Zelira’s Revenue Collapse Raises Questions Despite Clinical and Patent Progress

• FY25 loss narrowed 90% to AUD 3.85 million
• Revenue declined sharply to AUD 656 amid clinical focus
• HOPE® 1 FDA trial preparations advanced via SPV with US$3.25M convertible notes converted to equity
• New patents granted for autism spectrum disorder formulations in Australia and US
• Commercial expansion in US, Australia, and Germany with proprietary cannabinoid products

Financial Overview and Revenue Decline

Zelira Therapeutics Limited has reported a preliminary final loss after tax of AUD 3.85 million for the year ended 30 June 2025, a marked improvement from the prior year’s AUD 36.74 million loss. This 90% reduction in net loss reflects a strategic pivot towards clinical development and funding activities, though revenue from product sales plummeted by over 99% to just AUD 656. The steep revenue decline underscores Zelira’s current prioritisation of advancing its pipeline over near-term commercial sales.

Clinical Development and FDA Trial Progress

Central to Zelira’s FY25 narrative is the advancement of its HOPE® 1 cannabinoid-based medicine through the US Food and Drug Administration (FDA) clinical trial pathway. The company established a special purpose vehicle (SPV) to conduct Phase 1 to Phase 3 trials, contributing its HOPE® 1 product, intellectual property, and real-world data for a 55% equity stake. Cash investors are funding the SPV with approximately US$35 million, with Zelira recently converting US$3.25 million in convertible notes into equity, reinforcing alignment with capital partners and bolstering the clinical trial funding base.

Patent Expansion and Intellectual Property Strengthening

In July 2025, Zelira secured patents for its HOPE® 1 and HOPE® 2 formulations targeting autism spectrum disorder from both the Australian Government Commission of Patents and the US Patent and Trademark Office. These patents enhance Zelira’s intellectual property portfolio within central nervous system therapeutics and add long-term value to the HOPE® platform, positioning the company for potential market exclusivity and competitive advantage.

Commercial Footprint and Product Development

Despite the revenue drop, Zelira continues to generate sales from its proprietary HOPE® medications in Australia and select US states, including Pennsylvania, Washington, D.C., and Louisiana. The company also expanded the commercialisation of ZENIVOL®, the world’s first clinically validated cannabinoid drug for chronic insomnia, into Germany through partner Adjupharm GmbH following regulatory approval. Additionally, Zelira’s over-the-counter oral care and dermatology products, such as the RAF FIVE™ acne treatment line, maintain revenue streams in the US market.

Funding and Financial Position

Zelira strengthened its financial position through government R&D tax incentives totaling over AUD 1.15 million and secured a AUD 650,000 R&D loan facility post-year end to support ongoing clinical programs and working capital needs. The company’s net tangible assets per security slightly improved to negative 40 cents, reflecting ongoing investment in intangible assets and clinical development. Convertible notes and loans remain a key funding mechanism, with recent conversions reducing debt and increasing equity in the HOPE® SPV.

Outlook and Strategic Focus

Zelira’s FY25 results highlight a company in transition, moving from early-stage commercialisation towards rigorous clinical validation and regulatory approval of its cannabinoid medicines. The ‘multiple shots on goal’ strategy, combining clinical trials, patent protection, and selective market expansion, aims to underpin long-term growth. However, the near-term financials reflect the costs and risks inherent in biopharmaceutical development, with revenue generation yet to recover.

Bottom Line?

Zelira’s narrowing losses and clinical milestones set the stage for critical FDA trial readouts and potential market breakthroughs ahead.

Questions in the middle?

• Will Zelira secure the full US$35 million funding target for the HOPE® SPV to complete FDA trials?
• How will the transition of Zenivol® to capsule form impact patient uptake and commercial scalability?
• What are the timelines and expected outcomes for the ongoing FDA clinical trials of HOPE® 1?