Kazia Therapeutics Limited (ASX:KZA) CEO and Executive Director Dr James Garner provides an update on the company's lead clinical stage drug development candidate for the treatment of glioblastoma. strategy and finances.
Dr James Garner:
Thanks, Clive and good afternoon, everybody. It's a pleasure to present today obviously under slightly unusual circumstances. As [Parva 00:00:09] said, we're a biotech company. Our focus is on developing new drugs for cancer and specifically with a primary focus on brain cancer. So I'm going to spend a few minutes talking through the lead program in our pipeline and explaining why we think it's an exciting opportunity, both for patients and for doctors and for investors.
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Now, I've summarized here just some of the key points that we think are most relevant for investors. So if there's really a key takeaway slide, this is it. The first thing I wanted to say is that our drug has been licensed from a company called Genentech in the United States. It wasn't developed in house. This isn't a drug that's been scraped together through limited means. This was developed by the very best pharmaceutical company ... or the very best oncology drug development in the world. Genentech is responsible for about $36 billion a year of cancer drug sales. They're widely regarded as one of the most successful companies in this field.
They made a decision not to focus on brain cancer. It's a strategic decision for their company, and so we were able to bring this drug into our pipeline and we're now responsible for taking it forward. We're developing it for a form of brain cancer called glioblastoma. Now that's the most common and the most aggressive form of brain cancer. It's a disease that's very poorly served by existing medicines. The only FDA approved drug for this patient group doesn't work for two thirds of patients. So if you're in the lucky one third, it provides about six or seven months of survival benefit. But for the remaining two thirds, the only drug available really offers no meaningful gain and survival.
So that's the need that we're trying to answer with our drug. I think the second point is a crucial one here. Obviously as investors, you'll recognize that drug development is a risky business. The vast majority of drugs that start the development process never finish. What is enormously reassuring about our drug, which is called Paxalisib or GDC-84, is that it's already well advanced in human testing. We've been through the first ... almost completed the first two phases of human testing and we've seen tremendously positive results, which I'll cover in a few moments. So this is a drug that is late in its development. It's showing extremely positive results and because of that a lot of the risk associated with drug development has already been taken out of it.
Now, although I said that glioblastoma is our primary focus, it's what we call our path to market, we are also at the drug through for other clinical trials in other forms of brain cancer. This is very important from an investment point of view because a lot of drug companies are essentially a binary choice. They either succeed or they fail. It's a one trick pony. With the four other clinical trials we have going on with Paxalisib, it gives us a lot of opportunities to explore other uses of the drug. Even if we were unsuccessful in glioblastoma, there is the potential to use the drug in other forms of brain cancer. Of course, if we are successful in glioblastoma, then all of these opportunities represent additional market potential for the drug. So we have a very broad based program of human trials for a company of our size.
Then finally our company is well financed and I'll talk a little bit about a recent institutional placement we completed, which leaves the company in very good shape to whether the current COVID-19 [inaudible 00:03:53].
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Now, this slide shows diagrammatically our current slate of work with Paxalisib, as I say, also known as GDC-84. You'll see right at the left is our lead study in glioblastoma. As I said, the most common and most aggressive form brain cancer. You'll see there four other studies and they divide between primary brain cancer, which is brain cancer that starts in the brain and secondary brain cancer, sometimes called metastatic brain cancer, which is brain cancer that's spread from somewhere else in the body. What's interesting is that these four other clinical trials we're doing are actually largely funded by the hospitals that are conducting them, or in one case by the U.S. National Cancer Institute.
We pay a little bit of money to help secure access to the data and guide the conduct of the trial, but essentially these are what investors would sometimes discard as a free carry. So we have a really nice broad spectrum of clinical trials all at some of the top cancer hospitals in the world and we're only really paying for one of these studies. Now for completeness, you'll see at the right of the chart, we also have a second drug in development, a drug called Cantrixil, which we're currently developing for ovarian cancer. There isn't going to be time to talk much about that today, but it does mean that we do have, of course, another horse in the race here and we'll be reporting data from Cantrixil later this year.
