Dual-listed brain cancer specialist Kazia Therapeutics is preparing for a possible launch of its drug paxalisib in the US market.

The process of taking a drug from discovery to the commercial arena is extremely complex, with the clinical trials posing perhaps the greatest challenge.

For biotech investors, the biggest opportunity lies during the transition phase from the clinic to commercialisation.

Brain cancer focused drug development company Kazia Therapeutics (ASX:KZA) is exactly at that juncture as it aims to bring its lead drug paxalisib to the US market.

“There are two big step changes in the life of a biotech company – there’s the point where it moves from animal work to human trials, and then there’s the phase where it moves from research and development to commercialisation,” Kazia CEO Dr James Garner explained to Stockhead.

“And we’re very excited to be starting the second of those transitions.”

The Aussie company has laid out a long-term strategy for the US, where 40% of its employees are now based including many of its senior executives.

Garner says many biotechs fail to prepare properly for international expansion and think they can just turn up the day before launch, but Kazia has worked hard to get ahead of the game and has been laying the groundwork for a US launch – a market that he says it needs to win first.

“The US has a special status for a couple of reasons. The first is that the US typically accounts for about 45 to 50% of the commercial opportunity for new drugs,” he said.

“And second, having a regulatory approval in the US is a real validation for the drug and makes access to almost every other country easier.”


Kazia’s pipeline

Kaxzia’s lead drug paxalisib has already been granted an Orphan Drug Designation for glioblastoma by the US FDA in 2018, and a Fast Track Designation for the same disease in 2020.

Glioblastoma is the most common and most aggressive form of brain cancer; the average life expectancy from diagnosis is around 15 months, and less than 5% of patients are still alive after five years.

Not only is it a huge unmet clinical need – glioblastoma affects approximately 130,000 patients per annum worldwide – it is also conservatively estimated to represent a US$1.5 billion annual commercial market.

The company’s pivotal GBM AGILE study in glioblastoma is due for completion in another 12 months’ time.

While the trial did not pass the statistical threshold to move to the second stage (of recruiting another 50 patients), the study has fully recruited the first stage of 150 patients and Garner says that could be enough to get an FDA approval.

“The data we get out of the existing patients could well be sufficient to support an FDA registration, so I think all we can do is wait and see what the final results look like next year,” Garner said.

“At the moment we have no real visibility into it.

In total, Kazia currently has eight clinical trials concurrently running with paxalisib, a brain-penetrant inhibitor of the PI3K/Akt/mTOR pathway.

Apart from glioblastoma, the drug is also being studied in several other forms of brain cancer such as DIPG (diffuse intrinsic pontine glioma), PCNSL (primary central nervous system lymphoma), and brain metastases.

Although the study on metastases is a year or two behind glioblastoma, Garner believes that it could become the biggest opportunity for Kazia as around 200,000 patients are diagnosed with the disease each year in the US alone.

“We’re talking about something that’s potentially about a 10 to 15 times greater market opportunity (than glioblastoma),” Garner said.

“It’s probably fair to say that metastases are the gold prize for us.”

The company has made significant ground on this front, having recently announced positive interim results from the phase I trial of paxalisib in combination with radiotherapy – namely a 100% overall response rate which means every evaluable patient has had some meaningful response.

Kazia has also made good progress with its second asset EVT801, a drug that was licensed from Evotec SE in April 2021 to treat lung cancer, bowel cancer, and kidney cancer.

That drug is now well-advanced in a phase I clinical trial and is expected to produce some initial results in the first half of 2023.

“I would say that investors probably have not yet attributed a huge amount of value to EVT801,” Garner said.

“And that’s understandable because it’s a much earlier stage asset. But we do think the drug has enormous potential,” he added.


Well diversified

Having all these clinical trials at the same time means that Kazia is diversifying its activities as broadly as possible to ensure that shareholders are insulated from adverse developments.

The reality is that many small biotech companies end up being an all-or-nothing bet on one single clinical trial, and that’s an outcome Kazia is trying to avoid.

“Drug development is a very risky endeavour. We believe that one of the best things we can do for our investors is to mitigate that risk by diversifying our pipeline,” explained Garner.

The other thing that diversification does is to build scale.

“Building a certain amount of resource, infrastructure, capability and external relationships around a single asset doesn’t really make sense,” said Garner.

“So for us to build these things around two assets, possibly more in the future, gives us greater economies of scale.”

Kazia has also diversified its funding base, with 40% of the company’s issued shares currently listed on the Nasdaq exchange.

While the company has licensed the rights to paxalisib in China with a Chinese company called Simcere, the US market still remains the holy grail for any first launch.

“Where we might think about commercialising the drug ourselves would be the United States,” said Garner.

“It’s a market where the economics would work, and it’s also a market that’s familiar enough for us that we could do it ourselves.”

In terms of the company’s valuation, Garner believes there could be an opportunity despite the negative sentiment towards the biotech sector at the moment.

“The whole sector is pretty discounted at the moment, and that’s true for our stock price as well,” he said.

‘Our stock is not expensive, and investors are now starting to think there could be more upside than downside in a company like Kazia.”


This article was developed in collaboration with Kazia Therapeutics, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.