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Ted Ohashi-Let's Toke Business Pg. 4
https://4495825a-d729-4d8f-ade8-e78f828e1c8d.usrfiles.com/ugd/449582_64527d5a1e9c4fbdb6a787d341325532.pdf
Well that's certainly nice to see, that's a fair Bunka Chunka change. Thanks for that bit of info.
Update from Chris Bunka
Hypertension study Hyper-H21-4- "Hypertension results are a bit slow in coming from the clinicians in part due to the sheer volume of work. But it is starting to arrive (finally) and we should have initial results to report in the next two weeks or maybe even less."
Epilepsy research EPIL-A21-1 - "Epilepsy study is ongoing. It turns out that it is a really complex series of studies. and earlier in the summer we had to re-calibrate certain things that cost us nearly two months. That said, we are nearing the end of the first "half" and expect to have results from that portion in November."
Human nicotine study NIC-H22-1- "We've been waiting for some time for IRB approval on the nicotine study - that's an independent entity and they told us originally they would need 7-10 days: instead we have been waiting over a month. Should be achieved "soon".
Ted Ohashi
https://4495825a-d729-4d8f-ade8-e78f828e1c8d.usrfiles.com/ugd/449582_053e7eb435cb4b13a3bec8289cef44bd.pdf
Lexaria Bioscience (NASDAQ: LEXX) (NASDAQ: LEXXW) has a well developed, drug delivery platform technology, DehydraTECH™, that helps the body absorb fat soluble Active Pharmaceutical Ingredients (APIs) such as cannabinoids, oral nicotine, antiviral drugs, PDE5 Inhibitors, vitamins and other molecules. Although water soluble molecules are well absorbed, fat soluble drugs aren’t and LEXX’s technology facilitates the oral delivery of fat soluble drugs more rapidly and efficiently which has profound implications for a number of drugs. For example, LEXX is working to implement commercial strategies around this technology including a recently started FDA registration using LEXX’s proprietary DehydraTECH™- CBD for the treatment of hypertension. Because of the preparatory work done,
LEXX’s application to the FDA was well received and as a result, it is expected to start at an advanced position somewhere in the range of Step 3, Phase 1(a) and Step 3, Phase 11(a). Management expects to be ready to begin the process by March/April 2023 after receiving FDA approval of their formal application. In addition, in September/October 2022, LEXX will likely publish the results from the most recent human clinical studies.
There are two other points to consider:
(1) DehydraTECH™- CBD tests have given indications it also improves the arterial elasticity. One of the causes of heart disease is a stiffening or hardening of the arteries that results in higher blood pressure. It requires more work but it could mean that DehydraTECH™- CBD is restoring some of the bodies natural function of healthy arteries. This would be a spectacular outcome.
(2) At around this point in time, management’s plan was to partner with a major pharmaceutical company that would carry the project forward. The plan may have changed and that approach would be interesting as well. But I guess over the next 12 – 18 months, LEXX might announce a partner in their hypertension approval process.
In addition, the technology has demonstrated apparent advantages in delivering APIs across the blood brain barrier. This is another high potential avenue to explore but in LEXX’s case it has been associated with the oral delivery of nicotine which may be of interest to every major tobacco company in the world.
Working along these lines means LEXX deals with Fortune 500 companies. It is known, they have made various agreements with companies such as announced on April 11, 2022 new agreements with Altria Client Services, associated with Altria Group (NYSE: MO) with a market cap of approximately $75 billion. On August 31, 2020, Lexaria announced a research and development project with British American Tobacco (LON: BATS) with a market cap of approximately $76 billion. On January 15, 2019, Lexaria Nicotine announced agreements with Altria Ventures, a subsidiary of Altria Group.
LEXX management has experience with dealing with multi-billion dollar market cap companies.
I have had experience in the past working with small and microcap resource exploration companies that have made agreements with large cap mining operators. I know how difficult it is for a small or microcap company to work with a Fortune 500 operator. The small cap company needs news to sustain interest in their shares. The large cap company believes the less information they share with others, the better. As a result, I am not surprised that these associations have not produced outstanding10 results. But that doesn’t mean there isn’t any. In fact, the better the results to the Fortune 500 company, the more tight lipped they will tend to be. Although this means we are left waiting for news of some
development, we shouldn’t forget these agreements have been made and are being worked on.
