Kazia Therapeutics Limited

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ASX:KZA | NASDAQ:KZIA

A N N U A L   R E P O R T   2 0 2 1

THERE WILL BE A 

GREAT DEAL MORE 

DATA TO COME OVER 

THE NEXT YEAR OR 

TWO, OF COURSE, BUT 

OUR FUTURE SUCCESS 

WILL MORE AND 

MORE BE MEASURED 

IN THE DELIVERY OF 

MILESTONES RELATING 

NOT TO THE DRUG’S 

EXPLORATION, 

BUT TO ITS 

COMMERCIALISATION. 

IN SUBTLE BUT 

FUNDAMENTAL WAYS, 
THE GAME  

HAS CHANGED.

II

Kazia Therapeutics Limited

Annual Report 2021

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2020/2021 at a glance

Chairman’s letter

CEO’s report

Key milestones and highlights

Pipeline review

Partner for success

Work with the best

Chapter two in the Kazia story

Financial report FY21

2

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8

10

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Annual Report 2021

Kazia Therapeutics Limited

1

CHANGINGTHE PARADIGM 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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2021 AT A GLANCE

Two best-in-class 
or first-in-class 
development 
candidates in 
clinical trials by 
end of CY2021

  9

  45

  >150

ongoing clinical trials 
with paxalisib 

hospitals currently 
recruiting patients in 
GBM AGILE

patients treated with 
paxalisib worldwide 
to date

As at 30 June 2021

As at 30 June 2021

As at 30 June 2021

Paxalisib is under 
investigation 
across a diverse 
range of brain 
cancers

Kazia has grown 
rapidly, driven 
by progress in 
its world-class 
pipeline of cancer 
drug candidates

  4

distinct indications  
in phase II studies 
with paxalisib

Glioblastoma, 
DIPG, primary CNS 
lymphoma, brain 
metastases

  3

major cross-border 
licensing deals  
in FY2021

2

Kazia Therapeutics Limited

Annual Report 2021

Number of phase III 
clinical trials active 
globally   

Average survival 
from diagnosis with 
glioblastoma

Lung Cancer

 184 
 13

Glioblastoma

12-18
months

SOURCE:  
clinicaltrials.gov

SOURCE: National  
Brain Tumor Society

US$ 323M

in potential milestone payments from 
outbound partnering deals

80%

of operating 
cashflows 
invested in R&D
For FY2021

$24M

of new equity 
capital raised 
through financing 
in FY2021

 
  
  
 
 
 
Kazia Therapeutics is an innovative oncology-focused drug development company. 
We collaborate with clinicians, scientists, and researchers around the world to bring 
new hope to patients with cancer.

Overall Survival 

Paxalisib

 17.5months 

Temozolomide  
(existing standard of care)

 12.7months

Interim analysis as  
at November 2020

Average age at  
diagnosis with DIPG

5-7
years

Phase I study of 
EVT801 expected 
to commence by 
end CY2021

  96

Up to 96 patients 
planned in EVT801 
phase I study

as at 30 June 2021

Number of new diagnoses  
of brain metastases each  
year in United States 

   >200,000

Five-year survival  
rate of primary  
CNS lymphoma 

   30%

SOURCE: DIPG.org

SOURCE: American Association  
of Neurological Surgeons

Green & Hogg (2020)

Enterprise value  
(market capitalisation,  
less cash)   
(AU$) 

$146.0m

Indicative Analyst Valuation (AU$)

19 Sept 2018 

$103m

01 Apr 2019 

$115m

23 Jun 2019 

$137m

28 Aug 2020

$145m

$5.7m 

$3.8m 

$12.7m  $14.9m 

$35.6m

10 Dec 2020

19 Apr 2021

$244m

$346m

30 June 
2016

30 June 
2017

30 June 
2018

30 June 
2019

30 June 
2020

30 June 
2021

SOURCE: Edison Research

Annual Report 2021

Kazia Therapeutics Limited

3

2021 AT A GLANCECHAIRMAN’S LETTERCEO’S REPORTKEY MILESTONESPIPELINE REVIEWPARTNER FOR SUCCESSWORK WITH THE BEST#2 IN THE KAZIA STORYFINANCIAL REPORTS  
  
CHAIRMAN’S LETTER

Dear Shareholder,

The end of the 2021 financial year 
finds Kazia in very robust health, 
with dramatic progress reported 
across every aspect of our business: 
clinical development, partnering, 
and financing. It is a pleasure to take 
this opportunity to review some of 
the most significant milestones of 
this past year.

FINANCIAL PERFORMANCE

Our cash balance at 30 June 2021 
was $27.6 million, versus $8.8 million 
at 30 June 2020. Our total assets 
were $58.1m, up from $23.1 million at 
30 June 2020. We committed outlays 
of $23.9m of which 80% was devoted 
directly to investment in R&D. 

4

Kazia Therapeutics Limited

PARTNERING LIES AT THE HEART OF KAZIA’S BUSINESS MODEL, AND THE TRANSACTIONS DURING FY2021 DEMONSTRATE THAT THIS IS NOT MERELY AN ASPIRATION BUT AN IMPORTANT AND HIGHLY DIFFERENTIATING ABILITY OF THE COMPANY.BUILDING VALUEWe feel that it represents first-class 
science, thanks in large part to the 
excellent work done by Evotec, its 
previous custodians. Its potential 
is enormous and we are fully 
committed to commencing a phase I 
study by the end of calendar 2021.

CONCLUSION

We conclude this financial year 
substantially further along our 
journey than we were twelve months 
ago. Our lead program, paxalisib, 
is in a pivotal study for registration 
and has already begun to generate 
commercial revenue by virtue of a 
regional licensing transaction. The 
legacy Cantrixil asset has been 
successfully partnered to Oasmia, 
a company that is ideally placed to 
take it forward, as we foreshadowed 
in last year’s Annual Report. And 
our pipeline has been broadened 
and immeasurably enriched by 
the addition of an exceptionally 
promising new asset, EVT801, 
for which we have extremely high 
hopes. All in all, it has been a 
year of remarkable progress, and 
a profound validation of Kazia’s 
efforts since 2016.

As always, I would like to thank 
my fellow directors and our 
management team, led by our CEO, 
James Garner, for their first-class 
work in support of the company. 
We are grateful to our shareholders 
whose belief in the company 
underpins everything that we do. I 
look forward to reporting our further 
progress in the year ahead. 

Iain Ross 
Chairman of the Board

In part, our healthy cash balance 
reflects a successful financing round 
in October 2020, which raised 
gross proceeds of approximately 
$24 million. This was anchored by 
existing institutional investors, but 
also brought several new names to 
the register, as well as providing an 
opportunity for eligible shareholders 
to increase their position via a non-
renounceable entitlement offer. 
The company has been grateful 
for the consistent and enthusiastic 
support of its major shareholders.

I am pleased that the market has 
rewarded that support. Kazia ended 
the previous financial year with a 
share price on the ASX of $0.46. 
On 30 June 2021, we closed at $1.31, 
representing a 185% appreciation in 
12 months. Those who participated 
in our October 2020 financing 
have made an annualised return of 
93% to 30 June 2021. This progress 
is set against a backdrop of an 
exceptionally challenging second 
half for the global biotech industry. 
Since its highs near the beginning 
of calendar 2021, the NASDAQ 
small cap biotech index is down 
more than 20%, and Kazia has 
remained remarkably resilient in the 
context of this challenging market.

BUSINESS DEVELOPMENT  
& LICENSING

Almost every young biotech 
company goes through several 
rounds of financing before it is 
able to become economically 
self-sufficient. Remarkably, that 
transition has already begun in 
Kazia. In the second half of FY2021, 
we reported material revenues from 
partnering activities, pertaining to 
licenses for Cantrixil and paxalisib. 
In effect, Kazia has declared its 
maiden revenue. Future payments 
from these transactions will be 
necessarily irregular, but we stand 
to receive up to a further US$ 
323 million in milestone payments, 
together with very substantial 
royalties on commercial sales. The 
majority of the territorial rights for 
paxalisib, representing more than 
90% of the global pharmaceutical 
market, remain unpartnered, and 
we expect to realise very much 
greater value in future partnering 
transactions.

PIPELINE PROGRESS

These partnering milestones would no 
doubt have been impossible without 
the rapid and convincing progress 
that has been made in the clinical 
development of paxalisib. In January 
of this year, the drug commenced 
recruitment to the GBM AGILE pivotal 
study and is now well advanced in its 
enrolment. The initial focus has been 
on the United States, but expansion 
to Europe and China is anticipated 
during the early part of FY2022. 
I have previously spoken and written 
about the merits of GBM AGILE, and 
the highly innovative approach to 
drug development that it represents. 
So far, our expectations have been 
exceeded  in terms of the operational 
execution of the study and the 
extraordinary rate of recruitment. 
The Board remains convinced that 
GBM AGILE is the appropriate way to 
bring paxalisib forward.

Meanwhile, our own phase II study 
of paxalisib draws rapidly to a 
close. New data presented at the 
Society for Neuro-Oncology Annual 
Meeting in November 2020 helped 
to corroborate the very positive 
efficacy signals that have previously 
been seen. We expect to conclude 
the study in the second half of 
calendar 2021.

A NEW ASSET

When we negotiated our license for 
GDC-0084, as paxalisib was then 
known, with Genentech in 2016, 
we never envisioned that we would 
become a single-asset company. 
Over the intervening years, the rich 
opportunities derived from paxalisib 
have exceeded all expectations, and 
it has been appropriate for us to 
focus our resources on exploiting it 
to the fullest extent possible.

With that drug now well advanced 
on its path to commercialisation, 
however, it has proven timely 
to revisit our earlier aspirations 
and to look at opportunities to 
broaden Kazia’s pipeline. The task 
set by the Board was simple and 
challenging: find a drug candidate 
that excites us as much as paxalisib. 
After considering many, many 
opportunities, EVT801 has been 
the first candidate that has met the 
threshold we set ourselves. 

Annual Report 2021

Kazia Therapeutics Limited

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Dear Shareholder,

It has become almost a cliché to 
describe each year in the young life 
of Kazia as transformative, but the 
word could hardly be more apt. In 
the last twelve months, our lead 
asset, paxalisib, has commenced 
a pivotal study for registration, we 
have completed a major financing 
round to the tune of AU$ 24 million 
in gross proceeds, we have out-
licensed the legacy Cantrixil asset, 
we have in-licensed an extremely 
promising new asset, EVT801, 
and we have begun the process of 
commercialising paxalisib through 
a substantial partnership with 
Simcere Pharmaceutical in China.

CEO’S REPORT

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Kazia Therapeutics Limited

IN ALMOST ANY OTHER SETTING, ONE OR TWO OF THESE MILESTONES WOULD PROVIDE THE CORNERSTONES OF AN EXTREMELY SUCCESSFUL YEAR. 
This list, dramatic as it is, is only a 
selective compilation of highlights. 
One could also point to our receipt 
of important regulatory designations 
by FDA, such as Fast Track and 
Rare Pediatric Disease Designation 
for paxalisib. Important new data 
read outs have been presented 
at international conferences and 
several new phase II clinical studies 
were launched. These include one 
in primary CNS lymphoma at Dana-
Farber Cancer Institute, one in DIPG 
with the Pacific Pediatric Neuro-
Oncology Consortium, and a third at 
Cornell University examining paxalisib 
in combination with ketogenesis. The 
scientific advisor for this study is none 
other than Professor Lew Cantley, the 
scientist who originally discovered the 
PI3K pathway. 

In almost any other setting, one 
or two of these milestones would 
provide the cornerstones of an 
extremely successful year. For Kazia, 
they simply represent the methodical 
delivery of the plan that we outlined 
some years ago, and which we have 
systematically reported on at every 
opportunity since. All our recent 
achievements represent the fruition of 
work that the company commenced 
in 2016, and which has seen us grow 
from a corporate shell with negligible 
enterprise value to an exciting 
contender in the global life sciences 
industry.

As such, there is a certain continuity 
to the first five years of Kazia. It has 
been a story dominated by paxalisib, 
by our efforts to demonstrate the 
broad potential of that drug, and 
by our rapid movement through the 
clinical development process. 

The future will be different. With the 
GBM AGILE study underway, Kazia 
now finds itself within just a few years 
of potentially commercialising a novel 
pharmaceutical product. And not just 
any product – paxalisib may be the 
first new drug for glioblastoma in more 
than twenty years. 

Increasingly, this will mean that Kazia’s 
attentions must focus on preparing 
paxalisib for commercialisation. Until 
now, the question has been a simple 
one: does the drug work?  
We have answered that question to 
the best of our ability, and at least to 
our own satisfaction, and this has been 

the basis of its transition to a pivotal 
study for registration. There will be a 
great deal more data to come over the 
next year or two, of course, but our 
future success will more and more be 
measured in the delivery of milestones 
relating not to the drug’s exploration, 
but to its commercialisation. 
In subtle but fundamental ways, 
the game has changed.

In that regard, the most 
important achievement of this 
past year has perhaps been 
our licensing transaction with 
Simcere Pharmaceutical for the 
commercialisation of paxalisib 
in Greater China. This deal 
provided gross upfront proceeds 
of US$ 11 million, contingent 
milestone payments of up to US$ 281 
million, and a mid-teen royalty on 
commercial sales in the territory. 

The deal is important for three 
reasons. First, it demonstrates that 
paxalisib is attractive to, and able 
to withstand detailed due diligence 
by, one of the leading companies 
in the world’s second largest 
pharmaceutical market. A company 
with a track record of more than 
forty successful commercial products 
also believes that the drug has the 
potential to be extremely successful. 

Second, and to the extent that 
this deal provides for the first time 
an implicit market valuation for 
paxalisib, it has become clear that 
the economic value of our asset is 
substantial. The deal terms described 
above relate to a market which 
comprises, at most, around 10% of 
the global pharmaceutical market. 
The remainder is ours to monetise 
at our discretion, and it would be 
reasonable to impute equivalent or 
greater value to those global rights. 

Finally, our ability to deliver a 
world-class partnering transaction 
validates not just paxalisib, but also 
Kazia’s entire business model. We 
have always said that Kazia’s core 
competencies would lie in clinical 
development and partnering. 
With nine clinical trials now ongoing, 
we have proven the first of these. And 
with two international out-licensing 
deals in the past six months, we can 
now claim to have demonstrated our 
capabilities in the second area. As  a 
business model, Kazia is not reliant 

on lofty aspirations, naïve hopes, 
or vague possibilities. Rather, the 
company has now established a track 
record, on which we hope to build 
further in the years ahead.

To that end, we have begun the next 
phase in the evolution of our pipeline 
by bringing on board a second asset. 
With paxalisib well advanced, it 
seemed timely to revisit our original 
goals for the business, which always 
envisaged a pipeline of several high-
quality drug candidates at different 
stages of development. Having a 
diversified pipeline maximises 
return and minimises risk for our 
shareholders, and it gives us the 
scale to build richer relationships 
with clinicians, deeper partnerships 
with collaborators, and a more 
efficient operating model. 

The challenge has been to find a 
drug candidate of the same calibre 
as paxalisib. EVT801 has been the 
first opportunity which excites us 
as much as paxalisib. Scientifically, 
it lies at the intersection of a 
well-established area of cancer 
treatment – angiogenesis – and a 
very new area of cancer treatment 
– immuno-oncology. In practice, it 
has been taken through preclinical 
development by Evotec, one of the 
most respected companies in the 
business. And in terms of its potential 
to benefit patients and realise value 
for Kazia, it is every bit the equal 
of paxalisib. We could not be more 
thrilled to bring it into our portfolio. 
EVT801 will enter a phase I clinical 
trial by the end of calendar 2021, and 
we will have much to report in the 
year ahead.

I am immensely grateful to my 
colleagues on the Board and in 
the Management Team for their 
perseverance and commitment 
over this past year, to our many 
collaborators and partners for their 
belief and investment in our drug 
candidates, and to our shareholders 
for their enthusiastic support of the 
company.

Dr James Garner 
Chief Executive Officer

Annual Report 2021

Kazia Therapeutics Limited

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KEY MILESTONES AND HIGHLIGHTS – 2020/2021 

November 2020

New interim data 
from paxalisib 
phase II study 
in glioblastoma 
directionally 
confirms earlier 
data and 
continues to 
suggest a survival 
benefit associated 
with the drug.

August 2020

Paxalisib is 
granted Rare 
Pediatric Disease 
Designation 
(RPDD) by the US 
FDA for DIPG and 
diffuse midline 
gliomas, making 
it eligible for a 
Pediatric Priority 
Review Voucher 
(PRV) if the drug is 
approved in  
this indication.

September 2020

Kazia enters into 
a partnership 
with Dana Farber 
Cancer Institute 
in Boston, MA to 
explore paxalisib 
in a phase II 
clinical trial in 
primary CNS 
lymphoma.

August 2020

Paxalisib is 
granted Fast Track 
Designation (FTD) 
by the US FDA 
for glioblastoma, 
permitting 
enhanced 
consultation with 
FDA and access 
to ‘rolling review’ 
NDA submission.

December 2020

Kazia enters into 
a partnership 
with the Pacific 
Pediatric Neuro-
Oncology 
Consortium 
(PNOC) to explore 
paxalisib in an 
international phase 
II combination 
trial in DIPG and 
diffuse midline 
gliomas.

October 2020

Kazia raises AU$ 
24 million via 
an accelerated 
non-renounceable 
rights offering.

8

Kazia Therapeutics Limited

Annual Report 2021

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’

March 2021

Kazia partners 
paxalisib for 
Greater China 
to Simcere 
Pharmaceutical 
for US$ 11 million 
upfront, up to 
US$ 281 million 
in contingent 
milestones, and 
tiered mid-teen 
royalties.

June 2021

Kazia enters into 
a partnership with 
Cornell University 
to explore 
paxalisib in 
combination with 
a ketogenic diet in 
a phase II trial for 
glioblastoma.

January 2021

GBM AGILE 
commences 
recruitment to 
the paxalisib arm, 
marking formal 
initiation of the 
international 
registration study 
for the drug.

June 2021

Key 
manufacturing 
patents granted 
for paxalisib, 
with potential 
to protect 
manufacturing 
process to 2036.

April 2021

Kazia in-licenses 
EVT801, a 
selective small-
molecule inhibitor 
of VEGFR3, from 
Evotec SE of 
Germany for € 1 
million upfront, 
approximately 
€ 300 million 
in contingent 
milestones, and 
single-digit 
royalties.

March 2021

Kazia partners 
Cantrixil legacy 
asset to Oasmia 
Pharmaceutical of 
Sweden for US$ 4 
million upfront, up 
to US$ 42 million 
in contingent 
milestones, and 
double-digit 
royalties.

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Annual Report 2021

Kazia Therapeutics Limited

9

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PIPELINE REVIEW: TWO FIRST-CLASS  
DEVELOPMENT CANDIDATES

FOR THE LAST FIVE YEARS, KAZIA’S STORY 

HAS BEEN PRINCIPALLY THE STORY OF 

PAXALISIB. A NEW DRUG CANDIDATE, 

EVT801, HAS NOW ENTERED THE KAZIA 

PIPELINE, CREATING RICHER AND MORE 

NUMEROUS OPPORTUNITIES FOR THE 

YEARS AHEAD.

PAXALISIB

One of the most important milestones 
in the entire development of paxalisib 
occurred on 4 January 2021. On that 
day, and right on schedule, paxalisib 
began recruitment to a pivotal study 
for registration – GBM AGILE, which is 
being driven by the Global Coalition 
for Adaptive Research. 

A pivotal study is the final chapter 
in the development of any new 
medicine, and the results that emerge 
from GBM AGILE will provide the 
basis on which FDA, EMA, and other 
regulatory agencies determine 
whether to grant paxalisib a marketing 
authorisation. GBM AGILE will test 
paxalisib both in newly diagnosed 
glioblastoma patients, and those with 
recurrent disease, and the drug may 
show benefit in either or both of these 
patient populations.

The primary endpoint of paxalisib 
is overall survival (OS), which is a 
measure of the ability of a drug to 
prolong life. It is the most demanding 
criterion on which to judge a cancer 
drug and is rightly considered 
the ‘gold standard’ by regulatory 
agencies. In glioblastoma, no drug 
this century has shown convincing 
evidence of an ability to improve OS. 

If our participation in GBM AGILE is 
a success, then paxalisib may be the 
first new therapy, at least for newly 
diagnosed patients, in twenty years. 

GBM AGILE will recruit up to 200 
patients on paxalisib. However, 
the study uses a sophisticated and 
novel statistical approach called 
an ‘adaptive design’ to readjust 
its statistical power as it goes. 
Consequently, if an answer becomes 
clear after fewer than 200 patients, 
the study will conclude early and 
Kazia will look to submit a new drug 
application to FDA with the final data 
in hand. As a base case, we expect 
that the duration of the study will be 
around two-and-a-half years, but the 
adaptive design means that it may be 
longer or shorter, depending on the 
data that emerges. 

The initial focus of GBM AGILE has 
been on the United States, where 
more than forty leading cancer 
hospitals are now participating. 
During FY2022, paxalisib will 
additionally become available to 
patients in Canada, Europe, and 
China, which will substantially 
accelerate recruitment. 

10

Kazia Therapeutics Limited

Annual Report 2021

SURGING AHEAD Much of the work that Kazia has been 
doing with paxalisib this year has 
been to support GBM AGILE, and to 
facilitate the regulatory submission 
which hopefully follows conclusion 
of the study. One manifestation 
of these efforts has been a slew of 
‘special designations’ from FDA in 
August 2020, comprising orphan 
drug designation, rare pediatric 
disease designation, and fast track 
designation. Collectively, these 
regulatory milestones very much 
enhance and deepen the discussion 
between Kazia and FDA, and help us to 
best position the drug for success.

IN GLIOBLASTOMA, NO DRUG 
THIS CENTURY HAS SHOWN 
CONVINCING EVIDENCE OF AN 
ABILITY TO IMPROVE OS. IF OUR 
PARTICIPATION IN GBM AGILE IS A 
SUCCESS, THEN PAXALISIB MAY BE 
THE FIRST NEW THERAPY, AT LEAST 
FOR NEWLY DIAGNOSED PATIENTS, 
IN TWENTY YEARS.

