Market reaction - current sentiment: Personally, I believe there was too much expectation regarding the data to be presented at AACR. I saw quite a few posts on various sites where individuals did not appear to understand what PK means. At the same time, international investors who are not used to ASX trading rules appear to assume that every trading halt will have life changing, "to the moon"-news. And quite a few posts contained the theme of "new time catalysts" - they have now been shifted to H2 2021. There will be some disappointment even though in the case of the Phase II GBM trial it is fabulous news - and people move on.
Out-licensing of cantrixil: Kazia's model is to inlicense "hidden gems" (my words) and then out-license them once value has been created. We can argue if this was the right timepoint for the outlicensing deal but it increased the cash position, reduced the risk of near-term capital raising and thereby de-risked it for investors.
In-licensing of EVT801: You are absolutely right - it is only preclinical data and the statistical success rate for regulatory approval for such a compound in oncology is less than 4%. So at this stage the market is probably right not to jump for joy in terms of share price. But given that Kazia does not have its own R&D organisation, why should they not make a move now if a compound is identified that fits the profile? It is a fairly low upfront payment and the upcoming studies will show if the investment is justified.
Paxalisib outside of oncology: I think you can't really have it both ways - it is inconsistent to fault management for bringing in a new compound with promising preclinical data but at the same time demand that they broaden the scope of company into areas where it has not been demonstrated if an inhibition of the PI3K pathway had any benefit.
Share price target / broker coverage: At the successful completion of every milestone in the clinical development towards approval I expect the brokers to increase their share price target. Would you rather have no analyst reports than those who come to a positive conclusion of the overall strategy but currently with a relatively conservative price target?
KZA Price at posting:
$1.35 Sentiment: Buy Disclosure: Held
