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.
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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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