Business Of Biotech
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Business Of Biotech
Cannabinoid And Psychedelic Combinations With Incannex Healthcare's Joel Latham
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On this week's episode, Joel Latham, President and CEO at Incannex Healthcare, talks about developing cannabinoid and psychedelic combination therapies for conditions as diverse as sleep apnea, rheumatoid arthritis, and generalized anxiety disorder. Joel walks through his funding strategy for the publicly-traded company, his desire to lead in a new category of medicine, and what comes next.
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Welcome back to the Business of Biotech. I'm your host, Ben Comer, chief editor at Life Science Leader, and today I'm excited to speak with Joel Latham, president, CEO, and Director at Incannex Healthcare, a clinical stage company developing cannabinoid and psychedelic combination therapies for obstructive sleep apnea, rheumatoid arthritis and generalized anxiety disorder. Joel joined Incannix Healthcare in 2016 and became CEO just two years later, in 2018. But before that, he worked at a diverse range of companies, including large multinationals, outside of the life sciences sector, and he was also a professional rugby player. I'm looking forward to hearing from Joel about his journey into life sciences leadership and the development programs Incannex is currently working on, why he thinks cannabinoids and psychedelic combination products hold particular promise for patients, his strategic approach to fundraising and providing value to shareholders as a public company, and what it took to move the company's operations from Australia to the US.
Ben Comer:Thanks so much for being here, Joel. It's a pleasure to be with you, ben. Thank you for having me. Absolutely. You are a professional rugby player I mentioned. What would you describe as your favorite thing about the game?
Joel Latham:for people in the US who may not be as familiar with it, as I was much younger and, like many kids, grew up playing sport and really had a love for rugby league from a young age, which I think has provided the opportunity and the solid grounding to be able to implement a lot of things and traits that I learned being a player into my business career. So rugby league is a unique sport that we play in Australia in a very competitive environment and something that I loved as a child growing up and, as I said, built a lot of strong foundations for me to really set me on the path that I've continued on throughout my career.
Ben Comer:It's a pretty rough sport. I wonder if that's helped you. You know deal with I don't know investors, errant board members, regulators. What are some of the skills, maybe, that you learned in rugby, that you've brought forward?
Joel Latham:It is a very tough sport. It made sure that I was resilient from a very young age, which is something that I've been able to implement into my role now and my business career. But I think one of the most important fundamentals that I learned was that winning is the only option, and also working in a team environment and building a competitive nature. So this has really been grounding for me and set the mentality that I wanted to have throughout my business career, and I think this is really one of the reasons why I'm so competitive still to this day and I have an unwavering willingness to ensure that Inconnex is successful.
Ben Comer:I mentioned at the beginning in the intro your diverse work experience. You've worked in sportswear and tobacco products, in gaming and entertainment and as a regional manager at Mars, the multinational confectioner. How did those experiences help prepare you for the life sciences industry?
Joel Latham:Yeah, so from a young age I always had an entrepreneurial mindset and I knew that a career in business was something that I wanted to pursue.
Joel Latham:I've had a really good grounding from a family perspective.
Joel Latham:My father was at the same business for 40 plus years, started there when he was 16 years old and gradually worked his way through the ranks to become the CEO of the organization that he was at and he was CEO for 20 plus years.
Joel Latham:So I always had that solid grounding growing up, which I was incredibly thankful and lucky to have. So I wanted to forge my own path in business and I identified very early on that having a diverse range of experience and learning from leaders in various different sectors was the right way for me to set myself up for success long term. Thankfully, I was able to gain an immense amount of experience working with some key global leaders in multinational businesses, multi-billion dollar organisations, working across both the public and private sectors. I was able to learn and pick and choose the key traits that I wanted to implement in the way that I was going to run a business, and I think that putting all that together has really set me up on the path that I'm on now and that unique experience that I've had to be able to forge a unique way to look at the way we develop our unique assets, the way we disrupt drug development and how we can really forge our own path at Inconnex as disruptors and leaders in the field that we're in.
Ben Comer:Yeah, I want to get into that, but I'm curious what was the company that your father worked at and led for 20 years?
Joel Latham:So it was a company called Sydney Markets Limited. So they're basically the largest fresh food provider hub in Australia. So that's a business that he built up over time. I actually I did part-time work there from the ages of 13 up, so I really got to know that business from the ground level. So, again, a bit of diversification in my experience, which has helped me get to where I am today.
Ben Comer:And your family is still in Australia. You're in the US now, and we'll talk about that a little bit later, but is most of your family still in Australia?
