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Last close As at 09/06/2023
USD1.32
▲ 0.04 (3.13%)
Market capitalisation
USD22m
Research: Healthcare
In the current viral pandemic, it is worth recalling that brain cancers will arise during and after the epidemic. The core business case for Kazia remains strong as it is developing the only brain penetrating PI3K inhibitor agent in trials to treat glioblastoma. In the current Phase II, the 21-patient expansion cohort was fully recruited in February. No hospitalisation is needed to continue with this study; it is oral dosing. The potentially pivotal Phase III using the AGILE trial network is on track for an H220 start. H120 results showed cash of A$6.4m. Our indicative value remains A$137m.
Written by
John Savin
Kazia Therapeutics |
Paxalisib trial still on track for H220 start |
Paxalisib update |
Pharma & biotech |
31 March 2020 |
Share price performance
Business description
Next events
Analyst
Kazia Therapeutics is a research client of Edison Investment Research Limited |
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In the current viral pandemic, it is worth recalling that brain cancers will arise during and after the epidemic. The core business case for Kazia remains strong as it is developing the only brain penetrating PI3K inhibitor agent in trials to treat glioblastoma. In the current Phase II, the 21-patient expansion cohort was fully recruited in February. No hospitalisation is needed to continue with this study; it is oral dosing. The potentially pivotal Phase III using the AGILE trial network is on track for an H220 start. H120 results showed cash of A$6.4m. Our indicative value remains 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) |
(15.4) |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are normalised, excluding exceptionals and share-based payments.
Phase II enrolment completed
In the ongoing paxalisib (GDC-0084) Phase II, the last enrolled patient started dosing on 27 February after surgery, TMZ chemotherapy and radiotherapy (Stupp regimen). This means Kazia is accumulating a further 21 patients’ worth of data in this expansion cohort. This formally tests the effects of food on paxalisib (GDC-0084) absorption (1:1 fed: fasted) and provides survival data. Patients continue the study until disease progression or unacceptable toxicity. Note that Kazia has sufficient supplies of paxalisib to continue this trial. It plans a further update in April. Kazia presented a poster on initial Phase IIa (NCT03522298) data in November 2019. If hospital visits for trial monitoring become difficult or impossible due to the COVID-19 virus, online monitoring is possible.
Progression to Phase III on track for H220
In the 20 February H120 results statement, the potentially pivotal study (AGILE) was scheduled for an H220 start. AGILE is a US study so might be restricted by the coronavirus pandemic if viral cases occupy the intensive care unit space and if it proves dangerous to conduct brain surgery. Currently, the AGILE study remains on track for a H220 start. New glioblastoma patients will continue to present and desperately need treatment options. In case the study is affected, given the US virus response is still patchy and limited, we have also modelled a scenario in which the trial effectively starts in H121. This would still make a 2025 launch after accelerated FDA review feasible and a deal in 2023–24 possible.
Valuation: Core value remains A$137m
Kazia is aiming for a 2024 paxalisib US launch and, assuming no trial delay, our valuation remains unchanged. In a possible six-month delay scenario, we assume 2020 cost reductions and estimate a slightly reduced value of A$130m. We note that scientific and clinical paxalisib fundamentals remain strong and Kazia quickly completed the current expansion cohort recruitment. Kazia had A$6.4m cash at 31 December 2019 and may conserve cash in the short term if needed. New Cantrixil data might be released by mid-2020; progression for this programme is assumed to require a partner. If the AGILE study runs as planned, Kazia will need further capital by H121.
Exhibit 1: Financial summary
Year end 30 June (A$000s) |
2018 |
2019 |
2020e |
2021e |
||
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 |
72.20 |
||
EPS - normalised (c) |
|
|
(22.2) |
(12.9) |
(12.6) |
(15.4) |
EPS - diluted |
|
|
(21.1) |
(12.4) |
(12.2) |
(14.9) |
EPS - reported |
|
|
(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 |
2,614 |
2,514 |
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) |
(5,081) |
(16,081) |
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 |
8,295 |
(3,805) |
|
||||||
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) |
0 |
||
Net Cash Flow |
(8,511) |
(539) |
(4,900) |
(11,100) |
||
Opening net debt/(cash) |
|
|
(14,455) |
(5,956) |
(5,433) |
(533) |
HP finance leases initiated |
0 |
0 |
0 |
0 |
||
Other |
13 |
16 |
0 |
0 |
||
Closing net debt/(cash) |
|
|
(5,956) |
(5,433) |
(533) |
10,567 |
Source: Kazia Therapeutics accounts, Edison Investment Research
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Research: Oil & Gas
Egdon Resources has provided an update on its Biscathorpe project (45% interest) in Lincolnshire. The company has integrated reprocessed 3D seismic data with data from the 2019 Biscathorpe-2 well and concluded that the project holds a potentially material and commercial resource. Management estimates that the project is robust at the current oil price with an NPV10 break-even Brent price of $18.07/bbl for the primary Westphalian target. In addition, the company sees significant commercial upside in the secondary Dinantian carbonate. Egdon retains the option to test the potential of any future drill targets via a side-track of the suspended Biscathorpe-2 well.
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