IntelGenx Technologies Corp. (IGXT) Q2 2023 Earnings Call Transcript

IntelGenx Technologies Corp. (IGXT) Q2 2023 Earnings Call Transcript August 14, 2023

Operator: Greetings. And welcome to the IntelGenx Second Quarter 2023 Financial Results Conference Call. At this time, all participants are in a 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, Mr. Stephen Kilmer, Investor Relations at IntelGenx. Stephen, you may begin.

Stephen Kilmer: Thank you. Good afternoon, everyone, and thank you for joining us on today’s call. With me on the line are Dwight Gorham, IntelGenx’s CEO; Andre Godin, our President and CFO; Dr. David Kideckel, the company’s SVP and Head of Corporate Development and Strategic Alliances; Dr. Frank Pietrantonio, our Director of Clinical Research; Tommy Kenny, our Senior Vice President and General Counsel; and Dr. Horst Zerbe, IntelGenx’s Chairman. 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 would now like to call the — turn the call over to Mr. Gorham. Dwight?

Dwight Gorham: Thank you, Steve. Good afternoon, everyone. And thank you for joining us for the IntelGenx second quarter 2023 conference call. On today’s call, I will provide a corporate update and discuss 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. So to start, I will now update you on one of our key programs begin — on our key programs, beginning with RIZAPORT. The FDA approval of our 505(b)(2) new drug application for RIZAFILM, the U.S. market named for RIZAPORT, marked a major milestone achievement for the company. It is IntelGenx first FDA approval for a film product developed in-house using proprietary VersaFilm technology.

Importantly, the FDA approval included a request that within two years, we developed a 5-milligram pediatric version of the film and submit an application for the agency’s review and approval. According to a recent issue of practical neurology, migraine affects up to 7 million children and adolescents in the U.S. In addition to reflecting the remarkable impact migraine has on younger individuals, the FDA’s request affirms our belief that a film delivered migraine treatment will be valuable younger patients that have difficulty swallowing pills due to nausea and other factors. The commercialization of RIZAFILM in the USA, as well as in Spain is one of our three short-term commercial objectives we unveiled in May. Our U.S. commercialization partner for RIZAFILM, Gensco Pharma is planning to achieve the first salable product later this year with full commercialization in early 2024.

Exeltis, our partner for RIZAPORT in Spain continues to await regulatory approval to implement a new strategy to enable product substitution at the pharmacy level. Based on the positive feedback they have received from prescribing doctors and patients, we believe, if approved, Exeltis’ new strategy will boost product sales. We are also pleased to announce that the work of our CDMO business development team has resulted in a binding term sheet with a CDMO customer with a packaging of pharmaceutical oral film produced that they are planning to commercialize in the United States. The expected agreement is estimated to generate approximately $9 million in revenue over three years and we look forward to providing updates as we work to finalize such agreement with them.

Turning to our other CDMO business, we received in May an amended Drug Establishment License from Health Canada that allows us to provide third-party testing services, further supporting our short-term commercial objective to expand this part of the business. Also on our CDMO business and subsequent to quarter end, we just signed up a customer to engage — sign up a customer to engage on an R&D project with the objective of advancing commercial output. We’re extremely excited to embark on this new piece of immediate revenue-generating business. Changing the subject and turning to our Montelukast program, we are thrilled to announce completion of enrollment in our Phase 2a clinical trial in patients with mild to moderate Alzheimer’s disease or AD.

As you may recall, the COVID-19 pandemic effectively halted the BUENA trial recruitment for year and a half and the post-pandemic restrictions imposed by hospitals pose an additional challenge to trial recruitment. With the intention of avoiding any further delay in achieving the program’s goal, we engage our statistical consultant, COGS State Limited [ph] and determined that we could just decrease enrollment while still providing a basis to determine which drug effect size — sizes are statistically significant by adjusting the p-value to less than 0.1. The study design modifications received a no objection letter from Health Canada and we were pleased to complete — we’ve completed study enrollment with 52 patients with 18 fewer than initially planned.

We are confident that this Health Canada authorized study design modification will enable us to utilize data from fewer patients while optimizing the power of the study to detect the effects of Montelukast’s VersaFilm compared to placebo. We are looking forward to completing the BUENA trial in the first quarter of 2024 and to report initial trial results in the following quarter. Believing that Montelukast’s VersaFilm has the potential to be disease modifying not only in AD, but as being currently investigated in BUENA trial, but also in the Parkinson’s disease, we’ve expanded the program. In conjunction with that, we recently announced that manufacturing both with active and placebo films are underway in preparation for a multicenter, randomized, double-blinded, placebo-controlled clinical study to investigate the use of Montelukast’s VersaFilm for the treatment of PD or Parkinson’s disease.