Joel Latham:Most of the family is still in Australia, so we spend obviously a lot of time in the US. We have the core part of our team within Australia as well, which I spend quite some time in Australia with our team. So, given that we've transitioned the business from Australia to the US, particularly with the focus on the NASDAQ, that has really been a key component of our strategy focusing on the North American market.
Ben Comer:Yeah, and, like I said, I definitely want to talk to that or talk about that in just a little bit, but I'm curious about how you know you or, I guess, why you wanted to come into life sciences. What were the circumstances, you know that led you to Incanex Healthcare, which I believe was called Impression Healthcare Limited, maybe what up until 2020?
Joel Latham:That's correct. So initially, impression Healthcare, now known as Incanex, was listed on the ASX back in 2016. So what led me to the business is quite unique circumstances. Actually, I was an investor in the business prior to becoming an employee, so I believed in the business initially. I liked the path and the trajectory the business was on and I invested my own money at that point in time, which was back in 2015. Once the company was public, I come on board as the general manager at the time and really started to play a key role in collaboration with our board of directors that we had at the time.
Joel Latham:Who I have? Some great leaders in their own right Mr Troy Valentine, who is our company's chairman, has great capital markets experience with over 30 years, and has been a great sounding board and guide as we've continued to drive this business forward. And also Mr Peter Widows, who has been a board member since that period of time, so he was actually the CEO of Heinz HJ Heinz so 20,000 employees, $2 billion in revenue. So he comes from a really strong background as well. So at that time, we had some great guidance with those two particular board members and now we've continued to build the business out and have some new board members that have joined over the past three to five years that have obviously played key roles in the development of our business as well.
Ben Comer:So you were an investor in the company and you were looking at it and thinking, well, maybe I can help this thing take off. You had some ideas, I would imagine, about it. What was Impression Healthcare Limited working on when you first joined?
Joel Latham:So Impression Healthcare were a dental business a dental healthcare business at the time, but collectively with the board and several advisors at the time, we saw an opportunity within the market that we thought was relatively untapped, and that was to be able to look at novel drug assets that were targeting indications that had limited or no treatment options available.
Joel Latham:We saw a significant gap within the market.
Joel Latham:We saw an opportunity and we decided to pivot the business from the ASX, at the time being a dental business, into the business that we are now.
Joel Latham:We built a world-leading team at the time and we've continued to drive and evolve the unique strategy that we implemented at the time and that was, as I said, to look at indications that had limited or no treatment options available. That provided us with potential fast-tracked approval with the FDA and also allowed us to form a strong and robust IP position, ensuring that our unique and proprietary combination products had the commercial protection long term. Not only that, we wanted to do something a little bit different to a lot of our peers and our competitors products that target two different mechanisms of action simultaneously, potentially providing us with the opportunity to have an enhanced therapeutic benefit, and I'm pleased to report that across our three lead assets. We've been able to validate that and justify our strategy with continued positive results and positive milestones that we have delivered to the market time after time. So we're in a really strong position at the moment, particularly when looking at our three lead assets and the positive outcomes that we've been able to provide to the market more recently.
Ben Comer:You're clearly an ambitious leader of the company, Joel. There are a number of drug mechanisms and substances out there. You chose combination products and combinations that utilize cannabinoids and psychedelics, which is somewhat non-traditional. There are a number of companies obviously working in psychedelics development. Now I don't know of many that are working in combinations of cannabinoids and psychedelics. What kind of drew you to that particular space and this was, I guess, what 2020, when you first brought in these assets and started preclinical work? Is that accurate?
Joel Latham:That's correct. That's correct. That's correct. So, in conjunction with our board and some key advisors at the time, we identified these emerging markets and really thought that both the cannabinoid and the psychedelic sectors had been somewhat untapped. We knew that there was an extensive amount of existing research on not only cannabinoids but also psychedelic compounds, and that really did fit into that overarching drug development strategy that we had in place. One thing that we have always prided ourselves on, not only as a company but me personally, is to be disruptive and to lead new markets and new sectors. And this is where we identified both the cannabinoid and psychedelic sectors as a unique opportunity, because we were able to target indications, being able to utilise cannabinoids and psychedelics and really lead the way. And I truly believe that we've been able to do that. We've been able to disrupt both sectors and we've been able to validate the hypothesis behind each of our programs, with the results that we've been able to deliver to the market.
