Kazia Therapeutics Limited — FY2023 Form 20-F
Period: Fiscal year ended June 30, 2023. Although the request metadata says “2022 Q4,” this filing is an annual report for FY2023, not a quarterly filing. Figures are in Australian dollars (A$) unless stated otherwise; comparative FY2022 and FY2021 figures were restated where noted.
Business context
Kazia is a clinical-stage oncology biotechnology company with no product sales. Its main candidates are paxalisib, a brain-penetrant PI3K/Akt/mTOR inhibitor, and EVT801, a selective VEGFR3 inhibitor. The company relies on external funding, licensing and collaborations to finance development.
Financial performance and position
| Metric | FY2023 | FY2022 restated |
|---|---|---|
| Revenue | A$0 | A$0 |
| Finance income | A$22,000 | A$2,000 |
| Research and development expense | A$15.6 million | A$20.2 million |
| General and administrative expense | A$8.6 million | A$5.1 million |
| Loss after tax | A$20.5 million | A$25.0 million |
| Net cash used in operating activities | A$15.2 million | A$22.8 million |
| Cash and cash equivalents at year-end | A$5.2 million | A$7.4 million |
| Total assets | A$28.1 million | A$35.9 million |
| Total liabilities | A$16.0 million | A$17.6 million |
| Net assets | A$12.1 million | A$18.3 million |
| Current borrowings | A$1.8 million | A$1.8 million |
| Contingent consideration | A$6.9 million | A$9.0 million |
| Basic and diluted loss per share | A$0.1123 | A$0.1888 |
Research and development expense fell 23%, primarily reflecting lower paxalisib trial spending after its GBM AGILE arm did not advance to the next stage. General and administrative expense rose 68%, including higher insurance costs, a full year of U.S. executive and office costs, and a former CEO termination payment. The FY2023 loss narrowed year over year, but the company remains loss-making and has accumulated losses of A$89.1 million. Product margins are not applicable because Kazia has no product sales.
Financing provided A$13.0 million of net cash in FY2023, principally through share issues, including placements, a shareholder purchase plan and the ATM program. The company issued 89.3 million ordinary shares during the year; 228.0 million were outstanding at June 30, 2023. The filing reports net current assets of A$3.2 million. No dividends were paid or declared.
Material developments, outlook and risks
- Liquidity and going concern: The auditor and management cite substantial doubt about the company’s ability to continue as a going concern within one year after issuance of the financial statements. Cash at June 30 was A$5.2 million; the filing estimated available cash, including July 2023 ATM proceeds, would fund anticipated requirements only through approximately November 2023. Additional financing is necessary, and the Form F-3 “Baby Shelf” limitation may constrain public offerings.
- Clinical progress and setbacks: The paxalisib arm in the pivotal GBM AGILE phase II/III study did not meet predefined criteria to proceed to its second stage. Final analysis was expected in the second half of calendar 2023. In an interim phase I brain-metastases study, all nine evaluable patients reportedly responded to paxalisib plus radiotherapy; this is an early, small-cohort result, not confirmatory evidence. The FDA granted paxalisib Fast Track designation in July 2023 for certain PI3K-mutated solid-tumor brain metastases in combination with radiation.
- Pipeline and milestones: Management anticipated FY2024 updates from several paxalisib trials, including PNOC, breast-cancer brain metastases and brain-metastases studies, as well as final GBM AGILE data. EVT801’s phase I trial continued, with further updates anticipated. These are expectations, not guaranteed outcomes.
- Restatement and controls: FY2022 and FY2021 comparatives were restated after the company omitted discounting for time value of money when initially recognizing the EVT801 intangible asset and related contingent consideration. Management identified a material weakness in financial reporting controls related to this accounting and said it was seeking external specialist advice. Disclosure controls and internal control over financial reporting were deemed ineffective as of June 30, 2023.
- Unusual accounting and obligations: FY2023 included a A$3.4 million gain from remeasurement of contingent consideration. The reported contingent consideration liability was A$6.9 million; substantial additional EVT801 milestones were not recognized because management did not consider them probable. The auditor identified valuation of intangible assets, contingent consideration and share-based payments as critical audit matters.
- Other risks: Kazia has no approved products and faces clinical, regulatory, manufacturing, financing, intellectual-property and competition risks. Unexpected safety findings or trial results could materially affect the pipeline and business. The company also cited currency exposure and potential difficulty obtaining capital or partners.
- Listing and governance changes: Kazia applied in October 2023 for voluntary ASX delisting while retaining its Nasdaq listing; completion was subject to conditions and anticipated around November 2023. Shareholders could lose the ability to trade ordinary shares on the ASX. Nasdaq minimum-bid compliance, previously regained in April 2023, remains a disclosed risk.
Important facts for investors to verify
- Current cash, financing proceeds and actual runway beyond the filing’s November 2023 estimate; also the company’s ability to raise capital under the Baby Shelf limitation.
- Final GBM AGILE results and whether the study supports any regulatory filing, given the paxalisib arm did not advance to stage two.
- Follow-up and confirmatory evidence for the 9-of-9 interim brain-metastases response result, including cohort size, durability and safety.
- Progress in remediating the material weakness, and the details and financial effects of the EVT801 restatement and contingent-milestone assumptions.
- Status and consequences of the proposed ASX delisting, including conversion arrangements and liquidity for holders of ordinary shares.