Announcement PDF ASX: RAC 2021 Annual Report Targeting Zantrene® towards better cancer outcomes Corporate Directory DIRECTORS John Cullity – Non-Executive Chairman Phillip Lynch – Managing Director and Chief Executive Officer Daniel Tillett – Executive Director and Chief Scientific Officer Mary Harney – Non-Executive Director COMPANY SECRETARY Peter Webse REGISTERED OFFICE Level 36, Gateway, 1 Macquarie Place Sydney NSW 2000 Ph: +61 2 8051 3043 Website: www.raceoncology.com AUDITOR Hall Chadwick WA 283 Rokeby Road Subiaco WA 6008 SECURITIES EXCHANGE LISTING Australian Securities Exchange Limited Level 40, 152-158 St Georges Terrace Perth, WA, 6000 SHARE REGISTRY Automic Registry Services Level 2, 267 St Georges Terrace Perth WA 6000 Ph: +61 8 9324 2099 ASX Code – RAC Race Oncology Limited ACN 149 318 749 Contents Chairman’s Letter 2 2021 Key Highlights 4 Directors’ Report 6 Auditor’s Independence Declaration 22 Consolidated Statement of Profit or Loss and Other Comprehensive Income 23 Consolidated Statement of Financial Position 24 Consolidated Statement of Changes in Equity 25 Consolidated Statement of Cash Flows 26 Notes to the Financial Statements 27 Directors’ Declaration 45 Independent Auditor’s Report 46 Corporate Governance Statement 50 ASX Additional Information 60 Annual Report 2021 1 Chairman’s Letter It is my pleasure to formally present Race Oncology’s Annual Report for the period ended 30 June 2021. Dear Fellow Shareholders It’s been a hallmark year for your company, marked by two keystone highlights. The first, in June 2020, was the fully independent finding by a highly respected team at City of Hope Hospital, that our drug, Zantrene® (bisantrene dihydrochloride) was shown to be the most potent known inhibitor of the Fatso/Fat Mass and Obesity Associated Protein (FTO). FTO plays a central role in the proliferation of cancer and this finding could lead our drug toward commercial potential we would never have previously considered possible. The second was the release of our Three Pillar strategy, which is designed to recognise and leverage Zantrene’s value as both an FTO inhibitor - and as a less cardiotoxic chemotherapeutic. In addition to the two major highlights, Race’s leadership capabilities and subject matter expertise were enhanced with recent appointments while capital management was strengthened via a targeted capital raise that was oversubscribed. We also awarded our loyal shareholders with a 1 for 20 bonus option to all eligible shareholders in May 2021. These opportunities and our activities have driven a significant rise in our market capitalisation, as the potential value that Zantrene offers cancer patients has been recognised by many in the market. 2 Race Oncology Limited The new Three Pillar strategy greatly expands the opportunities that lie ahead for Race. Pillar 1 seeks to build on the published City of Hope (COH) findings around the FTO protein and its role in regulating RNA translation and cancer progression as reported in the June 2020 Cancer Cell publication by Su et al. The Race team has embarked on an extensive pre-clinical program in partnership with the University of Newcastle, investigating Zantrene and its FTO targeting activity in Acute Myeloid Leukaemia (AML), melanoma, and clear cell renal cell carcinoma. Pillar 2 builds on the known lower cardiotoxic properties of Zantrene and its potential to be used in chemotherapeutic settings more safely or adjunctively to complement existing therapies. A pre-clinical program is underway to determine Zantrene’s low cardiotoxic mechanism of action and to guide its appropriate clinical translation. Pillar 3 leverages our long history in AML, working again with Professor Nagler at Chaim Sheba Israel, on a Phase 1b/2 R/R AML program using a novel combination drug approach. We have initiated a Phase 1b/2 clinical trial in Australia for patients with extramedullary AML, which will use Zantrene in combination with other standard of care drugs seeking to improve patient outcomes as part of our pathway to drug registration in the USA, and other markets. We are extremely fortunate to maintain access to an international network of advisors and expertise, supplemented by a highly capable Board and