KAZIA THERAPEUTICS LIMITED (KZIA) at GUGGENHEIM 3RD ANNUAL HEALTHCARE INNOVATION CONFERENCE - KAZIA THERAPEUTICS LTD

I am very pleased to be joined today with Kaseya Therapeutics. My name is Paul. I'm a biotech analyst with Guggenheim, and today I have John Friend, CEO of Kasey. John, welcome. Thanks, Paul. Appreciate it. So maybe to get things started, could you provide a brief overview of the company and your key pipeline programs before we get into the key questions? You got it. So thank you again, Guggeheim, for having us. It's great to be here. So COSD Therapeutics is a clinical oncology based R&D program with three major programs. Our lead asset is Paxalisib or Paxilisib. This is a oral once-a-day dual PI3K mTOR inhibitor. We also have a couple of R&G platforms, protein degraders, as well as EVT801, which is a secondary asset that we just completed phase one, VEGFR3 specific. Our main focus is Paxalisib. That's our lead stage clinical asset. We are in a phase 1B in triple negative breast and expanding very quickly and imminently into HR positive as well as colorectal cancer. Great. So yeah, obviously most of the focus will be on Paxarisib. And inhibition of PI3K and mTOR is a well-established strategy in oncology and even dual inhibition to some degree has been validated so with that sort of backdrop in mind how is Paxalis different from existing molecules in this class thanks Paul so what I'll do is I'm going to be take a step back as far as the foundational for Pax as well as the innovation and then the novelty that we've uncovered here over the past year and a half so Pax was a it was discovered by Genentech researcher who had a family member died of glioblastoma and he thought gosh if I could get a PI3K mTOR inhibitor to cross the blood-brain barrier I may have a targeted therapeutic. They went about and discovered Pax as a blood- brain penetrant dual PI3k mTOR inhibitor. Took it through phase one and then made a corporate decision not to go into neuro-oncology. We happen to be at the right place right time because the Therapeutics was born essentially as a gliobastoma company. I joined the company about five years ago actually pretty close to the date five years ago initially chief medical officer and transition to CEO I love the science I thought the the potential of PACS outside of just glioblastoma and so we launched a number of investigator initiated trials and cooperative group trials in neuro-oncology so we transitioned the company to more of a neuro- oncology based company about two and a half years ago actually now three years ago I was approached with the concept that PACS as as a dual PI3K mTOR could have additional downstream effects that maybe we'll talk to here in a little bit. And by downstream effects, epigenetic effects in breast cancer in particular. So we went down the road as far as preclinical program and a cooperative group with a research-based institution in Brisbane, Australia. And all the preclinal work was working beautifully and launched into this phase 1B trial in triple negative breast. So yes, we know a lot about PI3K. We know a about mTOR. What we didn't know is this downstream effect of dual PI3k mTOR could have this additional reprogramming effect in terms of cancer stem cells, in terms our own innate immune system. Great, so yeah, definitely wanna get into the mechanism. But before that, sort of you alluded to the fact that the history of the drug was a CNS penetrant drug for glioblastoma. And there was a good amount of data that was generated in this setting. So, we'd love to hear what you think, I guess, are the main learnings from that clinical data as they apply to breast cancer and other solids. Absolutely, so we've dosed over 580 patients, so we have a really strong idea as far as the safety and tolerability of Pax or Paxalisib. Most of our dosing originally was based in neuro-oncology, as I mentioned, so glioblastoma, but also pediatric brain cancer. So we have an extensive safety and tolerabilty profile with GBM. What that led us into was the preclinical work outside of just sort of the traditional sort of kinase inhibition with PI3K mTOR. Obviously, safety tolerability with PI 3K and mTOR has been historically an issue with significant bone marrow dyscrasias as well as hyperglycemia and mucositis, stomatitis. With the dosing regimen that we have as well the molecule itself, the program that we're running as far as breast cancer, but also in colorectal, is utilizing much lower doses of packs on a daily basis. So this is quite a bit different, and from our hypothesis that using these even lower doses in combination with standard of care therapies, immunotherapies, checkpoint inhibitors, as well as chemo, that we are not seeing, or the hypothesis is that we aren't going to see those sorts of on target effects, i.e., the hyperglycemia, stomatitis. And so far, knock on wood, that's what's