Kazia Licenses Rights to Paxalisib in Greater China to Simcere, a Leading Chinese Pharmaceutical Company

Rhea-AI Summary

Kazia Therapeutics Limited (NASDAQ: KZIA; ASX: KZA) has announced a licensing agreement with Simcere Pharmaceutical Group to develop and commercialize its investigational drug, paxalisib, in Greater China. Kazia will receive an upfront payment of US$11 million, including US$7 million in cash and US$4 million in equity. The deal allows Kazia to retain rights outside Greater China and continue its GBM AGILE study. The licensing deal could yield up to US$281 million in milestone payments and royalties from commercial sales, directly funding further development of paxalisib.

Positive

• Kazias licensing agreement with Simcere could yield milestone payments of up to US$281 million for glioblastoma, enhancing financial stability.
• Upfront payment of US$11 million provides immediate funding for paxalisib's further development.
• Simcere's established market presence in China is expected to enhance paxalisib's commercial success.

Negative

• None.

SYDNEY, March 29, 2021 /PRNewswire/ -- Kazia Therapeutics Limited (ASX: KZA; NASDAQ: KZIA), an oncology-focused drug development company, is pleased to announce that it has entered into a licensing agreement with Simcere Pharmaceutical Group Ltd (Simcere) (HKSE: 2096) to develop and commercialise Kazia's investigational new drug, paxalisib, in Greater China.

Key Points

• Simcere will assume responsibility for the development, registration, and commercialisation of paxalisib in Greater China - a territory which includes Mainland China, Hong Kong, Macau, and Taiwan.
• Kazia retains rights to the development and commercialisation of paxalisib in all other territories and will continue to drive forward the GBM AGILE pivotal study as planned, including in China.
• Under the terms of the agreement, Kazia will receive an upfront payment of US$ 11 million (~AU$ 14.2 million), comprising US$ 7 million in cash and a US$ 4 million equity investment, priced at a 20% premium to recent trading. Kazia will also receive contingent milestone payments of up to US$ 281 million (~AU$ 362 million) for glioblastoma, with further milestones payable for indications beyond glioblastoma. Simcere will additionally pay to Kazia mid-teen percentage royalties on commercial sales.
• Transaction proceeds will be applied directly to the further development of paxalisib.
• Simcere is one of China's leading pharmaceutical companies, with over 40 marketed products and an extensive development pipeline. It was incorporated in 1995 and is listed on the Hong Kong Stock Exchange (HKSE: 2096). Simcere's primary areas of strategic focus are in oncology, central nervous system disease, and autoimmune disease.
• Paxalisib is currently the subject of six additional studies in other forms of brain cancer beyond glioblastoma.

Kazia CEO, Dr James Garner, commented, "China is one of the world's largest pharmaceutical markets, with specific requirements and opportunities for innovative oncology products. We are delighted to partner with Simcere to secure the commercial success of paxalisib in this critical territory. Simcere's track record of success is unrivalled, and they bring to paxalisib first-class capabilities in clinical development, regulatory affairs, and commercialisation. We look forward to working closely with our new partners to make paxalisib available for Chinese patients as swiftly as possible."

Dr Renhong Tang, Senior Vice President at Simcere, added, "we are tremendously excited by the potential for paxalisib to make a difference in this very challenging disease. The need for new therapies in brain cancer is significant in China, and we share Kazia's commitment to bringing forward new treatment options for patients."

Kazia has been advised in this transaction by Janette Dixon at JustPartnering and by Dragon Financial Partners.

Simcere Pharmaceutical Group

Simcere Pharmaceutical Group is rapidly transitioning to an innovation and R&D-driven pharmaceutical company, with a mission of "providing today's patients with medicines of the future." It has established a national key laboratory of translational medicine and innovative pharmaceuticals. Simcere focuses on oncology, central nervous system disease and autoimmune disease therapeutic areas, with a diversified product portfolio and industry-leading capabilities. Its vigorous in-house R&D efforts and extensive R&D collaborations have made it a strategic cooperation partner with world leading pharmaceutical companies and biotechnology companies, in an effort to bring more global life science breakthroughs to China.

For more information, please visit www.simcere.com.

Equity Issuance

Under the terms of the transaction, Simcere will make a US$ 4 million (~AU$ 5.2 million) equity investment in Kazia, priced at a 20% premium to recent trading.

In relation to Kazia's 2016 purchase of Glioblast Pty Ltd, this transaction satisfies the conditions for Milestone 4 of that agreement and will therefore result in the issuance of escrowed ordinary shares to Glioblast shareholders, under terms previously disclosed by Kazia.

Paxalisib

Paxalisib is a brain-penetrant inhibitor of the PI3K / Akt / mTOR pathway, which is disordered in the vast majority of patients with glioblastoma, the most common and most aggressive form of primary brain cancer.

In a phase II study in patients with newly diagnosed glioblastoma with unmethylated MGMT promotor status, paxalisib has shown highly encouraging signals of clinical efficacy. In January 2021, patient recruitment commenced for paxalisib in the GBM AGILE platform study, which is expected to serve as the basis for registration in key territories.

Investor Conference Call

Kazia is pleased to invite investors to attend a conference call to further discuss the partnership with Simcere.

The call will be held on Tuesday 30 March 2021 at 8:00am, Sydney time (AEDT), which is 5:00pm on 29 March in New York (ET) and 2:00pm on 29 March in San Francisco (PT).

Participants will need to pre-register for the call via the following link: https://s1.c-conf.com/diamondpass/10013168-83hs6e.html

Click the 'Register Now' button and follow the prompts to complete pre-registration. You will receive a calendar invite with dial in numbers, passcode and PIN to join the conference call.

About Kazia Therapeutics Limited

Kazia Therapeutics Limited (ASX: KZA, NASDAQ: KZIA) is an oncology-focused drug development company, based in Sydney, Australia.

Our lead program is paxalisib, a brain-penetrant inhibitor of the PI3K / Akt / mTOR pathway, which is being developed to treat glioblastoma, the most common and most aggressive form of primary brain cancer in adults. Licensed from Genentech in late 2016, paxalisib commenced recruitment to GBM AGILE, a pivotal study in glioblastoma, in January 2021. Seven additional studies are active in other forms of brain cancer. Paxalisib was granted Orphan Drug Designation for glioblastoma by the US FDA in February 2018, and Fast Track Designation for glioblastoma by the US FDA in August 2020. In addition, paxalisib was granted Rare Pediatric Disease Designation and Orphan Designation by the US FDA for DIPG in August 2020.

For more information, please visit www.kaziatherapeutics.com.

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SOURCE Kazia Therapeutics Limited

FAQ

What is the licensing agreement between Kazia Therapeutics and Simcere Pharmaceutical Group?

Kazia has licensed its drug paxalisib to Simcere for development and commercialization in Greater China, receiving an upfront payment and potential milestone earnings.

How much is Kazia expected to earn from the licensing deal with Simcere?

Kazia will receive US$11 million upfront and could earn up to US$281 million in milestone payments, plus royalties on sales.

What territories does the agreement cover for the drug paxalisib?

The licensing agreement covers Greater China, including Mainland China, Hong Kong, Macau, and Taiwan.

When did Kazia commence patient recruitment for the GBM AGILE study?

Patient recruitment for the GBM AGILE study began in January 2021.

What type of drug is paxalisib and what condition is it targeting?

Paxalisib is a brain-penetrant inhibitor targeting glioblastoma, the most common and aggressive form of brain cancer.