Copyright: zneb076 / 123RF Stock Photo

The study will be conducted at the Karolinska University Hospital under our previously announced research collaboration with Dr. Per Svenningsson who will serve as a study’s principal investigator. Dr. Svenningsson previously conducted a clinical trial study utilizing the tablet form of Montelukast for the treatment of PD or two tablets of 10-milligram Montelukast were administered twice daily for a total dose of 40 milligrams. The planned study will assess Montelukast in doses exceeding 40 milligrams. So the Montelukast’s VersaFilm offers study participants an attractive dosing alternative to tablets, which would have the required administration of multiple tablets several times per day. Dr. Svenningsson will sponsor the study through a Swedish research grant worth approximately US$2 million.

IntelGenx has the option to acquire, developed IP and study data for our potential further development of Montelukast’s VersaFilm for the treatment of PD. We are currently expecting the study to commence in Q3 2023 and we’ll provide more details on its design when they are available. Xiromed, in April, we announced that chemo research through its agent and affiliate, Xiromed, received the complete response letter from the FDA regarding the submitted abbreviated new drug application for Buprenorphine Buccal Film. 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 Versa technology in a novel formulation and is designed to be a bioequivalent, lower cost alternative for patients. Xiromed CRL responses is expected in the current quarter. Animal health, as mentioned on our previous earnings call, our newly appointed Senior VP and Head of Corporate Development Strategy, Dr. David Kideckel is in advanced discussions to engage a potential major animal health partner over a multiyear period. We expect to be able to announce more details on this during the next quarter. With that, I would like to now turn the call over to Andre for a review of our financial results. Andre?

Andre Godin: Thank you, Dwight. Good afternoon, everyone. As Dwight mentioned, I’ll take a few minutes to discuss the company’s financial performance for the second quarter ended June 2023. Let’s start with the revenue. The total revenue for the second quarter amounted to $133,000, compared to $398,000 in the same period last year. The change is mainly attributable to the decrease in R&D revenue of $260,000 and royalty on product sales of $5,000. Operating costs and expenses were $2.7 million for Q2 2023, similar to last year’s $2.6 million. For Q2 2023, the company had an operating loss of $2.5 million, compared to $2.2 million in Q2 2022. The adjusted EBITDA was negative $2.2 million for Q2 2023, compared to negative $2 million for the corresponding three-month period of 2022.

Our net comprehensive loss was $3 million or $0.02 on a basic and diluted per share basis for this quarter, down slightly from a net comprehensive loss of $3.2 million or $0.02 per share for the comparable period of 2022. As at June 30, 2023, the company cash and short-term investment totaled $1.3 million, but I would like to also add that, I’m presently working on a financing so and the new should be out shortly. So there’s not much detail I can mention at this time, but the cash runway of the company has been taken care of. Right now, I will now turn the call back to Dwight. Dwight?

Dwight Gorham: 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 over for questions. I would like to remind you that our forward-looking statements apply to both our prepared remarks and the following Q&A. Thank you.

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Q&A Session

Operator: Thank you very much. [Operator Instructions] Thank you. Your first question is coming from Brent Geikie [ph], who is private investor. Brent, your line is live.

Unidentified Analyst: Yeah. Good afternoon, guys. On the last call, I asked a question to you guys, and Horst, and someone else were very confident you guys had some short — they indicated were short-term catalysts that we’re going to increase the share price. Maybe we have a different definition of short-term, but I would have assumed that would have meant during the last quarter and nothing seemed to have happened. So is that — are those no longer in the hopper or are you all just thinking they just haven’t hit yet or kind of let’s deal with that?

Andre Godin: Yeah. Brent, it’s Andre here. I think that there were some an announcement last week. Obviously, about Dwight covered that, that new CDMO partnership. That obviously generated a lot of volume. But we did mention last quarter that we were going to hit several catalysts. It is still true, but sometimes it takes a little bit more time to materialize. So we’re expecting some more news flow in the current quarter and in Q4. So I guess everybody has to be patient, but it’s coming. It’s just like sometimes, we think that it might go faster than it actually is. So, but it’s coming. There’s nothing that is any different from the last quarter.

Unidentified Analyst: Okay. Thank you.

Operator: Thank you very much. Your next question is coming from Doug Destler [ph], who’s a private investor. Doug, your line is live.

Unidentified Analyst: Yes. Thank you. If I may, I’d like to ask two questions. My first question is what is the status of the Tilray arbitration?

Andre Godin: Unfortunately, the answer is similar to last time, the arbitration is confidential by its nature. So we’re hoping to have a resolution to this arbitration by the end of the year. That’s all I can say at the moment.

Unidentified Analyst: Yeah. Okay. Well, it seems like it keeps getting pushed back every time we have an earnings call, but I can appreciate the answer. Also, what happened to the joint venture with Aquestive Therapeutics on Tadalafil. This joint venture was first announced, I think, several years ago and Aquestive does never provide any updates on the progress on this drug getting through the FDA? Is this a dead project or where does it stand, because it seems like this is a real lost opportunity.

