InMed Pharmaceuticals Reports Full Year Fiscal 2023 Financial Results and Provides Business Update
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Completed Phase 2 Clinical Trial demonstrating anti-itch activity of INM-755 (CBN) topical cream
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$4.1M revenues in fiscal year 2023, representing a 280% increase over the previous fiscal year and $2.3M revenues in fiscal Q4 2023, representing 123% increase quarter over quarter ("QoQ")
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Strengthens pharmaceutical pipeline with launch of INM-900 series program targeting neurodegenerative diseases such as Alzheimer's
Vancouver, British Columbia--(Newsfile Corp. - September 29, 2023) - InMed Pharmaceuticals Inc. (NASDAQ: INM) ("InMed" or the "Company"), a leader in the pharmaceutical research, development, manufacturing and commercialization of rare cannabinoids and cannabinoid analogs, today announced financial results for the fiscal year ending June 30, 2023 and provided a business update on the pharmaceutical drug development programs as well as the commercial segment for a wholly-owned subsidiary, BayMedica, LLC ("BayMedica").
The Company's full financial statements and related MD&A for the fiscal year ended June 30, 2023, are available at www.inmedpharma.com and at www.sedarplus.ca.
Financial and operating highlights for fiscal 2023:
-
Total sales for subsidiary BayMedica of rare cannabinoids in the health and wellness sector of $4.1M in fiscal year 2023, representing a 280% increase over the previous fiscal year and $2.3M in revenue for the three months ended June 30, 2023, a 123% increase QoQ;
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As of June 30, 2023, the Company's cash, cash equivalents and short-term investments were $9.0M;
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For the year ended June 30, 2023, the Company recorded a net loss of $7.9M, compared with a net loss of $18.6M for the previous year;
-
Completed Phase 2 clinical trial in the treatment of Epidermolysis Bullosa ("EB");
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Launched INM-900 series preclinical program targeting the treatment of neuro-degenerative diseases such as Alzheimer's, Huntington's and Parkinson's disease; and
-
Published a peer-reviewed study showing the anti-inflammatory potential of rare cannabinoids in skin conditions.
Eric A. Adams, InMed Chief Executive Officer commented, "In fiscal year 2023, the Company's wholly-owned subsidiary, BayMedica, achieved substantial revenue growth via the supply of rare cannabinoids as ingredients to the health and wellness sector. In the January to June timeframe, BayMedica experienced substantial growth, as evidenced by two consecutive quarters of significant revenue increases. While we expect some fluctuations in revenue as ordering patterns in this developing market still mature, we remain optimistic about the long-term growth potential in the rare cannabinoids sector as the business dynamics and commercial opportunities continue to mature. Additionally, we continue to advance our pharmaceutical pipeline using rare cannabinoids for potential therapeutic applications in dermatology, ocular and neurodegenerative disease."
Adams continued, "Results from the Phase 2 clinical trial in the treatment of symptom related to EB demonstrated sufficient clinically important anti-itch activity to warrant further development. We are now seeking strategic partnership opportunities to further advance INM-755 in EB and other anti-itch indications with larger commercial opportunities. Progress in both our ocular and neurodegenerative disease programs highlights our commitment to advancing our pharmaceutical pipeline, with a particular emphasis on advancing our library of proprietary cannabinoid analogs."
Business Update
Pharmaceutical Development Programs
Dermatology Program - Phase 2 Clinical Trial Complete
In the fourth quarter, we announced safety and efficacy results from the Phase 2 clinical trial, called 755-201-EB (the "Phase 2 Trial"), for the treatment of symptoms related to EB. Of the 18 participants assessed in this trial, chronic itch improved by a clinically meaningful amount in 12 patients (66.7%) of whom 5 patients (27.8%) treated with INM-755 showed meaningful anti-itch activity beyond that of the control cream. Due to several factors, including the small size of the trial and the clinically important anti-itch activity of the underlying cream without study drug, results were not statistically significant, but we believe the results are clinically important based on additional analyses. That the majority of the assessed patients in the trial showed clinically meaningful improvement in chronic itch from the application of INM-755, be it with similar outcomes to the control cream or better than the control cream, can be considered impressive. We are encouraged by and satisfied with the INM-755 clinical data for chronic itch treatment. The results indicate that continue development as an anti-itch product is warranted. Please see press release dated June 22, 2023, for full details.
