Operator: Good afternoon. My name is Emmy and I'll be your conference operator today. At this time, I'd like to welcome everyone to the IntelGenx Second Quarter 2019 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. [Operator Instructions] Thank you. Stephen Kilmer, Investor Relations. You may begin your conference.

Stephen Kilmer: Thanks Emmy. Good afternoon, everyone. And thank you for joining us on today's call. With me on the line are Dr. Horst Zerbe, IntelGenx's CEO; and Andre Godin, our President and CFO. Before we begin, I would like to remind you that all amounts mentioned today are in U.S. dollars unless otherwise mentioned. And today’s call may contain certain forward-looking information that represent our expectations as of today and accordingly are subject to change. We do not undertake any obligation to update any forward-looking statements except as may be required by U.S. and Canadian Securities laws. A number of assumptions were made by us in preparing these forward-looking statements, which are subject to risks, and results may differ materially. Details on these risks and assumptions could be found in our filings with the U.S. and Canadian Securities Commissions. I would now like to turn the call over to Dr. Zerbe. Horst?

Horst Zerbe: Thank you, Steve. Good afternoon and thank you for joining us for the IntelGenx's 2019 second quarter conference call. On today's call, I will provide a corporate update and discuss the progress we've made on our key pipeline projects. Following that Andre will review our Q2, 2019 financial results. Then we will open up the line for your questions. So let me start with the RIZAPORT and let me start by providing an update regarding our NDA which continues to be a top priority for this company. Since receiving the FDA's complete response letter in April, we've been working to address the questions the agency raise related to the chemistry manufacturing the toad section of our applications. We have made progress on our responses to the items and remain on track to respond to the April CRL at the end of this --of the third quarter of this year which means next month. Moving on to the Tadalafil now and as previously announced we entered into a definitive worldwide agreement with a Aquestive Therapeutics for the co-development and commercialization of Tadalafil or films for the treatment of erectile dysfunction. I will not spend too much time on the details of this agreement as this was covered on our last call, but I'd like to highlight a few elements of this strategic and mutually beneficial partner. IntelGenx and Aquestive will -- each will grant each other exclusive worldwide licenses to the respective or film formulations and manufacturing IP. We will jointly co-develop and commercialize our Tadalafil or film products equally sharing net profits from worldwide product sales. The single most important strategic advantage from this partnership is that our combined IP on the Tadalafil or film product will make it very challenging for any competitor to enter the market and compete with our broad patent portfolio. Our combined patent portfolio would give our companies an opportunity to market an exclusive product with broad IP protection. We believe our complementary technologies and similar commercialization strategies maximize the commercial opportunity of Tadalafil or film for all stakeholders. Looking forward to updating shareholders as we jointly perform the activities required to respond to the complete response letter and move forward to commercialization of the product in the United States and potentially in other markets. Moving on now to cannabis-infused films, we are developing certain cannabis-infused films in collaboration with our partner Tilray. At the end of May, we received the first shipment of cannabis extract from Tilray and have been developing various medical use and adult use formulation prototypes that would comply with the Canadian adults market. We are planning to commence commercial production of cannabis into espresso film, so we can launch these products as soon as possible following the amended Canadian cannabis regulations which I expected to come into effect by mid December of this year. A recent Deloitte report estimates a Canadian cannabis adult market of roughly $1.6 billion representing more than half of the $2.7 billion Canadian market for alternative cannabis products. We are working with Tilray so we can participate in this virgin market and look forward to updating investors with our progress on future calls. Moving on now to Montelukast and we established two phase 2a clinical trial sites in Ottawa and Peterborough during the second quarter. We continue to drive enrollment across our sites and are working with the contract research organizations and reviewing current sites with new enrollment and limited screening activity. Our new Ottawa site was established to replace our former Toronto site for this reason. We will identify it and begin patient recruitment at this site once we have obtained final research Ethics Board approval, who also honored to report that renowned clinical researcher Dr. Donald Doell will serve as the lead investigator of the Peterborough site at the quwata Center. Overall, the number of randomized patients in this study has increased from the 15 we reported on our last quarterly call to currently 25. We continue to work to generate investor interest by increasing awareness of the trial and our role as a significant player in the hugely attractive Alzheimer's and dementia market and as part of this effort, we are planning to present a Montelukast poster at the 12th edition of clinical trials on Alzheimer's disease in Sanyo, California in December of this year. Currently we have completed -- I am sorry, will have completed 10 patients in the fall as previously announced, we will report intermediate results mostly pertaining to safety aspects of the study. And in addition attempt a bio statistical evaluation line to pick up any therapeutic trend. Please keep in mind though that this is a blinded study and we will not be able to unblind the data for the purpose of this intermediate evaluation. That is not to invalidate anything. With that I would now like to turn the call over to our President and CFO, Andre Godin who will review our financial results. Andre?