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Indeed, this shows an illustration of some of the milestones we're expecting over the course of this year. We've hit every one of our milestones over the last 18 months or so, like clockwork. You can see those ticked off as we go and we have at least three or four important data readouts expected over the course of the next six to nine months. So this is a busy year for us. As I said in a previous slide, we have a lot of clinical work going on and of course a lot of clinical trials means a lot of data, and a lot of data means a lot of opportunity to revalue the company.
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So I'm going to just talk in a little bit more detail now about brain cancer, about the specifics of what we're trying to do and if I could ask to advance twice here. The lower part of the slide here shows lung cancer as a comparison and in the last 10 years we've seen 20 new drugs approved by FDA for lung cancer. Although this is a common disease, it's a very, very congested field now. There's a lot of drugs available. By comparison, brain cancer and specifically glioblastoma, the form of brain cancer we're focusing on, has only really seen three drugs in the last 30 years and the mainstay of treatment is the drug you see there, the second one, Temodar. That was approved more than two decades ago and really the outlook for these patients is not improved in that time. So this is a disease area that is crying out for new drugs. It is relatively uncontested space and it's a space where we think we can bring real value.
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Again, I'll ask if you can advance a five times please. Now, this just shows a little bit of background about glioblastoma and it's not as common a tumor as lung cancer or breast cancer, but it's still a much more common cancer than we sometimes realize. About 130,000 patients a year worldwide, about 12,500 new cases a year in the United States, probably somewhere around a thousand patients each year here in Australia. It is one of the worst cancers in terms of outlook. With best available treatment, the average life expectancy is about 12 to 15 months and it is unfortunately universally a fateful disease.
The five year survival rates, as you can see here, is negligible. There's a number of people who sadly have been taken by this disease, Senator John McCain in the United States being a noteworthy example from last year, and I think the point that we're trying to make here is really just that this is a disease that can affect anybody at any stage in their life. It isn't a disease that's associated with particular risk factors or behaviors. It's something that can strike anybody out of the blue, and unfortunately progresses very rapidly when it does.
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Now this slide shows the current standard of care treatments for this disease, so patients who are diagnosed with glioblastoma typically have surgery. They then have radiotherapy and they then go on this drug temozolomide that I briefly referred to a moment ago, and that collectively is the current treatment for glioblastoma. It hasn't changed in 20 years and temozolomide was in its heyday a $1 billion a year blockbuster, which gives you an idea of the commercial opportunity. It's now off patent, so it sells very much less than that.
Now, the thing about temozolomide is it only works for one out of every three patients. Roughly one third of patients will get a benefit from temozolomide. It'll extend their life by six to seven months, but for the remaining two thirds of patients, it offers no benefit at all and those are the patients we're targeting with our drug. So we're targeting the two thirds of patients who will not respond to the existing standard of care and who really have no other treatment options.
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I'm just going to make a brief note to say that our drug is a member of a class of cancer drugs called PI3K inhibitors. Now that sounds like the kind of jargon that biotech companies love, but the reason why that's relevant to you as investors is that there are four approved drugs in this class. There are four PI3K inhibitors that had been approved by FDA and which are being used today to treat patients with cancer. Now, why is ours different? Well, ours is the only drug of its kind that is able to get into the brain. The only one that is able to cross the so called blood brain barrier. That makes it unique out of all the drugs in the world in this group. But it does mean that it's got a very, very nice balance of a very well-proven, well understood, well validated mechanism. We know that PI3K inhibitors fundamentally work, but we also have this unique selling point, this differentiating feature that sets us aside from every other drug of this time.
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We're starting to see data that really bears this out. So shown here is a snapshot of some data we presented just before Easter. So this is very much hot off the presses and this shows two measures of cancer drug efficacy. On the left you see a measure called progression free survival. This measures the ability of a drug to delay the progression of a disease, to delay the growth of the tumor. On the right you see overall survival, which is a measure of the ability of the drug to extend life. That's clearly the gold standard for any drug. There is no higher bar for a cancer drug than to extend the life of patients. In each chart you see the blue bar shows our drug Paxalisib, GDC-84, and the gray bar shows temozolomide, the existing standard of care drug. What you see in each case is there's really nice clear air between our drug and between the existing standard of care.