Based on the safety and efficacy data for treating non-wound itch in this EB study, as well as previous safety data from Phase 1 trials, we believe there is sufficient data to warrant its further development as an anti-itch therapy in patients with EB or other diseases. Further development of the INM-755 CBN cream is expected to extend beyond its application in EB, potentially encompassing broader indications related to chronic itch with larger target populations and potential commercial opportunities. InMed has engaged the services of an external business development consultant to assess potential partnership opportunities for the advancement of INM-755.
Ocular Programs - Advancing treatment for both front and back of eye diseases
The Company continued to advance INM-088 in the treatment of glaucoma, conducting IND-enabling preclinical testing for the development of a CBN-based eye drop formulation.
Establishing the role of certain cannabinoids in neuroprotection of the eye led to the investigation of our proprietary cannabinoid analogs as a potential treatment for other ocular diseases including Age-Related Macular Degeneration ("AMD"), who's affected populations are much larger than glaucoma. We are currently screening our library of proprietary analog candidates for continued research and will provide further updates in the near term.
Neurodegenerative diseases program - Promising proprietary cannabinoid analogs
In November 2022, InMed launched the INM-900 series program targeting the use of proprietary cannabinoid analogs to treat neurodegenerative diseases such as Alzheimer's, Huntington's and Parkinson's. InMed's ocular neuroprotection research led to investigation as to how cannabinoids might play a role in protecting other neurons in the human body from cell death and potentially impacting different diseases.
Cannabinoids have two inherent advantages when assessing their potential to treat diseases in the brain. First, they are highly lipophilic compounds (readily dissolve in fats, oils and lipids) that can effectively cross the blood-brain barrier in meaningful concentrations, which is traditionally a challenge in drug development. Second, they have proven to be relatively safe compounds in the brain, whereas several currently approved treatments for neurodegenerative diseases can cause inflammation and bleeding in the brain. InMed's research thus far demonstrates that certain cannabinoid analogs may inhibit or slow the progression of neurodegenerative diseases by providing neuroprotection in a population of affected neurons.
To date, InMed has identified two cannabinoid analogs (INM-900 series of compounds) demonstrating promising effects related to the treatment of neurodegenerative diseases. Candidate selection and further preclinical in vivo readout is expected in the near term.
BayMedica Commercial Subsidiary
BayMedica, a leading supplier of non-intoxicating rare cannabinoids to the health and wellness sector, has experienced strong revenue growth during the fiscal year 2023, reaching $4.1M, representing a 280% increase over the previous year. Notably, BayMedica has achieved three consecutive quarters of substantial revenue growth, with Q2, Q3, and Q4 2023 seeing increases of 46%, 100%, and 123%, respectively. While we expect revenue fluctuations based on distributor order patterns, there are no assurances that this growth will continue in future quarters. However, the recent trend of increased sales is encouraging. Over the last 12 months, BayMedica has optimized and scaled up manufacturing processes to meet increasing demand, secured more sources of raw materials as well as secured additional downstream purification partners in order to provide customers with high-purity rare cannabinoids with minimal batch-to-batch variations.
Although there are no assurances this growth will continue in future quarters, this recent trend is encouraging. BayMedica will continue to evaluate opportunities for potential structured supply arrangements and collaborations for the commercial business. Sales and marketing efforts will remain focused on products that contribute highest margins, where BayMedica continues to hold a strong competitive position.
Financial commentary:
For the year ended June 30, 2023, the Company recorded a net loss of $7.9M, or $3.25 per share, compared with a net loss of $18.6M or $33.17 per share, for the previous year.
Research and development and patents expenses were $3.7M for year ended June 30, 2023, compared with $7.3M for the year ended June 30, 2022. Expenses decreased by $3.1M in our InMed segment, or 52%, for the year ended June 30, 2023 compared to the year ended June 30, 2022. The decrease in research and development and patents expenses was due to a combination of lower personnel expenses, legal fees and decreased expenses related to the INM-755 program as a result of high start-up costs associated with the multicentre Phase 2 clinical trial during fiscal 2022.