Dr. David Kideckel: Hi. This is David. I’ll take this. No. The project — thanks for your question. The project is still very much alive. In fact, we’re working with Aquestive right now to embark on the final stages of the project. We still — that will still take some time. We have a commercial partner set as well for — in the U.K. So by no means is the project dead, because I am newer to the team. I don’t know what was disclosed for time lines. So I’m a little reluctant to give time lines, because they all still being worked out. But I would say investors should really consider the Tadalafil project more medium to longer term in nature right now as far as FDA approvals and actual sales are concerned. But as far as project development and moving forward to getting submission towards the FDA, that is one of the organization’s top priorities as we speak.

Unidentified Analyst: Yeah. It seems like IntelGenx is more optimistic about it than what Aquestive is because Aquestive you would think with the potential it has, it would be more in the forefront. But I mean it’s — they just never mentioned it.

Dr. David Kideckel: We can’t comment on other companies.

Dwight Gorham: Just to clarify.

Dr. David Kideckel: Right. Go ahead, Andre. Go ahead, Andre.

Unidentified Analyst: Yeah. Go ahead.

Andre Godin: Just to clarify, the commercial partner is from U.S., I think, just to avoid confusion.

Unidentified Analyst: It’s not Aquestive Therapeutics?

Andre Godin: No. No. But I mean the — yeah. Aquestive is based in the U.S., but a commercial partner that we signed up is also based in the U.S.

Unidentified Analyst: Okay. Thank you, Andre.

Dr. David Kideckel: So, Andre, just to clarify, the commercial partner that we’ve signed up through Aquestive, it’s a NASDAQ-listed company, but for sales to commercialize, they have rights for the U.K. That’s what the point was.

Andre Godin: Yeah.

Dr. David Kideckel: Thank you.

Andre Godin: Within U.K. Yeah.

Dwight Gorham: But again, to reiterate David’s point, this is a medium to longer term project. It’s in the two-year to three-year horizon that the commercialization would take place.

Unidentified Analyst: But it just seems like it’s been out there forever.

Dwight Gorham: Yeah. I understand that.

Operator: Okay. Thank you so much. Your next question is coming from Steve Gee of Wedbush. Steve, your line is live.

Steve Gee: Hello, fellas. How are you? So I’m in a public offering three times with the now out of business Phantom Financials. Are you guys willing to raise money again to another company?

Andre Godin: Yeah. As I mentioned in my intro, we’re working on something actually right now as we speak and we’re expecting to announce something shortly. So there’s no issue in terms of cash runway for the company.

Steve Gee: And is this money going to research, is this money going to salaries and bonuses for you guys and wives and girlfriends and anybody else talks about you hiring that company. We first, don’t think it’s fair that you guys are getting bonuses and I’ve been in the stock for six years and added three public offerings that I’m in to two of them, I lost my warrants now. because you guys have taken so long trying to manufacture stuff from marijuana scripts, the cancer scripts, the headache medicine credoships. You guys are smokers again and I hope everybody is listening to this. It’s the same old, same old stuff. The only announcement we get is up, this guy is retiring and we are hiring somebody new, he comes from 30 years of experience from so and so company and it’s still the same, six years everybody still sitting on the stock.

Dwight Gorham: No. But…

Steve Gee: I mean, everything thing is quarter, year, next year. I never hear a minute, days, weeks or…

Dwight Gorham: By the way.

Steve Gee: I mean — go ahead. I’m listening.

Dwight Gorham: Sir, by the way, we haven’t had bonus in a couple of years and we have reduced our salary right now. So I don’t know what you’re…

Steve Gee: Why don’t you take that then because, I don’t see none of that? I don’t think that anybody sees on that.

Dwight Gorham: Okay.

Steve Gee: I mean what do you think is going to happen to the stock price…

Dwight Gorham: We require…

Steve Gee: … that’s the asset base after the call with the Smoke & Mirrors thing. Where is this going to happen? I think it’s going to drop from $0.14 down into single digits. I don’t seem optimistic, just tickets, just ticket, oh, don’t hang off [ph]. No answer on that, guys don’t see optimistic about this stuff.

Dwight Gorham: I didn’t get the question…

Dr. Horst Zerbe: Yeah. I’m not…

Steve Gee: Or is that…

Dr. Horst Zerbe: … understood exactly what the question was.

Steve Gee: Well, the question is, I’ve been sitting on the stock for six years with three public offerings that I’m in, two of them I lost the warrants and now I’m sitting on. I’m all over the place, $0.40 to $0.80. We’re down to $0.14. I’m asking, what do you think since you guys work for the company and you have all the big titles, do you think this stock is going to move any time soon or are we going to sit on it for another six years. I’m just curious, because I think after today’s Smoke & Mirrors conference call that you guys just pulled again, it’s going to drop down from the teen. Nothing positive came out of this. What I heard from on you guys at all. Everything is next quarter, next…

Operator: Thank you very much. [Operator Instructions] Okay. Our next question is coming from Justin Foster [ph], who’s a private investor. Justin, your line is live.

