IntelGenx Technologies Corp. (PNK:IGXT) Q4 2022 Earnings Call Transcript

IntelGenx Technologies Corp. (PNK:IGXT) Q4 2022 Earnings Call Transcript March 29, 2023

Operator: Greetings and welcome to the IntelGenx Fourth Quarter and Full Year 2022 Financial Results Conference Call. At this time all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. Please note this conference is being recorded. I will now turn the conference over to your host, Stephen Kilmer, Investor Relations at IntelGenx. 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 Dr. Horst Zerbe, IntelGenx’s CEO; Andre Godin, our President and CFO; Dr. David Kideckel, the Company’s Head of Corporate Development and Strategic Alliances; Dr. Frank Pietrantonio, our Director of Clinical Research; and Tommy Kenny, our VP, Legal Affairs and Intellectual Property 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 contains 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 fourth quarter and full year 2022 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 David Kideckel to our team and to his inaugural IntelGenx investor call. David succeeds Dana Matzen, who recently left IntelGenx to pursue another opportunity. David has nearly 20 years of combined industry and capital markets experience, most recently managing his own advisory group.

Before that, he was a Managing Director, Senior Institutional Equity Research Analyst at ATB Capital Markets. David’s industry experience spans several senior healthcare and biotechnology executive roles, including Johnson & Johnson Inc. and Alexion Pharmaceutical. David has a PhD in neuroscience from the University of Toronto. While he is just getting up to speed, David has volunteered 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 you on our key programs. First on the ATAI partnership. As many of you will recall, in September, we shipped a clinical trial batch of our previously undisclosed candidate Buccal VLS-01 to ATAI. VLS-01 is a pharmaceutical grade psychedelic Buccal film containing a synthetic form of an N,N-dimethyltryptamine, or DMT.

ATAI is developing the product as a novel therapy for treatment resistant depression, in combination with its digital therapeutic, designed to provide contextual mindset and setting support to patients prior to dosing. In October, ATAI announced that it had dosed the first subject in its Phase 1 clinical trial of Buccal VLS-01, the first ever in-human clinical study, evaluating an oral thin film psychedelic drug candidate with top line results expected in the first half of 2023. The PK study was delayed due to flooding in New Zealand and is still ongoing. ATAI is also evaluating potential new candidates, which obviously I can’t disclose yet. In €“ no, sorry, moving on to RIZAPORT now. In November, the FDA accepted for review of Class 2 response to the 2020 Complete Response Letter for our 505(b)(2) NDA for RIZAFILM.

We believe the Class 2 response provided all of the additional chemistry manufacturing controls information that the FDA requires. FDA has assigned a PDUFA goal date of April 17, 2023 for completion of the review of the RIZAFILM NDA. We look forward to their decision and to hopefully making RIZAFILM available to acute migraine patients in the United States. Regarding the OUS an update there, recently we met with Exeltis, our partner for RIZAPORT in Spain. They reported great feedback from prescribing doctors and patients, but have been struggling with significant product substitution at the pharmacy level. They are now working on a strategy to overcome the loss in sales and Exeltis is waiting for regulatory approval to implement that new strategy, which is basically revolving around modifying the packaging format, which would then make Genx substitution no longer possible.

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. I will not mention all these countries, but I can tell it’s a total of 22 countries spanning that region. ARWAN knows the MENA marketplace intimately and has successful track record. We’re looking forward to working with them. Moving on to Tadalafil. As we reported last quarter, there was a slight delay as our partner Aquestive has encountered some API related issues, or 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 €“ this API issue, and we are preparing for manufacturing of the clinical batch.

Moving on to cannabis films, we are planning a PK study to demonstrate the superiority of our THC sublingual film over conventional applications like gummy bears, and so on. We also recently received a U.S. patent for our novel cannabis-emulsion based film technology. Also, words on Montelukast, while enrollment in the ongoing Phase 2a BUENA 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 and there is sufficient scientific evidence that Montelukast VersaFilm has the potential to be disease modifying in both AD and PD. In February, we announced a research collaboration with Dr. Per Svenningsson of the Karolinska Institute, to 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 principal investigator for the plan study and will sponsor it through a grant awarded by the Swedish Research Council to grant in excess 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. Now, some comments on Xiromed. In October, we announced that Buprenorphine Buccal Film received an FDA Generic Drug User Fee Act or GDUFA date of April 28, 2023.

We partner with Chemo, part of the Insud Pharma Group on the development of Buprenorphine Buccal Film in September 2016 and co-developed the candidate’s ANDA that was filed through Xiromed and is currently under review by the FDA. 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. According to IMS Health, global annual sales of Belbuca were 315 million as of July, 2022.

