IntelGenx Technologies Corp. (IGX) 2012年年度報告「TSX-V」.pdf

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1、UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington,D.C.20549 FORM 10-K X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31,2012 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 For

2、 the transition period from _ to _ Commission File Number:000-31187 INTELGENX TECHNOLOGIES CORP.(Exact name of registrant as specified in its charter)(514)331-7440 (Registrants telephone number,including area code)Securities registered pursuant to Section 12(b)of the Act:None Securities registered p

3、ursuant to Section 12(g)of the Act:Common Stock,$0.00001 par value per share Indicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes No X Indicate by check mark if the registrant is not required to file reports pursuant to Section 13

4、or Section 15(d)of the Act.Yes No X Indicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant was required to file such reports)

5、,and(2)has been subject to such filing requirements for the past 90 days.Yes X No Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site,if any,every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation

6、S-T during the preceding 12 months(or for such shorter period that the registrant was required to submit and post such files).Yes X No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein,and will not be contained,to the best of reg

7、istrants knowledge,in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,or a smaller reporting c

8、ompany.See the definitions of“large accelerated filer,”“accelerated filer,”and“smaller reporting company”in Rule 12b-2 of the Exchange Act.(Check one):Delaware 87-0638336(State or other jurisdiction of incorporation or organization)(I.R.S.Employer Identification No.)6425 Abrams,Ville Saint Laurent,Q

9、uebec H4S 1X9(Address of principal executive offices)(Zip Code)Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Act).Yes No X Large accelerated filer Accelerated filer Non-accelerated filer Smaller reporting company X (Do not check if a smaller reporti

10、ng company)As of June 30,2012,the aggregate market value of the registrants voting and non-voting common equity held by non-affiliates of the registrant was$25,804,095 based on the closing price of the registrants common shares of U.S.$0.52,as reported on the OTCQX on that date.Shares of the registr

11、ants common shares held by each officer and director and each person who owns 10%or more of the outstanding common shares of the registrant have been excluded in that such persons may be deemed to be affiliates.This determination of affiliate status is not necessarily a conclusive determination for

12、other purposes.Indicate the number of shares outstanding of each of the registrants classes of common stock,as of the latest practicable date.DOCUMENTS INCORPORATED BY REFERENCE:Portions of the Companys Proxy Statement for its 2013 Annual Meeting of Shareholders(the“2013 Proxy Statement”)are incorpo

13、rated by reference into Part III 2 Class Outstanding at March 18,2013 Common Stock,$.00001 par value 50,302,922 shares TABLE OF CONTENTS Terminology and references In this Annual Report on Form 10-K,the words“Company”,“IntelGenx”,“we”,“us”,and“our”,refer collectively to IntelGenx Technologies Corp.a

14、nd IntelGenx Corp.,our wholly-owned Canadian subsidiary.In this Form 10-K,unless otherwise specified,all monetary amounts are in United States dollars,all references to“$”,“U.S.$”,“U.S.dollars”and“dollars”mean U.S.dollars and all references to“C$”,“Canadian dollars”and“CAD$”mean Canadian dollars.To

15、the extent that such monetary amounts are derived from our consolidated financial statements included elsewhere in this Form 10-K,they have been translated into U.S.dollars in accordance with our accounting policies as described therein.Unless otherwise indicated,other Canadian dollar monetary amoun

16、ts have been translated into United States dollars at the December 31,2012 closing rate reported by the Bank of Canada,being U.S.$1.00=CAD$0.9949.3 Page PART I Item 1.Business.4 Item 1A Risk Factors.11 Item 1B Unresolved Staff Comments.17 Item 2.Properties.17 Item 3.Legal Proceedings.17 Item 4.Mine

17、Safety Disclosures.17 PART II Item 5.Market for Registrants Common Equity,Related Stockholder Matters and Issuer Purchases of Equity Securities.18 Item 6 Selected Financial Data.19 Item 7.Managements Discussion and Analysis of Financial Condition and Results of Operations.19 Item 7A Quantitative and

18、 Qualitative Disclosures About Market Risk.26 Item 8.Financial Statements and Supplementary Data.26 Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.26 Item 9A.Controls and Procedures.26 Item 9B.Other Information.27 PART III Item 10.Directors,Executive Offi

19、cers,and Corporate Governance.27 Item 11.Executive Compensation.27 Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.27 Item 13.Certain Relationships and Related Transactions,and Director Independence.27 Item 14.Principal Accounting Fees and Servi

20、ces.27 PART IV Item 15.Exhibits.28 Financial Statements Schedules.F-1-F-27 PART I Cautionary Statement Concerning Forward-Looking Statements Certain statements included or incorporated by reference in this report constitute forward-looking statements within the meaning of applicable securities laws.

21、All statements contained in this report that are not clearly historical in nature are forward-looking,and the words“anticipate”,“believe”,“continue”,“expect”,“estimate”,“intend”,“may”,“plan”,“will”,“shall”and other similar expressions are generally intended to identify forward-looking statements wit

22、hin the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.All forward-looking statements are based on our beliefs and assumptions based on information available at the time the assumption was made.These forward-looking statements are not base

23、d on historical facts but on managements expectations regarding future growth,results of operations,performance,future capital and other expenditures(including the amount,nature and sources of funding thereof),competitive advantages,business prospects and opportunities.Forward-looking statements inv

24、olve significant known and unknown risks,uncertainties,assumptions and other factors that may cause our actual results,levels of activity,performance or achievements to differ materially from those implied by forward-looking statements.These factors should be considered carefully and prospective inv

25、estors should not place undue reliance on the forward-looking statements.Although the forward-looking statements contained in this report or incorporated by reference herein are based upon what management believes to be reasonable assumptions,there is no assurance that actual results will be consist

26、ent with these forward-looking statements.These forward-looking statements are made as of the date of this report or as of the date specified in the documents incorporated by reference herein,as the case may be.We undertake no obligation to update any forward-looking statements to reflect events or

27、circumstances after the date on which such statements were made or to reflect the occurrence of unanticipated events,except as may be required by applicable securities laws.The factors set forth in Item 1A.,Risk Factors,as well as any cautionary language in this report,provide examples of risks,unce

28、rtainties and events that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements.Before you invest in the common stock,you should be aware that the occurrence of the events described as risk factors and elsewhere in this report could hav

29、e a material adverse effect on our business,operating results and financial condition.ITEM 1.BUSINESS.Corporate History Our predecessor company,Big Flash Corp.,was incorporated in Delaware on July 27,1999.On April 28,2006,Big Flash,through its Canadian holding corporation,completed the acquisition o

30、f IntelGenx Corp.,a Canadian company incorporated on June 15,2003.The Company did not have any operations prior to the acquisition of IntelGenx Corp.In connection with the acquisition,we changed our name from Big Flash Corp.to IntelGenx Technologies Corp.IntelGenx Corp.has continued operations as ou

31、r operating subsidiary.Overview We are a drug delivery company focusing on the development of novel,orally administered drug delivery products based on our proprietary oral drug delivery technologies.We have positioned ourselves as a provider of product development services for the pharmaceutical in

32、dustry,including the branded and generic pharmaceutical markets.Drug delivery systems are an important tool in the hands of physicians for purposes of optimizing drug therapy.For the pharmaceutical industry,drug delivery systems represent an opportunity to extend the market exclusivity and product l

33、ifecycle of drugs whose patent protection is nearing expiration.A significant portion of our current products under development focus on controlled release delivery systems.Controlled release delivery systems play an important role in the development of orally administered drug delivery systems.Cont

34、rolled release technology provides patients with the required amount of medication over a pre-determined,prolonged period of time.Because of the reduced fluctuation of the active drug in the blood and the avoidance of plasma spikes,controlled release products are deemed safer and more tolerable than

35、 conventional dosage forms,and have shown better patient compliance.Our primary business strategy is to develop pharmaceutical products based upon our proprietary drug delivery technologies and license the commercial rights to companies in the pharmaceutical industry once the viability of a product

36、has been demonstrated.In exchange for licensing rights to our products,we seek funding consisting of a combination of one or more of the following:advance down payments,milestone fees,reimbursement for development costs,and royalties on sales.In addition,we may receive a manufacturing royalty from o

37、ur contract manufacturers for the exclusive right to manufacture our products.The companies we partner with are typically responsible for managing the regulatory approval process of the product with the United States Food and Drug Administration(“FDA”)and/or other regulatory bodies,as well as for th

38、e marketing and distribution of the products.On a case-by-case basis,we may be responsible for providing all or part of the documentation required for the regulatory submission.In addition to pursuing partnering arrangements that provide for the full funding of a drug development project,we may unde

39、rtake development of selected product opportunities until the marketing and distribution stage.We would first assess the potential and associated costs for successful development of a product,and then determine at which stage it would be most prudent to seek a partner,balancing costs against the pot

40、ential for higher returns later in the development process.4 Technology Platforms Our product development efforts are based upon three delivery platform technologies:(1)VersaTab,a Multilayer Tablet technology(2)VersaFilm,an Oral Film technology,and(3)AdVersa,a Mucoadhesive Tablet technology.Our Mult

41、ilayer Tablet platform technology allows for the development of oral controlled-release products.It is designed to be versatile and to reduce manufacturing costs as compared to competing oral extended-release delivery technologies.The Oral Film technology allows for the instant delivery of pharmaceu

42、ticals to the oral cavity,while the Mucoadhesive Tablet allows for the controlled release of active substances to the oral mucosa.The Multilayer Tablet platform technology represents a new generation of controlled release layered tablets designed to modulate the release of active compounds.The techn

43、ology is based on a multilayer tablet with an active core layer and erodible cover layers.The release of the active drug from the core matrix initially occurs in a first-order fashion.As the cover layers start to erode,their permeability for the active ingredient through the cover layers increases.T

44、hus,the Multilayer Tablet can produce quasi-linear(zero-order)kinetics for releasing a chemical compound over a desired period of time.The erosion rate of the cover layers can be customized according to the physico-chemical properties of the active drug.In addition,our multilayer technology offers t

