- The report provides an investment analysis of IntelGenx Technologies Corp (IGXT), assigning a "Buy" rating and $3 price target. - Key catalysts in 2013 include expected acceleration in sales of IGXT's migraine drug Forfivo and regulatory submissions of new drug candidates. - IGXT is developing novel formulations of existing drugs and recently appointed a new CEO to help expand partnerships.

1. The Disclosure section may be found on page 3 of this report.
Biopharmaceuticals
Raghuram Selvaraju, Ph.D.
(646) 502-2464
rselvaraju@aegiscap.com
Yi Chen, Ph.D.
(646) 502-2463
ychen@aegiscap.com
Company Update / Estimates Change
May 20, 2013
Key Metrics
IGXT - OTC $0.62
Pricing Date May 17 2013
Price Target $3.00
52-Week Range $0.75 - $0.45
Shares Outstanding (mm) 50.3
Market Capitalization ($mm) $31.2
3-Mo Average Daily Volume 158,584
Institutional Ownership 0%
Debt/Total Capital NM
ROE NM
Book Value/Share $0.04
Price/Book 15.5x
Dividend Yield NM
LTM EBITDA Margin NM
EPS ($) FY: December
Prior Curr. Prior Curr.
2011A 2012E 2012E 2013E 2013E
1Q-Mar (0.01) -- (0.01) 0.00E (0.01)A
2Q-Jun (0.01) -- (0.01) 0.00E (0.01)E
3Q-Sep (0.02) -- (0.01) 0.00E (0.01)E
4Q-Dec (0.01) -- (0.01) 0.01E (0.01)E
FY (0.05) -- (0.04) 0.01E (0.04)E
P/E NM NM NM
Revenue ($M)
Prior Curr. Prior Curr.
2011A 2012E 2012E 2013E 2013E
1Q-Mar 0.1 -- 0.3A 0.8E 0.2E
2Q-Jun 0.1 -- 0.0A 0.9E 0.2E
3Q-Sep 0.0 0.2E 0.0E 1.1E 0.5E
4Q-Dec 0.3 0.5E 0.9E 1.3E 0.6E
FY 0.4 1.0E 1.2E 4.0E 1.4E
Company Description:
IntelGenx (http://www.intelgenx.com/) is an emerging firm developing
novel formulations of existing drugs.
IntelGenx Technologies Corp.
Rating: Buy
IntelGenx: Looking Towards A Pivotal Year Ahead
Investment Highlights:
■
Forfivo™ Traction Expected To Accelerate. We note that Forfivo™ has
now been available in the U.S. for roughly six months, and that IntelGenx's
partner Edgemont Pharmaceuticals appears to have dealt with most of the
initial snags that impacted the launch of the drug. Accordingly, therefore,
we anticipate meaningful acceleration in Forfivo™ prescription volumes in
the coming months. While we do not expect the drug to become a massive
seller, we note that even a relatively modest revenue base would likely have
substantial impact on IntelGenx's bottom line, and should be sufficient to
drive the company towards profitability. We note that IntelGenx continues to
exhibit a cost-effective operational approach, burning roughly $2mm or less
per year. We reiterate our Buy rating and 18-month price target of $3.00 per
share on IGXT.
■
Rizatriptan 505(b)(2) Application Filed. In March 2013, IntelGenx
reported that it had filed for approval of an oral film-based proprietary
formulation of rizatriptan, a well-known anti-migraine drug belonging
to the triptan class. Rizatriptan, which was originally developed and
commercialized by Merck & Co. (MRK/NYSE, Not Rated) under the trade
name Maxalt, had sales of $638mm in 2012. The patent protection on Maxalt
has now expired. We believe that, even in the face of generic competition,
it should be possible for IntelGenx's oral film formulation to eke out a solid
niche in the migraine market, particularly as the company's delivery approach
provides substantial advantages from an absorbability perspective.
■
Management Transition Announced. IntelGenx recently appointed Dr.
Rajiv Khosla, a widely-respected industry veteran who previously spent
several years at Biovail Corporation - now Valeant Pharmaceuticals
International (VRX/NYSE, Buy) - as Chief Scientific Officer and Chief
Operating Officer. Dr. Khosla is also slated to assume the post of CEO
effective January 2014. Horst Zerbe, the company's founder and current CEO,
is expected to stay on as Chairman of the Board of Directors and is slated to
continue to provide expertise on formulation, drug manufacturing and R&D.
From our perspective, the appointment of Dr. Khosla is a solid step forward
for IntelGenx and should enable the firm to operate more aggressively from
an out-licensing and partnership standpoint.
■
Additional Catalysts Expected Near-Term. We believe that 2013 is likely
to be a watershed year for IntelGenx because this is the first time that
the company is in position to reap rewards from a marketed product -
Forfivo - which is in full ramp mode, while simultaneously filing other
drug candidates for approval with the FDA. In our view, even one or two
regulatory submissions should catch the eye of discerning investors, the
majority of whom we continue to believe are unaware of the potential inherent
in IntelGenx's diversified product candidate portfolio and capital-efficient
business model.

