Hello and welcome to Cantargia Q3 report for 2021. Throughout the call, all participants will be in listening only mode, and afterwards there will be a question and answer session. Today, I am pleased to present CEO, Göran Forsberg and CFO, Bengt Jöndell. Please begin your meeting.
Thank you so much. It's a pleasure to present Cantargia Q3 report. I suggest that we introduce ourselves and by that we can go to slide number three. I'm Göran Forsberg. I'm CEO of Cantargia, and I'm here together with my CFO, Bengt Jöndell. Pleasure to be here. If we go to slide number four, showing the significant event during period. It's been a very intense third quarter and a very productive and let's say successful third quarter for development of Cantargia's projects. The most significant event relates to new clinical data in non-small cell lung cancer, which were presented at the ESMO conference. We'll come back to those data during this presentation. Clearly it shows that we have an efficacy which is better than you would expect from historical controls.
We also had several new trials starting up in some kind of second wave strategy to explore new opportunities. Several of these trials, like the CIRIFOUR, the CAPAFOUR, and the TRIFOUR, had early milestones like acceptance from regulatory authorities or start of treatment of patients. We also had important new data in preclinical showing new insights into the benefits of CAN04 versus competitive drugs, and we'll also come back to that during presentation. Finally, we had a very successful outcome of an opposition against one of our European patents. The opposition was completely rejected by the European Patent Office. Again, showing that we have a very strong patent situation with our patents around CAN04 and IL-1RAP for cancer therapy.
After Q3, there has been further progress regarding orphan drugs in Europe. I also forgot to say that we got an orphan drug in pancreatic cancer in the U.S. during the period. We also reported some progress in the production of CAN10, which is our second project, and also updated the timeline for start of clinical trials. I suggest that we go to the next slide, and in fact, a blue slide, just saying that it's product safe. Yes, we go to the next one, which is showing our pipeline. Just to remind everyone, our lead product CAN04, it's developing a large number of diseases, but the lead diseases are pancreatic cancer, non-small cell lung cancer, where development is focused on treatment together with standard chemotherapy.
The idea is really to increase the efficacy of the chemotherapy as well as have activity of our own compound leading to prolonged survival and benefits for patients. We also have a large number of trials starting up in what we call second wave in both pancreatic non-small cell lung cancer, but also other cancer forms like triple-negative breast cancer, biliary cancer, colon cancer. Our second product, CAN10, is not cancer product. It's directed against autoimmune inflammatory diseases. It directed against the same molecular target, but it has very different properties, and it's been designed for myocarditis and systemic sclerosis treatment. Then the CANxx is our platform product to develop new compounds to let's say, feed the pipeline with new compounds not competing with lead projects.
If we turn to slide number sevem then, this is some new key data which was presented during the period. What we show is, to the left, the biology that we're trying to address. The interleukin-1 system is one of the system which is leading to let's say, severe cancer, and it's causing that by some kind of chronic inflammatory response. There are two components in the IL-1 system called IL-1 alpha and IL-1 beta. Cantargia CAN04 is unique in that it's blocking both interleukin-1 alpha and interleukin-1 beta. There is, for instance, competition of antibodies blocking one of these, either IL-1 alpha or IL-1 beta. The most advanced development is from an antibody called canakinumab, which is blocking IL-1 beta.
What we're showing in this experiment is that if you can treat mice with tumors with one chemotherapy called docetaxel, there is obviously an effect of docetaxel, so the tumor size is reduced. But when you add an antibody against IL-1 beta, nothing. The effect is similar, but in very stark contrast, when we add our antibody, we're just blocking both forms of IL-1, very synergistic effect. We believe that we have very interesting clues about this difference because if you treat cancer cells with docetaxel or other chemotherapies, that will stimulate interleukin-1 alpha production. Interleukin-1 alpha has in principle the same activity as interleukin-1 beta. To have an efficient drug, you need to block both.
You can say that we are solving the problem of IL-1 signaling completely, while competitors seem to have more, let's say, restricted activity, which may be very important in other settings. When it comes to chemotherapy combinations, blocking both forms of IL-1 seems to be superior. We are investigating CAN04 in combination with docetaxel as well as several other chemotherapies right now. Now we're at next slide eight, showing combination data in non-small cell lung cancer. The key message here is that we treated 27 patients with non-small cell lung cancer. We observed a very high response rate, so the response rate is in the order of 50% in the total population.
