Summary: Incannex Healthcare Inc announced it has entered into a financing agreement with Arena Investors LP, securing up to $10 million in convertible notes and a $50 million equity line of credit. The funds will be used to advance clinical trials for its lead product, IHL-42X, targeting obstructive sleep apnea, as well as other drug candidates in the company’s pipeline. This financing will support Incannex’s ongoing development of synthetic cannabinoid and psychedelic-assisted therapies.
Key Takeaways:
- Strategic Financing: Incannex secured up to $10 million in secured convertible notes and a $50 million equity line of credit to support clinical trials.
- Clinical Trial Advancement: The funds will help advance key programs in phase 2/3 and phase 2 trials, including treatments for obstructive sleep apnea, generalized anxiety disorder, and rheumatoid arthritis.
- Partnership with Arena Investors: This partnership strengthens Incannex’s financial position, allowing the company to reach critical late-stage clinical milestones.
Incannex Healthcare Inc, a clinical-stage biopharmaceutical company advancing IHL-42X—its lead product—for the treatment of obstructive sleep apnea (OSA), announced it has entered into an agreement to issue up to $10 million in secured convertible notes to Arena Investors LP and its affiliates.
Under the terms of the agreements, Incannex will also secure a $50 million equity line of credit with Arena affiliate Arena Business Solutions, which the company does not anticipate drawing upon at closing.
Incannex intends to use the proceeds from the strategic financing to support the ongoing clinical trials of the company’s drug candidates and for working capital and other general corporate purposes.
Incannex is currently advancing synthetic cannabinoid and psychedelic-assisted therapeutics targeting sleep apnea, anxiety, and inflammatory diseases, with three programs currently in phase 2/3 and phase 2 development.
“We are pleased to be partnering with Arena and [Arena Business Solutions] on this strategic financing, which strengthens Incannex’s ability to advance our lead programs through key late-stage clinical milestones,” says Joel Latham, Incannex’s president and chief executive officer, in a release. “We look forward to updating investors on our progress, including progressing IHL-42X through phase 2/3 trials for the treatment of obstructive sleep apnea, PsiGAD through a phase 2 study for generalized anxiety disorder, and IHL-675A through a phase 2 trial for rheumatoid arthritis.”
Details of the Agreements
Incannex will determine allocation of funds according to the company’s needs. The initial funding tranche of $3.33 million will be received by Incannex upon closing. The company may elect to access to two subsequent tranches up to a total of $6.67 million. All three tranches will include a 10% original issue discount and are subject to customary closing conditions.
Incannex has also entered an equity line of credit with Arena with ABS. Under the terms of the agreement the company will have the right, but not the obligation, to issue and sell to Arena up to $50 million of shares of common stock over a period of 36 months, subject to customary conditions.
Further information regarding the securities purchase agreement and the equity line of credit agreement are provided in the current report on Form 8-K filed with the Securities and Exchange Commission.
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