Incannex Healthcare Inc. (NASDAQ:IXHL) on Thursday detailed an updated clinical development plan for IHL-42X, its oral treatment candidate for obstructive sleep apnea, following results from its Phase 2 trial.
The company said it intends to launch a Phase 2 crossover dose-optimization study known as DReAMzz, which will assess various ratios of the drug’s two active components, dronabinol and acetazolamide. According to a company press release, patient dosing is expected to begin within the next few months.
IHL-42X has been granted Fast Track Designation by the U.S. Food and Drug Administration, enabling closer and more frequent engagement with the agency during the development process.
Results from the completed RePOSA Phase 2 study showed that 33.3% of participants in the low-dose group and 41.2% in the high-dose group achieved more than a 30% reduction in the apnea-hypopnea index. In addition, 58% of patients reported an improvement in their obstructive sleep apnea symptoms, with roughly 90% of those respondents describing the improvement as meaningful in their daily lives. The trial reported no serious adverse events.
“Following the strong, statistically significant outcomes from our Phase 2 RePOSA trial, we believe IHL-42X is emerging as one of the most promising oral therapies in development for obstructive sleep apnea,” said Joel Latham, President and Chief Executive Officer of Incannex Healthcare.
Investors reacted positively to the news, sending the stock up nearly 49% over the past week to $5.97, although shares remain about 73% lower over the past year.
The company said the planned optimization study aims to determine the formulation that delivers improvements in objective sleep and respiratory measures while preserving patient-reported benefits and the favorable safety profile observed in the Phase 2 trial.
Incannex has appointed a contract research organization to oversee the DReAMzz study, and the findings are expected to support progression into a Phase 3 development program.
Incannex is a clinical-stage biopharmaceutical company focused on developing combination therapies for chronic conditions such as obstructive sleep apnea, rheumatoid arthritis and generalized anxiety disorder. With a market capitalization of about $71 million, InvestingPro analysis suggests the stock is currently trading above its Fair Value. An InvestingPro Tip also indicates the company is burning through cash at a rapid pace, although it currently holds more cash than debt on its balance sheet.
In other developments, Incannex Healthcare Inc. recently announced a 1-for-30 reverse stock split of its common shares, approved by the company’s board of directors. The move is intended to maintain compliance with Nasdaq listing requirements. The shares will trade on a split-adjusted basis under a new CUSIP number while retaining the existing ticker symbol.
The company has also expanded its Clinical Advisory Board with the addition of three experts—Murray B. Stein, MD, MPH; Andrew Cutler, MD; and Amir Kalali, MD—to support development of its PSX-001 program targeting generalized anxiety disorder. The advisory board was established to provide independent clinical and scientific guidance as the program advances into its next stage.
Additionally, during its 2025 Annual Meeting of Stockholders, Incannex elected Dr. George Anastassov and Robert Clark to its board of directors, both receiving strong shareholder support. The company’s shareholders also approved the ratification of its external auditor. These developments reflect Incannex’s ongoing strategic and operational initiatives.