This is about twice as high as you would expect from chemotherapy alone based on historical controls. Obviously a very good number and very good outcome. The progression-free survival is also much higher or longer than you would expect from chemotherapy alone. It's 7.2 months in this very early analysis compared to about five months for the chemotherapy. Again, a good outcome. Obviously we need much more patients here, so we are adding on 40 patients.
What we also discovered in this analysis, and that's on slide nine, so next slide please, is that we do get a much stronger signal in one of the two subtypes of non-small cell lung cancer that's called non-squamous, which is the biggest form of non-small cell lung cancer, where we observed very high for most patients benefit with tumor shrinkage. Several of these patients are still on therapy, so it's hard to say exactly what the response rates will be, but it's definitely much better than you would expect from chemotherapy alone. You can see that in the waterfall plot, which is above or in the so-called spider plot showing the kinetics over time. In both analysis, it looks much better than you would expect from chemotherapy alone.
In non-small cell lung cancer, we observed one side effect, which is called neutropenia, which is higher than you would expect from chemotherapy alone. We are working on that, and we know that there is something called G-CSF which can be administered to patients to counteract neutropenia, and it works in this setting. It's more a question of optimizing the procedures, to get everything right rather than then have to live with the neutropenia problem forever. By that, we'll start to let's say look more into status of our clinical trials and a little bit forward-looking. That's slide number 10. If we take the trial by trial, so the CANFOUR trial, which is a first trial in non-small cell lung cancer and pancreatic cancer. In pancreatic cancer, we have recruited all the patients.
We have presented data from the first cohort of patients earlier this year, and we expect to update these data which is of relevance in particular for overall survival later on this year. The second part of 40 patients were fully recruited in September. We believe that the data will be mature enough for initial efficacy presentations during H1 next year. In non-small cell lung cancer, the first data set was presented at ESMO and was what I presented just a minute ago. But we are then starting recruitment in non-squamous non-small cell lung cancer right now.
We expect the data update on the initial group of patients during H1, and we need to come back a little bit on guidance when we can present data from the second group of non-squamous non-small cell lung cancer. In pancreatic cancer, we're now at the stage where we are preparing for the next step, which will be some kind of late-stage development. We're currently in discussions with the key opinion leaders, with regulatory authorities and everything. Once this is all clear, we will also communicate that to the market. Next slide. The CIRIFOUR trial is a much smaller trial at this point in time. It's combination with immunotherapy with pembrolizumab.
It's done in several different cancer forms, and the primary aim of this trial is really to document safety of the combination. Because it's not a non-trivial exercise to combine two immunotherapies, and we want to make sure that there are no strange side effects or unexpected side effects popping up. We expect to present data later on this year for this combination. But it was 15 patients. Based on those data already, we are starting an extension. So now we're combining pembrolizumab, so the immunotherapy and chemotherapy together with CAN04, and we're going to start that phase. That part, and that will then be in first-line patients. It will be, let's say, more closer to the relevant patients group. Next slide, which is the CAPAFOUR. This is a pancreatic cancer trial with combination with FOLFIRINOX first-line patients.
Recruitment started a few months ago, and everything is going as planned here. We expect to present some kind of interim update once the initial dose escalation is finished, which we expect somewhere during first half next year. If we go to the CESTAFOUR trial, which is next slide. This is a much bigger trial. It carries out in three different indications at three different times. One, lung cancer together with docetaxel in second or third-line patients. It's biliary tract cancer first-line in combination with platinum gemcitabine, and it's colorectal cancer in third-line in combination with FOLFOX, which is another chemotherapy. Recruitment are ongoing in all these arms right now.
We expect to present again some kind of interim update once the initial dose escalation phase is finalized, and we expect that to happen during first half next year as well. Finally, on the next slide is the TRIFOUR trial, which is done in triple-negative breast cancer together with GEICAM. We expect the first patient in during November. Once we have first patient in, we will also be able to guide a little bit more about upcoming milestones. In summary, there are a lot of activities ongoing in our clinical trials, and there are lots of milestones ahead of us. We look forward to the future next steps. At this point in time, I would like to hand over to Bengt, who would then go through the finance update.