Kazia has primarily been focused 
on FDA, the US Food and Drug 
Administration, for much of paxalisib’s 
development. Following our partnership 
with Simcere Pharmaceutical in China, 
however, an almost equal amount of 
work is going into preparing paxalisib 
for consideration by NMPA, the 
Chinese regulatory agency. The Kazia 
and Simcere teams have spent many 
hundreds of hours preparing for the very 
specific requirements set out by NMPA, 
with an objective of launching GBM 
AGILE in China by the end of CY2021. 

Our partnership with Simcere is not 
only of great operational value – by 
itself, Kazia would never be able 
to optimally navigate the Chinese 
regulatory environment – but it 
also represents another important 
milestone for the drug. Our licensing 
agreement with Simcere in March 
2021 provided gross proceeds of 
US$ 11 million upfront, plus up to 
$281 million in contingent milestones 
and mid-teen royalties on net sales. 
These terms represent one of the 
richer transactions ever executed in 
China for a drug of this type and have, 
in effect, provided the first revenue 
for paxalisib. As the drug proceeds 
through development, further 
milestone payments will be reinvested 
by Kazia in the global paxalisib 
program. Although all eyes are rightly 
focused on product registration, the 
reality is that paxalisib has already 
begun to generate value for Kazia and 
its shareholders.

Meanwhile, a broad and growing 
portfolio of clinical trials in other 
forms of brain cancer will help us in 
due course to expand the potential 
commercial opportunity for paxalisib. 
Although glioblastoma represents, 
on a conservative assessment, a 
US$ 1.5 billion annual commercial 
market, paxalisib has the potential to 
provide benefit in a much wider range 
of diseases. The clinical program that 
has been deployed will help to identify 
new opportunities. To be clear, it is 
possible that not all of these trials will 
be successful. However, if even one of 
them suggests an additional use for 
paxalisib, it will substantially increase 
the commercial value of the product.

A ‘PIVOTAL’ STUDY OR A 
‘PHASE III’ STUDY?

Clinical drug development 
has traditionally been divided 
into three phases, denoted by 
Roman numerals. However, the 
terminology has become old-
fashioned. Regulatory agencies 
increasingly differentiate between 
studies which are exploratory 
in nature, and those which are 
intended to secure product 
registration. The latter are 
described as ‘pivotal’ studies, or 
‘registration’ studies, and Kazia 
generally uses that language 
in relation to GBM AGILE.

GBM AGILE – KEY FACTS

•   An ‘adaptive trial’ that only 

recruits the number of patients 
needed to reach an answer

•   Substantially faster and more 

cost-effective than conventional 
approaches

•   Up to 200 patients on paxalisib, 
with the potential to conclude 
much earlier, depending on 
emergent data

•   Operational in >40 hospitals 
across the United States, with 
expansion to Canada, Europe, 
and China in FY2022

Annual Report 2021

Kazia Therapeutics Limited

11

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PIPELINE REVIEW: TWO FIRST-CLASS DEVELOPMENT CANDIDATES (continued)

Sponsor

Phase

Indication

Kazia Therapeutics

II

Glioblastoma

Registration

NCT03522298

Global Coalition for 
Adaptive Research

Weill Cornell Cancer Center

Alliance for Clinical Trials 
in Oncology

Dana-Farber Cancer Institute

Dana-Farber Cancer Institute

Pacific Pediatric  
Neuro-Oncology Consortium

St Jude Children’s Research 
Hospital

Memorial Sloan Kettering 
Cancer Center

II / III

Glioblastoma

NCT03970447

II

II

II

II

II

I

I

Glioblastoma (with ketogenic diet)

TBD

Brain metastases

NCT03994796

Breast cancer brain metastases (with Herceptin) NCT03765983

Primary CNS lymphoma

NCT04906096

DIPG & DMGs (childhood brain cancer)

TBD

DIPG (childhood brain cancer)

NCT03696355

Brain metastases (with radiotherapy)

NCT04192981

EVT801

In April 2021, Kazia licensed EVT801, an 
investigational new drug for multiple 
forms of cancer, from Evotec SE, a 
European drug development company. 
EVT801 is now Kazia’s second 
pipeline asset, behind paxalisib, and 
it represents a tremendously exciting 
addition to the company’s portfolio.

An introduction to EVT801 can be 
found later in this Annual Report. 
In terms of activity, however, the 
entire focus of the program since 
April has been on launching a phase 
I clinical trial by the end of CY2021. 
The Kazia and Evotec teams have been 
working closely together to design a 

cutting-edge study protocol, identify 
suitable clinical trial sites, manufacture 
investigational product, and navigate 
the European regulatory processes.

The study remains well on track, 
indeed potentially ahead of schedule. 
The transition into a human trial 
is always an enormous step in the 
development of any new medicine. 
For EVT801, we expect that the 
study will rapidly begin to generate 
data that demonstrates its potential, 
guides its future development, and 
establishes it as a worthy companion 
to paxalisib in the Kazia portfolio.

Such a rapid transition into human 
trials is only possible with the benefit 
of a compelling package of preclinical 
data. Kazia and Evotec have begun 
work on an academic publication 
that will summarise this rich body 
of data, and it is expected that this 
will be published in a peer-reviewed 
academic journal and communicated 
to investors by the end of CY2021.

Sponsor

Phase

Indication

Registration

Kazia Therapeutics

I

Advanced Solid Tumours

TBD

12

Kazia Therapeutics Limited

Annual Report 2021

PARTNERING FOR SUCCESS: THREE MAJOR  
CROSS-BORDER LICENSING DEALS IN FY2021

working closely together to secure 
regulatory approval and commercial 
success in China. The Greater China 
market represents 8-10% of the 
global opportunity for a new cancer 
drug, and so Kazia remains free to 
find other partners in other regions 
or, in principle, to commercialise 
itself in some territories.

In April 2021, we executed a deal 
with Evotec SE which brought a new 
asset, EVT801, into our pipeline. 
Evotec is one of the world’s leading 
drug development partners and 
works closely with a wide range of 
pharmaceutical companies to help 
develop their drug candidates. 
Unsurprisingly, the work done 
on EVT801 was first-class. Their 
business strategy does not envisage 
taking their own drugs into clinical 
trials, and so it presented an ideal 
partnering opportunity for Kazia. 
The deal comprised a €1 million 
upfront payment, up to €308 
million in milestones, and single 
digit royalties (i.e. < 10%). 

In aggregate, these three transactions 
have radically reshaped Kazia 
as a business, and left it greatly 
strengthened. The sense of 
transformation however is deceptive 
– these sorts of transactions are a 
central part of what Kazia exists to 
do and they represent one of our 
core competencies as a business.

A typical pharmaceutical licensing 
deal has three components:

Upfront Payment – this is paid at the 
time of signing a licensing agreement 
and is non-refundable. 

Milestone Payments – these are 
paid throughout the development 
and commercialisation of the drug, 
providing certain milestones are met. 
Typical milestones may include FDA 
approval, selling >$500 million in a 
given year, or achieving approval for 
a second indication.

Royalties – these are paid as a 
percentage of net sales. They 
may be tiered, so that higher 
sales in a given year pay a larger 
percentage in royalties.

In March 2021, Kazia partnered the 
legacy Cantrixil asset to Oasmia 
Pharmaceutical AB of Sweden. 
This drug candidate was developed 
by Novogen Limited, and Kazia was 
of the view that the work needed to 
shape it into a viable commercial 
product would be better performed 
by a larger, more specialised 
company. Oasmia has an existing 
commercial product in ovarian cancer, 
and deep expertise in this field, so it 
represented the ideal partner. Kazia 
received a US$ 4 million upfront 
payment, up to US$ 42 million in 
milestone payments, and double-
digit royalties (i.e. ≥ 10%). In this 
way, Kazia will substantially benefit 
from any future success in the drug, 
without needing to devote further 
resources to its development.

Also in March 2021, Kazia partnered 
the Greater China rights for 
paxalisib to Simcere Pharmaceutical. 
Regional partnerships such as this 
are sometimes executed late in the 
development of a drug, so as to 
provide the specialist capabilities 
required to commercialise in territories 
such as China. Kazia received a 
US$ 11 million upfront payment, 
up to US$ 281 million in milestone 
payments, and mid-teen royalties. 
Unlike the Cantrixil deal, where 
Oasmia will take the lead in the drug’s 
future development, the Simcere 
partnership envisages the companies 

Annual Report 2021

Kazia Therapeutics Limited

13

Not so long ago, drug development 
used to be conducted in complete 
isolation, with individual companies 
working on their own drugs, ‘from 
the bench to the bedside’. This is no 
longer the case. Today, many drugs 
pass through the custodianship 
of several companies during their 
development and commercialisation. 
In 2020, pharmaceutical licensing 
deals in oncology alone totalled  
US$ 59 billion in value.1

Kazia has been established to 
capitalise on this trend. The company 
performs no in-house drug discovery. 
Rather, we look to identify promising 
drug candidates in the global pipeline 
which are no longer strategic for their 
parent companies. We bring those 
in to Kazia, build their value through 
innovative clinical development 
strategies, and generally seek to 
partner them for commercialisation.

One key advantage of this approach 
is financial in nature. To bring a good 
quality drug candidate to the point 
where it can begin clinical trials 
costs many millions of dollars. Kazia 
typically acquires assets for a discount 
to their sunk cost, providing future 
upside to licensors in the event of 
success. This has allowed us to bring 
two world-class drug candidates into 
our pipeline at very modest cost. 
A second advantage is that it gives 
us access to the very best research, 
without being limited by the expertise 
of in-house scientists.

1S Hardison (2021). BioPharma Dealmakers.

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MAKING DEALSKAZIA’S BUSINESS MODEL IS PREDICATED NOT JUST ON THE ABILITY TO DESIGN AND EXECUTE INNOVATIVE CLINICAL TRIALS, BUT ALSO ON THE CAPACITY TO PARTNER WITH OTHER COMPANIES FOR DISCOVERY AND COMMERCIALISATION. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
WORKING WITH THE BEST

Dr Lakshmi Nayak is Director of the 
Center for CNS Lymphoma at Dana-
Farber Cancer Institute in Boston, 
MA, and an Assistant Professor of 
Neurology at Harvard Medical School. 
After completing her residency at 
Weill Cornell Medical College in New 
York, she underwent a fellowship at 
Memorial Sloan Kettering Cancer 
Center. She became a board-certified 
neurologist in 2009, and a board-
certified neuro-oncologist in 2013.

Dr Nayak has been instrumental in 
establishing Dana-Farber as a centre 
of excellence for the treatment of 
primary CNS lymphoma. The CNS 
Lymphoma Center is the first of 
its kind dedicated specifically to 
providing multi-disciplinary care to 
patients with primary or secondary 
CNS lymphoma. Her research is 
focussed on exploring the genomic 
landscape of CNS lymphomas, 
including identification of targets 
and mechanisms of resistance 
and response to targeted agents. 
To this end, she has established 
a cerebrospinal fluid and brain 
tumour tissue banking protocol and 
developed patient-derived xenograft 
models for this rare disease. 

In addition to her research interests 
in CNS lymphoma, Dr Nayak has led 
numerous multicentre clinical trials in 
glioblastoma and other solid tumours. 
The US National Cancer Institute’s 
Cancer Therapy Evaluation Program 
(CTEP) selected her proposal for a 
phase I study of two novel agents for 
a study in solid tumours, including 
glioblastoma, from among a highly 
competitive field. 

Dr Nayak is an author of more than 
seventy peer-reviewed academic 
publications in brain cancer. She is a 
highly sought-after thought leader in 
the field, serving on a national panel 
of the Joint Guidelines Committee 
of the American Association of 
Neurological Surgeons (AANS) and 
Congress of Neurological Surgeons 
(CNS) which has drafted guidelines 
for management of progressive 
glioblastoma, as well as on the Neuro-
Oncology Guidelines Committee 
for the American Academy of 
Neurology (AAN). She leads the 
Neurologic Assessment in Neuro-
Oncology (NANO) working group 
with international thought-leaders in 
neuro-oncology and has developed 

an objective and quantifiable measure 
of neurologic function to facilitate 
comparison across clinical trials in 
brain tumours.  

Dr Nayak has conducted preclinical 
and clinical research on the PI3K/
mTOR pathway in primary brain 
tumours and is the principal 
investigator for a phase II clinical 
study of paxalisib (NCT04906096) 
in primary CNS lymphoma, which 
commenced patient recruitment in 
June 2021.

Dr Sabine Mueller is a paediatric 
neuro-oncologist who specialises in 
caring for children with brain tumours 
and related genetic syndromes. 
She obtained her PhD and her 
medical degree from the Universität 
Hamburg School of Medicine. She is 
a Professor at University of California, 
San Francisco (UCSF), Departments 
of Neurology, Neurosurgery and 
Pediatrics. 

In addition to her roles at UCSF, Dr 
Mueller also serves as the Clinical 
Lead of The Diffuse Didline Glioma 
Center of  at the Universität-
Kinderspital in Zurich, Switzerland. 
The DIPG/DMG Center in Zurich is a 
leading multi-disciplinary unit focused 
on clinical practice and translational 
research, with a mission to improve 
the prognosis for children with DIPG/
DMG.

Prior to her medical career, Dr Mueller 
worked as a scientist, director of 
genomics, and project leader for 
a brain tumour program at AGY 
Therapeutics, a biotechnology 
company in South San Francisco. 

Dr Mueller is a highly experienced 
clinical researcher, with specialist 
qualifications in trial design and 
methodology. She is the Project 
lead of the Pacific Pediatric Neuro-
Oncology Consortium (PNOC), an 
international coalition of more than 
two hundred brain tumour specialists, 
focused on finding new treatment 
options for children with brain cancer. 

Dr Mueller is the principal investigator 
for an adaptive clinical study which 
will explore multiple combination 
therapies in DIPG/DMG. Paxalisib 
will be one of the therapies under 
investigation. Recruitment is expected 
to commence in the second half of 
calendar 2021.

14

Kazia Therapeutics Limited

Annual Report 2021

Dr Lakshmi Nayak

Dr Sabine Mueller

KAZIA IS PRIVILEGED TO WORK WITH CANCER RESEARCHERS AROUND THE GLOBE WHO SHARE OUR PASSION FOR GOOD SCIENCE AND OUR COMMITMENT TO PATIENTS.I

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CHAPTER TWO IN THE KAZIA STORY

ANGIOGENESIS: TARGETING 
THE SUPPLY CHAIN OF THE 
TUMOUR

In a famous academic paper in 1971, 
an American medical researcher 
named Judah Folkman observed 
that tumours were ‘hot and bloody’. 
The reason, he surmised, was that a 
rapidly growing tumour depended 
on rich supply of oxygen and 
nutrients to grow, and consequently 
needed to trigger the formation of 
new blood vessels to supply those 
materials. The implication was 
obvious: if we could prevent the 
formation of new blood vessels, 
it would starve the tumour of 
essential nutrients, and thereby 
slow or even reverse its growth.

More than thirty years later, 
Dr Folkman’s theory was proven. 
A young biotech company named 
Genentech secured FDA approval 
for a new drug named Avastin 
(bevacizumab), for use in bowel 
cancer. Avastin worked by targeting 
vascular endothelial growth factor 
(VEGF), a chemical that tumours 
use to trigger the formation of 
new blood vessels. As Dr Folkman 
had hypothesised, blocking VEGF 
limited the supply of nutrients to 
the tumour and thereby slowed or 
even reversed its growth. Today, 
Avastin is one of the most successful 
cancer drugs of all time and is used 
in diseases as diverse as lung cancer, 
breast cancer, ovarian cancer, and 
even some cases of brain cancer.

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VASCULARIZED, 
ANGIOGENIC TUMOUR

TREATMENT WITH 
ANGIOGENESIS 
INHIBITOR

VESSELS BEGIN TO 
REGRESS

TUMOUR SHRINKS

Source: Nature Reviews / Cancer

Annual Report 2021

Kazia Therapeutics Limited

15

WITH PAXALISIB WELL ADVANCED ON ITS JOURNEY TO COMMERCIALISATION, KAZIA HAS BROUGHT A NEW ASSET INTO THE PORTFOLIO: EVT801, A NOVEL DRUG CANDIDATE WITH POTENTIAL APPLICATIONS IN A WIDE VARIETY OF CANCERS. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CHAPTER TWO IN THE KAZIA STORY (continued)

TODAY, A WIDE VARIETY OF MARKETED DRUGS TARGET ANGIOGENESIS 

Some, like Avastin, work by targeting VEGF. Others target the receptor on blood vessels to which VEGF binds, which is 
known as the VEGF receptor or VEFGR. Drugs which work this way include Nexavar (sorafenib) and Sutent (sunitinib). 
In aggregate, drugs modulating angiogenesis account for more than US$ 10 billion in annual sales.

Product

Company

Target(s)

Indications

Avastin 
(bevacizumab)

Genentech

VEGF-A

– Colorectal cancer 
– Lung cancer 
– Breast cancer 
– Other cancers

Annual Sales 
(US$)

$7 billion

Nexavar 
(sorafenib)

Bayer

Sutent (sunitinib)

Pfizer

Votrient 
(pazopanib)

Novartis

Inlyta (axitinib)

Pfizer

VEGFR 
PDGFR 
RAF kinases

– Hepatocellular carcinoma 
– Renal call carcinoma 
– Thyroid cancer

$1 billion

VEGFR 
PDGFR

VEGFR 
PDGFR 
c-Kit 
FGFR

VEGFR 
c-Kit 
PDGFR

– Renal cell carcinoma 
– Gastro-intestinal stromal tumor

$750 million

– Renal cell carcinoma 
– Soft tissue sarcoma

$1 billion

– Renal cell carcinoma

$400 million

FROM ANGIOGENESIS TO LYMPHANGIOGENESIS – BUILDING A BETTER CANCER DRUG

As effective as it is, targeting 
angiogenesis has a very significant 
problem. Cutting off the blood 
supply reduces the oxygen levels in 
the tumour, a situation described as 
hypoxia in scientific literature. Initially, 
hypoxia stops the tumour from 
growing. However, prolonged hypoxia 
triggers adaptive mechanisms in 
the tumour which allow it to grow 
via different means. Because of this, 
as tumours mutate and develop, 
they eventually become resistant to 
anti-angiogenic therapies. Avastin, 
and therapies like it, are never 
curative, and will eventually become 
ineffective in most patients.

Thankfully, the human body has two 
circulations. The blood circulation 

is the best known and most visible. 
But the lymphatic circulation runs in 
parallel and is just as important for the 
growth of tissues. Cells need access to 
both systems. One can think of them 
as similar to the water and electricity 
supply to a house – both are critical 
for the house to be habitable. 
Targeting the lymphatic system may 
be just as effective in treating cancer. 
And as a bonus, oxygen is carried 
almost entirely by the blood, and so 
cutting off the lymphatic supply to 
a tumour does not cause the same 
level of hypoxia. In principle, a drug 
targeting lymphangiogenesis may 
have all the advantages of a drug 
targeting angiogenesis, without 
the downside of resistance.

16

Kazia Therapeutics Limited

Annual Report 2021

TARGETING VEGFR3 –  
A SELECTIVE APPROACH  
TO LYMPHANGIOGENESIS

Targeting lymphangiogenesis is much 
more technically challenging. Of the 
five subtypes of VEGF, VEGF-C and 
VEGF-D are substantially involved in 
promoting lymphangiogenesis, but 
they also promote angiogenesis, so 
they are not promising as targets for a 
selective therapy.

Fortunately, there are three 
subtypes of VEGF receptor, and 
VEGFR3 is specifically involved in 
lymphangiogenesis. A drug which 
was able to inhibit VEGFR3 would 
selectively reduce the formation of 
new lymphatic vessels but would 
leave blood vessels untouched. 
The result should be a reduction in 
tumour growth, without the problem 
of hypoxia-induced resistance. That is 
the principle that led to the invention 
of EVT801.

EVT801 – A NEXT GENERATION  
ANTI-LYMPHANGIOGENESIS 
THERAPY

EVT801 was originally invented by 
Sanofi, a French pharmaceutical 
company, and was licensed to 
Evotec as part of a transaction 
between those companies. Evotec 

took the drug through the complex 
process of preclinical development, 
building a formidable body of 
data that supports its activity. 

The drug is a selective VEGFR3 
inhibitor. This selectivity is very 
important. Several of the existing 
anti-angiogenesis drugs do have some 
activity against VEGFR3. However, 
they are all relatively non-specific, 
affecting a wide variety of other 
targets, and this leads to substantial 
toxicity. A drug which is selective for 
VEGFR3 should successfully inhibit 
lymphangiogenesis without the many 
toxicities seen in other agents.

EVT801 inhibits the growth of tumours 
in the same way as older anti-
angiogenic therapies: by starving the 
tumour of essential nutrients. However, 
it also has two other important 
benefits. First, many tumours spread 
(metastasise) via the lymphatic system. 
By restricting the development of 
lymphatic vessels, EVT801 is likely to 
reduce the potential metastasis of the 
tumour. This would be very valuable, 
because tumours become much more 
difficult to treat when they spread.

The final potential advantage 
for EVT801 is something that 
would be less obvious from an 
understanding of its mechanism 
of action. For reasons that are 
incompletely understood, drugs 
targeting angiogenesis and 
lymphangiogenesis have the effect 
of changing the balance of white 
blood cells in and around the 
tumour. White blood cells are the 
main actors in the immune system, 
and this effect has important 
therapeutic consequences. One of 
the most significant advances of 
the last decade has been the ability 
to use the body’s own immune 
system to fight cancer. ‘Immuno-
oncology’ drugs have rapidly 
gained a foothold in diseases such 
as melanoma and lung cancer. 
However, many tumours do not 
have many white blood cells in 
them, or they have the wrong 
kind of white blood cells, and in 
these ‘cold’ tumours, immuno-
oncology drugs are usually 
ineffective. If EVT801 is able to 
turn cold tumours ‘hot’, as it does 
in the laboratory, then it may be a 
valuable adjunct to these therapies.