Unidentified Analyst: Thanks. Good afternoon, gentlemen. On the financing that you remarked upon, I know that you cannot expand upon it at great length. However, could you — since you have confidence that it will be accomplished, give us an idea, does it involve issuing of new shares, warrants, is it dilutive, is it internal people forwarding some loan to the company. Can you give us a little bit of direction there without compromising your need for restriction of information at this moment?

Andre Godin: Yeah. There’s not much I can say. But what I can say is that, yeah, there will be some dilution, but it will be in — most of it will be in very strong and — so for the long-term, that is very clear in the process. But the terms, obviously, I cannot disclose, because they haven’t been announced publicly. But we’re trying to avoid as much as possible dilution, but we need the money. We’re going commercial next year, maybe the end of this year or for sure, next year. So we need to get there and that’s what we’re doing. We’re getting a bridge to get us to next year.

Unidentified Analyst: Okay. Thank you for that. Thanks. Much appreciated. I think the good part of all of that is you’re starting out with not a lot of shares so that investors can afford a little bit of dilution and you’ve been wonderfully adamant about not reversing shares just to increase the share price in order to get financing. So that — whatever the disappointments out there, both those things are certainly appreciated by your shareholders and I think it advances integrity on all of your parts and I for one thank you for that and one good luck next quarter.

Dwight Gorham: Thank you.

Unidentified Analyst: Thank you.

Operator: Thanks. Thank you very much. Your next question is coming from Tom Miglino [ph], who is also a private investor. Tom, your line is live.

Unidentified Analyst: Thank you very much. Thank you for taking my calls. I think congratulations are in order. I think this was a very exciting quarter. I’ve been in the stock for probably eight years or nine years and it’s the most exciting quarter I’ve seen. So keep the good news coming. I was wondering if you could give us an update on the PEI project and how that testing is going with the non-humans?

Dr. David Kideckel: Yeah. I can — this is David Kideckel here. So the PEI project is underway. In fact, I was out there not too long ago to meet the individual researcher who was just starting testing in both dogs and eventually cats or the other way around. But we have just commenced that actual R&D or almost clinical trial in animals on that front. There hasn’t been any data received to-date.

Unidentified Analyst: Oh! I’m sorry. How — when do you expect that you might hear results? Is it something that’s imminent?

Dr. David Kideckel: No. And that’s something more to bridge our longer term entrants into the animal health space. I don’t know off the top of my head what the exact time lines are for any data coming through. But what I can tell you, too, that in, Mr. Gorham’s prepared remarks, he also mentioned another project that I’ve taken over since joining the company not too long ago. And that, if approved and if it goes through, we’ll have a lot of legs and potentially material upside to the company. And we hope to give investors in the market an update on that as soon as we have one, which we hope will be within the next quarter.

Unidentified Analyst: So the two animal health projects are not related. The one isn’t contingent upon the other.

Dr. David Kideckel: No. That’s correct. They’re completely unrelated. One is more of an R&D type study and the other would be R&D going into commercial. Like you mentioned at the outset of your questions here, sir, this was at the University of Prince Edward Island or PEI out in Eastern Canada. The other — and that’s the university-based. The other project, which is more commercial and R&D in nature, at least at the outset, that’s with an actual company.

Unidentified Analyst: Okay. Thank you very much, David. And also, has there been any movement in getting RIZAPORT into other European countries? I know a while ago they were talking about entry into some of the other big four. I know that they’re stalled currently in Spain and I’m sure in August not much gets done in Spain. But I wondered if there was any movement on entering other European markets with that product?

Dr. David Kideckel: Yeah. No. Thank for the question. David here again. I’ll take this. The short answer is, nothing material to report. Even Spain, as you heard in Mr. Gorham’s prepared remarks, has been delayed to some extent. In fact, we reported no sales this quarter. We hope that some of the regulatory issues on the ground in Spain will be rectified. But there certainly are other European markets that as part of the corporate development and business development team were actively or listening to potential opportunities, but nothing right now that we can report that’s material.

Unidentified Analyst: Terrific. Well, thank you all very much for taking my call and again, congratulations.

Dwight Gorham: Thank you.

Operator: Thank you. Thank you very much. Your next question is coming from Hugh Kelly [ph], who’s a private investor. Hugh, your line is live.

Unidentified Analyst: Yes. Good afternoon, everyone. First question I have on the — to follow-up the gentleman’s question with Spain. There was any — I know on the last call, they thought they were submitting a new application to the authorities to resolve that packaging or a substitution issue, but that’s not resolved as of yet?

Dr. David Kideckel: That’s correct. That’s not resolved as of yet. And I mean the sales has shown it. I mean we — there’s essentially zero sales in rest of world for RIZA. But at the end of the day as well, I mean, Spain, it’s not even one of the top four markets in Europe. So we are keeping a very close eye on that and speak with our partners Exeltis for Spain, and if there’s any material updates, as always, we would share that with investors and the market.

Unidentified Analyst: So the same issues that effect on non-pharmaceutical and the other partner, I think, ARWAN?

