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1、UNITEDSTATESSECURITIESANDEXCHANGECOMMISSIONWashington,D.C.20549FORM10-K ANNUALREPORTPURSUANTTOSECTION13OR15(d)OFTHESECURITIESEXCHANGEACTOF1934ForthefiscalyearendedDecember31,2016 TRANSITIONREPORTPURSUANTTOSECTION13OR15(d)OFTHESECURITIESEXCHANGEACTOF1934Forthetransitionperiodfrom_to_CommissionFileNum
2、ber:000-31187IntelGenxTechnologiesCorp.(Exact name of registrant as specified in its charter)Delaware87-0638336(State or other jurisdiction of incorporation or organization)(I.R.S.Employer Identification No.)6420Abrams,VilleSaint-Laurent,QuebecH4S1Y2 (Address of principal executive offices)(Zip Code
3、)(514)331-7440(Registrants telephone number,including area code)Securities registered pursuant to Section 12(b)of the Act:NoneSecurities registered pursuant to Section 12(g)of the Act:CommonStock,$0.00001parvaluepershareIndicate by check mark if the registrant is a well-known seasoned issuer,as defi
4、ned in Rule 405 of the Securities Act.Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d)of the Act.Yes No Indicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Secur
5、ities Exchange Act of 1934during the preceding 12 months(or for such shorter period that the registrant was required to file such reports),and(2)has been subject to such filing requirementsfor the past 90 days.Yes No Indicate by check mark whether the registrant has submitted electronically and post
6、ed on its corporate Web site,if any,every Interactive Data File requiredto be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months(or for such shorter period that the registrant was required tosubmit and post such files).Yes No Indicate by check mark if disclosu
7、re of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein,and will not be contained,to thebest of registrants knowledge,in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form10-K.Indicate by che
8、ck mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,or a smaller reporting company.Seethe definitions of“large accelerated filer,”“accelerated filer,”and“smaller reporting company”in Rule 12b-2 of the Exchange Act.(Check one):Large accelerated fil
9、er Accelerated filer Non-accelerated filer Smaller reporting company (Do not check if a smaller reportingcompany)Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Act).Yes No As of June 30,2016,the aggregate market value of the registrants voting and no
10、n-voting common equity held by non-affiliates of the registrant was$26,564,328 based on the closing price of the registrants common shares of U.S.$0.50,as reported on the OTCQX on that date.Shares of the registrants commonshares held by each officer and director and each person who owns 10%or more o
11、f the outstanding common shares of the registrant have been excluded in thatsuch persons may be deemed to be affiliates.This determination of affiliate status is not necessarily a conclusive determination for other purposes.Indicate the number of shares outstanding of each of the registrants classes
12、 of common stock,as of the latest practicable date.ClassOutstandingatMarch23,2017Common Stock,$.00001 par value65,422,021 sharesDOCUMENTSINCORPORATEDBYREFERENCE:Portions of the Companys Proxy Statement for its 2017 Annual Meeting of Shareholders(the“2017 Proxy Statement”)are incorporated by referenc
13、e into Part III2TABLEOFCONTENTS PagePARTI Item 1.Business.4Item 1ARisk Factors.14Item 1BUnresolved Staff Comments.24Item 2.Properties.24Item 3.Legal Proceedings.24Item 4.Mine Safety Disclosures.25 PARTII Item 5.Market for Registrants Common Equity,Related Stockholder Matters and Issuer Purchases of
14、Equity Securities.26Item 6Selected Financial Data.27Item 7.Managements Discussion and Analysis of Financial Condition and Results of Operations.27Item 7AQuantitative and Qualitative Disclosures About Market Risk.36Item 8.Financial Statements and Supplementary Data.36Item 9.Changes in and Disagreemen
15、ts with Accountants on Accounting and Financial Disclosure.36Item 9A.Controls and Procedures.36Item 9B.Other Information.37PARTIII Item 10.Directors,Executive Officers,and Corporate Governance.37Item 11.Executive Compensation.37Item 12.Security Ownership of Certain Beneficial Owners and Management a
16、nd Related Stockholder Matters.37Item 13.Certain Relationships and Related Transactions,and Director Independence.37 PARTIV Item 15.Exhibits,Financial Statement Schedules36Item 16Form 10-K Summary Page39 Financial StatementsF-1-F-30Terminology and references In this Annual Report on Form 10-K,the wo
17、rds“Company”,“IntelGenx”,“we”,“us”,and“our”,refer collectively to IntelGenx Technologies Corp.and IntelGenxCorp.,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”m
18、eanU.S.dollars and all references to“C$”,“Canadian dollars”and“CA$”mean Canadian dollars.To the extent that such monetary amounts are derived from ourconsolidated financial statements included elsewhere in this Form 10-K,they have been translated into U.S.dollars in accordance with our accounting po
19、licies asdescribed therein.Unless otherwise indicated,other Canadian dollar monetary amounts have been translated into United States dollars at the December 31,2016closing rate reported by the Bank of Canada,being U.S.$1.00=CA$1.3256.3PARTICautionaryStatementConcerningForward-LookingStatementsCertai
20、n statements included or incorporated by reference in this report constitute forward-looking statements within the meaning of applicable securities laws.Allstatements contained in this report that are not clearly historical in nature are forward-looking,and the words“anticipate”,“believe”,“continue”
21、,“expect”,“estimate”,“intend”,“may”,“plan”,“will”,“shall”and other similar expressions are generally intended to identify forward-looking statements within the meaningof Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.All forward-looking statements ar
22、e based on our beliefs andassumptions based on information available at the time the assumption was made.These forward-looking statements are not based on historical facts but onmanagements expectations regarding future growth,results of operations,performance,future capital and other expenditures(i
23、ncluding the amount,nature andsources of funding thereof),competitive advantages,business prospects and opportunities.Forward-looking statements involve significant known and unknownrisks,uncertainties,assumptions and other factors that may cause our actual results,levels of activity,performance or
24、achievements to differ materially from thoseimplied by forward-looking statements.These factors should be considered carefully and prospective investors should not place undue reliance on the forward-looking statements.Although the forward-looking statements contained in this report or incorporated
25、by reference herein are based upon what managementbelieves to be reasonable assumptions,there is no assurance that actual results will be consistent with these forward-looking statements.These forward-lookingstatements are made as of the date of this report or as of the date specified in the documen
26、ts incorporated by reference herein,as the case may be.Weundertakenoobligationtoupdateanyforward-lookingstatementstoreflecteventsorcircumstancesafterthedateonwhichsuchstatementsweremadeortoreflecttheoccurrenceofunanticipatedevents,exceptasmayberequiredbyapplicablesecuritieslaws.The factors set forth
27、 in Item 1A.,Risk Factors,as well asany cautionary language in this report,provide examples of risks,uncertainties and events that may cause our actual results to differ materially from theexpectations we describe in our forward-looking statements.Before you invest in the common stock,you should be
28、aware that the occurrence of the eventsdescribed as risk factors and elsewhere in this report could have a material adverse effect on our business,operating results and financial condition.ITEM1.BUSINESS.CorporateHistoryOur predecessor company,Big Flash Corp.,was incorporated in Delaware on July 27,
29、1999.On April 28,2006,Big Flash,through its Canadian holdingcorporation,completed the acquisition of IntelGenx Corp.,a Canadian company incorporated on June 15,2003.The Company did not have any operations prior tothe acquisition of IntelGenx Corp.In connection with the acquisition,we changed our nam
30、e from Big Flash Corp.to IntelGenx Technologies Corp.IntelGenxCorp.has continued operations as our operating subsidiary.OverviewWe 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 controlle
31、d-release products for the pharmaceutical market.More recently,we have made the strategic decision to enter the oral film market and are inthe process of implementing commercial oral film manufacturing capability.This enables us to offer our partners a comprehensive portfolio of pharmaceuticalservic
32、es,including pharmaceutical R&D,clinical monitoring,regulatory support,tech transfer and manufacturing scale-up,and commercial manufacturing.Our business strategy is to develop pharmaceutical products based on our proprietary drug delivery technologies and,once the viability of a product has beendem
33、onstrated,to license the commercial rights to partners in the pharmaceutical industry.In certain cases,we rely upon partners in the pharmaceutical industry tofund development of the licensed products,complete the regulatory approval process with the U.S.Food and Drug Administration(“FDA”)or other re
34、gulatoryagencies relating to the licensed products,and assume responsibility for marketing and distributing such products.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 potentialfor successful
35、development of a product and associated costs,and then determine at which stage it is most prudent to seek a partner,balancing such costs againstthe potential for additional returns earned by partnering later in the development process.Managing our project pipeline is a key success factor for the Co
36、mpany.We have undertaken a strategy under which we will work with pharmaceutical companiesin order to apply our oral film technology to pharmaceutical products for which patent protection is nearing expiration,a strategy which is often referred to as“lifecycle management”.Under(505)(b)(2)of the Food
37、,Drug,and Cosmetics Act,the FDA may grant market exclusivity for a term of up to three years ofexclusivity following approval of a listed drug that contains previously approved active ingredients but is approved in a new dosage,dosage form,route ofadministration or combination.4The 505(b)(2)pathway
38、is also the regulatory approach to be followed if an applicant intends to file an application for a product containing a drug that is alreadyapproved by the FDA for a certain indication and for which the applicant is seeking approval for a new indication or for a new use,the approval of which isrequ
39、ired to be supported by new clinical trials,other than bioavailability studies.We have implemented a strategy under which we actively look for such so-called“repurposing opportunities”and determine whether our proprietary VersaFilm technology adds value to the product.We currently have two such drug
40、repurposing projects in our development pipeline.We continue to develop the existing products in our pipeline and may also perform research and development on other potential products as opportunities arise.We have established a state-of-the-art manufacturing facility with the intent to manufacture
41、all our VersaFilm products in-house as we believe that this:1)represents a profitable business opportunity,2)will reduce our dependency upon third-party contract manufacturers,thereby protecting our manufacturing process know-how and intellectualproperty,and 3)allows us to offer our clients and deve
42、lopment partners a full service from product conception through to supply of the finished product.TechnologyPlatformsOur product development efforts are based upon three delivery platform technologies:(1)VersaFilm,an Oral Film technology,(2)VersaTab,a MultilayerTablet technology,and(3)AdVersa,a Muco
43、adhesive Tablet technology.VersaFilm is a drug delivery platform technology that enables the development of oral thin films,improving product performance:Rapid disintegration without the need for water;Quicker buccal or sublingual absorption;Potential for faster onset of action and increased bioavai
44、lability;Potential for reduced adverse effects by bypassing first-pass metabolism;Easy administration for patients who have problems in swallowing:pediatric,geriatric,fear choking and/or suffering from nausea(e.g.,nausearesulting from chemotherapy,radiotherapy or any surgical treatment);Pleasant tas
45、te;Small and thin size,making it convenient for consumers.Our VersaFilm technology consists of a thin(25-35 micron)polymeric film comprised of United States Pharmacopeia(USP)components that are approved bythe FDA for use in food,pharmaceutical,and cosmetic products.Derived from the edible film techn
46、ology used for breath strips and initially developed for theinstant delivery of savory flavors to food substrates,the VersaFilm technology is designed to provide a rapid response compared to existing conventional tablets.Our VersaFilm technology is intended for indications requiring rapid onset of a
