Zelira Therapeutics (ASX: ZLD) secures US$33 million for cannabis autism drug as shares double, but long-term holders remain underwater

Perth-based cannabis company Zelira Therapeutics has locked in US$33 million from a New York investment firm to push its autism medication through US FDA trials, sending shares soaring more than 100% on Friday, at the time of writing. But for shareholders who have held through the past five years, the rally barely registers. The stock remains down 99.97% over that period.

Zelira (ASX: ZLD) announced that its HOPE 1 special purpose vehicle has signed definitive agreements with ThirdGate Capital's TGC Biotechnology Fund to raise US$32.98 million (before costs). The deal values the SPV at US$66 million.

"This transformative fundraising directly into the HOPE 1 SPV represents a compelling endorsement of our vision, our science, and the significant potential of HOPE 1," said Zelira CEO Dr Oludare Odumosu.

The deal structure

At completion, ThirdGate Capital will hold 50% of the SPV. Zelira retains 39.7% after contributing its intellectual property and real-world patient data. Existing investors The 2011 Forman Investment Trust and Malik Majeed hold the remaining 5.4%, with 4.9% reserved for a management incentive pool.

Zelira's stake is valued at US$26.2 million (roughly A$38 million). The deal is expected to close by 31 January 2026.

ThirdGate will appoint three of the SPV's five board members. Zelira Chairman Osagie Imasogie has been appointed Executive Chairman of the SPV.

What is HOPE 1?

HOPE 1 is a proprietary cannabis formulation being developed to treat irritability in patients with autism spectrum disorder. The initial target is Phelan-McDermid Syndrome, a rare genetic condition caused by mutations in the SHANK3 gene.

Children with Phelan-McDermid Syndrome experience developmental delays, intellectual disability, and absent or delayed speech. There are currently no approved treatments.

Zelira previously sponsored an observational trial at the Children's Hospital of Philadelphia studying cannabinoid treatments in 124 paediatric autism patients. HOPE is already generating revenue in Australia and parts of the United States.

FDA pathway

The funding will support clinical trials under the FDA's 505(b)(2) regulatory pathway, which allows companies to rely on existing safety and efficacy data to speed up approvals.

Zelira completed a Pre-IND meeting with the FDA in mid-2024. The agency endorsed the proposed clinical plan and confirmed that Phelan-McDermid Syndrome qualifies as a rare disease. This opens the door to Orphan Drug Designation, which would provide seven years of data exclusivity.

Next steps include submitting an Investigational New Drug application, starting Phase 1 trials, and filing for Orphan Drug Designation.

Phase 1/2 trials are budgeted at US$17.7 million, with Phase 3 trials costing an additional US$14.1 million. The SPV has appointed iNGENu CRO to run the trials.

The valuation question

The deal raises some questions about structure and shareholder value.

Zelira's 39.7% stake in the SPV is now valued at roughly A$38 million. Yet the company's market capitalisation before Thursday's spike was around $5 million. With approximately 11.9 million shares on issue, the implied value of Zelira's SPV stake alone works out to more than $3 per share.

Some observers have asked why ThirdGate chose to invest US$33 million into the SPV rather than simply acquiring Zelira outright at its tiny market cap. The company has not addressed this question.

Others note that while the deal provides capital, Zelira has effectively transferred majority ownership of its HOPE 1 intellectual property to outside investors. The company contributed IP and data but now controls less than 40% of the asset.

A long road for shareholders

Thursday's share price spike will provide little comfort to long-term holders.

Over the past five years, Zelira shares have fallen 99.97%. The company previously undertook a 150-to-1 share consolidation. Some shareholders say they would need the stock to reach $13 or higher just to break even on their original investment.

Today's rally, while dramatic in percentage terms, still leaves the stock trading under $1.

Who is ThirdGate Capital?

ThirdGate Capital Global Management is a New York-based private investment firm founded in 2014 by Marlon Thomas, who serves as Founder and Chief Investment Officer. The firm invests its own capital across public and private markets.

ThirdGate has offices in New York, Kenya, London, Singapore and Switzerland.

"The compelling real-world patient data, combined with the clear regulatory pathway established through the Pre-IND meeting, gives us confidence in HOPE 1's potential to address a significant unmet need for patients with Phelan-McDermid Syndrome and autism spectrum disorder," said Cynthia Parrish, Senior Partner at ThirdGate Capital.

What happens next

The deal is expected to close by the end of January. Zelira and ThirdGate have said they have no current plans to spin out or separately list the SPV.

Whether this funding marks a genuine turning point for Zelira or another chapter in a long and painful journey for shareholders remains to be seen. The company now has the capital to pursue FDA approval, but it has also given up majority control of its most promising asset to get there.