Andre Godin: Thank you, Horst. Good afternoon, everyone. As Horst mentioned, I'll take a few minutes to discuss the company's financial performance for second quarter ended June 30th, 2019. Revenue for the second quarter amounted to $197,000 compared to $234,000 for the same period last year. The decrease is mainly attributable to a decrease in R&D revenue of $37,000. We're expecting recurrent revenue to commence within the very near future with the expected launch of our cannabis and migraine film which will give IntelGenx sustainable revenue growth in the quarters following these launches. In the meantime, we should be receiving R&D revenue as well as milestones revenues and potentially upfront revenue from new potential deals. Operating costs and expenses were $2.5 million for Q2, 2019 versus $2.4 million for the same period last year. The increase is mainly attributable to the $325,000 increase in R&D expenses compared to the same period last year, primarily related to the Montelukast clinical program. We are closely monitoring expenses and preparing our different departments to be ready to come in commercial production in the very near future. For Q2, 2019, the company had an operating loss of $2.2 million compared to an operating loss of $2.1 million for the comparable period of 2018. Adjusted EBITDA was negative $2.1 million for Q2, 2019 compared to negative $1.9 million for the same period last year. Net comprehensive loss was $2.5 million or $0.03 on a basic and diluted per share basis for Q2, 2019 compared to a net comprehensive loss of $2.4 million or $0.04 per share for the comparable period of 2018. As of June 30th, 2019, the company's cash and short-term investment total US $6.1 million. I will now turn the call back to the Dr. Horst Zerbe to conclude our remarks.

Horst Zerbe: Thanks, Andre. I would like to close by thanking our Board of Directors for their ongoing guidance, our shareholders for their loyalty and most importantly our staff whose dedication will drive our success. I will now turn the call over for questions. I would like to remind you that our forward-looking statements applied to both our prepared remarks and the following Q&A. Thank you.

Operator: [Operator Instructions] Your first question comes from the line of Jason McCarthy with Maxim Group. Jason, your line is open.

UnidentifiedAnalyst: Hi, everyone. It's Deb on the line for Jason. Just had a couple of quick questions here. So now with respect to the montelukast VersaFilm Alzheimer's disease trial, just curious given the role of that inflammation plays and Alzheimer's disease pathogenesis can you comment on the impact that the VersaFilm product has on this capacity?

HorstZerbe: Well montelukast is a leukotriene inhibitor and as such should suppress inflammation and that is in fact the mode of action that we are pursuing here. And from the mold anecdotal and more systematic studies that we have become aware that seems to be a promising pathway. So it's basically depression of inflammatory situations that would drive the mode of action.

UnidentifiedAnalyst: Great, thanks. And then I just wanted to reconfirm a couple of things that I believe you mentioned on the call just to make sure I got my facts straight here. So you mentioned that again with respect to the montelukast phase 2a trial, we can expect a data readout in the fall, is that -- am I correct in saying that?

HorstZerbe: And later this month by the end of August or may be September, we will have completed eight patients. What we're doing and did I say eight, I'm sorry, currently we have 8-10 patients and what I announced or discussed before previous calls was that we will attempt an intermediate readout. Now keep in mind the study is blinded and there's a placebo arm involved, it's completely randomized. So we will not unblind the study, so we will surely be able to report on safety and we like will make an effort to pick up any trends, therapeutic trends if you will of the blinded data. And to the extent that that is possible we will certainly discuss those readings.

UnidentifiedAnalyst: Okay and that would be like sometime at the end of the month or September like with respect to the like the safety data?

