Why Nexalis Therapeutics (ASX:NX1) is rethinking its clinical plan after its funding facility was cancelled

Sonal Goyal

16 October 2026 11:02 PM AEDT

Why Nexalis Therapeutics (ASX:NX1) is rethinking its clinical plan after its funding facility was cancelled

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Key Highlights

Linlithgow Family Office cancelled the remaining commitment under its Facility with Nexalis Therapeutics, as announced on 28 May 2026.
Nexalis said on 6 July 2026 that it would reassess clinical priorities after withdrawing from a letter of intent with Point8 Capital.
The half-year report to 30 June 2026 showed a loss after tax of A$1,297,938 and cash of A$791,334.

Nexalis Therapeutics (ASX:NX1), formerly InhaleRx Limited, is a Melbourne-based, clinical-stage drug developer working on inhaled therapies for pain and mental health. Its development timetable is now constrained by funding. After a lender cancelled its undrawn facility, the company said in July 2026 that it would reassess clinical priorities and had no meaningful funding discussions under way.

Business and programmes

The company's 6 July 2026 announcement and its half-year report describe three programmes. IRX-616a, aimed at panic disorder, has completed a Phase 1 trial in healthy volunteers. IRX-211, for breakthrough cancer pain, is in a Phase 2 trial that has run into recruitment problems. SRX-25, for treatment-resistant depression, is in planning, with an Australian Phase 1 as the goal. None of these is approved for any use, and early-stage trials in healthy volunteers do not demonstrate efficacy in patients.

Funding facility cancelled

On 28 May 2026 Nexalis announced that Linlithgow Family Office had cancelled the remaining commitment under its facility and stopped accepting drawdown requests. It also said it had signed a binding letter of intent with Point8 Capital to replace what the announcement called an existing A$53 million facility; a 28 April 2026 announcement had referred to a funding partner providing a facility of up to A$52.3 million. By 6 July 2026 the company said it had been unable to convert the Point8 letter into a formal agreement and had withdrawn.

Drawdown requests totalled A$2.4 million, of which A$0.8 million was received before cancellation, leaving A$1.6 million of eligible requests that the company said the lender must honour. Nexalis said it had sent a resolution proposal. A deed dated 27 August 2026, described in the half-year report, settled A$641,848 owed: 38,449,145 shares held by the lender were cancelled and 15,000,000 Options with a A$0.15 exercise price were issued. The 6 July update also reported A$490,000 of Research and Development Tax Incentive proceeds.

Half-year results

The Appendix 4D for the half-year to 30 June 2026, signed on 31 August 2026, showed a loss after tax of A$1,297,938, up 51.9%, and R&D tax rebate income of A$630,103. Cash was A$791,334, up from A$436,900 at December 2025. Net liabilities stood at A$1,864,182, and current liabilities exceeded current Assets by A$1,875,337. Shares on issue were 253,037,323. Auditor RSM flagged a material uncertainty that may cast significant doubt on the company's ability to continue as a going concern, although its review opinion was not modified.

A related party, Ingenu CRO Pty Ltd, is owed A$2,125,952 in trade payables, and the directors were negotiating a deferral. Study orders with the CRO have been suspended.

Clinical progress and trading status

On 28 April 2026 the company said a safety review committee had recommended moving the IRX-616a trial to its third and final cohort. By 6 July 2026 it reported that the Phase 1 was complete with no serious adverse events and results that exceeded its expectations. Quantitative safety or efficacy data have not been released, the formal clinical study report is delayed, and the company says the IRX-616a Phase 2 will proceed once funded. For IRX-211, a review of recruitment is planned and may lead to protocol changes.

The shares entered a Trading halt on 22 May 2026, were suspended on 26 May and were reinstated on 28 May 2026.

Key Insights

Nexalis has a completed Phase 1 study but no funding in place for the next step, a disputed A$1.6 million of drawdowns, a large related-party payable and an auditor's going-concern flag. The company has given no dates for its revised clinical plan.

FAQs

Q:What happened to Nexalis's funding facility?

A:On 28 May 2026 the company announced that Linlithgow Family Office had cancelled the remaining commitment and stopped accepting drawdown requests. A replacement letter of intent with Point8 Capital did not proceed to a formal agreement.

Q:What is the status of IRX-616a?

A:The company said in July 2026 that the Phase 1 trial in healthy volunteers was complete with no serious adverse events, and that Phase 2 will proceed once funded.

Q:What did the half-year accounts show?

A:For the half-year to 30 June 2026, the loss after tax was A$1,297,938, cash was A$791,334 and net liabilities were A$1,864,182.

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