We are looking forward to the FDA’s decision and assuming a positive decision by the FDA. We’re looking forward to the commercialization of Buprenorphine Buccal Film as soon as possible. Last but not least animal health. In December, we announced a research collaboration with the University of Prince Edward Island PI to assess palatability, owner perceived acceptability and ease of administration of our VetaFilm platform in dogs and cats. The University of Prince Island Edward is one of North America’s leading veterinary universities. So, we are very much looking forward to the results of this assessment as we continue to advance our drug delivery technology into the animal health space. Earlier 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 Q2. And with that, I would now like to turn the call over to Andre for a review of our financial results. Andre?

Photo by National Cancer Institute on Unsplash

Andre Godin: Thank you, Horst. Good afternoon everyone. As Horst mentioned, I’ll take a few minutes to discuss the company’s financial performance for the fourth quarter as well as the full fiscal year ended December 31, 2022. For the fourth quarter, the total revenue amounted to $273,000 compared to $494,000 the same period last year. The change is mainly attributable to decrease in revenue from licensing agreement of $249,000, R&D revenue of $43,000 and product revenue of $36,000. That was offset partially by an increase in royalty on product sales of $7,000. The main difference comes from the one time licensing fee we received last year for Tadalafil. Operating costs and expenses were $2.7 million for Q4 2022 versus for the corresponding three-month period of 2021, a slight year-over-year reduction.

For Q4 2022, the company had an operating loss of $2.5 million, essentially in Q4 2021, as well as adjusted EBITDA, which was negative $2.3 million for Q4 2022, again, essentially unchanged from Q4 2021. Our net comprehensive loss was improved to $2.3 million or $0.01 on a basic and diluted per share basis for Q4 2022, compared to a net comprehensive loss of $2.9 million or $0.02 per share for the comparable period of 2021. For the full year total revenue for the 12-month amounted to $1 million compared to $1.5 million in 2021. Again, the main difference coming from the one time licensing fee we received last year for Tadalafil. The full year operating cost were $10.4 million for 2022 versus $9.5 million for 2021. For the full year 2022, the company had an operating loss of $9.4 million compared to an operating loss of $8 million for the comparable period of 2021.

Net comprehensive loss was $11.6 million or $0.07 €“ per basic and diluted share for a 12 months of 2022 compared to a net comprehensive loss of $9.8 million or again, $0.07 per basic and diluted share for the comparable period of 2021. As of December 31, 2021 €“ 2022, sorry, the company’s cash and short term investments totaled $2.5 million, which does not include the $3 million secured loan granted to IntelGenx by atai that we received in January of 2023, nor the 1 million in Canadian dollar in gross proceed from the private placement offering of the convertible note which we closed just earlier this month. I will turn the call back to Dr. Zerbe. Horst?

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

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Q&A Session

Operator: Thank you. At this time, we will be conducting a question-and-answer session. The first question is coming from , who is a Private Investor. Brent, your line is live.

Unidentified Analyst: Good afternoon, guys. We got a couple questions. So if either of these products are approved later this in April, are you all ready for production? How soon would production start?

Horst Zerbe: The current plan of our commercialization partners is to commence with the launch preparation, meaning manufacturing of validation batches later in the year. In the case of buprenorphine, I can tell you that the launch timeline is driven by litigation €“ patent for litigation. If you want more information on that, and to the extent that that is a public domain, Tommy can certainly comment on that. And our partner for the RIZAFILM also targets for manufacturing of validation batches, which would be the first saleable product for later in the year. I think Q3 or probably Q4 and both would then be lined up for actual commercialization in early 2024.

Unidentified Analyst: Okay. So it sounds like you’re still a ways off from revenues, any significant revenues. I mean, how long can the company survive without any revenues? I mean, do you plan to just keep diluting or what?

Horst Zerbe: I think what have to do with it? Andre, do you want to comment?

Andre Godin: Yes, I think that’s €“ it’s not defined I mean, or obviously just mentioned that what the partners are planning to do. But obviously when you €“ after we get these approval, it would be much clearer as to when both launch could take place. We’re expecting to get obviously some momentum with those approvals. And we have other things in the pipeline, so at some point where we might have to raise money but at a much higher evaluation as we are presently. So that’s why we were very conservative with the offering we did earlier this month. Those were investors that we’re already shareholders of the company. So we limited that offering. But we’re expecting to have great momentum and probably raise money to secure all the necessary step to be able to launch commercially these two products. But it could be Q3, Q4, Q1, but it will be, I guess, a little bit clearer when we get these approvals.

Unidentified Analyst: Okay. Thank you, guys.

Operator: Welcome. Thank you. The next question is coming from . Steve is a Private Investor. Steve, your line is live.

