Stonegate Updates Coverage on Incannex Healthcare Inc. (IXHL) 1Q 2026November 20, 2025 9:34 AM EST | Source: Reportable, Inc.Dallas, Texas--(Newsfile Corp. - November 20, 2025) - Incannex Healthcare Inc. (NASDAQ: IXHL): Stonegate Capital Partners updates their coverage on Incannex Healthcare Inc. (NASDAQ: IXHL). In 4Q25, Incannex continued to build the clinical and patient-reported evidence base for IHL-42X in obstructive sleep apnoea (OSA), following full Phase 2 RePOSA data and exit-intervie ...

Revenue Performance - Revenue from customers for the three months ended September 30, 2025, was $0, a decrease of 100% compared to $74,000 in the same period in 2024[92]. - The company has not generated revenue and does not expect to do so until drug candidates are approved[93]. Expenses - Research and development expenses decreased by $1.8 million to $1.1 million for the three months ended September 30, 2025, a reduction of 61% compared to $2.9 million in 2024[92][96]. - General and administrative expenses increased by $2.2 million to $5.7 million for the three months ended September 30, 2025, a rise of 65% compared to $3.4 million in 2024[92][102]. - The company anticipates substantial increases in general and administrative expenses as it expands operations and prepares for potential commercialization of drug candidates[102]. - Stock-based compensation is recognized using a fair value method, with expenses recorded over the vesting period[121]. - Research and development costs are expensed as incurred, including salaries, benefits, and clinical trial costs[122]. - Nonrefundable advance payments for future research and development activities are deferred as prepaid expenses until services are performed[123]. - Accrued liabilities for estimated research and development costs are based on services provided but not yet invoiced[124]. - The company has not experienced material differences between accrued costs and actual costs incurred[125]. Financial Position - Total comprehensive loss for the three months ended September 30, 2025, was $6.2 million, compared to a loss of $5.1 million in 2024, representing an increase of 22%[92][110]. - Cash and cash equivalents as of September 30, 2025, were $73.3 million, an increase of $58.3 million from $15.0 million as of June 30, 2025[112]. - Net cash used in operating activities for the three months ended September 30, 2025, was $9.2 million, an increase of $7.0 million compared to $2.2 million in 2024[112][116]. - Cash provided by financing activities increased by $67.2 million for the three months ended September 30, 2025, due to share issuances under the ATM program[115][118]. - The accumulated deficit as of September 30, 2025, was $164.0 million[110]. Tax Credits and Market Risk - Benefit from R&D tax credit in Australia is recorded within other income, recognized once compliance conditions are met[126]. - As a smaller reporting company, the company omits certain market risk disclosures[127].

Core Insights - Incannex Healthcare Inc. is making significant progress in clinical, regulatory, and capital initiatives aimed at long-term growth [1] Recent Highlights - IHL-42X (OSA) Phase 2 trial showed statistically significant efficacy with up to 83% reduction in Apnea-Hypopnea Index (AHI) from baseline, indicating potential for improved treatment of obstructive sleep apnea [2] - Patient-reported outcomes were positive, with 57.6% of participants reporting perceived improvement, increasing to 78.6% in the low dose group, and 86.4% of those reporting improvement found it meaningful to daily life [2] Priorities for the Remainder of 2025 - The company is focusing on regulatory engagement and planning for late-stage development of IHL-42X and PSX-001, with ongoing discussions with the U.S. FDA to define optimal pathways for late-stage studies [3] - Further updates will be provided after FDA interactions are concluded [3] PSX-001 Phase 2 Results - PSX-001 demonstrated statistically significant improvements in anxiety symptoms compared to placebo, with sustained relief over 11 weeks and excellent safety profile [4] - The results indicate PSX-001's potential to address a significant unmet medical need in anxiety disorders [4] Financial Position - The company has not utilized its At-The-Market (ATM) facility since August 28, 2025, maintaining a stable share count of 347,705,507, reflecting strong capital efficiency [4] - This decision underscores the company's focus on long-term shareholder value creation and confidence in growth catalysts [4] Operational Readiness - Incannex is prioritizing activities to maintain clinical momentum, data integrity, and capital discipline as programs progress [5] - The company is evaluating opportunities for prudent capital deployment to support value-creating milestones [5] Strategic Collaborations - The company is exploring partnerships and co-development opportunities to advance its scientific initiatives and create long-term value for stakeholders [6] - The CEO emphasized the significance of the Phase 2 trial results for IHL-42X in transforming treatment for obstructive sleep apnea [6][7] Overall Positioning - With two successful Phase 2 trials completed and a Nasdaq extension secured, Incannex is positioned to capitalize on strong clinical validation and disciplined capital management as it advances toward late-stage development [8]

