IntelGenx Technologies Corp. (PNK:IGXT) Q3 2023 Earnings Call Transcript

IntelGenx Technologies Corp. (PNK:IGXT) Q3 2023 Earnings Call Transcript November 9, 2023

Operator: Greetings. Welcome to IntelGenx’s Third 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 call is being recorded. I will now turn the conference over to your host Stephen Kilmer, Investor Relations at IntelGenx. You may begin.

Stephen Kilmer: 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. 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 all that 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 medical scientist holding up a test tube, illustrating biopharmaceutical research.

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 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 third quarter 2023 conference call. On today’s call, I will provide a corporate update and discuss the progress we’ve made on our key pipeline projects consistent with what we had previously committed to shareholders. Then Andre will review our financial results. Following that, we will open up the line for your questions. I will now update you on our key programs beginning with RIZAPORT. During the quarter, we received the first purchase order for RIZAFILM, the U.S. market name for RIZAPORT, from our U.S. commercial partner Gensco Pharma. This represents a significant milestone for the company as it is our first purchase order for commercial supply of a pharmaceutical oral film.

The purchase order triggered both an upfront order deposit payment as well as a pre-specified milestone payment both of which are reflected in our Q3 2023 financial results. We expect to ship the order to RIZAFILM product to Gensco in Q1 2024 for immediate launch to market. Production of the RIZAFILM is expected to commence in December 2023. Also Exeltis, our partner for RIZAPORT in Spain received this week the regulatory approval to implement a new strategy that enables product substitution at the pharmacy level. Based on the positive feedback they received from prescribing doctors and patients, we believe Exeltis new strategy will ultimately boost product sales. We are eager to see this new strategy implemented to increase product substitution at the pharmacy level and the corresponding increase in RIZAPORT sales in Spain.

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Q&A Session

Turning to our Buprenorphine Buccal Film program, Xiromed, the agent and affiliate of our co-development partner Chemo Research submitted to the FDA an amendment to the abbreviated new drug application requesting priority review. The FDA granted priority review with a Generic Drug User Fee Act or GDUFA goal date of March 8, 2024. However, if the agency determines that an inspection is required, the GDUFA date is July 8, 2024. But given the March 2023 preapproval inspection of our facility and the subsequent approval of Rizatriptan oral film, we are relatively confident that the FDA will decide to review this amendment without the need for an additional inspection. Now, turning to our cannabis business. We are happy to have entered into a settlement agreement with Tilray.

The settlement agreement includes a purchase order for three new product CBD20, THC10, and a 10:10 combined CBD, THC. And was entered into concurrently with an amendment to our licensing and development and supply agreement with Tilray that renders the relationship non-exclusive for both parties. Clearly, this represents a new stage in our relationship with Tilray. However, we have worked hard this year to develop these three products and are looking forward to having them available to medical cannabis patients. Next, turning to animal health. We have discussed during the previous call that we are under discussions with a potential partner for an important development and license agreement for an animal health product using our VetaFilm technology.

These discussions are still ongoing, and with the substantial progress we have made to date, we anticipate being able to announce this animal health partnership later this year. Finally, with respect to our commercial activities, we expanded our CDMO offering by signing a binding term sheet for the packaging of a pharmaceutical oral film product that an undisclosed CDMO customer is planning to commercialize in the U.S. IntelGenx will package the product at our GMP manufacturing facility in Montreal. Moving on to R&D, and specifically turning to our Montelukast program. We have completed enrollment of 52 patients in our Phase 2a BUENA clinical trial in patients with mild to moderate Alzheimer’s disease. With the intention of efficiently achieving the program’s goal, we’ve made a Health Canada authorized study design modification where we adjust the p-value to less than 0.1. This modification enabled us to decrease enrollment while optimizing the power of the study to detect the effects of Montelukast VersaFilm compared to placebo.

We are looking forward to completing the BUENA trial dosing in the first quarter of 2024 and to report initial trial results the following quarter. Additionally, manufacturing of both placebo and active films are ongoing in preparation for a clinical study to investigate the use of Montelukast VersaFilm for the treatment of Parkinson’s disease or PD. The multi-center, randomized, double-blinded, placebo-controlled trial will be conducted at the Karolinska University Hospital in collaboration with principal investigator Dr. Per Svenningsson, who will sponsor the study through a Swedish Research Council grant worth approximately US$2 million USD. The planned study will assess Montelukast VersaFilm as an alternate to the tablet form of Montelukast.

