Incannex Healthcare Reports $5.9 Million Net Loss in Q2 Fiscal 2025

Incannex Healthcare Inc. reported its financial results for the second quarter of fiscal year 2025, revealing a net loss of $5.9 million for the three months ended December 31, 2024, compared to a loss of $5.2 million for the same period in the previous year. For the six months ended December 31, 2024, the company recorded a net loss of $11.3 million, significantly higher than the $6.0 million loss reported for the first half of fiscal 2024. The company generated $12,000 in revenue during the quarter, marking a notable increase from zero revenue in the prior year, but overall operating expenses decreased by 37% to $5.0 million compared to $8.0 million in the same quarter last year.

The company’s total assets decreased to $11.1 million as of December 31, 2024, down from $17.0 million at the end of the previous fiscal year. This decline was primarily attributed to a reduction in cash and cash equivalents, which fell to $2.1 million from $5.9 million. The decrease in cash was influenced by ongoing operational losses and a reduction in the R&D tax incentive receivable, which dropped to $6.6 million from $9.8 million. The accumulated deficit also widened to $122.0 million, reflecting the company's continued investment in research and development activities.

Strategically, Incannex Healthcare has made significant moves, including the completion of a re-domiciliation from Australia to the United States in November 2023, which has allowed the company to list its shares on the Nasdaq Global Market. The company has also entered into an equity line of credit Purchase Agreement with Arena Business Solutions Global SPC II, Ltd, allowing for the potential purchase of up to $50 million in common stock. Additionally, the company issued 142,403 shares as a commitment fee related to this agreement and has plans to utilize the proceeds to support its clinical development programs.

Operationally, the company has paused its Australian Phase 2 clinical trial for IHL-675A due to slower-than-expected patient recruitment, reallocating resources to a larger Phase 2 study in the U.S. for the same drug. The company reported a decrease in research and development expenses, which fell by 46% to $1.4 million for the quarter, primarily due to the completion of the IHL-42X safety and pharmacokinetics clinical trial. The company continues to focus on its lead drug candidates, including IHL-42X for obstructive sleep apnea and IHL-675A for inflammatory conditions.

Looking ahead, Incannex Healthcare expressed concerns regarding its ability to continue as a going concern, citing substantial doubt about its capacity to secure additional capital to sustain operations. The company plans to address this through public offerings, private placements, and potential collaborations, although it acknowledges the uncertainty surrounding these efforts. The company is actively monitoring its compliance with Nasdaq listing requirements, particularly regarding its market value, which must exceed $50 million to avoid delisting.