Kazia Therapeutics Limited (Nasdaq: KZIA), a clinical-stage oncology company advancing therapies to reprogram cancer biology and overcome treatment resistance, announces the in-licensing of a first-in-class SETDB1-targeted epigenetic drug development platform from QIMR Berghofer.

The platform includes use of an AI-integrated epigenetic drug discovery engine, enabling rapid, precise, and scalable candidate generation. The lead drug candidate, MSETC, was discovered and optimized using this AI-integrated epigenetic drug discovery engine. MSETC is a highly selective bicyclic peptide designed to target a novel, disease-associated nuclear SETDB1 complex. By targeting SETDB1, the program is intended to restore immune signaling in tumors that have become resistant to immunotherapy, including checkpoint inhibitors.

"SETDB1 represents a compelling emerging target in oncology," said Dr. John Friend, CEO of Kazia Therapeutics. "With this acquisition, we are extending our strategy to target how cancer controls its own behavior by addressing immune resistance at the chromatin level, one of the earliest layers of tumor immune regulation, alongside transcriptional reprogramming with paxalisib and targeted protein degradation with our PD-L1 platform. Together, these programs position Kazia's pipeline to address cancer therapy across multiple layers of tumor biology."

SETDB1 A High-Value Target in Immune Resistance

SETDB1 is increasingly recognized as a key epigenetic regulator of tumor immune evasion and has been associated with aggressive disease and poorer clinical outcomes in several tumor types. Preclinical studies suggest that inhibition of SETDB1 can restore interferon signaling, enhance antigen presentation, and increase tumor immune recognition.

Internal translational research has also identified a novel SETDB1-associated nuclear complex observed in resistant and metastatic disease settings, supporting continued development of Kazia's first-in-class therapeutic approach targeting this biology.

The SETDB1 program is supported by extensive peptide screening and optimization, generating a pipeline of candidates with strong selectivity and intracellular targeting capability.

Building a Differentiated, Multi-Layered Oncology Platform

Cancer cells can evade treatment through genetic mutations, but also by dynamically reprogramming how genes and immune signals are regulated. This adaptive behavior underpins resistance to many current therapies, including immunotherapy.

Kazia's pipeline now spans three complementary layers of cancer control:

• Chromatin-level regulation (SETDB1) restoring immune visibility by reactivating suppressed signaling pathways
• Transcriptional reprogramming (paxalisib) altering gene expression programs that drive tumor growth and immune suppression
• Protein-level control (PD-L1 degrader platform, NDL2) eliminating intracellular PD-L1 and overcoming resistance mechanisms beyond antibody-based therapies

This integrated approach is designed to address tumor resistance at its source and create new opportunities for combination therapies across multiple cancer types.

Positioned Within a Large and Growing Oncology Opportunity

Epigenetic therapies represent a validated and expanding segment of oncology, with multiple approved agents demonstrating clinical impact. Earlier approaches helped establish the importance of epigenetic regulation in cancer but were often limited by broad, non-specific activity and modest clinical impact, particularly in solid tumors.

Advances in the understanding of tumor biology and immune resistance now enable more precise, mechanism-driven approaches. These next-generation strategies are designed to target specific drivers of tumor adaptation and immune evasion, with the potential for broader applicability and improved outcomes, particularly in combination with immunotherapy.

The global epigenetic therapeutics market is estimated to be in the range of $15–20 billion annually and is expected to grow meaningfully over the next decade, driven by next-generation approaches targeting immune resistance and tumor plasticity.

By targeting SETDB1, Kazia is addressing a major unmet need in aggressive, treatment-refractory cancers that account for a significant proportion of cancer-related mortality. The approach is designed to restore immune responsiveness across multiple tumor types, particularly in advanced and metastatic disease settings where treatment options remain limited.

Clear Development Path and Partnering Potential

The SETDB1 program is currently in preclinical development with a defined path toward IND-enabling studies. Kazia plans to generate translational data to support biomarker-driven development and combination strategies with immunotherapies and targeted agents.

Given its broad applicability across tumor types, and its role in immune resistance, the Company believes the program represents a compelling opportunity for early strategic partnerships.

Efficient Pipeline Expansion

Kazia intends to advance the SETDB1 program in parallel with its PD-L1 degrader platform through IND-enabling studies. By leveraging shared CRO resources, coordinated study design, and established scientific collaborations, the Company expects to achieve meaningful execution efficiencies.

The combined cost to advance both programs to IND readiness is expected to be approximately $6 million over 18 months, with a substantial portion of eligible expenditure expected to qualify for the Australian R&D tax incentive. This approach enables Kazia to expand its pipeline while maintaining capital discipline and preserving focus on ongoing clinical programs.

Transaction Terms

Under the terms of the agreement, Kazia has acquired global rights to the SETDB1 platform, including the lead candidate MSETC. Financial terms include an upfront payment of approximately $1.39 million and a tiered revenue-sharing structure aligned with development progress, with no clinical or regulatory milestone obligations.