Lexaria Bioscience And British American Tobacco Unite In A Planned R&D Agreement; DehydraTECHâ„¢ Platform Continues To Attract Attention

Lexaria Bioscience (OTC: LXRP; CSE: LXX) may be a micro-cap stock, but it plays in the big leagues by signing significant and potentially lucrative deals with multi-billion-dollar businesses. Most recently, Lexaria announced entering into a research and development framework agreement with British American Tobacco Limited (NYSE: BTI) to investigate Lexaria’s technology for potential use in nicotine products. 

The deal is valuable, and potentially accretive, on at least two fronts. First, BTI will fund all work under the final research and development agreement. And second, as a result of these non-dilutive studies, the results can become valuable assets to Lexaria and its partners. It’s a win/win scenario that showcases how the innovative and patented DehydraTECH™ technology can improve the way pharmaceutical ingredients enter the bloodstream. Moreover, this latest R&D agreement further validates the interest in DehydraTECH™ as a potential game-changing platform to meet the needs of fast-changing pharmaceutical and consumer goods sectors.

In particular, the opportunities created from this research agreement can be substantial and come well-backed by an industry giant, British American Tobacco, a 118-year-old tobacco and consumer goods business with products sold in over 11 million locations across more than 180 countries. The company is focused on building “A Better Tomorrow” by reducing its business’s health impact by offering a greater choice of enjoyable and less risky products for its consumers. BTI’s market cap stood at over $75 billion at the end of August.

Their mission may play directly into Lexaria’s strength through the DehydraTECH™ technology. Further, the additional research and development agreements already in place with other billion-dollar companies like Altria Group (NYSE: MO), position Lexaria to create near and long-term shareholder value by identifying and exploiting opportunities born through its innovative platform.

Video Link: https://www.youtube.com/embed/oNUJeOo83EU

The Broad Applications Of DehydraTECH™

The value driver at Lexaria comes through its DehydraTECH™ platform. More than improving the way active pharmaceutical ingredients (APIs) enter the bloodstream, this platform also promotes healthier ingestion methods and increases the effectiveness of fat-soluble active molecules, which, in turn, can be a valuable factor to lowering overall dosing. Also, the technology is not one-dimensional. It can be applied to numerous ingestible product formats, including foods, beverages, oral suspensions, tablets, and capsules. Thus, the opportunities can be nearly endless for its commercial applications.

An example of that reach came last month when the company received ethics board approval from a European university research hospital to conduct an exploratory clinical study using cannabidiol (“CBD”) formulated together with its patented DehydraTECH™ technology. The trial will assess blood pressure reduction potential in volunteers with pre-or mild hypertension. According to Lexaria, the study is designed as a double-blinded, placebo-controlled, cross-over pilot study where 24 volunteers (12 males and 12 females, aged 45-70 years) will be randomized to receive a 300 mg dose of CBD with or without DehydraTECH™ formulation enhancement. Dosing will be in oral capsule form across two separate study visits. The primary outcome will be automated measures of blood pressure and heart rate. Secondary outcome measures will include circulating plasma concentrations of CBD and assessing key inflammatory markers associated with cardiovascular disease.

Results from this study are intended to complement its previous clinical research from 2018, as published in the peer-reviewed medical journal “Advances in Therapy.” In that study, a single 90mg CBD dose of Lexaria’s TurboCBD™ oral capsule provided evidence of lower blood pressure, higher blood flow to the brain, faster delivery onset of CBD into the bloodstream, and larger quantities of CBD within the blood compared to a single 90mg dose of generic CBD in healthy, normotensive volunteers. Additional findings demonstrated a significant 5% reduction in mean arterial blood pressure (MAP) when normalized to end-tidal CO2 at peak blood levels of CBD with Lexaria’s TurboCBD™ compared to placebo (95% CI; p=0.016). The trial is designed to evaluate performance in a pre- and mildly hypertensive population more representative of consumers who may benefit from blood pressure control and reduction. 

Lexaria expects to have results from the study during the fourth quarter of 2020, with updates provided as the data is analyzed and available. The existing annual market for blood pressure control is roughly $24 billion but many of the drugs currently in use are plagued with unwanted and sometimes dangerous side effects. There is a real opportunity for Lexaria’s patented processing of CBD to enter this market, after suitable testing and evaluation.

Milestone Achieved In Completing Altria Ventures Phase I Study

With a potential catalyst in the near-term from its CBD study, Lexaria is now working to capitalize on its previously announced milestone. That event came at the conclusion of a Phase I research and development program with Altria Ventures Inc. (NYSE: MO) to evaluate oral forms of nicotine delivery utilizing Lexaria’s patented DehydraTECH™ technology. Mainly, that research and development program was initiated to assess reduced health risks of a preliminary DehydraTECH™ oral nicotine formulation relative to combusted tobacco. 

