By John Vandermosten, CFA

NASDAQ:LEXX

READ THE FULL LEXX RESEARCH REPORT

Lexaria Bioscience Corporation (NASDAQ:LEXX) reported fiscal second quarter 2025 results through the filing of its Form 10-Q. Since our previous update, the company has made progress with its multiple GLP-1 trials, received patent awards in epilepsy and shared its strategy for advancing its development candidates. Lexaria’s GLP-1-H24-4 trial announced that it had enrolled more quickly than expected and that all five study arms completed enrollment. Results for the study are expected before the end of the year. In this report we will bring investors up to date on the status of Lexaria’s various GLP-1 studies and review second quarter financial performance.

Just prior to this reports’ publication, Lexaria published a letter highlighting industry developments that may shift the balance towards the DehydraTECH (DHT) platform. Early last week, Pfizer announced that it would discontinue development of its oral GLP-1 agonist danuglipron due to liver toxicity, a point emphasized in the letter. Another hurdle to GLP-1 success is the side effects that cause gastrointestinal (GI) issues in a material proportion of patients which has been a meaningful cause of discontinuation. DHT formulated GLP-1s show reduced GI side effects. These results have attracted the attention of an established pharmaceutical company that signed a material transfer agreement (MTA) with Lexaria last September. While working with larger partners is almost always a long, drawn-out affair, Lexaria reports that the collaboration continues to advance despite the lack of a signed agreement. The expansion of GLP-1 agonists into new disease areas is another opportunity for DHT, with many chronic diseases such as sleep apnea and kidney disease potentially making life easier for patients if they have the option for oral delivery.

Second Quarter 2025 Results

Lexaria filed its Form 10-Q reporting quarterly results for the three-month period ending February 28^th, 2025. The company reported revenues of $174,000 and total operating expense of $2.9 million resulting in net loss of ($2.7) million or ($0.15) per diluted common share.

For its fiscal second quarter and versus the comparable prior year period:^[1]

• Revenue totaled $174,000, up 20% from $145,000 due to increases in licensing revenues related to the licensing agreement with Premier;
• Research and development expenses totaled $1.7 million, up 590% from $0.2 million as a result of increased expenses related to the Phase Ib GLP-1 agonist trial and investigational drug product manufacturing;
• General and administrative expenses totaled $1.2 million up 118% from $0.6 million due primarily to higher consulting fees and salaries related to the hiring of a new CEO and CFO, increased legal fees due to additional registration statement filings and greater use of legal advisory services. Greater advertising and promotion expenses were incurred to share results of the diabetes and weight loss programs with the scientific and investment communities;
• Interest income was essentially $0 in both periods;
• Other loss of ($34,000) represented unrealized loss on marketable securities related to decreases in fair value;
• Net loss was ($2.7) million, or ($0.15) per share, compared to net loss of ($0.6) million or ($0.6) per share.

As of February 28^th, 2024, cash and marketable securities totaled $6.5 million which compares to $6.6 million at the end of fiscal year 2024. Cash burn for 1H:25 was approximately ($4.3) million. Cash from financing over the same period totaled $4.4 million from equity sales. Management estimates that the company holds sufficient cash to meet its financial obligations until year end.

New Patents

Lexaria was granted two new patents by the US Patent and Trademark Office in mid-February for DHT-formulated epilepsy treatments. The company has received its 5^th and 6^th US patents in patent family #24 entitled Compositions and Methods for Treating Epilepsy. These patents complement earlier research which demonstrated that DHT-CBD could mitigate epileptic seizures in rodents and that the molecule was also absorbed into the bloodstream more effectively than the commercially available cannabinoid-based anti-seizure medication, Epidiolex. The new patents expire in 2043, if not extended, and increase Lexaria’s granted patent total to 48.

• Compositions and methods for treating epilepsy – US Patent Number #12,213,986
• Compositions and methods for treating epilepsy – US Patent Number #12,220,422

DehydraTECH GLP-1 Agonist Studies

Lexaria is conducting numerous GLP-1 agonist studies from in vitro molecular characterization studies to a Phase Ib 12-week chronic study. During the second quarter and to date, Lexaria provided updates to Study #3, the Human 12-Week Study, Study #5, the Chronic Dosing Animal Study and the Biodistribution Study. Human studies #1, #2 and #3 have been completed. We summarize the latest updates on each of these efforts. For reference, see the exhibit below illustrating the expected timeline for these efforts over the next several quarters.

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^{[1] Our year over year comparison uses originally reported data.}