IntelGenx Technologies Corp.

Stephen Kilmer - Investor Relations Dr. Horst Zerbe - President and Chief Executive Officer Andre Godin - Executive Vice President and CFO

Sean Lee - H.C. Wainwright Greg Eisen - Singular Research

Thank you, Christine. Good afternoon, everyone.

And thank you for joining us on today’s call. With me on the line are Dr.

Horst Zerbe, IntelGenx’s President and CEO and Andre Godin, our Executive Vice President and CFO. Before we begin, I would like to remind you that all amounts mentioned today are in U.S.

dollars. And today’s call may contain forward-looking information that represent 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 could be found in our filings with the U.S.

and Canadian Securities Commissions. I will now turn the call over to Dr.

Zerbe. Horst.

Thank you, Steve. Good afternoon, and welcome to the IntelGenx second quarter 2017 conference call.

On today’s call, I will initially provide a corporate update and discuss progress made on our pipeline projects. Following that, Andre Godin, will review our Q2 financial results.

Overall, we’re very pleased with the Company's performance. We significantly advanced our product pipeline towards commercialization.

We obtained patent for the design and manufacturing of topical oral films, and that consist of an effective delivery system for the treatment of localized diseases of oral mucosa by cold sores using mucoadhesive particles. We also received notice of allowance for another oral film patent.

Both patents are eligible for Orange Book listing, and will potentially provide additional protection of several of our pipeline products. A few words on our facility.

We completed implementation of the TMP systems required to obtain an establishment license on the Health Canada. The establishment license is the license that allows us to pursue commercial manufacturing.

We sent an invitation letter to Health Canada in July, and expect Health Canada to show up for their inspection later this month. The issuance of the establishment license is expected within two weeks post inspection.

Now moving onto our pipeline projects, initially tadalafil, tadalafil as you know is indicated for the treatment of erectile dysfunction and pulmonary hypertension. IntelGenx only pursues the erectile dysfunction indication.

The film that we developed is fully equivalent with the brand product, Cialis tablets. The submission batche manufacturing is completed.

Also, the pivotal biostudy, including bioanalytical and biostatistical evaluation is completed. This study was performed as a four way crossover study with a fasting arm, [indiscernible] arm fasting with water and TRD.

The result is now available in full. We are fully bioequivalent with the reference, and the study report has been awarded to an external clinical pharmacologist with the intent that this scientist provides us with the expert opinion required to support our regulatory filing.

The filing of 505(b)(2) NDA is on track for a Q3 submission. We expect an eight to 12 months review by FDA; and correspondingly, launch in the United States is scheduled for mid-2018.

As I mentioned at previous calls, the project is at this point mostly IP driven. Now with respect to the substance patent, the substance patent expires in November of 2017.

The project is further protected by two formulation patents that were invalidated through an IPR procedure, and the ruling is currently under appeal. There is a third Orange Book patent that’s relevant, the so-called 166 dosing patent.

IntelGenx submitted an IPR with the intent to invalidate that patent. That IPR leads to a settlement with Eli Lilly, we reported on this event under which we obtained an exclusive license to this patent.

The license will become effective upon expiry of substance patent in November of 2017. Mylan and Monosol had IPR submitted with the intent to invalidate this 166 dosing patent; Mylan recently settled with Lilly and withdrew the IPR; Monosol’s IPR was denied institution.

What that means is that we continue to be the only company that will not be affected by the 166 dosing patent for the time being. Lilly settled with the ANDA applicants that are pursuing generic versions of Cialis.

The settlement again means that nor invalidity or non-infringement position, could be achieved by any of the ANDA filers. But that is a fluid situation, and we are aware that in the meantime there have been more court cases.

And as I briefly indicated before the exclusive license from Lilly for the 166 dosing patent provides free and clear path to product launch and expiry of the substance patent. We are in advanced discussions with interstate commercialization partners.

But at this point, I cannot provide any details on those discussions. Moving on to our power project for opioid dependency or rather treatment thereof.

That product too is entirely driven by IP at the moment two patents that are IntelGenx, the so called 497 process patent. The trial was held in November 2016, ruling on that court proceeding was initially expected for June.

