Kazia Therapeutics Limited — FY2022 Form 20-F
Reporting period: Fiscal year ended 30 June 2022. The request metadata says “2021 Q4,” but this filing is an annual report for FY2022, not a quarterly filing. Financial amounts below are in Australian dollars (A$) unless noted.
Business context
Kazia is a clinical-stage oncology biotechnology company with no product sales. Its lead candidate, paxalisib, was being studied across multiple cancer trials; its second clinical asset, EVT801, entered a Phase I trial in late 2021. The company depends on equity financing, licensing, collaborations and grants to fund development.
Financial results and liquidity
| Metric | FY2022 | FY2021 |
|---|---|---|
| Revenue | A$0 | A$15.183 million |
| Research and development expense | A$20.252 million | A$14.541 million |
| General and administrative expense | A$4.512 million | A$7.022 million |
| Loss after tax | A$24.648 million | A$8.422 million |
| Net cash used in operating activities | A$22.761 million | A$9.111 million |
| Cash and cash equivalents at year-end | A$7.361 million | A$27.587 million |
| Basic and diluted loss per share | A$0.1861 | A$0.0716 |
FY2021 revenue was primarily upfront licensing income from Cantrixil and paxalisib agreements, not recurring product revenue. Accordingly, operating margins are not meaningful for FY2022, when the company reported no revenue. Cash used in investing activities was A$2.365 million, relating to an EVT801 development milestone; financing activities generated A$3.726 million, primarily from ATM share sales.
At 30 June 2022, total assets were A$34.958 million, total liabilities A$16.320 million and net assets A$18.638 million. The company reported no borrowings and no credit facility. It had A$2.923 million of net current assets, versus A$21.064 million a year earlier. Accumulated losses were A$68.254 million. Recorded contingent consideration totaled A$9.515 million; significant additional EVT801 milestones were contingent and not recorded as liabilities.
Material changes and notable events
- Revenue fell from A$15.183 million in FY2021 to zero in FY2022. FY2021 included license upfront payments; the company said it recognized no revenue under those agreements in FY2022.
- R&D expense rose about 39%, reflecting increased paxalisib trial spending, the EVT801 Phase I program and higher clinical and scientific staffing costs.
- The FY2022 loss widened substantially, driven principally by higher R&D spending and absence of the prior-year licensing revenue. G&A expense decreased about 36%, partly because FY2021 included Chinese withholding and value-added taxes on a licensing payment.
- Ordinary shares outstanding were 138,755,376 at year-end, compared with 132,012,209 a year earlier. The May 2022 ATM facility permits sales of up to US$35 million of ADSs; the company raised approximately US$2.95 million through 30 June 2022.
Outlook, risks and contingencies
- Going concern and financing: The auditor highlighted substantial doubt about the company’s ability to continue as a going concern, citing recurring losses and negative operating cash flows. Management stated that year-end cash was expected to support R&D only until approximately Q1 2023 and that continued operations depend on additional funding. The directors relied on prospective equity, licensing, partnering and grant funding. Post-year-end ATM sales through 11 August 2022 raised a further US$2.53 million (about A$3.67 million).
- GBM AGILE update after year-end: On 1 August 2022, Kazia was advised that the first stage of the paxalisib arm had completed recruitment but did not meet predefined criteria to continue to a second stage. Patients in the first stage were to continue treatment and follow-up, with final analysis expected in the second half of calendar 2023. The company said it remained blinded to efficacy and safety data and could not interpret the result before final analysis. The paxalisib arm would not open in Germany or China.
- Clinical and execution risks: Results in trials may not establish safety or efficacy; unexpected toxicity, trial delays, manufacturing or CRO issues, regulatory decisions, competition and failure to secure commercial partners could impair development or the business.
- Other exposures: The company disclosed currency exposure, chiefly to the U.S. dollar, and had no foreign-exchange derivatives at year-end. It also warned that future equity financing could dilute shareholders and that its U.S. investors may face PFIC tax consequences.
- No dividends were paid or declared in FY2020–FY2022. The filing reported no other contingent liabilities beyond contingent consideration and no material capital-expenditure commitments.
Key facts for investors to verify
- Current cash runway, subsequent financing raised, ATM capacity remaining and potential dilution.
- Final GBM AGILE paxalisib results and implications of failure to advance beyond the first stage.
- Progress and data timing for other paxalisib trials and the EVT801 Phase I study.
- Milestone probabilities, payment obligations and any impairment indicators for the paxalisib and EVT801 intangible assets.
- Whether planned funding, licensing, partnering or grant sources materialize in time to sustain operations.