Incannex Healthcare has strengthened its financial position after completing a A$13m institutional placement with a group of US and international investors.
The raise brings the company's total cash reserves to $45m, which it says is sufficient to support its clinical development program through to 2025.
Despite the announcement, the company's shares declined sharply, falling close to 11% on Monday to $0.205 — the same price at which the placement was priced — resulting in an equity dilution of 4.2%.
Incannex described the investor consortium as having "significant experience" in providing long-term support to emerging healthcare companies in the US, Europe, and Asia.
The proceeds will go toward funding research and development initiatives, including those that came to Incannex through its acquisition of APIRx Pharmaceuticals.
Incannex managing director and chief executive Joel Latham said: "We are delighted to welcome new institutional shareholders onto our share register after an approach to me directly from the consortium's cornerstone investor in September.
"The consortium has a long history of providing expertise and support to emerging healthcare companies focused on changing gears from research and development to drug registration and commercialisation".
He added that the capital raise was structured "to ensure our team has a certain long-term budget runway, unhindered by uncertainty in global markets".
"This will become increasingly important over the next two years as we commence multiple pivotal clinical trials and manufacture of cGMP pharmaceutical products," Latham said.
