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KTRA: Year-End Kick-off for GCAR Trial

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By John Vandermosten, CFA



First Quarter Fiscal Year 2021 Operational and Financial Results

Kintara Therapeutics Inc. (NASDAQ:KTRA) announced first quarter financial and operational results last week in a press release and filed its 10-K with the SEC for its fiscal first quarter ending September 30, 2020. The reporting period included the execution of the merger between DelMar Pharmaceuticals and Adgero Biopharmaceuticals Holdings which was approved on August 17. Subsequent to the merger close, Kintara raised $25 million in gross proceeds, which will support the entry of VAL-083 and REM-001 into registrational trials for glioblastoma multiforme (GBM) and cutaneous metastatic breast cancer (CMBC). Details of the Series C issuance are found here in our report.

2020 was a busy year for Kintara, with advancements in GBM trial enrollment and reporting of results including interim data from the ongoing Phase II studies presented at AACR. In a strong vote of confidence by the Global Coalition for Adaptive Research (GCAR), Kintara’s GBM program for VAL-083 was selected to participate in the Glioblastoma Adaptive Global Innovative Learning Environment (GBM AGILE) study. A $500,000 loan was granted to the company from the National Brain Tumor Society and National Foundation for Cancer Research to support preparation for the study. The agreement to move forward with GCAR was executed on October 21.

Other key events during the third quarter and to date include the company regaining compliance with minimum bid requirements on the NASDAQ and the receipt of a Small Business Technology Transfer grant to study REM-001 in the prevention of arteriovenous fistula maturation failure (AFMF).

Kintara reported no revenues in 1Q:21. Operating costs were $2.9 million which excludes merger costs of $500,000 and a non-cash write down of in-process research and development of $16.1 million. Other income and loss includes net interest expense of $8,000, loan amortization of $27,000 and a small foreign exchange gain. Net loss was ($19.5) million or ($1.33) per share. Research and development expenses were $1.4 million, up 91% compared with 1Q:20 levels. Higher clinical development, intellectual property and share based compensation expenses contributed to the change. Initiation costs for the GCAR trial and greater intellectual property costs also added to the total. General and administrative costs of $1.5 million rose 46% over prior year levels. The expansion was attributable to higher professional fees, office and sundry expense, share-based compensation and professional fees. Warrant issuance related expenses were also a factor in the rise.

Cash on the balance sheet as of September, 30, 2020 was $22.6 million, compared to $2.4 million as of fiscal year end 2020. The change in the balance was the sum of cash from financing of $23.4 million offset by cash burn. Shares outstanding as of November 9, 2020 were 24.7 million in active equity shares with another 21.7 million shares represented by the unconverted Series B and Series C preferred stock (see share balance on page 1) (1).

Corporate Milestones

Kintara is conducting multiple Phase II clinical trials for GBM in VAL-083 and will soon launch a pivotal study for REM-001. The focus for the company is to complete these studies and begin the GCAR registrational effort before year end 2020 and REM-001 by 2Q:21. Below we list recent milestones and anticipated future events.

‣ Completed enrollment, newly diagnosed GBM – 1Q:20

‣ Acquisition of Adgero announced – June 2020

‣ NBTS & NFCR Loan in Support of GCAR – June 2020

‣ Complete enrollment, recurrent GBM – 3Q:20

‣ Merger Close – August 14, 2020

‣ Launch GCAR AGILE registration study, stage 1 – 4Q:20

‣ Top-line preliminary results for Newly Diagnosed Phase II GBM study at SNO – 4Q:20

‣ Top-line preliminary results for Recurrent Phase 2 GBM study – 1Q:21

‣ Initiate CMBC confirmatory trial – 2Q:21

‣ Top-line preliminary results for Adjuvant Phase 2 GBM study – 2Q:21

‣ CMBC confirmatory trial results & Phase III start – 4Q:21

‣ GCAR AGILE registration study, stage 2 – 1H:22

‣ CMBC trial complete – 2023

‣ CMBC NDA filing - 2024

‣ GCAR AGILE top-line results – 2023

What’s New?

Kintara has continued to advance the VAL-083 and REM-001 programs towards pivotal studies and executed the GCAR agreement for VAL-083 to enter registrational studies. The adaptive study in glioblastoma multiforme (GBM) will generate the data necessary for a new drug application (NDA) with the FDA. GCAR has activated 31 US sites that are actively enrolling patients and is expected to launch international sites over the next year. The trial is targeting enrollment of 150 to 200 subjects and we think it can be complete by 2022. See our initiation for additional detail on the anticipated structure of the trial. The company also received notification of a Small Business Technology Transfer grant to study the use of REM-001 in the prevention of arteriovenous fistula maturation failure (AFMF). While AFMF is in a non-oncology indication, it is an opportunity to use non-dilutive funds to advance a candidate in the company’s pipeline. There may be an additional grant at a later date that is likely to provide sufficient funds to advance the indication to the investigational new drug (IND) stage at which time a partner would be identified to take it into the clinic.

Our Thesis

Key reasons to own Kintara shares:

‣ Phase III ready assets to address an unmet need in GBM and CMBC

‣ VAL-083 is a well-understood chemotherapy agent with long history of use in other cancers

◦ Granted orphan status for both GBM and ovarian cancer

◦ Differentiated mechanisms that cross blood brain barrier and block repair enzyme

◦ Favorable drug safety profile

‣ Acceptance of VAL-083 into the highly regarded GCAR AGILE GBM study

◦ Provides registrational pathway with top tier partners

‣ REM-001 addresses unmet need in CMBC

◦ Substantial work completed to characterize safety and efficacy

◦ 1,100 patients in safety database

◦ Light activated drug reduces systemic risk

◦ Small inexpensive trial may be sufficient for approval

‣ Additional indications for VAL-083 and REM-001 in clinical development

An expanded summary of our investment thesis on Kintara can be found here.


Kintara is developing a pair of well-researched therapies in oncology with several characteristics that make the candidates particularly amenable to addressing GBM and CMBC. For VAL-083, the ability to cross the blood brain barrier and overcome DNA-repair enzyme resistance combined with the agent’s affinity to be absorbed by cancer cells provides a mechanism of action that may provide superior safety and efficacy compared with the current standard of care. In the case of REM-001, the targeted nature of the approach avoids systemic exposure and addresses many of the shortcomings of surgery, chemotherapy and radiotherapy. Kintara offers exposure to two large oncology markets and is developing two assets primed to enter pivotal studies.

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1. Note that shares outstanding used to calculate our target price includes share balance as of November 9, 2020 as reported on page 1 of the first quarter FY2020 10-Q, assumed conversion of the Series B Preferred Stock and assumed conversion of the Series C Preferred Stock.