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spk08: Good afternoon, ladies and gentlemen, and welcome to the Intel GenX third quarter 2021 financial results. At this time, all participants have been placed on the listen-only mode, and the floor will be open for questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Stephen Kilmer, Investor Relations. Sir, the floor is yours.
spk09: Thank you. Good afternoon, everyone, and thank you for joining us on today's call. With me on the line are Dr. Horst Urbe, IntelligentX's CEO, Andre Godin, our President and CFO, Tommy Kenney, our General Counsel, and Dr. Dana Madsen, the company's Vice President of Business and Corporate Development. 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. Finally, a quick administrative note in that regard. The SEC is closed today because of Memorial Day, so our filings for Q3 won't be accessible on Edgar or Cedar until tomorrow morning. With that said, I'd now like to turn over the call to Dr. Zerbe. Horst?
spk11: Thank you, Steve. Good afternoon, everyone, and thank you for joining us for the InterGenics third quarter 2021 conference call. On today's call, I will provide a corporate update and discuss the progress we have made on our Q3. Following that, Andre will review our Q3 2021 financial results. then we will open up the line for your questions. But first, on the Attai partnership, on August 4th, we appointed two Attai delegates, Frank Stegard to our board of directors. As a reminder, our partnership agreement with Attai provides that they are entitled to board representation proportional to their stake in the company. Their 25% ownership position entitles them to two board seats. Dr. Srinivas Rao is one of the co-founders of the Thai Life Sciences and currently serves as its Chief Scientific Officer. Dr. Rao, or Srini as we refer to him, has more professional experience in the pharmaceutical and biotechnology industries. He will serve on Intergenic's Compensation Committee. We also welcome Frank Stegart, ATTAI's Vice President of Investment Management and Operations. Frank serves on our audit committee. We very much look forward to Srini's and Frank's contributions as we continue to execute on our growth strategy. In September, we entered into an amended and restated secured loan agreement with ATTAI Life Sciences, which committed $6 million in future financial support to Intergenics. We needed to secure this loan facility in order to meet certain requirements in conjunction with our uplisting to the TSX. Moving on to Resupport, we were pleased to announce earlier in the quarter that Exceltis, our Resupport commercialization partner in 27 European countries, has finally launched Resupport in Spain. This is a major milestone for Intergenics as this is the first Versafilm-based product to launch in the global pharmaceutical market. Because of its neutral flavor and favorable mode of administration, it does not require swallowing a pill or consuming water. We believe that Resupport Versafilm offers an attractive therapeutic alternative for migraine patients, especially for those estimated 80% of patients who suffer from migraine-related nausea as well as those who suffer from dysphagia or difficulties following. With the European migraine drug market expected to approach 1.5 billion US dollars by 2024, we're looking forward to continuing to support Excelsis' launch of Resupport in Spain and in additional European countries in the future. Now moving on to Tadalafil. In September, we announced that Equestive Therapeutics, a co-development and commercialization partner for Tadalafil oral films, entered into a definitive license and supply agreement with an undisclosed leading men's health company. Tadalafil, as you will remember, is approved for the treatment of erectile dysfunction and benign prostatic hyperplasia, or BPH. This is an important development with Equestiv that will help make Tadalafil oral films available to men suffering from these conditions. Now, cannabis films. In August, we completed an initial shipment of CBD film strips in support of the launch of Heritage Cannabis CV4 control brand in Canada. This partnership helped Intengenics to transition from a development to commercial stage company and we are looking forward to continuing to work with Heritage on oral thin-film cannabis products. On Montelukast, in August, we closed a $2.1 million convertible notes offering with U.S. investors, the proceeds of which would be used to finance our Montelukast study. In Q2 of 2020, we placed on hold our Phase IIA Buena clinical trial in patients with mild to moderate Alzheimer's disease because the target study population is considered to be a higher risk group for severe illness from COVID-19. This quarter, we resume patient screening for this study, which is proceeding under the amended protocol with a higher daily dose that was previously cleared by Health Canada. We're very excited to resume this trial and evaluate the potential of Montelukas as a much needed treatment for Alzheimer's disease patients. And with that, I would now like to turn the call over to André for a review of our financial results. André?