experienced Management team. Through the year our Board enhanced its independence and governance strength with the appointment of Ms Mary Harney as a Non-Executive Director. The management ranks were also boosted by the appointments of Dr David Fuller as Chief Medical Officer and Professor Michael Kelso as Principal Scientist. Our CEO, Mr Phil Lynch, and CSO Dr Daniel Tillett, continue to work effectively as a team in leading the business and have made considerable progress over the last year on many fronts. Looking at our capital management, this financial year shows a loss of $6.3m vs a loss of $3.8 m in 2020 reflecting additional investment in our clinical and pre-clinical programs. Cash on hand as at 30 June 2021 increased to $9.3m versus the prior year’s $1.7m, owing to our successful and oversubscribed capital raise of $5.4m in March 2021, supplemented by option exercises and continued diligence in managing expenses. Race has full funding for all current commitments and will continue to address capital requirements on an as needed basis. It’s been a transformative year for Race as we continue to target and develop the many oncology applications of Zantrene. Our expanded and highly qualified team continues to pursue programs and plans with a strategy that appropriately capitalise on the risk/rewards on offer. We look forward to sharing pre-clinical and clinical results in the new financial year ahead, and to shaping our plans to ensure that patients, potential pharma partners, clinicians, and our investors, all participate in the potential that Zantrene presents. Dr. John Cullity Non-Executive Chairman Annual Report 2021 3 2021 Key Highlights A pivotal period for Zantrene® 4 June 2020 July 2020 November 2020 February 2021 Impressive 40% response in Phase II AML trial Race secures 4th US patent for Zantrene® Impressive preclinical Zantrene® breast cancer results Impressive preclinical Zantrene® ovarian cancer results June 2020 September 2020 November 2020 March 2021 Zantrene® highlighted as potent inhibitor of FTO in Cancer Cell – COH / Prof Chen CCSA appointed clinical + FDA regulatory strategic advisors Zantrene® clinical data published in the European Journal of Haematology Multiple pre-clinical FTO-directed programs initiated March 2021 May 2021 May 2021 June 2021 Final breast cancer preclinical results demonstrating activity in treatment resistant cancer cells Race Placement closes oversubscribed and Bonus Option Issue launched for shareholders Race appoints Professor Michael Kelso as Principal Scientist Race Executes Key Contract for Israel Phase 2 AML trial April 2021 May 2021 June 2021 August 2021 Appointment of Prof Chen of COH to SAB MD Anderson Cancer Center Researchers Publish AML Preclinical Study on Zantrene® Drug Combinations showing superior efficacy in AML cells Commence Phase 2 Extramedullary AML Trial – Aust. First patient dosed in Phase 2 AML trial – Israel Race Oncology Limited Annual Report 2021 5 Directors’ Report DIRECTORS’ REPORT Your Directors present their report, together with the financial statements of Race Oncology Limited (the company, Race or RAC) for the financial year ended 30 June 2021. Information on Directors Directors have been in office since the start of the financial year to the date of this report unless otherwise stated. John Cullity — Non-Executive Chairman (appointed as a Director 6 April 2018) Qualifications — MBBS, MRCP, MSc(Econs), MBA Experience — Dr Cullity is Managing Director at BioSynergy Partners, a New York and Melbourne based advisory recently spun out of Torreya – the renowned life sciences investment bank. He additionally serves on the Boards of several life sciences companies including Ceramedix (seeded by Torreya). At Torreya, he provided strategic advisory on Mergers and Acquisitions, Partnering and Financing to life-science companies worldwide. Prior to joining Torreya, he was a senior member of the Business Development team at Sanofi Pharmaceuticals, where he led buy side transactions in oncology and diabetes. Earlier in his career, Dr Cullity was Head of Strategic Pricing and Reimbursement at Sanofi, Director of Health Economics at Schering-Plough, and Consultant at A.T. Kearney. He has also worked at the World