Dr. David Kideckel: ARWAN, no…

Dwight Gorham: That…

Dr. David Kideckel: Those are — yeah. No. That would be separate. ARWAN is more for the Middle East and Lebanon in particular with the goal to — as a gateway to other parts of the Middle East, but those are completely unrelated right now. We’re dealing with ARWAN too with a number of other, I guess, hiccups that we’re trying to work through our contractual agreements. But again, I would focus, if I have you and an investor, I think, the biggest opportunity having crunched the numbers and doing this on a near weekly, if not daily basis, RIZA USA is by far one of the company’s largest opportunities. And that’s what we’re putting a lot of our efforts into right now and we have been for the past several months.

Unidentified Analyst: Okay. The validation batches, are they completed, they are going through the testing, are they still need to be manufactured.

Dr. David Kideckel: We still need to have those manufactured, correct?

Unidentified Analyst: Okay. Thanks. Is that David speaking.

Dr. David Kideckel: That’s David. Yeah.

Unidentified Analyst: Okay. David, thank you. So I’ll be back in a moment. A question for Andre and the — was bought before regarding last conference call and now catalysts near-term. Could we peel that back a little bit as a catalyst regarding oral film, transdermal, VetaFilm or the CDMO?

Andre Godin: I mean there’s — like I said earlier, I think, we have a few things coming up and all of the above that you mentioned, but those are ongoing agreements that we are working on. David, is obviously involved, Dwight, everybody is involved. But it’s just taking a little bit longer than we expected, but it will happen. It’s coming, if not in the current quarter, it’s going to be in the fourth quarter for sure.

Unidentified Analyst: Okay. Will they fall into that name of significant catalysts, Andre?

Andre Godin: Yeah.

Unidentified Analyst: That was used in the last call?

Andre Godin: They’re a good catalyst. Everything is good when you announce a new partnership or your settlement or CMO contract like we just announced last week. So we’re working hard on getting these things done.

Dwight Gorham: Yeah. I think. Bigger part of that…

Unidentified Analyst: Okay.

Dwight Gorham: … rest in the human films and the VetaFilms. The CBD, I believe we’ll see major announcements on what they’ll be announcement. The big ones will be in the human side.

Unidentified Analyst: Okay. Thank you, Dwight. And I don’t know if it was covered, any new programs with the tie?

Andre Godin: Not at this time. I mean we’re working on DMP. That’s their main…

Unidentified Analyst: Yeah.

Andre Godin: … program with us, but there’s discussion, but nothing new on that front.

Unidentified Analyst: Okay. On the transdermal front, on the last call and one before there was just potential opportunities with some discussions going on with a partner for transdermal?

Dwight Gorham: Yes. I mean those conversations are ongoing. However, the focus of the organization is really making sure we bring to market reason, which is approved, and we get the proper partnership agreement with that, and then resolving epinephrine issuing getting it resubmitted to the agency. So we can get that to the market as well. Those are the two…

Unidentified Analyst: Yeah.

Dwight Gorham: …however, we do have conversations on transdermal.

Unidentified Analyst: Okay. In the resubmission for the Belbuca is, I believe in the last call, there was two items, one for Xiromed and one that was a clarification issue for IntelGenx. Is that one been resolved we believe?

Dwight Gorham: The submission to the agency is what — is next week.

Unidentified Analyst: Okay. All right. And the anticipated announcement for the CBD for animal health, is that study completed, is that still going on? I didn’t catch your comments on that, David?

Dr. David Kideckel: Yeah. So I would say right now, we have two active animal health programs, both of which I just mentioned, the one at the University of PEI. The second thing with the company. The other project that I think you’re referring to last quarter call or the quarterly call, I believe we had three ongoing projects. There was a third and the recent CBD data in dogs as reviewed by our R&D team was not as promising as we thought. There might have been a few experimental errors. We’re not exactly sure, but we decided to pull the plug on that one. So the two projects that we have right now in animal health are, again, the one in PEI, which is not material from a business standpoint, just to be very clear, that’s more going to feed into what data we can present for other potential partners down the road.

What the most important projects and revenue generating opportunity that we have existing now is the one that I was referring to with a company that we believe we could be in a position to announce over the coming months.

Unidentified Analyst: That be associated with cats, maybe?

Dr. David Kideckel: It could be. It’s mostly dogs, but it’s also just to be clear, it’s not — it doesn’t have anything to do with CBD or any…

Unidentified Analyst: Okay.

Dr. David Kideckel: cannabinoid derive medicine.

Unidentified Analyst: But was it a prior study or maybe some type of effort with an undisclosed partner on cats. Is that one still active or?

Dr. David Kideckel: I’m not sure which one that’s actually referring to. I don’t recall any undisclosed partner with cats.

Unidentified Analyst: That was a BD before David.

Dr. David Kideckel: It could have been. To my knowledge, there is the only one that we’re looking at cats and again is the one in PEI — University of PEI and that’s more…

Unidentified Analyst: Yeah.

Dr. David Kideckel: … clinical and R&D in nature as opposed to the commercial.

