Key Highlights

  • Trials have been largely on hold since a lender withdrew funding in May 2026, and the company has settled that dispute.
  • IRX-616a completed a Phase 1 safety study in 24 healthy volunteers, with no serious adverse events reported.
  • Cash was $371,000 at 30 September, with an estimated 0.9 quarters of funding.
  • A Research and Development tax incentive forward financing Facility is expected in the December 2026 quarter.

Nexalis Therapeutics (ASX:NX1) is a Melbourne clinical-stage drug developer whose trial programmes have been largely on hold since a lender withdrew funding in May 2026. Its September quarter reports, dated 30 October 2026, show it has since settled that dispute and cleared its Assets of security, but with $371,000 in cash and an estimated 0.9 quarters of funding, restarting the clinical work depends on new money.

The company says a research and development tax incentive (RDTI) forward financing facility is expected in the December 2026 quarter and that it intends to raise capital, with timing and structure not yet set. Until then, its candidates sit at Phase 1 completion and Phase 2 planning rather than active trials.

What Nexalis develops

Nexalis has three drug candidates aimed at pain and mental health conditions, with the long-term goal of US Food and Drug Administration approval for each. IRX-616a, an inhaled treatment for panic disorder, has completed a Phase 1 safety study in 24 healthy volunteers at CMAX in Adelaide, with no serious adverse events reported. IRX-211, an inhaled treatment for breakthrough cancer pain, is in Phase 2. SRX-25, an oral treatment for treatment-resistant depression, remains at planning stage.

Completing Phase 1 safety work is an early step: it says nothing yet about efficacy, and approval would require further trials and regulatory review.

Lender settlement and trial pause

In October 2025 Nexalis signed a Debt facility with Linlithgow Family Office (LFO) of up to $52.3 million, but LFO cancelled the remaining commitment in May 2026 after the company had received about $0.8 million. Study orders with contract research organisation iNGENū for IRX-211 and IRX-616a were then suspended.

Under a settlement deed signed on 27 August 2026, the facility was terminated, the $0.8 million received is not repayable and LFO's security was released. LFO's 38.4 million Options were cancelled on 29 October 2026 and replaced with 15 million unlisted options exercisable at $0.15, notified as issued on 11 November 2026.

After the quarter, Sean Williams stepped down as chairman on 2 October 2026 and Niv Dagan was appointed in his place.

Cash position

According to the Appendix 4C, net operating outflows for the quarter were $419,000, including $202,000 on research and development and $181,000 on administration and corporate costs. Financing inflows were $196,000 and there were no undrawn facilities. Cash at 30 September 2026 was $371,000.

The company says cost reductions have been made and further cuts are planned, so it expects lower outflows, and believes its funding steps are likely to succeed given past raisings. These are company expectations, not completed transactions.

Risks and what to watch

Funding is the immediate risk: without the RDTI facility or a raising, Nexalis has less than one quarter of cash at the September rate, and any Equity raise at current prices could be heavily dilutive. Clinical risk remains high, as no candidate has demonstrated efficacy in a completed controlled patient study, and the iNGENū settlement is not yet confirmed.

Key items to watch are execution of the iNGENū deed, the RDTI forward financing, the terms of any Capital raising and a restart of IRX-616a close-out work.