ANNUAL REPORT 2023
ii CONTENTS CHAIRMAN AND CEO’S LETTER KEY MILESTONES INTRODUCTION TO KAZIA’S CEO PIPELINE REVIEW ENVIRONMENT, SOCIETY & GOVERNANCE FINANCIAL REPORTS 2 6 8 10 12 14 ASX:KZA | NASDAQ:KZIA
Kazia Theraputics Limited Annual Report 2023 1 The past year has been significant for Kazia Therapeutics, with considerable progress being made across our clinical programs and as a business. We have completed a full portfolio review and we will streamline the paxalisib clinical development program into three pillars; adult brain cancer, paediatric brain cancer and brain metastases. As targeted therapeutics, both paxalisib and EVT801 have the potential to benefit many patients around the world with PI3K pathways and VEGFR3 mutations respectively. kaziatherapeutics.com Chairman and CEO’s Letter Key Milestones Introduction to Kazia’s CEO Pipeline Review Environment, Society and Governance Financial Reports
2 CHAIRMAN AND CEO’S LETTER Dear fellow shareholder, The past year has been significant for Kazia Therapeutics, with considerable progress being made across our clinical programs and as a business. Before diving into more detail around the business and clinical developments of FY2023, it’s important to acknowledge some very significant changes to Kazia’s Board and leadership team. Firstly, I would like to recognise the impactful contribution of Iain Ross, whose insights and stewardship has led the Board as Chair for the past eight years. I also wish to recognise and thank my predecessor, Dr James Garner, for his work as Chief Executive Officer and Managing Director. The many milestones that James achieved in transforming Kazia were key to positioning our Company for the exciting advances that lie ahead of us, particularly in relation to our lead program, paxalisib, and in securing EVT801 as another key asset for the Company. I couldn’t be more excited about the opportunity to lead Kazia and to continue our clinical development progress towards commercialisation. Kazia further enhanced the Board of Directors with the appointment of Ms Ebru Davidson in June of this year. Ebru is a seasoned corporate lawyer and is General Counsel for QBiotics Group Limited. We are delighted Ebru has joined the Kazia Board and look forward to her expertise and insight strengthening and complementing our team. With a renewed and refreshed Board and management team, we are more committed than ever to driving the business and our clinical programs forward, and that work is well underway. Since stepping into the CEO role in May, we have completed a full portfolio review. As a result, we are streamlining the paxalisib clinical development program into three pillars; adult brain cancer, paediatric brain cancer and brain metastases. As targeted therapeutics, both paxalisib and EVT801 have the potential to benefit a number of patients with PI3K pathway and VEGFR3 mutations respectively. Many of the recently announced clinical studies will enrol patients with these mutations. PIPELINE PROGRESS Paxalisib has seen a strong year of clinical development. Promising data from several clinical trials have been released, some clinical trials have been expanded and new trials started to further advance the potential therapeutic application of paxalisib. In early July, we were delighted to announce that the U.S. Food and Drug Administration (FDA) granted paxalisb Fast Track Designation (FTD) for the treatment of solid tumour brain metastases harbouring PI3K pathway mutations in combination with radiation therapy, the second such designation for paxalisib, and another demonstration of the continual progress of our clinical programs. Promising interim data from an ongoing phase I clinical trial in paxalisb in which patients with brain metastases from a primary tumour are receiving paxalisib in combination with radiotherapy, presented by Dr Jonathan Yang at the 2022 Annual Conference on CNS Trials and Brain Metastases, was the basis for the FDA’s decision to grant this FTD. This trial, originally conducted at the Memorial Sloan Kettering Cancer Center (MSKCC) in New York, NY, had an initial cohort of nine patients, all of which responded positively to the treatment, paving the way for the trial expansion. The Miami Cancer Institute and Fred Hutch Cancer Centre in Seattle, WA have recently joined this trial and preliminary data from the expanded cohort is expected in early 2024. In September 2022, final data from the completed phase II study of paxalisib monotherapy for newly diagnosed glioblastoma patients with unmethylated MGMT promotor status was presented at the Annual Congress of the European Society for Medical Oncology (ESMO), held in Paris, France. Key findings from the study were summarized in an oral presentation by Professor John de Groot. The overall survival of 15.7 months in the intent-to-treat population compared favourably to historical controls of 12.7 months for patients receiving temozolomide, the existing FDA-approved standard of care, in this patient group. Key pharmacodynamic data was also presented which further supported brain penetration and biological activity of paxalisib. This data was expanded upon at the Annual Meeting of the Society for Neuro-Oncology (SNO), which was held in Tampa, FL, from 17-20 November 2022 by Professor Patrick Wen from the Dana Farber Cancer Institute. In addition, Professor Matt Dun of the Hunter Medical Research Institute at the University of Newcastle was invited to give a plenary session presentation on his research during the same meeting. Professor Dun’s research combines paxalisib and ONC201 (Chimerix, Inc) for the treatment of diffuse midline gliomas (DMGs), an aggressive group of childhood brain cancers which include diffuse intrinsic pontine glioma (DIPG), with the results highlighting the synergy between the two drugs. In March of this year, we announced the launch of a new phase II clinical collaboration with the Australian and New Zealand Children’s Haematology / Oncology PROGRESSING TREATMENT AREAS
