We alerted our subscribers on IntelGenx Technologies Corp (OTCMKTS:IGXT) last month as our pharma focus. We said at the time that the stocks recent pullback was a buying opportunity as IGXT had set itself up well for future gains after selling its royalty on future sales of Forfivo XL® to SWK Holdings Corporation (OTCMKTS:SWKH) for $6 million (CAD$8 million). Shares are now up more than 50% from where we first recommended them and are now on the verge of a breakout above $1 a share.First up, a little background on the pharma player. 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.Since our last report, IGXT reported second quarter earnings. Revenues reached $672 thousand, an increase of 15% over the same period last year. Net comprehensive loss was ($806 thousand), compared to a net comprehensive loss of ($220 thousand) over the same period last year. Adjusted EBITDA loss was ($665 thousand), compared to adjusted EBITDA loss of ($186 thousand) over the same period last year. Cash and cash equivalents totaled $1.1 million as at June 30, 2016, which does not include the money from selling its royalty on Forfivo XL. CEO Dr. Horst G. Zerbe said:
"IntelGenx has made considerable progress this past quarter. We successfully completed our first agreement for Rizaport in Spain with Grupo Juste, which we believe is significant as it will open new markets to build upon going forward. The initiation of our phase 1 study of Montelukast is an important step forward in what is our most important and promising drug repurposing opportunity. We are most excited about the future prospects for IntelGenx as we continue to advance the company forward into a global leader in pharmaceutical oral film development and manufacturing."
The company also appointed Mark Nawacki as a new member of the Board of Directors. He is currently the President and CEO of Searchlight Pharma Inc., a Canadian-based specialty pharmaceutical company focused on the acquisition and commercialization of innovative and unique healthcare and pharmaceutical products. What we like about Nawacki is that he has experience building pharma companies. He helped build Paladin Labs by taking revenues from $20 million annually to almost $270 million annually. Paladin was subsequently acquired by Endo International in 2014 for over $3 billion. Worth noting is that the value of Paladin Labs was just $75 million when he started. This is just a little more than IGXT's current market cap of $56 million.At the end of last month, IGXT completed the pilot clinical study for Montelukast VersaFilm™ which demonstrated a significantly improved pharmacokinetic profile against the reference product. Montelukast is a unique drug repurposing opportunity for the treatment of degenerative diseases of the brain, such as mild cognitive impairment and Alzheimer's disease, the most prominent form of dementia.
The study data confirmed that buccal absorption of the drug from the Montelukast film product resulted in a significally improved bioavailability of the drug compared to the commercial tablet. The study was designed as a single-dose, randomized, two-way cross-over pilot study in 8 healthy subjects. AUC0-inf was 3863 ± 1343 ng/ml*h-1 for the IntelGenx product vs. 2697 ± 1003 ng/ml*h-1 for the reference product Singulair® tablets, representing a 52% increase in bioavailability of the drug after administration of the IntelGenx film product. In addition, the study data confirmed that Montelukast crosses the blood/brain barrier when administered using IntelGenx' Versafilm™ delivery technology.
IGXT said that it began "preparation for a phase II-a proof-of-concept (POC) study. Patient enrollment for this study is expected to commence in Q1/2017. The Company expects the results from the study to be available in Q4/2017. Based on the outcome of this first efficacy trial in humans, IntelGenx will be actively seeking a partnership or alliance opportunity to further advance developmental work and commercialization of this product." CEO Dr. Horst G. Zerbe added:
"We are very pleased by the results of the study which confirmed that our Montelukast VersaFilm™ significantly improves the bioavailability of the drug when given as an oral film product. The study demonstrates that the VersaFilm™ technology is an effective delivery system for CNS applications. Montelukast is an important drug repurposing opportunity that the company has in its product pipeline which could potentially become a multi-billion-dollar product in the large and underserved market for degenerative diseases of the brain."
We will be monitoring IGXT closely. For the latest updates, sign up below!
Disclosure: We have NO position in IGXT and have NOT been compensated for this article.
Discover Hidden Gems
Don't miss the next big opportunity. Subscribe for timely alerts on potential market movers.
