Here's why the Incannex (ASX:IHL) share price is up 10% today.

The Incannex (ASX:IHL) share price is flying today after the company's new drug delivered positive results in its latest clinical trial.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Incannex Healthcare Ltd (ASX: IHL) shares are up again today as the company announced its new CBD-based drug is more effective in treating rheumatoid arthritis than currently available medications.

The Incannex share price opened nearly 15% higher than yesterday's close after the news broke. It has since dropped back to 22.5 cents, representing a 9.76% gain for the day so far. 

Incannex is a pharmaceutical development company working on the commercialisation of medical cannabis and psychedelic medicine therapies.

Here's a closer look at what the company announced today.

Young doctor raising arms in air with hands in fists celebrating a new development

Image source: Getty Images

Rheumatoid arthritis treatment breakthrough

The Incannex share price is surging higher today after the company heralded another research program for its new drug IHL-675A following positive results in a pre-clinical study. 

The company's latest study found the drug is up to 3.5 times more effective at reducing arthritis than common treatments currently on market.

Currently, the main treatment for rheumatoid arthritis is hydroxychloroquine (HCQ), marketed as Plaquenil. The company noted long term use of HCQ has been linked to increased cardiovascular mortality.

Incannex's new treatment is a combination of cannabidiol (CBD) and HCQ. By combining CBD And HCQ, the amount of HCQ needed to treat arthritis can be reduced up to 10-fold, resulting in fewer side effects for patients.

In further news boosting the Incannex share price, the new drug also showed potential for treating other types of inflammation. The study demonstrated it to have "potent anti-inflammatory activity" when treating inflammatory lung conditions such as asthma and bronchitis, as well as colitis.

Incannex plans to market IHL-675A in key global markets, including the United States, Europe, Japan and Israel. It has filed an International Patent Application and plans to pursue US Food and Drug Administration registration, subject to the ongoing success of clinical trials. 

Commentary from management

Incannex Healthcare CEO and managing director Joel Latham said IHL-675A has the potential to be a breakthrough in the treatment of rheumatoid arthritis. He commented:

Hydroxychloroquine is an established medication for rheumatoid arthritis and IHL-675A has been demonstrated to outperform it at reducing disease severity in an animal model.

The benefit of the CBD and hydroxychloroquine combination in IHL-675A is potent. The observation that IHL-675A was as effective or better than a standard dose of hydroxychloroquine, even though it contained 90% less drug, is an exciting result for the Company.

Incannex share price snapshot

Over the past 12 months, the Incannex share price has risen by more than 460%. The company's shares are also up by 50% year to date.

Based on the current Incannex share price, the company has a market capitalisation of around $217 million with approximately 1 billion shares outstanding.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

Girl with painted hands.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a disappointing Tuesday for investors.

Read more »

A smiling florist gets some good news on his laptop and tablet.
Broker Notes

What is Morgan's view on Navigator Global Investments shares after update

Morgans sees further upside for this stock.

Read more »

Two happy and excited friends in euphoria holding a smartphone, after winning in a bet.
Share Gainers

Why Artrya, Cleanaway, DroneShield, and Nuix shares are pushing higher today

These shares are outperforming on Tuesday. But why?

Read more »

Cheerful businessman with a mining hat on the table sitting back with his arms behind his head while looking at his laptop's screen.
Broker Notes

What are brokers predicting for BHP shares over the next 12 months?

Have the mining giant's shares reached their peak? Or can they keep climbing? Let's find out.

Read more »

An older man wearing glasses and a pink shirt sits back on his lounge with his hands behind his head and blowing air out of his cheeks.
Share Fallers

Why ANZ, Challenger, Hub24, and Lynas shares are dropping today

These shares are under pressure on Tuesday. But why?

Read more »

A young woman holds her hand to her mouth in surprise as she reads something on her laptop.
Share Market News

4 ASX shares tipped to fly 100% to 125% higher

Brokers rate all of these ASX shares a strong buy.

Read more »

Three guys in shirts and ties give the thumbs down.
Share Market News

3 ASX 200 shares tipped to tumble 10% (or more) in the next 12 months

Here's why the shares are tipped to drop, and by exactly how much.

Read more »

A young woman wearing a red and white striped t-shirt puts her hand to her chin and looks sideways as she wonders whether to buy ASX shares
Broker Notes

Buy, hold, sell: Aristocrat, Lovisa, Bendigo Bank shares

Here's what some experts think.

Read more »