Lexaria Bioscience Corporation (NASDAQ:LEXX) has traversed considerable ground with its drug development program and study result reports in FY:23.1 Since our previous update, Lexaria has identified a potential novel mechanism for DehydraTECH CBD in hypertension and shared its diabetes study data. Over the last quarters, a new board member and strategic advisor were added to help navigate the development of DehydraTECH. On the regulatory front, the company expects to submit its investigational new drug (IND) application for the hypertension program mid-year followed by a Phase Ib in 2H:23. See below for a summary of second quarter financial performance, Lexaria’s study results and additional detail on the company’s operations.
2Q:23 Results
Lexaria filed its second quarter fiscal year 2022 Form 10-Q on April 14, 2022. The company reported 2Q:23 revenues of $35,000, and total operating expense of $1.3 million resulting in net loss of ($1.3) million or ($0.22) per basic and diluted common share.
For the second quarter ending February 28, 2023 and versus the same prior year period in 2021:
➢ Revenue totaled $35,000, up 15% from $31,000 on an increase in other revenues. Intellectual property licensing fees related to Premier Wellness Science and royalty fees contributed to the balance;
➢ Research and development expenses totaled $696,000, increasing from $276,000 reflecting expenditures for analysis and execution of the hypertension, nicotine and diabetes studies;
➢ General and administrative expenses totaled $647,000, down by almost half from $1.2 million due primarily to lower consulting fees, salary and stock-based compensation. Decreased legal fees, advertising and promotion, and investor relation spending were all lower. This was partially offset by an increase in office expenses;
➢ Net loss was ($1.3) million, or ($0.22) per share, compared to net loss of ($1.4) million or ($0.24) per share.
As of February 28, 2023, cash and marketable securities totaled $3.5 million - a sequential $1.3 million decline from the end of 1Q:23. Cash burn for the first six months of FY:22 was approximately ($2.5) million. Following the end of the reporting period, Lexaria took advantage of its at-the-market facility, raising gross proceeds of $115,000.
Addition of Strategic Advisor
Julian Gangolli has been added to the Lexaria roster as Strategic Advisor. He was previously President of GW Pharmaceuticals USA and has substantial experience in commercial development and the cannabinoid field. Mr. Gangolli led GW’s US team during the approval process for Epidiolex and its commercialization. His prior roles included senior positions at Allergan and other distinguished biotechnology companies. We expect Mr. Gangolli to help Lexaria navigate the regulatory and commercial waters as DehydraTECH CBD advances through upcoming clinical trials.
DehydraTECH and Diabetes
In its consistent effort to expand into new therapeutic areas, Lexaria launched an animal study in diabetes in November 2022 designated DIAB-A22-1. It has evaluated the DehydraTECH-processed cannabidiol (CBD) molecule and how it impacts diabetes-related biomarkers in rats. The associated press release highlighted the relationship between heart disease, hypertension and diabetes and the prevalence of diabetes, as the seventh most common cause of death. Impetus for the study has come from other work cited in the press release supporting CBD efficacy in reducing the incidence of diabetes.
A dose ranging study was conducted over 56 days that evaluated 32 male Zucker rats. 24 of the rats were obese and eight lean. The two groups were compared with respect to weight gain, blood glucose, cholesterol and triglyceride levels between those administered DHT-CBD and those which were not. Blood was drawn six times over the course of the study. It was conducted in Canada with initial data provided in an early March press release.
Results from the study generated multiple outcomes including weight loss in obese diabetic-conditioned animals, improved triglyceride and variable cholesterol levels. These biomarkers are all associated with diabetes and improvements can be associated with better outcomes for diabetic patients. Weight loss was observed four days after initial dosing of DehydraTECH-CBD. Maximum weight loss was achieved nine days after dosing began and was maintained for the 8-week duration of the study. The weight loss averaged 7% of body weight for both of the doses used in the study (30 mg/Kg and 100 mg/Kg). Only the DehydraTECH-CBD-dosed animals weighed less at the end of the study than at the beginning, whereas the weight of the untreated obese animals trended upwards throughout. Food and water intake for all groups was similar, supporting the hypothesis that weight loss is, at least in part, attributable to enhanced metabolic function.
