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What changed in Incannex Healthcare Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Incannex Healthcare Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+581 added−547 removedSource: 10-K (2025-09-29) vs 10-K (2024-09-30)

Top changes in Incannex Healthcare Inc.'s 2025 10-K

581 paragraphs added · 547 removed · 406 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

178 edited+69 added−38 removed285 unchanged
Biggest changeAs a result, we will be subject to controlled substance laws and regulations from the Australian Therapeutic Goods Administration (“TGA”) in Australia, Health Canada’s Office of Controlled Substances in Canada, the Drugs & Firearms Unit (Home Office) of the National Drug Control System in the United Kingdom, and from other regulatory agencies in other countries where we develop, manufacture or commercialize each drug asset in the future. 21 Patent Term Restoration Depending upon the timing, duration and specifics of FDA approval of our drug candidates, some of our United States patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act, informally known as the Hatch-Waxman Act.
Biggest changeAs a result, we will be subject to controlled substance laws and regulations from the Australian Therapeutic Goods Administration (“TGA”), Health Canada’s Office of Controlled Substances, the Drugs & Firearms Unit (Home Office) of the National Drug Control System in the United Kingdom, and from other regulatory agencies in other countries where we develop, manufacture or commercialize, if approved, each drug asset in the future.
There are a large number of existing pharmaceutical companies marketing drugs for the treatment of rheumatoid arthritis, including Pfizer Inc., Abbvie Inc., Amgen Inc., Novartis AG, Boehringer Ingelheim International GmbH, Eli Lilly and Company, F. Hoffmann-La Roche AG, Bristol Myers Squibb, AstraZeneca PLC, Merck & Co., Inc.
There are a large number of existing pharmaceutical companies marketing drugs for the treatment of rheumatoid arthritis, including Pfizer Inc., Abbvie Inc., Amgen Inc., Novartis AG, Boehringer Ingelheim International GmbH, Eli Lilly and Company, F. Hoffmann-La Roche AG, Bristol Myers Squibb, AstraZeneca PLC, and Merck & Co., Inc.
Marketing Application Submission and FDA Review Assuming successful completion of the required clinical testing, the results the preclinical studies and clinical trials, along with the information relating to the product’s chemistry, manufacturing and controls and proposed labeling, are submitted to the FDA as part of an NDA requesting approval to market the product for one or more indications.
Marketing Application Submission and FDA Review Assuming successful completion of the required clinical testing, the results of the preclinical studies and clinical trials, along with the information relating to the product’s chemistry, manufacturing and controls and proposed labeling, are submitted to the FDA as part of an NDA requesting approval to market the product for one or more indications.
The steps required before a drug may be marketed in the United States generally include the following: ● completion of extensive preclinical laboratory tests, potentially including animal studies, and formulation studies in accordance with the FDA’s good laboratory practice (“GLP”) regulations and other applicable regulations; ● submission to the FDA of an IND to support human clinical testing, which must become effective before human clinical trials may begin; ● approval from the DEA prior to commencement of any clinical trials in the United States that involve the use of Schedule I controlled substances, which would include our lead drug candidates, IHL-42X, PSX-001 and IHL- 675A; ● authorization from an independent institutional review board (“IRB”) or ethics committee at each clinical trial site before each clinical trial may be initiated; ● performance of adequate and well-controlled human clinical trials in accordance with applicable IND regulations, good clinical practice (“GCP”) requirements, and other clinical-trial related regulations to establish the safety and efficacy of the investigational drug for each proposed indication; ● submission to the FDA of an NDA for marketing approval, including payment of application user fees; ● satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the API and finished drug product are produced and tested to assess compliance with cGMP requirements to assure that the facilities, methods and controls are adequate to preserve the product’s identity, strength, quality and purity; ● potential FDA audit of the clinical trial sites to assure compliance with IND regulations and GCP requirements and to assure the integrity of the clinical data submitted in support of the NDA; ● satisfactory completion of an FDA advisory committee review, if applicable; and ● FDA review and approval of the NDA/Biologics Licensing Application (“BLA”) and DEA scheduling (for a controlled substance) prior to any commercial marketing or sale of the drug in the United States.
The steps required before a drug may be marketed in the United States generally include the following: ● completion of extensive preclinical laboratory tests, potentially including animal studies, and formulation studies in accordance with the FDA’s good laboratory practice (“GLP”) regulations and other applicable regulations; ● submission to the FDA of an IND to support human clinical testing, which must become effective before human clinical trials may begin; 14 ● approval from the DEA prior to commencement of any clinical trials in the United States that involve the use of Schedule I controlled substances, which would include our lead drug candidates, IHL-42X, PSX-001 and IHL- 675A; ● authorization from an independent institutional review board (“IRB”) or ethics committee at each clinical trial site before each clinical trial may be initiated; ● performance of adequate and well-controlled human clinical trials in accordance with applicable IND regulations, good clinical practice (“GCP”) requirements, and other clinical-trial related regulations to establish the safety and efficacy of the investigational drug for each proposed indication; ● submission to the FDA of an NDA for marketing approval, including payment of application user fees; ● satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the API and finished drug product are produced and tested to assess compliance with cGMP requirements to assure that the facilities, methods and controls are adequate to preserve the product’s identity, strength, quality and purity; ● potential FDA audit of the clinical trial sites to assure compliance with IND regulations and GCP requirements and to assure the integrity of the clinical data submitted in support of the NDA; ● satisfactory completion of an FDA advisory committee review, if applicable; and ● FDA review and approval of the NDA/Biologics Licensing Application and DEA scheduling (for a controlled substance) prior to any commercial marketing or sale of the drug in the United States.
Other potential consequences include, among other things: ● Restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; ● Fines, warning letters or other enforcement-related letters, or clinical holds on post-approval clinical trials; ● Refusal of the FDA to approve pending marketing applications or supplements to approved marketing authorizations, or suspension or revocation of product approvals; ● Product seizure or detention, or refusal to permit the import or export of products; ● Injunctions or the imposition of civil or criminal penalties; 19 ● Consent decrees, corporate integrity agreements, debarment, or exclusion from federal healthcare programs; and/or ● Mandated modification of promotional materials and labeling and the issuance of corrective information.
Other potential consequences include, among other things: ● Restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; ● Fines, warning letters or other enforcement-related letters, or clinical holds on post-approval clinical trials; ● Refusal of the FDA to approve pending marketing applications or supplements to approved marketing authorizations, or suspension or revocation of product approvals; ● Product seizure or detention, or refusal to permit the import or export of products; ● Injunctions or the imposition of civil or criminal penalties; ● Consent decrees, corporate integrity agreements, debarment, or exclusion from federal healthcare programs; and/or ● Mandated modification of promotional materials and labeling and the issuance of corrective information.
In addition, the government may assert that a claim including items or services resulting from a violation of the AKS constitutes a false or fraudulent claim for purposes of the FCA or federal civil money penalties statute; ● The federal civil and criminal false claims laws and civil monetary penalty laws, including the federal False Claims Act, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, false or fraudulent claims for payment to, or approval by Medicare, Medicaid, or other federal healthcare programs, knowingly making, using or causing to be made or used a false record or statement material to a false or fraudulent claim or an obligation to pay or transmit money to the federal government, or knowingly concealing or knowingly and improperly avoiding or decreasing or concealing an obligation to pay money to the federal government.
In addition, the government may assert that a claim including items or services resulting from a violation of the AKS constitutes a false or fraudulent claim for purposes of the FCA or federal civil money penalties statute; 25 ● The federal civil and criminal false claims laws and civil monetary penalty laws, including the federal False Claims Act, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, false or fraudulent claims for payment to, or approval by Medicare, Medicaid, or other federal healthcare programs, knowingly making, using or causing to be made or used a false record or statement material to a false or fraudulent claim or an obligation to pay or transmit money to the federal government, or knowingly concealing or knowingly and improperly avoiding or decreasing or concealing an obligation to pay money to the federal government.
All parties engaged for Incannex projects, including but not limited to formulation development, manufacturing, preclinical and clinical research, involving controlled substances in the United States must have the appropriate registrations with and permits from the DEA as well as licenses from applicable state authorities. We may also decide to develop, manufacture or commercialize our drug candidates in additional countries.
All parties engaged for our projects, including but not limited to formulation development, manufacturing, preclinical and clinical research, involving controlled substances in the United States must have the appropriate registrations with and permits from the DEA as well as licenses from applicable state authorities. We may also decide to develop, manufacture or commercialize our drug candidates in additional countries.
The psychotherapy comprises three distinct phases: ● Preparation psychotherapy: conducted following full enrollment and prior to the first dosing session with a key focus on explaining the concept of the trial and principles of the psychotherapy program to the patient, gaining and understanding of the patient’s presenting problem(s), establishing a safety plan and dosing day plan and conducting experiential exercises. 6 ● Dosing sessions: the patients will be administered PSX-001 orally.
The psychotherapy comprises three distinct phases: ● Preparation psychotherapy: conducted following full enrollment and prior to the first dosing session with a key focus on explaining the concept of the trial and principles of the psychotherapy program to the patient, gaining and understanding of the patient’s presenting problem(s), establishing a safety plan and dosing day plan and conducting experiential exercises. ● Dosing sessions: the patients will be administered PSX-001 orally.
The substantial patient and society costs related to undiagnosed and diagnosed obstructive OSA include increased healthcare usage, reduced productivity, and diminished quality of life. 3 A 2019 article published by The Lancet premised on literature-based analysis of 17 studies across 16 countries, estimated that OSA affects some 936 million adults worldwide.
The substantial patient and society costs related to undiagnosed and diagnosed obstructive OSA include increased healthcare usage, reduced productivity, and diminished quality of life. A 2019 article published by The Lancet premised on literature-based analysis of 17 studies across 16 countries, estimated that OSA affects some 936 million adults worldwide.
Safety of the IHL-42X combination was assessed through adverse event (“AE”) monitoring. Participants completed a single-blind placebo treatment period followed by three double-blind IHL-42X treatment periods, each with a different dose strength of IHL-42X. Each treatment period was seven days with an overnight sleep study on night seven to determine AHI and other secondary endpoint data.
Safety of the IHL-42X combination was assessed through adverse event monitoring. Participants completed a single-blind placebo treatment period followed by three double-blind IHL-42X treatment periods, each with a different dose strength of IHL-42X. Each treatment period was seven days with an overnight sleep study on night seven to determine AHI and other secondary endpoint data.
IHL-675A Inflammatory Bowel Disease - Corticosteroids - Immune system suppressors (ISSs) - Biologic agents - Corticosteroids can reduce immune system activity; - ISSs can damage the digestive tract lining; PSX-001 Generalized Anxiety Disorder - Antidepressants (SSRI/SNRI classes) - Non-curative, poor side effect profile; - some patients become treatment resistant. 11 However, the biopharmaceuticals industry is highly competitive.
IHL-675A Inflammatory Bowel Disease - Corticosteroids - Immune system suppressors (ISSs) - Biologic agents - Corticosteroids can reduce immune system activity. - ISSs can damage the digestive tract lining. PSX-001 Generalized Anxiety Disorder - Antidepressants (SSRI/SNRI classes) - Non-curative, poor side effect profile. - Some patients become treatment resistant. However, the biopharmaceuticals industry is highly competitive.
The overall 10-year period will be extended to a maximum of 11 years if, during the first eight years of those ten years, the marketing authorization holder obtains an authorization for one or more new therapeutic indications which, during the scientific evaluation prior to authorization, is held to bring a significant clinical benefit in comparison with existing therapies.
The overall 10-year period will be extended to a maximum of 11 years if, during the first eight years of those 10 years, the marketing authorization holder obtains an authorization for one or more new therapeutic indications which, during the scientific evaluation prior to authorization, is held to bring a significant clinical benefit in comparison with existing therapies.
In international markets, reimbursement and healthcare payment systems vary significantly by country, and many countries have instituted price ceilings on specific products and therapies. We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative or executive action, either in the United States or abroad.
In international markets, reimbursement and healthcare payment systems vary significantly by country, and many countries have instituted price ceilings on specific products and therapies. 36 We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative or executive action, either in the United States or abroad.
The primary endpoint of this Australian Phase 2 clinical trial was the change in AHI relative to baseline, and the secondary endpoints included change in oxygen desaturation index (“ODI”), daytime somnolence measured by the Epworth Sleepiness Scale, improvement in mood as measured by the Profile of Moods State (“POMS”), and well-being as measured by the Short Form 36.
The primary endpoint of this Australian Phase 2 clinical trial was the change in AHI relative to baseline, and the secondary endpoints included change in oxygen desaturation index (“ODI”), daytime somnolence measured by the Epworth Sleepiness Scale (“ESS”), improvement in mood as measured by the Profile of Moods State (“POMS”), and well-being as measured by the Short Form 36.
A drug designated as breakthrough therapy is also eligible for accelerated approval if the relevant criteria are met. 17 Even if a product qualifies for one or more of these programs, the FDA may later decide that the product no longer meets the conditions for qualification or decide that the time period for FDA review or approval will not be shortened.
A drug designated as breakthrough therapy is also eligible for accelerated approval if the relevant criteria are met. Even if a product qualifies for one or more of these programs, the FDA may later decide that the product no longer meets the conditions for qualification or decide that the time period for FDA review or approval will not be shortened.
Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain cGMP compliance. Future inspections by the FDA and other regulatory agencies may identify compliance issues at the facilities of our contract manufacturing organizations that may disrupt production or distribution or require substantial resources to correct.
Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain cGMP compliance. Future inspections by the FDA and other regulatory agencies may identify compliance issues at the facilities of our contract manufacturing organizations (“CMOs”) that may disrupt production or distribution or require substantial resources to correct.
Multiple Phase 2 clinical trials may be conducted to obtain information prior to beginning larger and more expensive Phase 3 clinical trials. 14 ● Phase 3: The investigational product is administered to an expanded patient population in adequate and well-controlled studies to further evaluate dosage, clinical efficacy and safety, generally at multiple geographically dispersed clinical trial sites.
Multiple Phase 2 clinical trials may be conducted to obtain information prior to beginning larger and more expensive Phase 3 clinical trials. ● Phase 3: The investigational product is administered to an expanded patient population in adequate and well-controlled studies to further evaluate dosage, clinical efficacy and safety, generally at multiple geographically dispersed clinical trial sites.
Plasma concentrations of hydroxychloroquine of HCQ metabolites desethylhydroxychloroquine, bisdesethylhydroxychloroquine and desethylchloroquine were detected only at low levels ( Tolerance IHL-675A was observed to be well-tolerated, with no serious adverse events reported. The same number of treatment related TEAEs were reported for IHL-675A as for Epidiolex. Fewer treatment related TEAEs were reported for Plaquenil.
Plasma concentrations of hydroxychloroquine of HCQ metabolites desethylhydroxychloroquine, bisdesethylhydroxychloroquine and desethylchloroquine were detected only at low levels ( 10 Tolerance IHL-675A was observed to be well-tolerated, with no serious adverse events reported. The same number of treatment related TEAEs were reported for IHL-675A as for Epidiolex. Fewer treatment related TEAEs were reported for Plaquenil.
We, along with our third-party contractors, will be required to navigate the various preclinical, clinical and commercial approval and post-approval requirements of the governing regulatory agencies of the countries in which we wish to conduct studies or seek approval or licensure of our drug candidates. 12 United States U.S.
We, along with our third-party contractors, will be required to navigate the various preclinical, clinical and commercial approval and post-approval requirements of the governing regulatory agencies of the countries in which we wish to conduct studies or seek approval or licensure of our drug candidates. United States U.S.
PRIME Scheme EMA now offers a scheme that is intended to reinforce early dialogue with, and regulatory support from, EMA in order to stimulate innovation, optimize development and enable accelerated assessment of PRIority Medicines (“PRIME”). It is intended to build upon the scientific advice scheme and accelerated assessment procedure offered by EMA.
PRIME Scheme EMA offers a scheme that is intended to reinforce early dialogue with, and regulatory support from, EMA in order to stimulate innovation, optimize development and enable accelerated assessment of PRIority MEdicines (“PRIME”). It is intended to build upon the scientific advice scheme and accelerated assessment procedure offered by EMA.
Medicines that are selected for the PRIME scheme are also expected to benefit from EMA’s accelerated assessment procedure at the time of application for marketing authorization. Where, during the course of development, a medicine no longer meets the eligibility criteria, support under the PRIME scheme may be withdrawn.
Medicines that are selected for PRIME designation are also expected to benefit from EMA’s accelerated assessment procedure at the time of application for marketing authorization. Where, during the course of development, a medicine no longer meets the eligibility criteria, support under the PRIME scheme may be withdrawn.
The United Kingdom has adopted existing European Union medicines regulation as standalone United Kingdom legislation with some amendments to reflect procedural and other requirements with respect to marketing authorizations and other regulatory provisions. The MHRA, is responsible for regulating the United Kingdom medicinal products market (Great Britain and Northern Ireland).
The United Kingdom has adopted existing European Union medicines regulation as standalone United Kingdom legislation with some amendments to reflect procedural and other requirements with respect to marketing authorizations and other regulatory provisions. 31 The MHRA, is responsible for regulating the United Kingdom medicinal products market (Great Britain and Northern Ireland).
The adequacy decision followed the signing of an executive order introducing new binding safeguards to address the points raised by the Court of Justice of the European Union in its decision on a case known as Schrems II , which invalidated the previous EU-US Privacy Shield.
The adequacy decision followed the signing of an executive order introducing new binding safeguards to address the points raised by the Court of Justice of the European Union (“CJEU”) in its decision on a case known as Schrems II , which invalidated the previous EU-US Privacy Shield.
