Kazia Therapeutics Limited (KZIA) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. My name is John Friend, and as the Interim Chairman of the Board of Kazia Therapeutics Limited, I would like to welcome you to today's meeting. As the time is now 10:00 a.m. in Sydney and a quorum is present, I formally declare open the 2023 Annual General Meeting of Kazia Therapeutics Limited. As set out in the notice of meeting, the 2023 Annual General Meeting is being held as a fully virtual meeting. We are joined online by my fellow directors, Bryce Carmine, Steven Coffey, Ebru Davidson. I'd also like to welcome Kelly Horsman and Gareth Few, our auditors from BDO. They'll be available later in the meeting to answer any questions you may have about the conduct of the audit. For management, I would also like to welcome Gabrielle Heaton, Vice President Finance; and Karen Krumeich, our Chief Financial Officer. I would also like to welcome all attendees to the meeting, and I confirm that only shareholders and proxy holders are able to ask questions and to vote. For our shareholders and proxy holders wishing to ask a question, you can either do that online or via the telephone by following the instructions written below the broadcast. I'll respond to any questions later in the meeting. Before we move to the formal business of the meeting, I would like to make some general observations about where Kazia is at the moment. Again, on behalf of the Board of Directors, it's my pleasure to welcome you to the Annual General Meeting of 2023 for Kazia Therapeutics Limited. I would like to start by recognizing that this past year has continued to be a challenging one with unfavorable conditions for the global biotech market persisting. It can be said though that despite the industry turbulence, we've made some considerable progress both across our many clinical programs and as a business. Before we move into more detail around the business and clinical developments for the fiscal year 2023, it's important to acknowledge some significant changes to the Kazia's Board and leadership team. Firstly, I would like to recognize the impactful contribution of Iain Ross, who led the Board as Chair for 8 years. Iain's stewardship and insights have ensured Kazia's position for the long term. I would especially like to recognize and thank my predecessor, former Chief Executive Officer and Managing Director, Dr. James Garner. James made a very significant contribution to Kazia during his 7-year tenure, including the transformation of the legacy Novogen business into the current organization. James was instrumental in driving the in-licensing of paxalisib and EVT801 and in attracting then managing a broad clinical program for both assets in collaboration with leading cancer centers in the U.S., Europe and even Australia. Kazia renewed the Board of Directors with the appointment of Ms. Ebru Davidson in June of this year. As a seasoned corporate lawyer and General Counsel for QBiotics Group Limited, Ebru has delivered significant impact since joining in June. Her expertise and insights have strengthened and complemented our team. Since being appointed CEO in May and then Managing Director and Interim Chair in August, it's been one of the busiest times in my 25-year career. As a Board, we've made some major decisions to shore up the company's future. Last month, we announced our intention to delist from the Australian Securities Exchange with our official removal from the ASX taking place on the 15th of November. I want to reiterate that this decision was made following careful consideration. Ultimately, the Board determined that the costs, administrative burden and commercial disadvantages of remaining listed on both ASX and Nasdaq outweighed the benefits of being solely listed on Nasdaq. I won't spend too much time retracing the rationale for the decision to delist from the ASX as I believe we've covered this via our recent ASX announcements and additional commentary. But I will say that by having a sole listing on Nasdaq, we will save on cost and administration requirements while retaining access to the world's largest market for equity in biotech. Through May, the team completed a full portfolio review. We made important decisions to streamline the paxalisib clinical development program into 3 pillars: Adult brain cancer, pediatric brain cancer and brain metastases. In paxalisib, we believe we have an extremely interesting asset. Indeed, it impressed us through the year in review, which is one of the busiest and most important in our history. We saw positive data readouts from several clinical trials. Other trials were expanded and new ones are commencing to further progress the potential treatment areas. Just last week, we announced some of the key highlights being presented by thought leaders at the Society for Neuro-Oncology 2023 Annual Meeting in Vancouver. From this point on, I'll refer to this meeting as SNO, S-N-O, excuse me. The presentation included promising results from the ongoing PNOC022 Phase II study. The study is sponsored by the Pacific Pediatric Neuro-Oncology Consortium, or PNOC, which is an international consortium focused on the development of novel combination therapy in pediatric patients. It's examining paxalisib in combination with another investigational drug called ONC201 in children and young adults with diffuse midline gliomas. At SNO, in a late-breaking oral presentation, Dr. Sabine Mueller presented encouraging preliminary interim overall survival data for PNOC022 study. Importantly, through the study, investigators were able to show that the combination of paxalisib and ONC201 provided an overall survival benefit of 16.5 months in 69 patients, significantly exceeding data controls ranging from 8 to 11 months. While preliminary data from all cohorts is still ongoing, these interim results are extremely encouraging. We look forward to being able to share more data with our shareholders in due course. In early July, we are delighted to announce the FDA fast track designation for the