HorstZerbe: I think we previously announced that we will be able to discuss this data in October, we will have the data available I think let's say in September. They go to a statistician and we'll do some number crunching there. That would take a bit of time. And so I think it would be fair to say that in October we'll be in a position to discuss those data.

UnidentifiedAnalyst: Okay, great. And then with respect to the cannabis-infused VersaFilm, you mentioned that you plan on a starting production and marketing. And did you say December, was that right mid-December?

HorstZerbe: We didn't say that and I'm not claiming that but what we're saying is that by mid-December the Health Canada will finally legalize the edibles. That is what they announced. So theoretically as of that date edibles and so it can be commercialized. We are gearing up to be ready to launch product should that then be possible, but the legalization has not heard yet and so at this point it is speculative. What I can tell you is that we are preparing this company to be ready to launch product by the time that edibles become legal but that assumes that our partner at the same time will also be ready in terms of supplying API, and all the rest of it. But I -- that the message that we keep getting from them is that film has a high priority that they want to launch it as soon as it becomes available and from a legal perspective can be launched. That I think that's the extent to which I can comment.

Operator: Your next question comes from the line of Sean Lee with H.C. Wainwright. Sean, your line is open.

SeanLee: Good afternoon, guys. And thank you for taking my questions. Could you elaborate a little more on the timelines we can expect for the Tadalafil film product?

HorstZerbe: Yes. We are right now working on generating the data that FDA requests in conjunction with a complete response letter that our partner received several months ago. That includes certainly certain CMC data and it also includes a safety study that needs to be repeated. And I'm not at liberty to discuss any further details until as far as a timeline is concerned, we expect to have the safety study completed and submitted in the second half of 2020. And there's -- no, I'm sorry in the first half of 2020 and there is the review by FDA. So at this point it's, Sean, it's difficult to nail down an exact date for launch. It will be most likely in early 2021.

SeanLee: Great, thank you for the additional color on that. My second question is on the plan to redeploy resubmission. Could you elaborate little more on what exactly needs to be done from now until the end of third quarter? And is that going to be a six-month review period once that were submitted?

HorstZerbe: We have a draft of our respond time, I can confidently say that we have been able to generate all the data that FDA has requested in the April --complete to response letter, so we have a draft of our response on the table. We're reviewing it; we are --we've also sent it to our commercialization partner to take another look in order to be sure that we come up with a satisfactory response. We've also involved external expertise, in other words a regulatory consultant. So we're in the final stages of reviewing our response. And so it will be submitted sometime next month.

Operator: Your next question comes from the line of Steven Giroux with ATA Manufacturing. Steven, your line is open.

UnidentifiedAnalyst: Hi, gentlemen. Just to clarify, the private investor here. I have a couple questions regarding RIZAPORT and to follow up on Sean's question. Will this be a class 1 or class 2 resubmission for RIZAPORT?

HorstZerbe: It'll be class 2 if I remember correctly, so it will involve six months review at FDA.

UnidentifiedAnalyst: Okay, thank you. And has your commercialization partner received approval for the name change?

HorstZerbe: Not yet, they are still working on that.

UnidentifiedAnalyst: Okay. And one final question, if I may. You guys, I'm not sure if you're aware Emory University is doing a montelukast study using a tablet. Your thoughts on that.

HorstZerbe: We are of course aware of that and we are as a matter of fact talking to two Emory to the principal investigator and also study sponsors. So we actually try to combine forces there because some of what they're doing though could be complementary.

UnidentifiedAnalyst: That's great to hear, Dr. Zerbe. And thank you very much for that information. And I'm sure Dr. Ajar will be glad to work with you. Thank you gentlemen. That's all I have.

Operator: Your next question comes from the line of Freddy Zindine, Private Investor. Freddy, your line is open.

UnidentifiedAnalyst: Yes, hi, guys. I had a question first in regards to the cannabis film with Tilray. You did receive the shipment back in May, the first shipment. My question, Andre, would be when do you anticipate to invoice Tilray for the first production batch?

