From COVID to Nicotine Treatments, this Bio Stock is One to Watch

(Image via Lexaria Bioscience Corp.)

There’s no shortage of excitement over potential COVID-19 vaccines. Just looking at the response to news around these developments is evidence of that, and one Company is working on a transformative, patented technology platform that’s fast acting, less expensive and a more effective oral drug delivery to treat such diseases as Coronavirus, or even to disrupt the $990 billion global nicotine market.



That Company is Lexaria Bioscience Corp. (CSE: LXX, OTCQX: LXRP, Forum), whose proprietary drug delivery technology, DehydraTECHTM, improves the way active pharmaceutical ingredients (APIs) enter the bloodstream by promoting healthier ingestion methods and increasing the effectiveness of fat-soluble active molecules, which also means lower dosing overall. There are many different ingestible product formats where this clinically proven technology can be applied to, from drugs, foods, beverages, oral suspensions, tablets, capsules and more.

Operating out of its federally licensed research laboratory, Lexaria holds a robust intellectual property portfolio, with 18 patents granted and approximately 60 patents pending worldwide.

According to the Company, DehydraTECH can increase bio-absorption by up to 5-10x, while also reducing time of onset from 1 - 2 hours to just minutes, and can even mask unwanted tastes for orally administered bioactive molecules, including anti-virals, cannabinoids, vitamins, non-steroidal anti-inflammatory drugs (NSAIDs), nicotine, and other molecules.

The Company’s business divisions include both technology licensing, where companies implement DehydraTECH under license within their own facilities under royalty agreements, and B2B operations where clients purchase pre-processed DehydraTECH CBD-powders.

Lexaria Bioscience has licensed DehydraTECH to multiple companies across the globe, including a world-leading tobacco producer for the development of smokeless, oral-based nicotine products and for use in industries that produce cannabinoid beverages, edibles, and oral products.

Stockhouse Editorial wanted to find out more and caught up with the Company’s Chairman and Chief Executive Officer, Chris Bunka to gain access to further details ….

• Thank you for joining us today. To begin, can we bring investors up to speed on your Company and the opportunity presented, can you explain how DehydraTECH works and how it can be so fast acting, less expensive and more effective?

Certainly: Lexaria initially had to overcome a lot of skepticism because actual new drug delivery technologies only come along every 15 or 20 years – our DehydraTECH is the first truly new drug delivery tech since nanotech was invented roughly 20 years ago. It is quite unique.

I’ll actually tell you the secret of how we deliver drugs so fast – one of the key benefits that DehydraTECH is known for.

Your liver, pancreas, gall bladder and intestine work together to identify the foods you’ve just consumed and distribute custom-formulated digestive secretions every time something new is detected within your intestine. Turns out that one of the most useful molecules secreted is a long-chain fatty acid (“LCFA”): these are actually recyceled up to dozens of times per day by your body they are so vital to your body’s ability to optimize absorption of beneficial vitamins, minerals and so on.

Lexaria’s technology is really elegant because we piggy-back on this natural process, and we add LCFA’s to a drug or active molecule outside the body, in a GMP processing facility that utilizes our patented formulas and processes to lock or bind the LCFA to the drug. This bond between the LCFA and the drug is vital: it allows the bodie’s own systems to “prioritize” the associated LCFA/drug and shunt most of it through the Lymphatic Lacteal system, largely bypasses first-pass liver metabolization.

Bypassing first-pass liver processing achieves two things: it allows the drug to reach the bloodstream in just minutes – some of testing in animals as shown blood circulation delivery in as little as t two minutes – and it also allows the drug to be delivered in its intended form without being altered by the liver. This is the secret of how we deliver drugs into the bloodstream so fast.

For a small business or nutraceutical company, the actual processing steps we utilize are relatively simple and a small capital expenditure can empower a single facility employee to produce easily 250,000 servings per day of DehydraTECH powders ready to be manufactured into capsules or any other final product format. Costs to the consumer of the DehydraTECH processing are negligible.

• As a technology licensing play, can you break down your multiple verticals?

Certainly. The largest market we are actively pursuing is nicotine, which is roughly a US$1 trillion per year industry; it’s actually one of the largest industries in the world. Lexaria’s DehydraTECH has NOTHING to do with cigarettes, however! In fact, our technology doesn’t work through combustion. Instead, we are propoents of trying to help consumers stay alive through reduced-risk methods of experiencing the nicotine they desire. So oral forms of nicotine – proven over and again to have dramatically lower rates of negative health impacts than combusted nicotine – is where we want to see DehydraTECH used. The largest nicotine company in North America is Altria, and they have already licensed our tech. Even larger than Altria is British American Tobacco, and they are currently evaluating our tech through an R&D program. And we are often in discussions with some of the world’s other largest nicotine companies.

