First quarter in brief
1 January – 31 March 2020
- Net sales for the period (January to March) amounted to SEK 0,04 million (3,1).
- R&D costs for the period amounted to SEK 9,7 million (10,2).
- Operating profit for the period amounted to SEK -11,1 million (-7,9).
- Profit after financial items for the period amounted to SEK -11,7 million (-8,0).
- Earnings per share for the period amounted to -0,06 kr (-0,04 kr).
- Cash flow from operating activities for the period amounted to SEK -8,6 million (-5,8).
- Equity amounted on the 31 March 2020 to SEK 25,0 million (25,4) or 0,03 kr (0,13 kr) per share.
- The equity/assets ratio amounted on the 31 March 2020 to 45 procent (60 procent).
- Cash and cash equivalents amounted on the 31 March 2020 to SEK 3,2 million (15,2) 1.
1 For information on the 100% guaranteed rights issue of SEK 61 million, see "Important events after the end of the first quarter". The issue proceeds were paid after the end of the first quarter, during April 2020.
Significant events during the first quarter
- The Finnish Medicines Agency Fimea gave approval to start the final part of the phase Ib study of KAND567.
- At an Extraordinary General Meeting on January 13, 2020, the Board of Directors was authorized to decide on a new share issue in accordance with that which was stated in the press release on November 21, 2019 and the notice of the Annual General Meeting.
- An Extraordinary General Meeting on January 31, 2020, decided in accordance with the Board of Directors' proposal to amend the Articles of Association limits for the share capital and the number of shares outstanding. According to the new articles of association, the share capital must be at least SEK 16 750 000 and at most SEK 67 000 000 and the number of shares shall be at least 201 000 000 and at most 804 000 000.
- The Phase Ib program for KAND567 was completed in March 2020. The results show that the drug candidate is well tolerated on intravenous administration. Kancera now intends to compile an application for permission to start a phase II clinical trial in patients with acute myocardial infarction.
- In March, it was announced that a patent application for KAND145 that was filed in June 2018 in accordance with the international patent treaty PCT has been reviewed with regard to news value, level of invention height and industrial utility. The review shows that KAND145 is performing well in all three categories, which points to the potential for a strong international patent protection for at least 20 years from the filing date.
- Conditions for conducting Kancera's Phase IIa study were described in light of the restrictions imposed as a consequence of the covid-19 pandemic. The focus of Kancera's Phase IIa study is emergency life-saving healthcare, which means that the recruitment of patients is not limited by travel restrictions linked to the pandemic. Furthermore, both the initial care and the inclusion of patients in the study are performed by dedicated cardiac specialists, which means that the risk is low that redistribution of staff to the care of covid-19 patients will hinder the study. However, the start of new studies is currently being limited. Covid-19 did not significantly affect the company's operational activities during the first quarter.
Significant events after the end of the first quarter
- Kancera has announced that the new issue of 157 369 119 Units consisting of each one share and two warrants has been completed. The issue, which was resolved at the Extraordinary General Meeting on January 13, 2020, was fully subscribed by guarantee to SEK 61.4 million. Of these, as of March 31, SEK 19.3 million was received by shareholders with preferential rights. Cash issue costs are estimated at approximately SEK 4.8 million. In addition, guarantors and advisors are remunerated with 22 000 203 Units. In total, the number of shares increases to 389 194 814 shares, which corresponds to a dilution of 85%. The share capital increases to SEK 32 432 901.
- An Extraordinary General Meeting on April 9, 2020 has decided in accordance with the Board's proposal to extend the subscription period for TO4 until the end of September 2020.
- The company has decided to focus its operations on the continued clinical development of the drug candidate KAND567. Against this background, the company plans to reduce the workforce in the preclinical research organization. After the organizational change has been implemented, the cost reduction is expected to amount to approximately SEK 8 million annually. In addition to KAND567, the company's resources will mainly focus on taking the preclinical drug candidate KAND145 into the clinical phase.
- Kancera has filed a patent application for the drug candidates KAND567 and KAND145. The new patent application deals with the treatment and prevention of hyperinflammation in viral infections, a condition that is seen in seriously ill patients in the ongoing covid-19 pandemic, amongst others.
- Kancera has submitted an application to the Swedish Medicines Agency for permission to conduct a phase II clinical study of the drug candidate KAND567 in covid-19 patients. The ultimate goal of clinical development is to curb hyperinflammation and thus avoid intensive care and long-term rehabilitation for patients with covid-19. The study is intended to be conducted in collaboration with Capio St. Görans Hospital and the Science for Life Laboratory.
- The Board of Directors has assessed that the covid-19 pandemic can have a negative effect on the company's operations in 2020, but that the Board cannot currently assess how large that effect could be.
