IntelGenx Technologies Corp.

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; and André Godin, our President and CFO.

Before we begin, I would like to remind you that all amounts mentioned today are in US 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 maybe required by US 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 US and Canadian securities commissions.

I would now like to turn the call over to Dr. Zerbe.

Horst?

Thank you, Steve. Good afternoon, everyone, and thank you for joining us for the IntelGenx third quarter 2020 conference call.

On today's call, I will provide a corporate update and discuss the progress we've made on our key pipeline projects. Following that, André will review our Q3 2020 financial results.

Then we will open up the line for your questions. I'll start with the RIZAPORT.

Last quarter, we agreed with Exeltis Healthcare to continue commercial production of RIZAPORT at the originally listed contract manufacturing organization in Germany. The reason for keeping commercial production in Europe is to accelerate the launch of the product in Spain and potentially other European countries.

The production of the validation batches required is well underway and we are on track for a first quarter 2021 product launch. I'm also pleased to report that in August, RIZAPORT commercialization agreement with Exeltis to including the European Union, which added 26 countries to our commercialization partnership.

We believe the expansion of this agreement is a testament to the potential of RIZAPORT as a new therapeutic option for the treatment of acute migraines and we look forward to Exeltis launch of the product in the first European market early next year. So, moving now on to Tadalafil, the revised protocol for the irritation study that FDA requested in the complete response letter was submitted to the agency in October.

The review normally takes four to six weeks, and approval is therefore expected very soon. The duration of the study will be approximately eight months.

In terms of our commercialization efforts, a partner has been identified and business terms have been agreed upon. Now, a few words on cannabis and psychedelic infused films.

During and subsequent to the end of the third quarter, we entered into three agreements related to using our film strip technology for the administration of cannabis and psychedelic compounds. First, we entered into a feasibility agreement with Cybin for the development of an orally dissolving film for the delivery of pharmaceutical-grade psilocybin for the treatment of depression and anxiety.

Second, we entered into a feasibility agreement with ATAI Life Sciences for the development of novel or film formulations of pharmaceutical-grade psychedelics. ATAI also is developing their product for the treatment of mental health disorders.

We will be conducting pre-development and formulation development work to provide ATAI with a prototype for further clinical investigation. If that is successful, the parties intend to enter into discussions for an exclusive royalty-bearing license to commercialize the product worldwide.

I would like to take a minute to comment on the significance of these projects for the company. The use of psychedelics for the treatment of depression is a new therapeutic trend, mainly because unlike after treatment with conventional antidepressants, the risk of suicide is greatly diminished because of the psychotropic effect of these drugs.

However, a problem with these tryptamine-based psychedelics is that they undergo a very significant first-pass metabolization when given orally, which requires the co-administration of so-called monoamino oxidase inhibitors, also referred to as MAO inhibitors. What makes oral films especially suitable as a delivery system for these tryptamine-based psychedelics is that buccal or sublingual absorption avoids this first-pass metabolization and, therefore, eliminates the need for co-medication with MAO inhibitor.

IntelGenx is the first company to develop oral films containing tryptamine-based psychedelics. We see great interest in these products and expect our films to become trendsetters in this novel therapeutic field.

Third we signed a binding letter of intent with Heritage Cannabis for the supply of films to products containing CBD for the Canadian and Australian markets. We look forwards to building a long-term partnership, currently finalizing the definitive supply agreement.

These agreements further demonstrate the versatility and clinical advantages of our VersaFilm platform. In addition to offering the discrete and convenient method of administration, the technology offers superior drug bioavailability, which decreases both the amount of active pharmaceutical ingredient required per dose as well as time to onset of action, which are paramount when treating mental health disorders, such as anxiety, depression and addiction.

In addition, we granted our development and commercialization partner Tetra Bio-Pharma additional exclusive worldwide rights, including the right to manufacture certain products involving our Adversa mucoadhesive delivery technology. Tetra purchased the worldwide Adversa technology rights as it relates to their Dronabinol drug product candidate for the treatment of chemotherapy-induced nausea and vomiting.

