Fourth quarter in brief
1 October – 31 December 2019
- Net sales for the period (January to December) amounted to SEK 3,24 million (0,4 million) of which the fourth quarter contributed SEK 0,0 million (0,3 million).
- R&D costs for the period amounted to SEK 34,5 million (45,2 million) of which the fourth quarter contributed SEK 7,0 million (14,0 million).
- Operating profit for the period amounted to SEK -35,6 million (-45,9 million) of which the fourth quarter contributed SEK -7,5 million (-12,4 million).
- Profit after financial items for the period amounted to SEK -36,1 million (-45,9 million) of which the fourth quarter contributed SEK -7,7 million (-12,1 million).
- Earnings per share for the period amounted to -0,18 kr (-0,26 kr) of which the fourth quarter contributed SEK -0,04 million (-0,06 million).
- Cash flow from operating activities for the period amounted to SEK -32,7 million (-45,0 million) of which the fourth quarter contributed SEK -0,13 million (-13,8 million).
- Shareholders' equity on 31 December 2019 amounted to SEK 17,4 million (33,4 million) or 0,08 kr (0,18 kr) per share.
- Cash and cash equivalents on 31 December 2019 amounted to 39 percent (73 percent) 1.
- Liquid funds on 31 December 2019 amounted to SEK 11,8 million (21,0 million) 1.
1 For information on 100% guaranteed rights issue of SEK 61 million, see "Important events after the end of the fourth quarter".
Significant events during the fourth quarter
- Kancera presented the importance of the 2019 Nobel Prize in Physiology or Medicine for Kancera's drug research (see https://kancera.com/sv/press-swedish/nyheter/nobelpriset2019/)
- Kancera announced a new patent strategy in collaboration with Grünenthal for the development of HDAC inhibitors for the treatment of pain and inflammation. The immediate consequence of this is that a patent application was withdrawn around a series of HDAC inhibitors in order to register a new supplementary application at a later stage. Existing cooperation agreements were supplemented in accordance with this new strategy to allow both parties to enjoy the benefits of the revised patent strategy.
- Kancera announced its intention to complete the final phase of the Phase Ib study of the drug candidate KAND567 in Finland instead of as previously planned in Sweden. The company believes that this will allow the phase Ib study to be completed with unchanged budget during the first quarter of 2020. The previously announced plan to apply for a phase IIa study during the second quarter of 2020 is thus unchanged.
- The Board of Directors of Kancera announced its decision to propose a rights issue of shares and warrants, which upon full subscription will give Kancera approximately SEK 61.4 million before options and issue costs. The issue is 100 percent guaranteed. The main purpose of the issue is to raise capital for the continued clinical development of KAND567.
- Kancera reported results from an in-depth immunological analysis of blood samples from a number of healthy subjects in the ongoing Phase Ib program. The analysis shows that KAND567 effectively blocks certain specific immune cells that are known to cause acute and chronic inflammatory diseases. This is the first time this effect has been shown on clinically relevant biomarkers and the results provide further support for the potential cardiovascular protective effect of KAND567.
Significant events after the end of the fourth quarter
- Kancera held extraordinary general meetings on January 13 when the meeting unanimously resolved to authorize the board to decide on a new share issue in accordance with the press release on November 21, 2019 and on January 31 when the meeting resolved in accordance with the board's proposal for changes in the company's rules on the share capital and number of shares outstanding. According to the new articles of association, the share capital shall 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.
- Based on i) a fully guaranteed issue of SEK 61.4 million planned for March 2020 ii) bridge financing of SEK 14 million and iii) a conservative market valuation of Kancera's project portfolio, Kancera's Board of Directors has stated that the company, with intact equity and good liquidity, has ensured continued operations and enables the implementation of projects planned for 2020.
- Kancera has announced that the company has received approval from the Finnish Medicines Agency, Fimea and the Ethics Committee to start the final part of the phase Ib program for KAND567. The company estimates that the results of the study may become available in March 2020. Thus, the timetable remains in place for the completion of the fully guaranteed issue during the current quarter.