Not to be overlooked is the Intellectual Property (IP) portfolio LEXX has built up. The company owns 27 patents worldwide covering DehydraTECH™ with 50 patents pending. This portfolio is an asset with value that should increase as LEXX’s commercial interests expand internationally. The most recent patent was issued by Mexico and covered heart disease. This could be important because Mexico, along with the U.S. and Canada, are part of the North American Free Trade Agreement (NAFTA) that was the first international trade agreement to protect intellectual property rights recognizing the rights of intellectual property holders.
Conclusion: with Lexaria Bioscience (NASDAQ: LEXX) (NASDAQ: LEXXW) we have a small cap company with large cap aspirations. When I look back at my original report on LEXX, there is very little taking place that wasn’t anticipated
seven years ago. A combination of business acumen, hard work and a touch of
luck has brought the company to the verge of breakthrough success. For investors, a little courage with a pinch of patience will produce massive return potential from current levels.
I don't get it! Are they saying they've gotten remarkable results from HYPER-H21-4, but they're not saying exactly what those results were?
Let's Toke Business-Ted Ohashi
https://4495825a-d729-4d8f-ade8-e78f828e1c8d.usrfiles.com/ugd/449582_03c92dcde04a4361ae4538084bed2dc9.pdf
Lexaria Bioscience (NASDAQ: LEXX) (NASDAQ: LEXXW) made a couple of announcements recently that many investors may have missed on overlooked. I will tell you what they were and why I think they are very important.
• LEXX announced that Catherine Turkel, PharmD, PhD has joined its board of directors.
The release reports that Dr. Turkel has more than 20 years' experience as an executive in start-up and mid-size pharma/biotech companies. She was Founder and CEO of Nezee Therapeutics and served as President and R&D head at Novus Therapeutics (renamed Eledon Pharmaceuticals - Nasdaq: ELDN). She currently acts as an independent Board Director at Object Pharma (private) and Prostate Cancer Research (non-profit; member of the Translational Scientific Advisory Committee) and is a Dean Advisor at Chapman University School of Pharmacy. Dr. Turkel has formulated Food and Drug Administration registration & commercial strategic plans and has led global development programs for pharmaceutical and biologic treatments from phase 1 through phase 4 related to Neurosciences, Pain, Cardiovascular, Psychiatry, Rare Diseases, Ophthalmology, Aesthetics, Urology and Otology therapeutic areas. Dr. Turkel designed and led Allergan's (now AbbVie - NYSE: ABBV) pioneering BOTOX® Chronic Migraine registration program, generating revenue of more than a billion dollars.
• LEXX has received its 27th worldwide patent granted in Mexico. The patent is from their third patent family, "Stable Ready-to-Drink Beverage Compositions Comprising Lipophilic Active Agents" that includes patents have already been issued in Australia, India and Japan. Certain claims allowed in this Mexican patent to use DehydraTECH-processed nonpsychoactive cannabinoids to treat cardiac and cardiometabolic disorders are of particular value to the Company. It also includes the treatment of Alzheimer's, Parkinson's, schizophrenia, and Human Immunodeficiency Virus (HIV) dementia; obesity; metabolic disorders
such as insulin related deficiencies and lipid profiles, hepatic diseases, diabetes, and appetite disorders; cancer chemotherapy; benign prostatic hypertrophy; irritable bowel syndrome; biliary diseases; ovarian disorders; marijuana abuse; and alcohol, opioid, nicotine, or cocaine addiction.
Conclusion: In broad brush strokes, here is what I expect from Lexaria Bioscience (NASDAQ: LEXX)
(NASDAQ: LEXXW). In the next six to nine months, I expect LEXX to receive approval from the FDA to initiate testing DehydraTECH-CBD as a treatment for hypertension. In the six to twelve months after that, I expect LEXX will conclude an agreement with a larger pharmaceutical company to complete the FDA approval process. If these objectives are met, I have shown in previous reports that LEXX’s market cap could be a ten-bagger or better in the next 12 – 24 months.
However, this is not the end of the story. If this were to happen, it would be a rare and tremendous accomplishment for LEXX but there would still be many opportunities ahead, some of which were covered in the Mexican patent above. Therefore, it is important to keep building the intellectual property values in the form of patents and to attract new and highly qualified people to join in the effort.
