10-Q: InMed Pharmaceuticals Reports Q3 2025 Financial Results, Cites Ongoing Concerns Over Funding

InMed Pharmaceuticals reports a net loss for Q3 2025 and expresses concerns about its ability to continue as a going concern without additional funding.

Summary

• InMed Pharmaceuticals reported a net loss of $2.12 million for the three months ended March 31, 2025, compared to a net loss of $1.72 million for the same period in 2024.
• The company's sales increased to $1.26 million from $1.17 million year-over-year.
• Research and development expenses increased to $909,653 from $656,764 year-over-year.
• The company has an accumulated deficit of $115.4 million as of March 31, 2025.
• InMed expects its cash, cash equivalents, and short-term investments of $4.7 million as of March 31, 2025, to be sufficient to fund operations into the third quarter of calendar 2025.
• The company's future viability is dependent on its ability to raise additional capital.
• InMed is developing INM-901 for Alzheimer's disease and INM-089 for age-related macular degeneration.
• The company is pursuing strategic partnership opportunities for INM-755 in epidermolysis bullosa and other itch-related skin conditions.
• InMed entered into a Standby Equity Purchase Agreement (SEPA) with YA II PN, LTD to sell up to $10 million in common shares.
• The company is seeking shareholder approval for the potential issuance of 20% or more of its common shares under the SEPA.
• The company is monitoring the potential impact of evolving trade policies and tariffs.

Sentiment

Score: 4

Explanation: The document presents a mixed sentiment. While there are positive aspects such as increased sales and progress in research and development, the company's financial losses, going concern warning, and need for additional funding weigh heavily on the overall sentiment.

Positives

• Sales increased by 8% in the BayMedica Commercial segment for the three months ended March 31, 2025.
• Gross profit increased by 78% in the BayMedica Commercial segment for the nine months ended March 31, 2025.
• Preclinical studies of INM-901 for Alzheimer's disease showed a reduction in neuroinflammation markers.
• An intravitreal formulation for INM-089 has been selected as a drug candidate for age-related macular degeneration, with successful delivery to the targeted area of the eye in preclinical studies.
• The company is actively pursuing strategic partnerships for INM-755 in epidermolysis bullosa.

Negatives

• The company reported a net loss of $2.12 million for the three months ended March 31, 2025.
• The company has an accumulated deficit of $115.4 million as of March 31, 2025.
• The company expects to continue to generate operating losses for the foreseeable future.
• 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 unaudited condensed consolidated financial statements are issued.
• Cost of goods sold increased by 23% in the BayMedica Commercial segment for the three months ended March 31, 2025, due to an increase in sales of lower margin products.

Risks

• The company's future viability is dependent on its ability to raise additional capital.
• The terms of any financing may adversely affect the holdings or the rights of the company's existing shareholders.
• The company may not be able to obtain financing on acceptable terms, or at all.
• The company is subject to risks related to the development and commercialization of pharmaceutical products.
• The company is subject to risks related to evolving trade policies and tariffs.
• The company is involved in a legal proceeding with a licensor alleging breach of a patent license agreement.
• The company's ability to sell common shares under the SEPA is subject to certain conditions, including shareholder approval and market conditions.
• The resale by the Investor of a significant number of Common Shares at any given time, or the perception that such sales may or are likely to occur, could cause the market price of our Common Shares to materially decline and be highly volatile.

Future Outlook

The company expects its cash, cash equivalents, and short-term investments to be sufficient to fund its operating expenses and capital expenditure requirements into the third quarter of calendar 2025, depending on the level and timing of realizing BayMedica revenues and the level and timing of company operating expenses. The company 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.

Management Comments

• The company is pursuing strategic partnership opportunities for INM-755 in epidermolysis bullosa and other itch-related skin conditions.
• 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 are expected to contribute to the highest margins, where BayMedica continues to hold a strong competitive position.

Industry Context

InMed Pharmaceuticals operates in the pharmaceutical and biotechnology industry, focusing on the development of cannabinoid-based therapies. The company's research and development efforts target diseases with high unmet medical needs, such as Alzheimer's disease, age-related macular degeneration, and epidermolysis bullosa. The company also operates in the health and wellness sector through its BayMedica subsidiary, which commercializes bulk rare cannabinoids for use as ingredients in various products.

Comparison to Industry Standards

• It is difficult to compare InMed's results directly to industry standards due to its unique focus on rare cannabinoids and its dual business model encompassing both pharmaceutical development and commercial sales of cannabinoid ingredients.
• However, the company's research and development expenses as a percentage of revenue can be compared to other small-cap pharmaceutical companies.
• The company's cash burn rate and runway can be compared to other companies in the biotechnology industry to assess its financial stability.
• The company's progress in clinical trials and regulatory approvals can be compared to other companies developing therapies for similar indications.

Legal Proceedings

• BayMedica received a letter from a licensor alleging breach of a patent license agreement and asserting monies due thereunder.
• BayMedica intends to vigorously defend its position.

Related Party Transactions

• Norton Rose Fulbright Canada LLP (NRFC) and Norton Rose Fulbright US LLP (NRFUS) rendered legal services to the Company.
• Janet Grove, a Partner of Norton Rose Fulbright Canada LLP (NRFC), was a director of the Company until February 10, 2025.

Stakeholder Impact

• Shareholders may be impacted by the company's need to raise additional capital, which could dilute their ownership.
• Employees may be impacted by the company's financial situation, which could affect job security.
• Customers of BayMedica may be impacted by the company's ability to supply products.
• The company's ability to develop and commercialize new therapies could benefit patients with unmet medical needs.

Next Steps

• The company will continue to advance its drug candidates and manufacturing technologies.
• The company will seek regulatory approvals for its drug candidates.
• The company will further develop selected research and development and commercial BayMedica activities.
• The company will seek shareholder approval for the potential issuance of 20% or more of its common shares under the SEPA.
• The company will continue to monitor the potential impact of evolving trade policies and tariffs.

Key Dates

Keywords

InMed Pharmaceuticals, financial results, net loss, revenue, research and development, Alzheimer's disease, macular degeneration, epidermolysis bullosa, cannabinoids, SEPA, funding, going concern