Unidentified Analyst: Hello. April 17, April 28 dates with PDUFA, doesn’t come through, what happens next? What’s the game plan there?

Stephen Kilmer: Horst, you want to comment or?

Horst Zerbe: Yes, I can certainly comment. I mean, that’s a very theoretical question. Our game plan depends on what the response is. At this point, we assume that we will €“ that the products will be approved should FDA require further information, then we will deal with that. That’s really all I can say at the moment. I simply, nobody knows at this point what FDA’s response will be at or around the PDUFA dates. We are in constant contact with FDA. They come regularly with requests, which indicates to us that they’re progressing well with the review. And at this point, we have not seen any showstoppers, but that’s really all I can say there. I cannot speculate on the outcome.

Unidentified Analyst: Okay. Because in the past, you’ve talked about this and we get dates set, and then next thing it’s more paperwork. It didn’t get this, it didn’t get that, in two public offerings there. One of them was five years ago, and my warrants expired, so I lost money on that. And now the second one ends at the end of this year. And I’m wondering what’s going to happen come April 17, 28, if we don’t get the approval? That was my question.

Horst Zerbe: No, I understand that we are as anxious as everybody else to get the approved, and we worked really hard to submit satisfactory responses to FDA, that’s all I can say.

Unidentified Analyst: Okay. And now, Andre just the last question, was you’re going to do another offering soon? Is that, Andre?

Andre Godin: Yes, it will depend on €“ that’s probably the plan, yes. But it will depend on the valuation and the terms that we might be able to get after April. I mean, we need, if we get these approval like we think we will, we will need to build inventory, we’ll need to get ready to get commercial ready. So there’s some investment there, and until we actually get the benefit from the product launch, it will take a few months. So that’s why we’ll need to fund the company, but I’m expecting the terms to be much better than the previous raise. And €“ but as Horst mentioned, we don’t know the outcome, but we’ll soon find out.

Unidentified Analyst: All right. Okay. Thank you.

Horst Zerbe: Thank you.

Andre Godin: Thank you. You’re welcome.

Operator: And the next question is coming from Hugh Kelly, Hugh is a Private Investor. Hugh, your line is live.

Hugh Kelly: Thank you. Good afternoon, folks, and welcome David to IntelGenx. Hey, one question I have I didn’t minute say hey, I apologize. On the Tadalafil, is that getting with the API issues that you believe resolved? Would that be we have a timeline for resubmission to the FDA?

Horst Zerbe: For the current timeline is that’s our partner Aquestive repeats the positive experiments or the experiments with the positive outcome that we conducted here IntelGenx and that led to the resolution of the problems that they encountered. They need to repeat that, which they’re currently doing. And once they have repeated that at the lab bench level, then they will proceed with manufacturing the clinical batch required for the irritation study. At this point, the expectation is that the study will be completed late summer, and that we submit our response to FDA in most probably Q4 of this year.

Hugh Kelly: Okay. And the anticipated date of announcing the undisclosed partner Dr. Zerbe?

Horst Zerbe: I’m sorry. I missed that acoustically.

Hugh Kelly: The anticipated date to disclose the partner?

Andre Godin: I think it would be upon approval.

Hugh Kelly: Okay.

Horst Zerbe: That’s what I believe, yes.

Andre Godin: Yes. Okay. So as soon as we get an approval, we’ll be able to disclose. Obviously, it’s a very credible and reputable partner, so we’re all anxious to be unable to announce it.

Hugh Kelly: Okay. And moving on to Montelukast, can you give us an update on the number of patients wrote for your clinical trial?

Horst Zerbe: Yes. For that, we brought Dr. Pietrantonio in our Clinical Director. And Frank, do you want to comment on that?

Frank Pietrantonio: Sure, sure. As of the March 29, 2023, we’ve screened over 105 patients. 44 have been randomized, and six are pendings. And a week or two, we should have another six randomized. Under the single dose regimen with the 10 milligram, we had about 25, and with the higher dose, the 60 milligram dose, we have over 20 subjects.

Hugh Kelly: Okay. And Frank, thanks for joining the call. The best guest and the completion of the study, I know it’s a moving target next year.

Frank Pietrantonio: Yes. So we were somewhat penalized with I guess from January when we started in 2022 because of, as I call post-pandemic syndrome, a lot of the sites did lose a lot of their staff. So there’s been a lot of retraining hesitancy from patients going to the hospitals after in fear of getting COVID. And so a lot of that activity, I would say, instead of starting January 2022 started I would say around April. So in terms of ameliorating the enrollment rate, so what we did is we opened new sites, and so based on that and we’re looking at ending, I guess, recruitment around June 2023 and hopefully by the end of the year of 2023. Yes.