We currently expect the study to commence in Q4 2023 with dosing to be initiated in Q1 2024 and we will provide more details on its design when they are available. Lastly, we also engaged an R&D customer to advance their product to commercial output and are proud to have secured the immediate, albeit small revenue generating business. With that, I would like now to 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 third quarter ended September 30, 2023. The total revenues for the 2023 third quarter amounted to $318,000 compared to $142,000 in the same period last year. The change is mainly attributable to increase in R&D revenue of $128,000 and R&D milestone revenues of $125,000. Operating costs and expenses were $2.7 million for Q3 2023 compared to $2.5 million in the same period last year. For Q3 2023, the company had an operating loss of $2.4 million, consistent with Q3 2022. Adjusted EBITDA was negative $2.1 million for Q3 2023 compared to negative $2.2 million for the corresponding three-month period of 2022.

Our net comprehensive loss was $2.5 million or $0.01 on a basic and diluted per share basis for Q3 2023, down from a net comprehensive loss of $3 million or $0.02 per share for the comparable period of 2022. As of September 30, 2023, the company’s cash and short-term investment totaled $2.1 million. In August, our parent company closed the first tranche of a non-broker private placement of units from atai Life Sciences for an aggregate gross proceeds of approximately US$3 million, including 750,000 in a subsequent atai subscription upon shareholders approval. We intend to use the proceed of the offering to fund the formulation and development efforts related to our collaboration with atai for working capital purposes and to cover costs related to the offering.

IntelGenx will seek to obtain shareholders approval at a special meeting of shareholders taking place on November 28, 2023. In addition to shareholders approval, the offering is subject to final TSX approval and the satisfaction of customary closing conditions. I will now turn the call back to Dwight.

Dwight Gorham: Thanks, Andre. At this point, I’d like to review our track record of delivering on our promises. During the previous Q2 call, we indicated we would soon advance RIZAFILM in the U.S., which we have done in Q3. We also told investors that we are expecting to resolve the Tilray arbitration by the end of the year, which was also recently accomplished in an outcome that is favorable to both the company and its partner. Finally, we indicated that our partner Xiromed would respond to the latest CRL in a timely manner, and such response was submitted in Q3. All of this to say, since joining IntelGenx’s CEO, the company has kept its commitment to the investment community and executed on key programs in line with commitments made.

We are looking forward to continue to execute and deliver on our upcoming milestones, such as the signature of our animal health partnership in Q4 2023, the launch of RIZAFILM in Q1 2024, and the fulfillment of the cannabid infused VersaFilm order from Tilray. We are also looking forward to receiving the latest tranche of our recent financing in Q4, assuming we receive shareholder approval. I would like to end my introductory remarks by highlighting the fact that the progress we have made in our key projects has opened the door within our R&D Group for additional projects. We look forward to updating everyone on future calls on how we successfully capitalize on that. In closing, I’d like to once again recognize our team for executing our long-term strategy and the team’s commitment and focus on the company’s transformation from solely an R&D organization into a full service R&D and commercial operation.

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.

Operator: Thank you. At this time, we will be conducting a question-and-answer session. [Operator Instructions] We did have a question come from Hugh Kelly. Hugh is a private investor. Hugh, your line is live.

Hugh Kelly: Thank you. Thank you, Dwight and Andre for the update. Question on the RIZAFILM, the shipment is going to go in the fourth quarter 2024 – first quarter, excuse me. Is that any idea? Can you share? Is that going to pharmacies, hospitals or any light on the distribution and rollout plan like CVS or anything like that.

Dwight Gorham: Yes, Hugh. This is Dwight. The product when it’s shipped from our warehouse will be immediately available for shipment and CVS is a lead one of the customers. So it’ll go to Gensco and Gensco has set that already in motion and they expect to have CVS as a large customer.

Hugh Kelly: That’s good, because I’ve seen on there, Dwight has seen it following this closely. It was highlighted on the website. There’s more info to come about arrival on their shelves. With the Gensco relationship, I know they have, I believe hopefully I say it correctly first right to China, is there any thoughts of expanding that or is that just further down the road? More specifically, just wondering about other countries besides the U.S. under Gensco?