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spk10: Good afternoon, ladies and gentlemen, and welcome to the Intelligenix First Quarter 2022 Financial Results Call. At this time, all participants have been placed on a 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, Abby Hardy, Investor Relations. Ma'am, the floor is yours.
spk02: Thank you, Operator. Good afternoon, everyone, and thank you for joining us on today's call. With me on the line are Dr. Horst Zerbe, IntelligenX CEO, Andre Godin, our president and CFO, and Dr. Dana Mattson, 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. I would now like to turn the call over to Dr. Zerbe. Horst?
spk00: Thank you, Abby. Good afternoon, everyone, and thank you for joining us for the Intertenix first quarter 2022 conference call. On today's call, I will provide a corporate update and discuss the progress we have made on our key pipeline projects. Then, Andre will review our first quarter 2022 financial results. Following that, we will open up the line for your questions. Although we continue to progress each of our development programs during the first quarter, today's corporate update will be brief. Our material news flow, which we expect would be heavier as the year progresses, was relatively light this quarter. So, first from the Atai partnership, in September, we entered into an amended and restated secured loan agreement with our partner, Atai Life Sciences. The loan committed $6 million in future financial support to Intergenix and helped us to meet certain requirements in conjunction with our uplisting for the TSX in October. During the first quarter of this year, we received our third term loan from Attai in the amount of $3 million, which we will use for working capital. Moving on to Resupport. We're meeting with Exceltis next week to discuss the internal analysis on commercializing in additional countries. On to Dalafil, there's no update at this time, certainly not from the last March investor call. Everything is progressing. Moving on to cannabis, we received an additional purchase order from Heritage for reselling our CB4 control film to one of the top three licensed producers in Canada. Montelukast, the resumption of patient enrollment and dosing in our Phase 2A Buena clinical trial in patients with mild to moderate Alzheimer's disease was definitely the highlight of the first quarter. The proof of concept study will assess Montelukast's versafilms safety, feasibility, tolerability, and efficacy for the treatment of mild to moderate Alzheimer's disease and is proceeding under the amended protocol with the higher daily dose that was previously cleared by Health Canada. In addition, we're in early discussions to expand the therapeutic use of Montelukast to COVID-19 and Parkinson's disease. Now moving on to animal health. We finalized the formulation development and completed a clinical batch for an undisclosed partner project. Again, the progress we continue to make is not reflected by this quarter's lighter news flow, which we expect will be a short-term trend. We look forward to updating you on our progress in the coming quarters. With that, I would now like to turn the call over to André for a review of our financial results. André?
spk08: Thank you, Urs. Good afternoon, everyone. As Urs mentioned, I'll take a few minutes to discuss the company's financial performance for the first quarter ended March 31st, 2022. The total revenue for 22 first quarter amounted to $237,000 compared to $286,000 in the same period last year. The change is mainly attributable to a decrease in product revenue of $160,000, partially offset by increases in R&D revenues of 99,000 and royalties of 12,000. Operating costs and expenses were 2.6 million for Q1 2022 versus 2.2 million for the corresponding three-month period of 2021. For Q1 2022, the company had an operating loss of 2.3 million compared to an operating loss of 1.9 million for the comparable period of 2021. Adjusted EBITDA was negative 2.1 million for Q1 2022, compared to 1.7 million for the same period last year. The net comprehensive loss was $3 million or two cents on a basic and diluted per share basis for Q4 for Q1 2022 compared to net comprehensive loss of 2.2 million or two cents per share for the comparable period of 2021. I will now turn the call back to Dr. Zerbe. Urs?
spk00: Thanks, Andre. In closing, I'd like to once again recognize our team for executing on our long-term strategy. And with that, I will now turn the call over for questions. I would like to remind you that our forward-looking statements apply to both our prepared remarks and the following QA. Thank you.
spk10: Ladies and gentlemen, the floor is now open for questions. If you have any questions or comments, please press star 1 on your phone at this time. We ask that while posing your question, you please pick up your handset if listening on a speakerphone to provide optimum sound quality. Please hold while we poll for questions. Once again, if you wish to place a question or you have any comments, press star one on your handset. Okay, the first question is coming from Hugh Killey, who is a private investor. Hugh, over to you.
spk05: Thank you. Good afternoon, folks. One question is on the last call, we talked about the scheduling and meeting with the FDA on the status of the Visipor complete response letter. Do you think there'll be a schedule between now and the end of the second quarter, Dr. Gervais?