However, a decision is not yet available. There is another patent, the so called 514 patent and ruling for that patent was expected what we have to be initially expected June ruling of the 497.

Again, there is no word on the 514 on the judge either. There’s also a motion to reopen the 497 process patent case following a claim construction that TEVA received.

That notion is currently under consideration. We also appealed a ruling that we received and the appeal is currently on hold, following until a decision has been achieved, considering the motion to reopen following the TEVA claim construction.

I’d like to pause here for a moment to address a number of investor inquiries. Frankly, these were some claims that we’ve received about changes to product development timeline estimates.

Let me start out with -- by giving you one example. I just reported a delayed ruling by the court on the 514 patent in the sub Suboxone case.

Now, we always try to provide reasonable timing estimates for our regulatory filings and other milestones. However, as this Suboxone optional example illustrates and there are, quite frankly, quite a few more examples.

There are a number of factors affecting clinical project timelines that are completely outside of our control, and those factors can, in some cases, shift things by a few days, weeks or even months. We are regularly receiving request for information on project timelines from investors, particularly on the submission timelines, availability of clinical study reports or tooling and the likes.

In order to be able to respond, we have to make assumptions regarding the availability of data and information that we are not in control of. We try to be as accurate as possible with our assumptions when it happens, more often than not, that our assumptions and estimates are incorrect because the events or the underlying events deviate from what we had experienced in the past.

The timing expectations change this often causes anxiousness or frustration amongst our investors. I can assure you that we will continue to do our best to provide what we determine are realistic estimates at the time that we give them.

From there, we will update them, if necessary, in our public disclosures and communications. We want to keep everyone as informed as much as possible and help you understand the direction we're heading in.

After these comments, I'd like to proceed with an update on Rizaport. We obtained, as you know, approval for Rizaport in Luxemburg under the DCP procedure in cooperation with our co-development partner RedHill.

We signed an exclusive licensing agreement with Pharmatronic on commercialization of Rizaport in South Korea. IntelGenx retain manufacturing rights, the anticipated launch of the product in Korea is first quarter of 2019.

We're also working with Grupo Juste on a commercial launch of Rizaport in Spain. The anticipated launch date there is first quarter of -- late first quarter of 2018.

In order to be properly prepare for the product launch, we've established a cross functional launch in with participation from all three companies involved. Moving onto the U.S.

FDA filing of that product. The resubmission of our 505(b)(2) NDA is scheduled for October of 2017.

Approval is expected for Q1 of 2018. I would like to mention that the FDA approval would trigger a $500,000 milestone payment by our development partner RedHill.

Partnering discussions are ongoing with additional potential partners for Europe, South American and the United States. Moving on now to Montelukast.

Montelukast is IntelGenx's most important and advanced drug repurposing opportunity. The molecule is indicated for degenerative diseases of the brain.

The market for this indication is in excess of $5 billion currently and is expected to grow to $13 billion over the next five years. As previously reported, we successfully completed Phase 1 clinical study.

The results show significantly improved pharmacokinetic profile. The bioavailability increased by 52% against the reference product.

And there’s clear evidence that the drug crosses the blood brain barrier. A Phase 2A study, so called proof of concept study, is in preparation.

The study will be supervised by C5R which is the Canadian governing body or Alzheimer's and dementia studies. The study will be conducted in mild to moderate Alzheimer patients and seven sites, study sites, have been secured in Canada to conduct the study.

Now, it is critically important that we design the study protocol properly. So as to minimize any risk of the study failure due to a non-optimal study design.

What we don’t want to happen is that because often insufficient study protocol, we are not able to prove that the molecule is effective. Even though, it is effective, but the insufficient study design doesn’t show that.

And we therefore initiated contact with leading Alzheimer research groups in the U.S., including the Head of the National Institute of Aging at the NIH, and other Alzheimer research centers. For example, the research center at University of California in San Diego two way in on the design of our study.

We found significant interest in the study by practically all leading Alzheimer disease opinion leaders, and expect input by these opinion leaders to our protocol in Q3. With that and then hopefully optimized protocol, we expect to commence our enrollment in Q4.