Hugh Kelly: Okay. Thank you, Frank. And that is €“ any update on the status of the Par program? Is that going to go forward or is that postponed?

Horst Zerbe: Well, sorry, which Par is in I’m assuming you’re talking about Suboxone that’s what I €“ it has been penetrated into the public, Par is in bankruptcy proceedings. So Par, that program has discontinued with Par, we have seen interest right now, there are concrete discussions ongoing between Par and a company that’s interested in acquiring the end, but I can obviously not disclose any names or any details. I just want to send a message that while the program with Par has been discontinued, that does not necessarily mean that the program itself is that we are working very hard to progress it. But inevitably because of the unfortunate Par and Endo situation, there is a pretty significant delay. But we’re hopeful and actually confident that, that the program will continue.

Hugh Kelly: Okay. That’s you €“ that’s I anticipated and then the other quick question is on the recent patent announcement of Loxapine how does that €“ would that program become active in the future? Or is that still on hold due to other priorities?

Horst Zerbe: And there are €“ we are discussing the opportunity with actually at this point a European company, but nothing is concrete in terms of entering into an agreement. We’ve seen interest and we continue promoting the program because we really believe in that.

Hugh Kelly: A very sizable market if I’m €“ my facts right, and then I’ll go back in the queue. There’s on the atai programs is, did I hear you say they’re in discussions with the third program or did I misunderstand that?

Horst Zerbe: They are discussing internally and two more potential candidates and then €“ and we hope that at least one of them will make it and evolve to an active program. But at this point, the discussion about those candidates is being held internally at atai. We just know information €“ internal information that discussion is proceeding.

Hugh Kelly: All right. Then my €“ before I go back in the queue, on the products that were developed €“ that were not co-developed with two-way with your €“ whether announcements with your new patents or new platforms, is your potential to introduce with other partners, other cannabis THC film products? Or is that still locked up with the arbitration?

Horst Zerbe: That is certainly the case. So we definitely plan to proceed with our forms. Tommy, since it’s

Tommy Kenny: Yes, I can answer that. So

Horst Zerbe: Since legal is heavily involved. Maybe Tommy you should comment on that.

Tommy Kenny: So we’re continuing to develop product and we’re €“ the arbitration is still ongoing, but we hope to be able to announce the resolution in the coming months to investor. Right now everything is confidential, but we’re still working on the cannabis franchise, because we still pretty much believe in the product, whether it’s with Tilray or with a future partner that should be clarified in the coming month.

Hugh Kelly: Okay. I guess, but if there was €“ I guess the question was asked Tommy, would the development that with other products after the €“ it would develop without the participation too? Are you free to launch them or is that locked up? Was my

Tommy Kenny: This is not something I want to comment too clearly. I guess, there are to be €“ because it’s under the arbitration, there’s things to be clarified, but rest assure that we’re doing everything we can and we’re planning to launch those product in the future.

Hugh Kelly: All right. And any penetration with the cannabis film over there? And I know you had on your web, on your presentation, Germany, Israel, Spain, Portugal, Mexico, any opportunities presenting himself for the countries?

Horst Zerbe: Not at this point. That would require a footprint in the U.S. because of certain legal reasons with our footprint right now only in Canada. We would’ve problems, at least with THC with CBD, but there are at this point no active leads.

Hugh Kelly: Okay. And penetrating two into the U.S., is that on the horizon or is that still legal challenges with cannabis in the U.S.?

Horst Zerbe: It’s €“ it would be too.

Tommy Kenny: Maybe I can answer that, Horst. Currently, it’s the Canadian legislation that prevents us from exporting cannabis products. So unless there is a change in legislation. So we’re permitted under certain exception for medical purposes, but since the U.S. has a very undefined line between medical and consumer, it’s not something that’s permitted for us to export to the U.S. There would be a possibility that we work with the U.S. partner to manufacture it in the U.S. under our brand, but this is not something we can comment on at this point.

Hugh Kelly: Okay. Thank you, Tommy. And one last question then I’ll be quiet. Is there €“ are you partnering with three different animal healthcare companies or is it the original two.

Horst Zerbe: At this point, we have two firm contracts and a third one is being worked on.

Hugh Kelly: Okay. Okay. Thank you. I’ll go back in a queue. Thank you all.

Horst Zerbe: You’re welcome.

Operator: Thank you. And the next question is coming from Trevor Lee. Trevor is a Private Investor. Trevor, your line is live.

Trevor Lee: Hey, how’s gone? I hada quick few questions for you today. Thanks for taking the call. I heard you had a VetaFilm study with the results Q2. Will there be any more studies necessary after that one before commercialization or would that be the last one?

