Kazia Therapeutics Limited

ANNUAL REPORT 2023

CONTENTS

CHAIRMAN AND CEO’S LETTER

KEY MILESTONES

INTRODUCTION TO KAZIA’S CEO

PIPELINE REVIEW

ENVIRONMENT, SOCIETY & GOVERNANCE

FINANCIAL REPORTS

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ASX:KZA | NASDAQ:KZIA

The past year has been significant for 
Kazia Therapeutics, with considerable 
progress being made across our 
clinical programs and as a business. 

We have completed a full portfolio 
review and we will streamline the 
paxalisib clinical development 
program into three pillars; adult brain 
cancer, paediatric brain cancer and 
brain metastases.

As targeted therapeutics, both 
paxalisib and EVT801 have the 
potential to benefit many patients 
around the world with PI3K pathways 
and VEGFR3 mutations respectively. 

kaziatherapeutics.com

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Kazia Theraputics Limited Annual Report 2023

 
 
 
 
 
 
 
 
 
 
 
 
 
CHAIRMAN AND CEO’S LETTER

PROGRESSING TREATMENT AREAS

Dear fellow shareholder,

The past year has been significant for Kazia 
Therapeutics, with considerable progress being made 
across our clinical programs and as a business.

Before diving into more detail around the 
business and clinical developments of FY2023, it’s 
important to acknowledge some very significant 
changes to Kazia’s Board and leadership team.

Firstly, I would like to recognise the 
impactful contribution of Iain Ross, whose 
insights and stewardship has led the Board 
as Chair for the past eight years. 

I also wish to recognise and thank my predecessor, 
Dr James Garner, for his work as Chief Executive 
Officer and Managing Director. The many 
milestones that James achieved in transforming 
Kazia were key to positioning our Company for the 
exciting advances that lie ahead of us, particularly 
in relation to our lead program, paxalisib, and 
in securing EVT801 as another key asset for the 
Company. I couldn’t be more excited about the 
opportunity to lead Kazia and to continue our clinical 
development progress towards commercialisation.

Kazia further enhanced the Board of Directors with 
the appointment of Ms Ebru Davidson in June of 
this year. Ebru is a seasoned corporate lawyer and 
is General Counsel for QBiotics Group Limited. 
We are delighted Ebru has joined the Kazia Board 
and look forward to her expertise and insight 
strengthening and complementing our team.

With a renewed and refreshed Board and 
management team, we are more committed 
than ever to driving the business and our clinical 
programs forward, and that work is well underway.

Since stepping into the CEO role in May, we have 
completed a full portfolio review. As a result, we are 
streamlining the paxalisib clinical development program 
into three pillars; adult brain cancer, paediatric brain 
cancer and brain metastases. As targeted therapeutics, 
both paxalisib and EVT801 have the potential to benefit 
a number of patients with PI3K pathway and VEGFR3 
mutations respectively. Many of the recently announced 
clinical studies will enrol patients with these mutations. 

PIPELINE PROGRESS

Paxalisib has seen a strong year of clinical development. 
Promising data from several clinical trials have been 
released, some clinical trials have been expanded 
and new trials started to further advance the 
potential therapeutic application of paxalisib. 

In early July, we were delighted to announce that 
the U.S. Food and Drug Administration (FDA) 
granted paxalisb Fast Track Designation (FTD) for 
the treatment of solid tumour brain metastases 
harbouring PI3K pathway mutations in combination 
with radiation therapy, the second such designation 
for paxalisib, and another demonstration of the 
continual progress of our clinical programs.

Promising interim data from an ongoing phase I 
clinical trial in paxalisb in which patients with brain 
metastases from a primary tumour are receiving 
paxalisib in combination with radiotherapy, presented 
by Dr Jonathan Yang at the 2022 Annual Conference 
on CNS Trials and Brain Metastases, was the basis for 
the FDA’s decision to grant this FTD. This trial, originally 
conducted at the Memorial Sloan Kettering Cancer 
Center (MSKCC) in New York, NY, had an initial cohort 
of nine patients, all of which responded positively to 
the treatment, paving the way for the trial expansion. 

The Miami Cancer Institute and Fred Hutch 
Cancer Centre in Seattle, WA have recently 
joined this trial and preliminary data from the 
expanded cohort is expected in early 2024.

In September 2022, final data from the completed 
phase II study of paxalisib monotherapy for newly 
diagnosed glioblastoma patients with unmethylated 
MGMT promotor status was presented at the 
Annual Congress of the European Society for 
Medical Oncology (ESMO), held in Paris, France. 
Key findings from the study were summarized in an 
oral presentation by Professor John de Groot. The 
overall survival of 15.7 months in the intent-to-treat 
population compared favourably to historical controls 
of 12.7 months for patients receiving temozolomide, 
the existing FDA-approved standard of care, in 
this patient group. Key pharmacodynamic data 
was also presented which further supported brain 
penetration and biological activity of paxalisib.

This data was expanded upon at the Annual Meeting of 
the Society for Neuro-Oncology (SNO), which was held 
in Tampa, FL, from 17-20 November 2022 by Professor 
Patrick Wen from the Dana Farber Cancer Institute. In 
addition, Professor Matt Dun of the Hunter Medical 
Research Institute at the University of Newcastle was 
invited to give a plenary session presentation on his 
research during the same meeting. Professor Dun’s 
research combines paxalisib and ONC201 (Chimerix, 
Inc) for the treatment of diffuse midline gliomas (DMGs), 
an aggressive group of childhood brain cancers which 
include diffuse intrinsic pontine glioma (DIPG), with the 
results highlighting the synergy between the two drugs.

In March of this year, we announced the launch of a 
new phase II clinical collaboration with the Australian 
and New Zealand Children’s Haematology / Oncology 

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Group (ANZCHOG) to investigate paxalisib in children 
with advanced solid tumours. OPTIMISE, as the study 
is known, will be the first clinical trial of paxalisib 
led out of Australia and will enrol children with PI3K 
pathway mutation cancers. Recruitment for the trial 
is expected to commence by the end of this calendar 
year, with 18 patients in an initial dose escalation cohort 
and up to 100 patients in a dose expansion cohort.

The significance of the work Kazia is doing to treat 
cancers, and in particular DIPG and GBM, were 
recognised in late May when I was invited to attend the 
Cancer Moonshot Brain Cancers Forum at the White 
House. It was a privilege and honour to represent Kazia 
at the event, where strategies to improve outcomes for 
DIPG and GBM patients were discussed and progress 
in drug research and development was shared.

Looking forward, the future is promising for paxalisib. 
As discussed in our last annual report, in August 
2022, we were informed by The Global Coalition for 
Adaptive Research that paxalisib had not graduated 
to the second stage of the GBM AGILE pivotal 
study. We anticipate receiving the final data from 
the GBM AGILE pivotal study of paxalisib later this 
calendar year. We are also anticipating interim data 
from the ongoing PNOC022 study in DMG/DIPG 
paediatric patients in 2023. The enrolment of this 
global study has been extremely robust and we 
look forward to sharing the data when available.

Paxalisib will also be evaluated in adult patients with 
recurrent/progressive isocitrate dehydrogenase (IDH) 
mutant grade 2 and 3 gliomas (G2/3 gliomas) in a 
phase II clinical study, LUMOS2, at the University of 
Sydney. This biomarker directed trial addresses an 
estimated 20% of the glioma patient population, 
with unmet needs for recurrent or progressive 
disease. The LUMOS2 study has multiple arms 
and is expected to enrol up to 76 patients at 
several Australian sites beginning in late 2023.

Beyond paxalisib, EVT801, our small-molecule inhibitor 
of VEGFR3, continues in development. Preclinical data 
showed EVT801 to be active against a broad range of 
tumour types and demonstrated evidence of synergy 
with immune-oncology agents. We continue to enrol 
patients in our phase I dose finding study, with data 
anticipated by the end of this calendar year, which 
will identify the recommended dose of EVT801 for 
subsequent phase II trials, if approved. As part of the 
anticipated release of phase I data by the end of this 
calendar year, we also expect to report preliminary 
biomarker and clinical data focused on high-grade, 
serious ovarian cancer patients enrolled in this study.

FINANCIAL PERFORMANCE

Our paxalisib and EVT801 clinical programs continue 
to deliver promising data and advance us towards 
commercialisation. Over the last fiscal year, we have 
raised AU$13.3 million in new capital, permitting us 
to advance the clinical milestones set out above. Our 
total assets were $28m, compared to $35m at 30 June 
2022. Prudent management of our cash burn over 
the last year sees our cash balance at $5.2m as at 30 
June 2023, compared to $7.4m at the end of FY22.

FUNDING

In February 2023 Kazia announced the successful 
conclusion of an equity financing, and we remain 
extremely grateful for the support of our shareholders. 
The placement to professional and sophisticated 
investors and the associated Share Purchase Plan for 
eligible shareholders raised an aggregate amount 
of A$7.1 million in new capital for the Company. The 
ATM facility draw downs during the year totaled 
A$6.2 million. The total proceeds of $A13.3 million 
from financing during the year have positioned the 
Company to drive towards important catalysts during 
calendar year 2023. This is a critical year for Kazia, 
with data read-outs expected across our clinical 
trial programs, including final data from the GBM 
AGILE pivotal study of paxalisib in glioblastoma 
anticipated by the end of this calendar year.

BOARD AND MANAGMENT TRANSITIONS

I would like to recognise and thank the Board and, 
my Kazia colleagues for their continued diligence 
and perseverance as we drive our clinical programs 
towards their full potential to improve the lives of 
patients. Their support, along with your support 
as a shareholder, has made my transition into the 
CEO role a seamless one. It is your commitment to 
the Company that enables us to take paxalisib and 
EVT801 forward through their development and 
clinical trials. We continue to believe the potential of 
our portfolio remains significant, and as we draw closer 
to realising that potential, all of us at Kazia remain 
wholly committed to delivering on your belief in the 
important and life-changing work we are doing.

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Dr John Friend

Chief Executive Officer, 
Managing Director and 
Interim Chairman of Board

Kazia Theraputics Limited Annual Report 2023

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KEY MILESTONES

HIGHLIGHTS – 2022/2023 

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Kazia enters a 
collaboration 
with QIMR 
Berghofer 
Medical Research 
Institute, one 
of Australia’s 
foremost cancer 
research centres, 
to explore novel 
uses of paxalisib 
in solid tumours.

The United 
States Food 
and Drug 
Administration 
(FDA) awards 
Rare Pediatric 
Disease 
Designation 
(RPDD) to 
paxalisib for the 
treatment of 
atypical teratoid/ 
rhabdoid 
tumours (AT/
RT), a rare and 
highly aggressive 
childhood 
brain cancer. 

Kazia announces 
launch of its 
new Scientific 
Advisory 
Board (SAB), 
consisting of four 
distinguished 
clinicians and 
scientists with 
expertise in the 
development 
of innovative 
therapies for 
brain cancer.

The Global 
Coalition for 
Adaptive 
Research (GCAR) 
advises Kazia 
that the first 
stage of the 
paxalisib arm of 
the GBM AGILE 
pivotal study 
has completed 
recruitment. The 
treatment arm 
did not meet pre-
defined criteria 
for continuing to 
a second stage, 
and patients 
enrolled in the 
first stage will 
continue on 
treatment as per 
protocol, and in 
follow-up, until 
completion of 
the final analysis.

Promising new 
interim data 
released from an 
ongoing phase 
I clinical trial 
of paxalisib in 
combination with 
radiotherapy for 
the treatment of 
brain metastases, 
sponsored by 
Memorial Sloan 
Kettering Cancer 
Center in New 
York, NY.

Final data from 
the completed 
phase II study 
of paxalisib 
monotherapy for 
newly diagnosed 
glioblastoma 
(GBM) 
patients with 
unmethylated 
MGMT promotor 
status was 
presented at 
the annual 
congress of the 
European Society 
for Medical 
Oncology 
(ESMO), held in 
Paris, France.

Professor Matt 
Dun of the 
Hunter Medical 
Research 
Institute at 
the University 
of Newcastle 
gives an oral 
presentation at 
the Society for 
Neuro-Oncology 
annual meeting 
in Tampa, FL, 
on his research 
evaluating 
ONC201 with 
paxalisib to 
treat DMGs.

Preclinical data 
for EVT801 
published in 
Cancer Research 
Communications: 
“Targeting Tumor 
Angiogenesis 
with the Selective 
VEGFR-3 
Inhibitor EVT801 
in Combination 
with Cancer 
Immunotherapy”.

The ongoing 
phase II study 
of paxalisib for 
the treatment of 
diffuse intrinsic 
pontine glioma 
(DIPG) and other 
diffuse midline 
gliomas (DMGs), 
sponsored by the 
Pacific Pediatric 
Neuro-Oncology 
Consortium 
(PNOC), 
opens in two 
Australian sites. 

Paxalisib 
demonstrates 
signals of 
activity as a 
monotherapy 
and in 
combination 
with MEK and 
BRAF inhibitors 
in preclinical 
models of 
melanoma 
according to new 
data from an 
ongoing research 
collaboration 
with the 
Huntsman 
Cancer Institute 
at the University 
of Utah in Salt 
Lake City, UT.

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Closure of an 
equity financing, 
with a total of 
A$7.106 million 
raised from a 
placement to 
professional and 
sophisticated 
investors and 
the associated 
Share Purchase 
Plan for eligible 
shareholders.

Kazia enters into 
a collaboration 
with the 
Australian and 
New Zealand 
Children’s 
Haematology / 
Oncology Group 
(ANZCHOG) for 
the OPTIMISE 
phase II clinical 
study which 
will examine 
paxalisib in 
children with 
advanced 
solid tumours, 
including brain 
tumours.

New data for 
both paxalisib 
and EVT801 
presented at the 
Annual Meeting 
of the American 
Association for 
Cancer Research 
(AACR).

Dr John Friend 
appointed Chief 
Executive Officer 
(CEO) following 
the resignation 
of Dr James 
Garner as CEO 
and Managing 
Director. 

Dr John Friend 
participates 
in the Cancer 
Moonshot Brain 
Cancers Forum 
on GBM and 
DIPG at the 
White House 
in Washington, 
DC, USA.

Highly 
experienced 
corporate 
lawyer Ms 
Ebru Davidson 
appointed to 
the Board as 
Non-Executive 
Director, 
bringing strong 
governance 
insights on 
corporate legal 
strategy and risk 
management. 

Kazia announces 
its support of 
the University 
of Sydney on 
a molecularly-
guided phase 
II clinical study, 
LUMOS2, 
to examine 
paxalisib in 
adult patients 
with recurrent/
progressive 
isocitrate 
dehydrogenase 
(IDH) mutant 
grade 2 and 3 
gliomas (G2/3 
gliomas). The 
study will be 
sponsored by 
the University 
of Sydney, and 
coordinated by 
NHMRC Clinical 
Trials Centre, 
University of 
Sydney, in 
collaboration 
with COGNO 
(CoOperative 
Trials Group 
for Neuro-
Oncology).

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Kazia Theraputics Limited Annual Report 2023

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
INTRODUCING KAZIA’S NEW CEO

DR JOHN FRIEND

A seasoned leader in the biotech 
industry, Dr John Friend originally 
joined Kazia Therapeutics as 
Chief Medical Officer in 
November 2021. Having made 
an enormous contribution to the 
company during this time, John was 
the natural choice to succeed Dr 
James Garner as Chief Executive 
Officer in May 2023.

With a deep understanding of the biotech landscape, 
over 25 years of scientific expertise, and a passion for 
transforming healthcare solutions, John says it has been 
a seamless transition from CMO into the CEO role. 

“I was part of all business discussions from day one 
when I joined Kazia so the transition has been a smooth 
one. A lot of what I do now as CEO is similar to my 
previous role with the company, including developing 
the business strategy, driving the clinical programs, as 
well as building and managing relationships with key 
stakeholders across all areas of the business,” he said.

For John, the elevation to the CEO role at Kazia marked 
a natural next step in what has been a distinguished 
career in the medical and biotech sectors. The medical 
field runs in the Friend family, with John’s father working 
for a multinational pharmaceutical company, and his 
wife, Dr. Kimberly Raymond, a practicing physician.

After securing his medical degree and speciality 
training, John practiced medicine in North Carolina, 
with his practice spanning from general care, through 
to obstetrics, minor surgery, and beyond. Following a 
move to Chicago to work for a large pharmaceutical 
company, John continued his career in the pharma 
and biotech industries, working in a variety of 
roles, including building business units at multiple 
pharmaceutical companies in the United States.

During this time, John discovered a passion for 
paediatric drug development, which continues 
to flow through to his work today at Kazia. His 
philosophy stems from putting patients at the 
centre of everything Kazia does and he is driven by 
the goal of improving patients’ lives by developing 
innovative therapies and treatment solutions. 

“We’ve not focused enough resources and effort on the 
paediatric population with regards to drug development 
and clinical trials, especially in the area of cancer. There 
is such a huge unmet need, and I am deeply passionate 
about being a part of developing new therapies for 
children suffering from rare and devastating cancers. To 
be able to give hope and promise to those children and 
families effected by cancer is incredibly motivating.”

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John also understands the importance of collaboration 
with healthcare professionals, patient advocacy 
groups, and regulatory agencies to ensure the 
accessibility, safety and efficacy of Kazia’s therapies.

“The medical community is built around collaboration. 
Be it through drug development, clinical trials, and 
ultimately in bringing treatments to the patients 
who need it, working closely with other healthcare 
professionals, regulators, and patient advocates is vital. 

“Collaboration has been at the centre of my career, 
so I really appreciate how important it is that we 
all work together to deliver the best outcome for 
patients. Of course, it’s critical that all of these 
aspects are supported by good governance, 
otherwise patient outcomes may be compromised.”

“Never have I been part of a company whereby I 
have researchers and physicians, and a lot of times 
families and parents, reaching out to me on a weekly 
basis, thanking me for what Kazia is doing. It is an 
incredibly powerful and potent reminder of why 
the work we’re doing here is so important, and the 
incredible potential it holds for so many people.”

Outside of work, John is just as passionate about 
his family and his hobbies. John, his wife Kimberly 
and their four children all share a love of sports, 
from soccer, crew, taekwondo to track and field. 

“I have done triathlons for around 20 years, but 
now I focus more on activities that are kinder to my 
knees! We are all about outdoor activities and love 
spending time together as a family in nature.”

When John joined Kazia as Chief Medical Officer in 
2021, he was driven by the exciting and extremely 
promising science of Kazia’s clinical programs.

Looking ahead, John is excited about the 
immense potential Kazia’s treatments may 
offer patients and their families one day. 

“Hearing the feedback that we do from patients and 
their families really reinforces the importance of what 
we are doing. Paxalisib now has two FDA Fast Track 
Designations, underscoring the momentum of our 
clinical programs. Between paxalisib and EVT801, we 
have multiple clinical programs progressing well, with 
further milestones in terms of clinical data expected 
to be released soon. There is such a huge potential 
benefit for patients, and we’re excited about the 
life-changing impact Kazia’s work could have as we 
continue to push our clinical programs forward and 
work to bring paxalisib and EVT801 to market.”

“I was super excited about the people working within 
the company and the opportunity to help grow the 
business. But what excited me most of all was the strong 
science behind Kazia’s drug candidates – paxalisib and 
EVT801. Since joining I haven’t looked back and I’ve 
never had a more fulfilling job in my entire career.”

John also emphasises the incredible calibre of Kazia’s 
people as being central to him joining the business. 

“It’s that gut feeling. You get the sense that these 
are the right people here at Kazia, that there are 
a lot of really passionate and talented leaders, 
as well as individual contributors who are really 
working hard to deliver results for both patients and 
shareholders. The team is the best of the best.”

A constant reminder of the importance of the work 
John and the team at Kazia are doing comes from 
the moving feedback he regularly receives from 
patients, their families, and their physicians. 

“We’ve not focused enough resources and effort on the paediatric 
population with regards to drug development and clinical trials, 
especially in the area of cancer. There is such a huge unmet need,  
and I am deeply passionate about being a part of developing new 
therapies for children suffering from rare and devastating cancers."

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PIPELINE REVIEW

ADVANCING THE CLINICAL PIPELINE

PAXALISIB

LUMOS2 phase II study 

Kazia is supporting the University of Sydney on a 
molecularly guided phase II clinical study, LUMOS2, 
evaluating paxalisib in adult patients with recurrent/
progressive isocitrate dehydrogenase (IDH) 
mutant grade 2 and 3 gliomas (G2/3 gliomas). 

The LUMOS2 study is sponsored by the University 
of Sydney with a goal of investigating targeted 
therapeutics in these patients who have limited 
options. The study is expected to enrol up to 76 
patients with PI3K pathway mutations and will be 
a multi-centre study at several Australian sites, 
with the potential to expand internationally. We 
anticipate enrolment to commence in 4Q CY2023. 

Paxalisib with metformin and ketogenic diet 
in GBM

This clinical study, which is being sponsored by 
and being conducted at Weill Medical College 
of Cornell University in the United States is 
exploring the use of paxalisib in combination with 
metformin and a ketogenetic diet for patients with 
GBM. A significant and growing body of research 
has suggested the potential for ketogenic diets 
to provide benefit in a range of tumour types, 
including GBM. The study is actively enrolling in 
two cohorts of GBM patients, and we anticipate 
providing an update to this study in 4Q CY2023.

Primary CNS lymphoma (PCNSL)

In June 2021, Kazia announced that the phase II 
investigator-initiated study of paxalisib in relapsed/
refractory patients with primary CNS lymphoma 
had commenced recruitment at the Dana Farber 
Cancer Institute. As a brain penetrant PI3K inhibitor 
in development for PCNSL, we believe paxalisib has 
unique potential in the form of this disease that occurs 
within the central nervous system, and we anticipate 
providing a clinical update to this study in 2H CY2023. 

Kazia’s lead program is paxalisib, an investigational 
brain-penetrant inhibitor of the PI3K / Akt / mTOR 
pathway, that was specifically designed to treat 
brain cancer. Brain cancers account for about 15% of 
paediatric cancers and are the second most common 
type of cancer in children whereas over 300,000 
adults are diagnosed every year with primary brain 
cancer. We believe that as a brain-penetrant therapy, 
paxalisib, by design, has the potential to be an integral 
component of precision medicine for brain tumours. 
Many of the ongoing trials are evaluating paxalisib 
in patients who have PI3K pathway mutations. 

