KZIA Kazia Therapeutics Ltd

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Kazia Therapeutics Limited (Registrant)

Kate Hill

Kate Hill

Company Secretary

Date 18 July 2018

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Dear Shareholder,

It is a pleasure to share with you the Half-Yearly Report for the period to 31 December 2017. This is our first statutory report as Kazia Therapeutics Limited, following the transformation of the Company that was approved by shareholders at our Annual General Meeting in November 2017, and reflects many of the significant changes that the Company has been through over the past twelve months or more. Accordingly, I wanted to take this opportunity to draw your attention to some of the recent key developments in the business.

We announced in December 2017 that we had reached an agreement with Noxopharm (ASX: NOX), whereby Kazia agreed to provide certain technical information to support the development of their lead program, and released Noxopharm from future claims by Kazia against the intellectual property associated with that program. To be clear, this agreement does not affect any of Kazia’s current portfolio in any way. We believe this settlement is in the best interests of shareholders in both companies, and we commend the Noxopharm Board for working pragmatically towards a mutually beneficial outcome. As a result, Kazia now holds approximately 4.9% of the issued share capital of Noxopharm, with options over a further tranche of stock. As a fellow drug developer, and as a shareholder, we wish them every success in their future efforts.

As you will see from the accompanying financial statements, this settlement has been fully brought to account on our balance sheet. In principle, the additional assets significantly extend Kazia’s runway, and we are now fully-funded into calendar 2019, which is an important consideration as we turn our attention to the phase II clinical study of GDC-0084. We had intended to open the study for recruitment at the very end of last year, and all of the necessary steps required of the Company had been completed on schedule. Despite the assiduous planning, the first site initiation has been held up due to some unanticipated internal procedural requirements at the site. As a result, we now anticipate that the study will commence in late March or early April. Whilst this has been frustrating, given the Kazia team had worked so hard toward a December start, we nevertheless expect that it will have minimal impact on the overall timeline and costs of the study.

We liaised with our Scientific Advisory Board throughout the period and in November 2017 we held a two-day, face-to-face meeting in Sydney, where it was exciting to hear their thoughts on the longer-term trajectory for the GDC-0084 program. The four members of the SAB bring an incredible wealth of experience to the Company, and we are very much looking forward to putting some of their advice into practice over the coming year, and sharing with you our progress in due course.

Meanwhile, the ongoing study of Cantrixil in ovarian cancer continues to progress well. At the time of writing, the study is still in the ‘dose escalation’ stage, which primarily aims to understand the safety and tolerability of the drug and to establish a ‘maximum tolerated dose’ for further investigation. Given the open-ended design of such dose escalation studies, the exact completion is difficult to forecast, but we currently expect to be able to report data from this initial phase in the second quarter of calendar 2018. We are tremendously grateful to the clinicians and hospital staff who have been so diligently driving this study forward at each of the participating sites.

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As you would expect, your Board remains highly attuned to the ongoing financial needs of the Company, and continues to consider appropriate channels to ensure that our work remains well funded. Whilst the Noxopharm settlement has strengthened our balance sheet significantly, we continue to explore grant funding, licensing opportunities, and equity investment opportunities in the Company. Your Board recognises that it is imperative to carefully balance the interests of our existing investors with the overarching obligation to deliver value-driving data across our key programs.

In line with our announcements regarding cost management in FY17, during the period we kept a tight control on our cost base and further reduced our operating expenses wherever possible. This strong focus on cost containment saw us make a number of changes in personnel and resulted in the relocation of our office to a more cost-effective site in Sydney, post the reporting period. For the time being we have suspended investment into discovery research, including the next generation ATM program, in order to more fully devote our resources to the GDC-0084 and Cantrixil clinical programs. Whilst we continue to be excited by our involvement in world-leading discovery science, it is high risk, costly and early-stage, and we believe that the two clinical programs represent a more near-term opportunity to provide value to patients and shareholders. Notwithstanding, we are working with our collaborators to find innovative alternatives to take this important discovery research forward.

In conclusion, I have spoken on many occasions about the transformation that our Company has been through over the past two years, which has been methodically implemented by the Board and Management team, and which culminated with the successful launch of our new identity as Kazia Therapeutics Limited at the end of last year. Suffice to say Kazia is now, in almost all respects, the Company that we have set out to build. No doubt we will continue to develop, change and improve, but I am confident enough in the work that has been done to declare that the rebuilding of the company is concluded.

Our task now is to deliver on the great promise of our portfolio, to execute world-class clinical trials, to produce high-quality data, and ultimately to bring forward new treatments for patients with cancer. There is much to be excited about in the coming year: data read-outs from the Cantrixil phase I study, commencement of the GDC-0084 phase II study, and the hopeful fruition of other projects and collaborations that the company continues to explore.

On behalf of our CEO, the Board & Management I can confirm that we are all invigorated by this challenge, and we continue to be grateful for the ongoing support of our shareholders

Yours sincerely,

/s/ Iain Ross

Iain Ross

Chairman of the Board

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Kazia Therapeutics Limited (Formerly known as Novogen Limited) Appendix 4D Half-year report

Dividends

There were no dividends paid, recommended or declared during the current financial period.

Comments

The profit for the consolidated entity after providing for income tax amounted to $424,779 (31 December 2016: loss of $4,182,556).

Operating revenue for the half year ended 31 December 2017 was $66,227 compared with $143,255 for the half year ended 31 December 2016 and operating expenses for the half year ended 31 December 2017 amounted to $3,806,734, compared with $3,969,579 in the previous corresponding period.

