Interim Report for Kancera AB (publ) Q2 2012


All figures relate to the Kancera Group unless otherwise specified. The 2011 comparison figures for operating income and income after financial items were affected by the release of negative goodwill of SEK 7m that arose in connection with the acquisition of iNovacia; the entire amount was recognized as revenue during Q1 2011. Furthermore, comparison figures for 2011 were affected by the fact that Kancera acquired iNovacia on February 17; consequently, figures for the first half of 2011 include iNovacia’s sales and income for 4.5 months only.

January – June and Q2 2012 in brief

  • R&D expenses for the period totaled SEK 13.8m (SEK 13.9m), of which Q2 expenses accounted for SEK 7.2m (SEK 8.1m).
  • Net sales of external contract research for the period totaled SEK 1.2m (SEK 2.3m), of which Q2 sales accounted for SEK 0.5m (SEK 1.7m).
  • Operating income for the period totaled SEK -16.4m (SEK -7.9m after the release of negative goodwill of SEK 7m), of which Q2 income accounted for SEK -8.6m (SEK -8.9m).
  • Income after financial items for the period totaled SEK -16.3m (SEK 8.2m after reversal of negative goodwill of SEK 7m), of which Q2 accounted for SEK -8.5 (SEK ­‑8.9m).
  • Earnings per share for the period were SEK -1.08 (SEK ‑0.66), and for Q2 were SEK ‑0.56 (SEK ‑0.67).
  • Cash flow from operating activities for the period totaled SEK -15.3m (SEK 12.6m), of which Q2 accounted for SEK -7.3m (SEK ‑7.7m).
  • Equity as of June 30, 2012 totaled SEK 17.6m (SEK 29.2m) or SEK 1.16 (SEK 2.36) per share. The equity/assets ratio on the reporting date was 57 percent (60 percent).
  • Cash and cash equivalents totaled SEK 13.3m (SEK 26.8m) on June 30, 2012 and SEK 7.4m (SEK 17.6m) for the Parent Company.

Significant events during the period

  • In collaboration with Professor Matthias Löhr of the Karolinska Institute, Kancera demonstrated that its ROR inhibitors are effective in a challenging human pancreatic cancer model.
  • Efficacy is significantly superior to that of gemcitabine, today’s standard treatment. Kancera presented these results at Bio Europe Spring in Amsterdam.
  • Kancera presented its structure-based design of active compounds targeting cancer metabolism at the World Cancer Metabolism Summit in Washington.
  • Kancera presented results from its ROR project which demonstrate that the company’s active compounds are significantly more specific than four competing kinase inhibitors that are being developed to target chronic lymphocytic leukemia.
  • The results were achieved in collaboration with Professor Håkan Mellstedt and his research team at the Karolinska Cancer Center.
  • Kancera filed a patent application for a chemical series of ROR-inhibiting small molecules with pharmaceutical properties.
  • iNovacia AB reported that it had entered into a collaboration with Boston-based Agios Pharmaceuticals relating to the identification of chemical starting points for a project using iNovacia’s high-speed screening and chemical library.
  • Kancera announced that its ROR inhibitors have the capacity to kill leukemia cells from 50 percent of patients who are no longer benefiting from the drugs currently available for chronic lymphocytic leukemia, opening the way for a possible breakthrough in the treatment of the most common form of chronic leukemia. The studies were carried out in collaboration with Professor Håkan Mellstedt and his research team at the Karolinska Cancer Center.
  • Kancera announced that, in cooperation with Professor Håkan Mellstedt and his research team at the Karolinska Cancer Center, it had developed antibodies that allow the development of a diagnostic tool for the identification of patients and for follow-up of individual patient response to treatment with ROR inhibitors.
  • Kancera’s cancer projects were presented at a seminar on “Lead Generation and Structure-Based Drug Design in Cancer Research” at the Cambridge Innovation Center in Boston, USA, in April 2012.
  • Following authorization by the Extraordinary General Meeting held on November 10, 2011, Kancera implemented a new share issue with preferential rights for existing shareholders. The issue was 95% subscribed and involved the issue of 3,608,208 shares at an issue price of SEK 2.30 per share, which raised SEK 8.3m for Kancera AB before issue costs and represents dilution of 19.2 percent based on a total of 18,756,208 shares.
  • On May 28, 2012 the Annual General Meeting approved the Board’s proposal that the Board be authorized to decide to issue new shares on one or more occasions during the period up to the next Annual General Meeting against payment in cash and/or in kind or by set-off. The total number of shares which may be issued under this authority shall not exceed 20 percent of the total number of shares.
  • Kancera announced that Professor Carl-Henrik Heldin had been appointed to the Board of Kancera. Professor Heldin has been director of the Ludwig Institute for Cancer Research in Uppsala since 1986 and a professor of molecular cell biology at Uppsala University since 1992. He has a solid reputation and an extensive network from assignments as advisor to several academic institutions and among successful biotech entrepreneurs, and thus brings an international view of how Kancera´s projects are valued scientifically and industrially.
  • Professor Håkan Mellstedt presented Kancera’s ROR project under the title “Effect of ROR1 targeting small molecules on chronic lymphocytic leukemia cells” at the American Society of Clinical Oncology (ASCO) in Chicago in June 2012.
  • In June 2012, Kancera presented the company’s cancer projects at the BIO International Convention in Boston, USA, which attracted corporate leaders and business developers from more than 2,500 companies.
  • Kancera announced that it had strengthened its patent rights for biological drugs targeting ROR-1 through the acquisition of BioInvent’s share of the rights to patent application WO 2011/079902. The acquisition is based on an agreement that imposes no financial burden on Kancera until revenue is generated. Through the company’s co-founder, Professor Håkan Mellstedt, Kancera already had an interest in patent application WO 2011/079902, which covers therapeutic antibodies targeting ROR for the treatment of cancer. This patent application was developed in collaboration with BioInvent and other members of the research team at the Karolinska Cancer Center. Kancera aims to develop these ROR antibodies in partnership with a company specializing in biological drugs.

Significant events after the end of the reporting period

  • Kancera announced that its PFKFB3 inhibiting compounds against solid cancers now enters preclinical efficacy studies in animals. This first generation of Kancera PFKFB3 inhibitors has been selected following two animal studies that have shown satisfactory distribution and tolerance. Results from the study will be reported during 2012.