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spk09: Greetings and welcome to the Intelligenix second quarter 2023 financial results conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, This is Stephen Kilmer, Investor Relations at Intelligenix. Stephen, you may begin.
spk13: Thank you. Good afternoon, everyone, and thank you for joining us on today's call. With me on the line are Dwight Gorham, Intelligenix's CEO, Andre Godin, our President and CFO, Dr. David Kudickel, the company's SVP and Head of Corporate Development and Strategic Alliances, Dr. Frank P.M. Trantonio, our Director of Clinical Research, Tommy Kenney, our Senior Vice President and General Counsel, and Dr. Horst Hervé, Intelligent Nexus Chairman. 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 Mr. Gorham. Dwight?
spk15: Thank you, Steve. Good afternoon, everyone, and thank you for joining us for the Intelligenix second quarter 2023 conference call. On today's call, I will provide a corporate update and discuss progress we've made on our key pipeline projects. Then Andre will review our financial results. Following that, we'll open up the line for your questions. So to start, I will now update you on one of our key programs, on our key programs, beginning with Aresaport. The FDA approval of our 505 new drug application for Rezafilm, the US market name for Rezaport, marked a major milestone achievement for the company. It is Intelligenic's first FDA approval for a film product developed in-house using proprietary Versafilm technology. Importantly, the FDA approval included a request that within two years we develop a five milligram pediatric version of the film and submit an application for the agency's review and approval. According to a recent issue of Practical Neurology, migraine affects up to 7 million children and adolescents in the US. In addition to reflecting the remarkable impact migraine has on younger individuals, the FDA's request affirms our belief that a film-delivered migraine treatment will be valuable to younger patients that have difficulty swallowing pills due to nausea and other factors. The commercialization of Rhizofilm in the USA as well as in Spain is one of our three short-term commercial objectives we unveiled in May. Our U.S. commercialization partner for Rhizofilm, Gensco Pharma, is planning to achieve the first saleable product later this year with full commercialization in early 2024. Exaltus, Our partner for Risaport in Spain continues to await a regulatory approval to implement a new strategy to enable product substitution at the pharmacy level. Based on the positive feedback they have received from prescribing doctors and patients, we believe, if approved, Exalta's new strategy will boost product sales. We are also pleased to announce that the work of our CDMO business development team has resulted in a binding term sheet with a CDMO customer with a packaging of pharmaceutical oral film produced that they are planning to commercialize in the United States. The expected agreement is estimated to generate approximately $9 million in revenue over three years and we look forward to providing updates as we work to finalize such agreement with them. Turning to our other CDMO business, we received in May an amended drug establishment license from Health Canada that allows us to provide third-party testing services, further supporting our short-term commercial objective to expand as part of the business. Also, on our CDMO business and subsequent to quarter end, we just signed up a customer to engage on an R&D project with the objective of advancing commercial output. We're extremely excited to embark on this new piece of immediate revenue generating business. Changing the subject and turning to our Monte Lucas program, we are thrilled to announce completion of enrollment in our Phase 2A, you know, clinical trial in patients with mild to moderate Alzheimer's disease, or AD. As you may recall, the COVID-19 pandemic effectively halted the BUNA trials recruitment for a year and a half, and the post-pandemic restrictions imposed by hospitals posed an additional challenge to trial recruitment. With the intention of avoiding any further delay in achieving the program's goal, we engaged our statistical consultant, Cog State Limited, and determined that we could decrease enrollment while still providing a basis to determine which drug effect sizes are statistically significant by adjusting the p-values to less than 0.1. The study design modifications received a no objection letter from Health Canada and we've completed study enrollment with 52 patients with 18 fewer than initially planned. We are confident that this Health Canada authorized study design modification will enable us to utilize data from fewer patients while optimizing the power of the study to detect the effects of Montelukas Versafilm compared to placebo. We are looking forward to completing the BUNO trial in the first quarter of 2024 and to report initial trial results the following quarter. Believing that Montelukas Versafilm has the potential to be disease-modifying not only in AD, but as being currently investigated in BUNO trial, but also in the Parkinson's disease, we've expanded the program. In conjunction with that, we recently announced that we that manufacturing both active and placebo films are underway in preparation for a multi-center, randomized, double-blinded, placebo-controlled clinical study to investigate the use of Monteluca's Versafilm for the treatment of PD or Parkinson's disease. The study will be conducted at the Karolinski University Hospital under our previously announced research collaboration with Dr. Pehr Sevingson, who