spk05: Thank you, Urs. Good afternoon, everyone. As Urs mentioned, I'll take a few minutes to discuss the company's financial performance for the third quarter of 2021. Total revenue for the third quarter of 2021 amounted to $593,000 compared to $510,000 in the same period last year. That was an increase of 16%, and it's mainly attributable to an increase in sales milestones revenue of $320,000 and product revenue of $70,000. That was partially offset by a $308,000 decrease in revenues from . Operating costs and expenses were 2.2 million for Q3 2021 versus 1.9 million for the corresponding three-month period of 2020. The increase is mainly attributable to increases of 26,000 in R&D expenses and 55,000 in manufacturing expenses 37,000 in SG&A and 17,000 in depreciation of tangible assets. One of the factors for the increase in operating expense was related to the COVID-19 government assistance programs that we received in 2020, but not this year in 2021. For Q3 2021, the company had an operating loss of $1.6 million compared to an operating loss of $1.4 for the comparable period of 2020. Adjusted EBITDA was negative $1.4 for Q3 2021 compared to negative $1.2 million for the same period last year. Net comprehensive loss was $2.2 million or one cent on a basic and diluted per share basis for Q3 of this year compared to the net comprehensive loss of $1.6 million or also $0.01 per share for the comparable period of 2020. As of September 30, 2021, the company's cash and short-term investment totaled $12 million. As everybody knows, last month we achieved a major milestone by graduating to the TSX, Canada's premier stock exchange. We believe this uplifting will help increase intelligent visibility among a broader and more diverse range of institutional investors. Also, following the end of the quarter, approximately 2.8 million shares were issued following the venture and no conversion. which has reduced our total debt by approximately $1.4 million. I will now turn the call back to Dr. Berbe.
spk11: Thanks, André. In closing, I'd like to once again recognize our team for continuing to execute on our long-term strategy. And with that, 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 QA. Thank you.
spk08: Certainly. The floor is now open for questions. If you have any questions or comments, please press star 1 on your touch-tone phone at this time. We ask while posing your question, you please pick up your handset if listening on speakerphone to provide optimum sound quality. Please hold a moment while we poll for questions.
spk06: Thank you.
spk08: Your first question is coming from Steve. Please announce your affiliation and pose your question.
spk13: Good afternoon, Steve. My question is the future of this company and the anticipation of the stock price. What's your estimate going ahead with all this pipeline development? stuff that you have in this company.
spk11: Henri, do you want to respond? It's a share price related question. So probably you should address that.
spk05: Yeah, I mean, you know, we're not going to, you know, basically discuss where the share price might go. I think that we're working very hard, you know, to make an appreciation in the company. the market cap has increased drastically over the past 12 months. But at the end of the day, we focus on execution. And I believe that with proper execution, we'll be able to see the share price appreciate. And I think that this is what Intelligenix team is committed to. But I wouldn't be in a position to discuss what kind of appreciation we we could have in the next uh you know few years but we're all very optimistic that obviously the share price should appreciate if the execution is done properly which which is the main mandate of our company okay thank you you're welcome
spk01: Your next question is coming from Alan Taylor. Please announce your affiliation and pose your question.
spk04: Hi. Yeah. My name is Colin Taylor. I've been a long-time investor. I have two questions. The first question would be, does the management team plan to buy personally into the stock of this company opposed to stock options? And with my second question, you can answer that, Sven, thank you.
spk11: Yeah, so my response to that would be we're doing that, and we have been doing that for quite some time. The entire executive management team owns stock to some degree, so we strongly, every single member of the company, strongly believes in the company and therefore is a shareholder.
spk04: Okay. I see it as I'd like to see more of that for confidence and just typical of executives at companies that would buy, especially at maybe a price at this point. Second would just be my next question and You know, we have a lot of cash on the books now. What do we plan to do with that cash?
spk05: Andre? I mean, the reason why we raise money is obviously to be in a position where we can advance all our programs. And this is what we're doing right now. We're committed to that. And as you know, We still have burn rate, so until we get to cash flow positive, we need that money to get there, and we're expecting that to happen in 2023. So the cash is basically going to be there to help us get to cash flow positive position, at which point we should be able to generate positive bottom line.
spk11: I may be a little more specific and add to that. We are focusing our development efforts on three strategic focal areas, animal health, psychedelics, cannabis, and to a very large extent the money that we have available is being used in support of advancing these programs and get them to the market as quickly as possible, besides those programs that we discussed previously.
spk04: Okay. And if I could just throw one more question in there. Because the United States does not allow Americans to buy Canadian drugs, which has been discussed in politics, is this a game changer if that
spk13: law does change?
