Why Lexaria’s Patents Represent a Big Opportunity
April 18th, 2018
Exclusive, News, Top News
The initial “green rush” may have been to expand production capacity in legal states and countries, but the cannabis industry’s next biggest opportunity is in patents. By building a patent portfolio early on, companies can obtain key intellectual property rights that will convey a broad market advantage as the industry matures. Investors benefit from both a legal monopoly and the opportunity to generate royalty income from licensing.
Lexaria Biosciences Corp. (OTCQX: LXRP) (CSE: LXX) has been diligently focused on building up its patent portfolio covering the DehydraTECH™ technology. By addressing key issues with bioavailability, the company’s DehydraTECH™ platform can be used with both patented and generic API substances. The company’s portfolio of more than 35 patent applications across 40 countries has already opened the door to new licensing agreements – and it’s just getting started.
Importance of Patents
The cannabis industry is a blue sky opportunity for innovative companies looking to build a patent portfolio covering plant strains, breeding methods, extraction techniques, growing technologies, proprietary software, and novel therapeutics. According to Google Patents, there are around 137,734 mentions of “marijuana” or “cannabis” in patents registered with the U.S. Patent and Trademark Office, and that figure is rapidly growing in the new “gold rush”.
Companies that start building a patent portfolio at these early stages may obtain key intellectual property rights that will convey a broad market advantage. In addition, these companies will have the ability to exclude competitors from the marketplace or create ongoing royalty revenue by licensing the patent to third parties. These patents are also a great investment with a 20-year amortized cost of just $1,750 per year, according to Marijuana Venture.
Investors may want to take a closer look at companies within the cannabis industry that are aggressively building out their intellectual property portfolios. These companies could represent lucrative opportunities as the industry matures, particularly if their patents address important problems within the industry. For example, cannabinoid bioavailability, efficient extraction, pesticide-free growing, and other issues could be lucrative areas of focus.
Building a Patent Portfolio
Lexaria Biosciences has recognized the value of building a patent portfolio early on and decided to focus on innovative delivery systems. Over the past several years, the company has built up a portfolio of more than 35 patent applications across 40 countries around the world. Management plans to continue making new patent application filings during 2018 and anticipates more rewards over the coming year.
On April 11, the company announced that it received a notice of allowance provided claims that protect processes for making specific compositions of matter for enhanced cannabinoid delivery utilizing its DehydraTECH™ technology. The news follows its March 22 announcement of the notice of allowance for the composition of matter claim for the technology. These two notices of allowance are expected to become its third and fourth granted patents in the United States.
The company’s six current patent families covering DehydraTECH™ include:
- “Food and Beverage Compositions Infused With Lipophilic Active Agents and Methods of Use Thereof”
- “Methods for Formulating Orally Ingestible Compositions Comprising Lipophilic Active Agents”
- “Stable Ready-to-Drink Beverage Compositions Comprising Lipophilic Active Agents”
- “Microwave Processing Methods for Formulating Orally Ingestible Compositions Comprising Lipophilic Active Agents”
- “Food and Beverage Compositions Comprising PDE5 Inhibitors”
- “Transdermal Delivery of Lipophilic Active Agents”
These patents provide a key barrier to entry when it comes to competing technologies that attempt to use the same techniques to improve bioavailability. At the same time, the patents open the door to licensing opportunities to generate royalty income. Several companies have already entered into licensing agreements to use the innovative technology in their own products to improve the taste and bioavailability of cannabinoids.
Lexaria Biosciences Corp. (OTCQX: LXRP) (CSE: LXX) represents a compelling opportunity in the burgeoning cannabis industry. By building an intellectual property portfolio early on, the company hopes to create significant barriers to entry for its DehydraTECH™ platform as well as open the door to royalty revenue from licensing agreements. Investors may want to keep a close eye on the stock given these developments.
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