InMed Pharmaceuticals Inc. (“InMed” or the “Company”) (TSX:IN; OTCQX:IMLFF), a fully integrated, cannabinoid-based biopharmaceutical company that leverages its proprietary platform technologies to develop novel therapeutics for the treatment of diseases with high unmet medical needs, today reported financial results for the three and six months ended December 31, 2018, which is the Company’s second quarter of fiscal year 2019 (“2Q19”).
“During the second quarter of fiscal 2019, InMed made some significant advancements, specifically with our two scientific priorities of 2019,” stated President and Chief Executive Officer, Eric A. Adams. “Regarding our INM-750 program for the treatment of Epidermolysis Bullosa (“EB”), we are nearing our final selection of the contract manufacturing organizations that will provide the process and analytical development and GMP production of the topical cream for our first-in-human trial; the final decision should be made by the end of this month. Between now and early summer, we will also be working on the GMP supply of the active pharmaceutical ingredients to be used in the Phase I clinical trial. During the balance of calendar 2019, we plan to initiate stability studies and other regulatory enabling studies, which will lead into Phase I trial. We are still currently targeting a Clinical Trial Application (“CTA”) submission to Health Canada in the second half of calendar 2019, and the beginning of the Phase I trial by the end of calendar 2019.”
Mr. Adams continued, “In terms of our ongoing toxicology and pharmacology work with INM-750, we conducted two topical, 7-day dose range finding studies during 2Q19. The studies evaluated skin irritation, plasma pharmacokinetics (“PK”), histology and skin/drug concentrations, whereby we demonstrated favorable results. There were no drug-related adverse effects on the skin and we confirmed that the extent of systemic cannabinoid exposure was minimal after topical administration of the cream despite a dosing level 100-1,000-fold higher than what we anticipate the clinical dose to be.”
“During 2Q19, we engaged the contract research organization that will be performing our initial Phase I study in healthy volunteers, subject to, and under the auspices of the CTA, which will have two parts. In the first cohort, we will evaluate the safety, tolerability, and PK of INM-750 cream in healthy volunteers with normal, intact skin; the volunteers will have cream applied once daily for 14 days. In a second cohort of healthy volunteers, we will test the local safety and tolerability of applying INM-750 cream to small wounds once daily for seven days. Both parts of the study will be conducted with two different drug concentrations.”
“During 2Q19, we also continued to make steady progress with regard to our biosynthesis platform technology,” commented Mr. Adams. “We initiated the technology transfer activities from the University of British Columbia (“UBC”) to the National Research Council Canada (“NRC”) to support scale-up activities in late 2018. The first part of this process is the transfer of the protocols for high-performance liquid chromatography which has recently been completed. The second portion of tech transfer process relates to the transfer of the gene construct containing the coding sequence for the enzymes responsible for cannabinoid production. We will initiate this portion of the tech transfer later this month. After this second portion of the tech transfer is completed, we will initiate parameter optimization for fermentation scale-up activities at NRC.”
Mr. Adams continued, “We will continue to explore current and proposed versions of plasmid structures to optimize cannabinoid overproduction during the course of our ongoing work with UBC. Ultimately, we believe that these ongoing efforts will likely lead to additional patents and other intellectual property for the Company. We currently anticipate filing additional provisional patents in the 2Q of calendar 2019, which, if granted, will materially strengthen protection of our biosynthesis technology.”
“As we discussed last quarter, we signed a master services agreement with an unnamed GMP contract development and manufacturing organization (“CDMO”) that will be working on the down-stream processing and purification for our biosynthesis process. Over the next several months, we will be working to develop and optimize the down-stream purification process with this CDMO.”
Results of Operations (expressed in Canadian Dollars):
- For 2Q19, the Company recorded a comprehensive net loss of $2.65 million, or $0.02 per share, compared with a comprehensive net loss of $1.54 million, or $0.01 per share, for the three months ended December 31, 2017 (“2Q18”). The primary reason for the increase in the comprehensive net loss in 2Q19 compared to 2Q18 was an increase in non-cash, share-based payments, in connection with the grant of stock options, which was $1.02 million for 2Q19, compared with $0.36 million for 2Q18, with the increase attributable to stock options granted during the second half of fiscal 2018.
- Research and development expenses were $0.95 million for 2Q19, compared with $0.42 million for 2Q18. The increase in research and development expenses in 2Q19 as compared to 2Q18 was primarily due to increased spending with external contractors for work associated with preclinical studies and formulation work for INM-750 together with increased spending on the Company’s biosynthesis program, as well as higher R&D personnel compensation as a result of increased R&D staffing.
- The Company incurred general and administrative expenses of $0.92 million for 2Q19, compared with $0.74 million for 2Q18. The increase in general and administrative expenses in 2Q19 as compared to 2Q18 was primarily due to increased personnel compensation that reflects increased staffing, reflective of the growth in the Company’s operations, as well as increased costs for holding the Company’s Annual General Meeting.
- At December 31, 2018, the Company’s cash, cash equivalents and short-term investments were $22.95 million, which compares to $24.77 million at September 30, 2018. During 2Q19, the Company’s cash, cash equivalents and short-term investments decreased by $1.82 million, which resulted primarily from cash outflows from operating activities. Recall that in December 2018, we announced a contribution agreement with the National Research Council Canada Industrial Research Assistance Program, or “IRAP”, whereby we will receive non-dilutive funding of up to C$500,000 to support our cannabinoid biosynthesis program. We began receiving this funding in late 2018.
- At December 31, 2018, the Company’s total issued and outstanding shares were 170,883,633. Including outstanding stock options and warrants, as at December 31, 2018, the Company had 222,066,290 shares on a fully diluted basis. During 2Q19, the weighted average number of common shares was 170,883,633, which is used for the calculation of loss per share.