The company had a busy quarter of clinical research breakthroughs, listing on NASDAQ and making a play for a cannabinoid development company with a big patent portfolio.

With its quarterly trading update this morning, leading ASX biotech Incannex Healthcare (ASX:IHL) highlighted a number of exciting developments in the March quarter as it executes on a multi-channel clinical pathway.

Along with important breakthroughs across its product suite, the company also had a busy quarter on the corporate front including a landmark deal to acquire innovative US biotech APIRx Pharmaceutical.

That was accompanied by the successful listing of ADSs representing IHL ordinary shares on the Nasdaq Global Market (under code “IHXL”), and a loyalty options program which provided the company with $23.6m in extra capital as it ramps up clinical trials in 2022 and 2023.

With an exciting future ahead, IHL provided quick summary for investors on the latest clinical developments and its US growth ambitions.



Leading off the company’s product summary is IHL-42X, a novel cannabinoid combination product for the treatment of obstructive sleep apnoea (‘OSA’).

During the March quarter, IHL confirmed successful preliminary results for its Phase 2a trial where three doses (low, medium, high) of IHL-42X were assessed for their capacity to reduce apnoea hypopnoea index (‘AHI’), the main diagnostic and monitoring criteria for OSA.

From a baseline average of 42.84, the average AHI was 23.81 after the treatment periods assessing all three doses, which represents a 44.4 % reduction in AHI.

That compared to a reduction of just 6.4% for placebo treatments.

In addition, 60% of participants experienced a reduction in AHI of greater than 55% and all dose levels were observed to be well tolerated. 20% of participants experienced a reduction in AHI greater than 80%.

With results like that, it’s no surprise that IHL’s chief scientific officer, Dr. Mark Bleackley, was optimistic about the treatment.

“The average reduction in AHI calculated across low, mid, and high-dose IHL-42X has met our expectations for what would constitute a valuable product for the treatment of obstructive sleep apnoea,” Bleackley said.

For its next important step, IHL now has a pre-IND meeting with the US FDA scheduled for May 11, which will assist with the planning process for the next phase of pivotal clinical trials.

“Patient dose strengths remain blinded by Novotech, the independent research organisation managing the data integrity of the trial, while analysis continues,” IHL said.

“The final report containing all pertinent trial data, including the superior IHL-42X dose strength, is anticipated to be released in the current June 2022 quarter.”


Corporate highlights

Further establishing its position in the US market, IHL’s proposed acquisition of APIRx Pharmaceutical will provide Incannex with another diverse portfolio of novel cannabinoid-based treatments.

APIRx has twenty-two active clinical and preclinical research and development projects ongoing, underpinned by a large intellectual property portfolio of19 granted patents and 23 pending patents.

Among its development suite are two novel medicated chewing gum products — CanQuit and CanQuitO – which are combination CBD therapies used in the treatment of addiction disorders.

Globally, the market for nicotine medicated chewing gums  for smoking cessation generates in excess of US$5bn in sales per annum.

The chewing gum delivery method works by releasing nicotine directly into the blood stream through the lining of the mouth to reduce cravings for a cigarette.

While it’s a mature industry, data shows that nicotine gum products still only assist around 15% of the smokers to quit for good.

In that context, the Incannex board believes both of APIRx’s CanQuit treatments have the capacity to materially disrupt the global nicotine gum market. They may achieve this by combining nicotine and CBD to potentially better assist smokers to quit smoking.

Alongside CanQuit, APIRx’s CanQuitO product is a separate combination treatment targeting opioid addiction – a crisis which has grown particularly acute in the US. CanQuitO combines CBD and a opioid antagonist to help reduce cravings for opioids, such as heroin and certain painkillers.

Given that broader medical priority, the market for effective opioid addiction products is estimated at more than US$60bn per annum and yet the crisis lingers.

What’s ultimately exciting about the APIRx products is that they bring a new (novel) and, orimproved solutions to already well-established markets.

This is achieved via multiple patented delivery methods (chewables, high-bioavailability, and slow-release formulations), that give APIRx/Incannex the chance to bring products that potentially have improved success rates to multi-billion dollar markets or even open up new channels of demand.

IHL’s proposed share-based acquisition remains subject to shareholder approval. The company will issue and extraordinary general meeting notice and detailed presentation on the APIRx acquisition in due course. The acqusuiton price is US$93.3M at a fixed price of A$0.573 per share, significantly higher than the current share price.

With such a busy schedule of activity, IHL’s $23.6m capital raise comes at a crucial strategic time for the business, as it advances toward a number of company-making breakthroughs in clinically backed combination cannabinoid treatments.

The raise leaves IHL with a cash balance of more than $40m as it works towards the acquisition of APIRx and advances its multi-channel development pathway.

And amid that exciting backdrop, IHL also has direct access to US capital markets through its Nasdaq Global listing, giving the company a sound footing in the huge US biotech market where it already has multiple regulatory discussions with the US FDA underway.

Elsewhere in its quarterly trading update, IHL provided an update in March quarter developments for its other exciting clinical-stage treatment solutions.



Also during the quarter, IHL provided an update on IHL-216A — its cannabinoid combination drug for the treatment of post-concussion or traumatic brain injury. The treatment combines cannabidiol (‘CBD’) with a volatile anaesthetic agent (isoflurane).

During the quarter, an extensive in vivo (on animals) study was conducted at Monash University, using a model that was developed in collaboration with the US National Football League (NFL), and will act as a precursor to pivotal human trials.

The study follows promising early experiments conducted by IHL, which indicated that CBD and isoflurane act synergistically to reduce neuronal damage, neuroinflammation and behavioural deficits that are consequences of TBI.

As with their other drug compounds, an International Patent Application has been filed as part of the IHL-216A development program.

Results from the Monash study “are being analysed to be released within 2-3 weeks in the current June 2022 quarter”, IHL said.


Psilocybin and psychotherapy for Generalised Anxiety Disorder (“Psi-GAD”)

Rounding out  major updates for the quarter, IHL explained that patient screening and recruitment commenced for the phase 2a Psi-GAD clinical trial, led by Dr Paul Liknaitzky.

The first participants to the trial have been enrolled and treatment has commenced in the unique trial, which incorporates a range of treatment innovations currently unseen in the field of psychedelic therapy.

Like its other treatments, IHL has also completed a pre-IND meeting with the FDA, to confirm that the therapeutic strategy for the development of a psilocybin-assisted therapy for GAD is appropriate.

Specific feedback from the FDA will shape “a pivotal phase 2b clinical trial, which will be the IND opening study, following either interim or full results from the phase 2a trial”, IHL said.

This article was developed in collaboration with Incannex Healthcare, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.