The Parliament of the United Kingdom is currently considering the Data Protection and Digital Information Bill to harmonize the 2018 Data Protection Act, UK GDPR, and the Privacy and Electronic Communications Regulations under one legislative framework. 30 Australia In Australia, the relevant regulatory body responsible for the pharmaceutical industry is the TGA.
The Parliament of the United Kingdom is currently considering the Data Protection and Digital Information Bill to harmonize the 2018 Data Protection Act, UK GDPR, and the Privacy and Electronic Communications Regulations under one legislative framework. Australia In Australia, the relevant regulatory body responsible for the pharmaceutical industry is the TGA.
If a Paragraph I or II certificati on is filed, the FDA may make approval of the application effective immediately upon completion of its review. If a Paragraph III certification is filed, the approval may be made effective on the patent expiration date specified in the application, although a tentative approval may be issued before that time.
If a Paragraph I or II certification is filed, the FDA may make approval of the application effective immediately upon completion of its review. If a Paragraph III certification is filed, the approval may be made effective on the patent expiration date specified in the application, although a tentative approval may be issued before that time.
Alternatively, if the listed patent holder does not file a patent infringement lawsuit within the required 45-day period, the follow-on applicant’s ANDA or 505(b)(2) NDA will not be subject to the 30-month stay. 23 Other U.S.
Alternatively, if the listed patent holder does not file a patent infringement lawsuit within the required 45-day period, the follow-on applicant’s ANDA or 505(b)(2) NDA will not be subject to the 30-month stay. Other U.S.
The SEC maintains an internet site that contains reports and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov. Organizational Structure Below is a list of our significant wholly-owned subsidiaries, date of formation and jurisdiction.
The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov. Organizational Structure Below is a list of our significant wholly-owned subsidiaries, date of formation and jurisdiction.
FDA Development We have completed pre-IND meetings with the FDA to discuss the regulatory pathway for the development of IHL-675A for rheumatoid arthritis and inflammatory lung conditions in the United States and plan to initially open an IND for a Phase 2 trial forrheumatoid arthritis.
FDA Development We have completed pre-IND meetings with the FDA to discuss the regulatory pathway for the development of IHL-675A for rheumatoid arthritis and inflammatory lung conditions in the United States and plan to initially open an IND for a Phase 2 trial for rheumatoid arthritis.
The Federal Trade Commission in mid-2022 also launched sweeping investigations into the practices of the PBM industry that could lead to additional federal and state legislative or regulatory proposals targeting such entities’ operations, pharmacy networks, or financial arrangements.
The Federal Trade Commission (“FTC”) in mid-2022 also launched sweeping investigations into the practices of the PBM industry that could lead to additional federal and state legislative or regulatory proposals targeting such entities’ operations, pharmacy networks, or financial arrangements.
If the FDA concludes a REMS is needed, the sponsor of the NDA must submit a proposed REMS. The FDA will not approve an NDA without a REMS, if required. Before approving an NDA, the FDA will typically inspect the facility or facilities where the product is manufactured.
If the FDA concludes a REMS is needed, the sponsor of the NDA must submit a proposed REMS. The FDA will not approve an NDA without a REMS, if required. 17 Before approving an NDA, the FDA will typically inspect the facility or facilities where the product is manufactured.
State and international laws also govern the privacy and security of health information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts. 24 Due to the breadth of these laws and the narrowness of their exceptions and safe harbors, it is possible that business activities can be subject to challenge under one or more of such laws.
State and international laws also govern the privacy and security of health information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts. 26 Due to the breadth of these laws and the narrowness of their exceptions and safe harbors, it is possible that business activities can be subject to challenge under one or more of such laws.
It is impossible to predict whether further legislative or regulatory changes will be enacted, whether FDA regulations, guidance or interpretations will be changed or what the impact of such changes, if any, may be.
It is often impossible to predict whether further legislative or regulatory changes will be enacted, whether FDA regulations, guidance or interpretations will be changed or what the impact of such changes, if any, may be.
Although our business is distinct from that of entities marketing FDA-unapproved marijuana and CBD-containing dietary supplement, future enacted legislation or federal government action authorizing the sale, distribution, use, and insurance reimbursement of non-FDA approved marijuana or CBD products could increase competition for and adversely affect our ability to generate sales from our drug candidates.
Although our business is distinct from that of entities marketing FDA-unapproved marijuana and CBD-containing dietary supplements, future enacted legislation or federal government action authorizing the sale, distribution, use, and insurance reimbursement of non-FDA approved marijuana or CBD products could increase competition for and adversely affect our ability to generate sales from our drug candidates.
Specifically, the applican t must certify with respect to each patent that: ● the required patent information has not been filed by the original applicant; ● the listed patent has expired; ● the listed patent has not expired, but will expire on a particular date and approval is sought after patent expiration; or ● the listed patent is invalid, unenforceable or will not be infringed by the manufacture, use or sale of the new product.
Specifically, the applicant must certify with respect to each patent that: ● the required patent information has not been filed by the original applicant; ● the listed patent has expired; ● the listed patent has not expired, but will expire on a particular date and approval is sought after patent expiration; or ● the listed patent is invalid, unenforceable or will not be infringed by the manufacture, use or sale of the new product.
State authorities, including boards of pharmacy, regulate use of controlled substances in each state. Failure to maintain compliance with applicable requirements, particularly as manifested in the loss or diversion of controlled substances, can result in enforcement action that could have a material adverse effect on our business, operations and financial condition.
State authorities, including boards of pharmacy, regulate use of controlled substances within the state. Failure to maintain compliance with applicable requirements, particularly as manifested in the loss or diversion of controlled substances, can result in enforcement action that could have a material adverse effect on our business, operations and financial condition.
While federal law prohibits the sale and distribution of most marijuana products not approved or authorized by FDA, the vast majority of states and the District of Columbia have legalized either CBD or marijuana for either recreational or medical use, or both, and congressional efforts related to legalization of marijuana continue. Further, under the U.S.
While federal law prohibits the sale and distribution of most marijuana products not approved or authorized by FDA, the vast majority of states and the District of Columbia have legalized either cannabinoids or marijuana for either recreational or medical use, or both, and congressional efforts related to legalization of marijuana continue. Further, under the U.S.
Reference pricing used by various Member States, and parallel trade, i.e., arbitrage between low-priced and high-priced Member States, can further reduce prices. 31 In international markets, reimbursement and healthcare payment systems vary significantly by country, and many countries have instituted price ceilings on specific products and therapies.
Reference pricing used by various Member States, and parallel trade, i.e., arbitrage between low-priced and high-priced Member States, can further reduce prices. 34 In international markets, reimbursement and healthcare payment systems vary significantly by country, and many countries have instituted price ceilings on specific products and therapies.
Based on the results of these experiments and in vitro studies, we believe IHL-675A also has the potential for use in rheumatoid arthritis and other inflammatory conditions, such as acute respiratory distress syndrome, COPD, asthma, bronchitis and inflammatory bowel diseases, e.g. colitis and Crohn’s disease.
Based on the results of these experiments, we believe IHL-675A also has the potential for use in rheumatoid arthritis and other inflammatory conditions, such as acute respiratory distress syndrome, COPD, asthma, bronchitis and inflammatory bowel diseases, e.g. colitis and Crohn’s disease.
An application for a manufacturing registration as a bulk manufacturer (not a dosage form manufacturer or a repacker/relabeler) for a Schedule I or II substance must be published in the Federal Register and is open for 30 days to permit interested persons to submit comments, objections, or requests for a hearing.
An application for a manufacturing registration as a bulk manufacturer (not a dosage form manufacturer or a repacker/relabeler) for a Schedule I or II substance must be published in the Federal Register and remain open for 30 days to permit interested persons to submit comments, objections, or requests for a hearing.
Even if a final rule is issued, it is likely to be subject to continued political opposition or possible legal challenges in federal court. We will be subject to DEA approval to conduct our clinical trials and manufacturing activities in the United States.
Even if a final rule is issued in either case, it will likely be subject to continued political opposition or possible legal challenges in federal court. We will be subject to DEA approval to conduct our clinical trials and manufacturing activities in the United States.
Per the protocol, participants will record their pain and function outcomes daily, by completing questionnaires on pain, fatigue, joint stiffness and quality of life, using an electronic patient reported outcomes device (similar to completing a questionnaire on an electronic tablet).
Per the protocol, participants were to record their pain and function outcomes daily, by completing questionnaires on pain, fatigue, joint stiffness and quality of life, using an electronic patient reported outcomes device (similar to completing a questionnaire on an electronic tablet).
The scheme is voluntary and eligibility criteria must be met for a medicine to qualify for PRIME. 26 The PRIME scheme is open to medicines under development and for which the applicant intends to apply for an initial marketing authorization application through the centralized procedure.
The program is voluntary and eligibility criteria must be met for a medicine to qualify for PRIME. The PRIME scheme is open to medicines under development and for which the applicant intends to apply for an initial marketing authorization application through the centralized procedure.
Later discovery of previously unknown problems with a product, including AEs of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in mandatory revisions to the approved labeling to add new safety information; imposition of post-market or clinical trials to assess new safety risks; or imposition of distribution or other restrictions under a REMS program.
Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in mandatory revisions to the approved labeling to add new safety information; imposition of post-market or clinical trials to assess new safety risks; or imposition of distribution or other restrictions under a REMS program.
IHL-42X, our drug candidate in a pivotal Phase 2/3 for the treatment of obstructive sleep apnea (“OSA”) is an oral fixed dose combination of dronabinol and acetazolamide designed to act synergistically, targeting two different physiological pathways associated with the intermittent hypoxia and hypercapnia that characterize OSA.
IHL-42X, our drug candidate in a pivotal Phase 2/3 clinical trial for the treatment of obstructive sleep apnea (“OSA”) is an oral fixed-dose combination of dronabinol and acetazolamide designed to act synergistically by targeting two different physiological pathways associated with the intermittent hypoxia and hypercapnia that characterize OSA.
Available treatment options include: the standard of care, positive airway pressure (“PAP”), including continuous positive airway pressure (“CPAP”), in which an external device pneumatically splints the airway open to prevent disruptions in breathing; oral appliances to advance the mandible or to retain the tongue, putting the mouth in a position more conducive to breathing; surgery to remove physical obstructions to airflow; and implantable electronic stimulators to activate muscles at the base of the tongue, opening the airway in synchrony with respiration.
Available non-pharmacological treatment options for OSA include: the standard of care, positive airway pressure (“PAP”), including continuous positive airway pressure (“CPAP”), in which an external device pneumatically splints the airway open to prevent disruptions in breathing; oral appliances to advance the mandible or to retain the tongue, putting the mouth in a position more conducive to breathing; surgery to remove physical obstructions to airflow; and implantable electronic stimulators to activate muscles at the base of the tongue, opening the airway in synchrony with respiration.
Phase 2 Exploratory Proof-of-Concept Clinical Trial We conducted a Australian Phase 2 exploratory, proof-of-concept clinical trial, known as PsiGAD1, pursuant to an authorization from the Human Research Ethics Committee (“HREC”). The trial was a Phase 2 randomized triple-blind active-placebo-controlled trial to assess the safety and efficacy of psilocybin-assisted psychotherapy for GAD.
Phase 2 Exploratory Proof-of-Concept Clinical Trial We conducted an Australian Phase 2 exploratory, proof-of-concept clinical trial, known as PsiGAD1, pursuant to an approval from the Human Research Ethics Committee. The trial was a Phase 2 randomized triple-blind active-placebo-controlled trial to assess the safety and efficacy of psilocybin-assisted psychotherapy for GAD.
Symptoms of GAD include excessive anxiety and worry that persists for over six months, which can lead to significant impairments in social, occupational and other functioning, according to the National Institute of Mental Health (“NIMH”). GAD is the most common anxiety disorder seen in primary care settings.
Symptoms of GAD include excessive anxiety and worry that persist for over six months, which can lead to significant impairments in social, occupational and other functioning, according to the National Institute of Mental Health. GAD is the most common anxiety disorder seen in primary care settings.
After we have completed our clinical trials, we must obtain marketing authorization before we can market our drug products in the European Union. We may submit Marketing Authorization Applications (“MAAs”) under the centralized procedure or one of the national authorization procedures. 25 The EMA is a body of the European Union located in Amsterdam.
After we have completed our clinical trials, we must obtain marketing authorization before we can market our drug products in the European Union. We may submit Marketing Authorization Applications (“MAA”) under the centralized procedure or one of the national authorization procedures. The EMA is a body of the European Union located in Amsterdam.
In addition, controlled substances, like synthetic cannabidiol, THC, and psilocybin, as well as security, recordkeeping, storage, manufacturing, distribution, and importation, among other things, are regulated by the Drug Enforcement Administration (“DEA”). The process of obtaining required authorizations from FDA or DEA and achieving and maintaining compliance with applicable laws and regulations requires the expenditure of substantial time and financial resources.
In addition, controlled substances, like synthetic cannabidiol, THC, and psilocybin, as well as security, recordkeeping, storage, manufacturing, distribution, and importation, among other things, are regulated by the DEA. The process of obtaining required authorizations from FDA or DEA and achieving and maintaining compliance with applicable laws and regulations requires the expenditure of substantial time and financial resources.
A clinical trial is conducted under a protocol that details, among other things, the objectives of the trial, the criteria for determining subject eligibility, the dosing plan, the parameters to be used in monitoring safety, the procedure for timely reporting of AEs, and the efficacy criteria to be evaluated.
A clinical trial is conducted under a protocol that details, among other things, the objectives of the trial, the criteria for determining subject eligibility, the dosing plan, the parameters to be used in monitoring safety, the procedure for timely reporting of adverse events, and the efficacy criteria to be evaluated.
The rheumatoid arthritis market in the United States is growing rapidly with sales for rheumatoid arthritis treatments reaching US$25.37 billion in 2023. This market is expected to exceed US$31.58 billion by 2033. Manufacturing Arrangements We engaged Procaps for the manufacture of a specific oral, fixed dose formulation of IHL-675A that is now being tested in our clinical trials.
The rheumatoid arthritis market in the United States is growing rapidly with sales for rheumatoid arthritis treatments reaching US$25.37 billion in 2023. This market is expected to exceed US$31.58 billion by 2033. Manufacturing Arrangements We engaged Procaps for the manufacture of a specific oral, fixed-dose formulation of IHL-675A for our clinical trials.
The DEA may adjust aggregate production quotas and individual manufacturing or procurement quotas from time to time during the year, although the DEA has substantial discretion in whether or not to make such adjustments for individual companies. The states in the United States also maintain separate controlled substance laws and regulations, including licensing, recordkeeping, security, distribution, and dispensing requirements.
The DEA may adjust aggregate production quotas and individual manufacturing or procurement quotas from time to time during the year, although the DEA has substantial discretion in whether or not to make such adjustments for individual companies. State governments also maintain separate controlled substance laws and regulations, including licensing, recordkeeping, security, distribution, and dispensing requirements.
However, the IRA’s impact on the pharmaceutical industry in the United States remains uncertain, in part because multiple large pharmaceutical companies and other stakeholders (e.g., the U.S. Chamber of Commerce) have initiated federal lawsuits against CMS arguing the program is unconstitutional for a variety of reasons, among other complaints. Those lawsuits are currently ongoing.
However, the IRA’s impact on the pharmaceutical industry in the United States remains uncertain, in part because multiple large pharmaceutical companies and other stakeholders (e.g., the U.S. Chamber of Commerce) have initiated federal lawsuits against CMS arguing the program is unconstitutional for a variety of reasons, among other complaints.
The majority of the states in the United States also have statutes or regulations similar to the aforementioned federal laws, some of which are broader in scope and apply to items and services reimbursed under Medicaid and other state programs, or, in several states, apply regardless of the payor.
The majority of state governments have statutes or regulations similar to the aforementioned federal laws, some of which are broader in scope and apply to items and services reimbursed under Medicaid and other state programs, or, in several states, apply regardless of the payor.
Product/Technology Number of Applications Type of Patent Protection Applicable jurisdictions IHL-42X/Compositions and methods for the treatment of obstructive sleep apnoea (OSA) 10 Standard/utility AU, CA, CO, EP, IL, JP, NZ, US IHL-675A/Compositions and methods for the treatment of an inflammatory conditions 16 Standard/utility AU, CA, CO, EP, IL, JP, NZ, US PSX-001 1 Standard/utility Provisional 10 We plan to continue to expand our intellectual property estate by filing patent applications directed to compositions, methods of use, treatment and patient selection, formulations and manufacturing processes created or identified from our ongoing development of our drug candidates.
Product/Technology Number of Applications Type of Patent Protection Applicable jurisdictions IHL-42X/Compositions and methods for the treatment of obstructive sleep apnoea (OSA) 12 Standard/utility AU, CA, CO, EP, IL, JP, NZ, US IHL-675A/Compositions and methods for the treatment of an inflammatory conditions 16 Standard/utility AU, CA, CO, EP, IL, JP, NZ, US We plan to continue to expand our intellectual property estate by filing patent applications directed to compositions, methods of use, treatment and patient selection, formulations and manufacturing processes created or identified from our ongoing development of our drug candidates.
This limited aggregate amount of cannabis or psilocybin that the DEA allows to be produced in the United States each year is allocated among individual companies, which, in turn, must annually apply to the DEA for individual manufacturing and procurement quotas. The quotas apply equally to the manufacturing of the active pharmaceutical ingredient and the production of dosage forms.
This limited aggregate amount of cannabis or psilocybin that the DEA allows to be produced in the United States each year is allocated among individual companies, which, in turn, must annually apply to the DEA for individual manufacturing and procurement quotas. The quotas apply equally to the manufacturing of the API and the production of dosage forms.