Enrolling paxalisib clinical trials with patients who 
have the potential to have the greatest response 
and benefits may accelerate clinical trial recruitment 
and time to potential regulatory approval. The 
overall clinical development strategy for paxalisib 
has been crafted into three core pillars:

•  Treatment for adult brain cancer: 4 active trials over 

3 different patient populations

•  Treatment for paediatric brain cancer: 2 active and 

one recently completed trial

•  Treatment of brain metastasis of solid tumours: 3 

active trials

Paxalisib in Adult Brain Cancer

Glioblastoma (GBM) is a fast-growing and aggressive 
brain tumour. Paxalisib is being developed primarily 
for the ~65% of newly-diagnosed unmethylated GBM 
patients who generally do not respond to chemotherapy 
with temozolomide. At two global conferences in 
2023, we presented final data from a phase II study 
in newly diagnosed GBM patients which reported 
promising signals of clinical activity with paxalisib.  

GBM AGILE Pivotal study 

Our GBM AGILE (Glioblastoma Adaptive Global 
Innovative Learning Environment) study is evaluating 
investigational therapies for patients with newly 
diagnosed and recurrent GBM. The goal of the study is 
to expedite the approval of new drugs for this disease.

Final data is expected from the GBM AGILE 
pivotal study of paxalisib in GBM in 2H CY2023. 
Depending on the results of the study, Kazia may 
use such data to support submission of a new drug 
application (NDA) for marketing authorisation to 
the U.S. Food and Drug Administration (FDA). 

8

Paxalisib in Paediatric Brain Cancer

Paxalisib in Brain Metastases 

Brain metastases occur when cancer cells spread 
from their original site to the brain, and treatment 
options are very limited. Brain metastases are a 
common complication of many tumours, but are 
particularly common in breast cancer, lung cancer, 
and melanoma. Brain metastases are typically 
highly resistant to treatment and survival rates are 
generally low. Radiotherapy is a common treatment 
modality for brain metastases. Despite some 
reported efficacy of radiotherapy, patients typically 
become resistant over time, and repeat courses 
of radiotherapy can be associated with significant 
neurological toxicity. Additionally, PI3K pathway 
mutations are common in brain metastasis and are 
frequently associated with a poor prognosis.

Paxalisib in combination with radiotherapy 

Paxalisib is being studied in combination with 
radiotherapy in an ongoing phase I clinical study 
for the treatment of patients with brain metastases 
who harbour PI3K pathway mutations, sponsored by 
Memorial Sloan Kettering Cancer Center (MSKCC) 
in New York, NY. Encouraging safety and clinical 
activity from this study was presented by the principal 
investigator, Dr. Jonathan Yang, in August 2022 at the 
2022 Annual Conference on CNS Clinical Trials and 
Brain Metastases, jointly organized by the Society for 
Neuro-Oncology and the American Society for Clinical 
Oncology held in Toronto, Canada. The expansion 
cohort is currently being enrolled and two world- 
renowned cancer centres have joined MSKCC in this 
study: Miami Cancer Institute and Fred Hutchinson 
Cancer Center in Seattle, WA. Preliminary data from 
the expansion cohort is anticipated by 1Q CY2024. 

Brain cancer is the most common malignancy of 
childhood cancer and represents about one-third of 
all childhood cancer deaths. The PI3K/AKT/mTOR 
pathway is frequently upregulated in paediatric cancers 
and therefore therapeutics that target those pathways 
could lead to long-awaited regulatory approvals. 
Diffuse intrinsic pontine glioma (DIPG) is the most 
common of a group of childhood brain cancers known 
as diffuse midline gliomas (DMGs). The disease currently 
has no FDA approved drug treatments and average 
survival from diagnosis is approximately 10 months. 

Kazia recognizes the critical importance and immense 
unmet need and is exploring paxalisib in two common 
forms of childhood cancer -DMG and advanced 
childhood cancer with PI3K/mTOR mutations. 

PNOC022 phase II study 

The PNOC022 phase II study is sponsored by the 
Pacific Pediatric Neuro-Oncology Consortium 
(PNOC), an international consortium focused on the 
development of novel combination therapies. It is an 
adaptive platform study that is examining paxalisib in 
combination with ONC201. The study enrolment has 
been progressing well since opening in late 2021 and 
the study teams at PNOC and University of California, 
San Francisco (UCSF) are analysing interim data for the 
study, which is expected to be reported in 2H CY2023. 

OPTIMISE phase II study

Kazia entered into a collaboration with the Australian 
and New Zealand Children’s Haematology / Oncology 
Group (ANZCHOG) in March 2023 for a phase II clinical 
study examining paxalisib as a targeted therapeutic 
in children with advanced solid tumours, including 
brain tumours. The OPTIMISE phase II study is the 
first Australian-led clinical trial of paxalisib and will 
combine paxalisib with chemotherapy for children 
with PI3K pathway mutations. Enrolment for this 
study is expected to commence in 4Q CY2023.

St Jude Children’s Research Hospital phase I study

The objective of this phase I investigator study in 
children with Diffuse Intrinsic Pontine Glioma (DIPG) 
to establish a maximum tolerated dose (MTD) was 
presented in November 2020 at the SNO Annual 
Meeting. The paediatric MTD of 27 mg/m2 was 
established and the safety profile and pharmacokinetics 
were highly consistent with the adult data. The long 
term survival follow-up was completed this year and 
will be incorporated into the clinical study report.

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Kazia Theraputics Limited Annual Report 2023

 
 
 
 
 
 
 
 
 
 
 
 
 
PIPELINE REVIEW

Fast Track Designation

Kazia received Fast Track Designation (FTD) from 
the FDA in July 2023 for paxalisib for the treatment 
of solid tumour brain metastases harbouring 
PI3K pathway mutations, in combination with 
radiotherapy, based on the promising interim 
clinical data from the MSKCC phase 1 trial.

preclinical data have been presented at a number 
of global conferences, including conferences held 
by the American Association for Cancer Research 
and the European Society for Medical Oncology. 

We anticipate providing additional EVT801 
updates and presentations of interim data 
at medical conferences in 2H CY2023.

Introduced under the FDA Modernization Act (1997), 
FTD may be awarded by FDA to investigational drugs 
which are intended to treat a serious or life-threatening 
condition, and which fill an unmet medical need. FTD 
must be requested by the sponsor company and must 
be accompanied by a detailed review of both preclinical 
and clinical data. To be awarded FTD, drugs must 
generally be able to show some potential advantage 
over existing therapies, either in terms of safety or 
efficacy. A key benefit of FTD is enhanced access to 
the FDA, with regular and more frequent opportunities 
for consultation and discussion. In addition, drugs 
with FTD may be eligible for Accelerated Approval, 
in which a new medicine is approved based on a 
surrogate endpoint, and for Priority Review, in which 
the standard 12-month review process may be reduced 
to eight months. Drugs with FTD may also receive 
a ‘rolling review’ of their NDA submission, in which 
sections are submitted for review as they become 
available, potentially expediting the approval process.

Genomically Guided phase II study

Sponsored by the Alliance for Clinical Trials in 
Oncology, paxalisib is one of the targeted therapeutics 
being investigated in this global, multi-drug study 
(NCT03994796) in patients with brain metastases. 
Patients with PI3K pathway mutations will be enrolled 
in three cohorts, breast cancer, non-small cell lung 
cancer (NSCLC) and other. The enrolment is ongoing 
for all cohorts including the expansion stage of the 
study in breast cancer brain metastases patients.

HER2+ Breast cancer brain metastases 
phase II study

A phase II investigator initiated clinical study is 
ongoing at Dana-Farber Cancer Institute exploring 
paxalisib in combination with trastuzumab 
(NCT03765983) in patients with brain metastases 
originating from HER2+ breast cancer. The 
enrolment is ongoing and we anticipate providing 
a study update later in the calendar year.

EVT801 

Kazia is also developing EVT801, a small molecule 
targeted VEGFR3 inhibitor. Preclinical data showed 
EVT801 to be active against a broad range of tumour 
types and has shown evidence of synergy with immuno-
oncology agents. Over the course of the year, these 

R&D PIPELINE

Paxalisib in Metastatic Melanoma

Data from an ongoing research collaboration with 
the Huntsman Cancer Institute at the University 
of Utah in Salt Lake City, UT has shown paxalisib 
to be active in vitro and in vivo against a range of 
preclinical models of metastatic melanoma, the most 
aggressive form of skin cancer. Data suggesting 
substantial activity for paxalisib as monotherapy 
in preclinical mouse models was presented at 
the 19th International Congress of the Society for 
Melanoma Research, held in Edinburgh, Scotland, 
in 2022. “This is among the most promising single 
agent data that we have seen in our research,” 
commented Professor Sheri Holmen, lead investigator 
on the project. “Despite the widespread adoption 
of immunotherapy in recent years, there remains 
substantial unmet need in melanoma, particularly in 
those patients who develop brain metastases. We 
look forward to exploring the potential of paxalisib 
further in our research, and hopefully seeing the 
drug transition to a clinical trial in the near future.” 

Paxalisib in Solid Tumours

Kazia’s collaboration with QIMR Berghofer Medical 
Research Institute, one of Australia’s foremost cancer 
research centres, is currently exploring novel uses 
of paxalisib in solid tumours. The collaboration 
is based on research that identified an entirely 
separate effect of PI3K inhibition: as a modulator of 
the immune microenvironment within and around 
the tumour. Administration of PI3K inhibitors such 
as paxalisib, at doses and frequencies different 
to those conventionally used, appears to activate 
the immune system in the tumour, making it more 
susceptive to immunotherapy. We believe this 
approach could therefore open up an important 
opportunity for paxalisib in combination with drugs 
such as Keytruda® (pembrolizumab, Merck) and 
Opdivo® (nivolumab, Bristol Myers Squibb) for the 
treatment of diseases such as breast cancer and 
lung cancer. The collaboration is ongoing and will 
build on initial research that has already led to the 
filing of a provisional patent last year, including 
the use of paxalisib as an immune modulator in 
the treatment of diseases such as breast cancer.

10

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11

Paxalisib 
Investigational, small molecule, potent, brain-penetrant inhibitor of PI3K / mTOR

PRECLINICLE PHASE 1

PHASE 2

PHASE 3 MARKET

Glioblastoma & IDH-mutant glioma
Common primary brain cancer

3 studies

DIPG/Advanced Solid Tumors 
Childhood brain cancer

3 studies

AT/RT
Childhood brain cancer

Brain Metastases
Cancer that spreads to brain from elsewhere

Primary CNS Lymphoma
Form of non-Hodgkin’s lymphoma

Cancers outside the CNS
Melanoma; TNBC, Ovarian

3 studies

3 studies

EVT801
Investigational, small molecule, highly specific inhibitor of VEGFR3

Advanced Solid Tumors
Patients w/ highly treatment-resistant cancer

licensed from: 

Anticipated

Final Data
2H CY23

Initial Data
3Q CY23

Further Data
1H CY23

Further Data
CY23

Initial Data
CY23

Further Data
CY23

licensed from: 

Initial Data
2H CY23

IDH: Isocitrate dehydrogenase, DIPG: Diffuse Intrinsic Pontine Glioma, AT/RT: Atypical Teratoid Rhabdoid Tumor, CNS: central nervous system, 
TNBC: triple negative breast cancer, VEGFR3: vascular endothelial growth factor receptor 3.

Kazia Theraputics Limited Annual Report 2023

BROAD CLINICAL PROGRAM ONGOINGSPONSORPHASEINDICATIONREGISTRATIONPAXALISIBGlobal Coalition for Adaptive ResearchII / IIIGlioblastomaNCT03970447Weill Medical College of CornellIIGlioblastoma (with metformin and ketogenesis)NCT05183204Alliance for Clinical Trials in OncologyIIBrain metastasesNCT03994796Dana-Farber Cancer InstituteIIBreast cancer brain metastases (with Herceptin)NCT03765983Dana-Farber Cancer InstituteIIPrimary CNS lymphomaNCT04906096University of SydneyI/IIGrade 2/3 IDH-mutant adult gliomas TBDPacific Pediatric Neuro-Oncology ConsortiumIIDIPG (childhood brain cancer)NCT05009992Australia & New Zealand Children’s Oncology GroupIIAdvanced solid tumours in childrenTBDSt Jude Children’s Research HospitalIDIPGNCT03696355Memorial Sloan Kettering Cancer CenterIBrain metastases (with radiotherapy)NCT04192981EVT801Kazia TherapeuticsIAdvanced solid tumoursNCT05114668CLINICAL DEVELOPMENT OVERVIEW 
 
 
 
 
 
 
 
 
 
 
 
 
ENVIRONMENT, SOCIETY & GOVERNANCE

OUR CORPORATE RESPONSIBILITY

ENVIRONMENT

Climate Change

Kazia is mindful of its impact on the environment and strives to 
reduce its carbon footprint. The Kazia business model is based on 
outsourcing, and we are working with major partners who are focused 
on reducing climate change and enhancing climate protection. 

Our major partner Evotec, who is running our EVT-801 trial, is a 
signatory to one of the most ambitious actions related to climate 
mitigation, the Science Based Targets initiative (SBTi). This implies 
to set carbon reduction targets aligned with the goals of the Paris 
Agreement: to limit global warming to well below 2°C above 
pre-industrial levels and pursue efforts to limit warming to 1.5°C 
and is determined to become net carbon neutral by 2050.

Evotec is implementing an innovative, web-based platform to 
collect environmental, social and governance indicators. This 
will allow them to identify sustainability-related risks at an early 
stage and derive appropriate measures. In this way, the large 
number of projects that Evotec have already implemented in 
the area of environmental protection and resource conservation 
can also be systematically mapped in the future. This includes, 
among other things, the procurement of green electricity and 
the conversion of office paper to 100 % recycled material.

Sustainability

Kazia head office is located in one of the most sustainable carbon 
neutral commercial precincts in the world. The serviced office is 
located in a building with a five-star NABERS energy rating.

SOCIETY

Community Contribution 

Our compassionate program 
has treated over 40 patients 
in 7 countries since its 
inception in 2018.

40PATIENTS IN
7COUNTRIES

SINCE 2018

Countries we treat compassionate patients in: Australia, USA, Israel, Spain, Switzerland, England and Ireland

12

 
Gender Equity

Kazia's board welcomed it's first female member in 2023.

  MEN  

  WOMEN

Board members at 30 June

2022

2023

Management at 30 June

2022

2023

Total Company

40%

44%

60%

54%

2022

2023

GOVERNANCE

Kazia strives to be 
a good corporate 
citizen. As a company 
listed on both ASX 
and NASDAQ, we 
respect and comply 
with the governance 
frameworks of both 
jurisdictions. When 
formulating and 
implementing our 
policies, processes 
and practices, we 
embed the E&S 
considerations into 
our decisions.

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Kazia Theraputics Limited Annual Report 2023

13

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ANNUAL REPORT 2023

FINANCIAL 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 
31 August 2023. The directors have the power to amend 
and reissue the financial statements.

14

Kazia Theraputics Limited Annual Report 2023

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CONTENTS

CONTENTS

Director’s Report 

Director’s Report 

Auditor’s independent declaration 

Auditor’s independence declaration 

Page

16

41

Statement of profit or loss and other comprehensive income 

Statement of profit or loss and other comprehensive income 

42

Statement of financial position 

Statement of financial position 

Statement of changes in equity 

Statement of changes in equity 

Statement of cash flows 

Statement of cash flows 

Notes to the financial statements 

Notes to the financial statements 

Directors’ declaration 

Directors’ declaration 

43

44

46

47

78

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

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

79

Shareholder information 

Shareholder information 

Corporate directory 

Environmental, social and governance (ESG) report 

85

iii

Corporate directory 

Page

2

27

28

29

30

32

33

63

64

69

70

iii

Kazia Theraputics Limited Annual Report 2023

15

 
 
 
 
 
 
 
 
 
 
 
 
 
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 2023.

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:

Dr John Friend (Appointed 1 August 2023 - Managing Director) (Appointed 11 August 2023 - Interim Chairman)

Iain Ross (Resigned 11 August 2023)

Bryce Carmine

Steven Coffey

James Garner (1 July 2022 to 30 April 2023)

Ebru Davidson (Appointed 5 June 2023)

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 $20,465,180 (30 June 2022: ($25,014,055)).

The attached financial statements detail the performance and financial position of the consolidated entity for the year 
ended 30 June 2023.

Cash resources

At 30 June 2023, the consolidated entity had total funds, comprising cash at bank and on hand of A$5,241,197 (2022 
A$7,361,112). 

Going concern

The entity is not generating revenues and is not expected to do so in the foreseeable future. There is material uncertainty 
which may cast significant doubt on whether the the consolidated entity will continue as a going concern. 

The Directors have considered this to be appropriate. During the month of July 2023 through 7 August 2023, the Company 
raised total proceeds for the period of US$1,019,769 (A$1,540,918) using the ATM facility and continues to seek additional 
funding sources both in Australia and overseas. Refer to ‘Going concern’ in note 2 to the financial statements and the Risks 
Related to Our Financial Condition and Capital Requirement section in the Director’s report for further details. Subject to 
the matters disclosed under Going concern in Note 2, the directors have reasonable grounds to believe that the Company 
will be able to pay its debts as and when they become due and payable.

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.

16

DIRECTORS’ REPORTKazia Therapeutics Limited Clinical Pipeline Overview

Paxalisib
Kazia’s lead program is paxalisib, an investigational brain-penetrant inhibitor of the PI3K / Akt / mTOR pathway, that was 
specifically designed to treat brain cancer. Brain cancers account for about 15% of paediatric cancers and are the second 
most common type of cancer in children whereas over 300,000 adults are diagnosed every year with primary brain cancer. 
It is important to recognize that paxalisib, by design, has the potential to be an integral component to precision medicine. 
As a targeted therapeutic, we have focused many of the ongoing trials to evaluate paxalisib in patients who have PI3K 
pathway mutations. Enriching clinical trials with patients who have the potential to have the greatest response and benefits 
accelerates clinical trial recruitment and time to commercialization. The overall clinical development strategy for paxalisib 
has been crafted into three core pillars. Within the adult brain cancer pillar, we have four ongoing clinical studies across 
three different patient populations. There are two actively recruiting clinical studies and one recently completed study in the 
paediatric brain cancer pillar. Within the brain metastases pillar, there are three ongoing studies.

Paxalisib in Adult Brain Cancer

Glioblastoma (GBM) is a fast-growing and aggressive brain tumour. Paxalisib is being developed primarily for the ~65% of 
newly-diagnosed unmethylated GBM patients who generally do not respond to existing chemotherapy with temozolomide. 
The final data from a phase II study in newly diagnosed GBM patients reported promising signals of clinical activity with 
paxalisib and was presented at two global conferences in 2023.

GBM AGILE Pivotal study 
GBM AGILE (Glioblastoma Adaptive Global Innovative Learning Environment) evaluates investigational therapies for 
patients with newly diagnosed and recurrent GBM. The goal is to expedite the approval of new drugs for this disease. Kazia 
announced on 1 August 2022 that the company had been advised by GCAR that the first stage of the paxalisib arm had 
completed recruitment. The treatment arm did not meet pre-defined criteria for continuing to a second stage, and patients 
enrolled in the first stage of the paxalisib arm will therefore continue on treatment as per protocol, and in follow-up, until 
completion of the final analysis, which we anticipate receiving in 2H CY2023. Depending on the results of the study, Kazia 
may use such data to support submission of a new drug application for marketing authorisation to the FDA. 

LUMOS2 phase II study 
Kazia is supporting the University of Sydney on a molecularly guided phase II clinical study evaluating paxalisib in adult 
patients with recurrent/progressive isocitrate dehydrogenase (IDH) mutant grade 2 and 3 gliomas (G2/3 gliomas). The 
LUMOS2 study is sponsored by the University of Sydney with a goal of investigating targeted therapeutics in these patients 
who have limited options. The study is expected to enrol up to 76 patients with PI3K pathway mutations and will be a multi-
centre study at several Australian sites, with the potential to expand internationally. We anticipate enrolment to commence 
in 4Q23. 

Weill Cornell Medicine
The clinical study at Weill Medical College of Cornell University in the United States, is exploring the use of paxalisib in 
combination with metformin and a ketogenic diet for patients with glioblastoma. A significant and growing body of research 
has suggested the potential for ketogenic diets to provide benefit in a range of tumour types, including glioblastoma. 
The study is actively enrolling in two cohorts of GBM patients, and we anticipate providing an update to this study in 4Q 
CY2023.

Dana Farber Cancer Institute (DFCI)
In June 2021, Kazia announced that the phase II study of paxalisib in relapsed/refractory patients with primary CNS 
lymphoma at DFCI had commenced recruitment. As a brain penetrant PI3K inhibitor in mainstream development, paxalisib 
has unique potential in the form of this disease that occurs within the central nervous system and we anticipate providing a 
clinical update to this study in 2H23. 

Paxalisib in Paediatric Brain Cancer

Brain cancer is the most common malignancy of childhood and represents about one third of all childhood cancer deaths. 
The PI3K/AKT/mTOR pathway is frequently upregulated in paediatric cancers and therefore therapeutics that target those 
pathways could lead to well long-awaited regulatory approvals. Diffuse intrinsic pontine glioma (DIPG) is the most common 
of a group of childhood brain cancers known as diffuse midline gliomas (DMGs). The disease has no FDA approved drug 
treatments and average survival from diagnosis is approximately 10 months. Kazia recognizes the critical importance and 
immense unmet need and is aggressively exploring paxalisib in two common forms of childhood cancer - Diffuse Midline 
Gliomas (DMG, DIPG) and Advanced Childhood Cancer with PI3K/mTOR mutations. 

PNOC022 phase II study 
The PNOC022 study is sponsored by the Pacific Pediatric Neuro-Oncology Consortium (PNOC), an international 
consortium focused on the development of novel combination therapies. It is an adaptive platform study that is examining 
paxalisib in combination with ONC201. The study enrolment has been very robust since opening in late 2021 and the study 
team at PNOC and University of California, San Francisco (UCSF) are preparing data for interim analysis, which is expected 
in 2H CY2023. 

17

Kazia Theraputics Limited Annual Report 2023Chairman and CEO’s LetterKey MilestonesIntroduction to  Kazia’s CEOPipeline ReviewEnvironment, Society and GovernanceFinancial ReportsOPTIMISE phase II study
Kazia entered into a collaboration with the Australian and New Zealand Children’s Haematology / Oncology Group 
(ANZCHOG) in March 2023 for a phase II clinical study examining paxalisib as a targeted therapeutic in children with 
advanced solid tumours, including brain tumours. The study, named OPTIMISE, is the first Australian-led clinical trial 
of paxalisib and will combine the drug with chemotherapy for children with PI3K pathway mutations in their tumours. 
Enrolment for this study is expected to commence in 4Q CY2023.

