Earnings Transcript for IGXT - Q1 Fiscal Year 2023

Operator: Greetings and welcome to the IntelGenx First Quarter 2023 Financial Results Conference Call. At this time all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions]. Please note this conference is being recorded. I will now turn the conference over to your host, Stephen Kilmer. You may begin.

Stephen Kilmer: Good afternoon and thank you for joining us on today's call. With me on the line are Dr. Horst Zerbe, IntelGenx's President and Former CEO; Dwight Gorha, newly appointed CEO, Andre Godin, our President and CFO, Dr. David Kideckel, Company's Head of Corporate and Strategic Alliances, Dr. Frank Pietrantonio, our Director of Clinical Research; and Tommy Kenny, our Senior Vice President and General Counsel. Before we begin, I would like to remind you that all amounts mentioned today are in U.S. 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 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 can be found in our filings with the U.S. and Canadian securities commissions. I'd now like to turn the call over to Dr. Zerbe. Horst?

Horst Zerbe: Thank you, Stephen. Good afternoon everyone, and thank you for joining us for the IntelGenx first quarter 2023 conference call. On today's call, I will provide the corporate update and discuss the progress we've made on our key pipeline projects. Then Andre will review our financial results. Following that, we will open up the line for your questions. Before launching into an update, I would like to take this opportunity to welcome our newly appointed CEO Dwight Gorham to our teams, and to his inaugural IntelGenx investor call. About a year ago, I informed the Board of Directors of my intent to retire as CEO of the company. The board subsequently appointed a succession committee, chaired by Bernard Boudreau, which, after thorough search that was conducted with the help of the Montreal based Executive search firm, Heidrick and Struggles recommended that the board appoint Dwight Gorham as the new CEO of the company. On March 13th, the board accepted my resignation and unanimously appointed Dwight Gorham as the new CEO effective upon my resignation. I will continue to serve on the board and remain available to help the new CEO during the transition. Dwight is exceptionally well qualified to lead IntelGenx for real and beyond its transformation from an R&D company to a successful commercial manufacturing operation. Why does an engineer by trade? Most recently, Dwight served as president and CEO Pillar 5 Pharma, Pillar 5 pharmaceutical contract manufacturing organization with a specialty, and sterile ophthalmic products. Before joining Pillar 5 Pharma in 2015 he served as senior vice president and general manager of global operations at Pharmascience Inc. Prior to that, he held a variety of senior roles, including President and CEO at Accucaps Industries, a leading North American supplier of soft gelatin capsules, a variety of management assignments at the Burroughs Wellcome & Co. facility in Montreal, president of Draxis Pharma Inc., a Montreal based CMO and supply of small volume parenteral and lyophilization products, General Manager of Baker Cummings and director of operations at the Canadian farm of Glaxo plc, which is now GSK plc. Giving each of these assignments, he managed to significantly improve the financial performance of the company or the unit he was responsible for. While he's still just getting up to speed glide has agreed to join us today on the call, and he will be available to participate in the Q&A session following our introductory remarks. With that, I will now update on all key programs. First on a ATAI, a phase 1, PK and dose escalation, PK, meaning pharmacokinetics and dose escalation study using ANDA Buccal film is ongoing. Activities have also commenced to proceed with the next phase of the development, which is a phase 2 study. Moving on to RIZAPORT. Last month, the FDA approved our 505(b)(2) NDA for RIZAFILM, the U.S. market name for RIZAPORT. Importantly, as follows a successful pre-approval inspection by the agency of our Montreal manufacturing facilities in March of this year. This was a major milestone achievement for IntelGenx as it was our first FDA approval, we're film product that is based on our proprietary VersaFilm technology and that was PD developed in-house. We certainly view this as an important validation of VersaFilm technology, and we'll communicate this accordingly to our partners and investors. According to the American Migraine Foundation, 39 million or 12% of Americans suffer from migraine, which is the second leading cause of disability nationwide. Our partner for RIZAFILM in the U.S., Gensco pharma is targeting the manufacturing of elevation batches to the first saleable product, while later in the year, and then we'll commercialization in early 2024. I should also mention that the FDA approval came with the request to develop and submit within two years to FDA for review and approval of 5 milligrams pediatric version of the film. Recently we met with Exeltis, our partner for RIZAPORT in Spain. They reported great feedback from prescribing doctors and patients that have been struggling with significant product substitution at the pharmacy level. They are now working on a strategy to overcome the loss of sales and Exeltis is waiting for regulatory approval to implement that new strategy. In January, we entered into an exclusive supply agreement for RIZAPORT with ARWAN Pharmaceuticals Industries, Lebanon, s.a.l in various countries in the MENA region. Moving on to Tadalafil. As we reported last quarter, there was a slight delay as our partner Aquestive has encountered some API related issues with Tadalafil. However, the R&D teams from both companies worked diligently and formed a task force to address the issue. We believe that we have now solved the API issue, and we are preparing for manufacturing of the clinical batch. As cannabis, the arbitration process involving Tilray is currently improper in process and province. As arbitration proceedings are confidential. We are unable to provide further details regarding this dispute at this time, we will promptly update our investors. As soon as a resolution has been reached. The words on Montelukast were able to add five more sites to the study. And as a result, we've seen an increase in patient enrollment, especially in the last two months. We're targeting to enrollment by July, possibly even earlier with the rate of enrollment has been as active as in the past two months. While enrollment in the ongoing Phase 2, when a clinical trial in patients with mild to moderate Alzheimer's disease or AD is continuing. We are also now expanding the Montelukast repurposing program to include another major neurodegenerative disorder, Parkinson's disease, or PD. We believe that Montelukast VersaFilm has the potential to be disease modifying in both AD and PD. In February, we announced the research collaboration with Dr. Per Svenningsson, of the Karolinska Institute and plan and conduct a multicentre, randomized, double-blind, placebo-controlled clinical study to investigate the use of Montelukast VersaFilm for the treatment of PD. Dr. Svenningsson will serve as the lead principal investigator for the plan study and will sponsor it through a grant awarded by the Swedish Research Council in the amount of $2 million. IntelGenx will supply Dr. Svenningsson with both active and placebo films to be used in the 18 months treatment regimen for study participants. On completion of the study, IntelGenx will retain the intellectual property rights and use the findings to further develop this program for PD treatment. We currently expect the study to commence in Q3 2023 and will provide more details on its design at that time. Moving on to Xiromed, in April, we announced that chemo research to its patient and affiliate Xiromed received the complete response letter from the FDA regarding the submitted abbreviated new drug application of Buprenorphine Buccal Film. It's Buprenorphine Buccal Film is a generic version of Belbuca, an opioid that is used to manage pain severe enough to require daily around the clock, long-term treatment with an opioid when other pain treatments are inadequate. Belbuca was approved by the FDA in 2015 and is applied to the oral or buccal mucosa every 12 hours. Buprenorphine Buccal Film incorporates our VersaFilm technology in a novel formulation and is designed to be a bioequivalent, lower cost alternative for patients. Permits row responses is expected in the current quarter. Lastly, animal health. In the fourth quarter, we entered into a new VetaFilm, feasibility and development agreement with an undisclosed animal health company for a VetaFilm-based oral film formulation containing CBD for use in companion animals. The results from the CBD study are expected in the current quarter as the newly appointed head of corporate development and strategic alliances Dr. David Kideckel is also engaged in discussions with potential major Animal Health Partners. And with that, I would now like to turn the call over to Andre, for review of our financial results. Andre?