Finally, we recently received the patent from the US Patent and Trademark Office covering a novel oral film technology platform for modulating the absorption profile of a sublingually or buccally administered active ingredient. The patent provides intellectual property protection in the US for IntelGenx novel technology used in the formulation of certain future products throughout 2018 -- I'm sorry, 2038.

This technology is suitable for cannabis containing oral films, especially for THC oral film dosage forms and represents a significant commercial opportunity for IntelGenx. We plan to actively market this novel technology in the US for a wide variety of active ingredients.

A few words on Montelukast. We recently announced that the peer-reviewed International Journal of Clinical Pharmacy published results of an observational study investigating if Montelukast may alleviate degenerative neurological changes.

The study found that previous use of Montelukast correlated with improved scores on cognitive or neurological functioning, suggesting that the drug may alleviate degenerative neurological changes associated with human aging. This is very encouraging for Montelukast VersaFilm candidate, which are -- which we are developing for the treatment of Alzheimer's disease.

In addition, the study argues that the Montelukast dosage used for asthma may not be optimal for possible effects on the brain, suggesting a higher dose be used in clinical trials assessing Montelukast's effect on cognitive decline. This is in agreement with the design [indiscernible] BUENA trial of Montelukast VersaFilm, which is studying Alzheimer's disease patients under an amended protocol using higher doses of Montelukast.

The BUENA study, however, remains on the temporary recruitment hold as target study population is considered to be a higher risk group for severe illness from COVID-19. We're closely monitoring the situation and will resume enrollment under our amended protocol as soon as practicable.

In the meantime, we will continue to evaluate the trial's expansion to the United States via a potential IND filing with the FDA when it is appropriate. Few words on animal health.

Earlier this year, we entered into a feasibility study agreement with a leading animal health company for the development of an oral film based on our proprietary VetaFilm platform for veterinary applications containing an undisclosed active. Under the agreement, we developed a prototype for clinical evaluation with the intent to study the buccal absorption of the drug in companion animals.

That study was successfully completed. We were informed by our partner that the drug is being buccally absorbed, and that the desired clinical effect was observed.

Based on this very successful outcome of the study and once the final report is available, we will enter into discussions for development and supply agreement to further develop, manufacture and supply the product. And with that, I would now like to turn the call over to our President and CFO, André Godin, who will review our financial results.

André?

Thank you, Horst. Good afternoon, everyone.

As Horst mentioned, I'll take a few minutes to discuss the company's financial performance for the third quarter ended September 30, 2020. Let me begin by mentioning that we are now seeing tangible results of our performance improvement program on our financial results this quarter.

We clearly see improvement in all areas of our P&L. Let's first look at our revenues.

Total revenues for the 2020 third quarter amounted to $510,000 compared to $61,000 in the same period last year, representing a 736% increase, which is mainly attributable to a $308,000 increase in licensing agreement, revenues and a $141,000 increase in R&D revenues. On operating costs and expenses were down to $1.9 million from Q3 2020, where we were at $2.6 million for the corresponding three months of 2019.

The decrease is mainly attributable to the -- to a $691,000 decrease in SG&A compared to last year. For Q3 2020, the company had an operating loss of $1.4 million compared to an operating loss of $2.5 million for the comparable period of 2019, an improvement of more than $1 million.

Adjusted EBITDA was negative $1.2 million for Q3 2020 compared to a negative $2.3 million for the same period last year, again, more than $1 million in improvement. Net comprehensive loss was $1.6 million or $0.01 on a basic and diluted per share basis for Q3 2020 compared to a comprehensive loss of $2.9 million or $0.03 per share for the comparable period of 2019.

As at September 30, 2020, the company's cash and short-term investment totaled $1.5 million compared to $3.1 million [ph] as of June 30, 2020, and $1.5 million does not include gross proceed of $1.8 million that was raised in our October 2020 convertible notes offering. I will now turn the call back to Dr.

Zerbe to conclude our remarks.

Thanks, André. In closing -- excuse me.

In closing, I'd like to once again recognize our team for executing on our strategy to identify and secure near-term revenue generating opportunities. As we began to see the results of our performance improvement programs this quarter, we continue to execute on our business development strategy entering into new and expanding on existing partnership agreements.

I will now turn the call over for questions. I'd like to remind you that our forward-looking statements apply to both our prepared remarks and the following Q&A.

