Kazia Therapeutics Stock: Is KZIA a Buyout Candidate in the Making?

InvestorPlace

Australian biotech company Kazia Therapeutics stock rocked the market after reporting encouraging results from a Phase II/III trial for its glioblastoma brain cancer therapy Paxalisib.

The positive results extended the life of patients by over three months compared to the current standard of care. Because the patients were a difficult-to-treat population, the results gave the oncology biotech developer cause to arrange a meeting with the Food & Drug Administration (FDA) to pursue an accelerated pathway for approval.

As a result, Kazia Therapeutics stock surged 730% on the news, jumping from 19 cents per share to as high as $1.58 before eventually tumbling lower. Shares stand 110% above where they traded before it posted the results.

Because glioblastoma treatment is seen as a $10 billion market opportunity according to some estimates, producing a treatment that is better than the current level of care is a major achievement.

As such, there are numerous avenues for Kazia Therapeutics to exploit this market if Paxalisib gains approval. What can’t be ignored is the possibility a pharmaceutical giant that is looking to bolster its portfolio of oncology drugs could step up and acquire Kazia Therapeutics stock.

A New Lease on Life

Glioblastoma (GBM) is reportedly one of the most common and aggressive forms of brain cancer. It represents nearly half of all brain cancers. Tumors form in the brain or spinal cord though they most often occur in the frontal and temporal lobes. Left untreated, GBM can be fatal in six months or less.

Kazia Therapeutics’ Paxalisib is itslead drug candidate and has been the subject of 10 clinical trials for this disease. The FDA previously granted the therapy Orphan Drug status in 2018 and it gained fast-track designation in 2020. It has received various other designations from the regulatory authorities for various diseases.

In the Phase II/III study, Paxalisib resulted in a median survival rate of over 15.5 months compared to 11.9 months under the current standard of care. This is in line with an earlier Phase II study that found similar longevity by administering Paxalisib.

A Hotbed of M&A Activity

According to analysts at White & Case, the field of oncology is setting a fire underneath mergers and acquisitions. Dealmaking will reach $375 billion in 2027 as demand for treatments grows.

In less than a year, Bristol Myers Squibb acquired Mirati Therapeutics for $5.8 billion to gain possession of its lung cancer treatment. It also paid $800 million upfront to China’s SystImmune for its signal-blocking therapy for cancer cells. It could be worth up to $8.4 billion.

AbbVie also acquired ImmunoGen for $10 billion and Johnson & Johnson bought Ambrx Biopharma for $2 billion. Previously, AstraZeneca , Gilead Sciences and Merck all made acquisitions in the cancer space to shore up their portfolios.

As patent expirations approach a critical stage for pharmaceutical stocks, Kazia Therapeutics could gain attention for Paxalisib.

Still a Risky Bet

Kazia Therapeutics stock has now traded in the 40-cent per share range for several days. Most of the gains were wrung out of the stock immediately after the results were published.

There could be a more massive upside in KZIA shares. Yet it still has the late-stage trials to go through, gaining permission from the FDA for fast-track approval and ultimately getting marketing approval.

Each step could excite the stock market again if the results are just as positive. Arguably staking a small claim to Kazia Therapeutics stock isn’t a bad idea. I wouldn’t go all-in because biotech investing is risky and full of unknowns. But for the speculative portion of your portfolio, buying a small tranche of the stock might not be a bad idea.

On the date of publication, Rich Duprey did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

On the date of publication, the responsible editor did not have (either directly or

indirectly) any positions in the securities mentioned in this article.

Rich Duprey has written about stocks and investing for the past 20 years. His articles have appeared on Nasdaq.com, The Motley Fool, and Yahoo! Finance, and he has been referenced by U.S. and international publications, including MarketWatch, Financial Times, Forbes, Fast Company, USA Today, Milwaukee Journal Sentinel, Cheddar News, The Boston Globe, L’Express, and numerous other news outlets.

Nasdaq Tumbles Amid Decline In Tech Stocks: Greed Index Moves To 'Fear' Zone

Benzinga

The CNN Money Fear and Greed index showed a decline in the overall market sentiment, with the index moving to the “Fear” zone on Tuesday.

U.S. stocks closed mixed on Monday, with the Dow Jones gaining more than 200 points ahead of earnings results from major companies and the Federal Reserve’s policy decision this week.

Big tech stocks moved lower with shares of Nvidia Corp. falling 7% and Microsoft Corp. slipping 0.9% on Tuesday.