reading out. Fantastic. So as you alluded to, there's a sort of novel mechanism that's emerging for PACS. You've talked about epigenetic ramifications of targeting PI3K, perhaps in the nuclear pathway. So could you sort of just walk through the key findings that you've had and what the implications are for clinical activity? Yeah, Paul. So what we know about PI3К and the pathway of PI3KK, AKT, mTORN, this has been around for 50 or 60 years. there are actually two different pathways within the PI3K. There's a canonical and a non-canonical pathway of PI3k. The canonical, which is a traditional sort of PI 3k pathway, it's in the cytoplasm of cancer cells as well as normal cells. That is something that pretty much the PI 3K, dual PI 3ks, but also the sub-unit specific PI 3 k alphas will hit. This is canonical cytoplastic. We've known now for over 50 or 60 years now that this non-kanonical pathway actually sits within the nucleus. And what we've shown, and we'll provide additional updates at San Antonio Breast and as far as some benchmarking, is to show that PAX, not the mechanism of action, so there's not a class effect, but PAX is able to cross that nuclear membrane and impact that epigenetic, that non-canonical pathway that we've been able to show these traditional sort of P3Ks and dual P3MTORs cannot get through the nuclear membrane. Why? Well, the molecule itself is quite small, so it was built, right, it was designed fit for purpose to cross the blood-brain barrier, so we think that that's being hijacked. That ability to cross that blood- brain barrier is actually able to utilize that to cross the nuclear membran and impact that non-canonical pathway, which is the epigenetic. That's where we're seeing the sort of, well, the hypothesis was preclinically wise to showing this reprogramming aspect and now into the clinic in our ongoing trial as well. Got it. So is it purely, I guess, a physiochemical, pharmacology-based reason why your molecule is able to address this pathway, whereas others are not? It's also lipophilic as well as a small molecule, so as far as the actual size of Pax we believe is what, and we'll provide additional more information around that ability to cross that nuclear membrane, but also some maybe head-to-head as far as benchmarking with Pax and some of the other molecules out there. Okay, and then in terms of, I guess, implications, you know, would you expect, you know, a deeper degree of antitumor activity? Is it specifically impacting metastases or other aspects? That's right, yeah, so our hypothesis is that, I mean, yes, we hit the canonical pathway, the traditional sort of PI3K mTOR pathway, so where do we think that this additional downstream effect, this epigenetic effect could have and that would be on the back end and by back end I mean you know the progression of your survival the overall survival so are we hitting the kinase traditional sort of kinase inhibition with PI3K and mTOR yes but are we able then to be able to reprogram these previously non-proliferating cancer stem cells circulating tumor cells and reprogram such that they can be identified by our own innate immune system but also So chemo is yes. On top of that would be the immune effect. And we know that there are terminally exhausted CD8 T cells. So you'll be able to show pre-clinically wise, but also now in the clinic be able to reprogram terminally-exhausted CD8-T cells. So this way our own innate immune system is also working to minimize it or to target those sorts of metastasis and recurrent aspect of the diseases we're going after. Okay, so I think probably a good time to talk about the clinical data to date. So you recently had a very interesting update in stage four triple negative breast cancer. So can you sort of remind us of that data both in terms of the anti-tumor activity as well as the translational data that you saw? Absolutely. So we have an ongoing phase 1B trial in stage 4 triple negative breasts. This is all conceptually based off the preclinical work both in vitro, in vivo, and in vivo work that we've done. And looking at packs added on to standard of care. So as you know, standard of care in stage four triple negative breast is pembrolizumab plus chemo. So this is an add-on therapy. Target enrollment is 36 patients. We provided data on the first six patients with stage four triple negative breasts, whereby we added Paxalysib to standard of care, i.e. Pembroke chemo, we were able to show radiographically. So we'll talk from a typical sort of a radiograph. We were able to show all six patients with a clinical benefit. What that led into was one complete metabolic response, four partial responses and one stable disease. So from a typical sort of radiographic, we're able to show stage four triple negative breast patients, right? Tremendous tumor burden, both bone, brain, soft tissue, et cetera. And we're about to show very, very