If LEXX gets to this point with hypertension in the next six to twelve months, CEO Chris Bunka and President John Docherty might step back and assume less active roles. But as investors, we may continue to benefit from today’s investment for decades to come. If you look at the charts above for the shares and warrants, you will see a pattern of accumulation since
mid-June. This is in stark contrast to what happened in the year or two previous when news would spark a sharp rally followed shortly by an equal or greater quick correction. This suggests to me that with what LEXX has underway at present, we may never see these prices again. This may be your last chance to accumulate LEXX at these extremely attractive price levels.
Don't worry, Be Happy! LOL
Ted Ohashi Pg. 5
https://4495825a-d729-4d8f-ade8-e78f828e1c8d.usrfiles.com/ugd/449582_f533eef7477f48caaed066fe2b00caaa.pdf
Delayed? We were promised up to 12 applied R&D programs planned for 2022, so far only one has started, HYPER-H21-4.
KELOWNA, BC / ACCESSWIRE / July 13, 2022 / Lexaria Bioscience Corp. (NASDAQ:LEXX) (NASDAQ:LEXXW) (the "Company" or "Lexaria"), a global innovator in drug delivery platforms announces the pending start of its upcoming human nicotine study NIC-H22-1. Lexaria expects to evidence that processing purified nicotine with its patented drug delivery technology, DehydraTECHTM, leads to enhanced oral-tissue absorption and reduced negative experiences.
Delayed, cancelled?
-HOR-A22-1: April 2022. This PK study will evaluate the ability of DehydraTECH to enhance the delivery characteristics of estrogen. Estrogen helps to control the menstrual cycle but also controls cholesterol and protects bone health. The hormone replacement market is estimated at $46.5 billion in 2027.
-DEM-A22-1: July 2022. This efficacy study will evaluate DehydraTECH-CBD with and without nicotine for the potential treatment of dementia. Alzheimer's disease is the most common form of dementia and accounts for at least 60% of all cases, and nicotine is already showing promising results related to Alzheimer's treatment. An estimated 55 million people worldwide are currently affected by dementia, with 78 million expected to be living with some form of dementia by 2030. The dementia drug treatment market is estimated at $19.6 billion in 2026.
Yeah, what the heck, all of a sudden we've traded almost a half million.
IT'S ALIVE!
Ted Ohashi-Pg.32
https://4495825a-d729-4d8f-ade8-e78f828e1c8d.usrfiles.com/ugd/449582_022fd8eeb4b84c2883fb2fec968ad232.pdf
No mention of Lexaria's HYPER-H21-4 and other studies for some unknown reason.
Oral Cannabidiol Effect on Blood Pressure in Hypertensive Patients (HYPER-H21-4) https://clinicaltrials.gov/ct2/show/NCT05346562
Ted Ohashi Pg. 14
https://4495825a-d729-4d8f-ade8-e78f828e1c8d.usrfiles.com...
1. Lexaria has been notified of the allowance of its 26th worldwide patent to be granted in Japan. Entitled Lipophilic Active Agent Infused Compositions With Reduced Food Effect, the patent recognizes DehydraTECH's ability to deliver active pharmaceutical ingredients (APIs) more efficiently regardless of the presence of foods within the gastrointestinal system. This can deliver drugs more consistently into the bloodstream regardless of the presence of food in the GI and is an important achievement in the quest for more reliable drug dosing. Lexaria has patents granted or patent applications progressing in countries around the world with aggregate populations of nearly 4 billion people.
2. Premier Anti-Aging Co. consolidated subsidiary Premier Wellness Sciences announced the launch of its new brand "Ko" with CBD (cannabidiol) as a core ingredient, effective July 21st, 2022. Ko will incorporate the DehydraTECH™ technology that increases the bioavailability of CBD and shorten the onset time of efficacy. DehydraTECH™ can increase CBD absorption by 5 to 10 times, even up to 27 times, compared to industry-standard formulated products. Furthermore, many studies have confirmed that DehydraTECH™ reduces the onset of efficacy from 1 to 2 hours to a few minutes
It would have to be some entity with an accredited lab because it's a human randomized, double blinded, cross-over study. I doubt that the pouch manufacturer would be Altria either as they're testing it against Altria's pouch.