The Company incurred general and administrative expenses of $5.8M for the year ended June 30, 2023, compared to $6.9M in the previous year. The decrease was primarily from a combination of changes in the InMed segment, including lower office and admin fees, investor relation expenses, stock-based compensation expenses, personnel expenses, accounting, and legal fees. This was offset by a slight increase in the BayMedica segment.
The Company realized sales of $4.1M in our BayMedica segment for the year ended June 30, 2023, representing a 280% increase over the previous year. BayMedica realized three consecutive quarters of significant revenue growth, with increases of 46%, 100%, and 123% in Q2, Q3, and Q4 2023, respectively.
As of June 30, 2023, the Company's cash, cash equivalents and short-term investments were $9.0M. The Company expects its cash will be sufficient to fund its planned operating expenses and capital expenditure requirements into the first quarter of calendar year 2024, depending on the level and timing of realizing BayMedica revenues from the sale of non-intoxicating rare cannabinoids in the health and wellness sector as well as the level and timing of the Company's operating expenses.
Table 1. Consolidated Balance Sheet
Expressed in U.S. Dollars
|
|
|
| June 30, |
| June 30, | ||
|
|
|
| 2023 |
| 2022 | ||
|
| ASSETS |
|
| $ |
| $ | |
|
| Current |
|
|
| |||
|
| Cash and cash equivalents |
|
| 8,912,517 |
| 6,176,866 | |
|
| Short-term investments |
|
| 44,422 |
| 44,804 | |
|
| Accounts receivable, net |
|
| 260,399 |
| 88,027 | |
|
| Inventories |
|
| 1,616,356 |
| 2,490,854 | |
|
| Prepaids and other current assets |
|
| 498,033 |
| 797,225 | |
|
| Total current assets |
|
| 11,331,727 |
| 9,597,776 | |
|
|
|
|
|
|
| ||
|
| Non-Current |
|
|
|
|
| |
|
| Property, equipment and ROU assets, net |
|
| 723,426 |
| 904,252 | |
|
| Intangible assets, net |
|
| 1,946,279 |
| 2,108,915 | |
|
| Other assets |
|
| 104,908 |
| 176,637 | |
|
| Total Assets |
|
| 14,106,340 |
| 12,787,580 | |
|
|
|
|
|
|
| ||
|
| LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
| |
|
| Current |
|
|
|
|
| |
|
| Accounts payable and accrued liabilities |
|
| 1,608,735 |
| 2,415,265 | |
|
| Current portion of lease obligations |
|
| 375,713 |
| 404,276 | |
|
| Deferred rent |
|
| 16,171 |
| - | |
|
| Acquisition consideration payable |
|
| - |
| 500,000 | |
|
| Total current liabilities |
|
| 2,000,619 |
| 3,319,541 | |
|
|
|
|
|
|
| ||
|
| Non-current |
|
|
|
|
| |
|
| Lease obligations, net of current portion |
|
| 15,994 |
| 389,498 | |
|
| Total Liabilities |
|
| 2,016,613 |
| 3,709,039 | |
|
| Commitments and Contingencies (Note 14) |
|
|
|
|
| |
|
|
|
|
|
|
| ||
|
| Shareholders' Equity |
|
|
|
|
| |
|
| Common shares, no par value, unlimited authorized shares: 3,328,191 |
|
| 77,620,252 |
| 70,718,461 | |
|
| Additional paid-in capital |
|
| 35,741,115 |
| 31,684,098 | |
|
| Accumulated deficit |
|
| (101,400,209) |
| (93,452,587) | |
|
| Accumulated other comprehensive income |
|
| 128,569 |
| 128,569 | |
|
| Total Shareholders' Equity |
|
| 12,089,727 |
| 9,078,541 | |
|
| Total Liabilities and Shareholders' Equity |
|
| 14,106,340 |
| 12,787,580 | |
|
| Related Party Transactions (Note 15) |
|
|
|
|
| |
|
| Subsequent Events (Note 16) |
|
|
|
|
|
Table 2. Consolidate Statements of Operations
Expressed in U.S. Dollars
|
|
|
|
| For the Years Ended | ||||
|
|
|
|
| June 30 | ||||
|
|
|
|
| 2023 |
| 2022 | ||
|
|
|
|
| $ |
| $ | ||
|
|
|
|
|
|
|
| ||
| Sales |
|
|
| 4,135,561 |
| 1,089,435 | ||
| Cost of sales |
|
|
| 2,423,588 |
| 545,889 | ||
| | Inventory write-down |
|
|