Bank and the World Health Organisation. Dr Cullity graduated in Medicine and sub-specialised in haematology-oncology at QE II Medical Centre, Perth. He holds a Bachelor of Medicine, Bachelor of Surgery from The University of Western Australia; Membership of the Royal College of Physicians; Masters in Health Economics from London School of Economics & Political Science, and MBA from The Wharton School, University of Pennsylvania. Interest in Shares and Options — 5,681,817 ordinary shares 2,000,000 options expiring on 27 November 2021 exercisable at $0.23 1,000,000 options expiring on 25 November 2021 exercisable at $0.25 189,394 options expiring on 16 May 2022 exercisable at $4.50 Directorships held — in listed entities None Phillip Lynch — Managing Director and Chief Executive Officer (appointed as a Director 1 June 2020) Qualifications — Graduate of Monash University with a Bachelor of Business in Marketing. Completed postgraduate studies at University of Virginia’s Darden Business School (USA). Graduate of the Australian Institute of Company Directors Experience — Mr Lynch has a career spanning more than 30 years in the Asia Pacific region with Johnson & Johnson. He is an experienced executive and board director, with a diverse background across corporate development, strategy, financial performance, marketing and governance. In his former role as Vice President of Commercial Growth and Innovation at Johnson & Johnson Asia Pacific (J&J AP), 2016 - 2019), Mr Lynch partnered with the Mergers and Acquisitions team to drive the integration and growth of acquired businesses. He retired from J&J AP in December 2019 following the >$2b acquisition and integration of a significant Japanese business. Mr Lynch was previously the Managing Director and CEO of J&J Pacific (AU/NZ - 2009 to 2015). He had further leadership roles across the Asia Pacific region, including Managing Director of various J&J divisions in Thailand, Vietnam, and Singapore. He is currently the Chair of Consumer Health Products Australia. . Interest in Shares and Options — 419,149 ordinary shares 2,000,000 options expiring on 29 November 2025 exercisable at $2.65 20,958 options expiring on 16 May 2022 exercisable at $4.50 6 Race Oncology Limited 3 | Race Oncology Limited ACN 149 318 749 – Annual Report 30 June 2021 DIRECTORS’ REPORT Information on Directors (continued) Directorships held — in listed entities None Daniel Tillett — Executive Director and Chief Scientific Officer (appointed as a Director 17 September 2019) Qualifications — Experience — Ph.D in Molecular Genetics & Biochemistry Dr Tillett is the CEO and founder of Nucleics Pty Ltd, a private biotechnology company in the genomics space. He was previously a Senior Lecturer within the School of Pharmacy at La Trobe University where he lectured on biochemistry, biotechnology, pharmacy, microbiology and virology. Dr Tillett’s Ph.D on the molecular genetics and biochemistry of microcystin toxin production was awarded by the University of New South Wales in 2000. Interest in Shares and Options — 13,450,000 ordinary shares 2,500,000 options expiring on 25 November 2022 exercisable at $0.19 2,000,000 options expiring on 29 November 2025 exercisable at $2.65 672,500 options expiring on 16 May 2022 exercisable at $4.50 Directorships held — in listed entities None Mary Harney — Non- Executive Director (appointed 8 February 2021) Qualifications — BSc, BA (Fine Arts), AICD Experience — Ms Harney is the Director of specialist consulting firm Mary Harney Advisory providing leadership, governance and strategic advice across innovation industries such as health, biotech and agriculture. She currently also serves as Chairman of private Australian biotech Oncology One Pty Ltd, a cancer drug discovery company. Ms Harney was formerly the CEO of Royal Australasian College of Surgeons; CEO of Gardiner Research Foundation; COO and Director of Office of Cancer Research for Peter MacCallum Hospital, and; COO of Cerylid Biosciences. Other former roles were with CSL, Amrad, BIOPROPERTIES and Royal Melbourne Hospital. Interest in Shares and Options — 13,400 ordinary shares 400 options expiring on 16 May 2022 exercisable at $4.50 Directorships held — in listed entities None Borje