Incannex Healthcare Cancels All Outstanding Series A Warrants Following Strategic ATM Execution
- Complete elimination of 347.2 million shares of potential dilution from Series A Warrants
- Streamlined capital structure ahead of key Phase 2 clinical milestones
- Upcoming topline data readout for IHL-42X sleep apnea treatment in July 2025
- Development of potential first-in-class oral therapy for sleep apnea with no current FDA-approved drug alternatives
- Used ATM facility to raise $12.2 million, which may have created immediate dilution to fund warrant cancellation
Insights
Incannex eliminates dilution risk by canceling all Series A Warrants, strengthening its position ahead of critical clinical data.
Incannex has executed a strategically significant financial maneuver by canceling all outstanding Series A Warrants, removing 347.2 million shares from potential future dilution. The company raised the necessary $12.2 million through its At-The-Market facility to complete the cancellation of the final 172 million warrants, following an earlier cancellation in May. This transaction fundamentally improves Incannex's capital structure by eliminating the warrant overhang that has likely weighed on investor sentiment.
This restructuring comes at a pivotal moment, just ahead of the company's Phase 2 RePOSA trial results for IHL-42X expected in July 2025. The timing is particularly strategic as clinical-stage biotech valuations typically experience heightened volatility around data readouts. By removing the dilution risk now, Incannex has positioned itself to potentially capture more upside should the trial results prove positive, as any share price appreciation won't trigger warrant exercises that could dilute that value.
The cancellation demonstrates management's focus on shareholder value preservation at a critical juncture. For clinical-stage biopharmaceutical companies, capital structure optimization is essential, as dilutive financing often becomes necessary to fund development pipelines. By proactively addressing this overhang, Incannex has created a cleaner investment thesis centered on its upcoming clinical catalyst for IHL-42X in obstructive sleep apnea – a condition with substantial market potential given the lack of FDA-approved drug treatments currently available.
Capital structure streamlined and potential dilution from Series A Warrants eliminated ahead of key Phase 2 clinical milestones
NEW YORK and MELBOURNE, Australia, June 12, 2025 (GLOBE NEWSWIRE) -- Incannex Healthcare Inc. (Nasdaq: IXHL) (“Incannex” or the “Company”), a clinical-stage biopharmaceutical company advancing combination drug therapies for high-impact indications, announces it has successfully canceled all remaining Series A Warrants pursuant to its letter agreements with the holders of the Series A Warrants, having raised the full amount of capital required to complete the cancellation through its At-The-Market (“ATM”) facility.
This follows the Company’s May 28, 2025, announcement of binding agreements to cancel the final 172 million Series A Warrants in exchange for
Incannex CEO Joel Latham commented, “Following increased market liquidity, we specifically utilized our ATM facility to fund the cancellation of all outstanding Series A Warrants. This eliminates a significant source of dilution and leaves Incannex with a clean capital structure ahead of key milestones, including the upcoming topline data readout from our Phase 2 RePOSA trial of IHL-42X for obstructive sleep apnea, expected in July 2025. This action reflects our commitment to disciplined capital management and long-term value creation for shareholders.”
IHL-42X is being developed as a potential first-in-class oral therapy for obstructive sleep apnea, a condition affecting millions globally with no FDA-approved drug treatment currently available.
For additional details, refer to the Company’s Form 8-K filed with the SEC on May 28, 2025.
About IHL-42X
IHL-42X is designed to treat obstructive sleep apnea (“OSA”) by targeting its underlying pathophysiology. An oral fixed-dose combination of dronabinol and acetazolamide, IHL-42X is currently advancing through the RePOSA Phase 2/3 clinical trial, which is expected to enroll more than 560 patients at sites worldwide.
Designed to act synergistically, IHL-42X uniquely targets two physiological pathways associated with the intermittent hypoxia (“IH”) and hypercapnia that characterize OSA. In a prior Australian Phase 2 clinical trial, IHL-42X was shown to reduce the Apnea-Hypopnea Index (“AHI”) in all dosage strengths, with the lowest dose reducing AHI by an average of 51 percent relative to baseline. RePOSA, a global Phase 2/3 clinical trial is underway, evaluating IHL-42X in individuals with OSA who are either non-compliant, intolerant, or naïve to positive airway pressure devices, including CPAP, with the Phase 2 portion conducted in the United States. A topline readout from the U.S. Phase 2 portion is anticipated in July 2025.
