InMed Pharmaceuticals Reports Third Quarter Fiscal 2024 Financial Results and Provides Business Update

Rhea-AI Summary

InMed Pharmaceuticals (NASDAQ: INM) released its financial results for Q3 fiscal 2024, ending March 31, 2024.

The company reported positive preclinical data for its Alzheimer's disease (INM-901) and dry AMD (INM-089) programs. InMed closed the quarter with $7.9 million in cash.

The BayMedica commercial business earned $3.3 million over nine months, an 83% increase from the previous year. Q3 revenues remained flat at $1.2 million, with BayMedica operating profitably.

The company recorded a net loss of $5.7 million for the quarter, down from $7.6 million the previous year. R&D and patents expenses dropped to $2.6 million from $3.1 million. Cash reserves should cover expenses into Q4 2024.

Notably, Alexandra Mancini, SVP Clinical & Regulatory Affairs, will retire effective June 30, 2024.

Positive

• Positive preclinical data for INM-901 (Alzheimer's) and INM-089 (dry AMD) programs.
• BayMedica revenues grew 83% YoY to $3.3 million for nine months.
• BayMedica operated profitably in Q3 with flat quarter-over-quarter revenues at $1.2 million.
• Net loss decreased to $5.7 million from $7.6 million YoY.
• R&D and patents expenses reduced to $2.6 million from $3.1 million YoY.

Negative

• Cash reserves decreased from $8.9 million to $7.9 million since June 30, 2023.
• General and administrative expenses remain high at $4 million for nine months.
• BayMedica revenue growth flat quarter-over-quarter at $1.2 million.
• Expected revenue fluctuations in future quarters for BayMedica.
• Retirement of key executive, Alexandra Mancini, could affect continuity.

Financial Analyst

InMed Pharmaceuticals' recent financial results for Q3 2024 show a mix of promising and challenging aspects. The company closed the quarter with a US$7.9 million cash position, a important indicator of liquidity. Despite this, the net loss came in at US$5.7 million, an improvement compared to the US$7.6 million loss in the same period last year. This indicates some progress in cost management.

Revenue from BayMedica, InMed's commercial business unit, was stable at US$1.2 million quarter-over-quarter, contributing to an 83% growth year-over-year. This stability is critical, although the flat quarter-over-quarter growth could indicate market saturation or other operational challenges. Further, BayMedica's profitability and efforts to reduce manufacturing costs are positive signs for future margins.

General and administrative expenses and R&D costs have decreased, pointing towards improved operational efficiency. However, the company still faces significant cash burn, necessitating careful cash flow management moving forward. The reduction in net loss is a positive trend but investors need to closely monitor revenue growth and the company's ability to control expenses.

Given these factors, the financial analyst rates this news as neutral for its immediate impact on InMed's stock.

Medical Research Analyst

The promising preclinical data from InMed's Alzheimer's (INM-901) and dry AMD (INM-089) programs are noteworthy. For Alzheimer's, the INM-901 drug candidate shows potential through its impact on CB1/CB2 receptors, reduced neuroinflammation and improved neuronal function. These indicators are important as Alzheimer's currently has very few effective treatments and remains a significant unmet medical need.

The dry AMD data further bolster confidence, particularly the neuroprotective effects of INM-089 on photoreceptors and improved retinal health. In a competitive landscape with limited effective treatments, these findings could position InMed favorably for future market capture. However, it's essential to recognize that preclinical success doesn't always translate to clinical efficacy in human trials.

Both programs are at a preclinical stage, meaning they are several years away from potential commercialization. Investors should balance the excitement around these advancements with the inherent risks and timelines of drug development.

In conclusion, these developments are positive for the company's long-term outlook, but cautious optimism is warranted given the early stage of development.

Market Research Analyst

The news of BayMedica's commercial performance offers insights into market dynamics for rare cannabinoids. The steady revenue of US$1.2 million this quarter reflects stable demand, while the 83% year-over-year growth underscores a growing market interest. Importantly, the profitability of BayMedica is a significant milestone, indicating a sustainable business model and potential for margin improvements as manufacturing costs decrease.

Investors should be mindful of the company's forecast for revenue fluctuations in upcoming quarters, signifying market volatility or dependency on certain clients or contracts. Nevertheless, the long-term growth potential in the rare cannabinoids sector appears robust, driven by increasing consumer acceptance and scientific validation of these compounds.

This segment's performance is important for InMed as it provides a revenue stream that supports its broader pharmaceutical R&D efforts.

The market research analyst views this news as positive for BayMedica's commercial prospects, potentially enhancing investor confidence in InMed's diversified strategy.

• Reported positive preclinical data in both its Alzheimer's and dry AMD programs
  
  
• Closed Fiscal Q3 with cash position of US$7.9 million

Vancouver, British Columbia--(Newsfile Corp. - May 14, 2024) - InMed Pharmaceuticals Inc. (NASDAQ: INM) ("InMed" or the "Company"), a clinical stage pharmaceutical company focused on developing a pipeline of proprietary small molecule drug candidates, today announced financial results and business update for the third quarter of the fiscal year 2024, which ended March 31, 2024.

