Incannex Surges 720% On Sleep Apnea Trial Progress: ‘Penny Bio Pharma Mania’ Lifts Retail Sentiment

Shares of Incannex Healthcare Inc. hit their highest levels in nearly two months on Wednesday after the company released updates about its lead candidate, IHL-42X, a once-daily oral treatment for obstructive sleep apnea (OSA).

The company announced completion of patient dosing for the Phase 2 portion of the RePOSA Phase 2/3 trial on May 8 and expects to finish final follow-up assessments by May 17. 

Shares of Incannex surged 720% on May 14 to close at $0.70, with the stock rising another 24% to $0.87 in after-hours trading.

The program's pharmacokinetic and safety profiles, and clinical knowledge will help progress upcoming development stages and regulatory discussions with the FDA.

The FDA end-of-Phase II meeting will formulate regulatory approaches for a new drug application.

The company started its Phase 3 preparations, which will enroll 440 patients across multiple U.S. trial sites. U.S. investigators and trial participants drove the decision to concentrate geographically.

IHL-42X treats intermittent hypoxia, defined by repeated blood oxygen level decreases, and hypercapnia, which involves carbon dioxide accumulation in the blood from inadequate airflow during sleep.

Patients receive a dual therapy of dronabinol and acetazolamide to achieve combined effects that lessen disease severity.

The Australian Phase 2 trials revealed that the lowest dose achieved a 51% reduction in the Apnea-Hypopnea Index (AHI) on average. 

Subsequent studies reported progress in measuring hypoxic burden (HB), which shows a stronger link to cardiovascular outcomes compared to AHI measurements.

The company pointed out that IHL-42X may be used as a broader treatment option than weight loss therapies because data reveals that 67% of OSA patients are not obese. 

It also announced initiation of early commercial engagement initiatives, which demonstrate increasing attention from prospective partners. 

Incannex has advanced multiple late-stage drug candidates, including IHL-675A targeting inflammatory conditions and PSX-001 for generalized anxiety disorder. 

On Stocktwits, retail sentiment was ‘extremely bullish’ amid ‘extremely high’ message volume.

One user suggested the sharp move in Incannex was part of what they described as a broader wave of "penny bio pharma mania" unfolding in the market.

Meanwhile, another user expressed regret over missing the rally while driving and hoped the stock would climb again the next day.

The stock has declined 65.4% so far in 2025.

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