Ben Comer:Now, when you say that you've been able to disrupt both sectors, you're talking about cannabinoids and psychedelics. What do you mean by that? How have you been able to disrupt those?
Joel Latham:Well, not only cannabinoids and psychedelics, but the overarching drug development industry in its entirety, where we're utilizing cannabinoids and psychedelics in combination. So, from the cannabinoid perspective, we're utilising cannabinoids in combination with other pharmaceutical products and combining them in uniquely formulated novel drug products. So this is something that hasn't been done previously, and we've been able to form a strong and robust IP position and we've been able to show that, combining cannabinoids with other pharmaceutical products, we're able to achieve enhanced research outcomes and we're able to have both compounds act synergistically, and this has been demonstrated through the results that we've delivered to the market previously results that we've delivered to the market previously.
Ben Comer:Well, let's talk about your three clinical programs. Maybe we could just start with an overview, just in terms of what the combinations are and then what the various stages of development that they're in for each of the three.
Joel Latham:Yeah, so our lead asset is called IHO426, which is targeting obstructive sleep apnea Significant opportunity for us as a company. There are no primary registered pharmaceutical treatments for obstructive sleep apnea currently available. Our goal is to have the first orally pharmaceutical treated obstructive sleep apnea opportunity. We're well on our way to being able to do that. We have a combination product of dronabinol and ezetizolamine, so both of these compounds target two different mechanisms for reducing obstructive sleep apnea simultaneously.
Joel Latham:We've been able to prove synergy in both of our Phase 2 clinical trials. More recently we completed a Phase 2 trial, so this was a multi-site trial within the US under an open IND, and I'm pleased to report that we delivered positive results that exceeded our expectations. So we're really pleased with those results that we've been able to deliver to the market. We saw a reduction on our primary endpoint of up to 83% reduction in the AHI, which is the apnea hypopnea index, the gold standard for measuring and diagnosing obstructive sleep apnea. So on our most efficacious dose, being able to achieve up to an 83% reduction was an extremely pleasing result for us. It has validated the hard work and effort that we have put into this program to get it to where it is, and it's justification for a lot of shareholders as well.
Joel Latham:We have an extensive shareholder base that have backed us continually from the time that we've developed this asset right up until when we've delivered these positive results. So it was really justification for these shareholders as well that have shown confidence in us, and we know that this is another building block to get us to where we need to be, and that is to commercialisation and partnership for this exciting asset. So next steps for us for IHL 4.2x we continue to engage and have favourable conversations with the FDA. We're continuing to do that and we expect to be in a position in due course to be able to provide an update to the market, which we hope to be an exciting update, because I know a lot of our shareholders are looking forward to this update, and I just want to let everyone know that this is our focus. We're working on this every day and we continue to make good progress, and this next step for us is a pivotal time for the business as we continue to expand with the rapid development of this exciting asset.
Ben Comer:Now the standard of care for obstructive sleep apnea? Is it the? What are the machines called? Like the IPAP machines? Yeah, sorry.
Joel Latham:Sorry to cut you off there. Yes, it's cut you off yet there, yes, it's a c-pap machine, so it's a device. Um, it's the gold standard of care at the moment.
Ben Comer:Um, unfortunately, nobody likes using nobody, I I would. I would submit no one likes to use a c-tap, uh, c-pap machine. So yeah, if you could produce a product that could deliver those kind of results, I would imagine that that would open up a huge global market.
Joel Latham:It does. It provides us with the opportunity to open up a significant market. The CPAP device has been extremely successful over previous years. There are companies within this space is there are companies within this space their market caps are in excess of $30 billion that are providing these devices to patients. Unfortunately, there is an extremely high non-compliance rate with these devices, but we see this as an opportunity for us to provide an alternative solution for patients that find these devices unbearable in certain situations. But it also provides us with an opportunity to be able to use our drug product in combination with these devices. In combination with these devices. So, whilst our goal is to see we see this as a monotherapy, without a shadow of a doubt, and IHL-4-2X, we see this being as a one-stop shop treatment for obstructive sleep apnea, but there is also the possibility where we could potentially look to see IHL-4-2X in combinations with other therapies as well, which again opens up many doors for us as a company.
Ben Comer:And what are the two active ingredients in IHL-4-2X?
Joel Latham:So it's dronabinol and ezetizolamide.
Ben Comer:Okay, all right, and which one of those is the cannabinoid, that's dronabinol, dronabinol. And what is the other one, the azetazolamide? Azetazolamide Is that a now generic drug that's patent has expired at this point. That's correct. Yes, okay, and so maybe just quickly, if you don't mind, joel, what is your IP holding for this particular product? What does that look like, given that it's two drugs that now kind of exist in the public domain?
