SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

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Equity Bottom-Up

<p><em><strong>Non- SGX Report: These equity research reports are not written by the SGX.&nbsp;</strong>SGX supports the distribution of the research reports by external contributors. Please refer to the Disclaimer in the attached report.</em></p>
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<h2>iX Biopharma Ltd</h2>
<h3>Wafermine out-licensed for c.US$248m</h3>
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<li>IXBIO announced the out-licensing of Wafermine, its sublingual Ketamine wafer, to Seelos Therapeutics (SEEL US, Non rated) for up to US$248m.</li>
<li>IXBIO is a specialty pharmaceutical and nutraceutical company that has developed WaferiX, a patented drug delivery platform technology.</li>
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<h3>Payout from out-licensing deal in phases</h3>
<p>According to the announcement by IXBIO, the out-licensing deal consists of an upfront payment of US$9m (US$3.5m in cash and US$5.5m in SEEL shares), which exceeds IXBIO’s FY21 (Y/E Jun 21) net losses of US$8.2m, and potentially up to US$239m in subsequent payments upon achieving various development and sales milestones (Fig 1), which will confer IXBIO periodic payouts before the product registration of Wafermine after successful phase 3 of clinical trials for commercialisation. In a separate announcement, SEEL has disclosed its recent capital raising exercise accounted for the expected development costs for initiating studies with Wafermine.</p>
<h3>Recurring income from royalties upon product registration</h3>
<p>Wafermine will further unlock its true value upon completion of phase 3 clinical trials as commercialisation prospects materialise, with double-digit percentage points in royalty fees attributable to IXBIO as per IXBIO’s announcement. As disclosed in the same announcement by IXBIO, the drug markets for acute pain and depression, the two clinical indications that Wafermine will be developed for with SEEL, were estimated to be worth US$74bn and US$12.7bn, respectively, in 2020, according to market research company IMARC Group.</p>
<h3>Portfolio includes other drugs incorporating WaferiX</h3>
<p>According to IXBIO, the company will retain rights and ownership to WaferiX, the underlying technology of Wafermine, post the out-licensing deal with SEEL. WaferiX is a patented drug delivery platform technology developed by IXBIO that allows drugs incorporated with the technology to be delivered sublingually via the mucosa for better absorption, faster onset of action and predictable effect, according to its annual report. Apart from Wafermine, IXBIO has developed other products such as Wafesil (sublingual Sildenafil), Xativa (sublingual medicinal cannabis), as well as a range of nutraceuticals being sold in countries such as Australia, China, and the United Kingdom as at FY21.</p>
<h3>Out-licensing as a revenue model</h3>
<p>Since pivoting its business towards commercialisation in 2019, IXBIO has successfully out- licensed Wafermine, and entered into a licensing agreement with China Resources Pharmaceutical Commercial Group (CRPCG) for Wafesil, its sublingual Sildenafil wafer to treat male erectile dysfunction, alongside a strategic cooperation framework agreement to collaborate on the commercialisation of its product portfolio in China as per IXBIO’s company announcements on 30 Sep 21 and 6 Apr 21 respectively. According to IXBIO, the company will continue its out-licensing efforts to generate additional revenue streams.</p>
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Non- SGX Report: These equity research reports are not written by the SGX.&nbsp;SGX supports the distribution of the research reports by external contributors. Please refer to the Disclaimer in the attached report.




iX Biopharma Ltd
Wafermine out-licensed for c.US$248m





IXBIO announced the out-licensing of Wafermine, its sublingual Ketamine wafer, to Seelos Therapeutics (SEEL US, Non rated) for up to US$248m.
IXBIO is a specialty pharmaceutical and nutraceutical company that has developed WaferiX, a patented drug delivery platform technology.





Payout from out-licensing deal in phases
According to the announcement by IXBIO, the out-licensing deal consists of an upfront payment of US$9m (US$3.5m in cash and US$5.5m in SEEL shares), which exceeds IXBIO’s FY21 (Y/E Jun 21) net losses of US$8.2m, and potentially up to US$239m in subsequent payments upon achieving various development and sales milestones (Fig 1), which will confer IXBIO periodic payouts before the product registration of Wafermine after successful phase 3 of clinical trials for commercialisation. In a separate announcement, SEEL has disclosed its recent capital raising exercise accounted for the expected development costs for initiating studies with Wafermine.
Recurring income from royalties upon product registration
Wafermine will further unlock its true value upon completion of phase 3 clinical trials as commercialisation prospects materialise, with double-digit percentage points in royalty fees attributable to IXBIO as per IXBIO’s announcement. As disclosed in the same announcement by IXBIO, the drug markets for acute pain and depression, the two clinical indications that Wafermine will be developed for with SEEL, were estimated to be worth US$74bn and US$12.7bn, respectively, in 2020, according to market research company IMARC Group.
Portfolio includes other drugs incorporating WaferiX
According to IXBIO, the company will retain rights and ownership to WaferiX, the underlying technology of Wafermine, post the out-licensing deal with SEEL. WaferiX is a patented drug delivery platform technology developed by IXBIO that allows drugs incorporated with the technology to be delivered sublingually via the mucosa for better absorption, faster onset of action and predictable effect, according to its annual report. Apart from Wafermine, IXBIO has developed other products such as Wafesil (sublingual Sildenafil), Xativa (sublingual medicinal cannabis), as well as a range of nutraceuticals being sold in countries such as Australia, China, and the United Kingdom as at FY21.
Out-licensing as a revenue model
Since pivoting its business towards commercialisation in 2019, IXBIO has successfully out- licensed Wafermine, and entered into a licensing agreement with China Resources Pharmaceutical Commercial Group (CRPCG) for Wafesil, its sublingual Sildenafil wafer to treat male erectile dysfunction, alongside a strategic cooperation framework agreement to collaborate on the commercialisation of its product portfolio in China as per IXBIO’s company announcements on 30 Sep 21 and 6 Apr 21 respectively. According to IXBIO, the company will continue its out-licensing efforts to generate additional revenue streams.













(Non-SGX Report) IX Biopharma Ltd - Wafermine Out-Licensed for C.US$248m

Singapore

iX Biopharma Ltd is a specialty pharmaceutical company. The Company works primarily on drug delivery and formulation required to reduce the loss of drugs due to hepatic and gastrointestinal metabolism.

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iX Biopharma Ltd (IXBIO SP)

(Non-SGX Report) IX Biopharma Ltd - Wafermine Out-Licensed for C.US$248m

Non- SGX Report: These equity research reports are not written by the SGX. SGX supports the distribution of the research reports by external...

Singapore Exchange Ltd (SGX)

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