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Currency in USD
Last close As at 27/03/2023
USD0.94
▲ −0.03 (−3.09%)
Market capitalisation
USD16m
Research: Healthcare
Kazia Therapeutics has released its Q223 activity report and provided a business update for the quarter. Q2 was marked by increased preclinical efforts towards exploring the applicability and efficacy of paxalisib in non-central nervous system (CNS) oncology indications such as melanoma and other solid tumors, including breast cancer. Post-period, Kazia announced a A$4.5m fund-raise through a two-stage private placement of 40.9m new shares (25.4m unconditional shares and 15.5m conditional shares) at A$0.11 per share. Management intends to use the proceeds to support its development programs (including the paxalisib GBM AGILE study due to readout in H2 CY23) and working capital requirements. The period-end net cash balance stood at A$4.4m and this, along with the A$4.5m fund-raise, should provide headroom into H2 CY23, based on current burn rates.
Kazia Therapeutics |
Reinvestment period with increased R&D focus |
Quarterly activities update |
Pharma and biotech |
1 February 2023 |
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Kazia Therapeutics is a research client of Edison Investment Research Limited |
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Kazia Therapeutics has released its Q223 activity report and provided a business update for the quarter. Q2 was marked by increased preclinical efforts towards exploring the applicability and efficacy of paxalisib in non-central nervous system (CNS) oncology indications such as melanoma and other solid tumors, including breast cancer. Post-period, Kazia announced a A$4.5m fund-raise through a two-stage private placement of 40.9m new shares (25.4m unconditional shares and 15.5m conditional shares) at A$0.11 per share. Management intends to use the proceeds to support its development programs (including the paxalisib GBM AGILE study due to readout in H2 CY23) and working capital requirements. The period-end net cash balance stood at A$4.4m and this, along with the A$4.5m fund-raise, should provide headroom into H2 CY23, based on current burn rates.
Year end |
Revenue* |
PBT* |
EPADR* |
DPADR |
P/E |
Gross yield |
06/21 |
10.7 |
(3.1) |
(0.25) |
0.0 |
N/A |
N/A |
06/22 |
0.0 |
(14.9) |
(1.11) |
0.0 |
N/A |
N/A |
06/23e |
0.0 |
(19.0) |
(1.11) |
0.0 |
N/A |
N/A |
06/24e |
10.8 |
(17.2) |
(0.83) |
0.0 |
N/A |
N/A |
Note: *Converted at A$1.42/US$. Dividend yield excludes withholding tax. Investors should consult their tax advisor regarding the application of any domestic and foreign tax laws.
The second quarter was characterized by Kazia’s efforts towards exploring the effectiveness of its lead drug, paxalisib, in other (non-CNS) cancer indications – a departure from the company’s traditional focus on brain cancers (both primary and secondary). Brain cancer remains a challenging space for therapeutics under development, and we see this strategic pivot as being driven by the company’s efforts to mitigate its pipeline risk, particularly following the following the recent setback in the GBM AGILE study. As a reminder, paxalisib was unsuccessful in graduating to stage 2 of the Phase III trial, although the first stage (~150 patients) remains ongoing, with final data expected in H2 CY23. Paxalisib is also being evaluated in seven other investigator-sponsored clinical trials, both in primary brain cancers (diffuse intrinsic pontine glioma (DIPG) and primary CNS lymphoma) and secondary cancers that have metastasized to the brain. The Phase II DIPG study (paxalisib in combination with ONC201) is ongoing at 22 sites globally (including Australia since October 2022), with initial data anticipated in CY23.
As part of the fund-raise, Kazia has issued 25,387,018 new unconditional ordinary shares (A$2.8m in gross proceeds) and a further 15,522,075 conditional shares (A$1.7m in gross proceeds) are subject to shareholder approval (24 February 2023). The company has also launched a share purchase plan (SPP) for existing shareholders to buy up to A$30k shares at a similar price (A$0.11). The SPP will close on 24 February and the new shares will be listed on the ASX on 3 March 2023. We note that the placement has not been underwritten.
Given the end-Q223 net cash balance of A$4.4m and latest fund-raise (A$4.5m), we believe that the company has cash to fund its operations into H2 CY23 based on current burn rates.
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Research: TMT
Filtronic has announced a contract win worth more than £2.0m with a new customer in the satellite communications equipment market, demonstrating its ability to diversify outside its three core sectors. However, specific semiconductor component shortages mean that some deliveries for mobile telecommunications infrastructure and defence applications will be delayed from FY23 (year ending May 2023) into FY24. We have cut our FY23 revenue and EBITDA estimates by 13% and 37% respectively to reflect these delays.
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