will serve as a study's principal investigator. Dr. Sevingson previously conducted a clinical trial study utilizing the tablet form of Monte Lucas for the treatment of PD, where two tablets of 10 milligram Monte Lucas were administered twice daily for a total dose of 40 milligrams. The planned study will assess Montelukas in doses exceeding 40 milligrams, so the Montelukas Versafilm offers study participants an attractive dosing alternative to tablets, which would have them require administration of multiple tablets several times per day. Dr. Sevingson will sponsor the study through a Swedish research grant worth approximately 2 million USD. Intelligenix has the option to acquire developed IP and study data for a potential further development of Monte Lucas Versafilm for the treatment of PD. We are currently expecting the study to commence in Q3 2023 and will provide more details on its design when they are available. ZyroMed. In April, we announced that Chemo Research, through its agent and affiliate, Zyromed, received a complete response letter from the FDA. They submitted a abbreviated new drug application for buprenorphine bucofilm. Buprenorphine bucofilm is a generic version of buca, an opioid that is used to manage pain. It's fair enough to require daily, around-the-clock, long-term treatment, with an opioid when other pain treatments are inadequate. Balbuca was approved by the FDA in 2015 and is applied to the oral or buccal mucosis every 12 hours. Buprenorphine buccal film incorporates our Versa technology in a novel formulation and is designed to be bioequivalent lower cost alternative for patients. ZyroMed's CRL response is expected in the current quarter. Animal health. As mentioned on our previous earnings call, our newly appointed Senior VP and Head of Corporate Development Strategy, Dr. David Cadigo, is in advanced discussions to engage a potential major animal health partner over a multi-year period. We expect to be able to announce more details on this during the next quarter. With that, I would like to now turn the call over to André for a review of our financial results. André.
spk04: Thank you, Dwight. Good afternoon, everyone. As Dwight mentioned, I'll take a few minutes to discuss the company's financial performance for the second quarter ended June 2023. Let's start with the revenue. The total revenue for the second quarter amounted to $133,000 compared to $398,000 in the same period last year. The change is mainly attributable to decrease in R&D revenue of $260,000 and royalty on product sales of $5,000. Operating costs and expenses were $2.7 million for Q2 2023 similar to last year, $2.6 million. For Q2 2023, the company had an operating loss of $2.5 million compared to $2.2 million in Q2 2022. The adjusted EBITDA was negative $2.2 million for Q2 2023 compared to negative $2 million for the corresponding three-month period of 2022. Our net comprehensive loss was 3 million or two cents on a basic and diluted per share basis for this quarter, down slightly from a net comprehensive loss of 3.2 million or two cents per share for their comparable period of 2022. As at June 30th, 2023, the company cash and short-term investment total 1.3 million. But I would like to also add that I'm presently working on a financing, and the news should be out shortly. So there's not much detail I can mention at this time, but the cash run with the company has been taken care of. Right now, we'll now turn the call back to Dwight. Dwight?
spk15: Thanks, André. 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 over for questions. I would like to remind you that our forward-looking statements apply to both our prepared remarks and the following Q&A. Thank you.
spk09: Thank you very much. At this time, we are opening the floor up for questions. If you would like to ask a question, please press star 1 on your phone keypad now. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For anyone using speaker equipment, it might be necessary to pick up your handset before you press the keys. Please pause a moment whilst we poll for questions.
spk07: Thank you.
spk09: Your first question is coming from Brent Gakey, who's a private investor. Brent, your line is live.
spk14: Yeah, good afternoon, guys. On the last call, I asked a question to you guys, and Horst and someone else were very confident. You guys had some short, which they indicated were short-term catalysts that were going to increase the share price. Maybe we have a different definition of short term but i would have assumed that would have meant during the last quarter and nothing seemed to have happened so is that um are those no longer in the hopper or y'all just thinking they just haven't hit yet or kind of what's the deal with that um yes brent it's andre here um i think that uh there were some um
spk04: an announcement last week, obviously, and Dwight covered that, that new CDMO partnership. That obviously generated a lot of volume, but we did mention last quarter that we were going to hit several catalysts. It is still true, but sometimes it takes a little bit more time to materialize. We're expecting some more news flow in the current quarter and in Q4. So I guess everybody has to be patient, but it's coming. It's just like sometimes we think that it might go faster than it actually is. But it's coming. There's nothing that is any different from the last quarter.
spk14: Okay, thank you.
spk09: Thank you very much. Your next question is coming from Doug Disler, who's a private investor. Doug, your line is live.
spk03: Yes, thank you. If I may, I'd like to ask two questions. My first question is, what is the status of the tillery arbitration process?
