Kazia Therapeutics Limited ABN 37 063 259 754 Half Yearly Report - 31 December 2023 Kazia Therapeutics Limited Directors' report 31 December 2023 The directors present their report, together with the financial statements

Kazia Therapeutics Limited

Half Yearly Report - 31 December 2023

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 Consolidated entity' or parent entity') and the entities it controlled at the end of, or during, the half-year ended 31 December 2023.

The following persons were directors of Kazia Therapeutics Limited during the whole of the financial year and up to the date of this report, unless otherwise stated:

Iain Ross (Resigned 11 August 2023)

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

Bryce Carmine (Appointed Chairman 18 January 2024)

Robert Apple (Appointed 18 January 2024)

Principal activities

During the financial year the principal continuing activity of the Consolidated entity consisted of pharmaceutical research and development.

Review of operations

The loss for the Consolidated entity after providing for income tax amounted to $8,823,513 (31 December 2022: $13,586,027).

The attached financial statements detail the performance and financial position of the Consolidated entity for the half-year ended 31 December 2023.

At 31 December 2023, the Consolidated entity had total funds of $3,562,602 comprising cash in hand and at bank.

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 Consolidated entity will continue as a going concern.

The Directors have considered this to be appropriate. During the month of February 2024 to, the Consolidated entity raised total proceeds for the period of US$447,788 (A$685,280) using the ATM facility and continues to seek additional funding sources both in Australia and overseas.

Refer to Going Concern' in Note 1 to the financial statements for further details. Subject to the matters disclosed under Going Concern in Note 1, the Directors have reasonable grounds to believe that the Consolidated entity will be able to pay its debts as and when they become due and payable.

Research and development report

The lead program for the Consolidated entity is paxalisib (formerly known as GDC-0084),

a small-molecule dual inhibitor of the phosphatidylinositide 3-kinase

(PI3K) pathway and the mammalian target of rapamycin (mTOR), which was licensed from Genentech, Inc. in October 2016. The development candidate is distinguished from the majority of molecules in this class by its ability to cross to the blood-brain barrier, which has been demonstrated in multiple animal species and confirmed in human data.

Paxalisib is protected by granted or pending composition-of-matter

patents in all commercially relevant territories. Loss of exclusivity varies between territories but is no earlier than 2030 in any territory. Paxalisib was granted Orphan Drug Designation (ODD) for glioblastoma by the US FDA in February 2018, and for the broader indication of glioma in August 2020. Paxalisib was granted Rare Pediatric Disease Designation (RPDD) for certain forms of childhood brain cancer by the US FDA in August 2020 and was also granted Fast Track Designation for glioblastoma in August 2020. In addition, paxalisib was granted ODD by the US FDA for the treatment of atypical rhabdoid/teratoid tumours (AT/RT), a rare pediatric brain cancer, in June 2022 and RPDD in July 2022. Paxalisib in combination with radiation therapy was also granted Fast Track Designation for patients with solid tumor brain metastases and PI3K pathway mutations in July 2023. Collectively, these special designations provide paxalisib with enhanced access to the FDA, a waiver of PDUFA fees, a period of data exclusivity and, in the specific cases of RPDD, the potential to secure a pediatric Priority Review Voucher (pPRV) should paxalisib be approved in either of these indications.

Paxalisib has completed a 47-patient

phase I clinical study under Genentech in patients with progressive or recurrent high grade glioma (NCT01547546), which showed the drug to be generally safe and well-tolerated, and which provided pharmacodynamic proof of concept and signals of potential clinical activity. This study was published in Clinical Cancer Research

, and a companion paper detailing a post hoc analysis of imaging data from the study has been published in the same journal.