Core Points - Incannex Healthcare Inc. has received a 180-calendar-day extension from Nasdaq to regain compliance with the minimum bid price requirement, allowing until April 20, 2026, to maintain a closing bid price of at least US$1.00 per share for a minimum of ten consecutive business days [1][2] - The extension was granted as Incannex continues to meet all other continued listing criteria for the Nasdaq Capital Market and has indicated its intention to cure the deficiency, potentially through a reverse stock split [2][3] - The company has successfully delivered two Phase 2 clinical data packages this year, validating its development platform and positioning it for future growth [3] Company Overview - Incannex Healthcare is focused on developing combination medicines targeting chronic conditions such as obstructive sleep apnea, rheumatoid arthritis, and generalized anxiety disorder [4] - The lead clinical program, IHL-42X, is an oral fixed-dose combination of dronabinol and acetazolamide aimed at treating obstructive sleep apnea [4] - IHL-675A, another clinical-stage product, combines cannabidiol and hydroxychloroquine sulfate to alleviate inflammatory conditions like rheumatoid arthritis, while PSX-001 is an oral synthetic psilocybin treatment for generalized anxiety disorder [4]

Core Insights - Several biotech and healthcare stocks experienced significant after-hours gains on October 1, driven by technical momentum and recent clinical updates rather than new disclosures [1] Company Summaries - Zhongchao Inc. (ZCMD) saw a 14.04% increase in after-hours trading, rising to $1.30 from $1.14, despite no new filings or press releases [2] - AbCellera Biologics Inc. (ABCL) rose 11.41% in after-hours trading, closing at $6.64, following an 18.49% gain during the regular session, attributed to recent clinical trial progress [3][4] - Vor Biopharma Inc. (VOR) surged 9.53% in after-hours trading, recovering from a 19.42% drop during the regular session, with no new updates since a recent announcement regarding clinical data presentation [5] - Incannex Healthcare Inc. (IXHL) gained 6.48% in after-hours trading, partially recovering from a 6.94% drop, with the latest update showing positive Phase 2 trial results for PSX-001 [6] - Ovid Therapeutics Inc. (OVID) shares rose 8.03% in after-hours trading, building on a 5.38% gain during the regular session, with recent earnings report indicating a narrower net loss and higher revenue [7] - Bullfrog AI Holdings Inc. (BFRG) advanced 3.44% in after-hours trading, following a 3.57% rise during the regular session, after announcing an expansion of its sales and marketing team [8]

