IntelGenx Technologies Corp (IGXT)

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Significant growth in revenues expected for IntelGenx, says H.C. Wainwright

Thursday, December 4th, 2014

IntelGenx Technologies (OTCMKTS:IGXT) (CVE:IGX), a company focused on orally adminstered drug products, had its buy rating and $2.00 price target reiterated by H.C. Wainwright Thursday, with the brokerage anticipating significant growth in revenues beyond 2016.

In a business update yesterday, management emphasized its confidence in partner Edgemont in maximizing Forfivo XL (a drug to treat depression) commercialization efforts, analyst Swayampakula Ramakanth said.

“This is underscored by Edgemont extending its license to exclusively market the product until the entry of an authorized generic in January 2018.

“Management is anticipating a seven-figure payment associated with license extension that will be accounted over the next two quarters (4Q14 and 1Q15). IntelGenx also believes that in early 2015 Edgemont’s efforts could aid in Forfivo XL cross a sales threshold, which would trigger a pre-determined milestone payment that the company would receive during late 2015,” H.C. Wainwright said.

“With the infusion of these milestone revenues, we expect the company to attain operating profitability by the end of 2015, earlier than our previous expectation of 2016.”

In addition, the analyst noted that Edgemont increased its sales efforts to sell Forfivo XL, and is currently employing 10 sales personnel, versus none at the end of 2013. During this period, monthly scripts for the drug rose to 1,700 to 2,700 as of October. If the current growth trend continues, H.C. Wainwright anticipates scripts to exit 2014 at nearly 3,100.

The company also has a migraine drug undergoing a a marketing application review by the German Federal Institute for Drugs and Medical Devices, with a potential European launch happening as early as the beginning of 2016. It could also enter the US market in early 2016.

On top of this, the brokerage noted a successful preclinical study of INT0036, a schizophrenia drug, with a pilot phase 2 study planned for the first half of next year, which if successful, could potentially result in a partnership to commercialize the product.

IntelGenx could also benefit from plans to initiate construction of a manufacturing plant next year, which could lower some of the risks in maufacturing and improve cost efficiency of development programs, H.C. Wainwright said.