Kazia has completed a phase II clinical trial of paxalisib in newly diagnosed glioblastoma patients with unmethylated MGMT promotor status (NCT03522298), which is expected to be the primarily target population at commercial launch. This study has confirmed the safety profile and pharmacokinetic parameters of the drug in this specific population, and has provided convincing signals of clinical efficacy. Final data from the completed phase ll study of paxalisib was presented at several neuro-oncology and medical oncology conferences. The key findings included a median overall survival of 15.7 months, which compares favorably to the figure of 12.7 months that has been reported for temolozolomide, the existing standard of care.

In October 2020, the Consolidated entity executed a definitive agreement with the Global Coalition for Adaptive Research (GCAR) to introduce paxalisib into the ongoing adaptive platform study, GBM AGILE (NCT03970447). This study is designed to provide substantial evidence for approval of new drugs in glioblastoma, and is intended to serve as the pivotal study for paxalisib in US, EU, and other markets. The first patient recruited by a site opened to the paxalisib arm occurred on 7 January 2021. In November 2021, the study opened to recruitment in Canada. Expansion to several countries in Europe was completed during CY2022. Final data from the GBM AGILE study is anticipated during 1H CY2024.

On 1 August 2022, the Consolidated entity announced that it had been informed by GCAR that the paxalisib arm had not graduated to the second stage of the GBM AGILE study, and that recruitment had therefore completed with approximately 150 patients enrolled to the first stage. Those patients remain ongoing, with final data anticipated in 1H CY2024. The interim graduation' analysis may have been affected by the rapid and back-loaded recruitment profile of the study and does not preclude a positive outcome in the final data.

Eight investigator-initiated studies continued to progress during the period: a phase ll study in DIPG and other diffuse midline pediatric gliomas run by the Pacific Pediatric Neuro-Oncology Consortium (PNOC) (NCT05009992) (see description below), a phase II study with paxalisib in HER2+ breast cancer brain metastases at Dana-Farber Cancer Institute in Boston, MA (NCT03765983), a phase II multi-drug, genomically-guided study in brain metastases run by the Alliance for Clinical Trials in Oncology (NCT03994796), a phase I study with paxalisib in combination with radiotherapy for brain metastases at Memorial Sloan Kettering Cancer Center in New York, NY (NCT04192981), a phase II study with paxalisib in primary CNS lymphoma at Dana-Farber Cancer Institute in Boston, MA(NCT04906096), a phase ll study in glioblastoma with ketogenesis run by Weill Cornell Medicine (NCT05183204), a phase I study in low grade glioma run by University of Sydney (LUMOS2) and a phase I study in children with high grade glioma and PI3K pathway mutations (OPTIMISE).

The investigator-initiated PNOC study is a phase II multi-arm

study, which includes several combinations of paxalisib with ONC201 (Chimerix, Inc), in paediatric patients with diffuse midline gliomas, including DIPG (NCT05009992). This study is run by the Pacific Pediatric Neuro-Oncology Consortium (PNOC), based at the University of California, San Francisco. In October 2022, the Consolidated entity announced the expansion of the PNOC022 study to Australia and additional sites in Israel, the Netherlands, and Switzerland. Preliminary data was presented at SNO Annual Meeting in Vancouver in November 2023. The overall survival in the first 68 patients enrolled was reported at 16.5 months which compares favorably to historical controls of 8-12

In August 2022, the Consolidated entity announced the presentation of promising new data from an ongoing phase l study of paxalisib in combination with radiotherapy for the treatment of brain metastases, sponsored by Memorial Sloan Kettering Cancer Center in New York, NY. Interim data from the first stage of the study was presented during an oral presentation at an international neuro-oncology conference on CNS clinical trials and brain metastases. The data reported in the initial exploratory stage that of the 9 patients evaluated for efficacy, all 9 patients exhibited a clinical response, according to RANO- BM criteria, with breast cancer representing the most common primary tumour. Recruitment to the expansion stage has commenced, with the objective of recruiting up to an additional 12 patients.