Financial Performance - The company reported total comprehensive losses of $46.7 million and $18.5 million for the fiscal years ended June 2024 and 2025, respectively, with accumulated comprehensive losses of $157.6 million as of June 30, 2025[245]. - The company has a history of operating losses and may not achieve profitability in the future, depending on the successful development of its drug candidates[244]. - The company has experienced negative cash flows from operating activities of $12.5 million and $5.8 million for the fiscal years ended June 2024 and 2025, respectively[245]. - The company anticipates substantial additional funding will be required to continue the development of its drug candidates, with no revenue generated from product sales to date[249]. Regulatory and Compliance Risks - The company is subject to ongoing regulatory obligations and may incur significant additional expenses if it receives marketing approval for its drug candidates[242]. - Regulatory approvals in one jurisdiction do not guarantee approvals in others, potentially limiting the market for drug candidates[268]. - Compliance with manufacturing regulations requires significant time and resources, and failure could lead to regulatory enforcement actions[288]. - The company must comply with extensive CSA requirements and DEA regulations for the importation, manufacturing, and distribution of drug candidates[343]. - The company faces potential delays in clinical trials if DEA researcher registrations are not granted in a timely manner[343]. - The company is subject to significant scrutiny regarding pharmaceutical pricing practices, which may lead to legislative changes affecting operations[352]. Clinical Development Challenges - The company relies on third parties for conducting preclinical and clinical trials, and any failure by these parties could substantially harm its business[237]. - Clinical trials are lengthy and expensive, with uncertain outcomes, and previous positive results do not guarantee future success[269]. - The company may encounter difficulties in enrolling patients for clinical trials, as evidenced by the termination of a Phase 2 trial due to recruitment challenges[276]. - Delays in clinical trials can arise from various factors, including recruitment challenges and regulatory compliance issues[270]. - Clinical trials may produce negative or inconclusive results, which could delay or prevent regulatory approvals[279]. Intellectual Property and Competition - The company is exploring a patent protection strategy for its candidate PSX-001, which is critical for protecting its intellectual property rights[244]. - The company’s success is dependent on the ability to protect its intellectual property rights globally, which may not be achievable[396][398]. - Third-party intellectual property rights could adversely affect the company's ability to commercialize drug candidates, leading to potential litigation[403][404]. - The company faces competition from major pharmaceutical and biotechnology firms, which may have greater resources and could develop superior products[318]. - The company may face challenges from third parties regarding the validity of its patents, which could adversely affect its business[422]. Market and Pricing Risks - Pricing regulations and reimbursement practices vary by country, potentially delaying product launches and impacting revenue[328]. - Coverage and reimbursement from payors are critical for the commercialization of drug candidates, with variability in the U.S. and Europe[329]. - Legislative changes, such as the IRA, may impose price controls and affect revenue from drug products[333]. - Price controls in non-U.S. markets, particularly in the EU, Japan, Australia, and Canada, may negatively impact future profitability due to governmental pricing negotiations[428]. Stock and Market Performance - The company's common stock has consistently closed below $1.00 per share since early March 2025, resulting in a notice from Nasdaq regarding non-compliance with the minimum bid price requirement[261]. - The trading price of the company's common stock has been highly volatile, influenced by various factors including quarterly financial results and revenue fluctuations[431]. - Broader market fluctuations unrelated to the company's performance may adversely affect the trading price of its common stock[433]. Cybersecurity and Data Protection - Cybersecurity threats pose significant risks to the company's operations, potentially leading to data breaches, regulatory investigations, and financial losses[366]. - The company is subject to evolving U.S. federal and state, and international laws regarding data protection, which could lead to significant fines and liability if compliance is not met[375]. - The California Consumer Privacy Act (CCPA) went into effect in January 2020, providing California residents with expanded rights and potential civil penalties for violations[375]. Operational and Management Risks - The company faces a scarcity of experienced professionals in the industry, which may hinder the company's ability to execute its business strategy effectively[388]. - High turnover rates among management personnel could significantly harm the company's ability to implement its business strategy successfully[389]. - The company may face material adverse effects from geopolitical events, accidents, and natural disasters, impacting operations and financial condition[390].

Core Insights - Incannex Healthcare Inc. reported positive results from its Phase 2 clinical trial of PSX-001, a psilocybin-assisted therapy for Generalised Anxiety Disorder (GAD), indicating its potential as a leading treatment globally [1][12] Trial Design Overview - The Phase 2 study was randomized, double-blind, and placebo-controlled, enrolling 73 adults with moderate to severe GAD, who received either a 25 mg dose of synthetic psilocybin or placebo [2] - Participants underwent two dosing sessions with equal psychological support, ensuring treatment effects were attributable to psilocybin [2] Efficacy Results - The trial demonstrated statistically significant improvements across all primary and secondary endpoints, with a notable 12.8-point reduction in HAM-A scores for the Psi-GAD group compared to a 3.6-point reduction in the placebo group (p<0.0001) [4] - A clinically meaningful response was observed in 44.1% of patients treated with Psi-GAD, achieving a ≥50% reduction in HAM-A scores, significantly higher than the placebo group [5] - The Psi-GAD group also showed a 7.4-point reduction in GAD-7 scores versus 3.5 points for placebo (p<0.0004) [7] - Improvements in functional impairment were noted with a 6.0-point reduction in SDS scores for Psi-GAD compared to 1.3 points for placebo (p<0.007) [8] - Statistically significant antidepressant effects were observed with a 3.9-point reduction in PHQ-9 scores for Psi-GAD versus 0.3 points for placebo (p<0.005) [9] - Quality of life, measured by the PWI, improved by 10.6 points in the Psi-GAD group compared to 2.7 points for placebo (p<0.002) [10] Safety and Tolerability - Treatment with Psi-GAD was well tolerated, with no serious adverse events reported and only one withdrawal from the trial [11] - Most treatment-emergent adverse events were mild to moderate and transient, with no increased risks of suicidality or psychosis noted [11] Company Statements - Dr. Lou Barbato, Chief Medical Officer, emphasized the statistically significant and durable treatment effects observed across multiple measures, positioning Psi-GAD as a leader in anxiety treatment innovation [12] - Joel Latham, President and CEO, highlighted the results as a major milestone for Incannex, reinforcing confidence in their clinical pipeline and strategy [13] Next Steps - Incannex is preparing to initiate a multi-jurisdiction Phase 2 clinical trial and is refining formulation strategies to strengthen its intellectual property position [14][16]

