Shares of Lexaria Bioscience, a company using its patented technology to change the delivery of drugs made by other firms, rose more than 3% on Tuesday, October 1, following the announcement of a new CFO. This comes on the heels of a CEO change, which signaled a strategic shift as Lexaria focuses on commercializing its products in the weight-loss drug market, dominated by Eli Lilly’s Zepbound and Novo Nordisk’s Wegovy.
Details
On Tuesday, Lexaria stock gained 3.6% to $3.16 per share. It has surged nearly 153% since the beginning of the year and 216% over the last 12 months.
In the morning, the company unveiled Michael Shankman as its new CFO. Shankman had previously assisted Lexaria with its financial reporting and 2023 audit as a contractor. “We continue to strengthen our executive team in expectations of strong growth into 2025,” said Richard Christopher, Lexaria’s new CEO. Recall that in September the previous CEO, Chris Bunka, stepped down after leading the company for 16 years. The CEO change was attributed to the decision of Lexaria, having finally identified its niche as a business, to focus on commercialization going forward..
About Lexaria
Lexaria, a Canadian company listed on the Nasdaq, originally explored and developed oil and gas fields before shifting to the cannabis market a decade later. One of its early acquisitions included a stake in PoViva Tea, a maker of hemp-infused teas and oils, through which it acquired patented dehydration biodelivery technology DehydraTECH.
DehydraTECH enhances the absorption of active ingredients into the bloodstream by mixing them with specific fatty acids, which are then processed, improving bioavailability. Initially, Lexaria applied this technology to marijuana.
Today, however, Lexaria uses DehydraTECH to transform blockbuster drugs from Big Pharma, including:
- semaglutide, the active ingredient in Ozempic, Wegovy, and Rybelsus from Novo Nordisk;
- tirzepatide, the active ingredient in Zepbound and Mounjaro from Eli Lilly;
- liraglutide, the active ingredient in Victoza and Saxenda from Novo Nordisk.
These drugs are based on synthetic glucagon-like peptide-1 analogs. Glucagon-like peptide-1 (GLP-1) is a hormone that regulates insulin production and signals satiety. Initially developed to treat diabetes, some of these drugs have also proven effective for weight-loss. All of them are available only as injections, with Rybelsus the lone exception (it can be taken as a pill, but is less effective).
Lexaria’s goal is to turn these only-injectable drugs into pills without compromising efficacy and improve the bioavailability of oral-delivered Rybelsus. Recently, the company signed a six-month licensing agreement with an unnamed pharmaceutical company to test DehydraTECH on animals in preclinical trials. In late September, Lexaria also announced plans to begin recruiting patients for trials of tirzepatide-based pills, tirzepatide being the active ingredient in Zepbound and Mounjaro.
Analyst insights
Analysts are upbeat on the outlook for oral weight-loss treatments. Pills could be crucial for patients looking to keep off the weight lost through injections, reports Barron’s. Lexaria is not alone in this market: companies such as Terns Pharmaceuticals, Structure Therapeutics, and Viking Therapeutics are exploring similar solutions.
If Lexaria can prove its technology through research, this will give it a leg up in negotiations with pharmaceutical giants, since they themselves stand to reap big gains. That would potentially lead to a major revaluation of Lexaria, believes Zacks Small-Cap Research.
Currently, two analysts cover Lexaria, according to MarketWatch. Both recommend buying the stock, with an average target price of $10 per share, for upside of more than 300%.