Mergers and acquisitions in the pharmaceutical, biotechnology and diagnostic industries may result in even more resources being concentrated among a smaller number of competitors. Smaller or emerging earlier stage companies may also prove to be significant competitors, particularly if they have collaborations with larger, established companies. Competitors in the OSA drug development space include Apnimed, Inc. and Desitin Arzneimittel GmbH.
Mergers and acquisitions in the pharmaceutical, biotechnology and diagnostic industries may result in even more resources being concentrated among a smaller number of competitors. Smaller or emerging earlier stage companies may also prove to be significant competitors, particularly if they have collaborations with larger, established companies. Competitors in the OSA drug development space include Apnimed, Inc. and Mineralys Therapeutics.
IHL-42X Obstructive Sleep Apnea or “OSA” OSA is a disease of sleep disordered breathing characterized by a narrow or collapse of the upper airway during sleep, which interferes with breathing and reduces sleep quality. Presentation of OSA often includes snoring and waking up gasping for air.
INDs. 3 IHL-42X Obstructive Sleep Apnea or “OSA” OSA is a disease of sleep disordered breathing characterized by a narrowing or collapse of the upper airway during sleep, which interferes with breathing and reduces sleep quality. Presentation of OSA often includes snoring and waking up gasping for air.
IHL-42X in OSA IHL-42X is an oral fixed dose combination of acetazolamide, a carbonic anhydrase inhibitor approved for various indications, and dronabinol, a synthetic form of delta-9-tetrahydrocannabinol (“THC”) approved for the treatment of nausea, vomiting and loss of appetite. Both agents have been shown in clinical studies to reduce the apnea hypopnea index (“AHI”).
IHL-42X in OSA IHL-42X is an oral fixed-dose combination of acetazolamide, a carbonic anhydrase inhibitor approved for various indications, and dronabinol, a synthetic form of delta-9-tetrahydrocannabinol (“THC”) approved for the treatment of nausea, vomiting and loss of appetite. Both agents have been shown in clinical studies to reduce the AHI.
Phase 2/3 Clinical Trial Investigating IHL-42X in Patients with OSA (the “RePOSA Study”) The RePOSA Study is a global, randomized, double-blind Phase 2/3 clinical trial, investigating the effect of IHL-42X in patients with OSA who are non-compliant, intolerant or naïve to positive airway pressure devices, such as CPAP, to determine the safety and efficacy of the drug candidate.
Phase 2/3 Clinical Trial Investigating IHL-42X in Patients with OSA (the “RePOSA Study”) The RePOSA Study is a randomized, double-blind Phase 2/3 clinical trial, investigating the effect of IHL-42X in patients with OSA who are non-compliant, intolerant or naïve to PAP devices, such as CPAP, to determine the safety and efficacy of the drug candidate.
Specifically, the MHRA will be responsible for approving all medicines intended to be marketed in the United Kingdom (including Northern Ireland), while the EMA will no longer be involved in approving medicines intended for sale in Northern Ireland. 29 The Trade and Cooperation Agreement, which sets forth a framework for partnership between the European Union and the United Kingdom, became effective as of January 1, 2021.
Specifically, the MHRA is responsible for approving all medicines intended to be marketed in the United Kingdom (including Northern Ireland), and the EMA is no longer involved in approving medicines intended for sale in Northern Ireland. 32 The Trade and Cooperation Agreement, which sets forth a framework for partnership between the European Union and the United Kingdom, became effective as of January 1, 2021.
By securing approvals in these key regions, we aim to maximize the global commercial potential of our drug candidates. 1 ● Seek streamlined regulatory pathway for our drug candidates .
By securing approvals in these key regions, we aim to maximize the global commercial potential of our drug candidates. ● Seek streamlined regulatory pathways for our drug candidates .
The required review of the trial dossier by the UK’s Medicines and Healthcare products Regulatory Agency (“MHRA”) is underway. We have designed the follow-up Phase 2b clinical trial with the assistance of Clerkenwell Health, a UK-based contract research organization (“CRO”) specializing in psychiatry and central nervous system treatments.
The required review of the trial dossier by the UK’s Medicines and Healthcare products Regulatory Agency (“MHRA”) has also been completed. We have designed the follow-up Phase 2b clinical trial with the assistance of Clerkenwell Health, a UK-based contract research organization (“CRO”) specializing in psychiatry and central nervous system treatments.
Data Privacy and Security in the European Union and the United Kingdom The collection, use, disclosure, transfer, or other processing of personal data regarding individuals in the European Union, including personal health data, is subject to the European Union’s General Data Protection Regulation (“GDPR”), which became effective on May 25, 2018.
Data Privacy and Security in the European Union and the United Kingdom The collection, use, disclosure, transfer, or other processing of personal data regarding individuals in the European Union, including personal health data, is subject to the European Union’s GDPR, which became effective on May 25, 2018.
For example, products approved for medical use in the United States that contain THC or cannabis plant extracts, must be placed in one of Schedules II–V as approval by the FDA satisfies the “acceptable medical use” requirement.
For example, products approved for medical use in the United States that contain THC, other cannabis plant extracts, or synthetic versions of such substances must be placed in one of Schedules II-V as approval by the FDA satisfies the “acceptable medical use” requirement.
Phase 2 Clinical Trial Assessing the Effects of IHL-675A on Pain and Function in Patients with Rheumatoid Arthritis We are conducting a Phase 2 clinical trial in Australia to assess the safety and efficacy of IHL-675A on pain and function in patients with rheumatoid arthritis.
Phase 2 Clinical Trial Assessing the Effects of IHL-675A on Pain and Function in Patients with Rheumatoid Arthritis We planned to conduct a Phase 2 clinical trial in Australia to assess the safety and efficacy of IHL-675A on pain and function in patients with rheumatoid arthritis.
This trial is expected to include approximately 94 subjects (including those currently treated with SSRIs who meet the study inclusion and exclusion criteria), evaluate change in the HAM-A anxiety score and other measures of efficacy and be conducted at multiple sites in the United States and the United Kingdom.
We are preparing to initiate this trial in 2026. This Phase 2b trial is expected to include approximately 94 subjects (including those currently treated with SSRIs who meet the study inclusion and exclusion criteria), evaluate change in the HAM-A anxiety score and other measures of efficacy and be conducted at multiple sites in the United States and the United Kingdom.
As of June 30, 2024, we also own trademark registrations in Australia and the United States to distinguish and/or protect our brand, including our company name and logo. Competition We are targeting indications that have limited, inadequate, or no approved pharmaceutical treatment options.
We also own trademark registrations in Australia and the United States to distinguish and/or protect our brand, including our company name and logo. 12 Competition We are targeting indications that have limited, inadequate, or no approved pharmaceutical treatment options.
Starting in 2023, a manufacturer of a drug or biological product covered by Medicare Parts B or D must pay a rebate to the federal government if the drug product’s price increases faster than the rate of inflation.
For example, a manufacturer of a drug or biological product covered by Medicare Parts B or D must pay a rebate to the federal government if the drug product’s price increases faster than the rate of inflation.
The resubmitted application is also subject to review before the FDA accepts it for filing. 15 Once an NDA is accepted for filing, the FDA’s goal is to review the application within ten months after it accepts the application for filing, or, if the application meets the criteria for “priority review,” six months after the FDA accepts the application for filing.
Once an NDA is accepted for filing, the FDA’s goal is to review the application within ten months after it accepts the application for filing, or, if the application meets the criteria for “priority review,” six months after the FDA accepts the application for filing.
However, the two drugs had a similar maximum plasma concentration. The Tmax for HCQ administered as IHL-675A was 46% slower than for Plaquenil. The hydroxychloroquine clearance and total exposure were similar for the two drugs. These patterns are trends at this point (p >0.05).
The Tmax for HCQ administered as IHL-675A was 46% slower than for Plaquenil. The hydroxychloroquine clearance and total exposure were similar for the two drugs. These patterns are trends at this point (p >0.05).
All promotional materials for drug candidates being considered and approved under the accelerated approval program are subject to prior review by the FDA. 18 Post-Approval Requirements After approval, the manufacturer and the approved drug product are subject to extensive continuing regulation by the FDA, which includes, among other things, obligations to manufacture the product in accordance with cGMP, monitoring and recordkeeping activities, reporting of adverse experiences with the product, product sampling and distribution restrictions, complying with FDA promotion and advertising requirements, which include restrictions on promoting drugs for unapproved uses or patient populations (i.e., “off-label uses”) and limitations on industry-sponsored scientific and educational activities.
Post-Approval Requirements After approval, the manufacturer and the approved drug product are subject to extensive continuing regulation by the FDA, which includes, among other things, obligations to manufacture the product in accordance with cGMP, monitoring and recordkeeping activities, reporting of adverse experiences with the product, product sampling and distribution restrictions, complying with FDA promotion and advertising requirements, which include restrictions on promoting drugs for unapproved uses or patient populations (i.e., “off-label uses”) and limitations on industry-sponsored scientific and educational activities.
The FDA may refuse to file any submission that it deems incomplete or not properly reviewable at the time of submission and may request additional information. In this event, the marketing application must be resubmitted with the additional information requested by the agency.
The FDA may refuse to file any submission that it deems incomplete or not properly reviewable at the time of submission and may request additional information. In this event, the marketing application must be resubmitted with the additional information requested by the agency. The resubmitted application is also subject to review before the FDA accepts it for filing.
Safety was assessed by monitoring adverse events including but not limited to liver function tests and scores on the Ultra Brief Checklist of Suicidality. Efficacy was assessed by comparing the change in Hamilton Anxiety Ratings Scale (“HAM-A”) from baseline between the placebo and treatment group.
Safety was assessed by monitoring adverse events including but not limited to liver function tests and scores on the Ultra Brief Checklist of Suicidality. Efficacy was assessed by comparing the change in HAM-A scores from baseline between the placebo and treatment group.
International Regulation In addition to regulations in the United States, we are subject to a variety of international regulations governing clinical trials and the commercial sales and distribution of our drug candidates.
Other states in the United States are considering privacy laws similar to the CCPA. International Regulation In addition to regulations in the United States, we are subject to a variety of international regulations governing clinical trials and the commercial sales and distribution of our drug candidates.
We are actively pursuing FDA registration for our lead drug candidates currently in development. Our approach focuses on advancing novel, scientifically validated therapies with strong clinical potential. Simultaneously, we will retain the flexibility to explore strategic partnerships, licensing agreements, and collaboration opportunities as they arise, with the objective of maximizing the value of our pipeline and approved drug candidates.
Our approach focuses on advancing novel, scientifically validated therapies with strong clinical potential. Simultaneously, we will retain the flexibility to explore strategic partnerships, licensing agreements, and collaboration opportunities as they arise, with the objective of maximizing the value of our pipeline and approved drug candidates.
Although general requirements for advertising and promotion of medicinal products are established under EU Directive 2001/83/EC as amended, the details are governed by regulations in each European Union member state (as well as Iceland, Norway and Liechtenstein) and can differ from one country to another. 28 United Kingdom As of January 1, 2021, European Union law no longer directly applies in the United Kingdom.
Although general requirements for advertising and promotion of medicinal products are established under EU Directive 2001/83/EC as amended, the details are governed by regulations in each European Union member state (as well as Iceland, Norway and Liechtenstein) and can differ from one country to another.
These efforts are aligned with our commitment to delivering long-term value for our shareholders. Lead Drug Candidates 2 The estimated addressable global market opportunity for OSA is approximately US$8.2 billion, with an estimated compound annual growth rate (“CAGR”) for the global market of OSA devices from 2024 to 2029 of 7.33%.
These efforts are aligned with our commitment to delivering long-term value for our stockholders. 2 Lead Drug Candidates The estimated addressable global market opportunity for OSA medical devices is approximately US$8.2 billion, with an estimated compound annual growth rate (“CAGR”) of 7.33% from 2024 to 2029. Sales for GAD treatments in the United States reached approximately US$21 billion in 2023.
Of the 11 subjects studied, TEAEs deemed to be possibly, probably, or related to study treatment occurred at a higher incidence at the higher doses on dronabinol/acetazolamide (5 mg dronabinol plus 250 mg acetazolamide and 10 mg dronabinol plus 500 mg acetazolamide) compared to the low (2.5 mg dronabinol plus 125 mg acetazolamide) dose and placebo treatment periods. 4 Low dose IHL-42X had a similar proportion of subjects reporting TEAEs and a lower number of total TEAEs than the placebo.
Of the 11 subjects studied, TEAEs deemed to be possibly, probably, or related to study treatment occurred at a higher incidence at the higher doses on dronabinol/acetazolamide (5 mg dronabinol plus 250 mg acetazolamide and 10 mg dronabinol plus 500 mg acetazolamide) compared to the low (2.5 mg dronabinol plus 125 mg acetazolamide) dose and placebo treatment periods.
European Union and United Kingdom In the European Economic Area (“EEA”), which is comprised of the Member States of the European Union plus Norway, Iceland and Liechtenstein, medicinal products can only be commercialized after obtaining marketing authorization from the European Medicines Agency (“EMA”).
In addition, the requirements governing the conduct of clinical trials vary greatly from country to country. 27 European Union and United Kingdom In the European Economic Area (“EEA”), which is comprised of the Member States of the European Union plus Norway, Iceland and Liechtenstein, medicinal products can only be commercialized after obtaining marketing authorization from the European Medicines Agency (“EMA”).

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRisks Related to Investing in Our Securities ● The price of our common stock has been and may continue to be highly volatile, which may make it difficult for stockholders to sell our common stock when desired or at attractive prices. ● Our common stock could be further diluted as the result of the issuance of additional shares of common stock, convertible securities, warrants, options, shares of common stock upon the conversion of the September 2024 Debentures, upon the sale of shares of our common stock pursuant to our equity line of credit agreement with Arena Business, or upon the exercise of the ELOC Warrant .
Biggest changeIf reimbursement of our drug candidates is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, our business, revenues or profitability could be harmed. 76 Risks Related to Investing in Our Securities The price of our common stock has been and may continue to be highly volatile, which may make it difficult for stockholders to sell our common stock when desired or at attractive prices.
The ongoing and future clinical trials of our drug candidates may not show sufficient safety and efficacy to obtain requisite regulatory approvals for commercial sale . We currently have no products approved for sale and we cannot guarantee that we will ever have marketable products. Clinical failure can occur at any stage of clinical development.
The ongoing and future clinical trials of our drug candidates may not show sufficient safety and efficacy to obtain requisite regulatory approvals for commercial sale . We currently have no products approved for sale and we cannot guarantee that we will ever have marketable products. Failure can occur at any stage of clinical development.
Publication of discounts by third-party payors or authorities may lead to further pressure on prices or reimbursement levels within the country of publication and other countries.
Publication of discounts by third-party payors or authorities may lead to further pressure on the prices or reimbursement levels within the country of publication and other countries.
The UN Conventions regulate narcotic drugs and psychotropic substances as Schedule I, II, III, IV substances with Schedule II substances presenting the lowest relative risk of abuse among such substances and Schedule I and IV substances considered to present the highest risk of abuse.
The UN Conventions regulate narcotic drugs and psychotropic substances as Schedule I, II, III, IV substances with Schedule III substances presenting the lowest relative risk of abuse among such substances and Schedule I and IV substances considered to present the highest risk of abuse.
We are also subject to information security policies and contractual obligations relating to privacy and data protection, including the use, processing, and cross-border transfer of personal data.
We are also subject to information security policies and contractual obligations relating to privacy and data protection, including the use, processing, and cross-border transfer of personal data.
Our business, and and any third parties with whom we do business, may be adversely affected by accidents, power shortages, telecommunications failures, war, conflicts (such as the current conflicts in the Middle East and the conflict between the Russian Federation and the Ukraine) acts of terrorism, protests or other geopolitical events.
Our business, and any third parties with whom we do business, may be adversely affected by accidents, power shortages, telecommunications failures, war, conflicts (such as the current conflicts in the Middle East and the conflict between the Russian Federation and the Ukraine) acts of terrorism, protests or other geopolitical events.
State and international laws also govern the privacy and security of health information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts. Efforts to ensure that our business arrangements with third parties will comply with applicable healthcare laws and regulations will involve substantial costs.
State and international laws also govern the privacy and security of health information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts. 61 Efforts to ensure that our business arrangements with third parties will comply with applicable healthcare laws and regulations will involve substantial costs.
For these reasons, a significant disruptive event of any CMOs could have drastic consequences, including placing our ability to continue operations at risk. If our third-party manufacturers fail to provide supplies of our drugs or drug candidates when and as needed for any reason, our business, results of operations and prospects may be materially and adversely harmed.
For these reasons, a significant disruptive event of any CMOs could have drastic consequences, including placing our ability to continue operations at risk. 50 If our third-party manufacturers fail to provide supplies of our drugs or drug candidates when and as needed for any reason, our business, results of operations and prospects may be materially and adversely harmed.
In addition, as permitted by Section 145 of the Delaware General Corporation Law (the “DGCL”), our amended and restated bylaws and our indemnification agreements that we have entered into with our directors and executive officers provide that: ● We will indemnify our directors and executive officers for serving us in those capacities or for serving other related business enterprises at our request, to the fullest extent permitted by Delaware law.
In addition, as permitted by Section 145 of the Delaware General Corporation Law, our amended and restated bylaws and our indemnification agreements that we have entered into with our directors and executive officers provide that: ● We will indemnify our directors and executive officers for serving us in those capacities or for serving other related business enterprises at our request, to the fullest extent permitted by Delaware law.
Cybersecurity incidents and attendant consequences may also deter new clinical trial participants from participating in our services, and negatively impact our ability to operate our business. 60 Our business is subject to complex and evolving U.S. federal and state, and international laws and regulations, imposing obligations on how we collect, use, disclose, store and process personal data.