treatment of solid brain tumors -- solid tumor brain metastasis harboring PI3K pathway mutations in combination with radiation therapy, the second such designation for paxalisib. The FDA's decision to grant this designation to paxalisib a second time followed the presentation of positive interim data by Dr. Jonathan Yang at the 2022 annual conference on CNS trials and brain metastases from an ongoing Phase I clinical trial in which patients with brain metastasis from a primary tumor would receive paxalisib in combination with radiotherapy. The trial, originally conducted at Memorial Sloan Kettering Cancer Center in New York City, had an initial cohort of 9 patients, all of which responded positively to the treatment, paving the way for the expansion of the trial and fast-track designation being granted. Miami Cancer Institute and Fred Hutch Cancer Center in Seattle, Washington, have since joined MSKCC in this trial, and we expect to receive preliminary data from this expanded cohort in early 2024. In September 2022, final data from the completed Phase II study of paxalisib monotherapy for newly diagnosed glioblastoma patients with unmethylated MGMT promoter status was presented by Professor John de Groot at the Annual Congress for the European Society of Medical Oncology, or ESMO. The study shows an overall survival of 15.7 months compared to historical controls of 12.7 months, which is associated with temozolomide in this patient population. Key pharmacodynamic data was also presented, which helped substantiate the brain penetration and biological activity of paxalisib. In March of this year, we announced a new Phase II clinical collaboration with the Australian and New Zealand Children's Hematology/Oncology Group, also known as in ANZCHOG, to investigate paxalisib in children with advanced solid tumors. The study known as OPTIMISE will be the first clinical trial paxalisib led out of Australia and will enroll children with PI3K pathway mutation cancers. Recruitment for the trial is on track to commence shortly with 18 patients in an initial dose escalation cohort and up to 100 in the dose expansion cohort. The significance of our work in treating brain cancers and in particular, DIPG and GBM, was recognized in May this year when I was invited to attend a cancer moonshot brain cancers forum at the White House. It was an honor to represent Kazia at the event where we discussed strategies to improve outcomes for DIPG and GBM patients, and we shared our progress in drug research and development. Looking forward, we await final data from the GBM AGILE pivotal study. While, as we discussed at last year's AGM, paxalisib did not graduate to the second stage of the study. The positive data from the first stage still may enable us to submit a new drug application for marketing authorization to the FDA. I'll provide more details in the clinical update to follow. A few weeks ago, we announced that the cooperative group sponsored clinical trial, LUMOS2 in relapsed grade 2, 3 IDH mutant gliomas, had officially opened in Australia. The first participant was successfully enrolled at Peter MacCallum Cancer Center in Melbourne, with patient recruitment increasing as 12 research sites in 6 states across Australia continue to open. LUMOS2 is an innovative Phase II umbrella study, and paxalisib is one of the treatment arms through which PI3K pathway mutation patients will be enrolled. Primary objective of this study is to determine progression-free survival at 6 months. Beyond paxalisib, EVT801, our small molecule inhibitor of VEGFR3, continues in development, continue to enroll patients in our Phase I dose-signing study. Encouraging clinical data, biomarker data and trial updates, especially in high-grade serous ovarian cancer patients, have been presented this year at both the AACR and ESMO meetings. Our paxalisib and EVT801 clinical programs continue to deliver promising data and advance us towards partnering and commercialization opportunities. Over the last financial year, we are prudent with our use of funds raising approximately AUD 7 million in new capital to drive towards important catalysts and deliver the clinical milestones I've outlined. I'm extremely positive about the future of this company. As we look out from this meeting, we are at an exciting point in our development with data readouts expected across both our pharmaceutical assets and the full breadth of our clinical trial programs. In closing, I would like to thank the Board and the entire Kazia team for working tirelessly and passionately to drive our clinical programs forward toward their full potential. We share the vision to help change the lives of cancer sufferers around the world for the better. I would also like to thank you, our shareholders, for your ongoing support of Kazia. With the weakened biotech market condition, changes to our Board and senior management team and the evolution of our business strategy, the past year has been a challenging one, and this has been reflected in our share price. However, the potential of our portfolio remains significant. And as we draw closer to realizing that potential, your team remains wholly committed to delivering on your belief in the important and life-changing work we are doing. We'll now proceed with an R&D and clinical update. Good on the slides, right? So we'll jump to the slides right now. I think we had the forward-looking statement first and then going on to Slide #3. So as just discussed, in parallel to bold moves from a corporate perspective, our collaborations across the globe have been yielding promising preclinical and clinical data. Taking full advantage of the targeting nature of paxalisib, 2 clinical studies were initiated this year. The first, the OPTIMISE study in children with PI3K pathway mutations; and the second, LUMOS2 in adults with IDH mutant gliomas, who also have PI3K pathway mutations. This has been a general shift in our strategy to focus on the targeted nature of paxalisib as a dual PI3K mTOR inhibitor. By enriching the clinical trial