Interim report first quarter 2022, 1 January – 31 March 2022 Kancera AB (publ.), org.nr. 556806-8851

First quarter in brief

January – March
Financial summary for the first quarter and the period January – March 2022
·        Net sales amounted to SEK 0 million (SEK 0.0 million).
·        R&D costs amounted to SEK 10,6 million (8,2 million).
·        Operating profit for the first quarter amounted to SEK -11,9 million (-9,0 million).
·        Profit after financial items for the first quarter amounted to SEK -12,0 million (-9 ,1 million).
·        Earnings per share, before and after dilution, for the first quarter amounted to SEK -0,21 (-0,03).
·        Cash flow from operating activities for the first quarter amounted to SEK -9,8 million (-9,0 million).
·        Equity as of March 31, 2022 amounted to SEK 110,50 million (122,80 million) or 1,97 SEK (2,19 SEK) per share.
·        The equity / assets ratio as of March 31, 2022 was 90 percent (92 percent).
·        Cash and cash equivalents on March 31, 2022 amounted to SEK 96,8 million (55,0 million).
 
Significant events during the first quarter
·        Kancera announced that the recruitment of heart patients at Freeman Hospital is going well and points out that all patients can be included in the study in 2022
·        Kancera announced that good results from 14-day toxicology studies mean that clinic-preparatory 28-day studies with KAND145 will start as planned during the first quarter of 2022.
·        Kancera presented a strategy for the most time-efficient start of clinical cancer studies, where a study with the drug candidate KAND567 begins, after which a transfer to KAND145 takes place.
·        Kancera presented preclinical results showing that KAND145 effectively reduces the tumor size of ovarian cancer in a disease model based on biopsies from original tumors and metastases.
·        Kancera presented an in-depth analysis of how KAND567 affects the immune system in severely ill covid patients, showing an immediate and specific effect of KAND567 on the human Fractalkine system. These results support that Kancera’s innovative drug candidates can slow down inflammatory conditions in which the Fractalkine system is activated, including acute inflammation of the heart and kidneys and rheumatic autoimmune diseases.
·        The board estimates that the war in Ukraine may have a negative effect on the company’s operations in 2022, but that the board currently cannot assess how large that effect may be.
 
Significant events after the end of the first quarter
·        In an operational update, Kancera has announced that:

• KAND567 FRACTAL study: Of the total of 60 patients to be included in the study, 28 have so far been treated, which means that progress is being made according to plan to include all patients during 2022.
• Second generation fractalkine blocker: 28 day GLP toxicological studies of KAND145 have been carried out and are under analysis and the KAND145 is under production for clinical studies.
• Increased potential to treat cancer: New research results supports that fractalkine blockers can act against cancer by intervening with the supporting environment surrounding tumors (the so called microenvironment).

·        Kancera has announced that Peter Selin has started his employment as Executive Vice President Corporate Development and Vice President with responsibility for business development, strategic partnerships and out-licensing.
 
 
CEO statement
 
FRACTAL studies in cardiac patients are being developed according to plan
and cancer studies are advancing towards decisions on clinical studies

The FRACTAL study with myocardial infarction patients is developing according to plan
·        Cardiovascular diseases are the most common cause of premature death in the world today and heart attacks are predominant. Every year, about 500,000 individuals suffer from extensive heart attacks in the United States and Europe, and for about 25% of those affected, a serious complication or death occurs within five years. The need for adequate and effective treatments is therefore significant. During the fourth quarter of 2021, Kancera launched the Phase IIa clinical study FRACTAL, which aims to document the safety and cardioprotective effect (with biomarkers) of the KAND567
Fractalkine blocker in patients suffering from an infarction in the anterior wall of the ventricle. The study is being conducted in collaboration with the NHS Foundation at the two prominent university hospitals Freeman Hospital and James Cook Hospital in the United Kingdom.

·        Of the total of 60 patients to be included in the study, 28 have so far been treated, which means that progress is being made according to plan to include all patients during 2022.

In-depth results from the COVID study
In March, we were able to present results from in-depth analyzes of a Phase IIa clinical trial of patients with moderate to severe COVID-19. The results show that KAND567 had an immediate and specific effect on the Fractalkine system in the patients who were seriously ill. This provides further support for the fact that Kancera’s innovative drug candidates have the potential to alleviate disease states where the Fractalkine system causes an over-activation of the immune system. The insight opens up for the treatment of a number of indications with a marked need for improved treatments, including acute inflammation of the heart and kidney and autoimmune diseases.

Progress in our cancer projects
·        Every year, 300,000 women are diagnosed with ovarian cancer, often at a late stage, which contributes to the disease being the most serious form of gynecological cancer. In 2021, Kancera has published cell studies that show that Kancera’s fractalkine blockers in combination with chemotherapy drugs act in synergy to damage the tumor’s DNA. The effect is that cancer cells are damaged so much that they are forced to eliminate themselves. This in turn leads to the tumor shrinking. In early 2022, Kancera reported further strengthening preclinical results showing that the company’s Fractalkine blockers, in combination with chemotherapy drugs, effectively target cancer cells in patient samples from primary tumors and metastases. During the period May to October, we carry out a confirmatory preclinical effect study against ovarian cancer and produce capsules with Kancera’s Fractalkine blockers for clinical studies.

·        Given the positive results from this preclinical effect study, we plan to apply for a approval for a clinical phase Ib / IIa study with the aim of documenting safety and biomarkers for tumor effect for the combination Fractalkine blockers – chemotherapy. Through these studies, we are taking significant steps in the evaluation of Kancera’s Fractalkine blockers as a new class of anticancer drugs that currently have no effective treatment options.

·        Our preclinical research has further generated new results that show how fractalkine blockers can reprogram the microenvironment that normally helps cancer cells to survive, divide and spread. These promising effects of Kancera’s fractalkine blockers are under scrutiny in ongoing studies of patient samples. Results from these studies are planned to be reported during the second half of 2022.

·        Operational status
On May 1, we welcomed Peter Selin to the company as Executive Vice President Corporate Development and Vice President with responsibility for business development, strategic partnerships and out-licensing. Peters is part of the management team and plays a significant role in the continued value building within Kancera.

We are now looking forward to a continued strong recruitment of patients for the cardiac study in the United Kingdom and the preparatory steps for a clinical study of Fractalkine blockers against cancer.

Solna, 20 May 2022
Kancera AB
Thomas Olin, CEO