InMed Pharmaceuticals Inc

InMed Pharmaceuticals Inc (NASDAQ: INM) is a drug development company focused on creating small molecule therapies. It specializes in advancing a pipeline of drug candidates that target the CB1 and CB2 cannabinoid receptors. Through its InMed Pharma division, the company conducts research and development activities aimed at developing innovative small molecule pharmaceutical treatments.

Positive Growth Aspects

• Progress in Proprietary Drug Development: InMed continues to make strides in the development of its two lead candidates—INM-901 for Alzheimer’s disease and INM-089 for dry age-related macular degeneration. The company has demonstrated promising preclinical results, particularly in reducing neuroinflammation independent of conventional targets like amyloid beta and tau. INM-089 has also shown protective effects on retinal cells and improved structural outcomes in animal models. These developments underscore the company’s innovative positioning in high-unmet-need therapeutic areas.
• Steady Growth in Commercial Revenues: The commercial division, BayMedica, reported revenues of USD 1.26 million, an 8% increase year-over-year, driven by effective marketing and demand for cannabinoid-based products. Although margins were compressed, the business maintained stable revenue quarter-over-quarter, suggesting a consistent market demand. The company’s dual focus on both commercial operations and pharmaceutical R&D provides a diversified revenue base.
• Operational Cost Controls and Strategic Focus: InMed successfully reduced general and administrative expenses to USD 1.33 million from USD 3.75 million a year earlier, representing a significant 65% reduction. This reflects effective internal cost control measures, notably in areas such as accounting and shareholder communications. Furthermore, despite rising R&D costs, these investments are tightly aligned with the company's strategic priorities in advancing its core pharmaceutical pipeline.
• Sufficient Near-term Liquidity: As of March 31, 2025, InMed held USD 4.68 million in cash and equivalents, which is expected to support operations into the third quarter of calendar year 2025, depending on revenue inflow from BayMedica. The company’s ability to secure USD 4.1 million from financing activities during the period shows access to capital markets. Moreover, the balance sheet remains modestly leveraged, with total liabilities of USD 2.26 million, ensuring a manageable debt load.

Growth Challenges

• Ongoing Net Loss and Margin Pressure: The company recorded a net loss of USD 2.12 million for Q3 FY2025, widening from USD 1.72 million the previous year. While part of the increase is due to higher R&D activity, it reflects continued challenges in achieving profitability. Furthermore, gross margin declined due to increased pricing pressure and a higher mix of lower-margin products, suggesting that commercial profitability remains under strain despite rising revenues.
• Diminishing Cash Reserves: Cash and cash equivalents declined from USD 6.57 million in June 2024 to USD 4.68 million by March 2025, a 29% drop in nine months. This signals high cash burn, primarily from operating activities which consumed nearly USD 6 million in the first nine months of FY2025. With limited runway left and no immediate profit visibility, the company may need to pursue additional capital raises, introducing dilution or debt risk.
• Dependence on External Financing: InMed continues to rely heavily on financing activities to sustain operations, as evident from the USD 4.1 million raised via private placement. While necessary, such financing has historically involved high share-based dilution, as reflected in the jump in outstanding shares from 446k to 1.2 million over nine months. This raises concerns for existing shareholders about long-term value dilution unless product development progresses into revenue-generating phases.

Technical Observation (on the daily chart):

INM has shown largely flat price movement over the past year, with occasional sharp spikes likely driven by news or speculative activity. The stock is currently trading at USD 3.25, slightly above its 21-day and 50-day moving averages, indicating mild short-term bullishness. The RSI at 55.2 reflects neutral to slightly positive momentum, while a recent volume increase to 60.4K suggests rising investor interest. Overall, the trend appears stable with signs of periodic volatility.

InMed Pharmaceuticals Inc. reported a mixed third-quarter performance, marked by notable progress in its R&D pipeline with encouraging preclinical results for INM-901 in Alzheimer's and INM-089 in dry AMD, reflecting strong innovation in high-unmet-need markets. The company's commercial arm, BayMedica, delivered modest revenue growth, though profitability was impacted by pricing pressures and a shift toward lower-margin products. While operational efficiency improved through a sharp reduction in administrative expenses, the overall net loss widened due to increased R&D spending. Additionally, declining cash reserves and continued reliance on external financing highlight the company’s ongoing liquidity challenges, underscoring both promise and financial risk.

As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Watch’ rating has been given to InMed Pharmaceuticals Inc (NASDAQ: INM) at the current market price of USD 3.25 as of June 30,2025 at 06:45 AM PDT. 

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is June 30,2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level that the stock is expected to reach as per the relative valuation method and or technical analysis taking into consideration both short-term and long-term scenarios.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the New York Stock Exchange (NYSE), NASDAQ Capital Markets (NASDAQ), and or REFINITIV. Typically, all sources (NYSE, NASDAQ, or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.