early responses. So as early as the first radiographic assessment three months for many of these patients. Patients all doing well. What we've given guidance to, Paul, is that we anticipate having all 36 patients enrolled by next summer. So super excited about what 2027 will bring. As far as the epigenetic effect, the downstream, the biomarker effect, we want to show in all six of these patient's tremendous reductions in terms of circulating tumor cell or circulating tumor cell clusters, as well as drastic reductions in terminally exhausted CD8 T cells. So again, the preclinical, the bench-to-bedside translation of that data, at least in these first six patients, is shown very, very consistently. What's super exciting about this is that we know immunotherapy checkpoint inhibitor has no effect on these slow or non-proliferating sort of cancer stem cells or circulating tumor cells. And we also know that pembrolizumab or checkpoint inhibitors have no effect on these terminally exhausted CD8 T cells, right? What's important about the finding that we have in our trial, as well as these first six patients, is that the denominator of CD8T cells is not changing. So it's not like Pax is essentially killing off these terminality-exhausted T cells. So they're actually being reprogrammed such that they're functional as well, as more of of a progenitor state or functional cytotoxic killing effect. Got it. Okay. So yeah, obviously, you know, a lot of potential here, especially given, you know, PD-L1 low patients or negative patients are not currently on label for PD-1BH residents in the setting. Um, have, you, what can you say about the activity that you're seeing for PAX combo, um, across PD-l1 expression levels? That's a great question. So, um. The original trial we had was looking at, sorry, we should have said, so pembrolizumab is approved in stage four triple negative breath with the CPS score greater than 10. So there are ineligible checkpoint inhibitor patients. So those are patients with CPS square 1 to 10. All six of these patients actually had CPS scored greater than 10, but we saw a huge, huge potential for those patients that are in ineligible to receive pembroglizumaba standard of care. So actually we did amend the protocol this past summer to incorporate patients who are ineligible to receive checkpoint inhibitor because we believe that this downstream effect could actually show additional impact and essentially show that pembrolizumab can now work in those ineligible to receive triple negative breast patients. Okay, so yeah, as you alluded to, you know, study is enrolling by the end of next summer, should be completed. So what can you say about the next clinical updates from the study in that intervening time? Yep, so as we mentioned. So all 36 patients enroll by next summer. We have full line of sight as far as the patients as well as the data coming out of that. So as I mentioned, meeting meaningful updates we can provide throughout throughout this year as well. As into next year, we definitely will have some updates regarding you know, by meeting meaningful, I mean, you know, 1012 those those sorts of numbers is what we'd be talking about. Providing that update, we don't necessarily need to provide you know onesie twosie sort of things. I think that that would be much more meaningful from an investor perspective. Okay, and then San Antonio is obviously coming up as you alluded to with some preclinical data. What are the key focus areas for those updates? Yeah, so I would say the key focused areas would be around benchmarking. As I mentioned, we've invested a lot of money and time over the last couple of years in terms of translational research. So understanding packs, understanding this downstream sort of epigenetic effect. So I would expect to see, well, and we will be presenting, at least one focus would be around benchmarking and showing that this downstream effect is not a mechanism of action. It's not a PI3K mTOR that's actually unique to PACS. So we'll definitely be providing that. One of the other areas that we've expanded into would be early stage triple negative breast. So as far as the mechanism of using PACS in the adjuvant setting in stage two B, stage three triple negative breasts, I think is super, super exciting, huge unmet need. We know that those patients with high risk, so residual disease with triple negative breast, so those patients that have had surgery, radiation, kind of chemo, that still have residual disease and are not having complete response after those have a high propensity of recurrence. And so we'll be providing more data around the early stage triple negative breasts. Okay, maybe the good time to transition then to the opportunities beyond the stage four. So recently you also talked about moving into earlier stage triple negative, HR positive, colorectal. So maybe starting with the stage two and three