Incannex Receives Positive Patient-Reported Outcomes and Compelling Phase 2 Efficacy Data for IHL-42X in Obstructive Sleep Apnoea Exit interviews and clinical results reinforce strong potential for meaningful improvement

Incannex Receives Positive Patient-Reported

Outcomes and Compelling Phase 2 Efficacy Data for IHL-42X in Obstructive Sleep Apnoea

Exit interviews and clinical results reinforce

strong potential for meaningful improvements in sleep quality, cognitive function, and daily life

MELBOURNE, Australia and NEW YORK, USA -

August 8 - Incannex Healthcare Inc. (Nasdaq: IXHL), a clinical-stage pharmaceutical company developing innovative combination

therapies for prevalent medical conditions, today announced new patient-reported outcome findings from a subset of participants in its

RePOSA Phase 2 trial of IHL-42X for the treatment of obstructive sleep apnoea (OSA). These new insights, collected through structured

exit interviews, add to an already compelling data package highlighting the significant potential of IHL-42X to improve both clinical

and patient-centric outcomes in individuals living with OSA.

The exit interviews were conducted in alignment

with FDA guidance on Patient-Focused Drug Development (PFDD) and aimed to qualitatively assess patient experience, including the impact

of IHL-42X on their sleep and quality of life. The interviews were completed prior to unblinding and included subjects from all three

arms of the trial-placebo, low-dose IHL-42X, and high-dose IHL-42X.

Key findings from the exit interviews include:

Patients reported being motivated to participate

in the trial due to a desire for improved health, better sleep, and access to alternatives to PAP (positive airway pressure) therapy.

These patient insights add important context to the robust clinical data from the RePOSA Phase 2 trial.

Joel Latham, President and CEO of Incannex, commented:

"Our recent Phase 2 results for IHL-42X

exceeded expectations. In some patients, we observed reductions in AHI of up to 83%, which is an extraordinary outcome and a powerful

signal of the drug's potential."

"We believe the findings from the patient

exit interviews underscore that these improvements are not just clinical-they are translating into meaningful, positive changes

in patients' daily lives. This reinforces our belief that IHL-42X has the potential to significantly shift the treatment paradigm

"However, despite the strength of our data

and news flow, we do not believe our share price reflects the underlying value we've created. Like many small-cap companies, we

are vulnerable to volatility-particularly from short-selling and trading that appears disconnected from company fundamentals. While

we cannot comment on specific trades or potential manipulation, I want shareholders to know that we are actively monitoring the situation.

We are also engaging with advisors and are committed to protecting shareholder value."

"From a financial standpoint, we remain

well-capitalized to execute on our clinical programs. We are being disciplined with capital allocation and considering all strategic levers

available to us to deliver long-term value-including those that reinforce confidence in our valuation and protect against dilution.

I want to be very clear: our belief in the potential of IHL-42X has never been stronger."

Compelling Clinical Efficacy

The RePOSA Phase 2 trial demonstrated clear statistically

and clinically significant improvements across multiple key endpoints for patients receiving IHL-42X compared to placebo, highlighting

its potential to reduce OSA severity and enhance patient quality of life.

Apnoea-Hypopnoea Index (AHI): The

low-dose and high-dose IHL-42X groups achieved a statistically significant reduction in percent change in AHI from baseline compared to

placebo (p<0.05), the primary measure of OSA severity. Maximum reductions in AHI were observed at up to 83% for the high-dose group

and up to 79% for the low-dose group.

30% and 50% AHI Reduction Rates: 33.3%

of patients in the low-dose group and 41.2% in the high-dose group achieved a greater than 30% reduction in AHI, while 13.9% (low-dose)

and 14.7% (high-dose) experienced reductions exceeding 50%-demonstrating a strong therapeutic response in a substantial subset of

Patient Global Impression of Change (PGI-C): Statistically

significant improvements in sleep-related impairment and fatigue in the low-dose group (p<0.05), reflecting meaningful patient-perceived

Oxygen Desaturation Index (ODI): Statistically

significant improvements in both low- and high-dose groups, indicating better oxygenation during sleep.

Patient-Reported Outcomes: Clinically

significant improvements were observed in the Functional Outcomes of Sleep Questionnaire-10 (FOSQ-10), PROMIS Sleep-Related Impairment

8a (PROMIS-SRI 8a), PROMIS Fatigue 7a, and Epworth Sleepiness Scale (ESS) in both dose groups, demonstrating enhanced sleep quality, reduced

fatigue, and improved daily function.