Andersson — Executive Director (appointed as a Director 1 February 2020, ceased 10 December 2020) Qualifications — MB, MD, PhD Experience — Prof Andersson is an internationally acclaimed leader in the field of leukaemia and stem cell transplantation research at the MD Anderson Cancer Centre in Houston, Texas. Prof Andersson was previously engaged as a scientific and clinical consultant to the Company and is Chair of RAC’s Clinical Advisory Board. Prof Andersson is the inventor of IV Busulfan, an FDA-approved drug used in stem cell transplantation. Busulfan was approved in 1999 and has drastically improved survival outlook for leukaemia patients, helping reduce the death rate in the first 100 days after transplant from 30-40% to less than 3%. Interest in Shares and Options — 420,000 ordinary shares (at resignation as a KMP) 420,000 options expiring on 21 January 2024 exercisable at $0.12 (at resignation as KMP) 840,000 options expiring on 5 December 2024 exercisable at $0.18 (at resignation as KMP) 2,400,000 options expiring on 23 January 2025 exercisable at $0.275 (at resignation as KMP) 118,577 performance rights 4 | Race Oncology Limited ACN 149 318 749 – Annual Report 30 June 2021 Annual Report 2021 7 Directors’ Report DIRECTORS’ REPORT Information on Directors (continued) Directorships held — in listed entities None William Garner — Non-Executive Director (resigned 28 October 2020) Qualifications — Master of Public Health, Harvard University Doctor of Medicine, New York Medical College Experience — William Garner, MD is a US physician, investor, and entrepreneur. Dr Garner is one of the inventors on the Zantrene® patents, originally filed by Update Pharma, Inc. and now owned by Race Oncology. Previously, he founded EGB Advisors LLC, a life sciences advisory firm whose clients have included the M.D. Anderson Cancer Centre, the Kauffman Foundation, ChemGenex (ASX:CXS) and CoTherix. He also founded Inverseon, Inc., which was merged with the ASX-listed company cBio to create Invion Ltd, serving as CEO until May of 2013. He founded Urigen Pharmaceuticals, Inc. and co-founded DelMar Pharmaceuticals, Inc. (NASDAQ:DMPI). Previously, he was at Hoffmann La Roche in oncology medical affairs and worked as a merchant banker in New York City. Dr. Garner serves as Chairman of InMed Pharmaceuticals (TSX:IN) & Isla Pharmaceuticals and works with several of the other portfolio companies of EGB Ventures. Dr Garner has a Master of Public Health from Harvard and received his MD degree from New York Medical College. Dr. Garner did residency training in Anatomic Pathology at Columbia-Presbyterian and is currently a licensed physician in the State of New York. Interest in Shares and Options — 14,037,774 ordinary shares (at resignation date) 1,000,000 options expiring on 25 November 2021 exercisable at $0.25 (at resignation date) 757,575 options expiring on 31 August 2021 exercisable at $0.099 (at resignation date) Directorships held — in listed entities Chairman of listed company InMed Pharmaceuticals (TSX:IN) Chris — Ntoumenopoulos Non-Executive Director (resigned 28 October 2020) Qualifications — Bachelor of Commerce, majoring in Money and Banking, Investment Finance and Electronic Commerce Experience — Mr Ntoumenopoulos is Managing Director at Twenty 1 Corporate, a boutique corporate advisory firm. He has worked in financial markets for the past 12 years, focusing on Capital Raisings, Portfolio Management and Corporate Advisory. Mr Ntoumenopoulos has advised and funded numerous ASX companies from early stage venture capital, through to IPO. He is also a director of various private and public companies which span across finance, technology and medical sectors. Interest in Shares and Options — 1,038,884 ordinary shares (at resignation date) 189,393 options expiring on 31 August 2021 exercisable at $0.099 (at resignation date) 1,000,000 options expiring 25 November 2021 exercisable at $0.25 (at resignation date) Directorships held — in listed entities ResApp Health Limited Company Secretary Peter Webse — Company Secretary Qualifications — B.Bus, FGIA, FCIS, FCPA, MAICD. Experience — Mr Webse has over 29 years' company secretarial experience and is the director of Governance Corporate Pty Ltd, a company specialising in providing company secretarial, corporate governance and corporate advisory services. 