Who is the third-party pouch manufacturing company? Is that Altria?
Glad to see that it's a human study and not an animal or lab study!
I think Chris gave a big hint that they were seeing great results in patients when he said that "In my discussions, they have mapped the possibilities and determined there could be as many as nine major academic papers coming from our hypertension studies."
Lexarias Human Nicotine Study Nearing Start Date
2022-07-13 09:06 ET - News Release
(via TheNewswire)
Lexaria is targeting the oral nicotine pouch category, one of the fastest growing segments of the nicotine industry.
Kelowna, British Columbia - TheNewswire - July 13, 2022 - Lexaria Bioscience Corp. (Nasdaq:LEXX) (Nasdaq:LEXXW) (the "Company" or "Lexaria"), a global innovator in drug delivery platforms announces the pending start of its upcoming human nicotine study NIC-H22-1. Lexaria expects to evidence that processing purified nicotine with its patented drug delivery technology, DehydraTECH TM , leads to enhanced oral-tissue absorption and reduced negative experiences.
Study NIC-H22-1 is a minimum 36-person human pharmacokinetic ("PK") randomized, double blinded, cross-over study to compare Lexaria's DehydraTECH-nicotine pouch performance to that of existing leading brands currently sold in the US such as ON! and Zyn . Objective data collection from blood samples that will evidence Tmax , Cmax , and AUC is the primary objective of the study. Secondary objectives include extensive subjective evaluations related to throat burn, user experience, and more.
The nicotine test article ingredient manufacturing and DehydraTECH processing have been completed and those processed materials have been received by the third-party pouch manufacturing company for filling and packaging. Independent Review Board approval and subsequent human dosing will be the next two major steps in this study.
A s reported on March 8, 2022 , Lexaria received its first ever patent granted to use DehydraTECH to more efficiently deliver nicotine through buccal tissue absorption, in Australia. A similar patent filing has been made in the USA and Lexaria believes that potential patent award could support significant competitive advantages in the nicotine white pouch category, as well as other oral nicotine product formats such as pills, tablets, lozenges, capsules, gums and sprays.
The oral nicotine pouch category is one of the fastest growing segments of the nicotine industry due in part to its reduced risk health outcomes as noted by the Food and Drug Administration ("FDA"). This delivery method, in the white pouch format specifically, which avoids harmful lung outcomes experienced by smokers or vapers, involves absorption primarily through the buccal tissues of the mouth, of purified nicotine that has been separated from most other harmful compounds in the tobacco leaf. The global market for the oral nicotine pouch category was US$2.33 billion in 2020 and is growing at a rapid CAGR of 30.7% and is expected to reach $21.84 billion in 2027.
About Lexaria Bioscience Corp.
Lexaria Bioscience Corp.'s patented drug delivery technology, DehydraTECH(TM), improves the way active pharmaceutical ingredients (APIs) enter the bloodstream by promoting more effective oral delivery. Since 2016, DehydraTECH has repeatedly demonstrated the ability to increase bio-absorption with cannabinoids, antiviral drugs, PDE5 inhibitors and more. DehydraTECH has also evidenced an ability to deliver some drugs more effectively across the blood brain barrier. Lexaria operates a licensed in-house research laboratory and holds a robust intellectual property portfolio with 25 patents granted and over 50 patents pending worldwide. For more information, please visit www.lexariabioscience.com .
https://www.mdpi.com/2075-4426/12/7/1037/htm
Chronic Effects of Effective Oral Cannabidiol Delivery on 24-h Ambulatory Blood Pressure and Vascular Outcomes in Treated and Untreated Hypertension (HYPER-H21-4): Study Protocol for a Randomized, Placebo-Controlled, and Crossover Study
Ted Ohashi-Bunka interview Pg. 7
https://4495825a-d729-4d8f-ade8-e78f828e1c8d.usrfiles.com/ugd/449582_fb7fedcba9454f1ab1fd34375f292bc0.pdf
General market selloff ahead of the long weekend.
Interesting to see some increasing share volume coming in this morning with a long weekend ahead.
