Kazia Therapeutics Limited (KZIA) Earnings Call Transcript & Summary

Ladies and gentlemen, good afternoon. It's a pleasure to be -- here we go. It's a pleasure to be able to introduce our company here for the first time on ShareCafe. And as Tim has touched on, we are an oncology biotech company. Our primary focus is on brain cancer. And our lead program is relatively well advanced in human trials at this stage. And I'm going to talk a little bit through the detail on it, but I really wanted to start with some of the key points about our company and about our lead program. Our lead drug is called paxalisib. And this drug was actually originally discovered by a U.S. company called Genentech. And Genentech, for those who aren't familiar, is one of the most successful cancer drug developers in history. It's wholly owned now by Roche. And Genentech completed the early development on this drug. They made a strategic decision that they weren't going to focus on brain cancer. And so as a result of that, we were able to bring the drug into our company, into Kazia; and we've been taking it forward since. Now this matters for investors because in drug development, pedigree counts. And our drug has come from really the very best minds in the industry. It's come from one of the most successful shops in early-stage drug discovery. And that's been borne out in some of the clinical data we've been generating in the last year or 2 with Kazia. So we've been conducting a human trial in a particular form of brain cancer called glioblastoma. And I'll say more about that in a moment, but it is the most common and the most aggressive form of brain cancer. And in this disease, our drug has been showing some very positive signals of potential efficacy here. So we're really getting a good read that our drug may well help for these patients. And this is a disease where really nothing else does, so this has been very, very exciting data. And as Tim has mentioned, this has been associated with a progressive revaluation of our company. Now one of the challenges investors have, though, nevertheless, with all biotech companies is they very often appear to be a binary risk. The drug either works or it doesn't. And we've managed to insulate against some of that downside by also deploying clinical trials in several other forms of brain cancer. And I won't go into a great deal of detail about that today, but we do have 4 human trials ongoing in other forms of brain cancer. And potentially those give us other shots on goal. They give us other opportunities to derive value from the drug and they protect investors to a certain extent against any potential surprises in our glioblastoma program, so for a small company, we have really quite a rich and diverse program. If we move on to the next slide, I can talk in a little bit more detail about this. You can see here a comparison of brain cancer and specifically glioblastoma with lung cancer, just to pick one other form of cancer for comparison. And in the last 20 years, we've seen more than 10 -- sorry, more than 20 new drugs approved for lung cancer. And that has really materially changed the outcome for patients with this disease. In brain cancer, the drug that we mainly use is a drug called temozolomide, which was actually approved in the late 1990s. The other 2 drugs you see there are really for relatively niche, specialist uses. So this is a disease where the outlook for patients has not improved since the last century, and that's very much what we're trying to change at Kazia. Moving on to the next slide. Just to touch on a few things here about glioblastoma as a disease. And if I can ask perhaps to advance 2 more times, there we go. One more, please. Thank you. So glioblastoma, as I mentioned, is the most common and the most aggressive form of brain cancer. And it affects about 130,000 patients a year worldwide. It is one of the most aggressive forms of cancer in modern medicine. Without treatment, it's fatal usually within 3 or 4 months. And with best available care, that stretches out to about 12 to 15 months, depending on the exact profile of the patient and the tumor. And as I say, that really hasn't changed in the last several decades, so it compares very poorly to diseases like lung cancer and breast cancer and prostate cancer where we've made enormous progress in their treatment. And as you can see there at the bottom of the slide, some notable people who've unfortunately passed from this disease, this is a disease that can affect anybody at any point in their life. It's a disease that doesn't have particular risk factors or predispositions. It comes out of the blue and it can turn -- can touch anybody really by surprise. Moving on to the next slide. I've shown here how this disease is currently treated. And the typical path for a newly diagnosed patient is that they will have surgery to remove as much of the tumor as possible. They then have radiotherapy. And they then get treated with this drug temozolomide that I mentioned a few moments ago. Now temozolomide was originally approved by a U.S. company called Merck. It was $1 billion a year in its heyday. It's now off patent, so it sells somewhat less than that, but it does work. It works reasonably well at extending life but only for 1/3 of patients. And as you can see from the chart in the bottom left, for the remaining 2/3 of patients, temozolomide adds no real clinical benefit. And for those patients, there is no alternative drug available. There is no drug that really has been shown to work. And that's the group for whom we're developing paxalisib. I'll move on to the next slide. Our drug is part of a class of drugs called PI3K inhibitors. And this is the sort of terminology that people love in biotech, but the reason why this is relevant for investors is that this is a well-understood, well-validated, well-proven class of medicines. There are 4 FDA-approved therapies in the PI3K inhibitor class, and you can see them on the slide here. 3 of them are approved for various kinds of blood cancer, 1 for breast cancer. The unique thing about our drug, the unique thing about paxalisib, is that it is the only drug in the class that is able to cross the blood-brain barrier. Now ordinarily the blood-brain barrier protects the brain from toxins and from damage, but it does make it very, very hard when we're trying to treat disease in the brain. Most of the drugs we have don't get into the brain. They don't cross the blood-brain barrier. And this is a real problem in diseases like multiple sclerosis, Alzheimer's disease, even depression; and it's certainly a problem in brain cancer. Our drug is unique in its ability to get into the brain. And this gives it a unique advantage in terms of treating a disease like brain cancer. Moving on to the next slide. You can see here some of the results we've been starting to see out of the clinical program, and we've looked at 2 measures here. The first is a measure called progression-free survival. And this really measures the ability of a drug to delay growth of the tumor, in other words, to stop the tumor from progressing. And on this we see, in the patients we're targeting, paxalisib has been associated with a progression-free survival of 8.5 months. That is to say patients on our drug will take on average about 8.5 months for their tumor to grow. Now with temozolomide, the existing standard-of-care drug, that number is 5.3 months. And that difference is really quite material in this, a progression-free survival of 3 or 4 months is really quite an achievement for a drug in a disease like this. More importantly, though, we've also been looking more recently at a measure called overall survival. Now this is a measure of the ability of a drug to extend the patient's life, which is always the gold standard for any new cancer drug. And on this measure, we see paxalisib showing an overall survival of 17.7 months, as against 12.7 months for the existing drug temozolomide. Now that's a very, very significant advantage. That's a -- on the face of it, a 5-month gain in survival, although the comparison is always a little more complex than that. And we have no doubt that, if that sort of result was replicated in a larger study, this drug would be eminently eligible for FDA approval and would be a very successful product. Next slide, please. And should it become a successful commercial product, there is a very real market here for the drug to address. Even though brain cancer is much less common than breast cancer or lung cancer, it's still a significant number of patients. Glioblastoma itself represents a market of about USD 1.5 billion per annum. And as I said at the beginning, there's really not a great deal of competition for that market, so it's really very addressable for a new drug, but beyond that, some of the other human trials that we're running potentially have the opportunity to extend the drug much, much further. We're looking at childhood brain cancer and we're looking at brain cancers that have spread to the brain from elsewhere in the body. And collectively this represents at least 10x as many patients, with a commensurate commercial opportunity. And then beyond that, this class of drug, as I touched on earlier, has been used in other diseases like the blood cancers and breast cancer. There's no reason why our drug is any less of a PI3K inhibitor than those, but we've targeted brain cancer initially because that's really our unique advantage, our ability to cross the blood-brain barrier. But in the long term, there's no reason why this could not be a breast cancer drug, a lung cancer drug or a blood cancer drug, so we see a lot of upside potential for the drug over the course of its life should we be able to secure an approval in glioblastoma. Next slide, please. I'll just finally touch on some of these other diseases we're looking at here, just very briefly. You see on the left of the slide our own study ongoing in glioblastoma. We also have a study ongoing in DIPG, which is a childhood brain cancer, very aggressive disease; and then 3 studies, as you can see, in cancer that has spread to the brain from elsewhere in the body. The great thing about this program is that most of these studies are funded by the institutions that are running them, so they are in effect a free-carry for Kazia there and opportunity for us to collect additional clinical data at very limited cost. For completeness, you'll see that, on the right hand of the page, we do have a second asset in our pipeline, Cantrixil development for ovarian cancer. In the interest of time, I won't really touch on it today, but we do have that also in the pipeline at an earlier stage. Next slide, please, and perhaps next slide. I'll just say a word about our financials. We're an ASX-listed company. We do also have a listing on NASDAQ. About 25% of our stock is held there. We're about a $45 million to $50 million market cap at the moment. And we just completed a successful financing round in April and May. We had $7.2 million in an oversubscribed institutional placement, and then that was followed by $1.8 million from existing investors and a share purchase plan. So the company has some cash at the bank to see through at least the next 3 or 4 rounds of data readouts. Next slide, please. And in the interest of time, I'll skip ahead to the next slide just to say we have a busy second half ahead of us. We have several more data readouts that are expected, including some first data from some of these studies in other forms of brain cancer. And we think this is going to be an exciting 6 months ahead for the company as we start to see some of these results take shape. Next slide, please. And I'll stop here just to say there's a great deal more information on our website. And we're always delighted to receive queries by e-mail as well, so do, please, feel free to get in touch with us. Ladies and gentlemen, thank you.

