** Shares of drug developer Kazia Therapeutics

fall 3.2% to $3 premarket

** KZIA says after discussions, US FDA said data from its mid-to-late stage cancer study "would generally not be appropriate for accelerated approval, but could be considered to support a standard approval"

** Co in July conducted a mid-to-late stage study testing its experimental drug, paxalisib, in patients with glioblastoma- a type of cancer that starts as a growth of cells in the brain

** Said paxalisib increased survival by 3.8 months in the study vs standard of care in patients with glioblastoma

** KZIA says it has aligned with FDA on the design of a late-stage study to test the drug

** Co says it continues to test the drug in pediatric brain cancer and brain metastases as it evaluates its next steps for the drug

** Up to last close, stock down 29.5% YTD

(Reporting by Sneha S K)

((Sneha.SK@thomsonreuters.com;))