Kazia Therapeutics Limited (KZIA) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the Kazia Therapeutics Limited New Data Investor Conference Call. [Operator Instructions] I would now like to hand the conference over to Dr. James Garner, CEO. Please go ahead.

Thank you, Rachel. Ladies and gentlemen, good afternoon, and welcome to this investor conference call. As you've heard, I'm James Garner. I'm the Chief Executive Officer of Kazia Therapeutics. The focus of today's call is on new data from 2 studies of paxalisib that is currently being presented at the Society for Neuro-Oncology Annual Meeting, which is being held virtually this year. The SNO meeting, as it's known, is one of the key conferences in the academic calendar for brain cancer specialists and something we've been a participant in for several years. Indeed, longstanding investors may recall that we presented initial efficacy data for paxalisib in glioblastoma at last year's SNO meeting, in fact, have a very similar conference call then to discuss those results. We plan to follow the same template today. I'll spend a couple of minutes making some introductory remarks, and we'll then throw open to questions. We do, again, have a large number of participants on the call today, so we'll try to take as many questions as possible and to take them approximately in order. But I will ask your understanding if it takes us a few minutes to get to your question. The most significant of the 2 data releases was a new interim analysis of our ongoing Phase II study in glioblastoma, which was presented as a poster, and the poster is available for download from the Kazia website. In brief, on this analysis, of the entire study population of 30 patients, we saw a median overall survival of 17.5 months. Now you may recall that the comparable figure for temozolomide, the existing FDA-approved standard of care, is 12.7 months. And so this continues to suggest a very substantial margin of superiority versus the historical control. In terms of progression-free survival, the figure was 8.4 months, which, again, compares very favorably to the figure of 5.3 months that is associated with temozolomide. The poster also provided the first substantial analysis of safety at a dose of 60 milligrams, which is the dose that we intend to take forward in the GBM AGILE study. In short, there were no surprises here with hyperglycemia, that's high blood sugar; oral mucositis, mouth ulcers; and rash, constituting the most common toxicities. Most of the adverse events were grade 1 and 2, so mild to moderate and were entirely reversible. Our best-performing patient who was highlighted in last year's SNO presentation continues to remain progression-free and on treatment some 27 months after diagnosis, which is an extremely positive result in this disease. And a number of other patients remain on treatment or in follow-up. From Kazia's perspective, there are 3 key takeaways from this latest data. The first is that the data is highly consistent with previous analyses. This is our relatively mature study. And at this stage, dramatic swings in the readout, even in a positive direction, are not always welcome because they draw into question the reliability of the data. The fact that this data seems so solid is immensely reassuring and I think gives us welcome confidence as we move into GBM AGILE. The second point is that the safety protocol here continues to look very favorable. All drugs have side effects, and this is especially true of cancer drugs. However, paxalisib is beginning to look as though it may have a best-in-class safety profile when compared to other PI3K inhibitors. And that raises interesting possibilities in terms of its broader use. Historically, the toxicity of cancer drugs has often been prohibitive. And so the safety of an investigational new drug like paxalisib is, in many ways, just as important as its efficacy. And this is something we'll be reflecting on with our advisers in the months ahead. The final point I'd make is that all lines really now shift to GBM AGILE, the pivotal study for registration, which, of course, has already moved into an operational phase. Even though this latest data [ learned ] from the Phase II study is wholly positive, there is a sense in which paxalisib has already moved beyond that. We will, of course, be sharing final data as soon as its available, which is expected to be in the first half of next year. But the day-to-day focus for the Kazia team is now very much on making sure that GBM AGILE is similarly successful. The second data release being presented at SNO was from the Phase I study of paxalisib in diffuse intrinsic pontine glioma, DIPG, that is being run at St. Jude Children's Hospital in Memphis, Tennessee. And this was the subject of an invited oral presentation by Dr. Chris Tinkle, the lead investigator. As a reminder, this study enrolled 27 children with DIPG and was designed as a first-in-pediatric study, which is to say that its primary endpoints were safety and tolerability and its objective was to understand how to use the drug in children. The study is fully recruited, but a number of patients do remain on treatment and in follow-up. In summary, the study reported broadly positive safety data with the toxicity profile in children very much resembling that in adults. In other words, hypoglycemia, rash, mouth ulcers. The pharmacokinetics, which is a term that describes the concentration in blood over time, was also very similar to the adult experience. That's important because this is often one of the key things that differentiates children and adults and can make it very difficult to use drugs in the pediatric setting. The St. Jude team also explored the difference between administration of closed capsules, which is what we do in the adult setting; and sprinkling of the capsule contents onto food, which is a common technique in pediatric use. And they found that both were very comparable. And this really helps for future studies of our drug. There is not, at this stage, a clear signal of survival benefit from this study. That's not unexpected. DIPG is a very aggressive cancer. And this study was not primarily designed to elucidate an efficacy signal. No drug in history has ever shown an efficacy signal in DIPG as a single agent. So it was always most likely that full potential of paxalisib in this disease was going to lie in combination with other drugs. I think this data simply confirms that hypothesis. And in fact, building on this point, I would add that in the 2 years or so since the St. Jude study commenced, we've not been idle on that front. A substantial body of very groundbreaking laboratory research into combination use has been performed by Dr. Matt Dunn's team at the Hunter Medical Research Institute at the University of Newcastle. And there's also been activity at laboratories in the United States and Switzerland. We're currently in discussion about how best to build on both the clinical data from the St. Jude study and the research from the Dunn laboratory. And we look forward to sharing some more detail about that in due course. But I'd only say in the meantime that the enthusiasm for paxalisib in DIPG, among both the Kazia team and our collaborators around the world, has never been stronger. Indeed, I'd go so far as to say that DIPG is secondary only to glioblastoma in a strategic sense for Kazia. So in conclusion, I'd just add that we're very pleased with both of these data readouts. Drug development is rarely composed of eureka moments and some revelations, rather a consistent of study patient accumulation of high-quality data in partnership with the world's best researchers. That's been Kazia's modus operandi for the last 4.5 years. And this latest data really enriches our understanding of our drug in a wholly positive way. And as a result, we are, today, a few steps closer to the finish line than we were yesterday. And with that, I will now open to questions.