Andre Godin: Thank you, Horst. Good afternoon everyone. As Horst just mentioned, a few minutes to discuss the company's financial performance for the first quarter ended March 31, 2023. On the revenue front, total revenue for 2023 first quarter amounted to $162,000 compared to $237,000 in the same period last year. The change is mainly attributable to decreases in R&D revenues of $63,000 and royalty on product sales of $12,000. Operating costs and expenses were $2.8 million for Q1 2023 versus $2.5 million for the corresponding three-month period of 2022. For Q1 2023, the company had an operating loss of $2.6 million compared to $2.3 million in Q1 of 2022. Adjusted EBITDA was negative $2.4 million for Q1 2023 compared to negative $2.1 million in Q1 2022. Our net comprehensive loss was $2.9 million or $0.02 on a basic and diluted per share basis for Q1 2023, down slightly from a net comprehensive loss of $3 million, or $0.02 per share for the comparable period of 2022. As of March 31, 2023, the company's cash and short-term investments totaled $3.8 million. I will now turn the call back to Dr. Zerbe. Horst?

Horst Zerbe : Thanks, Andre. In closing, I'd like to once again recognize our team for executing on our long-term strategy. With that, I will now turn the call of questions. I'd like to remind you that are looking statements apply to both our prepared remarks and the following QA. Thank you.

Operator: [Operator Instructions]. We have a first question the queue from David [indiscernible], a private investigator or private investor.

Unidentified Analyst: [Technical Difficulty] see revenue, we've gone to the PBMs. Have we gone to the wholesalers? I mean, I just want to understand the marketing plan or the commercialization plan for this product moving forward?

Horst Zerbe: David, we missed the first part of the question. You were just there? Could you please repeat the question?