| 308,937 |
| - | |
| Gross profit |
|
|
| 1,403,036 |
| 543,546 | ||
|
|
|
|
|
|
|
| ||
| Operating Expenses |
|
|
|
|
|
| ||
| Research and development and patents |
|
|
| 3,732,056 |
| 7,282,615 | ||
| General and administrative |
|
|
| 5,847,518 |
| 6,867,030 | ||
| Amortization and depreciation |
|
|
| 202,249 |
| 185,657 | ||
| Impairment of intangible assets and goodwill |
|
|
| - |
| 3,472,593 | ||
| Total operating expenses |
|
|
| 9,781,823 |
| 17,807,895 | ||
|
|
|
|
|
|
|
| ||
| Other Income (Expense) |
|
|
|
|
|
| ||
| Interest and other income |
|
|
| 492,440 |
| 96,090 | ||
| Warrant modification expense |
|
|
| - |
| (1,314,307) | ||
| Foreign exchange loss |
|
|
| (48,175) |
| (117,551) | ||
| Loss before income tax expense |
|
|
| (7,934,522) |
| (18,600,117) | ||
|
|
|
|
|
|
|
| ||
| Income tax expense |
|
|
| (13,100) |
| - | ||
| Net loss for the year |
|
|
| (7,947,622) |
| (18,600,117) | ||
|
|
|
|
|
|
|
| ||
| Net loss per share for the year |
|
|
|
|
|
| ||
| Basic and diluted |
|
|
| (3.25) |
| (33.17) | ||
| Weighted average outstanding common shares |
|
|
|
|
|
| ||
| Basic and diluted |
|
|
| 2,448,458 |
| 560,829 | ||
Table 3. Consolidated Statements of CashFlows
Expressed in U.S. Dollars
|
|
|
| 2023 | 2022 | |||
|
|
|
| $ | $ | |||
| Cash provided by (used in): |
|
| |||||
|
|
|
| |||||
| Operating Activities |
|
| |||||
| Net loss |
|
| (7,947,622) | (18,600,117) | |||
| Items not requiring cash: |
|
|
|
| |||
| Amortization and depreciation |
|
| 202,249 | 185,657 | |||
| Share-based compensation |
|
| 278,155 | 697,894 | |||
| Shares issued for services |
|
| - | 79,879 | |||
| Amortization of right-of-use assets |
|
| 393,748 | 326,133 | |||
| Loss on disposal of assets |
|
| - | 11,355 | |||
| Interest income received on short-term investments |
|
| (803) | (115) | |||
| Unrealized foreign exchange loss |
|
| 1,183 | 1,770 | |||
| Impairment of intangible assets and goodwill |
|
| - | 3,472,593 | |||
| Inventory write-down |
|
| 308,937 | - | |||
| Bad debts |
|
| 46,775 | - | |||
| Warrant modification expense |
|
| - | 1,314,307 | |||
| Changes in operating assets and liabilities: |
|
|
|
| |||
| Inventories |
|
| 565,561 | (2,003,732) | |||
| Prepaids and other currents assets |
|
| 299,192 | 190,661 | |||
| Other non-current assets |
|
| 5,507 | (61,432) | |||
| Accounts receivable |
|
| (219,147) | (40,008) | |||
| Accounts payable and accrued liabilities |
|
| (806,530) | (811,599) | |||
| Deferred rent |
|
| 16,171 | (5,142) | |||
| Lease obligations |
|
| (426,575) | (341,862) | |||
| Total cash used in operating activities |
|
| (7,283,199) | (15,583,758) | |||
|
|
|
|
|
| |||
| Investing Activities |
|
|
|
| |||
| Cash acquired from acquisition of BayMedica |
|
| - | 91,566 | |||
| Payment of acquisition consideration payable |
|
| (500,000) | (300,457) | |||
| Payment of deposit on equipment |
|
| (1,790) | - | |||
| Purchase of property and equipment |
|
| (160,014) | (39,108) | |||
| Sale of short-term investments |
|
| (42,268) | - | |||
| Purchase of short-term investments |
|
| 42,268 | - | |||
| Loan receivable |
|
| - | (425,000) | |||
| Total cash (used in) provided by investing activities |
|
| (661,804) | (672,999) | |||
|
|
|
|
|
| |||
| Financing Activities |
|
|
|
| |||
| Shares issued for cash |
|
| 12,000,436 | 17,146,114 | |||
| Share issuance costs |
|
| (1,319,782) | (1,784,791) | |||
| Repayment of debt |
|
| - | (290,826) | |||
| Total cash provided by financing activities |
|
| 10,680,654 | 15,070,497 | |||
| Increase (decrease) in cash during the period |
|
| 2,735,651 | (1,186,260) | |||