spk00: Thanks, Hugh. Yes, I think that is going to be the case. We're progressing. For planned meaning, we're right now in the process of gathering the stability data required to put together the application for the meeting. So, in short, yes, the meeting is going to be scheduled according to plan.
spk05: Okay. Thank you.
spk00: Yeah.
spk10: Thank you. Your next question is coming from Trevor Reed. a private investor. Trevor, please ask your question.
spk07: Hey, I was just wondering, it shows that there's $750,000 in accounts receivable. What is that for and when do you expect to receive that?
spk08: Yeah, that would be for... It's multiple things. There is... There is GST and QST, so tax... sales tax that we're supposed to get back. There are also some receivables from Zaromed, one of our main customers, as well as some receivables also from the government on investment tax credits. And it should all be received, I would say, in in Q2 most likely, so it shouldn't be there or most of it shouldn't be there by the end of this quarter.
spk07: Okay. And on the revenue side as well, I saw it was all logged in Europe. There was no revenue from Canada. In terms of royalties and income, you know, from RIS report and CBD, are you able to distinguish how much of the $237,000 is from each or any specific numbers on that?
spk08: Most of it is, uh, from R and D revenue. Um, and, um, the royalty is, I would say it's about, you know, 15,000 on each, uh, you know, both, um, uh, from the, uh, reservoir, uh, Spain and CBD.
spk07: Okay. Um, also do you have a current patient enrollment number for the Buena study?
spk00: Yes. We are right now at regarding the increased dosing. We're now in the process of enrolling the sixth patient. So in total, we are around 30. Okay.
spk07: Thank you. And then one question about Tadalafil. I noticed that Equestiv always fails to mention anything to do with their involvement in Tadalafil or anything like that. Do you know why that is?
spk00: Dana, do you want to respond to that?
spk03: Well, it's just speculative. I mean, at the end, we don't know why they don't mention it. One, I guess, idea is that Tadalafil is certainly a little bit non-strategic for them. They're mostly focused on their CNS programs and Tadalafil is outside that focus. But at the end of the day, you know, this is all speculation.
spk07: And they're not dragging their feet on anything that we've done kind of behind the scenes with them that you've noticed at all, have they?
spk03: No, we have weekly team meetings. We're actually progressing quite nicely on the last items that we need to do. And no, this is a full team effort. So there's just certainly a strong collaboration between the companies.
spk07: Okay, that's good. And regarding the additional purchase order from one of the top three licensed producers in Canada, are you able to say how big that order was for what we can expect for revenue from that?
spk03: So we received an order for a full batch. Again, this is for 200,000, 220,000 cents. This is good news for us. Our partner, Heritage, as you know, is selling the product in Canada. It's also selling it to resellers or distributing it to resellers. So there are a bunch of companies that are also selling our brand within their channels. And one of the recent purchase orders that we received is a signal that there's an uptick in the market because that AP company I received a small order recently and just ordered again. So there is just certainly quite an activity right now on the marketing and distribution side for our CBD for control film in Canada.
spk07: Okay. Did you say 200 or 20? I said 200 to 220,000. So that's kind of the range. Okay. And do you know if Heritage has any plans? I know they're trying to expand into the U.S., I believe in Missouri. Is that something that we would be involved with as well?
spk03: At this moment, due to federal legislation, we cannot cross-border with our products to the U.S. One would have to manufacture within the U.S. to distribute there. So we have discussions about how we could enter that market and We're certainly very optimistic on it. At this moment, there are no concrete plans that we can share.
spk07: Okay. And I just have one more question. Sorry for the bunch. I know in terms of the generic Suboxone that we've been in litigation with in the past, I believe the agreement was that it came off patent or we were allowed to sell it January 1st, 2023, which is coming up. Do we have any plans for marketing or, you know, application of that or where does that kind of stand?
spk00: Maybe you say it. Data, Tommy is going to respond to that.
spk04: Yeah, so it's not off patents. Some patents are still there. We do are able to launch our product, but right now, We don't have anything to tell investors as to when we will launch the product because nothing is firm at the moment.
spk07: Okay. And then I do believe I saw a, we recently got a CRL in March. Are you able to comment on that at all?