45、he opportunity to develop combination products in a regulatory-compliant format.Combination products are made up of two or more active ingredients that are combined into a single dosage form.The Oral Film technology consists of a thin(25-35 micron)polymeric film comprised of United States Pharmacope

46、ia(USP)components that are approved by the FDA for use in food,pharmaceutical,and cosmetic products.Derived from the edible film technology used for breath strips and initially developed for the instant delivery of savory flavors to food substrates,the VersaFilm technology is designed to provide a r

47、apid response compared to existing conventional tablets.The VersaFilm technology is intended for indications requiring rapid onset of action,such as migraine,motion sickness,erectile dysfunction,and nausea.The Mucoadhesive Tablet is a drug delivery system capable of adhering to the oral mucosa and r

48、eleasing the drug onto the site of application at a controlled rate.The Mucoadhesive Tablet is designed to provide the following advantages relative to competing technologies:(i)it avoids the first pass effect,whereby the liver metabolizes the active ingredient and greatly reduces the level of drug

49、in the systemic circulation,(ii)it leads to a higher absorption rate in the oral cavity as compared to the conventional oral route,and(iii)it achieves a rapid onset of action for the drug.The Mucoadhesive Tablet technology is designed to be versatile in order to permit the site of application,reside

50、nce time,and rate of release of the drug to be modulated to achieve the desired results.Product Portfolio Our product portfolio includes a blend of generic and branded products based on our proprietary delivery technology(“generic”drugs are essentially copies of drugs that have already received FDA

51、approval).Of the eleven projects currently in our product portfolio,four utilize our VersaTab technology,six utilize our VersaFilm technology,and one utilizes our AdVersa technology.INT0001/2004.This is the most advanced generic product involving our multilayer tablet technology.Equivalency with the

52、 reference product Toprol XL and its European equivalent Beloc-ZOK has been demonstrated in-vitro.The product has been tested in phase I studies.Pivotal development activities are ongoing.INT0004/2006.The development of a new,higher strength of the antidepressant Bupropion HCl,the active ingredient

53、in Wellbutrin XL,has been completed.In November 2011 the FDA approved the drug for patients with Major Depressive Disorder and,in February 2012,we entered into an agreement with Edgemont Pharmaceuticals LLC(“Edgemont”)for commercialization of the product in the United States.Under the terms of the a

54、greement,Edgemont has obtained certain exclusive rights to market and sell the product in the U.S.In exchange IntelGenx received a$1.0 million upfront payment and will receive launch related milestones totaling up to$4.0 million.In addition,IntelGenx will be eligible for additional milestones upon a

55、chieving certain sales and exclusivity targets of up to a further$23.5 million.IntelGenx will also receive tiered double-digit royalties on the net sales of the product.The agreement has no expiry date but may be terminated in the event of,without limitation(i)failure by either us or Edgemont to per

56、form our respective obligations under the agreement;(ii)if either party files a petition for bankruptcy or insolvency or otherwise winds up,liquidates or dissolves its business,or(iii)otherwise by mutual consent of the parties.The agreement also contains customary confidentiality,indemnification and

57、 intellectual property protection provisions.5 The product was launched in the U.S.in October 2012 under the brand name Forfivo XL.As of December 31,2012 we have received an upfront payment of$1 million and we have invoiced a$1 million milestone payment related to the launch.We expect to commence re

58、ceiving royalty payments in the first quarter of 2013.INT0006/2005.On December 10,2007,we entered into a license and development agreement with Azur Pharma(now part of Jazz Pharmaceuticals plc)for the development and manufacture of a prenatal vitamin supplement using product specific intellectual pr

59、operty that we developed.The product was launched in the United States during the fourth quarter of 2008 under the brand name Gesticare.As of December 31,2011,we had received a total of approximately$2 million in upfront,milestone and development fees and royalties.Sales of the product were disconti

60、nued in the third quarter of 2011.INT0007/2006.An oral Tadalafil film product based on our proprietary edible film technology is currently in the optimization stage.The product is intended for the treatment of erectile dysfunction(ED).The results of a phase I pilot study that was conducted in the th

61、ird quarter of 2010 indicate that the product is bioequivalent with the brand product,Cialis .A second clinical trial comparing an alternative formulation with the reference listed drug(RLD)was completed in the first quarter of 2013.The results of this study suggest the potential for a faster acting

62、 Tadalafil using our VersaFilm product.INT0008/2007.We are currently preparing a 505(b)(2)new drug application(“NDA”)for our novel oral thin-film formulation of Rizatriptan,the active drug in Maxalt-MLT orally disintegrating tablets.Maxalt-MLT is a leading branded anti-migraine product manufactured

63、by Merck&Co.The thin-film formulation of Rizatriptan has been developed in accordance with the co-development and commercialization agreement with RedHill Biopharma Ltd.using IntelGenx proprietary immediate release VersaFilm oral drug delivery technology.In December 2011,we received approval by Heal

64、th Canada to conduct a pivotal bioequivalence study to determine if our product is safe and bioequivalent with the FDA approved reference product,Maxalt-MLT.The trial was conducted in the second quarter of 2012 and was a randomized,two-period,two-way crossover study in healthy male and female subjec

65、ts.The study results indicate that the product is safe,and that the 90%confidence intervals of the three relevant parameters Cmax,AUC(0-t)and AUC(0-infinity)are well within the 80 125 acceptance range for bioequivalency.In November 2012 we had a successful pre-New Drug Application meeting with the F

66、DA which confirmed the adequacy of the clinical,non-clinical and CMC data for our proposed 505(b)(2)NDA submission with the FDA that we intend to file in the first quarter of 2013.INT0020/2010.An oral Eszopiclone film product based on our proprietary edible film technology is currently in the formul

67、ation optimization stage.The product is intended for the treatment of insomnia.INT0024/2010.An oral tablet product based on our proprietary multilayer tablet technology is currently in the development stage.An interaction study was conducted in the third quarter of 2012 and yielded positive results.

68、The product is intended for the treatment of idiopathic pulmonary fibrosis.INT0027/2011.An oral controlled-release film product based on our proprietary edible film technology is currently in the development stage.INT0028/2011.We initially entered into an agreement with Cynapsus Therapeutics Inc.(fo

69、rmerly Cannasat Therapeutics Inc.,“Cynapsus”)for the development of a buccal mucoadhesive tablet product containing a cannabinoid-based drug for the treatment of neuropathic pain and nausea in cancer patients undergoing chemotherapy.A clinical biostudy undertaken in 2009 on the mucoadhesive tablet d

70、eveloped by us and based on our proprietary AdVersa technology indicated improved bioavailability and reduced first-pass metabolization of the drug.In the fourth quarter of 2010,we acquired from Cynapsus full control of,and interest in,this project going forward.We also obtained worldwide rights to

71、US Patent 7,592,328 and all corresponding foreign patents and patent applications to exclusively develop and further provide intellectual property protection for this project.INT0030/2011.An oral film product based on our proprietary edible film technology is currently in the development stage.The p

72、roduct is intended for the animal health market.An initial acceptability study of the placebo in dogs indicated that the product is well accepted and a larger study is in preparation.INT0031/2012.An oral controlled-release film product based on our proprietary edible film technology is currently in

73、the early development stage.The product is intended for the treatment of benign prostatic hyperplasia The current development status of each of our products as of the date of this report is summarized in the following table:6 Growth Strategy Our primary growth strategies include:(1)identifying lifec

74、ycle management opportunities for existing market leading pharmaceutical products,(2)developing generic drugs with high barriers to entry,(3)developing products for the(non-pharmaceutical)nutritional supplement market,and(4)developing new drug delivery technologies.Lifecycle Management Opportunities

75、 We are seeking to position our delivery technologies as an opportunity for lifecycle management of products for which patent protection of the active ingredient is nearing expiration.While the patent for the underlying substance cannot be extended,patent protection can be obtained for a new and imp

76、roved formulation by filing an application with the FDA under Section 505(b)(2)of the U.S.Federal Food,Drug and Cosmetic Act.Such applications,known as a“505(b)(2)NDA”,are permitted for new drug products that incorporate previously approved active ingredients,even if the proposed new drug incorporat

77、es an approved active ingredient in a novel formulation or for a new indication.A 505(b)(2)NDA may include information regarding safety and efficacy of a proposed drug that comes from studies not conducted by or for the applicant.The first formulation for a respective active ingredient filed with th

78、e FDA under a 505(b)(2)application may qualify for up to three years of market exclusivity upon approval.Based upon a review of past partnerships between third party drug delivery companies and pharmaceutical companies,management believes that drug delivery companies which possess innovative technol

79、ogies to develop these special dosage formulations present an attractive opportunity to pharmaceutical companies.Accordingly,we believe“505(b)(2)products”represent a viable business opportunity for us.Generic Drugs with High Barriers to Entry We plan to pursue the development of generic drugs that h

80、ave certain barriers to entry,e.g.,where product development and manufacturing is complex and can limit the number of potential entrants into the generic market.We plan to pursue such projects only if the number of potential competitors is deemed relatively insignificant.7 Product Application Status

81、 of Development INT0001/2004 CHF(Coronary Heart Failure),Hypertension Pivotal batches in preparation.INT0004/2006 Antidepressant FDA approved November 2011 and launched in USA as Forfivo XL in October,2012.INT0006/2005 Prenatal vitamin supplement Product launched in USA Q4,2008.Discontinued end Q3,2

82、011.INT0007/2006 Erectile Dysfunction Pilot biostudy completed indicating bioequivalence with brand product.Pilot phase 1 study against the Reference Listed Drug(“RLD”)suggests faster rate of absorption.INT0008/2007 Migraine Pivotal biostudy completed indicating bioequivalence with RLD.Pivotal manuf

83、acturing activities completed.FDA submission scheduled for late Q1,2013 INT0020/2010 Insomnia Formulation improvements ongoing.INT0024/2010 Idiopathic pulmonary fibrosis Interaction study completed.Formulation optimization in preparation.INT0027/2011 Undisclosed Formulation development ongoing.INT00