47、ction,such as migraine,opioid dependence,chronic pain,motion sickness,erectile dysfunction,and nausea.Our VersaTab platform technology allows for the development of oral controlled-release products.It is designed to be versatile and to reduce manufacturingcosts as compared to competing oral extended
48、-release delivery technologies.Our VersaFilm technology allows for the instant delivery of pharmaceuticals to theoral cavity,while our AdVersa allows for the controlled release of active substances to the oral mucosa.Our VersaTab technology represents a new generation of controlled release layered t
49、ablets designed to modulate the release of active compounds.Thetechnology 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 ina first-order fashion.As the cover layers start to erode,their permeabi
50、lity for the active ingredient through the cover layers increases.Thus,the Multilayer Tabletcan 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 becustomized according to the physico-chemical properties
51、of the active drug.In addition,our multilayer technology offers the opportunity to develop combinationproducts in a regulatory-compliant format.Combination products are made up of two or more active ingredients that are combined into a single dosage form.5Our Mucoadhesive Tablet is a drug delivery s
52、ystem capable of adhering to the oral mucosa and releasing 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 livermetabolizes the active
53、ingredient and greatly reduces the level of drug reaching the systemic circulation,(ii)it leads to a higher absorption rate in the oral cavity ascompared to the conventional oral route,and(iii)it achieves a rapid onset of action for the drug.Our AdVersa technology is designed to be versatile in orde
54、r topermit the site of application,residence time,and rate of release of the drug to be modulated to achieve the desired results.ProductPortfolioOur product portfolio includes a blend of generic and branded products based on our proprietary delivery technology(“generic”products are essentially copie
55、s ofproducts that have already received FDA approval).Of the fourteen projects currently in our product portfolio,three utilize our VersaTab technology,ten utilizeour VersaFilm technology,and one utilizes our AdVersa technology.INT0001/2004:This is the most advanced generic product involving our mul
56、tilayer tablet technology.Equivalency with the reference product Toprol XL and itsEuropean equivalent Beloc-ZOK has been demonstrated in-vitro.The product has been tested in phase I studies.In November 2016 we entered into a Licenseand Development Agreement with Chemo Group to advance the commercial
57、ization of our Versa Tab product.The manufacturing technology transfer to Chemois currently ongoing.INT0004/2006:We developed a new,higher strength of the antidepressant Bupropion HCl,the active ingredient in Wellbutrin XL ,and,in November 2011,theFDA approved the drug for patients with Major Depres
58、sive Disorder.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 agreement,Edgemont obtained certain exclusive rights to marketand sell the product in the U.S.In exchange we recei
59、ved a$1.0 million upfront payment,received launch related milestones totaling up to$4.0 million,and areeligible for additional milestones of up to a further$23.5 million upon achieving certain sales and exclusivity targets.We also receive tiered double-digit royaltieson the net sales of the product.
60、The agreement has no expiry date but may be terminated in the event of,without limitation(i)failure by either us or Edgemont toperform our respective obligations under the agreement;(ii)if either party files a petition for bankruptcy or insolvency or otherwise winds up,liquidates ordissolves its bus
61、iness,or(iii)otherwise by mutual consent of the parties.The agreement also contains customary confidentiality,indemnification and intellectualproperty protection provisions.The product was launched in the U.S.in October 2012 under the brand name Forfivo XL .As of December 31,2015 we had received an
62、upfront payment of$1million and a$1 million milestone payment related to the launch.The commercialization of Forfivo XL triggered a launch-related milestone payment of$3million from IntelGenx licensing partner Edgemont due to Edgemont reaching in July 2015,$7 million of cumulative net trade sales of
63、 Forfivo XL over thepreceding 12 months.From that$3 million milestone payment,$1 million was received in Q3 2015.Of the remaining balance of$2 million,$1 million wasreceived in Q4 2015 and$1 million was received in Q1 2016.We commenced receiving royalty payments in the first quarter of 2013.We recor
64、ded$433 thousandfor the cost of royalty and license revenue in the twelve-month period ended December 31,2015 compared with$61 in the same period of 2014.In August 2013,we announced receipt of a Paragraph IV Certification Letter from Wockhardt Bio AG,advising of the submission of an Abbreviated New
65、DrugApplication(ANDA)to the FDA requesting authorization to manufacture and market generic versions of Forfivo XL 450 mg tablets in the U.S.In November2014 we announced that the Paragraph IV litigation with Wockhardt had been settled and that,under the terms of the settlement,Wockhardt has been gran
66、ted theright,with effect from January 15,2018,to be the exclusive marketer and distributor of an authorized generic of Forfivo XL in the U.S.In December 2014 we announced that Edgemont had exercised its right to extend the license for the exclusive marketing of Forfivo XL 450 mg tablets.Inexchange,w
67、e received milestone payments of$650 thousand in December 2014 and$600 thousand in February 2015.All other financial obligations contained inthe license agreement entered into by Edgemont and IntelGenx in February 2012,specifically launch-related and sales milestones,together with the contractualroy
68、alty rates on net sales of the product,remained in effect.On August 5 th,2016,we announced that we had sold our U.S.royalty on future sales of Forfivo XL to SWK Holdings Corporation(SWK)for$6 million(CAD$8 million).Forfivo XL (Bupropion extended-release)is the first 450 mg bupropion HCl tablet indic
69、ated for Major Depressive Disorder,approved by theFDA.As per terms of the agreement,we received$6 million from SKW at closing.In return for,(i)100%of any and all royalties(as defined in the EdgemontPharmaceuticals,LLC License Agreement)or similar royalty amounts received on or after April 1,2016,(ii
70、)100%of the$2 million milestone payment uponEdgemont reaching annual net sales of$15 million,and(iii)35%of all potential future milestone payments.Patent protection for Forfivo XL in the United Statesexpires in 2027 with an authorized generic entering the market in January 2018.6SWK is a specialized
71、 finance company with a focus on the global healthcare sector.SWK partners with ethical product marketers and royalty holders to provideflexible financing solutions at an attractive cost of capital to create long-term value for both SWKs business partners and its investors.INT0007/2006:We are develo
72、ping an oral film product based on our VersaFilm technology containing the active ingredient Tadalafil.The product is intendedfor the treatment of erectile dysfunction(ED).The results of a phase I pilot study that was conducted in the second quarter of 2015 confirmed that the product isbioequivalent
73、 with the brand product,Cialis .We are currently manufacturing submission batches that are intended to support a 505(b)(2)NDA filing with theFDA with a target submission date of about mid-2017 and a PDUFA date expected to be approximately mid-2018.On November 21,2016,we announced the signing of a bi
74、nding term sheet for a license to Eli Lilly and Companys tadalafil dosing patent,United States Patent No.6,943,166(the 166 dosing patent).Any exclusivity associated with the tadalafil compound patent is not affected by this agreement.Subject to FDA approval,this license allows us to commercialize a
75、Tadalafil ED VersaFilm product in the U.S.prior to the expiration of the 166 dosing patent.This license terminates all our current tadalafil-related litigation activities.We are currently actively seeking a partner for the commercialization of our Tadalafil ED VersaFilm product.INT0008/2007:We devel
76、oped this oral film product based on our VersaFilm technology.In March 2013 we submitted a 505(b)(2)new drug application(“NDA”)to the FDA for our novel oral thin-film formulation of Rizatriptan,the active drug in Maxalt-MLT orally disintegrating tablets.Maxalt-MLT is aleading branded anti-migraine p
77、roduct marketed by Merck&Co.The thin-film formulation of Rizatriptan was developed in accordance with a co-development andcommercialization agreement with RedHill Biopharma Ltd.(“RedHill”).The product uses our proprietary immediate release VersaFilm oral drug deliverytechnology.In December 2011,we r
78、eceived approval by Health Canada to conduct a pivotal bioequivalence study to determine if our product is safe andbioequivalent 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 health
79、y male and female subjects.The study results indicate that the product is safe,and that the 90%confidence intervals of the threerelevant parameters Cmax,AUC(0-t)and AUC(0-infinity)are well within the 80 125 acceptance range for bioequivalency.In June 2013 the FDA assigned a Prescription Drug User Fe
80、e Act(“PDUFA”)action date of February 3,2014 for the review of the NDA for marketing approvaland in February 2014 we received a Complete Response Letter(“CRL”)from the FDA informing us that certain questions and deficiencies remain that preclude theapproval of the application in its present form.The
81、 questions raised by the FDA in the CRL regarding the NDA for our anti-migraine VersaFilm productprimarily relate to third party Chemistry,Manufacturing and Controls(“CMC”)and to the packaging and labeling of the product.No questions or deficiencies wereraised relating to the products safety and the
82、 FDAs CRL does not require additional clinical studies.In March 2014 we submitted our response to the FDAs CRL and in April,2014 the FDA requested additional CMC data.We also reported that the supplier of theactive pharmaceutical ingredient(“API”)of the product has been issued with an“Import Alert”b
83、y the FDA.The Import Alert bans the import into the USA of allraw materials from the suppliers manufacturing facility,which therefore prohibits the import of any products using these raw materials,and effectively preventsour VersaFilm product from being approved by the FDA.We have identified a new s
84、ource of API which is currently used to manufacture new submission lots tosupport the re-submission of the NDA filing in mid 2017 with PDUFA date expected by early 2018.In October 2014 we announced the submission of a Marketing Authorization Application(“MAA”)to the German Federal Institute for Drug
85、s and Medical Devices(“BfArM”)seeking European marketing approval of our oral thin film formulation of Rizatriptan for acute migraines,under the brand name RIZAPORT .Thebrand name RIZAPORT was also conditionally approved by the FDA as part of the NDA review process in the U.S.The MAA was submitted u
86、nder theEuropean Decentralized Procedure(DCP)with Germany as the reference member state.The submission is supported by several studies,including a comparativebioavailability study which successfully established the bioequivalence between RIZAPORT and the European reference drug.BfArM validated the M
87、AA andinitiated the formal review process of the application on November 25,2014.BfArM granted national marketing approval on November 9,2015 for RIZAPORT under the DCP.On September 10,2015 we announced the positive outcome of the DCP confirming that RIZAPORT is approvable in Europe.The announcement
88、 followed theissuance of the Final Assessment Report from the Reference Member State(RMS),the Federal Institute for Drugs and Medical Devices of Germany(BfArM),andthe agreement of all the Concerned Member States(CMS)in DCP that RIZAPORT is approvable.With the decision,the regulatory process entered
89、its finalphase known as the national licensing phase during which the National Agencies in the individual countries will issue the marketing licenses that allowRIZAPORT to be marketed in each country.7On November 9,2015 we announced that the Federal Institute for Drugs and Medical Devices of Germany
90、(BfArM)has granted marketing authorization ofRIZAPORT 5mg and 10mg,an oral thin film formulation of rizatriptan benzoate for the treatment of acute migraines.The national approval of RIZAPORT inGermany was granted under the European Decentralized Procedure(DCP),in which Germany served as the Referen
91、ce Member State.This authorization was thefirst national marketing approval of RIZAPORT.Marketing authorization in Luxemburg,the Concerned Member State,is expected to follow.IntelGenx andRedHill intend to continue to work together to obtain national phase approvals in other European DCP territories.
