Interim Report Fourth Quarter 2022 January 1 – December 31 2022 Kancera AB (publ.), org.nr. 556806-8851

Year in brief
October – December
Financial summary for the fourth quarter

• Net sales amounted to SEK 0 million (SEK 0.0 million).
• R&D costs amounted to SEK 11,6 million (12,9 million).
• Operating profit for the fourth quarter amounted to SEK -14,0 million (-12,7 million).
• Profit after financial items for the fourth quarter amounted to SEK -14.0 million (SEK -13.0 million).
• Earnings per share, before and after dilution, for the fourth quarter amounted to -0.22 kr (-0.23 kr).
• Cash flow from operating activities amounted to SEK -9.8 million (SEK -14.6 million) for the fourth quarter.
• As of December 31, 2022, equity amounted to SEK 106.9 million (SEK 122.5 million) or SEK 1.34 (SEK 2.19) per share.
• The equity ratio as of 31 December 2022 was 89 percent (92 percent).
• Cash and cash equivalents on 31 December 2022 amounted to SEK 95.1 million (SEK 106.5 million).

January – December
Financial summary for the entire period

• Net sales amounted to SEK 0 million (SEK 0.0 million).
• R&D costs amounted to SEK 45,6 million (42,6 million).
• Operating profit for the period amounted to SEK -51,9 million (-45,3 million).
• Profit after financial items for the period amounted to SEK -52.5 million (SEK -45.7 million).
• Earnings per share, before and after dilution, for the period amounted to -0.90 kr (-0.82 kr).
• Cash flow from operating activities for the period amounted to SEK -48.2 million (SEK -44.1 million).
• As of December 31, 2022, equity amounted to SEK 106.9 million (SEK 122.7 million) or SEK 1.34 (SEK 2.19) per share.
• The equity ratio as of 31 December 2022 was 89 percent (92 percent).
• Cash and cash equivalents on 31 December 2022 amounted to SEK 95.1 million (SEK 106.5 million).

Significant events during the fourth quarter

• Kancera reported that the application to conduct the KANDOVA study has been submitted to the Swedish Medicines Agency and that the company has entered into a collaboration with the clinical trial unit within the Nordic Society of Gynecological Oncology (NSGO-CTU).
• Kancera reported in November that the rights issue had been subscribed for approximately SEK 46 million before transaction costs, corresponding to a subscription rate of approximately 52 percent, which meant that the issue guarantees did not need to be used.
• Kancera reported new results from preclinical studies that support the potential for the company’s Fractalkine-blocking drug candidates to treat B-cell lymphomas, such as chronic lymphocytic leukemia.
• Kancera reported new results from preclinical studies supporting the potential of the company’s ROR1 inhibitor for the treatment of mantle cell lymphoma. The results show that the ROR1 inhibitor KAN571 effectively kills cancer cells that have become resistant to established therapies.

Significant events after the reporting period

• Kancera reported that the Swedish Medicines Agency approved the company’s application to conduct the KANDOVA study.
• Kancera announced that Hanjing Xie has been appointed as new Chief Medical Officer.
• Kancera reported that applications to the regulatory authorities in Denmark and Norway to conduct the KANDOVA study have been submitted.
• Kancera reported that the US Patent Office granted a patent protecting the production method for KAND567 and KAND145. The patent is owned by Kancera and is valid until 2039.

Other significant events during January 1 – December 31 2022

• Kancera reported compelling preclinical results and a decision on clinical development of KAND567 against ovarian cancer.
• Kancera announced that a decision has been made to enable the recruitment of an additional 10 patients to the FRACTAL study, with the aim of increasing the number of evaluable patients and thereby strengthening the study.
• Kancera announced that Peter Selin is taking over responsibility for the company’s financial reporting with the new title of Executive Vice President Corporate Development and Finance.
• Kancera announced that the United States Patent Office (USPTO) issued a patent protecting the chemical structure of Kancera’s Fractalkine blocker KAND145, a so called “composition of matter” patent. This patent, US 11,339,183, is owned by Kancera and is valid through 2039.
• Kancera presented 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 Fractalkine axis in humans. These results support the idea that Kancera’s innovative drug candidates can slow down inflammatory conditions in which the Fractalkine axis is activated, such as acute inflammation in the heart and kidney as well as rheumatic autoimmune diseases.

