Summary and Analysis of Key Points

Overview:

• InMed is a pharmaceutical company developing small molecule drug candidates that target the endocannabinoid system, which is involved in many homeostatic functions in the body.
• The company’s current pipeline consists of three programs targeting Alzheimer’s disease, dry age-related macular degeneration, and Epidermolysis Bullosa.
• InMed also has a commercial subsidiary, BayMedica, that specializes in the B2B commercialization of bulk rare, non-intoxicating cannabinoids.

Recent Developments:

• The company regained compliance with Nasdaq’s minimum bid price requirement after effecting a 20-to-1 reverse stock split.
• InMed renewed its at-the-market (ATM) equity offering program and entered into a $10 million standby equity purchase agreement (SEPA).
• One director resigned from the board following the company’s annual general meeting.
• The company reported positive preclinical results for its INM-901 Alzheimer’s drug candidate and selected a formulation for its INM-089 dry AMD drug candidate.

Financial Performance:

• InMed Pharma segment:
  • Research and development expenses increased 86% in Q3 FY2024 due to higher external contractor costs.
  • General and administrative expenses increased 15% in Q3 FY2024 due to higher consulting, legal, and personnel costs.
  • Finance expenses of $352,000 were incurred in Q3 FY2024 related to the SEPA.
• BayMedica Commercial segment:
  • Sales decreased 10% in Q3 FY2024 due to lower product pricing from increased competition.
  • Cost of sales decreased 29% in Q3 FY2024 due to lower inventory write-downs.
  • Gross profit increased 42% in Q3 FY2024.

Liquidity and Capital Resources:

• As of December 31, 2024, the company had $3.5 million in cash, cash equivalents, and short-term investments.
• The company expects its current cash and recent financing activities to fund operations through the end of Q2 2025, but has concluded there is substantial doubt about its ability to continue as a going concern.
• The company will need to raise additional capital through equity or debt financing, collaborations, or other strategic transactions to fund its ongoing operations and development programs.

Outlook:

• InMed expects its research and development expenses to increase significantly as it advances its drug candidates into later stages of clinical development.
• The company will continue to focus on the development of its pharmaceutical pipeline and the commercialization efforts of its BayMedica subsidiary.
• Securing additional financing will be critical for the company to continue its operations and development activities.

Analysis:

• InMed has made progress in advancing its drug candidates, but faces significant financial challenges. The company’s reliance on external financing and limited revenue from its commercial subsidiary raise concerns about its long-term viability.
• The reverse stock split and financing activities provide some near-term relief, but the company will need to find a sustainable path to funding its operations and development programs.
• Successful outcomes from the company’s clinical trials and continued growth of the BayMedica business could improve the financial outlook, but the risks and uncertainties remain high.
• Investors should closely monitor the company’s ability to raise additional capital and the progress of its development programs to assess the long-term potential of InMed.