spk04: The CRL, it's Tommy here, the CRL that we received, it's for an undisclosed project on our pipeline. So hopefully we can answer quickly and move this project toward approval as soon as possible. Things are looking good in that respect.
spk00: Just to add to that, it's our survey here. This was entirely an expected CRL. It is in that sense really minor. We were prepared to receive it. Our partner, which we cannot disclose, was expecting that and we are, as we speak, responding to that.
spk07: Okay. And do you have a timeline for when you might resubmit on that?
spk01: It'll be Q3.
spk07: Okay. Thank you so much. I think that's all I have for now. I appreciate it. You're welcome.
spk10: Thank you. Our next question is coming from Hugh Killey, who is a private investor. Hugh, over to you.
spk05: One more question is on the update with Tommy of how things are progressing or looking with the two-way arbitration.
spk04: The arbitration is still ongoing. The nature of the arbitration process is that it is confidential and this is why that forum was chosen when we entered into the agreement, so I cannot disclose anything more. I will be happy to let the investor community know what the outcome of the proceeding is once we get there, but right now things are progressing. We don't have a full scattering order at the moment, so I cannot tell you when it will be completed, but things are progressing.
spk05: Okay. Thank you, Tommy. That's the end of my questions. Thank you. Thank you.
spk10: Thank you. Your next question is coming from Colin Taylor, who is a private investor. Colin, over to you.
spk09: Hi. Thank you for taking my question, long-time investor. So quarter after quarter, I feel that we do not have a product that we're focusing on. We have multiple products that we're trying to get to market and it's part frustration on what is the problem with management executing on business lines that we already have that are developed and why can't we expand on those? Thank you.
spk00: I think We've demonstrated over the past quarters that we are executing. We brought one product to the market in Spain, one of our legacy products. We brought the cannabis film to the market. We're expanding there quite rapidly also, as Dana expanded. There have been setbacks. I'm the first one to admit that. But I think you should also recognize that we are trying to learn from our mistakes, fix them, and move on. And I think the most recent successes in terms of those launches that I mentioned do prove that. Okay.
spk09: Yeah, I strongly favor a more monetized approach in the way that we do business and understand that we're not a research and development company anymore. So I look forward to, you know, increasing our numbers, increasing our sales for established business lines. So thank you for my consideration and my call. You're welcome.
spk10: Thank you. The next question is coming from Adam Sabaro, the private investor. Adam, please pose your question.
spk01: Hey, everyone. Thanks for taking my question. I have two questions. The first one is, I'm sorry if I might have missed this early in the call if you mentioned it, but is there any info regarding the pet medications that you can give to us investors regarding like what's going on with negotiations, where are we at, timelines maybe of what we might hear about any of the companies that you have partnered with in regards to the pet medications? Dana?
spk03: Yeah, I can take that question. So we are having a strong VETAFIM campaign running right now where we'll be at trade shows. We have several partners lined up in various stages of the term sheet discussions. As Horst mentioned previously, we have a company where we are submitting the clinical trial samples on our VETAFIM program. At the end of the day, you know, we're doing what we can to advertise it and we're at different stages. So this is the normal process with a new platform. It's highly innovative in the market that hasn't seen much innovation over the last decades. If you think about what are out there in terms of medicines for animals, you don't have a lot of innovation. There's a little bit of a barrier that we have to break, but we're progressing, and I'm sure in the future you will see more of announcements in that area.
spk01: Awesome. Thank you so much for the response. My second question is a two-part question. So basically, in terms of have you guys, I don't know if you guys can even answer this, but have you guys been in discussion with any other psychedelic companies in terms of putting any formulations on strips I don't need to know about any specific companies, but just generally, aside from Atai?
spk00: We have an exclusive deal with Atai, so the answer is no, but to be fully correct, prior to entering into the deal with Atai, we had a deal in place with another psychedelics company that... The agreement has been completed, and so now we are fully focused and exclusively dealing with Atai.
spk01: Understood. So I assume that was Saibin. To build on that question, are you guys expecting to get another loan from Atai at some point soon? And how has everything been going in terms of your relationship back and forth with Atai and the way they've been supporting you?
spk00: On the relationship, I can comment. Andre will certainly comment on the financial part of the question. The relationship has been and continues to be very good. It's a very, yeah, partner-like and collaborative relationship. I can only say the best. And the interaction occurs at different levels, at the corporate level. as well as at the project level. And like I said, at both levels, the communication is really excellent. André, you want to comment on the financial part of the question?