| Cash and cash equivalents beginning of the period |
|
| 6,176,866 | 7,363,126 | |||
| Cash and cash equivalents end of the period |
|
| 8,912,517 | 6,176,866 | |||
|
|
|
|
|
| |||
| SUPPLEMENTARY CASH FLOW INFORMATION: |
|
|
|
| |||
| Cash Paid During the Year for: |
|
|
|
| |||
| Income taxes |
| $ | - | $ | - | ||
| Interest |
| $ | - | $ | - | ||
|
|
|
|
|
| |||
| SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: |
|
|
|
| |||
| Preferred investment options to its placement agent |
| $ | 691,484 | $ | 192,491 | ||
| Warrants to its placement agent |
| $ | - | $ | 739,920 | ||
| Shares issued for acquisition |
| $ | - | $ | 3,013,500 |
About InMed
InMed Pharmaceuticals is a global leader in the research, development, manufacturing and commercialization of rare cannabinoids, including clinical and preclinical programs targeting the treatment of diseases with high unmet medical needs. We also have significant know-how in developing proprietary manufacturing approaches to produce cannabinoids for various market sectors. For more information, visit www.inmedpharma.com.
Investor Contact:
Colin Clancy
Vice President, Investor Relations
and Corporate Communications
T: +1.604.416.0999
E: cclancy@inmedpharma.com
Cautionary Note Regarding Forward-Looking Information:
This news release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking information") within the meaning of applicable securities laws. Forward-looking information is based on management's current expectations and beliefs and is subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Forward-looking information in this news release includes statements about: expecting revenue fluctuations based on distributor order patterns; remaining optimistic about the long-term growth potential in the rare cannabinoids sector as the business dynamics and commercial opportunities continue to mature; advancing our pharmaceutical pipeline using rare cannabinoids for potential therapeutic applications in dermatology, ocular and neurodegenerative disease; seeking strategic partnership opportunities to further advance INM-755 in EB and other anti-itch indications; advancing our pharmaceutical pipeline, with a particular emphasis on advancing our library of proprietary cannabinoid analogs; believing there is sufficient data to warrant its further development as an anti-itch therapy in patients with EB or other diseases; development of the INM-755 CBN cream is expected to extend beyond its application in EB; analogs may inhibit or slow the progression of neurodegenerative diseases by providing neuroprotection in a population of affected neurons; selecting a candidate for the INM-900 program with further readout is expected in the near term; BayMedica being a leading supplier of non-intoxicating rare cannabinoids to the health and wellness sector.
Additionally, there are known and unknown risk factors which could cause InMed's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information contained herein. A complete discussion of the risks and uncertainties facing InMed's stand-alone business is disclosed in InMed's Annual Report on Form 10-K and other filings with the Securities and Exchange Commission on www.sec.gov.
All forward-looking information herein is qualified in its entirety by this cautionary statement, and InMed disclaims any obligation to revise or update any such forward-looking information or to publicly announce the result of any revisions to any of the forward-looking information contained herein to reflect future results, events or developments, except as required by law.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/182337