Interim report for fourth quarter 2020, 1 January – 31 December 2020
Fourth quarter in brief as well as the period 1 January – 31 December 2020
Net sales for the period (January to December) amounted to SEK 0,1 million (3,2 million), of which the fourth quarter contributed SEK 0 million (0 million).
R&D costs for the period amounted to SEK 39,3 million (34,5 million), of which the fourth quarter contributed SEK 11,2 million (7,0 million).
Operating profit for the period amounted to SEK -46,5 million (-35,6 million), of which the fourth quarter contributed SEK -12,9 million (-7,6 million). The result for the period was negatively affected by two non-recurring items: guarantee costs of SEK 7 million for a new share issue during the first quarter and a write-down of intangible assets of SEK 3 million.
Profit after financial items for the period amounted to SEK -47,6 million (-36,1 million), of which the fourth quarter contributed SEK -12,7 million (-7,7 million).
Earnings per share for the period amounted to -0,13 kr (-0,18 kr), of which the fourth quarter contributed -0,03 kr (-0,04 kr).
Cash flow from operating activities for the period amounted to SEK -46,0 million (-33,3 Mkr), of which the fourth quarter contributed SEK -11,1 million (-0,1 million).
Equity amounted on 31 December 2020 to SEK 72,3 million (17,4 million) or 0,15 kr (0,08 kr) per share.
The equity/assets ratio amounted on 31 December 2020 to 87 percent (39 percent).
Cash and cash equivalents amounted on 31 December 2020 to SEK 55,0 million (11,8 million).
Significant events during the fourth quarter
Important events after the end of the fourth quarter
Kancera has announced that a merger of Kancera's shares (so-called reverse split) will be carried out in accordance with a decision at the Annual General Meeting in Kancera 2020. The decision means that ten (10) shares will be merged into one (1) share. Prior to the completion of the merger, Kancera has 474 195 466 outstanding shares. In a first step, Kancera is now carrying out a new issue of four (4) shares to equalize the number of shares in the company to a number that is evenly divisible by 10. Thereafter, the decision on amalgamation must be registered with the Swedish Companies Registration Office. Kancera will publish a timetable for enforcement when the registrations with the Swedish Companies Registration Office have taken place. Following the completion of the split, Kancera will have 47 419 547 outstanding shares.
Phase II study of KAND567 in myocardial infarction patients is scheduled to start in the first half of the year.
In 2020, Kancera has made continued progress in the development of two drug candidates that are being developed to neutralize severe inflammatory conditions where current treatments are lacking. During the year, we conducted two successful Phase I clinical trials with our leading drug candidate and started Kancera's first patient study.
The outbreak of covid-19 has increased the focus on the need for new therapies that protect health and life by preventing the immune system from overreacting in a so-called hyperinflammation. Such protection has the potential to improve the care of patients regardless of whether the hyper-inflammation is caused by a severe viral infection or tissue damage such as a heart attack.
The common factor for these disease states is cell damage in the blood vessels. Such a damaged blood vessel allows inflammatory cells to pass and infiltrate e.g. heart and lung. The strategic focus of Kancera's research has resulted in two unique drug candidates that neutralize the ability of these cells to cross the damaged blood vessel, resulting in protection against inflammation and tissue damage. Kancera has a globally leading position in the development of this type of drug that selectively controls immune cells through the so-called "Fractalkine system".
Kancera's operational focus is now on showing the potential of our drug candidate KAND567 in two Phase IIa clinical trials. A phase IIa study is planned to start in the first half of 2021 to demonstrate signs of heart-protecting effect in patients after a heart attack. The second is ongoing in covid-19 patients and aims to demonstrate signs of lung protective effect.
Our financial situation gives us sufficient resources to carry out both these comprehensive and potentially value-adding studies. During the past quarter, a successful phase I study was completed which confirms that the new capsule product of KAND567 exhibits the desired properties and is thus ready for use in clinical studies. Being able to offer an oral dosage form in addition to intravenous treatment also increases the potential for future use of our drug candidate.
Mapping the heart-protective effect
Kancera's top priority is now to prepare for the upcoming study of KAND567 in patients undergoing balloon rupture after a heart attack. The purpose is to map the cardiovascular protective effect of KAND567, which in the long run is expected to reduce complications and increase survival. Preclinical studies in disease models provide strong support for the idea that KAND567 could provide the patient with such protection. The clinical study will be conducted in collaboration with Freeman Hospital in Newcastle, UK, one of the highest ranked hospitals in the world. Study preparations have been delayed due to the covid-19 pandemic. The entire healthcare system in the UK has been focused on saving lives, but we have done our utmost to meet all the challenges posed by the virus outbreak and now expect to be able to start this phase IIa study before the end of the first half of the year.
The rampant pandemic has increased interest in drugs that can reduce viral inflammation in the airways. Anti-inflammatory treatment with cortisone quickly established itself as a standard component in the care of covid-19 patients, but the need for safe drugs that both reduce inflammation and allow a good antibody response in the patient is still significant. Based on the unique mechanism of action of KAND567, it was a natural step for Kancera to initiate a development program in this area as well. The treatment concept rests on a strong scientific basis – the role of the Fractalkine system in hyperinflammation is well documented and we know that strong activation is closely linked to severe covid-19 disease. The fact that the global pharmaceutical companies Eisai and Boehringer-Ingelheim have been involved in the development of drugs that block the Fractalkine system is further evidence that Kancera is in the right place at the right time. We are now evaluating KAND567 in a phase II study that is planned to include 40 hospitalized covid-19 patients. The extremely high workload in healthcare as a result of the pandemic has made it more difficult for patients to be included, but after including more reputable study centers, we now see good opportunities for an increased inclusion rate.
The scientific quality of Kancera's platform for drug development – the Fractalkine system – has enabled us to engage world-leading authorities in our newly established Scientific Council. Petter Brodin, Associate Professor of Systems Immunology at ScienceForLife Laboratory and Karolinska Institutet, Peter Libby, Professor of Medicine at Harvard Medical School, and Ioakim Spyridopoulos, Professor of Cardiovascular Gerontology and specialist in the treatment of myocardial infarction at Newcastle University och Freeman Hospital, are now all deeply involved in the continued clinical development of our drug candidates. We also experience strong support from the clinics involved in the ongoing and upcoming clinical trial of KAND567, and are now working at the highest possible pace to be able to obtain the study results as soon as possible.
In order to further strengthen our focus in the Fractalkine area, we have decided to phase out the PFKFB3 project, which is aimed at a very different drug target. This has been run for six years as an academic research project that has mainly been funded through EU grants. The project's scientific progress has been published in Nature Communications, but like other international research groups, we have encountered technical obstacles in the development of a sufficiently good drug candidate. Thus, it is logical for us to free up resources from this project to instead conduct a probing preclinical evaluation of the possibility of developing KAND145 for the treatment of autoimmune diseases and cancer. We look forward to presenting results from preclinical research in the spring, in collaboration with our academic partners, which maps new areas of use for KAND567 and KAND145. This is partly an interim report from a two-year project in rheumatic autoimmune disease, and partly a final report from a four-year project focusing on ovarian cancer, both EU-funded.
Strengthened by the steps we took last year, I look forward to continuing our work according to a well-defined strategy and operational plan to drive our priority projects and drug candidates forward. Kancera's own research competence together with our partners and networks, as well as a good financial situation, means that we have secured resources to carry out both the ongoing and the planned phase II study at the greatest possible pace.
Solna, 19 February 2021
Thomas Olin, CEO