Kancera prepares Phase II clinical studies of KAND567 in two inflammatory conditions – acute myocardial infarction and covid-19
The development of our most advanced drug candidates KAND567 and KAND145, which work by inhibiting the Fractalkine system, continues to take clear steps forward. In February we were able to announce that the KAND567 project received approval from the Finnish medical products agency, FIMEA, to start the final stages of the phase Ib program. Already in early March, we presented positive results in the form of good tolerability and a favorable safety profile after intravenous treatment in healthy individuals. Thus, preparations could be stepped up for the next important step in the development of KAND567 – the start of a phase II study in patients with acute myocardial infarction. The introductory part of the next clinical study aims to further evaluate the safety profile and the heart-protective effect of the Fractalkine blocker in the event of a heart attack. The potential medical benefit of our drug candidate is great, and for this reason, there is strong interest from clinicians to assist in the continued development. Negotiations are currently underway with one of the world's most renowned university hospitals, Freeman Hospital, to expand the ongoing preclinical collaboration to include the Phase IIa clinical trial. Our hope is that the prevailing world situation and the burden on health care facilities will become reduced well in advance of the planned start of the phase IIa study.
In line with success in the clinical development of our leading drug candidates, the internal need for expertise is changing. Against this background, we are pleased to have appointed Torbjörn Lundström as Chief Medical Officer (CMO) with medical responsibility for Kancera's product portfolio. As a medical doctor and physician, he has extensive experience in clinical cardiology and internal medicine, but also 20 years of experience in clinical drug development, having been responsible for products in the advanced development phase of cardiovascular and metabolic diseases at AstraZeneca. At the same time, I would like to thank Joachim Forsgren for his decisive efforts as CMO during the hitherto development of the Fractalkine project. Joachim will remain as senior advisor in the area of patient safety.
In May, the decision was made to concentrate continued operations on the clinical development of the drug candidate KAND567. For this reason, Kancera will carry out a reduction of the personnel in the preclinical research organization. The planned organizational change is expected to reduce the cost base for the company by approximately SEK 8 million annually. In addition to the development of KAND567, the company's resources will be focused on taking the preclinical drug candidate KAND145 into the clinical phase.
As a result of the ongoing covid pandemic, we have investigated the potential of our drug candidates to curb the severe and life-threatening inflammatory conditions (hyperinflammation) that can occur in connection with viral infections. In early May, we announced a patent application for KAND567 and KAND145 for the treatment and prevention of hyperinflammation in viral infections, and shortly thereafter we submitted an application to the Swedish Medicines Agency to conduct a phase II clinical study documenting the potentially protective effect of the drug candidate KAND567 in patients with covid-19. The study is intended to be conducted in collaboration with Capio St. Görans Hospital and the Science for Life Laboratory (SciLifeLab). By opening up this new area of use for Fractalkine inhibitors, we hope to contribute to the treatment of severe viral infections caused by covid-19 and other viruses that cause the same type of hyperinflammation.
Kancera's financial situation was strengthened by a successfully completed new share issue in early April. The new share issue was subscribed to 100 percent and provided the company with SEK 64 million before issue costs. The warrants that were issued at the same time may add an additional SEK 40 million in 2020, before issue costs. The funds from the issue and the exercise of TO4 are considered together to be sufficient to finance the two planned Phase II studies of KAND567. We are now looking forward to continuing the development of our most advanced Fractalkine antagonists in two separate indication areas where the need for better treatments is significant.Solna, 22 May 2020
Thomas Olin, CEO
About Kancera AB
Kancera develops drugs that counteract damage during acute and chronic inflammation. The Fractalkine blocker KAND567 is primarily developed to effectively and selectively reduce the inflammation of the heart and vessels following a heart attack and is expected to apply for a clinical phase II study during 2020. Since scientific studies have shown elevated levels of fractalkine not only in heart attacks but also in inflammatory conditions including virus infections and certain forms of cancer, there are several possible development opportunities for the fractalkine blockers KAND567 and KAND145. In collaboraton with academic groups, Kancera also develops preclinical drug projects against cancer aimed at stopping survival signals in the cancer cell and preventing the cancer cell's ability to be repaired. Kancera operates at Karolinska Institutet Science Park in Stockholm. The share is traded on Nasdaq First North. FNCA Sweden AB (tel. 08-528 00 399, email@example.com) is the company's Certified Adviser. MD PhD Charlotte Edenius, MD PhD Anders Gabrielsen, Professor Carl-Henrik Heldin and Professor Håkan Mellstedt are all scientific advisors and board members of Kancera AB.
For further information, contact:
Thomas Olin, CEO: +46-(0)735-20 40 01
Kancera AB (publ)
Karolinska Institutet Science Park
SE 171 48 Solna