IntelGenx Technologies Corp. (PNK:IGXT) Q1 2023 Earnings Call Transcript May 11, 2023

IntelGenx Technologies Corp. reports earnings inline with expectations. Reported EPS is $-0.02 EPS, expectations were $-0.02.

Operator: Greetings and welcome to the IntelGenx First Quarter 2023 Financial Results Conference Call. At this time all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions]. Please note this conference is being recorded. I will now turn the conference over to your host, Stephen Kilmer. You may begin.

Stephen Kilmer: Good afternoon and thank you for joining us on today’s call. With me on the line are Dr. Horst Zerbe, IntelGenx’s President and Former CEO; Dwight Gorha, newly appointed CEO, Andre Godin, our President and CFO, Dr. David Kideckel, Company’s Head of Corporate and Strategic Alliances, Dr. Frank Pietrantonio, our Director of Clinical Research; and Tommy Kenny, our Senior Vice President and General Counsel. Before we begin, I would like to remind you that all amounts mentioned today are in U.S. dollars, unless otherwise mentioned. And today’s call may contain forward-looking information that represents our expectations as of today and accordingly, are subject to change. We do not undertake any obligation to update any forward-looking statements, except as may be required by U.S. and Canadian securities laws.

A number of assumptions were made by us in preparing these forward-looking statements, which are subject to risks, and results may differ materially. Details on these risks and assumptions can be found in our filings with the U.S. and Canadian securities commissions. I’d now like to turn the call over to Dr. Zerbe. Horst?

Horst Zerbe: Thank you, Stephen. Good afternoon everyone, and thank you for joining us for the IntelGenx first quarter 2023 conference call. On today’s call, I will provide the corporate update and discuss the progress we’ve made on our key pipeline projects. Then Andre will review our financial results. Following that, we will open up the line for your questions. Before launching into an update, I would like to take this opportunity to welcome our newly appointed CEO Dwight Gorham to our teams, and to his inaugural IntelGenx investor call. About a year ago, I informed the Board of Directors of my intent to retire as CEO of the company. The board subsequently appointed a succession committee, chaired by Bernard Boudreau, which, after thorough search that was conducted with the help of the Montreal based Executive search firm, Heidrick and Struggles recommended that the board appoint Dwight Gorham as the new CEO of the company.

On March 13th, the board accepted my resignation and unanimously appointed Dwight Gorham as the new CEO effective upon my resignation. I will continue to serve on the board and remain available to help the new CEO during the transition. Dwight is exceptionally well qualified to lead IntelGenx for real and beyond its transformation from an R&D company to a successful commercial manufacturing operation. Why does an engineer by trade? Most recently, Dwight served as president and CEO Pillar 5 Pharma, Pillar 5 pharmaceutical contract manufacturing organization with a specialty, and sterile ophthalmic products. Before joining Pillar 5 Pharma in 2015 he served as senior vice president and general manager of global operations at Pharmascience Inc.

Prior to that, he held a variety of senior roles, including President and CEO at Accucaps Industries, a leading North American supplier of soft gelatin capsules, a variety of management assignments at the Burroughs Wellcome & Co. facility in Montreal, president of Draxis Pharma Inc., a Montreal based CMO and supply of small volume parenteral and lyophilization products, General Manager of Baker Cummings and director of operations at the Canadian farm of Glaxo plc, which is now GSK plc. Giving each of these assignments, he managed to significantly improve the financial performance of the company or the unit he was responsible for. While he’s still just getting up to speed glide has agreed to join us today on the call, and he will be available to participate in the Q&A session following our introductory remarks.

With that, I will now update on all key programs. First on a ATAI, a phase 1, PK and dose escalation, PK, meaning pharmacokinetics and dose escalation study using ANDA Buccal film is ongoing. Activities have also commenced to proceed with the next phase of the development, which is a phase 2 study. Moving on to RIZAPORT. Last month, the FDA approved our 505(b)(2) NDA for RIZAFILM, the U.S. market name for RIZAPORT. Importantly, as follows a successful pre-approval inspection by the agency of our Montreal manufacturing facilities in March of this year. This was a major milestone achievement for IntelGenx as it was our first FDA approval, we’re film product that is based on our proprietary VersaFilm technology and that was PD developed in-house.

We certainly view this as an important validation of VersaFilm technology, and we’ll communicate this accordingly to our partners and investors. According to the American Migraine Foundation, 39 million or 12% of Americans suffer from migraine, which is the second leading cause of disability nationwide. Our partner for RIZAFILM in the U.S., Gensco pharma is targeting the manufacturing of elevation batches to the first saleable product, while later in the year, and then we’ll commercialization in early 2024. I should also mention that the FDA approval came with the request to develop and submit within two years to FDA for review and approval of 5 milligrams pediatric version of the film. Recently we met with Exeltis, our partner for RIZAPORT in Spain.

They reported great feedback from prescribing doctors and patients that have been struggling with significant product substitution at the pharmacy level. They are now working on a strategy to overcome the loss of sales and Exeltis is waiting for regulatory approval to implement that new strategy. In January, we entered into an exclusive supply agreement for RIZAPORT with ARWAN Pharmaceuticals Industries, Lebanon, s.a.l in various countries in the MENA region. Moving on to Tadalafil. As we reported last quarter, there was a slight delay as our partner Aquestive has encountered some API related issues with Tadalafil. However, the R&D teams from both companies worked diligently and formed a task force to address the issue. We believe that we have now solved the API issue, and we are preparing for manufacturing of the clinical batch.

