NASDAQ:LEXX
READ THE FULL LEXX RESEARCH REPORT
Lexaria Bioscience Corporation (NASDAQ:LEXX) reported fiscal second quarter 2024 results along with program updates, progress in its GLP-1 and hypertension trials, a capital raise and appointment of a new CFO. The investigational new drug (IND) application for hypertension was cleared in March and ethics board approval was given to start the second GLP-1 agonist human pilot study. Additionally, several new patents were granted. Lexaria’s primary focus this year is to demonstrate that DehydraTECH (DHT) can be an effective delivery system for the burgeoning GLP-1 agonist space. Oral options for GLP-1s are limited and initial data for DHT-GLP-1s promising leading to the development of a series of studies that seek to find the best approach for a more convenient delivery method.
2Q:23 Results
Lexaria filed its 2Q:24 Form 10-Q on April 9, 2024. The company reported FY:23 revenues of $145,000, and total operating expense of $813,000 resulting in net loss of ($650,000) or ($0.06) per basic and diluted common share.
For the fiscal quarter ending February 29th, 2024 and versus the comparable prior year period:1
➢ Revenue totaled $145,000, up 314% from $35,000 due to an increase in licensing revenues due to a contracted increase in minimum fees. No product or other revenues were recognized;
➢ Research and development expenses totaled $246,000, down 65% from $696,000 as a result of completing the manufacturing of DHT CBD drug for the company’s clinical studies, and the completion of other studies for nicotine replacement, diabetes and seizures. Existing spending is tied to the DHT investigational research programs underway in GLP-1 agonists and CBD;
➢ General and administrative expenses totaled $567,000, down by 12% from $647,000 due primarily to a decrease in consulting fees, salary from the loss of two employees and advertising. Legal and professional fees increased due to patent filings and other miscellaneous legal advisory work;
➢ Other income of $15,000 represented unrealized gains on marketable securities which compares to a similar contribution in interest income in the prior year;
➢ Net loss was ($6.7) million, or ($1.01) per share, compared to net loss of ($7.3) million or ($1.24) per share.
As of February 29, 2024, cash and marketable securities totaled $4.8 million which compares to $1.5 million at the end of fiscal year 2023. Cash burn for the first six months of FY:24 was approximately ($1.9) million. Management estimates that the company holds sufficient cash as of April 2024 to meet its financial obligations for the next year.
Video Series with Lexaria Management
We produced a series of videos featuring Lexaria’s CEO Chris Bunka and President John Docherty where we discussed the FDA’s IND clearance for the hypertension study, the upcoming GLP-1 agonist studies and held a fireside chat which touched on some of the other areas where the company is making progress.
See links below for series episodes:
➢ Lexaria’s Hypertension Program Explained
➢ Lexaria’s GLP-1 Agonist Human Pilot Study
➢ Lexaria’s Upcoming GLP-1 Agonist Studies
➢ Lexaria’s IND for DehydraTECH CBD Cleared by FDA
➢ Fireside Chat Illuminates Lexaria’s DehydraTECH
Hypertension Investigational New Drug (IND) Submission and Clearance
After some delays related to the delivery of analytical and stability data from a supplier, Lexaria submitted its investigational new drug (IND) application in January for hypertension. About a month later, the IND was cleared by the FDA, which allows Lexaria to conduct a Phase Ib hypertension clinical trial (HYPER-H23-1). The study will evaluate DehydraTECH CBD in an effort to demonstrate safety, efficacy and the mechanistic performance of the candidate. We expect to see the study begin when certain conditions are met including sufficient additional funding.
Appointment of New Chief Financial Officer
In a March 14th press release, Lexaria announced the appointment of Nelson Cabatuan as Chief Financial Officer to lead the company’s financial operations. Mr. Cabatuan has over 15 years of corporate finance and operations experience within the life sciences industry, most recently serving as SVP, Finance and Operations at Rain Oncology, a late-stage precision oncology biotech company. At Rain, Mr. Cabatuan built and led the company’s financial organization that experienced significant growth during his tenure. Previously, Mr. Cabatuan served in various roles at Rigel Pharmaceuticals, Inc., including as Vice President, Finance. At Rigel, he was a key member of the executive team that developed and launched Tavalisse for the treatment of chronic immune thrombocytopenia.
Mr. Cabatuan has deep industry contacts with bankers and analysts which have so far led to a number of connections with these groups that has helped improve investor awareness of Lexaria with the investment community.