The results from Phase I are encouraging. In July, study data released by Lexaria showed that the DehydraTECH™ formulation showed acceptable chemical and microbiological stability and was well-tolerated in a 7-day, repeat dose acute toxicology study in rats. Critical to the safety profile, those results showed no test-article-related effects on survival, macroscopic findings, or organ weights. There were also no test-article-related histopathological tissue findings.

Further, the formulation created no throat burn or irritation issues in an oral pouch or chew formats at standard commercial doses upon small scale sensory analysis in humans. Data also demonstrated the formation of a unique mixture of nanoparticles without creating a covalently linked, new molecular entity construct upon molecular characterization by Canada’s National Research Council (NRC). Thus, the formulation is not believed to be preclusive of Premarket Tobacco Product Application (“PMTA”) applicability in this respect.

Lexaria noted that after completing the Phase I study, Altria preserved its right to activate the “First Warrant Tranche Trigger,” a term defined in the Warrant and Option Agreement dated as of January 15, 2019. The tranche trigger activation would initiate a staged payment to Lexaria Nicotine LLC. and enable Altria to retain its current exclusivity in the US market for Lexaria’s DehydraTECH™ for oral nicotine delivery purposes.

Altria currently holds an existing minority equity stake and board representation in Lexaria Nicotine LLC. and is titled to a non-exclusive license to use DehydraTECH™ worldwide. Lexaria is expected to benefit from an earlier-defined royalty payment schedule if Altria decides to utilize the technology commercially, regardless of additional R&D results.

DehydraTECH™ Delivers Speed Of Bio-Absorption

The most notable advantages to utilizing DehydraTECH™ in orally delivered products is that it increases bio-absorption by up to 5-10x, reduces the time of onset from 1-2 hours to 10-20 minutes, and masks unwanted tastes for orally administered bioactive molecules. Those advantages substantially broaden the potential applications of the technology. Examples of molecules tested or currently under investigation using Lexaria’s DehydraTECH™ include anti-viral drugs, cannabinoids, vitamins, non-steroidal anti-inflammatory drugs (NSAIDs), nicotine, and other molecules.

Lexaria is also expanding its revenue-generating opportunities. The company has licensed DehydraTECH™ to multiple companies across different sectors, including Altria, where the goal would be to develop smokeless, oral-based nicotine products. Other licensees include companies that produce cannabinoid beverages, edibles, and oral products. To quickly capitalize on market opportunities, Lexaria operates a licensed in-house research laboratory and owns a robust intellectual property portfolio with 16 patents granted and over 60 patents pending worldwide.

That IP portfolio provides the time and protection needed to identify and develop new platform applications. An important and timely opportunity may come in the fight against COVID-19. Lexaria has commenced a program to investigate how the rapid and effective absorption offered by DehydraTECH™ could potentially help the best anti-viral drug candidates in treating the pandemic virus. Updates from that program may also be imminent.

New Deals, Ongoing Studies Set Stage For Strong Finish In 2020

The stage is set to produce at least one catalyst as interim results from its ongoing CBD trial evaluating blood pressure reduction in patients with hypertension is expected by the end of the year. However, late-breaking news, similar to the British American Tobacco agreement, can come at any time. And as the value of its DehydraTECH™ platform becomes more mainstream, those events are likely to occur.

Moreover, Lexaria is already leveraging established relationships with multiple pharmaceutical, nicotine, and cannabis/CBD companies to create more effective treatments and revenue-generating opportunities. And while the BTI agreement may be one of the new partnerships, the company has stated on occasion that they are in discussions with large tobacco companies to secure additional working relationships by the end of this year. That’s a plurality of opportunity.

Investors should also remember that Lexaria has filed to uplist to a more senior exchange, a move that can generate a new level of interest and exposure to investors. That filing occurred in July, making updates on that status another potential catalyst before the end of 2020. For Lexaria, and its investors, combining the sum of the parts may equate to a great opportunity, especially at current price levels. 

And while no investment is without risk, Lexaria has come a long way to mitigate its downside by securing important agreements and contracts with some of the world’s largest companies. Having deep-pocketed allies is always welcome. 

Along with a robust and innovative drug delivery platform, those relationships may play an important factor in positioning Lexaria for near and long-term success.

Visit https://get.ceo3in60.com/lxrp/ for additional insights into Lexaria Bioscience

 

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