[Operator Instructions] Your first question comes from Sean Lee from H.C. Wainwright.

I just have 2 quick ones. First, on the safety side for paxalisib. Do you -- can you give us any idea on whether there were any treatment discontinuations or treatment holidays or reduced doses with the patients?

Sean, absolutely. I don't have detailed data to hand, but as with just about every cancer drug, we did see some patients that needed to temporarily pause the drug or reduce dose. Now sometimes that was in response to some of the known toxicities of paxalisib, the high blood sugar, the mouth ulcers. Sometimes it was for incidental reasons. For example, one of our patients needed a repair of a wound because the surgical site was not doing well. They had to go back to the operating theater. They came off the drug for 3 or 4 weeks while they were going through that. So I think as in any clinical trial, we saw a certain amount of that. And as I say, a certain number of treatment discontinuations ultimately for patients that had marked toxicity. I wouldn't say it was a particularly large number. As I said, I don't have the numbers right to hand, but certainly nothing out of keeping with a typical cancer study. I'd just perhaps add, the significance of this in terms of the use of the drug is very much open to question. As I say, a lot of cancer drugs are limited by toxicity. When we look at temozolomide, the approval for that drug is for 6 cycles of treatment. In other words, 6 months of treatment. But in fact, in the clinical study of temozolomide that enabled its approval, the average was 3 cycles. So in other words, most patients got only about half the total dose because of toxicity for the most part. And yet that drug was still able to show a significant survival benefit in the overall population. So we're certainly not seeing anything in the Kazia data in terms of treatment pauses or treatment cessation, which really gives us any real cause for concern in this context.