triple negative. Can you talk about the size of the opportunity here, how patients are currently treated and how PACS might fold into that to address an unmet need? Absolutely. So as we mentioned, you know, the stage 2B, stage 3 patients, right, have a standard of care, right? So they go through surgery, they go through radiation, they through sort of chemo, and then they all receive essentially adjuvant setting with pembrolizumab. We know that these high risk patients, patients with residual disease are recurring much, much quicker. As far as the size of the patient population, I would say it's even larger than the stage four triple negative breast from a commercial potential. We have said and have committed that we'll be initiating trial probably in the second half of 2027 with regard to the early stage triple negative breasts. As far HR positive, and we can jump into that, obviously that space has been moving very, very quickly with some recent approvals as far as an IV dual PI3K mTOR inhibitor. Yeah, obviously we wanted to move into that space. What we've talked about is that we don't just wanna be another fast follower, another me too drug, right? Which I think definitely has a place for an oral once a day dual PI 3K mTor inhibitor with a reasonable sort of safety tolerability profile, very limited mucositis, stomatitis, and a few other sorts of those on target effects. But where we want to be is we want to be, how are we different? So how is Pax different? We know that the molecule itself is different. We'll be providing more data around the benchmarking maybe against some of these dual PI3K mTOR in December at San Antonio Press. But we wanted to show that sort of differentiation feature and that ability of Pax to be able to downstream sort of reprogram circulating tumor cells, but also terminally exhausted CD8 T cells. So that recurrence. And that's where really our focus has been, is how can we avoid that sort of recurrence or progression of disease, which we know that these patients with HR positive, especially if you're talking about a second line setting, and that's what the impetus and the preclinical work we've done both in vitro, in vivo and ex vivo has shown and that we're be initiating that extension of this ongoing trial this year. So we expect to have first patient enrolled by the end of this year, And that's gonna be in combination with Fulvestrant plus CDK4-6, so standard of care. It's approximately 78 patients total. So we're looking at two different dose levels of Pax, 15 milligram or 30 milligram once a day in that combination, that doublet second line setting. And we have given guidance that we expect to have all of those patients enrolled by the end of this year, sorry, end of 2027. I'm already skipping ahead to 2027 That's right, lots happening. So yeah, obviously you mentioned, you might see the impact of this mechanism in the sort of PFS and OS readout, but obviously that may take some time to translate for HR positive. But in the meantime, is it really about tracking these biomarkers and the benchmarks for these translational elements? How would you get conviction earlier on that you're seeing something different? Absolutely. So on top of that, yeah, you're right. So PFS OS is kind of a later readout. Obviously response rates is important. That's what's been shown as far as those other PI3K alphas and other drugs out there in the space. But the longitudinal biomarker assays and the blood assays that we have across the TMBC arm we're launching as well as within the HR positive and also in the colorectal study that we're are launching early next year as well. So we expect to see those sorts of early translational markers that we've shown in triple negative breast, but also to see how that plays out in terms of HR-positive and CRC. So you're spot on. That is really giving us an early readout as far as if we're gonna be able to move and see potentially that downstream effect from a PFS and OS down the road. Okay, and completing enrollment, as you mentioned, by year-end next year, would you expect a similar type of clinical updates earlier than that, sort of 10 to 12 pages? We will. With the longitudinal biomarker assays, we would expect to show some reasonable, sort of, again, medium, meaningful updates along the way. Obviously, response rates I think would be important to show, and you're right, you know, one, two patients is not meeting meaningful. I would expect to see some very healthy updates throughout 2027. Okay. And then the other opportunity is colorectal cancer, and so this is an area where, you know, I think it's well known that standard of care is fairly poor in the late-land setting, but it's also an increasingly crowded space, new mechanisms like ADCs. So, yeah, just curious how you see the potential positioning for PAX in this setting. Yeah, how we came across colorectal cancer is one of these unique