Group (ANZCHOG) to investigate paxalisib in children with advanced solid tumours. OPTIMISE, as the study is known, will be the first clinical trial of paxalisib led out of Australia and will enrol children with PI3K pathway mutation cancers. Recruitment for the trial is expected to commence by the end of this calendar year, with 18 patients in an initial dose escalation cohort and up to 100 patients in a dose expansion cohort. The significance of the work Kazia is doing to treat cancers, and in particular DIPG and GBM, were recognised in late May when I was invited to attend the Cancer Moonshot Brain Cancers Forum at the White House. It was a privilege and honour to represent Kazia at the event, where strategies to improve outcomes for DIPG and GBM patients were discussed and progress in drug research and development was shared. Looking forward, the future is promising for paxalisib. As discussed in our last annual report, in August 2022, we were informed by The Global Coalition for Adaptive Research that paxalisib had not graduated to the second stage of the GBM AGILE pivotal study. We anticipate receiving the final data from the GBM AGILE pivotal study of paxalisib later this calendar year. We are also anticipating interim data from the ongoing PNOC022 study in DMG/DIPG paediatric patients in 2023. The enrolment of this global study has been extremely robust and we look forward to sharing the data when available. Paxalisib will also be evaluated in adult patients with recurrent/progressive isocitrate dehydrogenase (IDH) mutant grade 2 and 3 gliomas (G2/3 gliomas) in a phase II clinical study, LUMOS2, at the University of Sydney. This biomarker directed trial addresses an estimated 20% of the glioma patient population, with unmet needs for recurrent or progressive disease. The LUMOS2 study has multiple arms and is expected to enrol up to 76 patients at several Australian sites beginning in late 2023. Beyond paxalisib, EVT801, our small-molecule inhibitor of VEGFR3, continues in development. Preclinical data showed EVT801 to be active against a broad range of tumour types and demonstrated evidence of synergy with immune-oncology agents. We continue to enrol patients in our phase I dose finding study, with data anticipated by the end of this calendar year, which will identify the recommended dose of EVT801 for subsequent phase II trials, if approved. As part of the anticipated release of phase I data by the end of this calendar year, we also expect to report preliminary biomarker and clinical data focused on high-grade, serious ovarian cancer patients enrolled in this study. FINANCIAL PERFORMANCE Our paxalisib and EVT801 clinical programs continue to deliver promising data and advance us towards commercialisation. Over the last fiscal year, we have raised AU$13.3 million in new capital, permitting us to advance the clinical milestones set out above. Our total assets were $28m, compared to $35m at 30 June 2022. Prudent management of our cash burn over the last year sees our cash balance at $5.2m as at 30 June 2023, compared to $7.4m at the end of FY22. FUNDING In February 2023 Kazia announced the successful conclusion of an equity financing, and we remain extremely grateful for the support of our shareholders. The placement to professional and sophisticated investors and the associated Share Purchase Plan for eligible shareholders raised an aggregate amount of A$7.1 million in new capital for the Company. The ATM facility draw downs during the year totaled A$6.2 million. The total proceeds of $A13.3 million from financing during the year have positioned the Company to drive towards important catalysts during calendar year 2023. This is a critical year for Kazia, with data read-outs expected across our clinical trial programs, including final data from the GBM AGILE pivotal study of paxalisib in glioblastoma anticipated by the end of this calendar year. BOARD AND MANAGMENT TRANSITIONS I would like to recognise and thank the Board and, my Kazia colleagues for their continued diligence and perseverance as we drive our clinical programs towards their full potential to improve the lives of patients. Their support, along with your support as a shareholder, has made my transition into the CEO role a seamless one. It is your commitment to the Company that enables us to take paxalisib and EVT801 forward through their development and clinical trials. We continue to believe the potential of our portfolio remains significant, and as we draw closer to realising that potential, all of us at Kazia remain wholly committed to delivering on your belief in the important and life-changing work we are doing. Dr John Friend Chief Executive Officer, Managing Director and Interim Chairman of Board 3 Kazia Theraputics Limited Annual Report 2023 Chairman and CEO’s Letter Key Milestones Introduction to Kazia’s CEO Pipeline Review Environment, Society and Governance Financial Reports
4 KEY MILESTONES HIGHLIGHTS – 2022/2023 The United States Food and Drug Administration (FDA) awards Rare Pediatric Disease Designation (RPDD) to paxalisib for the treatment of atypical teratoid/ rhabdoid tumours (AT/ RT), a rare and highly aggressive childhood brain cancer. Kazia announces launch of its new Scientific Advisory Board (SAB), consisting of four distinguished clinicians and scientists with expertise in the development of innovative therapies for brain cancer. The Global Coalition for Adaptive Research (GCAR) advises Kazia that the first stage of the paxalisib arm of the GBM AGILE pivotal study has completed recruitment. The treatment arm did not meet predefined criteria for continuing to a second stage, and patients enrolled in the first stage will continue on treatment as per protocol, and in follow-up, until completion of the final analysis. Promising new interim data released from an ongoing phase I clinical trial of paxalisib in combination with radiotherapy for the treatment of brain metastases, sponsored by Memorial Sloan Kettering Cancer Center in New York, NY. Final data from the completed phase II study of paxalisib monotherapy for newly diagnosed glioblastoma (GBM) patients with unmethylated MGMT promotor status was presented at the annual congress of the European Society for Medical Oncology (ESMO), held in Paris, France. The ongoing phase II study of paxalisib for the treatment of diffuse intrinsic pontine glioma (DIPG) and other diffuse midline gliomas (DMGs), sponsored by the Pacific Pediatric Neuro-Oncology Consortium (PNOC), opens in two Australian sites. Paxalisib demonstrates signals of activity as a monotherapy and in combination with MEK and BRAF inhibitors in preclinical models of melanoma according to new data from an ongoing research collaboration with the Huntsman Cancer Institute at the University of Utah in Salt Lake City, UT. Professor Matt Dun of the Hunter Medical Research Institute at the University of Newcastle gives an oral presentation at the Society for Neuro-Oncology annual meeting in Tampa, FL, on his research evaluating ONC201 with paxalisib to treat DMGs. Preclinical data for EVT801 published in Cancer Research Communications: “Targeting Tumor Angiogenesis with the Selective VEGFR-3 Inhibitor EVT801 in Combination with Cancer Immunotherapy”. Kazia enters a collaboration with QIMR Berghofer Medical Research Institute, one of Australia’s foremost cancer research centres, to explore novel uses of paxalisib in solid tumours. JUL 22 AUG 22 SEP 22 OCT 22 NOV 22 DEC 22
