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Kazia Therapeutics achieves key half-year milestones and ends period with cash balance of $19.4 million

Kazia Therapeutics Ltd (ASX:KZA) (NASDAQ:KZIA) (FRA:NV9) made substantial progress and achieved key milestones in the half-year ending December 31, 2020, ending the period with a cash balance of A$19.4 million and net assets of A$31.7 million. Chairman Iain Ross stated in the half-year report that in line with Kazia’s ongoing focus on cost efficiency, more than 90% of its expenditure in this period was invested directly in R&D programs. ‘Exceptional’ financial period  He said this corporate growth illustrated important financial movements such as completing a fully underwritten, non-renounceable entitlement offer to eligible shareholders, which resulted in gross proceeds of just over A$25 million in October 2020. These funds are being applied directly to the GBM AGILE pivotal study for paxalisib. As this study moved into an operational phase during the December quarter of 2020, the company made material one-off payments to its partner, the Global Coalition for Adaptive Research. Ross noted that in that sense, it had been an ‘exceptional period’ from a financial perspective for Kazia, but these cashflows illustrated a substantial step-change in the nature of the company’s business. Phase-III company At the end of December 2020, the first site in GBM AGILE opened to the paxalisib arm and recruitment is now well underway. The initial focus is on sites in the United States, with expansion to Canada, the EU and China anticipated during 2021. Ross said this meant that Kazia was now a ‘phase III company’. “In the immensely challenging and competitive landscape of drug development, the company joined a rarefied group of organisations that have brought a potential new therapy to the cusp of commercialisation,” he said. “Should paxalisib meet our hopes in the GBM AGILE study, Kazia expects it to become a valuable new therapy for one of the most challenging cancers in modern medicine, and in so doing to claim a share of a market opportunity that is conservatively sized at US$1.5 billion per annum.” Rich flow of new information Ross said by crossing this threshold, the company’s focus as a business had begun to change in subtle but fundamental ways. He said: “I have said before that any drug development company is measured by the scientific data it is able to generate. “This remains true for Kazia, and we expect a rich flow of new information about our drug during the coming year. “However, there is also a sense in which paxalisib’s potential is now clear. “We know, as best we can, that the drug is active in patients with glioblastoma. “Further data will no doubt teach us much more, but the critical decision to move into a pivotal study has already been made. “As such, our focus now shifts to commercialisation, and to putting in place the plans and strategies necessary to make paxalisib available to patients as swiftly as possible, and to realise the maximum value for our shareholders.” Staged-approach for paxalisib Ross said he envisaged a staged approach for paxalisib, which would allow the company to bring on board the right partners at the right time. Kazia is in discussion with several companies that may represent the first stage of that process and expects to share further detail in due course In the meantime, expanding broader interest in Kazia’s asset continues to offer new opportunities to build on the work that has already been done. Following its stated strategy to seek a partner for Cantrixil, a process is well underway and has been driven by the recent positive data from the phase I study in ovarian cancer. Growth towards commercial product “Over the last five years, Kazia has evolved from being a preclinical company with a market capitalisation of around A$30 million to where it stands today as a late-stage clinical company, with more than five times more valuable and international interest from investors, partners, scientists, and clinicians,” the chairman said. “As we look to the future, I believe that the pace of transformation in the company will only increase as Kazia continues along the journey towards a commercial product.”

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