Interim report for third quarter 2021,1 January – 30 September 2021 Kancera AB (publ.), org.nr. 556806-8851

The year in brief

Juli – September
Financial summary of the third quarter

Net sales amounted to SEK 0 million (0,05 million).

R&D costs amounted to SEK 10,9 million (8,8 million).

Operating profit for the third quarter amounted to SEK – 10,9 million (-9,3 million).

Profit after financial items for the third quarter amounted to SEK –11,0 million (-9,3 million).

Earnings per share for the third quarter amounted to -0,20 kr (-0,21 kr).

Cash flow from operating activities for the third quarter amounted to SEK –6,2 million (-10,9 million).

Equity on 30 September 2021 amounted to SEK 133,3 million (85 million) or 2,38 kr (1,95 kr) per share.

The equity/assets ratio on 30 September 2021 amounted to 91 percent (88 percent).

Cash and cash equivalents on 30 September 2021 amounted to SEK 118,7 million (47,6 million).

January – September
Financial summary of the entire period

Net sales amounted to SEK 0 million (0,09 million).

R&D costs amounted to SEK 29,7 million (28,1 million).

Operating profit for the period amounted to SEK -32,5 million (-26,6 million).

Profit after financial items for the period amounted to SEK -32,8 million (-27,8 million).

Earnings per share for the period amounted to -0,59 kr (-0,85 kr).

Cash flow from operating activities for the period amounted to SEK –29,5 million (-27,9,0 million).

Equity on 30 September 2021 amounted to SEK 133,3 million (85 million) or 2,38 kr (1,95 kr) per share.

The equity/assets ratio on 30 September 2021 amounted to 91 percent (88 percent).

Cash and cash equivalents on 30 September 2021 amounted to SEK 118,7 million (47,6 million).

Important events during the third quarter

Kancera announced that the UK’s drug and ethics testing authorities have approved the start of a
Phase IIa clinical trial of KAND567 following myocardial infarction.

Warrant 5 (TO5) was exercised early until the end of September 2021 and provided the company with SEK 1.3 million. The last date for redemption of TO5 is 30th November 2021.

Important events after the end of the third quarter

Kancera has announced that the Phase IIa clinical trial of KAND567 in patients with myocardial infarction has started in Newcastle.

Kancera has announced the planned start of pre-clinical toxicological studies of KAND145.

Kancera has reported top-line results from the Phase IIa clinical trial of KAND567 in acute COVID-19. Results show safety, predicted plasma concentration of KAND567 and a pharmacological effect on immune cells as proof of principle for its mechanism of action. For additional information, see “Drug development”.

CEO statement

Start of Kancera’s second clinical phase IIa study of KAND567 against hyperinflammation and pre-clinical effect studies of KAND145 against ovarian cancer.

Kancera is currently developing two innovative drug candidates, KAND567 and KAND145, both of which have the ability to inhibit the Fractalkine receptor – a key player in the regulation of both immune cells and cancer cells. By reducing the activity of the Fractalkine receptor, it is possible to counteract life-threatening complications due to excessive inflammation in the heart, kidney and lung, but this also has the potential to increase the effect of conventional treatments for cancer and thus help to normalize life for the seriously ill. During the third quarter of the year, we made progress in both the clinical development programs for KAND567 and in the clinical preparation program for KAND145.

The FRACTAL study of KAND567 in patients with myocardial infarction is progressing according to plan.

This summer, Kancera received approval from the UK Drug and Ethics Review Authority to launch the Phase IIa clinical trial of KAND567 in patients with myocardial infarction. In October, the clinical start-up meeting for the study was conducted. The placebo-controlled study is being conducted in collaboration with the Newcastle upon Tyne Hospitals NHS Foundation Trust at Freeman Hospital and James Cook Hospital and aims to evaluate the clinical efficacy and safety profile of KAND567 in a total of 60 patients with myocardial infarction (STEMI). Patients are treated for three days and an evaluation of markers for cardioprotective effect, inflammation and general health takes place at days 30 and 90 after the first dose. Through this thorough evaluation, we will create a more solid knowledge base for the continued development of both KAND567 and other drug substances in our project portfolio.
According to the schedule, the last patient is expected to be included during the fourth quarter of 2022, and top line data can be presented four to six months after.

Results from our Phase II clinical trial of KAND567 in COVID-19 patients.

In the spring of 2020, the world was hit by the first wave of COVID-19. Lack of knowledge of the disease led to high mortality and required a major effort from the healthcare system. Medical expertise indicated that hyperinflammation could be a significant contributor to the severe symptoms that afflicted some patients. Together with the scientific and clinical professions, Kancera decided to meet the healthcare challenges by evaluating the potential of KAND567 to counteract hyper-inflammation in a clinical study and thereby limit disease in COVID patients. We are proud of our decision and of the extensive work by our clinical partners that made the study possible and happy about top-line results supporting a pharmacological effect of KAND567 on the immune system, strengthening the continued development of this drug candidate for the treatment of severe inflammatory conditions.

The results provide evidence for that the chosen dose of KAND567 resulted in an pharmacologically active concentration in blood plasma which was well tolerated in patients suffering from an acute and severe inflammatory condition. Retrospectively it was concluded that the majority of patients showing the highest level of inflammation were accumulated in the KAND567-treated group. Following a 7-day treatment with KAND567, this difference in inflammation had levelled out and there were no differences between groups with regards to lung lesions and respiratory capacity. Due to the random difference between groups from start, the study cannot distinguish if the course of clinical development was influenced by KAND567 treatment. Results do support that KAND567 triggers a de-activation of inflammatory immune cells and inhibits their escape from blood circulation. This effect on the immune system is expected to prevent an escalating inflammation and constitute a proof of concept for the KAND567 mechanism of action.

Several established and broadly acting anti-inflammatory drugs have already proven to help patients suffering from severe COVID-19. For this reason, Kancera chooses to continue to focus on the company’s main track, that is inflammatory conditions with a clear trigger for the start of treatment and which are not sufficiently treated by use of broadly acting anti-inflammatory drugs. Such conditions include inflammation in conjunction with acute cardiac ischemia-reperfusion and relapsing-remitting auto-immune disease. Kancera’s direction and focus is exemplified by the initiated phase IIa-trial of KAND567 in myocardial infarction patients active at the Freeman Hospital in Great Britain.

Clinical trials in cancer determine the development of KAND145.

A number of new and important research advances indicate that KAND145, our second drug candidate that acts against the Fractalkine receptor, has the ability to break down resistance to the type of chemotherapy used to treat ovarian and lung cancer. In 2021, we therefore decided to raise new capital to start a clinical development program for KAND145, with ovarian cancer as the first indication. The Fractalkine receptor supports the repair of DNA in tumor cells, which helps the tumors to neutralize the damage that chemotherapies are designed to cause. This in turn results in the cancer becoming resistant (insensitive) to the best chemotherapies available.

Prior to the start of a clinical development program with KAND145, we have successfully produced the substance in kilogram quantities. We are now conducting a preclinical study package consisting of toxicological studies and studies in disease models for human ovarian cancer towards the goal of applying for study start in 2022 for a combined clinical phase I / IIa study of KAND145, first in healthy (phase I) and then in cancer patients (phase IIa).

Pioneering research with high commercial potential
Kanceras has, based on scientific and experience from translating medical inventions into clinical trials and products, established a portfolio of assets with good opportunities to generate new classes of sought-after drugs. We continue our intensive and structured work towards the goal of bringing effective treatments to large patient groups.

Solna, November 19 2021
Kancera AB
Thomas Olin, CEO