Activity levels were also measured in the animal subjects. An open field test3 was used to measure distance and by extension, activity. Lean rats travel the greatest distance, followed by obese rats administered the 30 mg/Kg dose. Untreated obese rats travelled the next longest distance and obese rats administered a 100 mg/Kg dose produced the least distance. Relative distances for each of the groups are provided below.
Study investigators hypothesize that the higher 100 mg/Kg dose may produce sedative effects, triggering hypolocomotion and the lesser distance for the higher dosed animals. This effect has been observed in other studies, including a rat study published in Psychopharmacology.5
Triglyceride and cholesterol levels responded to DehydraTECH CBD in test subjects. The effect was more pronounced for triglycerides and for the lower 30 mg/Kg dose. For the 30 mg/Kg dose, DehydraTECH CBD was more than 25% lower than the untreated obese animals.
Cholesterol readings were less remarkable than those for triglycerides. However, the lower dose cohort outperformed the higher dose cohort for total cholesterol, low density lipoprotein (LDL) and high-density lipoprotein (HDL) cholesterol.
Lexaria’s first foray in to diabetes with DehydraTECH CBD provided some notable insights into the mechanism of action for the candidate. Weight loss was the primary benefit identified in the diabetic rats as well as increased mobility and reduced triglycerides relative to obese models. The study used two doses in the preclinical evaluation which showed better efficacy at the lower 30 mg/Kg dose. Next steps for this program may include further investigation potentially with other drugs that help control glucose levels directly.
Hypertension
Hypertension grabbed the spotlight in early 2023 with AstraZeneca’s (NASDAQ:AZN) bid for the recently IPOed CinCor Pharma (NASDAQ:CINC). CinCor recently provided top-line data from its Phase II study that evaluated baxdrostat in hypertension patients. Baxdrostat is a selective aldosterone synthase inhibitor shown to lower aldosterone levels without affecting cortisol. The primary endpoint of the study was not met; however, there were large reductions in systolic blood pressure. AstraZeneca saw enough promise in the data to support further trials in hypertension and chronic kidney disease. Merger and acquisition activity in the space accentuates the unmet need for effective control of hypertension and provides a healthy backdrop for further work by Lexaria in this area.
Lexaria’s latest update on its hypertension program was in late February 2023, where a potential novel mechanism of action was identified. The press release highlighted the FDA’s desire to review anti-hypertensive medicines that offer complementary mechanisms. Based on observations from the HYPER-H21-4 hypertension study using DHT-CBD, CBD may stimulate the production of catestatin via its interaction with the sympatho-chromaffin system which can favorably affect hypertension and may represent a novel mechanism of action for treating hypertension.
Catestatin is a peptide and a potent inhibitor of nicotinic cholinergic-stimulated catecholamine secretion. It is a 21-amino acid residue, cationic and hydrophobic peptide that is produced in the adrenal gland’s chromaffin cells and adrenergic neurons. Catestatin regulates the cardiovascular system, immune system and metabolic homeostasis.
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1. Lexaria fiscal year begins September 1.
2. Source: Lexaria Press Release - Lexaria's DehydraTECH-CBD Diabetes Study Demonstrates Weight Loss, Improved Triglyceride and Cholesterol Levels. March 2, 2023.
3. The open field test is a commonly used method to measure behaviors in animal models, including anxiety and movement.
4. Source: Lexaria Press Release - Lexaria's DehydraTECH-CBD Diabetes Study Demonstrates Weight Loss, Improved Triglyceride and Cholesterol Levels. March 2, 2023.
5. Monti, J.M. Hypnoticlike effects of cannabidiol in the rat. Psychopharmacology. December 1977.
6. Source: Lexaria Press Release - Lexaria's DehydraTECH-CBD Diabetes Study Demonstrates Weight Loss, Improved Triglyceride and Cholesterol Levels. March 2, 2023.
7. Source: Lexaria Press Release - Lexaria Discovers Potential Novel Mechanism From Hypertension Study HYPER-H21-4. February 21, 2023.