Unidentified Analyst: Basic -- we points been approved, we have a, I just want to understand the commercialization plan of IGXT for this product, because it's pretty significant to gain an FDA approval even though it's a 505(b)(2) drug. I'm just trying to understand, has a company contacted PBM? Wholesalers how we can distribute this product? How are we going to make it aware that on the market compared to the oral option that's out there?

Horst Zerbe: David, do you want to respond to that?

David Kideckel: Hi, David. Thanks, for the question. David Kideckel here, SVP Head of Corporate Development and Strategic Alliances. So, we do have a commercial partner in the U.S. that we've had for quite some time. That commercial partner is Gensco. So, we are in active discussions as we have been since the inception of the execution of the contract to finalize commercialization plan. So, all planning for this is well underway for the launch of the product in the U.S.

Unidentified Analyst: Are there any details you can share to how they're going to get this out to the wholesalers and make also like physician awareness channels by which they're going to market this product?

David Kideckel: I think the it'll be more traditional type of sales and marketing upwards here. We're unable to really give more final details at this point in time, with Genesco and mainly because we're still finalizing the commercialization clients for the product.

Horst Zerbe: David, I should probably add, because it's relevant for what the timing of the after-launch that we still have to conduct the process validation. So, we have to manufacture three batches and undergo a full process validation exercise with those that's our requirement by the agency. And during that time, we will finalize with our partner Gensco in detail the launch and marketing activities.

Unidentified Analyst : So, my final question, or is it for can we expect a 2023 launch?

David Kideckel: Yeah, I would say it's highly unlikely that we'll see a 2023 launch it is possible, but just given all the planning that's involved to launch a product, once approved by the FDA, I would say we're looking at some time in 2024.

Unidentified Analyst : In regards to Montelukast. Doctor, you've talked about the enrollment speed sounds very favorable. Say that you stop enrollment in July, could we have the first set of data?

Horst Zerbe: Frank, do you want to respond to that? Frank is our clinical director or director clinical research?

David Kideckel: Frank you have to unmute yourself.

Andre Godin: Frank, can you unmute yourself?

David Kideckel: Can anyone speak to the data?

Frank Pietrantonio: Yeah, you want to do it or you want me to do it?

Horst Zerbe: No, go ahead.

Frank Pietrantonio: Yeah, so basically, if enrollment is finalized by June, July. Since it's a six-month treatment, then the we're expecting the trial to be over by year-end or early Q1. So, data should be available in late Q1 or early Q2 of next year.

Operator: Our next question comes from Abraham Shapiro.

Unidentified Analyst : Good afternoon, Andre and Horst. I'd like to news of the product development the past quarter and so congratulations on FDA approval. My concern is cash on hand. What can we expect? For a raise Andre?

Andre Godin: Yeah. Hi. Hey, thanks for your question. I think you know, we're very cautious and patience because you don't just stock price obviously, but we have multiple option we're looking at multiple options. We will have to raise money at some point. Right now, we're managing the cash very carefully. But, I wouldn't worry, we'll, we always find ways and we'll find a way. Again, and but, we're expecting some good catalysts to come in the near future. So hopefully that can give some momentum to the stock and we can raise money at a higher level, because as you can see, the stock price is pretty depressed right now. I mean, the entire market, but especially small cap. So, we're being cautious, but we have a plan, and we have multiple options.

Unidentified Analyst: Because, your partner requested it stock has risen nicely, the best quarter, I'm looking forward to that happening to IntelGenx. I have a couple other questions. Gensco, your partner, and they're going to make some sort of announcement, some sort of public relations, and as I put something on their website?

David Kideckel: Gensco is a private company. So, there's likely no press release issued. As far as products available on their website, I mean, yes, I mean, that's not a bad idea, either.

Unidentified Analyst: There's no mention of IntelGenx at all.

David Kideckel: Yeah, I mean, to their defense, however, I mean, the product was just approved, two to three weeks ago. So, we'll let them do the bit, but we have regular communications with them. And I think that's a good idea. Thank you.

Unidentified Analyst: Thank you, welcome to IntelGenx best of luck. Dr. Zerbe do enjoy your extra time. That's all I got.

Operator: [Operator Instructions].

Unidentified Analyst: Just a follow-up. Good afternoon, everyone, and welcome to the new members have joined IntelGenx family, I'm excited to have you on board. Just a couple of follow up questions and I'll go back in the queue is regarding the Gensco rollout. And with the comment that David made is the normal sales process. Any idea of the number of sales people that they have in that organization? I know it's private. So, the information is limited in scope. Just wondering how they're going to tackle the major U.S.