AndreGodin: What we actually receive in May was products for R&D. So to develop the formulation we are expecting obviously to receive the commercial production supply before -- several months before the launch. So that will come in the next upcoming month, but we can only --we will be only able to invoice when the product is manufactured and shipped to Tilray, so but for commercial production which hasn't happened yet.

UnidentifiedAnalyst: Okay. And can you like shed some light on when you think this is going to be happening this year or if it is this year or next year?

AndreGodin: As Horst mentioned a little bit earlier, obviously, we're gearing up to be ready to launch the product with Tilray. And it will most likely be in Q1. And so at which point we would be able to invoice Tilray for the shipment. And then probably a month or two or three after the initial shipment then we will be receiving or invoicing them for the royalty on their net sales. Because the first part is the revenue on manufacturing. And then follows the royalty on that sale.

UnidentifiedAnalyst: Okay. And would you be able to shed some light on like some numbers concerning the percentages from the royalties on manufacturing? As percentage wise.

AndreGodin: I mean it's not royalty; it's gross margin that is --that what you mean?

UnidentifiedAnalyst: Yes. That's what I mean like what percentage will IntelGenx be making on production?

AndreGodin: Yes, unfortunately I cannot disclose the amount or the percentage. What I can tell you is that we have a cost plus agreement with Tilray. So basically it's our cost plus a certain percentage on top of our cost. But I'm not at liberty to disclose what it is. But it is obviously generates profit for IntelGenx.

UnidentifiedAnalyst: Okay, that's fair. My next question is in regards to RIZAPORT Europe. Can you shed some light on any updates concerning there?

AndreGodin: Yes. The critical item with respect to the European submission are the process validation data with scheduled process validation runs for early next year, so the process as it can unfold is that within the new future. I can give you exact date off the top of my head, our Spanish partner will submit an application for the site change to the Spanish authority. And then couple months into that the Spanish authority, we know that already will request process validation data from this site. And so knowing this we are planning ahead to be ready to then run those process validation trials and submit those data.

UnidentifiedAnalyst: Okay and another question concerning the RIZAPORT US, you said that the CRL, the deficiencies that were noted in the CRL have been addressed by IntelGenx. How confident are you on this next submission that I believe you stated is going to commence within, by next month?

AndreGodin: I certainly don't want to create any expectations and then down the line I can't deny, but what I can say with full confidence is that we have evaluated the complete response letter very thoroughly. We had a lengthy discussion with FDA to clarify what exactly they want. We've been able to address every single request and component of the letter. So in my personal opinion and that's only mine not only my personal opinion that is the company's position and that is by the way the position of our partner as well. We believe that we will be able to respond to the CRL satisfactorily. And we do expect approval. But, obviously, I can't guarantee that.

Operator: Your next question comes from the line of Danny Doell, Private Investor. Danny, your line is open.

UnidentifiedAnalyst: Yes. I got a question, private investor. What is --what are we looking into for raising capital? I see we have $6.1 million as of the end of June. Are the stock at 52 week low, almost all-time lows and but we're going to need cash with nothing coming online for a while. Just curious what's going on with that?

AndreGodin: I mean we're always looking at the multiple options and try to be less diluted as possible especially where with the stock price, where it is now. So I think that we have some time in front of us and especially to be able to hit some milestones in regards to a few programs. And hopefully the stock will react accordingly. I think it's really about execution now and so if we execute well, I think that we will succeed at which point maybe it's going to be a less painful to go on the market. But as we speak we're prudent with the way we're spending our money. And obviously, we're not looking to raise money in the short term. We have some time and we're hopefully looking to execute, so that the stock price appreciates at which point we'll be in a better shape to finance the company.

UnidentifiedAnalyst: Okay. The second more of a statement question. Is this Board of Directors looking at a change in the senior management of this company? I think I speak for a lot of investors that these years of missed projection, the failures if you will, RIZAPORT three times. Are we looking at the possibility of changing out the CEO? I don't want to take anything away from Horst but something's got to change at this company. End of Q&A

Operator: This concludes our question-and-answer session. I will now turn the call back over to Dr. Zerbe for closing remarks.

Horst Zerbe: Okay. I'd like to thank everybody again for their support. And with that we'd like to conclude the call. Thank you very much.

Operator: This concludes today's conference call. Thank you for your participation. You may now disconnect.