Paxalisib in Brain Metastases

Brain metastases occur when cancer cells spread from their original site to the brain, and treatment options are very limited. 
Brain metastases are a common complication of many tumours, but are particularly common in breast cancer, lung cancer, 
and melanoma and account for 67% - 89% of all cancers. Brain metastases are typically highly resistant to treatment 
and survival rates are generally low. Radiotherapy is a common treatment modality for brain metastases. Despite some 
efficacy, patients typically become resistant over time, and repeat courses of radiotherapy can be associated with significant 
neurological toxicity. Additionally, PI3K pathway mutations are common in brain metastasis and are frequently associated 
with a worse prognosis.

MSKCC phase I clinical study
Paxalisib is the subject of an ongoing phase I clinical study in combination with radiotherapy for the treatment of patients 
with brain metastases who harbour PI3K pathway mutations, sponsored by Memorial Sloan Kettering Cancer Center in 
New York, NY. Encouraging safety and clinical activity from this study was presented by the lead investigator, Dr. Jonathan 
Yang in August 2022 at the ASCO/SNO CNS meeting held in Toronto, Canada. The phase I expansion cohort is currently 
enrolling and two world- renowned cancer centres have joined MSKCC in this study: Miami Cancer Institute and Fred 
Hutchinson Cancer Center in Seattle, WA. Preliminary data from the expansion cohort is anticipated by 1Q CY2024.

Fast Track Designation
We were also very pleased to receive Fast Track Designation (FTD) by the United States Food and Drug Administration 
(FDA) in July 2023 for paxalisib for the treatment of solid tumour brain metastases harbouring PI3K pathway mutations in 
combination with radiation therapy, based on the promising clinical data from an interim analysis of the MSKCC phase 1 trial.

To be awarded FTD, drugs must generally be able to show some potential advantage over existing therapies, either in 
terms of safety or efficacy. The key benefits of FTD comprise enhanced access to FDA, with regular and more frequent 
opportunities for consultation and discussion. In addition, drugs with FTD may be eligible for Accelerated Approval, 
in which a new medicine is approved based on a surrogate endpoint, and Priority Review, in which the standard 
12-month review process may be reduced to eight months. Drugs with FTD may also receive a ‘rolling review’ of their 
NDA submission, in which sections are submitted for review as they become available, potentially expediting the 
approval process.

EVT801

Kazia is also developing EVT801, a small molecule targeted therapeutic VEGFR3 inhibitor. Preclinical data showed 
EVT801 to be active against a broad range of tumour types and has shown evidence of synergy with immuno-oncology 
agents. Over the course of the year, this clinical study and preclinical EVT801 data has been presented at a number of 
global conferences, including AACR and ESMO. We anticipate providing additional EVT801 updates and presentations of 
data at medical conferences in 2H23.

R&D Pipeline

Paxalisib in metastatic melanoma
Data from an ongoing research collaboration with the Huntsman Cancer Institute at the University of Utah in Salt Lake City, 
UT has shown paxalisib to be active in vitro and in vivo against a range of preclinical models of metastatic melanoma, the 
most aggressive form of skin cancer. The data suggested substantial activity for paxalisib as monotherapy in preclinical 
mouse models and was presented at the 19th International Congress of the Society for Melanoma Research, held in 
Edinburgh, Scotland. “This is among the most promising single agent data that we have seen in our research,” commented 
Professor Sheri Holmen, lead investigator on the project. “Despite the widespread adoption of immunotherapy in recent 
years, there remains substantial unmet need in melanoma, particularly in those patients who develop brain metastases. 
We look forward to exploring the potential of paxalisib further in our research, and hopefully seeing the drug transition to a 
clinical trial in the near future.”

Paxalisib in solid tumours
Kazia’s collaboration with QIMR Berghofer Medical Research Institute, one of Australia’s foremost cancer research centres, 
is currently exploring novel uses of paxalisib in solid tumours. The collaboration is based on research that identified an 
entirely separate effect of PI3K inhibition: as a modulator of the immune microenvironment within and around the tumour. 
Administration of PI3K inhibitors such as paxalisib, at doses and frequencies different to those conventionally used, appears 
to activate the immune system in the tumour, making it more susceptive to immunotherapy. This could therefore open up 
an important opportunity for Paxalisib in combination with drugs such as Keytruda® (pembrolizumab, Merck) and Opdivo® 
(nivolumab, Bristol Myers Squibb) for the treatment of diseases such as breast cancer and lung cancer. The collaboration is 
ongoing and will build on initial research that has already led to the filing of a provisional patent last year, including the use 
of paxalisib as an immune modulator in the treatment of diseases such as breast cancer.

18

DIRECTORS’ REPORTBroad Clinical Program Ongoing

Sponsor

PAXALISIB

Phase

Indication

Registration

Global Coalition for Adaptive Research

II/III

Glioblastoma

Weill Cornell Medicine

Alliance for Clinical Trials in Oncology

Dana-Farber Cancer Institute

Dana-Farber Cancer Institute

II

II

II

II

Glioblastoma  
(with ketogenesis)

Brain metastases

Breast cancer brain metastases 
(with Herceptin)

NCT03970447

NCT05183204

NCT03994796

NCT03765983

Primary CNS Iymphoma

NCT04906096

University of Sydney

I/II

Grade 2/3 IDH-mutant adult gliomas

TBD

Pacific Pediatric Neuro-Oncology 
Consortium

Aus. & NZ Children’s Oncology Group

ST Jude Children’s Research Hospital

Memorial Sloan Kettering Cancer Center

EVT801

Kazia Therapeutics

II

II

I

I

I

DIPG (childhood brain cancer)

NCT05009992

Advanced solid tumours in children

TBD

DIPG

Brain metastases  
(with radiotherapy)

NCT03696355

NCT04192981

Advanced solid tumours

NCT05114668

Paxalisib 
Investigational, small molecule, potent, brain-penetrant inhibitor of PI3K / mTOR

PRECLINICLE PHASE 1

PHASE 2

PHASE 3 MARKET

Glioblastoma & IDH-mutant glioma
Common primary brain cancer

3 studies

DIPG/Advanced Solid Tumors 
Childhood brain cancer

3 studies

AT/RT
Childhood brain cancer

Brain Metastases
Cancer that spreads to brain from elsewhere

Primary CNS Lymphoma
Form of non-Hodgkin’s lymphoma

Cancers outside the CNS
Melanoma; TNBC, Ovarian

3 studies

3 studies

EVT801
Investigational, small molecule, highly specific inhibitor of VEGFR3

Advanced Solid Tumors
Patients w/ highly treatment-resistant cancer

licensed from: 

Anticipated

Final Data
2H CY23

Initial Data
3Q CY23

Further Data
1H CY23

Further Data
CY23

Initial Data
CY23

Further Data
CY23

licensed from: 

Initial Data
2H CY23

19

Kazia Theraputics Limited Annual Report 2023Chairman and CEO’s LetterKey MilestonesIntroduction to  Kazia’s CEOPipeline ReviewEnvironment, Society and GovernanceFinancial ReportsRisks Related to Our Financial Condition and Capital Requirement

We have incurred significant net losses. We anticipate that we will continue to incur significant net losses for the 
foreseeable future and we may never achieve or maintain profitability. We are a biotechnology company and have not yet 
generated significant revenue. We have incurred losses of A$8,419,484, A$25,014,055 and A$20,465,180 for the fiscal 
years ended June 30, 2021, 2022 and 2023, respectively. We have not generated any revenues from sales of any of our 
product candidates in prior financial years, however in the fiscal year ended June 30, 2021 we did generate revenues of 
A$15.2 million from the licensing of our development stage drug candidates.

As of 30 June 2023, we had accumulated losses of A$89.1 million. We have devoted most of our financial resources to 
research and development, including our clinical development activities. To date, we have financed our operations primarily 
through the issuance of equity securities, research and development grants from the Australian government and payments 
from our collaboration partners. While we have generated revenue in recent fiscal years from license transactions, the 
nature of such revenue is irregular and unpredictable, and is based upon achievement of milestones over which we have 
limited or no control. As a consequence, we expect to continue to incur significant operating losses for the foreseeable 
future due to the cost of research and development including clinical trials and the regulatory approval process for product 
candidates. The amount of our future net losses is uncertain and will depend, in part, on the rate of our future expenditures. 
Our ability to continue operations will depend on, among other things, our ability to obtain funding through equity or debt 
financing, strategic collaborations or grants.

We expect to continue to incur significant expenses and similar or increasing operating losses for the foreseeable future. We 
anticipate that our expenses will increase substantially if and as we:

•  continue our research and clinical development of our product candidates;

•  expand the scope of our current clinical studies for our product candidates or initiate additional clinical or other studies 

for product candidates;

•  seek regulatory and marketing approvals for any of our product candidates that successfully complete clinical trials;

• 

further develop the manufacturing process for our product candidates;

•  change or add additional manufacturers or suppliers;

•  seek to identify and validate additional product candidates;

•  acquire or in-license other product candidates and technologies;

•  maintain, protect and expand our intellectual property portfolio;

•  create additional infrastructure to support our operations as a public company in the United States and our product 

development and future commercialization efforts; and

•  experience any delays or encounter issues with any of the above.

The net losses we incur may fluctuate significantly from year to year, such that a period-to-period comparison of our results 
of operations may not be a good indication of our future performance.

We have never generated any revenue from product sales and may never be profitable.

Our ability to generate significant revenue and achieve profitability depends on our ability, alone or with strategic 
collaboration partners, to successfully complete the development of and obtain the regulatory approvals for our product 
candidates, to manufacture sufficient supply of our product candidates, to establish a sales and marketing organization or 
suitable third-party alternative for the marketing of any approved products and to successfully commercialise any approved 
products on commercially reasonable terms. All of these activities will require us to raise sufficient funds to finance 
business activities. In addition, we do not anticipate generating revenue from commercializing product candidates for 
the foreseeable future, if ever. Our ability to generate future revenues from commercializing product candidates depends 
heavily on:

•  successfully initiating and completing clinical trials of our product candidates;

• 

• 

• 

the timing of the initiation and completion of preclinical studies and clinical trials

the timing of patient enrolment and dosing in any future clinical trials;

the timing of the availability of data from clinical trials

•  expectations about the successful completion of clinical trials

•  obtaining regulatory and marketing approvals for product candidates for which we complete clinical trials;

• 

the timing of expected regulatory filings;

•  expectations about approval by regulatory authorities of our drug candidates;

• 

the clinical utility and potential attributes and benefits of our product candidates, including the potential duration of 
treatment effects;

•  potential licenses of intellectual property and collaborations;

• 

the commercialization of our product candidates, if approved;

•  expectations regarding expenses, ongoing losses, future revenue and capital needs;

•  our financial performance;

20

DIRECTORS’ REPORT• 

the length of time over which we expect our cash and cash equivalents to be sufficient;

•  our intellectual property position and the duration of our patent portfolio;

•  maintaining, protecting and expanding our intellectual property portfolio, and avoiding infringing on intellectual 

property of third parties;

•  establishing and maintaining successful licenses, collaborations and alliances with third parties;

•  developing a sustainable, scalable, reproducible and transferable manufacturing process for our product candidates;

•  establishing and maintaining supply and manufacturing relationships with third parties that can provide products 

and services adequate, in amount and quality, to support clinical development and commercialization of our product 
candidates, if approved;

• 

launching and commercializing any product candidates for which we obtain regulatory and marketing approval, 
either by collaborating with a partner or, if launched independently, by establishing a sales, marketing and 
distribution infrastructure;

•  obtaining market acceptance of any product candidates that receive regulatory approval as viable treatment options;

• 

the outcome of corresponding endeavours in respect of competitive or potentially competitive product candidates by 
other drug development companies;

•  obtaining favourable coverage and reimbursement rates for our products from third-party payers;

•  addressing any competing technological and market developments;

• 

identifying and validating new product candidates; and

•  negotiating favourable terms in any collaboration, licensing or other arrangements into which we may enter.

Even if one or more of our product candidates is approved for commercial sale, we may incur significant costs associated with 
commercializing any approved product candidate. As one example, our expenses could increase beyond expectations if we 
are required by the U.S. Food and Drug Administration (‘FDA’), or other regulatory agencies, domestic or foreign, to perform 
clinical and other studies in addition to those that we currently anticipate. Even if we are able to generate revenues from 
the sale of any approved products, we may not become profitable and may need to obtain additional funding to continue 
operations, which could have an adverse effect on our business, financial condition, results of operations and prospects.

The Company has two product candidates currently in clinical trials. Failure of one or both of these therapies to show 
benefit to patients could materially affect the continuity of our business and our financial condition.

The Company’s lead programs include paxalisib (formerly GDC-0084), a small molecule inhibitor of the PI3K/Akt/mTOR 
pathway, and EVT801, a small molecule selective inhibitor of vascular endothelial growth factor receptor 3 (VEGFR3). 
However, even though progress has been made, such as the clinical validation of the PI3K/Akt/mTOR pathway as a 
target for oncology therapies, development of our product candidates may prove unsuccessful, after completion of 
clinical trials, due to any failure to provide adequate beneficial effect to cancer patients. It is possible that either or 
both agents may fail to show sufficient benefit as an intended treatment for the specific cancer indication to become 
commercially viable products.

The Company has ongoing clinical trials in which experimental therapies are administered to human subjects. If profound 
and unexpected safety concerns are encountered in clinical trials, it may materially affect the continuity of our business 
and our financial condition.

Despite all applicable efforts to characterize the safety profile of our drug development candidates through animal studies 
and other mechanisms, the possibility of unexpected safety concerns remains. If one or both of our clinical stage candidates 
were found to be associated with profound and unexpected toxicity, the Company may be required to cease development, 
and may additionally incur other impairments to the business including reputational damage.

The Company relies on third-party contract manufacturing organizations to manufacture its drug product candidates. If 
one or more of these vendors were unable to meet the Company’s needs, it may materially impact our business.

Manufacture of pharmaceutical material for human administration is technically complex and highly regulated. If one or 
more of the Company’s vendors failed to produce drug product to the requisite standard, the continuity of the Company’s 
operations may be severely disrupted. Even if a vendor was found deficient in respect of another product, it may impair 
the confidence of regulatory agencies in our product candidates, thereby disrupting our operations. Global contract 
manufacturing capacity is limited, and the manufacturing process is not readily portable. As a result, the Company’s 
ability to manufacture its product candidates in a timely manner is dependent on the availability of suitable capacity at its 
vendors. The manufactured drug products, and their intermediaries, are of significant financial value. Loss, damage, or theft 
of this material, for example while in storage or transit, may result in significant detriment to the Company, which may be 
incompletely covered by insurance.

The Company’s ability to continue as a going concern is dependent on its ability to raise capital to support its 
R&D programs.

The Company has limited cash resources and will periodically need additional funds to maintain the planned level of R&D 
activity. We expect to consume cash and incur operating losses for the foreseeable future as the Company continues 
developing its oncology drug candidates. The impact on cash resources and results from operations will vary with the extent 
and timing of future clinical trial programs. While it is not possible to make accurate predictions of future operating results, 
we expect existing cash and cash equivalents will be sufficient to enable us to continue our research and development 
activities until approximately December 2023.

21

Kazia Theraputics Limited Annual Report 2023Chairman and CEO’s LetterKey MilestonesIntroduction to  Kazia’s CEOPipeline ReviewEnvironment, Society and GovernanceFinancial ReportsAs at 30 June 2023, we had cash on hand at the bank of A$5.2million. The financial statements have been prepared on 
a going concern basis, which contemplates continuity of normal activities and realization of assets and settlement of 
liabilities in the normal course of business. As is often the case with drug development companies, our ability to continue 
as a going concern is dependent upon our ability to derive sufficient cash from investors, from licensing and partnering and 
collaboration 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 have initiated funding strategies they anticipate provide 
reasonable grounds to generate sufficient funding to allow us to continue as a going concern.

If the Company is unable to obtain additional funds on favourable terms or at all, it may be required to cease or reduce its 
operations. Also, if the Company raises more funds by selling additional securities, the ownership interests of holders of its 
securities will be diluted.

Global economic uncertainty caused by rising inflation, political instability, and conflicts and other events of geopolitical 
significance, such as the COVID-19 pandemic and the conflict between Russia and Ukraine, could adversely affect our 
business and financial performance.

Negative global economic conditions may pose challenges to the Company’s business strategy, which relies on access to 
capital from financial markets and/or investment by other companies. Failure to obtain sufficient funding on acceptable 
terms could have a material adverse effect on our business, results of operations and financial condition. Negative 
conditions in the global economy, including credit markets and the financial services industry, have generally made equity 
and debt financing more difficult to obtain, and may negatively impact the Company’s ability to complete financing 
transactions. We are currently operating in a period of economic uncertainty and capital markets disruption, which has been 
significantly impacted by the ongoing COVID19 pandemic and geopolitical instability due to the ongoing military conflict 
between Russia and Ukraine. Our business, financial condition, and results of operations may be materially adversely 
affected by the negative impact on the global economy and capital markets resulting from the conflict in Ukraine or any 
other geopolitical tensions. U.S. and global markets are experiencing volatility and disruption following the escalation of 
geopolitical tensions and the start of the military conflict between Russia and Ukraine. In late February 2022, a military 
invasion of Ukraine by Russian troops began. Although the length and impact of the ongoing military conflict is highly 
unpredictable, the conflict in Ukraine has led to market disruptions, including significant volatility in commodity prices, 
credit and capital markets, as well as supply chain disruptions.

Additionally, various of Russia’s actions have led to sanctions and other penalties being levied by the U.S., Australia, the 
European Union, and other countries, as well as other public and private actors and companies, against Russia and certain 
other geographic areas, including agreement to remove certain Russian financial institutions from the Society for Worldwide 
Interbank Financial Telecommunication payment system and restrictions on imports of Russian oil, liquified natural gas and 
coal. Additional potential sanctions and penalties have also been proposed and/or threatened. Russian military actions and 
the resulting sanctions could further adversely affect the global economy and financial markets and lead to instability and 
lack of liquidity in capital markets, potentially making it more difficult for us to obtain additional funds.

The duration and severity of these conditions is uncertain, as is the extent to which they may adversely affect the Company’s 
business and the business of current and prospective vendors and collaborators. If negative global economic conditions 
persist or worsen, the Company may be unable to secure additional funding to sustain its operations or to find suitable 
collaborators to advance its internal programs, even if positive results are achieved from research and development efforts.

Any of the above-mentioned factors could affect our business, prospects, financial condition, and operating results. 
The extent and duration of the military action, sanctions, and resulting market disruptions are impossible to predict, but 
could be substantial.

If we are unable to raise sufficient funding on acceptable terms due to these or other factors, we may be unable to continue 
to operate. There is no assurance that we will be successful in obtaining sufficient financing on acceptable terms and 
conditions to fund continuing operations, if at all. Our failure to obtain sufficient funds on acceptable terms when needed 
could have a material adverse effect on our business, results of operations and financial condition.

Risks Related to Our Business Operations

We may not successfully engage in strategic transactions or enter into new collaborations, which could adversely affect our 
ability to develop and commercialize product candidates, impact our cash position, increase our expenses and present 
significant distractions to our management. From time to time, we may consider additional strategic transactions, such 
as collaborations, acquisitions, asset purchases or sales and out- or in-licensing of product candidates or technologies. In 
particular we will evaluate and, if strategically attractive, seek to enter into additional collaborations, including with major 
biotechnology or pharmaceutical companies. The competition for collaborators is significant, and the negotiation process is 
time-consuming and complex. Any new collaboration may be on terms that are not optimal for us, and we may not be able 
to maintain any new or existing collaboration if, for example, development or approval of a product candidate is delayed, 
sales of an approved product candidate do not meet expectations or the collaborator discontinues the collaboration. Any 
such collaboration, or other strategic transaction, may require us to incur non-recurring or other charges, increase our 
expenditures, pose significant integration or implementation challenges or disrupt our management or business.

These transactions would entail numerous operational and financial risks, including exposure to unknown liabilities, 
incurrence of substantial debt or dilutive issuances of equity securities to pay transaction consideration or costs, higher 
than expected collaboration, acquisition or integration costs, write-downs of assets or impairment charges, increased 
amortization expenses, difficulty and cost in facilitating the collaboration or combining the operations and personnel of any 
acquired business, impairment of relationships with key suppliers, manufacturers or customers of any acquired business due 
to changes in management and ownership and the inability to retain key employees of any acquired business.

22

DIRECTORS’ REPORTAccordingly, although there can be no assurance that we will undertake or successfully complete any additional transactions 
of the nature described above, any transactions that we do complete may be subject to the foregoing or other risks and 
have a material adverse effect on our business, results of operations, financial condition and prospects. Conversely, any 
failure to enter any collaboration or other strategic transaction that would be beneficial to us could delay and make more 
expensive the development and potential commercialization of our product candidates and have a negative impact on the 
competitiveness of any product candidate that reaches market.

Any inability to attract and retain qualified key management and technical personnel would impair our ability to 
implement our business plan.

Our success largely depends on the continued service of key management and other specialized personnel. The loss of 
one or more members of our management team or other key employees or advisors could delay or increase the cost of 
our research and development programs and materially harm our business, financial condition, results of operations and 
prospects. The relationships that our key managers have cultivated within our industry make us particularly dependent upon 
their continued employment with us. We are dependent on the continued service of our technical personnel because of 
the highly technical nature of our product candidates and the specialized nature of the regulatory approval process for our 
product candidates. Because our management team and key employees are not obligated to provide us with continued 
service, they could terminate their employment with us at any time without penalty. We do not maintain key person life 
insurance policies on any of our management team members or key employees. Our future success will depend in large 
part on our continued ability to attract and retain other highly qualified scientific, technical and management personnel, as 
well as personnel with expertise in clinical testing, manufacturing, governmental regulation and commercialization. We face 
competition for personnel from other companies, universities, public and private research institutions, government entities 
and other organisations.

Our collaborations with outside scientists and consultants may be subject to restriction and change.

We work with medical experts, chemists, biologists and other scientists at academic and other institutions, and consultants 
who assist us in our research, development and regulatory efforts, including the members of our scientific advisory board. In 
addition, these scientists and consultants have provided, and we expect that they will continue to provide, valuable advice 
regarding our programs and regulatory approval processes. These scientists and consultants are not our employees and 
may have other commitments that would limit their future availability to us. If a conflict of interest arises between their work 
for us and their work for another entity, we may lose their services. In addition, we are limited in our ability to prevent them 
from establishing competing businesses or developing competing products. For example, if a key scientist acting as a 
principal investigator in any of our future clinical trials identifies a potential product or compound that is more scientifically 
interesting to professional interests, their availability to remain involved in any future clinical trials could be restricted 
or eliminated.