8 Race Oncology Limited 5 | Race Oncology Limited ACN 149 318 749 – Annual Report 30 June 2021 DIRECTORS’ REPORT Meeting of Directors During the financial year 10 meetings of Directors were held. Attendances by each Director during the year are stated in the following table. DIRECTORS’ MEETINGS Number eligible to attend Number Attended John Cullity 11 11 Phillip Lynch 11 11 Daniel Tillett 11 11 Mary Harney 4 4 Borje Andersson 4 4 William Garner 3 3 Chris Ntoumenopoulos 3 3 Principal Activities Race Oncology is an ASX listed precision oncology company with a Phase 2/3 cancer drug called Zantrene® (bisantrene dihydrochloride). Zantrene® is a potent inhibitor of the Fatso/Fat mass and obesity associated (FTO) protein. Overexpression of FTO has been shown to be the genetic driver of a diverse range of cancers. Race is exploring the proof-of-concept use of Zantrene® as a new therapy for melanoma and clear cell renal cell carcinoma, which are both frequent FTO over-expressing cancers. The Company also has compelling clinical data for the use of Zantrene® as a chemotherapeutic agent with reduced cardiotoxicity in Acute Myeloid Leukaemia (AML), breast and ovarian cancers and is investigating its use in these areas. Race is pursuing outsized commercial returns for shareholders via its ‘Three Pillar’ strategy for the clinical development and regulatory approval of Zantrene®. Operating Results The operating loss after income tax amounted to $6,340,319 (2020: $3,845,965 loss); net cash used in operating activities was $4,697,578 (2020: $2,463,083). Dividends Paid or Recommended No dividends were paid or are payable for the financial year (2020: Nil). Review of Operations On 6 July 2020, the Company issued 500,000 fully paid ordinary shares at an issue price of $0.25 on exercise of 500,000 unlisted options with an expiry date of 1 April 2022. On 13 July 2020, the Company advised it had received firm commitments for $3 million in new capital via a strategic placement of 5,000,000 ordinary shares at an issue price of $0.60 per share. The placement was made to three prominent biotechnology investors, Kidder Williams’ David Williams, EFM Asset Management’s Jeff Emmanuel, and a follow-on investment by Merchant Opportunities Fund. The Shares were issued on the 14 July 2020. On 22 July 2020, the Company announced it had secured a new patent on its cancer drug, Zantrene® (bisantrene dihydrochloride), from the United States Patent and Trademarks Office. This was Race’s fourth patent granted on Zantrene in the United States. During July 2020, the Company issued 818,560 fully paid ordinary shares at an issue price of $0.099 upon exercise of 818,560 unlisted options with an expiry date of 31 August 2021. On 11 August 2020, the Company held a General Meeting of Shareholders with all resolutions passed. Resolutions passed included the Selective Share Buy-Back by Race of former Managing Director and CEO Peter Molloy’s Loan Shares. The 2,222,222 loan shares were subsequently cancelled on 26 August 2020. 6 | Race Oncology Limited ACN 149 318 749 – Annual Report 30 June 2021 Annual Report 2021 9 Directors’ Report DIRECTORS’ REPORT Review of Operations (Continued) On 12 August 2020, the Company issued 6,000,000 fully paid ordinary shares at an issue price of $0.25 on exercise of 6,000,000 unlisted options with an expiry date of 1 July 2021. The options were originally issued to former CEO and Managing Director, Peter Molloy and were acquired by a strategic investor on the 12 August 2020 and exercised early. On 2 September 2020, the Company appointed Mr Phillip Lynch as CEO and Managing Director and Dr Daniel Tillett as Chief Scientific Officer and Executive Director each on a 50% full time equivalent basis. On 2 October 2020, the Company announced Professor Borje Andersson was appointed Chief Medical Officer (CMO) on a 40% full time equivalent basis. On 28 October 2020, Dr. William Garner and Chris Ntoumenopoulos resigned as Non-Executive Directors. On 24 November 2020, the Company shared impressive results from a pre-clinical research program in breast cancer, conducted in collaboration with the