spk11: I mean, that wouldn't affect us all that much because we can still, and as we have been doing all along, partner up with U.S. commercialization partners and then supply their distribution channels with our products, and so they can sell. I think what you're discussing, is not really applicable to us because that concerns the purchase of finished product that's intended for the Canadian market by U.S. customers. We are not dealing with that situation at all.
spk04: Okay. Thank you for your time and answers.
spk11: No problem.
spk08: Your next question is coming from David Nguyen. Please announce your affiliation and pose your question.
spk02: Good afternoon. Thank you for the call. My name is David Nguyen. I'm a longtime investor. Two questions. With all the activity, positive things that are happening, especially in the last few months, could you give us an idea of any milestones that may be met within Q4 of this year or Q1 early next year? And the second part of the question is that now that we have a couple of new board members from the entire leadership team and one of them being involved with compensation, how are they looking at executive compensation or how are they involved with the executive compensation within Intelligenix?
spk11: They would be entitled to the same compensation scheme that we have in place for all other directors. They are being treated as every other director on our board.
spk02: Well, if I can interrupt. I meant, well, if I can interrupt. I'm sorry, Dr. . Are they, do they have any involvement in determining executive compensation, not so much the board compensation?
spk11: Yes. Particularly one of them, which would be Trini, He is serving on our audit, I'm sorry, on our comp committee, and to that extent, he would have involvement. But then the comp committee doesn't decide on executive compensation alone. It's the full board that eventually decides. So, yes, both ATAI representatives have a direct say and input in executive compensations.
spk02: Thank you for that. And then in terms of milestones, do you foresee any more progress in the next two quarters?
spk11: Dana, do you want to comment on upcoming milestones?
spk00: Yeah, I can comment on that. So announceable milestones, you won't really see much during Q4. There's a lot of progress on our programs where we have where we will hit milestones to push those programs forward, but those are internal milestones, you know, meeting certain batch requirements, you know, submitting something to, you know, to answer some questions, but nothing that I foresee that we will be announcing.
spk06: Thank you. Mm-hmm.
spk08: Your next question is coming from Adam Tiberio. Please announce your affiliation and pose your question.
spk14: Hello, my name is Adam Tiberio. I'm a long-time shareholder, and I also cover your stock on social media and other platforms. Two questions for you guys. The first question is, can you give any clarity on the relationship with Sideman and what's going on with that? Because when... we were reading through what was going on with a ties deal. It seemed that Saibin might end up not, you guys might not be allowed to continue evolving that relationship because of a tie. And the second question is at any point, do you guys plan on ramping up PR? I feel like you guys are very quiet and I understand that, but in terms of spreading awareness on the company, you guys could be doing so much better. And that's it.
spk11: On PR, I let Andre and probably Tommy and or Gina comment as in regards to SIBIN, the agreement that we have in place to them is very clear. It is a development agreement. We are providing formulation development services to them to the extent that upon completion of the development of a prototype, we supply them with material for a Phase I clinical study, and that is the end of that relationship. They, under the agreement, do not have any rights to commercialize the formulation that we developed for them. For any further questions regarding that relationship, Tommy, our general counsel, would be available to answer further questions.
spk14: Because of the ATAI relationship, would that stop you, say, once you guys finish doing the stuff with Seidman and say they want to move forward with something else? Would the relationship with ATAI be a conflict for continuing anything with Seidman?
spk11: The conflict situation has been addressed contractually, but Tommy will comment on that further.
spk15: Yeah, we are currently completing our obligation with the current agreement with Cybin. Anything further than that will have to be discussed with our current partner, which is Atai, but we don't foresee anything in the future with Cybin at this time.
spk14: Okay, thank you. And the second question, please.
spk05: Yeah, in regards to IRPR, obviously, yeah, you're right. We've been quiet, you know, recently. We haven't been able, obviously, to travel because of COVID. But our budget was obviously reduced during the pandemic, even though it's not over. But, you know, obviously, it's looking better. And we have great ambition for 2022 and we'll go back on the road and we should have more disclosure and probably more exposure as well because we're looking to maybe hire firms that could help us disseminate the story. So I think that you'll see more and more of us and you'll hear more and more of us. And we also have now a communication team that is basically addressing that and is really after media and trying to put the company forward. at a higher level. So I think 2022, you'll see a big change in our IRPR approach.