We face potential product liability, and, if successful claims are brought against us, we may incur substantial liability 
and costs. If the use of our product candidates harms patients, or is perceived to harm patients even when such harm is 
unrelated to our product candidates, our regulatory approvals could be revoked or otherwise negatively impacted and 
we could be subject to costly and damaging product liability claims.

The use of our product candidates in clinical trials and the sale of any products for which we may in the future obtain 
marketing approval exposes us to the risk of product liability claims. Product liability claims might be brought against us 
by consumers, healthcare providers, pharmaceutical companies or others selling or otherwise coming into contact with our 
product candidates. There is a risk that our product candidates may induce adverse events. If we cannot successfully defend 
against product liability claims, we could incur substantial liability and costs. In addition, regardless of merit or eventual 
outcome, product liability claims may result in:

• 

impairment of our business reputation;

•  withdrawal of clinical trial participants;

•  costs due to related litigation;

•  distraction of management’s attention from our primary business;

•  substantial monetary awards to patients or other claimants;

• 

the inability to commercialize our product candidates;

•  decreased demand for our product candidates, if approved for commercial sale; and

• 

increased cost, or impairment of our ability, to obtain or maintain product liability insurance coverage.

We may use our limited financial and human resources to pursue a particular research program or product candidate and 
fail to capitalize on programs or product candidates that may be more profitable or for which there is a greater likelihood 
of success.

Because we have limited resources, we may forego or delay pursuit of opportunities with certain programs or product 
candidates or for indications that later prove to have greater commercial potential. Our resource allocation decisions may 
cause us to fail to capitalize on viable commercial products or profitable market opportunities. Our spending on current and 
future research and development programs for product candidates may not yield any commercially viable products. If we 
do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish 
valuable rights to that product candidate through strategic collaboration, licensing or other royalty arrangements in cases 
in which it would have been more advantageous for us to retain sole development and commercialization rights to such 
product candidate, or we may allocate internal resources to a product candidate in a therapeutic area in which it would have 
been more advantageous to enter into a collaboration arrangement.

23

Kazia Theraputics Limited Annual Report 2023Chairman and CEO’s LetterKey MilestonesIntroduction to  Kazia’s CEOPipeline ReviewEnvironment, Society and GovernanceFinancial ReportsOur internal computer and information technology systems, or those of our collaborators and other development 
partners, third-party Contract Research Organizations (CROs) or other contractors or consultants, may fail or suffer 
security breaches, which could result in a disruption of our product development programs.

Despite the implementation of security measures, our internal computer and information technology systems and those 
of our current and any future CROs and other contractors, consultants and collaborators are vulnerable to damage 
from computer viruses, cyber-attacks, unauthorized access, natural disasters, terrorism, war and telecommunication and 
electrical failures. Such events could cause interruptions of our operations. While we have not experienced any material 
system failure, accident or security breach to date, if such an event were to occur and cause interruptions in our operations, 
it could result in a disruption of our development programs and our business operations, whether due to a loss of our 
trade secrets or other similar disruptions. For example, the loss of clinical trial data from ongoing or future clinical trials or 
data from preclinical studies could result in delays in our regulatory approval efforts and significantly increase our costs to 
recover or reproduce the data. Likewise, we rely on third parties to manufacture our product candidates and will rely on 
third parties to conduct future clinical trials, and similar events relating to their computer systems could also have similar 
consequences to our business. To the extent that any disruption or security breach were to result in a loss of, or damage to, 
our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability and 
the further development and commercialization of our product candidates could be delayed and become more expensive.

Our ability to utilize our net operating losses and certain other tax attributes may be limited.

We have substantial carried forward tax losses which may not be available to offset any future assessable income. In order 
for an Australian corporate taxpayer to carry forward and utilize tax losses, the taxpayer must pass either the continuity of 
ownership test (“COT”), or, if it fails the COT, the same business test (“SBT”), or similar business test, in respect of relevant 
tax losses.

We have not carried out any formal analysis as to whether we have met the COT or, failing the COT, the SBT or similar 
business test over relevant periods. In addition, future shareholding changes may result in a significant ownership change 
for us. It is therefore uncertain as to whether any of our tax losses carried forward as of 30 June 2023 will be available to be 
carried forward and available to offset our assessable income, if any, in future periods.

Risks Related to the Product Development and Regulatory Approval of Our Product 
Candidates

We may not be able to obtain orphan drug exclusivity, where relevant, in all markets for our product candidates.

Regulatory authorities in some jurisdictions, including the United States, may designate drugs for relatively small patient 
populations as orphan drugs. Under the Orphan Drug Act, the FDA may designate a product as an orphan drug if it 
is a product intended to treat a rare disease or condition, which is generally defined as a patient population of fewer 
than 200,000 individuals annually in the United States. The FDA may also designate a product as an orphan drug if it is 
intended to treat a disease or condition of more than 200,000 individuals in the United States and there is no reasonable 
expectation that the cost of developing and making a drug or biological product available in the United States for this type 
of disease or condition will be recovered from sales of the product candidate.

Generally, if a product with an orphan drug designation subsequently receives the first marketing approval for the indication 
for which it has such designation, the product is entitled to a period of marketing exclusivity, which precludes the FDA from 
approving another marketing application for the same drug for such indication for that time period. The applicable period is 
seven years in the United States. Orphan drug exclusivity may be lost if the FDA determines that the request for designation 
was materially defective or if the manufacturer is unable to assure sufficient quantity of the drug to meet the needs of 
patients with the rare disease or condition.

Paxalisib (formerly GDC-0084) was granted orphan drug designation by the FDA in February 2018 for the treatment of 
glioblastoma, in August 2020 for the treatment of malignant glioma, which includes DIPG, a rare and highly aggressive 
childhood brain cancer, and in June 2022 for the treatment of atypical rhabdoid / teratoid tumors (AT/RT). However, even 
if we obtain orphan drug exclusivity for additional products in the United States or other jurisdictions, that exclusivity may 
not effectively protect the product from competition because different drugs can be approved for the same condition, and 
the same drug could be approved for a different condition. Moreover, even after an orphan drug is approved, the FDA can 
subsequently approve the same drug, made by a competitor, for the same condition if the FDA concludes that the competitive 
product is clinically superior in that it is shown to be safer, more effective or makes a major contribution to patient care.

Positive results from preclinical studies of our product candidates are not necessarily predictive of the results of our 
planned clinical trials of our product candidates.

Positive results in preclinical proof of concept and animal studies of our product candidates may not result in positive 
results in clinical trials in humans. Many companies in the pharmaceutical and biotechnology industries have suffered 
significant setbacks in clinical trials after achieving positive results in preclinical development or early-stage clinical trials, 
and we cannot be certain that we will not face similar setbacks. These setbacks have been caused by, among other 
things, preclinical findings made while clinical trials were underway or safety or efficacy observations made in clinical 
trials, including adverse events. Moreover, preclinical and clinical data are often susceptible to varying interpretations 
and analyses, and many companies that believed their product candidates performed satisfactorily in preclinical 
studies and clinical trials nonetheless failed to obtain FDA or other regulatory authority approval. If we fail to produce 
positive results in our clinical trials of our product candidates, the development timeline and regulatory approval and 
commercialization prospects for our product candidates, and, correspondingly, our business and financial prospects, would 
be negatively impacted.

24

DIRECTORS’ REPORTEven if the Company receives regulatory approval to commercialize its drug candidates, the ability to generate 
revenues from any resulting products will be subject to a variety of risks, many of which are out of the Company’s 
control.

Regardless of regulatory approval, products arising from the development process may not gain market acceptance 
among physicians, patients healthcare payers or the medical community. The Company believes that the degree of market 
acceptance and its ability to generate revenues from such products will depend on a number of factors, including, but not 
limited to:

•  advancements in the treatment of cancer that make our treatments obsolete;

•  market exclusivity and competitor products;

• 

timing of market introduction of the Company’s drugs and competitive drugs;

•  actual and perceived efficacy and safety of the Company’s drug candidates;

•  prevalence and severity of any side effects;

•  potential or perceived advantages or disadvantages over alternative treatments;

•  strength of sales, marketing and distribution support;

•  price of future products, both in absolute terms and relative to alternative treatments;

• 

the effect of current and future healthcare laws on the Company’s drug candidates; and

•  availability of coverage and reimbursement from government and other third-party payers.

If any of the Company’s drugs are approved and fail to achieve market acceptance, the Company may not be able to 
generate significant revenue to achieve or sustain profitability.

Risks Related to Commercialization of Our Product Candidates

The Company may not be able to establish the contractual arrangements necessary to develop, market and distribute the 
product candidates. Our failure to do so may adversely affect our business, results of operations and financial condition.

The Company has been successful in executing contractual agreements with strategic partners. This remains a key part of 
the Company’s business plan and the Company must continue to partner with third parties to manufacture clinical grade 
drug product and conduct key pre-clinical and clinical investigations. Strategic agreements around packaging, branding, 
market access and distribution for its drug products will also eventually be required.

However, potential partners could be discouraged by the Company’s limited operating history. There is no assurance that 
the Company will be able to negotiate commercially acceptable licensing or other agreements for the future exploitation of 
its drug product candidates including continued clinical development, manufacture or marketing. If the Company is unable 
to successfully contract for these services, or if arrangements for these services are terminated, the Company may have to 
delay the commercialization program which will adversely affect its ability to generate operating revenues.

The Company’s commercial opportunity will be reduced or eliminated if competitors develop and market products, 
devices or other treatments that are more effective, have fewer side effects or are less expensive than its drug 
candidates.

The development of drug candidates is highly competitive and is high risk. A number of other companies have products 
or drug candidates in various stages of pre-clinical or clinical development that are intended for the same therapeutic 
indications for which the Company’s drug candidates are being developed. Some of these potential competing drugs are 
further advanced in development than the Company’s drug candidates and may be commercialized sooner. Even if the 
Company is successful in developing effective drugs, its compounds may not compete successfully with products produced 
by its competitors.

The Company’s competitors include pharmaceutical companies and biotechnology companies, as well as universities and 
public and private research institutions. In addition, companies active in different but related fields represent substantial 
competition. Many of the Company’s competitors developing oncology drugs have significantly greater capital resources, 
larger R&D staff and facilities and greater experience in drug development, regulation, manufacturing and marketing. 
These organizations also compete with the Company and its service providers, to recruit qualified personnel, and to 
attract partners for joint ventures and to license technologies. As a result, the Company’s competitors may be able to 
develop technologies and products that would render the Company’s technologies or its drug candidates obsolete or 
non-competitive.

25

Kazia Theraputics Limited Annual Report 2023Chairman and CEO’s LetterKey MilestonesIntroduction to  Kazia’s CEOPipeline ReviewEnvironment, Society and GovernanceFinancial ReportsRisks Related to Our Intellectual Property

If we are unable to protect intellectual property rights related to our product candidates, we may not be able to obtain 
exclusivity for our product candidates or prevent others from developing similar competitive products.

We rely upon a combination of patents, know-how, trade secret protection and confidentiality agreements to protect the 
intellectual property related to our product candidates. The strength of patents in the biotechnology and pharmaceutical 
field involves complex legal and scientific questions and can be uncertain. The patent applications that we own or 
in-license may fail to result in issued patents with claims that cover our product candidates in the United States or other 
jurisdictions. In addition, we cannot guarantee that any patents will issue from any pending or future patent applications 
owned by or licensed to us. There is no assurance that all of the potentially relevant prior art relating to our patents and 
patent applications has been found. If such prior art exists, it can invalidate a patent or prevent a patent from issuing from 
a pending patent application. Even if patents do successfully issue and even if such patents cover our product candidates, 
third parties may initiate opposition, interference, re-examination, post-grant review, inter partes review, nullification or 
derivation action in court or before patent offices or similar proceedings challenging the validity, enforceability or scope 
of such patents, which may result in the patent claims being narrowed or invalidated. Furthermore, even if our patents and 
patent applications are unchallenged, they may not adequately protect our intellectual property, provide exclusivity for our 
product candidates or prevent others from designing around our claims. Any of these outcomes could impair our ability to 
prevent competition from third parties.

If the patent applications we hold or have in-licensed with respect to our programs or product candidates fail to issue, 
or are revoked, if the breadth or strength of our patent protection is threatened, or if our patent portfolio fails to provide 
meaningful exclusivity for our product candidates, it could dissuade companies from collaborating with us to develop 
product candidates and threaten our ability to commercialize future products. Any successful opposition to any patents 
owned by or licensed to us could deprive us of rights necessary for the successful commercialization of any product 
candidates that we may develop. Further, if we encounter delays in regulatory approvals, the period of time during which we 
could market a product candidate under patent protection could be reduced. Even where we have a valid and enforceable 
patent, we may not be able to exclude others from practicing our invention where the other party can show that they used 
the invention in commerce before our filing date or the other party benefits from a compulsory license. In addition, patents 
have a limited lifespan. In the United States, the natural expiration of a patent is generally 20 years after it is filed. Various 
extensions may be available, but the life of a patent, and the protection it affords, is limited. Even if patents covering our 
product candidates are obtained, once the patent life has expired for a product, we may be open to competition from 
competitive medications, including biosimilar or generic medications. This risk is material in light of the length of the 
development process of our products and lifespan of our current patent portfolio.

In addition to the protection afforded by patents, we rely on trade secret protection and confidentiality agreements 
to protect proprietary know-how that is not patentable or that we elect not to patent, processes for which patents are 
difficult to enforce and any other elements of our product candidate discovery and development processes that involve 
proprietary know-how, information or technology that is not covered by patents. However, trade secrets can be difficult 
to protect. What constitutes a trade secret and what protections are available for trade secrets varies from state to state 
in the United States and country by country worldwide. We seek to protect our proprietary technology and processes, in 
part, by entering into confidentiality agreements with our employees, consultants, scientific advisors and contractors. We 
also seek to preserve the integrity and confidentiality of our data and trade secrets by maintaining physical security of our 
premises and physical and electronic security of our information technology systems. Security measures may be breached, 
and we may not have adequate remedies for any breach. In addition, our trade secrets may otherwise become known or 
be independently discovered by competitors. Although we expect all of our employees and consultants to assign their 
inventions to us, and all of our employees, consultants, advisors and any third parties who have access to our proprietary 
know-how, information or technology to enter into confidentiality agreements, we cannot provide any assurances that all 
such agreements have been duly executed or that our trade secrets and other confidential proprietary information will not 
be disclosed or that competitors will not otherwise gain access to our trade secrets or independently develop substantially 
equivalent information and techniques.

Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, 
fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be 
reduced or eliminated for non-compliance with these requirements.

Periodic maintenance fees, renewal fees, annuity fees and various other governmental fees on patents and applications 
are required to be paid to the USPTO and various governmental patent agencies outside of the United States in several 
stages over the lifetime of the patents and applications. The USPTO and various corresponding governmental patent 
agencies outside of the United States require compliance with a number of procedural, documentary, fee payment and 
other similar provisions during the patent application process and after a patent has issued. There are situations in which 
non-compliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss 
of patent rights in the relevant jurisdiction.

26

DIRECTORS’ REPORTOur success depends, in part, on our ability to protect our intellectual property and our technologies.

Our commercial success depends, in part, on our ability to obtain and maintain patent and trade secret protection for 
our technologies, our traits, and their uses, as well as our ability to operate without infringing upon the proprietary rights 
of others. If we do not adequately protect our intellectual property, competitors may be able to use our technologies and 
erode or negate any competitive advantage we may have, which could harm our business and ability to achieve profitability.

Filing, prosecuting and defending patents on product candidates in all countries around the world would be prohibitively 
expensive. In addition, we may at times in-license third-party technologies for which limited international patent protection 
exists and for which the time period for filing international patent applications has passed. Consequently, we may not 
be able to prevent third parties from practicing our inventions, or from selling or importing products made using our 
inventions. Potential competitors may use our technologies in jurisdictions where we have not obtained patent protection 
to develop their own products and further, may export otherwise infringing products to territories where we have patent 
protection but enforcement is difficult. These products may compete with our product candidates, if approved, and our 
patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.

Many companies have encountered significant problems in protecting and defending intellectual property rights around 
the world. The legal systems of certain countries, particularly certain developing countries, do not favour the enforcement 
of patents, trade secrets and other intellectual property protection, particularly those relating to biotechnology products, 
which could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation 
of our proprietary rights generally. Proceedings to enforce our patent rights could result in substantial costs and divert our 
efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted 
narrowly and our patent applications at risk of not issuing and could provoke third parties to assert claims against us. We 
may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if any, may not be commercially 
meaningful. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to 
obtain a significant commercial advantage from the intellectual property that we develop or license.

Risks Related to Our Reliance on Third Parties

The Company relies on third parties to conduct its pre-clinical studies and clinical trials. If those parties do not 
successfully carry out their contractual duties or meet expected deadlines, the Company’s drug candidates may not 
advance in a timely manner or at all.

In the course of discovery, pre-clinical testing and clinical trials, the Company relies on third parties, including laboratories, 
investigators, clinical contract research organizations (“CROs”), and manufacturers, to perform critical services. For 
example, the Company relies on third parties to conduct all of its pre-clinical and clinical studies. These third parties may 
not be available when the Company needs them or, if they are available, may not comply with all regulatory and contractual 
requirements or may not otherwise perform their services in a timely or acceptable manner, and the Company may need 
to enter into new arrangements with alternative third parties and the studies may be extended, delayed or terminated. 
These independent third parties may also have relationships with other commercial entities, some of which may compete 
with the Company. As a result of the Company’s dependence on third parties, it may face delays or failures outside of its 
direct control. These risks also apply to the development activities of collaborators, and the Company does not control their 
research and development, clinical trial or regulatory activities.

The Company has no direct control over the cost of manufacturing its drug candidates. Increases in the cost of 
manufacturing the Company’s drug candidates would increase the costs of conducting clinical trials and could adversely 
affect future profitability.

The Company does not intend to manufacture the drug product candidates in-house, and it will rely on third parties for 
drug supplies both for clinical trials and for commercial quantities in the future. The Company has taken the strategic 
decision not to manufacture active pharmaceutical ingredients (“API”) for the drug candidates, as these can be more 
economically supplied by third parties with particular expertise in this area. The Company outsources the manufacture of its 
drug products and their testing to FDA requirements. The Company uses contract facilities that are registered with the FDA, 
have a track record of large-scale API manufacture, and have already invested in capital and equipment. The Company has 
no direct control over the cost of manufacturing its product candidates. If the cost of manufacturing increases, or if the cost 
of the materials used increases, these costs may be passed on, making the cost of conducting clinical trials more expensive. 
Increases in manufacturing costs could adversely affect the Company’s future profitability if it was unable to pass all of the 
increased costs along to its customers.

27

Kazia Theraputics Limited Annual Report 2023Chairman and CEO’s LetterKey MilestonesIntroduction to  Kazia’s CEOPipeline ReviewEnvironment, Society and GovernanceFinancial ReportsRisks Related to our Securities

Enforceability of civil liabilities under the federal securities laws against the Company or the Company’s officers and 
directors may be difficult.

The Company is a public company limited by shares and is registered and operates under the Australian Corporations 
Act 2001. Half of the Company’s directors and officers reside outside of the United States. In addition, a substantial portion 
of the directly owned assets of the Company are located outside of the United States. As a result, it may be difficult or 
impossible for investors to effect service of process within the United States against the Company or its directors and 
officers or to enforce against them any of the judgments, including those obtained in original actions or in actions to 
enforce judgments of the U.S. courts, predicated upon the civil liability provisions of the federal or state securities laws of 
the United States. There is doubt as to the enforceability in the Commonwealth of Australia, in original actions or in actions 
for enforcement of judgments of U.S. courts, of civil liabilities predicated solely upon federal or state securities laws of the 
U.S., especially in the case of enforcement of judgments of U.S. courts where the defendant has not been properly served 
in Australia.

The trading price of the Company’s ordinary shares and American Depositary Shares (“ADSs”) is highly volatile. Your 
investment could decline in value and the Company may incur significant costs from class action litigations.

The trading price of the Company’s ordinary shares and ADSs is highly volatile in response to various factors, many of which 
are beyond the Company’s control, including:

•  unacceptable toxicity findings in animals and humans;

• 

lack of efficacy in human trials at Phase II stage or beyond;

•  announcements of technological innovations by the Company and its competitors;

•  new products introduced or announced by the Company or its competitors;

•  changes in financial estimates by securities analysts;

•  actual or anticipated variations in operating results;

•  expiration or termination of licenses, research contracts or other collaboration agreements;

•  conditions or trends in the regulatory climate in the biotechnology, pharmaceutical and genomics industries;

•  changes in the market values of similar companies;

•  changes in the broader macroeconomic environment;

• 

the liquidity of any market for the Company’s securities; and

•  additional sales by the Company of its shares.

In addition, equity markets in general and the market for biotechnology and life sciences companies in particular, have 
experienced substantial price and volume fluctuations that have often been unrelated or disproportionate to the operating 
performance of the companies traded in those markets. Further changes in economic conditions in Australia, the U.S., EU, 
or globally, could impact the Company’s ability to grow profitably. Adverse economic changes are outside the Company’s 
control and may result in material adverse effects on the Company’s business or results of operations. These broad market 
and industry factors may materially affect the market price of the Company’s ordinary shares and ADSs regardless of its 
development and operating performance. In the past, following periods of volatility in the market price of a company’s 
securities, securities class action litigation has often been instituted against that company. Such litigation, if instituted 
against the Company, could cause it to incur substantial costs and divert management’s attention and resources.

If the market price of the Company’s ADSs falls and remains below US$5.00 per share, under stock exchange rules, the 
Company’s stockholders will not be able to use such ADSs as collateral for borrowing in margin accounts. This inability 
to use ADSs as collateral may depress demand as certain institutional investors are restricted from investing in securities 
priced below US$5.00 and may lead to sales of such ADSs, creating downward pressure on and increased volatility in the 
market price of the Company’s ordinary shares and ADSs.

A decrease in the trading price of our ADSs could cause their delisting from NASDAQ.

Under NASDAQ rules, companies listed on the NASDAQ Capital Market are required to maintain a share price of at least 
US$1.00 per share to avoid delisting of their shares. If the share price declines below US$1.00 for a period of 30 consecutive 
business days, then that listed company would have 180 days to regain compliance with the US$1.00 per share minimum. In 
the event that the Company’s share price declines below US$1.00, it may be required to take action in order to comply with 
the NASDAQ rules that may be in effect at the time.

28

DIRECTORS’ REPORTYou are reliant on the depositary to exercise your voting rights and to receive distributions on ADSs and, as a result, you 
may be unable to exercise your voting rights on a timely basis or you may not receive certain distributions.