David Kideckel: Thanks, for the question. It is a fairly smaller organization. I'm not sure the number of employees that work there that would that wouldn't be considered public information. But I would say it's not necessarily even the number of salespeople there or any organization would have been commercialization. It's where is the product going to be positioned. As far as effort allocation is concerned? And this will become one of their top priorities as an organization. So, we're very much looking forward to working with Gensco at this point. But as far as again, I wouldn't, I don't know if I would be focused so much on that solely at least, the number of salespeople just back to effort allocation.

Unidentified Analyst: The follow-up to that. It is the other countries that have partnered with IntelGenx the RIZAPOR any update on South Korea or the Arwan [ph] territories?

David Kideckel: I was just going to say there's no real update to R1. All I can say is that there are ongoing negotiations and discussions with all of the above that you just mentioned.

Unidentified Analyst : Okay. And consistent with the RIZAPORT, any details of the product substitution and packaging that there were Exeltis experience in Spain, and we have an estimated timeframe where that would everyone was pretty excited with the rollout. And 18 months ago, just do they see a light at the end of the tunnel in that, David?

David Kideckel: Horst, I'll leave that one with you.

Horst Zerbe: Yeah. What Exeltis, has done there is change the packaging format, in such a way that it would prevent substitution at the pharmacy level. They submitted that a few months ago to the Spanish regulatory authority until waiting, currently, as we speak, for approval. When the approval will be issued. Obviously, I can't tell you, but I know it's pending, Exeltis is waiting for a response from the authority and then was immediately after that. They will transfer that into the market.

Unidentified Analyst : With that issue that was in Spain, Dr. Zerbe, would that be a challenge in the other countries that Exeltis says, the right to commercialize in Europe?

Horst Zerbe: I would think so. We don't have any specific knowledge about that. But I would certainly think so. I mean, Exeltis has been around for some years. So, I think that they will learn from past experience and not commit similar mistakes in other jurisdictions. But that is speculation on my part, we haven't yet discussed that specifically with them.

Unidentified Analyst : Thank you, for the response. And then follow-up on the fourth quarter call was any update on the discussion with a company that would be potentially replacing prior to Suboxone?

Horst Zerbe: That discussion, and I know what you're talking about, I don't want to say I can't disclose that potential partner. That discussion is currently on hold, because bankruptcy proceedings have still not been completed. And so, we have to wait until that process has come to a closure in full because only then will the asset become available. We have in the meantime and our potential partner for that has in the meantime, confirmed with par that the asset would be available. So I assume that once the process has come to a conclusion that those negotiations will resume.

Unidentified Analyst: Okay. There’ll be hard to put a timeframe on that, I imagine. Alright with the same as the ENDO project that we discussed on the last fourth quarter. The undisclosed ENDO, is that still terminated or tabled or ended?

Horst Zerbe : That was the second program that we had with ENDO/ Par. That program, unfortunately, at this point is on hold, we have -- not at this point anyways found an alternative partner to continue that program.

Unidentified Analyst: Is it still a potential of product that would be attractive to somebody? Do you believe? Or is that maybe shelved?

Horst Zerbe: It depends on how the sales of the reference product develop. Until a few months ago, the sales of the reference product, the brand, we're lagging behind expectations. And I haven't checked recently as to whether there has been any, at least a significant improvement. So that's really all I can say, on the comment on that one.

Unidentified Analyst: Okay. Two more than I'll go back in the queue. The transdermal patches, discussion still going on in that unique product?

Horst Zerbe: Yes, that is still going on. And it is the likelihood that negotiate will come to fruition, has increased we have received a provisional informal notice of acceptance by our partner. So there, I'm very confident that this will come to a positive result. David, if you want to comment further that would be the extent of my comment.

David Kideckel: Thank you, Zerbe. That was me as always.

Horst Zerbe: Thank you.

Unidentified Analyst: No comment, David, or is it ending.

David Kideckel: No, I thought we were moving on. I did want to make a comment that is something from a business development side. That is something we're pitching to potential clients. I know that there is interest just in my short time that I've been here, it's come up several time with potential partners. So the transdermal technology is definitely a positive asset that we have within our tool bag at IntelGenx for future potential partners.

Unidentified Analyst: And the other one that's in your tool bag, David is Loxapine. The last call it was potential discussions going on with an interested partner. Is that still active?

David Kideckel: I'll put this one back to Horst again.

Horst Zerbe: On Loxapine, there's no progress to report since last quarter. We will reach out, but quite frankly, because of obvious reasons, for the past couple of months and the focus has really more been on the Xiromed activity on RIZAPORT and related aspects. Loxapine has not been pushed to the side, but it has not received much attention over the past quarter. It's continues to be an important and as we think, very valuable asset. And as soon as BD finds the time, they will proactively continue to reach out.

