Under the leadership of Joel Latham, Incannex Healthcare is advancing a differentiated pipeline of cannabinoid- and psychedelic-based therapeutics targeting significant unmet needs in sleep disorders, inflammatory disease, and anxiety-related conditions. With positive Phase 2 data, FDA engagement, and a clear focus on mechanism-driven science, the company is working to transition these emerging modalities from the margins of medicine into validated, regulator-ready treatments. In this BioPharma Boardroom Q&A, Latham outlines the scientific rationale behind Incannex’s programs, the clinical milestones achieved to date, and the strategic roadmap shaping its next phase of growth.

Incannex Healthcare is advancing therapies in areas with significant unmet medical need. What was the original scientific and strategic rationale behind focusing on cannabinoid- and psychedelic-based therapeutics, and how has that vision evolved as your clinical programs have progressed?

Incannex Healthcare was founded to address significant unmet medical needs using innovative, mechanism-based approaches. Early on, we recognized that cannabinoid- and psychedelic-based therapeutics had the potential to target underlying biology in ways traditional therapies could not. For example, obstructive sleep apnea (OSA) affects over 20 million adults in the U.S. alone, and globally the numbers are even higher. While CPAP devices are effective, adherence is poor, leaving millions inadequately treated and at increased risk of cardiovascular disease, metabolic dysfunction, and daytime fatigue. By combining dronabinol, a synthetic cannabinoid, with acetazolamide in IHL-42X, we aimed to create an oral therapy that improves ventilatory stability and upper airway function. As our programs progressed, clinical and patient-reported data have reinforced our strategy. Our phase 2 results for IHL-42X showed up to an 83% reduction in apnea-hypopnea events and meaningful improvements in sleep quality and daytime function, showing that our mechanism-driven approach can produce real-world patient benefits.

Your oral cannabinoid-based therapy for obstructive sleep apnea represents a novel approach compared with traditional mechanical interventions. Could you explain the underlying mechanism and what clinical advantages this pharmacological strategy may offer patients?

IHL-42X is designed to address OSA through a dual mechanism: dronabinol stabilizes respiratory drive, while acetazolamide enhances upper airway muscle responsiveness. Together, this combination reduces airway collapse during sleep, improving oxygenation and sleep continuity. OSA remains a widespread and underdiagnosed disorder, with millions of adults struggling with poor CPAP adherence or intolerance to mechanical devices. In our Phase 2 RePOSA trial, participants experienced up to an 83% reduction in the Apnea-Hypopnea Index (AHI), with nearly 58% reporting meaningful improvements in daily life, including reduced fatigue and better alertness. Unlike CPAP, IHL-42X is non-invasive, orally administered, and patient-friendly, which we believe could improve adherence, expand access to therapy, and provide a viable alternative for the large population of patients who currently remain undertreated.

The development of synthetic cannabinoid combinations for inflammatory conditions such as rheumatoid arthritis is particularly intriguing. What differentiates your approach from existing anti-inflammatory or immunomodulatory therapies, and what clinical outcomes are you aiming to demonstrate?

Our approach to inflammatory conditions, such as rheumatoid arthritis, leverages synthetic cannabinoids’ ability to modulate immune responses while minimizing off-target effects. Unlike conventional anti-inflammatories or immunomodulators, our combinations are designed to act on multiple biological pathways simultaneously, providing both anti-inflammatory and immunoregulatory effects. Our clinical programs demonstrate not only reductions in objective disease activity, but also improvements in patient-reported outcomes, including pain relief, mobility, and quality of life. By combining mechanistic insight with rigorous clinical evaluation, we hope to offer an alternative for patients with conditions that remain inadequately addressed by current therapies.

Psilocybin-assisted therapy has gained increasing scientific and regulatory attention in recent years. How is Incannex positioning its psilocybin program to address anxiety-related disorders, and what distinguishes your clinical and development strategy in this space?

Psilocybin-assisted therapy represents a promising new paradigm for anxiety disorders, and Incannex is positioning PSX-001 (formerly Psi-GAD) as a regulator-ready, best-in-class treatment for moderate to severe Generalised Anxiety Disorder. Our program combines a standardized, pharmaceutical-grade dose of synthetic psilocybin with a proprietary, structured psychotherapy protocol delivered in controlled clinical settings, prioritizing safety, reproducducibility, and scalability. 

What differentiates Incannex is the strength of our clinical evidence and development rigor.

In a randomized, double-blind, placebo-controlled Phase 2 study, PSX-001 demonstrated statistically significant and clinically meaningful improvements across validated anxiety, mood, function, and quality-of-life measures, with rapid onset and durable effects. We are designing our program for regulatory alignment, including validated endpoints and an open IND with the U.S. Food and Drug Administration, alongside a strong safety profile and a defensible IP strategy. Together, this positions Incannex to responsibly advance a scalable psilocybin-assisted therapy for anxiety disorders.

As these therapies move through clinical development, what regulatory, clinical, or perception-related challenges do cannabinoid- and psychedelic-based medicines still face, and how is Incannex helping to address these barriers?

Cannabinoid- and psychedelic-based therapies still face regulatory scrutiny, clinical adoption barriers, and public perception challenges. At Incannex, we address these through evidence-driven programs, patient-focused outcomes, and operational rigor. For example, in the RePOSA Phase 2 trial, we not only demonstrated statistically significant improvements in AHI and oxygenation, but also collected patient-reported outcomes under FDA guidance to support real-world relevance. Transparent reporting, robust safety monitoring, and peer-reviewed dissemination of our findings help build confidence among clinicians, regulators, and patients. Additionally, by standardizing trial operations and scaling efficiently across multiple sites, we set a precedent for high-quality evidence generation that can accelerate adoption and acceptance of these novel therapies.

Looking ahead, how do you see cannabinoid and psychedelic therapeutics integrating into mainstream medicine over the next five years, and what role do you expect Incannex Healthcare to play in shaping this emerging treatment paradigm?

Over the next five years, we expect cannabinoid- and psychedelic-based therapeutics to move from the periphery into mainstream medicine, particularly in areas with high unmet need where existing treatments are limited, poorly tolerated, or suffer from low adherence. As clinical evidence matures and regulatory frameworks continue to evolve, these modalities are likely to become part of standard treatment pathways rather than niche alternatives.

"Incannex is positioning itself to play a meaningful role in shaping this shift by building a diversified, CNS-focused pipeline backed by clinical validation, regulatory momentum, and strong financial footing. With two positive Phase 2 programs, FDA Fast Track designation for IHL-42X, and more than $70 million in cash providing runway well into 2027, the Company is well resourced to execute into later-stage development. Oral cannabinoid-based therapies like IHL-42X have the potential to broaden access to care in large, underserved markets such as obstructive sleep apnea, while our psilocybin-assisted PSX-001 program reflects how next-generation psychiatric treatments can be developed with regulatory rigor and scalable clinical models."

By combining disciplined capital allocation, regulator-aligned development, and a focus on real-world patient needs, Incannex is aiming to help normalize and integrate these emerging therapeutic classes into mainstream care, through moving them from innovation to impact.