This is a translation of a Press Release in Swedish Stockholm 2018-04-03

The Board of Directors of Kancera AB (publ.) ("Kancera" or "The Company") has decided to propose a preferential rights issue of shares and warrants ("New Issue"), which, on full subscription, will yield approximately 60 MSEK for Kancera before issue costs. The main purpose of the issue is to fund continued clinical development of KAND567 against inflammatory diseases and cancer based on the results recently obtained from the first clinical phase I study. The issue is secured to 80 percent through guarantees. However, the company has neither requested nor received bank security for these. The New Issue requires the approval of an Extraordinary General Meeting, which is scheduled to take place Friday, April 20th, 2018.

Emission liquidity, together with available funds, will be used for continued clinical development of the drug candidate KAND567, as well as for further development of the Company's other project portfolio for increased opportunities for commercialization.

The majority of Kancera's resources will be concentrated on preparing and implementing a Phase IIa study with KAND567 in patients with a view to studying a potential effect of KAND567 on cardiac damage following an infarction. Prerequisites for using KAND567 against incurable and rapid development of lymphoma (blood cancer) will also be investigated. The emission liquidity is also intended to cover initial toxicology studies in the ROR1 project to take it one step closer to clinical development, as well as to the ongoing operation of the company for more than 12 months ahead. This also includes continued development of the other projects, PFKFB3 and HDAC6, at a lower level.

Background and motives 

In 2017, Kancera has started and completed the Company's first clinical trial with successful results. Data from the Phase I study show that KAND567 blocks the Fractalkine system, as Kancera hoped, and KAND567 is well tolerated in doses up to levels five to ten times higher than the calculated effective dose. As a result, the Company has prematurely achieved the main goals identified in connection with the issue in May 2016. It is now time to take the next step in the development of KAND567. The promising results from the Phase I study provide good prospects for achieving the company's goal of developing new, effective and safe drugs for cancer and inflammatory diseases.

An important event in 2017 in the field of immunology was the presentation of the Novartis so-called CANTOS study (Canakinumab Anti-inflammatory Thrombosis Outcomes Study1). The study provided convincing clinical evidence for the first time that anti-inflammatory treatment reduces the risk of complications following myocardial infarction. In addition, the follow-up analyzes showed a surprisingly strong and dose-dependent decrease in lung cancer in patients treated with the anti-inflammatory drug. The study thus strongly supports Kancera's further development of KAND567 against cardiovascular disease, as well as cancer, with its unique way of selectively controlling the immune system through the Fractalkine system. The goal is to reduce cardiac damage after an infarction and to slow down the development of unbearable lymphoma respectively.

Recently published external studies, together with internal studies, provide support for carrying out the first patient study in the field of cardiovascular disease, focusing on reducing the damage after acute myocardial infarction. Parallel to the preparation for such a study, the potential for KAND567 is further investigated for the treatment of severe cases of blood cancer. Preparing and conducting a Phase IIa clinical trial in patients will be the company's main activity.

1http://www.nejm.org/doi/full/10.1056/NEJMoa1707914

Preliminary time plan (dates refer to 2018)

Friday 20th April                                                                Extraordinary General Meeting

Friday 27th April                                                               First day for trading of shares without the right to participate

in New Issue with preferential rights

Friday 27th April                                                                Estimated date for publication of prospectus

Wednesday 2nd May                                    Reconciliation day for the acquisition of unit rights and rights

to participate in the New Issue with preferential rights

Friday 4th May                                             Subscription period begins, trading of unit rights starts

Thursday 18th May                                     Trade in unit rights is concluded

Wednesday 22nd May                                  The subscription period ends

Friday 25th May                                                                Publication of results of the New Issue

Terms for the New Issue

Kancera's share capital amounts to SEK 12, 386, 282.67, divided into 148 635 392 shares before the New Issue. The quota value of the shares is approximately SEK 0,0833 (1/12 SEK).

The new share issue refers to a maximum of 49 545 130 shares and a maximum of 49 545 130 gratuitous warrants (in units of units). In addition, the Board will have a so-called over-allotment option to issue a maximum of 12 500 000 shares and a maximum of 12 500 000 warrants (in units), on over-allotment of the issue, which may increase the New Issue amount by up to 15 MSEK. Finally, the underwriters of the New Issue will be paid by way of cash compensation equivalent to 10 percent of the guarantee amount or units equivalent to 12 percent of the guaranteed amount. Given a guarantee amount of 48 MSEK, the fee amounts to 4.8 – 8.8 MSEK and is paid in the form of cash benefits of no more than 4.8 MSEK or up to 4 800 000 shares and warrants (in units).

In total, Kancera can thus issue up to 66 845130 shares and warrants, given that the New Issue is fully subscribed and the over-allotment option is fully utilized and that the issue guarantee amounts to the rounded-off sum of MSEK 48 and is fully rewarded with units. Through the New Issue, the share capital may increase by no more than SEK 5, 570, 427.50 and amount to at the highest (rounded off) 17, 956, 710.17 SEK after the issue. In addition, part of the remuneration of Kancera's financial adviser in the New Issue is planned to be paid in the form of units through a separate emission.

