Pharmaceutical research company Pharmaxis Ltd (ASX: PXS) has received a $6.2 million R&D tax incentive in relation to the 2019 financial year. The receipt of this incentive adds to the Company’s cash funds, which were $31 million at 30 June 2019.

The 2019 incentive effectively reduces Pharmaxis 2019 expenditure on research and development by more than 40%.

"The R&D tax incentive provides significant leverage to the Pharmaxis research team’s development of new drugs for inflammation and fibrotic diseases. The Pharmaxis research team has taken four in‐house compounds to Phase 1 trials in just five years and in the 2019 year alone completed phase 1 trials in two LOXL2 inhibitors, commenced phase 1 trials in a systemic LOX inhibitor compound and advanced a topical LOX inhibitor through preclinical development.”

Pharmaxis CEO Gary Phillips

The R&D tax incentive is payable in cash on eligible R&D expenditure for companies with total revenue less than $20 million in the claim year.

In the 2019 financial year Pharmaxis incurred drug discovery employee expenses of $2.8 million and external expenditure of $8.9 million in advancing its new drug pipeline into and through Phase 1 clinical trials.