EVT801 IS EXPECTED TO HAVE THREE PRIMARY MECHANISMS OF ACTION

1

2

3

TUMOR KILLING

Direct effect on VEGFR3-expressing tumor 
cells (typically from endothelial origin,  
eg. sarcoma)

INCREASE IN ANTI-TUMOR  
IMMUNE ACTIVITY

Increased infiltration of effector T-cells, and 
reduction in immunosupressive myeloid cells

INHIBITION OF METASTASIS

Stabilsation of tumor vasculature and 
avoidance of hypoxia decreases potential for 
metastatic spread

Annual Report 2021

Kazia Therapeutics Limited

17

Blood vessel

Lymphatic vessel

Normal tissue

Tumor cell

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FINANCIAL REPORTS

18

Kazia Therapeutics Limited

Annual Report 2021

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Annual Report 2021

Kazia Therapeutics Limited

19

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the 
‘consolidated entity’) consisting of Kazia Therapeutics Limited (referred to hereafter as the ‘company’ or ‘parent entity’) and the 
entities it controlled at the end of, or during, the year ended 30 June 2021.

DIRECTORS

The following persons were Directors of Kazia Therapeutics Limited (ABN 37 063 259 754) during the whole of the financial year 
and up to the date of this report, unless otherwise stated:

Iain Ross

Bryce Carmine

Steven Coffey

James Garner

PRINCIPAL ACTIVITIES

During the financial year the principal continuing activity of the consolidated entity consisted of pharmaceutical research and 
development with a view to commercialising the results of our research through license transactions or other means.

DIVIDENDS

There were no dividends paid, recommended or declared during the current or previous financial year.

REVIEW OF OPERATIONS

The loss for the consolidated entity after providing for income tax amounted to $8,421,960 (30 June 2020: $12,467,466).

The attached financial statements detail the performance and financial position of the consolidated entity for the year ended 
30 June 2021.

Cash resources

At 30 June 2021, the consolidated entity had total funds, comprising cash at bank and on hand of $21,086,760 and short term 
deposits of $6,500,000, giving total cash resources amounting to $27,586,760 at year end. Total current assets at year-end stand 
at $29,390,818.

Going concern

The financial statements have been prepared on a going concern basis. The Directors have considered this to be appropriate. 
Refer to ‘Going concern’ in note 2 to the financial statements for further details.

Impact of COVID-19

The Directors have considered the impact of COVID-19 on the operations of the Company and make the following observations:

(1)  Kazia’s key clinical trials have not been materially impacted by COVID-19 to date. The GBM Agile study, the pivotal study 

for paxalisib in glioblastoma, is on track with recruitment running to plan, and no disruption to this schedule is foreseen. The 
Phase II study of paxalisib in glioblastoma was fully recruited prior to the onset of restrictions and is in wrap up stage at the 
date of this report. Plans are on track for the commencement of a Phase I trial for the consolidated entity’s new asset, EVT801, 
before the end of 2021. Further details of this asset are included later in this report.

(2)  In general, clinical research in advanced cancer is relatively protected from pandemic disruption due to the ongoing and 

time-critical need for patient care in specialised facilities which cannot easily be repurposed;

(3)  The Company’s staff have been working remotely since the onset of the pandemic, and hence no operational disruptions have 

occurred or are anticipated to occur; and

(4)  The Company is not reliant on ongoing revenue from customers, and so changes in customer behaviour over the next several 

years due to public health restrictions and reduced economic activity will have little to no impact on its finances.

Accordingly the Directors do not foresee any material impacts on the Company’s operations as a result of the COVID-19 
outbreak.

Rounding of amounts

The Company is a type of Company referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 
2016/191 and therefore the amounts contained in this report and in the financial report have been rounded to the nearest dollar.

20
20

Kazia Therapeutics Limited

Annual Report 2021

Research and development report

The company’s lead development candidate is paxalisib (formerly known as GDC-0084), a small molecule, brain-penetrant 
inhibitor of the PI3K / Akt / mTor pathway, that is being developed as a potential therapy for glioblastoma (GBM), the most 
common and most aggressive form of primary brain tumour in adults, as well as other forms of brain cancer. Paxalisib is orally 
administered and is presented in a 15mg capsule formulation. The development candidate is the subject of IND 112,608 with the 
US FDA.

Paxalisib was developed by Genentech, Inc (South San Francisco, California) and the company entered into a worldwide exclusive 
license for the asset in October 2016. Prior to this transaction, Genentech had completed an extensive preclinical development 
program that provided convincing validation for paxalisib as a potential drug for brain cancer. Genentech also completed a phase 
I clinical trial in 47 patients with advanced recurrent grade III and grade IV glioma (NCT01547546). The most common adverse 
events were oral mucositis and hyperglycemia. Per RANO criteria, 40% of patients exhibited a best observable response of stable 
disease, and 26% demonstrated a metabolic partial response on FDG-PET.

The development candidate was granted the International Non-Proprietary Name (INN) ‘paxalisib’ by the World Health Organisation 
in December 2019. This was confirmed as the United States Adopted Name (USAN) by the USAN Council in April 2020.

Paxalisib is the subject of granted or pending composition-of-matter patents in all key territories. In general, the expiry of these 
patents is in December 2031. However, the company expects that it will be able to secure patent term extensions in the most 
substantial markets, including US, EU, China, Japan, and Korea, and that these extensions will provide effective protection 
until 2036. In addition, the company has recently received notice of grant for a patent protecting the manufacturing process 
associated with paxalisib, and this will provide an additional layer of protection in relevant territories until 2036.

Paxalisib was granted orphan drug designation (ODD) by FDA for glioblastoma in February 2018, and for the broader indication of 
glioma in August 2020. The development candidate also received Fast Track designation (FTD) for glioblastoma in August 2020, 
and Rare Pediatric Disease Designation (RPDD) for diffuse midline gliomas in August 2020. Collectively, these special designations 
provide paxalisib with enhanced access to FDA, a waiver of PDUFA fees, a period of data exclusivity and, in the specific case of 
RPDD, the potential to secure a pediatric Priority Review Voucher (pPRV) should paxalisib be approved in this indication.

Paxalisib commenced recruitment to GBM AGILE (NCT03970447), a phase II / III adaptive clinical trial in glioblastoma, in 
January 2021. GBM AGILE is sponsored by the Global Coalition for Adaptive Research, a US-based 501(C)(3) non-profit 
organisation dedicated to advancing the development of new therapies via the application of cutting-edge statistical 
methodologies. The study is a platform study, or master protocol study, in which multiple experimental agents are evaluated 
in parallel, and are compared against a shared control arm. GBM AGILE uses an adaptive Bayesian statistical design to ensure 
that only the number of patients required to reach a definitive answer are enrolled. Three patient populations are included in the 
study: newly diagnosed patients with unmethylated MGMT promotor status, newly diagnosed patients with methylated MGMT 
promotor status, and recurrent patients. Paxalisib is participating in the first and third of these groups but will not examine 
patients with methylated MGMT promotor status in this study.

As at 30 June 2021, three experimental agents are enrolling patients in GBM AGILE: Bayer’s regorafenib, Kazia’s paxalisib, 
and VAL-083, manufactured by Kintara Therapeutics. The study has screened approximately 650 patients, and approximately 
two-dozen study sites are open to the paxalisib arm, with more expected to open during 2H CY2021.

A company-sponsored phase II study of paxalisib in newly diagnosed patients with unmethylated MGMT promotor status 
(NCT03522298) remains ongoing. In November 2020, an interim analysis was presented at the Society for Neuro-Oncology 
(SNO) Annual Meeting. This analysis showed a median progression-free survival (PFS) of 8.4 months, and a median overall 
survival (OS) of 17.5 months, each of which compare favourably to the corresponding figures of 5.3 months and 12.7 months 
which are associated in this patient population with temozolomide, the existing standard of care. The safety profile of paxalisib 
continues to appear highly favourable, with rash, hyperglycemia, and oral mucositis representing the most common toxicities. In 
April 2021, the company presented additional interim data focusing on pharmacokinetics at the American Association for Cancer 
Research Annual Meeting. This data supported 60mg as the go-forward dose, and suggested no significant food effect, allowing 
for both fed and fasted administration in future studies.

In May 2021, the last patient in the phase II study experienced disease progression and came off study drug, after some 2.3 years 
of treatment. The study is now in survival follow-up, with final data expected by end of CY2021. 

An investigator-initiated phase I study of paxalisib in children with diffuse intrinsic pontine glioma (DIPG) and other diffuse midline 
gliomas (DMGs) (NCT03696355), sponsored by St Jude Children’s Research Hospital in Memphis, TN, reported initial interim 
data in an oral presentation at the SNO Annual Meeting in November 2020. The study met its primary objective and determined 
a maximum tolerated dose for paediatric use of 27 mg/m2. 27 patients were recruited, of whom 24 received at least one dose 
of paxalisib. The safety profile and pharmacokinetics were highly consistent with the adult data. The study had not at that stage 
demonstrated a survival benefit. As at 30 June 2021, a number of patients remain in survival follow-up.

Three further investigator-initiated studies in patients with brain metastases continued to recruit during the period: a phase II 
genomically-guided study in patients with brain metastases (NCT03994796), sponsored by the Alliance for Clinical Trials in 
Oncology; a phase II study in patients with HER2-positive breast cancer brain metastases, in which paxalisib is administered in 
combination with Herceptin (trastuzumab) (NCT03765983), sponsored by Dana-Farber Cancer Institute in Boston, MA; and a 
phase I study in patients with brain metastases and leptomeningeal metastases, in which paxalisib is administered in combination 
with radiotherapy (NCT04192981), sponsored by Memorial Sloan-Kettering Cancer Center in New York, NY. Each of these studies 
are expected to provide interim data during FY2022.

During the period, the company initiated three further investigator-initiated studies. In September 2020, the company signed 
an agreement with Dana-Farber Cancer Institute in Boston, MA, for an investigator-initiated phase II clinical study of paxalisib in 
patients with primary CNS lymphoma (PCNSL) (NCT04906096). This study commenced recruitment in June 2021. Four of the 
five FDA-approved PI3K inhibitors are indicated for various forms of lymphoma, so this is considered a high-potential indication 
for paxalisib. The unique brain-penetrant qualities of paxalisib make it ideally suitable for investigation in this patient group. The 

Annual Report 2021

Kazia Therapeutics Limited

21

2021 AT A GLANCECHAIRMAN’S LETTERCEO’S REPORTKEY MILESTONESPIPELINE REVIEWPARTNER FOR SUCCESSWORK WITH THE BEST#2 IN THE KAZIA STORYFINANCIAL REPORTSstudy is expected to recruit around 25 patients, and to run for approximately two years. The Principal Investigator is Professor 
Lakshmi Nayak, a highly experienced clinical researcher in brain cancer, with a specialist interest in PCNSL. 

In December 2020, the company entered into a letter of intent with the Pacific Pediatric Neuro-Oncology Consortium (PNOC) 
to execute an investigator-initiated phase II adaptive study of paxalisib in patients with DIPG and other DMGs, a group which 
collectively constitutes one of the most aggressive childhood cancers. The study will explore paxalisib in combination with 
ONC-201, a small-molecule investigational new drug which targets dopamine receptor D2 (DRD2), and which is manufactured by 
Oncoceutics, Inc, a wholly-owned subsidiary of Chimerix, Inc. The St Jude phase I study in DIPG has already provided invaluable 
information regarding dosing and safety of paxalisib in a paediatric population, but it has always been assumed that combination 
therapy would be required to achieve meaningful efficacy in such an aggressive tumour. Research by Professor Matt Dun at the 
Hunter Medical Research Institute in Newcastle, Australia, has shown compelling evidence of combinatorial synergy between 
paxalisib and ONC-201, and so the PNOC study will investigate this combination, among others, in patients.

In June 2021, the company entered into an agreement with the Joan & Sanford I Weill Medical College of Cornell University in 
New York, NY, known generally as Weill Cornell Medicine, for an investigator-initiated phase II clinical trial combining paxalisib with 
ketogenesis in patients with newly-diagnosed and recurrent glioblastoma. In addition to the general interest in ketogenic diets as a 
potential adjunct to treatment for various forms of cancer, research by Professor Lew Cantley and colleagues has demonstrated the 
potential for insulin to antagonise PI3K inhibition. Administering a PI3K inhibitor in the context of minimal insulin secretion should 
allow the drug to achieve its full potential, and a combination of ketogenic diet and metformin will be used in this study to achieve 
a hypoinsulinaemic state. Professor Cantley serves as a scientific advisor to the study, and Dr Howard Fine, a highly experienced 
neuro-oncologist, will serve as Principal Investigator. The study is expected to commence recruitment during 2H CY2021.

The company’s second development candidate is EVT801, a small-molecule selective inhibitor of vascular endothelial growth 
factor receptor 3 (VEGFR3). EVT801 was originally discovered by Sanofi SA and was licensed to Evotec SE as part of a broader 
transaction. Evotec conducted an extensive program of preclinical development, which showed compelling evidence of activity in 
a broad range of animal models. The drug was licensed to Kazia in April 2021. 

For several decades, it has been clear that growing tumours require an extensive network of newly formed blood vessels and 
lymphatic vessels to satisfy their substantial nutrient requirements. Drugs which inhibit the formation of new blood vessels 
(angiogenesis inhibitors) have proven effective in a wide range of solid tumours, with Avastin (bevacizumab) being the best-known 
example of the class. However, the use of such drugs is limited by hypoxia-induced resistance mechanisms and, in the case of 
many small-molecule inhibitors, by toxicity. EVT801 has been designed to respond to these challenges by selectively targeting 
lymphangiogenesis, the formation of new lymphatic vessels. Doing so, and with a high degree of selectivity, is expected to 
provide many of the same benefits as inhibition of angiogenesis, but without the attendant problems of resistance and toxicity.

In addition, drugs which target VEGF receptors have shown the potential to alter the population of immune cells within the 
tumour micro-environment, thereby potentially making ‘cold’ tumours more susceptible to immuno-oncology agents such as 
checkpoint inhibitors. A wealth of preclinical evidence supports this hypothesis with EVT801 and provides a second and almost 
entirely distinct mechanism of action through which the drug may provide benefit to cancer patients.

EVT801 is protected by granted or pending composition-of-matter patents in all key territories, with exclusivity generally through 
to the early 2030s. 

Kazia has initiated work on a phase I clinical trial of EVT801, which will seek to explore both of these mechanisms, as well as 
provide critical information regarding the safety, tolerability, and pharmacokinetics of the drug. The planned phase I study will be 
initiated at two trial sites in France and will aim to recruit up to 96 patients with advanced cancer. Multiple stages of the study will 
evaluate EVT801 both as monotherapy and in combination with one or more immuno-oncology agents. The study is expected to 
commence recruitment by the end of CY2021.

Subsequent events

There were no significant events subsequent to the reporting date.

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

There were no significant changes in the state of affairs of the consolidated entity during the financial year.

LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS

The consolidated entity has a reasonable expectation that over the course of the coming 12 months:

•  Final results will be reported from the phase II clinical trial of paxalisib in glioblastoma;

• 

• 

• 

Interim results will be reported from the phase II clinical trial of paxalisib in combination with trastuzumab in breast cancer 
metastases;

Interim results will be reported from the phase II genomically-guided study of paxalisib in brain metastases;

Interim results will be reported from the phase I study of paxalisib in combination with radiotherapy in brain metastases;

•  Final data will be reported from the phase I study of paxalisib in children with diffuse intrinsic pontine glioma (DIPG);

•  The phase II study of paxalisib in combination with a ketogenic diet in glioblastoma will commence recruitment;

•  The phase II study of paxalisib in combination with ONC-201 in DIPG and DMGs will commence recruitment; and

•  The phase I study of EVT801 in patients with advanced solid tumours will commence recruitment.

ENVIRONMENTAL REGULATION

The consolidated entity is not subject to any significant environmental regulation under Australian Commonwealth or State law.

22
22

Kazia Therapeutics Limited

Annual Report 2021

INFORMATION ON DIRECTORS

‘Other current directorships’ quoted below are current directorships for listed entities only and excludes directorships of all other 
types of entities, unless otherwise stated.

‘Former directorships (last 3 years)’ quoted below are directorships held in the last 3 years for listed entities only and excludes 
directorships of all other types of entities, unless otherwise stated.

Name:

Title:

Qualifications:

Experience and expertise:

Other current directorships:

Former directorships (last 3 years):

Special responsibilities:

Interests in shares:

Interests in options:

Iain Ross

Non-Executive Director, Chairman

B.Sc. (Hons). C Dir.

Iain, based in the UK, is an experienced Director and has served on a number of 
Australian company boards. He is Chairman of Silence Therapeutics plc (LSE & 
NASDAQ:SLN), ReNeuron Group plc (LSE:RENE) and BiVitctriX Therapeutics plc 
(LSE:BVX) as well as unlisted Biomer Technology Limited. He is also a non-executive 
director of Palla Pharma Limited (ASX:PAL). In his career he has held senior positions 
in Sandoz AG, Fisons Plc, Hoffmann-La Roche AG and Celltech Group Plc and also 
undertaken a number of start-ups and turnarounds on behalf of banks and private 
equity groups. His track record includes multiple financing transactions having raised 
in excess of £400 million, both publicly and privately, as well as extensive experience 
of divestments and strategic restructurings and has over 25 years in cross-border 
management as a Chairman and CEO. He has led and participated in 8 Initial Public 
Offerings,(5 LSE, 1 ASX, 2 NASDAQ) and has direct experience of mergers and 
acquisitions transactions in Europe, USA and the Pacific Rim

Silence Therapeutics plc (LSE:SLN), ReNeuron Group plc (LSE:RENE), Palla Pharma 
Limited (ASX:PAL) and BiVictriX Therapeutics plc (LSE:BVX)

Redx Pharma plc (LSE:REDX), Premier Veterinary Group Plc (LSE:PVG), Anatara 
Lifesciences Limited (ASX:ANR) and e-Therapeutics plc (LSE:ETX).

Member of Remuneration and Nomination Committee, Member of Audit, Risk and 
Governance Committee.

1,000,001 ordinary shares

400,000 options with exercise price of $1.132 expiring 9 November 2024

Contractual rights to shares:

None

Name:

Title:

Qualifications:

Experience and expertise:

Bryce Carmine

Non-Executive Director

B.Sc., Biochemistry, Microbiology & Genetics

Bryce spent 36 years working for Eli Lilly & Co. and retired as Executive Vice President 
for Eli Lilly & Co, and President, Lilly Bio-Medicines. Prior to this he lead the Global 
Pharmaceutical Sales and Marketing and was a member of the company’s Executive 
Committee. Mr Carmine previously held a series of product development portfolio 
leadership roles culminating when he was named President, Global Pharmaceutical 
Product Development, with responsibility for the entire late-phase pipeline 
development across all therapeutic areas for Eli Lilly. During his career with Lilly, 
Bryce held several country leadership positions including President Eli Lilly Japan, 
Managing Dir. Australia/NZ & General Manager of a JV for Lilly in Seoul, Korea. Bryce 
is currently Chairman and CEO of HaemaLogiX Pty Ltd, a Sydney based privately 
owned biotech.

Other current directorships:

Former directorships (last 3 years):

None

None

Special responsibilities:

Interests in shares:

Interests in options:

Member of Audit, Risk and Governance Committee, Chair of Remuneration and 
Nomination Committee.

372,693 ordinary shares

400,000 options with exercise price of $1.132 expiring 9 November 2024

Contractual rights to shares:

None

Annual Report 2021

Kazia Therapeutics Limited

23

2021 AT A GLANCECHAIRMAN’S LETTERCEO’S REPORTKEY MILESTONESPIPELINE REVIEWPARTNER FOR SUCCESSWORK WITH THE BEST#2 IN THE KAZIA STORYFINANCIAL REPORTSName:

Title:

Qualifications:

Experience and expertise:

Steven Coffey

Non-Executive Director

B. Comm, CA

Steven is a Chartered Accountant and registered company auditor and has over 
35 years experience in the accounting and finance industry. He has been a partner in 
the chartered accounting firm Watkins Coffey Martin since 1993. Steven sits on the 
board of a number of large private family companies and audits a number of large 
private companies and not-for-profit entities.

Other current directorships:

None

Former directorships (last 3 years):

The Docyard Limited (ASX:TDY)

Special responsibilities:

Interests in shares:

Interests in options:

Chair of Audit, Risk and Governance Committee, Member of Remuneration and 
Nomination Committee.

434,265 ordinary shares

400,000 options with exercise price of $1.132 expiring 9 November 2024

Contractual rights to shares:

None

Name:

Title:

Qualifications:

Experience and expertise:

Dr James Garner

Chief Executive Officer, Managing Director

MA, MBA, MBBS, BSc (Hons), MAICD

Dr Garner is an experienced life sciences executive who has previously worked with 
companies ranging from small biotechs to multinational pharmaceutical companies 
such as Biogen and Takeda. His career has focused on regional and global 
development of new medicines from preclinical to commercialisation.

Dr Garner is a physician by training and holds an MBA from the University of 
Queensland. He began his career in hospital medicine and worked for a number of 
years as a corporate strategy consultant with Bain & Company before entering the 
pharmaceutical industry. Prior to joining Kazia in 2016, he led R&D strategy for Sanofi 
in Asia-Pacific and was based in Singapore.

Other current directorships:

Former directorships (last 3 years):

None

None

Interests in shares:

Interests in options:

430,000 ordinary shares 

1,200,000 options with exercise price of $0.4925 expiring 4 January 2024  
800,000 options with exercise price of $0.8812 expiring 13 January 2025

Contractual rights to shares:

None

COMPANY SECRETARY

Kate Hill (CA, GAICD, BSc (Hons)) has held the role of Company Secretary since 9 September 2016.

Kate has over 20 years’ experience as an audit partner with Deloitte Touche Tohmatsu, working with ASX listed and privately 
owned clients. She has worked extensively in regulated environments including assisting with Initial Public Offerings, capital 
raising and general compliance, as well as operating in an audit environment. She is a Non-executive Director of Countplus 
Limited and Elmo Software Limited (ASX:ELO) as well as Chair of their Audit and Risk Committees. She is also Chair of Seeing 
Machines Limited (LSE:SEE).