Diabetes and Weight Loss GLP-1 Agonist Program
Following the report of final data for the DehydraTECH (DHT)-Rybelsus comparison study, Lexaria outlined an extensive research and development program for 2024 in a January 16th press release. The goal of the work is to further characterize the pharmacokinetics of DHT-semaglutide delivery. Additionally, the company seeks to identify the commercial applicability of DHT-formulated versions of semaglutide, liraglutide and tirzepatide. With this end in mind, Lexaria has planned one animal and three human studies along with long-term stability testing of DHT compositions of GLP-1 agonists. All human studies will be investigator-initiated, non-registrational studies and will require certain approvals before beginning. Third-party laboratories will be used exclusively.
Chronic Dosing Animal Study
A chronic dosing animal study that will advance 12 arms with 8 to 10 obese rats per arm is being readied for Spring 2024 which will be designated WEIGHT-A24-1. It is planned to run for 12 weeks to evaluate weight loss, pharmacokinetics and blood sugar control over the duration of the study. Following collection of the data, full analysis will be performed and results will be shared. DHT formulations of semaglutide and liraglutide, alone and together with DHT-CBD, will be evaluated. This study will incorporate both the synthetic N-acylated amino acid derivative of salicylic acid (SNAC) technology developed by Emisphere and a compounded formulation of semaglutide. A report of interim results is expected while the study is in progress.
A March 5th press release announced the start of the trial providing additional detail about the 8-week study. An unidentified, Health Canada licensed Canadian research laboratory was awarded the contract to run the study. Manufacturing of the CBD and GLP-1 compositions to be used in the study have been completed and drug product will be administered after laboratory testing that is expected to finish before mid-April. Lexaria provided details on each of the 12 study arms which will evaluate DHT CBD, DHT GLP-1 with reformulated Rybelsus, DHT GLP-1 pure semaglutide and combinations of these arms against a vehicle and positive control arm.
Investigators estimate that over 1,500 samples will be taken from 72 rats for analysis. Body weight, glucose readings and brain tissue will be evaluated. Brain tissue will be examined to determine whether DHT is able to produce higher brain absorption compared with the non-DHT arms. The brain absorption is important as one of the proposed mechanisms of action for the GLP-1 agonists is its impact in the brain where it can regulate the appetite, particularly in the hypothalamus. Combined with delayed gastric emptying and other mechanisms, this approach provides a multi-pronged effort to help patients lose weight. Lexaria will seek to find if the DehydraTECH delivery of the GLP-1 agonists is able to achieve better central nervous system (CNS) delivery, thereby enhancing the brain regulation of the hunger mechanism.
Human Pilot Study #2
A second human pilot study is scheduled to begin in Spring 2024. The study’s independent third-party review board granted approval to start the trial on April 16th, 2024 with management guiding towards first dosing in the subsequent month. Up to nine healthy volunteers will be administered a single dose of DHT-semaglutide (what we termed DHT-Rybelsus above) capsules, similar to the formulation used in the first human pilot study. An oral dissolvable DHT-semaglutide tablet will be administered to evaluate whether or not it can be effectively delivered using the sublingual/buccal tissue route. Tolerability, side effects, pharmacokinetics, and blood sugar control will also be evaluated. As with the first human pilot study, the formulation of DHT-semaglutide will use Rybelsus tablets as source material for the composition.
Human Pilot Study #3
Planned for May or June 2024, the third human pilot study will enroll up to eight healthy human volunteers. Subjects will be administered a single dose of DHT-tirzepatide, which will be compounded from Eli Lilly’s Zepbound and manufactured into capsules. Study endpoints include tolerability, pharmacokinetics and blood sugar. The trial will evaluate DHT effectiveness in combination with a dual action GLP-1 agonist and a glucose-dependent insulinotropic peptide (GIP) drug absent the SNAC formulation used in the Rybelsus semaglutide composition from the first two human pilot studies.
Chronic Dosing Human Study
Planned for 3Q:24, a 70-90 subject human study in pre-diabetic and Type 2 diabetic individuals will dose daily using DHT-CBD and DHT-Rybelsus capsules. It will evaluate tolerability, pharmacokinetics, weight loss and blood sugar among other metrics over a 12-week period. The study seeks to compare the performance of DHT-CBD product with DHT-Rybelsus product both separately and together relative to a placebo arm. A secondary goal for the study is to confirm glycemic control and weight loss shown in the first pilot human study.
Lexaria anticipates that this trial will be run in Australia and/or Eastern Europe and will test the best performing formulations in the previous studies conducted. Results from this study should be available before the end of the year.
Long Term Stability Testing
Lexaria also plans to evaluate the chemical and microbiological purity and stability of select DHT compositions over an extended period of 6 to 12 months. Long-term stability is a necessary feature if the DHT-formulations are to be commercially successful and replace injectable versions of GLP-1 agonists. Success in this study will support this objective.
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1. Our year over year comparison uses originally reported data.