Cybersecurity incidents and attendant consequences may also deter new clinical trial participants from participating in our services and negatively impact our ability to operate our business. Our business is subject to complex and evolving U.S. federal and state, and international laws and regulations, imposing obligations on how we collect, use, disclose, store and process personal data.
Such information reported to CMS is made publicly available on a searchable website. 55 Analogous state and international laws and regulations, such as state anti-kickback and false claims laws, may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers.
Such information reported to CMS is made publicly available on a searchable website. Analogous state and international laws and regulations, such as state anti-kickback and false claims laws, may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers.
There can be no assurance that we will be successful in preventing cybersecurity incidents or successfully mitigating their effects.Cyberattacks, malicious internet-based activity, and online and offline fraud are prevalent and continue to increase. These threats are becoming increasingly difficult to detect. These threats come from a variety of sources.
There can be no assurance that we will be successful in preventing cybersecurity incidents or successfully mitigating their effects. Cyberattacks, malicious internet-based activity, and online and offline fraud are prevalent and continue to increase. These threats are also becoming increasingly difficult to detect and come from a variety of sources.
Correspondingly, the amount of our future net losses will depend, in part, on the rate of our future expenditures. 37 We anticipate that our expenses will increase substantially for the foreseeable future if, and as, we: ● continue our research and preclinical and clinical development of our drug candidates; ● expand the scope of our current proposed clinical studies for our drug candidates; ● initiate additional preclinical, clinical or other studies for our drug candidates; ● change or add manufacturers or suppliers; ● seek regulatory and marketing approvals for our drug candidates that successfully complete clinical studies; ● seek to identify and validate additional drug candidates; ● acquire or in-license other drug candidates and technologies; ● maintain, protect and expand our intellectual property portfolio; ● attract and retain skilled personnel; ● create additional infrastructure to support our operations as a publicly quoted company and our product development and planned future commercialization efforts; and ● experience any delays or encounter issues with any of the above.
Correspondingly, the amount of our future net losses will depend, in part, on the rate of our future expenditures. 42 We anticipate that our expenses will increase substantially for the foreseeable future if, and as, we: ● continue our research and preclinical and clinical development of our drug candidates; ● expand the scope of our current proposed clinical studies for our drug candidates; ● initiate additional preclinical, clinical or other studies for our drug candidates; ● change or add manufacturers or suppliers; ● seek regulatory and marketing approvals for our drug candidates that successfully complete clinical studies; ● seek to identify and validate additional drug candidates; ● acquire or in-license other drug candidates and technologies; ● maintain, protect and expand our intellectual property portfolio; ● attract and retain skilled personnel; ● create additional infrastructure to support our operations as a publicly quoted company and our product development and planned future commercialization efforts; and ● experience any delays or encounter issues with any of the above.
If any of our third-party suppliers fails to comply with cGMP or other applicable manufacturing regulations, our ability to develop and, as applicable, commercialize our drug candidates could suffer significant interruptions. 44 If our candidates are approved, we would likely need to rapidly scale our manufacturing capabilities, including any capability we may have through our CMOs.
If any of our third-party suppliers fails to comply with cGMP or other applicable manufacturing regulations, our ability to develop and, as applicable, commercialize our drug candidates could suffer significant interruptions. If our candidates are approved, we would likely need to rapidly scale our manufacturing capabilities, including any capability we may have through our CMOs.
If a defendant or other patent challenger were to prevail on a legal assertion of invalidity or unenforceability, we could lose at least part, and perhaps all, of the patent protection on our drug candidates, compositions and associated uses. In addition, the complexity and uncertainty of European patent laws have increased in recent years.
If a defendant or other patent challenger were to prevail on a legal assertion of invalidity or unenforceability, we could lose at least part, and perhaps all, of the patent protection on our drug candidates, compositions and associated uses. 73 In addition, the complexity and uncertainty of European patent laws have increased in recent years.
To date, we have not generated any revenue from product sales to customers and none of our drug candidates have been approved for commercialization by any regulatory body. We do not expect to receive any revenue from any drug candidates that we develop, including IHL-42X, PSX-001, and IHL-675A, unless and until we obtain regulatory approval for these candidates.
To date, we have not generated any revenue from product sales to customers and none of our drug candidates have been approved for commercialization by any regulatory body. We do not expect to receive any material revenue from any drug candidates that we develop, including IHL-42X, PSX-001, and IHL-675A, unless and until we obtain regulatory approval for these candidates.
Many comparable non-U.S. regulatory authorities have similar approval requirements. 47 In addition, while these clinical trials are subject to the applicable local laws, the FDA acceptance of the data will be dependent upon its determination that the trials also complied with all applicable U.S. laws and regulations.
Many comparable non-U.S. regulatory authorities have similar approval requirements. In addition, while these clinical trials are subject to the applicable local laws, the FDA acceptance of the data will be dependent upon its determination that the trials also complied with all applicable U.S. laws and regulations.
A delay in a clinical trial or, upon commercialization, a partial or total loss of revenue from one or more shipments of API or our drug candidates, could have a material adverse effect on our business, results of operations and financial condition. Our drug candidates will be subject to controlled substance laws and regulations.
A delay in a clinical trial or, upon commercialization, a partial or total loss of revenue from one or more shipments of API or our drug candidates, could have a material adverse effect on our business, results of operations and financial condition. 58 Our drug candidates will be subject to controlled substance laws and regulations.
Failure to meet applicable regulatory requirements could lead to enforcement and sanctions by the states in addition to those from the DEA or otherwise arising under federal law, which could have a material adverse effect on our business, financial condition and results of operations. 53 ● Clinical trials .
Failure to meet applicable regulatory requirements could lead to enforcement and sanctions by the states in addition to those from the DEA or otherwise arising under federal law, which could have a material adverse effect on our business, financial condition and results of operations. ● Clinical trials .
We do not currently maintain a program to hedge exposures to non-U.S. dollar currencies. We write business on a global basis, and our results of operations may be affected by fluctuations in the value of currencies other than the U.S. Dollar. The primary international currencies in which we currently operate are the Australian Dollar.
We do not currently maintain a program to hedge exposures to non-U.S. dollar currencies. 68 We write business on a global basis, and our results of operations may be affected by fluctuations in the value of currencies other than the U.S. Dollar. The primary international currencies in which we currently operate are the Australian Dollar.
If we are unable to secure sufficient capital to fund our operations, then we may be required to delay, limit, reduce or terminate our drug development or future commercialization efforts or grant rights to third parties to develop and market drug candidates that we would otherwise prefer to develop and market ourselves.
If we are again unable to secure sufficient capital to fund our operations, then we may be required to again delay, limit, reduce or terminate our drug development or future commercialization efforts or grant rights to third parties to develop and market drug candidates that we would otherwise prefer to develop and market ourselves.
The effects of patent litigation or other proceedings could therefore have a material adverse effect on our ability to compete in the marketplace. 67 Issued patents covering our drug candidates, compositions or uses could be found invalid or unenforceable if challenged in a patent office or court.
The effects of patent litigation or other proceedings could therefore have a material adverse effect on our ability to compete in the marketplace. Issued patents covering our drug candidates, compositions or uses could be found invalid or unenforceable if challenged in a patent office or court.
We may also encounter unexpected delays or increased costs due to new government regulations, for example, from future legislation or administrative action, or from changes in FDA policy during the period of product development, clinical trials and FDA regulatory review.
We may also again encounter unexpected delays or increased costs due to new government regulations, for example, from future legislation or administrative action, or from changes in FDA policy during the period of product development, clinical trials and FDA regulatory review.
If we experience delays in the commencement or completion of, or suspension or termination of, any clinical trial for our drug candidates, the commercial prospects of the drug candidate could be harmed, and our ability to generate product revenues from the drug candidate may be delayed or eliminated.
If we experience additional delays in the commencement or completion of, or suspension or termination of, any clinical trial for our drug candidates, the commercial prospects of the drug candidate could be harmed, and our ability to generate product revenues from the drug candidate may be delayed or eliminated.
If these third parties do not successfully carry out their contractual duties or meet expected deadlines, we may not be able to obtain regulatory approval for or commercialize our drug candidates and our business could be substantially harmed. 35 Risks Related to Commercialization of Our Drug Candidates ● Even if we receive marketing approval of a drug candidate, we will be subject to ongoing regulatory obligations and continued regulatory review, which may result in significant additional expense and we may be subject to penalties if we fail to comply with regulatory requirements or experience unanticipated problems with our products, if approved. ● Our drug candidates will be subject to controlled substance laws and regulations.
If these third parties do not successfully carry out their contractual duties or meet expected deadlines, we may not be able to obtain regulatory approval for or commercialize our drug candidates and our business could be substantially harmed. 40 Risks Related to Commercialization of Our Drug Candidates ● Even if we receive marketing approval of a drug candidate, we will be subject to ongoing regulatory obligations and continued regulatory review, which may result in significant additional expense and we may be subject to penalties if we fail to comply with regulatory requirements or experience unanticipated problems with our products, if approved. ● Our drug candidates will be subject to controlled substance laws and regulations.
Delays or failures in planned enrollment or retention of clinical trial subjects may result in increased costs or program delays, which could have a harmful effect on our ability to develop a drug candidate or could render further development impossible.
Delays or failures in planned enrollment or retention of clinical trial subjects may again result in increased costs or program delays, which could have a harmful effect on our ability to develop a drug candidate or could render further development impossible.
These competitors could also recruit our employees, which could negatively affect our level of expertise and our ability to execute our business plan. 49 Our drug candidates for which we obtain approval may face competition sooner than anticipated.
These competitors could also recruit our employees, which could negatively affect our level of expertise and our ability to execute our business plan. Our drug candidates for which we obtain approval may face competition sooner than anticipated.
Furthermore, the number of government investigations related to data security incidents and privacy violations continue to increase and government investigations typically require significant resources and generate negative publicity, which could harm our business and reputation. 61 Our business activities may be subject to the Foreign Corrupt Practices Act (“FCPA”) and similar anti-bribery and anti-corruption laws of other countries in which we operate.
Furthermore, the number of government investigations related to data security incidents and privacy violations continue to increase and government investigations typically require significant resources and generate negative publicity, which could harm our business and reputation. 67 Our business activities may be subject to the Foreign Corrupt Practices Act (“FCPA”) and similar anti-bribery and anti-corruption laws of other countries in which we operate.
The market price for our common stock may be influenced by many factors, including: ● our ability to obtain regulatory approvals for IHL-42X, PSX-001, and IHL-675A, or other drug candidates, and delays or failures to obtain such approvals; ● adverse results, clinical holds, or delays in the clinical trials of our drug candidates or any future clinical trials we may conduct, or changes in the development status of our drug candidates; 71 ● failure of any of our drug candidates, if approved, to achieve commercial success; ● negative publicity or public perception of the use of cannabinoid or psychedelic substances as a medical treatment; ● failure to maintain our existing third-party collaboration, license and supply agreements; ● failure by us or our licensors to prosecute, maintain, or enforce our intellectual property rights; ● changes in laws or regulations applicable to our drug candidates; ● any inability to obtain adequate supply of our drug candidates or the inability to do so at acceptable prices; ● adverse regulatory authority decisions; ● introduction of new products, services or technologies by our competitors; ● failure to meet or exceed financial and development projections we may provide to the public; ● failure to meet or exceed the financial and development projections of the investment community; ● the perception of the pharmaceutical industry by the public, legislatures, regulators and the investment community; ● announcements of significant acquisitions, strategic collaborations, joint ventures or capital commitments by us or our competitors; ● disputes or other developments relating to proprietary rights, including patents, litigation matters, and our ability to obtain patent protection for our technologies; ● additions or departures of key personnel; ● significant lawsuits, including patent or stockholder litigation; ● failure by securities or industry analysts to publish research or reports about our business, or issuance of any adverse or misleading opinions by such analysts regarding our business or stock; ● changes in the market valuations of similar companies; ● general market or macroeconomic conditions, such as inflation; ● fluctuations of exchange rates between the U.S. dollar and the Australian dollar; ● sales of our common stock by us or our stockholders in the future; ● the trading volume of our common stock; ● our ability to maintain the listing of our common stock on the Nasdaq Global Market; ● announcements by commercial partners or competitors of new commercial products, clinical progress or the lack thereof, significant contracts, commercial relationships or capital commitments; ● the introduction of technological innovations or new therapies that compete with our potential drugs; ● changes in the structure of healthcare payment systems; ● the impact of political instability and military conflicts, such as the conflicts and recent events in Ukraine and the Middle East, which has resulted in instability in the global financial markets and export controls; and ● period-to-period fluctuations in our financial results.
The market price for our common stock may be influenced by many factors, including: ● our ability to obtain regulatory approvals for IHL-42X, PSX-001, and IHL-675A, or other drug candidates, and delays or failures to obtain such approvals; ● adverse results, clinical holds, or delays in the clinical trials of our drug candidates or any future clinical trials we may conduct, or changes in the development status of our drug candidates; ● failure of any of our drug candidates, if approved, to achieve commercial success; ● negative publicity or public perception of the use of cannabinoid or psychedelic substances as a medical treatment; ● failure to maintain our existing third-party collaboration, license and supply agreements; ● failure by us or our licensors to prosecute, maintain, or enforce our intellectual property rights; ● changes in laws or regulations applicable to our drug candidates; ● any inability to obtain adequate supply of our drug candidates or the inability to do so at acceptable prices; ● adverse regulatory authority decisions; ● introduction of new products, services or technologies by our competitors; ● failure to maintain the listing of our Common Stock on the Nasdaq Capital Market and the effects of any reverse stock split that we may complete in order to maintain this listing; ● failure to meet or exceed financial and development projections we may provide to the public; ● failure to meet or exceed the financial and development projections of the investment community; ● the perception of the pharmaceutical industry by the public, legislatures, regulators and the investment community; ● announcements of significant acquisitions, strategic collaborations, joint ventures or capital commitments by us or our competitors; ● disputes or other developments relating to proprietary rights, including patents, litigation matters, and our ability to obtain patent protection for our technologies; ● additions or departures of key personnel; ● significant lawsuits, including patent or stockholder litigation; ● failure by securities or industry analysts to publish research or reports about our business, or issuance of any adverse or misleading opinions by such analysts regarding our business or stock; ● changes in the market valuations of similar companies; ● general market or macroeconomic conditions, such as inflation; ● fluctuations of exchange rates between the U.S. dollar and the Australian dollar; 77 ● sales or repurchases of our common stock by us or our stockholders in the future; ● the trading volume of our common stock; ● announcements by commercial partners or competitors of new commercial products, clinical progress or the lack thereof, significant contracts, commercial relationships or capital commitments; ● the introduction of technological innovations or new therapies that compete with our potential drugs; ● changes in the structure of healthcare payment systems; ● the impact of political instability and military conflicts, such as the conflicts and recent events in Ukraine and the Middle East, which has resulted in instability in the global financial markets and export controls; and ● period-to-period fluctuations in our financial results.
We do not currently conduct any manufacturing or repackaging/relabeling of any of our drug candidates or their active ingredients in the United States. ● Importation .
We do not currently conduct any manufacturing or repackaging/relabeling of any of our drug candidates or their active ingredients in the United States. 59 ● Importation .
The listing requirements of the Nasdaq Global Market require that we satisfy certain corporate governance requirements relating to director independence, distributing annual and interim reports, stockholder meetings, approvals and voting, soliciting proxies, conflicts of interest and a code of conduct, each of which requires additional attention and effort of management and our board of directors and additional costs.
The listing requirements of the Nasdaq Capital Market require that we satisfy certain corporate governance requirements relating to director independence, distributing annual and interim reports, stockholder meetings, approvals and voting, soliciting proxies, conflicts of interest and a code of conduct, each of which requires additional attention and effort of management and our board of directors and additional costs.
Numerous other countries have, or are developing, laws governing the collection, use and transmission of personal information as well.
Globally, numerous other countries have, or are developing, laws governing the collection, use and transmission of personal information as well.
As a public company listed on the Nasdaq Global Market, and particularly if we cease to be a “smaller reporting company,” we are incurring and will continue to incur significant legal, accounting and other expenses that we did not incur as a private company or as a public company without such specified statuses.
As a public company listed on the Nasdaq Capital Market, and particularly if we cease to be a “smaller reporting company,” we are incurring and will continue to incur significant legal, accounting and other expenses that we did not incur as a private company or as a public company without such specified statuses.
We or our third-party manufacturers may also encounter shortages in the raw materials or APIs necessary to produce our drug candidates in the quantities needed for our clinical trials or, if our drug candidates are approved, in sufficient quantities for commercialization or to meet an increase in demand, as a result of demands from competing businesses, quota restrictions, capacity constraints or delays or disruptions in the market for the raw materials or active pharmaceutical ingredients, including shortages caused by the purchase of such raw materials or APIs by our competitors or others.
We or our third-party manufacturers may also encounter shortages in the raw materials or APIs necessary to produce our drug candidates in the quantities needed for our clinical trials or, if our drug candidates are approved, in sufficient quantities for commercialization or to meet an increase in demand, as a result of demands from competing businesses, quota restrictions, capacity constraints or delays or disruptions in the market for the raw materials or APIs, including shortages caused by the purchase of such raw materials or APIs by our competitors or others.
While we may maintain insurance as we deem reasonably appropriate, many of these contingencies would likely not be covered by insurance, and we cannot assure you that the amounts of insurance coverage that we may acquire or have acquried will be sufficient to satisfy any damages and losses.
While we may maintain insurance as we deem reasonably appropriate, many of these contingencies would likely not be covered by insurance, and we cannot assure you that the amounts of insurance coverage that we may acquire or have acquired will be sufficient to satisfy any damages and losses.