92、On February 18,2016,we announced that the USPTO had granted a patent protecting Rizaport,an oral thin film formulation of rizatriptan benzoate for thetreatment of acute migraines.This patent protects the composition of Rizaport and will be listed in the Orange Book upon approval of the product by th
93、e FDA.The patent application,entitled Instantly Wettable Oral Film Dosage Form Without Surfactant or Polyalcohol covers rapidly disintegrating film oral dosageforms and is valid until 2034.On July 5,2016,we announced the signing of the definitive agreement with Grupo Juste S.A.Q.F.(now Exeltis Healt
94、hcare,S.L.(“Exeltis”)for thecommercialization of RIZAPORT,our proprietary oral thin film for the treatment of acute migraines,in the country of Spain.All commercial manufacturing ofRIZAPORT will take place at our new state-of-the-art manufacturing facility in Canada.Grupo Juste(Exeltis)is a prominen
95、t private Spanish company with over90 years of experience in the research,development and commercialization of proprietary pharmaceutical products,including migraine and other central nervoussystem drugs,in Europe,Latin America and other territories.According to the definitive agreement,Grupo Juste(
96、Exeltis)has obtained exclusive rights to register,promote and distribute RIZAPORT in Spain.In exchange,we and Redhill Biopharma will receive upfront and milestone payments,together with a share of the net sales of RIZAPORT.Commercial launch in Spain isestimated to take place in the second half of 20
97、17.The initial term of the definitive agreement shall be for ten years from the date of first commercial sale of theproduct and shall automatically renew for one additional two-year term.Through our partner Grupo Juste(Exeltis),the product was submitted in Spain in September 2016 for approval using
98、a decentralized procedure.Approval in Spainis currently expected for Q4 2017.On December 14,2016,we,together with our partner RedHill,announced the signing of an exclusive license agreement with Pharmatronic Co.for thecommercialization of RIZAPORT in the Republic of Korea(South Korea).Under the term
99、s of the agreement,RedHill granted Pharmatronic Co.the exclusiverights to register and commercialize RIZAPORT in South Korea.IntelGenx and RedHill have received an upfront payment and will be eligible to receiveadditional milestone payments upon achievement of certain predefined regulatory and comme
100、rcial targets,as well as tiered royalties.The initial term of thedefinitive agreement with Pharmatronic Co.is for ten years from the date of first commercial sale and shall automatically renew for an additional two-year term.Commercial launch in South Korea is estimated to take place in the first qu
101、arter of 2019.INT0010/2006:We initially entered into an agreement with Cynapsus Therapeutics Inc.(formerly Cannasat Therapeutics Inc.,“Cynapsus”)for the developmentof a buccal muco-adhesive tablet product containing a cannabinoid-based drug for the treatment of neuropathic pain and nausea in cancer
102、patients undergoingchemotherapy.In 2009,we completed a clinical biostudy on the muco-adhesive tablet we developed which is based on our proprietary AdVersa technology.Thestudy results indicated improved bioavailability and reduced first-pass metabolization of the drug.In the fourth quarter of 2010,w
103、e acquired from Cynapsus fullcontrol of,and interest in,this project going forward.We also obtained worldwide rights to U.S.Patent 7,592,328 and all corresponding foreign patents and patentapplications to exclusively develop and further provide intellectual property protection for this project.Subse
104、quent to the 2016 fiscal year end,on February 9,2017,we announced the signing of a binding term sheet with Tetra Bio-Pharma Inc.(“Tetra”)for the development and commercialization of a drug product containingdronabinol.Under the binding term sheet,Tetra will have exclusive rights to sell the product
105、in North America with a right of first negotiation for outside the U.S.and Canada.As per the Binding Term Sheet,we received a non-refundable exclusive negotiation payment from Tetra.We will also be entitled to receive an upfront paymentalong with set milestone payments based on the completion of an
106、efficacy study,approvals from FDA and Health Canada and launching of the product.We will be responsible for the research and development of the product,including optimization of the prototype,scale-up activities and preparation of a phase IIproof of concept clinical study and will develop the produc
107、t as an oral mucoadhesive tablet based on our proprietary AdVersa controlled-release technology.Tetra will be responsible for funding the product development,and will own and control all regulatory approvals,including the application and any other marketingauthorizations.Tetra will also be responsib
108、le for all aspects of commercializing the drug product.INT0027/2011:We developed this oral film product based on our VersaFilm technology.In accordance with a co-development and commercializationagreement with Par Pharmaceutical Companies,Inc.(“Par”),we developed an oral film product based on our pr
109、oprietary VersaFilm technology.The product is ageneric formulation of buprenorphine and naloxone Sublingual Film,indicated for the treatment of opioid dependence.A bioequivalent film formulation wasdeveloped,scaled-up,and pivotal batches manufactured and tested during a subsequent pivotal clinical s
110、tudy.An ANDA was filed with the FDA by Par in July2013.8In August 2013 we were notified that,in response to filing of the ANDA,we were named as a codefendant in a lawsuit pursuant to Paragraph IV litigation filed byReckitt Benckiser Pharmaceuticals and Monosol RX in the U.S.District Court for the Di
111、strict of Delaware alleging infringement of U.S.Patent Nos.8,475,832,8,603,514 and 8,017,150,each of which relate to Suboxone .We believe the ANDA product does not infringe those or any other patents,and will vigorouslydefend ourselves in this matter.In accordance with the terms of the co-developmen
112、t and commercialization agreement,Par is financially responsible for the costs ofthis defense.Since Paragraph IV litigation is a regular part of the ANDA process,we do not expect any unanticipated impact on our already planned developmentschedule.In June 2016,an opinion from the district court was o
113、btained on the validity and infringement of the 3 orange book patents.The court ruled that theproduct is not infringing on two out of the three patents.Subsequently,appeals were filed by both parties.In December 2014,Reckitt Benckiser Pharmaceuticals and Monosol RX filed a lawsuit for patent infring
114、ement in the U.S.District Court for the District ofDelaware relating to the Suboxone ANDA product.We were named as a codefendant in this action alleging patent infringement United States Patent Nos.8,900,497(“the 497 patent”)and 8,906,277(“the 277 patent”),each of which relate to a process for makin
115、g a uniform oral film(“the process patents”).The trialfor the process patents was held in November 2016.We believe the ANDA product relating to Suboxone does not infringe those process patents or any otherpatents,and will vigorously defend ourselves in this matter.In accordance with the terms of the
116、 co-development and commercialization agreement,Par isfinancially responsible for the costs of this defense.On July 11,2016,the Company announced the receipt of the notice of appeal for the buprenorphine/naloxone sublingual film product for the treatment of opiateaddiction by Par and the Company to
117、the United States Court of Appeals for the Federal Circuit from the final judgment issued by the U.S.District Court for theDistrict of Delaware on June 28,2016.The ruling in the U.S.District Court of Delaware in the ANDA litigation of Par and the Company against Indivior PLC and Monosol Rx,LLC resul
118、ted in Par andthe Company prevailing on the non-infringement of the U.S.Patent No.8,017,150,which is set to expire in 2023,and on the invalidity(all claims)and non-infringement(certain claims)of the U.S.Patent No.8,475,832,which is set to expire in 2030.The Court also ruled that Pars ANDA product wo
119、uld infringe theasserted claims of U.S.Patent No.8,603,514,one of the Orange Book listed patents for Suboxone Film,and that the asserted claims of U.S.Patent No.8,603,514were not shown to be invalid.Subsequent to year end,in late January 2017 we received a CRL from the FDA requesting more informatio
120、n on the APIs and the finished product.INT0036/2013:Loxapine is for the treatment of anxiety and aggression in patients suffering from schizophrenia or bipolar 1 disorder.Loxapine oral film willutilize the companys proprietary VersaFilm technology,allowing for an improved product to offer patients s
121、ignificant therapeutic benefits compared to existingmedications.A fast acting loxapine oral film dosage form that can be used to effectively treat acute agitation associated with schizophrenia or bipolar 1 disorder innon-institutionalized patients while reducing the risk of pulmonary problems is nee
122、ded as it could substantially reduce the potential risks of violence and injury topatients and others by preventing or reducing the duration and severity of an episode of acute agitation.Our first clinical study on this product,completed in Q42014,suggested improved bioavailability compared to the c
123、urrently approved tablet.In late 2015 we completed a second pilot clinical study which demonstratedthat buccal absorption of the drug from the loxapine oral film results in a significantly higher bioavailability of the drug compared to oral tablets.We are currentlyoptimizing the film to further impr
124、ove time to reach peak plasma concentrations.On February 10,2016,we announced the submission of the patent application with the U.S.patent office for an oral film dosage form containing Loxapine for thetreatment of anxiety and aggression in patients suffering from schizophrenia or bipolar 1 disorder
125、.INT0037/2013:A product based on one of our proprietary technologies has been developed and we are currently preparing submission batches in support of amarketing application to the FDA.The product was being developed in accordance with another development and commercialization agreement with ParPha
126、rmaceutical,Inc.On September 18,2015,Par was acquired by Endo International plc.As a result of this acquisition,there was a conflict for Par to remain asthe partner for these products.As such,the product was returned to the Company with full rights and no requirement for any compensation for work pa
127、id by Par.We continue to work closely with Par on the opioid dependence product and are pleased the relationship is on excellent terms.On September 12,2016,we announced that we had entered into a licensing,development and supply agreement with Chemo Group(“Chemo”)granting Chemo theexclusive license
128、to commercialize two generic products for the USA market and one product on a worldwide basis.Under the terms of the agreement,Chemo hasobtained certain exclusive rights to market and sell our products in exchange for upfront and milestone payments,together with a share of the profits ofcommercializ
129、ation.Chemo also has a right of first negotiation to obtain the exclusive commercialization rights for two of the products to include any countryoutside the USA.Preparation of Scale-up activities for the product are currently ongoing.9INT0039/2013:A product based on one of our proprietary technologi
