IntelGenx Technologies Corp.
Q4 2020 Earnings Call Transcript

Published: 25 Mar 2021

[Operator:]

Good afternoon everyone, and welcome to today's IntelGenx Technologies Corp. Fourth Quarter and Full-Year 2020 Call and Webcast. At this time, all participants are in a listen-only mode. Later, you will have an opportunity to ask a question during the question-and-answer session. It is now my pleasure to turn today's program over to Stephen Kilmer, Investor Relations. Please go ahead.

[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; André Godin, our President and CFO; Dana Matzen, our VP, Business and Corporate Development; and Tommy Kenny, Vice President, Intellectual Property and Legal Affairs, General Counsel of IntelGenx Corp.

[Horst Zerbe:]

Thank you, Steve. Good afternoon everyone, and thank you for joining us for the IntelGenx fourth quarter and full-year 2020 conference call. This time we are going to break with tradition a little. First, André will review our Q4 and full-year 2020 financial results, then I’m going to review the partnership with atai that we announced earlier this month, as well as provide an update on our key pipeline projects. Following that, we will open up the line for your questions. With that I will now turn the call over to André. André?

[André 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, 2020. As we mentioned in today's press release, the positive impact of our performance improvement program continued to be reflected in the numbers. For the fourth quarter, the total revenue for 2020 fourth quarter amounted to 790,000, compared to 68,000 in the same period last year. Greater than 11 fold increase in revenue is attributable to an increase in revenues from licensing agreements of 671,000, and an increase in R&D revenue of . Operating costs and expenses were 1.8 million for Q4 2020 versus 2.4 million for their corresponding three month period of 2019. The decrease is mainly attributable to a decrease in R&D expenses, and a decrease of 127,000 SG&A, compared to the same period last year. For Q4 2020, the company had an operating loss of 1 million, compared to an operating loss of 2.7 million for the comparable period of 2019. That's an improvement of $1.7 million in this quarter alone. Adjusted EBITDA was negative 754,000 for Q4 2020, compared to negative 2.1 million for the same period last year, an improvement of $1.3 million. Net comprehensive loss was 1.3 million or $0.01 on a basic and diluted per share basis for Q4 2020, compared to net comprehensive loss of 2.7 million or $0.03 per share for the comparable period of 2019.

[Horst Zerbe:]

Thanks André. First on the atai partnership. Last week, we announced our strategic partnership with atai Life Sciences, biopharmaceutical company with an attractive portfolio of psychedelic and non-psychedelic compounds intended for the treatment of mental health disorders. In the course of our dealings with atai in 2020, we realized that psychedelics have the potential to become a hugely attractive alternative for the treatment of mental health diseases. And we became aware that our collaboration, which initially was simply a feasibility agreement, offered the company the opportunity to become a significant player in the market with significant growth potential that motivated us to approach atai in late 2020 with the proposal for negotiating a strategic partnership. Through this partnership, we will integrate our film technology with atai’s existing pipeline, and work exclusively with them in the field of compounds, skin, or treatment of mental health disorders, or compounds that have psychedelic, entactogenic, and properties for those who are not so familiar with these entactogenic compounds are create empathy, and compounds have hallucinogenic properties. Now, through our prior collaboration with atai, during that feasibility study, we found that our film technology can address some of the unique complexities of developing psychedelic compounds for the treatment of mental health disorders, and can play an integral role in clearing a clinical pathway for atai’s existing pipeline, as well as create promising development opportunities for us.

[Operator:]

And we will take our first question from , who is a Private Investor. Please go ahead.

[Unidentified Analyst:]

Hi, good afternoon, everyone. My first question, Horst is, in regards to the RIZAPORT Spain, the projected launch was supposed to be in Q1 and I believe you said it's in June; could you please shed some light on this?

[Horst Zerbe:]

Yeah. That has to do with the validation. The regulatory requirement in the target country in Spain is such that three validation batches have to be completed in order to perform the launch. And there is, and these are relatively simple technical reasons that in the meantime, have been overcome and the validation is progressing.

