Incannex secures $10M to accelerate sleep apnea drug trials and FDA approvals

Incannex Healthcare has secured $10 million in fresh funding through a private placement. The Australian biotech firm will use the capital to push forward its clinical trials and improve financial stability. This move comes as the company prepares for a key Phase 2 study of its lead drug for obstructive sleep apnea (OSA).

The company raised the funds by issuing two million units at $5.00 each. Every unit included one share and a warrant to buy another at $6.50. As part of the financial restructuring, Incannex also ended its existing at-the-market (ATM) equity program to streamline its capital base.

Recent clinical data has bolstered confidence in Incannex's pipeline. In the RePOSA study, patients using positional therapy saw a notable drop in the Apnea-Hypopnea Index (AHI), with an average reduction of 6.6 events per hour after three months. The results were most pronounced in those with positional OSA. Meanwhile, high-dose cohorts of IHL-42X, the company's experimental drug, achieved AHI reductions of up to 83% in 58% of participants, with no serious side effects reported. Regulatory progress is also underway. The U.S. Food and Drug Administration (FDA) granted Fast Track designation to IHL-42X, which could speed up its review. Incannex is additionally using the FDA's 505(b)(2) pathway to accelerate approval for its formulations. The new funding will primarily support the DReAMzz Phase 2 trial, set to refine dosing for IHL-42X. If successful, a Phase 3 program is planned for the second half of 2027. The company's stock has experienced fluctuations, with shares closing near $3.27 following a 1-for-30 reverse split. This adjustment gives Incannex a market capitalisation of roughly $38.1 million.

The $10 million injection will help Incannex advance its sleep apnea treatment through critical trials. With FDA Fast Track status and a planned Phase 3 study, the company aims to bring IHL-42X closer to market approval. The funding also strengthens its financial position as it continues clinical development.