Kazia Therapeutics (KZIA): Q123 Cash Flows in Line with Our Estimates

LONDON, UK / ACCESSWIRE / November 2, 2022 / Kazia Therapeutics' Q123 cash flow report provided an update on the company's financial position and business progress. While the quarter was dominated by lead asset paxalisib hitting a roadblock (failing to graduate to stage two of the GBM AGILE study), the period was also marked by clinical progress across other serious indications such as pediatric brain cancers and brain metastases. With multiple studies expected to read-out in CY23, the next few quarters will be crucial for the company. Period-end cash balance of AU$5.3m (c US$3.4m) was supported by an AU$3.7m equity injection and should be sufficient to extend the runway to end CY22 at current burn rates (A$6.1m in Q123). Further support is expected from drawing down on the outstanding at-the-market funding facility. We anticipate the capital requirements to come down materially as the GBM study approaches completion in H2 CY23. Our estimates and valuation remain unchanged at US$146.6m or US$9.79 per basic ADR.

R&D related expenses (A$4.3m) made up the majority of cash expenses during the period although with enrollment for the GBM AGILE study now complete, we expect future expenditure to be significantly reduced (management has disclosed that the remaining part of the trial is fully funded). Cash used in operations for the quarter was A$6.1m and the company received A$3.7m in proceeds from the issue of equity during the period, resulting in a net cash outflow (including FX movements) of AU$2.1m. At current burn rates, the company has sufficient cash to last to end CY22, although management's internal projections suggest the funds lasting into Q1 CY23. In light of the current release, our forecasts and valuation of Kazia Therapeutics remains unchanged, pending disclosure of full accounts.

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