Incannex secures $10M to accelerate sleep apnea drug trials after stock rebound

Incannex Healthcare has made significant strides in developing its lead drug candidate, IHL-42X, for obstructive sleep apnea. The company recently secured $10 million in funding to push forward its clinical trials. This follows a strong recovery in its stock price, which climbed after a reverse split and positive trial updates.

Incannex announced a $10 million private placement in mid-March 2026. The funds will primarily support the upcoming DReAMzz Phase 2 trial, designed to refine dosing for IHL-42X. This trial builds on encouraging results from the earlier RePOSA study.

The company also terminated its at-the-market (ATM) equity offering to stabilise its financial position. Around the same time, its stock price rebounded sharply. After a 1-for-30 reverse split in late February, shares traded at roughly $3.26 by March 13—up from a yearly low of $0.080. The stock saw gains of up to 7.49% on that day, partly driven by the financing news and Phase 3 plans for IHL-42X.

Regulatory progress has been swift. The U.S. Food and Drug Administration granted IHL-42X Fast Track designation. Incannex is now using the 505(b)(2) pathway to accelerate approval. A Phase 3 program for the drug is set to begin in late 2027, following DReAMzz results.

By late February 2026, Incannex's market capitalisation reached approximately $38.1 million. The company's focus remains on clinical milestones and strengthening its financial strategy.

The $10 million funding will advance Incannex's clinical pipeline, particularly the DReAMzz trial. With Fast Track status and a streamlined regulatory path, IHL-42X is on track for Phase 3 testing by the second half of 2027. The company's stock performance and capital moves reflect confidence in its development plans.