cancer patients with these mutations, there's an even greater possibility that they respond and show a tremendous benefit. In 2023, there were over 8 preclinical presentations highlighting paxalisib in a number of different pediatric cancer models, including diffuse midline glioma and atypical teratoid/rhabdoid tumors, or AT/RT. The Society for Neuro-Oncology 2023 Annual Meeting is the largest CNS and brain cancer-focused congress in the world. Two exciting presentations, including a plenary session, were given by researchers in Matt Dunn's Laboratory at University of Newcastle. Each presentation highlighted the rationale, utility and importance of paxalisib as a core component in a multi-drug approach that could have the best outcome for children with DIPG. Next slide. In a way to simplify the paxalisib clinical trial program, you've heard me call them pillars. Within the pediatric brain cancer pillar, we have 2 ongoing trials working from the bottom up. I've already discussed the OPTIMISE clinical study. Again, this is a collaborative cooperative group study evaluating the efficacy and safety of paxalisib in children and adolescents with PI3K pathway mutations. They're also evaluating other drugs or drug combinations that target other mutations outside of PI3K. Our development of paxalisib in DMG, or diffuse midline glioma, and DIPG is headlined by the PNOC022 study. As mentioned 2 weeks ago, the lead investigator presented highly encouraging interim data from cohort 2 of the study. An interim overall survival of 16.5 months was presented in 69 children and young adults with DMG. Putting in this number in context, previous clinical trials that have been published in this patient population have reported overall survival ranges between 8 and 11 months. The researchers have shared that they are evaluating the other 2 cohorts in the study and are planning on presenting that data in early 2024. The PNOC organization posted last week that they'll be initiating a study in a different childhood brain cancer indication, atypical teratoid/rhabdoid tumor, or AT/RT, for which they've expressed a strong interest in evaluating paxalisib in that study. AT/RT is a debilitating CNS-based childhood cancer. As you may recall, in June of last year, the U.S. FDA granted paxalisib orphan drug designation and rare pediatric disease designation for AT/RT based on promising preclinical data stemming from our collaboration with Johns Hopkins University in the U.S. Next slide. The adult brain cancer pillar is quite advanced. I would like to provide an update regarding the ongoing Phase III study GBM AGILE. Again, let me remind you, this is a cooperative group sponsored and run clinical trial, evaluating a number of therapeutic agents for the treatment of newly diagnosed and recurrent GBM or glioblastoma patients. The sponsor, the Global Coalition for Adaptive Research, or GCAR, is responsible for all aspects of this trial, including execution, oversight, monitoring, data management and statistics. The Kazia team remains completely blinded to all data. What we do know is that all patients have completed the study, and the study is being verified and validated, also referred to as cleaning the data, by the clinical sites, GCAR and a data management vendor. Based on our last discussions with GCAR, the sponsor of the study, they will not be able to provide us with a clean final data set this year. Based on their recent status update, we hope that the data will be finalized or as we call it, hard locked, and provided to Kazia by the second quarter of 2024. Again, Kazia is not the sponsor of the study, and this delay is no reflection on the potential outcome of the data or utility thereafter. Next slide. Moving on to the last clinical pillar, adult patients with brain metastases. As you saw encouraging clinical data from paxalisib in combination with radiation therapy was presented at the SNO 2023 Annual Meeting. Circulating tumor DNA was evaluated at baseline and up to 2 months after completing the 30-day course of paxalisib in the enrolled patients with PI3K pathway mutations. Circulating tumor DNA is a biomarker that can be thought of as a measure of overall tumor burden in a patient. The authors presented a case study for a patient enrolled with breast cancer with a significant radiographic or MRI response to paxalisib and radiation therapy, and a corresponding 99% reduction in circulating tumor DNA 3 months after completing their treatment. The study was expanded, and 2 additional sites were added and opened this year, and we look forward to sharing a clinical update in the first half of 2024. Next slide. Here are 2 advanced collaborations that continue to advance the science and potential utility of paxalisib outside of brain cancer. Professor Sheri Holmen and her lab at University of Utah and Huntsman Cancer Institute focused on novel interventions for metastatic melanoma. Since last year, they presented their interim data from our collaboration, all of which has led to a peer-reviewed publication in molecular cancer therapeutics last month. The authors concluded our results support the use of paxalisib as a single agent, either in the first line or MAPK inhibitor resistant setting for BRAF-mutant cutaneous melanoma. They went on to conclude in this paper. We demonstrate the beneficial use of next-generation PI3K mTOR inhibitors, notably paxalisib, to inhibit melanoma cell growth. We're currently considering options and how this could translate into a clinical trial in the future. Column on the left provides a snapshot into the collaboration we put into motion with Dr. Sudha Rao from QIMR, or Queensland Institute of Medical Research. She's demonstrated that in treatment-resistant preclinical models of breast cancer, in particular, triple-negative breast cancer models, 4T1 models, paxalisib has shown encouraging results in inhibiting both the primary tumor burden and metastases by reinvigorating the immune system within the tumor microenvironment. Her focus has been on the cellular or epigenetic