We are very active in the US in the processed CBD industry, where our technology is processed into bulk quantities of powder as an intermediate ingredient and then used by the corporate customer to make their final product. This is currently our fastest growing and largest producer of revenue, and these operations are currently profitable outside of G&A.

We are also very interested in pharmaceutical applications of cannabinoids, including THC, CBD, and other active ingredients including terpenoids. We are not active in the recreational cannabis space. GW Pharmaceuticals is a global leader in FDA-registered cannabinoid drugs, with its Epidiolex drug having generated nearly US$378 million in revenue in the first nine months of 2020.

We have already completed one human clinical stufy utilizing CBD that proved the effectiveness of our technology, and was published in a peer-reviewed medical journal. We expect to commence our second human clinical study in Q1 2021, pending certain approvals. This will focus on hypertension, since our technology already proved that, when combined into CBD, DehydraTECH can lower human blood pressure whereas generic CBD did not. Hypertension drugs are already a US$24 billion market.

NSAID’s (non-steroidal anti-inflammatory drugs) are also of interest to us, and we have conducted some preliminary R&D in this space through the National Research Council of Canada. Common over the counter versions of NSAIDs include things like ibuprofen or aspirin, and there are also many prescription based NSAIDs.

In early 2020 we began researching the possible use of our technology to enhance delivery of antiviral drugs and are very pleased to have experienced early success. Some of the largest antiviral drug applications include things like SARS-CoV-2/COVID-19, HIV/AIDS, Tuberculosis, Influenza, Measels and Hepatitus.

• What are your most profitable revenue streams, how are they accelerating, and at what pace?

It took a couple of years to establish our presence in the US marketplace, but our bulk CBD-powder-processing business is both our fastest growing and currently most profitable. We’re currently experiencing more than 1,000% growth year-on-year, albeit from a very small base. To give an idea, we processed less than 800,000 servings of CBD powder in the quarter that ended May 31, 2020 and we just processed more than 8,000,000 servings of CBD powder in the quarter than ended November 30, 2020.

I like to bring up these numbers to compare the enormous US market to the really tiny Canadian market: if we were doing these sorts of volumes in Canada we might be the largest company in the CBD market in Canada! This rate of growth is not sustainable of course, but our customers have notified us to expect order from them for more then 50 million servings during calendar 2021.

We expect over time that our much larger market pursuits – things like nicotein or antiviral drugs – will greatly overtake the CBD busieness. This is part of our business plan; to partner with globally dominant companies that, if they adopt and utilize our technology, will be able to access large international markets through their existing infrastructure.

• Lexaria has patents in different sectors, can you list these sectors and what benefit does this offer the Company?

Lexaria’s intellectual property (IP) is one area where we are most proud, and that really separates us from most competitors. We already have 18 patents granted and roughly 60 more pending, and all our technology was developed in-house instead of being licensed from some other company as is most often the case.

Dehydratech is already patent granted for both formulas and processes, in the USA, Australia and the European Union. The granted patents already cover nicotine, cannabinoids, NSAIDs and fat soluble vitamins.

In the European Union and in Australia, DehydraTECH is also patent granted for certain medical treatment uses, for example including using cannabinoids to treat Heart Disease, Alzheimer’s, Parkinson’s and more.

Our IP is patent pending for use with human hormones (such as estrogen and testosterone), PDE5-inhibitors (drugs such as Viagra or Cialis), antiviral drugs, and more. We are patent pending in many countries such as Canada, India, Mexico, Japan, China, and more. And we have many newer areas of investigation under patent application, including our evidenced ability to cross the blood brain barrier more effectively.

We expect many exciting developments in our granted patent space in 2021 and are always thrilled when we are awarded a new patent, since each granted patent increases shareholder value and also our ability to generate future business activity with them.

• Can you tell us more about programs that have commenced to prove delivery effectiveness in antiviral therapies for SARS diseases (such as COVID-19) and other infectious diseases?

It may seem strange to some people that Lexaria operates in so many different business areas – but actually, all our areas of focus are actually VERY similar in a couple of really simply ways. Most important, the drugs or active ingredients within each of those sectors are often, or mostly, fat soluble. It’s a simple thing: our technology works easily with fat-soluble molecules and works only in limited ways with water-soluble molecules. Nicotine, cannabinoids, and many anti viral drugs are all fat soluble.