spk01: Unfortunately, the answer is similar to last time. The arbitration is confidential by its nature, so we're hoping to have a resolution to this arbitration by the end of the year. That's all I can say at the moment.
spk03: Yeah, okay. Well, it seems like it keeps getting pushed back every time we have an earnings call, but I can appreciate the answer. Also, what happened to the joint venture with Equestive Therapeutics on Tadatafil? This joint venture was first announced, I think, several years ago, and Equestive does never provide any updates on the progress on this drug getting through the FDA. Is this a dead project, or where does this stand? Because it seems like This is a real lost opportunity.
spk05: Hi, this is David. I'll take this. No, thanks for your question. The project is still very much alive. In fact, we're working with Equestiv right now to embark on the final stages of the project that will still take some time. We have a commercial partner set as well in the UK. So by no means is the project dead. Because I am newer to the team, I don't know what was disclosed for timelines. So I'm a little reluctant to give timelines because they're all still being worked out. But I would say investors should really consider the Tadalipil project more medium to longer term in nature right now as far as FDA approvals and actual sales are concerned. But as far as project development and moving forward to getting submission towards the FDA, That is one of the organization's top priorities as we speak.
spk03: It seems like Intelligenic is more optimistic about it than what Equested is because Equested, you would think with the potential it has, it would be more in the forefront. But, I mean, they just never mention it.
spk05: We can't comment on other companies. I understand. Go ahead.
spk04: Just to clarify, the commercial partner is from U.S. I think just to avoid confusion.
spk02: It's not Equestiv Therapeutics?
spk04: No, no, but I mean, yeah, Equestiv is based in the U.S., but a commercial partner that we signed up is also based in the U.S.,
spk05: Okay, thank you, Andre. Andre, just to clarify, the commercial partner that we've signed up through Equestive, it's a NASDAQ listed company, but for sales to commercialize, they have rights for the UK. That's what the point was. Yeah.
spk15: Thank you. But again, to reiterate David's point, this is a medium to longer term project. It's in the two to three-year horizon that the commercialization would take place.
spk03: It just seems like it's been out there forever. Yeah, I understand that.
spk09: Okay, thank you so much. Your next question is coming from Steve Gee of Wedbush. Steve, your line is live.
spk11: Hello, fellas. All right. So I'm in a public offering three times with the now out-of-business canton, financials. Are you guys looking to raise money again to another company?
spk04: Yeah. As I mentioned in my intro, we're working on something actually right now as we speak. And we're expecting to announce something shortly. So there's no issue in terms of cash runway for the company.
spk11: And is this money going to research? Is this money going to salaries and bonuses and for you guys and wives and girlfriends and anybody else that you hire in that company. You know, me personally, I don't think it's fair that you guys are getting bonuses. And I've been in this stock for six years. And out of the three public offerings that I'm into, two of them, I lost my warrants now. Because you guys are taking so long trying to manufacture stuff from, you know, marijuana strips to cancer strips to headache medicine to dog strips. You guys, you know, smoking mirrors again. And I hope everybody's listening to this. It's the same old, same old stuff. The only announcements we get is, oh, this guy's retiring. We're hiring somebody new. He comes from 30 years experience from so-and-so company. And it's still the same. Six years already, I'm still sitting in this shop. I mean, everything is quarter, year, next year. I never hear minutes, days, weeks. I mean, go ahead.
spk10: I'm listening.
spk04: Sir, by the way, we haven't had bonus in –
spk11: a couple of years and we have uh reduced our salary right now so i don't know what you're why why don't you close that then because i don't see none of that i don't think anybody sees one of that okay i mean what do you think is going to happen to the stock price after after after you fall with the smoke and mirror thing wait this is going to happen you think it's going to drop from 14 cents down into single digits
spk10: Nothing. No crickets there, huh? Just crickets? I don't hear nothing. No answer on that, huh? Guys don't seem optimistic about this stock.
spk15: What was that? I'm not sure I understood exactly what the question was.
spk11: Well, the question is, I've been sitting on this stock for six years with three public offerings that I'm in. Two of them I lost their warrants. And now I'm sitting on, I'm all over the place, 40 cents, 80 cents. We're down to 14 cents today. I'm asking, what do you think, since you guys work for the company and you have all the big titles, do you think this stock is going to move anytime soon? Or are we going to sit on it for another six years? I'm just curious. Because I think after today's smoke and mirror conference call that you guys just pulled again, it's going to drop down to the teens. Nothing positive came out of this, what I heard from you guys at all. Everything is next quarter, next.