130、es has complete development and phase I clinical trial with positive data.The product wasbeing developed in accordance with another development and commercialization agreement with Par Pharmaceutical,Inc.On September 18,2015,Par wasacquired by Endo International plc.As a result of this acquisition,t
131、here was a conflict for Par to remain as the partner for this product.As such,the product wasreturned to the Company with full rights and no requirement for any compensation for work paid by Par.We continue to work closely with Par on the opioiddependence product and are pleased the relationship is
132、on excellent terms.On September 12,2016,we announced that we had entered into a licensing,development and supply agreement with Chemo granting Chemo the exclusive licenseto commercialize two generic products for the U.S.market and one product on a worldwide basis.Under the terms of the agreement,Che
133、mo has obtained certainexclusive rights to market and sell our products in exchange for upfront and milestone payments,together with a share of the profits of commercialization.Chemoalso has a right of first negotiation to obtain the exclusive commercialization rights for two of the products to incl
134、ude any country outside the U.S.Preparationscale-up and submission activities are currently ongoing.INT0040/2014:An oral film product based on our proprietary edible film technology is currently in the optimization development stage.In order to protect ourcompetitive advantage,no further details of
135、the product can be disclosed at this stage.On December 27,2016,we announced that we have entered into a co-development and commercialization agreement with Endo Ventures Ltd.for this productutilizing our proprietary VersaFilm for the U.S.market.Under the agreement,Endo has obtained certain exclusive
136、 rights to market and sell our product in theU.S.We received an upfront payment and will receive future milestone payments.Endo and IntelGenx will share the profits of commercialization.INT0041/2015:An oral film product based on our proprietary edible film technology is currently in the development
137、stage.In order to protect our competitiveadvantage,no further details of the product can be disclosed at this stage.INT0042/2015:An oral film product based on our proprietary edible film technology is currently in the early development stage.In order to protect ourcompetitive advantage,no further de
138、tails of the product can be disclosed at this stage.INT0043/2015:We are currently developing an oral film containing montelukast as an active ingredient based on our proprietary edible film technologyVersaFilm.In pre-clinical studies,it was discovered that montelukast has the potential to rejuvenate
139、 the brain in aged rats.We are collaborating with Dr.Ludwig Aigner,a neuroscientist who is a member of our Scientific Advisory Board and head of the Institute of MolecularRegenerative Medicine at the Paracelsus Medical University in Salzburg,Austria.Dr.Aigner has made major contributions in the fiel
140、d of brain and spinal cordregeneration over the last 25 years.He was the first to develop tools to visualize neurogenesis in living animals and identified signaling mechanisms that arecrucially involved in limiting brain regeneration.One of these mechanisms,leukotriene signaling,is related to asthma
141、.In consequence,Dr.Aigner and his teamrecently demonstrated that the anti-asthmatic drug montelukast structurally and functionally rejuvenates the aged brain.His main aim is to develop molecular andcellular therapies for patients with neurodegenerative diseases and for the aged population.On July 13
142、,2016,we announced the initiation of a phase 1 clinical trial of montelukast,a unique drug repurposing opportunity for the treatment of degenerativediseases of the brain,such as:mild cognitive impairment and Alzheimers disease,the most prominent form of dementia.The objectives of the trial were tode
143、monstrate that our oral film product will provide therapeutically effective blood levels of montelukast,and that montelukast when delivered using our oral filmcrosses the blood brain barrier.On August 22,2016,we announced the successful completion of the pilot clinical study for our Montelukast Vers
144、aFilm that demonstrated a significantlyimproved pharmacokinetic profile against the reference product.The study data confirmed that buccal absorption of the drug from the Montelukast film productresulted in a significantly improved bioavailability of the drug compared to the commercial tablet.In add
145、ition,the study data confirmed that Montelukast crossesthe blood brain barrier when administered using our Versafilm delivery technology.We commenced preparation for a phase II-a proof-of-concept(“POC”)study.The Company expects the results from the study to be available in Q4/2017.We arealso activel
146、y working on securing the IP of our product by filing numerous patent applications.Based on the outcome of this first efficacy trial in humans,we willbe actively seeking a partnership or alliance opportunity to further advance developmental work and commercialization of this product.10INT0044/2016:A
147、 product based on one of our VersaTab TM proprietary technologies currently in the early development stage.In order to protect our competitiveadvantage,no further details of the product can be disclosed at this stage.On December 1 st,2016,we announced that we had strengthened our relationship with C
148、hemo by signing a term sheet for the co-development andcommercialization of a generic tablet in the area of CNS(central nervous system)on a worldwide basis.According to Global Data,worldwide sales in 2015 of theCNS related product exceeded$4 billion.As per the agreement we received an upfront paymen
149、t and will be entitled to receive development costs of the product and future milestone payments.Chemo andIntelGenx will also share the profits of commercialization.The definitive agreement was signed on December 30,2016.The current status of each of our products as of the date of this report is sum
150、marized in the following table:ProductIndication StatusofDevelopmentINT0001/2004Anti-hypertensionTechnology transfer ongoingINT0004/2006AntidepressantFDA-approved November 2011.Commerciallylaunched in USA as Forfivo XL in October 2012.In 2016 we sold the royalty revenue to SWK.INT0007/2006Erectile d
151、ysfunctionSubmission preparation ongoingINT0008/2008MigraineSubmission preparation ongoing at IntelGenx.Submission currently under review by Spanishauthorities.INT0010/2006PainFormulation optimization,scale-up preparation andclinical study evaluationINT0027/2011Opioid dependenceANDA submitted to FDA
152、 in July 2013.CRLreceived and under review.INT0036/2012SchizophreniaFormulation development ongoingINT0037/2013UndisclosedProduct developed.Preparing manufacture ofsubmission batches.INT0039/2013UndisclosedProduct developed.Preparing manufacture ofsubmission batchesINT0040/2013UndisclosedFormulation
153、 development ongoingINT0041/2015UndisclosedFormulation development ongoingINT0042/2015UndisclosedFormulation development ongoingINT0043/2015AlzheimerFormulation development completed in preparationfor clinical phase II proof of conceptINT0044/2016UndisclosedFormulation development ongoingGrowthStrat
154、egyOur primary growth strategies include:(1)identifying lifecycle management opportunities for existing market leading pharmaceutical products,(2)develop oralfilm products that provide tangible patient benefits,(3)development of new drug delivery technologies,(4)repurposing existing drugs for new in
155、dications,(5)developing generic drugs where high technology barriers to entry exist in reproducing branded films,and(6)manufacturing our VersaFilm products forcommercial sale.In addition,our service portfolio also includes contract manufacturing services as contract manufacturing presents an attract
156、ive short term revenueopportunity and increases the utilization of the manufacturing factory,thus further absorbing overhead costs.11LifecycleManagementOpportunitiesWe are seeking to position our delivery technologies as an opportunity for lifecycle management of products for which patent protection
157、 of the active ingredient isnearing expiration.While the patent for the underlying substance cannot be extended,patent protection can be obtained for a new and improved formulation byfiling an application with the FDA under Section 505(b)(2)of the U.S.Federal Food,Drug and Cosmetic Act.Such applicat
158、ions,known as a“505(b)(2)NDA”,arepermitted for new drug products that incorporate previously approved active ingredients,even if the proposed new drug incorporates an approved active ingredientin a novel formulation or for a new indication.A 505(b)(2)NDA may include information regarding safety and
159、efficacy of a proposed drug that comes from studiesnot conducted by or for the applicant.The first formulation for a respective active ingredient filed with the FDA under a 505(b)(2)application may qualify for up tothree years of market exclusivity upon approval.Based upon a review of past partnersh
160、ips between third party drug delivery companies and pharmaceuticalcompanies,management believes that drug delivery companies which possess innovative technologies to develop these special dosage formulations present anattractive opportunity to pharmaceutical companies.Accordingly,we believe“505(b)(2
161、)products”represent a viable business opportunity for us.ProductOpportunitiesthatprovideTangiblePatientBenefitsOur focus will be on developing oral film products leveraging our VersaFilm technology that provide tangible patient benefits versus existing drug deliveryforms.Patients with difficulties s
162、wallowing medication,pediatrics or geriatrics may benefit from oral films due to the ease of use.Similarly,we are working onoral films to improve bio-availability and/or response time versus existing drugs and thereby reducing side effects.DevelopmentofNewDrugDeliveryTechnologiesThe rapidly disinteg
163、rating film technology contained in our VersaFilm,and our AdVersa mucosal adhesive tablet,are two examples of our efforts to developalternate technology platforms.As we work with various partners on different products,we seek opportunities to develop new proprietary technologies.RepurposingExistingD
164、rugsWe are working on the repurposing of already approved drugs for new indications using our VersaFilm film technology.This program represents a viable growthstrategy for us as it will allow for reduced development costs,improved success rates and shorter approval times.We believe that through our
165、repurposing programwe will be able minimize the risk of developmental failure and create value for us and potential partners.GenericDrugswithHighBarrierstoEntryWe plan to pursue the development of generic drugs that have certain barriers to entry,e.g.,where product development and manufacturing is c
166、omplex and canlimit the number of potential entrants into the generic market.We plan to pursue such projects only if the number of potential competitors is deemed relativelyinsignificant.VersaFilmManufacturingWe are in the process of establishing a state-of-the-art manufacturing facility for the fut
167、ure manufacture of our VersaFilm products.Construction of themanufacturing and laboratories are now completed and equipment is being prepared to begin manufacturing in 2017.We believe that this(1)represents a profitablebusiness opportunity,(2)will reduce our dependency upon third-party contract manu