We are approaching clinical phase IIa and see three external factors which strengthen our belief in KAND567 as part of future treatments of cardiovascular disease. During the final quarter of the year, we were able to present positive data from an in-depth analysis of the Phase 1b program with KAND567 – a drug candidate with the potential to protect the heart from the damage that occurs in the heart and vascular tissues following an acute heart attack. KAND567 works by inhibiting the Fractalkine system, which plays a key role in the deleterious immunological response following a heart attack. We have previously shown that KAND567 blocks the Fractalkine system in humans. Based on the new analyses we presented in December, we can now also see that blocking of the fractalkine system also hamper certain immune cells, which are known to cause acute and chronic inflammatory diseases. Taken together, the results provide additional support for the potential cardiovascular protective effect of KAND567.
During the autumn we made the decision to apply for the final part of the phase 1b program for KAND567 in Finland. After the end of the quarter, in February, we got approval from the Finnish Medicines Agency, Fimea and the relevant ethics committee to start the study. In the final part of the Phase 1b program, infusion of KAND567 will be given at lower concentration, higher flow and during a shorter time period than in the earlier part of the program. The rapid approval from the Finnish Medicines Agency means that we believe that the results of the study will be available in March 2020, which means that we continue to expect to apply for permission during the second quarter of 2020 for the upcoming Phase IIa study.
The fact that the clinical development program for KAND567 is now proceeding according to plan also means that the timetable for the implementation of the fully guaranteed issue during the first quarter of 2020 is set. The main purpose of the issue, which will initially provide Kancera SEK 61.4 million, and provides the opportunity for additional capital injection through options, is to secure resources to carry out the phase IIa study of KAND567 in patients affected by heart attack.
As we now summarize the year 2019, we also note three external factors that strengthen our belief in KAND567 as part of the future treatment of cardiovascular disease. The first is a study presented by the pharmaceutical company Eisai. Eisai also develops a Fractalkine inhibitor, but in the form of an antibody and with other indications in sight. The preclinical results they made public in June show that blocking the Fractalkine system reduces the risk of rejection after a heart transplant. Although heart transplantation is something quite different from a heart attack, the body's response to a transplanted heart is similar to that arising in the event of an acute myocardial infarction. In both situations, a rapid flow of blood into the organ occurs, and it is precisely then that the strong immunological reaction that damages the tissue occurs. Protecting a transplanted organ by inhibiting the Fractalkine system thus strengthens the hypothesis that the same is true in the case of a heart attack.
Another situation analysis concerns the regulatory climate. A challenge in developing drugs for acute heart disease has previously been to identify efficacy parameters that can be measured within a time frame that allows a reasonable time span for a clinical trial. Although the long-term goal is increased survival, measures are needed that enable the effect of treatment to be assessed at an earlier stage. In this perspective, it is appreciated that the US FDA during the year has taken a first step in this direction by presenting a proposal for new guidelines on the effects that must be shown to get a drug for acute heart failure approved (however, not yet for heart attack). According to the proposal, it will suffice with a demonstrated effect on, for example, symptom relief, the need for invasive procedures during the treatment period or time to discharge. Although the proposal do not specifically cover myocardial infarction, it speaks in favor of a development that could allow clinical studies in acute heart disease to be executed both faster and cheaper. Such development is also likely to enhance the interest in the development of new drugs addressing the major unmet medical needs of acute heart disease.
Finally, our own market analyses conducted during the year show that the timing is favorable for a KAND567 investment. A growing number of clinical studies in the cardiovascular field indicate a new interest in the indication of the global pharmaceutical companies and Kancera is well positioned with KAND567 when the global companies are looking for projects to fill their pipelines. In addition, the analyzes we conducted on the willingness to pay for new drugs in the event of acute myocardial infarction show that the threshold is in the range of $ 2,000 – 9,000 per treatment which would mean an estimated peak sale in the US and Europe in the range of $ 200-1,000 year. Although the uncertainty is great in this kind of analysis, it provides a picture of an area with a high demand for new treatments.
These external factors combined with the fact that we now have a drug candidate that will begin to be evaluated in a patient in 2020 create good grounds for a positive development for Kancera in the future.
Solna, 21 February 2020
Thomas Olin, CEO
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 enter the clinical phase II study during the first half of 2020. Since scientific studies have shown elevated levels of fractalkine not only in heart attacks but also in inflammatory diseases and certain forms of cancer, there are several possible development opportunities for the fractalkine blockers KAND567 and KAND145. 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
We welcome you to visit our home-page: www.kancera.com