As cannabis, the arbitration process involving Tilray is currently improper in process and province. As arbitration proceedings are confidential. We are unable to provide further details regarding this dispute at this time, we will promptly update our investors. As soon as a resolution has been reached. The words on Montelukast were able to add five more sites to the study. And as a result, we’ve seen an increase in patient enrollment, especially in the last two months. We’re targeting to enrollment by July, possibly even earlier with the rate of enrollment has been as active as in the past two months. While enrollment in the ongoing Phase 2, when a clinical trial in patients with mild to moderate Alzheimer’s disease or AD is continuing. We are also now expanding the Montelukast repurposing program to include another major neurodegenerative disorder, Parkinson’s disease, or PD.

We believe that Montelukast VersaFilm has the potential to be disease modifying in both AD and PD. In February, we announced the research collaboration with Dr. Per Svenningsson, of the Karolinska Institute and plan and conduct a multicentre, randomized, double-blind, placebo-controlled clinical study to investigate the use of Montelukast VersaFilm for the treatment of PD. Dr. Svenningsson will serve as the lead principal investigator for the plan study and will sponsor it through a grant awarded by the Swedish Research Council in the amount of $2 million. IntelGenx will supply Dr. Svenningsson with both active and placebo films to be used in the 18 months treatment regimen for study participants. On completion of the study, IntelGenx will retain the intellectual property rights and use the findings to further develop this program for PD treatment.

We currently expect the study to commence in Q3 2023 and will provide more details on its design at that time. Moving on to Xiromed, in April, we announced that chemo research to its patient and affiliate Xiromed received the complete response letter from the FDA regarding the submitted abbreviated new drug application of Buprenorphine Buccal Film. It’s Buprenorphine Buccal Film is a generic version of Belbuca, an opioid that is used to manage pain severe enough to require daily around the clock, long-term treatment with an opioid when other pain treatments are inadequate. Belbuca was approved by the FDA in 2015 and is applied to the oral or buccal mucosa every 12 hours. Buprenorphine Buccal Film incorporates our VersaFilm technology in a novel formulation and is designed to be a bioequivalent, lower cost alternative for patients.

Permits row responses is expected in the current quarter. Lastly, animal health. In the fourth quarter, we entered into a new VetaFilm, feasibility and development agreement with an undisclosed animal health company for a VetaFilm-based oral film formulation containing CBD for use in companion animals. The results from the CBD study are expected in the current quarter as the newly appointed head of corporate development and strategic alliances Dr. David Kideckel is also engaged in discussions with potential major Animal Health Partners. And with that, I would now like to turn the call over to Andre, for review of our financial results. Andre?

Andre Godin: Thank you, Horst. Good afternoon everyone. As Horst just mentioned, a few minutes to discuss the company’s financial performance for the first quarter ended March 31, 2023. On the revenue front, total revenue for 2023 first quarter amounted to $162,000 compared to $237,000 in the same period last year. The change is mainly attributable to decreases in R&D revenues of $63,000 and royalty on product sales of $12,000. Operating costs and expenses were $2.8 million for Q1 2023 versus $2.5 million for the corresponding three-month period of 2022. For Q1 2023, the company had an operating loss of $2.6 million compared to $2.3 million in Q1 of 2022. Adjusted EBITDA was negative $2.4 million for Q1 2023 compared to negative $2.1 million in Q1 2022.

Our net comprehensive loss was $2.9 million or $0.02 on a basic and diluted per share basis for Q1 2023, down slightly from a net comprehensive loss of $3 million, or $0.02 per share for the comparable period of 2022. As of March 31, 2023, the company’s cash and short-term investments totaled $3.8 million. I will now turn the call back to Dr. Zerbe. Horst?

Horst Zerbe : Thanks, Andre. In closing, I’d like to once again recognize our team for executing on our long-term strategy. With that, I will now turn the call of questions. I’d like to remind you that are looking statements apply to both our prepared remarks and the following QA. Thank you.

Q&A Session

Operator: [Operator Instructions]. We have a first question the queue from David [indiscernible], a private investigator or private investor.

Operator: Our next question comes from Abraham Shapiro.

Operator: [Operator Instructions].

Operator: We now hear from Brent DB [ph].

Operator: Our next our next questioner is [indiscernible].

Operator: We have Hugh Kelly back on the line.

Operator: David Wen [ph].

Operator: Abraham Shapiro [ph].

Operator: Justin Foster [ph].

Operator: Doug Destler [ph].

Operator: [Indiscernible].

Operator: We have reached the end of the question-and-answer session, and I will now turn the call over to Horst Zerbe for closing remarks.

Horst Zerbe: Thank you. And this concludes our first quarter 2023 investor update call. I would once again like to thank the IntelGenx team for its hard work and dedication, all of our directors for their continued support, the management team. And finally, our investors for continuing to believe in and supporting us. And on a personal note, I would like to reiterate, what a pleasure it has been steering this company to this pivotal stage. And I look forward to continuing to contribute to success as champ. Naturally going forward and in future quarters as I previously mentioned, Dwight will lead these calls instead of me. As my last comment, there is really no doubt in my mind that I’m passing the torch into the right hands. Thanks to everybody and goodbye.

Operator: This concludes today’s conference and you may disconnect your lines at this time. Thank you for your participation.