MEETINGS OF DIRECTORS

The number of meetings of the company’s Board of Directors (‘the Board’) and of each Board committee held during the year 
ended 30 June 2021, and the number of meetings attended by each director were:

Full Board

Audit,  
Risk & Governance 
Committee

Remuneration &  
Nomination  
Committee

Attended

Held

Attended

Held

Attended

Held

13

12

13

13

13

13

13

13

2

2

2

-

2

2

2

-

1

1

1

-

1

1

1

-

Iain Ross

Bryce Carmine

Steven Coffey

James Garner 

Held: represents the number of meetings held during the time the director held office or was a member of the relevant 
committee.

Note: James Garner is not a member of the Audit, Risk and Governance Committee or the Remuneration and Nomination 
Committee, but attended all meetings as a guest.

24
24

Kazia Therapeutics Limited

Annual Report 2021

 
 
REMUNERATION REPORT (AUDITED)

The remuneration report, which has been audited, outlines the Key Management Personnel (‘KMP’) remuneration arrangements 
for the consolidated entity, in accordance with the requirements of the Corporations Act 2001 and its Regulations.

KMP are defined as those persons having authority and responsibility for planning, directing and controlling the major activities 
of the group, directly or indirectly.

The remuneration report is set out under the following main headings:

•  Principles used to determine the nature and amount of remuneration

•  Details of remuneration

•  Service agreements

•  Share-based compensation

•  Additional disclosures relating to key management personnel

Principles used to determine the nature and amount of remuneration

Remuneration philosophy
Remuneration for Directors and Senior Executives is based on the overall objective of attracting and retaining people of high 
quality who will make a worthwhile contribution to the consolidated entity in the short, medium and long term, and thereby 
contribute to long term shareholder value. The Board and its Remuneration and Nomination Committee take a balanced position 
between the need to pay market rates to attract talent, and the financial resources of the consolidated entity, in determining 
remuneration.

Non-Executive Directors remuneration
The Constitution of the consolidated entity and the ASX listing rules specify that the aggregate remuneration of Non-Executive 
Directors shall be determined from time to time by General Meeting. The last determination for the consolidated entity was at the 
Annual General Meeting held on 7 November 2020 when the shareholders approved an aggregate remuneration of $700,000.

Non-Executive Directors’ fees are reviewed periodically by the Board and are regularly compared with those of companies of 
comparable market capitalisation and stage of development. The Chairman’s fees are determined independently to the fees of 
other non-executive Directors based on comparative roles in the external market.

The directors fees were held constant in recent years as a result of funding constraints, and in the current financial year, after 
conducting a benchmarking exercise, directors fees were increased to a market rate, and a bonus was paid to Non-Executive 
Directors to reflect their service over recent years at a discounted remuneration level. Further, at the 2020 AGM the shareholders 
approved the award of 400,000 options to each Non-Executive Director. 

In relation to the cap on aggregate fees of Non-Executive Directors, the value of the options has been excluded from the 
calculation of aggregate fees because the options were separately approved by the shareholders.

Executive Directors and other KMP
The Board and the Remuneration and Nomination Committee, in consultation with the Managing Director, have put in 
place a remuneration structure which provides incentive for employees to drive the activities of the company forward. These 
arrangements are reviewed annually at the end of the calendar year.

The Board determines an appropriate level of fixed remuneration for the CEO and Group Executives, as well as the proportion of 
performance based remuneration.

The executive remuneration and reward framework has three components:

• 

fixed remuneration

•  short-term performance incentives - cash bonus

•  share-based payments - award of options through the ESOP

Fixed remuneration is reviewed annually by the Remuneration and Nomination Committee based on individual performance, 
the overall performance of the consolidated entity and comparable market remunerations. The Remuneration and Nomination 
Committee approved increases in fixed remuneration during the financial year ended 30 June 2021.

Annual Report 2021

Kazia Therapeutics Limited

25

2021 AT A GLANCECHAIRMAN’S LETTERCEO’S REPORTKEY MILESTONESPIPELINE REVIEWPARTNER FOR SUCCESSWORK WITH THE BEST#2 IN THE KAZIA STORYFINANCIAL REPORTSThe short-term incentives program is designed to align the targets of the consolidated entity with the performance hurdles of 
executives. Short-term incentive payments are granted to executives based on specific annual performance objectives, metrics 
and performance appraisals. Annual performance reviews are conducted at the end of each calendar year and bonuses are paid 
shortly after the performance reviews are completed. Annual performance objectives cover matters such as progress in clinical 
trials, and management of the Company’s financial resources.

The Board or the Remuneration and Nomination Committee may, at its discretion, award bonuses for exceptional performance.

During the year the Remuneration and Nomination Committee approved the payment of cash bonuses to the CEO and 
employees in respect of the financial year ended 30 June 2020.

The long-term incentive comprises equity-based payments. The consolidated entity aims to attract and retain high calibre 
executives, and align their interests with those of the shareholders, by granting equity-based payments which are issued at a 
premium to the share price on date of issue and vest in tranches based on tenure. The share-options issued to executives are 
governed by the ESOP.

Employee share option plan
The Employee Share Option Plan (‘ESOP’) was most recently approved by shareholders on 6 November 2020.

The ESOP provides for the issue of options to eligible individuals, being employees, Non-executive directors and Officers of the 
consolidated entity.

Each option issued under the ESOP entitles its holder to acquire one fully paid ordinary share and is exercisable at a price based 
on a formula, which includes the weighted average price of such shares at the close of trading on the Australian Securities 
Exchange for the seven days prior to the date of issue, and a premium which is applied to this value. The number of options 
offered, the amount payable, the vesting period, the option period, the conditions of exercise or any other factors are at the 
discretion of the Board of Directors.

The consolidated entity issued 2,200,000 share options under the ESOP during the financial year ended 30 June 2021, of which 
2,100,000 were issued to KMP.

Any change to the ESOP will require approval by shareholders.

Use of remuneration consultants
During the year ended 30 June 2021 the consolidated entity did not engage remuneration consultants to assist with the 
determination of remuneration levels.

Details of remuneration

Amounts of remuneration
Details of the remuneration of key management personnel of the consolidated entity are set out in the following tables.

The KMP of the consolidated entity consisted of the following directors of Kazia Therapeutics Limited:

• 

Iain Ross - Non-Executive Director, Chairman 

•  Bryce Carmine - Non-Executive Director

•  Steven Coffey - Non-Executive Director

•  Dr James Garner - Managing Director, CEO

And the following persons:

•  Gabrielle Heaton - Director of Finance and Administration 

•  Kate Hill - Company Secretary 

26
26

Kazia Therapeutics Limited

Annual Report 2021

Short-term benefits

Post-
employment 
benefits

Share-
based 
payments

Salary & 
fees Cash
$

Bonus 
Cash
$

Movements 
in accrued 
leave  
Non- 
monetary
$

Super- 
annuation
$

Options  
Equity- 
settled
$

Total
$

147,436

20,000

82,500

22,500

82,500

22,500

-

-

-

-

119,067

286,503

9,975

9,975

119,067

234,042

119,067

234,042

503,000 240,000

90,400

70,585

228,651

1,132,636

204,000

25,000

108,525

26,400

(241)

-

21,755

15,069

265,583

-

15,677

150,602

1,127,961

356,400

90,159

112,290

616,598

2,303,408

2021

Non-Executive Directors:

I Ross*

B Carmine

S Coffey

Executive Directors:

J Garner

Other Key Management Personnel:

G Heaton

K Hill

* 

Salary paid in UK pounds, but disclosed in Australian dollars using a conversion rate of 0.5562

Annual Report 2021

Kazia Therapeutics Limited

27

2021 AT A GLANCECHAIRMAN’S LETTERCEO’S REPORTKEY MILESTONESPIPELINE REVIEWPARTNER FOR SUCCESSWORK WITH THE BEST#2 IN THE KAZIA STORYFINANCIAL REPORTSShort-term benefits

Post-
employment 
benefits

Share-
based 
payments

Salary & 
fees Cash
$

Bonus 
Cash
$

Movement  
in accrued 
leave  
Non-
monetary
$

Super- 
annuation
$

Options  
Equity- 
settled
$

135,272

75,000

75,000

-

-

-

-

-

-

-

7,125

7,125

-

-

-

Total
$

135,272

82,125

82,125

473,000

180,000

23,423

62,035

206,465

944,923

195,000

17,500

127,875

15,000

7,275

-

20,188

-

10,745

12,826

250,708

155,701

1,081,147

212,500

30,698

96,473

230,036

1,650,854

2020

Non-Executive Directors:

I Ross*

B Carmine

S Coffey

Executive Directors:

J Garner

Other Key Management Personnel:

G Heaton

K Hill

* 

Salary paid in UK pounds, but disclosed in Australian dollars using a conversion rate of 0.5323

The relative proportions of remuneration that are linked to performance and those that are at risk

Name

Non-Executive Directors:

Iain Ross

Bryce Carmine

Steven Coffey

Executive Directors:

James Garner

Other Key Management Personnel:

Gabrielle Heaton

Kate Hill

Fixed remuneration

At risk - STI

At risk - LTI

2021

2020

2021

2020

2021

2020

51% 

40% 

40% 

100% 

100% 

100% 

7% 

10% 

10% 

-

-

-

42% 

50% 

50% 

-

-

-

59%

59%

21%

19%

20%

22%

85%

72%

89%

82%

9%

18%

7%

10%

6%

10%

4%

8%

28
28

Kazia Therapeutics Limited

Annual Report 2021

Consequences of performance on shareholder wealth
Shareholder wealth in a company engaged in drug development is generally driven by successful commercialisation, out-licence 
or sale of a drug candidate, and is a long term proposition, rather than being linked to annual financial performance. The 
directors have selected a CEO and key management team who, in the directors opinion, are well placed to realise such an 
outcome for our shareholders. Now that the current CEO and management team have been in place for a number of years, 
the directors are able to provide the below table showing increase in enterprise value of the Company over the relevant period, 
with details of bonuses and options awarded each year, to demonstrate the link between performance, reward and increase in 
shareholder wealth.

June 2017

June 2018

June 2019

June 2020

June 2021

Enterprise Value

5,736,560

12,659,955

14,884,643

35,582,939

145,349,234

Total bonuses paid to KMP

Number of bonus participants

Share options issued to KMP

191,135

5

-

-

125,400

212,500

356,400

3

3

6

450,000

362,000

100,000

1,300,000

2,100,000

Number of KMP granted options

2

2

2

3

6

Enterprise Value of the Company has been calculated as the market capitalisation of the Company at each period end, adjusted 
for cash held at year end, and the for anticipated R&D cash rebate (deemed to be essentially cash). The use of Enterprise Value 
seeks to represent the underlying value of the business after adjusting for cash or debt balances.

Voting and comments made at the consolidated entity’s last Annual General Meeting
The consolidated entity received 93.63% of “yes” votes on its Remuneration Report for the financial year ending 30 June 2020. 
The consolidated entity received no specific feedback on its Remuneration Report at the Annual General Meeting.

Bonuses included in remuneration
Details of short term incentive cash bonuses awarded as remuneration to each key management personnel are included in the 
above tables.

Service agreements

Under Remuneration and Nomination Committee policy, employment contracts are entered into with each of the executives 
who is considered to be KMP. Under the terms of the contracts, remuneration is reviewed at least annually. The employment 
contracts of KMPs include a termination clause whereby a party can terminate the agreement on notice. Such notice may vary 
between 4 weeks and 6 months. Under the terms of each contract, payment in lieu can be made by the consolidated entity to 
substitute the notice period. The consolidated entity may terminate the contracts at any time without cause if serious misconduct 
has occurred. In the event that employment is terminated for cause, no severance pay or other benefits are payable by the 
consolidated entity.

Remuneration and other terms of employment for key management personnel are formalised in service agreements. Details of 
these agreements are as follows:

Name:

Title:

James Garner

Chief Executive Officer, Managing Director

Agreement commenced:

1 February 2016

Term of agreement:

Full-time employment

Details:

Name:

Title:

Base salary to be reviewed annually by the Remuneration and Nomination Committee. 
James’s appointment with the consolidated entity may be terminated with the consolidated 
entity giving 6 months’ notice or by James giving 6 months’ notice. The consolidated entity 
may elect to pay James equal amount to that proportion of his salary equivalent 6 months’ 
pay in lieu of notice, together with any outstanding entitlements due to him.

The current base salary, as from 1 January 2021, is $510,000 including an allowance for 
health benefits.

Gabrielle Heaton

Director of Finance and Administration

Agreement commenced:

13 March 2017

Term of agreement:

Full time employment

Details:

Base salary to be reviewed annually by the Remuneration and Nomination Committee. 
Gabrielle’s appointment with the consolidated entity may be terminated with the consolidated 
entity giving 4 weeks’ notice or by Gabrielle giving 4 weeks’ notice. The consolidated entity 
may elect to pay Gabrielle equal amount to that proportion of her salary equivalent 4 weeks’ 
pay in lieu of notice, together with any outstanding entitlements due to her.

The current base salary, from 1 January 2021, is $208,000.

Annual Report 2021

Kazia Therapeutics Limited

29

2021 AT A GLANCECHAIRMAN’S LETTERCEO’S REPORTKEY MILESTONESPIPELINE REVIEWPARTNER FOR SUCCESSWORK WITH THE BEST#2 IN THE KAZIA STORYFINANCIAL REPORTSName:

Title:

Kate Hill

Company Secretary

Agreement commenced:

9 September 2016

Term of agreement:

Part-time contractor

Details:

Base remuneration is based on time worked. Daily rate to be reviewed annually by the 
Remuneration and Nomination Committee, with a monthly rate of $11,900 for a two-day 
week, applied from 1 January 2021. The contract is open ended. Kate’s appointment with 
the consolidated entity may be terminated with the consolidated entity giving 60 days’ 
notice or by Kate giving 60 days’ notice. 

Key management personnel have no entitlement to termination payments in the event of removal for misconduct.

Share-based compensation

Issue of options
The terms and conditions of each grant of options over ordinary shares granted as remuneration to Directors or other Key 
Management Personnel in this financial year or future financial years are set out below.

The options issued on 9 November 2020 were to James Garner (800,000 options with a fair value at grant date of $402,000), 
Iain Ross (400,000 options with a fair value at grant date of $165,300), Bryce Carmine (400,000 options with a fair value at grant 
date of $165,300) and Steven Coffey (400,000 options with a fair value at grant date of $165,300).

The options issued on 4 January 2021 were to Kate Hill (50,000 options, with a fair value at grant date of $29,929) and Gabrielle 
Heaton (50,000 options, with a fair value at grant date of $29,929). Service conditions are that any unvested options are forfeit 
on cessation of employment. There are no performance conditions, consistent with the Company’s Employee Share Option Plan 
rules, as reapproved by shareholders on 6 November 2020.

Grant date

09/11/2020

09/11/2020

09/11/2020

09/11/2020

09/11/2020

09/11/2020

09/11/2020

09/11/2020

04/01/2021

04/01/2021

04/01/2021

04/01/2021

No  

of options

Vesting  
date

200,000

200,000

200,000

200,000

300,000

300,000

300,000

300,000

25,000

25,000

25,000

25,000

2,100,000

13/01/2021

13/01/2022

13/01/2023

13/01/2024

01/01/2021

01/07/2021

01/01/2022

01/07/2022

04/01/2022

04/01/2023

04/01/2024

04/01/2025

Expiry date

13/01/2025

13/01/2025

13/01/2025

13/01/2025

09/11/2024

09/11/2024

09/11/2024

09/11/2024

04/01/2025

04/01/2025

04/01/2025

04/01/2025

Exercise price 
$

Fair value at  
grant date 
$

$0.881 

$0.881 

$0.881 

$0.881 

$1.132 

$1.132 

$1.132 

$1.132 

$1.690 

$1.690 

$1.690 

$1.690 

$0.450 

$0.490 

$0.520 

$0.550 

$0.379 

$0.403 

$0.425 

$0.446 

$0.520 

$0.576 

$0.627 

$0.671 

Options granted carry no dividend or voting rights. Each option is convertible to one ordinary share upon exercise. During 
the year, 96,500 options were exercised by Gabrielle Heaton and 245,000 options were exercised by Kate Hill.

30
30

Kazia Therapeutics Limited

Annual Report 2021

Additional disclosures relating to key management personnel

Shareholding
The number of shares in the company held during the financial year by each director and other members of Key Management 
Personnel of the consolidated entity, including their personally related parties, is set out below:

Ordinary shares

B Carmine 

S Coffey

I Ross

J Garner

K Hill

G Heaton

Balance at  
the start of  
the year

Purchased  
on market

Allocated on  
entitlement  
offer

Exercise of  
options

Balance at  
the end of  
the year

266,293

326,474

800,001

275,000

30,000

10,000

43,900

45,291

75,000

92,500

-

-

1,707,768

256,691

62,500

62,500

125,000

62,500

20,000

6,668

339,168

-

-

-

-

245,000

96,500

341,500

372,693

434,265

1,000,001

430,000

295,000

113,168

2,645,127

Option holding
The number of options over ordinary shares in the company held during the financial year by each Director and other members of 
Key Management Personnel of the consolidated entity, including their personally related parties, is set out below:

Options over ordinary shares

J Garner *

K Hill *

G Heaton *

Iain Ross *

Bryce Carmine *

Steven Coffey *

Balance at  
the start of  
the year

Granted as  

remuneration

Expired

Exercised

Balance at  
the end of  
the year

1,200,000

800,000

320,000

242,000

-

-

-

50,000

50,000

400,000

400,000

400,000

1,762,000

2,100,000

-

-

-

-

-

-

-

-

2,000,000

(245,000)

(96,500)

-

-

-

125,000

195,500

400,000

400,000

400,000

(341,500)

3,520,500

* 

Options issued under the Employee Share Option Plan. Unvested options are forfeited upon cessation of employment with the Company.

Options over ordinary shares - vested and unvested

J Garner

K Hill

G Heaton

Iain Ross

Bryce Carmine

Steven Coffey

Vested and  
exercisable

Unvested

Balance at  
the end of  
the year

1,200,000

800,000

2,000,000

12,500

92,500

100,000

100,000

100,000

112,500

103,000

300,000

300,000

300,000

125,000

195,500

400,000

400,000

400,000

1,605,000

1,915,500

3,520,500

Other transactions with key management personnel and their related parties
There was no other transaction with KMP and their related parties.

This concludes the remuneration report, which has been audited.

Annual Report 2021

Kazia Therapeutics Limited

31

2021 AT A GLANCECHAIRMAN’S LETTERCEO’S REPORTKEY MILESTONESPIPELINE REVIEWPARTNER FOR SUCCESSWORK WITH THE BEST#2 IN THE KAZIA STORYFINANCIAL REPORTSSHARES UNDER OPTION

Unissued ordinary shares of Kazia Therapeutics Limited under option at the date of this report are as follows. All options are 
unlisted and were issued under the Company’s Employee Share Option Plan.

Grant date

5 September 2016

31 October 2016

12 October 2016

21 November 2016

7 August 2017

5 February 2018

4 January 2019

13 November 2019

13 January 2020

9 November 2020

9 November 2020

4 January 2021

Expiry date

5 September 2021

1 November 2021

17 October 2021

23 November 2021

7 August 2022

5 February 2023

4 January 2024

4 January 2024

13 January 2025

13 January 2025

9 November 2024

4 January 2025

Exercise  
Price

Closing  
Balance

$1.630 

$1.380 

$1.560 

$1.380 

$0.670 

$0.780 

$0.493 

$0.493 

$0.881 

$0.881 

$1.132 

$1.690 

50,000

12,500

62,000

50,000

87,000

320,000

37,500

1,200,000

200,000

800,000

1,200,000

200,000

4,219,000

No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue of the 
company or of any other body corporate.

SHARES ISSUED ON THE EXERCISE OF OPTIONS

The following ordinary shares of Kazia Therapeutics Limited were issued during the year ended 30 June 2021 and up to the date 
of this report on the exercise of options granted:

Date options granted

7 August 2017

5 February 2018

4 January 2019

Exercise  
price

Number of  

shares issued

$0.670 

$0.780 

$0.490 

121,500

120,000

200,000

441,500

INDEMNITY AND INSURANCE OF OFFICERS

The consolidated entity has not indemnified the Directors and Executives of the consolidated entity for costs incurred, in their 
capacity as a Director or Executive, for which they may be held personally liable, except where there is a lack of good faith.

During the financial year, the consolidated entity paid a premium in respect of a contract to insure the Directors and Executives 
of the consolidated entity against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance 
prohibits disclosure of the nature of the liability and the amount of the premium.

INDEMNITY AND INSURANCE OF AUDITOR

The consolidated entity has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of 
the consolidated entity or any related entity against a liability incurred by the auditor.

During the financial year, the consolidated entity has not paid a premium in respect of a contract to insure the auditor of the 
consolidated entity or any related entity.

PROCEEDINGS ON BEHALF OF THE COMPANY

No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of 
the company, or to intervene in any proceedings to which the company is a party for the purpose of taking responsibility on behalf 
of the company for all or part of those proceedings.

32
32

Kazia Therapeutics Limited

Annual Report 2021

NON-AUDIT SERVICES

There were no non-audit services provided during the financial year by the auditor.

OFFICERS OF THE COMPANY WHO ARE FORMER PARTNERS OF GRANT THORNTON 
AUDIT PTY LTD

There are no officers of the company who are former partners of Grant Thornton Audit Pty Ltd.

AUDITOR’S INDEPENDENCE DECLARATION

A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out 
immediately after this directors’ report.

AUDITOR

Grant Thornton Audit Pty Ltd continues in office in accordance with section 327 of the Corporations Act 2001.

This report is made in accordance with a resolution of Directors, pursuant to section 298(2)(a) of the Corporations Act 2001.

On behalf of the Directors

Mr Iain Ross

Chairman

26 August 2021

Sydney

Dr James Garner

Managing Director, Chief Executive Officer

Annual Report 2021

Kazia Therapeutics Limited

33

2021 AT A GLANCECHAIRMAN’S LETTERCEO’S REPORTKEY MILESTONESPIPELINE REVIEWPARTNER FOR SUCCESSWORK WITH THE BEST#2 IN THE KAZIA STORYFINANCIAL REPORTS 
KAZIA THERAPEUTICS LIMITED

Auditor’s independence declaration

Level 17, 383 Kent Street
Sydney NSW 2000

Correspondence to:
Locked Bag Q800
QVB Post Office
Sydney NSW 1230

T +61 2 8297 2400
F +61 2 9299 4445
E info.nsw@au.gt.com
W www.grantthornton.com.au

Auditor’s Independence Declaration 

To the Directors of Kazia Therapeutics Limited 

In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Kazia 

Therapeutics Limited for the year ended 30 June 2021, I declare that, to the best of my knowledge and belief, there have 

been:

a

b

no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and

no contraventions of any applicable code of professional conduct in relation to the audit.

