Lexaria Bioscience Corp (LEXX)

[Shawking]

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.