Horst Zerbe: That is a €“ the study that we were €“ that I was discussing or mentioning is a palatability study. And we expect for the key programs that we are working on that the studies will be necessary. That’s €“ these €“ those are just regulatory requirements without those studies, the product wouldn’t be approvable.

Trevor Lee: Okay. Yes. So I was just wondering if there’d be more studies after that one. Would that €“ if that’s

Horst Zerbe: Yes, for sure.

Trevor Lee: Okay. Wondering if you can give an update on like any sort of specific sales numbers for support Spain or CBD products? Like, are you seeing any sort of consistent growth in the CBD or is it kind of leveled off? What is that looking like there?

Horst Zerbe: Andre, do you want to comment?

Andre Godin: Yes, but I mean for RIZAPORT in Spain I think that Horst mentioned that in the introduction that excel this is working on avoiding generic substitution. So that should probably increase the level of sales over there. But there was a peak at first, but now it has declined. So they’re looking at ways to go back on a growing path. So for the CBD, we had a nice order in Q1 and we’re expecting the growth to continue, but we’re not seeing extreme growth at this point. And that’s why we’ve been working on this THC formulation, because we all believe that THC might be more suitable for our technology. But for the time being, it’s pretty steady, but we don’t see that much growth into these product.

Trevor Lee: Yes. And then I think Tommy, for the THC till rate thing, did you say the coming month singular or months plural?

Tommy Kenny: So right now the arbitration is ongoing. I cannot really comment on it. It’s the coming months, several months before we can announce something, but it takes a life of itself. You never know when there could be a resolution earlier, but to manage expectation, we’re looking at several months to be able to announce a resolution and hopefully will be successful in announcing that.

Trevor Lee: Okay. Has there been any talks with atai about any further loans or any sort of share purchasing as part of the original deal or any additional capital coming in from that route?

Andre Godin: Not at the moment, no.

Trevor Lee: Okay.

Andre Godin: But atai still has their option, just to be clear, their option are good for three years. So to some extent, it will also depend on the share price.

Trevor Lee: Okay. And then Dr. Kideckel, if you’re on the call, I was just curious what maybe Horst, if you could clarify what made you guys choose him? And what is you plan to focus on?

Horst Zerbe: I’ll let David speak for himself. David, why don’t you introduce yourself?

David Kideckel: Sure. Thanks. Yes. So, I just joined last week to IntelGenx to lead the Corporate Development Department and really in tandem with the executive team. We’re going to be spearheading an initiative to look for new business development opportunities, while also maintaining the existing business development portfolio, which is why the title actually come strategic alliances. But just quickly to give you a quick background, what I bring to the table is approximately 20 years of combined experience between pharmaceuticals and biotechnology, coupled with capital markets and finance experience. So it’s not really unique blend of the two different worlds, all within life sciences and pharmaceuticals to be able to what we hope will drive shareholder value for IntelGenx.

Trevor Lee: Yes. Is there any other €“ like any kind of strategies that you think IntelGenx has been missing out on or anything different that you would do, I guess, in the future?

David Kideckel: I think this strategy is sound. Again, I’ve only been in the role for about a week now. So, I’m coming up to speed. But I think with the oral film technology and looking at the generic market, one strategy in particular, I think going after those companies, looking at innovator companies and seeing, which products will be going into generic over the next couple of years or so. So so-called low-hanging fruit. I think that’s an area that we could more further develop to target moving forward. And that’s just one example, but there will be others as I .

Horst Zerbe: Maybe I can add to that. We not too long ago, maybe half a year ago, hired another business development person, specifically focusing on our CDMO business. At €“ that person, Mihai has initiated a systematic outreach campaign, has contacted in excess of 100, I think, 130 or so companies where we think that our CDMO services could be used. And he has, in fact, received a pretty interesting feedback. He has initiated concrete program discussions with right now, three companies. So that is a direction that we will keep pursuing with some priority, applying our existing manufacturing and R&D technologies and capabilities to businesses interested in our CDMO services. And just as a side effect, I think I’ve mentioned in the past that our film equipment is also capable of handling transdermal products.

And so one of these CDMO contacts is actually concretely discussing a transdermal program with us. So that’s certainly one focal area in our business development efforts. And a second person in David’s group is looking more closely into animal health. We mentioned two opportunities, and we do see ever increasing interest in applying our film technology to the animal health space.

Trevor Lee: Okay. Nice. I just have a couple more. For the Montelukast, you said enrollment maybe June and then study €“ would that be study results by the end of the year? Or that speed as last dosing by the end of the year?

Horst Zerbe: It’s yes, but I’ll let Frank comment.