Grant Thornton Audit Pty Ltd
Chartered Accountants

S M Coulton
Partner – Audit & Assurance

Sydney, 26 August 2021

Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389

www.grantthornton.com.au

‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients 
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International 
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are 
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one 
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to 
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to 
Grant Thornton Australia Limited.

Liability limited by a scheme approved under Professional Standards Legislation. 

34

34
34

Kazia Therapeutics Limited

Annual Report 2021

CONTENTS

Statement of profit or loss and other comprehensive income 

Statement of financial position 

Statement of changes in equity 

Statement of cash flows 

Notes to the financial statements 

Directors’ declaration 

Independent auditor’s report to the members of Kazia Therapeutics Limited 

Shareholder information 

Corporate directory 

Page

37

38

39

41

42

65

67

70

73

Annual Report 2021

Kazia Therapeutics Limited

35

2021 AT A GLANCECHAIRMAN’S LETTERCEO’S REPORTKEY MILESTONESPIPELINE REVIEWPARTNER FOR SUCCESSWORK WITH THE BEST#2 IN THE KAZIA STORYFINANCIAL REPORTSGENERAL INFORMATION

The financial statements cover Kazia Therapeutics Limited as a consolidated entity consisting of Kazia Therapeutics Limited and 
the entities it controlled at the end of or during the year. The financial statements are presented in Australian dollars, which is 
Kazia Therapeutics Limited’s functional and presentation currency.

Kazia Therapeutics Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered 
office and principal place of business is:

Three International Towers, 
Level 24 
300 Barangaroo Avenue 
Sydney NSW 2000

A description of the nature of the consolidated entity’s operations and its principal activities are included in the Directors’ report, 
which is not part of the financial statements.

The financial statements were authorised for issue, in accordance with a resolution of directors, on 26 August 2021. The directors 
have the power to amend and reissue the financial statements.

36
36

Kazia Therapeutics Limited

Annual Report 2021

Revenue

Other income

Finance income

Expenses

Research and development expense

General and administrative expense

Fair value losses on financial assets at fair value through profit or loss

Loss on revaluation of contingent consideration

Loss before income tax benefit

Income tax benefit

Loss after income tax benefit for the year attributable to the owners of  
Kazia Therapeutics Limited

Other comprehensive income

Items that may be reclassified subsequently to profit or loss

Net exchange difference on translation of financial statements of foreign controlled 
entities, net of tax 

Other comprehensive income for the year, net of tax

Total comprehensive income for the year attributable to the owners of  
Kazia Therapeutics Limited

Basic earnings per share

Diluted earnings per share

Note

5

6

Consolidated

2021
$

15,182,711

2,192 

42,240 

2020
$

-

995,000

65,905

(14,541,366)

(9,494,328)

(7,021,823)

(3,689,867)

- 

(2,570,261)

(167,814)

(474,557)

(8,906,307)

(12,765,661)

8

484,347 

298,195

(8,421,960)

(12,467,466)

1,868

1,868

(3,520)

(3,520)

(8,420,092)

(12,470,986)

Cents

(7.16)

(7.16)

Cents

(17.07)

(17.07)

31

31

The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying 
notes

Annual Report 2021

Kazia Therapeutics Limited

37

STATEMENT OF PROFIT OR LOSS AND  OTHER COMPREHENSIVE INCOMEFor the year ended 30 June 20212021 AT A GLANCECHAIRMAN’S LETTERCEO’S REPORTKEY MILESTONESPIPELINE REVIEWPARTNER FOR SUCCESSWORK WITH THE BEST#2 IN THE KAZIA STORYFINANCIAL REPORTSAssets

Current assets

Cash and cash equivalents

Trade and other receivables

Other assets

Total current assets

Non-current assets

Trade and other receivables

Intangibles

Total non-current assets

Total assets

Liabilities

Current liabilities

Trade and other payables

Employee benefits

Contingent consideration

Total current liabilities

Non-current liabilities

Deferred tax

Employee benefits

Contingent consideration

Total non-current liabilities

Total liabilities

Net assets

Equity

Contributed equity

Other contributed equity

Reserves

Accumulated losses

Total equity

Note

Consolidated

2021
$

2020
$

9

10

11

10

12

13

14

15

16

14

15

17

18

19

27,586,760 

8,764,044 

84,362 

1,352,252 

1,719,696 

537,305 

29,390,818 

10,653,601 

6,693,628 

- 

22,002,593 

12,410,139 

28,696,221 

12,410,139 

58,087,039

23,063,740

4,932,660 

3,488,933 

229,337 

191,451 

3,164,557 

1,387,089 

8,326,554 

5,067,473 

2,928,441 

3,412,788 

54,684 

- 

8,926,641 

457,899 

11,909,766 

3,870,687 

20,236,320

8,938,160

37,850,719

14,125,580

80,290,062 

48,781,214 

464,000 

464,000 

1,300,566 

1,065,923 

(44,203,909)

(36,185,557)

37,850,719

14,125,580

The above statement of financial position should be read in conjunction with the accompanying notes

38
38

Kazia Therapeutics Limited

Annual Report 2021

STATEMENT OF FINANCIAL POSITIONAs at 30 June 2021Consolidated

Contributed 
equity
$

Other 
contributed
equity
$

Foreign 
currency
translation 
reserve
$

Share 
based
payments 
reserve
$

Accumulated 

losses Total equity
$

$

Balance at 1 July 2019

36,641,519

464,000

(451,668)

2,489,121

(24,948,206)

14,194,766

Loss after income tax benefit  
for the year

Other comprehensive income  
for the year, net of tax

Total comprehensive income  
for the year

Shares issued (note 17)

Share issue costs (note 17)

Transactions with owners in their 
capacity as owners:

Share-based payments (note 32)

Expired options

-

-

-

12,972,747

(833,052)

-

-

-

-

-

-

-

-

-

-

(3,520)

(3,520)

-

-

-

-

-

-

-

-

-

262,105

(12,467,466)

(12,467,466)

-

(3,520)

(12,467,466)

(12,470,986)

-

-

-

12,972,747

(833,052)

262,105

-

(1,230,115)

1,230,115

Balance at 30 June 2020

48,781,214

464,000

(455,188)

1,521,111

(36,185,557)

14,125,580

The above statement of changes in equity should be read in conjunction with the accompanying notes

Annual Report 2021

Kazia Therapeutics Limited

39

STATEMENT OF CHANGES IN EQUITYFor the year ended 30 June 20212021 AT A GLANCECHAIRMAN’S LETTERCEO’S REPORTKEY MILESTONESPIPELINE REVIEWPARTNER FOR SUCCESSWORK WITH THE BEST#2 IN THE KAZIA STORYFINANCIAL REPORTSConsolidated

Contributed
equity
$

Other 
contributed
equity
$

Foreign 
currency
translation 
reserve
$

Share 
based
payments 
reserve
$

Accumulated 

losses Total equity
$

$

Balance at 1 July 2020

48,781,214

464,000

(455,188)

1,521,111

(36,185,557)

14,125,580

Loss after income tax benefit  
for the year

Other comprehensive income  
for the year, net of tax

Total comprehensive income  
for the year

Shares issued (note 17)

Share issue costs (note 17)

Transactions with owners in their 
capacity as owners:

-

-

-

32,908,949

(1,673,388)

Issue of shares on exercise of options

273,287

Share based payment (note 32)

Expired options

-

-

-

-

-

-

-

-

-

-

-

1,868

1,868

-

-

-

-

-

-

-

-

-

-

(8,421,960)

(8,421,960)

-

1,868

(8,421,960)

(8,420,092)

- 32,908,949

-

(1,673,388)

(80,353)

636,383

80,353

273,287

-

636,383

(323,255)

323,255

-

Balance at 30 June 2021

80,290,062

464,000

(453,320)

1,753,886

(44,203,909)

37,850,719

The above statement of changes in equity should be read in conjunction with the accompanying notes

40
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Kazia Therapeutics Limited

Annual Report 2021

STATEMENT OF CHANGES IN EQUITY (CONTINUED)For the year ended 30 June 2021Cash flows from operating activities

Receipts from customers *

Payments to suppliers (inclusive of GST)

R&D cash rebate

Net cash used in operating activities

Net cash from investing activities

Cash flows from financing activities

Note

Consolidated

2021
$

2020
$

13,739,254

-

(23,868,218)

(10,200,368)

1,018,448 

1,390,849 

30

(9,110,516)

(8,809,519)

-

-

Proceeds from issue of shares - net of issuance costs

17

28,108,848

12,139,695

Net cash from financing activities

Net increase in cash and cash equivalents

Cash and cash equivalents at the beginning of the financial year

Effects of exchange rate changes on cash and cash equivalents

28,108,848

12,139,695

18,998,332

3,330,176

8,764,044

5,433,868

(175,616)

-

Cash and cash equivalents at the end of the financial year

9

27,586,760

8,764,044

* 

Receipts from customers were subject to deduction of VAT and withholding tax at source.

The above statement of cash flows should be read in conjunction with the accompanying notes

Annual Report 2021

Kazia Therapeutics Limited

41

STATEMENT OF CASH FLOWSFor the year ended 30 June 20212021 AT A GLANCECHAIRMAN’S LETTERCEO’S REPORTKEY MILESTONESPIPELINE REVIEWPARTNER FOR SUCCESSWORK WITH THE BEST#2 IN THE KAZIA STORYFINANCIAL REPORTSNOTE 1. GENERAL INFORMATION

The financial statements cover Kazia Therapeutics Limited as a consolidated entity consisting of Kazia Therapeutics Limited and 
its subsidiaries. The financial statements are presented in Australian dollars, which is Kazia Therapeutics Limited’s functional and 
presentation currency. 

Kazia Therapeutics Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered 
office and principal place of business is:

Three International Towers 
Level 24, 300 Barangaroo Avenue 
Sydney NSW 2000

The financial statements were authorised for issue, in accordance with a resolution of Directors, on 26 August 2021. The Directors 
have the power to amend and reissue the financial statements.

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies have 
been consistently applied to all the years presented, unless otherwise stated. 

New or amended Accounting Standards and Interpretations adopted

The consolidated entity has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the 
Australian Accounting Standards Board (‘AASB’) that are mandatory for the current reporting period. 

The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial performance 
or position of the consolidated entity.

Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. 

New Accounting Standards and Interpretations not yet mandatory or early adopted

Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have 
not been early adopted by the consolidated entity for the annual reporting period ended 30 June 2021. The consolidated entity’s 
assessment of the impact of these new or amended Accounting Standards and Interpretations is that none are deemed to have a 
material impact on the entity.

Going concern

The consolidated entity incurred a loss after income tax of $8,421,960 (2020: $12,467,466), was in a net current asset position of 
$21,064,264 (2020: net current asset position of $5,586,128) and had net cash outflows from operating activities of $9,110,516 
(2020: $8,809,519) for the year ended 30 June 2021. 

As at 30 June 2021 the consolidated entity had cash in hand and at bank, including cash on deposit, of $27,586,760.

The financial statements have been prepared on a going concern basis, which contemplates continuity of normal activities and 
realisation of assets and settlement of liabilities in the normal course of business. As is often the case with drug development 
companies, the ability of the consolidated entity to continue its development activities as a going concern is dependent upon it 
deriving sufficient cash from investors, from licensing and partnering activities, and from other sources of revenue such as grant 
funding. 

The directors have considered the cash flow forecasts and the funding requirements of the business and continue to explore grant 
funding, licensing opportunities and equity investment opportunities in the Company. In particular, the directors have considered 
the impact of COVID-19 on the operations of the Company, and make the following observations:

•  Kazia’s key clinical trials have not been impacted by COVID-19 to date. The GBM Agile study, the pivotal study for paxalisib in 
glioblastoma, is on track with recruitment running to plan, and no disruption to this schedule is foreseen. The Phase II study 
of paxalisib in glioblastoma was fully recruited prior to the onset of restrictions and is in wrap up stage at the date of this 
report. Plans are on track for the commencement of a Phase I trial for EVT801 before the end of 2021;

• 

In general, clinical research in advanced cancer is relatively protected from pandemic disruption due to the ongoing and 
time-critical need for patient care in specialised facilities which cannot easily be repurposed;

•  The Company is not reliant on ongoing revenue from customers, and so changes in customer behaviour over the next several 

years due to public health restrictions and reduced economic activity have little to no impact on its finances; 

•  The Company was able to secure funding of approximately $9 million at the height of the initial wave of COVID-19 in April 

2020, and additional funds of approximately $25 million during the 2021 financial year; 

•  Based on budgets and forecasts, the Company has sufficient cash to fund the operations for a period of at least 12 months 

from the date of this report; and 

•  As a consequence, the directors do not foresee any other impacts of COVID-19 on the Company’s ability to pursue its 

objectives, and in particular on its ability to raise additional funding if required.

Accordingly the directors have prepared the financial statements on a going concern basis. Should the above assumptions 
not prove to be appropriate, there is material uncertainty whether the consolidated entity will continue as a going concern and 
therefore whether it will realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in 
these financial statements.

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Kazia Therapeutics Limited

Annual Report 2021

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Basis of preparation

These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and 
Interpretations issued by the Australian Accounting Standards Board (‘AASB’) and the Corporations Act 2001, as appropriate for 
for-profit oriented entities. These financial statements also comply with International Financial Reporting Standards as issued by 
the International Accounting Standards Board (‘IASB’). 

The financial statements have been prepared on an accruals basis and under the historical cost conventions, except for listed 
equity investments which are carried at fair value. 

Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires management 
to exercise its judgement in the process of applying the consolidated entity’s accounting policies. The areas involving a higher 
degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are 
disclosed in note 3.

Parent entity information

In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity only. 
Supplementary information about the parent entity is disclosed in note 28. 

Principles of consolidation

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Kazia Therapeutics Limited 
(‘company’ or ‘parent entity’) as at 30 June 2021 and the results of all subsidiaries for the year then ended. Kazia Therapeutics 
Limited and its subsidiaries together are referred to in these financial statements as the ‘consolidated entity’. 

Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity controls an entity when 
the consolidated entity is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to 
affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on 
which control is transferred to the consolidated entity. They are de-consolidated from the date that control ceases. 

Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated entity are 
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset 
transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies 
adopted by the consolidated entity. 

The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest, 
without the loss of control, is accounted for as an equity transaction, where the difference is between the consideration 
transferred and the book value.

Where the consolidated entity loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-
controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The consolidated 
entity recognises the fair value of the consideration received and the fair value of any investment retained together with any gain 
or loss in profit or loss. 

Operating segments

Operating segments are presented using the ‘management approach’, where the information presented is on the same basis as 
the internal reports provided to the Chief Operating Decision Makers (‘CODM’). The CODM is responsible for the allocation of 
resources to operating segments and assessing their performance. The CODM is considered to be the Board of Directors.

Foreign currency translation

The financial statements are presented in Australian dollars, which is the consolidated entity’s functional and presentation 
currency.

Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of the 
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at 
financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or 
loss. 

Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the reporting 
date. The revenues and expenses of foreign operations are translated into Australian dollars using the average exchange rates, 
which approximate the rate at the date of the transaction, for the period. All resulting foreign exchange differences are recognised 
in other comprehensive income through the foreign currency reserve in equity. 

The foreign currency reserve is recognised in profit or loss when the foreign operation is disposed of.

Exchange differences arising on a monetary item that forms part of a reporting entity’s net investment in a foreign operation 
shall be recognised initially in other comprehensive income and reclassified from equity to profit or loss on disposal of the net 
investment.

Annual Report 2021

Kazia Therapeutics Limited

43

2021 AT A GLANCECHAIRMAN’S LETTERCEO’S REPORTKEY MILESTONESPIPELINE REVIEWPARTNER FOR SUCCESSWORK WITH THE BEST#2 IN THE KAZIA STORYFINANCIAL REPORTSNOTE 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Financial Instruments

Recognition and derecognition
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the 
financial instrument and are measured initially at fair value adjusted by transactions costs, except for those carried at fair value 
through profit or loss, which are measured initially at fair value. Subsequent measurement of financial assets and financial 
liabilities are described below. Financial assets are derecognised when the contractual rights to the cash flows from the 
financial asset expire, or when the financial asset and substantially all the risks and rewards are transferred. A financial liability is 
derecognised when it is extinguished, discharged, cancelled or expires. 

Classification and initial measurement of financial assets 
Except for those trade receivables that do not contain a significant financing component and are measured at the transaction 
price in accordance with AASB 15, all financial assets are initially measured at fair value adjusted for transaction costs (where 
applicable). 

Subsequent measurement of financial assets
For the purpose of subsequent measurement, financial assets are classified into the following categories upon initial recognition:

• 

• 

financial assets at amortised cost 

financial assets at fair value through profit or loss (FVPL) 

Classifications are determined by both: 

• 

• 

the entity’s business model for managing the financial asset 

the contractual cash flow characteristics of the financial assets 

All income and expenses relating to financial assets that are recognised in profit or loss are presented within finance costs, 
finance income or other financial items, except for impairment of trade receivables which is presented within other expenses. 

Financial assets at amortised cost
Financial assets are measured at amortised cost if the assets meet the following conditions (and are not designated as FVPL): 

• 

• 

they are held within a business model whose objective is to hold the financial assets and collect its contractual cash flows 

the contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest on the 
principal amount outstanding.

After initial recognition, these are measured at amortised cost using the effective interest method. Discounting is omitted where 
the effect of discounting is immaterial. The Group’s cash and cash equivalents, trade and most other receivables fall into this 
category of financial instruments. 

Financial assets at fair value through profit or loss (FVPL)
Financial assets that are held within a business model other than ‘hold to collect’ or ‘hold to collect and sell’ are categorised at fair 
value through profit and loss. Further, irrespective of business model, financial assets whose contractual cash flows are not solely 
payments of principal and interest are accounted for at FVPL. The Group’s investments in equity instruments and derivatives fall 
under this category.

Impairment of financial assets
AASB 9’s new impairment model uses more forward looking information to recognize expected credit losses - the ‘expected 
credit losses (ECL) model’. The application of the new impairment model depends on whether there has been a significant 
increase in credit risk. The Group considers a broader range of information when assessing credit risk and measuring expected 
credit losses, including past events, current conditions, reasonable and supportable forecasts that affect the expected 
collectability of the future cash flows of the instrument. 

In applying this forward-looking approach, a distinction is made between:

• 

• 

financial instruments that have not deteriorated significantly in credit quality since initial recognition or that have low credit risk 
(‘Stage 1’) and

financial instruments that have deteriorated significantly in credit quality since initial recognition and whose credit risk is not 
low (‘Stage 2’).

‘Stage 3’ would cover financial assets that have objective evidence of impairment at the reporting date. ‘12-month expected 
credit losses’ are recognised for the first category while ‘lifetime expected credit losses’ are recognised for the second category. 
Measurement of the expected credit losses is determined by a probability-weighted estimate of credit losses over the expected 
life of the financial instrument.  

Classification and measurement of financial liabilities
The Group’s financial liabilities comprise trade and other payables. Financial liabilities are initially measured at fair value, and, 
where applicable, adjusted for transaction costs unless the Group designated a financial liability at fair value through profit or 
loss. Subsequently, financial liabilities are measured at amortised cost using the effective interest method.

All interest-related charges and, if applicable, changes in an instrument’s fair value that are reported in profit or loss are included 
within finance costs or finance income. 

44
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Kazia Therapeutics Limited

Annual Report 2021

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Revenue from contracts with customers

Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of 
returns, trade allowances, rebates and amounts collected on behalf of third parties. Revenue is recognised using a five step 
approach in accordance with AASB 15 Revenue from Contracts with Customers to depict the transfer of promised services to 
customers in an amount that reflects the consideration to which the Group expects to be entitled in exchange for those services. 
Distinct promises within the contract are identified as performance obligations. The transaction price of the contract is measured 
based on the amount of consideration the consolidated entity expects to be entitled to from the customer in exchange for 
services. Factors such as requirements around variable consideration, significant financing components, noncash consideration, 
or amounts payable to customers also determine the transaction price. The transaction is then allocated to separate performance 
obligations in the contract based on relative standalone selling prices. Revenue is recognised when, or as, performance 
obligations are satisfied, which is when control of the promised service is transferred to the customer. Amounts received prior 
to satisfying the revenue recognition criteria are recorded as deferred revenue. Amounts expected to be recognised as revenue 
within the 12 months following the balance sheet date are classified within current liabilities. Amounts not expected to be 
recognised as revenue within the 12 months following the balance sheet date are classified within non-current liabilities.

The consolidated entity recognises contract liabilities for consideration received in respect of unsatisfied performance obligations 
and reports these amounts as other liabilities in its consolidated statement of financial position. Similarly, if the consolidated 
entity satisfies a performance obligation before it receives the consideration, the consolidated entity recognises either a contract 
asset or a receivable in its statement of financial position, depending on whether something other than the passage of time is 
required before the consideration is due.

Licensing revenues, including milestone revenue
Revenue from licensees of the consolidated entity’s intellectual property reflects the transfer of a right to use the intellectual 
property as it exists at the point in time in which the licence is transferred to the customer. 

Licensing agreements are examined to determine whether they contain additional performance obligations, over and above 
the right to use the intellectual property. To the extent that additional performance obligations exist, the transaction price the 
consolidated entity expects to receive for the contract is allocated to the separate performance obligations.

The receipt of milestone payments is often contingent on meeting certain clinical, regulatory or commercial targets, and is 
therefore considered variable consideration. The transaction price of the contingent milestone is estimated using the most likely 
amount method. Within the transaction price, the price associated with a contingent milestone is included only to the extent that 
it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Milestone payments 
that are not within the control of the Group, such as regulatory approvals, are not considered highly probable of being achieved 
until those approvals are achieved.

Finance Income
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the 
amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, 
which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net 
carrying amount of the financial asset. 

Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established. 

