LEXX: Lexaria’s DehydraTECH Shows Fast Delivery

By John Vandermosten, CFA

NASDAQ:LEXX

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In an October 5th press release, Lexaria Biosciences (NASDAQ:LEXX) presented impressive results in its nicotine animal study NIC-A21-1. Lexaria has worked with both Altria Group (NYSE:MO) and British American Tobacco (NYSE:BTI) to research improved methods of nicotine absorption as an alternative to combustible tobacco products. Each of these dominant players has non-exclusive rights to use Lexaria’s DehydraTECH technology in new tobacco products. We also think it is likely that other tobacco companies will recognize DehydraTECH’s value of and strike a deal with Lexaria to use its technology in oral pouch or snus and perhaps other products.

The nicotine study evaluated nicotine plasma levels in canines. Tobacco-derived nicotine benzoate was compared in both DehydraTECH 2.0 form and control. Nicotine polacrilex was also compared in both DehydraTECH 2.0 format vs. control. Both controls consisted of concentration matched non-DehydraTECH control pouches. 40 anesthetized male beagle dogs were evaluated in the study and blood samples were taken every few minutes over a two hour period.

Results from NIC-A21-1 were materially faster and demonstrated a greater area under the curve (AUC). The generic nicotine benzoate pouch required ~45 minutes to achieve its peak plasma levels while the DehydraTECH pouch achieved it in 8 minutes. At four minutes the DehydraTECH group achieved higher concentrations than the control group did at any time during the study.

The comparison between DehydraTECH nicotine and nicotine polacrilex was similarly pronounced. Peak plasma levels were reached at the twelve minute mark and higher levels of nicotine in the plasma were observed at two minutes in the DehydraTECH arm than were reached at any time during the observations for the polacrilex sample.

Earlier work conducted by Lexaria in 2018 demonstrated effective delivery of nicotine to the central nervous system (CNS) in a rodent study. In a water solution, nicotine polacrilex achieved 195% greater delivery and four-fold more rapid delivery across the blood brain barrier (BBB) compared with control. Rapid delivery to the brain is critically important for non-combustible nicotine use especially when used as an alternative to smoking. Many nicotine replacement therapies (NRTs) such as patches and gums fail for patients due to the slow and low levels of nicotine delivered to nicotine receptors in the brain. When the craving is not satisfied, they revert to smoking.

Efficient and rapid delivery is crucial to the success of tobacco pouch alternatives in Canada. The national health regulatory entity, Health Canada, classifies products with > 4mg of nicotine per dose as a prescription drug4 requiring all candidates above this level to follow a more arduous and costly approval process. This limitation can impede the tobacco companies from providing an effective option unless there is an alternative such as DehydraTECH that can more efficiently deliver nicotine sufficient to deter smoking.

With the promising data generated by the latest nicotine study, Lexaria plans a larger study to compare with marketed products Zyn (Swedish Match) and ON! (Altria) which will be funded with internal capital. This will be a human clinical study with details to be announced as they are available.

There are 1.1 billion tobacco smokers around the world and smoking cessation has been identified as one of the most important controllable factors for human health around the globe. Smoking is associated with more than 480,000 deaths per year in the US according to the CDC and more than 8 million deaths around the globe based on WHO data. The FDA says 70% of US smokers want to quit, signaling an immense addressable market for alternatives to combustible tobacco. While oral nicotine pouches may not be the perfect solution, they do not contribute to lung cancer or any of the respiratory diseases related to smoke inhalation. Lexaria cites an oral pouch market of an estimated $2.3 billion in its press release where even a small proportion of market share would be material. If data continue to be validated, DehydraTECH would provide an effective approach for nicotine delivery that will allow for lower levels of nicotine to be used while providing faster action, overcoming one of the flaws of existing NRT. See our initiation for additional discussion of Lexaria.

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1. Source: Analyst work compiled from Lexaria Press Release: Lexaria Oral Nicotine Study NIC-A21-1 Delivers Outstanding Results. October 5, 2021

2. Source: Lexaria Press Release: Lexaria Oral Nicotine Study NIC-A21-1 Delivers Outstanding Results. October 5, 2021

3. Source: Lexaria Press Release: Lexaria Oral Nicotine Study NIC-A21-1 Delivers Outstanding Results. October 5, 2021

4. Unauthorized nicotine buccal pouches may pose serious health risks

5. Source: Lexaria Press Release: Lexaria Oral Nicotine Study NIC-A21-1 Delivers Outstanding Results. October 5, 2021

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