• Sun. Jun 16th, 2024

Lexaria Bioscience: An Undervalued Growth Story

Earlier this year, we highlighted Lexaria Bioscience Corp. (Nasdaq: LEXX) (Nasdaq: LEXXW) as an undervalued biotech company and want to provide more information on the story.

During the last year, Lexaria has reported a series of positive developments and we believe the stock is on the verge on breaking out. So far this year, Lexaria has been trending higher and this is a business that our readers need to be aware of.

One of the most exciting aspects of Lexaria’s business is its DehydraTECH drug delivery platform. DehydraTECH is a disruptive, patented drug delivery technology that is more effective at delivering Active Pharmaceutical Ingredients (APIs) into the bloodstream and into brain tissue. The technology can be applied to multiple ingestible product formats such as tablets, capsules, oral suspensions, mouth-melts, and others.

So far, the initial data from studies on DehydraTECH have been impressive and we consider this to be a core pillar of our bullish view on Lexaria. Pharmacokinetic (PK) studies have shown that the technology can deliver higher quantities of APIs in less time. So far, this has been proven to work for CBD for hypertension, for oral nicotine, and for antiviral drugs for COVID-19 and other infectious diseases.

Nicotine and the Commercial Opportunity for Lexaria

A core reason for our bullish outlook on Lexaria is due to its opportunity to potentially disrupt the oral nicotine pouch category. In December, the biotech company started dosing for a randomized, double blinded crossover study comparing DehydraTECH-nicotine oral pouch performance to currently sold brands, ON! and Zyn. In the near future, data for the 36-person study will be released and the management team expects the study to show that DehydraTECH-nicotine delivers better oral-tissue absorption and fewer negative experiences.

When it comes to the nicotine crossover study, we are excited about the opportunity for two key reasons. First, the study is more advanced than other studies being conducted by Lexaria which makes the data from future trials more valuable. Second, the commercial opportunity that is associated with this side of the business is massive.

We are of the opinion that Lexaria is charting a path to commercial success with DehydraTECH and believe the market undervalues this aspect of the business. Over the next few months, we expect additional information on the nicotine study to be released and for the achievement of major advancements on the commercial side.  

With regard to Altria, the tobacco giant has licensed the technology for use in the US and agreed to pay royalties on all oral nicotine product sales. Currently, Lexaria is negotiating the use of the technology with British American Tobacco and other CPG and pharmaceutical companies and we believe this makes the business a potential acquisition target.

Owns a Portfolio of Valuable Intellectual property

From dementia to diabetes, we are impressed with the number of applications that are associated with the platform. Another impressive aspect of the story is related to the amount of patents and intellectual property (IP) that is owned by the business. The company is highly focused on improving bioavailability for a variety of treatments and is currently conducting several studies on animals and humans.

In late December, Lexaria was granted its first granted patent in Canada (its 28th granted patent worldwide) and has continued to strengthen its IP portfolio. The patent is a part of Lexaria’s sixth patent family and is entitled Transdermal And/Or Dermal Delivery Of Lipophilic Active Agents. The patent is for improved compositions and methods for transdermal and dermal delivery of cannabinoids, including cannabidiol (CBD) and tetrahydrocannabinol (THC) and we are favorable on the development.

An Investigational New Drug (IND) enabling program is currently underway for DehydraTECH-CBD as a prospective FDA registered treatment for hypertension. We consider this to be a core pillar of the Lexaria story in 2023 and will monitor how the process advances from here.

An Undervalued Biotech Business

We consider Lexaria’s DehydraTECH technology to be the most important part of the business. So far, the drug delivery technology has proven to have multiple mainstream applications in cannabinoids, oral nicotine, antiviral therapies, phosphodiesterase inhibitors and other APIs. We believe the market is discounting this aspect of the story and expect this to change as the company continues to execute.

In the near-term, Lexaria is highly focused on having its  DehydraTECH-CBD platform as a potential registered treatment for hypertension with the FDA in 2023. The management team believes if the product was registered it would likely be a Phase 1B/2A study.

When it comes to valuing biotech companies, the most important data point is related to the type of preclinical or clinical trials that are being conducted. This means that when a biotech company reports positive preclinical or clinical trial data, valuations significantly increase. ‘

According to Bay Bridge Bio, typical company valuations at the start of Phase I are USD $88 million and USD $248 million at the start of Phase II. Based on these valuation metrics, we believe Lexaria has substantial upside potential and consider the business to be significantly undervalued.