The profit for the half year ended 31 December 2017 includes Research and Development spending of $4,696,374 compared with $4,880,831 for the half year ended 31 December 2016.

The consolidated entity’s current assets at 31 December 2017 were $14,752,740 (June 2017 $19,480,341), with current liabilities of $7,056,769 (June 2017 $5,384,107).

During the period the Company’s share capital was consolidated by a factor of 10. Accordingly, the comparative figure of net tangible assets per share has been adjusted by the same factor, to disclose the comparative figure as if the shares were also consolidated in the previous period.

Not applicable.

Not applicable.

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Kazia Therapeutics Limited (Formerly known as Novogen Limited) Appendix 4D Half-year report

Current period

There were no dividends paid, recommended or declared during the current financial period.

Previous period

There were no dividends paid, recommended or declared during the previous financial period.

Not applicable.

Not applicable.

Details of origin of accounting standards used in compiling the report:

Not applicable.

Details of audit/review dispute or qualification (if any):

The financial statements were subject to a review by the auditors and the review report is attached as part of the Half Yearly Report.

Details of attachments (if any):

The Half Yearly Report of Kazia Therapeutics Limited for the half-year ended 31 December 2017 is attached.

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Kazia Therapeutics Limited

(Formerly known as Novogen Limited)

ABN 37 063 259 754

Half Yearly Report - 31 December 2017

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Kazia Therapeutics Limited (Formerly known as Novogen Limited) Directors’ report 31 December 2017

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 ‘company’ or ‘parent entity’) and the entities it controlled at the end of, or during, the half-year ended 31 December 2017.

Directors

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

Bryce Carmine

Steven Coffey

James Garner

Principal activities

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

Review of operations

The profit for the consolidated entity after providing for income tax amounted to $424,779 (31 December 2016: loss of $4,182,556).

The attached financial statements detail the performance and financial position of the consolidated entity for the half-year ended 31 December 2017.

Cash resources

At 31 December 2017, the consolidated entity had total funds of $6,641,073 comprising cash in hand and at bank of $3,641,073 and short term deposits of $3,000,000.

The lead R&D program for the consolidated entity is 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. GDC-0084 has completed a 47-patient phase I clinical study under Genentech in patients with progressive or recurrent high grade glioma, which showed the drug to be generally safe and well-tolerated, and which provided signals of potential clinical activity. 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 clinical data. The company convened an Advisory Board of experts in November 2017 to help in finalising the design of the Phase ll development of GDC-0084 and anticipates initiating a Phase II clinical trial early in calendar 2018.

The consolidated entity is also developing Cantrixil (TRX-E-002-1), a small-molecule agent arising from an in-house discovery program. Through a collaboration with researchers at Yale University, Cantrixil has shown in vitro and in vivo activity against both differentiated cancer cells and cancer stem cells (sometimes referred to as tumour-initiating cells), which are believed to be an important contributor to chemotherapy resistance and disease recurrence. Cantrixil commenced a phase I clinical trial in patients with recurrent or refractory ovarian cancer in December 2016, and this study is expected to provide data in calendar 2018.

Significant changes in the state of affairs

As settlement of an ongoing legal dispute on 22 December 2017 the consolidated entity reached an agreement with another ASX listed company, Noxopharm Limited, in relation to that company’s key asset, NOX66. As part of this agreement, the consolidated entity has taken up shares and options in that listed entity at no financial cost. Further details are set out in Note 21.

On 13 November 2017 the consolidated entity entered into an agreement to license and assign certain pre-clinical assets to Heaton-Brown Life Sciences, LLC (HBLS), a privately-held start-up enterprise. The agreement provides for the licensing of Trilexium (TRX-E-009-1) and other ‘superbenzopyran’ molecules, and assignment of the early-stage ‘ad-het’ series of discovery leads. The consolidated entity retains all worldwide rights to Cantrixil (TRX-E-002-1), which is currently in a phase I clinical trial for ovarian cancer. In consideration for the licensed assets, the consolidated entity receives 10% of the equity in HBLS, along with milestone and royalty payments linked to successful development of the intellectual property. The equity in HBLS has been recorded in the financial statements at a carrying value of $1, reflecting the start up nature of that company.

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Kazia Therapeutics Limited (Formerly known as Novogen Limited) Directors’ report 31 December 2017

There were no other 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

No matter or circumstance has arisen since 31 December 2017 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.

Auditor’s independence declaration

A copy of the auditor’s 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

/s/ Iain Ross

Iain Ross

Chairman

21 February 2018

Sydney

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Kazia Therapeutics Limited (Formerly known as Novogen Limited) Contents 31 December 2017

General information

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 listed public company 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

Sydney NSW 2000

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 21 February 2018.

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Kazia Therapeutics Limited (Formerly known as Novogen Limited) Statement of profit or loss and other comprehensive income For the half-year ended 31 December 2017

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

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Kazia Therapeutics Limited (Formerly known as Novogen Limited) Statement of financial position As at 31 December 2017

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

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Novogen Limited (Formerly known as Novogen Limited) Statement of changes in equity For the half-year ended 31 December 2017

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

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Kazia Therapeutics Limited (Formerly known as Novogen Limited) Statement of cash flows For the half-year ended 31 December 2017

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

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Kazia Therapeutics Limited (Formerly known as Novogen Limited) Notes to the financial statements 31 December 2017