Joel Latham:It's two drugs that now kind of exist in the public domain. Yeah, so it's a combination therapy that we've been able to basically manufacture here, so the combination therapy of the two drugs combined to treat obstructive sleep apnea. So we have a position over the combination of the both products. So methods of use, and then there's also various items that we have around the formulation development of the product. So, yeah, we have quite an extensive IP position. You can't just go and combine these two products, given the fact that we have coverage over that at all the escalating doses. So we've been able to. We've been working on this IP position for the past five years and have ensured that we've put ourselves in extremely strong position to have protection over these two compounds in combination when treating obstructive sleep apnea.
Ben Comer:Got it, Got it Okay. And then your second program is IHL 675A, and that one's targeting rheumatoid arthritis correct.
Joel Latham:That's correct. So IHL 675A was originally developed as a platform drug because we saw the benefits across multiple inflammatory conditions. So when we first hypothesised and built the program around this being a platform, a potential inflammatory platform treatment drug, a potential inflammatory platform treatment drug, we completed extensive preclinical and early clinical studies to really de-risk and validate this particular product. We were able to see fantastic results in irritable bowel disease, pulmonary inflammation and, more importantly, rheumatoid arthritis. Not only was IHL 675A efficacious across those three indications, but it was also extremely safe, which was very pleasing for us.
Joel Latham:It got to the point where we delivered positive phase one results and we really needed to ensure that we're allocating our resources effectively and efficiently. So instead of launching the three individual assets that we had tested in a pre-clinical setting into larger stage phase two clinical trials, we identified to push forward rheumatoid arthritis first, which is exactly what we have done. There's a significant addressable market in excess of $50 billion and it's primed to be disrupted $50 billion and it's primed to be disrupted. So we've decided to move forward with the phase three component of rheumatoid arthritis and we're in the process at the moment of generating the required documents to open our IND with the FDA and once that IND is opened we will be commencing phase two studies within the US. For this exciting asset.
Ben Comer:What are the active drugs that are in IHL675A, the constituent parts of the combination? So?
Joel Latham:it's CBD, which is the cannabinoid, and hydroxychloroquine. So again, we've been able to combine these two products that target the different factors of reducing inflammation within the body simultaneously.
Ben Comer:Now, hydroxychloroquine is one of these kind of drugs that have been politicized by by covid um, you know, for for a number of reasons I don't need to get into here, I, but I am curious if you get questions about that, if it has any bearing, or or or anything else with potential investors. I mean, do people ask you, you know why hydrochloroquine, or why you're using this particular drug, or you know what you know does it? Does it put you on, you know, one political side or another to even be developing this compound? I'm just curious about that.
Joel Latham:Yeah, so back during the COVID times it was something that was raised because it was extremely politicized at the time. But the answer and the view is simple from us it's about providing the best therapeutic outcome for our patients and having a patient-focused approach. Regardless of how politicized hydroxy hydroxychloroquine has been, there is an existing body of research that shows how efficacious that this drug, this compound, has been over time and we've been able to justify that in our earlier stage clinical trials as well. So, taking the political side of hydroxychloroquine out, we look at it from a patient-centric focus. We focus on the patient and what is going to be the best outcomes for the patient, and the combination of these two compounds is what's going to provide, in our view, the best outcome. Hence why we've progressed with this combination. Product of IHL 675A.
Ben Comer:Safety and efficacy. Data trumps politics is what I'm hearing you say. Unlike obstructive sleep apnea, rheumatoid arthritis does have a number of marketed treatments. Now there's obviously, you know, biosimilar. Humira is available now. How do you see this particular product differentiating itself from what's currently on the market?
Joel Latham:Yeah, we see ourselves we're going to be in a unique position, similar to all of our assets. We enter into markets with the aim and the goal to disrupt. That's what we want to do. So there is a $50 billion addressable market that we're coming in to disrupt. We want to provide a unique and favourable alternative solution for patients within the rheumatoid arthritis space, and the combination of hydroxychloroquine and CBD potentially provide that in the unique soft gel capsule that we've been able to develop internally. So the ease of use, the safety profile and how potentially efficacious our drug can be is what's going to set us apart from other potential treatments that are on the market currently.
Ben Comer:Got it. And then your third program, PSX-001,. This is your psychedelic combination therapy for generalized anxiety disorder, I believe. What would you tell us about that development program?