University of Newcastle. The research program confirmed the historical clinical data that Zantrene showed similar efficacy to doxorubicin and epirubicin in a range of breast cancer types. In addition, the research program showed that Zantrene was effective and compatible in combination with other oncology drugs currently used in the breast cancer treatment setting. The program provided support for the progression of Zantrene in breast cancer clinical trials. On 26 November 2020 Race announced that clinical research organisation, George Clinical, would scope and cost a proof of concept Phase I/II breast cancer clinical trial of Zantrene in combination with cyclophosphamide. The program will enable the Company to make an informed and costed decision on this potential clinical pathway prior to expending significant investor funds. On 30 November 2020, the Company shared the Three Pillar Strategy, communicating an evolution to a precision oncology focus via the Fat Mass and Obesity associated protein (FTO), while retaining legacy opportunities in breast cancer and Acute Myeloid Leukaemia (AML). The updated strategy allows the Company to pursue outsized rewards for shareholders, while minimising clinical and commercial risk. The Three Pillar strategy addresses the following areas: • • • Pillar 1 – FTO inhibition focused on melanoma and clear cell renal cell carcinoma as clinical proof-of-concept indications Pillar 2 – Breast cancer treatment as a safer chemotherapeutic agent with expanded therapeutic index Pillar 3 – AML addressing legacy plans in adult and paediatric populations. Evaluation of extramedullary AML, building on the Israel trial observation and clear unmet clinical need. On 30 November 2020, as approved at the Annual General Meeting, the Company issued a total of 5,600,000 Incentive Options and 118,557 Incentive Performance Rights as follows: a) b) c) d) 2,000,000 Options exercisable at $2.65 and expiring on 29 November 2025 to Phillip Lynch; 2,000,000 Options exercisable at $2.65 and expiring on 29 November 2025 to Daniel Tillett; 1,600,000 Options exercisable at $2.65 and expiring on 29 November 2025 to Prof. Borje Andersson; 118,557 Performance Rights expiring on 29 November 2025 to Prof. Borje Andersson. On 10 December 2020, Prof. Borje Andersson resigned as an Executive Director to focus on the role of Chief Medical Officer and Chair of the Race Clinical Advisory Board. On 17 December 2020, the Company received a Research and Development tax incentive refund of $387,385 from the Australian Taxation Office for financial year ended 30 June 2020. On 8 February 2021, Mary Harney was appointed as an independent Non-Executive Director (NED). Ms Harney is an accomplished NED and executive with a deep academic and applied life science understanding, as well as biopharmaceutical experience. On 19 February 2021, Race announced that Professor Borje Andersson would retire as Chief Medical Officer (CMO) but retain his role as Chair of the Clinical Advisory Board. Race shared plans to recruit a full time Australian based CMO, which would allow the Company to execute upon the expanded clinical program shared in the Three Pillar strategy. 10 Race Oncology Limited 7 | Race Oncology Limited ACN 149 318 749 – Annual Report 30 June 2021 DIRECTORS’ REPORT Review of Operations (Continued) On 19 February 2021, the Company issued 2,972,575 fully paid ordinary shares following the exercise of options: • 757,575 unlisted options with an exercise price of $0.099 expiring 31 August 2021; • 1,540,000 unlisted options with an exercise price of $0.25 expiring 25 November 2021; and • 675,000 unlisted options with an exercise price of $0.45 expiring 12 March 2022. On 23 February 2021, Race announced positive early pre-clinical ovarian cancer results from the collaborative pre-clinical research program with The University of Newcastle. Zantrene was found to be more effective compared to doxorubicin and epirubicin in ovarian cancer cell lines and killed ovarian cancer cells resistant to the current standard of care chemotherapeutic agents cisplatin, 5-fluorouracil and chlorambucil. On 9 March 2021, the Company announced the final results of the continuing collaborative preclinical research program