- LXRP subsidiary Lexaria Nicotine LLC enters definitive investment agreement with large tobacco company to receive R&D funding in exchange for licensing and equity
- Partner has provided initial $1 million – with an option for up to $11 million more – for research on DehydraTECH’s oral forms of nicotine delivery through a series of private financings
- LXRP still retains majority equity ownership of Lexaria Nicotine, while partner receives a minority equity interest in the subsidiary, not in LXRP itself
Lexaria Bioscience Corp.’s (CSE: LXX) (OTCQX: LXRP) DehydraTECH absorption platform will receive a significant injection of R&D financing under an investment agreement that wholly owned subsidiary Lexaria Nicotine LLC has entered into with a large tobacco partner. LXRP has initially received $1 million toward its research on nicotine consumer products that use DehydraTECH (http://cnw.fm/12hJT).
Through the agreement, the partner also has the option to provide up to $11 million in additional research through multiple phased private financings to underwrite LXRP’s R&D. In exchange, the partner will receive certain license rights to commercialize these DehydraTECH products exclusively in the United States and non-exclusively elsewhere. The partner, the largest cigarette company in the U.S., will be obligated to pay LXRP a royalty on sales of all products that use DehydraTECH.
The partner will have the option to buy full ownership of LXRP’s subsidiary, but no equity in LXRP itself, per the terms of the agreement. Additionally, the partner will have the right to appoint one of the seven directors of LXRP, and, as the phased additional investments are made, it may have the right to appoint up to three directors.
Lexaria Nicotine plans to conduct a series of clinical investigations into oral forms of nicotine delivery using DehydraTECH technology. In a news release, John Docherty, LXRP president, said, “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.”
Based in British Columbia, Canada, LXRP is a biotechnology company and drug-delivery platform innovator focused on out-licensing its disruptive delivery technology, which promotes healthier ingestion methods. LXRP holds a patent for the oral delivery of all cannabinoids and has a growing IP portfolio that includes 10 patents granted in the United States and Australia, with more than 50 patent applications worldwide across 10 patent families. DehydraTECH is its proprietary absorption technology platform.
For more information, visit the company’s website at www.LexariaBioscience.com
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