mechanism of this response. We expect to share the preliminary results of this research shortly and discussing how this data could be translated into a clinical trial. Next slide. The ongoing Kazia-sponsored Phase I study evaluating EVT801 in advanced cancer patients is advancing nicely. The key objective of this trial is to identify the maximal tolerated dose to bring forward into stage 2 of this trial. The key objective of stage 2 is to evaluate the safety and efficacy in selective biomarkers in cancers that historically had VEGF -- high expression of VEGFR3. To date, we've enrolled 28 patients and have successfully dose escalated to 500 milligrams twice a day. Of those enrolled, we've enrolled a large cohort, actually 8 patients with high-grade serous ovarian cancer and have observed promising clinical activity in several of these patients. In addition, we've demonstrated that these patients have a moderate-to-high expression of VEGFR3 on the tumor and in the microenvironment around the tumor. Next slide. So where are we headed as we look to 2024 and beyond? We were excited to announce today that we have executed a non-binding letter of intent with an undisclosed biotech company for the license of worldwide rights other than Mainland China, Hong Kong, Macau and Taiwan to develop and commercialize pharmaceutical product containing paxalisib in an indication outside of cancer. As we continue to pursue the potential benefits of paxalisib in patients with cancer, this strategic alliance would assist us to develop paxalisib to address a significant unmet need -- unmet medical need outside of oncology. As you saw in the press release, the LOI sets out the proposed terms and preliminary conditions of the agreement as well as a 90-day exclusivity period. The proposed terms include an upfront payment and potential for clinical and regulatory milestones as well as commercial sales-based royalties and milestones. The companies have completed their due diligence and are currently negotiating the definitive license agreement. Please do keep in mind that there can be no assurance that a definitive license agreement will be executed or that the proposed transaction will be consummated on the terms or time frame currently described. A top priority sits around engaging with new investors. Shareholders may be aware that we recently received short-term funding by way of a 6-month promissory note to the value of USD 500,000. This note comes from a new European investor interested in our clinical assets and pipeline. We are also out in the U.S. market, speaking with investors. And of course, we continue to engage with our Australian investors. An important part of this activity is continued dialogue with leading investment banks in the U.S. We're working through some very active and engaged discussions and expect to update you regarding these activities in due course. We continue to explore strategic and alternative opportunities for places where our assets, paxalisib and EVT801, may have a home. To support the capital needs, we'll use the ATM which we have in place opportunistically. In this market, the ATM remains one of the lowest cost methods available for the placement of capital. As we've discussed, it's been a highly productive year on the clinical side and preclinical side in 2023. Looking out to 2024, we'll continue to execute our R&D and clinical pipeline. This will see us announce several new data readouts to include, but not limited to, data from our paxalisib-QIMR collaboration in solid tumors; two potential additional readouts from the pediatric PNOC022 study in paxalisib combinations; the expansion stage of our collaborative clinical study with Memorial Sloan Kettering in paxalisib plus radiation therapy; and of course, the eagerly anticipated GBM AGILE Phase III study data. By all accounts, there is much to look forward to in 2024. I thank you for your ongoing support and look forward to keeping shareholders updated on our progress. We now move into the formal business of the meeting. Shareholders will be given the opportunity to ask questions on each resolution and generally in relation to the company's business and management at the appropriate time. [Operator Instructions] Please note, I will endeavor to respond to as many questions as possible today. If your question is in relation to the delisting process from the ASX, the Kazia website has comprehensive information about this process, and will continue to be updated with information as it comes to hand. Other information about the company is also on the website. If I do not manage to answer your question today, the company secretary will be in touch with you in due course. Voting today will be conducted by way of a poll on all items of business. I will shortly open voting for all resolutions. If you're able to vote, once voting opens, press the vote icon and all resolutions will be activated with voting options. To cast your vote, simply select one of the options. There's no need to hit a submit or enter button as the vote is automatically recorded. You will receive a vote confirmation notification on the screen. You can change your vote up until the time I declare voting closed. I now declare voting open on all items of business. I appoint Paul [ Latinski ] of Computershare Investor Services Limited as returning officer. As Interim Chairman of the meeting, I confirm that I intend to vote all available proxies in accordance with the voting recommendations set out in the notice. I now move to the formal business of the meeting. The notice has been given in accordance with the company's constitution, and I will take it as read. I will take the financial report, directors' report and auditor's report as read and received. I'll be pleased to answer any questions relating to the financial report, directors' report and auditor's report. And of course, if there are any questions for the financial report for our external auditors who are present. Are there any questions for the financial report for our external auditor?

