Third quarter in brief
1 July – 30 September 2019
- Net sales for the period (January to September) amounted to SEK 3,3 Million (0,1 Million) of which the third quarter contributed SEK 0,2 Million (0,0 Million).
- R&D costs for the period amounted to SEK 27,5 Million (31,3 Million) of which the third quarter contributed SEK 7,2 Million (10,5 Million).
- Operating profit for the period amounted to SEK -28,1 Million (-33,5 Million) of which the third quarter contributed SEK –7,5 Million (-10,7 Million).
- Profit after financial items for the period amounted to SEK -28,4 Million (-33,8 Million) of which the third quarter contributed SEK -7,6 Million (-10,8 Million).
- Earnings per share for the period amounted to SEK -0,14 (-0,21) of which the third quarter contributed SEK -0,04 (-0,06).
- Cash flow from operating activities for the period amounted to SEK -32,6 Million (-31,2 Million) of which the third quarter contributed SEK -11,6 Million (-17,9 Million).
- Shareholders' equity as of 30 September 2019 was SEK 23,6 Million (45,5 Million) or SEK 0,11 (0,24) per share.
- The equity/assets ratio as of 30 September 2019 was 65 percent (77 percent).
- Cash and cash equivalents on 30 September 2019 amounted to SEK 3,9 Million (34,8 Million). For information about a 100% guaranteed rights issue of SEK 61 million, see the section “Significant events after the end of the third quarter”.
Significant events during the third quarter
- Kancera announced that the third and final installment payment for the Fractalkine project and KAND567 has been made in accordance with the acquisition agreement. The payment that has been activated in connection with the ongoing Phase Ib study is made through a new issue of two million of the company's shares to Acturum AB.
- Kancera announced that a further developed dosing strategy for KAND567 is intended to be introduced, which means an added delay of the Phase 1b study. The new dosing strategy is consistent with clinical practice for the cardiac protection of patients with myocardial infarction. The results obtained from the Phase 1 studies support that such dosing provides the desired effect and tolerability. For more information on the completion of the Phase Ib study, see under "Significant events after the end of the third quarter".
- Kancera presented new preclinical findings for its lead compound KAND567 at the world's largest cardiac congress, which is a joint arrangement between the ESC Congress and the World Congress of Cardiology. The preclinical results were considered by the ESC to be of "outstanding quality" and were thus selected for oral presentation during the central session for scientific progress in the area of "acute coronary artery disease". The results show that Kancera's drug candidate KAND567 has an anti-inflammatory effect that protects the heart and blood vessels from damage associated with myocardial infarction and atherosclerosis. Click here for a link to a video recording of the presentation.
Significant events after the end of the third quarter
- Kancera described the importance of the 2019 Nobel Prize in Physiology or Medicine for Kancera’s drug discovery research (see https://kancera.com/en/press/news/nobel-price-2019/ )
- Kancera announced a revised patent strategy in collaboration with Grünenthal for the development of HDAC inhibitors for the treatment of pain and inflammation. This means that a patent application covering a series of HDAC inhibitors will be withdrawn in order to submit a new supplementary application at a later stage. The existing cooperation agreements have been supplemented in accordance with this revised strategy to allow both parties to reap the benefits of this revised patent strategy.
- Kancera announced that the company intends to complete the final step in the Phase Ib study of the drug candidate KAND567 in Finland instead of as previously planned in Sweden. In August 2019, Kancera applied for permission from the Swedish Medical Products Agency to change the dosing strategy in the study to enable an optimal dosage for patients. The Swedish Medicinal Products Agency has announced that the authority wants supplementary information and a new application for a permit to continue the study. Kancera has compiled the requested information and prepared a new application, but in order to maintain the timetable for the Phase IIa study, the company chooses to apply for the final part of the study in Finland. The company’s assessment is 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 thus remains unchanged.
- The Board of Directors of Kancera announced a decision to propose a rights issue of shares and warrants, which upon full subscription gives Kancera approximately SEK 61.4 million before warrants and issue costs. The issue is 100% guaranteed through guarantee commitments. The new share issue will be submitted for approval at an Extraordinary General Meeting scheduled to take place on January 13, 2020. The main purpose of the share issue is to raise capital for the continued clinical development of KAND567.