Grant Income

The R&D Tax Incentive is a government program which helps to offset some of the incurred costs of R&D. Eligible expenditure 
incurred under the scheme in a financial year attracts an additional 43.5% tax deduction, and for a group earning income of less 
than $20 million, the cash value of the additional deduction is remitted to the taxpayer. In accordance with AASB 120, as the 
compensation relates to expenses already incurred, it is recognised in profit or loss of the period in which it becomes receivable. 
Accordingly the group accounts for the R&D Tax Incentive in the same year as the expenses to which it relates.

Income tax

The income tax expense or benefit for the period is the tax payable on that period’s taxable income based on the applicable 
income tax rate for each jurisdiction, adjusted by changes in deferred tax assets and liabilities attributable to temporary 
differences, unused tax losses and the adjustment recognised for prior periods, where applicable. 

Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets are 
recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for: 

•  When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in a transaction 
that is not a business combination and that, at the time of the transaction, affects neither the accounting nor taxable profits; or

•  When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and the timing 
of the reversal can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future. 

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future 
taxable amounts will be available to utilise those temporary differences and losses.

The carrying amount of recognised and unrecognised deferred tax assets are reviewed each reporting date. Deferred tax assets 
recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for the carrying 
amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable that there 
are future taxable profits available to recover the asset.

Annual Report 2021

Kazia Therapeutics Limited

45

2021 AT A GLANCECHAIRMAN’S LETTERCEO’S REPORTKEY MILESTONESPIPELINE REVIEWPARTNER FOR SUCCESSWORK WITH THE BEST#2 IN THE KAZIA STORYFINANCIAL REPORTSNOTE 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets against 
current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable authority on either 
the same taxable entity or different taxable entities which intend to settle simultaneously.

Kazia Therapeutics Limited (the ‘parent entity’) and its wholly-owned Australian controlled entities have formed an income 
tax consolidated group under the tax consolidation regime. Kazia Therapeutics Limited as the parent entity discloses all of 
the deferred tax assets of the tax consolidated group in relation to tax losses carried forward (after elimination of inter-group 
transactions). The tax consolidated group has applied the ‘separate taxpayer in the group’ allocation approach in determining the 
appropriate amount of taxes to allocate to members of the tax consolidated group. 

As the tax consolidation group continues to generate tax losses there has been no reason for the company to enter a tax funding 
agreement with members of the tax consolidation group. 

Interpretation 23 Uncertain tax positions

Interpretation 23 clarified the application of the recognition and measurement criteria in AASB 112 Income Taxes (AASB 112) 
where there is uncertainty over income tax treatments and requires an assessment of each uncertain tax position as to whether 
it is probable that a taxation authority will accept the position. Where it is not probable, the effect of the uncertainty is reflected 
in determining the relevant taxable profit or loss, tax bases, unused tax losses and unused tax credits or tax rates. The amount 
is determined as either the single most likely amount or the sum of the probability weighted amounts in a range of possible 
outcomes, whichever better predicts the resolution of the uncertainty. Judgments are reassessed as and when new facts and 
circumstances are presented. 

Current and non-current classification

Assets and liabilities are presented in the statement of financial position based on current and non-current classification. 

An asset is current when: it is expected to be realised or intended to be sold or consumed in normal operating cycle; it is held 
primarily for the purpose of trading; it is expected to be realised within 12 months after the reporting period; or the asset is cash 
or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting 
period. All other assets are classified as non-current. 

A liability is current when: it is expected to be settled in normal operating cycle; it is held primarily for the purpose of trading; it 
is due to be settled within 12 months after the reporting period; or there is no unconditional right to defer the settlement of the 
liability for at least 12 months after the reporting period. All other liabilities are classified as non-current. 

Deferred tax assets and liabilities are always classified as non-current. 

Cash and cash equivalents

Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid 
investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are 
subject to an insignificant risk of changes in value. 

Research and development

Expenditure during the research phase of a project is recognised as an expense when incurred. Development costs are capitalised 
only when technical feasibility studies identify that the project will deliver future economic benefits and these benefits can be 
measured reliably. 

Leases

Under AASB 16, leases are accounted for as follows:

•  Right-of-use assets and lease liabilities are recognised in the consolidated statement of financial position, initially measured at 

the present value of future lease payments;

•  Depreciation on right-of-use assets and interest on lease liabilities are recognised in the consolidated statement of profit or 

loss; and

•  The total amount of cash paid under lease arrangements is separated into a principal portion (presented within financing 

activities) and interest (presented within operating activities) in the consolidated cash flow statement.

Lease incentives under AASB 16 are recognised as part of the measurement of right-of-use assets and lease liabilities.

Under AASB 16, right-of-use assets are tested for impairment in accordance with AASB 136 Impairment of Assets. This replaces 
the previous requirement to recognise a provision for onerous lease contracts.

For short-term leases (lease term of 12 months or less) and leases of low-value assets, the consolidated entity has opted to 
recognise a lease expense on a straight-line basis as permitted by AASB 16. This expense is presented within other expenses in 
the consolidated statement of profit or loss.

Intangible assets

Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their fair value at the 
date of the acquisition. Intangible assets acquired separately are initially recognised at cost. Indefinite life intangible assets are not 
amortised and are subsequently measured at cost less any impairment. Finite life intangible assets are subsequently measured 
at cost less amortisation and any impairment. The gains or losses recognised in profit or loss arising from the derecognition of 
intangible assets are measured as the difference between net disposal proceeds and the carrying amount of the intangible asset. 

46
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Kazia Therapeutics Limited

Annual Report 2021

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

The method and useful lives of finite life intangible assets are reviewed annually. Changes in the expected pattern of consumption 
or useful life are accounted for prospectively by changing the amortisation method or period. Amortisation expense is included in 
research and development expenditure.

Licensing agreement for paxalisib 
The Licensing agreement asset was initially brought to account at fair value, and is being amortised on a straight-line basis over 
the period of its expected benefit, being the remaining life of the patent, which was 15 years from the date of acquisition. 

Licensing agreement for EVT801
The Licensing agreement asset was initially brought to account at cost and is being amortised on a straight-line basis over the 
period of its expected benefit, being the remaining life of the patent, which was 12.5 years from the date of acquisition.

Impairment of non-financial assets

Non-financial assets with finite useful lives are reviewed for impairment whenever events or changes in circumstances indicate 
that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying 
amount exceeds its recoverable amount. 

Recoverable amount is the higher of an asset’s fair value less costs of disposal and value-in-use. The value-in-use is the present 
value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or cash-generating 
unit to which the asset belongs. Assets that do not have independent cash flows are grouped together to form a cash-generating 
unit. 

Compound financial instruments

Subsequent to initial recognition, the liability component of a compound financial instrument is measured at amortised cost 
using the effective interest rate method, whereas the equity component is not remeasured. Interest, gains and losses relating to 
the financial liability are recognised in profit or loss. On conversion, the financial liability is reclassified to equity; no gain or loss is 
recognised on conversion. 

Provisions

Provisions are recognised when the consolidated entity has a present (legal or constructive) obligation as a result of a past event, 
it is probable the consolidated entity will be required to settle the obligation, and a reliable estimate can be made of the amount 
of the obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present 
obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. If the time value of 
money is material, provisions are discounted using a current pre-tax rate specific to the liability. The increase in the provision 
resulting from the passage of time is recognised as a finance cost. 

Employee benefits

Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be settled 
within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities are settled. 

Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting date is measured 
as the present value of expected future payments to be made in respect of services provided by employees up to the reporting 
date using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of 
employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date 
on high quality corporate bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash 
outflows. 

Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred. 

Share-based payments
Equity-settled share-based compensation benefits are provided to employees under the terms of the Employee Share Option 
Plan (‘ESOP’) and consultants as compensation for services performed.

Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for the 
rendering of services.

The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined using the 
Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, 
the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free 
interest rate for the term of the option, together with non-vesting conditions that do not determine whether the consolidated 
entity receives the services that entitle the employees to receive payment. No account is taken of any other vesting conditions.

The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the vesting 
period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate of 
the number of awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit or loss 
for the period is the cumulative amount calculated at each reporting date less amounts already recognised in previous periods.

Annual Report 2021

Kazia Therapeutics Limited

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2021 AT A GLANCECHAIRMAN’S LETTERCEO’S REPORTKEY MILESTONESPIPELINE REVIEWPARTNER FOR SUCCESSWORK WITH THE BEST#2 IN THE KAZIA STORYFINANCIAL REPORTSNOTE 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

The cumulative charge to profit or loss until settlement of the liability is calculated as follows:

•  during the vesting period, the liability at each reporting date is the fair value of the award at that date multiplied by the 

expired portion of the vesting period.

• 

from the end of the vesting period until settlement of the award, the liability is the full fair value of the liability at the reporting date.

Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market conditions are 
considered to vest irrespective of whether or not that market condition has been met, provided all other conditions are satisfied.

If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made. An 
additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair value of the 
share-based compensation benefit as at the date of modification.

If the non-vesting condition is within the control of the consolidated entity or employee, the failure to satisfy the condition is treated 
as a cancellation. If the condition is not within the control of the consolidated entity or employee and is not satisfied during the 
vesting period, any remaining expense for the award is recognised over the remaining vesting period, unless the award is forfeited.

If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining expense 
is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and new award is 
treated as if they were a modification.

Finance costs

Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in the 
period in which they are incurred, including interest on short-term and long-term borrowings.

Fair value measurement

When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair value 
is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market 
participants at the measurement date; and assumes that the transaction will take place either: in the principal market; or in the 
absence of a principal market, in the most advantageous market.

Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming 
they act in their economic best interest. For non-financial assets, the fair value measurement is based on its highest and best use. 
Valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, 
are used, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

Assets and liabilities measured at fair value are classified, into three levels, using a fair value hierarchy that reflects the significance 
of the inputs used in making the measurements. Classifications are reviewed each reporting date and transfers between levels are 
determined based on a reassessment of the lowest level input that is significant to the fair value measurement.

For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either not available 
or when the valuation is deemed to be significant. External valuers are selected based on market knowledge and reputation. Where 
there is a significant change in fair value of an asset or liability from one period to another, an analysis is undertaken, which includes 
a verification of the major inputs applied in the latest valuation and a comparison, where applicable, with external sources of data.

Issued capital

Ordinary shares are classified as equity.

Incremental costs directly attributable to the issue of new shares or options, including share based payments relating to the issue 
of shares are, shown in equity as a deduction, net of tax, from the proceeds.

Earnings per share

Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Kazia Therapeutics Limited, excluding 
any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during 
the financial year, adjusted for bonus elements in ordinary shares issued during the financial year.

Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after 
income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average 
number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.

Goods and Services Tax (‘GST’) and other similar taxes

Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable 
from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable 
from, or payable to, the tax authority is included in other receivables or other payables in the statement of financial position.

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which 
are recoverable from, or payable to the tax authority, are presented as operating cash flows.

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.

48
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Annual Report 2021

NOTE 3. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect 
the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation to 
assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions on 
historical experience and on other various factors, including expectations of future events, management believes to be reasonable 
under the circumstances. The resulting accounting judgements and estimates will seldom equal the related actual results. The 
judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of 
assets and liabilities (refer to the respective notes) within the next financial year are discussed as follows:

Research and development expenses 

The Directors do not consider the development programs to be sufficiently advanced to reliably determine the economic benefits 
and technical feasibility to justify capitalisation of development costs. These costs have been recognised as an expense when 
incurred.

Research and development expenses relate primarily to the cost of conducting human clinical and pre-clinical trials. Clinical 
development costs are a significant component of research and development expenses. Estimates have been used in determining 
the expense liability under certain clinical trial contracts where services have been performed but not yet invoiced. Generally the 
costs, and therefore estimates, associated with clinical trial contracts are based on the number of patients, drug administration 
cycles, the type of treatment and the outcome being measured. The length of time before actual amounts can be determined will 
vary depending on length of the patient cycles and the timing of the invoices by the clinical trial partners. 

Revenue recognition

The consolidated entity applies judgement in determining whether contracts entered into fall within the scope of AASB 15 
‘Revenue from Contracts with Customers’. In doing so, management considers the commercial substance of the transaction and 
how risks and benefits of the contract accrue to the various parties to the contract. In determining the accounting treatment of 
the contracts with each customer, management assessed that the contracts were within the scope of AASB 15 ‘Revenue from 
Contracts with Customers’. Management has also made the judgement in each case that the grant of the licence and transfer of 
associated know-how and materials are accounted for as one performance obligation as they are not considered to be distinct; 
they are highly interrelated and could not provide benefits to the customer independently from each other. Judgements were also 
made in relation to the transfer of the licence and know-how in each case, and whether this should be recognised over time or a 
point in time. The point in time has been determined with regard to the point at which the transfer of know-how has substantially 
been completed and the customer has control of the asset and the ability to direct the use of and receive substantially all of the 
remaining benefits.

Clinical trial expenses

The timing of payment for work conducted under clinical trials often bears little relation to the timing of the work effort. 
Detailed estimates are made to determine the amount of work effort expended during a reporting period in order to determine 
the appropriate expense to be recognised, with the resulting prepayments or un-invoiced amounts being recognised as a 
prepayment or an accrual respectively.

Share-based payment transactions

The consolidated entity measures the cost of equity-settled transactions with employees by reference to the fair value of the 
equity instruments at the date at which they are granted. The fair value is determined by using the Black-Scholes option pricing 
model taking into account the terms and conditions upon which the instruments were granted. The accounting estimates and 
assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of assets and 
liabilities within the next annual reporting period but may impact profit or loss and equity.

Acquisition of intangible assets

The consolidated entity has applied judgement in determining the accounting treatment for the acquisition of the License 
agreement for EVT801. The License agreement has been determined to be a stand alone transaction, independent from any 
other agreements which have been or may be entered into with Evotec (France) SAS. Management has also made the decision 
to account for the cost of the asset conferred by the License agreement on the basis of the milestones that are probable of being 
payable, that is, those for which there is judged to be a probability of greater than 50% that the milestone will be triggered.  

Contingent consideration

Contingent consideration relates to the intangible assets acquired, and the fair value of contingent consideration is dependent on 
the key assumptions used in accounting for the acquisition of those intangible assets. These assumptions include the probability 
of milestones occurring, and can also include the anticipated timing of settlement and discount rates used.

In the case where contingent consideration is recognised on the basis that the liability is probable of occurring, judgement is used 
in determining which milestones are considered probable of being triggered.

Intangible assets available for use

The consolidated entity has exercised judgement in determining that its intangible assets, being license agreements, have a finite 
life and are available for use once acquired. As the business model is to acquire such assets and then develop them to generate 
returns from future license transactions or other means, management have determined that the assets are available for use from 
the time that they are acquired. In each case the prima facie useful life is the remaining life of the patent over the asset, unless 
other factors over-ride this assessment.

Annual Report 2021

Kazia Therapeutics Limited

49

2021 AT A GLANCECHAIRMAN’S LETTERCEO’S REPORTKEY MILESTONESPIPELINE REVIEWPARTNER FOR SUCCESSWORK WITH THE BEST#2 IN THE KAZIA STORYFINANCIAL REPORTSNOTE 3. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS 
(CONTINUED)

Impairment of non-financial assets other than goodwill and other indefinite life intangible assets

The consolidated entity assesses impairment of non-financial assets other than goodwill and other indefinite life intangible 
assets at each reporting date by evaluating conditions specific to the consolidated entity and to the particular asset that may 
lead to impairment. Judgement is used to determine whether any indicators of impairment exist, and reference is made to the 
considerations included in AASB 136 Impairment of Assets in this assessment. If an impairment trigger is found to exist, the 
recoverable amount of the asset is determined.

NOTE 4. OPERATING SEGMENTS

Identification of reportable operating segments

The consolidated entity’s operating segment is based on the internal reports that are reviewed and used by the Board of 
Directors (being the Chief Operating Decision Makers (‘CODM’)) in assessing performance and in determining the allocation of 
resources. 

The consolidated entity operates in the pharmaceutical research and development business. There are no operating segments for 
which discrete financial information exists. 

The information reported to the CODM, on at least a quarterly basis, is the consolidated results as shown in the statement of 
profit or loss and other comprehensive income and statement of financial position. 

Major customers

During the year the consolidated entity transacted with two customers, and revenue from each customer amounted to in excess 
of 10% of the total revenue from the period. Both companies entered into license agreements for the consolidated entity’s drug 
assets. 

NOTE 5. REVENUE

Licensing revenue

Disaggregation of revenue

The disaggregation of revenue from contracts with customers is as follows:

Geographical regions

China

Sweden

Timing of revenue recognition

Licensing revenue recognised at a point in time

NOTE 6. OTHER INCOME

Net foreign exchange gain

Payroll tax rebate

Subsidies and grants

Research and development rebate

Other income

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Kazia Therapeutics Limited

Annual Report 2021

Consolidated

2021
$

15,182,711 

2020
$

-

Consolidated

2021
$

2020
$

10,006,031 

5,176,680 

15,182,711 

15,182,711 

- 

- 

- 

- 

Consolidated

2021
$

- 

2,192 

- 

- 

2020
$

4,631 

2,259 

20,000 

968,110 

2,192 

995,000 

NOTE 7. EXPENSES

Loss before income tax includes the following specific expenses:

Amortisation

Paxalisib licensing agreement

Evotech licensing agreement

Total amortisation

Net foreign exchange loss

Net foreign exchange loss

Leases

Expense relating to short term leases

Superannuation expense

Defined contribution superannuation expense

Employee benefits expense excluding superannuation

Employee benefits expense excluding superannuation

Other expenses

Chinese With-Holding Tax incurred on license transaction 

Chinese Value Added Tax incurred on license transaction 

NOTE 8. INCOME TAX BENEFIT

Numerical reconciliation of income tax benefit and tax at the statutory rate

Loss before income tax benefit

Tax at the statutory tax rate of 26% (2020: 27.5%)

Tax effect amounts which are not deductible/(taxable) in calculating taxable income:

Amortisation of intangibles

Share-based payments

Gain/loss on revaluation of contingent consideration

Research and Development claim

Adjustment to deferred tax balances as a result of change in statutory tax rate

Tax losses and timing differences not recognised

Income tax benefit

Consolidated

2021
$

2020
$

1,084,344 

1,084,344 

180,965 

- 

1,265,309

1,084,344

430,273 

- 

92,552 

107,929

138,010 

139,697 

1,562,868 

1,525,599 

931,099 

537,578 

1,468,677

- 

- 

- 

Consolidated

2021
$

2020
$

(8,906,307)

(12,765,661)

(2,315,640)

(3,510,557)

347,960 

175,005 

706,822 

- 

298,195 

72,079 

130,503 

279,675 

(1,085,853)

(2,730,105)

(186,152)

787,658 

- 

2,431,910 

(484,347)

(298,195)

Consolidated

2021
$

2020
$

Tax losses not recognised

Unused tax losses for which no deferred tax asset has been recognised-Australia

70,896,259 

67,429,803 

Potential tax benefit @ 26% (2020: 27.5%)

Unused tax losses for which no deferred tax asset has been recognised-US

Potential tax benefit at statutory tax rates @ 21%-US

18,433,027 

17,531,749 

2,038,587 

1,570,207 

428,103 

329,743 

Annual Report 2021

Kazia Therapeutics Limited

51

2021 AT A GLANCECHAIRMAN’S LETTERCEO’S REPORTKEY MILESTONESPIPELINE REVIEWPARTNER FOR SUCCESSWORK WITH THE BEST#2 IN THE KAZIA STORYFINANCIAL REPORTSNOTE 9. CASH AND CASH EQUIVALENTS

Current assets

Cash at bank and on hand 

Short-term deposits 

NOTE 10. TRADE AND OTHER RECEIVABLES

Current assets

Trade receivables

R&D tax rebate receivable

Other receivables

Deposits held

Less: Provision for impairment of deposits held

Non-current assets

Deposit paid

Consolidated

2021
$

2020
$

21,086,760 

1,264,044 

6,500,000 

7,500,000 

27,586,760 

8,764,044 

Consolidated

2021
$

2020
$

- 

- 

- 

76,675 

7,687 

439 

1,017,278 

1,017,717 

177,125 

566,508 

- 

(409,098)

84,362 

1,352,252 

6,693,628 

- 

6,777,990 

1,352,252 

Of the deposit paid, $6.65m represents an advance to GCAR at the start of the GBM Agile trial, and is refundable if not utilised 
against trial expenses.  The amount will be allocated against expenditure towards the latter end of the trial, which is expected to 
be over 12 months from year end. 

NOTE 11. OTHER ASSETS

Current assets

Prepayments

NOTE 12. INTANGIBLES

Non-current assets

Licensing agreement – at acquired fair value

Less: Accumulated amortisation

Licensing agreement – at cost

Less: Accumulated amortisation

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Kazia Therapeutics Limited

Annual Report 2021

Consolidated

2021
$

2020
$

1,719,696 

537,305 

Consolidated

2021
$

2020
$

16,407,788 

16,407,788 

(5,081,993)

(3,997,649)

11,325,795 

12,410,139 

10,857,763 

(180,965)

10,676,798 

- 

- 

- 

22,002,593 

12,410,139 

NOTE 12. INTANGIBLES (CONTINUED)

Consolidated

Balance at 1 July 2019

Amortisation expense

Balance at 30 June 2020

Additions

Amortisation expense

Balance at 30 June 2021

EVT801 
licensing 
agreement
$

Paxalisib 
licensing 
agreement
$

Total
$

-

-

-

10,857,763

13,494,483

13,494,483

(1,084,344)

(1,084,344)

12,410,139

-

12,410,139

10,857,763

(180,965)

(1,084,344)

(1,265,309)

10,676,798

11,325,795

22,002,593

During the financial year the consolidated entity acquired exclusive rights to EVT801, a small-molecule selective inhibitor of 
vascular endothelial growth factor receptor 3 (VEGFR3).

NOTE 13. TRADE AND OTHER PAYABLES

Current liabilities

Trade payables

Accrued payables

Refer to note 21 for further information on financial instruments.

