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Currency in USD
Last close As at 09/06/2023
USD1.32
▲ 0.04 (3.13%)
Market capitalisation
USD22m
Research: Healthcare
Kazia Therapeutics’ Q123 cash flow report provided an update on the company’s financial position and business progress. While the quarter was dominated by lead asset paxalisib hitting a roadblock (failing to graduate to stage two of the GBM AGILE study), the period was also marked by clinical progress across other serious indications such as pediatric brain cancers and brain metastases (BMs). With multiple studies expected to read-out in CY23, the next few quarters will be crucial for the company. Period-end cash balance of AU$5.3m (c US$3.4m) was supported by an AU$3.7m equity injection and should be sufficient to extend the runway to end CY22 at current burn rates (A$6.1m in Q123). Further support is expected from drawing down on the outstanding at-the-market funding facility. We anticipate the capital requirements to come down materially as the GBM study approaches completion in H2 CY23. Our estimates and valuation remain unchanged at US$146.6m or US$9.79 per basic ADR.
Kazia Therapeutics |
Q123 cash flows in line with our estimates |
Q123 trading update |
Pharma and biotech |
1 November 2022 |
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Kazia Therapeutics is a research client of Edison Investment Research Limited |
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Kazia Therapeutics’ Q123 cash flow report provided an update on the company’s financial position and business progress. While the quarter was dominated by lead asset paxalisib hitting a roadblock (failing to graduate to stage two of the GBM AGILE study), the period was also marked by clinical progress across other serious indications such as pediatric brain cancers and brain metastases (BMs). With multiple studies expected to read-out in CY23, the next few quarters will be crucial for the company. Period-end cash balance of AU$5.3m (c US$3.4m) was supported by an AU$3.7m equity injection and should be sufficient to extend the runway to end CY22 at current burn rates (A$6.1m in Q123). Further support is expected from drawing down on the outstanding at-the-market funding facility. We anticipate the capital requirements to come down materially as the GBM study approaches completion in H2 CY23. Our estimates and valuation remain unchanged at US$146.6m or US$9.79 per basic ADR.
Year end |
Revenue (US$m) |
PTP* |
EPADR |
DPADR |
P/E |
Gross yield |
06/21 |
10.5 |
(3.1) |
(0.25) |
0.0 |
N/A |
N/A |
06/22 |
0.0 |
(14.6) |
(1.08) |
0.0 |
N/A |
N/A |
06/23e |
0.0 |
(18.6) |
(1.23) |
0.0 |
N/A |
N/A |
06/24e |
10.6 |
(16.8) |
(1.11) |
0.0 |
N/A |
N/A |
Note: *Converted at 1.45/US$. Dividend yield excludes withholding tax. Investors should consult their tax advisor regarding the application of any domestic and foreign tax laws.
In addition to the company’s cash flow position, management has highlighted several encouraging developments for Kazia over Q123, notwithstanding the somewhat disappointing announcement from the Phase III GBM AGILE study in August 2022. The international expansion of the PNOC022 study, investigating paxalisib in combination with ONC201 in diffuse intrinsic pontine glioma (DIPG) and diffuse midline gliomas, hints at paxalisib’s potential utility in these serious orphan diseases. Early clinical data in BMs, which appear to show a 100% response rate to paxalisib (albeit in a small patient population), further support the PI3K inhibitor’s potential impact in the brain cancer. In addition, the recent presentation of positive preclinical data for paxalisib in melanoma is potentially encouraging for the drug’s use in other, non-central nervous system oncology indications. Several of these studies are anticipated to report data in CY23 and we foresee a number of potential inflection points for the company in the coming quarters.
R&D related expenses (A$4.3m) made up the majority of cash expenses during the period although with enrollment for the GBM AGILE study now complete, we expect future expenditure to be significantly reduced (management has disclosed that the remaining part of the trial is fully funded). Cash used in operations for the quarter was A$6.1m and the company received A$3.7m in proceeds from the issue of equity during the period, resulting in a net cash outflow (including FX movements) of AU$2.1m. At current burn rates, the company has sufficient cash to last to end CY22, although management’s internal projections suggest the funds lasting into Q1 CY23. In light of the current release, our forecasts and valuation of Kazia Therapeutics remains unchanged, pending disclosure of full accounts.
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Research: Metals & Mining
Agnico Eagle Mines (AEM) reported a strong set of Q3 results, delivering gold production of 816,795oz at competitive cash and all-in sustaining costs (AISC) of US$779/oz and US$1,106/oz, respectively, notwithstanding cost pressures, constraints regarding workforce availability and the lingering aftermath of COVID-19. Material mark-to-market losses on foreign exchange and oil hedges of US$134.5m distorted headline earnings. However, excluding these non-cash, exceptional items, adjusted net income was US$235.4m or US$0.52/share, compared to US$119.0m or US$0.49/share in Q321. The quarterly dividend was held at US$0.40/share.
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