Ted Ohashi
"One bit of news is that the U.S. Food and Drug Administration (FDA) has banned the sale of Juul ecigarettes from the United States market. Apart from the fact that Juul did not provide the data needed to convince the FDA to allow marketing to continue. There may have been a little bit of vindictiveness in the FDA’s action as it also mentioned that Juul had a disproportionate impact on youth vaping. Altria also has an interest in Lexaria Bioscience (NASDAQ: LEXX) (NASDAQ: LEXXW) nicotine. Although having their $12.8 billion investment in Juul effectively incinerated it may change Altria’s direction toward ingested delivery of nicotine.
"Lexaria Bioscience (NASDAQ: LEXX) (NASDAQ: LEXXW) announced signing two agreements with
Atlanta-based BevNology LLC ("BevNology").
1. The first agreement is a manufacturing operating agreement that expands production capabilities for LEXX’s own growing list of business-to-business (B2B) clientele interested in
purchasing DehydraTECH-powered active ingredients for consumer packaged-goods
brands. A new, state-of-the-art processing facility custom-built by BevNology is operational
that increases and broadens production capacity and is currently serving Lexaria's corporate clients. Lexaria has moved and installed all required commercial DehydraTECH manufacturing equipment into BevNology's new facility as it prepares for future growth in its B2B ingredient processing business.
2. The second agreement is a commercial license empowering BevNology to offer DehydraTECH products with active ingredients derived from hemp including cannabidiol (CBD) under BevNology and partnered brands. For powdered DehydraTECH formulations this agreement is non-exclusive. For liquid
ehydraTECH formulations, where BevNology has
highly specialized skills and capabilities, the license is non-exclusive in most areas of the
world but includes limited exclusivity rights in the U.S. only that require certain minimum
fee payments in order to maintain those rights. Lexaria will receive royalties from BevNology as a result of their utilization of this license. The only countries specifically excluded
under this license are Japan, the Republic of Korea, and the People's Republic of China.
"These are two separate agreements. The first is a new agreement to have BevNology manufacture the products that LEXX sells to commercial customers in facilities that LEXX CEO describes as “class leading.” The second is a more conventional commercial contract that licenses BevNology to use LEXX’s technology in return for royalties on sales.
Conclusion: I recently described the series of recent commercial agreements announced by Lexaria
Bioscience (NASDAQ: LEXX) (NASDAQ: LEXXW) as adding grains of sand on the scales measuring LEXX’s valuation in the market. You never know which deal causes the scale to turn sharply in LEXX’s favour. It is clear, however, that shift is taking place."
Here is some news that impacted LEXX just this month.
• June 21, 2022: BevNology commercial and manufacturing contract.
• June 17, 2022: I reported between June 6 - 17, 2022 the number of LEXX reported short sales divided by the total volume of off exchange trading declined sharply from a Short Volume Ratio of 43.67 to 8.18. The Short Volume Ratio is the Short Volume divided by Total off exchange Volume reported.
• June 8, 2022: AnodGen Bioceuticals commercial sales agreement
• June 6, 2022: Pre-IND meeting request letter with U.S. Food and Drug Administration
• June 3, 2022: Premier Wellness Science sales agreement including Premier’s worldwide independent assessment of DehydraTECH™ as their technology of choice
• June 2, 2022: Valcon Medical in the European Market
13
Conclusion: It appears to me that the recent acceleration in LEXX’s B2B commercial sales have not
been lost on investors. At the same time, the even more explosive growth potential comes from the steps taken on the hypertension front with the U.S. FDA.
What investors see is the increasing credibility of LEXX’s business model to generate sufficient B2B royalty revenue to sustain operations. It should not be forgotten that royalty revenue is the equivalent of gross profit for other operators because there is no ‘cost of goods sold’ associated.
Finally, investors should remember that the business plan always contemplated separating the different
applications of the technology. This means the DehydraTECH™ application in CBD is separate from its application in nicotine that is separate from antiviral drugs that is separate from PDE5 inhibitors and more. The “blue sky” implication is with hypertension it is possible that LEXX could replicate the GW
Pharma success or see it completed by a partner and it is within the realm of possibility that it could be repeated many times over. All of this is speculative but it is, at least, within the realm of possibilities.
https://4495825a-d729-4d8f-ade8-e78f828e1c8d.usrfiles.com/ugd/449582_c36ce2a24ea94e54bae68b89f35a09f2.pdf
OK, right. That explains it. Thanks abundance.
