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IntelGenx: A Fourth Quarter Diamond in the OBB Rough

|Includes: IntelGenx Technologies Corp. (IGXT)

Many times companies on the OBB market are forgotten due to the small size. However one company that is poised to have a great fourth quarter of this year is IntelGenx Technologies Corporation (OTCQX:IGXT). IntelGenx focuses on improving existing drugs by adding IntelGenx's novel advanced controlled release technologies. IntelGenx is currently developing drugs that treat depression, osteoarthritis, hypertension, erectile dysfunction, and pain management. As the company continues to expand, investors should not be surprised to see IntelGenx pop up on a major healthcare companies buy list.

In December of 2010, President and CEO of IntelGenx Horst Zerbe spoke about the company and his objectives. When asked how he got started with new drug delivery systems; Zerbe discussed how pharmaceutical films are a much more efficient way for drug delivery. He also mentioned how he developed the Listerine film strips for fresh breath. Furthermore Zerbe stated how applying IntelGenx's novel delivery platforms to pre existing drugs allows the company to bypass phase two and phase three trials most of the time; which saves money. 

Zerbe was also asked about the current market of pharmaceutical films and how these films work. Zerbe stated the market for pharmaceutical films is still very new as less than a handful of companies are working on pharmaceutical films. Also, two recently developed films for cough and cold in children have been approved for Novartis (NYSE:NVS). He also mentioned how films make the drug more bioavailable and uptake is quicker as the medicine dissolves faster.

Zerbe gave the most speculative answer of the interview when asked what films the company currently has in development. Zerbe stated IntelGenx portfolio of products has a "large blockbuster potential and targets a combined market in the tens of billions of dollars." I wont say the combination of erectile dysfunction, migraine, insomnia, bipolar disorder, and pain management isn't a $10 billion market; but I think the numbers are a bit speculative at this point. I may be wrong 5-10 years from now, but currently over $10 billion potential is speculative rabble.

As I previously mentioned, IntelGenx will make a run in the fourth quarter. This is because the company has a PDUFA set for November 13, 2011. The NDA for CPI-300 was submitted in May of 2010. Briefly, CPI-300 is an anti-depressant to treat major depressive disorder (NYSEARCA:MDD) and contains a high strength form of Bupropion HCl. CPI-300 was rejected in February of 2010 due to some food affects and manufacturing issues. The manufacturing issue was an easy fix as the company simply had to fix the problems at a specific facility. In terms of the food affect issues, IntelGenx is confident a label specification and restrictions will lead to an approval.

As the PDUFA date approaches expect a long drawn out run that could see the share price stay around the 0.90-1.10 range. The current 52 week high is the lower end of this scale and it should be eclipsed as November gets closer. We may see the all time high eclipsed on approval as well. IntelGenx's all time high is about 1.58 from August of 2007. Also, as November becomes more near, we may see investment firms initiate coverage; which would cause an instant share price jump. IntelGenx is a stock to watch in the fourth quarter, and I recommend doing research now to see if this company is right for your portfolio.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.