InhaleRx has entered into a loan agreement with Clendon Biotech Capital (CBC) to fund Phase 1 and 2 clinical development of its cannabinoid drug candidates IRX-211 and IRX-616a.
The deal provides InhaleRx with up to A$38.5 million in funding, which it said should enable it to reach the Phase 3 “pivotal stage” for both candidates within the next two-to-three years. The arrangement allows for the drawdown of funding as eligible expenditure is incurred.
Once approved, InhaleRx said the loan facility will allow it to “immediately activate the specification adjustment and batch manufacturing work required in the manufacture of the requisite trial drugs for the proposed IRX616a (Phase 1) and IRX-211 (Phase 2) trials”.
While it is expected that the funding arrangement will cover all necessary clinical trial costs, InhaleRx will remain responsible for its operational and corporate overheads.
It said it “remains confident in its ability to secure the necessary additional funding to meet these working capital costs and ensure continued operational sustainability”.
Drug-device medications IRX-211 and IRX-616a are designed to provide rapid onset relief for breakthrough cancer pain and panic disorder respectively.
CBC is a Melbourne-based venture capital investor focused on small to medium-size biotechnology companies in its target therapeutic areas of neuroscience, gastroenterology, oncology and anti-ageing.
InhaleRx CEO Darryl Davies said: “This agreement enables [us] to focus on advancing our key clinical programs, including addressing the requirements outlined in FDA feedback on our recent IRX616a IND application.”
In July, the US Food and Drug Administration (FDA) placed a temporary suspension on the company’s Investigational New Drug (IND) application for a Phase 1 clinical trial involving IRX616a “in order to address certain safety concerns for the purposes of ensuring the highest standards of patient safety”.
The terms of the funding agreement include an interest rate of 15% per annum, with repayment terms tied to the completion of each project. Additionally, CBC will receive options in InhaleRx representing 19.9% of the ordinary shares on issue.
InhaleRx must repay the money owed in cash, but may use the proceeds from the exercise of the options to make the repayments. The facility will be secured by a general security deed granted by InhaleRx in favour of CBC over all of its assets and undertaking.