"The only countries specifically excluded under this license are Japan, the Republic of Korea, and the People's Republic of China."
Are China and Korea next?
We need Altria to take us to the altar. LOL
It reaffirms my faith in the technology when major corporations like IBC and Premier Wellness sign deals wit lexaria. You know that they have done extensive due diligence and have selected the best.
I don't think any other company can say this.
"Lexaria's DehydraTECH TM -CBD nanoemulsification formulation and processing techniques exhibited exceptional stability one year after production with less than 1% variability in CBD potency in fractions sampled from the top, middle and bottom of the beverage formulation without physical mixing or agitation; and, CBD content was verified at 93.4% of target potency and also evidenced excellent microbial purity after 12 months."
Premier Wellness Science
Produce the best products
Behind the creation of a single brand, we are developing products based on scientific quantitative data in collaboration with
medical and pharmaceutical researchers, research institutes, and biotechnology companies . In today's world of product turmoil, obtaining solid evidence is the key to becoming a leading brand in that area. “We create the best products.” We are forming and working on a complex global partnership to achieve this simple result .
To create a global brand
Our brands are sold after undergoing rigorous quality checks. We believe that
products with solid efficacy, emotional visual design,
communication with customers, and all of these activities
will foster a brand image and form a world-leading and outstanding brand identity.
Ted Ohashi Let's Toke Business Pg. 11
https://4495825a-d729-4d8f-ade8-e78f828e1c8d.usrfiles.com/ugd/449582_49796dbd6f0a4b31b20ff1c009fbb7dc.pdf
http://anodgen.com/
Scroll down to see who Lexaria's US representative is, its Joseph Fanelli. He's also a technical advisor to anodgen. https://anodgen.com/?page_id=1120
There's is also the expected royalty payments. The Japanese didn't sign this agreement with the expectation of not selling products.
"In addition to the Payments, Lexaria will also receive royalty revenue from DehydraTECH licensed product sales, the terms of which have been agreed to. Total revenue is expected to be significantly greater than the minimum Payments if Premier is capable of meeting its expected revenue targets. If Premier achieves even their worst-case projected penetration into the Japanese non-pharmaceutical CBD market, then based on their projections Lexaria could expect to receive annual payments of over $5 million by the fifth year of the contract."
Ted Ohashi Pg. 7
https://4495825a-d729-4d8f-ade8-e78f828e1c8d.usrfiles.com/ugd/449582_5fd3798e43074dacb8f1a381c974d835.pdf
Special Report
Important News from Lexaria Bioscience
There was some important news from Lexaria Bioscience (NASDAQ: LEXX) (NASDAQ: LEXXW)
that is all the more important because it seems to me the market missed the point.
(1) On June 2, 2022, LEXX announced it grant Valcon Medical, a DehydraTECH™ license
for medical cannabis applications, its first licensing agreement in Europe. Valcon
Medical is a European contract manufacturing organization specializing in the manufacturing of medical cannabis extracts for the European Union and the UK. Valcon is GMP certified and licensed under the Danish medical cannabis program to manufacture cannabis
products requiring physician-patient consultation. I think this is important because:
• Valcon is the most advanced medical cannabis manufacturer in its field in Europe and
leads the cannabis industry in manufacturing capacity and production of the highest quality
full spectrum extracts and API cannabinoid isolates.
• Valcon is supported by a shareholder group comprised of some of the leading cannabis
investment funds in the world, including Altitude Capital, Artemis Growth Partners, Enexis
AB, Greenfield Global Opportunities, and Nimb Capital.
• The license is non-exclusive and includes a combination of defined milestone fees payable
to Lexaria upon completion of batch validation and marketing authorization application approvals for the first DehydraTECH-enabled products for each of several product categories
as well as defined royalties payable to LEXX on revenues generated from Valcon's sales.
Conclusion: this may not be the most significant short term financial agreement but I think it is important for these reasons:
? It is another piece of evidence that DehydraTECH™ produces results that users assess
and decide it adds value.
? Valcon is an industry leader and others will be watching to see the ultimate results.
? It is a non-exclusive agreement which means separate agreements can be signed with
other companies that might decide to follow Valcon’s lead.
