Kazia Therapeutics Annual Report 2021

Kazia Therapeutics Limited Annual Report 2021 5 In part, our healthy cash balance reflects a successful financing round in October 2020, which raised gross proceeds of approximately $24 million. This was anchored by existing institutional investors, but also brought several new names to the register, as well as providing an opportunity for eligible shareholders to increase their position via a non- renounceable entitlement offer. The company has been grateful for the consistent and enthusiastic support of its major shareholders. I am pleased that the market has rewarded that support. Kazia ended the previous financial year with a share price on the ASX of $0.46. On 30 June 2021, we closed at $1.31, representing a 185% appreciation in 12 months. Those who participated in our October 2020 financing have made an annualised return of 93% to 30 June 2021. This progress is set against a backdrop of an exceptionally challenging second half for the global biotech industry. Since its highs near the beginning of calendar 2021, the NASDAQ small cap biotech index is down more than 20%, and Kazia has remained remarkably resilient in the context of this challenging market. BUSINESS DEVELOPMENT & LICENSING Almost every young biotech company goes through several rounds of financing before it is able to become economically self-sufficient. Remarkably, that transition has already begun in Kazia. In the second half of FY2021, we reported material revenues from partnering activities, pertaining to licenses for Cantrixil and paxalisib. In effect, Kazia has declared its maiden revenue. Future payments from these transactions will be necessarily irregular, but we stand to receive up to a further US$ 323 million in milestone payments, together with very substantial royalties on commercial sales. The majority of the territorial rights for paxalisib, representing more than 90% of the global pharmaceutical market, remain unpartnered, and we expect to realise very much greater value in future partnering transactions. PIPELINE PROGRESS These partnering milestones would no doubt have been impossible without the rapid and convincing progress that has been made in the clinical development of paxalisib. In January of this year, the drug commenced recruitment to the GBM AGILE pivotal study and is now well advanced in its enrolment. The initial focus has been on the United States, but expansion to Europe and China is anticipated during the early part of FY2022. I have previously spoken and written about the merits of GBM AGILE, and the highly innovative approach to drug development that it represents. So far, our expectations have been exceeded in terms of the operational execution of the study and the extraordinary rate of recruitment. The Board remains convinced that GBM AGILE is the appropriate way to bring paxalisib forward. Meanwhile, our own phase II study of paxalisib draws rapidly to a close. New data presented at the Society for Neuro-Oncology Annual Meeting in November 2020 helped to corroborate the very positive efficacy signals that have previously been seen. We expect to conclude the study in the second half of calendar 2021. A NEW ASSET When we negotiated our license for GDC-0084, as paxalisib was then known, with Genentech in 2016, we never envisioned that we would become a single-asset company. Over the intervening years, the rich opportunities derived from paxalisib have exceeded all expectations, and it has been appropriate for us to focus our resources on exploiting it to the fullest extent possible. With that drug now well advanced on its path to commercialisation, however, it has proven timely to revisit our earlier aspirations and to look at opportunities to broaden Kazia’s pipeline. The task set by the Board was simple and challenging: find a drug candidate that excites us as much as paxalisib. After considering many, many opportunities, EVT801 has been the first candidate that has met the threshold we set ourselves. We feel that it represents first-class science, thanks in large part to the excellent work done by Evotec, its previous custodians. Its potential is enormous and we are fully committed to commencing a phase I study by the end of calendar 2021. CONCLUSION We conclude this financial year substantially further along our journey than we were twelve months ago. Our lead program, paxalisib, is in a pivotal study for registration and has already begun to generate commercial revenue by virtue of a regional licensing transaction. The legacy Cantrixil asset has been successfully partnered to Oasmia, a company that is ideally placed to take it forward, as we foreshadowed in last year’s Annual Report. And our pipeline has been broadened and immeasurably enriched by the addition of an exceptionally promising new asset, EVT801, for which we have extremely high hopes. All in all, it has been a year of remarkable progress, and a profound validation of Kazia’s efforts since 2016. As always, I would like to thank my fellow directors and our management team, led by our CEO, James Garner, for their first-class work in support of the company. We are grateful to our shareholders whose belief in the company underpins everything that we do. I look forward to reporting our further progress in the year ahead. Iain Ross Chairman of the Board 2021 AT A GLANCE CHAIRMAN’S LETTER CEO’S REPORT KEY MILESTONES PIPELINE REVIEW PARTNER FOR SUCCESS WORK WITH THE BEST #2 IN THE KAZIA STORY FINANCIAL REPORTS