The Company's full financial statements and related MD&A for the third quarter ended March 31, 2024, are available at www.inmedpharma.com, www.sedar.com and at www.sec.gov.

Eric A. Adams, InMed President and CEO, commented, "The third quarter of fiscal year 2024 was another positive quarter for the Company as we continue to make exciting progress in our pharmaceutical pipeline and deliver steady growth in our commercial business. Last month we announced important updates in our two preclinical programs in the treatment of Alzheimer's disease ("ALZ") and dry Age-related Macular Degeneration ("dry AMD"). Both programs utilize proprietary small molecule drug candidates activating both the CB1 / CB2 receptors as well as other disease-relevant receptors. We are highly encouraged by the positive findings and we are committed to further advancing our research in these two highly underserved indications."

Adams continued, "Revenues from the BayMedica commercial business remain consistent with the previous quarter and BayMedica operated as a profitable commercial business unit in the current quarter. We remain optimistic for the sector as more brands start to incorporate rare cannabinoids into their product portfolios."

Business update

Pharmaceutical Development Programs

INM-901: A multipronged approach in treatment of Alzheimer's disease.

INM-901 is a proprietary small molecule drug candidate being developed as a potential treatment for ALZ employing multiple mechanisms of actions. On April 4, 2024, the Company announced additional preclinical data demonstrating INM-901's positive pharmacological effects. Results included:

• INM-901 is a preferential signaling agonist of the CB1/CB2 receptors and impacts the PPAR signaling pathway;
  
  
• INM-901 demonstrates reduced neuroinflammation and improved neuronal function; and
  
  
• mRNA data from INM-901 preclinical studies support the observations made in the previously released behavior studies in locomotor activity, cognition and memory.

InMed continues to accelerate the development of its ALZ program, with long-term behavioural and mechanism of action / receptor interaction studies currently underway. Data read-out expected in calendar 3Q 2024.

Additionally, the Company recently announced the addition of Dr. David G. Morgan, a leader in neurodegenerative disease, to its Scientific Advisory Board ("SAB"), reinforcing the Company's commitment to advancing it's INM-901 program.

INM-089: Neuroprotection in the treatment of dry AMD

INM-089 is another proprietary small molecule drug candidate being studied in the treatment of Age-related Macular Degeneration ("AMD"). In April, the Company announced additional preclinical data for INM-089 further demonstrating positive pharmacological effects. Results from INM-089 preclinical studies included:

• Data indicates that INM-089 may be more effective as a therapeutic treatment for dry AMD compared to neovascular, or wet, AMD;
  
  
• More specifically, data suggests INM-089 may be an important candidate for geographic atrophy ("GA") which is common in more advanced cases of dry AMD;
  
  
• Enhanced neuroprotection of photoreceptors as well as improved photoreceptor function;
  
  
• Improved integrity of retinal pigment epithelium; and
  
  
• Reduction in extracellular autofluorescent deposits, a hallmark of dry AMD.

The Company has strategically prioritized the utilization of its proprietary small molecule drug candidates in its drug development initiatives, resulting in the INM-089 program for the treatment of dry AMD taking precedence over the INM-088 program in the treatment of glaucoma. Therefore, the Company will not be advancing INM-088 in the immediate future. Notably, the initial research and data from the INM-088 program have played an instrumental role in shaping the development of INM-089 program.

BayMedica Commercial Business

BayMedica revenues were $3.3 million for the nine months ended March 31, 2024, compared with $1.8 million for the nine months ended March 31, 2023, representing 83% growth over the same period last year. Quarter over quarter revenue has remained flat this period with sales of $1.2 million, same as the previous quarter. BayMedica operated as a profitable business unit this quarter and continues to make progress lowering manufacturing costs that should incrementally improve margins over time. While we are optimistic about the long-term growth potential in the rare cannabinoids sector, we expect revenue to fluctuate in future quarters.

Financial and Corporate Highlights:

• Net loss was $5.7 million for the quarter ended March 31, 2024, compared to a net loss of $7.6 million in the same period last year.

• Research and development and patents expenses were $2.6 million for the nine months ended March 31, 2024, compared with $3.1 million for the nine months ended March 31, 2023.

• General and administrative expenses were $4 million for the nine months ended March 31, 2024, compared with $4.4 million for the same period last year.

• As of March 31, 2023, the Company's cash, cash equivalents and short-term investments were $7.6 million, which compares to $8.9 million on June 30, 2023.

Based on current forecasts, the Company expects its cash will be sufficient to fund its planned operating expenses and capital expenditure requirements into the fourth quarter of calendar year 2024, depending on the level and timing of realizing BayMedica revenues from the sale of products in the Health & Wellness sector as well as the level and timing of our operating expenses.