NOTE 14. EMPLOYEE BENEFITS

Current liabilities

Annual leave

Non-current liabilities

Long service leave

NOTE 15. CONTINGENT CONSIDERATION

Current liabilities

Contingent consideration – paxalisib

Contingent consideration - EVT801

Non-current liabilities

Contingent consideration – paxalisib

Contingent consideration – EVT801

Consolidated

2021
$

2020
$

1,893,150 

1,693,632 

3,039,510 

1,795,301 

4,932,660 

3,488,933 

Consolidated

2021
$

2020
$

229,337 

191,451 

54,684 

284,021 

- 

191,451 

Consolidated

2021
$

2020
$

- 

1,387,089 

3,164,557 

- 

3,164,557 

1,387,089 

1,015,249 

7,911,392 

8,926,641 

457,899 

- 

457,899 

12,091,198 

1,844,988 

Annual Report 2021

Kazia Therapeutics Limited

53

2021 AT A GLANCECHAIRMAN’S LETTERCEO’S REPORTKEY MILESTONESPIPELINE REVIEWPARTNER FOR SUCCESSWORK WITH THE BEST#2 IN THE KAZIA STORYFINANCIAL REPORTSNOTE 15. CONTINGENT CONSIDERATION (CONTINUED)

Contingent consideration - paxalisib

During the 2017 financial year, the consolidated entity acquired 100% of the issued shares in Glioblast Pty Ltd, a privately-
held, neuro-oncology-focused Australian biotechnology company. On the same day, Kazia entered into a worldwide licensing 
agreement with Genentech to develop and commercialise GDC-0084, now known as paxalisib.

The Glioblast acquisition contains four contingent milestone payments, the first two milestone payments are to be settled with Kazia 
shares, and the third and fourth milestone payments are to be settled with either cash or Kazia shares at the discretion of Kazia. 
Milestones 1 and 4 have now been paid out, and Milestone 3 has lapsed. Milestone 2 comprises shares to the value of $1,250,000.

The Genentech agreement comprises of one milestone payment payable on the first commercial licensed product sale, in the 
amount of $1,394,000.

Each milestone payment is probability weighted for valuation purposes. The milestone payments are discounted to present 
value, using a discount rate of 15% (previously 35%) per annum. The discount rate was considered at 30 June 2021 and it was 
determined that the risk of the asset, and therefore of the milestones being met, has been considerably decreased as a result of 
paxalisib entering the pivotal GBM Agile trial, which is progressing well, and the license transaction with Simcere Pharmaceutical 
Group, which provides an external validation of paxalisib. Accordingly, the discount rate applied to future expected cash flows has 
been revised downwards.

Kazia is also required to pay royalties to Genentech in relation to net sales. These payments are related to future financial 
performance, and are not considered as part of the consideration in relation to the Genentech agreement.

Contingent consideration - EVT801

As set out in note 2, the acquisition of EVT801 has been accounted for at cost, with milestones where the payment is considered 
probable being booked as a current or non-current liability at year end, according to the estimated payment date. Milestones 
where the payment is not considered probable at year end have not been accounted for as a liability. The total amount of 
milestone payments not booked at year end amounts to €300,500,000 ($475,474,684).

NOTE 16. DEFERRED TAX

Consolidated

2021
$

2020
$

Non-current liabilities

Deferred tax liability associated with Licensing Agreement

2,928,441 

3,412,788 

NOTE 17. CONTRIBUTED EQUITY

Consolidated

2021
Shares

2020
Shares

2021
$

2020
$

Ordinary shares – fully paid

132,012,209

94,598,369

80,290,062 

48,781,214 

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Annual Report 2021

NOTE 17. CONTRIBUTED EQUITY (CONTINUED)
Movements in ordinary share capital

Details

Balance

Share placement

Share placement

Issued under Share Purchase Plan

Issued on conversion of options

Less: share issue transaction costs

Date

Shares

Issue price

$

1 July 2019

62,166,673

36,641,519

1 November 2019

10,000,000

$0.400 

4,000,000

16 April 2020

11 May 2020

18,041,667

4,390,010

19

-

$0.400 

$0.400 

$4.000 

$0.000

7,216,667

1,756,004

76

(833,052)

48,781,214

Balance

30 June 2020

94,598,369

Issued on conversion of options

28 August 2020

25,000

$0.493 

12,313

Institutional placement under ANREO

12 October 2020

20,525,820

$0.800 

16,420,656

Retail placement under ANREO

Issued on conversion of options

Issued on conversion of options

Share placement

Issued on achievement of milestone

Less: share issue transaction costs

Balance

Ordinary shares

26 October 2020

11,017,075

$0.800 

8,813,660

2 March 2021

15 March 2021

28 April 2021

21 May 2021

391,500

25,000

3,037,580

2,391,865

$0.635 

$0.493 

$1.407 

248,661

12,313

4,274,633

$1.421 

3,400,000

-

$0.000

(1,673,388)

30 June 2021

132,012,209

80,290,062

Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company in proportion to 
the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the company does not 
have a limited amount of authorised capital.

On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share 
shall have one vote.

Share buy-back

There is no current on-market share buy-back.

Capital risk management

The consolidated entity’s objectives when managing capital are to safeguard its ability to continue as a going concern, so that it 
can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce 
the cost of capital.

Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated as 
total borrowings less cash and cash equivalents.

The capital structure of the consolidated entity consists of cash and cash equivalents and equity attributable to equity holders. 
The overall strategy of the consolidated entity is to continue its drug development programs, which depends on raising sufficient 
funds, through a variety of sources including issuing of additional share capital, as may be required from time to time.

The capital risk management policy remains unchanged from the prior year.

NOTE 18. OTHER CONTRIBUTED EQUITY

Convertible note – Triaxial

Consolidated

2021
$

2020
$

464,000 

464,000 

On 4 December 2014, the consolidated entity and the convertible note holder (‘Triaxial’) signed a Convertible Note Deed Poll 
(‘Deed’) which superseded the precedent Loan Agreement between Triaxial shareholders and the consolidated entity. The 
Deed extinguishes the liability created by the Loan Agreement and provides that the Convertible Notes will convert into a 
pre-determined number of ordinary shares on the achievement of defined milestones established in the schedule of the Deed. 
Accordingly the convertible note has been reclassified as an equity instrument rather than debt instrument.

Annual Report 2021

Kazia Therapeutics Limited

55

2021 AT A GLANCECHAIRMAN’S LETTERCEO’S REPORTKEY MILESTONESPIPELINE REVIEWPARTNER FOR SUCCESSWORK WITH THE BEST#2 IN THE KAZIA STORYFINANCIAL REPORTSNOTE 18. OTHER CONTRIBUTED EQUITY (CONTINUED)

During the financial year ended 30 June 2017, the Company reached two milestones triggering the conversion of a portion of its 
convertible note as follows;

•  on 11 August 2016 the Company announced the submission of an IND application. On 10 September 2016, the Company 
received a letter from the FDA advising the study may proceed triggering conversion of 20,000,000 ordinary shares; and

•  on 31 October 2016, the Company announced it had licensed a Phase II ready molecule triggering the conversion of 

16,000,000 ordinary shares.

During the financial year ended 30 June 2018, a portion of the convertible notes was extinguished. 

The remaining portion of the convertible note will be exercised at the holders’ discretion on completion of Phase II clinical trial or 
achieving Breakthrough Designation, and would convert to 1,856,000 ordinary shares if converted. Completion will be deemed to 
occur upon the receipt by the consolidated entity of a signed study report or notification of the designation. There is a possibility 
for an early conversion of the convertible notes if a third party acquires more than 50% of the issued capital of the consolidated 
entity.

NOTE 19. RESERVES

Foreign currency translation reserve

The reserve is used to recognise exchange differences arising from translation of the financial statements of foreign operations to 
Australian dollars.

Share-based payments reserve

The reserve is used to recognise the value of equity benefits provided to employees and executive directors as part of their 
remuneration, and other parties as part of their compensation for services.

NOTE 20. DIVIDENDS

There were no dividends paid, recommended or declared during the current or previous financial year.

NOTE 21. FINANCIAL INSTRUMENTS

Financial risk management objectives

The consolidated entity’s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The 
consolidated entity uses different methods to measure and manage the different types of risks to which it is exposed. These 
methods include monitoring the levels of exposure to interest rates and foreign exchange, ageing analysis and monitoring of 
specific credit allowances to manage credit risk, and, rolling cash flow forecasts to manage liquidity risk.

Market risk

Foreign currency risk
The consolidated entity operates internationally and is exposed to foreign exchange risk arising from various currency exposures, 
primarily with respect to the US dollars (‘USD’). Foreign exchange risk arises from future transactions and recognised assets and 
liabilities denominated in a currency that is not the entity’s functional currency and net investments in foreign operations.

As of 30 June 2021, the consolidated entity did not hold derivative financial instruments in managing its foreign currency, 
however, the consolidated entity may from time to time enter into hedging arrangements where circumstances are deemed 
appropriate. The consolidated entity used natural hedging to reduce the foreign currency risk, which involved processing USD 
payments from cash held in USD. Foreign subsidiaries with a functional currency of Australian Dollars (‘AUD’) have exposure to 
the local currency of these subsidiaries and any other currency these subsidiaries trade in.

The carrying amount of the consolidated entity’s foreign currency denominated financial assets and financial liabilities at the 
reporting date was as follows:

Consolidated

US dollars

Euros

Assets

2021
$

Liabilities

2020
$

2021
$

2020
$

21,072,592

272,450

3,447,803

2,196,281

-

-

15,943

-

21,072,592

272,450

3,463,746

2,196,281

The consolidated entity had net assets denominated in foreign currencies of $17,608,845 as at 30 June 2021 (2020: net liabilities 
$1,923,831).

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NOTE 21. FINANCIAL INSTRUMENTS (CONTINUED)

If the AUD had strengthened against the USD by 10% (2020: 10%) then this would have had the following impact: 

Consolidated - 2021

% change

Effect on 
profit before 
tax

Effect on 
equity

% change

AUD strengthened

AUD weakened
Effect on 
profit before 
tax

Effect on 
equity

US dollars

Euros

10% 

10% 

(1,762,479)

(1,762,479)

1,594

1,594

(10%)

(10%)

1,762,479

1,762,479

(1,594)

(1,594)

(1,760,885)

(1,760,885)

1,760,885

1,760,885

Consolidated - 2020

% change

Effect on 
profit before 
tax

Effect on 
equity

% change

AUD strengthened

AUD weakened
Effect on 
profit before 
tax

Effect on 
equity

US dollars

Price risk

10%

192,383

192,383

(10%)

(192,383)

(192,383)

The consolidated entity is not exposed to any significant price risk.

Interest rate risk

The consolidated entity’s exposure to market interest rates relate primarily to the investments of cash balances.

The consolidated entity has cash reserves held primarily in Australian dollars and United States dollars and places funds on 
deposit with financial institutions for periods generally not exceeding three months.

As at the reporting date, the consolidated entity had the following variable interest rate balances:

Consolidated

Cash at bank and in hand

Short term deposits

2021

2020

Weighted 
average 
interest rate
%

Weighted 
average 
interest rate
%

Balance
$

-

21,086,760

0.04% 

6,500,000

0.04% 

0.95% 

Net exposure to cash flow interest rate risk

27,586,760

Balance
$

1,264,044

7,500,000

8,764,044

The consolidated entity has cash and cash equivalents totalling $27,586,760 (2020: $8,764,044). An official increase/decrease in 
interest rates of 100 basis points (2020: 100 basis points) would have a favourable/adverse effect on profit before tax and equity 
of $275,867 (2020: $87,640) per annum. The percentage change is based on the expected volatility of interest rates using market 
data and analysts forecasts.

Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the 
consolidated entity. The entity is not exposed to significant credit risk on receivables.

The consolidated entity has adopted a lifetime expected loss allowance in estimating expected credit losses to trade receivables 
through the use of a provisions matrix using fixed rates of credit loss provisioning. These provisions are considered representative 
across all customers of the consolidated entity based on recent sales experience, historical collection rates and forward-looking 
information that is available.

The consolidated entity places its cash deposits with high credit quality financial institutions and by policy, limits the amount 
of credit exposure to any single counter-party. The consolidated entity is averse to principal loss and ensures the safety and 
preservation of its invested funds by limiting default risk, market risk, and reinvestment risk. The consolidated entity mitigates 
default risk by constantly positioning its portfolio to respond appropriately to a significant reduction in a credit rating of any 
financial institution.

Generally, trade receivables are written off when there is no reasonable expectation of recovery. Indicators of this include the 
failure of a debtor to engage in a repayment plan, no active enforcement activity and a failure to make contractual payments for a 
period greater than 1 year.

There are no significant concentrations of credit risk within the consolidated entity. The credit risk on liquid funds is limited as the 
counter parties are banks with high credit ratings.

Credit risk is managed by limiting the amount of credit exposure to any single counter-party for cash deposits.

Annual Report 2021

Kazia Therapeutics Limited

57

2021 AT A GLANCECHAIRMAN’S LETTERCEO’S REPORTKEY MILESTONESPIPELINE REVIEWPARTNER FOR SUCCESSWORK WITH THE BEST#2 IN THE KAZIA STORYFINANCIAL REPORTSNOTE 21. FINANCIAL INSTRUMENTS (CONTINUED)

Liquidity risk

The consolidated entity manages liquidity risk by maintaining adequate cash reserves and by continuously monitoring actual and 
forecast cash flows and matching the maturity profiles of financial assets and liabilities. In particular, contingent consideration 
may be satisfied either by payment of cash or by issue of shares, at the discretion of the entity.

Remaining contractual maturities
The following tables detail the consolidated entity’s remaining contractual maturity for its financial instrument liabilities. The 
tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which 
the financial liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as remaining 
contractual maturities and therefore these totals may differ from their carrying amount in the statement of financial position.

Weighted 
average  
interest  
rate  
%

1 year or less 
$

Between 
 1 and 2  
years 
$

Between  
2 and 5  
years 
$

Over 5 
years 
$

Remaining 
contractual 
maturities 
$

-

-

-

1,893,150

3,039,510

3,164,557

8,097,217

-

-

-

-

-

-

9,305,392

9,305,392

-

-

-

-

1,893,150

3,039,510

12,469,949

17,402,609 

Weighted 
average 
interest  

rate

%

1 year or less 
$

Between  
1 and 2  
years 
$

Between  
2 and 5  
years 
$

Over 5  
years 
$

Remaining 
contractual 
maturities 
$

-

-

-

1,693,632

1,795,301

-

-

-

4,199,000

3,488,933

4,199,000

-

-

-

-

-

-

-

-

1,693,632

1,795,301

4,199,000

7,687,933

Consolidated - 2021

Non-derivatives

Trade payables

Accrued payables 

Contingent consideration

Total non-derivatives

Consolidated - 2020

Non-derivatives

Trade payables

Accrued payables 

Contingent consideration

Total non-derivatives

The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed above.

NOTE 22. FAIR VALUE MEASUREMENT

Fair value hierarchy

The following tables detail the consolidated entity’s assets and liabilities, measured or disclosed at fair value, using a three level 
hierarchy, based on the lowest level of input that is significant to the entire fair value measurement, being:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the 
measurement date

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or 
indirectly

Level 3: Unobservable inputs for the asset or liability

Consolidated - 2021

Liabilities

Contingent consideration 

Total liabilities

Consolidated - 2020

Liabilities

Contingent consideration 

Total liabilities

Level 1
$

-

-

Level 1
$

-

-

Level 2
$

-

-

Level 2
$

-

-

Level 3
$

1,015,249

1,015,249

Level 3
$

1,844,988

1,844,988

Total
$

1,015,249

1,015,249

Total
$

1,844,988

1,844,988

58
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Kazia Therapeutics Limited

Annual Report 2021

NOTE 22. FAIR VALUE MEASUREMENT (CONTINUED)

There were no transfers between levels during the financial year.

The fair value of contingent consideration related to the acquisition of Glioblast Pty Ltd and the licence agreement is estimated 
by probability-weighting the expected future cash outflows, adjusting for risk and discounting. 

The effects on the fair value of risk and uncertainty in the future cash flows are dealt with by adjusting the estimated cash flows 
rather than adjusting the discount rate. The estimated cashflows were adjusted based on the directors’ assessment of achieving 
contracted milestones as disclosed in Note 15. The probabilities used fell in the range of 35% to 55% and were informed by 
generally accepted industry probabilities of drugs achieving certain milestones in their progression towards registration.

Level 3 assets and liabilities
Movements in level 3 assets and liabilities during the current and previous financial year are set out below:

Consolidated

Balance at 1 July 2019

Losses recognised in profit or loss

Balance at 30 June 2020

Losses recognised in profit and loss

Payout of milestone

Balance at 30 June 2021

Level 3
$

1,370,431

474,557

1,844,988

2,570,261

(3,400,000)

1,015,249

Available- 
for-sale
$

-

-

-

-

-

-

Total
$

1,370,431

474,557

1,844,988

2,570,261

(3,400,000)

1,015,249

NOTE 23. KEY MANAGEMENT PERSONNEL DISCLOSURES

Compensation

The aggregate compensation made to directors and other members of key management personnel of the consolidated entity is 
set out below:

Short-term employee benefits

Post-employment benefits

Share-based payments

Consolidated

2021
$

2020
$

1,574,520 

1,324,345 

112,290 

616,598 

96,473 

230,036 

2,303,408

1,650,854

Please refer to Note 27 for other transactions with key management personnel and their related parties.

NOTE 24. REMUNERATION OF AUDITORS

During the financial year the following fees were paid or payable for services provided by Grant Thornton Audit Pty Ltd, the 
auditor of the company:

Audit services - Grant Thornton Audit Pty Ltd

Audit or review of the financial statements

NOTE 25. CONTINGENT LIABILITIES

Consolidated

2021
$

2020
$

151,400 

124,250

Other than the contingent consideration set out in note 15, the consolidated entity does not have any other contingent liabilities.

NOTE 26. COMMITMENTS

Lease commitments comprise contracted amounts for leases of premises. The agreement has a duration less than 12 months 
from financial year end.

Annual Report 2021

Kazia Therapeutics Limited

59

2021 AT A GLANCECHAIRMAN’S LETTERCEO’S REPORTKEY MILESTONESPIPELINE REVIEWPARTNER FOR SUCCESSWORK WITH THE BEST#2 IN THE KAZIA STORYFINANCIAL REPORTSNOTE 27. RELATED PARTY TRANSACTIONS

Parent entity

Kazia Therapeutics Limited is the parent entity.

Subsidiaries

Interests in subsidiaries are set out in note 29.

Key management personnel

Disclosures relating to key management personnel are set out in note 23 and the remuneration report included in the directors’ 
report.

Transactions with related parties

There was no other transaction with KMP and their related parties.

Receivable from and payable to related parties

There were no trade receivables from or trade payables to related parties at the current and previous reporting date.

Loans to/from related parties

There were no loans to or from related parties at the current and previous reporting date.

Terms and conditions

All transactions were made on normal commercial terms and conditions and at market rates.

NOTE 28. PARENT ENTITY INFORMATION

Set out below is the supplementary information about the parent entity.

Statement of profit or loss and other comprehensive income

Loss after income tax

Total comprehensive income

Statement of financial position

Total current assets

Total assets

Total current liabilities

Total liabilities

Equity

Contributed equity

Other contributed equity

Reserves

Accumulated losses

Total equity

Parent

2021
$

2020
$

(16,853,528)

(11,064,061)

(16,853,528)

(11,064,061)

Parent

2021
$

25,041,721

47,044,314

3,177,348

15,032,430

2020
$

9,702,674

22,112,813

1,521,946

5,392,633

80,290,062 

48,781,213 

464,000 

1,753,886 

464,000 

1,521,111 

(50,496,064)

(34,046,144)

32,011,884

16,720,180

Reserves comprise Share Based Payments Reserve.

Contingent liabilities

The parent entity contingent liabilities as at 30 June 2021 and 30 June 2020 are as set out in Note 15. The contingent 
consideration is specific to the parent entity.

Capital commitments - Property, plant and equipment

The parent entity had no capital commitments for property, plant and equipment at as 30 June 2021 and 30 June 2020.

60
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Kazia Therapeutics Limited

Annual Report 2021

NOTE 28. PARENT ENTITY INFORMATION (CONTINUED)

Significant accounting policies

The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in note 2, except for 
the following:

• 

Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.

•  Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be an indicator 

of an impairment of the investment.

NOTE 29. INTERESTS IN SUBSIDIARIES

The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with 
the accounting policy described in note 2:

Name

Kazia Laboratories Pty Limited

Kazia Research Pty Limited

Kazia Therapeutics Inc.

Glioblast Pty Limited

Kazia Therapeutics (Hong Kong) Limited

Principal place of business /
Country of incorporation

Australia

Australia

United States of America

Australia

Hong Kong

Ownership interest

2021
%

100.00% 

100.00% 

100.00% 

100.00% 

100.00% 

2020
%

100.00% 

100.00% 

100.00% 

100.00% 

-

NOTE 30. RECONCILIATION OF LOSS AFTER INCOME TAX TO NET CASH USED IN 
OPERATING ACTIVITIES

Loss after income tax benefit for the year

Adjustments for:

Depreciation and amortisation

Net fair value loss on financial assets

Share-based payments

Foreign exchange differences

Loss on contingent consideration

Change in operating assets and liabilities:

(Increase)/decrease in trade and other receivables

Increase in prepayments

Increase in trade and other payables

Decrease in deferred tax liabilities

Increase in other provisions

Net cash used in operating activities

Consolidated

2021
$

2020
$

(8,421,960)

(12,467,466)

1,265,309 

1,084,344 

- 

636,383 

430,273 

2,570,261 

(5,027,134)

(1,182,391)

1,010,520 

(484,347)

92,570 

167,814 

262,105 

- 

474,557 

358,452 

(167,701)

1,721,472 

(298,195)

55,099 

(9,110,516)

(8,809,519)

Significant non-cash transactions
During the year the consolidated entity acquired a licensing agreement in relation to the asset EVT801. At year end no portion of 
the purchase price had been paid and accordingly the transaction does not appear in the cash flow statement.

Furthermore, the consolidated entity issued shares in satisfaction of an acquisition milestone. This transaction did not involve cash 
and accordingly the transaction does not appear in the cash flow statement.