Joel Latham:So, again, this is another exciting asset, hence why it's one of our three leads, and we've been able to significantly de-risk this product given that we've recently announced positive phase two results.
Joel Latham:So this is a combination of psilocybin, which is a psychedelic compound, in combination with psychotherapy. So this is a world first clinical program that we've been able to develop here at Inconex. So it is a combination therapy, something that is quite unique in itself because there isn't a combination therapy that has been registered with the FDA as yet. So, similar to what I've talked through previously our goal around disruption and breaking down barriers and doing things that companies haven't done previously and this program really fits within our wheelhouse. So we're combining psilocybin in combination with psychotherapy to treat generalized anxiety disorder. So, similar to our other assets, it's providing our company and our shareholders with a significant commercial opportunity if we're able to continue to justify, validate and have successful clinical trial results and have favorable interactions with the regulators. So, again, an exciting asset that we've been able to significantly de-risk in a phase two 72 patient clinical trial and we released the results to the market a couple of weeks ago and the feedback has been overwhelmingly positive.
Ben Comer:This is a synthetic psilocybin. Do you have like a composition of matter patent on that particular piece of the combination or is your ip protecting the, the combination product, as a single kind of compound?
Joel Latham:so it is a. It is a synthetic version of psilocybin and our provisional ip position sits across the combination of the therapy in combination with the synthetic psilocybin.
Ben Comer:Now and with this development program, you're trialing this drug in combination with psychological support, correct? Can you maybe just explain or describe what that psychological support would look like to a patient who's participating in the trial?
Joel Latham:Well, it's extremely important for us to put the patient first, as you may have gathered throughout a lot of our conversation today, and nothing changes in relation to PSX001.
Joel Latham:We put the patients first and the discussion that we've had with the FDA given that there hasn't been a combination therapy and a psychedelic compound registered with the agency previously we've adopted an approach where we need to ensure that we put the patient's safety first.
Joel Latham:We look at the results that we've been able to generate from our Phase 2 study and it's clear that our protocol put the patient's safety first. We look at the results that we've been able to generate from our phase two study and it's clear that our proprietary protocol that we have been able to develop, where we go through psychological therapy with the patients, it shows the enhanced safety outcomes that we have been able to generate compared to some of our peers in the psychedelic sector. So, with the psychotherapy support that we provide to our patients, we're able to ensure that our patients are in a safe environment, a guided, safe environment, with our therapists that have gone through an extensive training regime to be able to deliver the protocols as a part of our package to these patients. So this is something that really does set us apart from most other companies within this space.
Ben Comer:And so that therapy component obviously improves the safety and efficacy of the product, or you wouldn't have it right. That's correct. Yeah, as most of the business of biotech listeners will remember or know, lycos Therapeutics developed a therapy-assisted MDMA candidate for PTSD. The FDA ultimately did not accept that for approval for a number of reasons. But I've heard other executives working in this space, joel, such as Sereni Rao at Atai Life Sciences, has argued that you know, therapy or person-to-person psychological support has no place on a drug label since the FDA doesn't or hasn't traditionally regulated therapy and Serenity, I remember, pointed to Spravato J&J's now blockbuster S-cadamine product as an example. The RIMS requirement for Spravato, I believe, requires healthcare provider oversight, you know, for at least two hours. But it's more of a safety monitoring, not necessarily an interventional therapy. But you know what could you say about, you know, that decision to incorporate that active psychological support? You know you've referenced some conversations, some engagement with FDA. Do you feel pretty confident that the agency is ready to accept this and potentially approve therapy as a component ultimately of the label?
Joel Latham:Well, I am confident if we're able to continue on the trajectory that we're on and we're able to have overwhelmingly positive results through our next stages of development.
Joel Latham:There's no denying how beneficial our therapy could be to patients suffering from this debilitating anxiety disorder. So it comes with complexities, but again, that's why we're comfortable in what we're doing, because we're disrupting a market, so a lot of our peers steer away from the psychological support with the narrative that they push out publicly, because there are a lot of complexities around that component of what we're doing. With what we're doing, because we've seen real world benefits of how that provides a better outcome to these patients, to the patients that we're looking to support, and with our patient-centric approach, safety is first and foremost at the forefront of what we're doing and we need to ensure that. And we've been able to demonstrate that and this is a path that we're going to continue to go down, whether or not our peers are doing it or not. We are unique and we are going to do this in the right way to ensure that we get the most efficacious result and ensure that we have the safest therapy that is potentially on the market to treat anxiety disorders.