The Consolidated entity announced on 07 March 2023 that it has entered into a collaboration with the Australian and New Zealand Children's Haematology / Oncology Group (ANZCHOG) for a phase II clinical study examining paxalisib in children with advanced solid tumours, including brain tumours. The study, named OPTIMISE, will combine paxalisib with chemotherapy for children with specific genetic mutations in their tumours. The study will harness expertise and insights gained from the Zero Childhood Cancer Program, which aims to match childhood cancer patients with targeted therapies suited to the unique characteristics of their tumour.

In June 2023, the Consolidated entity announced that it is supporting the University of Sydney on a molecularly-guided phase II clinical study to examine paxalisib in adult patients with recurrent/progressive isocitrate dehydrogenase (IDH) mutant grade 2 and 3 glioma (G2/3 gliomas). The first patient was enrolled and dosed on the paxalisib arm in 4Q23.

In the context of a previously declared strategy to explore the use of paxalisib in cancers outside the central nervous system, the Consolidated entity has entered into a number of research collaborations with leading cancer centers. In October 2022, such a collaboration at the Huntsman Cancer Center at the University of Utah presented preclinical data for paxalisib in melanoma at a conference for melanoma research in Edinburgh, Scotland. The data, summarized in a poster presentation, demonstrated potent single agent activity for paxalisib, as well as synergy with BRAF and MEK inhibitors, which are standard of care therapies in this disease. In November 2023, this data was published in the high impact journal, Molecular Cancer Therapeutics.

In December 2022, the Consolidated entity announced the existence of a research collaboration with the Queensland Institute of Medical Research, to explore the use of paxalisib as an immodulator in the treatment of solid tumours. This work potentially identifies a novel mechanism of action for the drug, and consequently has been patented to secure novel intellectual property. Potentially, the project may support use of the drug in combination with immuno-oncology therapies.

The Consolidated entity's second R&D program is EVT801, a small-molecule selective inhibitor of vascular endothelial growth factor receptor 3 (VEGFR3), which was licensed from Evotec SE in April 2021. The development candidate exhibits a very high degree of selectivity for VEGFR3 over other protein kinases, and this is expected to be associated with a favourable toxicity profile in the clinic and, potentially, a lesser propensity for secondary resistance.

A phase I multiple-ascending dose study of EVT801 in patients with advanced cancer (NCT05114668) is ongoing. This study is designed to provide information on the safety, tolerability, and pharmacokinetics of EVT801 in humans, and to establish the maximum tolerated dose for future studies. The study also includes a rich suite of translational biomarkers which will provide detailed information about the pharmacological activity of the drug. The study is ongoing at two sites in France, with clinical data anticipated in CY2024.

In December 2022, scientists working for and with Evotec SE, the Consolidated entity's licensing partner for EVT801, published a summary of their preclinical research on the drug in the cancer journal, Cancer Research Communications. The paper outlines the substantial body of evidence supporting the activity of EVT801 as an anti-cancer therapy, and includes comparative data against several approved therapies with similar mechanisms of action. The paper also presents combination data with several immuno-oncology agents showing evidence of synergy.

Significant changes in the state of affairs

There were no significant changes in the state of affairs of the Consolidated entity during the financial half-year.

Matters subsequent to the end of the financial half-year

On 8 January, 2024, Kazia Therapeutics Limited received notice from Karen Krumeich of her intention to resign as the Consolidated entity's Chief Financial Officer, effective immediately. On 11 January, 2024, the Consolidated entity's Board of Directors appointed Gabrielle Heaton as its Principal Accounting Officer and Principal Financial Officer, effective 15 January, 2024.

On 18 January 2024, Kazia Therapeutics Limited announced the appointment of pharma industry executive, Mr. Robert Apple to Kazia's Board of the Directors as a Non-Executive

During the month of February 2024, the Consolidated entity raised total proceeds for the period of US$447,788 (A$685,280) using the ATM facility and continues to seek additional funding sources both in Australia and overseas.