There are no questions, Chair.

The first item as set out in the notice of meeting relates to the reelection of Ms. Ebru Davidson as Director. Brief biographical data on Ebru is set out in the explanatory notes to the notice of meeting. The resolution and proxy votes are seen -- are on your screen. Are there any questions?

There are no questions, Chair.

Okay. Please now record your vote. [Voting]

The next item of business relates to the reelection of Mr. Bryce Carmine as director. Please -- I'm sorry. A brief biographical data on Bryce is set out in the explanatory notes to the notice of meeting. The resolution and proxy votes are on your screen. Are there any questions?

There are no questions, Chair.

Please now record your vote. [Voting]

The next item of business is the appointment of BDO as auditor. The background to this resolution is set out in the notice of meeting. The resolution and proxy votes are on your screen. Are there any questions?

There are no questions, Chair.

Please now record your vote. [Voting]

That is the end of the resolutions. Please ensure you've registered a vote for each resolution. I'll wait a couple of moments before closing the poll to ensure you have all had time to record your vote. [Voting]

Okay. I now declare the poll closed. Are there any further questions?

There are no questions, Chair.

We'll just wait maybe another moment. See if there's any further questions. And with nothing further, ladies and gentlemen, I declare this Annual General Meeting closed. The results of the voting will be published on the Kazia website as soon as they're finalized. I thank you for your attendance.