spk09: Thank you very much. If anyone has any remaining questions, please press star one on your phone handset now. Okay, our next question is coming from Justin Foster, who's a private investor. Justin, your line is live.
spk00: Thanks. Good afternoon, gentlemen. On the financing that you remarked upon, I know that you cannot expand upon it at great length. However, could you, since you have confidence that it will be accomplished, give us an idea, does it involve issuing of new shares, warrants, is it dilutive? Is it internal people forwarding some loan to the company? Can you give us a little bit of direction there without compromising your need for restriction of information at this moment?
spk04: Yeah, there's not much I can say, but what I can say is that, yes, there will be some dilution, but... it will be in, most of it will be in very strong hands. So for the long term, that is very clear in the process, but the terms obviously I cannot disclose because they haven't been announced publicly, but we're trying to avoid as much as possible dilution But we need the money. We're going commercial next year, maybe the end of this year or for sure next year. So we need to get there. And that's what we're doing. We're getting a bridge to get us to next year.
spk00: Okay, thank you for that. Thanks. Much appreciated. I think the good part of all of that is you're starting out with not a lot of shares so that investors can afford a little bit of dilution and you've been wonderfully adamant about not reversing shares just to increase the share price in order to get financing. So that Whatever the disappointments out there, both those things are certainly appreciated by your shareholders, and I think it evinces integrity on all of your parts. And I, for one, thank you for that, and good luck next quarter.
spk03: Thank you.
spk00: Thank you.
spk09: Thank you very much. Your next question is coming from Tom Maglino, who's also a private investor. Tom, your line is live.
spk12: Thank you very much. Thank you for taking my calls, and I think congratulations are in order. I think this was a very exciting quarter. I've been in this stock for probably eight or nine years, and it's the most exciting quarter I've seen. So keep the good news coming. I was wondering if you could give us an update on the PEI project and how that testing is going with the nonhumans.
spk05: Yeah, I can. This is David Cadecco here. So the PEI project is underway. In fact, I was out there not too long ago to meet the individual researcher who was just starting testing in both dogs and eventually cats or the other way around. But we have just start, we have just commenced that actual R&D or almost clinical trial in animals on that front. There hasn't been any data received to date.
spk12: Oh, I'm sorry. When do you expect that you might hear results? Is it something that's imminent?
spk05: No, and that's something more to bridge our longer-term entrance into the animal health space. I don't know off the top of my head what the exact timelines are for any data coming through, but what I can tell you, too, that in Mr. Gorham's prepared remarks, he also mentioned another project that I've uh, taken over since joining, uh, the company, uh, not too long ago. Um, and that, um, if, if approved and if it goes through, um, we'll have a lot of legs and potentially material upside to the company. Um, and we hope to give, uh, you know, give investors in the markets and update on that. Um, as soon as we have one, which we, which we hope, uh, will be within the next quarter.
spk12: So the two, um, animal health projects are not related. The one isn't contingent upon the other.
spk05: No, that's correct. They're completely unrelated. One is more of an R&D type study and the other would be R&D going into commercial. Like you mentioned at the outside of your questions here, sir, this was at the University of Prince Edward Island or PEI out in Eastern Canada. And that's a university-based. The other project, which is more commercial and R&D in nature, at least at the outset, that's with an actual company.
spk12: Thank you very much, David. And also, has there been any movement in getting Resiport into other European countries? I know a while ago they were talking about entry into some of the other big four. I know that they're stalled currently in Spain, and I'm sure in August not much gets done in Spain. But I wondered if there was any movement on entering other European markets with that product.
spk05: Yeah, no, thanks for the question. David here again. I'll take this. The short answer is nothing material to report. Even Spain, as you heard in Mr. Gorham's prepared remarks, has been delayed to some extent. In fact, we reported no sales this quarter. We hope that some of the regulatory issues on the ground in Spain will be rectified. But there certainly are other European markets that, as part of the corporate development and business development team, were actively or listening to potential opportunities. But nothing right now that we can report that's material.
spk12: Terrific. Well, thank you all very much for taking my call. And again, congratulations. Thank you.
spk09: Thank you. Thank you very much. Your next question is coming from Hugh Kiley, who's a private investor. Hugh, your line is live.
spk16: Yes. Good afternoon, everyone. First question I have on the follow-up to the gentleman's question with Spain. I know in the last call they thought they were submitting a new application to the authorities to resolve that packaging or substitution issue, but that's not resolved as of yet?