Ben Comer:And you would be the first company to receive approval for a product paired with therapy that's in the US. Is that also true in Australia? Are there any products that have been approved to be kind of co-administered with therapy in Australia?
Joel Latham:co-administered with therapy in Australia, so Australia is a little bit of a different landscape. So the TGA, the equivalent to the FDA in the US, has allowed for psychedelics to be prescribed to patients here within Australia, which has allowed us as a company to be able to, has allowed us as a company to be able to utilize the decision from the TGA to be able to open a psychedelic psychotherapy clinic so we're able to generate real world experiences in Australia with patients that are suffering from different conditions, where they can go through guided experiences and guided treatment protocols when being prescribed psychedelics. So this is why we're so firmly set on our strategy and why we believe it is the best path forward, because it's not just results that we've been able to deliver in a clinical setting, which has been favorable results. We have realworld experience in a clinic that we have built from the ground up in Melbourne, australia, and we've seen long and real, lasting changes in patients when being prescribed, with patient support. So that's why we have such a strong view on this.
Ben Comer:I want to ask a question about just kind of handling and manufacturing scheduled drugs, whether it's cannabinoids or psychedelics. Have there been challenges that you've had to overcome in order to manufacture and administer controlled substances in clinical trials? What's that experience been like? So, in clinical trials, yes's that experience been like.
Joel Latham:So in clinical trials, yes, there are extra layers and complexities, but our team is extremely well-versed. I look at our team and, under the guidance of Dr Mark Bleakley, our Chief Scientific Officer, and Dr Luke Barbato, our Chief Medical Officer, we've built out a world-leading team that we've been able to manage the end-to-end process here. There are complexities around scheduled products, particularly psychedelics and Schedule 1 products. There are extra processes with permits, shipping, storage and distribution and licensing at trial sites. So that's something that we've continued to manage over time, but we haven't had many issues in that regard. So, no teething, not insurmountable, yeah, no, no. And I think that the credit is really to go down to the team that we have here at Inconnex who have managed that so well. And I think it's worth noting as well for our lead asset, ihl-426, targeting obstructive sleep apnea. It is our goal and our view that that product will be, if successful when registered, a Schedule 3 product, so removes a lot of the additional layers of complexity if we're able to continue to be successful with that asset.
Ben Comer:Right, that seems to be the approach that has been taken in the US Previously. There have been at least one product that I know of that is a cannabis-based product. That was a Schedule 1 up until it was approved by the FDA and then it transitioned into Schedule 3. But there's also this ongoing rulemaking process at the US Justice Department and the DEA about reclassifying cannabis in general from Schedule 1 to Schedule 3, although it appears to have kind of stalled at the moment. And you know, based on what you've just said, I suspect your answer to this question is going to be no. But I'm curious you know what that decision to reschedule from Schedule 1 to Schedule 3 for cannabis generally? Would that have any impact, any sort of meaningful impact on your business in any way? You know, good or bad Not?
Joel Latham:particularly because, as I mentioned, our goal is to have IHL-426 as a Schedule 3 product. Ihl-675a, our other cannabinoid-related product, is also classified as a Schedule 3. So limited impact for us, but I think it's good for the sector in its entirety. Again, looking at it from a patient-focused approach, there are benefits to cannabinoids and I'm sure that it's going to assist other companies out there that are looking to develop cannabinoid-based assets and follow our lead to a certain degree.
Ben Comer:Great. I want to ask about funding next, Joel. I wonder if you could describe your funding strategy as a public company and how you think about providing shareholder value.
Joel Latham:So for us. We are quite a unique company. We always have shareholders front of mind. We run this business as shareholders for shareholders. So myself and our other board members are all major shareholders within the business and have participated in capital raises from the very, very early days of being listed on the Australian Stock Exchange back in 2016. So that is a very, very important point and what I firmly believe sets us apart from some of our peers and other companies in similar sectors.
Joel Latham:So we've always been very strategic in relation to our capital management and how we've looked to raise capital. Over previous years, we've adopted a strategy where it is vitally important that we lessen dilution and minimize the impact of dilution wherever we can, whilst ensuring that the company is being adequately funded to be able to deliver on the key milestones and the catalysts that we have for each of our three lead assets. So we've run the business extremely efficiently and only looked to raise capital over previous years when we've needed to to ensure the rapid, advanced development of our three lead assets. So we've been able to utilize an ATM facility with our banking partners over the past six months, which has put us in a position to be able to ensure that we're funded into the next stages of development for our next three assets.