A Company with Catalysts for Growth

We categorize Lexaria as a company that has major potential growth catalysts and consider this to be an important theme of the business. Over the next year we expect the company to report significant developments and believe the three most important catalysts for the company include:

  1. Advancing pre-clinical and clinical trials (especially for dementia and diabetes)
  2. Executing on the commercial opportunity for DehydraTECH
  3. Strengthening the IP portfolio

Another reason for our bullish view on Lexaria is related to the amount of stock that is owned by the management team. This leads us to believe that the management team views the business as undervalued and we find this to be an important trait.

We consider Lexaria to be a company with substantial potential growth catalysts and are excited about the business due to the advancement on the commercial side of the business and the data that has already been reported.

If you are interested in learning more about Lexaria Bioscience, please send an email to support@onthebids.com with the subject “Lexaria Bioscience” to be added to our distribution list.

Company Relationship Disclosure

OTB is responsible for the OTB opinions provided in this disclosure except all sources or information provided by other parties were not verified or authenticated and OTB does not undertake to confirm or substantiate or be responsible for such information provided by other parties.

Any Content posted regarding a Profiled Issuer is not a solicitation or recommendation to buy, sell or hold securities. We cannot and do not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. All information should be independently verified. We are not responsible for errors or omissions in our publications, and any opinions expressed are subject to change, without notice. We do not, nor are we under any obligation to undertake due diligence or investigation or authenticate and verify whatsoever regarding Profiled Issuers or any Content posted in relation thereto and we do not receive any verification from the Profiled Issuer regarding the Content we disseminate. Similarly, while we endeavor to facilitate the provision of quality information, we are not responsible for any loss or damages caused or alleged to have been caused by its use nor verify or authenticate or update such information.

Pursuant to an agreement between Spotlight Media and Lexaria Bioscience we have been hired for a period of 30 days beginning January 9, 2023 and ending February 9, 2023 to publicly disseminate information about Lexaria Bioscience including on the Website and other media including Facebook and Twitter. We are being paid $2,000 per month by Lexaria Bioscience and were paid “ZERO” shares of unrestricted or restricted common shares. We plan to sell the “ZERO” shares of Lexaria Bioscience that we hold during the time the Website and/or Facebook and Twitter Information recommends that investors or visitors to the website purchase without further notice to you. We may buy or sell additional shares of Lexaria Bioscience in the open market at any time, including before, during or after the Website and Information, provide public dissemination of favorable Information.

This article contains forward-looking statements within the meaning of applicable securities laws. All statements that are not historical facts, including without limitation, statements regarding future estimates, plans, programs, forecasts, projections, objectives, assumptions, expectations or beliefs regarding future performance are “forward-looking statements”. Forward-looking statements can be identified by the use of words such as “expects”, “does not expect”, “is expected”, “believes”, “intends”, “anticipates”, “does not anticipate”, “believes” or variations of these words, expressions or statements, that certain actions, events or results “may”, “could”, “would”, “might” or “will be” taken, will occur or will be realized. Such forward-looking statements involve risks, uncertainties and other known and unknown factors that could cause actual results, events or developments to differ materially from the results, events or developments expected and expressed or implied in such forward-looking statements. These risks and uncertainties include, but are not limited to, dependence on obtaining and maintaining regulatory approvals, including the acquisition and renewal of federal, provincial, state, municipal, local or other licenses, and any inability to obtain all necessary government authorizations, licenses and permits to operate and expand the Company’s facilities; regulatory or policy changes such as changes in applicable laws and regulations, including federal, state and provincial legalization, due to fluctuations in public opinion, industry perception of integrative mental health, including the use of psychedelic-assisted therapy, delays or inefficiencies or any other reason; any other factor or development likely to hamper the growth of the market; the Company’s limited operating and profitability track record; dependence on management; the Company’s need for additional financing and the effects of financial market conditions and other factors on the availability of capital; competition, including that of more established and better funded competitors; the impact of the Russia-Ukraine conflict on the global economy; the continued impact of the COVID-19 pandemic; and the need to build and maintain alliances and partnerships, including with research and development companies, customers and suppliers. These factors should be carefully considered, and readers are cautioned not to place undue reliance on forward-looking statements. Despite the Company’s efforts to identify the main risk factors that could cause actual measures, events or results to differ materially from those described in forward-looking statements, other risk factors may cause measures, events or developments to materially differ from those anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in forward-looking statements. The Company does not undertake to revise forward-looking statements, even if new information becomes available as a result of future events, new facts or any other reason, except as required by applicable laws

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