DALLAS, TX -- August 19th, 2025 -- Incannex Healthcare Inc. (NasdaqGM:IXHL): Stonegate Capital Partners updates their coverage on Incannex Healthcare Inc. (NasdaqGM:IXHL). Recently, IXHL has made significant progress on its IHL-42X asset after very positive topline results from the Phase 2 study have returned, with more granular data trickling in. Both the low and high dose groups achieved a statistically significant reduction in percentage change in Apnoea-Hypopnoea Index (AHI) from baseline compared to placebo. With AHI being the primary indicator of success, we are excited by the phenomenal topline results with maximum AHI reductions of up to 83% for the high-dose group and up to 79% for the low-dose group. In addition to this effectiveness, IHL-42X was tolerated well across both cohorts, having no serious adverse events reported during the treatment period. Lastly, the patient reported outcomes were equally impressive as 57.6% of participants reported a perceived improvement in their OSA, and 89.5% of those reporting improvement described the change as meaningful to their lives. This positions IXHL favorably as it begins the next steps of bringing IHL-42X to market. 

Company Updates:

IHL-42X Next Steps: As mentioned below, the Company is in an extremely favorable position due to its vastly improved capital structure and balance sheet. We believe IXHL has sufficient liquidity to bring IHL-42X to commercial readiness. In the short term we expect more news to become available as more clinical data is analyzed with the help of the expanded advisory board. We also expect that IXHL will have a meeting with the FDA prior to beginning Phase 3. Given the strong phase 2 results it is expected that the Company will continue to evaluate future commercialization at the same time.

Financing and Capital Structure Update: IXHL has significantly strengthened its financial position through strategic financing arrangements designed to optimize capital structure and minimize dilution related to its Series A Warrants. Utilizing proceeds from the Company’s ATM, IXHL has issued a total of ~$24.7M worth of shares to repurchase all outstanding Series A Warrants representing 347.2M shares that could be dilutive. These measures highlight management’s proactive approach to capital management, supporting the Company’s financial flexibility and providing a significant amount of visibility.

PSX-001 and IHL-675A Update: IXHL’s PSX-001, a psilocybin-based candidate for Generalized Anxiety Disorder (GAD), successfully achieved positive results from a Phase 2 proof-of-concept study. The Company has secured IND clearance from the FDA and Clinical Trial Authorization from the UK regulatory authorities for the PsiGAD2 Phase 2 trial, which will recruit 94 patients across the U.S. and U.K. Meanwhile, IHL-675A, targeting inflammation associated with rheumatoid arthritis, completed patient dosing in its Phase 2 trial with approximately 128 participants. Data from this study is expected in the second half of 2025, with future resources dedicated to a larger U.S. Phase 2 study, potentially accelerating its regulatory approval.

Valuation: We use a probability-adjusted Discounted Cash Flow Model when valuing IXHL. Our valuation model returns a valuation range of $1.05 to $2.86 with a midpoint of $1.70 based on a discount rate range of 12.50% to 17.25% and a current risk adjustment range of 13% to 18%. Further details on our model can be found on page 5 of this report. We note that this model is highly levered to the out years due to the long term nature of IXHL's industry, leading to the potential for dramatic re-ratings as new information becomes available.

About Stonegate
Stonegate Capital Partners is a leading capital markets advisory firm providing investor relations, equity research, and institutional investor outreach services for public companies. Our affiliate, Stonegate Capital Markets (member FINRA) provides a full spectrum of investment banking services for public and private companies.

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