Annual Report 2021

Kazia Therapeutics Limited

61

2021 AT A GLANCECHAIRMAN’S LETTERCEO’S REPORTKEY MILESTONESPIPELINE REVIEWPARTNER FOR SUCCESSWORK WITH THE BEST#2 IN THE KAZIA STORYFINANCIAL REPORTSNOTE 31. EARNINGS PER SHARE

Consolidated

2021
$

2020
$

Loss after income tax attributable to the owners of Kazia Therapeutics Limited

(8,421,960)

(12,467,466)

Weighted average number of ordinary shares used in calculating basic earnings per share

117,674,543

Weighted average number of ordinary shares used in calculating diluted earnings per share

117,674,543

Number

Basic earnings per share

Diluted earnings per share

Cents

(7.16)

(7.16)

Number

73,053,514

73,053,514

Cents

(17.07)

(17.07)

1,865,000 unlisted convertible notes with a face value of $464,000 and 4,446,500 unlisted options have been excluded from the 
above calculations as they were anti-dilutive.

NOTE 32. SHARE-BASED PAYMENTS

All of the options set out below have been issued to employees and directors under the ESOP. During the financial year an 
expense of $636,383 was recognised.

2021

Tranche Grant date Expiry date

Exercise 
price

Balance at 
the start of 
the year

Granted

Exercised 

1

2

3

4

5

6

7

8

9

10

11

12

13

16/11/2015

16/11/2020

$2.200 

236,667

05/09/2016

05/09/2021

12/10/2016

17/10/2021

31/10/2016

01/11/2021

21/11/2016

23/11/2021

$1.630 

$1.560 

$1.380 

$1.380 

50,000

62,000

12,500

50,000

07/08/2017

07/08/2022

$0.670 

224,000

05/02/2018 05/02/2023

$0.780 

440,000

04/01/2019

04/01/2024

$0.492 

250,000

13/11/2019

04/01/2024

$0.492 

1,200,000

13/01/2020

13/01/2025

$0.881 

250,000

-

-

-

-

-

-

-

-

-

-

09/11/2020

13/01/2025

$1.132 

09/11/2020

13/01/2025

$0.881 

04/01/2021

04/01/2025

$1.690 

-

-

-

1,200,000

800,000

200,000

Expired / 
lapsed

on termination  
of employment

(236,667)

-

-

-

-

(15,500)

Balance at 

the end of 

the year

-

50,000

62,000

12,500

50,000

87,000

-

320,000

-

-

-

-

-

(121,500)

(120,000)

(200,000)

(12,500)

37,500

-

-

-

-

-

-

1,200,000

(50,000)

200,000

-

-

-

1,200,000

800,000

200,000

Weighted average 
exercise price

No options were forfeited during the year. 

2,775,167

2,200,000

(441,500)

(314,667)

4,219,000

$0.797 

$1.090

$0.620

$1.850

$0.826

At the end of the period the following outstanding options were vested and exercisable:

•  Options in tranche 1 have expired during the year 

•  Options in tranches 2 - 8 were vested and exercisable except for tranche 6 which was vested as to 53% 

•  Options in tranche 9 were vested as to 1million of the 1.2million options on issue

•  Options in tranches 10-12 were 25% vested

•  Options in tranche 13 were unvested at year end

The weighted average remaining contractual life of options outstanding at 30 June 2021 is 2.6 years. 

62
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Kazia Therapeutics Limited

Annual Report 2021

NOTE 32. SHARE-BASED PAYMENTS (CONTINUED)

2020

Tranche Grant date Expiry date

Exercise 
price

Balance at 
the start of 
the year

Granted

Modified 

Expired

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

04/03/2015

16/12/2019

$1.500 

04/03/2015

18/12/2019

$1.500 

46,647

19,952

24/06/2015

30/06/2020

$4.000 

519,000

15/11/2015

16/11/2020

$2.200 

236,667

18/03/2016

01/02/2021

$1.990 

300,000

18/03/2016

01/02/2021

$1.990 

200,000

18/03/2016

01/02/2021

05/09/2016

05/09/2021

12/10/2016

17/10/2021

31/10/2016

01/11/2021

21/11/2016

23/11/2021

$2.610 

$1.630 

$1.560 

$1.380 

$1.380 

250,000

50,000

62,000

12,500

50,000

07/08/2017

07/08/2022

$0.670 

224,000

05/02/2018 05/02/2023

$0.780 

440,000

04/01/2019

04/01/2024

$0.492 

250,000

13/11/2019

04/01/2024

$0.492 

13/01/2020

13/01/2025

$0.880 

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

(300,000)

(200,000)

(250,000)

-

-

-

-

-

-

-

1,200,000

250,000

-

(46,647)

(19,952)

(519,000)

-

-

-

-

-

-

-

-

-

-

-

-

-

Weighted average exercise price

$1.960

$0.880

$2.348

$3.716

2,660,766

250,000

450,000

(585,599)

Balance at 
the end of 
the year

-

-

-

236,667

-

-

-

50,000

62,000

12,500

50,000

224,000

440,000

250,000

1,200,000

250,000

2,775,167

$0.797

At the end of the period the following options were vested and exercisable:

•  Options in Tranches 4, 8, 10, 11 and 13 were vested and exercisable 

•  Options in Tranche 16 were unvested 

•  Options in other tranches were vested as follows: 9: 75%, 12: 50%, 14: 50%, 15: 67%

All remaining options are expected to vest in future periods.

The weighted average remaining contractual life of options outstanding at 30 June 2020 is 2.78 years. 

Employee share options

During the year ended 30 June 2021, 2,200,000 options have been issued to directors and employees by the consolidated entity 
pursuant to the Company’s Employee Share Option Plan. 

•  Tranche 11 vests in four equal 6-monthly tranches from 1 January 2021

•  Tranche 12 vests in four equal annual amounts  from 13 January 2021

•  Tranche 13 vests in four equal annual tranches from 4 January 2022

Options within all tranches will only vest if the option holder continues to be a full-time employee with the Company or an 
Associated Company during the vesting period relating to the option. 

Conditions for an option to be exercised: 

•  The option must have vested;

•  Option holder must have provided the Company with an Exercise Notice and have paid the Exercise Price for the option. 

•  The Exercise Notice must be for the exercise of at least the Minimum Number of Options; 

•  The Exercise Notice must have been provided to the Company and Exercise Price paid before the expiry of 5 years from the 

date the Option is issued.

Options Valuation

In order to obtain a fair valuation of these options, the following assumptions have been made:

The Black Scholes option valuation methodology has been used with the expectation that the majority of these options would be 
exercised towards the end of the option term. Inputs into the Black Scholes model includes the share price at grant date, exercise 
price, volatility, and the risk free rate of a five year Australian Government Bond on grant date.

Annual Report 2021

Kazia Therapeutics Limited

63

2021 AT A GLANCECHAIRMAN’S LETTERCEO’S REPORTKEY MILESTONESPIPELINE REVIEWPARTNER FOR SUCCESSWORK WITH THE BEST#2 IN THE KAZIA STORYFINANCIAL REPORTSNOTE 32. SHARE-BASED PAYMENTS (CONTINUED)

Risk-free rate and grant date
For all tranches, the risk-free rate of a five-year Australian Government bond on grant date was used. Please refer to the table 
below for details. 

Options in Tranches 1 to 13 have various vesting periods and exercising conditions. These options are unlisted as at 30 June 2021.

No dividends are expected to be declared or paid by the consolidated entity during the terms of the options.

The underlying expected volatility was determined by reference to historical data of the Company’s shares over a period of time. 
No special features inherent to the options granted were incorporated into measurement of fair value.

Based on the above assumptions, the table below sets out the valuation for each tranche of options:

Grant date

Expiry date

05/09/2016

05/09/2021

12/10/2016

17/10/2021

31/10/2016

01/11/2021

21/11/2016

23/11/2021

07/08/2017

07/08/2022

05/02/2185

05/02/2023

04/01/2019

04/01/2024

13/11/2019

04/01/2024

13/01/2020

13/01/2025

09/11/2020

09/11/2024

09/11/2020

09/11/2024

09/11/2020

09/11/2024

09/11/2020

09/11/2024

09/11/2020

13/01/2025

09/11/2020

13/01/2025

09/11/2020

13/01/2025

09/11/2020

13/01/2025

04/01/2021

04/01/2025

04/01/2021

04/01/2025

04/01/2021

04/01/2025

04/01/2021

04/01/2025

Share 
price at 
Grant Date

Exercise 

price Volatility (%)

Remaining 
Life (years)

Risk free 
Rate (%)

Fair value 
per option

$0.105 

$0.098 

$0.090 

$0.092 

$0.430 

$0.500 

$0.340 

$0.410 

$0.620 

$0.890 

$0.890 

$0.890 

$0.890 

$0.890 

$0.890 

$0.890 

$0.890 

$1.185 

$1.185 

$1.185 

$1.185

$1.630 

$1.560 

$1.380 

$1.380 

$0.670 

$0.780 

$0.493 

$0.493 

$0.881 

$1.132 

$1.132 

$1.132 

$1.132 

$0.881 

$0.881 

$0.881 

$0.881 

$1.169 

$1.169 

$1.169 

$1.169

122.00% 

122.00% 

122.00% 

122.00% 

74.50% 

74.50% 

74.50% 

74.50% 

74.50% 

90.00% 

90.00% 

90.00% 

90.00% 

90.00% 

90.00% 

90.00% 

90.00% 

90.00% 

90.00% 

90.00% 

90.00%

1.16 

1.29

1.20 

1.20 

2.08 

2.58 

3.50 

4.20 

4.50 

2.10 

2.30 

2.60 

2.80 

2.20 

2.70 

3.20 

3.70 

2.50 

3.00 

3.50 

4.00

1.60% 

1.89% 

1.87% 

2.10% 

1.95% 

1.95% 

1.95% 

1.95% 

1.95% 

0.10% 

0.10% 

0.10% 

0.10% 

0.10% 

0.10% 

0.10% 

0.10% 

0.19% 

0.19% 

0.19% 

0.19%

$0.840 

$0.780 

$0.720 

$0.730 

$0.206 

$0.200 

$0.140 

$0.180 

$0.340 

$0.379 

$0.403 

$0.425 

$0.446 

$0.450 

$0.490 

$0.520 

$0.550 

$0.520 

$0.576 

$0.627 

$0.671

NOTE 33. SUBSEQUENT EVENTS

There were no significant events subsequent to the reporting date.

64
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Kazia Therapeutics Limited

Annual Report 2021

DIRECTORS’ DECLARATION

In the directors’ opinion:

• 

• 

• 

• 

the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the 
Corporations Regulations 2001 and other mandatory professional reporting requirements;

the attached financial statements and notes comply with International Financial Reporting Standards as issued by the 
International Accounting Standards Board as described in note 2 to the financial statements;

the attached financial statements and notes give a true and fair view of the consolidated entity’s financial position as at 
30 June 2021 and of its performance for the financial year ended on that date; and

there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and 
payable.

The directors have been given the declarations required by section 295A of the Corporations Act 2001.

Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.

On behalf of the Board of Directors

Mr Iain Ross

Chairman

26 August 2021

Sydney

Dr James Garner

Managing Director, Chief Executive Officer

Annual Report 2021

Kazia Therapeutics Limited

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KAZIA THERAPEUTICS LIMITED

Independent auditor’s report to the members of Kazia Therapeutics Limited

Level 17, 383 Kent Street
Sydney NSW 2000

Correspondence to:
Locked Bag Q800
QVB Post Office
Sydney NSW 1230

T +61 2 8297 2400
F +61 2 9299 4445
E info.nsw@au.gt.com
W www.grantthornton.com.au

Independent Auditor’s Report

To the Members of Kazia Therapeutics Limited

Report on the audit of the financial report

Opinion

We have audited the financial report of Kazia Therapeutics Limited (the Company) and its controlled entities (the Group),
which comprises the consolidated statement of financial position as at 30 June 2021, the consolidated statement of profit 
or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash 
flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant
accounting policies, and the Directors’ declaration. 

In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:

a giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its performance for the year 

ended on that date; and 

b complying with Australian Accounting Standards and the Corporations Regulations 2001.

Basis for opinion

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are 
further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are 
independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and
the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for 
Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial 
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. 

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389

www.grantthornton.com.au

‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients 
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International 
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are 
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one 
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to 
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to 
Grant Thornton Australia Limited.

Liability limited by a scheme approved under Professional Standards Legislation. 

66

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Annual Report 2021

KAZIA THERAPEUTICS LIMITED

Independent auditor’s report to the members of Kazia Therapeutics Limited

Key audit matters 

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial 
report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in 
forming our opinion thereon, and we do not provide a separate opinion on these matters. 

Key audit matter

How our audit addressed the key audit matter

Intangible asset impairment (Note 2, Note 3 & Note 12)

The Group carries in its statement of financial position intangible 
assets relating to:

Our procedures included, amongst others:





the Licensing Agreement which grants the Group the right to
develop the paxalisib molecule; and

the Licensing Agreement which grants the Group the right to
develop the EVT801 molecule.

 obtaining an understanding of and evaluating management’s



process and controls related to the assessment of the existence of
impairment indicators;
reviewing and assessing management’s assessment of the
existence of any impairment indicators, including making enquiries
of management’s experts;

 considering each of the internal and external factors outlined by

The paxalisib Licensing Agreement has a carrying value of 
$11,325,795 and the EVT801 Licensing Agreement has a carrying 
value of $10,676,798. These assets are being amortised over the 
remaining life of the underlying patents at acquisition date, being 15 
years and 12.5 years respectively.  

AASB 136 and assessing whether any indicators of impairment are
present;
reviewing management’s assessment of the potential impact of
COVID-19 on the performance of the assets; and



 assessing the adequacy of the relevant disclosures in the financial

statements.

AASB 136 Impairment of Assets requires an entity to assess at the
end of each reporting period whether there is any indication that an 
asset may be impaired. If any indication exists, the entity shall 
estimate the recoverable amount of the asset.

This is a key audit matter due to the materiality of amounts in question 
and the high degree of management judgement required in assessing 
whether there are indicators of impairment.

Asset acquisition accounting (Note 2, Note 3, Note 12 and 
Note 15)

On 19 April 2021 the Group entered into a worldwide exclusive 
licensing agreement with Evotec SE, for the oncology drug candidate 
EVT801. 

The transaction has been accounted for as an asset acquisition and 
as noted in note 15, the agreement contains contingent payments 
dependent on the achievement of contracted milestones. 
Management has exercised judgement in determining the probability 
of achieving such milestones and the timing of each. The estimated 
contingent consideration at 30 June 2021 is $11,075,949. 

This is a key audit matter due to the materiality of amounts in question 
and the high degree of management judgement required. 

Our procedures included, amongst others: 

 obtaining and reviewing the license agreement to understand the



terms and conditions of the transaction;
reviewing management’s assessment of the proposed accounting
treatment of the transaction;

 agreeing key terms of agreements utilised in management’s

assessment;

 challenging key assumptions made by management in its

assessment of accounting treatment;

 assessing management’s method of amortisation;
 making enquiries of management’s experts; and
 assessing the adequacy of the relevant disclosures within the

financial statements.

Annual Report 2021

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Kazia Therapeutics Limited

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Independent auditor’s report to the members of Kazia Therapeutics Limited

Accounting for license agreements under AASB15 
Revenues from Contracts with Customers (Note 2, Note 3 
and Note 5)

During the year, the Group entered into the following transactions:

Our procedures included, amongst others: 

 On 1 March 2021, the Group entered into an exclusive worldwide
license agreement with Oasmia Pharmaceutical AB (Oasmia),
granting Oasmia the worldwide rights to develop and
commercialise Cantrixil; and

 On 29 March 2021 the Group entered into a licensing agreement
with Simcere Pharmaceutical Group Ltd (Simcere), granting
Simcere the rights to develop and commercialise Paxalisib, in the
Greater China territory.

The transactions included the receipt if upfront cash payments of 
US$4 million and US$7million made to the Group from Oasmia and 
Simcere respectively. 



 obtaining and reviewing copies of the license agreements to
understand the terms and conditions of the transactions;
reviewing management’s accounting papers documenting the
accounting treatments, including in relation to the applicability of
AASB15;

 agreeing key terms of agreements utilised in management’s

assessment;

 challenging key assumptions made by management in its

assessment of accounting treatments;

 making enquiries of management’s experts; and
 assessing the adequacy of the relevant disclosures within the

financial statements.

This is a key audit matter due to the materiality of the transactions and 
the judgement required by management in accounting for these 
transactions in accordance with AASB15 Revenue from Contracts 
with Customers.

Information other than the financial report and auditor’s report thereon

The Directors are responsible for the other information. The other information comprises the information included in the 
Group’s annual report for the year ended 30 June 2021, but does not include the financial report and our auditor’s report 
thereon.

Our opinion on the financial report does not cover the other information and we do not express any form of assurance 
conclusion thereon. 

In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider 
whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or 
otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are 
required to report that fact. We have nothing to report in this regard.

Responsibilities of the Directors for the financial report 

The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in 
accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the Directors 
determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material 
misstatement, whether due to fraud or error. 

In preparing the financial report, the Directors are responsible for assessing the Group’s ability to continue as a going concern, 
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the 
Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. 

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Annual Report 2021

68

KAZIA THERAPEUTICS LIMITED

Independent auditor’s report to the members of Kazia Therapeutics Limited

Auditor’s responsibilities for the audit of the financial report 

Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material 
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance 
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing 
Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are 
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions 
of users taken on the basis of this financial report. 

A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance 
Standards Board website at: https://www.auasb.gov.au/auditors_responsibilites/ar1_2020.pdf. This description forms part of 
our auditor’s report.

Report on the remuneration report

Opinion on the remuneration report

We have audited the Remuneration Report included in pages 25 to 31 of the Directors’ report for the year ended 30 June 
2021.

In our opinion, the Remuneration Report of Kazia Therapeutics Limited, for the year ended 30 June 2021 complies with 
section 300A of the Corporations Act 2001.

Responsibilities

The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance 
with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, 
based on our audit conducted in accordance with Australian Auditing Standards. 

Grant Thornton Audit Pty Ltd
Chartered Accountants

S M Coulton
Partner – Audit & Assurance

Sydney, 26 August 2021

Annual Report 2021

Kazia Therapeutics Limited

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Shareholder information
30 June 2021

The shareholder information set out below was applicable as at 24 August 2017.

Equity security holders

Unquoted equity securities
There are no unquoted equity securities.

Substantial holders

There are no substantial holders in the company.

Voting rights

The voting rights attached to ordinary shares are set out below:

Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share 
shall have one vote.

There are no other classes of equity securities.

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Annual Report 2021

SHAREHOLDER INFORMATION

The shareholder information set out below was applicable at 17 August 2021.

Range

1 - 1,000

1,001 - 5,000

5,001 - 10,000

10,001 - 100,000

100,001 Over

Total

Holding less than a marketable parcel

EQUITY SECURITY HOLDERS

The names of the twenty largest quoted equity security holders are listed below:

Name

HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
WILLOUGHBY CAPITAL PTY LTD 
BNP PARIBAS NOMINEES PTY LTD 
BNP PARIBAS NOMS PTY LTD 
CITICORP NOMINEES PTY LIMITED
MNA FAMILY HOLDINGS PTY LTD 
NETWEALTH INVESTMENTS LIMITED 
BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
HISHENK PTY LTD
JAMPLAT PTY LTD
MR IAIN ROSS
MR PETER ALAN LUEDEKE + MRS JULIA LUEDEKE  

MR FRANCIS SAMSON
MR TONY MARK ELDRIDGE + MRS ANITA MAREE ELDRIDGE  

NATIONAL NOMINEES LIMITED
D & G BROWN INVESTMENTS PTY LIMITED
C & L JACKSON INVESTMENTS PTY LTD 
INVIA CUSTODIAN PTY LIMITED 
EL CORONADO HOLDINGS
MR ROSS RICHARD EDDISON

SUBSTANTIAL HOLDERS

Substantial holders of equity in the Company are:

WILLOUGHBY CAPITAL PTY LTD 

MNA FAMILY HOLDINGS PTY LTD 

Platinum International Health Care Fund *

Quest Asset Partners *

* Held via a nominee

VOTING RIGHTS
The voting rights attached to ordinary shares are set out below:

Ordinary shares

Total holders

1,302

1,187

361

503

94

3,447

412

Number 
of shares

701,945

3,053,974

2,801,494

14,370,636

111,084,160

132,012,209

58,259

Number of 
shares

52,263,824
15,500,000
5,951,957
5,342,372
2,926,720
1,920,000
1,384,872
1,316,415
1,295,000
1,293,334
1,000,001

650,000
570,000

555,000
506,172
503,589
479,001
454,988
453,164
450,000
94,816,409

15,500,000

1,920,000

9,878,436

11,101,710

38,400,146

%

40.32
11.96
4.59
4.12
2.26
1.48
1.07
1.02
1.00
1.00
0.77

0.50
0.44

0.43
0.39
0.39
0.37
0.35
0.35
0.35
73.15

11.96

1.48

7.50

8.40

29.34

On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share 
shall have one vote.

There are no other classes of equity securities.

Annual Report 2021

Kazia Therapeutics Limited

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Annual Report 2021

KAZIA THERAPEUTICS LIMITED

Corporate directory 
30 June 2021

DIRECTORS

Mr Iain Ross 
Mr Bryce Carmine 
Mr Steven Coffey 
Dr James Garner

AUDITOR

Grant Thornton Audit Pty Ltd 
Level 17 
383 Kent Street 
Sydney NSW 2000

COMPANY SECRETARY

STOCK EXCHANGE LISTING

Ms Kate Hill

PRINCIPAL PLACE OF BUSINESS

Three International Towers 
Level 24 
300 Barangaroo Avenue  
Sydney, NSW 2000

SHARE REGISTER

Computershare Investor Services Pty Limited 
Level 4 
60 Carrington Street 
Sydney NSW 2000 
Tel: 1300 787 272

Kazia Therapeutics Limited ordinary shares are listed on the 
Australian Stock Exchange (ASX code: KZA)

Kazia Therapeutics Limited’s ordinary shares trade in the 
United States in the form of ADRs on the NASDAQ Capital 
Market (NASDAQ code: KZIA). At year end each ADR 
represents ten ordinary Kazia shares.

WEBSITE

 www.kaziatherapeutics.com

ideate 

Co.

Annual Report 2021

Kazia Therapeutics Limited

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