Unidentified Analyst : All right. And one last one, then I'll go in the queue. The Belbuca, with the CRL and then the challenges with the other company. Follow that pretty closely with the legal issues. Is still four indications on the -- with your partner for the -- it will be developed for the marketplace for the four doses? Was it changed?

Horst Zerbe: No, that hasn't changed at this point. That's still the case. I mean, eventually, the partner plans to commercialize all strengths, but for the moment, the focus is on those core strengths. But I mean, the reality is, the sales volume of those two strengths that we are not actively pursuing at this point is in the 10% range. So it really wouldn't make much of a difference. Those are, those two low strengths are mostly used in the initial phase to titrate patients up to their final maintenance level. So that's why they don't play any significant role sales wise.

Unidentified Analyst : All right. And then last, before going to queue, on the VetaFilm. Is it three companies that we're in partnership with or just two with multiple programs?

Horst Zerbe: David, I'll pass that on to you.

David Kideckel: I'm sorry. Can you repeat the question?

Unidentified Analyst : On the VetaFilm partnership, David, is it three companies or just two companies with multiple programs?

David Kideckel: Right. Well, there's multiple programs ongoing right now. We do have there's a couple of them, with they we're deep in discussions with and hope to have an update for you once they do -- if they become public over the next little while.

Unidentified Analyst : Okay, but is it still two companies, more than two that are under a partnership, or contract for trials?

David Kideckel: Yes, we have University of PEI, Prince Edward Island in Canada. And I believe there's another one and I'm not sure if that's been made public and that would be for CBD in dogs.

Horst Zerbe: So there are two -- I can confirm that. It's Horst. And to confirm what David said. We're actively talking to two companies. And then in addition to that, we are conducting a study with University of Prince Edward Island.

Unidentified Analyst : Okay, I'll go back in a queue. Thank you for your responses and taking my questions.

Operator: We now hear from Brent DB [ph].

Unidentified Analyst: Yes. I was wondering I think Andre had mentioned some catalysts coming up that he thought would boost the share price. I mean, if an FDA approval wasn't a catalyst to boost the share price, I mean, what would you'll have coming up that you think is going to do some get to the share price?

Horst Zerbe: We have significant catalysts coming up, I can only confirm what Andre said. But for obvious reasons, we cannot provide any details. So I apologize for that. Andre, if you want to add to that?

Unidentified Analyst : And these are in 2023?

Horst Zerbe: Way up in the near-term.

Unidentified Analyst: Okay, one more question.

Horst Zerbe: Go ahead.

Unidentified Analyst : Have you guys entertained at all a reverse split or anything to try to get the share price up to maybe attract investors? I'm sure at a barely over 10% share price. There's a lot of investors that are not attracted?

Horst Zerbe: Not seriously. I mean, this talk is being, Andre, you're welcome to comment further. But we think the share price is right now massively manipulated. And so we're not contemplating a reverse split at this point. But Andre feel free to add to that.

Andre Godin: Yes. I don't think that the reverse split would be an answer. If we were to, at some point, uplift the NASDAQ that could be helpful. But at this level, I think that what we need to do is really execute on our front. Like I said earlier, there's some catalysts coming work on the, with Xiromed, with Buprenorphine program to get it approved, launch product on the market. And I think that will definitely make the stock appreciate. And since there's a lot of shorts on the stock right now, we basically need to squeeze the short and the only way to squeeze the short is by executing properly and announcing very tangible news. And that's what we're working on right now.

Horst Zerbe: And increase volume, with that.

Andre Godin: Yes.

Unidentified Analyst: Right. Okay. I guess, I just would have expected the written announcement to have done that a little more than obviously didn't do it at all as we've gone backwards, but I appreciate you guys information. Thank you.

Operator: Our next our next questioner is [indiscernible].

Unidentified Analyst: Hi, good afternoon gentlemen. My first question is in regards to the CRL that was received by Chemo. In your press release, you said that Chemo received the CRL. So is it fair to assume that the CRL has nothing to do with the actual film and stability and more of like a packaging technicality on the partner’s side? And if you can shed some light on the CRL?

Horst Zerbe: There is -- let me just paint how to properly respond to that. There is one tox [ph] related question that our partner however, things to be able to respond to within an acceptable period of time. And then there was another comment that we quite frankly don't understand, because we believe that we provided the information to the agency. And that's the main reason as to why our partner has filed a request for reconsideration.

