Saint Laurent, Quebec--(Newsfile Corp. - March 11, 2014) - IntelGenx Corp. (TSXV: IGX) (OTCQX: IGXT) (the "Company") today announced financial results for its fiscal year ended December 31, 2013 and provided an update on operational developments. All amounts are in U.S. Dollars, unless otherwise stated.
"2013 was a challenging and exciting year for IntelGenx," said Rajiv Khosla, President and CEO of IntelGenx. "We made significant progress with the filing of the NDA for our anti-migraine film and the subsequent filing of an ANDA by our partner, Par Pharmaceutical, for our opioid dependence film. Also, subsequent to the end of the year, in early January, we reached agreement with Par for the development of another two products. One of the challenges throughout 2013 was the disappointing sales performance of Forfivo XL®, our high strength anti-depressant tablet. We continue to work together with Edgemont Pharmaceuticals, our commercialization partner for this product, to address the Forfivo XL® business. At the corporate-level we successfully completed a public offering in December, raising net funds of $3.0 million, which strengthened our cash position at December 31, 2013 to $5.0 million. These funds will enable us to move forward with the next important phase of our development, which is to expand into a new facility and establish a pilot plant for VersaFilm™ manufacturing, whilst continuing to further our product portfolio."
Corporate Development Update
Anti-depressant tablet, Forfivo XL®
Forfivo XL®, our first FDA approved product, was launched in October 2012 and is being marketed in the United States under the terms of a license agreement between us and Edgemont Pharmaceuticals. Forfivo XL® is indicated for the treatment of Major Depressive Disorder ("MDD") and is the only extended-release bupropion HCl product to provide a once-daily, 450mg dose in a single tablet. The active ingredient in Forfivo XL® is bupropion, the same active ingredient used in the well-known antidepressant product Wellbutrin XL®. Prior to the launch of Forfivo XL®, most patients in the US requiring a 450mg dose of bupropion had been taking multiple tablets to achieve their 450mg dose requirement. With Forfivo XL® now available in the US, these patients can simplify their dosing regimen to a single Forfivo XL tablet, once-daily.
The commercialization of Forfivo XL® triggered launch-related milestone payments to us of up to $4.0 million, of which $1 million was received in Q1, 2013, and additional milestones upon achieving certain sales and exclusivity targets of up to a further $23.5 million. We also receive tiered, double-digit, royalties on net sales of Forfivo XL®. We recorded total revenue for Forfivo in 2013 of approximately $492 thousand.
In August, 2013 we announced receipt of a Paragraph IV Certification Letter from Wockhardt Bio AG, advising of the submission of an ANDA to the FDA requesting authorization to manufacture and market generic versions of Forfivo XL® 450 mg capsules in the United States. We intend to vigorously enforce our intellectual property rights for Forfivo XL® and will pursue all available legal and regulatory pathways in defense of the product, which is currently protected by an issued patent listed in the FDA's Approved Drug Products List (Orange Book).
In March, 2013 we submitted a 505(b)(2) NDA to the FDA for our novel oral thin-film formulation of Rizatriptan, the active drug in Maxalt-MLT® orally disintegrating tablets. Maxalt-MLT® is a leading branded anti-migraine product manufactured by Merck & Co. The thin-film formulation of Rizatriptan was developed in accordance with the co-development and commercialization agreement with RedHill Biopharma Ltd. using IntelGenx' proprietary immediate release VersaFilm™ oral drug delivery technology. In December 2011, we received approval by Health Canada to conduct a pivotal bioequivalence study to determine if our product is safe and bioequivalent with the FDA approved reference product, Maxalt-MLT®. The trial was conducted in the second quarter of 2012 and was a randomized, two-period, two-way crossover study in healthy male and female subjects. The study results indicate that the product is safe, and that the 90% confidence intervals of the three relevant parameters Cmax, AUC(0-t) and AUC(0-infinity) are well within the 80 - 125 acceptance range for bioequivalency.
In June, 2013 the FDA assigned a PDUFA action date of February 3, 2014 for the review of the NDA for marketing approval.
