Why Did InMed Pharmaceuticals Inc. (INM) Plunge 11.11%?

On June 25, 2025, InMed Pharmaceuticals Inc. (INM) experienced a significant drop of 11.11% in pre-market trading, marking a notable decline in its stock price.

InMed Pharmaceuticals Inc. has made significant strides in Alzheimer's research, which has been a key driver of its stock performance. The company's drug candidate, INM-901, has shown promising results in preclinical studies, demonstrating its ability to reduce neuroinflammation in animal brain tissue. This breakthrough is particularly significant as it targets key markers of inflammation, such as NLRP3 and cytokines, which are major contributors to the progression of Alzheimer's disease. Unlike other treatments that focus on amyloid beta and tau proteins, INM-901 offers a novel approach by directly addressing brain inflammation, potentially broadening its applications to other neurodegenerative conditions like Parkinson's disease.

InMed's success in Alzheimer's research has positioned the company as a leader in the biotech industry, with its stock price reflecting the significant impact of biotech catalysts. The company's market capitalization is modest, and with only 1.21 million shares outstanding, it doesn't take much buying to push the price higher. This low float makes INM a highly volatile stock, which can be both an opportunity and a risk for traders.

Beyond INM-901, InMed is also working on other drug candidates, including INM-755 for epidermolysis bullosa and INM-089 for age-related macular degeneration. Additionally, their BayMedica segment produces rare cannabinoids for the health and wellness industry, contributing to a diversified revenue stream. This diversification adds to the company's appeal, but it is the Alzheimer's news that is currently driving the stock's performance.

Investing in biotech stocks like INM comes with high risks and high rewards. The company's cash position is tight, with limited funds to sustain its operations through Q2 2025. Drug development is expensive, and InMed may need additional funding soon, which could lead to dilution and impact the stock price. Preclinical results are promising, but they are still a long way from human trials, and many biotech drugs fail to make it through the FDA's approval process. The stock's volatility is evident in its 52-week range, which has swung from $0.12 to $15.70, indicating significant price fluctuations.

Despite the risks, the potential rewards are substantial. If INM-901 continues to show promise in preclinical studies and moves toward human trials, the stock could see further gains. Alzheimer's drugs represent a multi-billion-dollar market, and any hint of success could attract big pharma partners or buyout offers. InMed's focus on cannabinoids and small molecule drugs also aligns with growing trends in cannabinoid-based therapies. The company's intellectual property, including multiple patent families, makes it a valuable acquisition target. With a lean operation of only 13 employees, InMed is well-positioned to focus on high-impact programs like INM-901.