5 Kazia Theraputics Limited Annual Report 2023 Closure of an equity financing, with a total of A$7.106 million raised from a placement to professional and sophisticated investors and the associated Share Purchase Plan for eligible shareholders. Kazia enters into a collaboration with the Australian and New Zealand Children’s Haematology / Oncology Group (ANZCHOG) for the OPTIMISE phase II clinical study which will examine paxalisib in children with advanced solid tumours, including brain tumours. New data for both paxalisib and EVT801 presented at the Annual Meeting of the American Association for Cancer Research (AACR). Dr John Friend appointed Chief Executive Officer (CEO) following the resignation of Dr James Garner as CEO and Managing Director. Dr John Friend participates in the Cancer Moonshot Brain Cancers Forum on GBM and DIPG at the White House in Washington, DC, USA. Highly experienced corporate lawyer Ms Ebru Davidson appointed to the Board as Non-Executive Director, bringing strong governance insights on corporate legal strategy and risk management. Kazia announces its support of the University of Sydney on a molecularlyguided phase II clinical study, LUMOS2, to examine paxalisib in adult patients with recurrent/ progressive isocitrate dehydrogenase (IDH) mutant grade 2 and 3 gliomas (G2/3 gliomas). The study will be sponsored by the University of Sydney, and coordinated by NHMRC Clinical Trials Centre, University of Sydney, in collaboration with COGNO (CoOperative Trials Group for NeuroOncology). FEB 23 MAR 23 APR 23 MAY 23 JUN 23 JUN 23 Chairman and CEO’s Letter Key Milestones Introduction to Kazia’s CEO Pipeline Review Environment, Society and Governance Financial Reports
INTRODUCING KAZIA’S NEW CEO A seasoned leader in the biotech industry, Dr John Friend originally joined Kazia Therapeutics as Chief Medical Officer in November 2021. Having made an enormous contribution to the company during this time, John was the natural choice to succeed Dr James Garner as Chief Executive Officer in May 2023. With a deep understanding of the biotech landscape, over 25 years of scientific expertise, and a passion for transforming healthcare solutions, John says it has been a seamless transition from CMO into the CEO role. “I was part of all business discussions from day one when I joined Kazia so the transition has been a smooth one. A lot of what I do now as CEO is similar to my previous role with the company, including developing the business strategy, driving the clinical programs, as well as building and managing relationships with key stakeholders across all areas of the business,” he said. For John, the elevation to the CEO role at Kazia marked a natural next step in what has been a distinguished career in the medical and biotech sectors. The medical field runs in the Friend family, with John’s father working for a multinational pharmaceutical company, and his wife, Dr. Kimberly Raymond, a practicing physician. After securing his medical degree and speciality training, John practiced medicine in North Carolina, with his practice spanning from general care, through to obstetrics, minor surgery, and beyond. Following a move to Chicago to work for a large pharmaceutical company, John continued his career in the pharma and biotech industries, working in a variety of roles, including building business units at multiple pharmaceutical companies in the United States. During this time, John discovered a passion for paediatric drug development, which continues to flow through to his work today at Kazia. His philosophy stems from putting patients at the centre of everything Kazia does and he is driven by the goal of improving patients’ lives by developing innovative therapies and treatment solutions. “We’ve not focused enough resources and effort on the paediatric population with regards to drug development and clinical trials, especially in the area of cancer. There is such a huge unmet need, and I am deeply passionate about being a part of developing new therapies for children suffering from rare and devastating cancers. To be able to give hope and promise to those children and families effected by cancer is incredibly motivating.” DR JOHN FRIEND 6
John also understands the importance of collaboration with healthcare professionals, patient advocacy groups, and regulatory agencies to ensure the accessibility, safety and efficacy of Kazia’s therapies. “The medical community is built around collaboration. Be it through drug development, clinical trials, and ultimately in bringing treatments to the patients who need it, working closely with other healthcare professionals, regulators, and patient advocates is vital. “Collaboration has been at the centre of my career, so I really appreciate how important it is that we all work together to deliver the best outcome for patients. Of course, it’s critical that all of these aspects are supported by good governance, otherwise patient outcomes may be compromised.” When John joined Kazia as Chief Medical Officer in 2021, he was driven by the exciting and extremely promising science of Kazia’s clinical programs. “I was super excited about the people working within the company and the opportunity to help grow the business. But what excited me most of all was the strong science behind Kazia’s drug candidates – paxalisib and EVT801. Since joining I haven’t looked back and I’ve never had a more fulfilling job in my entire career.” John also emphasises the incredible calibre of Kazia’s people as being central to him joining the business. “It’s that gut feeling. You get the sense that these are the right people here at Kazia, that there are a lot of really passionate and talented leaders, as well as individual contributors who are really working hard to deliver results for both patients and shareholders. The team is the best of the best.” A constant reminder of the importance of the work John and the team at Kazia are doing comes from the moving feedback he regularly receives from patients, their families, and their physicians. “Never have I been part of a company whereby I have researchers and physicians, and a lot of times families and parents, reaching out to me on a weekly basis, thanking me for what Kazia is doing. It is an incredibly powerful and potent reminder of why the work we’re doing here is so important, and the incredible potential it holds for so many people.” Outside of work, John is just as passionate about his family and his hobbies. John, his wife Kimberly and their four children all share a love of sports, from soccer, crew, taekwondo to track and field. “I have done triathlons for around 20 years, but now I focus more on activities that are kinder to my knees! We are all about outdoor activities and love spending time together as a family in nature.” Looking ahead, John is excited about the immense potential Kazia’s treatments may offer patients and their families one day. “Hearing the feedback that we do from patients and their families really reinforces the importance of what we are doing. Paxalisib now has two FDA Fast Track Designations, underscoring the momentum of our clinical programs. Between paxalisib and EVT801, we have multiple clinical programs progressing well, with further milestones in terms of clinical data expected to be released soon. There is such a huge potential benefit for patients, and we’re excited about the life-changing impact Kazia’s work could have as we continue to push our clinical programs forward and work to bring paxalisib and EVT801 to market.” “We’ve not focused enough resources and effort on the paediatric population with regards to drug development and clinical trials, especially in the area of cancer. There is such a huge unmet need, and I am deeply passionate about being a part of developing new therapies for children suffering from rare and devastating cancers." Chairman and CEO’s Letter Key Milestones Introduction to Kazia’s CEO Pipeline Review Environment, Society and Governance Financial Reports 7
