The stock market had an impressive day on Tuesday, recovering from a downturn caused by the tensions in Ukraine and general fears of an economic slowdown. However, Incannex Healthcare Limited (NASDAQ:IXHL) was a big outperformer. As of 1:30 p.m. ET, Incannex was up by more than 50% for the day.
The rally came barely a week after the company announced the completion of a preliminary analysis of data for its lead product candidate, IHL-42X. IHL-42X, a novel cannabinoid combination product, reported highly encouraging results from its phase 2, proof-of-concept clinical trial investigating it for the treatment of obstructive sleep apnea (‘OSA’).
In 2018, sleep apnea, a disorder in which patients repeatedly stop and start breathing during sleep, made the news when the NTSB revealed that engineer fatigue caused by undiagnosed sleep apnea was responsible for two serious commuter railroad crashes.
The analysis from the clinical data showed that IHL-42X has the potential to significantly improve sleep quality and increase the quality of life by reducing the disorder’s severity. Furthermore, IHL-42X was observed to be well tolerated in the clinical trial.
Over the course of the IHL-42X treatment periods (using low, mid, and high doses), the average AHI was 23.81, a 44.4 % reduction from the baseline score of 42.84, compared to a 6.4% reduction in the placebo group.
On the backdrop of these results, Incannex said it is already in the process of preparing for a pre-IND meeting with the FDA scheduled on May 11.
Now what
Since Incannex is still a clinical-stage biotech working on potentially revolutionary treatments, the company’s lack of revenue shouldn’t be a significant concern.
Regardless of the direction shares are heading, volatility has been the name of the game recently, especially for clinical-stage biotech stocks like Incannex Healthcare. It seems highly probable that this trend is likely to continue going forward, at least until investors get some clarity on inflation, interest rate hikes, and the war in Ukraine.
But even after today’s rally, Incannex is still about 60% below its 2022 high, so if you’re a believer in the company’s lead product candidate, now could be a brilliant time to take a closer look.