If approved, any of these events could prevent us from achieving or maintaining market acceptance of the affected drug candidates and could substantially increase the costs of commercializing our drug candidates, and significantly impact our or a partner’s ability to successfully commercialize drug candidates and generate revenues.
If a drug candidate is approved, any of these events could prevent us from achieving or maintaining market acceptance of the affected drug candidates and could substantially increase the costs of commercializing our drug candidates, and significantly impact our or a partner’s ability to successfully commercialize drug candidates and generate revenues.
As calculated as of December 31, 2023, we qualified as a smaller reporting company. For as long as we continue to be a smaller reporting company, we expect that we will take advantage of the reduced disclosure obligations available to us as a result of those respective classifications.
As calculated as of December 31, 2024, we qualified as a smaller reporting company. For as long as we continue to be a smaller reporting company, we expect that we will take advantage of the reduced disclosure obligations available to us as a result of those respective classifications.
If this happens, we may need to raise additional capital to fund our operations, which may not be available in sufficient amounts or on reasonable terms, if at all, sooner than expected. 58 Changes in interpretation or application of account principles generally accepted in the (“US GAAP”) may adversely affect our operating results.
If this happens, we may need to raise additional capital to fund our operations, which may not be available in sufficient amounts or on reasonable terms, if at all, sooner than expected. Changes in interpretation or application of account principles generally accepted in the United States (“US GAAP”) may adversely affect our operating results.
Our ongoing or planned clinical trials may also be delayed, suspended or prematurely terminated because costs are greater than we anticipate or for a variety of other reasons, such as: ● delay or failure in reaching agreement with the FDA or a comparable international regulatory authority on a trial design that we are able to execute; ● delay or failure in obtaining authorization to commence a trial, including approval from the appropriate IRB to conduct testing of a candidate on human subjects, or inability to comply with conditions imposed by a regulatory authority regarding the scope or design of a clinical trial; ● delay in reaching, or failure to reach, agreement on acceptable terms with prospective contract research organizations (“CROs”), and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; ● inability, delay or failure in identifying and maintaining a sufficient number of trial sites, many of which may already be engaged in other clinical programs; ● delay or failure in recruiting and enrolling suitable volunteers or patients to participate in a trial; ● delay or failure in developing and validating companion diagnostics, if they are deemed necessary, on a timely basis; ● failure of trial participants to complete a trial or return for post-treatment follow-up; ● inability to monitor trial participants adequately during or after treatment; ● clinical sites and investigators deviating from trial protocols, failing to conduct the trial in accordance with regulatory requirements or dropping out of a trial; ● failure to initiate or delay of or inability to complete a clinical trial as a result of a clinical hold imposed by the FDA or comparable international regulatory authority due to observed safety findings or other reasons; ● negative or inconclusive results in our clinical trials, and our decision to or regulators’ requirement that we conduct additional non-clinical studies, clinical trials or that we abandon one or more of our product development programs; or ● inability to manufacture sufficient quantities of a drug candidate of acceptable quality for use in clinical trials.
Our ongoing or planned clinical trials may also again be delayed, suspended or prematurely terminated because costs are greater than we anticipate or for a variety of other reasons, such as: ● delay or failure in reaching agreement with the FDA or a comparable international regulatory authority on a trial design that we are able to execute; ● delay or failure in obtaining authorization to commence a trial, including approval from the appropriate IRB to conduct testing of a candidate on human subjects, or inability to comply with conditions imposed by a regulatory authority regarding the scope or design of a clinical trial; ● delay in reaching, or failure to reach, agreement on acceptable terms with prospective CROs, and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; 46 ● inability, delay or failure in identifying and maintaining a sufficient number of trial sites, many of which may already be engaged in other clinical programs; ● delay or failure in recruiting and enrolling suitable volunteers or patients to participate in a trial such as occurred in our prior trial investigating IHL-675A; ● delay or failure in developing and validating companion diagnostics, if they are deemed necessary, on a timely basis; ● failure of trial participants to complete a trial or return for post-treatment follow-up; ● inability to monitor trial participants adequately during or after treatment; ● clinical sites and investigators deviating from trial protocols, failing to conduct the trial in accordance with regulatory requirements or dropping out of a trial; ● failure to initiate or delay of or inability to complete a clinical trial as a result of a clinical hold imposed by the FDA or comparable international regulatory authority due to observed safety findings or other reasons; ● negative or inconclusive results in our clinical trials, and our decision to or regulators’ requirement that we conduct additional non-clinical studies, clinical trials or that we abandon one or more of our product development programs; or ● inability to manufacture sufficient quantities of a drug candidate of acceptable quality for use in clinical trials.
We will need to obtain additional funding in connection with the further development of our drug candidates. In the near term, any additional equity fundraising in the capital markets may be dilutive for stockholders.
We will need to obtain additional funding in connection with the further development of our drug candidates. Any additional equity fundraising in the capital markets may be dilutive for our stockholders.
If the FDA or a comparable international regulatory authority grants marketing authorization for a candidate, the manufacturing processes, labeling, packaging, distribution, AE reporting, storage, advertising, promotion, import and export and record keeping for the candidate will be subject to extensive and ongoing regulatory requirements.
If the FDA or a comparable international regulatory authority grants marketing authorization for a candidate, the manufacturing processes, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion, import and export and record keeping for the candidate will be subject to extensive and ongoing regulatory requirements.
If the amount of R&D tax incentives decreases, our results of operations and cash resources may be materially affected. ● We expect that we will need substantial additional funding in the near term to continue the development of our drug candidates.
If the amount of R&D tax incentives decreases, our results of operations and cash resources may be materially affected. ● We expect that we will need substantial additional funding to continue the development of our drug candidates.
We rely, and expect to continue to rely, on third-party supply and manufacturing partners, such as Procaps SA and Catalent, to manufacture and supply the materials for our R&D and preclinical and clinical trial supplies, including those needed for our lead drug candidates.
We rely, and expect to continue to rely, on third-party supply and manufacturing partners, such as Procaps and Ardena, to manufacture and supply the materials for our R&D and preclinical and clinical trial supplies, including those needed for our lead drug candidates.
We may become involved in securities litigation that could materially divert management’s attention and harm the Company’s business, and insurance coverage may not be sufficient to cover all costs and damages. We may be exposed to securities litigation even if no wrongdoing occurred.
We may become involved in securities litigation that could materially divert management’s attention and harm our business, and insurance coverage may not be sufficient to cover all costs and damages. We may be exposed to securities litigation even if no wrongdoing occurred.
We have also issued common stock as compensation for services and incentive compensation for our employees, directors and certain vendors. We have shares of common stock reserved for issuance upon the exercise of certain of these securities and may increase the shares reserved for these purposes in the future.
We have also issued common stock, restricted stock units and options as compensation for services and incentive compensation for our employees, directors and certain vendors. We have shares of common stock reserved for issuance upon the exercise of certain of these securities and may increase the shares reserved for these purposes in the future.
Management has concluded that we did not maintain effective disclosure controls and procedures due to the material weakness in internal control over financial reporting which existed as of June 30, 2024, relating to the documentation of accounting policies and procedures, particularly relating to the correct application of complex accounting measures and segregation of duties.
Management has concluded that we did not maintain effective disclosure controls and procedures due to the material weakness in internal control over financial reporting which existed as of June 30, 2025, relating to the documentation of accounting policies and procedures, particularly relating to the correct application of complex accounting measures.
If our information technology systems or data, or those of third parties upon which we rely, are of were compromised, we could experience adverse consequences resulting from such compromise, including regulatory investigations or actions, litigation, fines and penalties, disruptions of our business operations, reputational harm, and other loss of revenue or profits.
If our information technology systems or data, or those of third parties upon which we rely, are or were compromised, we could experience adverse consequences, including regulatory investigations or actions, litigation, fines and penalties, disruptions of our business operations, reputational harm, and other loss of revenue or profits.
Supreme Court held unanimously that federal law does not preempt the states’ ability to regulate PBMs, and other members of the healthcare and pharmaceutical supply chain, an important decision that may lead to further and more aggressive efforts by states in this area.
In December 2020, the U.S. Supreme Court held unanimously that federal law does not preempt the states’ ability to regulate PBMs, and other members of the healthcare and pharmaceutical supply chain, an important decision that may lead to further and more aggressive efforts by states in this area.
Biotechnology patent matters can involve complex legal and scientific questions, and it is impossible to predict the outcome of biotechnology and pharmaceutical patent claims. Any of our future patent applications may not be approved, or we may not develop additional products or processes that are patentable.
However, these efforts may be unsuccessful. Biotechnology patent matters can involve complex legal and scientific questions, and it is impossible to predict the outcome of biotechnology and pharmaceutical patent claims. Any of our future patent applications may not be approved, or we may not develop additional products or processes that are patentable.
If our drug candidates receive marketing approval, and we or others identify undesirable side effects caused by these drug candidates (or any other similar products) after this approval, a number of potentially significant negative consequences could result, including: ● regulatory authorities may withdraw or limit their approval of our drug candidates; ● regulatory authorities may require the addition of labeling statements, specific warnings or a contraindication; ● we may be required to create a medication guide outlining the risks of such side effects for distribution to patients, or we may be required to implement a REMS in the United States or a comparable risk mitigation plan in other jurisdictions to ensure that the benefits of the drug candidate outweigh the risks; ● we may be required to change the way the drug candidates are distributed or administered, or change the labeling of the drug candidates; ● we may be subject to regulatory investigations and government enforcement actions; ● the FDA or a comparable international regulatory authority may require us to conduct additional clinical trials or costly post-marketing testing and surveillance to monitor the safety and efficacy of the drug candidate; ● we may decide to recall or withdraw drug candidates from the marketplace after they are approved; ● we could be sued and held liable for injury caused to individuals exposed to or taking our drug candidates; and ● our reputation may suffer. 43 In addition, adverse side effects caused by any drugs that may be similar in nature to our drug candidates could delay or prevent regulatory approval of our drug candidates, limit the commercial profile of an approved label for our drug candidates, or result in significant negative consequences for our drug candidates following and assuming marketing authorization.
If our drug candidates receive marketing approval, and we or others identify undesirable side effects caused by these drug candidates (or any other similar products) after this approval, a number of potentially significant negative consequences could result, including: ● regulatory authorities may withdraw or limit their approval of our drug candidates; ● regulatory authorities may require the addition of labeling statements, specific warnings or a contraindication; ● we may be required to create a medication guide outlining the risks of such side effects for distribution to patients, or we may be required to implement a REMS in the United States or a comparable risk mitigation plan in other jurisdictions to ensure that the benefits of the drug candidate outweigh the risks; ● we may be required to change the way the drug candidates are distributed or administered, or change the labeling of the drug candidates; ● we may be subject to regulatory investigations and government enforcement actions; ● the FDA or a comparable international regulatory authority may require us to conduct additional clinical trials or costly post-marketing testing and surveillance to monitor the safety and efficacy of the drug candidate; ● we may decide to recall or withdraw drug candidates from the marketplace after they are approved; ● we could be sued and held liable for injury caused to individuals exposed to or taking our drug candidates; and ● our reputation may suffer.
We may rely upon third parties service providers and technologies to operate critical business systems to process confidential and personal information in a variety of contexts, including, without limitation, third-party providers of cloud-based infrastructure, encryption and authentication technology, employee email, and other functions.
We may rely upon third party service providers and technologies to operate critical business systems to process such information in a variety of contexts, including, without limitation, third-party providers of cloud-based infrastructure, encryption and authentication technology, employee email, and other functions.
The following examples are illustrative: ● Others may be able to make products that are similar to ours but that are not covered by our intellectual property rights. ● Others may independently develop similar or alternative technologies or otherwise circumvent any of our technologies without infringing our intellectual property rights. ● We or any of our collaboration partners might not have been the first to conceive and reduce to practice the inventions covered by the patents or patent applications that we own, license or will own or license. ● We or any of our collaboration partners might not have been the first to file patent applications covering certain of the patents or patent applications that we or they own or have obtained a license or will own or will have obtained a license. ● It is possible that any pending patent applications that we have filed, or will file, will not lead to issued patents. ● Issued patents that we own may not provide us with any competitive advantage, or may be held invalid or unenforceable, as a result of legal challenges by our competitors. ● Our competitors might conduct R&D activities in countries where we do not have patent rights, or in countries where R&D safe harbor laws exist, and then use the information learned from such activities to develop competitive products for sale in our major commercial markets. ● Ownership of our patents or patent applications may be challenged by third parties. ● The patents of third parties or pending or future applications of third parties, if issued, may have an adverse effect on our business. 69 Changes in patent law could diminish the value of patents in general, thereby impairing our ability to protect our drug candidates and any future drug candidates.
The following examples are illustrative: ● Others may be able to make products that are similar to ours but that are not covered by our intellectual property rights. ● Others may independently develop similar or alternative technologies or otherwise circumvent any of our technologies without infringing our intellectual property rights. ● We or any of our collaboration partners might not have been the first to conceive and reduce to practice the inventions covered by the patents or patent applications that we own, license or will own or license. ● We or any of our collaboration partners might not have been the first to file patent applications covering certain of the patents or patent applications that we or they own or have obtained a license or will own or will have obtained a license. ● It is possible that any pending patent applications that we have filed, or will file, will not lead to issued patents. ● Issued patents that we own may not provide us with any competitive advantage, or may be held invalid or unenforceable, as a result of legal challenges by our competitors. ● Our competitors might conduct R&D activities in countries where we do not have patent rights, or in countries where R&D safe harbor laws exist, and then use the information learned from such activities to develop competitive products for sale in our major commercial markets. ● Ownership of our patents or patent applications may be challenged by third parties. ● The patents of third parties or pending or future applications of third parties, if issued, may have an adverse effect on our business.
Subject enrollment and retention in clinical trials depends on many factors, including: ● the eligibility criteria defined in the protocol; ● the size of the patient population required for analysis of the trial’s primary endpoints; ● the nature of the trial protocol; ● the proximity of potential subjects to clinical sites; ● the existing body of safety and efficacy data with respect to the drug candidate; ● our ability to recruit clinical trial investigators with the appropriate competencies and experience; ● clinicians’ and patients’ perceptions as to the potential advantages of the drug candidate being studied in relation to other available therapies; ● competing clinical trials being conducted by other companies or institutions; ● the risk that participants enrolled in clinical trials will drop out of the trials before completion; and ● the operational efficiency of trial sites, including sufficient staffing.
Subject enrollment and retention in clinical trials depends on many factors, including: ● the eligibility criteria defined in the protocol; ● the size of the patient population required for analysis of the trial’s primary endpoints; ● the nature of the trial protocol; ● the proximity of potential subjects to clinical sites; ● the existing body of safety and efficacy data with respect to the drug candidate; ● side effects or adverse events caused by our drug candidates; ● our ability to recruit clinical trial investigators with the appropriate competencies and experience; ● clinicians’ and patients’ perceptions as to the potential advantages of the drug candidate being studied in relation to other available therapies; ● competing clinical trials being conducted by other companies or institutions; ● the risk that participants enrolled in clinical trials will drop out of the trials before completion; ● the occurrence of epidemics or pandemics and other similar events; and ● the operational efficiency of trial sites, including sufficient staffing.
Periodic maintenance fees, renewal fees, annuity fees and various other governmental fees on patents and applications are required to be paid to the United State Patent and Trademark Office and other governmental patent agencies outside of the United States in several stages over the lifetime of the patents and applications.
Periodic maintenance fees, renewal fees, annuity fees and various other governmental fees on patents and applications are required to be paid to the USPTO and other governmental patent agencies outside of the United States in several stages over the lifetime of the patents and applications.
Our success is to a certain degree also dependent on our ability to obtain and maintain protection of our intellectual property portfolio, including the assets acquired through the Acquisition or, where applicable, to receive/maintain orphan drug designation/status and resulting marketing exclusivity for our drug candidates, and we may not be able to protect our intellectual property rights throughout the world.
Our success is to a certain degree also dependent on our ability to obtain and maintain protection of our intellectual property portfolio where applicable, to receive/maintain orphan drug designation/status and resulting marketing exclusivity for our drug candidates, and we may not be able to protect our intellectual property rights throughout the world.
In addition, upon issuance of a United States patent, any patent term may be adjusted based on specified delays during patent prosecution caused by the applicant(s) or the United States Patent and Trademark Office.
In addition, upon issuance of a United States patent, any patent term may be adjusted based on specified delays during patent prosecution caused by the applicant(s) or the USPTO.
We consider proprietary trade secrets and/or confidential know-how and unpatented know-how to be important to our business. We may rely on trade secrets and/or confidential know-how to protect our technology, especially where patent protection is believed by us to be of limited value. However, trade secrets and/or confidential know-how can be difficult to maintain as confidential.
We may rely on trade secrets and/or confidential know-how to protect our technology, especially where patent protection is believed by us to be of limited value. However, trade secrets and/or confidential know-how can be difficult to maintain as confidential.
In the U.S., numerous federal and state laws and regulations, including state data breach notification laws, state health information privacy laws and federal and state consumer protection laws govern the collection, use, disclosure and protection of health-related and other personal information.
In the United States, numerous federal and state laws and regulations, including state data breach notification laws, state health information privacy laws and federal and state consumer protection laws govern the collection, use, disclosure and protection of health-related and other personal information.
Intellectual property rights do not address all potential threats to our competitive advantage. The degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations, and may not adequately protect our business, or permit us to maintain our competitive advantage.
The degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations, and may not adequately protect our business, or permit us to maintain our competitive advantage.