8 PIPELINE REVIEW ADVANCING THE CLINICAL PIPELINE PAXALISIB Kazia’s lead program is paxalisib, an investigational brain-penetrant inhibitor of the PI3K / Akt / mTOR pathway, that was specifically designed to treat brain cancer. Brain cancers account for about 15% of paediatric cancers and are the second most common type of cancer in children whereas over 300,000 adults are diagnosed every year with primary brain cancer. We believe that as a brain-penetrant therapy, paxalisib, by design, has the potential to be an integral component of precision medicine for brain tumours. Many of the ongoing trials are evaluating paxalisib in patients who have PI3K pathway mutations. Enrolling paxalisib clinical trials with patients who have the potential to have the greatest response and benefits may accelerate clinical trial recruitment and time to potential regulatory approval. The overall clinical development strategy for paxalisib has been crafted into three core pillars: • Treatment for adult brain cancer: 4 active trials over 3 different patient populations • Treatment for paediatric brain cancer: 2 active and one recently completed trial • Treatment of brain metastasis of solid tumours: 3 active trials Paxalisib in Adult Brain Cancer Glioblastoma (GBM) is a fast-growing and aggressive brain tumour. Paxalisib is being developed primarily for the ~65% of newly-diagnosed unmethylated GBM patients who generally do not respond to chemotherapy with temozolomide. At two global conferences in 2023, we presented final data from a phase II study in newly diagnosed GBM patients which reported promising signals of clinical activity with paxalisib. GBM AGILE Pivotal study Our GBM AGILE (Glioblastoma Adaptive Global Innovative Learning Environment) study is evaluating investigational therapies for patients with newly diagnosed and recurrent GBM. The goal of the study is to expedite the approval of new drugs for this disease. Final data is expected from the GBM AGILE pivotal study of paxalisib in GBM in 2H CY2023. Depending on the results of the study, Kazia may use such data to support submission of a new drug application (NDA) for marketing authorisation to the U.S. Food and Drug Administration (FDA). LUMOS2 phase II study Kazia is supporting the University of Sydney on a molecularly guided phase II clinical study, LUMOS2, evaluating paxalisib in adult patients with recurrent/ progressive isocitrate dehydrogenase (IDH) mutant grade 2 and 3 gliomas (G2/3 gliomas). The LUMOS2 study is sponsored by the University of Sydney with a goal of investigating targeted therapeutics in these patients who have limited options. The study is expected to enrol up to 76 patients with PI3K pathway mutations and will be a multi-centre study at several Australian sites, with the potential to expand internationally. We anticipate enrolment to commence in 4Q CY2023. Paxalisib with metformin and ketogenic diet in GBM This clinical study, which is being sponsored by and being conducted at Weill Medical College of Cornell University in the United States is exploring the use of paxalisib in combination with metformin and a ketogenetic diet for patients with GBM. A significant and growing body of research has suggested the potential for ketogenic diets to provide benefit in a range of tumour types, including GBM. The study is actively enrolling in two cohorts of GBM patients, and we anticipate providing an update to this study in 4Q CY2023. Primary CNS lymphoma (PCNSL) In June 2021, Kazia announced that the phase II investigator-initiated study of paxalisib in relapsed/ refractory patients with primary CNS lymphoma had commenced recruitment at the Dana Farber Cancer Institute. As a brain penetrant PI3K inhibitor in development for PCNSL, we believe paxalisib has unique potential in the form of this disease that occurs within the central nervous system, and we anticipate providing a clinical update to this study in 2H CY2023.
9 Kazia Theraputics Limited Annual Report 2023 Paxalisib in Paediatric Brain Cancer Brain cancer is the most common malignancy of childhood cancer and represents about one-third of all childhood cancer deaths. The PI3K/AKT/mTOR pathway is frequently upregulated in paediatric cancers and therefore therapeutics that target those pathways could lead to long-awaited regulatory approvals. Diffuse intrinsic pontine glioma (DIPG) is the most common of a group of childhood brain cancers known as diffuse midline gliomas (DMGs). The disease currently has no FDA approved drug treatments and average survival from diagnosis is approximately 10 months. Kazia recognizes the critical importance and immense unmet need and is exploring paxalisib in two common forms of childhood cancer -DMG and advanced childhood cancer with PI3K/mTOR mutations. PNOC022 phase II study The PNOC022 phase II study is sponsored by the Pacific Pediatric Neuro-Oncology Consortium (PNOC), an international consortium focused on the development of novel combination therapies. It is an adaptive platform study that is examining paxalisib in combination with ONC201. The study enrolment has been progressing well since opening in late 2021 and the study teams at PNOC and University of California, San Francisco (UCSF) are analysing interim data for the study, which is expected to be reported in 2H CY2023. OPTIMISE phase II study Kazia entered into a collaboration with the Australian and New Zealand Children’s Haematology / Oncology Group (ANZCHOG) in March 2023 for a phase II clinical study examining paxalisib as a targeted therapeutic in children with advanced solid tumours, including brain tumours. The OPTIMISE phase II study is the first Australian-led clinical trial of paxalisib and will combine paxalisib with chemotherapy for children with PI3K pathway mutations. Enrolment for this study is expected to commence in 4Q CY2023. St Jude Children’s Research Hospital phase I study The objective of this phase I investigator study in children with Diffuse Intrinsic Pontine Glioma (DIPG) to establish a maximum tolerated dose (MTD) was presented in November 2020 at the SNO Annual Meeting. The paediatric MTD of 27 mg/m2 was established and the safety profile and pharmacokinetics were