Australian oncology-focused company, Kazia Therapeutics (ASX: KZA, NASDAQ:KZIA) has just announced a license agreement with Swedish speciality pharmaceutical company Oasmia Pharmaceutical for Cantrixil (TRX:002-1), a clinical trial–stage, first in-class drug candidate under development for the treatment of ovarian cancer.

Oasmia, which will assume worldwide exclusive rights to commercialise and develop Cantrixil, expects to commence a Phase II study of Cantrixil in ovarian cancer in 2022.

In return, Kazia will receive an upfront payment of US$4 million, and has the potential to earn up to US$42 million in milestone payments, plus royalties on net sales worldwide.

Commenting on the agreement, Kazia’s CEO Dr James Garner noted that the agreement was the perfect way to take the drug forward, while helping the company realise some value out of the program.

“Given that taking the drug into the next phase of development (phase II) is complex, we thought it was the right move to place the baton into the hands of a large company, and Oasmia is an idea partner,” said Dr Garner.

It’s understood the initial $4 million upfront payment will be used to accelerate the development of Paxalisib, Kazia’s other pipeline asset. Paxalisib recently entered a pivotal study for brain cancer in the US, which will being rolled out in Europe and China, which Garner notes put the drug on a path to registration over the next few years.

There are another seven clinical trials with Paxalisib currently in various stages of activity in 2021. Dr Garner noted that while investors can expect a lot of data this year, Kazia has reached the stage of the game where data isn’t the only factor that can move the needle.

“As we’re working more on the potential commercialisation of Paxalisib, that also represents an opportunity for catalysts to be every bit as impactful.”