PharmAust will get early access to its FY22 R&D Tax Incentive amount, estimated at ~$210k, strengthening its financial position to execute on upcoming clinical trials.
Clinical stage biotech PharmAust (ASX:PAA) has received a portion of its FY22 R&D tax incentive (RDTI) claim in advance, after signing a non-dilutive funding agreement with Radium Capital which in turn can be used to fund further R&D.
The facility so far allows PharmAust early access to approximately $210,000 of its forecast FY22 R&D Tax Incentive amount, equivalent to around 80% of its accrued RDTI rebate for the period 1 July 2021 – 28 February 2022. The deal also allows for a second advance payment on its R&D expenditure to 30 June 2022, which could be a substantial amount given the planned clinical trials being conducted between now and then.
“The Radium facility has provided PharmAust with secure and non-dilutive funds against a backdrop of geopolitical uncertainty and broader equity market volatility,” said PharmAust Finance Director, Sam Wright.
Wright added that bringing PharmAust’s future R&D refund forward will strengthen the company’s financial position to execute on upcoming clinical trials.
The advance is accruing interest at the compounded rate of 1.25% per month, and repayment is timed to coincide with receipt of the company’s 2022 R&D refund, expected by 31 December.
Solid cash position
PharmAust reported a cash position of $2.14 million as at 31 March, with subsequent receipts of $708,113 for the FY21 RDTI refund, and $201,615 from the FightMND first instalment.
Further installments for a total commitment of $881,085 will be paid by FightMND to PharmAust, as additional milestones relating to the clinical trial are met.
PharmAust announced yesterday that it was ready to proceed to the all-important Phase 1 clinical trial in MND (Motor Neurone Disease), with tablets of Monepantel expected to arrive at the trial site in Melbourne later this week.
The study is being conducted following a funding grant by the FightMND charity, which had pledged $881,085 in funding last September for PharmAust to examine the effects of its lead drug MPL on MND.
With the current Good Manufacturing Practice tablets’ imminent arrival, preparation for the trial commencement is mostly complete, and is expected to be finalised prior to the end of May.
This article was developed in collaboration with PharmAust, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.