Incannex Healthcare Reports Promising Phase 2 Results for Sleep Apnea Treatment IHL-42X
TL;DR
Incannex Healthcare's IHL-42X shows up to 83% AHI reduction, positioning investors for significant gains as the drug advances toward commercialization.
Incannex Healthcare's Phase 2 study demonstrated statistically significant AHI reductions with both dose groups showing excellent tolerability and no serious adverse events.
IHL-42X improves sleep apnea for patients with 89.5% reporting meaningful life changes, enhancing daily quality of life and long-term health outcomes.
Incannex Healthcare's psilocybin-based PSX-001 for anxiety and IHL-675A for arthritis show promising Phase 2 results alongside the sleep apnea breakthrough.
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Stonegate Capital Partners has updated its coverage on Incannex Healthcare Inc. following significant progress with the company's IHL-42X asset for obstructive sleep apnea treatment. The Phase 2 study results show both low and high dose groups achieved statistically significant reduction in Apnoea-Hypopnoea Index from baseline compared to placebo, with maximum AHI reductions reaching 83% for the high-dose group and 79% for the low-dose group.
The treatment's safety profile appears favorable, with no serious adverse events reported during the treatment period across both cohorts. Patient-reported outcomes were equally impressive, as 57.6% of participants reported perceived improvement in their OSA condition, and 89.5% of those reporting improvement described the change as meaningful to their lives. These results position IXHL favorably as it begins next steps toward bringing IHL-42X to market.
Financially, IXHL has strengthened its position through strategic arrangements designed to optimize capital structure and minimize dilution. The company utilized proceeds from its ATM to issue approximately $24.7 million worth of shares to repurchase all outstanding Series A Warrants representing 347.2 million potentially dilutive shares. This proactive capital management approach supports the company's financial flexibility and provides significant visibility for future operations.
Beyond the sleep apnea program, IXHL's PSX-001, a psilocybin-based candidate for Generalized Anxiety Disorder, achieved positive results from a Phase 2 proof-of-concept study. The company has secured IND clearance from the FDA and Clinical Trial Authorization from UK regulators for the PsiGAD2 Phase 2 trial, which will recruit 94 patients across both countries. Meanwhile, IHL-675A, targeting inflammation associated with rheumatoid arthritis, completed patient dosing in its Phase 2 trial with approximately 128 participants, with data expected in the second half of 2025.
Stonegate's valuation model returns a range of $1.05 to $2.86 with a midpoint of $1.70 based on probability-adjusted discounted cash flow analysis using discount rates between 12.50% and 17.25%. The model acknowledges the long-term nature of IXHL's industry and the potential for dramatic re-ratings as new clinical information becomes available. Further details on the valuation methodology can be found at https://www.stonegatecp.com/research.
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