spk08: Yes. Yeah, so in September of 2021, we signed an addendum to the existing loan for an additional $6 million. will receive the first $3 million in January of this year, and there's an additional $3 million that will be received in January of 2023 for the total of $6 million. So there's still $3 million to come.
spk01: Okay, awesome. Thank you so much for answering my question, and I really appreciate the work you guys are doing. Thank you. Thank you.
spk10: Thank you. Your next question is coming from Lindsay Murphy, a private investor. Lindsay, please ask your question.
spk11: Hi, yes, thank you for taking my question. I was wondering if the manufacturing facility in Montreal is ready to produce volumes of the risipore and tadalafil. Excuse me.
spk00: The second one was tadalafil?
spk11: Yes, yes, I apologize.
spk00: Yeah. To Dalafil, we wouldn't manufacture ourselves under the deal that we have with Equestiv. They would be responsible for the manufacturing. And the short answer for the Resupport part of the question is yes, we're prepared to handle any volumes.
spk11: Okay, thank you.
spk00: You're welcome.
spk10: Okay, we have another follow-up question from Adam Sabara. Adam, please ask your question.
spk01: Yeah, sorry about that, guys. Are we still on track to being cash flow positive by early next year?
spk08: Yes. No, we're not. We will be cash flow positive at some point next year. We are looking to launch two products next year, and as soon as those launches are done, then we would turn cash flow positive. But we will not be happening in Q1, but sometimes during 2023.
spk01: Are you guys at liberty to mention what products those are?
spk00: I mean, one for sure not. One is confidential and the other one Yeah, would be the migraine film.
spk01: Okay. All right, awesome. And in regards to, I remember during the webcast, you mentioned the migraine films are being very well received in Spain and also by the company that you partnered with. Is this still the same sentiment going around?
spk00: Tina?
spk03: Yes, of course. As Horst mentioned during the intro, that we actually have a meeting with them next week to discuss the strategy for the additional countries. If you might remember, Excitus has the right for all European countries. At this moment, the product is only commercialized in Spain, so certainly we are very interested to learn about the strategy about launching in additional countries. But they're very happy with the product and receiving great feedback also from the market.
spk01: That's awesome. That's great to hear. Congratulations. Thank you for answering my question. Thank you. Thank you.
spk10: Thank you. We have a question now from Jeff Hamilton, a private investor. Jeff, over to you.
spk06: Hello, and thanks for taking my call. I was wondering if you could provide any update on the Tilray situation, arbitration with them, and timeline of when that may be resolved. Thank you.
spk04: It's Tommy here. As I mentioned a little earlier, unfortunately, the nature of arbitration is that it's confidential. What I can say is that the arbitration is progressing, but we don't yet have an idea of when it will be completely terminated, completely completed. We should get a decision by an arbitrator at the end of the process, but right now we're still in the beginning of the process. So I would expect maybe... to be able to give you more information once we have a fixed scheduling order, which could be in the next call. But at the moment, I cannot give more timeline update as to that. And as for the relationship, well, we're in arbitration, so I guess it says a lot. Okay, thank you.
spk10: Okay, we have another question in from Hugh Keeley. Hugh, the floor is yours.
spk05: Yes, thank you again. I should have said this earlier, Dr. Zerbe. Nice presentation at the Bloom Conference. Great detail on your presentation. I wanted to say thank you for that. And the one quick question on the tie is there was discussions about working on another potential indication, product number three. Is that still ongoing?
spk00: That is still ongoing. Dana, you are closer to that. Do you want to add anything?
spk03: No, at this moment we had the discussion between the different R&D teams to discuss the feasibility timeline and potential budget. They're very interested, so I can't really review it more at this moment. This is before we sign the agreement. But yes, we're progressing on that.
spk05: Thank you, Dana. Thank you.
spk03: Sure.
spk10: Okay, there appear to be no more questions in the queue. I will now hand back over to Horst for closing remarks.
spk00: Thank you. So this concludes our Q1 2022 investor update call. Once again, I'd like to thank the entire Intergenics team for its hard work and dedication, our directors for their continued support of the management team, and finally our investors for continuing to believe in and supporting us. Thanks to you all and goodbye.
spk10: Thank you, ladies and gentlemen. This does conclude today's conference call. You may now disconnect your phone line and have a wonderful day. Thank you for your participation.
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