highly consistent with the adult data. The long term survival follow-up was completed this year and will be incorporated into the clinical study report. Paxalisib in Brain Metastases Brain metastases occur when cancer cells spread from their original site to the brain, and treatment options are very limited. Brain metastases are a common complication of many tumours, but are particularly common in breast cancer, lung cancer, and melanoma. Brain metastases are typically highly resistant to treatment and survival rates are generally low. Radiotherapy is a common treatment modality for brain metastases. Despite some reported efficacy of radiotherapy, patients typically become resistant over time, and repeat courses of radiotherapy can be associated with significant neurological toxicity. Additionally, PI3K pathway mutations are common in brain metastasis and are frequently associated with a poor prognosis. Paxalisib in combination with radiotherapy Paxalisib is being studied in combination with radiotherapy in an ongoing phase I clinical study for the treatment of patients with brain metastases who harbour PI3K pathway mutations, sponsored by Memorial Sloan Kettering Cancer Center (MSKCC) in New York, NY. Encouraging safety and clinical activity from this study was presented by the principal investigator, Dr. Jonathan Yang, in August 2022 at the 2022 Annual Conference on CNS Clinical Trials and Brain Metastases, jointly organized by the Society for Neuro-Oncology and the American Society for Clinical Oncology held in Toronto, Canada. The expansion cohort is currently being enrolled and two world- renowned cancer centres have joined MSKCC in this study: Miami Cancer Institute and Fred Hutchinson Cancer Center in Seattle, WA. Preliminary data from the expansion cohort is anticipated by 1Q CY2024. Chairman and CEO’s Letter Key Milestones Introduction to Kazia’s CEO Pipeline Review Environment, Society and Governance Financial Reports
10 PIPELINE REVIEW Fast Track Designation Kazia received Fast Track Designation (FTD) from the FDA in July 2023 for paxalisib for the treatment of solid tumour brain metastases harbouring PI3K pathway mutations, in combination with radiotherapy, based on the promising interim clinical data from the MSKCC phase 1 trial. Introduced under the FDA Modernization Act (1997), FTD may be awarded by FDA to investigational drugs which are intended to treat a serious or life-threatening condition, and which fill an unmet medical need. FTD must be requested by the sponsor company and must be accompanied by a detailed review of both preclinical and clinical data. To be awarded FTD, drugs must generally be able to show some potential advantage over existing therapies, either in terms of safety or efficacy. A key benefit of FTD is enhanced access to the FDA, with regular and more frequent opportunities for consultation and discussion. In addition, drugs with FTD may be eligible for Accelerated Approval, in which a new medicine is approved based on a surrogate endpoint, and for Priority Review, in which the standard 12-month review process may be reduced to eight months. Drugs with FTD may also receive a ‘rolling review’ of their NDA submission, in which sections are submitted for review as they become available, potentially expediting the approval process. Genomically Guided phase II study Sponsored by the Alliance for Clinical Trials in Oncology, paxalisib is one of the targeted therapeutics being investigated in this global, multi-drug study (NCT03994796) in patients with brain metastases. Patients with PI3K pathway mutations will be enrolled in three cohorts, breast cancer, non-small cell lung cancer (NSCLC) and other. The enrolment is ongoing for all cohorts including the expansion stage of the study in breast cancer brain metastases patients. HER2+ Breast cancer brain metastases phase II study A phase II investigator initiated clinical study is ongoing at Dana-Farber Cancer Institute exploring paxalisib in combination with trastuzumab (NCT03765983) in patients with brain metastases originating from HER2+ breast cancer. The enrolment is ongoing and we anticipate providing a study update later in the calendar year. EVT801 Kazia is also developing EVT801, a small molecule targeted VEGFR3 inhibitor. Preclinical data showed EVT801 to be active against a broad range of tumour types and has shown evidence of synergy with immunooncology agents. Over the course of the year, these preclinical data have been presented at a number of global conferences, including conferences held by the American Association for Cancer Research and the European Society for Medical Oncology. We anticipate providing additional EVT801 updates and presentations of interim data at medical conferences in 2H CY2023. R&D PIPELINE Paxalisib in Metastatic Melanoma Data from an ongoing research collaboration with the Huntsman Cancer Institute at the University of Utah in Salt Lake City, UT has shown paxalisib to be active in vitro and in vivo against a range of preclinical models of metastatic melanoma, the most aggressive form of skin cancer. Data suggesting substantial activity for paxalisib as monotherapy in preclinical mouse models was presented at the 19th International Congress of the Society for Melanoma Research, held in Edinburgh, Scotland, in 2022. “This is among the most promising single agent data that we have seen in our research,” commented Professor Sheri Holmen, lead investigator on the project. “Despite the widespread adoption of immunotherapy in recent years, there remains substantial unmet need in melanoma, particularly in those patients who develop brain metastases. We look forward to exploring the potential of paxalisib further in our research, and hopefully seeing the drug transition to a clinical trial in the near future.” Paxalisib in Solid Tumours Kazia’s collaboration with QIMR Berghofer Medical Research Institute, one of Australia’s foremost cancer research centres, is currently exploring novel uses of paxalisib in solid tumours. The collaboration is based on research that identified an entirely separate effect of PI3K inhibition: as a modulator of the immune microenvironment within and around the tumour. Administration of PI3K inhibitors such as paxalisib, at doses and frequencies different to those conventionally used, appears to activate the immune system in the tumour, making it more susceptive to immunotherapy. We believe this approach could therefore open up an important opportunity for paxalisib in combination with drugs such as Keytruda® (pembrolizumab, Merck) and Opdivo® (nivolumab, Bristol Myers Squibb) for the treatment of diseases such as breast cancer and lung cancer. The collaboration is ongoing and will build on initial research that has already led to the filing of a provisional patent last year, including the use of paxalisib as an immune modulator in the treatment of diseases such as breast cancer.