Core Viewpoint - Incannex Healthcare Inc. has announced a share repurchase program for up to $20 million of its outstanding common stock, reflecting confidence in its clinical pipeline and market valuation [1][3]. Summary by Sections Share Repurchase Program - The program allows the company to repurchase shares through various methods, including open market purchases and privately negotiated transactions, in compliance with applicable securities laws [2]. - The timing and amount of repurchases will depend on market conditions and available capital resources [2]. Company Leadership Commentary - CEO Joel Latham stated that the repurchase program demonstrates confidence in the company's pipeline and strategy, and aims to enhance long-term shareholder value [3]. - The initiative is part of a broader commitment to sustainable shareholder value and disciplined capital allocation [3]. Company Overview - Incannex is focused on developing combination medicines for chronic conditions such as obstructive sleep apnea, rheumatoid arthritis, and generalized anxiety disorder [4]. - The lead clinical program, IHL-42X, targets obstructive sleep apnea and is an oral fixed-dose combination of dronabinol and acetazolamide [4]. - Other clinical-stage candidates include IHL-675A for inflammatory conditions and PSX-001 for generalized anxiety disorder, both of which are in Phase 2 development [4].

Core Insights - Incannex Healthcare Inc. (NASDAQ: IXHL) has made significant progress with its IHL-42X asset, achieving positive topline results from the Phase 2 study, with maximum reductions in Apnoea-Hypopnoea Index (AHI) of up to 83% for the high-dose group and 79% for the low-dose group [1][7] - The treatment was well tolerated, with no serious adverse events reported, and 57.6% of participants noted a perceived improvement in their obstructive sleep apnea (OSA) [1][7] - IXHL has eliminated approximately $347 million in potentially dilutive Series A Warrants through around $24.7 million in at-the-market (ATM) proceeds, enhancing financial flexibility for advancing IHL-42X towards commercialization [7] Clinical and Regulatory Developments - The Phase 2 trial of IHL-42X demonstrated statistically significant reductions in AHI and broad improvements in patient-reported outcomes, indicating both efficacy and safety [7] - Beyond IHL-42X, IXHL is advancing other assets, including PSX-001 for generalized anxiety disorder (GAD) with IND clearance in the U.S. and U.K., and IHL-675A, which is in Phase 2 for rheumatoid arthritis, with data expected in the second half of 2025 [7]

Core Insights - Incannex Healthcare Inc. announced new patient-reported outcomes from its RePOSA Phase 2 trial of IHL-42X for obstructive sleep apnoea (OSA), indicating strong potential for improving sleep quality and cognitive function [1][4] - The exit interviews conducted aligned with FDA guidance and assessed patient experiences, revealing significant motivation among participants for improved health and alternatives to traditional therapies [2][3] Clinical Efficacy - The RePOSA Phase 2 trial showed statistically significant improvements in key endpoints for patients receiving IHL-42X compared to placebo, indicating its potential to reduce OSA severity and enhance quality of life [5] - The Apnoea-Hypopnoea Index (AHI) showed maximum reductions of up to 83% in the high-dose group and 79% in the low-dose group, with both groups achieving statistically significant reductions compared to placebo [6] - 57.6% of participants reported perceived improvements in their OSA, with 89.5% of those describing the changes as meaningful [7] - Reduction rates of ≥30% in AHI were observed in 33.3% of the low-dose group and 41.2% of the high-dose group, while reductions exceeding 50% were seen in 13.9% (low-dose) and 14.7% (high-dose) [8] - Statistically significant improvements in sleep-related impairment and fatigue were noted in the low-dose group, along with better oxygenation during sleep in both dose groups [9] Patient-Reported Outcomes - Clinically significant improvements were observed in various sleep quality metrics, including the Functional Outcomes of Sleep Questionnaire-10 and the Epworth Sleepiness Scale, demonstrating enhanced sleep quality and reduced fatigue [10] - Objective sleep parameters also improved, with a 29.8% reduction in Wake After Sleep Onset (WASO) and a 30.3% decrease in AHI during supine sleep in the high-dose group [11] - IHL-42X did not reduce the proportion of time spent in REM sleep, which is crucial for memory consolidation and emotional regulation [12] Safety Profile - IHL-42X was well tolerated across both low- and high-dose cohorts, with no serious adverse events reported and most treatment-emergent adverse effects being mild or moderate [14] Company Overview - Incannex Healthcare is focused on developing combination medicines targeting chronic conditions, including OSA, rheumatoid arthritis, and generalized anxiety disorder, with IHL-42X being its lead clinical program [15]