In certain circumstances, holders of ADSs may have limited rights relative to holders of ordinary shares. The rights 
of holders of ADSs with respect to the voting of ordinary shares and the right to receive certain distributions may be 
limited in certain respects by the deposit agreement entered into by us and The Bank of New York Mellon. For example, 
although ADS holders are entitled under the deposit agreement, subject to any applicable provisions of Australian 
law and of our Constitution, to instruct the depositary as to the exercise of the voting rights pertaining to the ordinary 
shares represented by the ADSs, and the depositary has agreed that it will try, as far as practical, to vote the ordinary 
shares so represented in accordance with such instructions, ADS holders may not receive notices sent by the depositary 
in time to ensure that the depositary will vote the ordinary shares. This means that, from a practical point of view, the 
holders of ADSs may not be able to exercise their right to vote. In addition, under the deposit agreement, the depositary 
has the right to restrict distributions to holders of the ADSs in the event that it is unlawful or impractical to make such 
distributions. We have no obligation to take any action to permit distributions to holders of our ADSs. As a result, holders 
of ADSs may not receive distributions.

There is a risk that we are, or will become, a passive foreign investment company, or PFIC, which will subject our U.S. 
investors to adverse tax rules.

There is a risk that we are, or will become, a passive foreign investment company, commonly referred to as a PFIC. Our 
treatment as a PFIC could result in a reduction in the after-tax return to the U.S. holders of our ordinary shares or ADSs and 
would likely cause a reduction in the value of such ordinary shares or ADSs. For U.S. federal income tax purposes, we will be 
classified as a PFIC for any taxable year in which either (i) 75% or more of our gross income is passive income, or (ii) at least 
50% of the average quarterly value of all of our assets for the taxable year produce or are held for the production of passive 
income. If we are classified as a PFIC for U.S. federal income tax purposes, highly complex rules will apply to U.S. holders 
owning ordinary shares or ADSs. Accordingly, you are urged to consult your tax advisors regarding the application of such 
rules. 

Currency fluctuations may adversely affect the price of our ordinary shares, ADSs.

Our ordinary shares are quoted in Australian dollars on the ASX and the ADSs are quoted in U.S. dollars on NASDAQ. 
Movements in the Australian dollar/U.S. dollar exchange rate may adversely affect the U.S. dollar price of the ADSs. In the 
past year the Australian dollar has generally weakened against the U.S. dollar. However, this trend may not continue and 
may be reversed.

Australian takeover laws may discourage takeover offers being made for us or may discourage the acquisition of a 
significant position in our ordinary shares and ADSs.

We are incorporated in Australia and are subject to the takeover laws of Australia. Among other things, we are subject 
to the Australian Corporations Act 2001, or the Corporations Act. Subject to a range of exceptions, the Corporations 
Act prohibits the acquisition of a direct or indirect interest in our issued voting shares if the acquisition of that interest 
will lead to a person’s voting power in us increasing to more than 20%, or increasing from a starting point that is above 
20% and below 90%. Australian takeover laws may discourage takeover offers being made for us or may discourage 
the acquisition of a significant position in our ordinary shares. This may have the ancillary effect of entrenching our 
board of directors and may deprive or limit our shareholders’ and ADS holders’ opportunity to sell their ordinary 
shares and ADSs and may further restrict the ability of our shareholders and ADS holders to obtain a premium from 
such transactions.

Subsequent events

Fast Track Designation from US FDA for paxalisib
Paxalisib was awarded Fast Track Designation (FTD) by the United States Food and Drug Administration (FDA) for the 
treatment of solid tumour brain metastases harbouring PI3K pathway mutations in combination with radiation therapy. 
The FDA’s decision to grant FTD was based on promising clinical data from an interim analysis of an ongoing phase 1 
clinical trial in which patients with brain metastases from a primary tumour are receiving paxalisib in combination with 
radiotherapy (NCT04192981). These clinical data were presented at the 2022 Annual Conference on CNS Clinical Trials 
and Brain Metastases, jointly organized by the Society for Neuro-Oncology (SNO) and the American Society for Clinical 
Oncology (ASCO), by Dr. Jonathan Yang, lead investigator in the clinical trial. All nine evaluable patients in the trial (100%) 
responded to the combination of paxalisib with radiotherapy. Published benchmarks suggest a typical response rate for 
radiotherapy alone to be around 20-40%.

Fast Track Designation is designed to expedite development of pharmaceutical products which demonstrate the potential 
to address unmet medical needs in serious or life threatening conditions. It provides Kazia with enhanced access to FDA, 
including opportunities for face-to-face meetings and written consultation throughout the remaining development of 
paxalisib. Drugs granted FTD may also be eligible for Accelerated Approval and Priority Review, which may result in faster 
product approval. Paxalisib was previously granted FTD for glioblastoma in August 2020, giving paxalisib now two largely 
independent opportunities to access the benefits of this designation.

29

Kazia Theraputics Limited Annual Report 2023Chairman and CEO’s LetterKey MilestonesIntroduction to  Kazia’s CEOPipeline ReviewEnvironment, Society and GovernanceFinancial ReportsAt-The-Market (ATM) Facility
During the month of July 2023 through to August 8 2023, the company raised total proceeds for the period of US$1.019 
million (AU$1.541 million). increasing the total shares outstanding to 236,349,374. Shares issued under the ATM are issued 
at the spot market price, with no discount, no accompanying warrants or options, and with banking fees approximately half 
of those associated with more traditional financing methods.

Resignation of Chairman
Kazia announced the resignation of Mr. Iain Ross as Chairman and non-executive director on 11 August 2023. The Board of 
Directors has elected Dr John Friend as Interim Chairman. 

No other matter or circumstance has arisen since 30 June 2023 that has significantly affected, or may significantly affect 
the consolidated entity’s operations, the results of those operations, or the consolidated entity’s state of affairs in future 
financial years.

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:

• 

• 

• 

• 

Interim results will be reported from the phase II PNOC clinical trial of paxalisib in combination with ONC201;

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; 
and

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

Environmental, social and governance (ESG) report

Environmental

The consolidated entity is not subject to any significant environmental regulation under Australian Commonwealth or 
State law. We are considering ways in which environmental impacts can be monitored however we do not foresee a material 
impact.

Kazia’s head office is located in one of the most sustainable carbon neutral commercial precincts. The serviced office is 
located in a building with a five star NABERS energy rating.

Social and Governance

Social and governance matters cover a vast range of potential issues including responsible business policies. Our policies 
set out our commitment to high social standards.

The following policies are in place and available on our website:

•  Anti-Corruption Compliance 

•  Continuous Disclosure

•  Corporate Governance

•  Expanded Access

•  Shareholder Communications

•  Whistleblower

Employees

The consolidated entity aims to ensure that it has a safe operating environment with an inclusive and diverse culture and the 
best talent and skills for our future success.

The following employee policies are in place:

•  Code of Business Conduct & Ethics

•  Whistleblowing

•  Recruitment and retention

• 

Inclusion and diversity

•  Parents returning to work

•  Education and training

•  Employee Share Option Plan

•  Health and safety

•  Equal Employment Opportunity and Diversity

•  Harassment and Discrimination

•  Anti-corruption and anti-bribery policies

•  Public disclosures

•  Securities trading

•  Scientific integrity

30

DIRECTORS’ REPORT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:

Iain Ross

Non-Executive Director, Chairman 
(Resigned 11 August 2023)

Qualifications:

B.Sc. (Hons). C Dir.

Experience and expertise:

Other current directorships:

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 
(NASDAQ:SLN), Executive Chairman of ReNeuron Group plc (LSE:RENE) and a 
Non-executive Director of BiVitctriX Therapeutics plc (LSE:BVX). 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 £600 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) and BiVictriX 
Therapeutics plc (LSE:BVX)

Former directorships (last 3 years):

Redx Pharma plc (LSE:REDX) and Palla Pharma Limited (ASX:PAL)

Special responsibilities:

Former member of Remuneration and Nomination Committee, Former member of 
Audit, Risk and Governance Committee.  

Contractual rights to Options:

None

Name:

Title:

Bryce Carmine

Non-Executive Director

Qualifications:

B.Sc., Biochemistry, Microbiology & Genetics

Experience and expertise:

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.

856,681 ordinary shares

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

Contractual rights to Options:

None

31

Kazia Theraputics Limited Annual Report 2023Chairman and CEO’s LetterKey MilestonesIntroduction to  Kazia’s CEOPipeline ReviewEnvironment, Society and GovernanceFinancial ReportsName:

Title:

Qualifications:

Experience and expertise:

Other current directorships:

Steven Coffey

Non-Executive Director

B. Comm, CA

Steven is a Chartered Accountant and registered company auditor and has over 
35 years of experience in the accounting and finance industry. Steven is a business 
and tax consultant with Charternet, the chartered accounting firm that merged with 
his accounting practice, Watkins Coffey Martin in February 2022. He is a director 
and principal of BC Advisory & Accountancy Services Pty Limited, a boutique 
accounting, tax and advisory practice.

Steven sits on the boards of a number of large private companies and private 
ancillary funds. He audits a number of large family companies and not-for-profit 
entities.

Former directorships (last 3 years):

Ansarada Group Limited (ASX: AND) formerly 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.

991,993 ordinary shares

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

Contractual rights to Options:

None

Name:

Title:

Dr James Garner

Chief Executive Officer, Managing Director - resigned 30 April 2023, terminated 
30 June 2023

Qualifications:

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

Experience and expertise:

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:

Antisense Therapeutics Limited (ASX:ANP)

Former directorships (last 3 years):

None

Name:

Title:

Ebru Davidson

Non-Executive Director - from 5 June 2023

Qualifications:

BSc, JD (Hons), AGIA, GAICD

Experience and expertise:

Ms Davidson is a highly experienced corporate lawyer and is currently the General 
Counsel for QBiotics Group Limited, an unlisted public Australian life sciences 
company. Prior to this, Ms Davidson was a partner at national law firm Thomson 
Geer Lawyers and has over 14 years’ experience in equity capital markets, private and 
public mergers and acquisitions, corporate transactions and corporate governance. 
Ms Davidson also has extensive experience in advising listed and unlisted entities on 
compliance and regulatory matters working closely with the Australian Securities and 
Investment Commission and Australian Securities Exchange.

Other current directorships:

Former directorships (last 3 years):

Interests in shares:

Interests in options:

None

None

None

None

32

DIRECTORS’ REPORTName:

Title:

Dr John Friend

Chief Executive Officer (appointed 1 May 2023) 
Managing Director  (appointed 1 August 2023) 
Interim Chairman of the Board (appointed 11 August 2023)

Qualifications:

B.A., M.D.

Experience and expertise:

Other current directorships:

Former directorships (last 3 years):

Interests in shares:

Interests in options:

Company secretary

Dr. Friend is a highly experienced physician executive who has previously worked 
with companies ranging from start-up biotechnology companies to multinational 
pharmaceutical companies.  Over the past 15 years, his focus has been in the 
oncology and hematology therapeutic space.

Dr. Friend is a US-trained physician who practiced medicine in North Carolina 
before transitioning to drug development. Before joining Kazia Therapeutics, he was 
Chief Medical Officer and member of the executive management team at Cellectar 
Biosciences, Inc, a US publicly traded biopharmaceutical company.

None

None

None

1,000,000 options with exercise price of $0.1500 expiring 3 March 2027 
3,000,000 options with exercise price of $0.1870 expiring 3 May 2027 

Kate Hill (CA, GAICD, BSc (Hons)) resigned as company secretary on 28 February 2023. 

Anna Sandham (BEc., Grad.Dip. AppCorpGov., FGIA,) was appointed as company secretary on 28 February 2023. 

Anna has more than 25 years’ experience as a company secretary and governance professional, working with ASX listed 
and privately owned companies. Anna is employed by Company Matters Pty Ltd (part of the Link Group). Prior to joining 
Company Matters in 2012, Anna was a Company Secretary at AMP Financial Services and prior to that was Company 
Secretary at Westpac Banking Corporation where she also led the secretariat function for the BT Financial Group. Anna has 
also held company secretarial roles within the private and public sectors, including NRMA Limited.

Anna holds a Bachelor of Economics (University of Sydney) and a Graduate Diploma of Applied Corporate Governance 
(Governance Institute of Australia). She is a Chartered Governance Professional, a Fellow of the Governance Institute of 
Australia and a member of its Legislative Review Committee.

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 2023, 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

11

11

12

9

-

12

12

12

11

-

3

3

4

-

-

4

4

4

-

-

-

2

2

-

-

-

2

2

-

-

Iain Ross

Bryce Carmine

Steven Coffey

James Garner

Ebru Davidson

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

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 consolidated entity, 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

33

Kazia Theraputics Limited Annual Report 2023Chairman and CEO’s LetterKey MilestonesIntroduction to  Kazia’s CEOPipeline ReviewEnvironment, Society and GovernanceFinancial Reports 
 
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 16 November 2022 when the shareholders approved the new constitution 
with an aggregate remuneration of $560,000.

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 Chairman’s fees increased to GBP12,000 per month for April, May and June 2023 to recognise the additional time the 
Chair spent securing the support of, and funds from major investors in the January 2023 fundraising through his personal and 
direct relationships; leading all discussions and negotiations with the current Chief Executive Officer and the incoming Chief 
Executive Officer about the position of Chief Executive Officer; and assisting the incoming Chief Executive Officer during the 
next short term period to secure additional funding for the business and to participate in 3rd party discussions as necessary.

In the event that a director’s appointment ceases other than for reasons (a) - (c)

(a)  if a director becomes disqualified from managing a corporation under the Corporations Act;

(b)  if a director is removed in accordance with section 203D of the Corporations Act; and

(c)  if, pursuant to the terms of the Constitution and the Listing Rules, a director is not re-elected to the Board after 

mandatory retirement and in particular, directly as a result of a corporate re-structuring or acquisition of the Company; 
and having carried out all duties required to facilitate such a transaction the non-executive directors will be entitled to a 
termination payment equivalent to 3 months fees and in the case of the Non- Executive Chairman 6 months fees.

The consolidated  entity issued 7,930,000 share options under the ESOP during the financial year ended 30 June 2023, of 
which 6,000,000 were issued to KMP.

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 2023.

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.

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 
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 10 November 2021.

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

34

DIRECTORS’ REPORT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 five days prior to the date of issue exercise price and may include a premium, or at fair market value 
on grant date. 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 7,930,000 share options under the ESOP during the financial year ended 30 June 2023, of 
which 6,000,000 were issued to KMP.

Any change to the ESOP will require approval by shareholders.

Use of remuneration consultants
During the year ended 30 June 2023 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 (resigned 11 August 2023)

•  Bryce Carmine - Non-Executive Director

•  Steven Coffey - Non-Executive Director

•  Dr James Garner - Managing Director, CEO - resigned 30 April 2023, terminated 30 June 2023

•  Ebru Davidson - Non-Executive Director - from 5 June 2023

And the following persons:

•  Kate Hill - Company Secretary - resigned 28 February 2023

•  John Friend - Chief Medical Officer - 15 November 2021 to 30 April 2023

•  John Friend - Chief Executive Officer - from 1 May 2023

•  Karen Krumeich - Chief Financial Officer

Short-term benefits

Termination 
payments 
and 
bonuses 
accrued at 
year end – 
monetary
$

Move- 
ments in  
accrued  
leave 
Non- 
monetary
$

Move- 
ments in  
long 
service  
leave  
Non- 
monetary
$

Salary 
& fees 
Cash
$

2023

Non-Executive Directors:

I Ross*

B Carmine

S Coffey

E Davidson

175,016

85,000

85,000

6,440

Executive Directors:

-

-

-

-

J Garner**

543,750

365,838

Other Key Management Personnel:

-

-

-

-

-

J Friend***

742,685

248,869

52,065

K Krumeich***

592,168

120,664

6,961

K Hill

81,813

-

-

2,311,872

735,371

59,026

-

-

-

-

-

-

-

-

-

Post-
employment 
benefits

Share-
based 
payments

Health- 
care  
&  
Insurance 

Cash

$

-

-

-

-

-

Pension 
and 
Super-
annuation
$

Options 
Equity-
settled
$

Total
$

-

8,925

8,925

676

74

74

74

-

175,090

93,999

93,999

7,116

77,022

263,945 1,250,555

28,448

13,797

-

31,669

473,177 1,576,913

22,409

295,150 1,051,149

-

13,366

95,179

42,245

149,626 1,045,860 4,344,000

* 

** 

Salary paid in UK pounds, but disclosed in Australian dollars using conversion rate of 0.5571

 Amounts shown are for the full year, not just to resignation date of 30 April 2023. Termination payment includes annual leave owing at 
30 June 2023, 4 months’ salary and superannuation in lieu of notice.

***  Salary paid in USD, but disclosed in Australian dollars using conversion rate of 0.6755. Guaranteed bonus accrued at year end rate.

35

Kazia Theraputics Limited Annual Report 2023Chairman and CEO’s LetterKey MilestonesIntroduction to  Kazia’s CEOPipeline ReviewEnvironment, Society and GovernanceFinancial Reports 
Short-term benefits

Salary 
& fees 
Cash
$

Movements 
in accrued 
leave 
monetary
$

Bonus 
Cash
$

Movements 
in long 
service 
leave  
Non-
monetary
$

2022 restated

Post-
employment 
benefits

Share-
based 
payments

Healthcare 
& 
Insurance 
Cash
$

Pension 
and 
Super-
annuation
$

Options 
Equity-
settled
$

Total
$

Non-Executive Directors:

I Ross*

B Carmine

S Coffey

150,546

85,000

85,000

Executive Directors:

-

-

-

-

-

-

-

-

-

J Garner**

530,500

325,000

35,905

12,074

-

-

-

-

-

46,159

196,705

8,500

8,500

46,159

139,659

46,159

139,659

85,550

1,165,618

2,154,647

Other Key Management Personnel:

J Friend***

430,279

201,978

K Krumeich****

277,972

-

G Heaton**

104,000

30,000

K Hill** 

195,501

21,000

34,336

15,272

2,337

-

-

-

26,819

6,307

7,763

250,194

951,369

14,182

100,331

414,064

19,262

-

-

-

13,400

14,029

183,028

-

26,478

242,979

1,858,798

577,978

87,850

31,336

33,126

137,895

1,695,127

4,422,110

* 

Salary paid in UK pounds, but disclosed in Australian dollars using conversion rate of 0.5447

** 

 2022 comparative figures have been updated and corrected to align with the vesting dates per the employee accepted documentation.

*** 

 Salary paid in USD, but disclosed in Australian dollars using conversion rate of 0.7192. Pension amount is retirement benefit paid on employee’s 
behalf, paid in USD, but disclosed at an average rate of 0.7137

****   Salary paid in USD, but disclosed in Australian dollars using conversion rate of 0.7195. Pension amount is retirement benefit paid on employee’s 

behalf, paid in USD, but disclosed at an average rate of 0.7195

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

Name

Non-Executive Directors:

I Ross

B Carmine

S Coffey

Executive Directors:

J Garner

Other Key Management 
Personnel:

J Friend

K Krumeich

G Heaton

K Hill

Fixed remuneration

STI

At risk - STI

At risk - LTI

2023

2022 
restated

2023

2022 
restated

99.96%

99.92%

99.92%

76.53%

66.95%

66.95%

-

-

-

-

-

-

2023

0.04%

0.08%

0.08%

2022 
restated

23.47%

33.05%

33.05%

49.64%

30.82%

29.25%

15.08%

21.11%

54.10%

54.12%

60.44%

-

52.47%

75.77%

75.95%

85.96%

80.46%

15.78%

11.48%

-

-

21.23%

-

16.39%

8.64%

30.01%

28.08%

-

26.30%

24.23%

7.66%

14.04%

10.90%

36

DIRECTORS’ REPORTConsequences of performance on shareholder wealth
Shareholder wealth in a company engaged in drug development is best delivered through retention of KMPs with an expert 
level of knowledge of our drug candidates. Non-performance vesting options best deliver this value to investors, through 
driving an increased retention of KMPs. 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.

Enterprise Value

Total bonuses paid to KMP

Number of bonus participants

Share options issued to KMP

June 
2019

June 
2020

June  
2021

June 
2022

June 
2023

15,715,234 34,751,206 145,349,234 77,973,444 31,243,461

125,400

212,500

356,400

577,978

3

3

6

4

-

-

100,000 1,300,000

2,100,000 4,300,000 6,000,000

Number of KMP granted options

2

3

6

5

2

Voting and comments made at the consolidated entity’s last Annual General Meeting
The consolidated entity received 62.03% of “yes” votes on its Remuneration Report for the financial year ending 30 June 
2022. As more than 25% of the votes were cast against this resolution, this constitutes a first strike for the purposes of the 
Corporations Act 2001 (Cth).

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. Guaranteed bonuses for J Friend and K Krumeich accrued at year end but unpaid.

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. Notice required 
is 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:

John Friend

Chief Executive Officer

Agreement commenced:

1 May 2023

Term of agreement:

Full-time employment

Details:

Name:

Title:

Base salary for the year ending 30 June 2023 of USD550,000 and healthcare and 
insurance benefits to be reviewed annually by the Remuneration and Nomination 
Committee. A minimum payout of 50% of bonus target agreed for 2023 of 
USD165,000. John’s employment with the consolidated entity is at-will, and if 
terminated, it must pay any outstanding entitlements due to him.

Karen Krumeich

Chief Financial Officer 

Agreement commenced:

3 January 2022

Term of agreement:

Full time employment

Details:

Base salary for the year ending 30 June 2023 of USD400,000 and healthcare and 
insurance benefits to be reviewed annually by the Remuneration and Nomination 
Committee. A minimum payout of 50% of bonus target agreed for 2023 of 
USD80,000. Karen's employment with the consolidated entity is at-will, and if 
terminated, it must pay any outstanding entitlements due to her.

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

37

Kazia Theraputics Limited Annual Report 2023Chairman and CEO’s LetterKey MilestonesIntroduction to  Kazia’s CEOPipeline ReviewEnvironment, Society and GovernanceFinancial ReportsShare-based compensation

Issue of options
The options issued on 3 March 2023 were to John Friend and Karen Krumeich 1,000,000 options each with an exercise 
price set at the volume weighted average (VWAP) of shares during the 5 trading days immediately prior to the issue date 
with a value of $101,376. The options issued on 3 May 2023 were 3,000,000 options to John Friend and 1,000,000 options 
to Karen Krumeich, with an exercise price set at the volume weighted average (VWAP) of shares during the 5 trading days 
immediately prior to the issue date, with values of $333,300 and $111,100 respectively. Service conditions are that any 
unvested options are forfeited 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 2021.

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.