Unidentified Analyst : So it's like, just -- so like sum it up the CRL had nothing to do with like, for example, the stability of the film or anything to do with it's the manufacturing part of it. Is that safe to say?

Horst Zerbe: It has got nothing to do with the manufacturing and/or the stability. That is correct.

Unidentified Analyst : Okay. The next question that I have, in regards to Heritage and your CBD Film. Any update on that with like, new orders from Heritage, how is that whole process going like from sales and so forth?

Horst Zerbe: Yes, David, I like if you responded to that. You met with them just a few days ago, so, please.

David Kideckel: Yes, so the Heritage agreement is still proceeding. The purchase orders we hope and expect will come in short order. I mean, if you follow the Canadian market at all, where the deal is for at this time, the Canadian markets in general, within Cannabis is just not produced to the level of expectations that a lot of investors and analysts had initially predicted. So moving forward, while we're optimistic that Heritage will continue to place additional orders. It's not -- we don't necessarily hold the same level of grandiose expectations for the Canadian cannabis market, as potentially, historically, some of my predecessors did.

Unidentified Analyst : Okay. All right. And the next question that I have is in regards to the RIZAPORT, VetaFilm approval that you recently got. Was IntelGenx expecting any, like, sort of like royalty payment upon FDA approval from Gensco? Was that like in the contract?

Horst Zerbe: There is a payment due upon shipping first commercial batch, if I remember correctly. Is this correct, David?

David Kideckel: It's actually a payment due from the time of FDA approval. And yes, that’s contractual.

Unidentified Analyst : Okay. And my last…

Horst Zerbe: Yes, there is some due right now. But yes, exactly.

Unidentified Analyst : And this will be reflected in during Q2?

Horst Zerbe: Q2. Yes.

Unidentified Analyst : Okay. Is there any way that you can shed light on roughly like, is it like a six figure, seven figure royalty payment or?

Horst Zerbe: Its six figures.

Unidentified Analyst : Okay. My last question is in regards to the ARWAN Pharmaceuticals, and that whole contract that you have with them. Since the RIZAPORT just got FDA approval, are you going to be supplying the RIZAPORT to those nations directly from your manufacturing facility in Canada?

David Kideckel: Horst, I'll give this to you. But my understanding is that we're currently assessing different parts of the agreement. But if you have other information, Horst, please feel free to chime in.

Horst Zerbe: Yes. The deal was negotiated on the basis of the European approval. So for the most part, the product would be manufactured by our manufacturing partner in Europe, and we would receive royalties. However, we do have other degree with the option of manufacturing the product ourselves.

Unidentified Analyst: Okay, all right. I just wanted to touch base on one thing that was mentioned by a previous caller. And what Andre was saying in regards to the possibility sorry -- in regards to possibly considering a reverse split. I just want to say that, I think, IntelGenx has come a long way on its own. And I highly, highly don't entertain the idea of reverse split. I think the results and the execution of this company will speak for itself, and it will eventually get the company to the fair valuation to where it needs to be, because it's like highly undervalued right now. And I think the company what you guys are doing, focusing on execution, and not just manipulating the stock price just to make the company look appealing, I think what you're doing is an amazing job. And we've been supporting you for all these years, I've been with IntelGenx for like, 11 plus years. And I believe and the company and I think we're at the finish line.

Horst Zerbe: First of all, I really appreciate the comment, thank you so much. But then what I really want to stress we’re fully on board with your assessment, I mean, we have discussed a reverse split several times, and we have every single time come to the same conclusion. This is nothing that we would seriously entertain. And going forward, I cannot see that to be changing at all. If Andre, if you want to add to that. Please go ahead. But my position Andre is very clear.

Andre Godin: I mean, if I may had -- I already commented on that. And I think that we're fully aligned with your comments here. And the only way that we would contemplate that is if the stock was much higher, and it would be to migrate to NASDAQ. But right now it's totally out of the question to contemplate any reverse split.

Unidentified Analyst: I got you. And congratulations to you guys on the RIZAPORT approval. And welcome to Dwight to the company and we are supporting you and we are fully behind you and we believe in the vision that IntelGenx has.

Horst Zerbe: Thank you very much, for your support.

Dwight Gorham: Thank you so much.

Unidentified Analyst : You got it. Thank you.

Operator: We have Hugh Kelly back on the line.

Unidentified Analyst : Thank you. First of all, my apologies for not recognizing you and the company on the successful FDA approval of RIZAPORT, I dropped the ball on that one. So congratulations to you and your team members and the continued long focus on that successful journey.

Horst Zerbe: Thank you.

Unidentified Analyst : Couple questions I have done -- couple follow-up questions on the cannabis film with the market acceptance as the film going to slowing down. And that is the intent still to focus on the adult use for the medical cannabis. Where do you see the biggest market opportunity?

