IntelGenx Technologies signs deal with Tilray to produce cannabis-laced oral products

IntelGenx Corp (TXV-V:IGX) (OTC:IGXT) announced on Thursday it has signed a non-binding letter of intent with Canadian cannabis company Tilray Inc (NASDAQ:TLRY) to co-develop and commercialize oral film products infused with recreational and medical cannabis which would allow adult-use consumers to purchase edible products. 

IntelGenx and Tilray will fund 20% and 80% of the costs, respectively, associated with the development of the products, a statement said. IntelGenx will have rights to manufacture and supply the co-developed products to Tilray, and will also receive a fixed single-digit royalty on net product sales. 

Tilray will have the exclusive, worldwide marketing and distribution rights for the co-developed products.

Tilray will make a strategic investment in IntelGenx by way of a non-brokered private placement. Tilray will purchase 1.25mln common shares of IntelGenx at a price of USD$0.80 per share, which is equal to the five-day volume weighted average closing price of IntelGenx’ common stock on the OTCQX for the period ending on September 18, 2018.  

READ: Maxim Group initiates coverage of IntelGenx Technologies with Buy recommendation and US$3 price target

Shares of Tilray were up 16% to US$248.46 in the premarket on Thursday. IntelGenx stock closed 5.59% higher on Wednesday at US$0.85 and its shares in Canada gained 5.77% to end the same day at C$1.10.  

IntelGenx intends to use the proceeds from the private placement for cannabis-infused VersaFilm product development in connection with the letter of intent.  The private placement will be subject to the approval of the TSX Venture Exchange.

“Our proprietary VersaFilm drug delivery platform offers a number of proven advantages – including increased bioavailability, precision dosing, accelerated onset of action, reduced side effects, child-resistant packaging and easier, more discrete administration, all of which we believe have the potential to improve the way people may use and experience cannabis in the future,” said IntelGenx president Horst Zerbe, adding the LOI is the first step in forming a partnership with Tilray.

IntelGenx is an oral drug delivery company focused on the development and manufacturing of innovative pharmaceutical oral films. The company is based in Saint Laurent, Quebec.

Tilray is one of the major Canadian cannabis companies.

Story by ProactiveInvestors