Zelira Faces Funding Pressure Despite Progress on HOPE 1 FDA Trials

Clinical Progress and Regulatory Milestones

Zelira Therapeutics (ASX, ZLD) has reported a productive first quarter of fiscal 2026, marked by a critical advancement in its HOPE 1 clinical trial program targeting autism spectrum disorder (ASD) associated with Phelan-McDermid Syndrome. The company successfully completed the Investigational New Drug (IND) submission to the US Food and Drug Administration (FDA), paving the way for Phase 1 trials. This milestone reflects Zelira’s strategic use of existing preclinical and clinical data to accelerate regulatory approval via the FDA’s 505(b)(2) pathway.

The HOPE 1 program is conducted through a special purpose vehicle (SPV) in which Zelira holds a majority equity stake, leveraging a $35 million capital raise to fund the clinical trials. The company has appointed iNGENū CRO Pty Ltd to manage the clinical validation and regulatory registration process, underscoring its commitment to rigorous scientific and regulatory standards.

Funding and Financial Position

To support its clinical development and operational expenses, Zelira secured a $650,000 non-dilutive loan facility from RH Capital Finance Co., LLC, collateralized against the anticipated FY25 R&D tax incentive rebate. This facility complements director loans totaling USD 150,000 provided by Managing Director Dr Oludare Odumosu and Non-Executive Director Dr Donna Gentile O’Donnell, both extended on favourable terms.

Despite these funding efforts, Zelira reported a net cash outflow from operations of $711,000 for the quarter, driven by increased research and development costs related to HOPE 1 trial preparations and timing of payments across staff and administrative expenses. The company ended the quarter with a modest cash balance of $172,000, highlighting the importance of its ongoing capital raising initiatives.

Strategic Outlook and Market Position

Zelira remains focused on clinical validation as the cornerstone of its growth strategy, with two key products advancing towards FDA clinical trials, HOPE 1 for autism and ZLT-L-007 for diabetic nerve pain. The latter recently demonstrated superior efficacy compared to the established pharmaceutical Lyrica in an IRB-approved trial, positioning Zelira well for further regulatory progress.

Commercially, Zelira continues to generate revenue from its proprietary cannabinoid-based medicines across Australia, the US, and Germany, including the ZENIVOL insomnia treatment and OTC oral and dermatology products. The company’s innovative Enhanced Distillate Capture and Dissolution Matrix technology also opens new avenues for pharmaceutical-grade cannabinoid formulations.

Capital Raising and Future Funding

To bolster its financial runway, Zelira has established a $1 million At-the-Market (ATM) equity facility, providing flexible access to capital aligned with operational needs. Additionally, the company is actively progressing further closings of the HOPE SPV capital raise, aiming to secure the remaining funds required to fully finance the FDA clinical trial program.

Management expresses confidence in sustaining operations and meeting business objectives, supported by anticipated R&D tax incentive refunds and ongoing investor support. However, the company’s low cash position and continued cash burn underscore the critical nature of these funding efforts.