On the economic data front, the number of job openings came in at 8.184 million in June compared to a revised 8.23 million in May. The S&P CoreLogic Case-Shiller 20-city home price index rose 6.8% year-over-year in May versus a revised 7.3% gain in April.

Shares of Merck & Co., Inc dipped 9.8% on Tuesday after the company reported second-quarter financial results and cut its FY24 adjusted EPS guidance below estimates. The Procter & Gamble Company shares fell 4.8% following a fourth-quarter revenue miss.

As far as the earnings season is concerned, 240 S&P 500 companies have released quarterly results so far, with around 80% of those exceeding market estimates.

Most sectors on the S&P 500 closed on a positive note, with energy, financials, and real estate stocks recording the biggest gains on Tuesday. However, consumer staples and information technology stocks bucked the overall market trend, closing the session lower.

The Dow Jones closed higher by around 203 points to 40,743.33 on Tuesday. The S&P 500 fell 0.50% at 5,436.44, while the Nasdaq Composite dipped 1.28% to 17,147.42 during Tuesday's session.

Investors are awaiting earnings results from The Boeing Company , Meta Platforms, Inc. , and Mastercard Incorporated today.

What is CNN Business Fear & Greed Index?

At a current reading of 42.2, the index moved to the “Fear” zone on Tuesday, versus a prior reading of 46.6.

The Fear & Greed Index is a measure of the current market sentiment. It is based on the premise that higher fear exerts pressure on stock prices, while higher greed has the opposite effect. The index is calculated based on seven equal-weighted indicators. The index ranges from 0 to 100, where 0 represents maximum fear and 100 signals maximum greediness.

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Equity Markets Close Mixed Ahead of Fed Decision

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Sector Update: Health Care Stocks Edge Higher Late Afternoon

MT Newswires

Health care stocks edged up late Tuesday afternoon with the NYSE Health Care Index increasing 0.1% and the Health Care Select Sector SPDR Fund (XLV) 0.2% higher.

The iShares Biotechnology ETF (IBB) rose 0.2%.

In corporate news, Imunon shares rose 171% after the company said topline data from a phase 2 trial of IMNN-001 in patients with advanced ovarian cancer showed an 11.1-month increase in median overall survival compared with treatment with standard-of-care alone.

Agape ATP shares soared 75% after the company disclosed Tuesday separate collaboration deals for projects related to the pain management and elderly care solutions market.

Pfizer lifted its full-year outlook after posting better-than-expected Q2 results, aided by double-digit revenue growth in the oncology and specialty care segments. Pfizer shares rose 2.4%.

Merck lowered its 2024 earnings guidance to reflect the costs tied to its Eyebiotech acquisition despite slightly raising its revenue outlook midpoint, while posting stronger-than-expected Q2 results. Its shares tumbled nearly 10%.

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Bristol Myers, Johnson & Johnson, AbbVie, AstraZeneca Expect Minimal Impact From Upcoming Medicare Price Negotiations

Benzinga

Four major pharmaceutical companies involved in the first U.S. negotiations over Medicare drug prices expect limited business impact despite anticipated price cuts.

Bristol Myers Squibb & Co , Johnson & Johnson , AbbVie Inc , and AstraZeneca Plc expressed this outlook after reviewing confidential government pricing set to take effect in 2026.

Reuters noted that executives shared their perspectives during recent quarterly conference calls.

The Medicare program, covering 66 million Americans aged 65 and older or with disabilities, spends billions annually on medications.

It plans to cut drug list prices by at least 25% in 2026, with official announcements expected by Sept. 1.

“I think the drugmakers were frightened (these prices) would be a big deal. But now, the ones who have reported or commented have actually said it seems to be OK and in line with expectations,” Reuters noted, citing a UBS analyst’s interview.

Under President Joe Biden’s 2022 Inflation Reduction Act, the Medicare agency identified the 100 most expensive drugs and selected 10 for price negotiations.

Chris Boerner, CEO of Bristol Myers, expressed confidence in navigating the impact on the blood thinner Eliquis, co-marketed with Pfizer Inc .

However, he and Robert Michael, CEO of AbbVie, reiterated concerns about government “price setting” potentially stifling innovation.

The IRA empowers Medicare to negotiate prices for costly drugs, potentially leading to price cuts ranging from the statutory minimum of 25% to a significant 60%.

AbbVie CEO Michael confirmed that the anticipated sales impact of its leukemia drug Imbruvica has been factored into its forecasts, while Jennifer Taubert, a J&J executive, maintained a positive long-term growth outlook despite the expected discounts for Stelara and Xarelto.