with The University of Newcastle. It was reported that the final results showed Zantrene to be an effective chemotherapeutic agent across a diverse range of genetically defined breast cancer subtypes and to also be able to kill breast cancer cells resistant to a wide range of breast cancer treatment drugs. On 10 March 2021, the Company issued 5,974,393 fully paid ordinary shares following the exercise of options: • 135,000 unlisted options with an exercise price of $0.256 expiring 1 August 2021; • 5,339,393 unlisted options with an exercise price of $0.099 expiring 31 August 2021; and • 500,000 unlisted options with an exercise price of $0.25 expiring 1 July 2021 On 12 March 2021, S&P Dow Jones announced that as of 22 March 2021 Race Oncology was added to the ASX All Ordinaries Index. On 19 March 2021, Race initiated a pre-clinical collaboration study with the University of Newcastle to explore the use of Zantrene as a novel FTO-directed treatment for melanoma. The study will assess drug combinations that may improve the current standard of care for patients with a particular focus on overcoming immune checkpoint resistance. This project seeks to capitalise on Zantrene’s FTO inhibiting properties in melanoma where FTO is overexpressed in approximately 50% of all metastatic melanoma cancers. On 25 March 2021, Race initiated a pre-clinical program with the University of Newcastle exploring the use of Zantrene as a novel FTO-directed treatment for the kidney cancer, clear cell renal cell carcinoma (ccRCC). Study results will support a proposed Phase II human trial of Zantrene in ccRCC scheduled to begin in Australia in 2022. On 30 March 2021, Race announced a pre-clinical collaboration with the University of Newcastle to investigate extramedullary AML using a mouse model developed by Associate Professor Nicki Verrills’ team. This program supports the Australian extramedullary AML-focused clinical trial plan (Pillar 3), focused on a US FDA registration pathway for Zantrene. On 31 March 2021, Race shared updates to the Company’s Three Pillar strategy detailing intended programs and activities. The updates to respective pillars included: • Pillar 1 – pre-clinical programs confirmed in melanoma and ccRCC. A potential Phase 1 FTO-focused dose escalation clinical safety study is under feasibility consideration. • Pillar 2 – a two path program investigating breast cancer was developed with advice from George Clinical. An Australian clinical study focused on late-stage metastatic breast cancer has enlisted a principal investigator with a proposed start date in late 2021. A secondary clinical program involving a potential opportunity to assess Zantrene’s heart-safety profile is undergoing full feasibility evaluation in anthracycline naïve patients by George Clinical. • Pillar 3 – (i) Race committed to a Phase I/II clinical trial of Zantrene in combination with clofarabine and fludarabine in relapsed or refractory (r/r) AML in Israel at the Chaim Sheba Medical Centre, led by Professor Arnon Nagler who also led the earlier 2020 Phase II study. (ii) A Phase I/II trial of Zantrene in extramedullary AML led by Associate Professor Anoop Enjeti, Director of Haematology at Calvary Mater Newcastle and John Hunter Hospitals. This trial seeks to demonstrate efficacy of Zantrene in fit patients or in combination with a hypomethylating agent in less fit patients. This trial will potentially enable Race to pursue FDA/EMA approvals for this indication. 8 | Race Oncology Limited ACN 149 318 749 – Annual Report 30 June 2021 Annual Report 2021 11 Directors’ Report DIRECTORS’ REPORT Review of Operations (Continued) (iii) A further opportunity in paediatric r/r AML is under feasibility assessment. This study is being shaped with input from the Children’s Oncology Group in the USA and has the potential for both US FDA registration and a Priority Review Voucher award. On 1 April 2021, the Company issued 625,000 fully paid ordinary shares following the exercise of options: • 125,000 unlisted options with an exercise price of $0.099 expiring 31 August 2021; and • 500,000 unlisted options with an exercise price of $0.25 expiring 1 July 2021 On 7 April 2021, the Company issued 1,000,000 fully paid ordinary sh