Subsequent to the end of the year, in February, 2014 we received a Complete Response Letter ("CRL") from the FDA. A CRL is issued by the FDA's Center for Drug Evaluation and Research to inform companies that certain questions and deficiencies remain that preclude the approval of the application in its present form. The questions raised by the FDA in the CRL regarding the NDA for our anti-migraine VersaFilm™ product primarily relate to third party Chemistry, Manufacturing and Controls ("CMC") and to the packaging and labeling of the product. No questions or deficiencies were raised relating to the product's safety and the FDA's CRL does not require additional clinical studies. We believe that the majority of issues raised by the FDA were addressed in an amendment submitted by us to the FDA in January, 2014 that has yet to be reviewed.
On March 3, 2014 we announced that we submitted a response to the CRL which, we believe, addresses all the issues raised in the CRL.
Opioid dependence Film
In accordance with a co-development and commercialization agreement with Par, we developed an oral controlled-release film product based on our proprietary VersaFilm™ technology. The product is a generic formulation of buprenorphine and naloxone Sublingual Film, indicated for maintenance treatment of opioid dependence. The reference listed drug is Suboxone® Sublingual Film. A bioequivalent film formulation was developed, scaled-up, and pivotal batches manufactured and tested during a subsequent pivotal clinical study. An ANDA was filed with the FDA by Par in July 2013.
In August, 2013 we learned that, in response to filing of the ANDA, we were named as a codefendant in a lawsuit pursuant to Paragraph IV litigation filed by Reckitt Benckiser Pharmaceuticals and Monosol RX in the U.S. District Court for the District of Delaware alleging infringement of U.S. Patent Nos. 8,475,832 and 8,017,150, each of which relate to Suboxone®. We believe the ANDA product does not infringe those or any other patents, and will vigorously defend ourselves in this matter. In accordance with the terms of the co-development and commercialization agreement, Par is financially responsible for the costs of this defense. Since Paragraph IV litigation is a regular part of the ANDA process, we do not expect any unanticipated impact on our already planned development schedule.
Two new (undisclosed) projects
Subsequent to the end of the year, in January, 2014 we announced the signing of another development and commercialization agreement with Par Pharmaceutical, Inc. for two new products.
Under the terms of the agreement, Par has obtained certain exclusive rights to market and sell our products in the USA. In exchange we will receive upfront and milestone payments, together with a share of the profits upon commercialization. In accordance with confidentiality clauses contained in the agreement, the specifics of the product descriptions, platform technologies and financial terms remain confidential.
In April, 2013 we announced that Rajiv Khosla, RPh, PhD, MBA would assume the role of President and Chief Executive Officer, succeeding Horst G. Zerbe, PhD, with effect from January 1, 2014. Dr. Zerbe will remain as Chairman of the Board of Directors and continue to provide expertise in research and development, and manufacturing.
Dr. Khosla held the positions of Chief Operating Officer and Chief Scientific Officer throughout the transitional period of 2013 and was a member of the our Board of Directors for the previous two years. Dr. Khosla has remarkable experience and credentials including, among other senior positions, five years as Vice President of Business Development at Biovail Corporation, a Canadian pharmaceutical company operating internationally. Whilst there, he successfully led the transaction process for more than 75 deal opportunities in a variety of therapeutic areas.
Dr. Khosla holds a Ph.D. in pharmaceutical science, with a thesis on Oral Drug Delivery Technology; an Executive MBA from the Henley Business School in England, a Bachelor of Pharmacy (Honours) from the University of Nottingham, England and is a registered pharmacist in the UK.
Dr. Khosla's biography can be found on our website at http://www.intelgenx.com/aboutus/mngmt.html.
$3.5 Million Public Offering
In December, 2013 we announced the closing of a registered public offering raising gross proceeds of approximately $3.5 million.
Earlier in the same month we entered into securities purchase agreements with certain accredited investors for the issuance and sale of an aggregate of 7,920,346 shares of its common stock at $0.4419 per share. Additionally, investors received warrants to purchase up to 7,920,346 shares of common stock at an exercise price of $0.5646 per share for a term of five years.
Net proceeds, after deducting the placement agent's fee and other estimated offering expenses payable by us were approximately $3.0 million. We intend to use the net proceeds from the offering for capital investments in VersaFilm™ manufacturing equipment, leasehold improvements on a new facility, working capital and other general corporate purposes.
H.C. Wainwright & Co., LLC acted as the exclusive placement agent for the transaction.
