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Research: Healthcare
Kazia Therapeutics has announced that GDC-0084, its promising glioblastoma drug, will join (subject to definitive agreement) the pivotal GBM AGILE trial. AGILE is a clinician-led trial that currently enables fast access to 11 US glioblastoma centres. GDC-0084 could be dosed from Q2/Q3 CY20. Data from the 20-patient stage of the GDC-0084 Phase II should be available during 2020. Our indicative value remains at A$137m.
Written by
Dr John Savin
Kazia Therapeutics |
An agile pivot |
GDC-0084 Phase II/III |
Pharma & biotech |
13 January 2020 |
23 June 2019 |
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Kazia Therapeutics is a research client of Edison Investment Research Limited |
Kazia Therapeutics has announced that GDC-0084, its promising glioblastoma drug, will join (subject to definitive agreement) the pivotal GBM AGILE trial. AGILE is a clinician-led trial that currently enables fast access to 11 US glioblastoma centres. GDC-0084 could be dosed from Q2/Q3 CY20. Data from the 20-patient stage of the GDC-0084 Phase II should be available during 2020. Our indicative value remains at A$137m.
Year |
Revenue |
PBT* |
EPS* |
DPS |
P/E |
Yield |
06/18 |
2.9 |
(11.0) |
(22.2) |
0.0 |
N/A |
N/A |
06/19 |
1.5 |
(7.7) |
(12.9) |
0.0 |
N/A |
N/A |
06/20e |
1.5 |
(8.7) |
(12.6) |
0.0 |
N/A |
N/A |
06/21e |
1.5 |
(11.1) |
(17.9) |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are normalised, excluding exceptionals and share-based payments.
AGILE: A new approach to a potentially pivotal study
The Glioblastoma (GBM) Adaptive Global Innovative Learning Environment (GBM AGILE, NCT03970447) trial is an adaptive Phase II/III platform designed to evaluate multiple therapies against one rolling control group; it currently has 11 US centres and plans to add leading international centres to its network. It is a clinician-led trial with an FDA-agreed single Master Clinical Trial Application. On entering the study, the newly diagnosed GBM AGILE patients undergo surgery to remove the tumour followed by radiation therapy combined with temozolomide (TMZ) (Stupp regimen). The difference tested is overall survival in the randomised maintenance phase using either TMZ or GDC-0084.
AGILE uses a stage 1, which recruits up to 150 patients to assess efficacy compared against patients with a similar profile in the control arm. If this stage appears positive, up to 50 patients might be recruited to a stage 2 expansion cohort for confirmatory data. Currently, the kinase inhibitor regorafenib (Stivarga, Bayer), approved for advanced gastrointestinal cancers but not GBM, is being tested. AGILE has several advantages: a faster start, an existing design and an expanding infrastructure plus involvement of key opinion leaders, a big benefit in the event of positive data, regulatory review and launch. However, Kazia will not have direct control over the study, so any problems or delays might take longer to resolve.
Kazia presented a poster in 2019 on the Phase IIa (NCT03522298) GDC-0084 dose-ranging results showing median progression-free survival (PFS) of 8.4 months in TMZ-resistant patients. Published studies indicate comparison PFS values of 5.9 months. Kazia is recruiting a 20-patient expansion cohort and further data should be available during 2020; this will help to inform AGILE expectations.
Cantrixil efficacy indications expected in 2020
Cantrixil is in a small Phase I study, with results expected by management in H120. Cantrixil could become a standard treatment for third-line ovarian cancer patients who now have few therapy alternatives. Interim data were presented in September.
Valuation: Indicative value of A$137m
Kazia is aiming for a 2024 GDC-0084 US launch. It had A$5.4m cash at 30 June 2019, boosted in H120 by a A$3.8m net placing and the expected cash A$1.4m tax credit in December. We maintain our indicative value of A$137m (A$1.91/share). We have assumed that Cantrixil will be partnered If the current trial data is strong.
