Nexalis Reports $490k R&D Tax Incentive Amid Funding Facility Cancellation
Nexalis Therapeutics has wrapped dosing for its IRX-616a Phase 1 trial with no serious adverse events, but faces a funding setback after Linlithgow Family Office cancelled its remaining commitment, prompting a clinical program review.
- IRX-616a Phase 1 dosing completed without serious adverse events
- Linlithgow Family Office cancels remaining funding commitment
- Clinical trials for IRX-211 and IRX-616a temporarily suspended
- SRX-25 Phase 1 planning advances with intellectual property focus
- Company seeks alternative funding amid board changes
IRX-616a Phase 1 Trial Completes Safely
Nexalis Therapeutics Ltd (ASX:NX1) has successfully completed dosing across all three cohorts in its first-in-human Phase 1 study of IRX-616a, an inhaled treatment targeting panic disorder. The trial, conducted at CMAX Clinical Research in Adelaide, enrolled 24 healthy volunteers and reported no serious adverse events. This milestone provides valuable safety and dose-ranging data to inform the next phase of development.
Despite the positive trial outcome, the formal clinical study report and database lock will be delayed due to a temporary suspension of study orders following funding challenges.
Funding Facility Cancellation Forces Clinical Review
On 20 May 2026, Linlithgow Family Office (LFO) permanently cancelled the remaining commitment under its $52.3 million debt funding facility with Nexalis, which was intended to accelerate development of IRX-211, IRX-616a, and SRX-25. Since the facility's inception, Nexalis drew down $2.4 million but only received $0.8 million in funding.
The cancellation has led to temporary suspension of clinical study orders for the Phase 2 trial of IRX-211 (breakthrough cancer pain) and remaining activities in the IRX-616a Phase 1 trial. The company is reviewing its clinical development strategy to focus on capital-efficient and commercially viable pathways.
IRX-211 Phase 2 Faces Recruitment Challenges and Expansion Efforts
Recruitment at the lead clinical site for IRX-211’s Phase 2 trial has been slower than anticipated. To broaden the recruitment pool, Nexalis conducted site evaluation visits at two additional Genesis Care locations in New South Wales and Western Australia. Genesis Care’s extensive oncology research network offers access to a large patient population and established trial infrastructure, which could aid recruitment efforts.
However, the study order suspension means active recruitment is paused while the company assesses operational and protocol adjustments to improve trial efficiency and patient enrolment.
SRX-25 Development Advances Amid Funding Constraints
SRX-25, an oral esketamine-based candidate for treatment-resistant depression, remains in the planning phase. The company continues to develop its Phase 1 clinical trial protocol and intellectual property strategy, including engagement with patent counsel. Nexalis is exploring a US FDA 505(b)(2) regulatory pathway that could leverage existing data on the active pharmaceutical ingredient to accelerate approval.
Progress on SRX-25 is carefully managed to avoid diverting resources from the more advanced Phase 2-ready candidates, IRX-211 and IRX-616a.
Corporate Restructuring and Financial Position
During the quarter, directors Dr Ron Wise and Anthony Fitzgerald resigned, with company secretary James Barrie and CEO Darryl Davies appointed as interim directors. The board is reviewing its composition in light of clinical priorities and funding challenges.
Financially, Nexalis reported a net cash surplus of $648,000 for the quarter, boosted by $490,000 in Research & Development Tax Incentive proceeds. Clinical development spending amounted to $170,000, with no new funding received under the LFO facility. The company is actively seeking alternative funding partners but currently has no substantive discussions underway.
Bottom Line?
Nexalis faces a critical juncture as it balances promising clinical progress with funding uncertainty, making the search for new capital a pivotal factor for its near-term development plans.
Questions in the middle?
- Will Nexalis secure alternative funding to resume suspended clinical trials?
- How might protocol adjustments improve recruitment in the IRX-211 Phase 2 trial?
- What impact will board changes have on the company’s strategic direction?