I see. My second question is on the DIPG study. Based on the press release, it seems like the study reported an excellent progression-free survival at 6 months of 96%. But you also said that this is a fairly difficult disease to measure. So I was wondering like what are the -- what would be considered historically a good endpoint for the DIPG study? And how do the investigators expect to proceed from this point on?

Yes, Sean, that's a great question. I think the challenge with PFS in DIPG, the challenge with progression-free survival is that we see a lot of inflammatory change in the tumor. We see a lot of growth and shrinkage in the tumor, particularly linked to the radiotherapy. And that can either look like tumor progression or it can even look sometimes like tumor shrinkage. And it's not always clear. It's not always the disease; sometimes it's almost just radiological change. It's artifact on the MRI scan. So that can make these -- that makes PFS quite a tough endpoint in this case. That's also true to some extent of glioblastoma, but I think it's perhaps a little bit less acute there. And obviously, we're looking at just a larger field on the scan. So some of these effects can be less marked there. There's no doubt that the gold standard here is survival. I think the dream for any drug is to show a survival benefit for these kids. Now I think there's always a question in this sort of disease, whether PFS, or even, in some cases, overall response rate, could constitute approvable endpoints. I think that's an open question. Nobody's really resolved that by taking a drug to FDA, which is the only way we know for sure. But I think at this stage, we're thinking if we're going to really turn our focus to DIPG, we should shoot for the stars, and that -- it means showing a survival benefit.

I see. That was helpful. And just a quick follow-up then. When do you think we can expect to see some survival data from that study?

We should see final data from this study in the first half of next year. So we're expecting final data first half of next year.

Your next question comes from Nathaniel Calloway from Edison.

My questions are with regards to the GBM AGILE study that we're initiating here pretty soon. The first one is just as we're entering the study, I was wondering if you could lay out any sort of differences between the GBM AGILE study and this current Phase II that we're talking about here today, just so we can understand some of the sort of structural differences and what we should expect between these 2 studies.

Absolutely, Nate. Thank you. So the broad architecture of GBM AGILE is very similar to our Phase II study in terms of the patients enrolled. However, it is, of course, a randomized controlled trial, a much larger study, so we anticipate very much more robust data. A couple of key differences. One is that the GBM AGILE study will, in fact, also include recurrent patients for the paxalisib arm. And this was a decision we made relatively late in our discussions with the GBM AGILE team. But our primary focus has been on the newly diagnosed population, the unmethylated MGMT promoter. Those are the patients who are resistant temozolomide. But we've decided to include some recurrent patients. In other words, patients who've been through the standard of care treatment and who have failed. Because we certainly have some indications from Genentech Phase I study that the drug is active there. We have no reason to believe it's not. And the adaptive design of GBM AGILE gives us the ability to dial that part of the study down if we don't start to see some encouraging data. So I think one difference is that although the newly diagnosed patients are extremely similar to the patients in our Phase II study, GBM AGILE will also include some recurrent patients. Then the second difference I'd perhaps highlight is that there is a little bit of a difference in approach to how GBM AGILE measures progression. Now one of the almost universal common practice in cancer studies is that when we see disease progression, when a patient's tumor grows significantly or their condition deteriorates materially, we stop treatment. We regard that as treatment failure. And there's some reasons to say actually that's not necessarily the sensible thing to do. And particularly in a disease like this where we do sometimes see these somewhat spurious changes on an MRI scan, that can result in patients dropping out of the study prematurely. So one of the really smart things they do on GBM AGILE is that if a patient looks like they're progressing on the MRI scan, they don't bring the patient off drug at that point. They leave them on, repeat the scan at least 4 weeks later and only then determine whether progression has occurred. And this is the first time I've seen a study do this, but I think it's a great approach because it should really reduce the number of patients that are unnecessarily dropping out of the study due to, as I say, incidental radiological changes. So broadly, I think, very comparable data. Some key differences, which, I think, on balance, really work to the favor of paxalisib in the favor of the study.