Exhibit 1: Financial summary
|
A$000s |
|
2018 |
2019 |
2020e |
2021e |
Year end 30 June |
AASB |
AASB |
AASB |
AASB |
||
PROFIT & LOSS |
||||||
Sales, royalties, milestones |
693 |
34 |
0 |
0 |
||
Other (includes R&D tax rebate) |
2,200 |
1,431 |
1,500 |
1,500 |
||
Revenue |
|
|
2,893 |
1,465 |
1,500 |
1,500 |
R&D expenses |
(9,774) |
(6,476) |
(7,200) |
(9,100) |
||
SG&A expenses |
(4,051) |
(2,594) |
(3,000) |
(3,500) |
||
Other |
0 |
0 |
0 |
0 |
||
EBITDA |
|
|
(10,932) |
(7,604) |
(8,700) |
(11,100) |
Operating Profit (before amort. and except.) |
|
|
(11,142) |
(7,711) |
(8,700) |
(11,100) |
Intangible Amortisation |
(1,336) |
(1,084) |
(1,000) |
(1,000) |
||
Exceptionals |
8,411 |
0 |
0 |
0 |
||
Operating Profit |
(6,687) |
(10,568) |
(9,700) |
(12,100) |
||
Net Interest |
119 |
0 |
0 |
0 |
||
Profit Before Tax (norm) |
|
|
(11,023) |
(7,711) |
(8,700) |
(11,100) |
Profit Before Tax (reported) |
|
|
(6,344) |
(10,568) |
(9,700) |
(12,100) |
Tax benefit |
305 |
298 |
0 |
0 |
||
Profit After Tax (norm) |
(10,718) |
(7,413) |
(8,700) |
(11,100) |
||
Profit After Tax (reported) |
(6,039) |
(10,270) |
(9,700) |
(12,100) |
||
Average Number of Shares Outstanding (m) |
48.4 |
57.5 |
68.9 |
72.2 |
||
EPS - normalised (c) |
|
|
(22.2) |
(12.9) |
(12.6) |
(17.9) |
EPS – diluted (c) |
|
|
(21.1) |
(12.4) |
(12.2) |
(14.9) |
EPS reported (c) |
(12.5) |
(17.9) |
(14.1) |
(16.8) |
||
Dividend per share (c) |
0.0 |
0.0 |
0.0 |
0.0 |
||
BALANCE SHEET |
||||||
Fixed Assets |
|
|
18,915 |
13,662 |
12,662 |
11,662 |
Intangible Assets |
14,579 |
13,494 |
12,494 |
11,494 |
||
Tangible Assets |
1 |
0 |
0 |
0 |
||
Investments |
4,335 |
168 |
168 |
168 |
||
Current Assets |
|
|
9,260 |
7,514 |
3,814 |
3,714 |
Stocks |
0 |
0 |
0 |
0 |
||
Debtors |
2,535 |
1,711 |
1,711 |
1,711 |
||
Cash |
5,956 |
5,433 |
533 |
433 |
||
Other |
768 |
370 |
370 |
370 |
||
Current Liabilities |
|
|
(3,888) |
(1,900) |
(1,900) |
(1,900) |
Creditors |
(2,067) |
(1,764) |
(1,764) |
(1,764) |
||
Short term borrowings |
0 |
0 |
0 |
0 |
||
Other |
(1,821) |
(136) |
(136) |
(136) |
||
Long Term Liabilities |
|
|
(5,046) |
(5,081) |
(10,081) |
(21,081) |
Long term borrowings |
0 |
0 |
0 |
(11,000) |
||
Other long-term liabilities |
(5,046) |
(5,081) |
(5,081) |
(5,081) |
||
Net Assets |
|
|
19,242 |
14,195 |
4,495 |
(7,605) |
|
||||||
CASH FLOW |
|
|||||
Operating Cash Flow |
|
|
(8,780) |
(6,714) |
(8,700) |
(11,100) |
Net Interest |
119 |
0 |
0 |
0 |
||
Tax |
0 |
0 |
0 |
0 |
||
Capex |
0 |
0 |
0 |
0 |
||
Acquisitions/disposals |
150 |
2,359 |
0 |
0 |
||
Equity Financing |
0 |
3,816 |
4,000 |
0 |
||
Dividends |
0 |
0 |
0 |
0 |
||
Other |
0 |
0 |
(200) |
11,0000 |
||
Net Cash Flow |
(8,511) |
(539) |
(3,900) |
(100) |
||
Opening net debt/(cash) |
|
|
(14,455) |
(5,956) |
(5,433) |
(533) |
HP finance leases initiated |
0 |
0 |
0 |
0 |
||
Other |
13 |
16 |
0 |
(11,000) |
||
Closing net debt/(cash) |
|
|
(5,956) |
(5,433) |
(533) |
10,567 |
Source: Kazia Therapeutics accounts, Edison Investment Research
|
|
Research: Investment Companies
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