"Funding for the trial of KAND567 with life-saving potential following myocardial infarction and patent strategic decisions to strengthen the HDAC project in the fight against nerve pain"
The recently announced, fully guaranteed issue enables Kancera to conduct planned clinical trials of the drug candidate KAND567 which could normalize and extend the lives of patients affected by a major heart attack. The financing consists of a bridge financing of approximately SEK 14.0 million for the completion of the Phase Ib study and a new issue of Units of approximately SEK 61.4 million during the first quarter of 2020, including the opportunity to redeem an attractive priced option during Q2 2020. Together, this is estimated to add up sufficient funds to carry out the Phase IIa study.
According to our overall schedule, the development program continues for KAND567, which protects both the heart and blood vessels from injuries in connection with acute and chronic heart disease, although there have been some delays in certain interim goals during the quarter.
Early in the summer, the first interim results from the Phase 1b study showed that we had achieved the goal of reaching the heart with the estimated effective concentration of KAND567 already within five minutes and that the safety profile was satisfactory during a short period of intravenous infusion. However, a local irritation occurred at the infusion site when the infusion was given for an extended period of time. The concentration and infusion rate correction tested during the summer produced better results, but the tolerance was not good enough for an intravenous infusion over three days. Together with our clinical advisors, we have therefore made the decision to further develop the dosing strategy by switching to a combination of shorter intravenous infusion and up to three days of oral treatment.
With a retained plan to apply for a Phase IIa study on myocardial infarction in the second quarter of 2020, we are now going to Finland to complete the Phase Ib study in February 2020. The reason for this is that Finland offers attractive timeframes for conducting a high-quality study with a maintained budgetary framework.
Kancera already has good Phase 1 data for orally administered KAND567, and the new proposed dosage is consistent with clinical practice for care following myocardial infarction. Our overall assessment, based on all available data, is that there is strong support that the new dosing strategy will provide the desired effect and safety.
The interest in the role of inflammation in myocardial infarction in general, and the importance of the fractalkine receptor in particular, remains high. In early September, we gave the first scientific presentation of our data from preclinical studies of KAND567 at the world's largest cardiac congress, ESC Congress 2019 in Paris. The congress attracted over 33,000 participants and Kancera's research was presented during the main session for scientific progress in the next generation of treatments for acute heart disease. The reception was very good among the researchers, companies and key opinion leaders who attended and the dialogue with key people continued during the American Heart congress (AHA) earlier this week. In connection with the meeting, Kancera's presentation was also highlighted in the international trade press, where BioCentury, BioSpace and Labiotech all referred to our research results. You may find a link to a video recording of the presentation at ECS here.
When this year's Nobel Prize in Medicine was presented at the beginning of October, we received yet another proof that our research is linked to major scientific breakthroughs. This year, the discovery of how cells sense and adapt to oxygen supply was rewarded, and in particular, focus the interest on proteins regulated by the oxygen-sensitive factor HIF-1α. Among them are the Fractalkine receptor CX3CR1 and the enzyme PFKFB3. In our ongoing work to pursue KAND567, it is beneficial that more and more people see the importance of inflammation and the Fractalkine system in the oxygen deficiency that occurs after a heart attack.
In parallel to the development of KAND567, our collaboration with Grünenthal continues on our HDAC inhibitors for the treatment of pain and inflammation. After the end of the quarter, the decision was made to strengthen the patent strategy within the collaboration, and, as part of this, we withdrew a patent application for a series of HDAC inhibitors in order to be able to submit a new supplementary application at a later stage. Existing collaboration agreements have been supplemented to allow both parties to reap the benefits of this revised patent strategy. Constantly reviewing and strengthening the patent strategy is a natural part of the work in this type of drug development project. Together with Grünenthal we look forward to achieve a breakthrough in the fight against nerve pain.
Solna, November 22, 2019
Thomas Olin, CEO