84、28/2011 Cancer pain Formulation development ongoing.INT0030/2011 Animal health Acceptability study in preparation.INT0031/2012 Benign prostatic hyperplasia Formulation development ongoing.Nutritional Supplement Products We plan to develop additional products for the nutritional supplement market bas

85、ed upon our proprietary drug delivery technologies.The market for these supplements is large,with little differentiation between products.Our proprietary technology is aimed at increasing the absorption rate of active ingredients.We believe that supplements represent attractive short-term revenue op

86、portunities since they are not regulated as pharmaceutical products and do not require FDA approval.Development of New Drug Delivery Technologies The rapidly disintegrating film technology contained in our VersaFilm,and our AdVersa mucosal adhesive tablet,are two examples of our efforts to develop a

87、lternate technology platforms.As we work with various partners on different products,we seek opportunities to develop new proprietary technologies.Competition The pharmaceutical industry is highly competitive and is subject to the rapid emergence of new technologies,governmental regulations,healthca

88、re legislation,availability of financing,patent litigation and other factors.Many of our competitors,including Monosol Rx,Labtec GmbH,BioDelivery Sciences International,Inc.and Skye Pharma PLC,have longer operating histories and greater financial,technical,marketing,legal and other resources than we

89、 have.In addition,many of our competitors have significantly greater experience than we have in conducting clinical trials of pharmaceutical products,obtaining FDA and other regulatory approvals of products,and marketing and selling products that have been approved.We expect that we will be subject

90、to competition from numerous other companies that currently operate or are planning to enter the markets in which we compete.The key factors affecting the development and commercialization of our drug delivery products are likely to include,among other factors:?The safety and efficacy of our product

91、s;?The relative speed with which we can develop products;?Generic competition for any product that we develop;?Our ability to defend our existing intellectual property and to broaden our intellectual property and technology base;?Our ability to differentiate our products;?Our ability to develop prod

92、ucts that can be manufactured on a cost effective basis;?Our ability to manufacture our products in compliance with current Good Manufacturing Practices(“cGMP”)and any other regulatory requirements;and?Our ability to obtain financing.In order to establish ourselves as a viable industry partner,we pl

93、an to continue to invest in our research and development activities in order to further strengthen our technology base and to develop the ability to manufacture our products through our manufacturing partners at competitive costs.Our Competitive Strengths We believe that our key competitive strength

94、s include:?Our intellectual property;?The versatility of our drug delivery technology;and?The potential manufacturing cost savings associated with our technology.8 Manufacturing Partnership We currently manufacture products only for testing purposes in our own laboratories,and we do not manufacture

95、products for pivotal clinical trials or for commercial use.In order to establish ourselves as a full-service partner for our thin film products,we plan to establish a pilot plant for the manufacture of larger scale test batches of products developed using our VersaFilm drug delivery technology.Versa

96、Film is IntelGenx immediate release polymeric film technology.It is comprised of a thin polymeric film using United States Pharmacopeia(USP)components that are safe and approved by the FDA for use in food,pharmaceutical and cosmetic products.VersaFilm provides a patent-protected method of re-formula

97、ting approved pharmaceuticals in a more convenient and discrete oral dosage form.We expect to establish our pilot plant by December 31,2013.We formed a strategic alliance with LTS Lohmann Therapie-Systeme AG(LTS)for the manufacturing of certain products developed by us using our VersaFilm technology

98、.LTS is regarded as a pioneer in the development and production of transdermal and film form oral systems and has become one of the worlds leading suppliers for the international pharmaceutical industry.We formed a strategic manufacturing partnership with,and took an ownership position in,Pillar5 Ph

99、arma Inc.(“Pillar5”).We have undertaken to use our best efforts to ensure that distributors of our oral solid dose pharmaceutical products that are developed for commercial production,be directed to Pillar5 for the purpose of negotiating a manufacturing agreement requiring Pillar5 to manufacture suc

100、h products.As consideration for this undertaking,Pillar5 issued to us common shares representing 10%of the issued and outstanding shares of Pillar5.This manufacturing partnership secures the production of clinical test batches and commercial products for our VersaTab and AdVersa tablet products.We a

101、re not currently a manufacturer and we do not usually purchase large quantities of raw materials.Our manufacturing partners,however,may purchase significant quantities of raw materials,some of which may have long lead times.If raw materials cannot be supplied to our manufacturing partners in a timel

102、y and cost effective manner,our manufacturing partners may experience delays in production that may lead to reduced supplies of commercial products being available for sale or distribution.Such shortages could have a detrimental effect on sales of the products and a corresponding reduction on our ro

103、yalty revenues earned.Dependence on Major Customers We do not rely on any one or a few major customers for our end products.However,we depend upon a limited number of partners to develop our products,to provide funding for the development of our products,to assist in obtaining regulatory approvals t

104、hat are required in order to commercialize these products,and to market and sell our products.Intellectual Property and Patent Protection We protect our intellectual property and technology by using the following methods:(i)applying for patent protection in the United States and in the appropriate f

105、oreign markets,(ii)non-disclosure agreements,license agreements and appropriate contractual restrictions and controls on the distribution of information,and(iii)trade secrets,common law trademark rights and trademark registrations.We plan to file core technology patents covering the use of our platf

106、orm technologies in any pharmaceutical products.We have obtained four(4)patents and have an additional six(6)pending patent applications,as described below.The patents expire 20 years after submission of the initial application.9 Government Regulation The pharmaceutical industry is highly regulated.

107、The products we participate in developing require certain regulatory approvals.In the United States,drugs are subject to rigorous regulation by the FDA.The U.S.Federal Food,Drug,and Cosmetic Act,and other federal and state statutes and regulations,govern,among other things,the research,development,t

108、esting,manufacture,storage,record keeping,packaging,labeling,adverse event reporting,advertising,promotion,marketing,distribution,and import and export of pharmaceutical products.Failure to comply with applicable regulatory requirements may subject a company to a variety of administrative or judicia

109、lly-imposed sanctions and/or the inability to obtain or maintain required approvals or to market drugs.The steps ordinarily required before a new pharmaceutical product may be marketed in the United States include:10 Patent No.Title Subject Date submitted/issued/expiration US 6,231,957 Rapidly disin

110、tegrating flavor wafer for flavor enrichment The composition,manufacturing,and use of rapidly disintegrating flavored films for releasing flavors to certain substrates Issued May 15,2001 Expires May 6,2019 US 6,660,292 Rapidly disintegrating film for precooked foods Composition and manufacturing of

111、flavored films for releasing flavors to precooked food substrates Issued December 9,2003 Expires June 19,2021 US 7,132,113 Flavored film Composition and manufacturing method of multi-layered films Issued April 16,2002 Expires April 16,2022 US Appl.2007/0190144 Multilayer Tablet Formulation and Metho

112、d of Preparation of Multilayered Tablets Published August 16,2007 US Appl.2007/0128272 Multi-Vitamin And Mineral Supplement Formulation and Method of Preparation of Prenatal Multivitamin Supplement Published June 7,2007 US Appl.11/782,838 PCT/IB2007/03950 Controlled Release Pharmaceutical Tablets Fo

113、rmulation and Method Of Making Tablets Containing Bupropion And Mecamylamine July 25,2006 US Patent 7674479 Sustained-release Bupropion and Bupropion/Mecamylamine tablets Formulation and Method Of Making Tablets Containing Bupropion And Mecamylamine Issued March 9,2010 Expires July 25,2027 US Appl.1

114、2/836810 Oral Mucoadhesive dosage form Direct compression formulation for buccal and sublingual dosage forms July 15,2010 US Appl.US 12/936.132 Oral film dosage forms and methods for making same Optimization of Film strip technology December 8,2010 US Appl.13/079,348 Solid oral dosage forms comprisi

115、ng Tadalafil Oral films containing Tadalafil April 04,2011?preclinical laboratory tests,animal studies and formulation studies under FDAs good laboratory practices regulations,or GLPs;?the submission to the FDA of an investigational new drug application,or IND,which must become effective before huma

116、n clinical trials may begin;?the completion of adequate and well-controlled clinical trials according to good clinical practice regulations,or GCPs,to establish the safety and efficacy of the product for each indication for which approval is sought;?after successful completion of the required clinic

117、al testing,submission to the FDA of a NDA,or an Abbreviated NDA(“ANDA”),for generic drugs.In certain cases,an application for marketing approval may include information regarding safety and efficacy of a proposed drug that comes from studies not conducted by or for the applicant.Such applications,kn

118、own as a 505(b)(2)NDA,are permitted for new drug products that incorporate previously approved active ingredients,even if the proposed new drug incorporates an approved active ingredient in a novel formulation or for a new indication;?satisfactory completion of an FDA inspection of the manufacturing

119、 facility or facilities at which the product is produced to assess compliance with cGMPs to assure that the facilities,methods and controls are adequate to preserve the drugs identity,strength,quality and purity;and?FDA review and approval of the NDA or ANDA.The cost of complying with the foregoing

120、requirements,including preparing and submitting an NDA or ANDA,may be substantial.Accordingly,we typically rely upon our partners in the pharmaceutical industry to spearhead and bear the costs of the FDA approval process.We also seek to mitigate regulatory costs by focusing on 505(b)(2)NDA opportuni

121、ties.By applying our drug delivery technology to existing drugs,we seek to develop products with lower research&development(“R&D”)expenses and shorter time-to-market timelines as compared to regular NDA products.Research and Development Expense Our R&D expenses,net of R&D tax credits,for the year en

122、ded December 31,2012 increased to$1,723 thousand as compared to$1,336 thousand for the year ended December 31,2011.The increase in R&D expenditure is explained in the section of this report entitled“Managements Discussion and Analysis of Financial Condition and Results of Operations”.Environmental R

123、egulatory Compliance We believe that we are in compliance with environmental regulations applicable to our research and development facility located in Ville Saint-Laurent,Quebec.Employees As of the date of this filing,we have 10 full-time and no part-time employees.None of our employees are covered

124、 by collective bargaining agreements.We believe that our relations with our employees are good.ITEM 1A.RISK FACTORS.Our business faces many risks.Any of the risks discussed below,or elsewhere in this report or in our other filings with the Securities and Exchange Commission(“SEC”),could have a mater