Thank you.

Thank you very much. I was just wondering, what steps are required before a product is available for sale for the Heritage Cannabis?

And also if there are any updates on a possible launch with Tilray?

Part of your first -- the first part as it related to Heritage, what exactly was the question, would you please repeat?

Sorry. Just what steps are required before the product will be available for sale?

Essentially preparing for the manufacturing of the launch quantities, and that's what the team is currently involved in. We're waiting for Heritage to ship the required quantity of API, which is imminent, and then we'll proceed with preparations for the manufacturing of the launch quantities, which is scheduled for early February, which would suggest a launch somewhere late in the first quarter.

But it's really mechanics of the -- and supply change aspects required for the -- for manufacturing the launch quantities. As far as Tilray, I can't provide any details.

We had conversations with them a while ago, they specified the two kind of products they would like us to manufacture. However, with respect to timing and when precisely they plan to trigger launch -- or commencement of launch activities, they didn't disclose.

Okay, thank you. And finally one last question, are you able to shed any light on the very basic number of the Tetra payment, six-figure, seven-figure?

Low seven-figure.

Thank you very much.

You're welcome.

Yes. Good afternoon, gentlemen.

I have a question for you, Horst, in regards to the re-filing of RIZAPORT with the FDA. What is the status on that?

We clarified with the agency -- I'm sorry, we clarified with the agency [indiscernible] to what they want us to include in the response. We plan to manufacture the required three batches that are necessary for the resubmission, I believe, in the next month -- either this month or next month and then have to put them on stability because the agency has required that we submit corresponding stability data.

We'll negotiate with the agency to submit with six-month stability data. Whether we are successful with that remains to be seen, we don't know that yet.

So, that's the current status.

Okay. Like when would you say -- could you shed some light on a possible resubmission, like day -- like not specific day, but, I mean, is it like a Q1 or -- because last time you were able to give us more detailed --?

Q2. And assuming FDA buys into our proposal that we submit with six-month stability, it will be Q2.

Okay, all right. And then my next question for you is in regards to RIZAPORT Spain and EU.

I know that you're going to go with the original manufacturer. However, what is the status on the license transfer process to manufacture in Canada, I mean?

There is no real license transfer, so we remain the license holder -- the contract manufacturer in Germany assumes the role of a contract manufacturer. So, there will be a supply agreement.

Okay. And how about -- like you mentioned earlier -- on earlier conference calls that you wanted to transfer the manufacturing side to Canada to IntelGenx, like, how is that going and what -- can you shed some light on the timeframe of that coming into effect?

For the US market and potentially other -- let's say, non-European markets, we will remain the manufacturer. We, meaning, IntelGenx here in Montreal.

As to whether a retransfer of the manufacturing of European supplies will ever occur is an open question. To a very large extent, supply price will impact on that.

So, we don't have any concrete plans to retransfer for the time being. And the German contract manufacturer will continue supplying the European market.

Okay. And my last question is for André.

Could you shed some light on the runway for the company with the current proceeds that you will be receiving and what you've received so far?

Yes. Obviously, we've cut expenses down dramatically.

And even though the good news is that we have -- haven't had any impact on our capabilities, we're just trying to be as careful as possible in terms of spending cash. So, at this moment, we probably have close to six months, but the plan that I'm -- that we are working on right now is to find ways.

I mean, Tetra was one avenue. We, obviously, just closed the financing on the note convertible, but there is also several other options that we are working on right now that would basically help our cash position.

And at this current share price, obviously, the different alternatives that we're looking at are even much less dilutive or non-dilutive. So, if the share price were to appreciate and that's what we're hoping and expecting with the two product launch in Q1, then we might be in a better position to -- maybe to raise equity.

Okay. All right.

Thank you so much, gentlemen. And I want to say that you guys are doing a very good job, and I see this company heading in the right direction, especially this quarter.

I mean, the activities and the accomplishments were significant in my opinion. Thank you.

Thank you.

Thank you.

Yes. If there are no further questions, I would again like to thank all our investors very much for their -- for the continued support and also, of course, a big thank you to our staff for executing properly on our existing programs.

So to everybody, stay safe and goodbye.