InMed Pharmaceuticals Inc. (INM)·Q1 2021 Earnings Summary

Executive Summary

• Pre-revenue quarter; net loss narrowed year-over-year as R&D and G&A declined, while cash fell sequentially ahead of a Nasdaq IPO that closed post-quarter and extended runway into fiscal 2022 .
• Clinical execution progressed: INM-755 Study 101 demonstrated the cream was safe and well-tolerated on intact skin; Study 102 on small epidermal wounds completed treatment with results anticipated in early Q1 calendar 2021 .
• Operational update: conference call was cancelled due to expected financing close; subsequent U.S. IPO raised ~$8.0M gross and included warrants, improving liquidity and capital access .
• Risks surfaced: material weakness in internal controls and potential contingent liability from inadvertent pre-IPO disclosures; neither affected Q1 financial statements, but they heighten governance and legal risk .
• Near-term stock catalysts: Phase 1 Study 102 results, EB trial filings across multiple jurisdictions, and continued progress on IntegraSyn manufacturing scale-up .

What Went Well and What Went Wrong

• What Went Well

  • INM-755 Phase 1 Study 101 showed the cream was “safe and well-tolerated on intact skin” with very low systemic exposure and no serious adverse effects; local reactions were mostly mild/moderate and resolved without intervention .
  • Management reiterated minimal COVID-19 impact and maintained timelines with only modest delays; EB filings expected across jurisdictions in late Q4 2020/early Q1 2021 and biosynthesis targeted to be GMP-batch ready by end of calendar 2020 .
  • Liquidity strengthened post-quarter via U.S. IPO/Nasdaq listing, with net proceeds expected at ~$6.9M, supporting operations into fiscal Q2 2022 and improving capital flexibility .

• What Went Wrong

  • Cash declined during the quarter as operating outflows continued ($4.50M at 9/30 vs $5.81M at 6/30); conference call for Q1 was cancelled due to financing logistics .
  • Internal control material weakness disclosed (finance function resources; warrant valuation error previously identified); remediation underway but not yet completed .
  • Potential contingent liability from inadvertent pre-IPO electronic communications; magnitude and likelihood not determinable, but possible rescission rights and regulatory sanctions pose risk .

Financial Results

US GAAP (USD) – Income statement and key cash metrics

Balance sheet comparison (USD)

IFRS (CAD) – Press release figures (quarter ended Sep 30, 2020)

Notes:

• No product revenues were generated; company remains pre-revenue and reports only interest income .
• Margins not meaningful in a pre-revenue biotech context .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “Results of Study 101 indicate that INM-755 was safe and well-tolerated on intact skin, caused no systemic or serious adverse effects” (press release summary of Phase 1) .
• “The second, 755-102-HV Phase 1 trial… recently completed subject treatment… anticipates reporting the results… in early first quarter of calendar 2021” .
• COVID-19: “minimal impact… anticipate INM-755 milestones to be pushed out by approximately 2 months” (CEO) .
• Manufacturing: “primary goal… GMP-batch ready by the end of calendar 2020” and collaboration with Almac to scale an integrated approach (CEO/SVP R&D) .
• Capital: “The Offering is expected to close on November 16, 2020… net proceeds… approximately US$6.9 million” (IPO 8-K) .
• Cash runway: “sufficient… into the second quarter of fiscal 2022” (10-Q) .

Q&A Highlights

• EB filing and NDA timing: Management emphasized patient enrollment rate as key limiter; too early to project NDA filing timing; EB clinical trial applications targeted late Q4 CY2020/Q1 CY2021 .
• Study readouts: 755-101 intact skin results in summer 2020; 755-102 wounded skin results within months of start, targeting calendar 2020 (subsequently updated to early Q1 CY2021) .
• Biosynthesis usage: Plan to crossover to internally produced CBN at Phase III, ensuring security of supply via external GMP sources in earlier phases .
• R&D spend trajectory: Sequential declines driven by preclinical work winding down; management expects R&D not to increase in coming quarters .
• COVID scenario planning: Low-risk topical study design, small sample, non-hospital sites to mitigate delays; aim to complete in vivo portions during summer .

Estimates Context

• Wall Street consensus estimates (EPS, revenue) via S&P Global were unavailable for Q1 FY2021 at the time of retrieval; results should be interpreted without an estimates comparison. We attempted to fetch “Primary EPS Consensus Mean” and “Revenue Consensus Mean” using S&P Global data, but data access limits prevented retrieval (Values retrieved from S&P Global).

Key Takeaways for Investors

• Clinical momentum: Positive safety/tolerability from Study 101 and near-term Study 102 readout are pivotal de-risking steps for INM-755 in EB; watch for data in early Q1 CY2021 .
• Capital runway extended: IPO proceeds plus cash on hand fund operations into fiscal Q2 2022, reducing financing overhang in the near term .
• Execution discipline: R&D and G&A declined year-over-year, narrowing net loss; lean spend supports runway while clinical programs advance .
• Manufacturing optionality: IntegraSyn scale-up continues with Almac, offering long-term CBN supply flexibility; near-term clinical supply secured via external GMP vendors .
• Risk monitoring: Internal control remediation and inadvertent disclosure contingent liability bear watching; governance improvements are an execution priority .
• Trading setup: Near-term catalysts (Phase 1 results, EB filings) plus improved liquidity could drive sentiment; absence of revenue means outcomes hinge on clinical and regulatory milestones .
• Medium-term thesis: If Phase 1/2 EB outcomes are supportive and manufacturing advances, InMed can progress toward pivotal design and partnership options; financing cadence likely tied to clinical progress .