spk05: That's correct. That's not resolved as of yet. The sales has shown it. There's essentially zero sales in the rest of the world. for RISA. But at the end of the day as well, I mean, Spain, it's not even one of the top four markets in Europe. So we are keeping a very close eye on that and speak with our partners, Exaltus, for Spain. And if there's any material updates, as always, we would share that with investors in the market.
spk16: So the same issue, does that affect Arwan Pharmaceutical and the other partner? I think it's Arvis.
spk05: Arwan? No, those are... Yeah, no, that would be separate. R1 is more for the Middle East and Lebanon in particular, with the goal to as a gateway to other parts of the Middle East. But those are completely unrelated right now. And we're dealing with R1 too, with a number of other, I guess, hiccups that we're trying to work through our contractual agreements. But again, I would focus if I'm you and an investor, I think the biggest opportunity, you know, having crunched the numbers and doing this on a near weekly, if not daily basis, you know, Risa USA is by far one of the company's largest opportunities. And that's what we're putting a lot of our efforts into right now. And we have been for the past several months.
spk16: Okay. The validation batches, they completed, they go into the testing and they still need to be manufactured. We still need to have those manufactured, correct. Okay, thanks. Is that David speaking? That's David, yep. Okay, David, thank you. I'm sure I'll be back in a moment. Question for Andre, and he was brought up before regarding the last conference call and their catalyst near term. Could we, you know, peel that back a little bit as a catalyst regarding Oral film, transdermal, vetafilm, or the CDMO?
spk04: I mean, there's... Like I said earlier, I think we have a few things coming up and all of the above that you mentioned. But, you know, those are ongoing... you know, agreements that we are, you know, working on. You know, David is obviously involved. Dwight, everybody's involved. But it's just taking a little bit longer than we expected. But it will happen. It's coming, you know, if not in the current quarter, it's going to be in the fourth quarter for sure.
spk16: Okay. Would they fall into the name of a significant catalyst, Andrej? that was used in the last call?
spk04: They're good catalysts. Everything is good when, you know, you announce a new partnership or your settlement or a CMO contract like we just announced last week. So we're working hard on getting these things done.
spk15: Yeah, I think a bigger part of that rests in the human films and the Vita films. CBT, I don't believe we'll see major announcements on, but there'll be announcements. The big ones will be in the human side.
spk16: Okay. Thank you, Joy. And I don't know if it was covered in any new programs with a tie?
spk04: Not at this time. I mean, we're working on DMT. That's their main, you know, program with us, but there's discussion, but nothing new on that front.
spk16: Okay. And on the transdermal front, I know the last call and one before there was this potential opportunities with some discussions going on with a partner for transdermal.
spk15: Yes. Those conversations are ongoing. However, The focus of the organization is really making sure we bring to market RISA, which is approved, and we get the proper partnership agreement with that, and then resolving the buprenorphine issue and getting it resubmitted to the agency so we can get that to the market as well. Those are the two posts. However, we do have conversations on trends now.
spk16: Okay. And the resubmission for the Bell Booker is, I believe from the last call, there was two items, one for ZeroMed and one that was a clarification issue for Intelligenix. Has that one been resolved?
spk15: The resubmission for the agency is next week.
spk16: Okay. All right. And the... The anticipated announcement for the CBD for animal health, is that study complete? Is that still going on? I didn't catch your comments on that, David.
spk05: Yeah, so I would say right now we have two active animal health programs, both of which I just mentioned, the one at the University of PEI, the second being with the company. The other project that I think you're referring to, last quarter call or the quarterly call, I believe we had three ongoing projects. There was a third, and the recent CBD data in dogs, as reviewed by our R&D team, was not as promising as we thought. There might have been a few experimental errors. We're not exactly sure, but we've decided to pull the plug on that one. So the two projects that we have right now in animal health are, again, the one in PEI, which is not material from a business standpoint, just to be very clear, that's more going to feed into what data we can present for other potential partners down the road. What the most important projects and revenue generating opportunity that we have existing now is the one that I was referring to with a company that we believe we could be in a position to announce over the coming months.
spk16: That'd be associated with CATS, maybe?
spk05: It could be. It's mostly dogs, but it's also, just to be clear, it doesn't have anything to do with CBD or any cannabinoid-derived medicine.
spk16: But was it a prior study or maybe some type of effort with an undisclosed partner on cats? Is that one still active?
spk05: I'm not sure which one that's actually referring to. I don't recall any undisclosed partner with cats.
spk16: It was BD before David, you know. It could have been.
spk05: To my knowledge, the only one that we're looking at cats in, again, is the one in the University of PEI. And that's more clinical and R&D in nature as opposed to anything commercial.