Joel Latham:What I like about the ATM facility facility is the company is in complete control. We can determine when and how much we can use as a part of that ATM and we use a very strategic approach. Where it doesn't impact, we ensure that there's as little impact on the share price and the trading volume as possible. We announced to the market a month or two ago that we had $50 million in the bank. We were able to uniquely manage the ATM during those times to put ourselves in this position. And again, another positive point of the ATM facility there are no attaching warrants and other potentially toxic terms that come with the use of the ATM when we have used it. So that's another reason why we have looked to adopt the ATM facility as a strategy to efficiently and strategically manage our capital requirements.
Ben Comer:moving forward, and how are you able to set that up? I'm hearing the voices of listeners saying, well, yeah, of course we don't want to take dilutive funding if we can help it, but given the state of just general investment in biotech, the past couple of years has been incredibly difficult for you know a number of companies, particularly early stage companies. How did you? Is there anything more you could say, joel, just about how you managed to set that up? And for listeners who aren't familiar with the ATM structure, if you wouldn't mind, just you know, providing a quick overview of that.
Joel Latham:Yeah, so we're able to set this up quite efficiently with our banking partners. I see having an ATM facility in place as good and standard housekeeping for listed businesses. It allows companies to remain agile and it allows companies to remain efficient when managing their capital requirements. So the way the ATM works is the company is in complete control of how it is used and provides instructions to their banking partners on how much the ATM is to be used. So, for example, we can head into, we can see how the stock is trading during the day and provide instruction to the banking partner to be at 5% of the trading volume once they're online and trading and not to add to any downward pressure. The company can provide clear instructions, essentially so for us when it has been used. We're not like other companies where companies provide a set number of shares or a set percentage of volume that is being traded. We monitor and manage on a real-time basis how the stock had been trading and look to manage how the ATM is implemented and in use when we have had it active previously.
Ben Comer:Excellent. Thank you for that. I want to ask about in CanX Healthcare's move or re-domiciled from Australia to the US. I believe that happened in 2023. Could you talk a little bit about what prompted that move and what challenges existed that you had to overcome to successfully do it Well, first, and foremost, the strategy behind the move was to provide potentially the greatest opportunity for shareholders in the long run.
Joel Latham:That was the goal. We saw the NASDAQ being domiciled as the NASDAQ as the greatest opportunity for us to be able to succeed as a business, to be able to tap into strategic ways to be able to raise capital, which has come to fruition over the past couple of years. But we thought that it was the best opportunity to maximise the value of our business. We saw peers in both the cannabinoid and psychedelic fields that were trading at multiples of where we were at, and we firmly believed that we were undervalued compared to some of our peers, particularly given our assets and the results that have underpinned the value of those assets over time. So we wanted to focus our attention on one market, that being the NASDAQ, rather than being duly listed on both stock exchanges. We saw that there was greater opportunity to increase liquidity on the NASDAQ, which we have experienced, and seen that to also come to fruition over time, and we're really pleased to be able to complete that process because it was an extensive one. So to the second part of your question what was involved in the transition from the ASX to domicile in the US. It was a long process. We had to go through shareholder approval so it was overwhelmingly voted through in favour at our EGM Extraordinary General Meeting to vote through the concept to be able to re-domicile to the US. We then had to go through the court system here within Australia to be able to essentially have the strategy validated as a part of the protocols that take place, which we then achieved, and then we had to go through what was an extensive process to transition all stockholding from the ASX over to the NASDAQ. So we had to take on a lot of that onus ourselves as a company.
Joel Latham:There were easy paths that we could have taken, but we decided to take on a lot of that onus ourselves as a company. There were easy paths that we could have taken, but we decided to take the path that was as least impact for our shareholders as possible. So, fast forward, a couple of years now, we've been able to ensure that the company is adequately funded. The company is extremely liquid in how it trades, which is something we would never have experienced on the ASX. The thought of being able to raise the funds to ensure that our lead assets were adequately funded we firmly believe that wouldn't have been able to be achieved on the ASX, given market conditions in Australia. So, whilst our share price isn't where we want it to be right now, we know that the fundamentals are stronger than ever and we know that, as we continue to push this company forward, we're confident that our true value will be realised over time. Given our lead assets are adequately funded through the next stages of development, which is extremely exciting for us as a business.
Ben Comer:Pardon my ignorance on this question, but what are the downsides of being dual listed, like if you were to stay on the ASX and come on to the NASDAQ? What's the downside of doing that? Or, I guess, why did you decide not to do that?
