Incannex Healthcare Ltd (ASX:IHL, NASDAQ:IXHL) has received an upgraded valuation of US$11.75 per ADR or US$745.8 million from Edison Investment Research after robust interim first-half results.
The period was mainly focused on enhanced clinical efforts across its drug development portfolio which included:
- initiation of a bioavailability and bioequivalence study for its lead clinical asset IHL42X;
- 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.
Incannex is targeting continued clinical progress through the year, including anticipated IND applications and additional clinical studies.
With the recent private placement of A$13 million, the company’s net cash position stood at A$41.4 million, providing a cash runway to the second half of FY24.
Following are the excerpts from Edison’s Research report:
Clinical development across portfolio
During H123, Incannex recorded developments across its clinical pipeline.
For its proprietary inhaled drug product, IHL-216A, the company received detailed feedback for the future clinical development plan from the FDA, followed by a positive pre-IND meeting and pre-IND package submission in August 2022.
Additionally, Incannex plans to submit an IND application in the first quarter of CY23 for IHL-42X in obstructive sleep apnea and, if approved, may initiate an international, multi-site Phase II/III study in the first half of CY23.
Furthermore, Incannex has now started a Phase II study assessing the efficacy and safety of IHL-675A in RA patients.
A$13 million placement to extend cash runway
In December 2022, Incannex raised a total of A$13 million (gross proceeds) through a private placement, issuing 63.4 million new common shares at A$0.0205/share.
In addition to this, the subscribers were offered an equal number of new options, exercisable at A$0.285 per option.
The options, if exercised in full, might raise a further A$18.1 million in proceeds.
Post the private placement, we now expect Incannex to need A$55 million in additional funding before reaching profitability in FY26.
Valuation: US$745.8 million
Our valuation for Incannex increases slightly to US$745.8 million or US$11.75 per ADR (US$736.6 million or US$11.7 per ADR previously), mainly due to rolling our model forward and foreign exchange movements.
With a net cash position of A$41.4 million, based upon our projections, we estimate an operational cash runway into H224