Unlike weight loss therapies, IHL-42X is uniquely engineered to target two key physiological pathways, intermittent hypoxia (IH) and hypercapnia, that underlie the pathology of OSA. By targeting these core mechanisms, IHL-42X offers a differentiated approach that may benefit a wider range of patients, including the
About Incannex Healthcare Inc.
Incannex is leading the way in developing combination medicines that target the underlying biological pathways associated with chronic conditions, including obstructive sleep apnea, rheumatoid arthritis and generalized anxiety disorder. The company is advancing three clinical-stage product candidates based on evidence-based innovation, and supported by streamlined operations. Incannex's lead clinical program, IHL-42X, is an oral fixed-dose combination of dronabinol and acetazolamide designed to target underlying mechanisms and act synergistically in the treatment of obstructive sleep apnea. In a Phase 2 development program, IHL-675A is an oral fixed-dose combination of cannabidiol and hydroxychloroquine sulfate designed to act synergistically to alleviate inflammatory conditions, such as rheumatoid arthritis. Approved for Phase 2 clinical development, PSX-001 is an oral synthetic psilocybin treatment for the treatment of generalized anxiety disorder. Incannex's programs target disorders that have limited, inadequate, or no approved pharmaceutical treatment options. For additional information on Incannex, please visit our website at www.incannex.com.
Forward Looking Statements
This press release contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements in this press release include statements about, among other things: Incannex's business strategy, future operations; Incannex’s judgements regarding the potential benefits from the cancellation of its Series A Warrants; Incannex's ability to execute on its objectives, prospects, or plans, evaluations and judgments regarding Incannex's research and development efforts, including any implications that the results of earlier clinical trials will be representative or consistent with later clinical trials or final results; the expected timing of enrollment for these trials and the availability of data or results of these trials, and the potential benefits, safety or of Incannex's drug candidates. Forward-looking statements are statements other than historical facts and relate to future events or circumstances or Incannex's future performance, and they are based on management's current assumptions, expectations, and beliefs concerning future developments and their potential effect on Incannex's business; Incannex’s ability to potentially benefit from its improved capital structure or to maintain or further improve its capital structure in the future. These forward-looking statements are subject to a number of risks and uncertainties, which may cause the forward-looking events and circumstances described in this press release to not occur, and actual results to differ materially and adversely from those described in or implied by the forward-looking statements. These risks and uncertainties include, among others: the continued availability of financing; Incannex's ability to raise capital to fund continuing operations, to complete capital raising transactions and to maintain or potentially further improve its capital structure; the impact of any infringement actions or other litigation brought against Incannex; the success of Incannex's development efforts, including Incannex's ability to progress its drug candidates through clinical trials on the timelines expected; competition from other providers and products; that the market for its drug candidates may not grow at the rates anticipated or at all; Incannex's compliance with the various evolving and complex laws and regulations applicable to its business and its industry; and Incannex's ability to protect its proprietary technology and intellectual property; and other factors relating to Incannex's industry, its operations and results of operations. The forward-looking statements made in this press release speak only as of the date of this press release, and Incannex assumes no obligation to update publicly any such forward-looking statements to reflect actual results or to changes in expectations, except as otherwise required by law. Incannex's reports filed with the U.S. Securities and Exchange Commission (SEC) including its annual report on Form 10-K for the fiscal year ended June 30, 2024, filed with the SEC on September 30, 2024, and the other reports it files from time to time, including subsequently filed annual, quarterly and current reports, are made available on Incannex's website upon their filing with the SEC. These reports contain more information about Incannex, its business and the risks affecting its business, as well as its results of operations for the periods covered by the financial results included in this press release. For additional information on Incannex, please visit our website at www.incannex.com.
Investor & Media Contacts
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media@incannex.com.au
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