BROAD CLINICAL PROGRAM ONGOING SPONSOR PHASE INDICATION REGISTRATION PAXALISIB Global Coalition for Adaptive Research II / III Glioblastoma NCT03970447 Weill Medical College of Cornell II Glioblastoma (with metformin and ketogenesis) NCT05183204 Alliance for Clinical Trials in Oncology II Brain metastases NCT03994796 Dana-Farber Cancer Institute II Breast cancer brain metastases (with Herceptin) NCT03765983 Dana-Farber Cancer Institute II Primary CNS lymphoma NCT04906096 University of Sydney I/II Grade 2/3 IDH-mutant adult gliomas TBD Pacific Pediatric Neuro-Oncology Consortium II DIPG (childhood brain cancer) NCT05009992 Australia & New Zealand Children’s Oncology Group II Advanced solid tumours in children TBD St Jude Children’s Research Hospital I DIPG NCT03696355 Memorial Sloan Kettering Cancer Center I Brain metastases (with radiotherapy) NCT04192981 EVT801 Kazia Therapeutics I Advanced solid tumours NCT05114668 CLINICAL DEVELOPMENT OVERVIEW 11 Kazia Theraputics Limited Annual Report 2023 Paxalisib Investigational, small molecule, potent, brain-penetrant inhibitor of PI3K / mTOR licensed from: PRECLINICLE PHASE 1 PHASE 2 PHASE 3 MARKET Anticipated Glioblastoma & IDH-mutant glioma Common primary brain cancer Final Data 2H CY23 DIPG/Advanced Solid Tumors Childhood brain cancer Initial Data 3Q CY23 AT/RT Childhood brain cancer Further Data 1H CY23 Brain Metastases Cancer that spreads to brain from elsewhere Further Data CY23 Primary CNS Lymphoma Form of non-Hodgkin’s lymphoma Initial Data CY23 Cancers outside the CNS Melanoma; TNBC, Ovarian Further Data CY23 EVT801 Investigational, small molecule, highly specific inhibitor of VEGFR3 licensed from: Advanced Solid Tumors Patients w/ highly treatment-resistant cancer Initial Data 2H CY23 3 studies 3 studies 3 studies 3 studies IDH: Isocitrate dehydrogenase, DIPG: Diffuse Intrinsic Pontine Glioma, AT/RT: Atypical Teratoid Rhabdoid Tumor, CNS: central nervous system, TNBC: triple negative breast cancer, VEGFR3: vascular endothelial growth factor receptor 3. Chairman and CEO’s Letter Key Milestones Introduction to Kazia’s CEO Pipeline Review Environment, Society and Governance Financial Reports
12 OUR CORPORATE RESPONSIBILITY ENVIRONMENT Climate Change Kazia is mindful of its impact on the environment and strives to reduce its carbon footprint. The Kazia business model is based on outsourcing, and we are working with major partners who are focused on reducing climate change and enhancing climate protection. Our major partner Evotec, who is running our EVT-801 trial, is a signatory to one of the most ambitious actions related to climate mitigation, the Science Based Targets initiative (SBTi). This implies to set carbon reduction targets aligned with the goals of the Paris Agreement: to limit global warming to well below 2°C above pre-industrial levels and pursue efforts to limit warming to 1.5°C and is determined to become net carbon neutral by 2050. Evotec is implementing an innovative, web-based platform to collect environmental, social and governance indicators. This will allow them to identify sustainability-related risks at an early stage and derive appropriate measures. In this way, the large number of projects that Evotec have already implemented in the area of environmental protection and resource conservation can also be systematically mapped in the future. This includes, among other things, the procurement of green electricity and the conversion of office paper to 100 % recycled material. Sustainability Kazia head office is located in one of the most sustainable carbon neutral commercial precincts in the world. The serviced office is located in a building with a five‑star NABERS energy rating. ENVIRONMENT, SOCIETY & GOVERNANCE Countries we treat compassionate patients in: Australia, USA, Israel, Spain, Switzerland, England and Ireland SOCIETY Community Contribution Our compassionate program has treated over 40 patients in 7 countries since its inception in 2018. 40 PATIENTS IN 7 COUNTRIES SINCE 2018
13 Gender Equity Kazia's board welcomed it's first female member in 2023. MEN WOMEN GOVERNANCE Kazia strives to be a good corporate citizen. As a company listed on both ASX and NASDAQ, we respect and comply with the governance frameworks of both jurisdictions. When formulating and implementing our policies, processes and practices, we embed the E&S considerations into our decisions. Board members at 30 June Total Company Management at 30 June 40% 60% 2022 2023 44% 54% 2023 2022 2023 2022 Kazia Theraputics Limited Annual Report 2023 Chairman and CEO’s Letter Key Milestones Introduction to Kazia’s CEO Pipeline Review Environment, Society and Governance Financial Reports
Kazia Theraputics Limited Annual Report 2023 14 ANNUAL REPORT 2023 FINANCIAL REPORTS GENERAL INFORMATION The financial statements cover Kazia Therapeutics Limited as a consolidated entity consisting of Kazia Therapeutics Limited and the entities it controlled at the end of or during the year. The financial statements are presented in Australian dollars, which is Kazia Therapeutics Limited’s functional and presentation currency. Kazia Therapeutics Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business is: Three International Towers, Level 24, 300 Barangaroo Avenue Sydney NSW 2000 A description of the nature of the consolidated entity’s operations and its principal activities are included in the Directors’ report, which is not part of the financial statements. The financial statements were authorised for issue, in accordance with a resolution of directors, on 31 August 2023. The directors have the power to amend and reissue the financial statements.
