A clinical-stage company short of funding

Nexalis Therapeutics Limited (ASX:NX1), formerly InhaleRx Limited, is a clinical-stage drug developer working on inhaled and oral therapies for pain and mental health. The name and code changed effective 17 February 2026, according to its half-year report.

The central point is a funding gap. In 2026 a lender cancelled a large Debt facility, two studies were suspended, and the half-year accounts carry a material uncertainty about going concern.

The programmes

IRX-616a, for panic disorder, completed a Phase 1 trial in healthy volunteers. The company says no serious adverse events were reported and that the data support planning for Phase 2, though the formal clinical study report is delayed. This is early safety work, not evidence of efficacy or regulatory approval.

IRX-211, for breakthrough cancer pain, is in a Phase 2 study targeting 156 participants. Recruitment has been slow, and the company is reviewing site performance and may change the protocol. SRX-25, an oral candidate for treatment-resistant depression, is still in planning, with an Australian Phase 1 intended once funding is available.

The Facility cancellation

On 31 October 2025 the company agreed a debt facility with Linlithgow Family Office Pty Ltd (LFO), described in the half-year report as up to A$52.3 million. According to a 6 July 2026 update, LFO permanently cancelled the remaining commitment on 28 May 2026. Of A$2.4 million in drawdown requests, A$0.8 million was received, and the company said it believed LFO should honour the remaining A$1.6 million.

A binding letter of intent for a replacement facility with Point8 Capital was signed on 28 May, but the company withdrew when a formal agreement could not be reached. On 6 July it said no meaningful alternative funding discussions were under way. On 27 August 2026 a deed settled the LFO facility, cancelling the A$641,848 liability, with 38,449,145 shares held by the lender cancelled and 15,000,000 Options at A$0.15 issued, per the half-year report.

Financial position

For the six months to 30 June 2026, the loss after tax was A$1.30 million, up from A$854,332. Cash was A$791,334, against A$436,900 at December 2025, helped by R&D tax incentive receipts of A$898,719. Net liabilities were A$1.86 million and the Working Capital Deficit was A$1.88 million.

Trade payables included A$2.13 million owed to Ingenu CRO, a related party of chief executive Darryl Davies. Management said it was negotiating to defer much of that amount until a significant capital raise or new funding partner, and had ceased product development to reduce spending. Shares on issue rose from 239.4 million to 253.0 million over the half through placements. The reviewing auditor, RSM, drew attention to the Going Concern uncertainty without modifying its conclusion.

Context and risks

Drug development is capital intensive, and early trials rarely lead to approved products. The company aims to use the US FDA 505(b)(2) pathway, but it has no approvals and no product revenue. The half-year document also contained a drafting error in the Directors' Report, corrected and redated on 1 September 2026.

What to watch

No dated milestones were confirmed. The company says it will set a revised development plan and timeline once funding is available. Any news on the Ingenu CRO arrangements and trading status will be important.