IntelGenx Technologies Inc (OTCMKTS:IGXT) has quickly run up the charts after the company sold its royalty on future sales of Forfivo XL® to SWK Holdings Corporation (OTCMKTS:SWKH) for $6 million (CAD$8 million). Forfivo XL® (Bupropion extended-release) is the first 450 mg bupropion HCl tablet indicated for Major Depressive Disorder, approved by the FDA. However, shares couldn't hold their gains and profit taking set in. As we take a closer look, we believe the pullback is a buying opportunity as IGXT has set itself up well for future gains.IGXT describes itself as leading oral drug delivery company focused on the development and manufacturing of innovative pharmaceutical oral films based on its proprietary VersaFilm™ technology platform. Established in 2003, the Montreal-based company is listed on the TSX-V and OTC-QX. The company's state-of-the art manufacturing facility, established for the VersaFilm™ technology platform, supports lab-scale to pilot and commercial-scale production, offering full service capabilities to its clients.Under the terms of the deal, SWK will pay IntelGenx $6 million at closing. In return for, (i) 100% of any and all royalties (as defined in the Edgemont Pharmaceuticals, LLC License Agreement) or similar royalty amounts received on or after April 1, 2016, (ii) 100% of the $2 million milestone payment upon Edgemont reaching annual net sales of $15 million, and (iii) 35% of all potential future milestone payments. Patent protection for Forfivo XL® in the United States expires in 2027 with an authorized generic entering the market in January 2018.We believe this is a great deal for IGXT for several reasons. First, the company gets an infusion of $6 million without having to dilute existing shareholders. This will give the company roughly $8 million in cash. Second, it allows the company to focus on advancing its oral pipeline. This is where the real money is to be made as IGXT hopes to be the market leader in oral films. When you consider that CEO Dr. Horst G. Zerbe co-developed Listerine breath strips, success is highly likely.Patients these days prefer a much better drug delivery system that having to swallow pills. Strips have proven to provide quicker action to relieve symptoms. Furthermore, many people have difficulty swallowing pills and are ideal for children and the elderly. Here, is where the greatest growth is as North Americans over 65 will grow from 54 million to 85 million over the next 15 years.Last month, IGXT announced the phase 1 clinical trial of montelukast, a unique drug repurposing opportunity for the treatment of degenerative diseases of the brain, such as: mild cognitive impairment and Alzheimers disease, the most prominent form of dementia. The objectives of the trial are to demonstrate: 1. IntelGenx oral film product will provide therapeutically effective blood levels of montelukast, and; 2. montelukast when delivered using IntelGenx oral film crosses the blood brain barrier.Montelukast (trade name Singulair) is a leukotriene receptor antagonist (LTRA) used for the maintenance treatment of asthma and to relieve symptoms of seasonal allergies. Montelukast is a CysLT1 antagonist; it blocks the action of leukotriene D4 (and secondary ligands LTC4 and LTE4) on the cysteinyl leukotriene receptor CysLT1 in the lungs and bronchial tubes by binding to it. This reduces the bronchoconstriction otherwise caused by the leukotriene and results in less inflammation. The "Mont" in Montelukast stands for Montreal, the place where Merck developed the drug.IntelGenx expects results from the phase 1 trial to be available in September 2016. Following the completion of the phase 1 results, the company will begin preparation work to initiate a phase 2 study where patients will be enrolled. IntelGenx will be actively seeking a partnership or alliance opportunity to complete the remaining developmental work and commercialization of this product. CEO Dr. Horst G. Zerbe said:
"Montelukast is by far the most important and promising drug repurposing opportunity that the company has in its product pipeline. IntelGenx is taking a leadership position in this most serious unmet need affecting millions globally. The market for degenerative diseases of the brain is a multi-billion-dollar opportunity for the company. We look forward to communicating the results from the phase 1 study and advancing montelukast forward to reach its full potential."
Another product in the pipeline is RIZAPORT, a proprietary oral thin film formulation of rizatriptan benzoate, a 5-HT1receptor agonist and the active drug in Merck & Co.'s Maxalt®. RIZAPORT™ 5mg and 10mg was approved for marketing in Germany in October 2015, under the European Decentralized Procedure. A New Drug Application for RIZAPORT™ was also filed with the U.S. FDA in 2013 and a CRL was received in 2014.RIZAPORT™ is based on IntelGenx's proprietary "VersaFilm™" technology. It dissolves rapidly and releases its active ingredient in the mouth, leading to efficient absorption of the drug through the gastrointestinal tract. The administration method of the RIZAPORT™ oral thin film, which does not require the patient to swallow a pill or consume water, along with its pleasant flavor, presents a potentially attractive therapeutic alternative for many migraine patients, including those who suffer from migraine-related nausea, estimated to be approximately 80% of the total migraine patient population.IGXT is also targeting erectile dysfunction with Tadalafil VersaFilm. This is the first oral thin film using IntelGenx proprietary drug delivery technology VersaFilm for ED and contains tadalafil (Cialis/Eli Lilly), a major molecule in the treatment of ED. The advantage is that the patient doesn't need water to take. They only need to slip the strip on the tongue and they're ready to go. The company plans a 505(b)(2) US NDA submission by the end of this year. If all goes according to plan, we're looking at a US launch by the end of 2017.Currently trading with a market cap of $39 million, IGXT is one OTC pharma stock that has a lot in the pipeline. All it needs is one product to hit, and the company will be worth 10x its current market cap. IGXT has multi-bagger written all over it. We'll know more after the markets close on August 11th when the company reports second quarter results and provides an update on the earnings call. We will be updating Insider Financial as soon as we know more. Sign up below and get our latest updates on IGXT!Disclosure: We have no position in IGXT and have not been compensated for this article.
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