That's really helpful. And my next question is also on GBM AGILE. Just regarding what sort of extra preparatory work that you guys need to do. Is it all ready to go, you just need to get the sites up and running? What exactly is going to happen between now and when you enroll that first patient?

Yes, Nate. We're in great shape actually. It's one of the joys of GBM AGILE is that it is already up and running. There's an entire operational infrastructure. GCAR, the sponsors of the study, they engaged IQVIA to run it, obviously, the world's largest contract research organization. And they're running a really tight ship. My first call today was actually with the team there to get a progress update, and it's going great. The process to bring paxalisib in, first of all, there's a lot of upfront work in designing protocols during the statistical modeling and so on to bring it into this adaptive machine. That has all been done. So a lot of that up-front work we've really been doing over the last 6 or 8 months. We have to submit paxalisib to the FDA to be added into the study. That submission has already gone in. We'll be submitting the paxalisib arm to each of the individual ethics committees at sites. Again, the great thing is they've already approved the study. They just have to approve the addition of a new drug to it. And this is a drug that's been comprehensively tested in the U.S., so it shouldn't be controversial for them. And then as those individual ethics committees -- well, once FDA gives us the green light and as those individual ethics committees approve the addition of paxalisib, we'll be opening those sites to the paxalisib arm. We're shooting to have first site opened by the end of this year. And then obviously, first patient in about as quickly after that as those early sites can find patients. So at this stage, my best estimate is first patient early in the new year. Obviously, the Christmas and New Year period is a bit of a hiatus for most sites. But we don't have a long lead time ahead of us. I think the next 6 to 8 weeks, we should hit first patient in.

Your next question is from Ron Garren from [ Bi ].

Congratulations on the data. So I had 2 questions. Do you know how many of the patients in your Phase II in GBM use the Optune cap? And the second -- I'll give you the second question as well is when the patients failed, do you know how many went on bev or other therapies?

Yes, Ron. So in response to the first question, we prohibited concurrent Optune in this study, and that's a common approach in glioblastoma studies at the moment. For those who aren't familiar, Optune is a medical device that has been recently approved in the U.S. and many other territories. It beams sort of electromagnetic fields into the brain and it's a device that patients wear kind of like a swimming cap with a pack on a belt. And there's been some -- it's fair to say it's a device that I think as everybody is still trying to get to grips with in terms of exactly where it fits in the clinical paradigm exactly, how it works and what it does. But there has been some promising data that's approved that is used by some patients. Right now, most clinical trials of drug treatments are excluding Optune just because we're not quite certain what impact it's going to have on the results. And we took that approach just like everyone else. And so we haven't included Optune in this study. And...

And AGILE will do the same?

Yes, that's correct. That's correct. The -- in response to your second question in terms of post-study treatments, in principle, these patients would, in many cases, be eligible for bevacizumab Avastin after participating in our study. Again, for people who are less familiar with the field here, Avastin is approved for recurrent glioblastoma. That's to say the patients who have failed first-line treatment. It's only really approved in the United States. And of course, that's where we're doing the study, but it's not a drug that's widely used in other territories. And in fact, it's perhaps fair to say it's not a drug that's all that widely used in the United States either. Although it is approved, I think there's perhaps not a very convincing clinical benefit. And for some patients, there are appreciable toxicities. So we don't have data right yet of exactly what the mix is; how many patients have gone on to Avastin post treatment. Our sense is that it's not very many in all honesty. Some of our patients we know have gone on to re-resection, which, of course, is one of the options for patients when they recur. Some of our patients have had repeat radiotherapy. We don't think there's a lot of them that have gone on to get Avastin.

[Operator Instructions] Your next question is from [ Bridget Wilson ] from [ Oakwood Trust ].

Congratulations. As some of the other callers have said, James, this data is looking really good. I may have missed it, but I've got 2 questions actually. The first one is just could you talk to where you expect to see the next data readouts on the trial? And then after that, I've got one about funding.