Ms. Alexandra D.J. Mancini, Senior Vice President, Clinical & Regulatory Affairs, provided notice to the Company and the Company's Board of Directors of her intention to retire from her position, effective June 30, 2024. Ms. Mancini intends to continue in a consultancy capacity to ensure a smooth transition of both the INM-755 program and ongoing regulatory matters. The Company would like to thank Ms. Mancini for her significant, valuable contributions, and leadership during her tenure with InMed and wish her all the best in her retirement. We congratulate her on a tremendous career in the biotech industry, having played an important role in developing and bringing to market several pharmaceutical products in many disease areas.

Table 1. InMed Pharmaceuticals Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS
Expressed in U.S. Dollars

		March 31,
		2024					June 30,
		(unaudited)					2023
		$					$
ASSETS
Current
Cash and cash equivalents				7,600,598			8,912,517
Short-term investments				43,085			44,422
Accounts receivable, net of allowance for credit losses of $66,775 in 2024 and 2023				207,681			260,399
Inventories				1,193,952			1,616,356
Prepaids and other current assets				1,018,686			498,033
Total current assets				10,064,002			11,331,727
Non-Current
Property, equipment and ROU assets, net				1,370,969			723,426
Intangible assets, net				1,823,745			1,946,279
Other assets				100,000			104,908
Total Assets				13,358,716			14,106,340
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current
Accounts payable and accrued liabilities				1,183,285			1,608,735
Current portion of lease obligations				345,545			375,713
Deferred rent				-			16,171
Total current liabilities				1,528,830			2,000,619
Non-current
Lease obligations, net of current portion				725,236			15,994
Total Liabilities				2,254,066			2,016,613
Commitments and Contingencies
Shareholders’ Equity
Common shares, no par value, unlimited authorized shares:
6,344,970 (June 30, 2023 - 3,328,191) issued and outstanding				80,606,863			77,620,252
Additional paid-in capital				37,507,306			35,741,115
Accumulated deficit				(107,138,088	)		(101,400,209	)
Accumulated other comprehensive income				128,569			128,569
Total Shareholders’ Equity				11,104,650			12,089,727
Total Liabilities and Shareholders’ Equity				13,358,716			14,106,340
Related Party Transactions
Subsequent Events

 

Table 2. InMed Pharmaceuticals Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
Expressed in U.S. Dollars

	For the Three Months Ended						For the Nine Months Ended
	31-Mar						31-Mar
		2024			2023			2024		2023
		$			$			$		$
Sales		1,172,601			1,033,925			3,314,663			1,824,496
Cost of sales		883,143			841,414			2,416,417			1,415,068
Inventory write-down		-			-			263,404			576,772
Gross profit		289,458			192,511			634,842			(167,344	)
Operating Expenses
Research and development and patents		656,764			878,303			2,558,648			3,108,312
General and administrative		1,374,095			1,412,727			4,036,784			4,438,083
Amortization and depreciation		54,767			50,689			164,833			148,786
Foreign exchange loss		48,156			2,733			36,717			79,287
Total operating expenses		2,133,782			2,344,452			6,796,982			7,774,468
Other Income (Expense)
Interest and other income		121,458			155,497			424,261			343,881
Loss before income taxes		(1,722,866	)		(1,996,444	)		(5,737,879	)		(7,597,931	)
Tax expense		-			(1,500	)		-			(11,300	)
Net loss for the period		(1,722,866	)		(1,997,944	)		(5,737,879	)		(7,609,231	)
Net loss per share for the period
Basic and diluted		(0.18	)		(0.60	)		(0.82	)		(3.53	)
Weighted average outstanding common shares
Basic and diluted		9,612,973			3,328,191			6,961,938			2,156,283	

FAQ

What were InMed Pharmaceuticals' financial results for Q3 2024?

InMed Pharmaceuticals reported a net loss of $5.7 million for Q3 2024, down from $7.6 million the previous year. Cash reserves stood at $7.9 million.

What positive data was reported for INM-901 and INM-089?

InMed reported positive preclinical data for INM-901 (Alzheimer's) showing reduced neuroinflammation and improved neuronal function, and for INM-089 (dry AMD) indicating enhanced neuroprotection and improved retinal integrity.

How did BayMedica perform financially in Q3 2024?

BayMedica reported $1.2 million in revenue for Q3 2024, with year-over-year revenue growth of 83% to $3.3 million over nine months. The unit operated profitably this quarter.

What are the future revenue expectations for BayMedica?

InMed expects revenue to fluctuate in future quarters for BayMedica, despite optimism about long-term growth in the rare cannabinoids sector.

What changes in executive leadership were announced?

Alexandra Mancini, SVP Clinical & Regulatory Affairs, announced her retirement effective June 30, 2024. She will continue in a consultancy capacity to aid in the transition.