One (1) existing share in the Company entitles one (1) unit right. Three (3) unit rights entitle to subscription of one (1) unit consisting of one (1) new share and one (1) warrant of series TO3. The subscription price per unit is 1.20 SEK.

Two (2) warrants of series TO3 entitle the holder to subscribe for a new share. The exercise price is SEK 1.95 for the subscription of a new share under two warrants during the period 22nd May 2019 through 22nd November 2019. Upon the issue of 66 845 130 warrants (see above), the Company, if all warrants are exercised, issue 33 422 565 shares and receive a subscription payment of approximately SEK 65.2 million.

Guarantees

The new issue is guaranteed through agreements with external investors to the amount of approximately MSEK 48, corresponding to approximately 80 percent of the New Issue. The guarantee fee is 10 percent of the guaranteed amount in the form of cash payment or 12 percent in the form of newly issued units at the same issue price as in the New Issue. No cash or other assets have been pledged and no other collateral has been provided to secure the commitments. Further information regarding the parties who have entered into guarantee commitments will be found in the prospectus that is expected to be published on 27th April, according to the preliminary timetable above.

Extraordinary General Meeting

The Board's decision on the New Issue and related decisions are subject to approval by an Extraordinary General Meeting, which is scheduled to take place Friday, April 20th, at 10:00 in Stockholm. Notice of the Extraordinary General Meeting is given by separate press release and notification.

At the Extraordinary General Meeting, the Board's decision and proposal for a decision as set out below will be submitted for approval.

(i)            new share issue of no more than 49,545,130 shares and no more than 49 545 130 warrants (in the form of units) regarding new share issue with preferential rights for shareholders

(ii)           new issue of no more than 4 800 000 shares and no more than 4 800 000 warrants (in terms of units) in respect of compensation to the issue underwriters

(iii)          new issue of no more than 12 500 000 shares and a maximum of 12 500 000 warrants (in units of units) for a so-called over-allocation option

(iv)          authorization to take decisions on new issues of shares and warrants (in the form of units). The authorization shall be used to pay fees to Kancera's financial adviser in the New Issue, which is partly in the form of units. In addition, the authorization may be used for supplementary issues due to, for example, increased emission guarantee amounts and possible rounding-off effects.

Publication of annual report and interim report

Due to the New Issue, Kancera has decided to announce the earlier publication of the Annual Report for 2017 on 20th April. The publication of the interim report for the first quarter is postponed until 28th May.

Advisor 

G & W Fondkommission is financial adviser to Kancera in the New Issue.

About Kancera

Kancera AB is engaged in the development of pharmaceuticals that begin with new treatment concepts and end with the sale of a drug candidate to international pharmaceutical companies. Currently, Kancera AB is developing cancer drugs by controlling the immune system, arresting survival signals in the cancer cell and preventing the cancer cell's ability to repair. Kancera AB operates in Karolinska Institutet Science Park in Stockholm and employs approximately 18 people. The share is traded on NASDAQ First North. The number of shareholders was approximately 7,300 on December 29, 2017. FNCA Sweden AB is Kancera AB's Certified Adviser. Professor Carl-Henrik Heldin, Professor Håkan Mellstedt and MD PhD Charlotte Edenius are scientific advisors and board members in Kancera AB.

For further information, contact:

Erik Nerpin, Chairman of the Board, 070-620 73 59

Thomas Olin, CEO: 0735-20 40 01

Kancera AB (publ)
Karolinska Science Park,
Banvaktsvägen 22
171 48 Solna

Visit our web site at: http://www.kancera.se

IMPORTANT INFORMATION

Publication or distribution of this press release may in certain jurisdictions be subject to restrictions by law and persons in the jurisdictions where this press release has been published or distributed should inform and comply with such legal restrictions. This press release does not contain and does not constitute an invitation or offer to acquire, subscribe or otherwise trade in shares or other securities of Kancera.

This press release may not be published, published or distributed, either directly or indirectly, in or to the United States, Australia, Hong Kong, Japan, Canada, New Zealand, South Africa or any other country in which such action is wholly or partly subject to legal restrictions. The information in this press release may also not be forwarded, reproduced or displayed in a way that violates such restrictions. Failure to comply with this instruction may result in violation of the United States Securities Act of 1933 or applicable laws in other jurisdictions.

Forward-looking statements

This press release contains certain forward-looking statements that reflect the Company's current views and expectations of future events as well as financial and operational development, including statements regarding the New Issue, and statements regarding guidance, planning, prospects and strategies. Words that are "referred", "expected", "expected", "planned", "estimated", "can", and other expressions that imply indications or predictions about future developments or trends, and which are not based on historical facts, are forward-looking information. Although the Company believes that these statements are based on reasonable assumptions and expectations, the Company cannot guarantee that such forward-looking statements will be implemented. As these forward-looking statements include both known and unknown risks and uncertainties, real outcomes can differ substantially from what is stated in forward-looking information. Prospective statements in the press release only apply at the time of the press release and may change without notice. The Company makes no commitment to publish updates or revisions of forward-looking statements as a result of new information, future events or the like beyond what is required by applicable laws or stock market regulation.