PERIOD 1 JAN – 30 SEPT 2017 IN BRIEF

 R&D expenses for the period amounted to SEK 39.8 million (13.3 million ), of which the third quarter amounted to SEK 14.7 million (4.6 million )

• Operating profit for the period amounted to SEK -44.2 million (-15.8 million ), of which third quarter amounted to SEK -16.6 million (-5.2 million )

• Profit after financial items for the period amounted to SEK -44.2 million (-15.9 million ), of which third quarter amounted to SEK -16.5 million (-5.4 million )

• Earnings per share for the period amounted to SEK -0.31 (SEK  -0.14), of which third quarter amounted to SEK -0.11 kr (SEK -0.04)

• Cash flow from operating activities for the period amounted to SEK -34.9 million (-17.4), of which third quarter amounted to SEK -9.3 million (-8.2 million)

•  Shareholders equity amounted to SEK 44.8 million (SEK 65.9 million) as of 30 September 2017, or SEK 0.31 (0.50) per share

• The equity ratio at 30th September 2017 was 65 percent (85 percent). Liquid funds amounted to SEK 46.1 million (63.5 million ) on September 30th, 2017

SIGNIFICANT EVENTS DURING THE THIRD QUARTER

• Kancera AB's final report on the HDAC6 project to Vinnova was approved in August 2017. Through a grant of 2 million SEK, Vinnova has part-financed the HDAC6 project for two years up to 2017-06-30.

• Kancera AB's final report on the EU project A-PARADDISE was approved in August 2017. The approval means that the EU will carry out the final payment for the project of approximately SEK 1.4 million in the fourth quarter of 2017.

• Kancera AB initiated the second part of the ongoing clinical Phase I study of KAND567 which comprises a total of 80 healthy subjects. During this part of the study, KAND567 is administered in increasing doses twice a day for seven days. The study is scheduled to be completed in the fourth quarter of 2017.

• Kancera AB signed an agreement with Recipharm AB, a leading contract manufacturing company, for product development and manufacturing of the KAND567 drug candidate.

 The Extraordinary General Meeting of Kancera AB resolved on 28 September 2017 to approve the Board's proposal for issue authorization for the payment of the agreed purchase price for the acquisition of the Fractalkine project and issue of warrants under a staff stock option plan.

SIGNIFICANT EVENTS AFTER THE END OF THE THIRD QUARTER

• Kancera has reported that the company's ROR inhibitor KAN0441571, after treatment every third day for 13 days, effectively eliminates ROR1-bearing leukemic cells in a mouse model of human chronic lymphocytic leukemia.

STATEMENT FROM THE CEO

During the second quarter, Kancera started the Phase I study in the Fractalkine project according to plans. The study aims at documenting the drug characteristics, safety and tolerability of the drug candidate KAND567 in healthy subjects. During the third quarter, we moved from increasing single doses to the final regime where KAND567 is given twice a day for seven days. We expect the results to be available by the end of 2017.

Preparations for the next step in the clinical development of KAND567 continue with the goal of demonstrating the effect of treatment on biomarkers that reflect the development or stage of disease. An effect on these markers can thus indicate the likelihood of KAND567 achieving the desired effect in continued clinical development.

In essence, we consider two indication areas for KAND567, cancer and inflammatory diseases. Within both these areas there are specific diseases where the Fractalkine system is activated and the medical need for improved care is high. Two examples of such diseases are pancreatic disease (including pancreatic cancer) and kidney disease.

During the third quarter, we have taken steps in this direction by starting the development of KAND567 in the product form that is intended for use in future clinical trials. This development is being done in collaboration with Recipharm.

In the ROR project, we reported in October that treatment with the substance KAN0441571 significantly reduced the amount of cancer cells in an animal model of human leukemia. We also reported that the optimization method that Kancera has used for the development of KAN0441571 has resulted in the substance controlling cell division and inflammation signals, in addition to inducing cell death in cancer. This molecular "fingerprint" of effects, together with the substance's long-term properties, can now help us to identify more cancer diseases in which KAN0441571 can be effective.

Thomas Olin
CEO Kancera AB (publ)