168、facturers,thereby protecting our manufacturing process know-how andintellectual property,and(3)allows us to offer our development partners a full service from product conception through to supply of the finished product.With our current manufacturing equipment,we are only able to manufacture product
169、s that do not contain flammable organic solvents.Since several of our filmproducts are solvent-based,we are in the process of acquiring manufacturing equipment that is capable of handling organic solvents,and we are expanding ourmanufacturing facility in order to create the space required for this n
170、ew manufacturing equipment.CompetitionThe pharmaceutical industry is highly competitive and is subject to the rapid emergence of new technologies,governmental regulations,healthcare legislation,availability of financing,patent litigation and other factors.Many of our competitors,including Monosol Rx
171、,Tesa-Labtec GmbH,BioDelivery SciencesInternational,Inc.and LTS Lohmann Therapy Systems Corp.,have longer operating histories and greater financial,technical,marketing,legal and other resourcesthan we have.In addition,many of our competitors have significantly greater experience than we have in cond
172、ucting 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 tocompetition from numerous other companies that currently operate or are planning to enter the mark
173、ets in which we compete.12The key factors affecting the development and commercialization of our drug delivery products are likely to include,among other factors:The regulatory requirements;The safety and efficacy of our products;The relative speed with which we can develop products;Generic competit
174、ion 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 products that can be manufactured on a cost effective basis;Our ability to manufa
175、cture our products in compliance with current Good Manufacturing Practices (“cGMP”)and any other regulatoryrequirements;and Our ability to obtain financing.In order to establish ourselves as a viable industry partner,we plan to continue to invest in our research and development activities and in our
176、 manufacturingtechnology expertise,in order to further strengthen our technology base and to develop the ability to manufacture our VersaFilm products ourselves,and ourVersaTab and AdVersa products through our manufacturing partners,at competitive costs.OurCompetitiveStrengthsWe believe that our key
177、 competitive strengths include:Our comprehensive full services;Our diversified pipeline;Our ability to swiftly develop products through to regulatory approval;and The versatility of our drug delivery technologies.ManufacturingPartnershipWhile we previously manufactured products only for testing purp
178、oses in our own laboratories,we have now started to manufacture products for pivotal clinicaltrials,and we are undertaking steps to manufacture products for commercial use.In order to establish ourselves as a full-service partner for our thin film products,we have completed the construction of a new
179、,state-of-the-art oral film manufacturing facility and are in the process of preparing the equipment and finalizing plansto commercially manufacture our products using our VersaFilm drug delivery technology.VersaFilm is our proprietary immediate release polymeric filmtechnology.It is comprised of a
180、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.We completed construction of our manufacturing facility and expect it to be fully operational in 2017.We are currently not a commercial manuf
181、acturer and we do not usually purchase large quantities of raw materials.Our manufacturing partners,however,maypurchase significant quantities of raw materials,some of which may have long lead times.If raw materials cannot be supplied to our manufacturing partners in atimely and cost effective manne
182、r,our manufacturing partners may experience delays in production that may lead to reduced supplies of commercial products beingavailable for sale or distribution.Such shortages could have a detrimental effect on sales of the products and a corresponding reduction on our royalty revenuesearned.13Depe
183、ndenceonMajorCustomersWe currently rely on a few major customers for our end products.We also currently depend upon a limited number of partners to develop our products,to providefunding for the development of our products,to assist in obtaining regulatory approvals that are required in order to com
184、mercialize these products,and to marketand sell our products.IntellectualPropertyandPatentProtectionWe protect our intellectual property and technology by using the following methods:(i)applying for patent protection in the United States and in the appropriateforeign markets,(ii)non-disclosure agree
185、ments,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 platform technologies inany pharmaceutical p
186、roducts.We have obtained 8 patents and have an additional 18 pending patent applications,as described below.The patents expire 20 years after submission of the initialapplication.In the U.S.the term of the patent sometimes extends over the 20 year period.The initial term of 20 years is extended by a
187、 period(the“patent termadjustment”)determined by the USPTO according to the delays in the prosecution of the patent application that are not applicant delays.Datesubmitted/issued/PatentNo.Title Subject expiration 6,231,957Rapidly disintegrating flavor waferfor flavor enrichment The composition,manuf
188、acturing,and use of rapidly disintegratingflavored films for releasing flavorsto certain substrates Issued May 15,2001 Expires May 6,2019 US 6,660,292Rapidly disintegrating film forprecooked foods Composition and manufacturing offlavored films for releasing flavorsto precooked food substrates Issued
189、 December 9,2003 Expires June 19,2021 US 7,132,113Flavored film Composition and manufacturingmethod of multi-layered films Issued November 7,2006 Expires April 16,2022 US 8,691,272Multilayer tablet Formulation of multilayered tablets Issued April 8,2014 Expires January 28,2033 US 8,703,191Controlled
190、 release pharmaceuticaltablets Formulation of tablets containingbupropion and mecamylamine Issued April 22,2014 Expires January 10,2032 US 7,674,479Sustained-release bupropion andbupropion/mecamylamine tablets Formulation and method of makingtablets containing bupropion andmecamylamine Issued March
191、9,2010 Expires July 25,2027 US 8,735,374Oral mucoadhesive dosage form Direct compression formulation forbuccal and sublingual dosage forms Issued May 27,2014 Expires April 15,2032 US 9,301,948Instantly wettable oral film dosageform without surfactant orpolyalcohol Formulation of oral films containin
192、gactive pharmaceutical ingredients Issued April 05,2016 Expires July 30,203314US Appl.13/079,348Solid oral dosage forms comprisingtadalafil Formulation of oral films containingtadalafil Filed April 4,2011 US Appl.12/963,132Oral film dosage forms and methodsfor making same Optimization of film stript
193、echnology Filed December 8,2010 US Appl.14/630,699Film dosage forms containingamorphous active agents Film containing amorphous agent Filed February 25,2015 US Appl.14/554,332Film dosage forms with extendedrelease mucoadhesive particles Film containing mucoadhesiveparticle Filed November 26,2014 US
194、Appl.13/748,241Oral film dosage forms and methodsfor making same Optimization of film striptechnology Filed January 23,2013 US Appl.15/216,903Film dosage forms containingamorphous active agents Film containing amorphous agent Filed July 22,2016 PCT Appl.WO2016134454Film dosage forms containingamorph
195、ous active agents Film containing amorphous agent Filed January 29,2016 PCT Appl.WO2016123696Oral dosage film exhibitingenhanced mucosal penetration Formulation of oral films withoutconventional penetration enhancer Filed January 22,2016 US Appl.14/612,433Oral dosage film exhibitingenhanced mucosal
196、penetration Formulation of oral films withoutconventional penetration enhancer Filed February 3,2015 Japanese Appl.JP2016527262Immediately wet oral films dosageforms have no surfactant and apolyhydric alcohol Formulation of oral films containingactive pharmaceutical ingredients Filed July 30,2014 Ko
197、rean Appl.KR2016008935Immediately wet oral films dosageforms have no surfactant and apolyhydric alcohol Formulation of oral films containingactive pharmaceutical ingredients Filed July 30,2014 EU Appl.EP3,027,179Immediately wet oral films dosageforms have no surfactant and apolyhydric alcohol Formul
198、ation of oral films containingactive pharmaceutical ingredients Filed July 30,2014 Chinese Appl.CN105530921Immediately wet oral films dosageforms have no surfactant and apolyhydric alcohol Formulation of oral films containingactive pharmaceutical ingredients Filed July 30,201415Singapore Appl.SG1120
199、1600455XImmediately wet oral filmsdosage forms have no surfactantand a polyhydric alcohol Formulation of oral filmscontaining active pharmaceuticalingredients Filed July 30,2014 Australian Appl.AU2014298130Immediately wet oral filmsdosage forms have no surfactantand a polyhydric alcohol Formulation
200、of oral filmscontaining active pharmaceuticalingredients Filed July 30,2014 Canadian Appl.CA2,919,422Immediately wet oral filmsdosage forms have no surfactantand a polyhydric alcohol Formulation of oral filmscontaining active pharmaceuticalingredients Filed July 30,2014 Canadian Appl.CA2797444Solid
201、oral dosage formscomprising tadalafil Formulation of oral filmscontaining tadalafil Filed November 3,2011 EU Appl.EP1,968,562Multilayer tablet Formulation of multilayeredtablets Filed November 22,2007GovernmentRegulationThe pharmaceutical industry is highly regulated.The products we participate in d
202、eveloping require certain regulatory approvals.In the United States,drugs aresubject to rigorous regulation by the FDA.The U.S.Federal Food,Drug,and Cosmetic Act,and other federal and state statutes and regulations,govern,amongother things,the research,development,testing,manufacture,storage,record
203、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 avariety of administrative or judicially-imposed sanctions and/or the in
204、ability to obtain or maintain required approvals or to market drugs.The steps ordinarilyrequired before a new pharmaceutical product may be marketed in the United States include:Preclinical laboratory tests,animal studies and formulation studies under FDAs good laboratory practices regulations,or GL
205、Ps;The submission to the FDA of an investigational new drug application,or IND,which must become effective before human clinical trials maybegin;The completion of adequate and well-controlled clinical trials according to good clinical practice regulations,or GCPs,to establish the safety andefficacy
206、of the product for each indication for which approval is sought;After successful completion of the required clinical testing,submission to the FDA of a NDA,or an ANDA,for generic drugs.In certain cases,anapplication for marketing approval may include information regarding safety and efficacy of a pr
207、oposed drug that comes from studies notconducted by or for the applicant.Such applications,known as a 505(b)(2)NDA,are permitted for new drug products that incorporate previouslyapproved active ingredients,even if the proposed new drug incorporates an approved active ingredient in a novel formulatio
208、n or for a newindication;Satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the product is to be produced,toassess compliance with cGMPs to assure that the facilities,methods and controls are adequate to preserve the drugs identity,strength
