Acrux’s Reliance on R&D Advances Raises Questions on Cash Flow Strategy
Acrux Limited has secured a further $0.46 million advance on its FY25 R&D Tax Incentive, bringing total advances to $2.19 million and supporting its pharmaceutical product development and working capital needs.
- Second advance of $0.46 million received from Radium Capital
- Total advances now $2.19 million, about 80% of estimated FY25 R&D Tax Incentive
- Funds to support product development and working capital management
- FY25 R&D rebate expected from Australian Tax Office later in 2025
- Acrux continues leveraging R&D advances for early access to tax rebates
Acrux Secures Additional Funding Through R&D Tax Incentive Advances
Specialty pharmaceutical company Acrux Limited (ASX – ACR) has announced it received a second advance payment of $0.46 million from Radium Capital against its FY25 Research and Development (R&D) Tax Incentive. This latest tranche brings the total advances secured to $2.19 million, representing approximately 80% of the estimated R&D rebate for the eleven months ending 31 May 2025.
The R&D Tax Incentive is a government program designed to encourage innovation by providing refundable tax offsets for eligible research activities. Acrux has utilised this short-term funding facility for several years, allowing the company to access a significant portion of its anticipated rebate ahead of the official payout from the Australian Tax Office, which is expected later this year.
Strategic Use of Funds to Support Growth
The funds obtained through these advances are earmarked to support the progression of Acrux’s development pipeline of topically applied pharmaceutical products. Additionally, the capital will assist in managing the company’s working capital requirements, providing financial flexibility as it continues to innovate and commercialise its products.
Acrux has a 25-year track record of developing topical generics and specialty pharmaceuticals, with a strong emphasis on the US market through licensing arrangements. The company leverages its in-house laboratories, manufacturing capabilities, and technical expertise to bring affordable, effective products to market.
Looking Ahead
While the advances provide near-term liquidity, the final R&D rebate amount and timing remain subject to the Australian Tax Office’s assessment. Acrux’s ability to secure these advances reflects confidence in its ongoing R&D activities and anticipated rebate. Investors will be watching closely how these funds translate into tangible progress in product development and commercial milestones.
Bottom Line?
Acrux’s continued access to R&D tax incentive advances underscores its strategic approach to funding innovation and managing cash flow amid ongoing product development.
Questions in the middle?
- What specific development milestones will Acrux target with the FY25 R&D funds?
- How might fluctuations in the final R&D rebate affect Acrux’s financial outlook?
- Will Acrux seek further advances or alternative funding as it scales its pipeline?