125、ial impact on our business,financial condition,or results of operations.Risks Related to Our Business We continue to sustain losses and our revenues are not sufficient to sustain our operations.Even though we ceased being a“development stage”company in April 2006,we are still subject to all of the r

126、isks associated with having a limited operating history and pursuing the development of new products.Our cash flows may be insufficient to meet expenses relating to our operations and the development of our business,and may be insufficient to allow us to develop new products.We currently conduct res

127、earch and development using our proprietary platform technologies to develop oral controlled release and other delivery products.We do not know whether we will be successful in the development of such products.We have an accumulated deficit of approximately$14,463 thousand since our inception in 200

128、3 through December 31,2012.To date,these losses have been financed principally through sales of equity securities,long-term debt and debt from related parties.Our revenues for the past five years ended December 31,2012,December 31,2011,December 31,2010,December 31,2009 and December 31,2008 were$1,20

129、8 thousand,$440 thousand,$1,337 thousand,$1,279 thousand and$977 thousand respectively.Our revenues in 2012 consisted primarily of milestone payments and the amortization of deferred revenue related to the commercialization of Forfivo XL,our first FDA-approved product,which was commercialized in Oct

130、ober 2012.Revenue generated to date has not been sufficient to sustain our operations.In order to achieve profitability,our revenue streams will have to increase and there is no assurance that revenues will increase to such a level.11 We may incur losses associated with foreign currency fluctuations

131、.The majority of our expenses are paid in Canadian dollars,while a significant portion of our revenues are in U.S.dollars.Our financial results are subject to the impact of currency exchange rate fluctuations.Adverse movements in exchange rates could have a material adverse effect on our financial c

132、ondition and results of operations.We may need additional capital to fulfill our business strategies.We may also incur unforeseen costs.Failure to obtain such capital would adversely affect our business.We will need to expend significant capital in order to continue with our research and development

133、 by hiring additional research staff and acquiring additional equipment.If our cash flows from operations are insufficient to fund our expected capital needs,or our needs are greater than anticipated,we may be required to raise additional funds in the future through private or public sales of equity

134、 securities or the incurrence of indebtedness.Additional funding may not be available on favorable terms,or at all.If we borrow additional funds,we likely will be obligated to make periodic interest or other debt service payments and may be subject to additional restrictive covenants.If we fail to o

135、btain sufficient additional capital in the future,we could be forced to curtail our growth strategy by reducing or delaying capital expenditures,selling assets or downsizing or restructuring our operations.If we raise additional funds through public or private sales of equity securities,the sales ma

136、y be at prices below the market price of our stock and our shareholders may suffer significant dilution.The loss of the services of key personnel would adversely affect our business.Our future success depends to a significant degree on the skills,experience and efforts of our executive officers and

137、senior management staff.The loss of the services of existing personnel would be detrimental to our research and development programs and to our overall business.We are dependent on business partners to conduct clinical trials of,obtain regulatory approvals for,and manufacture,market,and sell our con

138、trolled release products.We depend heavily on our pharmaceutical partners to pay for part or all of the research and development expenses associated with developing a new product and to obtain approval from regulatory bodies such as the FDA to commercialize these products.We also depend on our partn

139、ers to distribute these products after receiving regulatory approval.Our revenues from research and development fees,milestone payments and royalty fees are derived from our partners.Our inability to find pharmaceutical partners who are willing to pay us these fees in order to develop new products w

140、ould negatively impact our business and our cash flows.We have limited experience in manufacturing,marketing and selling pharmaceutical products.Accordingly,if we cannot maintain our existing partnerships or establish new partnerships with respect to our other products in development,we will have to

141、 establish our own capabilities or discontinue the commercialization of the affected product.Developing our own capabilities would be expensive and time consuming and could delay the commercialization of the affected product.There can be no assurance that we would be able to develop these capabiliti

142、es.Our existing agreements with pharmaceutical industry partners are generally subject to termination by the counterparty on short notice upon the occurrence of certain circumstances,including,but not limited to,the following:a determination that the product in development is not likely to be succes

143、sfully developed or not likely to receive regulatory approval;our failure to satisfy our obligations under the agreement,or the occurrence of a bankruptcy event.If any of our partnerships are terminated,we may be required to devote additional resources to the product,seek a new partner on short noti

144、ce,or abandon the product development efforts.The terms of any additional partnerships or other arrangements that we establish may not be favorable to us.We are also at risk that these partnerships or other arrangements may not be successful.Factors that may affect the success of our partnerships in

145、clude the following:?Our partners may incur financial and cash-flow difficulties that force them to limit or reduce their participation in our joint projects;?Our partners may be pursuing alternative technologies or developing alternative products that are competitive to our product,either on their

146、own or in partnership with others;?Our partners may reduce marketing or sales efforts,or discontinue marketing or sales of our products,which may reduce our revenues received on the products;?Our partners may have difficulty obtaining the raw materials to manufacture our products in a timely and cos

147、t effective manner or experience delays in production,which could affect the sales of our products and our royalty revenues earned;12?Our partners may terminate their partnerships with us.This could make it difficult for us to attract new partners or adversely affect perception of us in the business

148、 and financial communities;?Our partners may pursue higher priority programs or change the focus of their development programs,which could affect the partners commitment to us.Pharmaceutical and biotechnology companies historically have re-evaluated their priorities from time to time,including follo

149、wing mergers and consolidations,a common occurrence in recent years;and?Our partners may become the target of litigation for purported patent or intellectual property infringement,which could delay or prohibit commercialization of our products and which would reduce our revenue from such products.We

150、 face competition in our industry,and many of our competitors have substantially greater experience and resources than we do.We compete with other companies within the drug delivery industry,many of which have more capital,more extensive research and development capabilities and greater human resour

151、ces than we do.Some of these drug delivery competitors include Monosol Rx,Labtec GmbH,BioDelivery Sciences International,Inc.and Skye Pharma PLC.Our competitors may develop new or enhanced products or processes that may be more effective,less expensive,safer or more readily available than any produc

152、ts or processes that we develop,or they may develop proprietary positions that prevent us from being able to successfully commercialize new products or processes that we develop.As a result,our products or processes may not compete successfully,and research and development by others may render our p

153、roducts or processes obsolete or uneconomical.Competition may increase as technological advances are made and commercial applications broaden.We rely upon third-party manufacturers,which puts us at risk for supplier business interruptions.We have entered into agreements with third party manufacturer

154、s to manufacture certain of our products once we complete development and after we receive regulatory approval.If our third-party manufacturers fail to perform,our ability to market products and to generate revenue would be adversely affected.Our failure to deliver products in a timely manner could

155、lead to the dissatisfaction of our distribution partners and damage our reputation,causing our distribution partners to cancel existing agreements with us and to stop doing business with us.The third-party manufacturers that we depend on to manufacture our products are required to adhere to FDA regu

156、lations regarding cGMP,which include testing,control and documentation requirements.Ongoing compliance with cGMP and other regulatory requirements is monitored by periodic inspection by the FDA and comparable agencies in other countries.Failure by our third-party manufacturers to comply with cGMP an

157、d other regulatory requirements could result in actions against them by regulatory agencies and jeopardize our ability to obtain products on a timely basis.We are subject to extensive government regulation including the requirement of approval before our products may be marketed.Even if we obtain ma

158、rketing approval,our products will be subject to ongoing regulatory review.We,our partners,our products,and our product candidates are subject to extensive regulation by governmental authorities in the United States and other countries.Failure to comply with applicable requirements could result in w

159、arning letters,fines and other civil penalties,delays in approving or refusal to approve a product candidate,product recall or seizure,withdrawal of product approvals,interruption of manufacturing or clinical trials,operating restrictions,injunctions,and criminal prosecution.Our products cannot be m

160、arketed in the United States without FDA approval.Obtaining FDA approval requires substantial time,effort,and financial resources,and there can be no assurance that any approval will be granted on a timely basis,if at all.We rely on our partners for the preparation of applications and for obtaining

161、regulatory approvals.If the FDA does not approve our product candidates in a timely fashion,or does not approve them at all,our business and financial condition may be adversely affected.Further,the terms of approval of any marketing application,including the labeling content,may be more restrictive

162、 than we desire and could affect the marketability of our or our collaborators products.Subsequent discovery of problems with an approved product may result in restrictions on the product or its withdrawal from the market.In addition,both before and after regulatory approval,we,our collaborators,our

163、 products,and our product candidates are subject to numerous FDA requirements covering testing,manufacturing,quality control,cGMP,adverse event reporting,labeling,advertising,promotion,distribution,and export.Our partners and we are subject to surveillance and periodic inspections to ascertain compl

164、iance with these regulations.Further,the relevant law and regulations may change in ways that could affect us,our partners,our products,and our product candidates.Failure to comply with regulatory requirements could have a material adverse impact on our business.Regulations regarding the manufacture

165、 and sale of our future products are subject to change.We cannot predict what impact,if any,such changes may have on our business,financial condition or results of operations.Failure to comply with applicable regulatory requirements could have a material adverse effect on our business,financial cond

166、ition and results of operations.13 Additionally,the time required for obtaining regulatory approval is uncertain.We may encounter delays or product rejections based upon changes in FDA policies,including cGMP,during periods of product development.We may encounter similar delays in countries outside

167、of the United States.We may not be able to obtain these regulatory acceptances on a timely basis,or at all.The failure to obtain timely regulatory acceptance of our products,any product marketing limitations,or any product withdrawals would have a material adverse effect on our business,financial co

168、ndition and results of operations.In addition,before it grants approvals,the FDA or any foreign regulatory authority may impose numerous other requirements with which we must comply.Regulatory acceptance,if granted,may include significant limitations on the indicated uses for which the product may b

169、e marketed.FDA enforcement policy strictly prohibits the marketing of accepted products for unapproved uses.Product acceptance could be withdrawn or civil and/or criminal sanctions could be imposed for our failure to comply with regulatory standards or the occurrence of unforeseen problems following

