Incannex advances to phase 3 trial for sleep apnea treatment

NEW YORK - Incannex Healthcare Inc. (NASDAQ: IXHL), a clinical-stage pharmaceutical company with a current market capitalization of $6.77 million, has announced the initiation of a Phase 3 clinical trial for its lead asset, IHL-42X, following the completion of its Phase 2 study. According to InvestingPro data, the company maintains a healthy balance sheet with more cash than debt, though analysts note rapid cash utilization in recent quarters. The U.S. Food and Drug Administration (FDA) has authorized the Phase 3 component of the RePOSA clinical trial, which aims to evaluate the efficacy and safety of IHL-42X in treating obstructive sleep apnea (OSA), a condition affecting an estimated one billion people worldwide.

The company has designed the Phase 3 trial to be conducted exclusively in the United States, leveraging the infrastructure and momentum from Phase 2 to enhance efficiency and speed. This strategic decision is based on the strong recruitment rate and site performance observed during the earlier phase. With a current ratio of 2.12, InvestingPro analysis shows the company’s liquid assets adequately cover its short-term obligations, providing financial flexibility for trial execution. Subscribers can access 14 additional ProTips and detailed financial metrics at InvestingPro. The study will continue to use approximately 20 U.S. sites from Phase 2 and will add 10 new sites after the final review of Phase 2 data.

RePOSA Phase 3 will be a randomized, placebo-controlled trial assessing IHL-42X over 12 months in patients with moderate-to-severe OSA. It will also include a 3-month comparison against the monotherapy components of the drug to demonstrate the synergistic effect of the combination therapy. The primary endpoint will be the change in the Apnea-Hypopnea Index (AHI), with secondary endpoints focusing on sleep quality, daytime function, and overall wellbeing.

IHL-42X is an oral fixed-dose combination of dronabinol and acetazolamide, targeting the intermittent hypoxia and hypercapnia that characterize OSA. Previous trials have shown promising results, with the lowest dose reducing AHI by an average of 51 percent relative to baseline. The topline results from the U.S. Phase 2 portion of the trial are expected in July 2025.

Joel Latham, President and CEO of Incannex, stated, "The progression of RePOSA into Phase 3 represents a major milestone for Incannex and our shareholders." He emphasized the potential of IHL-42X to become the first FDA-approved oral therapy for OSA and its ability to transform the treatment paradigm for millions of patients globally. Despite the stock’s significant volatility, with a beta of 2.24, analysts project revenue growth of 24.55% for fiscal year 2025, suggesting potential commercial opportunities ahead.

Incannex is also developing other clinical-stage product candidates for conditions such as rheumatoid arthritis and generalized anxiety disorder. The company’s approach focuses on combination therapies that target underlying biological pathways associated with chronic conditions.

This announcement is based on a press release statement and contains forward-looking statements regarding the future operations and prospects of Incannex Healthcare Inc.

In other recent news, Incannex Healthcare Inc. has made significant moves to manage its financial structure and enhance its growth potential. The company announced the cancellation of 172 million Series A Warrants, following a prior cancellation of 175.2 million shares, preventing up to 347.2 million shares from entering the market. This strategic decision aims to reduce potential future share dilution and strengthen the company’s capital structure. Additionally, Incannex has amended its Sales Agreement with A.G.P./Alliance Global Partners to increase its common stock offering capacity by up to $2,514,214, supplementing the $16,768,095 worth of shares already sold.

In related developments, Incannex revised terms with Series A warrant holders, allowing a portion of net proceeds from stock sales to be allocated to them, impacting up to $12,499,828 in net proceeds. The company emphasized that the actual amount of net proceeds remains uncertain. Furthermore, Incannex has entered into a Sales Agreement with A.G.P./Alliance Global Partners for potential "at-the-market" equity offerings, although there is no obligation to sell shares immediately. These steps reflect Incannex’s proactive approach to managing its financial arrangements and strategic decisions.

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