On December 1, 2020 Lexaria reported its first-ever results of a formal, third party laboratory animal study wherein DehydraTECH evidenced its ability to improve/increase the quantity of antiviral drug delivered into animal bloodstream. The two antiviral drugs we tested were originally developed for HIV/AIDS but are under active investigation by other pharma companies for thie applicability related to SARS diseases, so our demonstrated ability to deliver those drugs more effectively to animal bloodstream could have utility in that vital area of health, as well.

Competitive pressures prevent us from disclosing too many details, but we absolutely are planning additional animal studies, invitro studies, and if we can afford it, even human studies all related to antiviral drugs during 2021. We hope to begin our next animal study, assuming we have the funding in place to do so, in January 2021.

• Can you speak to the major US exchange up list program?

During 2020 we repeatedly told our shareholders that we thought we needed to move to a senior US securities exchange. We trade on the Canadian Securities Exchange and we are also quoted on the OTCQX – the highest tier of the OTC markets.

But a lot of people don’t realize that the OTC is not actually a stock exchange. As such, the vast majority – IDK for sure but possibly over 90% - of all the investible money in the USA is disallowed from investing in OTC securities. This includes most institutional money, mutual funds, family offices, ETF’s and more. Even the very popular US trading platform RobinHood only allows its customers to trade securities listed on the NYSE and Nasdaq. The bottom line is simple: in order for Lexaria to be accessible to the majority of US capital, we need a senior US securities exchange listing.

We received overwhelming shareholder support to do so at our last AGM, and our uplist program is, we think, getting close to being complete. Final timing is out of our hands but we certainly expect and hope it to take place during the first quarter of 2021. Our investment banking partner is ready to proceed and the necessary filings are being made with the SEC and others.

Our US secior exchange uplisting is the single most exciting development to happen to Lexaria and we hope that the ability of a vastly larger pool of capital to invest into Lexaria will assist in our pursuit of increasing shareholder value.

• Lexaria recently entered a definitive asset purchase agreement to sell certain non-core, non-pharmaceutical THC-related business assets for $3.85 million (CAD), what benefit did this offer the Company?

Lexaria has been guilty of having too many opportunities. As exciting as the recreational cannabis market is, we had to face the facts that it is our smallest market opportunity – our other pursuits are each bigger than THC and some of them dramatically so, like nicotine which is literally a $1 trillion per year global business. We’re focusing on what we do best – innovation – and ensuring we do everything possible to get our innovative solutions into the hands of multi-billion sectoral leaders.

We will own a significant minority interest in Hill Street Beverages, the company that is buying these assets from us, allowing us to continue to experience financial upside. And we are retaining the THC-pharmaceutical applications of our technology where we hope to realize significant gains for our technology. We really see this as a rare win-win: we gain non-dilutive capital and an improved ability to focus on what we do best.

• Looking ahead, in your outline for planned strategic initiatives for 2021, the Company intends to advance solutions related to the regulated pharmaceutical and medical market segments. Where do you believe Lexaria’s patented technology will offer the highest value and utility?

There are two main areas that I think each have the ability to assist Lexaria as we try to build a billion dollar company from the ground up.

One is nicotine. The cigarette industry is just so enormous, and it is the only legal product in the world that kills nearly 7 million people per year. The carnage in health and health care costs is just incredible.

Meanwhile the FDA issued a reduced risk notice for an oral nicotine product – for the first time in the FDA’s history – in 2019. That’s because purified nicotine – NOT chewing tobacco – taken in an oral form does NOT cause emphysema or lung disease or lung cancers and likely causes drastically fewer cancers of any kind compared to cigarettes. The market demand for a non-fatal, consumer friendly method of ingesting nicotine is overwhelming and is what earlier drove the multi-billion growth of JUUL before concerns about vaping predominated.

Lexaria believes that it’s technology can be part of the answer towards a safer and more sustainable method of people interacting with nicotine, and if our technology is in fact utilized by one of the global juggernauts we have already built relationships with, the strategic benefits to Lexaria are obvious.

The other strategic area of most interest is antiviral application. Millions of people die every year from various viruses. The current COVID environment is just the latest in a string of Coronavirus-related events. Viruses will never go away. Vaccines will never be 100% effective, and 100% of the population will never have access to them or be willing to take them, meaning drug treatments will always be needed.

If Lexaria’s technology can enhance the delivery characteristics of a number of antiviral drugs, we feel this is a second area that could provide incalculable gains to our shareholders.



For more information, visit lexariabioscience.com.


FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.