CEO Statement

Continued strong recruitment of myocardial infarction patients to the FRACTAL study. Completed rights issue ensures financing of the KANDOVA study – clinical development against ovarian cancer.

The FRACTAL study in myocardial infarction patients is progressing according to plan, results expected in third quarter 2023.

Since the fourth quarter of 2021, Kancera has been conducting the FRACTAL study in collaboration with the British NHS Foundation at the two university hospitals, Freeman and James Cook Hospital. The FRACTAL study is a phase IIa clinical study of Kancera’s Fractalkine-blocking drug candidate KAND567 in patients with myocardial infarction undergoing percutaneous coronary intervention therapy. The primary objective of the study is to evaluate safety and tolerability. The secondary aim of the study is to evaluate the signs of cardiovascular protective effect from treatment with KAND567.

Patient recruitment has progressed well during the year, which opened up an opportunity for us to further strengthen the study by achieving approximately 60 evaluable patients who underwent all of the study’s planned sampling and examinations. By the end of December, 63 patients had been recruited to the study, exceeding the originally defined goal of a total of 60 patients, and to date 70 patients have been recruited. During the month of February, we will be able to complete the recruitment of new patients in order to present results from the FRACTAL study in the third quarter of 2023 as planned.

The KANDOVA study in ovarian cancer patients is expected to start according to plan in the first half of 2023
Based on strong preclinical results, which show that Kancera’s Fractalkine-blocking drug candidates can increase the effect of platinum-based cytostatics against ovarian cancer, Kancera made the decision in September 2022 to increase the pace of development through the KANDOVA study. KANDOVA is a combined phase Ib/IIa clinical study of KAND567 in combination with carboplatin in ovarian cancer patients. During the fourth quarter, Kancera submitted the regulatory application in Sweden and after the end of the period, applications in Denmark and Norway have been submitted.

Furthermore, during the reporting period, Kancera entered into a cooperation agreement with the Nordic Society of Gynecological Oncology and its clinical trials unit (NSGO-CTU). NSGO-CTU is a Nordic society among the leading Nordic university

hospitals and clinical gynecological oncology specialists. Through this collaboration, Kancera has managed to engage the leading university hospitals and investigators in Sweden, Denmark and Norway. NSGO-CTU has expressed strong
interest in the KANDOVA-study and sees that positive study results will mean that Kancera’s drug candidate stands good chances of adding significant clinical benefit.

The goal is to shortly begin patient recruitment for the phase Ib part of the study and to recruit 30 patients in total for the combined phase Ib/IIa study at all Nordic hospitals. Results from the KANDOVA study are expected to be reported in the second half of 2024.

Completed rights issue secures financing of strategic clinical studies
Kancera’s board decided in October to carry out a rights issue with the support of authorization from the annual general meeting, and the company reported in November that the rights issue brought the company approximately SEK 36 million after transaction costs, which also meant that the issue guarantees did not need to be used.

Despite the challenging capital market environment, Kancera judged that the timing of this rights issue was well justified as it was critical to be able to conduct the KANDOVA study as a combined phase Ib/IIa study without interruption. Our assessment is that the financing now secured for both phases of the study will reduce the overall development lead time with more than a year, which has a significant impact on the project’s value. Positive clinical results from the phase IIa will mean that a strong foundation will be laid for a future industrial partnership, in line with the company’s business strategy.

In addition to the KANDOVA study, Kancera has full funding to complete the ongoing FRACTAL study and conduct the phase Ia study of KAND145 as planned in 2023. KAND145 is the company’s second generation Fractalkine-blocking drug candidate and strategically important for the company’s continued drug development in the cancer area.

In summary, we see that 2022 ended with a strong fourth quarter, when important steps were taken in the direction of establishing a clinical project portfolio that lays the foundation for commercially attractive partnerships.

Solna, 21 February 2023
Kancera AB
Thomas Olin, CEO