Unidentified Analyst: Okay. And there’s a product that’s in your SEC filing is called DisinteQ, if I’m saying that. I hope I’m seeing it properly, David, some controlled oral release film. Is that one active and going in discussions?

Dr. David Kideckel: I’m sorry, can you repeat that? Did you say DisinteQ?

Dwight Gorham: Yeah. I think it’s.

Unidentified Analyst: Yeah.

Dwight Gorham: Yeah. That’s…

Unidentified Analyst: D-I-S-T-E, DisinteQ.

Dwight Gorham: Yeah. This is correct. This is a platform that we have established and we filed IP on it. Right now, there are no current discussion on — with the existing partner with that, but it’s a platform that we still believe in and we’re trying to protect from an IP standpoint as much as we can and the hope is to offer it to a future partner in the near to mid future.

Unidentified Analyst: Okay. And last question for me, nothing going on with — I have two questions. So with Heritage, is that kind of panned out?

Dr. David Kideckel: Yeah. Maybe I am — first of all, let me talk about Heritage and then maybe Dwight wants to comment on our overall cannabinoid program. But Heritage, the sales have been very low and I wouldn’t put this on Heritage, but it’s more just the Canadian market, in particular, has been quite lower in results than most people have thought. So Heritage is — while not saying by many means, as the program terminated, I would say that, it’s not forming a focal point to this company by any shape or form, just with effort and resource allocation, and ultimately, with material sales, which just aren’t panning out, it’s not something that we believe firmly in at this point for all of cannabis, not specifically Heritage again.

Dwight Gorham: And the THC platform, if I could use that terminology, David, is that still an attractive opportunity for IntelGenx.

Dr. David Kideckel: I personally don’t think so. And it’s not just for IntelGenx.

Dwight Gorham: Okay.

Dr. David Kideckel: I think the market in Canada as a whole is very saturated and I don’t see where incremental business will come to the company. But we never know too. We’re also very opportunistic. And if another partner comes to IntelGenx and asks us to develop as part of our CDMO business, particular products, I mean, we’d be very open to such an arrangement.

Unidentified Analyst: So the horizon for medical THC and cannabis looks a little bit soft, if I can use that acronym…

Dr. David Kideckel: Yeah.

Unidentified Analyst: … or description.

Dwight Gorham: Yeah. The market is very soft.

Dr. David Kideckel: Yeah.

Unidentified Analyst: Okay. All right. And last question. How was — Andre, you said before about the plant build out that you needed some funds to complete or expand the plant for production? Is that going right?

Andre Godin: We’re not there yet. I mean, as Dwight mentioned, and right now, the focus of the company is really short-term revenue and that should start unfolding early next year, but we have sufficient capacity right now to support the product launch. But at some point, we will have to definitely look at expanding, because based on the projections that we have for the product that will be launched next year, we’ll run our capacity at some point. But right now, we’re — I would say, we’re fine for at least 18 months to 24 months…

Dwight Gorham: Correct.

Andre Godin: … with the current capacity.

Dwight Gorham: Right. I mean it’s an ongoing project to look at and we run capacity utilization models on a regular basis. But we should be good through until mid-2025, if not till the end of 2025. And we will need to talk about this perhaps in some more length at the end of the first quarter in 2024.

Unidentified Analyst: Okay. And the — any update, any discussions on prior — Andre is that still tabled pending the Endo bankruptcy?

Dwight Gorham: That’s on hold — that program is on hold.

Unidentified Analyst: That’s on hold. Okay. All right. That’s all for me. Thank you, gentlemen, and welcome aboard, Dwight.

Dwight Gorham: Thank you.

Operator: Thank you very much. Your next question is coming from Abraham Shapiro [ph], who is of private investor. Abraham, your line is live.

Unidentified Analyst: Yeah. Good evening, Andre. Good evening, Dwight and David. I was hoping that you guys down to $1 billion. I was hoping that there would be some sort of financial — financing news during the earnings, but time is of the effort. So I’m going to hold you guys that you’re going to announce something shortly. What did catch by ear is, first of all, congratulations on getting the CDM deal, so that time some revenue starts coming in, even though $3 million a year is not what we’re looking for it. It certainly started in the right direction to get some revenue. But you mentioned that RIZA is where you guys are going, right, for the money and you said you’re looking for the right partner. What happened with the partnership with the firm in Florida?

Dr. David Kideckel: Well, let me clarify, it’s David here. When we’re saying we’re looking for the right partner, the question was more referring in context to those in Europe. We still — we have our agreement, our partnership. Our U.S. commercial partner is Gensco Pharma based in Florida. So that — there’s been no change there. My comment again was more based on other markets within Europe.

Unidentified Analyst: And what is Gensco doing in regards to the partnership late — later?

Dr. David Kideckel: Well, we have regular update meetings with Gensco. So to launch a product, I’m sure, as you can appreciate, Abraham is no easy feat and we’re prepared for a launch. That’s what we’re doing as we speak.