170、 initial marketing.We may not be able to expand or enhance our existing product lines with new products limiting our ability to grow.If we are not successful in the development and introduction of new products,our ability to grow will be impeded.We may not be able to identify products to enhance or

171、expand our product lines.Even if we can identify potential products,our investment in research and development might be significant before we could bring the products to market.Moreover,even if we identify a potential product and expend significant dollars on development,we may never be able to brin

172、g the product to market or achieve market acceptance for such product.As a result,we may never recover our expenses.The market may not be receptive to products incorporating our drug delivery technologies.The commercial success of any of our products that are approved for marketing by the FDA and ot

173、her regulatory authorities will depend upon their acceptance by the medical community and third party payers as clinically useful,cost-effective and safe.To date,only two products based upon our technologies have been marketed in the United States,which limits our ability to provide guidance or assu

174、rance as to market acceptance.Factors that we believe could materially affect market acceptance of these products include:?the timing of the receipt of marketing approvals and the countries in which such approvals are obtained;?the safety and efficacy of the product as compared to competitive produc

175、ts;?the relative convenience and ease of administration as compared to competitive products;?the strength of marketing distribution support;and?the cost-effectiveness of the product and the ability to receive third party reimbursement.We are subject to environmental regulations and any failure to co

176、mply may result in substantial fines and sanctions.Our operations are subject to Canadian and international environmental laws and regulations governing,among other things,emissions to air,discharges to waters and the generation,handling,storage,transportation,treatment and disposal of raw materials

177、,waste and other materials.Many of these laws and regulations provide for substantial fines and criminal sanctions for violations.We believe that we are and have been operating our business and facility in a manner that complies in all material respects with environmental,health and safety laws and

178、regulations;however,we may incur material costs or liabilities if we fail to operate in full compliance.We do not maintain environmental damage insurance coverage with respect to the products which we manufacture.We may have to make significant expenditures in the future to comply with evolving envi

179、ronmental,health and safety requirements,including new requirements that may be adopted or imposed in the future.To meet changing licensing and regulatory standards,we may have to make significant additional site or operational modifications that could involve substantial expenditures or reduction o

180、r suspension of some of our operations.We cannot be certain that we have identified all environmental and health and safety matters affecting our activities and in the future our environmental,health and safety problems,and the costs to remediate them,may be materially greater than we expect.Risks R

181、elated to Our Intellectual Property If we are not able to adequately protect our intellectual property,we may not be able to compete effectively.Our success depends,to a significant degree,upon the protection of our proprietary technologies.While we currently own four U.S.patents and have applied fo

182、r six U.S.patents,we will need to pursue additional protection for our intellectual property as we develop new products and enhance existing products.We may not be able to obtain appropriate protection for our intellectual property in a timely manner,or at all.Our inability to obtain appropriate pro

183、tections for our intellectual property may allow competitors to enter our markets and produce or sell the same or similar products.14 If we are forced to resort to legal proceedings to enforce our intellectual property rights,the proceedings could be burdensome and expensive.In addition,our propriet

184、ary rights could be at risk if we are unsuccessful in,or cannot afford to pursue,those proceedings.We also rely on trade secrets and contract law to protect some of our proprietary technology.We have entered into confidentiality and invention agreements with our employees and consultants.Nevertheles

185、s,these agreements may not be honored and they may not effectively protect our right to our un-patented trade secrets and know-how.Moreover,others may independently develop substantially equivalent proprietary information and techniques or otherwise gain access to our trade secrets and know-how.In 1

186、995,the U.S.Patent and Trademark Office adopted changes to the U.S.patent law that made the term of issued patents 20 years from the date of filing rather than 17 years from the date of issuance,subject to specified transition periods.Beginning in June 1995,the patent term became 20 years from the e

187、arliest effective filing date of the underlying patent application.These changes may reduce the effective term of protection for patents that are pending for more than three years.While we cannot predict the effect that these changes will have on our business,they could have a material adverse effec

188、t on our ability to protect our proprietary information.Furthermore,the possibility of extensive delays in the patent issuance process could effectively reduce the term during which a marketed product is protected by patents.We may need to obtain licenses to patents or other proprietary rights from

189、third parties.We may not be able to obtain the licenses required under any patents or proprietary rights or they may not be available on acceptable terms.If we do not obtain required licenses,we may encounter delays in product development or find that the development,manufacture or sale of products

190、requiring licenses could be foreclosed.We may,from time to time,support and collaborate in research conducted by universities and governmental research organizations.We may not be able to acquire exclusive rights to the inventions or technical information derived from these collaborations,and disput

191、es may arise over rights in derivative or related research programs conducted by us or our collaborators.If we infringe on the rights of third parties,we may not be able to sell our products,and we may have to defend against litigation and pay damages.If a competitor were to assert that our products

192、 infringe on its patent or other intellectual property rights,we could incur substantial litigation costs and be forced to pay substantial damages.Such litigation costs could be as a result of direct litigation against us,or as a result of litigation against one or more of our partners to whom we ha

193、ve contractually agreed to indemnify in the event that our intellectual property is the cause of a successful litigious action against our partner.Third-party infringement claims,regardless of their outcome,would not only consume significant financial resources,but would also divert our managements

194、time and attention.Such claims could also cause our customers or potential customers to purchase competitors products or defer or limit their purchase or use of our affected products until resolution of the claim.If any of our products are found to violate third-party intellectual property rights,we

195、 may have to re-engineer one or more of our products,or we may have to obtain licenses from third parties to continue offering our products without substantial re-engineering.Our efforts to re-engineer or obtain licenses could require significant expenditures and may not be successful.Our controlled

196、 release products that are generic versions of branded controlled release products that are covered by one or more patents may be subject to litigation,which could delay FDA approval and commercial launch of our products.We expect to file or have our collaborators file ANDAs or NDAs for our controll

197、ed release products under development that are covered by one or more patents of the branded product.It is likely that the owners of the patents covering the brand name product or the sponsors of the NDA with respect to the branded product will sue or undertake regulatory initiatives to preserve mar

198、keting exclusivity.Any significant delay in obtaining FDA approval to market our products as a result of litigation,as well as the expense of such litigation,whether or not we or our collaborators are successful,could have a materially adverse effect on our business,financial condition and results o

199、f operations.15 Risks Related to Our Securities:The price of our common stock could be subject to significant fluctuations.Any of the following factors could affect the market price of our common stock:?Our failure to achieve and maintain profitability;?Changes in earnings estimates and recommendati

200、ons by financial analysts;?Actual or anticipated variations in our quarterly results of operations;?Changes in market valuations of similar companies;?Announcements by us or our competitors of significant contracts,new products,acquisitions,commercial relationships,joint ventures or capital commitme

201、nts;?The loss of major customers or product or component suppliers;?The loss of significant partnering relationships;and?General market,political and economic conditions.We have a significant number of convertible securities outstanding that could be exercised in the future.Subsequent resale of thes

202、e and other shares could cause our stock price to decline.This could also make it more difficult to raise funds at acceptable levels pursuant to future securities offerings.We have a concentration of stock ownership and control,and a small number of shareholders have the ability to exert significant

203、 control in matters requiring shareholder vote and may have interests that conflict with yours.Directors and Officers hold 23.1%of our common stock.See“Security Ownership of Certain Beneficial Owners and Management”in the 2013 Proxy Statement.As a result,such shareholders,acting together,may have th

204、e ability to control matters requiring shareholder approval,including the election of directors and approval of mergers and other significant corporate transactions.This concentration of ownership may have the effect of delaying,preventing or deterring a change in control of our company.It may also

205、deprive our shareholders of an opportunity to receive a premium for their shares as part of a sale of our company and may affect the market price of our common stock.In deciding how to vote on such matters,those shareholders interests may conflict with yours.Changes in the independence of our direct

206、ors could result in governance risks.Currently,we have a majority of independent directors,but in the future we cannot guarantee that our Board of Directors will always have a majority of independent directors.In the absence of a majority of independent directors,our chief executive officer,who is a

207、lso a principal shareholder and director,could establish policies and enter into transactions without independent review and approval.This could present the potential for a conflict of interest between us and our shareholders generally and the controlling officers,stockholders or directors.Our commo

208、n stock is a high risk investment.Our common stock was quoted on the OTC Bulletin Board under the symbol“IGXT”from January 2007 until June 2012 and,subsequent to our upgrade in June 2012,has been quoted on the OTCQX.Our common stock has also been listed on the TSX Venture Exchange under the symbol“I

209、GX”since May 2008.There is a limited trading market for our common stock,which may affect the ability of shareholders to sell our common stock and the prices at which they may be able to sell our common stock.The market price of our common stock has been volatile and fluctuates widely in response to

210、 various factors which are beyond our control.The price of our common stock is not necessarily indicative of our operating performance or long term business prospects.In addition,the securities markets have from time to time experienced significant price and volume fluctuations that are unrelated to

211、 the operating performance of particular companies.These market fluctuations may also materially and adversely affect the market price of our common stock.In the United States,our common stock is considered a“penny stock”.The SEC has adopted regulations which generally define a“penny stock”to be an

212、equity security that has a market price of less than$5.00 per share or an exercise price of less than$5.00 per share,subject to specific exemptions.This designation requires any broker or dealer selling these securities to disclose certain information concerning the transaction,obtain a written agre

213、ement from the purchaser and determine that the purchaser is reasonably suitable to purchase the securities.These rules may restrict the ability of brokers or dealers to sell our common stock and may affect the ability of investors to sell their shares.As a result of the foregoing,our common stock s

214、hould be considered a high risk investment.16 We became public by means of a reverse merger,and as a result we are subject to the risks associated with the prior activities of the public company with which we merged.In addition,we may not be able to attract the attention of major brokerage firms or

215、institutional buyers.Additional risks may exist because we became public through a reverse merger with a shell corporation.Although the shell did not have recent or past operations or assets and we performed a due diligence review of the public company,there can be no assurance that we will not be e

216、xposed to undisclosed liabilities resulting from the prior operations of our company.Security analysts of major brokerage firms and securities institutions may not cover us since there are no broker-dealers who sold our stock in a public offering who would have an incentive to follow or recommend th