Thanks, James. Thank you for your time. I know you've got a bit of a following on the NASDAQ, I've seen.

Can I ask -- I've got a couple of questions here. How many people get brain cancer a year? And what's the usual price of such drugs?

Yes, Tim. So with glioblastoma, the number of new cases per year worldwide is about 130,000. In the U.S. it's probably about 10% of that, about 12,500, 13,000 and Australia really just proportional to population. This isn't a disease that's particularly associated with ethnic groups or different geographical regions. It just hits everybody more or less equally. So about 12,500 cases a year world -- sorry, in the U.S. Now in terms of pricing, the average price at launch for a new cancer drug in the U.S. in 2018 was USD 148,000 per year of treatment. Now of course, not every drug is taken for years. If you take the drug for 6 months, then it scales accordingly, but that's the average price for a new cancer drug in the U.S. as of 2018, which is the most recent data. So new cancer drugs launch at a high price. And there's no reason to believe that pricing for paxalisib should be fundamentally different from other new cancer drugs that have come forward.

And one last question. So what are the kind of the next key data points that an investor should focus on when following Kazia?

Tim, we've got a couple of big things coming up. So we'll be seeing new data from our ongoing study in glioblastoma. This is the one that I just touched on earlier. We've seen some very promising interim data, but the study is not yet complete, so we'll be seeing more mature data and then, in due course, final data from that study. We'll certainly be seeing at least one more data readout in the second half of this year. And that will, hopefully, help to really confirm and strengthen and provide additional confidence around the data we've been seeing already. What we should also be seeing is some initial data from some of these other studies. So particularly our study in childhood brain cancer and also a study in breast cancer that has spread to the brain. We're hoping to have some initial data readouts from those studies. And I think it's fair to say those studies perhaps haven't been at the center of investors' radar screens yet. And I think, hopefully, that will be a good surprise if we're able to report something positive out of one or both of those studies.