IntelliPharmaCeutics Intl Inc (USA) (NASDAQ:IPCI), a pharmaceutical company specializing in the research, development and manufacture of novel and generic controlled-release and targeted-release oral solid dosage drugs, today reported the results of operations for the three and nine months ended August 31, 2015. All dollar amounts referenced herein are in United States dollars unless otherwise noted.

During the three months ended August 31, 2015, the Company continued its focus on the development of its specialty drug product candidates Rexista™ Oxycodone XR and Regabatin™ XR. Considerable progress was made towards satisfying the requirements to file a New Drug Application (“NDA”) for Rexista™ Oxycodone XR with the United States Food and Drug Administration (“FDA”) and the Company plans to complete this filing in the first half of 2016. Regarding Regabatin™ XR, based on positive feedback and guidance from the FDA the Company submitted an Investigational New Drug Application (“IND”) in August 2015.

Revenue related to the Company’s license and commercialization agreement with Par Pharmaceutical, Inc. (“Par”) in the three months ended August 31, 2015, was $0.8 million versus $1.1 million for the three months ended August 31, 2014. As the first-filer for generic Focalin XR® (dexmethylphenidate hydrochloride extended-release) capsules in the 15 mg strength, the Company had 180 days (up to May 19, 2014) of exclusivity of sales for that strength from the date of launch on November 19, 2013 in the United States by our partner, Par. The lower revenue in the third quarter of 2015 was in large part a result of a softening of pricing conditions and market share, consistent with industry post-exclusivity experience and to a lesser extent, seasonality. These products are indicated for conditions including attention deficit hyperactivity disorder which we expect may see increases in prescription rates during the school term and declines in prescription rates during the summer months. During the quarter ended August 31, 2015 we held a combined market share of 43% of total generic prescriptions dispensed for the 15 mg and 30 mg strengths, more than double our nearest generic competitor.

The Company recorded net loss for the three months ended August 31, 2015 of $1.9 million or $0.08 per common share, compared with a net loss of $1.7 million or $0.07 per common share for the three months ended August 31, 2014. The net loss for the three months ended August 31, 2015, is higher than the comparable prior period primarily due to the lower revenues for the third quarter of 2015 as explained above. During the three months ended August 31, 2015, the net loss is attributed to the ongoing R&D and selling, general and administrative expenses, including an increase in bio-studies, partially offset by licensing revenues from commercial sales of generic Focalin XR® (dexmethylphenidate hydrochloride extended-release) capsules. During the three months ended August 31, 2014, the net loss is attributed to the ongoing R&D and selling, general and administrative expense, and salary increases to certain non-management employees; partially offset by licensing and milestone revenue.

Intellipharmaceutics CEO Dr. Isa Odidi commented, “Subsequent to the FDA’s final decision regarding our tentatively approved strengths of generic Focalin XR® (dexmethylphenidate hydrochloride extended-release) capsules, the Company is actively addressing the requirements in order to meet the newly imposed conditions for bioequivalence. We are also pleased with the progress made during the quarter in respect of our specialty new drug candidates Rexista™ Oxycodone XR and Regabatin™ XR, consistent with our renewed focus on new product candidates with 505(b)(2) potential.”

Research and development (“R&D”) expenditures in the three months ended August 31, 2015 were $1.7 million, which were comparable to $1.7 million in the three month period ended August 31, 2014. The Company incurred increased expenses on furthering R&D activities of several generic and NDA 505(b)(2) new product candidates (RexistaTM Oxycodone XR and RegabatinTM XR), offset by lower expenses on stock options and the U.S. dollar strengthening by 17% versus the Canadian dollar (local salaries are paid in Canadian funds) relative to the prior period.

Selling, general and administrative expenses were $0.8 million for the three months ended August 31, 2015 in comparison to $0.9 million for the three months ended August 31, 2014. The decrease is primarily due to strengthening of the U.S. dollar by 17% versus the Canadian dollar in the third quarter of 2015, relative to the three months ended August 31, 2014. In particular, the stronger US dollar had a positive impact on local wages and salaries and administrative costs, partially offset by higher marketing costs.

The Company had cash of $2.8 million as at August 31, 2015 compared to $3.0 million as at May 31, 2015. The decrease in cash during the three months ended August 31, 2015 is mainly a result of lower cash receipts relating to commercial sales of our generic Focalin XR® (dexmethylphenidate hydrochloride extended-release) capsules, an increase in cash flows provided from financing activities which are mainly from common share sales under the Company’s at-the-market offering program, partially offset by an increase in purchases of production, laboratory and computer equipment. We believe our current cash position is sufficient to fund our currently projected operations to January 2016.

For the three months ended August 31, 2015, cash flows used in operating activities decreased to $1.2 million as compared to cash flows used in operating activities for the three months ended August 31, 2014 of $1.4 million. The August 31, 2015, decrease was due to the receipt of approximately $1.0 million, compared to $1.6 million, as our payment relating to commercial sales of Focalin XR® (dexmethylphenidate hydrochloride extended-release) capsules by Par under the Par agreement for the period April 1 to June 30, 2015 and April 1, 2014 to June 30, 2014, respectively.