spk06: All right. Thank you very much.
spk08: Your next question is coming from Fadi Zandedine. Please announce your affiliation and pose your question.
spk03: Yeah. Hi, I'm Fadi Zandedine. I'm a private investor. Horst, I had a question in regards to the Eurisaport Spain. Congratulations on the launch this last quarter. Could you shed some light on the numbers and the sales guidance going into Q4 and 2022?
spk11: It's very early to comment meaningfully on numbers, but Dana can provide you with some insight there. Dana?
spk00: Yeah, absolutely. So Resupport launched on September 3rd, so we received kind of the first sale, which was very well distributed in Spain. It's now in the commercial phase. We're discussing with Excelsis how we can expand into other territories given that they have the remaining European Union, the rights to it. But to get a full sales report, usually you have to be patient for the first quarter because during the commercial launch, a lot of units are being distributed to pharmacies. They'll order them as the demand goes up. So I know that they're in the full commercial phase at the moment, but I think in the next quarter we have more insights into how the series will be trending. It is really too early at this moment.
spk03: Okay, and another question for you, Dana. In regards to the Vita film, any developments with that company that you are possibly going to partner with in the Q4?
spk00: So on animal health, as Horst mentioned, this is a key program, and we're very active with several companies at this moment and having discussions about contracts. We have signed an R&D agreement with a company to further develop a previous product with them. We didn't announce it at this moment because we can't disclose who we're working with. and it's still early stage. So we're advancing on a product for an EUS company. That's how much I can disclose. And we're in discussion with at least two other companies in late stage. But as you know, in business development, until you have agreement signed, there's little we can say. So yes, we're really acting on several fronts. We also hired a consultant to help us being more visible with larger animal health companies to showcase our technology. So there's a lot of activity, but I hope we can announce something early next year.
spk03: Okay. And Horst, back to you. In regards to ResaPort US, the batches that you guys manufactured for the resubmission, how is that going and when do you anticipate to resubmit the application to the FDA?
spk11: We're in the final stages of preparing those three batches, literally as we speak. We are involved with that over the next few weeks. That'll wrap up. The first batch is already put on stability. As I'm sure you know, before you can resubmit, or it's not a resubmission, it's a response to a complete response data, we need to generate stability data on those freshly manufactured batches. That will be the case throughout the first several months next year. So sometime mid-next year, we'll meet with FDA and then decide on the resubmission, which will happen for sure sometime in the second half of next year. When exactly? it's too early to say.
spk03: Okay. And if you don't mind, just two more questions. First question is in regards to heritage. You said that you had a significantly larger order from them in the third quarter. How is that going? And can you shed some light on Q4 and the further guidance on your relationship with them?
spk11: Yeah, I would like to defer again to Dana. My pleasure.
spk00: So this heritage at this moment, you're absolutely right. We had a large order. We delivered half of it. The rest is still in our storage given that they're launching in Canada or they have launched in Canada and they had some storage issues at their site. They didn't have space anymore. It's quite a large order, but they're coming back and want more. At this moment, both companies exploring other territories. We got some interest from large other territories that could potentially import our product, which would be very good for future business. We are also looking at expanding our relationship to including other forms of the film and other versions of the film. But for now, Canada launched, Australia launched. We're waiting for, similarly to Resupport in Spain, we're waiting for the first quarter of sales report. But so far, it's doing well.
spk03: Okay. And when do you see a launch of the cannabis product in the U.S.? Because I heard that Heritage was looking into launching it in Missouri. Okay.
spk00: Yeah, so in the US, as you know, at this moment, the Canadian government, and Tommy can shed some light on this too, but we're not allowed to export cannabis products into the US. So we would have to manufacture it locally. We have explored that option to do a tech transfer and manufacture with another company in the US for the US market. It has been put on board. because there's a lot of discussions and we want to make sure we do it at the right time or if legislation changes that we do it from our facility because the tech transfer always involves quite a bit of money to move the technology. So we wanted to make sure that the business case is right.
spk03: I got you. And my final question for Horst is in regards to the definitive agreement that Equestiv signed for the Cialis. what is Intelligenix getting out of this agreement? And if you can just shed some light on your partnership with them and that definitive deal, like what's in it for Intelligenix?
spk11: Yeah, I would again like to refer to Dana because that's one of her main programs. She's handling that. Dana?
