Lexaria Bioscience Announces Partnership with Altria to Fund Research and Development of DehydraTECH(TM) Technology for Oral Nicotine
KELOWNA, BC / ACCESSWIRE / January 15, 2019 / Lexaria Bioscience Corp. (OTCQX: LXRP) (CSE: LXX) ( “Lexaria Bioscience”), a drug delivery platform innovator, is pleased to announce that its wholly-owned subsidiary Lexaria Nicotine LLC (“Lexaria Nicotine”) and Altria Ventures Inc., an indirect wholly owned subsidiary of Altria Group, Inc. (NYSE: MO) (“Altria”), have executed definitive agreements to pursue innovation in oral, reduced risk nicotine consumer products using Lexaria’s patented DehydraTECH™ technology. Lexaria’s DehydraTECH™ technology enhances the performance of beneficial compounds in ingestible products across four categories: taste & smell, speed of action, bio-absorption and bioavailability.
Altria is funding a milestone-based research & development program (“R&D Program”) in exchange for a minority equity interest in Lexaria Nicotine and certain DehydraTECH™ license rights. Altria will provide initial funding of US$1 million, with the option for additional funding of up to US$12 million through multiple phased private financings.
Lexaria Nicotine will execute a comprehensive series of clinical investigations of oral forms of nicotine delivery, utilizing Lexaria’s patented DehydraTECHTM technology.
Altria has been granted a license to use Lexaria Bioscience’s patented DehydraTECH™ technology for oral nicotine delivery forms on an exclusive basis in the United States and a non-exclusive basis elsewhere globally. Altria will pay Lexaria Nicotine a royalty on revenue generated from the sale of nicotine products containing DehydraTECH™, until such time it may acquire 100% ownership in Lexaria Nicotine.
Altria will initially have the right to appoint one of the seven directors on Lexaria Nicotine’s board of directors and, through the additional phased investments, may have the right to appoint up to three of the seven directors.
Altria has the option to acquire 100% ownership interest in Lexaria Nicotine commensurate with then-current fair market value. Lexaria Bioscience has not sold or optioned any of its own equity. As announced on October 10, 2018, Lexaria Bioscience has created a number of individual subsidiaries - including Lexaria Nicotine - in a structure whereby Lexaria Bioscience retains ownership of its patented DehydraTECH™ technology and licenses its use to multiple molecular classes, including nicotine.
“Lexaria Bioscience is proud that, after careful selection, Altria has chosen to fund research into DehydraTECH™ technology and potentially commercialize this technology for oral nicotine,” remarks Chris Bunka, CEO of Lexaria Bioscience. “This partnership will provide significant benefits to Lexaria Bioscience and its shareholders with a world-class R&D Program and regulatory compliance process. We believe Altria is the best corporate partner we could work with to truly make a difference in the lives of millions of consumers.”
“Lexaria Bioscience has repeatedly demonstrated the powerful effects of its patented DehydraTECH™ technology for enhancing the palatability and speed of onset of orally-consumed bioactive substances such as nicotine,” added John Docherty, President of Lexaria Bioscience. “Laboratory research to date on oral nicotine formulations has been quite encouraging. We are very excited to advance the clinical phases of our comprehensive R&D Program together with Altria with a view to full commercial product development.”
Borden Ladner Gervais LLP acted as independent legal counsel to Lexaria Bioscience and Lexaria Nicotine. Hunton Andrews Kurth LLP acted as independent legal counsel to Altria.
About Lexaria Bioscience
Lexaria Bioscience Corp. has developed and out-licenses its disruptive delivery technology that promotes healthier ingestion methods, lower overall dosing and quicker onset of lipophilic active molecules. Lexaria has ten patents granted in the USA and in Australia and has filed over 50 patent applications worldwide across ten patent families. Lexaria’s technology provides more rapid delivery to the bloodstream; and important taste-masking benefits, for orally administered bioactive molecules including cannabinoids, vitamins, non-steroidal anti-inflammatory drugs (NSAIDs), nicotine and other molecules.