Intermediate study results should then be available in Q1 or -- and I should say Q2 of 2018. Commercialization strategy of the product will depend on the outcome of the proof-of-concept study.

We have thought as to what to do in terms of commercialization. But it appears to be too early to discuss that in public yet.

This concludes the update on project progress. I’m very pleased with the progress we’re making with our pipeline products and also with our efforts to transform IntelGenx into a global leader in pharmaceutical or films.

And I’d now like to turn the call over to our CFO, Andre Godin, who will review Q2 financial results.

Thank you, Horst. Good afternoon, everyone.

As Horst mentioned, I’ll take a few minutes to discuss the Company’s financial performance in the quarter. But first of all, I’d like to thank all the investors that subscribed to the debenture that we recently closed, and the syndicate that made it happen.

Now, let’s talk about numbers. Total revenue for the three month period ended June 30, 2017 amounted to $1.1 million, representing an increase of $454,000 or 68% compared to $672,000 for the three months period ended June 30, 2016.

The increase for the three months ended June 30, 2017 compared to last year was mainly attributable to the increase in upfront and deferred revenues. Operating cost and expenses were $1.7 million for the second quarter versus $1.5 million for the second quarter of 2016.

Adjusted EBITDA for Q2 was negative $390,000, which is an improvement of 41% over negative $665,000 in Q2 2016. For Q2 2017, the Company had an operating loss of $613,000, which is 26% improvement over $794,000 last year.

Net comprehensive loss was $550,000 or $0.01 on a basic and diluted per share basis for the period ended in June 2017 compared to $806,000 or $0.01 per share for 2016, that’s an important of 32%. As of June 30, 2017, the Company’s cash and cash equivalents and short-term investments were $2.8 million.

That does not include the $7.6 million closing that we recently completed the second tranche was closed a few days ago. That’s for total $7.6 million or $6.1 million.

With the completion of that financing, we now have the necessary financial resources to continue executing on our commercialization plans and other important elements of our growth strategy. We also are happy that its structures allow us to significantly strengthen our balance sheet, while at the same time, minimize and push out the timing of shareholder dilutions.

I will now turn the call back to the Dr. Zerbe to conclude our remarks.

Thank you, Andre. Again, we’re most pleased with the progress that we made in Q2, and with the strong start to 2017.

I’d like to thank all of you for your attention. And we will now turn the call over for questions.

First question is on tadalafil. With the submission batch ready and the crossover steady completed.

Are there any other additional steps before you can submit an NDA?

We’re just wrapping up stability testing that would be the last piece, and then we will submit the application as mostly been compiled. So we’re simply just waiting to plug-in these final results and that we’re interested in.

The one outstanding item I mentioned that in my presentation is the expert opinion from our external clinical pharmacologist to obtain on the bioequivalency of the product with the reference.

My second question is on Rizaport. With the pending launch of Rizaport in Spain, early next year and later on in South Korea, how is the manufacturing handled for that product?

Have you completely switched over to internal manufacturing?

As far as the plant here at IntelGenx is concerned, yes, we are prepared to manufacture commercial supplies here at IntelGenx. The one step that's missing there in order to be able to do so is a regulatory step.

After the Spanish authority has approved the file, they need to additionally approve the manufacturing transfer from these initial European CMO to IntelGenx. This is more a formality and we don't expect any problems there nor do we inspect that to be causing any delays to our launch timeline.

But that regulatory hurdle has yet to be cleared here, at IntelGenx, from the standpoint of setting up the manufacturing operation, we are ready to go.

My final question is on Montelukast. Would you be presenting the results from the Phase 1 study at any scientific conference or thereabouts?

We already have done that. We just came back three weeks ago from the so called ADPD, which is the worldwide biggest and most important conference for Alzheimer's and related the brain degenerative diseases.

And we presented our results and our plans going forward in a poster presentation. We did that previously at the ADPD conference, which took place in, and if I remember correctly, May in Vienna, Austria.

And we will continue to report our progress on this really important program to the public.

Regarding the Montelukast again. What's your thinking on the type and size of Phase 2, you're likely to conduct?

And I understand that Alzheimer's is a very complex disease. So are you be tackling a substantial-portion of patient?