209、,quality andpurity;and FDA review and approval of the NDA or ANDA.The cost of complying with the foregoing requirements,including preparing and submitting an NDA or ANDA,may be substantial.Accordingly,we typically relyupon our partners in the pharmaceutical industry to spearhead and bear the costs o
210、f the FDA approval process.We also seek to mitigate regulatory costs byfocusing on 505(b)(2)NDA opportunities.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 regu
211、lar NDA products.16ResearchandDevelopmentExpenseOur R&D expenses,net of R&D tax credits,for the year ended December 31,2016 increased by$733 thousand to$1,766 thousand,compared with$1,033thousand for the year ended December 31,2015.The increase in R&D expenditure is explained in the section of this
212、report entitled“Managements Discussion andAnalysis of Financial Condition and Results of Operations”.EnvironmentalRegulatoryComplianceWe believe that we are in compliance with environmental regulations applicable to our research and development and manufacturing facility located in Ville SaintLauren
213、t,Quebec.EmployeesAs of the date of this filing,we have 25 full-time and four part-time employees.None of our employees are covered by collective bargaining agreements.Webelieve that our relations with our employees are very good.ITEM1A.RISKFACTORS.Our business faces many risks.Any of the risks disc
214、ussed below,or elsewhere in this report or in our other filings with the Securities and Exchange Commission(“SEC”),could have a material impact on our business,financial condition,or results of operations.RisksRelatedtoOurBusinessWehaveahistoryoflossesandourrevenuesmaynotbesufficienttosustainouroper
215、ations.Even though we ceased being a“development stage”company in April 2006,we are still subject to all of the risks associated with having a limited operatinghistory and pursuing the development of new products.Our cash flows may be insufficient to meet expenses relating to our operations and the
216、development of ourbusiness,and may be insufficient to allow us to develop new products.We currently conduct research and development using our proprietary platform technologiesto develop oral controlled release and other delivery products.We do not know whether we will be successful in the developme
217、nt of such products.We have anaccumulated deficit of approximately$17,737 thousand since our inception in 2003 through December 31,2016.To date,these losses have been financedprincipally through sales of equity securities.Our revenues for the past five years ended December 31,2016,December 31,2015,D
218、ecember 31,2014,December31,2013 and December 31,2012 were$5.2 million,$5.1 million,$1.7 million,$948 thousand and$1,198 thousand respectively.Revenue generated to date has notbeen sufficient to sustain our operations.In order to achieve profitability,our revenue streams will have to increase and the
219、re is no assurance that revenues willincrease to such a level.Wemayincurlossesassociatedwithforeigncurrencyfluctuations.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 theimpact of currency
220、exchange rate fluctuations.Adverse movements in exchange rates could have a material adverse effect on our financial condition and results ofoperations.Wemayneedadditionalcapitaltofulfillourbusinessstrategies.Wemayalsoincurunforeseencosts.Failuretoobtainsuchcapitalwouldadverselyaffectourbusiness.We
221、will need to expend significant capital in order to continue with our research and development by hiring additional research staff and acquiring additionalequipment.If our cash flows from operations are insufficient to fund our expected capital needs,or our needs are greater than anticipated,we may
222、be required toraise additional funds in the future through private or public sales of equity securities or the incurrence of indebtedness.Additional funding may not be available onfavorable terms,or at all.If we borrow additional funds,we likely will be obligated to make periodic interest or other d
223、ebt service payments and may be subject toadditional restrictive covenants.If we fail to obtain sufficient additional capital in the future,we could be forced to curtail our growth strategy by reducing ordelaying capital expenditures,selling assets or downsizing or restructuring our operations.If we
224、 raise additional funds through public or private sales of equitysecurities,the sales may be at prices below the market price of our stock and our shareholders may suffer significant dilution.17Thelossoftheservicesofkeypersonnelwouldadverselyaffectourbusiness.Our future success depends to a signific
225、ant degree on the skills,experience and efforts of our executive officers and senior management staff.The loss of theservices of existing personnel would be detrimental to our research and development programs and to our overall business.Wearedependentonbusinesspartnerstoconductclinicaltrialsof,obta
226、inregulatoryapprovalsfor,andmanufacture,market,andsellourproducts.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 toobtain approval from regulatory bodies such as the FDA to commercialize th
227、ese products.We also depend on our partners to distribute these products afterreceiving regulatory approval.Our revenues from research and development fees,milestone payments and royalty fees are derived from our partners.Our inabilityto find pharmaceutical partners who are willing to pay us these f
228、ees in order to develop new products would 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 orestablish new partnerships with respect to our other pr
229、oducts in development,we will have to establish our own capabilities or discontinue the commercialization ofthe 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
230、 be able to develop these capabilities.Our existing agreements with pharmaceutical industry partners are generally subject to termination by the counterparty on short notice upon the occurrence ofcertain circumstances,including,but not limited to,the following:a determination that the product in dev
231、elopment is not likely to be successfully developed or notlikely to receive regulatory approval;our failure to satisfy our obligations under the agreement,or the occurrence of a bankruptcy event.If any of our partnershipsare terminated,we may be required to devote additional resources to the product
232、,seek a new partner on short notice,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 t
233、he success of our partnerships include thefollowing: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 t
234、o our product,either on their own orin 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 onthe products;Our partners may have difficulty obtaining the raw materials to manufacture our pr
235、oducts in a timely and cost effective manner or experiencedelays in production,which could affect the sales of our products and our royalty revenues earned;Our partners may terminate their partnerships with us.This could make it difficult for us to attract new partners,and it could adversely affect
236、howthe business and financial communities perceive us;Our partners may pursue higher priority programs or change the focus of their development programs,which could affect the partnerscommitment to us.Pharmaceutical and biotechnology companies historically have re-evaluated their priorities from tim
237、e to time,includingfollowing 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 prohibitcommercialization of our products and which would reduce our revenu
238、e from such products.Wefacecompetitioninourindustry,andseveralofourcompetitorshavesubstantiallygreaterexperienceandresourcesthanwedo.We compete with other companies within the drug delivery industry,many of which have more capital,more extensive research and development capabilities andgreater human
239、 resources than we do.Some of these drug delivery competitors include Monosol Rx,Tesa-Labtec GmbH,BioDelivery Sciences International,Inc.and LTS Lohmann Therapy Systems Corp.Our competitors may develop new or enhanced products or processes that may be more effective,less expensive,saferor more readi
240、ly available than any products or processes that we develop,or they may develop proprietary positions that prevent us from being able to successfullycommercialize new products or processes that we develop.As a result,our products or processes may not compete successfully,and research and development
241、 byothers may render our products or processes obsolete or uneconomical.Competition may increase as technological advances are made and commercial applicationsbroaden.18Werelyuponthird-partymanufacturers,whichputsusatriskforsupplierbusinessinterruptions.In certain instances,we may have to enter into
242、 agreements with third party manufacturers to manufacture certain of our products once we complete developmentand after we receive regulatory approval.If our third-party manufacturers fail to perform,our ability to market products and to generate revenue would beadversely affected.Our failure to del
243、iver products in a timely manner could 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.Any third-party manufacturers that we depend on to manufacture our prod
244、ucts are required to adhere to FDA regulations regarding current Good ManufacturingPractices (cGMP),which include testing,control and documentation requirements.Ongoing compliance with cGMP and other regulatory requirements ismonitored by periodic inspection by the FDA and comparable agencies in oth
245、er countries.Failure by our third-party manufacturers to comply with cGMP and otherregulatory requirements could result in actions against them by regulatory agencies and jeopardize our ability to obtain products on a timely basis.Weareintheprocessofestablishingourownmanufacturingfacilityforthefutur
246、emanufactureofVersaFilmproducts,whichrequiresconsiderablefinancialinvestmentand,ifweareunsuccessful,couldhaveamaterialadverseeffectonourbusiness,financialconditionorresultsofoperations.We currently manufacture products only for clinical and testing purposes in our own facility and we do not manufact
247、ure products for commercial use.In order toestablish ourselves as a full-service partner for our thin film products,we invested approximately$6.5 million to establish a state-of-the-art manufacturing facilityfor the commercial manufacture of products developed using our VersaFilm drug delivery techn
248、ology.We anticipate the manufacturing facility to be qualifiedand ready for regulatory approval in the second half of 2017.With our current manufacturing equipment,we are only able to manufacture products that do not contain flammable organic solvents.Since several of our filmproducts are solvent-ba
249、sed,we are in the process of acquiring manufacturing equipment that is capable of handling organic solvents,and we are expanding ourmanufacturing facility in order to create the space required for this new manufacturing equipment.We have limited expertise in establishing and operating a manufacturin
250、g facility and although we have contracted with architects,engineers and constructioncontractors specialized in the planning and construction of pharmaceutical facilities,there can be no guarantee that the project can be completed within the time orbudget allocated.In addition,we may be unable to at