Now, these comparisons are always a little bit difficult at this stage in a drug's development. It's never a perfect like for like comparison and we're still looking at relatively small numbers of patients. But this gives us a really, really strong, clear signal that our drug is working. That's incredibly valuable data at this stage. It's rare for a drug at this stage of its development to be showing a potential survival signal. So we see this as a very exciting data and on the basis of this data we've made a decision to take the drug forward into a pivotal study. That's to say a clinical trial for the purpose of registration so that we can start to commercialize the drug. That study will be starting in the second half of this year and we'll be sharing a little bit more detail as we get closer to the time, but I think the key message here is the drug is showing great data, it clearly works and we have a clear path forward now to take this forward to a commercial product.
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I'll ask you to advance twice here please. This really just shows a little bit of a background. This shows a little bit of an illustration of what this looks like as a commercial product. As I've said, our primary focus, our lead indication is glioblastoma. This most common and most aggressive form of brain cancer, and that is conservatively a one and a half billion dollars global market. But beyond that we have the potential to use our drug in other forms of brain cancer. As I mentioned at the beginning, there are four other human trials recruiting patients right now and any of those could add upsides to the use of the drug. So just one of those, for example, speaks to a pool of patients that represents about a $3 billion commercial market. So there is room for very, very significant expansion to the market opportunity.
Then beyond that there is the potential to use this class of drugs in other forms of cancer outside the brain, and although we focus on brain cancer because we have unique advantages here, there's no respect in which our drug is any inferior to any of the other PI3K inhibitors out there. So we could easily start to look at diseases like breast cancer and lung cancer, and of course those represent enormous commercial opportunities.
Finally, moving on to the next slide, I'll just say a word about our financial position. As you can see here we're an ASX listed company, we [inaudible 00:13:59] market cap today, but approximately 40 million Australian dollars. Like a lot of companies, we've taken a little bit of a beating in the market recently. I think that probably reflects the broader experience of the whole ASX, but I think it's important to say that our fundamentals really remain unchanged. So at the end of the day, the value of our company is driven by the quality of our drug and the incidents of brain cancer. Those things don't change because of the current coronavirus pandemic.
Of course, a question that's very much front of mind for investors at the moment is around the financial security of the company. Is the company funded to weather the ongoing crisis? Recognizing as the first speaker noted that we are in the midst of extraordinarily volatile capital markets, I'm pleased to say that we're in very good shape. We started the year with about 7.5 million in current assets, so it comprises cash and some receivables. A couple of weeks ago, we did an oversubscribed institutional placement of $7.2 million and we also have ongoing a share purchase plan right now and the purpose of that is really not to raise a huge amount of money, but primarily just to offer fairness and equity to our existing shareholders.
Collectively, these measures mean that we're in very robust shape to weather the ongoing coronavirus storm and we're confident being one of the companies that comes out of this in very good shape. In the meantime, we're well funded to get on with the drug development and to ignore some of the background noise in equity [inaudible 00:15:33].
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Just finally, I'll make just one or two points to conclude. Our strategy for the drug long term, as I mentioned, we plan to start a pivotal study for marketing authorization in the second half of this year. Beyond that, we don't really expect to be the people commercializing this. As this drug continues to develop and as it continues to generate new data, it becomes a very attractive opportunity for larger companies and we embrace that. Our expectation, our strategy is to look from larger big pharma partners to license or acquire the drug along the way, and I've shown here some indications of the kinds of valuations that are typical in the industry for these kind of assets. Some of these may seem ambitious right now, but this is the sort of exit that we aspire to for our program.
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Finally, as I mentioned at the top of the presentation, this is a busy year for us. We have a lot of data coming through this year. I've itemized some of the key points here. We will be starting a pivotal study for registration in the second half of the year. We remain on track despite the coronavirus pandemic, and so I think this will be a critical year for our company. It will see both some very value generating data and some important steps forward in realizing the commercial value of that.
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Just finally, I'd say in conclusion, obviously the format today doesn't give us a lot of opportunity for interaction and questions, but we welcome interest and discussion in our programs. I'd really recommend our website, there's a rich set of resources there. Presentations, videos, newsletters, ASX announcements and so on. So I'd encourage everybody to use that as a resource. Of course, we welcome engagement directly with investors. Please reach out to us at email@example.com and we'd love to share more detail about what we're doing. Ladies and gentlemen, thank you very much. It's been a pleasure to share this update and look forward to keeping everybody posted on our progress and what is sure to be a very exciting year ahead. Thank you.