Citing an analyst at J.P. Morgan, Reuters noted that the responses from Bristol Myers and J&J indicate more manageable price cuts than initially feared.

An AstraZeneca executive indicated that minimal impact is expected by the time new prices take effect due to competition from generic versions of its diabetes drug Farxiga.

Guggenheim Partners analyst added that other drugs on the initial list, including Merck & Co Inc’s Januvia and Amgen Inc’s Enbrel, are also expected to face generic competition by 2029.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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Sector Update: Health Care Stocks Softer Tuesday Afternoon

MT Newswires

Health care stocks fell Tuesday afternoon with the NYSE Health Care Index shedding 0.1% and the Health Care Select Sector SPDR Fund (XLV) down 0.2%.

The iShares Biotechnology ETF (IBB) declined 0.2%.

In corporate news, Pfizer lifted its full-year outlook after posting better-than-expected Q2 results, aided by double-digit revenue growth in the oncology and specialty care segments. Pfizer shares rose 2%.

Merck shares tumbled 9.6% after the company lowered its 2024 non-GAAP EPS forecast to $7.94 to $8.04 from $8.53 to $8.65.

Grifols revised its financial records from 2020 to 2023 downward by 457 million euros ($494 million) to adjust the value of its stake in Chinese company Shanghai RAAS, Reuters reported. Grifols shares rose 2.1%.

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Why Merck Shares Are Trading Lower By 10%? Here Are Other Stocks Moving In Tuesday's Mid-Day Session

Benzinga

Processa Pharmaceuticals

-0.74%

Shares of Merck & Co., Inc. fell sharply during Tuesday's session after the company reported second-quarter financial results and cut its FY24 adjusted EPS guidance below estimates.

Merck reported second-quarter sales of $16.1 billion, up 7% year-over-year, beating the consensus estimate of $15.84 billion. Excluding the impact of foreign exchange, sales increased 11%. Merck reported adjusted EPS of $2.28, a shift from an EPS loss of $(2.06), beating the consensus of $2.15, according to data from Benzinga Pro.

Merck shares dipped 9.5% to $115.50 on Tuesday.

Here are some other stocks moving in today’s mid-day session.

Gainers

Imunon, Inc. shares jumped 147.8% to $2.9250 after the company announced topline results from its Phase 2 OVATION 2 study with IMNN-001. The results showed an 11.1-month improvement in median overall survival compared to standard-of-care alone in the intent-to-treat population.
Agape ATP Corporation surged 97% to $0.1731. AGAPE ATP strengthened wellness division via innovative incubation with emerging local SMEs.
Processa Pharmaceuticals, Inc. shares climbed 53% to $2.60 after the company announced FDA clearance of its IND application for a Phase 2 clinical trial of NGC-Cap in breast cancer.
INVO Bioscience, Inc. gained 33% to $1.1513.
Jet.AI Inc. shares gained 29% to $0.3850.
2U, Inc. jumped 28% to $3.4018.
CalciMedica, Inc. jumped 26.3% to $5.24.
JetBlue Airways Corporation rose 20.6% to $7.16 after the company reported better-than-expected second-quarter financial results.
Lumen Technologies, Inc. rose 19.1% to $2.3050.
Commvault Systems, Inc. gained 19.1% to $146.77 after the company reported better-than-expected first-quarter financial results and issued second-quarter revenue guidance above estimates. Also, the company raised its FY25 revenue guidance.
Harmonic Inc. climbed 18.8% to $13.96 after the company reported better-than-expected second-quarter financial results and issued third-quarter revenue guidance above estimates.
Meta Data Limited gained 18.8% to $5.42.
Enveric Biosciences, Inc. rose 18.3% to $0.59 after jumping around 6% on Monday.
Inspirato Incorporated gained 18.3% to $6.20 after jumping over 50% on Monday.
Sprouts Farmers Market, Inc. shares gained 15.9% to $98.13 after the company reported better-than-expected second-quarter financial results and issued its third-quarter earnings guidance above estimates.
NeoGenomics, Inc. gained 16.1% to $17.00 following upbeat earnings.
Tilray Brands, Inc. rose 16.1% to $2.1250 after the company reported better-than-expected quarterly financial results.
Sprouts Farmers Market, Inc. gained 15.5% to $97.79 after the company reported better-than-expected second-quarter financial results. Additionally, the company issued third-quarter earnings guidance above estimates.
Howmet Aerospace Inc. climbed 14.1% to $94.56 following better-than-expected second-quarter earnings, issued strong guidance, raised its dividend, increased its buyback authorization and issued strong guidance.
Repligen Corporation gained 13.4% to $156.48 following -quarter earnings.
Varonis Systems, Inc. climbed 13.3% to $54.92 as the company reported better-than-expected second-quarter financial results and raised its FY24 guidance on Monday.
Hayward Holdings, Inc. gained 11% to $14.98 after the company reported better-than-expected second-quarter EPS results.
F5, Inc. shares rose 10.6% to $196.46 after the company reported better-than-expected third-quarter financial results and raised its FY24 earnings guidance above estimates.
Pharming Group N.V. shares gained 9.8% to $8.28. Pharming Group will report second quarter financial results on Aug. 1.
PayPal Holdings, Inc. climbed 8.5% to $63.98 after the company reported better-than-expected second quarter financial results.
Stanley Black & Decker, Inc. rose 8.1% to $104.28 after the company reported better-than-expected second quarter financial results. Additionally, the company revised its FY24 adjusted EPS forecast upward.
Gartner, Inc. gained 6.4% to $500.83 following better-than-expected quarterly earnings.