251、tract suitably qualified personnel for our manufacturing facility at acceptable terms and conditions ofemployment.In addition,before we can begin commercial manufacture of our VersaFilm products for sale in the United States,we must obtain FDA regulatory approval forthe product,which requires a succ
252、essful inspection of our manufacturing facilities,processes and quality systems by various health authorities in addition to otherproduct-related approvals.Further,pharmaceutical manufacturing facilities are continuously subject to inspection by the FDA and other health authorities beforeand after p
253、roduct approval.Due to the complexity of the processes used to manufacture our VersaFilm products,we may be unable initially or at any future timeto pass federal,state or international regulatory inspections in a cost effective manner.If we are unable to comply with manufacturing regulations,we may
254、besubject to fines,unanticipated compliance expenses,recall or seizure of any approved products,total or partial suspension of production and/or enforcementactions,including injunctions,and criminal or civil prosecution.The manufacture of our products is heavily regulated by governmental health auth
255、orities,including the FDA.We must ensure that all manufacturing processescomply with current Good Manufacturing Practices(“cGMP”)and other applicable regulations.If we fail to comply fully with these requirements and the healthauthorities expectations,then we could be required to shut down our produ
256、ction facilities or production lines,or could be prevented from importing our productsfrom one country to another.This could lead to product shortages,or to our being entirely unable to supply products to patients for an extended period of time.Such shortages or shut downs could lead to significant
257、losses of sales revenue and to potential third-party litigation.In addition,health authorities have in somecases imposed significant penalties for such failures to comply with cGMP.A failure to comply fully with cGMP could also lead to a delay in the approval of newproducts to be manufactured at our
258、 manufacturing facility.Any disruption in the supply of our future products could have a material adverse effect on our business,financial condition or results of operations.19WehavenotimelyabilitytoreplaceourfutureVersaFilmmanufacturingcapabilities.If our manufacturing facility suffers any type of
259、prolonged interruption,whether caused by regulator action,equipment failure,critical facility services,fire,naturaldisaster or any other event that causes the cessation of manufacturing activities,we would be exposed to long-term loss of sales and profits.There are no facilitiescapable of contract m
260、anufacturing our VersaFilm products at short notice.If we suffer an interruption to our manufacturing of VersaFilm products,we mayhave to find a contract manufacturer capable of supplying our needs,although this would require completing a Manufacturing Site Change process,which takesconsiderable tim
261、e and is costly.Replacement of our manufacturing capabilities will have a material adverse effect on our business and financial condition or resultsof operations.WedependonalimitednumberofsuppliersforAPI.Generally,onlyasinglesourceofAPIisqualifiedforuseineachproductduetothecostsandtimerequiredtovali
262、dateasecondsourceofsupply.ChangesinAPIsuppliersmustusuallybeapprovedthroughaPriorApprovalSupplementbytheFDA.Our ability to manufacture products is dependent,in part,upon ingredients and components supplied by others,including international suppliers.Any disruption inthe supply of these ingredients o
263、r components or any problems in their quality could materially affect our ability to manufacture our products and could result inlegal liabilities that could materially affect our ability to realize profits or otherwise harm our business,financial,and operating results.As the API typicallycomprises
264、the majority of a products manufactured cost,and qualifying an alternative is costly and time-consuming,API suppliers must be selected carefully basedon quality,reliability of supply and long-term financial stability.Wearesubjecttoextensivegovernmentregulationincludingtherequirementofapprovalbeforeo
265、urproductsmaybemarketed.Evenifweobtainmarketingapproval,ourproductswillbesubjecttoongoingregulatoryreview.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
266、 requirements could result in warning letters,fines and other civil penalties,delays in approving or refusal to approve a productcandidate,product recall or seizure,withdrawal of product approvals,interruption of manufacturing or clinical trials,operating restrictions,injunctions,andcriminal prosecu
267、tion.Our products cannot be marketed in the United States without FDA approval.Obtaining FDA approval requires substantial time,effort,and financial resources,andthere can be no assurance that any approval will be granted on a timely basis,if at all.With most of our products,we rely on our partners
268、for the preparation ofapplications and for obtaining regulatory approvals.If the FDA does not approve our product candidates in a timely fashion,or does not approve them at all,ourbusiness and financial condition may be adversely affected.Further,the terms of approval of any marketing application,in
269、cluding the labeling content,may bemore restrictive than we desire and could affect the marketability of our or our partners products.Subsequent discovery of problems with an approved product mayresult in restrictions on the product or its withdrawal from the market.In addition,both before and after
270、 regulatory approval,we,our partners,our products,and ourproduct candidates are subject to numerous FDA requirements regarding testing,manufacturing,quality control,cGMP,adverse event reporting,labeling,advertising,promotion,distribution,and export.Our partners and we are subject to surveillance and
271、 periodic inspections to ascertain compliance with theseregulations.Further,the relevant law and regulations may change in ways that could affect us,our partners,our products,and our product candidates.Failure tocomply with regulatory requirements could have a material adverse impact on our business
272、.Regulations regarding the manufacture and sale of our future products are subject to change.We cannot predict what impact,if any,such changes may have on ourbusiness,financial condition or results of operations.Failure to comply with applicable regulatory requirements could have a material adverse
273、effect on ourbusiness,financial condition and results of operations.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 sim
274、ilar delays in countries outside of the United States.We may not be able to obtainthese 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 adverseeffe
275、ct on our business,financial condition and results of operations.In addition,before it grants approvals,the FDA or any foreign regulatory authority may imposenumerous other requirements with which we must comply.Regulatory acceptance,if granted,may include significant limitations on the indicated us
276、es for whichthe product may be marketed.FDA enforcement policy strictly prohibits the marketing of accepted products for unapproved uses.Product acceptance could bewithdrawn or civil and/or criminal sanctions could be imposed for our failure to comply with regulatory standards or the occurrence of u
277、nforeseen problemsfollowing initial marketing.20Wemaynotbeabletoexpandorenhanceourexistingproductlineswithnewproductslimitingourabilitytogrow.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 toenh
278、ance or expand our product lines.Even if we can identify potential products,our investment in research and development might be significant before we canbring the products to market.Moreover,even if we identify a potential product and expend significant dollars on development,we may never be able to
279、 bring theproduct to market or achieve market acceptance for such product.As a result,we may never recover our expenses.Themarketmaynotbereceptivetoproductsincorporatingourdrugdeliverytechnologies.The commercial success of any of our products that are approved for marketing by the FDA and other regu
280、latory authorities will depend upon their acceptance bythe medical community and third party payers as clinically useful,cost-effective and safe.To date,only two products based upon our technologies have beenmarketed in the United States,which limits our ability to provide guidance or assurance as t
281、o 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 products;The relat
282、ive 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.Wearesubjecttoenvironmentalregulations,andanyfailuretocomplymayresultinsubstant
283、ialfinesandsanctions.Our operations are subject to Canadian and international environmental laws and regulations governing,among other things,emissions to air,discharges to watersand the generation,handling,storage,transportation,treatment and disposal of raw materials,waste and other materials.Many
284、 of these laws and regulationsprovide for substantial fines and criminal sanctions for violations.We believe that we are and have been operating our business and facility in a manner thatcomplies in all material respects with environmental,health and safety laws and regulations;however,we may incur
285、material costs or liabilities if we fail to operatein full compliance.We do not maintain environmental damage insurance coverage with respect to the products which we manufacture.The decision to establish commercial film manufacturing capability may require us to make significant expenditures in the
286、 future to comply with evolvingenvironmental,health and safety requirements,including new requirements that may be adopted or imposed in the future.To meet changing licensing andregulatory standards,we may have to make significant additional site or operational modifications that could involve subst
287、antial expenditures or reduction orsuspension of some of our operations.We cannot be certain that we have identified all environmental and health and safety matters affecting our activities and inthe future our environmental,health and safety problems,and the costs to remediate them,may be materiall
288、y greater than we expect.RisksRelatedtoOurIntellectualPropertyIfwearenotabletoadequatelyprotectourintellectualproperty,wemaynotbeabletocompeteeffectively.Our success depends,to a significant degree,upon the protection of our proprietary technologies.While we currently own 8 patents and have an addit
289、ional 18pending patent applications in several jurisdictions,we will need to pursue additional protection for our intellectual property as we develop new products andenhance existing products.We may not be able to obtain appropriate protection for our intellectual property in a timely manner,or at a
290、ll.Our inability to obtainappropriate protections for our intellectual property may allow competitors to enter our markets and produce or sell the same or similar products.If we are forced to resort to legal proceedings to enforce our intellectual property rights,the proceedings could be burdensome
291、and expensive.In addition,ourproprietary 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 withour e
292、mployees and consultants.Nevertheless,these agreements may not be honored and they may not effectively protect our right to our un-patented trade secretsand know-how.Moreover,others may independently develop substantially equivalent proprietary information and techniques or otherwise gain access to