For the three months ended August 31, 2015, net cash flows provided from financing activities of $1.2 million, related principally to at-the-market issuances of 218,300 of our common shares sold on NASDAQ for gross proceeds of $0.7 million and net proceeds of $0.7 million, as well as $0.6 million related to the exercise of warrants, partially offset by capital lease and financing cost payments.

Corporate highlights

  • In May 2015, the Company announced that the FDA had provided the Company with notification regarding its IND submission for Rexista™ Oxycodone XR (Abuse Deterrent oxycodone hydrochloride) extended release tablets indicating that the Company will not be required to conduct Phase III studies if bioequivalence to Oxycontin® is demonstrated. The Company believes, in light of previously announced results of the three definitive Phase I pharmacokinetic trials, that it will not be required to conduct Phase III studies, although no assurance to that effect can be given. In May 2015, the Company also announced that the FDA had reviewed the Company’s request for Fast Track designation for its Rexista™ Oxycodone XR (Abuse deterrent oxycodone hydrochloride)) extended-release tablets development program incorporating its Paradoxical OverDose Resistance Activating System (“PODRAS™”) and had concluded that it meets the criteria for Fast Track designation.  The designation mandates the FDA to facilitate the development and expedite the review of drugs intended to treat serious or life threatening conditions and that demonstrate the potential to address unmet medical needs. During the quarter ended August 31, 2015, the Company continued to work towards satisfying the requirements to file an NDA for Rexista™ Oxycodone XR (Abuse Deterrent oxycodone hydrochloride) extended release tablets with the FDA and plans to complete this filing in the first half of 2016, although no assurance to this effect can be given.
  • The Company previously reported that the FDA had accepted a Pre-Investigational New Drug (“Pre-IND”) meeting request for its once-a-day Regabatin™ XR non-generic controlled release version of pregabalin under the NDAs 505(b)(2) regulatory pathway, with a view to possible commercialization in the United States at some time following the December 30, 2018 expiry of the patent covering the pregabalin molecule. Based on positive feedback and guidance from the FDA, the Company submitted an IND for RegabatinTM XR in August 2015.
  • In June 2015, the Company announced that the FDA had indicated that the Company’s tentatively-approved strengths of its generic Focalin XR® (dexmethylphenidate hydrochloride extended-release) capsules would have to meet newly-imposed conditions for bioequivalence prior to receiving final approval. The strengths affected were 5 mg, 10 mg, 20 mg and 40 mg. The already-approved 15 mg and 30 mg strengths now in the market were not affected. In July 2015, the FDA indicated to the Company that it had rescinded its previous requirement that the Company meet the newly-imposed conditions for bioequivalence prior to receiving final approval for the Company’s tentatively-approved strengths of its generic Focalin XR®. In August 2015, the Company announced that the FDA reinstated its previously-imposed (and subsequently rescinded) requirement that the Company’s tentatively-approved strengths of its generic Focalin XR® (dexmethylphenidate hydrochloride extended-release) capsules would have to meet new conditions for bioequivalence prior to receiving final approval. The Company will be required to demonstrate bio-equivalence with Focalin XR ® for the 40 mg strength under fed conditions as the basis for approval of each of the 5 mg, 10 mg, 20 mg and 40 mg affected strengths. The already-approved 15 mg and 30 mg strengths of the Company’s generic Focalin XR® (dexmethylphenidate hydrochloride extended-release) capsules now in the market are not affected. The Company is actively addressing the FDA requirements but cannot reasonably estimate when it will refile with the FDA.

There can be no assurance that the Fast Track designation for RexistaTM Oxycodone XR will translate to a faster development and review process with the FDA, that our tentatively-approved strengths of generic Focalin XR® will be granted final FDA approval or sold commercially, that we will be successful in submitting any additional Abbreviated New Drug Applications (“ANDAs”), Abbreviated New Drug Submissions (“ANDSs”) or NDAs with the FDA or similar applications with Health Canada, that the FDA or Health Canada will approve any of our current or any future product candidates for sale in the U.S. market and Canadian market, or that they will ever be successfully commercialized and produce significant revenue for us. (Original Source)

Shares of Intellipharmaceutics International closed yesterday at $1.85. IPCI has a 1-year high of $3.92 and a 1-year low of $1.75. The stock’s 50-day moving average is $2.08 and its 200-day moving average is $2.78.

On the ratings front, IPCI has been the subject of a number of recent research reports. In a report issued on July 14, Brean Murray Carret analyst Jonathan Aschoff reiterated a Buy rating on IPCI, with a price target of $8, which implies an upside of 332.4% from current levels. Separately, on July 13, Maxim Group’s Jason Kolbert reiterated a Buy rating on the stock and has a price target of $8.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Jonathan Aschoff and Jason Kolbert have a total average return of -3.4% and -15.1% respectively. Aschoff has a success rate of 37.5% and is ranked #3561 out of 3772 analysts, while Kolbert has a success rate of 27.1% and is ranked #3771.

IntelliPharmaCeutics International Inc is a pharmaceutical company specializing in the research, development and manufacture of novel and generic controlled-release and targeted-release oral solid dosage drugs.