Topline, interim or preliminary data from our trials may not be representative of final results. From time to time, we may publish or report topline, interim or preliminary data from our clinical trials.
Topline, interim or preliminary data from our trials may not be representative of final results. From time to time, we have published and may again publish or report topline, interim or preliminary data from our clinical trials.
We may not experience a faster development or regulatory review or approval process with Fast Track designation compared to conventional FDA procedures. In addition, the FDA may withdraw Fast Track designation if the designation is no longer supported by data from our clinical development program.
We may not experience a faster development or regulatory review or approval process with Fast Track designation compared to conventional FDA procedures. In addition, the FDA may withdraw Fast Track designation if the designation is no longer supported by data from our clinical development program. Fast Track designation alone does not guarantee qualification for the FDA’s priority review procedures.
Despite our implementation of security measures, our internal information technology systems and those of our clinical sites, and other contractors and consultants upon which we rely are vulnerable to cyberattacks, computer viruses, bugs, worms, or other malicious codes, malware, including as a result of advanced persistent threat intrusions, and other attacks by computer hackers, cracking, application security attacks, social engineering, including through phishing attacks, supply chain attacks and vulnerabilities through our third-party service providers, denial-of-service attacks, such as credential stuffing, credential harvesting, personnel misconduct or error, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, earthquakes, fires, floods, and other similar threats.
Our ability to monitor these third parties’ cybersecurity practices is limited, and these third parties may not have adequate information security measures in place. 64 Despite our implementation of security measures, our internal information technology systems and those of our clinical sites, and other contractors and consultants upon which we rely are vulnerable to cyberattacks, computer viruses, bugs, worms, or other malicious codes, malware, including as a result of advanced persistent threat intrusions, and other attacks by computer hackers, cracking, application security attacks, social engineering, including through phishing attacks, supply chain attacks and vulnerabilities through our third-party service providers, denial-of-service attacks, such as credential stuffing, credential harvesting, personnel misconduct or error, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, telecommunications failures, earthquakes, fires, floods, and other similar threats and occurrences.
HIPAA, as amended by HITECH and its implementing regulations, also imposes obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information.
HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act and its implementing regulations, also imposes obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information.
In fiscal 2023 and 2024, respectively, we received $683,000 and $11.4 million in R&D tax incentives from the Australian government as a result of the clinical trials activities conducted in Australia.
In fiscal 2024 and 2025, respectively, we received $1.7 million and $11.4 million in R&D tax incentives from the Australian government as a result of the clinical trials activities conducted in Australia.
Although none of our drug candidates has reached Phase 3 of clinical development, we or our licensing partners must submit a diversity action plan to the FDA by the time a Phase 3 trial, or pivotal study, protocol is submitted to the agency for review, unless we or our licensing partners are able to obtain a waiver for some or all of the requirements for a diversity action plan.
We or our licensing partners must submit a diversity action plan to the FDA by the time a Phase 3 trial, or pivotal study, protocol is submitted to the agency for review, unless we or our licensing partners are able to obtain a waiver for some or all of the requirements for a diversity action plan.
Later discovery of previously unknown problems with any authorized product, including AEs of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things: ● restrictions on the labeling, distribution, marketing or manufacturing of the product, withdrawal of the product from the market, or product recalls; ● untitled or warning letters from the FDA, or comparable notices of violation from comparable international regulatory authorities; ● imposition of clinical holds on ongoing clinical trials; ● refusal by the FDA or comparable international regulatory authorities to authorize pending applications or supplements to authorized applications we filed or suspension or revocation of marketing authorizations; ● requirements to conduct post-marketing studies or clinical trials; ● restrictions on coverage by third-party payors; ● fines, restitution or disgorgement of profits or revenues; ● suspension or withdrawal of marketing approvals; ● product seizure or detention, or refusal to permit the import or export of the product; and ● injunctions or the imposition of civil or criminal penalties. 48 The FDA’s and other regulatory authorities’ policies may change, and additional government regulations may be enacted that could prevent, limit or delay marketing authorization of a product.
Later discovery of previously unknown problems with any authorized product, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things: ● restrictions on the labeling, distribution, marketing or manufacturing of the product, withdrawal of the product from the market, or product recalls; ● untitled or warning letters from the FDA, or comparable notices of violation from comparable international regulatory authorities; ● imposition of clinical holds on ongoing clinical trials; ● refusal by the FDA or comparable international regulatory authorities to authorize pending applications or supplements to authorized applications we filed or suspension or revocation of marketing authorizations; ● requirements to conduct post-marketing studies or clinical trials; ● restrictions on coverage by third-party payors; ● fines, restitution or disgorgement of profits or revenues; ● suspension or withdrawal of marketing approvals; ● product seizure or detention, or refusal to permit the import or export of the product; and ● injunctions or the imposition of civil or criminal penalties.
To the extent that we raise additional capital through the sale of equity (including through our ELOC (as defined below)), convertible debt (including our September 2024 Debentures (as defined below)) or other securities convertible into equity, the ownership interest of our stockholders will be diluted, and the terms of new securities may include liquidation or other preferences that adversely affect rights of our stockholders.
To the extent that we raise additional capital through the sale of equity, convertible debt or other securities convertible into equity, the ownership interest of our stockholders will be diluted, and the terms of new securities may include liquidation or other preferences that adversely affect rights of our stockholders.
If the price of our common stock declines, our ability to raise funds through the issuance of equity or otherwise use our common stock as consideration will be reduced. A low price for our equity may negatively impact our ability to access additional debt capital.
If the price of our common stock declines, our ability to raise funds through the issuance of equity or otherwise use our common stock as consideration will be reduced. A low price for our equity may negatively impact our ability to access additional debt capital. These factors may limit our ability to implement our operating and growth plans.
Fast Track designation alone does not guarantee qualification for the FDA’s priority review procedures. 46 We expect to utilize the FDA’s Section 505(b)(2) pathway for certain of our drug candidates and if that pathway is not available, the development of our drug candidates will likely take significantly longer, cost significantly more and entail significantly greater complexity and risk than currently anticipated, and, in any case, may not be successful.
We expect to utilize the FDA’s Section 505(b)(2) pathway for certain of our drug candidates and if that pathway is not available, the development of our drug candidates will likely take significantly longer, cost significantly more and entail significantly greater complexity and risk than currently anticipated, and, in any case, may not be successful.
If a third-party intellectual property right exists it may require the pursuit of litigation or administrative proceedings to nullify or invalidate the third-party intellectual property right concerned, or entry into a license agreement with the intellectual property right holder, which may not be available on commercially reasonable terms, if at all. 65 Third-party intellectual property right holders, including our competitors, may bring infringement claims against us.
If a third-party intellectual property right exists it may require the pursuit of litigation or administrative proceedings to nullify or invalidate the third-party intellectual property right concerned, or entry into a license agreement with the intellectual property right holder, which may not be available on commercially reasonable terms, if at all.
We may also fail to take the required actions or pay the necessary fees to maintain our patents. 64 Moreover, any of our pending applications may be subject to a third-party pre-issuance submission of prior art to the USPTO, the European Patent Office (“EPO”), the Intellectual Property Office (“IPO”), in the United Kingdom, the Australian Patent and Trademark Office and/or any patents issuing thereon may become involved in opposition, derivation, reexamination, post grant review, interference proceedings or other patent office proceedings or litigation, in the United States or elsewhere, challenging our patent rights.
Moreover, any of our pending applications may be subject to a third-party pre-issuance submission of prior art to the USPTO, the European Patent Office (“EPO”), the Intellectual Property Office, in the United Kingdom, the Australian Patent and Trademark Office and/or any patents issuing thereon may become involved in opposition, derivation, reexamination, post grant review, interference proceedings or other patent office proceedings, inter partes review or litigation, in the United States or elsewhere, challenging our patent rights.
Future sales of shares of our common stock in the public market, or the perception that such sales could occur, could cause our stock price to fall . 36 Risks Related to Our Financial Condition and Capital Requirements We have a history of operating losses and may not achieve or maintain profitability in the future .
Future sales of shares of our common stock in the public market, or the perception that such sales could occur, has in the past and could in the future cause our stock price to fall. ● We are and may continue to be subject to short-selling strategies. 41 Risks Related to Our Financial Condition and Capital Requirements We have a history of operating losses and may not achieve or maintain profitability in the future .
Future potential sales of our drug candidates may suffer if they are not accepted in the marketplace by physicians, patients and the medical community . There is a risk that our drug candidates may not gain market acceptance among physicians, patients and the medical community, even if they are approved by the regulatory authorities.
There is a risk that our drug candidates may not gain market acceptance among physicians, patients and the medical community, even if they are approved by the regulatory authorities.
Failure to receive necessary approvals may delay the launch of our drug candidates and failure to comply with these laws and regulations may adversely affect the results of our business operations. ● The production and sale of our drug candidates may be considered illegal or may otherwise be restricted due to the use of controlled substances, which may have consequences for the legality of investments from international jurisdictions.
Failure to receive necessary approvals may delay the launch of our drug candidates and failure to comply with these laws and regulations may adversely affect the results of our business operations. ● The production and sale of our drug candidates may be considered illegal or may otherwise be restricted due to the use of controlled substances, which may have consequences for the legality of investments from international jurisdictions. ● The markets for the target indications for our drug candidates are competitive and certain of our competitors have more advanced candidates in their respective pipelines.
These factors may limit our ability to implement our operating and growth plans. 72 U.S. investors may have difficulty enforcing civil liabilities against our directors or members of senior management. Several of our officers and directors are non-residents of the United States, and a substantial portion of the assets of such persons are located outside the United States.
U.S. investors may have difficulty enforcing civil liabilities against our directors or members of senior management. Several of our officers and directors are non-residents of the United States, and a substantial portion of the assets of such persons are located outside the United States.
In addition, we may decide to develop, manufacture or commercialize our drug candidates in additional countries. As a result, we will also be subject to controlled substance laws and regulations from the TGA in Australia and from other regulatory agencies in other countries where we develop, manufacture or commercialize our drug candidates in the future.
As a result, we will also be subject to controlled substance laws and regulations from the TGA in Australia and from other regulatory agencies in other countries where we develop, manufacture or commercialize our drug candidates in the future. 60 Other countries may have different laws and regulations with which we will be required to comply.
All signatories have a dual obligation to ensure that these substances are available for medical purposes and to protect populations against abuse and dependence.
The individual EU member states are all signatories to these UN Conventions. All signatories have a dual obligation to ensure that these substances are available for medical purposes and to protect populations against abuse and dependence.
In addition, governments may impose price controls on any of our products that obtain marketing approval, which may adversely affect our future profitability. 51 Most recently, in August 2022, President Biden signed into the law the Inflation Reduction Act of 2022, which among other things, contains multiple provisions that may impact the prices of drug products that are both sold into the Medicare program and throughout the United States, including mandatory rebates to the federal government if a drug product’s price increases faster than the rate of inflation and direct government negotiation of drug prices for certain Part D drugs (starting for payment year 2026) and Part B drugs (starting for payment year 2028).
In August 2022, President Biden signed into the law the IRA, which among other things, contains multiple provisions that may impact the prices of drug products that are both sold into the Medicare program and throughout the United States, including mandatory rebates to the federal government if a drug product’s price increases faster than the rate of inflation and direct government negotiation of drug prices for certain Part D drugs (starting for payment year 2026) and Part B drugs (starting for payment year 2028).
Risks Related to Our Business Operations Our R&D efforts will be jeopardized if we are unable to retain key personnel and cultivate key academic and scientific collaborations . Changes in our senior management could be disruptive to our business and may adversely affect our operations.
Any investigations of authorities against international investors could generate negative publicity. 63 Risks Related to Our Business Operations Our R&D efforts will be jeopardized if we are unable to retain key personnel and cultivate key academic and scientific collaborations . Changes in our senior management could be disruptive to our business and may adversely affect our operations.
We expect the rules and regulations applicable to public companies to substantially increase our legal and financial compliance costs and to make some activities more time-consuming and costly.
We expect the rules and regulations applicable to public companies to continue to result in substantial legal and financial compliance costs and to continue to make some activities more time-consuming and costly.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe describe whether and how risks from identified cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition, under the heading “ If our information technology systems or data, or those of third parties upon which we rely, are of were compromised, we could experience adverse consequences resulting from such compromise, including regulatory investigations or actions, litigation, fines and penalties, disruptions of our business operations, reputational harm, and other loss of revenue or profits, ” which disclosures are incorporated by reference herein.
Biggest changeThis program, in conjunction with our enterprise risk management assessment processes, addresses cybersecurity risks to our information technology environment including systems, hardware, software, data, people, and processes. 81 We describe whether and how risks from identified cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition, under the heading “ If our information technology systems or data, or those of third parties upon which we rely, are of were compromised, we could experience adverse consequences resulting from such compromise, including regulatory investigations or actions, litigation, fines and penalties, disruptions of our business operations, reputational harm, and other loss of revenue or profits, ” which disclosures are incorporated by reference herein.
Our management team selects, deploys, and oversees cybersecurity technologies, initiatives, and processes directly or via selection of strategic third-party partners, and relies on threat intelligence as well as other information obtained from governmental, public, or private sources, including external consultants engaged for strategic cybersecurity risk management, advisory and decision making.
Our management team selects, deploys, and oversees cybersecurity technologies, initiatives, and processes directly or via selection of strategic third-party partners, and relies on threat intelligence as well as other information obtained from governmental, public, or private sources, including external consultants engaged for strategic cybersecurity risk management, advisory and decision making. 82 Board Oversight Our board of directors oversees our cybersecurity risk exposures and the steps taken by our management team to monitor and mitigate cybersecurity risks.
Additionally, we generally require those third parties that could introduce significant cybersecurity risk to us to agree by contract to manage their cybersecurity risks in specified ways, and to agree to be subject to cybersecurity audits, which we conduct as appropriate.
Additionally, we generally require those third parties that could introduce significant cybersecurity risk to us to agree by contract to manage their cybersecurity risks in specified ways, and to agree to be subject to cybersecurity audits, which we conduct as appropriate. During the last fiscal year, we have not experienced any material cybersecurity incidents.
During the last fiscal year, we have not experienced any material cybersecurity incidents. 76 Governance Management Oversight Our cybersecurity program is overseen by our management team with assistance from our third-party information technology and cybersecurity consultants, with responsibility to lead our enterprise-wide cybersecurity strategy, policy, standards, architecture, and processes.
Governance Management Oversight Our cybersecurity program is overseen by our management team principally our chief financial officer and chief executive officer, with assistance from our third-party information technology and cybersecurity consultants, with responsibility to lead our enterprise-wide cybersecurity strategy, policy, standards, architecture, and processes.
In addition, cybersecurity risks are reviewed by our board of directors at least annually, as part of our corporate risk oversight processes.
Our management team, in consultation with our third-party information technology and cybersecurity consultants, brief our board of directors on assessing and managing cybersecurity risks. In addition, cybersecurity risks are reviewed by our board of directors at least annually, as part of our corporate risk oversight processes.
We maintain a cybersecurity risk management program designed to identify, assess, manage, mitigate, and respond to cybersecurity threats. This program, in conjunction with our enterprise risk management assessment processes, addresses cybersecurity risks to our information technology environment including systems, hardware, software, data, people, and processes.
We maintain a cybersecurity risk management program designed to identify, assess, manage, mitigate, and respond to cybersecurity threats.
Removed
Board Oversight Our board of directors oversees our cybersecurity risk exposures and the steps taken by our management team to monitor and mitigate cybersecurity risks. Our management team, in consultation with our third-party information technology and cybersecurity consultants, brief our board of directors on assessing and managing cybersecurity risks.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe believe substantially all of our property and equipment is in good condition and that Incannex has sufficient capacity to meet its current operational needs.
Biggest changeWe believe substantially all of our property and equipment is in good condition and that we have sufficient capacity to meet its current operational needs.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeMarket for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information for Our Common Shares Our shares of common stock commenced trading on the Nasdaq Global Market in November 2023 under the symbol “IXHL.” Holders of Record As of July 31, 2024, there were 17,642,832 shares of our common stock outstanding and held of record by approximately 4,991 stockholders.
Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information for Our Common Shares Our shares of common stock commenced trading on the Nasdaq Global Market in November 2023 under the symbol “IXHL” and were transferred to the Nasdaq Capital Market effective as of July 10, 2025.
Dividend Policy We have never declared or paid any dividends on our shares of common stock. We intend to retain any earnings for use in our business and do not currently intend to pay cash dividends on our shares of common stock.
We intend to retain any earnings for use in our business and do not currently intend to pay cash dividends on our shares of common stock.
Dividends, if any, on our outstanding shares of common stock will be declared by and subject to the discretion of our board of directors, and subject to the terms of our debt arrangements, as described above, and Delaware law.
Dividends, if any, on our outstanding shares of common stock will be declared by and subject to the discretion of our board of directors, and subject to the terms of our debt arrangements, as described above, and Delaware law. Recent Sales of Unregistered Securities None. Purchases of Equity Securities by the Issuer and Affiliated Purchasers None. Item 6. [Reserved]
Removed
Securities Authorized for Issuance Under Equity Compensation Plans The information included under Item 12 of Part III of this Annual Report, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters,” is hereby incorporated by reference herein. Recent Sales of Unregistered Securities None. Purchases of Equity Securities by the Issuer and Affiliated Purchasers None.
