InhalerX Secures $38.5M Funding Facility but Posts Negative Cash Flow

Quarterly Cash Flow Overview

InhalerX Limited has released its Appendix 4C quarterly cash flow report for the period ending December 31, 2024, revealing a net cash outflow from operating activities of $97,000. This negative cash flow reflects ongoing expenditures primarily related to research and development, staff costs, and corporate overheads as the company advances its biotechnology pipeline.

Despite the cash burn, the company’s cash position remains stable with $194,000 in cash and cash equivalents at the end of the quarter. This modest cash reserve underscores the importance of the recently secured funding facility to support upcoming clinical milestones.

New Funding Facility to Underpin Clinical Trials

InhalerX has entered into a $38.5 million funding facility agreement with Clendon Biotech Capital. This facility is earmarked exclusively for financing clinical trial costs, including non-clinical work and drug manufacturing expenses, for its lead drug candidates IRX-211 and IRX-616a through to the completion of Phase 2 trials over the next two to three years.

Notably, the company has not drawn any funds from this facility as of the quarter’s end. The facility carries a 15% per annum interest rate, capitalised monthly, with repayment terms linked to the successful completion of the Phase 2 clinical trials. This arrangement provides InhalerX with a significant financial runway dedicated to advancing its clinical programs while preserving flexibility for other corporate expenses.

Operational and Financial Implications

The company’s quarterly cash outflows highlight the typical financial pressures faced by clinical-stage biotech firms, balancing costly development activities against limited revenue streams. InhalerX’s decision to delay drawing on the funding facility may reflect a strategic approach to capital management, preserving borrowing capacity while monitoring trial progress and cash needs.

Payments to related parties during the quarter were modest, including $10,000 in key management personnel fees and $7,000 for company secretary services, indicating controlled administrative expenses.

Looking Ahead

With an estimated 199 quarters of funding available when combining cash reserves and the undrawn facility, InhalerX appears well-positioned to sustain its clinical development activities in the near term. However, the company will likely need to raise additional capital to cover corporate overheads and other non-clinical expenses not covered by the facility.

Investors will be watching closely for updates on the timing and scale of drawdowns from the funding facility, as well as any capital raising initiatives to support broader operational needs.