? The ideal end game is to reach the point where so many companies are using DehydraTECH™ others will be forced to use it if they are to be competitive. Each agreement of
this type brings LEXX one step closer to this objective.
(2) A far more important and financially rewarding agreement was announced effectively on June 3, 2022 as LEXX granted an exclusive license to Premier Wellness
Science for a strategic and long-term partnership in the Japanese market. Under the
agreement, Premier is purchasing the rights to DehydraTECH™ technology for the Japanese non-pharmaceutical market for use with CBD and hemp ingredients in oral liquid and
non-liquid products, as well as for topical, hair-care, lip-care and cosmetics products. I think
this agreement is important because:
8
• Lexaria and DehydraTECH™ finished first in a worldwide competition to evaluate advanced
delivery technology for active pharmaceutical ingredients run by Premier. In January 2022,
LEXX was contacted by Premier as the first step in the agreement that was just announced.
As Shinji Shosoyama said, "Premier conducted a global competition to evaluate the world's
most advanced molecule delivery technologies, and selected Lexaria's DehydraTECH
technology based on its superior performance and the extensive data available through
Lexaria's years of testing." For the first time, we have an independent commercial assessment of molecule delivery technologies and DehydraTECH™ prevailed. This lends significant credibility to the potential for DehydraTECH™ and LEXX.
• It is the largest financial commercial agreement for LEXX to date.
- In order to retain ongoing exclusivity, the minimum quarterly payments to LEXX amount
of US $4,527,500 during the first five years starting September 1, 2022.
- Assuming that Premier continues to submit all required payments, the license for the
Japanese market is perpetual.
- LEXX will receive royalty revenue from DehydraTECH licensed product sales, the
terms of which have been agreed to. If Premier achieves their minimum projections,
LEXX can expect annual payments of over $5 million by the fifth year of the contract.
- Lexaria and Premier have agreed to examine the possibility of research and development collaborations related to advanced formulation science. Premier and Parent have
long-established relationships with leading scientists in relevant fields in Japan.
• Premier is a wholly-owned subsidiary of Premier Anti-Aging (PAA) which is listed on the
Tokyo Stock Exchange Mothers division. PAA had revenues of approximately US $187
million in the first three quarters of fiscal 2021 with year-over-year revenue growth of
63.1%, strong profit margins from sales though over 45 product SKU's across four brands
sold in over 16,000 retail stores as well as directly through mail/web orders to over 2.6
million proprietary members. This is another major step up in the size and quality of a
DehydraTECH™ licensee.
• This financial information is more significant because:
- As fee and royalty income, these payments are far more significant that sales. They
represent gross profit because there is no cost of goods sold.
- One more agreement of this approximate financial impact would mean LEXX’s current
annual operating cash burn is covered.
- In fact, I suspect that if Premier should exceed their minimum expectations, it is possible
that the payments from this contract alone could do the job.
- LEXX’s business model is superior to other companies that may record higher revenues but negative gross profit.
• This agreement follows the awarding of two issued patents by the Japan Patent Office for
DehydraTECH™ technology. This confirms patent protection is a vital component of entering commercial agreements and, as I have said on several occasions, LEXX’s patent portfolio represents a valuable Intellectual Property asset.
9
• The overall Japanese cosmetics and personal products markets are estimated to be over
US $35 billion in annual sales.
Conclusion: I conclude these announcements are very significant despite the market’s apparent indifference. Over the past several months, investors have been critical of the slow pace at which LEXX’s
commercial business has developed. Management has said there was a need to develop information
that is required to conclude commercial contracts. It may be that LEXX has reached the tipping point
where we will see an increase in the number of commercial contracts concluded each year. Also, it
appears there is a clear trend toward potential commercial partners being well-established commercial
entities.
TWO DOWN.
"What I can say is in three geographic areas around the world, Lexaria is making significant progress on commercial relationships that we are really excited about." CB
I've been dreaming about Japan Tobacco (JTI). One of the big 4 tobacco companies, they do have a snus product but don't appear to have a pure nicotine pouch. A deal with them would be phenomenal.
P&P would be pissed off if he won the powerball. "Now I need a lawyer and accountants, people are calling me all the time, God my life is hell"