Added
Holders of Record As September 28, 2025, there were 347,705,507 shares of our common stock outstanding and held of record by approximately 4,657 stockholders. Dividend Policy We have never declared or paid any dividends on our shares of common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeResults of Operations Comparison of Fiscal Years Ended June 30, 2024 to June 30, 2023 The following tables summarize our results of operations for the periods presented (in thousands): For the Years Ended June 30 $ % 2024 2023 Change Change Revenue from customers 12 - 12 - Operating expenses: Research and development (12,879 ) (6,309 ) (6,570 ) 104 % Acquisition of in-process research and development - (35,347 ) 35,347 (100 )% General and administrative (17,174 ) (8,012 ) (9,162 ) 114 % Total operating expenses (30,053 ) (49,668 ) 19,615 (39 )% Loss from operations (30,041 ) (49,668 ) 19,627 (40 )% Other income/(expense): R&D tax incentive 11,434 683 10,751 1574 % Foreign exchange gains (losses) (28 ) (67 ) 39 (58 )% Interest income 206 241 (35 ) (15 )% Total other income/(expense), net 11,612 857 10,755 1255 % Loss before income tax expense (18,429 ) (48,811 ) 30,382 (62 )% Income tax expense (30 ) - (30 ) - Net loss (18,459 ) (48,811 ) 30,352 (62 )% Other comprehensive income/(loss): Currency translation adjustment, net of tax (77 ) (2,292 ) 2,215 (97 )% Comprehensive loss $ (18,536 ) $ (51,103 ) $ 35,267 (64 )% 80 Revenue from Customers During the fiscal year ended June 30, 2024, we have generated revenue from clinic patients on rehabilitation services which reflects the consideration to which the Company expects to be entitled in exchange for those services.
Biggest changeResults of Operations Comparison of Fiscal Years Ended June 30, 2025 to June 30, 2024 The following tables summarize our results of operations for the periods presented (in thousands): For the Years Ended June 30 $ % 2025 2024 Change Change Revenue from customers 86 12 74 617 Operating expenses: Research and development (10,747 ) (12,879 ) 2,132 (17 ) General and administrative (13,128 ) (17,174 ) 4,046 (24 ) Total operating expenses (23,875 ) (30,053 ) 6,178 (21 ) Loss from operations (23,789 ) (30,041 ) 6,252 (21 ) Other income/(expense): R&D tax incentive 1,756 11,434 (9,678 ) (85 ) Foreign exchange gains (losses) (289 ) (28 ) (261 ) 932 Interest expense 62 206 (144 ) (70 ) Interest income (303 ) - (303 ) 100 Change in fair value of convertible rights 299 - 299 100 Change in fair value of warrant liabilities (21,925 ) - (21,925 ) 100 Warrant issuance costs (129 ) - (129 ) 100 Loss on extinguishment (1,472 ) - (1,472 ) 100 ELOC commitment fee (1,095 ) - (1,095 ) 100 Total other income/(expense), net (23,096 ) 11,612 (34,708 ) (299 ) Loss before income tax expense (46,885 ) (18,429 ) (28,456 ) 154 Income tax expense - (30 ) 30 (100 ) Net loss (46,885 ) (18,459 ) (28,426 ) 154 Other comprehensive income/(loss): Currency translation adjustment, net of tax 208 (77 ) 285 (370 ) Comprehensive loss $ (46,677 ) $ (18,536 ) $ (28,141 ) 152 Revenue from Customers During the fiscal year ended June 30, 2025, we generated revenue from clinic patients for rehabilitation services.
R&D consist of salaries, benefits and other personnel related costs including equity-based compensation expense, laboratory supplies, preclinical studies, clinical trials and related clinical manufacturing costs, costs related to manufacturing preparations, fees paid to other entities to conduct certain R&D activities on our behalf and allocated facility and other related costs.
R&D costs consist of salaries, benefits and other personnel related costs including equity-based compensation expense, laboratory supplies, preclinical studies, clinical trials and related clinical manufacturing costs, costs related to manufacturing preparations, fees paid to other entities to conduct certain R&D activities on our behalf and allocated facility and other related costs.
We will continue to remain an emerging growth company until the earliest of the following: ● the last day of the fiscal year following the fifth anniversary of the date of the completion of the first sale of common equity securities pursuant to an effective registration statement under the Securities Act of 1933; ● the last day of the fiscal year in which our total annual gross revenue is equal to or more than $1.235 billion; ● the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; or ● the date on which we are deemed to be a large accelerated filer under the rules of the SEC.
We will continue to remain an emerging growth company until the earliest of the following: ● the last day of the fiscal year following the fifth anniversary of the date of the completion of the first sale of common equity securities pursuant to an effective registration statement under the Securities Act; ● the last day of the fiscal year in which our total annual gross revenue is equal to or more than $1.235 billion; ● the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; or ● the date on which we are deemed to be a large accelerated filer under the rules of the SEC.
If this is the case, the acquired set is not deemed to be a business and is instead accounted for as an asset acquisition. If this is not the case, the Company further evaluate whether the acquired set includes, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs.
If this is the case, the acquired set is not deemed to be a business and is instead accounted for as an asset acquisition. If this is not the case, we further evaluate whether the acquired set includes, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs.
In determining whether an acquisition should be accounted for as a business combination or an asset acquisition, the Company first perform a screen test to determine whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets.
In determining whether an acquisition should be accounted for as a business combination or an asset acquisition, we first perform a screen test to determine whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets.
Acquisitions The Company evaluate acquisitions under the accounting framework in ASC 805, Business Combinations, to determine whether the transaction is a business combination or an asset acquisition.
Acquisitions We evaluate acquisitions under the accounting framework in ASC 805, Business Combinations, to determine whether the transaction is a business combination or an asset acquisition.
Our actual results may differ from these estimates under different assumptions or conditions. 84 While our significant accounting policies are described in more detail in Note 2 to our financial statements included elsewhere in this prospectus, we believe the following accounting policies are those most critical to the judgments and estimates used in the preparation of our financial statements.
Our actual results may differ from these estimates under different assumptions or conditions. While our significant accounting policies are described in more detail in Note 2 to our financial statements included elsewhere in this Annual Report, we believe the following accounting policies are those most critical to the judgments and estimates used in the preparation of our financial statements.
Our R&D expenses have varied, and our future R&D expenses may vary, significantly based on a wide variety of factors such as: • the number and scope, rate of progress, expense and results of our clinical trials and preclinical studies, including any modifications to clinical development plans based on feedback that we may receive from regulatory authorities; • per patient trial costs; • the number of trials required for approval; • the number of sites included in the trials; • the countries in which the trials are conducted; • the length of time required to enroll eligible patients; • the number of patients that participate in the trials; • the number of doses that patients receive; 81 • the drop-out or discontinuation rates of patients; • the potential additional safety monitoring requested by regulatory agencies; • the duration of patient participation in the trials and follow-up; • the cost and timing of manufacturing of our drug candidates; • the costs, if any, of obtaining third-party drugs for use in our combination trials; • the extent of changes in government regulation and regulatory guidance; • the efficacy and safety profile of our drug candidates; • the timing, receipt, and terms of any approvals from applicable regulatory authorities; and • the extent to which we establish additional collaboration, license, or other arrangements.
Our R&D expenses have varied, and our future R&D expenses may vary, significantly based on a wide variety of factors such as: ● the number and scope, rate of progress, expense and results of our clinical trials and preclinical studies, including any modifications to clinical development plans based on feedback that we may receive from regulatory authorities; ● per patient trial costs; ● the number of trials required for approval; ● the number of sites included in the trials; ● the countries in which the trials are conducted; ● the length of time required to enroll eligible patients; ● the number of patients that participate in the trials; ● the number of doses that patients receive; ● the drop-out or discontinuation rates of patients; ● the potential additional safety monitoring requested by regulatory agencies; ● the duration of patient participation in the trials and follow-up; ● the cost and timing of manufacturing of our drug candidates; ● the costs, if any, of obtaining third-party drugs for use in our combination trials; ● the extent of changes in government regulation and regulatory guidance; ● the efficacy and safety profile of our drug candidates; ● the timing, receipt, and terms of any approvals from applicable regulatory authorities; and ● the extent to which we establish additional collaboration, license, or other arrangements. 86 A change in the outcome of any of these variables with respect to the development of our drug candidates could significantly change the costs and timing associated with the development of that drug candidate.
If so, the Company conclude that the acquired set is a business. The Company measures and recognizes asset acquisitions that are not deemed to be business combinations based on the cost to acquire the assets, which includes pre-acquisition direct costs recorded in accrued professional and consulting fees. Goodwill is not recognized in asset acquisitions.
If so, we conclude that the acquired set is a business. We measure and recognizes asset acquisitions that are not deemed to be business combinations based on the cost to acquire the assets, which includes pre-acquisition direct costs recorded in accrued professional and consulting fees. Goodwill is not recognized in asset acquisitions.
Stock-based Compensation The Company accounts for stock-based compensation arrangements with employees and non-employees using a fair value method which requires the recognition of compensation expense for costs related to all stock-based payments including share options. The fair value method requires the Company to estimate the fair value of stock-based payment awards on the date of grant using an option-pricing model.
Stock-Based Compensation We account for stock-based compensation arrangements with employees and non-employees using a fair value method which requires the recognition of compensation expense for costs related to all stock-based payments including share options. The fair value method requires us to estimate the fair value of stock-based payment awards on the date of grant using an option-pricing model.
Option valuation models, including the trinomial pricing and Black-Scholes option-pricing model, require the input of several assumptions. These inputs are subjective and generally require significant analysis and judgment to develop. R&D Costs R&D costs are expensed as incurred.
Option valuation models, including the trinomial pricing and BSOPM, require the input of several assumptions. These inputs are subjective and generally require significant analysis and judgment to develop. R&D Costs R&D costs are expensed as incurred.
Historically, we have funded our operations primarily through the sale of equity securities, proceeds from the exercise of options, tax grants from R&D activities and interest income. We incurred total comprehensive losses of $18.5 million and $48.8 million for the fiscal years ended June 30, 2024 and 2023, respectively.
Historically, we have funded our operations primarily through the sale of equity securities, proceeds from the exercise of options, tax grants from R&D activities and interest income. We incurred total comprehensive losses of $46.7 million and $18.5 million for the fiscal years ended June 30, 2025 and 2024, respectively.
The Company uses either the trinomial pricing or Black-Scholes option-pricing model to estimate the fair value of options granted. Stock-based compensation awards are expensed using the graded vesting method over the requisite service period, which is generally the vesting period, for each separately vesting tranche. The Company has elected a policy of estimating forfeitures at grant date.
We use either the trinomial pricing or Black-Scholes option-pricing model (“BSOPM”) to estimate the fair value of options granted. Stock-based compensation awards are expensed using the graded vesting method over the requisite service period, which is generally the vesting period, for each separately vesting tranche. We have elected a policy of estimating forfeitures at grant date.
Our lead drug candidates, which are currently in Phase 2/3 and Phase 2 clinical developments, include IHL-42X for the treatment of OSA; PSX-001, our psilocybin treatment in combination with psychological therapy in development to treat patients with GAD; and IHL-675A for rheumatoid arthritis. Each of these programs target conditions that currently have limited, inadequate, or no approved pharmaceutical treatment options.
Our lead drug candidates include IHL-42X for the treatment of OSA; PSX-001, our psilocybin treatment in combination with psychological therapy in development to treat patients with GAD; and IHL-675A for rheumatoid arthritis. Each of these programs target conditions that currently have limited, inadequate, or no approved pharmaceutical treatment options.
We have not generated any revenue from the sale of products. We do not expect to generate material revenues unless and until our drug candidates are approved. Operating Expenses Our operating expenses consist of (i) R&D expenses, (ii) acquisition of in-process research and development (“IPR&D”) expense and (iii) general and administrative expenses.
We do not expect to generate material revenues unless and until our drug candidates are approved. Operating Expenses Our operating expenses consist of (i) R&D expenses, (ii) acquisition of in-process research and development (“IPR&D”) expense and (iii) general and administrative expenses.
Net cash flows from investing activities Net cash used in investing activities decreased by $39,000 in the fiscal year ended June 30, 2024 compared to fiscal 2023. The decrease was due to less spending on property, plant and equipment.
Net cash flows from investing activities Net cash used in investing activities decreased by $0.3 million in the fiscal year ended June 30, 2025 compared to fiscal year ended June 30, 2024. The decrease was due to less spending on property, plant and equipment.
Our R&D expenses include: • external costs incurred under agreements with CROs, contract manufacturers, consultants and other third parties to conduct and support our clinical trials and preclinical studies; and • internal costs, including R&D personnel-related expenses such as salaries, and benefits, as well as allocated facilities costs and dues and subscriptions. We expense R&D costs as incurred.
R&D Expenses R&D expenses consist primarily of external and internal costs incurred in performing clinical and preclinical development activities. 85 Our R&D expenses include: ● external costs incurred under agreements with CROs, contract manufacturers, consultants and other third parties to conduct and support our clinical trials and preclinical studies; and ● internal costs, including R&D personnel-related expenses such as salaries, and benefits, as well as allocated facilities costs and dues and subscriptions.
Acquisition of IPR&D Acquisition of IPR&D expense was recorded in the fiscal year ended June 30, 2023, in connection with the acquisition of APIRx in August 2022.
Acquisition of IPR&D Acquisition of IPR&D expense was recorded in the fiscal year ended June 30, 2024, in connection with the acquisition of APIRx Pharmaceutical USA, LLC (“APIRx”) in August 2022.
Going Concern We believe there is substantial doubt about our ability to obtain additional capital when and as needed to continue as a going concern as of the date of this Annual Report.
Going Concern As of the date of this Annual Report, we believe there is no longer substantial doubt about our ability to continue as a going concern.
In addition, future regulatory factors beyond our control may impact our clinical development programs. Drug candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later stage clinical trials.
Drug candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later stage clinical trials.
Cash Flows Comparison of cash flows for the fiscal year ended June 30, 2024, with June 30, 2023 The following table summarizes our cash flows for the periods presented: Year Ended June 30, 2024 2023 Net cash used in operating activities $ (15,845 ) $ (10,749 ) Net cash used in investing activities (277 ) (316 ) Net cash provided by financing activities - 8,175 Net (decrease)/increase in cash, cash equivalents and restricted cash $ (16,122 ) $ (2,890 ) Net cash flows from operating activities Net cash used in operating activities increased by $5.1 million in the fiscal year ended June 30, 2024 compared to the fiscal year ended June 30, 2023.
Cash Flows Comparison of Cash Flows for the Fiscal Year ended June 30, 2025, with June 30, 2024 The following table summarizes our cash flows for the periods presented: Year Ended June 30, 2025 2024 Net cash used in operating activities $ (12,513 ) $ (15,845 ) Net cash provided by/(used in) investing activities (8 ) (277 ) Net cash provided by financing activities 21,396 - Net (decrease)/increase in cash, cash equivalents and restricted cash $ 8,875 $ (16,122 ) Net cash flows from operating activities Net cash used in operating activities decreased by $3.3 million in the fiscal year ended June 30, 2025 compared to the fiscal year ended June 30, 2024.
Critical Accounting Estimates Our financial statements are prepared in accordance with generally accepted accounting principles in the United States. The preparation of our financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, costs and expenses, and the disclosure of contingent assets and liabilities in our financial statements.
The preparation of our financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, costs and expenses, and the disclosure of contingent assets and liabilities in our financial statements.
As of June 30, 2024, our current assets exceed our current liabilities by $10.6 million, a $9.8 million decrease compared to the difference between our current assets and current liabilities as of June 30, 2023 of $20.4 million.
As of June 30, 2025, our current assets exceed our current liabilities by $13.0 million, a $2.4 million increase compared to the difference between our current assets and current liabilities as of June 30, 2024 of $10.6 million.
General and administrative expenses increased by $9.2 million for the fiscal year ended June 30, 2024 compared to the fiscal year ended June 30, 2023.
General and administrative expenses decreased by $4.0 million for the fiscal year ended June 30, 2025 compared to the fiscal year ended June 30, 2024.
Our aggregated turnover is less than A$20 million and not be controlled by one or more income tax exempt entities, we anticipate being entitled to a claim of 48.5% refundable tax offset for costs relating to eligible R&D activities during the year. 82 Benefit from R&D tax credit increased by $10.8 million (from $0.7 million to $11.4 million) for the fiscal year ended June 30, 2024 compared to the fiscal year ended June 30, 2023.
As our aggregated turnover is less than A$20 million and we are not controlled by one or more income tax exempt entities, we anticipate being entitled to a claim of 48.5% refundable tax offset for costs relating to eligible R&D activities during the year.
We record the estimated costs of R&D activities based upon the estimated amount of services provided but not yet invoiced and includes these costs in trade and other payables on the consolidated balance sheets and within R&D expenses on the consolidated statements of operations and comprehensive loss. 85 We accrue for these costs based on factors such as estimates of the work completed and in accordance with agreements established with its third-party service providers.
We record the estimated costs of R&D activities based upon the estimated amount of services provided but not yet invoiced and includes these costs in trade and other payables on the consolidated balance sheets and within R&D expenses on the consolidated statements of operations and comprehensive loss.
For the fiscal year ended June 30, 2024, we experienced net cash outflows from operating activities of $15.8 million, an increase of $5.1 million compared to the fiscal year ended June 30, 2023.
For the fiscal year ended June 30, 2025, we experienced net cash outflows from operating activities of $12.5 million, a decrease of $3.3 million compared to the fiscal year ended June 30, 2024.
Emerging Growth Company Status and Smaller Reporting Company Status We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act (“JOBS Act”). The JOBS Act permits an emerging growth company such as us to take advantage of an extended transition period to comply with new or revised accounting standards.
The JOBS Act permits an emerging growth company such as us to take advantage of an extended transition period to comply with new or revised accounting standards.
We anticipate our general and administrative expenses will increase substantially in the future as we expand our operations, including increasing our headcount to support our continued R&D activities and preparing for potential commercialization of our drug candidates.
