IntelGenx Technologies Corp (IGXT)

[specular]

Two items from yesterday's presentation (just posted on the IGXT web site). The first is from 'Strategy Focus' (page 3) where Zerbe states they are trying to create a "Second Biovail". Biovail was a Canadian drug company that came under intense SEC scrutiny and eventually paid a $10M fine. They were subsequently purchased by Valient, who then tried to sue IGXT over the launch of CPI-300. Not sure the wisdom of stating you want to be the next Biovail, especially to a group of primarily Canadian investment houses.

Second item, which is really not new it's just that I hadn't put 2 and 2 together on it, is related to CPI-300 revenue. In the presentation it projects 2014 sales of CPI-300 to be $30M, and that royalties will be $7M from that. Again, hadn't done the math before but that calculates to a 23% royalty rate - which is quite nice, and a well done to Zerbe for negotiating that.

More importantly (to me at least) relates to what I have been claiming as low ball projections on CPI-300 penetration. Current high dose sales are running close to $200M a year, $30M then is only 15% of the market. I have got to believe that entering the market with the only single dose form (and no seizure warning) should allow you get more than 15% of the market . And that doesn't even factor in new Bupropion users now that seizure concerns are eliminated, and /or taking share from other AD drugs.

I for one can realistically see sales hitting $100M a year over time, which translates to $23M in royalties. If he can negotiate similar royalty rates with PAR, RedHill, ED partner, etc., that's looking pretty damn good. Now kick Edgemont in the ass and start selling.