[Unidentified Analyst:]

Okay. So, would it be safe to say that June is going to be a definite month for the launch of RIZAPORT Spain?

[Horst Zerbe:]

Unless something really unexpected and I wouldn't know, at this time, what could happen, would happen, my answer would be yes.

[Unidentified Analyst:]

Okay. And my next question is, in regards to the cannabis, or sorry, CBD VersaFilm with the heritage, so just to make sure I heard you correctly, you said that you will be delivering the first batch to Heritage by end of this quarter, which literally ends next week.

[Horst Zerbe:]

Yes, that is correct. That's the target. The batch has been manufactured. It has been packaged. It sits in our warehouse. We're waiting for the final analytical release. And the very last results are coming from an external lab, that’s micro testing that's supposed to come by the end of this week or at the latest early next week. So, we are at this point still on target to deliver to ship I should say in Q1. And so my answer is yes. We're on target for that.

[Unidentified Analyst:]

Okay. And I just have two more questions. The third question is in regards to the Suboxone VersaFilm, with Par, any update on that and a potential near-term launch?

[Horst Zerbe:]

That product has moved back a little, mostly for capacity reasons. We have to perform under FDA requirements, a so-called site change. The site change involves the manufacturing of three full scale batches, plus we might, but that's not sure yet, we might have to repeat the biostudy. And the manufacturing of these full scale batches is going to take time and effort. We are debating to later this year, but that is still open. We have competing projects that compete for production space.

[Unidentified Analyst:]

Okay. And my last question for you is, in regards to the Tadalafil, you had mentioned that the irritation study received positive feedback from the FDA, and that you were in significant discussions with a partner, and that the partnership should be announced in Q2? Could you shed more light on that? And what are going to be your main monetary or, sorry, your main income drivers going forward in the next quarter?

[Horst Zerbe:]

You mean for this particular product or more…?

[Unidentified Analyst:]

No, I'm sorry. I kind of split it into two. I want to, if you can shed some more light on the Tadalafil and the partnership, and the next question was for André in regards to income for the company when do you guys see yourself going into the cash flow positive territory and with which products do you see that happening first?

[Horst Zerbe:]

Yeah. So, let me respond to your question pertaining to Tadalafil, and unfortunately, I can't provide any details. These are ongoing discussions. Dana is conducting those; mainly she is on the call as well. What I can say is that we are talking to two companies one in Canada, the other one the U.S., but I cannot provide at this point any specifics. Sorry about that.

[Unidentified Analyst:]

No problem.

[André Godin:]

Yeah, so, it’s André here. We obviously were expecting to launch our CBD film next week. So, and our RIZAPORT in Spain in June, there will be or should be also some R&D revenue and also, you know, based on the discussion we will have with our potential partner with the Tadalafil product that could also generate revenue. But in order to – been in a situation where we would be able to cover our burn rates or the cash flow positives, it's probably not going to come until 2022, and but with the obviously with the investment of atai that will allow us to get to that point, you know, without needing any further investment even though atai might invest more than 12.3 million, but we are expecting that with the 12.3 million we should be able to get to a point where we're profitable at least cash flow positive.

[Unidentified Analyst:]

Okay. Thank you so much, guys. And I wish you guys the best of luck. And I think the company has made a tremendous achievement, you know, since the pandemic and I congratulate all of you on all the hard work. Thank you so much.

[Horst Zerbe:]

Thank you.

[André Godin:]

Thank you.

[Operator:]

And we have another question from – never mind. I apologize. We have no further questions at this time. I will now turn it back over to Dr. Zerbe for closing remarks.

[Horst Zerbe:]

Yeah. So, thank you very much. In closing, I just would like to thank all our investors for their ongoing support. And I would, that really comes from that and would really ask every single investor to take advantage of your voting rights and vote in favor of the atai investment. I think that it has become very obvious through the various publications that this is a huge step forward for this company. So, all investors please contribute to making this happen. Thank you very much again.

[Operator:]

This does conclude our presentation. Thank you for your participation. You may disconnect at any time.