It was only last month that we were discussing Incannex Healthcare Ltd (ASX: IHL) shares and the epic run they had been on over the previous five years.
Yes, back in May, investors who had held onto Incannex shares were up a lucrative 425% from May 2018. Today, the same gains hold, with the Incannex share price notching a five-year gain of 435% on current pricing.
However, the fact remains that Incannex shares, while still a great long-term performer, are also down significantly from their recent highs. In fact, this ASX cannabis share is currently trading at a multi-year low.
At present, the Incannex share price is going for 10.7 cents a share, up 1.9% for the day so far. At this level, the company has lost more than 40% from the 19 cents per share levels we saw back in January. Investors are also down a nasty 82% or so from the high we saw back in March 2022, when Incannex touched the 60-cent mark, as you can see below:
So this rather volatile journey might posit the question today: are Incannex shares still worth buying at these multi-year lows?
Are Incannex shares a buy today?
Incannex is certainly doing some exciting work. This ASX cannabis share specialises in finding cannabis-based medical solutions. Back in March, the company announced it would be developing a psilocybin-based drug to help combat anxiety disorders for clinical trials.
Last month, it also announced the appointment of Dr John Hudson and Dr Russell Rosenberg to lead its phase two and three clinical trials for a cannabis-based drug for the treatment of sleep apnoea.
However, hope and dreams are not enough to warrant an investment in my view. At its core, Incannex is still a loss-making company. Its quarterly cash flow statement from April revealed that Incannex has received exactly $0 in revenues while burning through $4.29 million in cash.
As of the report, the company has just over $37 million in cash left over. Its activities are currently being funded through capital raisings and issuances of new shares. In other words, shareholders.
Now if Incannex can pull off the creation of a new cannabis- or psilocybin-based wonder drug, then this might all be worth it and the shares could look cheap in hindsight.
But to me, this looks like a lottery-ticket investment (win big or lose it all). And I don't do lottery ticket investments. So I'll be avoiding Incannex shares for now, although the company has my sincerest best wishes for the future.
