Kazia Therapeutics (KZIA): Ambiguity in GBM But Pipeline Still Busy

·3 min read
Edison Investment Research Limited

LONDON, UK / ACCESSWIRE / August 8, 2022 / Kazia Therapeutics has reported that the company's lead asset paxalisib (PI3K/mTOR inhibitor) has not graduated to Stage 2 of the Phase III GBM AGILE study in glioblastoma multiforme (GBM), as advised by the study sponsors (Global Coalition for Adaptive Research, GCAR). The study is still fully blinded and therefore we cannot draw definitive conclusions from this news. Full survival and response data from GBM AGILE (expected H2 CY23) may still form the basis for FDA approval, however we expect the likelihood of approval to have been affected. Despite this, GBM is not the only indication in Kazia's pipeline. Encouraging data in brain metastases (BMs) and a series of rare disease designations in childhood brain cancers provide support for paxalisib's utility in other indications. Considering this development, we reduce our valuation of Kazia Therapeutics to US$151.3m or US$10.86 per basic ADR, from US$294m or US$22.28 per basic ADR previously.

We value Kazia Therapeutics at US$151.3m or US$10.86 per basic ADR, previously US$294m or US$22.28 per basic ADR. Our valuation decrease comes from a reduced probability of success for paxalisib in GBM to 20% from 35% and a reduced peak market penetration of 15% (previously 25%). Kazia reported net cash of US$7.6m (A$5.3m) at end-June 2022, which we estimate will fund it into Q4 CY22.

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