Grant date

3 March 2023

3 March 2023

3 March 2023

3 March 2023

3 May 2023

3 May 2023

3 May 2023

Vesting date and 
exercisable date

3 July 2023

3 January 2024

3 July 2024

3 January 2025

3 May 2023

3 May 2024

3 May 2025

Expiry date

3 March 2027

3 March 2027

3 March 2027

3 March 2027

3 May 2027

3 May 2027

3 May 2027

Exercise  
price

$0.1500

$0.1500

$0.1500

$0.1500

$0.1870

$0.1870

$0.1870

Approval for the issue was obtained under ASX listing rule 10.14.

Additional disclosures relating to key management personnel

Fair value  
per option 
at grant date

$0.10138

$0.10138

$0.10138

$0.10138

$0.11110

$0.11110

$0.11110

Option holding
All options are issued under the Employee Share Option Plan. Unvested options are forfeited upon cessation of 
employment with the Company. The number of options 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

I Ross

B Carmine

S Coffey

J Garner*

K Hill**

J Friend

K Krumeich

Balance at  
the start of  
the year

Granted as  

Remuneration

Forfeited

400,000

400,000

400,000

4,500,000

200,000

-

-

-

-

-

Disposed 
(for KMP 
reporting 
purposes 
only)

-

-

-

-

-

-

(1,450,000)

(3,050,000)

(100,000)

(100,000)

Balance at  
the end of  
the year

400,000

400,000

400,000

-

-

800,000

4,000,000

800,000

2,000,000

-

-

-

-

4,800,000

2,800,000

7,500,000

6,000,000

(1,550,000)

(3,150,000)

8,800,000

* 

Disposal for KMP reporting purposes only. J Garner still holds 3,050,000 options.

**  Disposal for KMP reporting purposes only. K Hill still holds 100,000 options.

38

DIRECTORS’ REPORT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:

I Ross

B Carmine

S Coffey

J Garner*

K Hill*

E Davidson

Balance at  
the start of  
the year

Off market 
additions/
disposals

Share 
Purchase  

Plan

Purchased  
on market

Disposed* (For 
KMP reporting 
purposes only)

Balance at  
the end of  
the year

1,075,001

419,862

484,265

500,000

-

135,000

135,000

-

320,000

(270,000)

-

2,799,128

-

-

272,728

181,819

272,728

181,819

-

-

175,000

120,000

100,000

100,000

-

-

-

-

-

1,522,729

856,681

991,993

(781,819)

(50,000)

-

-

-

-

909,094

495,000

(831,819)

3,371,403

* 

Shares held on ceasing to be KMP are treated as a disposal in the table above.

Other transactions with key management personnel and their related parties
Iain Ross (from his company Gladstone Consultancy Partnership) was reimbursed for travel and accommodation expenses 
of $114,684.

James Garner was reimbursed travel and accommodation expenses of $149,382.

Kate Hill (from her company Sabio Solutions Pty Ltd) was reimbursed for expenses of $74.

John Friend was for reimbursed travel and accommodation expenses of $67,440.

Karen Krumeich was reimbursed for travel and accommodation expenses of $63,157.

This concludes the remuneration report, which has been audited.

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

13 November 2019

13 January 2020

9 November 2020

9 November 2020

4 January 2021

9 September 2021

16 November 2021

16 November 2021

16 November 2021

1 February 2022

24 May 2022

3 March 2023

3 May 2023

Expiry date

4 January 2024

13 January 2025

13 January 2025

13 November 2024

4 January 2025

21 June 2026

16 November 2025

16 November 2025

16 November 2026

1 February 2027

24 May 2027

3 March 2027

3 May 2027

Exercise  
Price

Closing  
Balance

$0.4925 

$0.8812 

$0.8812 

$1.1320 

$1.6900 

$1.3650 

$1.6900 

$2.2400 

$1.5600 

$0.9400 

$0.7800 

$0.1500 

$0.1870 

1,200,000

187,500

600,000

1,200,000

187,500

100,000

750,000

500,000

800,000

1,225,000

100,000

3,930,000

4,000,000

14,780,000

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.

No ordinary shares of Kazia Therapeutics Limited were issued during the year ended 30 June 2023 and up to the date of 
this report on the exercise of options granted.

39

Kazia Theraputics Limited Annual Report 2023Chairman and CEO’s LetterKey MilestonesIntroduction to  Kazia’s CEOPipeline ReviewEnvironment, Society and GovernanceFinancial ReportsIndemnity and insurance of officers

The consolidated entity has 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.

Non-audit services

Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the 
auditor are outlined in note 26 to the financial statements.

The Directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by another 
person or firm on the auditor’s behalf), is compatible with the general standard of independence for auditors imposed by 
the Corporations Act 2001.

The Directors are of the opinion that the services as disclosed in note 26 to the financial statements do not compromise the 
external auditor’s independence requirements of the Corporations Act 2001 for the following reasons:

•  all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity 

of the auditor; and

•  none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code 
of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board, including 
reviewing or auditing the auditor’s own work, acting in a management or decision-making capacity for the Company, 
acting as advocate for the Company or jointly sharing economic risks and rewards. All services have been pre-approved 
by the Audit, Risk and Governance Committee.

Officers of the Company who are former partners of BDO Audit Pty Ltd

There are no officers of the company who are former partners of BDO 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

BDO 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

Dr John Friend

Interim Chairman, Managing Director, 
Chief Executive Officer

31 August 2023

Sydney

Karen Krumeich

Chief Financial Officer

40

DIRECTORS’ REPORT 
AUDITOR’S INDEPENDENCE DECLARATION

41

Kazia Theraputics Limited Annual Report 2023AUDITOR’S INDEPENDENCE DECLARATIONChairman and CEO’s LetterKey MilestonesIntroduction to  Kazia’s CEOPipeline ReviewEnvironment, Society and GovernanceFinancial Reports  Level 11, 1 Margaret Street  Sydney NSW 2000 Australia Tel: +61 2 9251 4100 Fax: +61 2 9240 9821 www.bdo.com.au BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.    DECLARATION OF INDEPENDENCE BY GARETH FEW TO THE DIRECTORS OF KAZIA THERAPEUTICS LIMITED   As lead auditor of Kazia Therapeutics Limited for the year ended 30 June 2023, I declare that, to the best of my knowledge and belief, there have been: 1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and 2. No contraventions of any applicable code of professional conduct in relation to the audit.  This declaration is in respect of Kazia Therapeutics Limited and the entities it controlled during the period.   Gareth Few  Director  BDO Australia Ltd Sydney 31 August 2023 FINANCIAL REPORT

STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
For the year ended 30 June 2023

Revenue and other income

Other income

Finance income

Expenses

Research and development expense

General and administrative expense

Commercialisation expense

Operating loss

Gain on remeasurement  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

Consolidated

2023
$

555

22,558

2022 
restated
$

24,956 

2,094 

(15,564,070)

(20,168,631)

(8,583,012)

(5,113,511)

-

(127,043)

(24,123,969)

(25,382,135)

3,387,697

-

(20,736,272)

(25,382,135)

271,092

368,080

(20,465,180)

(25,014,055)

110,248

110,248

34,615

34,615

(20,354,932)

(24,979,440)

Cents

(11.23)

(11.23)

Cents

(18.88)

(18.88)

Note

7

8

18

9

31

31

Refer to note 4 for detailed information on restatement of comparatives. 

Refer to note 5 for detailed information on reclassification of comparatives.

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

42

STATEMENT OF FINANCIAL POSITION
As at 30 June 2023

Assets

Current assets

Cash and cash equivalents

Trade and other receivables

Other assets

Total current assets

Non-current assets

Intangibles

Trade & other receivables - non-current

Total non-current assets

Total assets

Liabilities

Current liabilities

Trade and other payables

Borrowings

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

Consolidated

2022 
restated
$

1 July 
2021 
restated
$

Note

2023
$

10

11

13

14

12

15

16

17

18

19

17

18

20

21

5,241,197

3,899,154

1,632,472

7,361,112

27,586,760 

90,975

84,362 

1,997,205

1,719,696 

10,772,823

9,449,292

29,390,818 

17,269,432

19,138,892

21,008,312 

42,922

7,300,870

6,693,628 

17,312,354

26,439,762

27,701,940 

28,085,177

35,889,053

57,092,758 

4,328,949

3,760,120

4,932,660 

1,796,500

1,841,052

689,802

750,000

368,616

758,840

–

229,337 

791,139

7,565,251

6,728,628

5,953,136

2,289,269

2,560,361

2,928,441

59,323

116,596

54,684

6,120,783

8,208,945

10,303,302

8,469,375

10,885,902

13,286,427

16,034,626

17,614,530

19,239,563 

12,050,551

18,274,523

37,853,195 

97,452,246

84,480,249

80,290,062 

–

–

464,000

3,680,876

2,411,665

1,300,566 

(89,082,571)

(68,617,391)

(44,201,433)

12,050,551

18,274,523

37,853,195 

Refer to note 4 for detailed information on restatement of comparatives. 

Refer to note 5 for detailed information on reclassification of comparatives.

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

4343

Kazia Theraputics Limited Annual Report 2023Chairman and CEO’s LetterKey MilestonesIntroduction to  Kazia’s CEOPipeline ReviewEnvironment, Society and GovernanceFinancial ReportsFINANCIAL REPORT

STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2023

Consolidated

Balance at 1 July 2021  
(as originally reported)

Contributed
equity
$

Other
contributed
equity
$

Foreign
currency
translation
reserve
$

Share
based
payments
reserve
$

Accumulated

losses Total equity
$

$

80,290,062

464,000

(453,320)

1,753,886 (44,203,909)

37,850,719

Adjustment for correction of error

-

-

-

-

2,476

2,476

Balance at 1 July 2021 - restated

80,290,062

464,000

(453,320)

1,753,886

(44,201,433)

37,853,195

Loss after income tax benefit for 
the year (restated)

Other comprehensive income 
for the year, net of tax

Total comprehensive income for 
the year

Transactions with owners in their 
capacity as owners:

Shares issued (note 20)

Share issue costs (note 20)

Immaterial reclassification

Issue of shares on exercise of 
options

-

-

-

4,202,222

(492,735)

-

16,700

-

-

-

-

-

-

-

Cancellation of convertible note

464,000

(464,000)

Share based payments (note 35)

Expired options

-

-

Balance at 30 June 2022 restated 

84,480,249

-

-

-

-

34,615

34,615

-

-

(433,333)

-

-

-

-

-

-

(25,014,055)

(25,014,055)

-

34,615

(25,014,055)

(24,979,440)

-

-

4,202,222

(492,735)

433,333

-

-

-

-

-

(5,622)

5,622

16,700

-

1,674,581

-

-

-

1,674,581

(159,142)

159,142

-

(852,038)

3,263,703

(68,617,391)

18,274,523

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

44

STATEMENT OF CHANGES IN EQUITY CONTINUED
For the year ended 30 June 2023

Contributed
equity
$

84,480,249

-

-

-

Consolidated

Balance at 1 July 2022

Loss after income tax benefit 
for the year

Other comprehensive income 
for the year, net of tax

Total comprehensive income  
for the year

Transactions with owners in their 
capacity as owners:

Shares issued (note 20)

Share issue costs (note 20)

13,372,747

(400,750)

Share based payments (note 35)

Expired options  

-

-

Balance at 30 June 2023

97,452,246

Other
contributed
equity
$

Foreign 
currency
translation 
reserve
$

Share 
based
payments 
reserve
$

Accumulated 

losses Total equity
$

$

-

-

-

-

-

-

-

-

-

(852,038)

3,263,703

(68,617,391)

18,274,523

-

110,248

110,248

-

-

-

-

-

-

-

-

-

1,159,125

(162)

(20,465,180)

(20,465,180)

-

110,248

(20,465,180)

(20,354,932)

-

-

-

-

13,372,747

(400,750)

1,159,125

(162)

(741,790)

4,422,666 (89,082,571)

12,050,551

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

4545

Kazia Theraputics Limited Annual Report 2023Chairman and CEO’s LetterKey MilestonesIntroduction to  Kazia’s CEOPipeline ReviewEnvironment, Society and GovernanceFinancial ReportsFINANCIAL REPORT

STATEMENT OF CASH FLOWS
For the year ended 30 June 2023

Cash flows from operating activities

Payments to suppliers (inclusive of GST)

Interest received

Government grant

Bad debt recovery

Net cash used in operating activities

Cash flows from investing activities

Payment of milestone relating to contingent consideration

Net cash used in investing activities

Cash flows from financing activities

Proceeds from issue of shares - net of issuance costs

Net cash from financing activities

Net decrease 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

Consolidated

Note

2023
$

2022 
restated
$

(15,179,270)

(22,787,619)

23,113

-

- 

10,000 

14,956 

(15,156,157)

(22,762,663)

-

-

(2,364,732)

(2,364,732)

30

18

20

12,971,997

12,971,997

3,726,187

3,726,187

(2,184,160)

(21,401,208)

7,361,112

27,586,760

64,245

5,241,197

1,175,560

7,361,112

Cash and cash equivalents at the end of the financial year

10

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

46

NOTES TO THE  
FINANCIAL STATEMENTS
30 June 2023

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 31 August 2023. 
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 2023. 
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 $20,465,180 (2022: $25,104,055), was in a net current 
asset position of $3,207,572 (2022: $2,702,664) and had net cash outflows from operating activities of $15,156,157 
(2022:$22,762,663) for the year ended 30 June 2023. 

As at 30 June 2023 the consolidated entity had cash in hand and at bank of $5,241,197 (2022: $7,361,112).

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 Company has not generated significant revenues nor does the company anticipate 
generating revenues in the near future. 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. During the month of 
July 2023 through 7 August 2023, the Company raised total proceeds for the period of US$1,019,769 (A$1,540,918) using 
the ATM facility and continues to seek additional funding sources both in Australia and overseas.

An ‘at-the-market’ equity program (ATM) with Oppenheimer & Co. Inc. (Oppenheimer), as sales agent was established 
in May 2022. Under the ATM, Kazia may offer and sell via Oppenheimer the remaining capacity of $US26.8million 
(2022 $US32.04million) of its ordinary shares, in the form of American Depository Shares (ADSs), with each ADS 
representing ten ordinary shares. Kazia entered into an Equity Distribution Agreement, dated as of 22 April 2022 
(the Sales Agreement), with Oppenheimer, acting as sales agent. for an initial capacity of $US35million. During the year 
ended 30 June 2023 $US4,203,221 (2022 $US2,956,036) was drawn down from the ATM facility.

The ATM allows the Company to raise capital dynamically in the market, with no discount, no warrant coverage, and 
modest banking fees, allowing it to fund operations with minimal dilution to existing shareholders. 

47

Kazia Theraputics Limited Annual Report 2023Chairman and CEO’s LetterKey MilestonesIntroduction to  Kazia’s CEOPipeline ReviewEnvironment, Society and GovernanceFinancial ReportsNote 2. Significant accounting policies continued

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 which may cast significant doubt on 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.

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. 

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 2023 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.

48

FINANCIAL REPORTNOTES TO THE  FINANCIAL STATEMENTS CONTINUED30 June 2023Note 2. Significant accounting policies continued

Foreign currency translation

The financial statements are presented in Australian dollars.

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.

Financial Instruments

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; and

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 consolidated entity’s cash and cash equivalents, trade and most other 
receivables fall into this category of financial instruments. 

Classification and measurement of financial liabilities
The consolidated entity’s financial liabilities comprise trade and other payables. Financial liabilities, borrowings and 
contingent consideration for business combination and licensing agreement acquisitions are initially measured at fair 
value, and, where applicable, adjusted for transaction costs unless the consolidated entity designated a financial liability 
at fair value through profit or loss. Subsequently, financial liabilities are measured at amortised cost using the effective 
interest method, except for contingent consideration in a business combination, which is measured at fair value.

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. 

4949

Kazia Theraputics Limited Annual Report 2023Chairman and CEO’s LetterKey MilestonesIntroduction to  Kazia’s CEOPipeline ReviewEnvironment, Society and GovernanceFinancial Reports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 consolidated entity 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 recognised will 
not occur. Milestone payments that are not within the control of the consolidated entity, 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. 

Grant income
Grants from governments are recognised at their fair value when there is a reasonable assurance that the grant will be 
received and the Company will comply with all attached conditions. Government grants relating to operating costs are 
recognised in the Statements of Comprehensive Income as grant income. A New South Wales Export Development 
Grant was received in the previous financial year. 

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

50

FINANCIAL REPORTNOTES TO THE  FINANCIAL STATEMENTS CONTINUED30 June 2023Note 2. Significant accounting policies continued

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.

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. 
Management believes that historical tax losses are not expected to be available for offset against the deferred tax liability 
at 30 June 2023. 

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. 

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Kazia Theraputics Limited Annual Report 2023Chairman and CEO’s LetterKey MilestonesIntroduction to  Kazia’s CEOPipeline ReviewEnvironment, Society and GovernanceFinancial ReportsNote 2. Significant accounting policies continued

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. 

Intangible assets

Separately acquired intangible assets are shown at historical cost. The cost of intangible assets acquired as part of a 
business combination is their fair value at the acquisition date. They have a finite useful life and are subsequently carried 
at cost less accumulated amortisation and impairment losses. 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 acquired as part of a business combination, 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 acquired separately, 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. 

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. 

52

FINANCIAL REPORTNOTES TO THE  FINANCIAL STATEMENTS CONTINUED30 June 2023Note 2. Significant accounting policies continued

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. 

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 value of the instruments is measured by reference to the fair value of the underlying instruments on grant date, as 
required by AASB2 Share-Based Payments. 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.

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.

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Kazia Theraputics Limited Annual Report 2023Chairman and CEO’s LetterKey MilestonesIntroduction to  Kazia’s CEOPipeline ReviewEnvironment, Society and GovernanceFinancial ReportsNote 2. Significant accounting policies continued

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 Options 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.

54

FINANCIAL REPORTNOTES TO THE  FINANCIAL STATEMENTS CONTINUED30 June 2023Note 2. Significant accounting policies continued

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.

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. 

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.

5555

Kazia Theraputics Limited Annual Report 2023Chairman and CEO’s LetterKey MilestonesIntroduction to  Kazia’s CEOPipeline ReviewEnvironment, Society and GovernanceFinancial ReportsNote 3. Critical accounting judgements, estimates and assumptions continued

Acquisition of intangible assets

During the 2017 financial year, the consolidated entity acquired the rights to develop and commercialise paxalisib, as 
part of a business combination from Genentech. Significant judgement was required in determining that the transaction 
was a business combination and in relation to the identification and valuation of assets and liabilities acquired. 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 and the timing thereof.

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.

Impairment of licensing agreements and other indefinite life intangible assets

The consolidated entity assesses impairment of licensing agreements 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. Restatement of comparatives 

During the year ended 30 June 2023, the calculation of the EVT-801 asset and its contingent consideration was 
found to contain errors as discounting for the time value of money was not taken into account on initial recognition. 
The contractual payments in relation to the milestones gave rise to a financial liability at acquisition. The cost of the 
intangible asset should comprise the initial payment plus an amount reflecting the fair value of the other contingent 
payments determined using a probability–weighted estimation. These values should be discounted to reflect the time 
value of money at the time of acquisition in April 2021. Management have utilised an Incremental Borrowing Rate of 6% 
to discount the future cash flows. The Incremental Borrowing Rate reflects the assumed credit rating of the Company. 
The error resulted in a material overstatement of the EVT-801 asset and a corresponding overstatement of the liability at 
acquisition. The impact of this error is noted below with the restated balances disclosed in note 14 and 18.

56

FINANCIAL REPORTNOTES TO THE  FINANCIAL STATEMENTS CONTINUED30 June 2023Note 4. Restatement of comparatives continued

Consolidated 
statement of 
financial position

Intangibles -  
licensing agreement 

Less Accumulated 
amortisation

Current contingent 
consideration

Non-Current 
contingent 
consideration

30 June 
2021 
Reported 

Increase/ 
(decrease)

1 July 2021 
Restated

30 June 
2022 
Reported

Increase/ 
(decrease)

30 June 
2022 
 Restated

 27,265,551 

 (1,044,401)

 26,221,150 

 27,265,551 

 (1,044,401)

 26,221,150 

 (5,262,958)

 50,120 

 (5,212,838)

 (7,215,899)

 133,641 

 (7,082,258)

 22,002,593 

 (994,281)

 21,008,312 

 20,049,652 

 (910,760)

 19,138,892 

 (3,164,557)

 2,373,418 

 (791,139)

 (758,840)

 -   

 (758,840)

 (8,926,641)

 (1,376,661)

 (10,303,302)

 (8,755,941)

 546,996 

 (8,208,945)

 (12,091,198)

 996,757 

 (11,094,441)

 (9,514,781)

 546,996 

 (8,967,785)

Net Assets

 37,850,719 

 2,476 

 37,853,195 

 18,638,287 

 (363,764)

 18,274,523 

Accumulated losses 

 (44,203,909)

 2,476 

 (44,201,433)

 (68,253,627)

 (363,764)

 (68,617,391)

Total equity 

 37,850,719 

 2,476 

 37,853,195 

 18,638,287 

 (363,764)

 18,274,523 

Consolidated 
statement of profit 
and loss

Research and 
development expense 
(Amortisation)

General and 
administrative expense 
(foreign exchange 
impact)

Loss on revaluation 
of contingent 
consideration

Commercialisation 
expense

Loss before tax 

Income tax benefit 

Loss after tax

Impact on basic and 
diluted earnings 
per share increase/
(decrease) in earning 
per share

Basic loss for the year 
attributable to equity 
holders

Diluted loss for the 
year attributable to 
equity holders

 30 June 
2022 

Increase/ 
(decrease)

30 June 
2022 
 Restated

 (20,252,152)

 83,521 

 (20,168,631)

 (4,511,463)

 (449,761)

 (4,961,224)

 (152,287)

 (127,043)

 -   

 -   

 (152,287)

 (127,043)

 (25,015,895)

 (366,240)

 (25,382,135)

 368,080 

 -   

 368,080 

 (24,647,815)

 (366,240)

 (25,014,055)

 Cents 

 Cents 

 Cents 

 (18.61)

 (0.27)

 (18.88)

 (18.61)

 (0.27)

 (18.88)

5757

Kazia Theraputics Limited Annual Report 2023Chairman and CEO’s LetterKey MilestonesIntroduction to  Kazia’s CEOPipeline ReviewEnvironment, Society and GovernanceFinancial ReportsNote 5. Reclassification of comparatives

During the preparation of the financial statements for the current year, a reclassification between borrowings and 
other assets was performed to better reflect the insurance funding premium utilised by the Company, a reclassification 
of non-current annual leave employee benefit to current employee benefits and a reclassification between loss on 
remeasurement of contingent consideration and general and administrative expense to accurately reflect the impact of 
the unwinding of discounting contingent consideration for the paxalisib.