217、e purchase of our common stock.No assurance can be given that established brokerage firms will want to conduct any financings for us in the future.Our limited cash resources restrict our ability to pay cash dividends.Since our inception,we have not paid any cash dividends on our common stock.We curr

218、ently intend to retain future earnings,if any,to support operations and to finance the growth and development of our business.Therefore,we do not expect to pay cash dividends in the foreseeable future.Any future determination relating to our dividend policy will be made at the discretion of our Boar

219、d of Directors and will depend on a number of factors,including future earnings,capital requirements,financial conditions and future prospect and other factors that the Board of Directors may deem relevant.If we do not pay any dividends on our common stock,our shareholders will be able to profit fro

220、m an investment only if the price of the stock appreciates before the shareholder sells it.Investors seeking cash dividends should not purchase our common stock.ITEM 1B.UNRESOLVED STAFF COMMENTS Not applicable.ITEM 2.PROPERTIES We currently occupy 3,500 square feet of leased space at a rate of CAD$8

221、.88/square foot in an industrial zone at 6425 Abrams,Ville St.-Laurent,Quebec,Canada under a five year renewable lease agreement signed in 2004.We expanded our laboratory and office space at this facility to its maximum during the second quarter of 2006.We extended the term of the lease agreement to

222、,most recently,the day immediately preceding the fulfillment of certain conditions relating to the occupation of new leased premises at 6410-6420 Abrams.Commencing in June 2013,we plan to occupy approximately 28,600 square feet of leased space at a rate of CAD$11.46/square foot for the first five ye

223、ars of a ten year renewable lease agreement,and at a rate of CAD$12.46/square foot thereafter.We plan to utilize approximately 16,000 square feet of the new facility to establish pilot plant manufacturing capabilities for our thin film VersaFilm products,approximately 7,000 square feet for our R&D a

224、ctivities,and approximately 5,000 square feet for administration.ITEM 3.LEGAL PROCEEDINGS There are no material pending legal proceedings to which we are a party or to which any of our property is subject and to the best of our knowledge,no such actions against us are contemplated or threatened.ITEM

225、 4.MINE SAFETY DISCLOSURES Not applicable.17 PART II ITEM 5.MARKET FOR REGISTRANTS COMMON EQUITY,RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock was quoted on the OTC Bulletin Board under the symbol“IGXT”from January 2007 until June 2012 and,

226、subsequent to our upgrade in June 2012,has been quoted on the OTCQX.Our common stock has also been listed on the TSX Venture Exchange under the symbol“IGX”since May 2008.The table below sets forth the high and low bid prices of our common stock as reported by the OTC Bulletin Board/OTCQX and the TSX

227、 for the periods indicated.These prices represent inter-dealer quotations without retail markup,markdown,or commission and may not necessarily represent actual transactions.Number of Shareholders On March 15,2013 there were approximately 65 holders of record of our common stock,one of which was Cede

228、&Co.,a nominee for Depository Trust Company,and one of which was The Canadian Depository for Securities Limited,or CDS.All of our common shares held by brokerage firms,banks and other financial institutions in the United States and Canada as nominees for beneficial owners are considered to be held o

229、f record by Cede&Co.in respect of brokerage firms,banks and other financial institutions in the United States,and by CDS in respect of brokerage firms,banks and other financial institutions located in Canada.Cede&Co.and CDS are each considered to be one shareholder of record.Dividend Policy We have

230、never declared or paid any cash dividends on our common stock.We currently intend to retain any earnings to support operations and to finance the growth and development of our business.Therefore,we do not expect to pay cash dividends in the foreseeable future.Any future determination relating to our

231、 dividend policy will be made at the discretion of our Board of Directors and will depend on a number of factors,including future earnings,capital requirements,financial conditions and future prospect and other factors that the board of directors may deem relevant.Purchases of Equity Securities by t

232、he Issuer and Affiliated Purchasers During the fourth quarter of 2012,there were no purchases or repurchases of our equity securities by us or any affiliated purchasers.Unregistered Sales of Equity Securities and Use of Proceeds During fiscal 2012,we did not sell equity securities without registrati

233、on under the Securities Act of 1933,as amended,except as disclosed on a Current Report on Form 8-K.18 OTCQX/OTCBB TSX-V High Low High Low (U.S.$)(U.S.$)(CAD$)(CAD$)2012 Fourth Quarter$0.725$0.560$0.750$0.540 Third Quarter$0.674$0.460$0.700$0.540 Second Quarter$0.580$0.445$0.590$0.450 First Quarter$0

234、.740$0.450$0.750$0.460 2011 Fourth Quarter$0.720$0.410$0.700$0.405 Third Quarter$0.985$0.580$0.950$0.590 Second Quarter$0.840$0.550$0.820$0.500 First Quarter$0.690$0.350$0.670$0.370 ITEM 6.SELECTED FINANCIAL DATA Not applicable.ITEM 7.MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND R

235、ESULTS OF OPERATIONS Introduction to Managements Discussion and Analysis The purpose of this section,Managements Discussion and Analysis of Financial Condition and Results of Operations,is to provide a narrative explanation of the financial statements that enables investors to better understand our

236、business,to enhance our overall financial disclosure,to provide the context within which our financial information may be analyzed,and to provide information about the quality of,and potential variability of,our financial condition,results of operations and cash flows.Unless otherwise indicated,all

237、financial and statistical information included herein relates to our continuing operations.Unless otherwise indicated or the context otherwise requires,the words,“IntelGenx,“Company”,“we”,“us”,and“our”refer to IntelGenx Technologies Corp.and its subsidiaries,including IntelGenx Corp.This information

238、 should be read in conjunction with the accompanying audited Consolidated Financial Statements and Notes thereto.Company Background We are a drug delivery company established in 2003 and headquartered in Montreal,Quebec,Canada.Our focus is on the development of novel oral immediate-release and contr

239、olled-release products for the pharmaceutical market.Our business strategy is to develop pharmaceutical products based on our proprietary drug delivery technologies and,once the viability of a product has been demonstrated,to license the commercial rights to partners in the pharmaceutical industry.I

240、n certain cases,we rely upon partners in the pharmaceutical industry to fund development of the licensed products,complete the regulatory approval process with the FDA or other regulatory agencies relating to the licensed products,and assume responsibility for marketing and distributing such product

241、s.In addition,we may choose to pursue the development of certain products until the project reaches the marketing and distribution stage.We will assess the potential for successful development of a product and associated costs,and then determine at which stage it is most prudent to seek a partner,ba

242、lancing such costs against the potential for additional returns earned by partnering later in the development process.We have also undertaken a strategy under which we will work with pharmaceutical companies in order to develop new dosage forms for pharmaceutical products for which patent protection

243、 is nearing expiration.Under Section 505(b)(2)of the Food,Drug,and Cosmetics Act,the FDA may grant market exclusivity for a term of up to three years following approval of a listed drug that contains previously approved active ingredients but is approved in a new dosage,dosage form,route of administ

244、ration or combination,or for a new use,the approval of which was required to be supported by new clinical trials,other than bioavailability studies,conducted by or for the sponsor.We are currently continuing to develop the existing products in our pipeline and may also perform research and developme

245、nt on other potential products as opportunities arise.We currently purchase and/or lease,on an as-needed basis,the equipment necessary for performing research and development activities related to our products.We plan to hire new personnel in the areas of research and development,manufacturing,and a

246、dministration on an as-needed basis as we enter into partnership agreements,establish pilot plant VersaFilm manufacturing,and increase our research and development activities.19 Key Developments We achieved a number of milestones in our strategic development throughout 2012,and subsequent to Decembe

247、r 31,2012,most notably the following:Forfivo XL Forfivo XL,our first FDA approved product,was launched in October 2012 and is being marketed in the United States under the terms of a license agreement between IntelGenx and Edgemont Pharmaceuticals.Forfivo XL is indicated for the treatment of Major D

248、epressive Disorder(“MDD”)and is the only extended-release bupropion HCl product to provide a once-daily,450mg dose in a single tablet.The active ingredient in Forfivo XL is bupropion,the same active ingredient used in the well-known antidepressant product:Wellbutrin XL.Prior to the launch of Forfivo

249、 XL,most patients in the US requiring a 450mg dose of bupropion have been taking multiple tablets to achieve their 450mg dose requirement.With Forfivo XL now available in the US,these patients can simplify their dosing regimen to a single Forfivo XL tablet,once-daily.The commercialization of Forfivo

250、 XL triggers launch-related milestone payments for IntelGenx of up to$4.0 million,of which$1 million was invoiced by us in the fourth quarter of 2012,and additional milestones upon achieving certain sales and exclusivity targets of up to a further$23.5 million.IntelGenx will also receive tiered doub

251、le-digit royalties on net sales of Forfivo XL.Anti-migraine Film On May 29,2012 we announced the successful completion of a pivotal bioequivalence study for our novel oral thin-film formulation of Rizatriptan,the active drug in Maxalt-MLT orally disintegrating tablets.The trial was a randomized,two-

252、period,two-way crossover study in healthy male and female subjects.The study was designed to determine whether the product is safe and bioequivalent to Maxalt-MLT as measured by industry standard pharmacokinetic measures,peak plasma concentration(Cmax)and area under the curve(AUC).On November 8,2012

253、 we announced the conclusion of a pre-New Drug Application(NDA)meeting with the FDA related to our oral thin-film formulation of Rizatriptan.The purpose of the meeting was to confirm the adequacy of the clinical,non-clinical and CMC data for our proposed 505(b)(2)NDA submission,which we intend to fi

254、le in the first quarter of 2013,as previously announced.Maxalt-MLT is a leading branded anti-migraine product manufactured by Merck&Co(“Merck”)and,according to Mercks 2011 annual report,sales of Maxalt grew 16%to$639 million in the year.The thin-film formulation of Rizatriptan has been developed usi

255、ng IntelGenx proprietary immediate release VersaFilm drug delivery technology.OTCQX Listing On June 14,2012 we announced that our common stock was upgraded from the OTC Bulletin Board and began trading on the prestigious OTCQX trading platform.The OTCQX is the highest tier of the OTC market and is e

