Out-Licensing Patented Biotechnologies
Lexaria Bioscience Corp. (NASDAQ:LEXX) is a biotechnology company focused on its proprietary drug delivery technology DehydraTECH™. The company has been granted 18 patents internationally and submitted over 60 patent applications. Operating on an out-licensing and royalty business model, the company generates most of its revenue from very high profit-margin royalties by licensing its patented DehydraTECH™ technology to other companies.
Lexaria is exploring several verticals for its DehydraTECH™ technology:
- A potentially game-changing hypertension medication using Lexaria’s patented processed CBD without the awful side effects of other leading drugs. There are 1.3 billion people with high blood pressure.
- Reduced risk nicotine alternatives to deadly cigarettes: intended to improve the lives of 1.1 billion global smokers.
- Much faster and more reliable oral cannabinoid delivery in product formats like oral pouches intended to eliminate cigarette smoking.
- Antiviral drug improvements targeting COVID-19, HIV/AIDS, influenza, and other viruses that together kill millions of people every year.
DehydraTECH™ improves the way in which active pharmaceutical ingredients enter the bloodstream and increases the effectiveness of fat-soluble active molecules, thereby lowering overall dosing. This method promotes healthier oral ingestion methods compared to smoking, and less wasteful methods compared to needles for vaccines. The technology enhances formulations that quickly and effectively deliver a wide range of bioactive molecules, such as nicotine, CBD, NSAIDs and various other drugs and medicines. In addition to these priority verticals, the technology can be applied to food and supplements.
In March 2021, the company announced significant progress in its research and development for DehydraTECH™ use for administering both CBD hypertension medication and antivirals for COVID-19 using DehydraTECH™ 2.0, an enhanced version of its proprietary technology. Lexaria expects to receive results for all five studies for its CBD for hypertension R&D this year, beginning as early as May. Results from Lexaria’s 2018 human clinical study were successful and positive 2021 results could open the door to a new commercial pathway within this US$28 billion annual market.
“It’s been a very productive start into 2021 with a total of seven studies currently underway across our various research programs,” commented Chris Bunka, CEO of Lexaria. “Lexaria’s applied R&D programs are vital to generate the supportive data required to pursue either regulatory approvals or corporate relationships necessary for commercial launch. We expect great success this year and are eager to report study results as they become available.”
Some existing studies have found that DehydraTECH™ technology increases the absorption of bioactive compounds by as much as five to 10 times and takes effect in as little as several minutes after swallowing a capsule.
The company is also focused on licensing its technology for use as a safer method of nicotine consumption, as millions of people die each year from smoking cigarettes – the worst possible method from a safety perspective of administering nicotine. Oral administration of purified nicotine, for example, avoids lung disease potential such as emphysema and lung cancer. Lexaria’s second-generation testing of its oral nicotine showed 195 percent more nicotine across the blood-brain-barrier, which could allow for smaller doses of nicotine. The formulation was also four times faster at reaching its peak level in brain tissue than the control formulation.
In other industries, DehydraTECH™ is licensed as an alternative form of orally administered THC and CBD. Like cigarettes, joints are harmful to users’ lungs, but the safer choice of edibles have their own drawbacks of a long onset and prolonged effect. The use of DehydraTECH™ for oral edible formulations offers a fast onset and more control, making it a much safer and more user friendly alternative to old-fashioned options.
Lexaria is led by an experienced management team that owns about 13 percent of the company’s shares and have many decades of experience.
Lexaria’s Company Highlights
- Intellectual property (IP) portfolio consists of ~60 pending patent application submissions and 18 granted patents.
- Most revenue generated is high profit-margin royalty income.
- B2B revenue model focused on out-licensing the patented DehydraTECH™ technology in return for licensing fees and commercial royalties.
- Positive results in preclinical and clinical research for DehydraTECH™ technology.
- Licensing or formal R&D agreements in place with Altria, Cannadips, Hill Street Beverages, British American Tobacco and more.
- Research partnership with the Canada’s prestigious National Research Council (“NRC”).
- Health Canada licensed, state-of-the art formulation development laboratory.
- Lexaria’s 19th patent granted in India complements the existing suite of granted patents spanning the EU, the US, and Australia. The 20-year patent also provides intellectual property protection to both consumer-packaged goods as well as registered drug applications.