Unidentified Analyst: I mentioned that last quarter conference call that the silence from them, maybe the partner could announce something on the data. I know that the Aquestive doesn’t say anything, Gensco, doesn’t say anything, I’m looking for somewhere from some of the partners. And again, you can’t control other companies, but certainly, you can recommend some sort of announcements.

Dwight Gorham: Yeah.

Dr. David Kideckel: Yeah. I mean I hear you, what I would — again, we can’t really speak for other companies, but Gensco is a private company. There’d be real not a lot of incentive for them to announce anything. I don’t even know if that’s part of the standard business. I can’t comment on them at all. But I mean, all we can control is what’s in our purview at IntelGenx. And I can tell you, RIZA USA is one of the pillars of the company.

Unidentified Analyst: Okay. And when can we expect — I missed the first part, I apologize. When do we think commercialization is going to happen with some revenue with RIZA?

Dr. David Kideckel: We expect any time from the end of 2023 up until the beginning parts of 2024. And the reason why there’s a bit of a kind of a goalpost there. It’s really just due to some moving parts that we’re trying to work through right now. But I would say latest, we hope, is going to be the first half of 2024.

Unidentified Analyst: Okay. And there was — I think it was — she had left one of your colleagues and she had mentioned a cat product. So I know that that’s — we didn’t pull it out than that. We heard — we have been hearing that some cat or dog product soon, I hope so. So listen, I’m happy that we’re seeing some revenue and a good job to bring some money in. I think that you don’t want to sell it so cheap and you guys got to stay in business, so you got to raise the money, right? So if you have to dilute somewhat I’m fine with it, get to the goalpost.

Andre Godin: Yeah. Abraham, I would have obviously expected to talk about a little bit more about the financing, but unfortunately, I can’t. But I can tell you that it’s really coming.

Unidentified Analyst: All right. I’m looking forward, because you guys get — you cut it to a wire here. Good luck.

Dwight Gorham: Thanks, Abraham.

Unidentified Analyst: I am rooting shareholders for many years and I’m — I like the new mousetrap, but I’m rooting, and hopefully, we’ll all become winners one of these days.

Dwight Gorham: Yeah. Thanks.

Unidentified Analyst: Thank you.

Operator: Thank you very much. Your next question is coming from Adam Devarito [ph], who is a private investor. Adam, your line is live.

Unidentified Analyst: Hey. How are you? I’m on a headset with the microphone, how is the audio on your side?

Andre Godin: Great. Thank you.

Unidentified Analyst: Good. Excellent. All right. Gentlemen, good work on the pending contracts for $9 million over the next three years. Wonderful, I hope things are going well. Just a quick question. I have been a holder for a few years and I don’t know if you want to share the frustration of, I don’t know, three or four callers ago, but on the revenue front, it is — what it is — we need to use negative descriptive adjectives and whatnot. But I just did a little research and I mean my blue sky thinking may be ridiculous, but the TAM of the vitamin and supplement market is $39.4 billion. I think that’s U.S. I don’t know about worldwide. That was as of 2022. So real quick, going back as a little kid, I remember there were chewable vitamins, then as we grow the we swallowed the vitamins and then within the last decade, there was like a huge, let’s say, emergence marketing of like gummy type of vitamins.

Your technology — it’s not novel. I mean I remember Listening scripts back in the day. But I don’t know if there are like film vitamins. I think it’s exceptional idea. And would it — if you capture the de minimis amount of the TAM of $40 billion, that would be huge. So I’ll stop and ask has there ever been any discussion thoughts about supplements and using your varied technology.

Dr. David Kideckel: So — okay, it’s David here. I’ll take a stab at this one. I mean it’s a fair point. Since Dwight and myself joined at roughly the same time points and to take really why Dwight was brought on to take the organization from R&D to commercial. I mean, the sky is the limit here, in my opinion, where we have to do — what we have to do to execute is the laser focus and with our plan to focus on two to three products and really do well with them, then we can start talking about where do we go from there from a very strategic perspective. But to rewrite the strategy and pivot to an altogether different area with one that you’d have to come fully up to speed on, I think that could actually take longer than pursuing our very laser-focused strategy right now.

Unidentified Analyst: Thanks, David, for the answer. But I’m not saying to deviate from your laser-focused strategy. I’m saying to augment your strategy. If you think about supplements, they’re not — you don’t have to go through FDA process — approval process. There may be other certifications, whatnot that you have to go through. But it seems like a much easier lift, so to speak. And once again, with a TAM of just under $40 billion, if you captured hardly any of it, you’re going to make a ton more money than you’re making. So that other color frustrations are valid. If you’ve been a shareholder for five years, 10 years, it’s pretty much the same old TAM. I mean if you look at the revenues, there’s not much there.