On 21 February 2024, Armistice Capital exercised 1,824,445 prefunded warrants for a cash price of US$18,244 and 18,244,450 ordinary shares were issued.

No other matter or circumstance has arisen since 31 December 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. .

Auditors independence declaration

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

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

DECLARATION OF INDEPENDENCE BY GARETH FEW TO THE DIRECTORS OF KAZIA THERAPEUTICS LIMITED

As lead auditor for the review of Kazia Therapeutics Limited for the half-year ended 31 December 2023, I declare that, to the best of my knowledge and belief, there have been:

This declaration is in respect of Kazia Therapeutics Limited and the entities it controlled during the period.

Sydney, 12 March 2024

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.

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 half-year. The financial statements are presented in Australian dollars, which is Kazia Therapeutics Limited's functional and presentation currency.

Kazia Therapeutics Limited is a public Consolidated entity 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

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 12 March 2024.

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

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

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

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

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

Note 1. Material accounting policy information

These general purpose financial statements for the interim half-year reporting period ended 31 December 2023 have been prepared in accordance with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001, as appropriate for for-profit

oriented entities. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 Interim Financial Reporting.

These general purpose financial statements do not include all the notes of the type normally included in annual financial statements. Accordingly, these financial statements are to be read in conjunction with the annual report for the year ended 30 June 2023 and any public announcements made by the Consolidated entity during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.

The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period, unless otherwise stated.

Classification and measurement of other financial liabilities

The Consolidated entity's other financial liabilities comprise deriviatives in respect of prefunded and ordinary warrants. Prefunded and ordinary warrants are measured at fair value through profit or loss. All transactions costs in relation to the warrants are expensed immediately. Changes to the fair value of the instruments post issue will be recognised in profit or loss.

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. Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of the Consolidated entity.

Note 1. Material accounting policy information (continued)

During the half year ended 31 December 2023 the Consolidated entity experienced net cash outflows from operating activities of $6,334,872(December 2022: $8,806,148) and incurred a loss after tax of $8,823,513 (December 2022: $13,586,027).

As at 31 December 2023 the Consolidated entity had cash in hand and at bank of $3,562,602.

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 Consolidated entity has not generated significant revenues nor does the Consolidated entity 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 Consolidated entity. During the month of February 2024, the Consolidated entity raised total proceeds for the period of US$447,788 (A$685,280) using the ATM facility and continues to seek additional funding sources both in Australia and overseas.

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 up to US$35 million 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 22 April 2022 (the Sales Agreement), with Oppenheimer, who acts as sales agent. During the period ended 31 December 2023 $US1,090,642 (2022 $US4,201,322) was drawn down on the ATM facility. The ATM allows the Consolidated entity 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.

Accordingly the directors have prepared the financial statements on a going concern basis. While the Consolidated entity's current cash balance is not sufficient to fund the operations for a period of 12 months from the date of this report, the directors have prepared the financial statements on a going concern basis as they are confident of the Consolidated entity's ability to raise additional funding, via licensing and partnering activities, obtaining of grant funding or raising additional capital from investors. Should the above assumptions not prove to be appropriate, there is material uncertainty related to events or conditions that may cast significant doubt 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. The financial statements do not include any adjustments to the recoverability and classification of asset carrying amounts or the amount of liabilities that might result should the Consolidated entity be unable to continue as a going concern and meet its debts as and when they fall due.

Note 2. Critical accounting judgements, estimates and assumptions

When preparing the half-year financial statements, management undertakes a number of judgements, estimates and assumptions about recognition and measurement of assets, liabilities, income and expenses. The actual results may differ from the judgements, estimates and assumptions made by management and will seldom equal the estimated results.

The judgments, estimates and assumptions applied in the half-year financial statements, including key sources of estimation uncertainty were the same as those applied in the Consolidated entity's last annual financial statements for the year ended 30 June 2023.

Note 3. 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 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.