256、xclusively for companies that meet the highest financial standards and undergo a qualitative review.We continue to trade under the symbol IGXT in the U.S.and our common shares also continue to trade on the TSX Venture Exchange under the symbol IGX.Currency Rate Fluctuations Our operating currency is

257、 Canadian dollars,while our reporting currency is U.S.dollars.Accordingly,our results of operations and balance sheet position have been affected by currency rate fluctuations.The following management discussion and analysis takes this into consideration whenever material.20 Results of Operations Ye

258、ar ended December 31,2012 compared to the Year ended December 31,2011.Revenue and Other Income Total revenue and other income increased by$768 thousand,or 175%,from$440 thousand in the year ended December 31,2011 to$1,208 thousand in the year ended December 31,2012.Forfivo XL,our first FDA approved

259、product,was launched in October 2012 under a licensing partnership with Edgemont Pharmaceuticals LLP(“Edgemont”).Forfivo XL is indicated for the treatment of Major Depressive Disorder(“MDD”)and is the only extended-release bupropion HCl product to provide a once-daily,450mg dose in a single tablet.U

260、nder the terms of the agreement with Edgemont,the commercial launch of Forfivo XL triggered a milestone payment of$1 million,which we invoiced to Edgemont and recognized as revenue in the fourth quarter of 2012.We expect to start receiving royalty payments from commercial sales of the product in the

261、 first quarter of 2013.Upon entering into the licensing agreement,Edgemont paid us an upfront fee of$1 million,which we recognized as deferred license revenue.The deferred license revenue will be amortized in income over the period where sales of Forfivo XL are expected to be exclusive.As a result o

262、f this policy,we recognized$77 thousand in income during the fourth quarter of 2012.Also included in revenue for the year ended December 31,2012 is the receipt of a$100 thousand development milestone in respect of our Rizatriptan VersaFilm project and was related to the successful completion of the

263、pivotal bioequivalence study.Revenue earned from our pharmaceutical partners for development milestones achieved,including non-refundable upfront license fees,were$359 thousand in the year ended December 31,2011.The decrease is attributable to the timing related to the achievement of development mil

264、estones.We are currently negotiating with a number of potential partners related to new development projects for various drug candidates and,whilst the timing of such events is difficult to predict,we are optimistic of securing contracts in the near future.Sales of our first commercialized product,a

265、 pre-natal multivitamin supplement,marketed in the USA as Gesticare,were discontinued in the third quarter of 2011.We received final royalties from the sale of the product in the fourth quarter of 2011 from Azur Pharma,now part of Jazz Pharmaceuticals plc.In the year ended December 31,2011 royalty r

266、evenues earned from Gesticare were approximately$74 thousand.Interest and other income of$10 thousand was recorded in the year ended December 31,2012,compared with$7 thousand in the previous year.Interest and other income relates primarily to interest earned on deposits at banks.21 Percentage In U.S

267、.$thousands 2012 2011 Increase/Increase/(Decrease)(Decrease)Revenue$1,198$433$765 177%Other Income 10 7 3 43%Research and Development Expenses 1,935 1,524 411 27%Research and Development Tax Credit (212)(188)24 13%Management Salaries 716 586 130 22%General and Administrative Expenses 347 333 14 4%Pr

268、ofessional Fees 582 594 (12)(2%)Depreciation 46 37 9 24%Foreign Exchange Loss 41 3 38 1,267%Interest and Financing Fees 3 3 0 0%Net Loss (2,250)(2,452)(202)(8%)Research and Development(“R&D”)Expenses R&D expenses totaled$1,935 thousand in the year ended December 31,2012 compared with$1,524 thousand

269、the previous year,representing an increase of$411 thousand,or 27%.The increase in R&D expenses is primarily attributable to approximately$289 thousand of costs incurred for the technical transfer of activities in preparation for manufacturing of Forfivo XL to our Contract Manufacturing Organization,

270、Pillar5 Pharma,together with the Product Fee for Forfivo XL of$100 thousand payable to the FDA.Included within R&D expenses for 2011 are R&D Salaries of$659 thousand,of which approximately$16 thousand represents non-cash compensation.This compares to R&D salaries of$739 thousand in 2011,of which app

271、roximately$18 thousand represented non-cash compensation.The decrease in R&D Salaries is attributable to vacancies in both the first and fourth quarters of 2012,paternity leave in the second and third quarters of 2012,and the foreign exchange impact arising from the translation of our operating curr

272、ency into our reporting currency.In the year ended December 31,2012 we recorded estimated Research and Development Tax Credits and refunds of$212 thousand,compared with$188 that was recorded in the previous year.Management Salaries and General and Administrative(“G&A”)Expenses Management salaries in

273、creased from$586 thousand in fiscal 2011 to$716 thousand in fiscal 2012,representing an increase of$130 thousand,or 22%.The increase is primarily attributable to approximately$80 thousand in costs related to the appointment of our business development director and an increase of approximately$28 tho

274、usand in directors fees.Included in management salaries for fiscal 2012 are approximately$12 thousand(2011:$10 thousand)in non-cash compensation from options granted to management employees in 2010,2011 and 2012,and$23 thousand(2011:$10 thousand)in non-cash compensation from options granted to non-e

275、mployee directors in 2010 and 2011.General and administrative expenses increased marginally from$333 thousand in the year ended December 31,2011 to$347 thousand in the year ended December 31,2012.Professional Fees Professional fees for the year ended December 31,2012 decreased slightly to$582 thousa

276、nd from$594 thousand in the year ended December 31,2011.Included within professional fees are shareholder/investor relations expenses of approximately$143 thousand(2011:$179 thousand)of which approximately$1 thousand(2011:$13 thousand)is a non-cash expense for options granted to an investor relation

277、 firm for investor relation services.Share-Based Compensation Expense,Warrants and Stock Based Payments Share-based compensation expense,warrants and share-based payments totaled$59 thousand for the year ended December 31,2012,compared to$51 thousand for the year ended December 31,2011.We expensed a

278、pproximately$28 thousand in 2012 for options granted to our employees in 2010,2011 and 2012 under the 2006 Stock Option Plan,and approximately$23 thousand for options granted to non-employee directors in 2010 and 2011,compared with$28 thousand and$10 respectively that was expensed in the previous ye

279、ar.We also expensed$1 thousand in 2012 for options granted to investor relation firms for investor relation services,compared to$13 thousand that was expensed in 2011 and we expensed$7 thousand for options granted to consultants(2011:$Nil).There remains approximately$72 thousand in stock based compe

280、nsation to be expensed in fiscal 2013 and 2014,of which$55 thousand relates to the issuance of options to our employees and directors during 2011 and 2012 and$17 thousand relates to the issuance of options to consultants during 2012.We anticipate the issuance of additional options and warrants in th

281、e future,which will continue to result in stock-based compensation expense.22 Depreciation The depreciation expense for the year ended December 31,2012 totaled$46 thousand,compared with$37 thousand for the year ended December 31,2011.The increase primarily relates to the amortization of addition res

282、earch and development equipment that was purchased during 2012.Foreign Exchange A foreign exchange loss of approximately$41 thousand was recorded in the year ended December 31,2012 compared with a foreign exchange loss of$3 thousand in the previous year.The foreign exchange losses relate primarily t

283、o currency fluctuations between the Canadian dollar and the U.S.dollar.Net Loss The net loss for the year ended December 31,2012 was$2,250 thousand and represents an improvement of$202 thousand compared to the net loss of$2,452 thousand for the previous year.The main items resulting in the decrease

284、in net loss are summarized as follows:Key Items from the Balance Sheet Current Assets Current assets totaled$3,656 thousand at December 31,2012 compared with$4,296 thousand at December 31,2011.The decrease of$640 thousand is attributable to a decrease in cash of$1,446 thousand,a decrease in loan rec

285、eivable of$85 thousand,and a decrease in investment tax credits receivable of$162 thousand,partly offset by an increase in accounts receivable of$1,019 thousand and an increase in prepaid expenses of$34 thousand.Cash and cash equivalents totaled$2,059 thousand as at December 31,2012 representing a d

286、ecrease of$1,446 thousand compared to the balance of$3,505 thousand as at December 31,2011.The decrease in cash on hand relates to net cash used in operating activities of$1,638 thousand,together with net cash used in investing activities of$270 thousand,partly offset with net cash provided by finan

287、cing activities of$365 thousand and an unrealized foreign exchange gain of$97 thousand.Accounts receivable totaled$1,282 thousand(2011:$263 thousand)as at December 31,2012,of which approximately$146 thousand is a sales tax refund that we expect to receive in the first half of 2013.Included within th

288、e accounts receivable balance as at December 31,2012 is a$1 million milestone that was invoiced to Edgemont Pharmaceuticals in the fourth quarter of 2012 under the terms of our licensing partnership for the launch of Forfivo XL.Subsequent to the end of the fiscal year,we received payment against thi

289、s invoice in February 2013.23 a)An increase of$765 thousand in revenue,primarily related to the commercialization of Forfivo XL b)An increase in net R&D expenses of approximately$387 thousand,primarily related the timing of research and development project milestones c)An increase in management sala

290、ries of approximately$130 thousand,primarily related to the appointment of our business development director and an increase in directors fees d)An increase in foreign exchange loss of$38 thousand Percentage In U.S.$thousands 2012 2011 Increase/Increase/(Decrease)(Decrease)Current Assets$3,656$4,296

291、$(640)(15%)Leasehold Improvements and Equipment 387 149 238 160%Intangible Assets 116 125 (9)(7%)Current Liabilities 1,366 666 700 105%Deferred License Revenue 615 -615 N/A Capital Stock 0 0 0 0%Additional Paid-in-Capital 16,342 15,918 424 3%As of December 31,2012,prepaid expenses totaled$102 thousa

292、nd compared with$68 thousand as of December 31,2011.The increase in prepaid expenses relates to invoices paid prior to December 31,2012 that are associated with items to be expensed in fiscal 2013,which include the annual fee for our listing on the U.S.stock exchange,European patent expenses,a depos

