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InMed Pharmaceuticals: A Neuroinflammation Play with Catalyst-Laden Upside in Alzheimer’s Therapeutics

Samuel ReedMonday, May 12, 2025 6:26 pm ET

25min read

The Contrarian’s Play: Why InMed’s Alzheimer’s Pipeline Deserves a Second Look
In the high-stakes world of Alzheimer’s drug development, most therapies focus on clearing amyloid-β plaques or tau tangles—the “amyloid hypothesis” that has dominated research for decades. Yet InMed Pharmaceuticals (CSE: INMED | OTCQB: INMDF) is betting on a different approach: targeting neuroinflammation, a pathway increasingly recognized as central to disease progression. With preclinical data showing promise and near-term catalysts on the horizon, InMed presents a compelling high-risk/high-reward opportunity for investors willing to act before clinical validation.

1. INM-901’s Scientific Edge: Beyond Amyloid and Tau

The neuroinflammation-centric mechanism of INM-901 sets it apart from competitors like Biogen’s Aduhelm or Eisai’s Leqembi, which focus on amyloid removal. Preclinical studies reveal that INM-901 significantly reduces pro-inflammatory cytokines (TNF-α, IL-1β, IFN-γ) and the neurodegeneration biomarker neurofilament light chain (NfL) in a dose-dependent manner. These reductions suggest it may slow neuronal damage—a benefit unaddressed by amyloid-centric therapies.

Mechanistically, INM-901 acts via dual pathways:
- CB1/CB2 Receptors: Promoting neuroprotection by reducing microglial activation.
- PPARs: Modulating inflammatory responses and oxidative stress.

This multifaceted approach also addresses neuritogenesis (neuronal repair) and improves cognitive function in preclinical models, offering a pathway to restore brain health that amyloid-focused drugs cannot.

InMed’s valuation lags peers despite preclinical milestones, suggesting underappreciation of its differentiation.

2. Near-Term Catalysts: Data Readouts and IND Submissions

The next 6–12 months will be pivotal for InMed:
- Q2 2025: Finalization of molecular mechanism studies, including receptor engagement data (CB1/CB2, PPARs) and neuritogenesis markers. Positive results could validate its neuroprotective claims.
- Q3 2025: Potential IND submission for Phase 1 trials, assuming successful preclinical toxicology studies. A green light here would mark a major inflection point.
- 2025 Q4–2026: Early clinical data from Phase 1 could re-rate the stock if safety and biomarker trends align with preclinical results.

These milestones are critical. Success could position INM-901 as a complementary or standalone therapy, given its unique focus on inflammation—a pathway now acknowledged as a key driver of AD progression even in amyloid-tau-positive patients.

3. Cash Runway Risks and BayMedica’s Safety Net

The cash runway is a concern: InMed’s Q1 2025 update projects funds sufficient through Q3 2025, with plans to seek partnerships or financing. However, BayMedica’s revenue (InMed’s cannabis extraction subsidiary) provides a stable cash flow. BayMedica’s 2024 revenue of $12.6M (up 23% YoY) and contracts with major pharma firms mitigate dilution fears.

A steady revenue stream buys time to execute on Alzheimer’s milestones without drastic equity raises.

4. Why Buy Now? The Contrarian Case

InMed trades at a 2025 EV/Sales ratio of 4.2x (vs. Biogen’s 4.5x), despite its neuroinflammation advantage. The market has yet to price in the potential of a therapy addressing a pathway that amyloid-centric drugs miss. Key catalysts include:
- Data-driven differentiation: If molecular analyses confirm INM-901’s multi-targeted mechanism, valuation could expand.
- Clinical validation: Positive Phase 1 safety/tolerability data could attract partnerships or M&A interest.

The risk? Clinical failure or delayed timelines. Yet the preclinical momentum—including reductions in NfL and cytokines—argues for a “buy the dip” strategy ahead of catalysts.

Conclusion: A High-Reward Catalyst Play

InMed Pharmaceuticals is a contrarian’s dream: a neuroinflammation-focused Alzheimer’s pioneer with underappreciated preclinical data and near-term catalysts. While risks exist—cash constraints, regulatory hurdles—the potential upside is vast. With BayMedica’s revenue providing a safety net and data readouts looming, now is the time to position ahead of a valuation re-rating. For investors with a stomach for risk and an eye on transformative therapies, InMed offers a rare opportunity to capitalize on a paradigm shift in Alzheimer’s treatment.

Actionable Takeaway: Consider a position in INMED ahead of Q2/Q3 catalysts, with a focus on long-term upside if clinical milestones are met.

This analysis is for informational purposes only. Consult a financial advisor before making investment decisions.

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