What a great opportunity !!!!!
Analyst Report from March 2009
INTELGENX TECHNOLOGIES CORP. Price: $0.50
Date | March 26, 2009 Target: $ 2.25
SPECULATIVE BUY
• Sales of IntelGenx’ first product (pre-natal vitamins) using
the Company’s proprietary Versatab technology began in the
fourth quarter.
• The Company reported revenues of $0.98 mm, an increase of
13% over the previous year, and a net loss of $2.8 mm, an
increase of 155%.
• The Company has $0.83 mm in cash remaining, of which
$0.28 mm is restricted. We believe this represents 6-10
months of operations, depending on the success of sales of
its pre-natal vitamin.
• The Company has taken somewhat longer than expected to
file their NDA application, so we have adjusted our model to
reflect sales beginning a quarter later than we had expected.
• We are maintaining a Speculative Buy rating and reducing
our target to $2.25 from $2.50.
IMPACT:
Neutral. Sales of IntelGenx’ first product (pre-natal vitamins) using the
Company’s proprietary Versatab technology began in the fourth quarter and the
Company is very close to filing a 505(b)(2) NDA application with the FDA for its
lead product anti-depressant CPI-300.
DETAILS:
IntelGenx has $833,219 in cash (as of Dec 2008), of which $277,220 is restricted for
product development with partners. The Company had a cash burn of
$1,737,032. We estimate that the Company has 6-10 months of cash remaining
depending on how fast the pre-natal vitamin sales build. The vitamins were
launched in Q4/08, but we will only see initial revenue in Q1/09 results.
The Company is very close to filing an NDA for their Anti-depressant drug CPI-
330, which is being developed with Cary Pharmaceuticals. This will be its first
major product, and could be approved and marketed by the end of this year.
The Company has taken somewhat longer than expected to file their NDA
application, so we have adjusted our model to reflect sales beginning a quarter
later than we had expected.
RECOMMENDATION
We are maintaining our Speculative Buy rating and decreasing our target to
$2.25 from $2.50 to reflect the delay in the NDA filing. The primary near-term
drivers for our valuation continue to be the Company filing an NDA for CPI-300 with the FDA and negotiating an Alliance agreement for marketing the drug.