The current plan is to target mild to moderate at Alzheimer's with an MLHD of between 14, and if I remember correctly, 23 as far as cognitive abilities are concerned. So the target -- Asian population has been well defined.

Where we are still in discussions with leading Alzheimer’s expert is with regards to the study parameters. We will test cognitive functions.

However, we also need to test or to look for certain biomarkers, and the discussion with those opinion leaders as to which biomarkers to look for, is still ongoing. That would be wrapped up within the next two weeks, and then we’ll finalize the protocol.

But that is exactly the reason as to why we’re taking a second and closer look at the study design. We really want to make sure that we avoid a data error meaning -- creating a situation that the molecule is efficacious for the treatment of Alzheimer, just the study result doesn’t reflect that.

So we need to optimize the study protocols so as to minimize that risk.

My first question, if I may I guess, on tadalafil. Can you estimate when you expect you would be signing up a partner?

You said you’re in discussions with a partner for the purposes of marketing this drug, which you expect to go to market, you said, second quarter next year. And are there any particular gating events, which need to occur before you would be willing to sign on the guided line with the partner.

And I realized you’ve been trying to build the case for the value that you’ve created as much as you can before signing up someone, because it makes you more valuable. But is there anything that left to be done?

Greg, as far as the -- as our partnering efforts are concerned, this is an extremely dynamic situation right now. And I have to excuse myself from any comments.

Whatever I say today literally could be incorrect in a few days from now. It’s a very, very dynamic situation.

We’re very confident that we will be able to sign-up a partner that could go very, very quickly. But I really cannot be any more specific.

Well, it sounds like you’ve reached the point of course where you have a very viable shot at taking this to market, and making something very profitable from it. So it sounds like you are a popular data on the dance cart.

So this is what I’m driving at. Is that the correct…

That’s how we [multiple speakers] at this point, Greg. But again, this would be -- this is all speculative.

But we are very confident that we are on the right track, on the right path.

Let me move on then, back to follow up on Rizaport. And I wasn’t hearing correctly, and I just want you to repeat something you said earlier.

Could you repeat when did you say for the U.S. FDA, you would be resubmitting your 505 (b)(2) NDA?

When would that occur?

I said October.

I wasn’t hearing when -- October 2017, I think.

Yes.

That answers my question then. Moving on, would you be willing to comment all on the status of your developments with your relationship with Chemo corporation.

You previously talked about having three drugs under development with them. Could you give us a status update on that please?

Actually we have five products under deal, or is it six [multiple speakers] with five products with them under development, these are all active programs. And the most advanced programs are two film programs that we have pretty significant confidentiality obligation.

So I really cannot comment at all on the status of those programs. What I can tell you is that both are expected to be filed with FDA in 2018.

We see both, meaning two film programs?

Yes, the three other programs, they are still early development very active, but early development. So it would be -- we’re still in full relation development.

So it would be premature to comment at any greater detail on those.

And you’ve gotten approval in Luxembourg, which is obviously a small country. But I was wondering the logic of getting approval after Spain -- in Luxemburg since it’s just a small country, small market.

Is that because product could be, for Rizaport, product could be shift to other European countries from Luxembourg?

The way how the DCP procedure works is that this multi-state procedure is that you select two lead countries. Our development partner RedHill who is responsible for the filing activity.

We provide the data, but they are responsible for the filing activities. They are the applicant they chose Germany as their lead country and as the second country Luxembourg for more or less arbitrary reasons.

There is no intent to launch the product in Luxembourg. So the focus is initially on Spain where we're quite advanced with the review process.

But we are also in promising negotiations with a partner in -- or potential partner in Germany for launch of the product. In Germany, business development is telling me that these discussions are advancing nicely.

The same I guess would apply in the United States. Again, October you're looking to file the 505 in the United States with an expected approval sometime next year.

Upon approval, you would need a marketing partner, you and RedHill would need a marketing partner in the United States, right?

Yes.

And are you working -- is there a discussion going on in anticipation of that, or is it early for that?

Again, business development is in active discussions with several, more than one partners in the U.S. But I am not at liberty to comment to provide any details of those negotiations.

So then again thank you very much for your attention, for your continued support of this Company. And with that, I want to say good bye.