Frank Pietrantonio: Yes. In terms of the results of €“ so we’re targeting the remaining recruitment would end, we’re estimating in June, and then you have to tack on €“ the patients have to be dosed for six months. So that’s why we’re looking at an estimate at the end of 2023. And at that point, close the database, and then you take a look at all the data, but the results…

Trevor Lee: How long would the data €“ like look, how long do you think that would take? Another few months or?

Frank Pietrantonio: Yes. Typically, the turnaround time is about one month to three months. So we close the database. And then we do the analysis and then create a report €“ study report based on results.

Trevor Lee: Okay. And then do you guys have like a rough plan for after that? Would it be a Phase 3 trial? Or when would that begin?

Horst Zerbe: Our strategy there is very clear. We will commit our own money only to completing this Phase 2 exploratory study, proof-of-concept study. The feedback that we are receiving from the market, from interested potential partners is such that they would contemplate entering into an agreement once we’ve been able to show the results of this proof-of-concept study. But we would not ourselves enter into any full-blown Phase 2 study. That would be the responsibility of any future partner.

Trevor Lee: Okay. But it would be another Phase 2.

Horst Zerbe: That would have to be the case, yes.

Trevor Lee: Okay. Yes. I think that’s all I had. Yes, I think that’s all I have for today. I appreciate it.

Horst Zerbe: Thank you.

Operator: Thank you. And we did have a follow-up coming from Hugh Kelly. Hugh, your line is live.

Hugh Kelly: Thank you. Regarding the Montelukast day release at the end of the year, Frank, is any feedback or intelligence I think Emory has been about five months since they completed their study. Any insights of they made progress or is that, I know the expectations were low on from prior calls, but are you hearing anything in that?

Frank Pietrantonio: Hi. Good question. We’ve been actively trying to get access to that information. I do know, however, that they initially were targeting 150 patients and then reduced that to 37 patients. And most unlikely, the reason is because of the pandemic, which imposed two years, we have not seen any of those results, which would be interesting. And would be nice to look at and share as well, so.

Hugh Kelly: Okay.

Frank Pietrantonio: But I have not yet seen anything.

Hugh Kelly: Okay. As a follow-up to that would €“ I appreciate that, Frank. Follow-up would…

Frank Pietrantonio: Okay. Sorry, go ahead, Hugh.

Hugh Kelly: I was just following up to the other gentleman’s questions. Once the data is reduced in 2024 presented, if it looks good, that’s when the €“ you open up the discussions with potential partners for Montelukast.

Frank Pietrantonio: Yes.

Hugh Kelly: Okay. And then my last question would be on the cannabis side, would the other film or film companies that do not have the breadth and depth of IntelGenx? Do you see them any of those emerging as potential competitors to our products?

Frank Pietrantonio: Not really. What we see is, and what we’re hearing in this space is that there is a €“ at this point still relatively small patient population that is firmly committed to the films and are €“ that are certainly repeat consumers. And so that’s €“ and so the objective in the industry is to systematically grow that patient base. And that’s what we’re targeting.

Hugh Kelly: Okay. And then €“ with the AdVersa product that’s on your technology, on the website, is there any interest in any partners entering in any collaborations on that product?

Frank Pietrantonio: We have more or less discontinued that. Tommy, maybe you want to comment on to the extent we can comment on what happened with AdVersa €“ with the AdVersa program?

Tommy Kenny: Yes. The AdVersa program was divested. So we sold this program and we still have a residual royalty to Tetra Bio-Pharma. So that’s been mucoadhesive though. It’s €“ they own the IP for Canada and the U.S. at the moment. If they’re not doing anything in the future, we might want to see if there is anything we can do. But at this point, we’re not pursuing anything. To be fair, we’re really focusing our business on film. And since this was not related to film, we decided to divest it at that time, and we still believe it was the best decision.

Hugh Kelly: Okay. Thank you.

Frank Pietrantonio: To add to that you, if we were contemplating any expansion of our technology portfolio, it would go into the transdermal space where we have actual conversations, because that is a natural extension of what we do with the films. It does essentially require the same manufacturing equipment. So that’s what we would be looking at if we contemplated our €“ a diversification of our technology portfolio.

Hugh Kelly: Okay.

Tommy Kenny: And also, if I can add, like, we are always developing new film platforms. So although for investor for the art side do well, sometimes it seems like a plug and play, but every active is a new platform and a new technology. And we’re constantly filing new application and patents to expand our technology portfolio for films and in the future transdermal.

Hugh Kelly: And the €“ if would €“ the two dates before the FDA get approval, is there milestone payments anticipated for the two products on approval?

Tommy Kenny: There’s one, yes. There is one milestone upon approval for RIZAFILM or RIZAPORT which is now which is, I think is due 60 days. But I don’t have the specific time, but there is a €“ I believe a $100,000 milestone. But there is one milestone for RIZAPORT for sure.