spk16: Okay. And there's a product that's in your, you know, SEC file. It's called Disintect, if I'm saying that. I hope I'm saying it properly, David. Some controlled oral release film. Is that one accurate at all with any discussions? I'm sorry, can you repeat that?
spk05: Did you say Disentech?
spk16: Yeah, I think it's D-I-S-T-E, Disentech.
spk01: Yeah, this is correct. This is a platform that we have established, and we filed IP on it. Right now, there are no current discussions with the existing partner with that, but it's a platform that we still believe in, and we're trying to protect it from an IP standpoint as much as we can, and the hope is to offer it to a future partner in the near-to-mid future.
spk16: Okay, and last question for me, nothing going on with the – I have two questions. With Heritage, is that kind of panned out?
spk05: Yeah, maybe – first of all, let me talk about Heritage, and then maybe Dwight wants to comment on our overall cannabinoid program. But Heritage, the sales have been very low, and I wouldn't put this on Heritage, but it's more just the Canadian market in particular has been quite lower recently. results than most people have thought. So heritage is, while not saying by any means is the program terminated, I would say that it's not forming a focal point to this company by any shape or form, just with effort and resource allocation and ultimately with material sales which just aren't panning out. It's not something that we believe firmly in at this point for all of cannabis, not specifically heritage again. And
spk16: The THC platform, if I could use that terminology, David, is that still an attractive opportunity for Intelligenix?
spk05: I personally don't think so. And it's not just for Intelligenix. I think the market in Canada as a whole is very saturated. And I don't see where incremental business will come to the company. But we never know, too. We're also very opportunistic. And if, you know, another partner comes to Intelligenix and asks us to develop as part of our CDMO business particular products, I mean, we'd be very open to such an arrangement.
spk16: So the horizon for medical THC and cannabis looks a little bit soft, if I can use that acronym with description.
spk15: Yeah, the market's very soft, yeah.
spk16: Okay. All right, and last question. How was, Andre, you said before about the plant build-out, that you needed some funds to complete or expand the plant for production. Is that going all right?
spk04: We're not there yet. I mean, as Dwight mentioned, right now the focus of the company is really short-term revenue, and that should start unfolding early next year. But we have sufficient capacity right now to support the product launch. But at some point, we will have to definitely look at expanding because based on the projections that we have for the product that will be launched next year, we'll run out of capacity at some point. But right now, I would say we're fine for at least 18 to 24 months with the current capacity.
spk15: Right. I mean, it's an ongoing project to look at. And we run capacity utilization models on a regular basis. But we should be good through to mid-25, if not to the end of 25. And we will need to talk about this perhaps in some more length. at the end of the first quarter in 2024. Okay.
spk16: Can you update any discussions on PAR? Andre, is that still tabled pending the endo-bankruptcy?
spk04: That's on hold. That program is on hold.
spk16: Okay. All right. That's all for me. Thank you, gentlemen, and welcome aboard, Dwight.
spk15: Thank you.
spk09: Thank you very much. Your next question is coming from Abraham Shapiro, who's a private investor. Abraham, your line is live.
spk06: Good evening, Andre. Good evening, Dwight and David. I was hoping that, you know, you guys are down to a million bucks. I was hoping that there would be some sort of financial financing news during the earnings, but time is of the essence, you know, so I'm going to hold you guys. You're going to announce something shortly. What didn't catch my ear is, you know, first of all, congratulations on getting the CDMO deal. It's about time some revenue starts coming in. Even though $3 million a year is not what we're looking for, it certainly is starting in the right direction to get some revenue. But you mentioned that RZA,
spk05: is where you guys are going right for the money and you said you're looking for the right partner what happened with the partnership with the firm in florida well let me clarify it's david here um when we're saying we're looking for the right partner the question was more referring in context to those in europe um we're we we still we have our agreement our partnership Our U.S. commercial partner is Gensco Pharma based in Florida. So there's been no change there. My comment again was more based on other markets within Europe.
spk06: And what is Gensco doing in regards to the partnership lately?
spk05: Well, we have regular update meetings with Gensco. So, you know, to launch a product, I'm sure as you can appreciate, Abraham, is no easy feat. And we're preparing for a launch. That's what we're doing as we speak.
spk06: I mentioned it last quarter, you know, conference call, that, you know, there's silence from them. You know, maybe the partner, you know, can announce something on occasion. I know that, you know, Equestiv doesn't say anything. Jetsco doesn't say anything. I'm looking for, you know, somewhere from some of the partners. You know, and again, you can't control other companies, but certainly you can recommend some sort of announcements.
