Company Interview / The race is on for R&D

Key points:

Race Oncology reports a $13.8M loss but sees a 41% rise in revenue Focuses on developing bisantrene and plans solid tumour trials with $5M raise Financially stable with $17.2M cash, confident in future growth and valuation

Dr Daniel Tillett of Race Oncology highlights several key developments for the company. Despite reporting an annual loss of $13.8 million, revenue rises by 41% to $830,000. The company focuses on developing bisantrene as an anti-cancer and cardioprotective agent and plans further trials in solid tumours, backed by a $5 million raise.Daniel explains their strategy involves intense R&D to accelerate the drug's market readiness. He mentions the unpredictability of biotech timelines, particularly with potential early takeovers. Regional deals have become common, facilitating funding for further work in primary markets like the US, Europe, and Japan. Daniel states they are financially stable with $17.2 million in cash, supporting their cash flow until 2026. With substantial R&D tax concessions and options, he's confident in their future growth. He asserts Race Oncology is undervalued, and despite being seen as a phase one asset, the drug bisantrene is advanced and de-risked.

Full unedited transcript below:

0:11

Wright's Oncology, posting a loss to $13.8 million for the full year, a further drop from its loss last year of 9.9 million revenue, increasing 41% to, uh 0.8 3 million. So I guess that's $830,000. The biopharmaceutical company that works towards providing cancer care is in the process of developing bison taurine as an anti-cancer and cardioprotective agent into the clinic. It's also raised $5 million, which puts it in a good position, it says, to undertake further trials in solid tumors. Let's get the details now from Race Oncology CEO Daniel Tillett. I was trying to do some maths on the fly there. Daniel, maybe you talk about the numbers in in your words. Yeah. For companies like race that are loss making, we spend the money we raise on doing R&D and that R&D. Um, It's a long term play to develop a drug through to the market. So it doesn't make a lot of sense actually, for the quarterlies that are

1:11

actually much more useful to look at, uh, because they tell you the cash position of the company. So we raise capital. We spend that capital on R&D. Uh, the more we spend on R&D, the faster those R&D projects go and the further we can advance and get us, uh, get the company and the drug, uh, onto the market. And then that is the point at which you, uh, get a return. Hopefully. Daniel, what is this sort of time frame, in your view, as the the leader of this ship that you might be able to get to?

1:40

Yeah, it's a little unusual, difficult to predict with biotechs because many companies in our position get, uh, what's called taken out early. You get taken over, so you do a deal potentially out of phase 1 or 2 data long before you get to market, and a large pharmaceutical company buys your, uh, company or buys your drug off. You, uh for hopefully a very large amount of money. Uh, and that's the sort of. And when that occurs, it's difficult to predict. The other complicating factor is regional deals. This is becoming increasingly common within the biotech space where you do a deal for, let's say, Chinese REITs or the Southeast Asian REITs. Um, and that brings in you, uh, sell the rights in a geographical location. And then that funds the further work. Also the primary markets of the US and Europe and Japan. So when you're working for the readiness for these human clinical studies, just tell us where you're at and you're working along some other partners too here. Yeah.

2:40

So what we've done in the last year is basically remanufacture, uh, reformulate our drug. It had a, the original version of the drug, which actually caused it to be lost. Uh, it couldn't be delivered very easily via peripheral veins into the arm or leg. Uh, we've been able to solve that problem. Reformulated, generate new IP, reset the patent clock. Um, but we had to go back through and do the manufacturing of that to what's called GMP standard. We have to do all the safety studies once again in animals. Uh, it's an amazing amount of work that has been accomplished over the last 12 months. Um, and all of that's gone really well. Uh, we're about to get straight back into the clinic as soon as possible with this new formulation and take that forward. So are you, I guess, going back to that earlier question in a good position then to deliver on some of those growth plans? Yes. Well, we we're kind of lucky we, we kind of early stage but at the same only because of the formulation change. But the drug itself has actually been all the way through

3:40

to approval in uh, as an anti-cancer agent. It's been in over 1500 patients, 50 clinical trials, including a couple of clinical trials that we've run ourselves in AML phase two trials. And it's performed really well in all of those. So even though it's technically an early stage asset, it really isn't in practice. We know the dose that to give. We know the toxicity. We know the cancers that it's active in. It's kind of, um, almost cheating. I think, uh, in the normal process that happens with drug development. All right. What about if investors are concerned or your rate of cash burn? How is that going? How is that faring? What's the outlook for the next year. Yeah. So we're in a really good position cash wise. We have 17.2 million at the end of June 30th. We have enough cash with all our spending. We've got two clinical trials coming up, uh, to last till the end of 2026. In mid 2026, we have $25 million

4:40

worth of, uh, options that are in the money dollar 25. We're sitting at around dollar 60. Um, and so we're in really well positioned to be able to fund all the way through pretty much to the end of the decade, uh, or going well. So on top of it, we get the benefit of R&D tax, uh, concession. So that brings in sort of $0.43 in the dollar, because we're doing all our clinical trials here in Australia and doing as much of the research as we can here in Australia. We get a very good conversion. And so last year we got $4 million dollars back on the R&D spend, and we expect to have more this year. I know that you can't control anything that happens on the market, but you are a growth stock. You've done very well over the past year incredibly well when you look at longer term charts as well. Um, do you think that you're fairly valued? Do you see further growth, or how do you feel that your you are compared to your peers as well?

5:35

That's always a really difficult question to answer. I think we're being undervalued at the moment. We're being valued sort of as though we're a phase one asset when we're really not a phase one asset. We're a phase one asset for a new formulation. Um, not a phase one asset for a drug. And so as a consequence of that, many people that don't understand the story well, um, underestimate how advanced we actually are and how quickly and how de-risked, uh, the drug is. And so we really should be in mind. This is, of course, my opinion, uh, that we should be valued more as a late stage asset than an early stage asset. There's plenty of upside to come, I think.