15 Kazia Theraputics Limited Annual Report 2023 Page Director’s Report 2 Auditor’s independence declaration 27 Statement of profit or loss and other comprehensive income 28 Statement of financial position 29 Statement of changes in equity 30 Statement of cash flows 32 Notes to the financial statements 33 Directors’ declaration 63 Independent auditor’s report to the members of Kazia Therapeutics Limited 64 Shareholder information 69 Environmental, social and governance (ESG) report 70 Corporate directory iii CONTENTS Chairman and CEO’s Letter Key Milestones Introduction to Kazia’s CEO Pipeline Review Environment, Society and Governance Financial Reports Page Director’s Report 16 Auditor’s independent declaration 41 Statement of profit or loss and other comprehensive income 42 Statement of financial position 43 Statement of changes in equity 44 Statement of cash flows 46 Notes to the financial statements 47 Directors’ declaration 78 Independent auditor’s report to the members of Kazia Therapeutics Li ited 79 Shareholder information 85 Corporate directory iii CONTENTS
16 DIRECTORS’ REPORT The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the ‘consolidated entity’) consisting of Kazia Therapeutics Limited (referred to hereafter as the ‘company’ or ‘parent entity’) and the entities it controlled at the end of, or during, the year ended 30 June 2023. Directors The following persons were Directors of Kazia Therapeutics Limited (ABN 37 063 259 754) during the whole of the financial year and up to the date of this report, unless otherwise stated: Dr John Friend (Appointed 1 August 2023 - Managing Director) (Appointed 11 August 2023 - Interim Chairman) Iain Ross (Resigned 11 August 2023) Bryce Carmine Steven Coffey James Garner (1 July 2022 to 30 April 2023) Ebru Davidson (Appointed 5 June 2023) Principal activities During the financial year the principal continuing activity of the consolidated entity consisted of pharmaceutical research and development with a view to commercialising the results of our research through license transactions or other means. Dividends There were no dividends paid, recommended or declared during the current or previous financial year. Review of operations The loss for the consolidated entity after providing for income tax amounted to $20,465,180 (30 June 2022: ($25,014,055)). The attached financial statements detail the performance and financial position of the consolidated entity for the year ended 30 June 2023. Cash resources At 30 June 2023, the consolidated entity had total funds, comprising cash at bank and on hand of A$5,241,197 (2022 A$7,361,112). Going concern The entity is not generating revenues and is not expected to do so in the foreseeable future. There is material uncertainty which may cast significant doubt on whether the the consolidated entity will continue as a going concern. The Directors have considered this to be appropriate. During the month of July 2023 through 7 August 2023, the Company raised total proceeds for the period of US$1,019,769 (A$1,540,918) using the ATM facility and continues to seek additional funding sources both in Australia and overseas. Refer to ‘Going concern’ in note 2 to the financial statements and the Risks Related to Our Financial Condition and Capital Requirement section in the Director’s report for further details. Subject to the matters disclosed under Going concern in Note 2, the directors have reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable. Rounding of amounts The Company is a type of Company referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191 and therefore the amounts contained in this report and in the financial report have been rounded to the nearest dollar.
17 Kazia Theraputics Limited Annual Report 2023 Chairman and CEO’s Letter Key Milestones Introduction to Kazia’s CEO Pipeline Review Environment, Society and Governance Financial Reports Kazia Therapeutics Limited Clinical Pipeline Overview Paxalisib Kazia’s lead program is paxalisib, an investigational brain-penetrant inhibitor of the PI3K / Akt / mTOR pathway, that was specifically designed to treat brain cancer. Brain cancers account for about 15% of paediatric cancers and are the second most common type of cancer in children whereas over 300,000 adults are diagnosed every year with primary brain cancer. It is important to recognize that paxalisib, by design, has the potential to be an integral component to precision medicine. As a targeted therapeutic, we have focused many of the ongoing trials to evaluate paxalisib in patients who have PI3K pathway mutations. Enriching clinical trials with patients who have the potential to have the greatest response and benefits accelerates clinical trial recruitment and time to commercialization. The overall clinical development strategy for paxalisib has been crafted into three core pillars. Within the adult brain cancer pillar, we have four ongoing clinical studies across three different patient populations. There are two actively recruiting clinical studies and one recently completed study in the paediatric brain cancer pillar. Within the brain metastases pillar, there are three ongoing studies. Paxalisib in Adult Brain Cancer Glioblastoma (GBM) is a fast-growing and aggressive brain tumour. Paxalisib is being developed primarily for the ~65% of newly-diagnosed unmethylated GBM patients who generally do not respond to existing chemotherapy with temozolomide. The final data from a phase II study in newly diagnosed GBM patients reported promising signals of clinical activity with paxalisib and was presented at two global conferences in 2023. GBM AGILE Pivotal study GBM AGILE (Glioblastoma Adaptive Global Innovative Learning Environment) evaluates investigational therapies for patients with newly diagnosed and recurrent GBM. The goal is to expedite the approval of new drugs for this disease. Kazia announced on 1 August 2022 that the company had been advised by GCAR that the first stage of the paxalisib arm had completed recruitment. The treatment arm did not meet pre-defined criteria for continuing to a second stage, and patients enrolled in the first stage of the paxalisib arm will therefore continue on treatment as per protocol, and in follow-up, until completion of the final analysis, which we anticipate receiving in 2H CY2023. Depending on the results of the study, Kazia may use such data to support submission of a new drug application for marketing authorisation to the FDA. LUMOS2 phase II study Kazia is supporting the University of Sydney on a molecularly guided phase II clinical study evaluating paxalisib in adult patients with recurrent/progressive isocitrate dehydrogenase (IDH) mutant grade 2 and 3 gliomas (G2/3 gliomas). The LUMOS2 study is sponsored by the University of Sydney with a goal of investigating targeted therapeutics in these patients who have limited options. The study is expected to enrol up to 76 patients with PI3K pathway mutations and will be a multicentre study at several Australian sites, with the potential to expand internationally. We anticipate enrolment to commence in 4Q23. Weill Cornell Medicine The clinical study at Weill Medical College of Cornell University in the United States, is exploring the use of paxalisib in combination with metformin and a ketogenic diet for patients with glioblastoma. A significant and growing body of research has suggested the potential for ketogenic diets to provide benefit in a range of tumour types, including glioblastoma. The study is actively enrolling in two cohorts of GBM patients, and we anticipate providing an update to this study in 4Q CY2023. Dana Farber Cancer Institute (DFCI) In June 2021, Kazia announced that the phase II study of paxalisib in relapsed/refractory patients with primary CNS lymphoma at DFCI had commenced recruitment. As a brain penetrant PI3K inhibitor in mainstream development, paxalisib has unique potential in the form of this disease that occurs within the central nervous system and we anticipate providing a clinical update to this study in 2H23. Paxalisib in Paediatric Brain Cancer Brain cancer is the most common malignancy of childhood and represents about one third of all childhood cancer deaths. The PI3K/AKT/mTOR pathway is frequently upregulated in paediatric cancers and therefore therapeutics that target those pathways could lead to well long-awaited regulatory approvals. Diffuse intrinsic pontine glioma (DIPG) is the most common of a group of childhood brain cancers known as diffuse midline gliomas (DMGs). The disease has no FDA approved drug treatments and average survival from diagnosis is approximately 10 months. Kazia recognizes the critical importance and immense unmet need and is aggressively exploring paxalisib in two common forms of childhood cancer - Diffuse Midline Gliomas (DMG, DIPG) and Advanced Childhood Cancer with PI3K/mTOR mutations. PNOC022 phase II study The PNOC022 study is sponsored by the Pacific Pediatric Neuro-Oncology Consortium (PNOC), an international consortium focused on the development of novel combination therapies. It is an adaptive platform study that is examining paxalisib in combination with ONC201. The study enrolment has been very robust since opening in late 2021 and the study team at PNOC and University of California, San Francisco (UCSF) are preparing data for interim analysis, which is expected in 2H CY2023.