Losers

QXO, Inc. Q shares fell 80.8% to $11.44. This sudden decline was triggered by the registration of two private placements with the U.S. Securities and Exchange Commission, which unlocked millions of shares and led to increased selling pressure, Bloomberg reported on Tuesday.
VBI Vaccines Inc. declined 64.8% to $0.1960 after the company was granted protection under Canada’s CCAA by the Ontario Superior Court. The company received approval for a DIP loan, and Ernst & Young was appointed as the monitor during the restructuring process.
CNS Pharmaceuticals, Inc. C dipped 40.8% to $0.6158 after the company announced it entered into an exclusive license agreement with Cortice Biosciences.
BIMI Holdings Inc. tumbled 37% to $0.73.
Bloomz Inc. B dipped 30.7% to $1.78.
Ekso Bionics Holdings, Inc. fell 26.6% to $1.0901 after the company reported worse-than-expected quarterly sales results.
Novavax, Inc. shares declined 25.2% to $12.27 after declining 4% on Monday.
VSee Health, Inc. V fell 23.3% to $2.7999.
SmartRent, Inc. dipped 21.5% to $1.8850 after the company announced a CEO resignation and suspended its 2024 outlook.
Symbotic Inc. shares fell 21.1% to $28.13 after the company reported worse-than-expected third-quarter earnings results and issued fourth-quarter revenue guidance below estimates.
Woodward, Inc. fell 16.5% to $152.91 after the company reported mixed third-quarter financial results and lowered its FY24 revenue guidance below estimates.
NIP Group Inc. N fell 16.2% to $13.82. NIP Group announced the closing of its initial public offering and partial exercise of underwriters' option to purchase additional ADSs.
Merchants Bancorp dipped 16.2% to $43.68 after the company reported worse-than-expected quarterly financial results. Additionally, Raymond James downgraded the stock.
Amkor Technology, Inc. shares fell 14.2% to $32.24 after the company issued roughly in-line guidance.
OneWater Marine Inc. dipped 13.2% to $26.43 after the company reported worse-than-expected third-quarter financial results and issued weak guidance.
Celldex Therapeutics, Inc. shares fell 11.6% to $37.06 after reporting Phase 2 results for barzolvolimab in chronic inducible urticaria.
Transcat, Inc. declined 11.2% to $120.00 following weak quarterly sales.
CrowdStrike Holdings, Inc. dipped 9.7% to $233.65 following reports indicating Delta Air Lines would seek compensation from the cybersecurity company for last week’s outage.
Rambus Inc. shares dipped 9.3% to $50.61 following weak quarterly sales.
Corning Incorporated fell 8.7% to $38.99 following second-quarter results.
Lattice Semiconductor Corporation shares fell 8.3% to $50.40 after the company reported worse-than-expected second-quarter financial results and issued weak third-quarter revenue guidance.
Ecolab Inc. declined 6.7% to $231.31 after the company reported worse-than-expected second-quarter sales results.
The Procter & Gamble Company fell 6.2% to $159.37 following a quarterly revenue miss.
Diageo plc fell 5.5% to $124.30 after the company missed annual profit expectations.
Fresenius Medical Care AG shares declined 4.5% to $19.45 following weak quarterly sales.