293、our tradesecrets and know-how.21We may need to obtain licenses to patents or other proprietary rights from third parties.We may not be able to obtain the licenses required under any patents orproprietary rights or they may not be available on acceptable terms.If we do not obtain required licenses,we
294、 may encounter delays in product development or findthat the development,manufacture or sale of products requiring licenses could be foreclosed.We may,from time to time,support and collaborate in researchconducted by universities and governmental research organizations.We may not be able to acquire
295、exclusive rights to the inventions or technical informationderived from these collaborations,and disputes may arise over rights in derivative or related research programs conducted by us or our partners.Ifweinfringeontherightsofthirdparties,wemaynotbeabletosellourproducts,andwemayhavetodefendagainst
296、litigationandpaydamages.If a competitor were to assert that our products infringe on its patent or other intellectual property rights,we could incur substantial litigation costs and be forced topay substantial damages.Such litigation costs could be as a result of direct litigation against us,or as a
297、 result of litigation against one or more of our partners towhom we have 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
298、significant financial resources,but would also divert our managements time andattention.Such claims could also cause our customers or potential customers to purchase competitors products or defer or limit their purchase or use of ouraffected products until resolution of the claim.If any of our produ
299、cts are found to violate third-party intellectual property rights,we may have to re-engineer one ormore 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 requir
300、e significant expenditures and may not be successful.Ourcontrolledreleaseproductsthataregenericversionsofbrandedcontrolledreleaseproductsthatarecoveredbyoneormorepatentsmaybesubjecttolitigation,whichcoulddelayFDAapprovalandcommerciallaunchofourproducts.We expect to file or have our partners file NDA
301、s or ANDAs for our controlled release products under development that are covered by one or more patents of thebranded 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 sueor undertake regulatory in
302、itiatives to preserve marketing exclusivity.Any significant delay in obtaining FDA approval to market our products as a result oflitigation,as well as the expense of such litigation,whether or not we or our partners are successful,could have a materially adverse effect on our business,financial cond
303、ition and results of operations.RisksRelatedtoOurSecurities:Thepriceofourcommonstockcouldbesubjecttosignificantfluctuations.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 recommendatio
304、ns 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 capitalcommitments;T
305、he loss of major customers or product or component suppliers;The loss of significant partnering relationships;and General market,political and economic conditions.22We have a significant number of convertible securities outstanding that could be exercised in the future.Subsequent resale of these and
306、 other shares could causeour stock price to decline.This could also make it more difficult to raise funds at acceptable levels pursuant to future securities offerings.Ourcommonstockisahighriskinvestment.Our common stock was quoted on the OTC Bulletin Board under the symbol“IGXT”from January 2007 unt
307、il June 2012 and,subsequent to our upgrade in June2012,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.There is a limited trading market for our common stock,which may affect the ability of shareholders to sell our co
308、mmon stock and the prices at which they may beable to sell our common stock.The market price of our common stock has been volatile and fluctuates widely in response to various factors which are beyond our control.The price of ourcommon stock is not necessarily indicative of our operating performance
309、 or long term business prospects.In addition,the securities markets have from time to timeexperienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies.These market fluctuations may alsomaterially and adversely affect the market price o
310、f 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 equitysecurity 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
311、exemptions.This designationrequires any broker or dealer selling these securities to disclose certain information concerning the transaction,obtain a written agreement from the purchaser anddetermine that the purchaser is reasonably suitable to purchase the securities.These rules may restrict the ab
312、ility of brokers or dealers to sell our common stock andmay affect the ability of investors to sell their shares.As a result of the foregoing,our common stock should be considered a high risk investment.Theapplicationofthe“pennystock”rulestoourcommonstockcouldlimitthetradingandliquidityofourcommonst
313、ock,adverselyaffectthemarketpriceofourcommonstockandincreasestockholdertransactioncoststosellthoseshares.As long as the trading price of our common stock is below$5.00 per share,the open market trading of our common stock will be subject to the“penny stock”rules,unless we otherwise qualify for an ex
314、emption from the“penny stock”definition.The“penny stock”rules impose additional sales practice requirements on certainbroker-dealers who sell securities to persons other than established customers and accredited investors(generally those with assets in excess of$1,000,000 orannual income exceeding$2
315、00,000 or$300,000 together with their spouse).These regulations,if they apply,require the delivery,prior to any transaction involvinga penny stock,of a disclosure schedule explaining the penny stock market and the associated risks.Under these regulations,certain brokers who recommend suchsecurities
316、to persons other than established customers or certain accredited investors must make a special written suitability determination regarding such apurchaser and receive such purchasers written agreement to a transaction prior to sale.These regulations may have the effect of limiting the trading activ
317、ity of ourcommon stock,reducing the liquidity of an investment in our common stock and increasing the transaction costs for sales and purchases of our common stock ascompared to other securities.Webecamepublicbymeansofareversemerger,andasaresultwearesubjecttotherisksassociatedwiththeprioractivitieso
318、fthepubliccompanywithwhichwemerged.Additional risks may exist because we became public through a“reverse merger”with a shell corporation.Although the shell did not have any operations or assetsand we performed a due diligence review of the public company,there can be no assurance that we will not be
319、 exposed to undisclosed liabilities resulting from theprior operations of our company.Ourlimitedcashresourcesrestrictourabilitytopaycashdividends.Since our inception,we have not paid any cash dividends on our common stock.We currently intend to retain future earnings,if any,to support operations and
320、 tofinance the growth and development of our business.Therefore,we do not expect to pay cash dividends in the foreseeable future.Any future determination relatingto our dividend policy will be made at the discretion of our Board of Directors and will depend on a number of factors,including future ea
321、rnings,capitalrequirements,financial conditions and future prospect and other factors that the Board of Directors may deem relevant.If we do not pay any dividends on ourcommon stock,our shareholders will be able to profit from an investment only if the price of the stock appreciates before the share
322、holder sells it.Investors seekingcash dividends should not purchase our common stock.23Ifwearethesubjectofsecuritiesanalystreportsorifanysecuritiesanalystdowngradesourcommonstockoroursector,thepriceofourcommonstockcouldbenegativelyaffected.Securities analysts may publish reports about us or our indu
323、stry containing information about us that may affect the trading price of our common stock.In addition,if a securities or industry analyst downgrades the outlook for our stock or one of our competitors stocks,the trading price of our common stock may also benegatively affected.ITEM1B.UNRESOLVEDSTAFF
324、COMMENTSNot applicable.ITEM2.PROPERTIESOn April 24,2015,we entered into an agreement to lease approximately 17,000 square feet in a property located at 6420 Abrams,St-Laurent,Quebec(the“Lease”).The Lease has a 10 year and 6-month term which commenced on September 1,2015 and we have retained two opti
325、ons to extend the Lease,with eachoption being for an additional five years.Under the terms of the Lease we will be required to pay base rent of approximately CA$110 thousand(approximately$84thousand)per year,which will increase at a rate of CA$0.25($0.19)per square foot/per year,every two years.Appr
326、oximately 9,500 square feet of the new facilityis being used to establish manufacturing capabilities for our VersaFilm thin film products,approximately 4,000 square feet for our R&D activities,andapproximately 3,500 square feet for administration.We also finalised negotiations on April 29,2015 for a
327、n agreement for the construction of manufacturing facilities,laboratories,and offices within the propertylocated at 6420 Abrams,St-Laurent,Quebec,at an aggregate cost of CA$2.9 million(approximately$2.2 million).The construction agreement was awarded toBTL Construction Inc.(“BTL”)in Quebec following
328、 a tender process that was completed in December 2014.BTL specializes in the construction and renovation offacilities for the pharmaceutical industry,and has completed projects for various major pharmaceutical companies.We funded this project from cash on hand aswell as a CA$1 million loan from IQ.I
329、TEM3.LEGALPROCEEDINGSLitigation related to Forfivo XL In August 2013,we announced receipt of a Paragraph IV Certification Letter from Wockhardt Bio AG,advising of the submission of an ANDA to the FDArequesting authorization to manufacture and market generic versions of Forfivo XL 450 mg tablets in t
330、he U.S.In November 2014,we announced that theParagraph IV litigation with Wockhardt had been settled and that,under the terms of the settlement effective November 26,2014,Wockhardt has been granted therights,with effect from January 15,2018,to be the exclusive marketer and distributor of an authoriz
331、ed generic of Forfivo XL in the U.S.Litigation related to Buprenorphine/NaloxoneIn August 2013 we learned that,in response to the July 2013 filing of an ANDA by Par,for our generic formulation of buprenorphine and naloxone SublingualFilm,indicated for the treatment of opioid dependence,we were named
332、 as a codefendant in a lawsuit pursuant to Paragraph IV litigation filed by Reckitt BenckiserPharmaceuticals and Monosol RX in the U.S.District Court for the District of Delaware alleging infringement of U.S.Patent Nos.8,475,832(“the 832 patent”),8,603,514(“the 514 patent”)and 8,017,150(“the 150 pat
333、ent”),each of which relate to Suboxone .On June 2016 we received a trial opinion from JudgeAndrews in which the asserted claims of the 832 patent and 150 patent were found either invalid or not infringed,while at least one of the alleged claims of the514 patent was found valid and infringed by the ANDA product.A post-judgment motion was filed to introduce additional evidence related to the definit
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