Additionally, compliance, legal and regulatory expenses increased by $0.8 million (from $3.1 million to $3.9 million) primarily due to enhanced reporting obligations. We anticipate our general and administrative expenses will increase substantially in the future as we expand our operations, including increasing our headcount to support our continued R&D activities and preparing for potential commercialization of our drug candidates.
Although R&D activities are central to our business model, the successful development of our drug candidates is highly uncertain. There are numerous factors associated with the successful development of our drug candidates, including future trial design and various regulatory requirements, many of which cannot be determined with accuracy at this time based on our stage of development.
There are numerous factors associated with the successful development of our drug candidates, including future trial design and various regulatory requirements, many of which cannot be determined with accuracy at this time based on our stage of development. In addition, future regulatory factors beyond our control may impact our clinical development programs.
We plan to address this condition through the sale of common stock in public offerings and/or private placements, debt financings, or through other capital sources, including collaborations with other companies or other strategic transactions, but there is no assurance these plans will be completed successfully or at all.
We continue to plan for additional capital through the sale of common stock in public offerings and/or private placements, debt financings, or through other capital sources, including pursuant to the ATM, collaborations with other companies or other strategic transactions.
Currency Translation Adjustment Losses Currency translation adjustment, net of tax decreased by $2.2 million for the fiscal year ended June 30, 2024 compared to the fiscal year ended June 30, 2023. The increase was due to currency translation of the financial statements from the Australian dollar to the US dollar.
Currency Translation Adjustment Losses Currency translation adjustment, net of tax increased by $0.3 million for the fiscal year ended June 30, 2025 compared to the fiscal year ended June 30, 2024. The increase resulted primarily from the translation of financial statements from the functional currency to U.S. dollars.
We expect our negative cash flows from operating activities to continue and thus have determined that the losses and negative cash flows from operations and uncertainty in generating sufficient cash to meet our obligations and sustain our operations raise substantial doubt about our ability to continue as a going concern for at least one year from the issuance date of the financial statements in this Annual Report.
Although we expect our negative cash flows from operating activities to continue, we believe our current cash balances, together with anticipated cash flows and available financing arrangements, provide sufficient resources to meet our obligations and sustain operations for at least one year from the issuance date of the financial statements in this Annual Report.
As of June 30, 2024, we had cash and cash equivalents of $5.6 million, a decrease of $16.5 million compared to our cash and cash equivalents as of June 30, 2023 of $22.1 million.
As of June 30, 2025, we had cash and cash equivalents of $15.0 million, an increase of $9.2 million compared to our cash and cash equivalents as of June 30, 2024 of $5.9 million.
Cash flows from financing activities Cash provided by financing activities decreased by $8.2 million in the fiscal year ended June 30, 2024 compared to the fiscal year ended June 30, 2023. The decrease was due to no issuances of shares of common stock during the fiscal year ended June 30, 2024.
Cash flows from financing activities Cash provided by financing activities increased by $21.4 million in the fiscal year ended June 30, 2025, compared to the fiscal year ended June 30, 2024.
We make significant judgments and estimates in determining the accrued liabilities balance at the end of each reporting period. As actual costs become known, we adjust our accrued liabilities. We have not experienced any material differences between accrued costs and actual costs incurred.
We accrue for these costs based on factors such as estimates of the work completed and in accordance with agreements established with its third-party service providers. We make significant judgments and estimates in determining the accrued liabilities balance at the end of each reporting period. As actual costs become known, we adjust our accrued liabilities.
Pursuant to the requirements of ASC 205-40, Presentation of Financial Statements - Going Concern , and as a result of our financial condition and other factors described herein, there is substantial doubt about our ability to continue as a going concern for a period of at least twelve months from the date of the financial statements. 83 Based on our unrestricted cash and cash equivalents as of June 30, 2024, we anticipate that we will be able to fund our planned operating expenses and capital expenditure requirements into December 2024.
Based on our unrestricted cash and cash equivalents as of September 29, 2025, we anticipate that we will be able to fund our planned operating expenses and capital expenditure requirements for at least twelve months from the date of the financial statements included in this Annual Report.
As of June 30, 2024, we had accumulated comprehensive losses of $110.7 million. As of June 30, 2024, we had cash and cash equivalents of $5.9 million.
As of June 30, 2025, we had cash and cash equivalents of $15.0 million.
R&D expenses increased by $6.6 million for the fiscal year ended June 30, 2024 compared to the fiscal year ended June 30, 2023.
Benefit from R&D tax credit decreased by $9.7 million (from $11.4 million to $1.8 million) for the fiscal year ended June 30, 2025 compared to the fiscal year ended June 30, 2024.
Uncertainty about our ability to continue as a going concern could materially and adversely affect our liquidity, financial condition and business prospects. Off-Balance Sheet Arrangements We did not have, during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.
We have based these estimates on assumptions that may prove to be wrong, and we could use our capital resources sooner than we currently expect. Off-Balance Sheet Arrangements We did not have, during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.
The increase was due to an increase in cash used to conduct our R&D activities of $6.6 million (from $6.3 million to $12.9 million), partially offset by an increase in R&D tax incentive received (from $0.7 million to $2.6 million).
The decrease was primarily driven by a $6.3 million reduction in share-based compensation expense (from $8.9 million to $2.6 million) and a decrease in cash paid related to trade and other payables of $1.6 million (from $3.0 million to $1.4 million), partially offset by an increase in R&D tax incentive received of $15.4 million (from outflow of $9.8 million to inflow of $5.6 million).
Benefit from R&D Tax Incentive Benefit from R&D tax credit consists of the R&D tax credit received in Australia, which is recorded within other income (expense), net. The Company recognizes grants once both of the following conditions are met: (i) the Company is able to comply with the relevant conditions of the grant and (ii) the grant is received.
We have not experienced any material differences between accrued costs and actual costs incurred. 90 Benefit from R&D Tax Incentive Benefit from R&D tax credit consists of the R&D tax credit received in Australia, which is recorded within other income (expense), net.
We have not yet established an ongoing source of revenue sufficient to cover our operating and capital expenditure requirements and to cover any potential payments that may become due and payable pursuant to any debentures to provide sufficient certainty that we will continue as a going concern .
Although we have not yet established an ongoing source of revenue sufficient to cover all operating and capital expenditure requirements, including any potential payments pursuant to debentures, recent improvements in our financial position provide reasonable assurance that we will continue as a going concern for at least twelve months from the date of the financial statements. 88 Historically, we have financed our operations to date primarily through partnerships, funds received from public offerings of common stock, a debt financing facility, as well as funding from governmental bodies.
We maintain our consolidated financial statements in Australian dollar, which is our functional currency. However, our financial statements are translated into US dollars for reporting purposes.
For certain of our international subsidiaries, the local currency is the functional currency, and their financial statements are then translated into U.S. dollars for reporting purposes.
The increase was due to increases of $6.8 million (from $2.1 million to $8.9 million) in salaries, equity compensation and benefits for employees and directors, $1.3 million (from $1.8 million to $3.1 million) in compliance, legal and regulatory expenses primarily as a result our reporting obligations following our re-domiciliation, $0.2 million in occupancy expenses, and $0.5 million in other administration expenses, partially offset by a decrease in advertising and investor relations related expenses of $0.1 million.
The decrease was mainly due to a decrease of $6.3 million (from $8.9 million to $2.6 million) in equity compensation and benefits for employees and directors, primarily driven by less amortization expense incurred as the equity compensation was issued in May 2025 (compared to the prior period the equity compensation was issued in December 2024).
A change in the outcome of any of these variables with respect to the development of our drug candidates could significantly change the costs and timing associated with the development of that drug candidate. We may never succeed in obtaining regulatory approval for any drug candidate.
We may never succeed in obtaining regulatory approval for any drug candidate. In addition, we are obligated under our contracts with CROs to reimburse these CROs for certain expenses incurred by them in the performance of the services they provide to us.
Foreign Exchange Losses and Interest Income Foreign exchange losses decreased by $39,000 for the fiscal year ended June 30, 2024 2024 compared to the fiscal year ended June 30, 2023, due to favorable currency exchange rates, and interest income received from cash deposited in our bank accounts decreased by $35,000 during the same period as a result of a decrease in the cash deposited.
Foreign Exchange Losses Foreign exchange losses increased by $0.3 million for the fiscal year ended June 30, 2025 compared to the fiscal year ended June 30, 2024, primarily due to unfavorable currency exchange rates during the period. 87 Change in fair value of convertible rights On October 17, 2024, we issued a convertible debenture as part of a financing arrangement.
Removed
Recent Developments Equity-Line of Credit On September 9, 2024, we entered into the ELOC Agreement with Arena Business. Under the ELOC Agreement, we have the right to sell, and Arena Business has the obligation to buy, up to $50 million of our common stock, in each case, subject to customary closing conditions.
Added
Recent Developments ATM Program Increase On July 24, 2025, we filed a prospectus supplement to increase the capacity of our existing “at-the-market” offering program (the “ATM”) by up to an additional $100 million. While this filing increases the available capacity under the ATM, we are under no obligation to issue any shares of our commons stock pursuant to the program.
Removed
The purchase price per share of our common stock is obtained by multiplying by 96% the daily volume weighted average price (“VWAP”) on Nasdaq for the trading day specified in the sale notice (same trading day or one trading day following such notice) delivered to Arena Business. The ELOC Agreement is effective for 36 months from its execution.
Added
The expanded facility is intended to enhance our financial flexibility, providing an efficient mechanism to access capital if, and when, deemed appropriate.
Removed
As consideration for Arena Business’ execution and delivery of the ELOC Agreement, we will (i) issue to Arena Business, as a commitment fee, that number of shares of our common stock equal to 250,000 divided by the simple average of the daily VWAP of our common stock during the five trading days immediately preceding the effectiveness of a “shelf” registration statement on Form S-3 on which the estimated number of shares of our common stock are registered, and (ii) issue the ELOC Warrant exercisable for 585,000 shares of our common stock, with a five year expiration and an exercise price equal to 115% of the closing price of our common stock on the warrant issuance date.
Added
Any utilization of the ATM will be at our discretion, taking into account prevailing market conditions and strategic priorities. 84 As previously disclosed, the ATM is conducted pursuant to the Amended and Restated Sales Agreement, dated May 28, 2025 (the “Amended and Restated Sales Agreement”) by and among us, A.G.P./Alliance Global Partners (“A.G.P.”) and Curvature Securities, LLC (“Curvature,” and together with A.G.P, the “Sales Agents”).
Removed
However, we may not sell common stock to Arena Business under the ELOC Agreement if (i) a shelf Registration Statement on Form S-3 that registers the common stock issuable under the ELOC Agreement has not been declared effective by the SEC; (ii) the number of shares of our common stock issuable to Arena Business pursuant to a sale notice causes the aggregate number of shares of our common stock beneficially owned by Arena Business and its affiliates would exceed 9.99% of the number of shares of our common stock then outstanding; (iii) after giving effect to such sale (a) the aggregate number of shares of our common stock issued under the ELOC Agreement, (b) the aggregate number of shares of our common stock issued upon exercise of the ELOC Warrant, (c) the aggregate number of shares of our common stock issued upon conversion of a secured convertible debenture issued to Arena Investors, LP (as discussed below) and upon exercise of the warrant issued in connection with such convertible debenture, would exceed 19.99% of the number of shares of our common stock outstanding as of the date of the ELOC Agreement, unless the Company obtains the requisite stockholder approval for issuances in excess of such limit; or (iv) such sale of shares of our common stock would exceed, during any 12-month period, one-third of the Company’s public float under the SEC’s “baby shelf” rule for SEC-registered transactions by an issuer with a public float under $75 million when using a “shelf” registration statement on Form S-3.
Added
Accordingly, pursuant to the prospectus supplement, the amount of shares of our common stock that we may issue under the Amended and Restated Sales Agreement has been increased by up to an aggregate of $100 million of shares of our common stock.
Removed
We have not yet filed a registration statement on Form S-3 for the issuances to be made under the ELOC Agreement. Convertible Debenture Financing On September 9, 2024, we entered into the September 2024 Purchase Agreement with Arena Investors, LP.
Added
There can be no assurance that the Sales Agents will be able to complete future placements pursuant to the Amended and Restated Sales Agreement, even if instructed to do so.
Removed
Under the September 2024 Purchase Agreement, we will issue the September 2024 Debentures in an aggregate principal amount of up to $10 million at an aggregate purchase price of up to $9 million, divided into three separate tranches that are each subject to closing conditions, with a 10% original issue discount.
Added
The number of shares of our common stock that we may ultimately sell under the Amended and Restated Sales Agreement will fluctuate based on a number of factors, including the market price of our common stock during the sales period, the limits it may set in any instruction to sell Shares, and the demand for our common stock during an applicable sales period.
Removed
The conversion price of each September 2024 Debenture would be equal to 115% of the closing price of our common stock on the trading day preceding the date of the issuance of the September 2024 Debenture, subject to adjustments related to the trading price of our common stock on the Nasdaq Global Market. 79 We and our subsidiaries, Incannex Healthcare Pty Ltd, Incannex Pty Ltd and Psychennex Pty Ltd, will grant senior security interests in all of our tangible and intangible assets, except for certain R&D Australian tax incentives, which are subject to a subordinated security interest.
Added
This figure reflects the consideration to which the Company expects to be entitled in exchange for those services. Revenue increased approximately 617% when compared to revenues generated during the fiscal year ended June 2024 primarily as a result of our expansion of these services. We have not generated any revenue from the sale of products.
Removed
Our subsidiaries will also guarantee the September 2024 Debenture.
Added
We expense R&D costs as incurred. R&D expenses decreased by $2.1 million for the fiscal year ended June 30, 2025 compared to the fiscal year ended June 30, 2024. The decrease was primarily due to a pause in our development activities that occurred during the fiscal year ended June 30, 2025 for resource conservation reasons.
Removed
As additional consideration for the Purchaser’s purchase of each September 2024 Debenture, we will issue a warrant (a “September 2024 Debenture Warrant”), with a five year expiration, each exercisable for number of shares of our common stock equal to 25% of the total principal amount of the related September 2024 September 2024 Debenture purchased by the Purchaser on the applicable closing date divided by 115% of the closing price of our common stock on the trading day immediately preceding such closing date.
Added
We have since resumed development activities for all of our lead drug candidates. Although R&D activities are central to our business model, the successful development of our drug candidates is highly uncertain.
Removed
We are not obligated to issue a September 2024 Debenture Warrant with respect to any September 2024 Debenture tranche that does not close. The exercise price of each September 2024 Debenture Warrant will be 115% of the closing price of our common stock on its issuance date.
Added
The precise timing and amounts of these expenses and our corresponding reimbursement obligations are and may continue to be uncertain and outside of our control. We incur the costs for these reimbursement obligations when invoiced by the CRO. We often receive invoices long after the CRO has performed the services that are the subject of the invoice.
Removed
We must register the shares of our common stock issuable upon conversion of the September 2024 Debentures and exercise of the September 2024 Debenture Warrants.
Added
As a result, our related operating expenses have and may continue to vary significantly period-to-period and are not necessarily indicative of the expenses associated with the activities of the CRO conducted during the period covered by the periodic report in which these expenses are disclosed.
Removed
However, the issuance of the common stock underlying the September 2024 Debenture and the September 2024 Debenture Warrants are subject to stockholder approval to the extent the issuance would exceed 19.99% of the number of shares of our common stock outstanding as of the date of the September 2024 Purchase Agreement.
Added
This decrease was partially offset by an increase of $1.4 million (from $2.8 million to $4.2 million) in salaries, and other employee benefits, which resulted from the appointment of Chief Medical Officer and additional middle management positions during the period.
Removed
R&D Expenses R&D expenses consist primarily of external and internal costs incurred in performing clinical and preclinical development activities.
Added
The decrease primarily due to the multiple years of tax incentives being granted and successful lodgement of overseas findings on the Company’s lead assets, which we revised the estimates for the R&D tax incentive receivable, primarily based on historical experience of claims in the fiscal year ended June 30, 2024.
Removed
The increase was primarily due to the commencement of a BA/BE clinical trial investigating IHL-42X in healthy volunteers, a Phase 2 clinical trial investigating IHL-675A in patients with rheumatoid arthritis, and a Phase 2/3 clinical trial investigating IHL-42X in patients with obstructive sleep apnea.
Added
The convertible debenture was repaid in full on March 13, 2025, and the convertible rights associated with the convertible debenture were derecognized along with the debt repayment. The changes in the fair value of the convertible rights amounted to $0.3 million for the fiscal year ended June 30, 2025.
Removed
The increase was due to an increase in the R&D tax credit received from the Australian Taxation Office of $2.6 million for our research and clinical trials activities in Australia following finalization of the fiscal 2023 Australian tax return.
Added
Change in fair value of warrant liabilities In 2024 and 2025 we issued warrants in connection with our equity line of credit financing, convertible debenture financing and private investment in public equity financing. These warrants were subsequently exercised or cancelled later during the year.
Removed
We incurred net losses of $18.5 million and $48.8 million for the fiscal years ended June 30, 2024 and 2023, respectively. The decrease in net loss is primarily attributable to a $35.3 million decrease in acquisition of IPR&D expense related to the acquisition of APIRx during the fiscal year ended June 30, 2023.
Added
The changes in the fair value of warrant liabilities amounted to $21.9 million for the fiscal year ended June 30, 2025. Loss on extinguishment As mentioned above, the convertible debenture was repaid in full on March 13, 2025, and the associated convertible rights were derecognized along with the debt repayment.
Removed
Historically, we have financed our operations to date primarily through partnerships, funds received from public offerings of common stock, a debt financing facility, as well as funding from governmental bodies.

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