Statement from the CEO

We are approaching clinical phase IIa and see three external factors which strengthen our belief in KAND567 as part of future treatments of cardiovascular disease. During the final quarter of the year, we were able to present positive data from an in-depth analysis of the Phase 1b program with KAND567 – a drug candidate with the potential to protect the heart from the damage that occurs in the heart and vascular tissues following an acute heart attack. KAND567 works by inhibiting the Fractalkine system, which plays a key role in the deleterious immunological response following a heart attack. We have previously shown that KAND567 blocks the Fractalkine system in humans. Based on the new analyses we presented in December, we can now also see that blocking of the fractalkine system also hamper certain immune cells, which are known to cause acute and chronic inflammatory diseases. Taken together, the results provide additional support for the potential cardiovascular protective effect of KAND567.

During the autumn we made the decision to apply for the final part of the phase 1b program for KAND567 in Finland. After the end of the quarter, in February, we got approval from the Finnish Medicines Agency, Fimea and the relevant ethics committee to start the study. In the final part of the Phase 1b program, infusion of KAND567 will be given at lower concentration, higher flow and during a shorter time period than in the earlier part of the program. The rapid approval from the Finnish Medicines Agency means that we believe that the results of the study will be available in March 2020, which means that we continue to expect to apply for permission during the second quarter of 2020 for the upcoming Phase IIa study.

The fact that the clinical development program for KAND567 is now proceeding according to plan also means that the timetable for the implementation of the fully guaranteed issue during the first quarter of 2020 is set. The main purpose of the issue, which will initially provide Kancera SEK 61.4 million, and provides the opportunity for additional capital injection through options, is to secure resources to carry out the phase IIa study of KAND567 in patients affected by heart attack.

As we now summarize the year 2019, we also note three external factors that strengthen our belief in KAND567 as part of the future treatment of cardiovascular disease. The first is a study presented by the pharmaceutical company Eisai. Eisai also develops a Fractalkine inhibitor, but in the form of an antibody and with other indications in sight. The preclinical results they made public in June show that blocking the Fractalkine system reduces the risk of rejection after a heart transplant. Although heart transplantation is something quite different from a heart attack, the body’s response to a transplanted heart is similar to that arising in the event of an acute myocardial infarction. In both situations, a rapid flow of blood into the organ occurs, and it is precisely then that the strong immunological reaction that damages the tissue occurs. Protecting a transplanted organ by inhibiting the Fractalkine system thus strengthens the hypothesis that the same is true in the case of a heart attack.

Another situation analysis concerns the regulatory climate. A challenge in developing drugs for acute heart disease has previously been to identify efficacy parameters that can be measured within a time frame that allows a reasonable time span for a clinical trial. Although the long-term goal is increased survival, measures are needed that enable the effect of treatment to be assessed at an earlier stage. In this perspective, it is appreciated that the US FDA during the year has taken a first step in this direction by presenting a proposal for new guidelines on the effects that must be shown to get a drug for acute heart failure approved (however, not yet for heart attack). According to the proposal, it will suffice with a demonstrated effect on, for example, symptom relief, the need for invasive procedures during the treatment period or time to discharge. Although the proposal do not specifically cover myocardial infarction, it speaks in favor of a development that could allow clinical studies in acute heart disease to be executed both faster and cheaper. Such development is also likely to enhance the interest in the development of new drugs addressing the major unmet medical needs of acute heart disease.

Finally, our own market analyses conducted during the year show that the timing is favorable for a KAND567 investment. A growing number of clinical studies in the cardiovascular field indicate a new interest in the indication of the global pharmaceutical companies and Kancera is well positioned with KAND567 when the global companies are looking for projects to fill their pipelines. In addition, the analyzes we conducted on the willingness to pay for new drugs in the event of acute myocardial infarction show that the threshold is in the range of $ 2,000 – 9,000 per treatment which would mean an estimated peak sale in the US and Europe in the range of $ 200-1,000 year. Although the uncertainty is great in this kind of analysis, it provides a picture of an area with a high demand for new treatments.

These external factors combined with the fact that we now have a drug candidate that will begin to be evaluated in a patient in 2020 create good grounds for a positive development for Kancera in the future.

Solna, 21 February 2020
Kancera AB
Thomas Olin, CEO