spk05: Yeah, I mean, I hear you. Again, we can't really speak for other companies, but Gensco is a private company. There'd be real not a lot of incentive for them to announce anything. And I don't even know if that's part of their standard business. I can't comment on them at all. But I mean, all we can control is what's in our purview at Intelligenix. And I can tell you, Risa USA is one of the pillars of the company.
spk06: Okay. And when can we expect... I missed the first part. I apologize. When do we think commercialization is going to happen with some revenue with RISA?
spk05: We expect any time from the end of 2023 up until the beginning parts of 2024. And the reason why there's a bit of a kind of a goalpost there, it's really just due to some moving parts that we're trying to work through right now. But I would say latest, we hope. is going to be the first half of 2024. Okay.
spk06: And I think she had left one of your colleagues, and she had mentioned a cat product. So I know that we didn't pull it out of thin air. We have been hearing that some cat or dog product soon. I hope so. So listen, I'm happy that we're seeing some revenue. And, you know, good job to bring some money in. I think that you don't want to, you know, you don't want to sell it so cheaply. You guys got to stay in business. So you got to raise the money, right? So, you know, if you have to dilute, you know, somewhere and I'm fine with it, you know, get to the goalpost.
spk04: Yeah, Abe, I would have, I would have, you know, Obviously expected, you know, to talk about a little bit more about the financing, but unfortunately I can't, but I can tell you that it's really coming, you know.
spk06: All right. I'm looking forward because you guys are, you know, you're cutting through the wire here. Good luck. Thank you.
spk00: I'm rooting.
spk06: I've been a shareholder for many years. And, you know, I like the new mousetrap, and I'm rooting. And hopefully, you know, we'll all become winners one of these days. Yeah.
spk04: Thanks. Thank you.
spk09: Thank you very much. Your next question is coming from Adam Viverito, who's a private investor. Adam, your line is live.
spk17: Hey, how are you? I'm on a headset with a microphone. How's the audio on your side?
spk15: Great. Thank you. Good.
spk17: Excellent. All right. Gentlemen, good work on the pending contract for $9 million over the next three years. Wonderful. Hope things are going well. Just a quick question. I've been a holder for a few years, and I don't want to share the frustration of, I don't know, three or four callers ago, but on the revenue front, it is what it is. We don't need to. Use negative descriptive adjectives and whatnot. But I just did a little research, and I mean my blue sky thinking may be ridiculous, but the TAM of the vitamin and supplement market is 39.4 billion. I think that's U.S. I don't know about worldwide. That was as of 2022. So real quick, you know, going back as a little kid, I remember, you know, there were chewable vitamins. Then as we grew older, we swallowed the vitamins. And then within the last decade, there was like a huge, let's say, emergence marketing of like gummy type of vitamins. Your technology, it's not novel. I mean, I remember Listerine scripts back in the day, but I don't know if there are like film vitamins. I think it's an exceptional idea. And, you know, if you capture a de minimis amount of the TAM of, $40 billion, that would be huge. I'll stop and ask, has there ever been any discussions, thoughts about supplements and using your varied technologies?
spk05: It's David here. I'll take a stab at this one. It's a fair point. Since Dwight and myself joined at roughly the same time points and to take really why Dwight was brought on to take the organization from R&D to commercial. I mean, the sky's the limit here, in my opinion, where we have to do, what we have to do to execute is be laser focused. And with our plan to focus on, you know, two to three products and really do well at them, then we can start talking about where do we go from there from a very strategic perspective. But, you know, to rewrite the strategy and pivot to an all together different area with, with, you know, one that we'd have to come fully up to speed on, I think that could actually take longer than pursuing our very laser-focused strategy right now.
spk17: Thanks, David, for the answer. But I'm not saying to deviate from your laser-focused strategy. I'm saying to augment your strategy. If you think about supplements, you don't have to go through an FDA process, approval process. There may be, you know, other strategies. certifications what not that you have to go through but it seems like a much easier lift so to speak and once again with a TAM of just under 40 billion if you capture hardly any of it you're going to make a ton more money than you're making so you know that other caller's frustrations are valid if you've been a shareholder for 5-10 years it's pretty much the same old same old I mean if you look at the revenues there's not much there. So I'm not saying to take your eye off the ball. I think you should be laser focused on your strategy, but there's nothing wrong with diversifying your strategy, pulling in a new team, seeing what it takes to get a supplement on the market, even if it's a small test batch, what have you. But once again, I mean, it's so much easier than going through all these approvals and whatnot. It just seems like we're jumping through myriad hoops. all the time. If you hit it out of the park, wonderful, it's going to be a bonanza, but why not diversify your revenue stream with something that may be very achievable? I mean, you go at any grocery, supermarket, drugstore, I mean, shelf space may be difficult to come by, but supplements are a huge business. $40 billion is $40 billion. Once again, if you capture a small one-tenth of one percent, I mean, you can do the math, that's more revenues than you've probably earned for the duration of the business thus far. So I'm not saying to take your eye off the ball. I'm not saying to remove the strategy or pivot from the strategy. I'm saying to add to the strategy. And there's no FDA approval for supplements, to my knowledge, vitamin C, what have you. So it just depends. Food for thought. And if you implement it and you hit on it, you could send me a free pack of vitamins or a small fine or sweet. Thanks.