2. 2 AEGIS CAPITAL CORP.
Table 1: IntelGenx Technologies Corp. (IGXT.OB) – Historical Income Statements, Financial Projections
FY end December 31
$ in thousands, except per share data
2012A 1QA 2QE 3QE 4QE 2013E 1QE 2QE 3QE 4QE 2014E
Revenue
Product revenue 500 80 120 350 500 1,050 850 1,400 1,900 2,200 6,350
Service revenue 420 77 100 100 100 377 200 200 200 200 800
Research and other 288 - - - - - 50 50 50 50 200
Total revenue 1,208 157 220 450 600 1,427 1,100 1,650 2,150 2,450 7,350
Expenses
Cost of product and service revenue - - - - - - - - - - -
Research & development 1,723 167 250 300 350 1,067 400 500 550 600 2,050
Selling and marketing - - - - - - - - - - -
General and administrative 1,645 476 500 550 600 2,126 600 600 600 600 2,400
Total expenses 3,368 643 750 850 950 3,193 1,000 1,100 1,150 1,200 4,450
Gain (loss) from operations (2,160) (486) (530) (400) (350) (1,766) 100 550 1,000 1,250 2,900
Other income/expense
Interest income/expense (3) - - - - - - - - - -
Depreciation (46) - - - - - - - - - -
Other income/expense (41) - - - - - - - - - -
Total investment income and other (90) - - - - - - - - - -
Earnings (Loss) before provision for income taxes (2,250) (486) (530) (400) (350) (1,766) 100 550 1,000 1,250 2,900
Foreign currency translation adjustment 100 (36) (36) (36) (36) (144) (40) (40) (40) (40) (160)
Net Income (Loss) (2,150) (522) (566) (436) (386) (1,910) 60 510 960 1,210 2,740
Net loss per share (basic) (0.04) (0.01) (0.01) (0.01) (0.01) (0.04) 0.00 0.01 0.01 0.02 0.04
Net loss per share (diluted) (0.04) (0.01) (0.01) (0.01) (0.01) (0.04) 0.00 0.01 0.01 0.02 0.04
Weighted average number of shares outstanding (basic) 49,638 50,236 51,323 53,873 56,423 52,964 60,473 64,523 64,573 64,623 63,548
Weighted average number of shares outstanding (diluted) 49,638 50,236 51,323 53,873 56,423 52,964 60,473 64,523 64,573 64,623 63,548
2014E2013E
Source: Company Reports and Aegis Capital Corp. estimates
IntelGenx Technologies Corp. May 20, 2013

3. 3 AEGIS CAPITAL CORP.
Required Disclosures
Price Target
Our 18-month price target for IGXT is $3.00 per share.
Valuation Methodology
We utilize a risk-adjusted Net Present Value (rNPV) analysis to determine our price target objective. Using a discounted cash flow
analysis, we derive an rNPV-based total firm value of $210 million, which translates into a price per share of $3.00, assuming 72 million
fully-diluted shares outstanding and roughly $20 million in cash as of mid-2014.
Risk Factors
Issues that could prevent the achievement of our price objective include, but are not limited to, clinical, regulatory, competitive,
reimbursement and financial risks. Drugs in clinical development may not advance due to inadequate safety, efficacy, or tolerability.
Regulatory agencies may decline to approve regulatory submissions in a timely manner, or may not approve a drug candidate at all. The
firm may require substantial funding to advance the clinical progress of its candidates, which could be dilutive to current shareholders.
We expect competition for the company's drugs from several public and private companies developing pharmaceuticals. Sales of the
firm's drugs could depend upon reimbursement from private, as well as public, reimbursement agencies.
For important disclosures go to www.aegiscap.com.
Research analyst compensation is dependent, in part, upon investment banking revenues received by Aegis Capital Corp.
Aegis Capital Corp. intends to seek or expects to receive compensation for investment banking services from the subject company within
the next three months.
Investment Banking
Services/Past 12 Mos.
Rating Percent Percent
BUY [BUY] 83.33 23.33
HOLD [HOLD] 16.67 16.67
SELL [SELL] 0.00 0.00
Meaning of Ratings
A) A Buy rating is assigned when we do not believe the stock price adequately reflects a company's prospects over 12-18 months.
B) A Hold rating is assigned when we believe the stock price adequately reflects a company's prospects over 12-18 months.
C) A Sell rating is assigned when we believe the stock price more than adequately reflects a company's prospects over 12-18 months.
Other Disclosures
The information contained herein is based upon sources believed to be reliable but is not guaranteed by us and is not considered to be all
inclusive. It is not to be construed as an offer or the solicitation of an offer to sell or buy the securities mentioned herein. Aegis Capital
Corp., its affiliates, shareholders, officers, staff, and/or members of their families, may have a position in the securities mentioned herein,
and, before or after your receipt of this report, may make or recommend purchases and/or sales for their own accounts or for the accounts
of other customers of the Firm from time to time in the open market or otherwise. Opinions expressed are our present opinions only and
are subject to change without notice. Aegis Capital is under no obligation to provide updates to the opinions or information provided
herein. Additional information is available upon request.
© Copyright 2012 by Aegis Capital
Aegis Capital Corp.
(212) 813-1010
810 Seventh Avenue, 18th Floor
New York, New York 10019
IntelGenx Technologies Corp. May 20, 2013