Other assets

Borrowings

Current employee benefits

Non-current employee benefits

 30 June 
2022 
Restated

30 June 
2022 
 Reclassified

Movement

 156,153 

 1,841,052 

 1,997,205 

 -   

 1,841,052 

 1,841,052 

 166,196 

 319,017 

 202,386 

 (202,386)

 368,582 

 116,631 

Loss on remeasurement of contingent consideration

 (152,287)

 152,287 

 -   

General and administrative expense

 (4,961,224)

 (152,287)

 (5,113,511)

Note 6. 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. 

Note 7. Other income

Subsidies and grants

Bad debt recovery

Other sundry income

Other income

Consolidated

2023
$

-

-

555 

555

2022
$

10,000 

14,956 

-

24,956

58

FINANCIAL REPORTNOTES TO THE  FINANCIAL STATEMENTS CONTINUED30 June 2023Note 8. Expenses

Loss before income tax includes the following specific expenses:

Research and development 

EVT-801 program costs

Cantrixil program costs

Paxalisib program costs

Scientific Advisory Board costs

Employee benefits expense 

- salaries & wages and staff benefits

- superannuation

- share based payment

Total research & development (excluding amortisation)

Amortisation

Amortisation

Total research and development

Leases

Expense relating to short term leases

Employee benefits expense G&A

- salaries & wages and staff benefits

- superannuation

- share based payments

Total employee benefits expense G&A

Consolidated

2023
$

2022
restated
$

5,059,589

2,519,673 

4,745 

11,614 

5,618,047

13,713,454 

30,899

-  

2,250,149

1,664,572 

29,611

701,570

25,198 

364,700 

13,694,610

18,299,211 

1,869,460 

1,869,420 

15,564,070 

20,168,631 

152,049 

73,138 

1,467,447

1,674,344 

101,765

457,555

2,026,767

129,241 

1,309,880 

3,113,465 

5959

Kazia Theraputics Limited Annual Report 2023Chairman and CEO’s LetterKey MilestonesIntroduction to  Kazia’s CEOPipeline ReviewEnvironment, Society and GovernanceFinancial ReportsNote 9. 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 25%

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

Amortisation of intangibles

Share-based payments

Gain/loss on remeasurement of contingent consideration  

Adjustment recognised for prior periods 

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

Tax losses and timing differences not recognised

Income tax benefit

Tax losses not recognised

Consolidated

2023
$

2022
restated
$

(20,736,272)

(25,382,135)

(5,184,068)

(6,345,534)

467,357  

288,868

(846,924)

467,355 

418,645

38,063 

(5,274,767)

(5,421,471)

-  

-  

16,265 

(113,258)

5,003,675

5,150,384

(271,092)

(368,080)

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

120,411,687

96,519,215

Potential tax benefit @ 25%

30,102,922

24,129,804

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

4,304,980  

2,379,604 

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

904,046  

499,717 

Note 10. Cash and cash equivalents

Current assets

Cash at bank and on hand 

Note 11. Trade and other receivables

Current assets

Trade receivables

GBM Agile deposit

Deposits held

BAS receivable

Consolidated

2023
$

2022
$

5,241,197 

7,361,112 

Consolidated

2023
$

610 

3,752,640 

40,870 

105,034 

3,899,154 

2022
$

-  

-  

39,622 

51,353 

90,975 

The GBM Agile deposit was advanced 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. Completion of the 
final analysis is expected in 2H CY2023. The deposit was moved to current for this reporting period.

60

FINANCIAL REPORTNOTES TO THE  FINANCIAL STATEMENTS CONTINUED30 June 2023Note 12. Trade & other receivables - non-current

Non-current assets

GBM Agile deposit

Corporate credit card deposit

Note 13. Other assets

Current assets

Prepayments

Note 14. Intangibles

Non-current assets

Licensing agreement - paxalisib

Less: Accumulated amortisation

Licensing agreement - EVT-801

Less: Accumulated amortisation

Reconciliations

Consolidated

2023
$

2022
$

-  

7,257,947 

42,922

42,922

42,923 

7,300,870 

Consolidated

2023
$

2022
$

1,632,472 

1,997,205 

Consolidated

2023
$

2022
restated
$

16,407,788 

16,407,788 

(7,250,728)

(6,166,344)

9,157,060 

10,241,444 

9,813,362 

9,813,362 

(1,700,990)

(915,914)

8,112,372 

8,897,448

17,269,432 

19,138,892

Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out 
below:

Consolidated

Balance at 1 July 2021 as restated * 

Amortisation expense

Balance at 30 June 2022

Amortisation expense

Balance at 30 June 2023

EVT801 
licensing 
agreement *
$

9,682,517

(785,069)

8,897,448

(785,076)

8,112,372

Paxalisib 
licensing 
agreement
$

11,325,795

(1,084,351)

10,241,444

(1,084,384)

9,157,060

Total
$

21,008,312

(1,869,420)

19,138,892

(1,869,460)

17,269,432

6161

Kazia Theraputics Limited Annual Report 2023Chairman and CEO’s LetterKey MilestonesIntroduction to  Kazia’s CEOPipeline ReviewEnvironment, Society and GovernanceFinancial ReportsNote 15. Trade and other payables

Current liabilities

Trade payables

Accrued payables

Refer to note 23 for further information on financial instruments.

Note 16. Borrowings

Current liabilities

Insurance premium funding

Refer to note 23 for further information on financial instruments.

Note 17. Employee benefits

Current liabilities

Annual leave

Employee benefits

Non-current liabilities

Long service leave

Note 18. Contingent consideration

Current liabilities

Contingent consideration – paxalisib

Contingent consideration – EVT801

Non-current liabilities

Contingent consideration – paxalisib

Contingent consideration – EVT801

62

Consolidated

2023
$

2022
$

857,312

1,524,174

3,471,637 

2,235,946

4,328,949

3,760,120

Consolidated

2023
$

2022
restated
$

1,796,500 

1,841,052 

Consolidated

2023
$

2022
$

488,775 

201,027 

689,802

59,323 

749,125 

368,616

-  

368,616

116,596 

485,212

Consolidated

2023
$

750,000 

- 

750,000 

2022
restated
$

-  

758,840 

758,840 

653,692 

1,167,536 

5,467,091 

7,041,409

6,120,783

8,208,945

6,870,783 

8,967,785 

FINANCIAL REPORTNOTES TO THE  FINANCIAL STATEMENTS CONTINUED30 June 2023Note 18. Contingent consideration continued

Consolidated

2023
$

2022
restated
$

Reconciliation of the balance at the beginning and end of the reporting 
period is set out below:

Contigent consideration at start of period (current and non-current)

8,967,785 

11,094,441

Payment of EVT801 milestone

Interest on unwinding of discount 

Foreign currency loss/(gain)

Gain on remeasurement of contingent consideration

Closing balance

Contingent consideration - paxalisib

-

(2,364,732)

593,462

697,233

(3,387,697)

566,949

(328,873)

-

6,870,783

8,967,785

During the 2017 financial year, the consolidated entity acquired the rights to develop and commercialise paxalisib, as part 
of a business combination.

The acquisition contained four development contingent milestone payments. The first two milestone payment 
settlements being Kazia shares, and the third and fourth development milestone payment settlements 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. 

Each milestone payment is probability weighted for valuation purposes. Milestone 2 is now a current liability and is no 
longer being discounted. Milestone 5 is a revenue based milestone contingent on net sales and is discounted to present 
value, using a discount rate of 20% (previously 15%) per annum. The discount rate was considered at 30 June 2023 and 
revised to reflect a rate within a more reasonable market range. Accordingly, the discount rate applied to future expected 
cash flows has been revised upwards.

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

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 period end, according to the estimated payment date. The key 
assumptions applied on initial recognition have been reassessed in the year based on the revised timing of when 
milestone payments are expected to be paid. Milestone 3 is expected to be paid in 2H2024, milestones 4 & 5 are 
expected to be paid Q12025 and Q12027. Milestone 3 payment has a probability of 100% (2022: 100%), Milestone 4 
payment has a probability of 80% (2022: 100%), and Milestone 5 payment has a probability of 63% (2022: 100%) of 
occurring. Milestones are discounted to present value, using a discount rate of 7% per annum (2022: 6% per annum). The 
discount rate was considered based on the incremental borrowing rate at the time of acquisition and has been updated 
to reflect recent market increases. 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 
($492,703,722) (2022: €300,500,000 ($456,063,136)).

Note 19. Deferred tax

Consolidated

2023
$

2022
$

Non-current liabilities

Deferred tax liability associated with Licensing Agreement

2,289,269 

2,560,361 

Company management has completed an analysis of the availability of historical tax losses to offset the deferred tax 
liability. Accordingly, the Company concludes that the historical tax losses are not expected to be available for offset 
against the deferred tax liability. 

6363

Kazia Theraputics Limited Annual Report 2023Chairman and CEO’s LetterKey MilestonesIntroduction to  Kazia’s CEOPipeline ReviewEnvironment, Society and GovernanceFinancial ReportsNote 20. Contributed equity

Consolidated

2023
Shares

2022
Shares

2023
$

2022
$

Ordinary shares – fully paid

228,029,114

138,755,376

97,452,246 

84,480,249 

Movements in ordinary option capital

Details

Balance

Date

Shares

Issue price

$

1 July 2021

132,012,209

80,290,062

Issued on conversion of options

15 December 2021

Conversion of Triaxial Convertible Note

ATM issue of shares No. 1

ATM issue of shares No. 2

ATM issue of shares No. 3

ATM issue of shares No. 4

ATM issue of shares No. 5

ATM issue of shares No. 6

ATM issue of shares No. 7

5 May 2022

24 May 2022

2 June 2022

6 June 2022

9 June 2022

14 June 2022

15 June 2022

20 June 2022

25,000

1,855,357

10,000

10,000

88,710

603,500

75,940

2,000

4,072,660

$0.6680 

$0.2500 

$0.8260 

$0.8020 

$0.8370 

$0.8400 

$0.8240 

$0.8300 

$0.8690 

16,700

464,000

8,256

8,025

74,258

507,035

62,583

1,661

3,540,404

Less: share issue transaction costs

-

$0.0000

(492,735)

30 June 2022

138,755,376

Balance

ATM issue of shares No. 8

ATM issue of shares No. 9

ATM issue of shares No. 10

ATM issue of shares No. 11

ATM issue of shares No. 12

ATM issue of shares No. 13

ATM issue of shares No. 14

ATM issue of shares No. 15

ATM issue of shares No. 16

ATM issue of shares No. 17

ATM issue of shares No. 18

Professional and sophisticated investors 
placement - 1st tranche

Professional and sophisticated investors 
placement - 2nd tranche

Share Placement Plan

Less: share issue transaction costs

7 July 2022

8 August 2022

9 August 2022

10 August 2022

11 August 2022

12 August 2022

12 September 2022

13 September 2022

573,370

8,561,490

10,000

158,020

330,960

1,247,440

651,030

28,350

60,000

736,760

7 October 2022

28 October 2022

12,296,180

11 January 2023

20,000

$0.7102 

$0.3316 

$0.2723 

$0.2465 

$0.2413 

$0.2469 

$0.2211 

$0.2187 

$0.2100 

$0.1789 

$0.1865 

$0.1380 

84,480,249

407,201

2,839,346

2,723

38,949

79,868

308,050

143,964

6,200

12,600

131,797

2,293,288

2,761

16 January 2023

25,387,018

$0.1100 

2,792,572

28 February 2023

3 March 2023

15,522,075

23,691,045

$0.1100 

$0.1100 

1,707,428

2,606,000

-

$0.0000

(400,750)

Shares issued to Scientific Advisory Board

14 September 2022

Balance

30 June 2023

228,029,114

97,452,246

Ordinary shares

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.

64

FINANCIAL REPORTNOTES TO THE  FINANCIAL STATEMENTS CONTINUED30 June 2023Note 20. Contributed equity continued

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 21. Reserves

Foreign currency reserve

Share-based payments reserve

Consolidated

2023
$

2022
$

(741,790)

(852,038)

4,422,666 

3,263,703 

3,680,876 

2,411,665 

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 22. Dividends

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

Note 23. 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.

6565

Kazia Theraputics Limited Annual Report 2023Chairman and CEO’s LetterKey MilestonesIntroduction to  Kazia’s CEOPipeline ReviewEnvironment, Society and GovernanceFinancial ReportsNote 23. Financial instruments continued
As of 30 June 2023, 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

Singapore dollars

Assets

Liabilities

2023
$

2,326,256

-

-

2022  

restated
$

7,275,701

-

-

2023
$

1,135,162

2,710,133

846

2022
$

3,071,170

204,886

-

2,326,256

7,275,701

3,846,141

3,276,056

The consolidated entity had net assets denominated in foreign currencies of $2,232,754 as at 30 June 2023 (2022: net 
assets $3,999,645).

If all currencies had strengthened and weakened against the USD by 10% (2022: 10%) then this would have the following 
impact:

Consolidated - 2023

% change

Effect on 
profit before 
tax

Effect on 
equity

% change

AUD strengthened

AUD weakened
Effect on 
profit before 
tax

US dollars

Euros

Singapore dollars

10% 

10% 

10% 

(494,373)

(494,373)

271,013

271,013

-

-

(10%)

(10%)

(10%)

494,373

(271,013)

-

Effect on 
equity

494,373

(271,013)

-

(223,360)

(223,360)

223,360

223,360

Consolidated - 2022 
restated

% change

Effect on 
profit before 
tax

Effect on 
equity

AUD strengthened

US dollars

Euros

10% 

10% 

(420,453)

(420,453)

20,489

20,489

(399,964)

(399,964)

AUD weakened
Effect on 
profit before 
tax

420,453

(20,489)

399,964

% change

(10%)

(10%)

Effect on 
equity

420,453

(20,489)

399,964

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

66

FINANCIAL REPORTNOTES TO THE  FINANCIAL STATEMENTS CONTINUED30 June 2023Note 23. Financial instruments continued
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

Net exposure to cash flow interest rate risk

2023

2022

Weighted 
average 
interest rate
%

0.40% 

Weighted 
average 
interest rate
%

-

Balance
$

5,241,197

5,241,197

Balance
$

7,361,112

7,361,112

The consolidated entity has cash and cash equivalents totalling $5,241,197 (2022: $7,361,112). An official increase/decrease 
in interest rates of 100 basis points (2022: 100 basis points) would have a favourable/adverse effect on profit before tax 
and equity of $52,411 (2022: $73,611) 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.

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.

6767

Kazia Theraputics Limited Annual Report 2023Chairman and CEO’s LetterKey MilestonesIntroduction to  Kazia’s CEOPipeline ReviewEnvironment, Society and GovernanceFinancial ReportsNote 23. Financial instruments continued
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  
%

-

-

-

Weighted 
average 
interest  

rate

%

-

-

-

Consolidated - 2023

Non-derivatives

Trade payables

Accrued payables 

Contingent consideration

Total non-derivatives

Consolidated - 2022 restated

Non-derivatives

Trade payables

Accrued payables 

Contingent consideration

Total non-derivatives

1 year or 
less 
$

857,312

3,471,637

1 year or 
less 
$

1,524,174

2,235,946

Between 
 1 and 2  
years 
$

Between  
2 and 5  
years 
$

Over 5 
years 
$

Remaining 
contractual 
maturities 
$

-

-

-

-

750,000

4,302,916

3,098,869

5,078,949

4,302,916

3,098,869

-

-

-

-

857,312

3,471,637

8,151,785

12,480,734

Between  
1 and 2  
years 
$

Between  
2 and 5  
years 
$

Over 5  
years 
$

Remaining 
contractual 
maturities 
$

-

-

-

-

758,840

8,338,405

4,518,960

8,338,405

794,580

794,580

-

-

-

-

1,524,174

2,235,946

9,891,825

13,651,945

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

Note 24. 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 - 2023

Liabilities

Contingent consideration 

Total liabilities

Level 1
$

Level 2
$

Level 3
$

Total
$

-

-

-

-

 1,403,692

 1,403,692

 1,403,692

 1,403,692

68

FINANCIAL REPORTNOTES TO THE  FINANCIAL STATEMENTS CONTINUED30 June 2023Note 24. Fair value measurement continued

Consolidated - 2022 restated

Liabilities

Contingent consideration 

Total liabilities

Level 1
$

Level 2
$

-

-

-

-

Level 3
$

1,167,534

1,167,534

Total
$

1,167,534

1,167,534

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 18. The probabilities used fell in the range of 57% to 100% 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 2021

Losses recognised in profit and loss

Balance at 30 June 2022

Losses recognised in profit and loss

Balance at 30 June 2023

Level 3
$

Total
$

1,015,249

1,015,249

152,287

1,167,536

236,156

152,287

1,167,536

236,156

1,403,692

1,403,692

Note 25. 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
2023
$

3,148,514

149,626 

1,045,860 

4,344,000

2022 
$

2,589,088 

115,950

1,559,930 

4,264,968

Please refer to Note 29 for other transactions with key management personnel and their related parties.

6969

Kazia Theraputics Limited Annual Report 2023Chairman and CEO’s LetterKey MilestonesIntroduction to  Kazia’s CEOPipeline ReviewEnvironment, Society and GovernanceFinancial ReportsNote 26. Remuneration of auditors

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

Audit services - BDO Audit Pty Ltd

Audit or review of the financial statements

Other services - BDO Audit Pty Ltd

Comfort letter ATM

Audit services - Grant Thornton Audit Pty Ltd

Audit or review of the financial statements

Other services - Grant Thornton Audit Pty Ltd

Comfort letter ATM

Consolidated
2023
$

2022 
$

 292,165 

 18,000 

 310,165 

-

-

-

 310,165 

-

-

 -   

154,935

 25,719 

 180,654 

 180,654 

Comfort letter ATM refers to the fee in relation to Comfort Letter provided to Oppenheimer for ATM facility. 

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 25 and the remuneration report included in the 
directors’ report.

Transactions with related parties

There were no other transactions 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.

70

FINANCIAL REPORTNOTES TO THE  FINANCIAL STATEMENTS CONTINUED30 June 2023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

Reserves

Accumulated losses

Total equity

Parent

2023
$

2022  

restated
$

(20,862,826)

(24,240,776)

(20,862,826)

(24,240,776)

Parent

2023
$

4,645,440 

2022  

restated
$

7,736,217 

21,914,872 

26,875,108 

7,003,013 

15,472,387 

2,931,452 

13,700,757 

97,452,246 

84,480,249 

4,422,666

3,263,703

(95,432,427)

(74,569,601)

6,442,485 

13,174,351 

Reserves comprise Share Based Payments Reserve.

Contingent liabilities

The parent entity contingent liabilities as at 30 June 2023 and 30 June 2022 are as set out in note 18. 

Capital commitments - Property, plant and equipment

The parent entity had no capital commitments for property, plant and equipment at as 30 June 2023 and 30 June 2022.

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.

7171

Kazia Theraputics Limited Annual Report 2023Chairman and CEO’s LetterKey MilestonesIntroduction to  Kazia’s CEOPipeline ReviewEnvironment, Society and GovernanceFinancial Reports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

2023
%

100.00% 

100.00% 

100.00% 

100.00% 

-

2022 
%

100.00% 

100.00% 

100.00% 

100.00% 

100.00% 

* 

Kazia Therapeutics (Hong Kong) Limited was formally deregistered and dissolved on 10 March 2023.

Note 30. Reconciliation of loss after income tax to net cash used in operating 
activities

Consolidated

2023
$

2022  

restated
$

Loss after income tax benefit for the year

(20,465,180)

(25,014,055)

Adjustments for:

Depreciation and amortisation

Share-based payments

Net foreign exchange differences

Gain on remeasurement of contingent consideration

Change in operating assets and liabilities:

Decrease/(increase) in trade and other receivables

Decrease/(increase) in prepayments

Decrease in trade and other payables

Decrease in deferred tax liabilities

Increase in other provisions

(Decrease)/increase in borrowings

Net cash used in operating activities

1,869,460

1,159,125

45,841

(2,097,002)

3,449,768 

364,733

568,829 

(271,092)

263,913

(44,552)

1,869,420

1,674,581

(2,154,165)

-  

(6,613)

(277,509)

(528,451)

(368,080)

201,157

1,841,052

(15,156,157)

(22,762,663)

72

FINANCIAL REPORTNOTES TO THE  FINANCIAL STATEMENTS CONTINUED30 June 2023Note 31. Earnings per share

Consolidated

2023
$

2022  

restated
$

Earnings per share for loss from continuing operations

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

(20,465,180)

(25,014,055)

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

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

Basic earnings per share

Diluted earnings per share

Number

Number

184,284,350

132,467,686

184,284,350

132,467,686

Cents

(11.23)

(11.23)

Cents

(18.88)

(18.88)

The number of unissued shares under option that have been excluded from the diluted EPS are 8,655,500 (2023) 9,905,200 
(2022) and shares issued post year end 8,320,260.

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 $1,159,125 (30 June 2022: $1,674,581) was recognised.