So I’m not saying to take your eye off the ball. I think you should be laser-focused on your strategy, but there’s nothing more with diversifying your strategy, pulling in a new team, seeing what it takes to get a supplement on the market, even if it’s a small test batch, what have you. But once again, I mean, it’s so much easier than going through all these approvals and whatnot. It just seems like we’re jumping through Marriott hoops all the time. And if you hit it out of the park, wonderful, it’s going to give an answer, but why not diversify your revenue stream with something that may be very achievable, I mean, you go at any grocery, supermarket, drugstore, I mean, a shelf space may be difficult to come by, but that supplements a huge business, $40 billion is $40 billion.

Once again, if you capture a small one-tenth of 1%, I mean you do the math, that’s more revenues than you probably earned for the duration of the business thus far. So I’m not saying to take you off the ball, I’m not saying that remove the strategy or pivot from the strategy, I am saying that adds to the strategy and there’s no FDA approval for a supplement to my knowledge, vitamins what have you. So just food for thought, and if you implement it, you hit on it, you could send me a free pack of vitamins or a small kind of films. Thanks.

Dr. David Kideckel: No. thank you. And point notice.

Unidentified Analyst: All right. Cool. Thanks. I won’t go on and on. Hopefully, we’ll see a press release soon. Thanks.

Operator: Thank you, Adam. Your next question is coming from Brent Baker [ph], who is private investor. Brent, your line is live.

Unidentified Analyst: Yeah, guys. Talking about RIZ and how it’s the pillar of the company. Do you all have — I’m assuming you do, but I’m not sure if you can tell us, do you have any — I mean, what are you all projecting revenue-wise and do you think it’s in 2024 or 2025, I mean, what are you all thinking and is RIZ? I mean, as RIZ going to make the company cash flow positive?

Dr. David Kideckel: Hi. It’s David. I’ll take — okay, someone else want to take that?

Dwight Gorham: Yeah. I think…

Andre Godin: David, I will — okay. You take it.

Dwight Gorham: Yeah. So I mean we’ve never given guidance, but it will take more than RIZA, obviously, Buprenorphine, if approved and launched, will be probably the biggest contributor. So it’s hard to say when we will be cash flow positive. It depends on the performance of RIZA and Buprenorphine. But next year would probably be a stretch, but maybe 12 months to 15 months to 18 months and we should be there.

Unidentified Analyst: Okay. Thank you.

Operator: Thank you very much. [Operator Instructions] Your next question is coming from. You okay?

Dwight Gorham: No. I’m fine. Thank you.

Operator: Okay. Our next question is coming from Hugh Kelly, who’s a private investor. Hugh, your line is live.

Unidentified Analyst: Okay. Thank you. One question for Dwight. In your announcement you put out, you want to do a top-down or complete review of the — where IGX was the product to focus, any redirection of the company? Is this going to be the status quo on the products that are under development and under commercial considerations.

Dwight Gorham: Yeah. That’s a great question. You’re talking about a top-down look at the strategy. As David said a couple of times, but I’ll reiterate, there’s some players with — there’s some products with the agency that we need to bring to market. If we bring them to market with the CDMO business that was announced last week. Then we have a business that’s EBITDA positive likely. In the next quarter to quarter and a half, there’s a full strategy review I need to go through. The other gentleman, obviously, brought the vitamins and something we’re not going to discount. But in the short-term operation, we’re going to really focus on making — hitting the bogeys and changing it from promising and not delivering the promising and delivering. And in the — maybe not the next conference — not the next call, but the one after we can talk about potential strategic changes in direction.

Unidentified Analyst: So on the short-term bogeys you’re addressing to be RIZAPORT potentially if you get Belbuca approved in the CDMO arena?

Dwight Gorham: Buprenorphine, yeah. Buprenorphine, RIZA and the CMO for the CDMO volume. Those three products on mature late in 2024, if the FDA approves the Buprenorphine by then as we go into 2025 the company then cash flow EBITDA positive.

Unidentified Analyst: Okay. Thanks.

Dwight Gorham: That’s the game we’re planning right now and that’s the focus in the business, staying by optically focused.

Unidentified Analyst: All right. And so the — is VetaFilm still in that arena to?

Dwight Gorham: Absolutely. We talked about it. I talked in my remarks about the work that David is doing, but it’s more R&D focused, it’s pipeline, commercial sales beyond 225. But R&D — there’s significant R&D revenues in the next three months to nine months.

Unidentified Analyst: Okay. Okay. And that’s my end of my question. Thank you, Dwight.

Dwight Gorham: You are welcome.

Operator: Thank you very much. That appears to be the end of our question-and-answer session. I will now turn the call back over to Mr. Gorham for any closing remarks.

Dwight Gorham: Great. I want to thank everybody for their patience and their time. Clearly, we’ve come a long way over the last five years and there’s a significant amount of frustration in our job is to clean that up and make it clear to everybody directionally where we’re going. And I just ask that people hang in there for the next three months, six months, nine months and you start to see a progression of positive news of the business. So thank you very much for your confidence and I look forward to our next call in three months and the one after that and six.

Operator: Thank you very much. This does conclude today’s conference call. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your…

Dwight Gorham: You too.

Operator: …participation.