Joel Latham:So we did do that initially. So we were a duly listed business from 2021. And we were duly listed for quite some time before making the pivot to list all of our shares onto the NASDAQ and be a NASDAQ domiciled company. So we saw back in 2021 the upside potential of being listed on the NASDAQ. However, being a duly listed company being domiciled on the ASX, we never truly got the benefits of being listed on the NASDAQ. We didn't have the liquidity that you would expect. We were being front run and led by the ASX, given we were domiciled here and we're essentially an ASX listed company with no benefits of the NASDAQ. We hadn't raised capital on the NASDAQ at that period of time, so we didn't have any liquidity trading in the NASDAQ.
Joel Latham:When we were duly listed and whilst we had an extremely compelling story, we worked very hard in building up relationships with investors high net worth, significant funds within the US and they loved the story and it really resonated but it often got put in the too hard basket because of the complexities around being duly listed and there was no liquidity on the NASDAQ. So to buy into Inconex they would have to go buy ASX shares and for a lot of US investors. Why would they do that, when they trade on the NASDAQ and the NYSE on a daily basis and there's no complexities around owning shares in Australia? So for us it was around simplifying that structure, removing all of those barriers to entry and ensuring that our compelling story continued to resonate with US investors without the complexities to navigate around the Australian Stock Exchange, potential tax complications and being able to have an Australian stock and then transition it back onto the NASDAQ. It was just far too complex and we wanted to completely simplify that for US investors. That for US investors.
Ben Comer:Got it Great. I wanted to ask a question about your leadership style, which I think I'm getting a bit of a sense of. You are not afraid to take on difficult challenges. You, in fact, may seek them out to some degree. I wonder how you would describe it though, your leadership style and the kinds of values you look for in employees or try to imbue in your workforce.
Joel Latham:Yeah, so my leadership style is entrepreneurial. I look at it as an old school approach. I pride myself on being the hardest worker in the room. I pride myself on leading by example and I pride myself on ensuring that our company is in a position where we can disrupt multi-billion dollar addressable markets and really forging a path that is going to leave a long and lasting impact on these sectors that we're working in. So those are things that I pride myself on and I am unbelievably motivated to ensure that this company is successful.
Joel Latham:I have skin in the game. I'm an investor. I mean, I am an investor and I want this company to be successful and I drive myself and this company every day to ensure that we're in a position to do that. So, when looking at it from a market perspective, shareholders can feel confident that they have a CEO that is in place that will outwork everyone and to ensure and continue to drive for a successful outcome, and this is something that I like to instill with our employees. So, whilst the hours that I work are quite unique and long, I don't necessarily expect that from our employees, but I expect our employees to have the same mindset, that entrepreneurial mindset, to break down barriers, to not take no for an answer and to think in unique and innovative ways to ensure that we're providing favorable outcomes for our shareholders and patients alike. So it's about disruption, it's about working hard and it's about finding ways that we can shorten our path to commercialization and liquidity events for our shareholders.
Ben Comer:Final question, Joel what are your top priorities for the rest of this year?
Joel Latham:question Joel, what are your top priorities for the rest of this year?
Joel Latham:Top priorities for the rest of this year is to provide a clear path for our shareholders for next steps for IHL 4.2x, psx, 0.0.1, and 6.7.5a. We continue to advance the rapid development of each of these assets on a daily basis and when we're in a position to provide a regulatory update for these assets, we look forward to providing that to the market. I know the market is and shareholders are anticipating these updates, but I just want everyone to understand this is our sole focus. We work on this day in, day out and we're ensuring that we're putting ourselves in the best possible position to succeed and provide the most favourable outcome in the long run. So our goals are to continue with the rapid development of these assets and provide a clear path forward. But again, I want everyone to know that this is something that we're close to being able to do and it is anticipated, and we're going to continue to drive this company forward. So we're excited, I'm extremely excited, and we'll continue to go down this path.
Ben Comer:Well, thank you so much for coming on the show.
Joel Latham:No, thank you, ben, it was an absolute pleasure.
Ben Comer:We've been speaking with Joel Latham, president, ceo and Director at Incanex Healthcare. I'm Ben Comer and you've just listened to the Business of Biotech. Find us and subscribe anywhere you listen to podcasts and be sure to check out new weekly videocasts of these conversations every Monday under the Business of Biotech tab at lifescienceleadercom. We'll see you next week and thanks, as always, for listening. We'll see you next time.
