DALLAS, TX -- November 20th, 2025 -- Incannex Healthcare Inc. (NasdaqGM:IXHL): Stonegate Capital Partners updates their coverage on Incannex Healthcare Inc. (NasdaqGM:IXHL). In 4Q25, Incannex continued to build the clinical and patient-reported evidence base for IHL-42X in obstructive sleep apnoea (OSA), following full Phase 2 RePOSA data and exit-interview analyses. Both low- and high-dose IHL-42X achieved statistically significant reductions in Apnoea-Hypopnoea Index (AHI) versus placebo, with maximum AHI reductions of up to 83% in the high-dose arm and 79% in the low-dose arm,. Exit interviews showed 57.6% of participants reported perceived improvement in their OSA, and most of those described the change as meaningful to daily life, citing better sleep quality, less fatigue, and improved daily functioning. IHL-42X was well tolerated across both dose cohorts, with no serious adverse events and mainly mild, transient treatment-emergent events, reinforcing its potential for broad use if approved.
Company Summary:
IHL-42X Next Steps: After two successful Phase 2 studies, management used 4Q25 to pivot IHL-42X from pure data generation toward regulatory and late-stage planning. The Company is preparing for formal FDA interactions to define the registrational path, including Phase 3 design, primary and secondary endpoints, and potential expedited-review options. These efforts align with Incannex’s 2025 priority to advance IHL-42X into pivotal development while maintaining capital discipline. We expect IXHL to update the market after FDA discussions conclude and the forward development strategy is finalized, positioning IHL-42X for late-stage trials in 2026.
Financing: IXHL exited 4Q25 with a reinforced balance sheet and enhanced flexibility. The Company completed a sizeable equity raise, issuing ~153.3M shares for gross proceeds of $69.5M, bringing cash and cash equivalents to $73.3M. Management has not used the ATM facility since August 28, 2025, and the share count has remained unchanged. In addition, the Board authorized a $20M share repurchase program, providing a tool to offset dilution and opportunistically return capital while still funding late-stage development, leaving no immediate need for further equity financing.
PSX-001 and IHL-675A Update: In 4Q25, Incannex highlighted highly positive Phase 2 results for PSX-001 (Psi-GAD), its psilocybin-assisted psychotherapy program for generalized anxiety disorder, reinforcing it as a second major value drive. The randomized, placebo-controlled study showed a statistically significant and clinically meaningful mean reduction in HAM-A scores, with 44.1% of treated patients achieving ≥50% response and 27% reaching remission. With an open IND, the Company is preparing a multi-jurisdiction clinical study and evaluating strategic partnerships to accelerate development and expand global access. Meanwhile, IHL-675A remains in Phase 2 development for rheumatoid arthritis, with ongoing trial-related investment reflected in R&D and tax-incentive activity and is viewed as a complementary anti-inflammatory platform asset that can broaden Incannex’s long-term commercial opportunity.
Valuation: We use a probability-adjusted Discounted Cash Flow Model when valuing IXHL. Our valuation model returns a valuation range of $1.32 to $1.76 with a midpoint of $1.50 based on a discount rate range of 12.50% to 17.25% and a current risk adjustment range of 13% to 18%. Further details on our model can be found on page 5 of this report. We note that this model is highly levered to the out years due to the long term nature of IXHL's industry, leading to the potential for dramatic re-ratings as new information becomes available.
Stonegate Capital Partners is a leading capital markets advisory firm providing investor relations, equity research, and institutional investor outreach services for public companies. Our affiliate, Stonegate Capital Markets (member FINRA) provides a full spectrum of investment banking services for public and private companies.
