Race Oncology Ltd - Pursuing a Three-Pillar Strategy to Treat Cancer

Business model

RAC is pursuing a three-pillar strategy to enhance partnering, licensing or sale opportunities to a scaled pharmaceutical company via advancing Zantrene in pre-clinical and clinical trials across a number of cancer targets, as well as new m6A RNA regulating molecules. The first pillar, based on the current Zantrene formulation, aims to pursue clinical programmes in EMD AML (including as an FTO-targeted agent) and a cardio-protective opportunity. The second pillar is focussed on improved formulations that will allow an expanded use of Zantrene in solid tumours. The third pillar (beyond Zantrene) is pursuing new ribonucleic acid (RNA) targeting molecules via internal development, partnership or acquisition. RAC has near-term opportunities for FDA approval for Zantrene via the 505(b)(2) approval pathway for AML. The company is also eligible for a Paediatric Priority Review Voucher in Paediatric AML as well as orphan drug designation for AML.

Q2 FY22 activity and expected news-flow in current quarter

RAC completed an SPP to raise $29.7m at $3.00/share to support an expanded three-pillar strategy, with new clinical programmes announced for FTO-directed solid tumours, a cardio- protection trial in breast cancer, an expansion of the EMD AML into Europe, and enhanced Zantrene formulations (28-Jan-2022 ASX release). RAC has new pre-clinical findings that Zantrene prevents drug-induced heart damage from anthracycline and carfilzomib while also improving the cancer-cell-killing effects of the drugs in treating cancer. RAC expects to have updates on the progress on its pre-clinical, in-vitro FTO-directed programs under way in melanoma, clear cell renal cell carcinoma and extramedullary AML in Q1 CY22. RAC also expects to announce results regarding its pre-clinical in vivo mouse model studies exploring the use of Zantrene in melanoma and for EMD AML. RAC also expects to receive human ethics approval for its EMD AML Phase Ib/II clinical trial and subject to patient recruitment, an update on the AML R/R Israel trial progress.

RAC’s three-pillar strategy and diverse pipeline Vs peers

Neuren Pharmaceuticals (ASX:NEU) has a similar market cap of ~$450m though not focussed on cancer, and has a Phase II and Phase III clinical trial for different syndromes utilising its lead drug compound, Trofinetide. Both NEU programmes have received fast-track designation by the FDA and orphan drug designation in the US and EU. NEU has licensed Trofinetide to a pharmaceutical company for commercialisation in North America and has retained all rights outside NA. NEU also has a clinical pipeline it is progressing. Prescient Therapeutics (ASX:PTX) has a market cap of ~$100m and is focussed on cancer therapies, with its most progressed clinical therapy in the Phase Ib/IIa stage. KZA has a market cap of ~$136m and is also focussed on clinical stage cancer drug development.