Absolutely, [ Bridget ]. Thank you. In terms of paxalisib data, the next data we expect is going to be in the new year. Exact timing to be confirmed, as I've noted previously, where we have a little bit of a double jeopardy situation here in that we're always at the mercy of the investigators and exactly when they feel comfortable to share their data. At the moment, we also have the challenge of a very movable feast in terms of conference time tables and so on due to COVID. So we're just always a little bit cautious about being too definitive about time. But next paxalisib data, early in the new year. We do have some data from our second drug Cantrixil, which has been developed in ovarian cancer, which we've said we will -- for which we said we'll share top line final data by the end of this year. So that will be, in all likelihood, the next data readout for Kazia. But the next data readout for paxalisib, as I say, early in the new year.

Okay. And then my other question was, so you completed a funding round recently. How long do you think that cash is going to last you? And do you have many institutional holders on the register as a result of that last raise?

Thank you, [ Bridget ]. Thank you. We've tended to be cautious about putting exact time lines for these things because, of course, it's governed quite a lot by exactly how fast the study moves and recruitment rates, things like that. But in general, we've been very clear that the financing we just did in October, which raised a little over AUD 25 million, that was specifically to fund the GBM AGILE study. The way we've thought about this is to try and accommodate the fact that GBM AGILE itself has quite a wide range around its cost. As many shareholders will be familiar, it is an adaptive study. The number of patients that it potentially recruits can occur within quite a wide range. And consequently, the time lines and the costs can also vary within a wide range. And so what we've done is we've tried to fund GBM AGILE to what we call a sensible base case scenario. So in other words, a sensible conservative assumption of how long it will take. Now if it takes a lot longer, then clearly, we may need to top up a small amount late in the course of the study. And equally, if it finishes way ahead of time, we may have surplus funds that we can invest in other parts of the paxalisib program. But we've tried to fund a sort of sensible base case, just to minimize dilution for existing shareholders and to avoid overdoing it. So I think we're pretty comfortable that we're well funded going into the study. And obviously, we'll be monitoring this very carefully as we move forward. It is going to be very lumpy expenditure during the course of GBM AGILE. All clinical studies don't cost money in a linear way. So this is going to be quite complex, I'm afraid, for shareholders to sort of follow through in our quarterly filings and annual reports. But we'll try and make it as clear as we can. In terms of how the registry is now looking, I think, as I mentioned, we completed an accelerated nonrenounceable entitlement offer in October through Bell Potter Securities, raised AUD 25 million. And as a result of that, we've been fortunate to welcome some new institutional holders to the registry and, of course, it's been great to see some existing holders reinforce their positions. We tend not to talk about our shareholders beyond information that is in the public domain or which is a sort of statutory obligation to disclose. But on the basis of publicly filed substantial shareholder notices, happy to share that our substantial shareholders include Hishenk, a -- essentially a family office in Sydney; Platinum Asset Management, a sector specialist fund based in Sydney; Quest Asset Partners, a leading boutique fund in Sydney; and UniSuper. And as I said, those are all matters of public disclosures through substantial shareholder notices. So we have some other institutional holders below the 5% threshold, and we're, of course, really grateful for their support. I've said before many times that a company can't really grow beyond a certain point without the support of specialist institutional investors. And I think one of the things that's been most gratifying over the last couple of years for Kazia has been to see those kind of investors embrace the stock.

Congratulations. That's been very informative.

Pleasure.

[Operator Instructions] There are no further questions at this time. I'll now hand back to Dr. Garner for closing remarks.

Thank you, Rachel. And I'd just like to thank everybody again for dialing into the call. I really appreciate the support and the engagement we've had from all our shareholders through the long journey of Kazia these last few years, but also in particular, in recent months. As I've said before, we're very much at the exciting part of the drug development process. And I think today's data reflects that, but certainly, there is a great deal more to come. And we very much look forward to continuing to share that journey with you all. So thank you very much once again.

Thank you. That does conclude the conference for today. Thank you for participating. You may now disconnect.