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Incannex Healthcare - Strong cash position supports clinical progression

Following its Q223 cash flow report in February, Incannex has reported detailed interim H123 results. The period was mainly focused on enhanced clinical efforts across its drug development portfolio, including initiation of a bioavailability and bioequivalence study for its lead clinical asset IHL-42X, a positive pre-IND meeting with the FDA on IHL216A (for concussion and traumatic brain injury) and the completion of patient dosing in the Phase I trial of IHL-675A. IHL-675A is being considered for rheumatoid arthritis (RA), inflammatory bowel disease and lung inflammation, and the company started a Phase II study in late February 2023 in RA. We expect continued clinical progress over CY23, including anticipated IND applications and additional clinical study starts. With the recent private placement of A$13m (US$8.7m), the company’s net cash position stood at A$41.4m (US$27.8m), which, based on our estimates, provides a cash runway to the second half of FY24. We value Incannex at US$745.8m or US$11.75/ADR (US$736.6m or US$11.7/ADR previously).