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Currency in USD
Last close As at 27/03/2023
USD0.96
▲ 0.02 (2.13%)
Market capitalisation
USD16m
Research: Healthcare
Kazia Therapeutics has announced that the company’s brain-penetrant kinase inhibitor, paxalisib, has been granted Rare Pediatric Disease Designation (RPDD) for the treatment of atypical teratoid/rhabdoid tumors (AT/RT) by the Food and Drug Agency (FDA). The designation entitles Kazia to receive a pediatric priority review voucher (pPRV), should paxalisib be approved, which could expedite the FDA approval process for another asset to six months (usually c 10 months). pPRVs are transferable and are often valued at over $100m. Previously, paxalisib has also been awarded an orphan drug designation, granting a potential seven-year market exclusivity from approval. We view continued regulator recognition of paxalisib’s utility in AT/RT as encouraging support for Kazia’s development program. For further detail on paxalisib and the company’s strategy, see our Deep dive into childhood brain cancer. Our valuation is unchanged at US$294m or US$22.28/ADR.
Kazia Therapeutics |
Paxalisib awarded RPDD in AT/RT |
Regulatory update |
Pharma & biotech |
7 July 2022 |
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Business description
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Kazia Therapeutics is a research client of Edison Investment Research Limited |
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Kazia Therapeutics has announced that the company’s brain-penetrant kinase inhibitor, paxalisib, has been granted Rare Pediatric Disease Designation (RPDD) for the treatment of atypical teratoid/rhabdoid tumors (AT/RT) by the Food and Drug Agency (FDA). The designation entitles Kazia to receive a pediatric priority review voucher (pPRV), should paxalisib be approved, which could expedite the FDA approval process for another asset to six months (usually c 10 months). pPRVs are transferable and are often valued at over $100m. Previously, paxalisib has also been awarded an orphan drug designation, granting a potential seven-year market exclusivity from approval. We view continued regulator recognition of paxalisib’s utility in AT/RT as encouraging support for Kazia’s development program. For further detail on paxalisib and the company’s strategy, see our Deep dive into childhood brain cancer. Our valuation is unchanged at US$294m or US$22.28/ADR.
Year end |
Revenue (US$m) |
PTP* |
EPADR |
DPADR |
P/E |
Gross yield |
12/20 |
0.8 |
(7.8) |
(1.04) |
0.0 |
N/A |
N/A |
12/21 |
11.0 |
(3.2) |
(0.26) |
0.0 |
N/A |
N/A |
12/22e |
0.0 |
(17.2) |
(1.27) |
0.0 |
N/A |
N/A |
12/23e |
0.0 |
(19.9) |
(1.47) |
0.0 |
N/A |
N/A |
Note: Converted at A$1.38/US$. Dividend yield excludes withholding tax. Investors should consult their tax advisor regarding the application of any domestic and foreign tax laws.
The RPDD program is a United States government initiative intended to incentivize the development of treatments for rare pediatric oncological indications. The approval of a designated drug targeting a qualifying indication can provide the sponsor with a pPRV that can be used for subsequent regulatory applications of other drugs in any indication. Importantly, pPRVs are transferable and can be sold to other drug developers, often for values exceeding $100m. Thus, the possession of an RPDD designation for paxalisib is a potentially valuable asset for Kazia, in our view.
As a reminder, AT/RT is a highly aggressive form of CNS cancer primarily diagnosed in early childhood. Tumors of this type represent the most common malignant CNS cancer in children below one year of age and over 90% of diagnoses are made in children younger than three years. AT/RT diagnosis is incredibly rare, with an estimated 596 people living with the cancer in the United States, or ~60 cases reported each year, and only 50 cases ever reported in adults. The primary treatment for AT/RT involves maximum safe surgical resection followed by adjuvant chemo- and radiotherapy, which are accompanied by often severe side effects. Many patients will become refractory to therapy and the prognosis for AT/RT is generally poor. The five-year survival rate is just 32.2%, representing a significant unmet medical need.
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Research: Financials
Numis has reported that its Q322 revenue was over £40m compared with the £37m run rate reported in H122. There was a strong improvement from Q222 with mergers and acquisitions (M&A) driving the performance of the investment banking activity. While conditions are less favourable for equity capital markets and equities, the group expects to meet market expectations for the full year and, allowing for a seasonally quiet summer period, our forecast is unchanged.
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