Outstanding at the beginning of the financial year

Granted

Forfeited

Exercised

Expired

Number of 
options

Weighted 
average 
exercise price

Number of 
options

Weighted 
average 
exercise price

2023

2023

2022

8,655,500

7,930,000

$1.2826 

4,219,000

$0.1785 

4,800,000

2022

$0.8911 

$1.6115 

(1,550,000)

$1.8977 

-

$0.0000

-

$0.0000

(25,000)

(255,500)

$0.7735 

(338,500)

Outstanding at the end of the financial year

14,780,000

$0.6292 

8,655,500

Exercisable at the end of the financial year

6,483,333

$0.9572 

3,430,500

$0.6700 

$1.1123 

$1.2826 

$0.9362 

7373

Kazia Theraputics Limited Annual Report 2023Chairman and CEO’s LetterKey MilestonesIntroduction to  Kazia’s CEOPipeline ReviewEnvironment, Society and GovernanceFinancial ReportsNote 32. Share-based payments continued
2023

Tranche Grant date Expiry date

Exercise 
price

Balance at 
the start of 
the year

Granted

Exercised 

Expired / 
lapsed

on termination  
of employment

Balance at 

the end of 

the year

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

07/08/2017 07/08/2022

$0.6700 

15,500

05/02/2018 05/02/2023

$0.7802 

240,000

13/11/2019

04/01/2024

$0.4925 

1,200,000

13/01/2020

13/01/2025

$0.8812 

200,000

09/11/2020

09/11/2024

$1.1320 

1,200,000

09/11/2020

13/01/2025

$0.8812 

800,000

04/01/2021 04/01/2025

$1.6900 

200,000

09/09/2021 26/06/2026

$1.3650 

100,000

16/11/2021

16/11/2025

$1.6900 

1,000,000

16/11/2021

16/11/2025

$2.2400 

1,500,000

16/11/2021

16/11/2026

$1.5600 

800,000

01/02/2022 01/02/2027

$0.9400 

800,000

01/02/2022 01/02/2027

$0.9400 

500,000

24/05/2022 24/05/2027

$0.7800 

100,000

-

-

-

-

-

-

-

-

-

-

-

-

-

-

03/03/2023 03/03/2027

$0.1500 

03/05/2023 03/05/2027

$0.1870 

-

3,930,000

- 4,000,000

8,655,500

7,930,000

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

(15,500)

(240,000)

-

-

-

1,200,000

(12,500)

187,500

-

1,200,000

(200,000)

600,000

(12,500)

187,500

-

100,000

(250,000)

750,000

(1,000,000)

500,000

-

-

800,000

800,000

(75,000)

425,000

-

-

-

100,000

3,930,000

4,000,000

(1,805,500)

 14,780,000

Weighted average exercise price

$1.2826 

$0.1785 

$0.0000

$1.8977 

$0.6292 

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

•  Options in tranche 1 - 2 expired during the year 

•  Options in tranches 3 & 6 were vested and exercisable

•  Options in tranches 4, 5, 7 & 9 were vested and exercisable to 75%, apart from those in the above table which have expired

•  Options in tranches 8 were vested and exercisable to 50%, apart from those in the above table which have expired

•  Options in tranche 10 & 16 were vested and exercisable as to 33%, apart from those in the above table which have expired

•  Options in tranche 11, 12, 13 & 14 were vested and exercisable as to 25%, apart from those in the above table which have 

expired

•  Options in tranche 15 were unvested 

The weighted average remaining contractual life of options outstanding at 30 June 2023 is 2.995 years. 

74

FINANCIAL REPORTNOTES TO THE  FINANCIAL STATEMENTS CONTINUED30 June 2023Note 32. Share-based payments continued
2022

Tranche Grant date Expiry date

Exercise 
price

Balance at 
the start 
of the year

Granted

Exercised 

Expired / 
lapsed

on termination  
of employment

Balance at 

the end of 

the year

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

05/09/2016 05/09/2021

$1.6300 

50,000

12/10/2016

17/10/2021

$1.5600 

62,000

31/10/2016

01/11/2021

$1.3800 

12,500

21/11/2016

23/11/2021

$1.3800 

50,000

07/08/2017 07/08/2022

$0.6700 

87,000

05/02/2018 05/02/2023

$0.7800 

320,000

04/01/2019 04/01/2024

$0.4925 

37,500

13/11/2019

13/11/2023

$0.4925 

1,200,000

13/01/2020

13/01/2025

$0.8812 

200,000

09/11/2020

09/11/2024

$1.1320 

1,200,000

09/11/2020

09/11/2024

$0.8812 

800,000

04/01/2021 04/01/2026

$1.6900 

200,000

-

-

-

-

-

-

-

-

-

-

-

-

09/09/2021 26/06/2026

$1.3700 

16/11/2021

16/11/2025

$1.6900 

16/11/2021

16/11/2025

$2.2400 

16/11/2021

16/11/2025

$1.5600 

01/02/2022 01/02/2027

$0.9400 

01/02/2022 01/02/2027

$0.9400 

24/05/2022

24/05/2027

$0.7800 

-

-

-

-

-

-

-

100,000

1,000,000

1,500,000

800,000

800,000

500,000

100,000

-

-

-

-

(25,000)

-

-

-

-

-

-

-

-

-

-

-

-

-

-

(50,000)

(62,000)

(12,500)

(50,000)

(46,500)

-

-

-

-

15,500

(80,000)

240,000

(37,500)

-

-

-

-

-

-

-

-

-

-

-

-

-

1,200,000

200,000

1,200,000

800,000

200,000

100,000

1,000,000

1,500,000

800,000

800,000

500,000

100,000

Weighted average exercise price

$0.8911 

$1.6115 

$0.6700 

$1.1123 

$1.2826 

4,219,000 4,800,000

(25,000)

(338,500)

8,655,500

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

•  Options in tranche 1-4 expired during the year 

•  Options in tranches 1 - 8 were vested and exercisable, apart from those in the above table which have expired 

•  Options in tranche 9 -10 were vested and exercisable to  50%

•  Options in tranche 11 were vested and exercisable to 75%

•  Options in tranche 12-14 were vested and exercisable to 25%

•  Options in tranche 15-19 were unvested

The weighted average remaining contractual life of options outstanding at 30 June 2022 is 3.048 years.

7575

Kazia Theraputics Limited Annual Report 2023Chairman and CEO’s LetterKey MilestonesIntroduction to  Kazia’s CEOPipeline ReviewEnvironment, Society and GovernanceFinancial ReportsNote 32. Share-based payments continued
Employee share options

During the year ended 30 June 2023, 7,930,000 options have been issued to employees by the consolidated entity 
pursuant to the Company’s Employee Share Option Plan. 

•  Tranches 12 & 13 vests 25% 6 months from issue date and then in 3 amounts at 6 monthly intervals from the date of 

issue. 

•  Tranches 14 vests 33% immediately then in two equal amounts annually from the date of grant. 

Vesting conditions for options within all tranches, is based on service period only; i.e. options 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; and

•  The Exercise Notice must have been provided to the Company and Exercise Price paid before the expiry of 4 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.

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. 

The abovementioned options have various vesting periods and exercising conditions.  These options are unlisted as at 
30 June 2023.

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.

76

FINANCIAL REPORTNOTES TO THE  FINANCIAL STATEMENTS CONTINUED30 June 2023Note 32. Share-based payments continued
Based on the above assumptions, the table below sets out the valuation for each tranche of options:

Tranche

Grant date Expiry date

Share 
price at 
Grant Date

Exercise 
price

Volatility 
(%)

Dividend 
yield (%)

Risk free 
Rate (%)

Fair value 
per option

1

2

3

4

5

6

7

8

9

10

11

12

13

14

13/11/2019 04/01/2024

$0.4100 

$0.4925 

74.50% 

13/01/2020

13/01/2025

$0.6200 

$0.8812 

74.50% 

09/11/2020

13/11/2024

$0.8900 

$1.1320 

90.00% 

09/11/2020

13/01/2025

$0.8900 

$0.8812 

90.00% 

04/01/2021 04/01/2025

$1.1850 

$1.1690 

90.00% 

09/09/2021

21/06/2026

$1.4200 

$1.3700 

76.00% 

16/11/2021

16/11/2025

$1.5700 

$1.6900 

76.00% 

16/11/2021

16/11/2025

$1.5700 

$2.2400 

76.00% 

16/11/2021

16/11/2026

$1.5700 

$1.5600 

76.00% 

01/02/2022 01/02/2027

$0.9600 

$0.9400 

79.00% 

24/05/2022

24/05/2027

$0.8000 

$0.7800 

44.00% 

03/01/2023 03/03/2027

$0.1700 

$0.1500 

80.00% 

03/03/2023 03/03/2027

$0.1700 

$0.1500 

80.00% 

03/05/2023 03/05/2027

$0.1900 

$0.1870 

80.00% 

-

-

-

-

-

-

-

-

-

-

-

-

-

-

1.95% 

$0.18000 

1.95% 

$0.34000 

0.10% 

$0.41300 

0.10% 

$0.50300 

0.19% 

$0.60000 

1.50% 

$0.88000 

1.50% 

$0.85000 

1.50% 

$0.75000 

1.50% 

$0.97000 

1.50% 

$0.59000 

2.95% 

$0.63000 

3.64% 

3.64% 

3.22% 

$0.10137 

$0.10137 

$0.11110 

Note 33. Subsequent events

Fast Track Designation from US FDA for paxalisib

Paxalisib was awarded Fast Track Designation (FTD) by the United States Food and Drug Administration (FDA) for the 
treatment of solid tumour brain metastases harbouring PI3K pathway mutations in combination with radiation therapy. 
The FDA’s decision to grant FTD was based on promising clinical data from an interim analysis of an ongoing Phase 1 
clinical trial in which patients with brain metastases from a primary tumour are receiving paxalisib in combination with 
radiotherapy (NCT04192981). These clinical data were presented at the 2022 Annual Conference on CNS Clinical Trials 
and Brain Metastases, jointly organized by the Society for Neuro-Oncology (SNO) and the American Society for Clinical 
Oncology (ASCO), by Dr. Jonathan Yang, lead investigator in the clinical trial. All nine evaluable patients in the trial 
(100%) responded to the combination of paxalisib with radiotherapy. Published benchmarks suggest a typical response 
rate for radiotherapy alone to be around 20-40%.

Fast Track Designation is designed to expedite development of pharmaceutical products which demonstrate the 
potential to address unmet medical needs in serious or life threatening conditions. It provides Kazia with enhanced 
access to FDA, including opportunities for face-to-face meetings and written consultation throughout the remaining 
development of paxalisib. Drugs granted FTD may also be eligible for Accelerated Approval and Priority Review, which 
may result in faster product approval. Paxalisib was previously granted FTD for glioblastoma in August 2020, giving 
paxalisib now two largely independent opportunities to access the benefits of this designation. 

At-The-Market (ATM) Facility

During the month of July 2023 through 7 August 2023, the Company raised total proceeds for the period of US$1,019,769 
(A$1,540,918). increasing the total shares outstanding to 236,349,374. Shares issued under the ATM are issued at the spot 
market price, with no discount, no accompanying warrants or options, and with banking fees approximately half of those 
associated with more traditional financing methods. 

Resignation of chairman

Kazia announced that Dr John Friend joined the Kazia Board as Managing Director on 1 August 2023. Kazia announced 
the resignation of Mr. Iain Ross as Chairman and non-executive director on 11 August 2023. The Board of Directors 
elected Dr John Friend as Interim Chairman on 11 August 2023.

No other matter or circumstance has arisen since 30 June 2023 that has significantly affected, or may significantly affect 
the consolidated entity’s operations, the results of those operations, or the consolidated entity’s state of affairs in future 
financial years.

7777

Kazia Theraputics Limited Annual Report 2023Chairman and CEO’s LetterKey MilestonesIntroduction to  Kazia’s CEOPipeline ReviewEnvironment, Society and GovernanceFinancial Reports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 2023 and of its performance for the financial year ended on that date; and

•  subject to the matters disclosed under Going concern in Note 2, the directors have 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

Dr John Friend

Interim Chairman, Managing Director, 
Chief Executive Officer

31 August 2023 
Sydney

Karen Krumeich

Chief Financial Officer

78

DIRECTORS’ DECLARATION30 June 2023FINANCIAL REPORT 
7979

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF KAZIA THERAPEUTICS LIMITED Kazia Theraputics Limited Annual Report 2023FINANCIAL REPORTChairman and CEO’s LetterKey MilestonesIntroduction to  Kazia’s CEOPipeline ReviewEnvironment, Society and GovernanceFinancial Reports    Level 11, 1 Margaret Street  Sydney NSW 2000 Australia Tel: +61 2 9251 4100 Fax: +61 2 9240 9821 www.bdo.com.au BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.   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 subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30 June 2023, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial report, 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:  (i) Giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its financial performance for the year ended on that date; and  (ii) 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 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 confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.  Material uncertainty related to going concern  We draw attention to Note 2 in the financial report which describes the events and/or conditions which give rise to the existence of a material uncertainty that may cast significant doubt about the group’s ability to continue as a going concern and therefore the group may be unable to realise its assets and 80

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF KAZIA THERAPEUTICS LIMITED CONTINUEDFINANCIAL REPORT   2  discharge its liabilities in the normal course of business. Our opinion is not modified in respect of this matter.  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.  In addition to the matter described in the Material uncertainty related to going concern section, we have determined the matters described below to be the key audit matters to be communicated in our report. Valuation of Intangible Assets  Key audit matter  How the matter was addressed in our audit The Group carries in its statement of financial position intangible assets relating to:   the Licensing Agreement, which grants the Group the right to develop and commercialise the paxalisib molecule; and   the Licensing Agreement, which grants the Group the right to develop and commercialise the EVT801 molecule.  As disclosed in Note 14, the paxalisib Licensing Agreement has a carrying value of $9,157,060 (2022: $10,241,444) and the EVT801 Licensing Agreement has a carrying value of $8,112,372 (2022: $8,897,448).  Per Note 2, these assets are amortised over the remaining life of the underlying patents at the acquisition date, being 15 years and 12.5 years respectively.     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.  The entity shall estimate the asset’s recoverable amount if any indication exists.  This is a key audit matter due to the materiality of the amounts and the high degree of management judgement required to assess whether there are impairment indicators as disclosed in Note 3.  To address the key audit matter, our procedures included, amongst others: • Obtaining an understanding of and evaluating managements process and controls relating to the identification of impairment indicators;  • Obtaining and critically assessing managements’ position paper documenting considerations of the existence of impairment indicators; • Enquiring of management and managements’ internal experts in relation to the science and potential for existence of impairment indicators; • Assessing the completeness, accuracy and reasonability of managements’ assessment of impairment indicators against the requirements of IAS 36 Impairment of Assets as well as in relation to external data and findings from enquiries of management and their experts;  • Assessing the reasonability of the useful life of the intangible assets; • Assessing the impact of the EVT 801 prior period error on the current and prior period financial statements;  • Checking mathematical accuracy of the accumulated amortization and amortization charge for the year;  8181

Kazia Theraputics Limited Annual Report 2023Chairman and CEO’s LetterKey MilestonesIntroduction to  Kazia’s CEOPipeline ReviewEnvironment, Society and GovernanceFinancial Reports   3  • Assessing the adequacy of the relevant disclosures in the financial statements.  Valuation of contingent consideration  Key audit matter  How the matter was addressed in our audit The group has material liabilities in relation to the paxalisib and EVT801 intangible assets acquired.  In 2017, the consolidated entity acquired the rights to develop and commercialise paxalisib, as part of a business combination.  As part of that transaction, the Company engaged an expert to perform purchase price accounting, determine the fair value of the intangible asset acquired in the business combination and estimate the value of contingent consideration based on the likelihood of achieving certain milestones. As disclosed in Note 18, the total contingent consideration in respect of paxalisib is $1,403,692 (2022: $1,167,536).  In 2021, Kazia entered into a worldwide exclusive licensing agreement with Evotec SE to develop the drug candidate EVT801. As part of this agreement, contingent fees are payable on achieving certain milestones. As disclosed in Note 18, the total contingent consideration in respect of EVT801 is $5,467,091 ($7,800,249).   The contingent consideration is a key audit matter due to the materiality of the amounts in question as well as the high subjectivity and management judgement involved in calculating the contingent consideration as disclosed in Note 3. To address the key audit matter, our procedures included, amongst others:  Obtaining an understanding of and evaluating managements process and controls relating to the estimation of the liability;  Obtaining and critically assessing management’s position paper and calculation of the contingent consideration;  Holding discussions with management to understand managements’ key assumptions in arriving at the timing and probability of milestone payments as well as the discount rate applied;  Critically evaluating the assumptions applied against publicly available information and published clinical trial updates and results;  Evaluating the competence and, capabilities and objectivities of management experts involved in the estimation of the liability;  Engaging BDO Corporate Finance to assess the reasonability of the discount rates applied by management in determining the contingent consideration;   Assessing the mathematical accuracy and methodology of managements’ calculation;   Assessing the impact of the EVT 801 prior period error on the current and prior period financial statements;  Assessing the disclosure of the prior period error and accuracy of the classification of the contingent 82

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF KAZIA THERAPEUTICS LIMITED CONTINUEDFINANCIAL REPORT   4  consideration based on the expected timing of the milestone payments;   Ensuring appropriate classification of the liabilities between current and non-current; and  Assessing the adequacy of the relevant disclosures in the financial statements.  Share-based payments  Key audit matter  How the matter was addressed in our audit As disclosed in Note 32, the group has recognised a share-based payment expense of $1,159,125 (2022: $1,1674,581) in the Statement of Profit and Loss and Other Comprehensive Income as at 30 June 2023 in relation to share options granted in the current and prior years which are expensed over their vesting period.  Refer to note 2 and note 3 of the financial report for a description of the accounting policy and significant estimates and judgements applied to these arrangements. Share-based payments are a complex accounting area and due to the complex and judgemental estimates used in determining the fair value of the share-based payments, we consider the Group’s calculation of the share-based payment expense to be a key audit matter.  To address the key audit matter, our procedures included, amongst others:  Obtaining an understanding of and evaluating managements process and controls relating to share-based payment arrangements;  Reviewing market announcements and board minutes to ensure all the new options granted during the year have been accounted for;  Reviewing relevant supporting documentation to obtain an understanding of the contractual nature and terms and conditions of the share-based payment arrangements;  Considering whether the group used an appropriate model in valuing the option;  Engaging BDO Corporate Finance to assess the reasonability of estimated fair value of the options using a relevant option valuation methodology, and assessing the valuations inputs;  Assessing the mathematical accuracy of managements calculation including the allocation of the share-based payment expense over the vesting period; and   Assessing the adequacy of the relevant disclosures in the financial statements.    8383

Kazia Theraputics Limited Annual Report 2023Chairman and CEO’s LetterKey MilestonesIntroduction to  Kazia’s CEOPipeline ReviewEnvironment, Society and GovernanceFinancial Reports   5  Other information  The directors are responsible for the other information.  The other information comprises the information in the Group’s annual report for the year ended 30 June 2023, but does not include the financial report and the 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.  Other matter The financial report of Kazia Therapeutics Limited, for the year ended 30 June 2023 was audited by another auditor who expressed an unmodified opinion on that report on 29 August 2022.  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 ability of the group 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 has no realistic alternative but to do so.  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/admin/file/content102/c3/ar1_2020.pdf This description forms part of our auditor’s report. 84

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF KAZIA THERAPEUTICS LIMITED CONTINUEDFINANCIAL REPORT   6   Report on the Remuneration Report Opinion on the Remuneration Report  We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2023. In our opinion, the Remuneration Report of Kazia Therapeutics Limited, for the year ended 30 June 2023, 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.  BDO Audit Pty Ltd  Gareth Few  Director Sydney, 31 August 2023  The shareholder information set out below was applicable at 28 August 2023.

Fully paid ordinary shares

Range
1 - 1,000

1,001 - 5,000

5,001 - 10,000

10,001 - 100,000

100,001 and over

Total

Total holders
1,158

955

336

591

164

3,204

Units
594,254

2,493,060

2,599,432

20,262,942

210,399,686

236,349,374

* There are 1889, holders of less than a marketable parcel as at 18 July 2023 at a share price 14 cents.

Unquoted  equity securities

Options

Range
1 - 1,000

1,001 - 5,000

5,001 - 10,000

10,001 - 100,000

100,001 and over

Total

Equity security holders

Total holders
0

0

0

1

12

13

Units
0

0

0

50,000

14,730,000

14,780,000

Details of the 20 largest shareholders of quoted securities by registered shareholding are:

Rank

Name

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED

WILLOUGHBY CAPITAL PTY LTD 

BNP PARIBAS NOMS PTY LTD 

MR FRANCIS SAMSON

HISHENK PTY LTD

MNA FAMILY HOLDINGS PTY LTD 

MR PETER ALAN LUEDEKE + MRS JULIA LUEDEKE 

CITICORP NOMINEES PTY LIMITED

JAMPLAT PTY LTD

MR IAIN ROSS

BRISPOT NOMINEES PTY LTD 

NETWEALTH INVESTMENTS LIMITED 

DR ANDREW HEATON

D & G BROWN INVESTMENTS PTY LIMITED

DA SILVA COMPANY PTY LTD 

MR VENKAT SUBBU GHANTALA + MRS LAVANYA GHANTALA

MR BRYCE DELLER CARMINE

MR DAVID LIM

MRS BIANCA ARNEAUD

DR JAMES STUART GARNER

Totals: Top 20 holders of FULLY PAID ORDINARY SHARES (Total)

Total Remaining Holders Balance

Units

106,665,493

24,815,910

9,081,774

6,090,000

6,000,000

3,725,000

3,404,359

2,323,597

1,569,728

1,522,729

1,397,108

1,351,400

1,234,087

1,048,232

1,000,001

1,000,000

856,681

804,241

751,523

750,000

175,391,863

60,957,511

% Units
0.25

1.05

1.10

8.57

89.02

100.00

% Units
0.00

0.00

0.00

0.34

99.66

100.00

% Units

45.13

10.50

3.84

2.58

2.54

1.58

1.44

0.98

0.66

0.64

0.59

0.57

0.52

0.44

0.42

0.42

0.36

0.34

0.32

0.32

74.21

25.79

8585

SHAREHOLDER INFORMATIONKazia Theraputics Limited Annual Report 2023Chairman and CEO’s LetterKey MilestonesIntroduction to  Kazia’s CEOPipeline ReviewEnvironment, Society and GovernanceFinancial ReportsSubstantial holders

Substantial holders of equity in the Compay, as notified to the ASX by that holder, are:

Name

BNY Mellon

Willoughby Capital Pty Ltd  and Associates

Platinum Investment Management Limited

Number

82,578,886

30,112,339

23,083,022

%

36.21%

15.95%

9.77%

Voting rights

Quoted equity securities

The voting rights attached to fully paid ordinary shares are that on a show of hands, every member present at a meeting 
in person or who has cast a Direct Vote will have one vote.  On a poll, every member present or who has cast a Direct 
Vote will have one vote foreach fully paid share.

Unquoted equity securities

There are no voting rights attached to options.  Options will rank equally with the company’s fully paid ordinary shares if 
and when the options vest and are thereafter exercised (prior to the applicable expiry date).

86

FINANCIAL REPORTSHAREHOLDER INFORMATION CONTINUEDCORPORATE DIRECTORY

KAZIA THERAPEUTICS LIMITED

Directors

Mr Iain Ross (resigned 11 August 2023)
Mr Bryce Carmine
Mr Steven Coffey
Dr James Garner (resigned 30 April 2023)
Ms Ebru Davidson
Dr John Friend (appointed 1 August 2023)

Company secretary

Ms Anna Sandham

Director nominations due

26 September 2023

Notice of annual general meeting

8 November 2023

Registered office

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

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

Auditor

BDO Audit Pty Ltd
Level 11
1 Margaret Street
Sydney NSW 2000

Stock exchange listing

Kazia Therapeutics Limited ordinary shares are listed on the 
Australian Securities 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. 

Kazia Therapeutics Limited options are listed on the 
Australian Securities Exchange (ASX code KZAO)

Website

www.kaziatherapeutics.com

iii

Kazia Theraputics Limited Annual Report 2022ASX: KZA