David Kideckel: Yes. I'll take this one. I mean, without question the bigger opportunity is within adult use in Canada, as opposed to medical. That said, there's a much higher price point in medical too. So we're opportunistic, as to which market to target. But to be honest with you Hugh, this isn't so much around what IntelGenx is going to be focused on, it's more a matter of what Heritage is going to be focused on, our commercialization partner. And they deal in both sectors within the Canadian cannabis market, both medical and adult use.

Unidentified Analyst : Okay. And then the expansion, I know you've been in Australia and Canada, is there any countries would Heritage on the horizon and/or other partners. Just taking the same five countries outline on the Investor presentation?

David Kideckel: I don't know which countries, or when that investor presentation was compiled. But like I said, as I just started a month or two ago, I'm in the process of reevaluating a lot of previous business opportunities, and where we're going to invest business developments, time and effort. And cannabis is certainly one of those areas that I'm keeping a close eye on. That said keep in mind, we do have the potential arrangement with Tilray subject to the outcome of our dealings with them. So, as far as additional countries, the U.S. right now is likely not going to happen just because of the legality there and then Australia still relatively small markets, certainly maybe parts of Europe. But Canada is really the focus, at least for right now.

Unidentified Analyst : Okay, thank you, for that one David. And just on your cannabis film, because there’s a handful of other companies out there. Any of them you see is a strong competitor to IntelGenx product?

David Kideckel: To be honest, I haven't seen any oral filmstrips in cannabis. Or even if I -- so I would have to do some more due diligence if others exist. But yes, to my knowledge, I don't know of any others. At least not in Canada. In other areas of the world, that could be a different story. So I'll leave it at that for now.

Unidentified Analyst : And it was a very good answer [indiscernible]. Back to Zerbe, any interest in partnership with anybody with your major repurposing effort, Marty Lucas?

Horst Zerbe: We're waiting until we have initial results. Actually from both studies, I mean, the BUENA study is nearing its end. So early next year, second quarter – first-second quarter, we will know the outcome and we'll then in earnest start our outreach. We had in the past discussions with a number of companies. Big Pharma certainly amongst them and with no exception, the message that we received were interested, but show us the data. So with that in mind, we haven't seriously entertained any outreach activities, while BUENA study is still ongoing. I suspect that with the Parkinson's study, that has not even begun, it will be similar. However, the situation is different and so far as Professor Svenningsson the lead investigator of that study, already conducted an efficacy study with Montelukast in 40 patients and found a significant level of efficacy, which prompted him to design this much larger study. And if I recall, correctly, in 170 patients, so there, we have very good evidence that the molecule is in fact, effective in Parkinson patients. So they're the outreach might start sooner.

Unidentified Analyst : That's very good news. And the last question Andre, is the regarding some of the prior questions on the catalysts in the year. That a catalyst you are indicating over and above RIZAPORT and Belbuca was something else maybe in horizon?

Andre Godin: Yes, it's something else. I mean, obviously, we're working on multiple fronts, these very active. So I mean, of course, we want this Buprenorphine film to be approved and launch. That's a priority, because it represents a great volume, great revenue for us. But the focus is also on other things, as you can see on the corporate presentation, and hopefully, we can have some catalysts there as well, in the near-term.

Unidentified Analyst : Okay. That’s all for me. Thank you, all.

Horst Zerbe: You’re welcome.

Operator: David Wen [ph].

Unidentified Analyst: Thank you. Just one more quick question. It's great that we have a new management team in place. Is it safe to assume for the next earnings call, that they will be up to speed and all the company's operations? I know Mr. Kideckel, you mentioned that you're going to look at past programs. Will it be an update on future programs based on what you will be seeing in the past? And maybe some of what Andre said, what are the programs you're looking at in terms of business development? I just want to make sure that, when we come to this next call, it's clear cut. It's not a lot of going back and forth. And we have our new CEO speaking to the investors.

Horst Zerbe: That’s what I can confirm. The new CEO will be actively running the next industrial call, that I can say. I would have mentioned that in my concluding comments, but since you asked me that, that I can confirm.

Unidentified Analyst : Thank you.

Operator: Abraham Shapiro [ph].

Unidentified Analyst : Yes, just one last. I just want to mention that I'm really happy of the results this past quarter and congratulations. And certainly, the share price is way undervalued in my opinion, I went in as I nibbled her some more at this price. But I'm 110% behind not doing reverse split. I think a reverse split plays into the hands of the shorts. And I'm with you 110%. Please do not do a reverse split. Best of luck to all. Thank you.