areas that we looked at the landscape of other huge unmet need populations. And colorector obviously jumped out as well as a number of others. But this is one that, in general, has not been successful with checkpoint inhibitors, right? So checkpoint inhibitor has notoriously been negative in the space, showing, you know, no effect with the PMMR colorectoral cancer, right. And so that's about 80, 85% of all metastatic colorectal cancer. What we thought was, well, if we're able to show pre-clinically wise, in vitro, in vivo, ex vivo, and now in patients with triple negative breast, then it will show this sort of effect of reprogramming, that maybe we can show that in colorextal. So that was really the impetus for us exploring CRC, in particular PMMR CRC. And lo and behold, the preclinical work is always laid out. We've essentially designed a phase two study looking at PAX in combination with pembrolizumab as well as PAX and monotherapy. So the preclinical work today, it has shown that PAX actually works as monotherapy as well in combination with pemberlizumat. So the phase two that we are launching in the first quarter of next year is gonna look at two different dose levels at 15 and 30 milligram is monotherapy, but also adding PEMBRO to the backbone of PACS in colorectal cancer. We also have a comparator in study, comparator arm. So it is a phase two study. We expect to have all of those patients enrolled. I think approximately 90 patients enrolled by the end of next year. So this is super unique. Again, there aren't too many other PI3Ks, I think, in the space with CRC. It is in third line settings. So, you know, very limited sort of options for these patients, but I would expect, you know, again, similar to the HR-positive, we'd expect to see some updates along the way in 2027 on that end. Obviously, you Know, the progression-free survival and response rates are quite low in this patient population, so we'd Expect to see Some early, you Know, some nice fruitful updates throughout 2027. Okay, so lots to look forward to for PACS, especially next year. You also have a few preclinical assets, so I was wondering if you could touch on the opportunity for these programs and sort of what we might hear at the upcoming R&D day. Yeah, great. So we have two R&B platforms, very, very unique, essentially protein degraders. One's at DB1, which is a chromatin-focused, very very novel, first of its kind. It's a bicyclic peptide. We are expecting to have some updates in early 2027 on that end, maybe even a future sort of R&D day to describe the the target as well as our optimized molecule. The one that's leading the way would be a protein degrader, a PDA1 protein degrador. That is super, super exciting. We actually have, as you mentioned, an R& D day early December, December 2nd, and it's open for people to come in and listen. Essentially, the protein degrader is very similar as far as a nuclear-based PD-L1 protein degrador. So this is focused on a PD-1 protein that is enriched in cancer cells. It's actually nuclear-base, so it's a post-transcriptional, nuclear- based, and our optimized lead asset, NDL2, is what we call it, is able to cross the nuclear membrane and impact that sort of of a post-transcriptionally modified PD-L1 protein. We'll provide more data on that. We've given guidance that we expect to be in the clinic in the, before the end of the year, 2027. And so again, we'll have some updates in December regarding kind of a, how we came to the, from concept to sort of the R&D and drug discovery and then kind of next steps. And so that'll be the focus of the RD day. Okay, fantastic. So I think we're up with about a minute left. do you mind reviewing just your upcoming catalysts and cash runway? So we'll start with cash runway. So with the recent financing, we have a little over $80 million in the bank. We have cash well into 2031, so it's quite a unique space for a small micro-cap biotech company. With that, we're able to really execute, as far as the programs I've kind of laid out, looking at completion of the triple negative breast stage four, completion of HR positive HER2 negative, as well as completion of the colorectal third line, as well initiating IND enabling, as well in the clinic with our set DB1 program, as well our PDO1 protein integrator. So significant catalysts all throughout the end of this year and well into 2027. 2027 is a year of execution. This past year was really execution around capital markets and expanding sort of our investments, as well as our investor relations. So I think we've done quite a big job here over the last year and a half, considering where we were about a year and half ago. And this year coming up is executions, clinical development, it's clinical data. Okay, great. Well, with that, I think, we're gonna wrap it up. So thanks so much for joining us, John, and thanks for tuning in, everybody. Great, thanks, Paul.