Hugh Kelly: Okay. All right. Thank you. Thank you.

Tommy Kenny: Thank you, Hugh.

Operator: Thank you. And the next question is coming from Lindsey Murphy. Lindsey is a private investor. Lindsey, your line is live.

Lindsey Murphy: Hi. Thank you for taking my call. I just had a quick question and was wondering if there was any update on the VevaDerm?

Horst Zerbe: Which one? I missed that acoustically.

Lindsey Murphy: It was the VevaDerm. If there was any update with the VevaDerm.

Frank Pietrantonio: I think she mean VevaDerm, which is our trademark for transdermal.

Lindsey Murphy: Okay. Yes, I briefly commented on that before. We are in active discussions with a European company about two transdermal programs. So we have determined that the transdermal space, and that’s where VevaDerm, the name comes from is an attractive technology and an attractive market for us. So we’re actively pursuing that. And like I said two €“ we’re discussing two opportunities. However, that’s early stage. So it’ll be a while until we can do €“ we’ll be able to present any more tangible or advanced project. But principally speaking, there is definite activity in that space.

Lindsey Murphy: Okay. Thank you. I really appreciate it. I apologize I missed that earlier.

Horst Zerbe: No problem.

Operator: Thank you. And we have a follow-up coming from Trevor Lee . Trevor, your line is live.

Unidentified Analyst: Hey, I just had one more thing I was just thinking of while listening. I know in the past, Horst you said like you don’t want to €“ you’re not about releasing fluff news or anything that’s not concrete. Have you considered, just doing more to bring awareness to the company? Like, if we need to raise capital in the future, I think bringing in investors or just bringing in awareness to the company couldn’t hurt. Like you having more of a social media presence or on Twitter with just leading people to the company via information about Alzheimer’s or some of the €“ some of the causes that we’re looking to help. Is that anything that you might be interested in?

Horst Zerbe: We definitely are. That is actually a subject that we’re discussing very often and regularly. I mean, as far as outreach to investors is concerned that is in Andre’s domain. He’s doing that. I think going forward and that was one of the many reasons as to why we brought David in. He will be supported by David, who has pretty significant capital markets expertise beside his BD background. We also have a communications group that regularly discusses what we can do in terms of bringing our message to investors. So we’re trying to be more active in that space. It is recognized as an area that we need to step up our efforts. Tommy, with you being a member of that group, if you want to add anything, be free.

Tommy Kenny: Yes, we know that we need to improve on the social media front. As for the hard news, the press releases, I mean, what you said is consistent. We want to only release things that are material and we don’t want to release press release about nothing. So we will work as hard as we can to improve our social media presence, but the press release will remain hard news as the investor would expect it and not those press release that means nothing.

Unidentified Analyst: That sounds good. Yes, I think €“ I think the company could definitely benefit from just more of a presence just to bring awareness. Power of the retail investors has definitely grown as well in the past couple years. I get to piggyback off that, maybe more presence at conferences and stuff like that. I was curious if there was any sort of, anything happened at the Roth conference on the West Coast like Andre

Horst Zerbe: That’s Andre’s area.

Andre Godin: Yes. I mean that was actually a very good conference. I met a lot of investors as well as Roth analysts, so we’re expecting to get some good feedback from that. There is obviously since we’re on the bulletin board in the U.S. sometimes it’s €“ it might be a little bit difficult to attract a lot of healthcare institution. But I think that being on the big board in Toronto that has improved our ability to attract healthcare institution from the U.S. But yes, there was good meeting and we’re expecting more coverage too there. We were present at €“ also at JP Morgan, not at the big conference, but €“ and there was a lot of interest from different banks and different analysts. So we’re pushing towards that direction to get more coverage. We have one coverage right now from Canada, but I think that we’re expecting an opening to get a few more from the U.S.

Unidentified Analyst: Yes. I think that would go a long way like more analyst coverage and stuff, but…

Andre Godin: Yes definitely.

Unidentified Analyst: Yes. That’s all I had for today guys.

Andre Godin: Thank you.

Horst Zerbe: Thank you.

Operator: Thank you. And we have a question from James Larcom from Ontario Limited . James, your line is live.

Unidentified Analyst: Hello, folks. Yes. Good to speak with you. This is my first time calling into one of your Investor Relations, but I’ve been invested long for a little while. I’m actually quite optimistic. David, you joining our team, you’re, if I understand correctly, Rotman from University in Toronto. Rotman, is that correct?

David Kideckel: Yes. I did. Hi, thanks for the question. PhD at University of Toronto and then an MBA at Rotman at University of Toronto as well, yes.