spk00: Again, so the partnership with Equestiv, we signed an agreement a while ago, which really defines that we are a true partner, meaning from that partnership that we signed, I think, two years ago, we're moving 50-50 on the program forward, meaning any costs that are related to Tadalafil, we're going to share 50-50, but also any proceeds we're receiving from the program we will share 50-50. So for the longest time, both companies have been quite active to find the right commercial partner. We found the right commercial partner. It's a very active man's health company. We, at this point, are not allowed to disclose. They wanted to wait a little bit closer to the product being ready for launch so that they don't give away competitive advantage, which we understood. And for us, we have a partnership. Once the commercial company launches the product, all the financial, the net sales, the royalties will be shared 50-50 between Equestriff and Intelligenix.
spk03: So did Intelligenix get any of the $1.2 million that they received?
spk00: Of course we got our portion.
spk03: Okay, no, just towards the question, I wasn't applying anything. All right, thank you so much, and I wish you guys the best of luck, and we're very proud of the progress that the company is making. God bless you.
spk00: Thank you.
spk08: Once again, if there are any remaining questions or comments, please press star 1 on your phone at this time. Your next question is coming from David DeAngelis. Please announce your affiliation and pose your question.
spk12: Hi, David DeAngelis, private investor. Just a quick follow-up on the request of royalties. Is that reflected in the current quarter, or will that show up next, the proceeds from that that were received?
spk11: That will show up in the next quarter.
spk12: Next quarter, okay. And then all my other questions were answered, but I do have a follow-up on actually a new question. Regarding the two undisclosed products, I know there's not much you could say about them, but they're both listed on the pipeline chart as ready to launch or near launch. Can you say anything about that? what the time frame is or expectations of possible launch during 22, PDUFA dates that might be coming up expected in 22, or even revenues possible should that occur during the calendar year. Anything you could say to that in terms of timeline or expectations would be appreciated.
spk11: I mean, they are undisclosed for a reason, and the reason is that we have a contractual obligation for confidentiality. So we really, I'm apologizing for that, but we really cannot comment on that. What I can say qualitatively is that we're making progress on those programs. We are in very close, in a very close dialogue with, but that's really all I can see.
spk12: Okay. All right. I think that's about it then. Everything else is answered. And looking forward to next year. I think it's going to be a very exciting year. Thank you.
spk11: Thank you.
spk08: Your next question is coming from Sam Lenson. Please announce your affiliation and pose your question.
spk10: Hi. I'm also a private investor. And my question also was about the Rizoport in Spain. And I think that Dana has touched on this already, but I just wanted to confirm something because I see the number of press releases about the CBD film strips being shipped to Canada and Australia. But I haven't seen, or maybe I missed it, any kind of press releases about Rizaport being shipped to Spain. So I just wanted to confirm that have we actually shipped the product to Spain and it's being distributed to pharmacies there?
spk11: Yeah, but you couldn't possibly see a press release announcing shipment because we are not manufacturing the product here at Intergenics. Rather, that's being done by our German contract manufacturer. So there's a European manufacturer that makes our product and ships it to Spain. to Exaltis All Partners.
spk10: Oh, I see. I was not aware of that. I'm sorry. And I guess in that case, Intelligenix is receiving a royalty on those sales.
spk11: That's correct.
spk10: I see. Okay. Thank you for the clarification.
spk01: Your next question is coming from Hugh Cayley. Please announce your affiliation and pose your question. Your next question is a return question from Adam Tiberio.
spk08: Please pose your question.
spk14: Hey, thanks again for letting me ask another question. Is there any conversations or can you give any insight on the relationship with Tilray? Are you having conversations again? Is there anything you can say about Tilray at all?
spk11: Very little, unfortunately. There is communication ongoing, but we can't really disclose any details. I'm sitting next to a general counsel and he's shaking his head. So we're really, it's an ongoing negotiation between We cannot, unfortunately, comment on that.
spk14: Okay, no problem.
spk06: Thank you very much. You're welcome.
spk01: Okay.
spk08: There appear to be no further questions in queue at this time. I'd like to turn the floor back over to Dr. Zerbe for any closing comments.
spk11: Thank you. So this concludes our Q3 2021 investor update call. I would once again like to thank the entire Intergenics team for its hard work and dedication. I'd like to thank our board directors for their continued support of the management team. And finally, our investors for continuing to believe in and supporting us. Thank you and goodbye.
spk08: Thank you, ladies and gentlemen. This does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.
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