Cash on hand at December 31, 2013 increased to $5.0 million compared with the cash balance of $2.1 million as at December 31, 2012. The increase in cash on hand relates to net cash provided by financing activities of $4.5 million (2012 - $0.4 million), partly offset by net cash used in operating activities of $1.1 million (2012 - $1.6 million), net cash used in investing activities of $0.3 million (2012 - $0.3 million), and an unrealized foreign exchange loss of $0.1 million (2012 - unrealized foreign exchange gain of $0.1 million). The net cash provided by financing activities consists of approximately $3.0 million from a registered public offering that we completed in December 2013, together with approximately $1.5 million in proceeds received from the exercise of warrants and stock options.
We intend to use the net proceeds from the registered public offering for capital investments in VersaFilm™ manufacturing equipment, new facility leasehold improvements, working capital and other general corporate purposes.
Accounts receivable totaled $0.1 million as at December 31, 2013 compared with $1.3 million at December 31, 2012. The accounts receivable balance at December 31, 2012 included an amount of $1.0 million related to the launch of Forfivo XL®™ that was invoiced to our commercialization partner for Forfivo XL®, Edgemont Pharmaceuticals, in the fourth quarter of 2012. Payment against the invoice was received in February 2013.
Revenue for the year ended December 31, 2013 decreased to $0.9 million from $1.2 million in the previous year. In fiscal 2013, we recorded approximately $0.5 million of revenue related to commercial sales of Forfivo XL®, compared with a milestone of $1.0 million that was recorded as revenue in 2012 related to the launch of Forfivo XL®.
Total expenses decreased from $3.5 million in fiscal 2012 to $2.6 million in 2013, representing a reduction of $0.9 million, or 25%. The decrease is primarily attributable to a reduction in R&D expenses that we incurred in 2012 for a) the development of our buprenorphine and naloxone Sublingual Film of approximately $0.7 million, b) the technical transfer of activities in preparation for manufacturing of Forfivo XL® to our Contract Manufacturing Organization, Pillar5 Pharma, of approximately $0.3 million (of which, approximately $0.1 million were credited to us in fiscal 2013), and a Product Fee that we paid to the FDA for Forfivo XL® of approximately $0.1 million, partly offset by an increase in SG&A expenses attributable to the addition of Dr. Rajiv Khosla to our management team.
The net loss decreased from $2.3 million in fiscal 2012 to a loss of $1.6 million in 2013, and the loss per share decreased from $0.04 per share in 2012 to $0.03 per share in 2013.
IntelGenx is a drug delivery company focused on the development of oral controlled-release products as well as novel rapidly disintegrating delivery systems. IntelGenx uses its unique multiple layer delivery system to provide zero-order release of active drugs in the gastrointestinal tract. IntelGenx has also developed novel delivery technologies for the rapid delivery of pharmaceutically active substances in the oral cavity based on its experience with rapidly disintegrating films. IntelGenx' development pipeline includes products for the treatment of indications such as severe depression, hypertension, erectile dysfunction, migraine, insomnia, CNS indications, idiopathic pulmonary fibrosis, oncology and pain, as well as animal health products. More information is available about the company at www.intelgenx.com.
Forward Looking Statements:
This document may contain forward-looking information about IntelGenx' operating results and business prospects that involve substantial risks and uncertainties. Statements that are not purely historical are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. These statements include, but are not limited to, statements about IntelGenx' plans, objectives, expectations, strategies, intentions or other characterizations of future events or circumstances and are generally identified by the words "may," "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "could," "would," and similar expressions. All forward looking statements are expressly qualified in their entirety by this cautionary statement. Because these forward-looking statements are subject to a number of risks and uncertainties, IntelGenx' actual results could differ materially from those expressed or implied by these forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed under the heading "Risk Factors" in IntelGenx' annual report on Form 10-K for the fiscal year ended December 31, 2013, filed with the United States Securities and Exchange Commission and available at www.sec.gov, and also filed with Canadian securities regulatory authorities and www.sedar.com. IntelGenx assumes no obligation to update any such forward-looking statements.
Each of the TSX Venture Exchange and OTCQX has neither approved nor disapproved the contents of this press release.
Paul A. Simmons
Chief Financial Officer
IntelGenx Technologies Corp.
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