Polysomnography (PSG) Metrics: IHL-42X

also improved objective sleep parameters including Wake After Sleep Onset (WASO), which was reduced by 29.8% in the high-dose arm, and

AHI During Supine Sleep, which decreased by 30.3% in the high-dose arm.

REM Sleep: IHL-42X did not reduce the proportion

of time spent in REM sleep, as measured in the PSGs. This distinguishes IHL-42X from many drugs that are approved for other sleep indications,

which are known to reduce the amount of time spent in REM sleep. REM is an important stage of sleep that contributes to memory consolidation,

emotional regulation and brain health.

These results collectively demonstrate IHL-42X's

ability to address both objective and subjective aspects of OSA, offering compelling clinical benefits to patients.

Outstanding Safety Profile

IHL-42X was well tolerated across both low- and high-dose cohorts. No serious adverse events were reported during the treatment period,

and treatment-emergent adverse effects (TEAEs) were infrequent, with the majority being mild or moderate in severity. The Company believes

this excellent safety profile supports IHL-42X's potential for broad patient use.

About Incannex Healthcare Inc.

Incannex is leading the way in developing combination

medicines that target the underlying biological pathways associated with chronic conditions, including obstructive sleep apnea, rheumatoid

arthritis and generalized anxiety disorder. The company is advancing three clinical-stage product candidates based on evidence-based innovation,

and supported by streamlined operations. Incannex's lead clinical program, IHL-42X, is an oral fixed-dose combination of dronabinol and

acetazolamide designed to target underlying mechanisms and act synergistically in the treatment of obstructive sleep apnea. In a Phase

2 development program, IHL-675A is an oral fixed-dose combination of cannabidiol and hydroxychloroquine sulfate designed to act synergistically

to alleviate inflammatory conditions, such as rheumatoid arthritis. Approved for Phase 2 clinical development, PSX-001 is an oral synthetic

psilocybin treatment for the treatment of generalized anxiety disorder. Incannex's programs target disorders that have limited, inadequate,

or no approved pharmaceutical treatment options. For additional information on Incannex, please visit our website at www.incannex.com.

Forward Looking Statements

This press release contains "forward-looking

statements" within the meaning of the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of

1995. Forward-looking statements are statements other than historical facts and relate to future events, future circumstances and Incannex's

future performance. These statements are based on management's current assumptions, expectations, and beliefs. Examples of forward-looking

statements in this press release include statements about, among other things: statements regarding potential future dilution; Incannex's

opinions and estimates about the fundamentals and underlying value of its business relative to the trading price of its common stock;

business strategy, future operations; Incannex's ability to execute on its objectives, prospects, commercial discussions or plans; evaluations

and judgments regarding Incannex's research and development efforts and potential future commercialization, including any implications

that the results (including qualitative patient-reported outcomes) of earlier clinical trials or interim or topline results will be representative

or consistent with later clinical trials or their respective interim or final results; the potential benefits (including qualitative patient-reported

outcomes) and safety of Incannex's drug candidates and the market opportunity for these candidates; and potential shareholder value. These

forward-looking statements are subject to a number of risks and uncertainties, which may cause the forward-looking events and circumstances

described in this press release to not occur, and actual results to differ materially and adversely from those described in or implied

by the forward-looking statements. These risks and uncertainties include, among others: that current expense and cash resource estimates

which may be ultimately be inaccurate and the Company may need to raise capital, including through the ATM, sooner than it presently anticipates;

the continued availability of financing; Incannex's ability to raise capital to fund continuing operations and to maintain or potentially

further improve its capital structure; Incannex's ability to maintain the listing of its shares of common stock on the Nasdaq Stock

Market; the impact of any infringement actions or other litigation brought against Incannex; the success of Incannex's development efforts,

including Incannex's ability to progress its drug candidates through clinical trials on the timelines expected and to obtain necessary

regulatory approvals for commercialization of its product candidates; the effects of competition from other providers and products as

currently existing or that may be developed in the future; that the market for its drug candidates may not grow at the rates anticipated

or at all or that estimates for these markets may ultimately be incorrect; that Incannex may be unable to successfully execute upon any

commercial discussions; Incannex's ability to comply with the various evolving and complex laws and regulations applicable to its business