18 DIRECTORS’ REPORT OPTIMISE phase II study Kazia entered into a collaboration with the Australian and New Zealand Children’s Haematology / Oncology Group (ANZCHOG) in March 2023 for a phase II clinical study examining paxalisib as a targeted therapeutic in children with advanced solid tumours, including brain tumours. The study, named OPTIMISE, is the first Australian-led clinical trial of paxalisib and will combine the drug with chemotherapy for children with PI3K pathway mutations in their tumours. Enrolment for this study is expected to commence in 4Q CY2023. Paxalisib in Brain Metastases Brain metastases occur when cancer cells spread from their original site to the brain, and treatment options are very limited. Brain metastases are a common complication of many tumours, but are particularly common in breast cancer, lung cancer, and melanoma and account for 67% - 89% of all cancers. Brain metastases are typically highly resistant to treatment and survival rates are generally low. Radiotherapy is a common treatment modality for brain metastases. Despite some efficacy, patients typically become resistant over time, and repeat courses of radiotherapy can be associated with significant neurological toxicity. Additionally, PI3K pathway mutations are common in brain metastasis and are frequently associated with a worse prognosis. MSKCC phase I clinical study Paxalisib is the subject of an ongoing phase I clinical study in combination with radiotherapy for the treatment of patients with brain metastases who harbour PI3K pathway mutations, sponsored by Memorial Sloan Kettering Cancer Center in New York, NY. Encouraging safety and clinical activity from this study was presented by the lead investigator, Dr. Jonathan Yang in August 2022 at the ASCO/SNO CNS meeting held in Toronto, Canada. The phase I expansion cohort is currently enrolling and two world- renowned cancer centres have joined MSKCC in this study: Miami Cancer Institute and Fred Hutchinson Cancer Center in Seattle, WA. Preliminary data from the expansion cohort is anticipated by 1Q CY2024. Fast Track Designation We were also very pleased to receive Fast Track Designation (FTD) by the United States Food and Drug Administration (FDA) in July 2023 for paxalisib for the treatment of solid tumour brain metastases harbouring PI3K pathway mutations in combination with radiation therapy, based on the promising clinical data from an interim analysis of the MSKCC phase 1 trial. To be awarded FTD, drugs must generally be able to show some potential advantage over existing therapies, either in terms of safety or efficacy. The key benefits of FTD comprise enhanced access to FDA, with regular and more frequent opportunities for consultation and discussion. In addition, drugs with FTD may be eligible for Accelerated Approval, in which a new medicine is approved based on a surrogate endpoint, and Priority Review, in which the standard 12-month review process may be reduced to eight months. Drugs with FTD may also receive a ‘rolling review’ of their NDA submission, in which sections are submitted for review as they become available, potentially expediting the approval process. EVT801 Kazia is also developing EVT801, a small molecule targeted therapeutic VEGFR3 inhibitor. Preclinical data showed EVT801 to be active against a broad range of tumour types and has shown evidence of synergy with immuno-oncology agents. Over the course of the year, this clinical study and preclinical EVT801 data has been presented at a number of global conferences, including AACR and ESMO. We anticipate providing additional EVT801 updates and presentations of data at medical conferences in 2H23. R&D Pipeline Paxalisib in metastatic melanoma Data from an ongoing research collaboration with the Huntsman Cancer Institute at the University of Utah in Salt Lake City, UT has shown paxalisib to be active in vitro and in vivo against a range of preclinical models of metastatic melanoma, the most aggressive form of skin cancer. The data suggested substantial activity for paxalisib as monotherapy in preclinical mouse models and was presented at the 19th International Congress of the Society for Melanoma Research, held in Edinburgh, Scotland. “This is among the most promising single agent data that we have seen in our research,” commented Professor Sheri Holmen, lead investigator on the project. “Despite the widespread adoption of immunotherapy in recent years, there remains substantial unmet need in melanoma, particularly in those patients who develop brain metastases. We look forward to exploring the potential of paxalisib further in our research, and hopefully seeing the drug transition to a clinical trial in the near future.” Paxalisib in solid tumours Kazia’s collaboration with QIMR Berghofer Medical Research Institute, one of Australia’s foremost cancer research centres, is currently exploring novel uses of paxalisib in solid tumours. The collaboration is based on research that identified an entirely separate effect of PI3K inhibition: as a modulator of the immune microenvironment within and around the tumour. Administration of PI3K inhibitors such as paxalisib, at doses and frequencies different to those conventionally used, appears to activate the immune system in the tumour, making it more susceptive to immunotherapy. This could therefore open up an important opportunity for Paxalisib in combination with drugs such as Keytruda® (pembrolizumab, Merck) and Opdivo® (nivolumab, Bristol Myers Squibb) for the treatment of diseases such as breast cancer and lung cancer. The collaboration is ongoing and will build on initial research that has already led to the filing of a provisional patent last year, including the use of paxalisib as an immune modulator in the treatment of diseases such as breast cancer.
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