Unidentified Analyst: Amazing. Okay. Because I did some work with CDL a few years back and in the quantum space. So seeing what may be to the American market, not necessarily the visible heavy hitter come on to the team, I think, you may be here. Can you tell me when you were first approached by IntelGenx, what excited you about joining the team?

David Kideckel: Yes. I think that’s a really good question. I think we’re at a pivotal stage right now. You have a company that’s been around for quite some time now, around 20 years in the oral film markets. And then the types of drugs that we’re actually targeting, generics, in particular, I felt €“ I’m a former analyst as well. We talked about my capital markets experience, but I mean I was a former analyst. So the former investors question too around increased presence. I mean I completely get it because I’ve worn that hat before. So I think just to go back to your question here, what excited me was the opportunities that we have, the markets that IntelGenx is competing in are quite large, and the technology is second to none.

When you look at the technology itself, the only oral film type of technology within Canada. There are others, obviously, in other parts of the world, but I think with Horst’s expertise and really the entire management teams here, I think now is the time for IntelGenx to really make inroads. So I’m certainly counting on that and betting on it as I put my career on the line to join the company and move forward here. So I’m excited to see how things will turn not just with FDA’s upcoming decisions, but also more specifically and more practically around how business development is going to aid in further developments here.

Unidentified Analyst: Okay. I’m really excited that you’re talking about generics because I don’t think everybody on this call really understands the lay of the land in Canada with regards to generics patterns and drugs because in the U.S., they have like longer-term patents for research and development. But in Canada, we have €“ is it correct, five years on generic transfer?

Horst Zerbe: Tommy, can you respond to that?

Tommy Kenny: I don’t know any specifics. I know that there is patents have a 20-year life span, and I think this is the same in Canada as well. But to be fair we

Unidentified Analyst: My understanding was part of the big reason why American Pharmaceutical like mail order drugs were destabilized, and the like late 1990s, early 2000s was because of the Canadian generics laws, but I could be misremembering. Regardless, I do think that there’s a really big opportunity here in generics. So I’m glad to hear that that’s the play. When you guys talk about taking on a $3 million cash infusion at an interesting time, I can’t remember who talked about this, but I got the impression that you were saying this is a bridge towards something larger. We’ve got like something in the background, and we don’t want to take on like a $9 million infusion and give up like 3%, 5% the company €“ when that $9 million may be worth like 1% to 3% of the company in the near future is I know that may be in the realm of speculation, but what kind of burn down are we looking at for $3 million when we just increased €“ we’ve just added a headcount of 300,000 for, I hope, a successful position, but we’re talking about a company of 20 to 40 people, right?

Andre Godin: We’re about 50 people.

Unidentified Analyst: About 50%. Okay. Excellent, cool. I am sorry. I have tried to do my research as much as possible a lot of IntelGenx. I’m really excited about the company. But €“ so that $3 million across 50 people, that’s looking like at most six months run down, right?

Andre Godin: Yes, I’m not too sure where you’re taking that $3 million from.

Unidentified Analyst: I’m talking about the new notes that you guys negotiated.

Andre Godin: No, the note was $1 million that we closed earlier this month and the $3 million that I referred to €“ No, the $3 million I referred to was a loan from atai, our partner.

Unidentified Analyst: Right, okay. I am getting we got you €“ to next step. Yes. You’re right.

Andre Godin: So we got that $3 million in January, and we closed €“ that was $3 million, and we closed CAD $1 million on a convertible note earlier this month.

Unidentified Analyst: Got it. Okay. I understand that. Then that $1 million is actually closer to what I was thinking about because that won’t really last very long, would it?

Andre Godin: No. I mean the plan was not to fund the company long term. I mean it €“ we were planning initially €“ sure. Yes.

Unidentified Analyst: So one could speculate, but I think there was some rumblings earlier on in the call where, oh, you’re going to have to draw in money again soon. And I just want other investors to realize that that’s actually part of the game, but the idea is to like get as little as possible now so that you can get more later at a lower valuation. I guess that’s just what I’, so yes. Yes.

David Kideckel: Yes, that’s the plan.

Unidentified Analyst: Excellent. I’m happy to hear that. Really, that’s all my questions. Then I’m going to pass the floor and thanks David for joining the team.

David Kideckel: Thank you very much.

Operator: Thank you. There were no other questions in queue. I would now like to hand the call back to Dr. Horst Zerbe for closing remarks.

Horst Zerbe: Thank you. So this concludes our fourth quarter and full year 2022 investor update call. And as always, I would once again like to thank the IntelGenx team for its hard work and dedication, our Board of Directors for their continued support of the management team and finally our investors for continuing to believe in and supporting this. Thank you all and goodbye.

Operator: Thank you. This does conclude today’s conference. You may disconnect your lines at this time. Have a wonderful day. Thank you for your participation.