Daily Brief Australia: Bank Of Queensland, Oh Baby Games, Aft Pharmaceuticals, Paradigm Biopharmaceuticals, Rent.com.au Ltd and more

• The Aussie local press is discussing renewed merger talks for Bendigo And Adelaide Bank (BEN AU) and Bank Of Queensland (BOQ AU).
• Talks of a merger are not new. And we have been here before when BOQ twice made overtures to Bendigo in 2007, but was rejected. 
• The swift removal of BOQ’s CEO, a lifetime high ratio – BEN/BOQ – and ANZ (ANZ AU)‘s tilt for Suncorp Bank – suggests a merger makes a lot of sense.

• Oh Baby Games said it’s working on an arcade racer that features recognizable figures. Called What The Kart, the company’s first blockchain-powered game will feature personalities from Crypto Twitter
• The startup said What The Kart will also feature streamers and different communities across the Crypto Twitter sphere.
• The game aims to mix recognizable characters with the tried-and-tested Mario Kart racing formula

AFT Pharmaceuticals continues to strengthen its R&D pipeline with the announced in-licensing agreement with Latitude Pharmaceuticals (a US-based contract research organisation) to develop antibiotic eye drops to treat serious eye infections. The formulation is already approved to treat bacterial infections, including those caused by the antibiotic-resistant MRSA bacteria. The IP relates to an aqueous stable formulation of this treatment. Eye care is a key focus for AFT (contributing over 20% of the group’s revenue, per our estimate) and we expect this new asset to complement the existing portfolio. AFT plans to launch around 65 new products in Australasia before 2025 and a robust R&D pipeline will be key to delivering this. The development programme will be covered by AFT’s budgeted R&D expenditure of c NZ$12m per year for FY23 and FY24.

Cash flow figures from Paradigm Biopharmaceuticals’ latest update show that it remains funded past key near-term inflection points. In Q223, management reported a net cash outflow from operating activities of A$7.8m (A$17.8m for the first six months of FY23), including an A$7.4m R&D tax incentive rebate, and no capital expenditure. R&D expenditure increased 54% q-o-q to A$13.2m, corresponding with ongoing recruitment and site identification for the pivotal PARA_OA_002 Phase III trial of iPPS in knee osteoarthritis and an increase in other clinical activities. With cash of A$83.9m at end Q223 and at the current quarterly burn rate (adjusted for the non-recurring R&D tax incentive, A$15.2m), management estimates that operations are funded into 2024 (5.5 quarters), past important clinical milestones in Paradigm’s osteoarthritis programme in 2023.