Business Overview
InMed Pharmaceuticals Inc. (NASDAQ:INM) is a clinical-stage pharmaceutical company developing a pipeline of proprietary small molecule drug candidates targeting the treatment of diseases with high unmet medical needs. The company also has significant expertise in developing proprietary manufacturing approaches to produce and sell bulk rare cannabinoids as ingredients for various market sectors.InMed has sought to focus on the research and development of preferential signaling ligands of the endocannabinoid system's CB1 and CB2 receptors. The company has produced a library of novel, proprietary drug candidates that are patentable new chemical entities (NCEs) for pharmaceutical development, aimed at targeting diverse clinical indications. InMed's current pharmaceutical pipeline consists of three programs, with drug candidates targeting Alzheimer's disease, dry age-related macular degeneration, and Epidermolysis Bullosa.
InMed's INM-901 is a proprietary drug candidate being developed as a potential treatment for Alzheimer's disease. INM-901 has multiple potential mechanisms of action as a preferential signaling agonist for both CB1 and CB2 receptors, as well as impacting the peroxisome proliferator-activated receptor (PPAR) signaling pathway. These mechanisms of action may offer a unique treatment approach targeting several biological pathways associated with Alzheimer's disease.
InMed's ocular research, based on a proprietary small molecule, INM-089, indicates potentially promising neuroprotective effects in the back of the eye, which may lead to the preservation of retinal function. Neuroprotection in dry age-related Macular Degeneration (dry AMD) remains an unmet medical need, and a new treatment option may help solve this multifactorial disease.
InMed has also completed a Phase 2 clinical trial of INM-755 (cannabinol) cream studying its safety and efficacy in Epidermolysis Bullosa (EB). Results from the Phase 2 clinical trial showed a positive indication of enhanced anti-itch activity for INM-755 cannabinol cream versus the control cream alone in an exploratory clinical evaluation.
Together with its wholly-owned subsidiary BayMedica, InMed has manufacturing capabilities that include traditional approaches such as chemical synthesis and biosynthesis, as well as a proprietary, integrated manufacturing approach called IntegraSyn. With multiple manufacturing approaches, InMed has sought to maintain enhanced flexibility to select the most cost-effective method to deliver high-quality, pure cannabinoids fit for their intended use.
BayMedica's commercial business specializes in the B2B supply of bulk rare cannabinoids as raw materials for the Health and Wellness sector that are bioidentical to those found in nature.
Financials
For the fiscal year ended June 30, 2023, InMed reported annual revenue of $4.1 million, an annual net loss of $7.9 million, annual operating cash flow of -$7.3 million, and annual free cash flow of -$7.4 million.In the three months ended March 31, 2024, InMed reported revenue of $1.2 million, a net loss of $1.7 million, operating cash flow of -$6.0 million, and free cash flow of -$6.0 million.
The company's revenue is primarily generated through its BayMedica subsidiary, which specializes in the B2B supply of bulk rare cannabinoids. BayMedica's revenue increased by 82% year-over-year to $3.3 million in the nine months ended March 31, 2024, driven by an increase in sales volume. However, revenue tends to fluctuate from quarter to quarter due to distributor order patterns.
Gross profit for the BayMedica segment increased by 50% to $0.3 million in the three months ended March 31, 2024, compared to the same period in the prior year. This was primarily due to the increase in sales volume. Cost of goods sold also increased by 5% to $0.9 million during the same period.
The InMed Pharma segment, which focuses on the research and development of the company's drug candidates, reported a decrease in research and development and patents expenses of 29% to $0.6 million in the three months ended March 31, 2024, compared to the same period in the prior year. This was due to the company no longer being engaged in clinical trials, resulting in lower research supplies and external contractor fees, as well as lower personnel costs.
General and administrative expenses for the InMed Pharma segment decreased by 3% to $1.2 million in the three months ended March 31, 2024, compared to the same period in the prior year. This was primarily due to a combination of changes, including lower office and administrative fees, and salaries and benefits, offset by an increase in accounting, legal, investor relations, and consulting fees.
Liquidity
As of March 31, 2024, InMed had cash, cash equivalents, and short-term investments of $7.6 million. The company has funded its operations to date primarily with proceeds from the sale of its common shares.InMed expects its cash, cash equivalents, and short-term investments will be sufficient to fund its 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 the company's operating expenses.
However, the company has concluded that there is substantial doubt about its ability to continue as a going concern within one year after the date that the consolidated financial statements are issued. InMed expects to continue to seek additional funding through equity financings, debt financings, or other capital sources, including collaborations with other companies, government contracts, or other strategic transactions.