293、it paid for attendance at a trade exhibition,and audit fees.An interest-bearing short term loan of$85 thousand was provided to an employee,who is also an officer of the Company,on November 9,2011.The loan was repaid on February 28,2012.In addition,we had R&D investment tax credits receivable of appr

294、oximately$213 thousand as at December 31,2012 compared with$375 thousand as at December 31,2011.The amount receivable as at December 31,2012 relates to credits accrued throughout fiscal 2012.We expect to receive reimbursement in the fourth quarter of 2013.The balance that was outstanding as at Decem

295、ber 31,2011 related to credits accrued throughout fiscal 2010 and fiscal 2011 of which$193 thousand was received in January 2012 and the balance of$182 thousand was received in November 2012.Leasehold Improvements and Equipment As at December 31,2012,the net book value of property and equipment amou

296、nted to$387 thousand,compared to$149 thousand at December 31,2011.In the year ended December 31,2012 additions to assets totaled$270 thousand and comprised$224 thousand for pilot plant manufacturing equipment for our VersaFilm products,$44 thousand for laboratory equipment,$1 thousand for furniture

297、and$1 thousand for computer equipment.Depreciation on Leasehold Improvements and equipment in the year ended December 31,2012 amounted to$37 thousand and a foreign exchange gain of$5 thousand was recorded.Intangible Assets As at December 31,2012 NDA acquisition costs of$116 thousand(December 31,2011

298、-$125 thousand)were recorded as intangible assets on our balance sheet and are related to the acquisition of 100%ownership of Forfivo XL.The asset will be amortized over its expected useful life and amortization commenced upon commercial launch of Forfivo XL in the fourth quarter of 2012.Current Lia

299、bilities Current liabilities totaled$1,366 thousand as at December 31,2012(December 31,2011-$666 thousand)and consisted of accounts payable and accrued liabilities of$1,058 thousand(December 31,2011-$666 thousand)as detailed above,and the current portion of deferred license revenue of$308 thousand(D

300、ecember 31,2011-$Nil).Accounts payable and accrued liabilities as at December 31,2012 amounted to$1,058 thousand(December 31,2011-$666 thousand),of which approximately$795 thousand relates to research and development activities,approximately$70 thousand relates to professional fees,and approximately

301、$165 thousand relates to accrued payroll liabilities.The increase in accounts payable and accrued liabilities as at December 31,2012,compared with December 31,2011,primarily relates to an invoice received for the technical transfer of manufacturing activities of Forfivo XL to our Contract Manufactur

302、ing Organization,Pillar5 Pharma,together with an invoice received from FDA related to Forfivo XL.Deferred License Revenue Pursuant to the execution of a licensing agreement for Forfivo XL,we received an upfront fee from Edgemont Pharmaceuticals in the first quarter of 2012,which we recognized as def

303、erred license revenue.The deferred license revenue will be amortized in income over the period where sales of Forfivo XL are expected to be exclusive.As a result of this policy,we have a deferred revenue balance of$923 thousand at December 31,2012 that has not been recognized as revenue,with$615 tho

304、usand recognized as the non-current portion and$308 thousand recognized in current assets as the current portion.24 Shareholders Equity As at December 31,2012 we had accumulated a deficit of$14,463 thousand compared with an accumulated deficit of$12,213 thousand as at December 31,2011.Total assets a

305、mounted to$4,159 thousand and shareholders equity totaled$2,178 thousand as at December 31,2012,compared with total assets and shareholders equity of$4,570 thousand and$3,904 thousand respectively,as at December 31,2011.Contractual Obligations and Commitments Excluding trade accounts payable and acc

306、rued liabilities,we are committed to the following contractual obligations and commitments:Capital Stock As at December 31,2012 capital stock amounted to$499 compared to$489 at December 31,2011.The increase reflects the issuance of 745,393 shares and 50,000 shares related to the exercise of warrants

307、 and stock options,respectively,with all shares issued at par value of$0.00001.Capital stock is disclosed at its par value with the excess of proceeds shown in Additional Paid-in-Capital.Additional Paid-in-Capital Additional paid-in capital totaled$16,342 thousand at December 31,2012,as compared to$

308、15,918 thousand at December 31,2011.The increase relates in part to$59 thousand for stock based compensation of which$1 thousand is attributable to the amortization of stock options granted to our investor relations consultants,$7 thousand is attributable to the amortization of stock options granted

309、 to other consultants,and$51 thousand is attributable to the amortization of stock options granted to employees and directors.Additional paid-in capital increased further by$337 thousand for warrants exercised,and by$28 thousand for options exercised.Key items from the Statement of Cash Flows Statem

310、ent of cash flows Net cash used by operating activities was$1,638 thousand in the year ended December 31,2012,compared to$2,316 thousand for the year ended December 31,2011.In fiscal 2012,net cash used by operating activities consisted of an operating loss of$2,145 thousand(2011-$2,311 thousand)and

311、an increase in non-cash operating elements of working capital of$507 thousand compared with a decrease of$5 thousand in 2011.Operating activities will continue to consume our available funds until we are able to generate increased revenues.The net cash provided by financing activities was$365 thousa

312、nd in fiscal 2012,compared to$4,780 thousand provided in the previous year.The net cash provided in 2012 resulted from proceeds of$337 thousand from the exercise of warrants and a further$28 thousand from the exercise of options.Of the net cash provided by financing activities in the previous year,$

313、3,230 thousand came from a private placement completed in the second quarter of 2011,less$369 thousand used to pay related transaction costs,plus proceeds of$1,600 thousand from the exercise of warrants and a further$319 thousand from the exercise of options.25 In U.S.$thousands 2013 (Less than 1 Ye

314、ar)1 Year or More Operating Lease Obligations$15$0 Investor Relations$5$0 Total$20$0 Percentage In U.S.$thousands 2012 2011 Increase/Increase/(Decrease)(Decrease)Operating Activities$(1,638)$(2,316)$(678)(29%)Financing Activities 365 4,780 (4,415)(92%)Investing Activities (270)(159)111 70%Cash and c

315、ash equivalents end of period 2,059 3,505 (1,446)(41%)Net cash used in investing activities amounted to$270 thousand in the year ended December 31,2012 compared to$159 thousand in the year ended December 31,201.The net cash used in investing activities in 2012 relates exclusively to the purchase of

316、fixed assets and comprised$224 thousand for pilot plant manufacturing equipment for our VersaFilm products,$44 thousand for laboratory equipment,$1 thousand for furniture and$1 thousand for computer equipment.Included within the use of funds in 2011 are intangible assets of approximately$125 thousan

317、d related to the acquisition of 100%ownership of Forfivo XL,our novel,high strength formulation of Bupropion HCl the active ingredient in Wellbutrin XL indicated for the treatment of patients with Major Depressive Disorder.The balance of cash and cash equivalents as at December 31,2012 amounted to$2

318、,059 thousand,compared to$3,505 thousand at December 31,2011.Off-Balance Sheet Arrangements We have no off-balance sheet arrangements as contemplated by SK 229 303(A)(4)(ii).ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.Not applicable.ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTAR

319、Y DATA The consolidated financial statements and supplementary data of the Company required in this item are set forth beginning on page F-1 of this Annual Report on Form 10-K.ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.ITEM 9A.CONTROLS AND PROCED

320、URES a.Evaluation of Disclosure Controls and Procedures Based on an evaluation under the supervision and with the participation of our management,our Chief Executive Officer and Chief Financial Officer have concluded that the Companys disclosure controls and procedures as defined in Rules 13a-15(e)a

321、nd 15d-15(e)under the Securities Exchange Act of 1934,as amended(the“Exchange Act”)were effective as of December 31,2012 to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is(i)recorded,processed,summarized and reported withi

322、n the time periods specified in the SEC rules and forms and(ii)accumulated and communicated to the Companys management,including our Chief Executive Officer and Chief Financial Officer,as appropriate to allow timely decisions regarding required disclosure.b.Changes in Internal Controls over Financia

323、l Reporting Our Chief Executive Officer and Chief Financial Officer have concluded that there were no changes in the Companys internal controls over financial reporting during the quarter ended December 31,2012 that have materially affected or are reasonably likely to materially affect the Companys

324、internal controls over financial reporting.26 c.Managements Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting,as such term is defined in Exchange Act Rule 13a-15(f).Our internal contro

325、l system was designed to provide reasonable assurance to our management and the Board of Directors regarding the preparation and fair presentation of published financial statements.All internal control systems,no matter how well designed,have inherent limitations.Therefore,even those systems determi

326、ned to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.Our management,including the Chief Executive Officer and Chief Financial Officer,assessed the effectiveness of the Companys internal control over financial reporting as of Decem

327、ber 31,2012.In making this assessment,our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission(COSO)in Internal ControlIntegrated Framework.Based on this assessment,we believe that,as of December 31,2012,our internal control over financial re

328、porting was effective based on those criteria.This Annual Report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting.Managements report was not subject to attestation by the companys registered public accounting firm pur

329、suant to rules of the SEC that permit the Company to provide only managements report in this Annual Report.ITEM 9B.OTHER INFORMATION None.PART III ITEM 10.DIRECTORS,EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Certain information required by this Item 10 relating to our directors,executive officers,a

330、udit committee and corporate governance is incorporated by reference herein from the 2013 Proxy Statement.We have adopted a Code of Business Conduct and Ethics that applies to our directors and officers,including our principal executive officer,principal financial officer and principal accounting of

331、ficer.The Code of Business Conduct and Ethics is posted on our website at http:/.We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding an amendment to,or waiver from,a provision of our Code of Business Conduct and Ethics by posting such information on our website at t

332、he web address specified above.ITEM 11.EXECUTIVE COMPENSATION Certain information required by this Item 11 relating to remuneration of directors and executive officers and other transactions involving management is incorporated by reference herein from the 2013 Proxy Statement.ITEM 12.SECURITY OWNER

333、SHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS Certain information required by this Item 12 relating to security ownership of certain beneficial owners and management,and the equity compensation plan information,is incorporated by reference herein from the 2013 Proxy Statement.ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,AND DIRECTOR INDEPENDENCE Certain