Horst Zerbe: No worries, no worries.

Operator: Justin Foster [ph].

Unidentified Analyst : Hi, gentlemen, a quick question and quick comment. The question is about the arbitration with Tilray. And I understand you can't say anything in terms of substance content, can you give any color on timing, either what would be agreed to going in when a decision would come or anything else without violating your roads to give us a little idea on progress or timing?

David Kideckel: I mean, the only thing I can tell you is that the most likely decision would come in default. This is the -- as far as we can go, this is highly confidential. And that's the reason why companies decide arbitration instead of court processes. If we weren't, I could give you the full picture. But now I just don't want to hamper our position.

Unidentified Analyst : Of course. And that's fine. That is helpful. And thank you. Finally, I was a shareholder many a year ago and have just recently joined you guys again. And at that time, several years ago, I think the reverse split, you actually had authority for it from the shareholders and decided not to do it. And I think that was one of the boldest and wisest things you gentlemen did. Because most small cap money losing companies think that that's the answer. And of course, as we know, the original share price after reverse split goes right back down within eight months or 10 months to where it was and market cap is 1/10 of what it was. And even being part of the NASDAQ is overrated because the dark pool trading, off exchange trading is there too. So I just want to congratulate you on that decision years ago, and affirm that your ongoing decision not to be entertained or even contemplated is smart and wise and at that time, bold. And thank you again. I look forward to good things this time, although I lost a little money with you guys years ago. So thank you again.

Horst Zerbe: Thank you.

Operator: Doug Destler [ph].

Unidentified Analyst : Hello, I just want to thank Horst for being accessible and congratulating on his retirement, and leadership and vision over the years and welcome to the new management team. I have a question. What product or products in the pipeline has the most potential to generate the revenue that's needed to place the company in a breakeven position the quickest?

Horst Zerbe: David, I think that's one for you.

David Kideckel: Yes, that’s -- I was going to take that. So that's a good question and that's part of our exercise in defining which of the business segments we should be targeting with a priority basis. What I can tell you is that RIZA with launch into the U.S., is likely not going to be the highest potential revenue generating opportunities. That's not to say it's, I mean, it's still a major priority for the company, one of our top priorities. But as far as drugs that are approved if and when we address the CRL, with our partner with Xiromed, between that and RIZA, those are going to be two of the most important products to the company. But then you look at other potential products as well that we have within our pipeline, Tadalafil being a very important product used for ED. And then another area, when you look at and when you talk about profitability, it's one thing to talk about revenue. But it's another thing to talk about margin. And that's something that we have to be very shrewd and careful with, in defining what are the highest margin types of segments and businesses we target. And one of those areas is our CDMO opportunity. And that's a pivot that was undertaken several months ago, where we hired another business development numbers part of my team. And he's really mostly focused on CDMO outreach and generating new business from that avenue. And moving forward, I expect you'll be hearing more and more about that on the next and subsequent conference calls.

Unidentified Analyst : Thank you. One other question, you may or may not be able to answer. But, with regard to legal expenses, on the litigation regarding Tilray. Have those expenses been high and does the company have the ability to recapture any legal expenses? Should they be successful in the arbitration settlement?

Horst Zerbe: Maybe I can answer that. Arbitration contrary to court is a process where you can normally recoup legal expenses. That means at the end, the arbitrator will rule on legal fees as much as the substance of the case.

Unidentified Analyst: Thank you. That’s all I had.

Operator: [Indiscernible].

Unidentified Analyst : Quick question for Tommy, regarding your comment with Tilray, somewhere potentially in the flow is a potential that could be sooner that Tommy, if an agreement is without or settled.

Tommy Kenny: We always hope that something can happen sooner, but to answer the question, we don't have anything that would give us any indication other than something sometime in the fall.

Unidentified Analyst : Okay. That’s if for me.

Operator: We have reached the end of the question-and-answer session, and I will now turn the call over to Horst Zerbe for closing remarks.

Horst Zerbe: Thank you. And this concludes our first quarter 2023 investor update call. I would once again like to thank the IntelGenx team for its hard work and dedication, all of our directors for their continued support, the management team. And finally, our investors for continuing to believe in and supporting us. And on a personal note, I would like to reiterate, what a pleasure it has been steering this company to this pivotal stage. And I look forward to continuing to contribute to success as champ. Naturally going forward and in future quarters as I previously mentioned, Dwight will lead these calls instead of me. As my last comment, there is really no doubt in my mind that I'm passing the torch into the right hands. Thanks to everybody and goodbye.

Operator: This concludes today's conference and you may disconnect your lines at this time. Thank you for your participation.