spk05: No, thank you. And point noted.
spk17: All right, cool. Thanks. I won't go on and on. Hopefully we'll see a press release soon. Thanks.
spk09: Thank you, Adam. Your next question is coming from Brent Gakey, who is a private investor. Brent, your line is live.
spk14: Yeah, guys, y'all are talking about Riz and how it's the pillar of the company. Do y'all have – I'm assuming you do, but I'm not sure if you can tell us. Do y'all have any – I mean, what are y'all projecting revenue-wise? I mean, do you think it's in 24 or 25? I mean, what are y'all thinking? And is Riz – I mean, is Riz going to, you know, make the company cash flow positive? Hi, it's David.
spk05: I'll take – Okay, someone else want to take that?
spk04: Yeah, I think I should.
spk05: Okay, you take it.
spk04: Yeah, so, I mean, we've never given guidance, but it will take more than RISA, obviously. Briber North, if approved and launched, will be probably the biggest contributor. So, it's hard to say when we will be cash flow positive. It depends on the performance of RISA and buprenorphine, but next year would probably be a stretch, but maybe 12 to 15 months to 18 months and we should be there.
spk14: Okay, thank you.
spk09: Thank you very much. If anyone has any remaining questions, please press star 1 on your phone keypad now. Your next question is coming from... You okay?
spk15: No, I'm fine. Thank you.
spk09: Okay. Our next question is coming from Hugh Kiley, who's a private investor. Hugh, your line is live.
spk16: Thank you. One question for Dwight. In your announcement, you put out Are you going to do a top-down or complete review of where IGXT was, the product, the focus? Any redirection of the company? Is this going to be the status quo on the products that are under development and under commercial considerations?
spk15: Yeah, that's a great question. You're talking about a top-down look at the strategy. David said it a couple of times, but I'll reiterate, there's some players, there's some products with the agency that we need to bring to market. If we bring them to market with the TDMO business that was announced last week, then we have a business that's EVDA positive, likely. In the next quarter to quarter and a half, there's a full strategy review I need to go through. The other gentleman obviously brought vitamins and something we're not going to discount. But in the short-term operation, we're going to really focus on hitting the bogeys and changing it from promising and not delivering to promising and delivering. And in the, maybe not the next conference, not the next call, but the one after we can talk about potential strategic changes of direction.
spk16: So on the short-term bogies, your address is going to be Rizapur. Potentially, if you get Belbuco approved in the CDMO arena.
spk15: Bupinephrine, yeah. Bupinephrine, Riza, and the CDMO for the CDMO volume. Those three products, when mature, late in 2024, if the FDA approves the buprenorphine, by then, as we go into 2025, the company is then cash flow EBITDA positive.
spk08: Okay.
spk15: That's the game we're playing right now, and that's the focus in the business, stay myoptically focused.
spk16: All right. And so is Venafilm still in that arena, too?
spk15: Absolutely. We talked about it. I talked in my remarks about the work that David's doing. But it's more R&D focused. It's pipeline commercial sales beyond 25. But R&D, there's significant R&D revenues in the next three to nine months.
spk16: Okay. Okay. And that's my end of my question. Thank you, Dwight.
spk09: You're welcome. Thank you very much. That appears to be the end of our question and answer session. I will now turn the call back over to Mr. Gorham for any closing remarks.
spk15: I want to thank everybody for their patience and their time. Clearly we've come a long way over the last five years and there's a significant amount of frustration in our jobs to clean that up and make it clear to everybody directionally where we're going. And I just ask that people hang in there for the next three, six, nine months, and you start to see a progression of positive news out the business. So thank you very much for your confidence, and I look forward to our next call in three months and the one after that in six.
spk09: Thank you very much. This does conclude today's conference call. You may disconnect your phone line at this time, and have a wonderful day. Thank you for your participation.
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