- Chris Bunka, Lexaria’s CEO, has reiterated the company’s commitment to creating value for its shareholders with the licensed use of its patented DehydraTECH(TM) technology
- Mr. Bunka has noted that Lexaria is already in discussions with interested parties in Europe and North America, a move that presents a critical fiscal opportunity for the company
- He has emphasized how profitable new licensing agreements could be for the company, presenting additional avenues for Lexaria to generate revenue and create value for its shareholders
- As the company continues to make a transition toward a more commercial focus in 2023, Bunka notes that licensing will play an integral part
Lexaria Bioscience (NASDAQ: LEXX), a global innovator in drug delivery platforms, has, since its inception, stayed committed to creating shareholder value and exploring different avenues for growth. This outlook has informed the company’s ambitious clinical studies, starting with the HYPER-H21-4 clinical study demonstrating a novel mechanism of action of its patented DehydraTECH(TM)-processed cannabidiol (“CBD”) capsule formulation for the reduction of blood pressure. It has also shaped other studies, including, but not limited to, diabetes, nicotine replacement, antivirals, and human epilepsy.
In the most recent annual letter to all stakeholders, dated January 2023, Chris Bunka, Lexaria’s CEO, reiterated the company’s commitment to creating value for its shareholders. Of note was his mention of the licensed use of its DehydraTECH technology, both for consumer sectors and the pharmaceutical industry. In addition, Bunka noted that the company was already in discussions with interested parties in Europe and North America, which presents a key fiscal opportunity for the company as time progresses (https://ibn.fm/HQL6N).
In the letter, Mr. Bunka broke down the financial upside to this move by Lexaria, citing how profitable it could be for the company in the immediate and distant future.
“For companies with sales of $10 billion or $30 billion per year, this makes sense. And given that Lexaria’s business model is to out-license our technology in exchange for royalties, you can see very quickly how every single percentage point of royalty on each $1 billion in revenue, amounts to $10,000,000 per year in highly profitable revenue to Lexaria,” Bunka noted.
“A 3% royalty rate on $4 billion would be $120,000,000 in revenue; or an 8% royalty on $2 billion would be $160,000,000 in revenue,” he added.
Lexaria’s licensing opportunities are constantly evolving. So far, the company’s DehydraTECH technology can be used to improve existing products or even create new products. In addition, the technology has proven suitable for a broad range of consumer products such as oral suspensions, topicals, nutraceuticals, registered drugs, capsules, pills, and tablets, among others.
As a technology designed to be effective in delivering fat-soluble molecules through the human gastrointestinal system, DehydraTECH has demonstrated an affinity for transdermal applications, which have shown effectiveness in crossing the blood-brain barrier once within blood plasma. This, in addition to other benefits such as doing away with the need for sugar-filled edibles, more efficiency, and the overall lowering of drug costs, has drawn the attention of parties interested in this technology, ultimately opening up Lexaria’s licensing opportunities.
As an avenue for generating revenue for the company, Bunka is optimistic that the licensing fees will significantly complement its royalty revenue generation while providing it with the much-needed capital to keep advancing its clinical studies and improving its technology.
“Lexaria expects licensing fees to significantly complement its royalty revenue generation and also allow it to realize commercial revenue generation well in advance of when revenues start to flow from royalties upon actual product sales under these licensing transactions,” he noted.
As Lexaria continues to transition towards a more commercial focus, licensing will play an integral part. It will be a fundamental aspect of building a successful and profitable future for the company while also forming a solid foundation for more ambitious future clinical studies.
For more information, visit the company’s website at www.LexariaBioscience.com.
NOTE TO INVESTORS: The latest news and updates relating to LEXX are available in the company’s newsroom at https://ibn.fm/LEXX
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