Noxopharm funds its next lupus trial with placement and note conversion

Noxopharm raises cash ahead of lupus study

Noxopharm Limited (ASX:NOX) has bought itself a development window, securing a $1.5 million placement while lining up the conversion of $3.78 million in shareholder notes as its lead drug candidate approaches testing in lupus patients. The company will also offer eligible shareholders a non-underwritten share purchase plan targeting a further $1 million at the same $0.042 price.

The capital raising comes after Noxopharm reported just A$31,000 in cash at 30 September, following A$663,000 of operating cash outflows during the quarter. The company drew a further $400,000 from an unsecured related-party loan facility carrying 12% annual interest, taking the amount outstanding to $600,000. The quarter’s cash position had made the funding question difficult to avoid, a concern captured in the earlier funding test for clinical progress.

Debt conversion changes the capital structure

Approximately 35.7 million placement shares will be issued at $0.042 each, a price the company said represented a 19.2% discount to its 26 October closing price and a 22.6% discount to its 15-day volume-weighted average price. Placement participants are also intended to receive attaching options on a one-for-one basis, with a $0.042 exercise price and expiry on 1 November 2027, plus a further piggyback option if those options are exercised.

The more consequential balance-sheet move is the proposed early conversion of 87% of Noxopharm’s existing shareholder notes. The $3.78 million, including capitalised interest, is to convert on the placement terms into approximately 90 million shares. That would remove a large portion of the notes from the company’s obligations, but it would also materially expand the share count. The placement, note conversion and several option issues require approval at a shareholder meeting expected in mid-December; the SPP is non-underwritten and may be scaled back.

Trading was reinstated by ASX Supervision after the capital raising announcement, following the suspension reported in the capital raising trading halt. Noxopharm also expects about $1.4 million from its 2025-26 research and development tax rebate, although that payment remains pending.

SOF-SKN heads towards first patient dosing

The proceeds are earmarked for an extension study of SOF-SKN in approximately 15 patients with cutaneous lupus erythematosus. Subject to ethics, regulatory and contractual requirements, enrolment is targeted for the first quarter of calendar 2027, with each patient scheduled to receive 14 days of daily topical dosing followed by seven days of follow-up. Noxopharm expects to report initial efficacy signals in the second quarter of 2027, although the study is primarily designed to assess safety and tolerability and generate early efficacy signals.

Results from that study are intended to inform a planned Phase II trial targeted for the first half of calendar 2028. The company has also received FDA feedback after requesting a pre-IND meeting, including support for its chemical manufacturing strategy and a view that the proposed Phase II design was reasonable. That regulatory step builds on the FDA Phase II pathway, but it does not remove the need for further non-clinical work, regulatory requirements or funding.

Beyond SOF-SKN, Noxopharm said studies of its SOF-CAN immuno-oncology program had shown immune activation when a TLR8-amplifying lead was combined with dying cancer cells. The company plans to use part of the new capital for preclinical SOF-CAN and SOF-VAC work, including in-vivo studies. Those findings remain preclinical, leaving the lupus extension study as the clearest near-term clinical test of the platform.