Thank you, Göran. Next page, please, 16. Operating expenses year to date increased with 125% to in total SEK 264.5 million. As you can see in the graph to the left, the main part of the increase is related to R&D. In total, 95% is actually invested in the R&D development. The increase was mainly driven by the broadening of the clinical program, as we have seen earlier quarters under studies CAN04, CIRIFOUR, CAPAFOUR, CESTAFOUR, and TRIFOUR, but also the CMC developments. It also CAN10 projects, pre-clinical studies mainly increased during the period. The personnel also increased to in total 24 full-time employee end of the period. Next page, please. The financial position is continued strong.
In total, we have available funds close to SEK 650 million. Looking to our present plans, this will last approximately to the end of the first half of 2023. Solidity is of course also high and strong, 91%. To sum up, I mean the finance situation. It's clear that we spend in the R&D field and we increase, but also we have still a very strong cash position. Then I hand over to Göran again.
Thank you very much. I would like to move over to the final slide, which is slide number 19, which is basically to summarize that I think we've had a very, very productive year and a very productive quarter behind us. We have invested a lot in our projects and are starting to see new and exciting results from that. Having said that, we believe that there is much more in the pipeline in the future.
Over the next 6-9 months, there should really be an expectation to get new results from the two in both pancreatic cancer, non-small cell lung cancer, so that's really through the combination. Also there should be more guidance around what are next steps in development both in pancreatic cancer, non-small cell lung cancer. One thing is clear, we are very positive and very confident in the data we have, and obviously we're going to continue to take this forward and explore more around this.
A very important part which we also need to present more about is preclinical and translational results as they become available in our projects. We will be trying to be transparent whenever we think that we have robust and interesting enough results to share. There are also the new clinical trials which are starting up. There are milestones ahead, and obviously we will give you an update of how things are progressing in the CESTAFOUR, in the TRIFOUR, as well as in the CAPAFOUR trial.
Then for CAN10, obviously a few interesting milestones ahead of us both when it comes to preclinical progress, our development milestones. The clear goal is to initiate the clinical trial, which is currently planned for Q3 next year. By that, we'd like to thank you for your attention, and we're very happy to take some questions.
Thank you. If you do wish to ask a question, please press zero one on your telephone keypad. If you wish to withdraw your question, you may do so by pressing zero two to cancel. There will be a brief pause while questions are being registered. Our first question comes from Arvid Necander with Carnegie. Please go ahead.
Thank you. Good afternoon, Göran and Bengt, and thanks for taking my questions. Just starting off with CIRIFOUR, obviously the main focus here is safety. Could you tell us what other measures you're looking at to capture potential signals of efficacy and signals of the synergy with pembro?
Yes. No, you're absolutely right, Arvid. The main focus is safety, but we are doing a very ambitious program to collect obviously CT scans, which I think is standard in the cancer population and follow patients for efficacy. Also biomarkers both in the blood as well as in tumor biopsies. That then takes a much longer time to get the analysis of the tumor biopsies done. It will be, let's say, sequential delivery of results starting late this year with some early, especially safety, but also some early efficacy, hopefully. It will be built on that during next year.
Exactly what type of data are you planning to report in the upcoming readouts now during Q3,Q4?
I think it depends on that. We're currently doing all the analysis to see what is robust enough to present at that point in time and which data needs a little bit more maturation. I need to come back on that. Overall, our goal is to present as much as possible without, let's say, being premature and misleading.
Okay. That's great. Thanks for that. Then just a second question on biomarkers. Obviously you're conducting a pretty comprehensive biomarker analysis in CANFOUR. I think there's quite great anticipation for the presentation of this, especially on the back of Novartis findings. So when can we expect the first results from this analysis?
Yeah. I ideally would like to present at least from the first two [cohorts], which is the 33 first patients in pancreatic cancer in combination, the lung cancer patients, as well as some monotherapy data. Do that at the same time because it really makes most sense to compare these different groups. With the last patient in lung cancer relatively late, we're still gonna take some time before we're ready to present all this. I would love to do it this year, but we probably have to wait until next year before we are ready to do all this. Again, it's a sequential analysis. We learn more and more, and we again prefer to present a very robust and solid story rather than go out and present some anecdotal findings.
Okay. Fair enough. Yep. That's it for me today. Thanks, Göran.
Our next question comes from [Rene Alders with Kempen]. Please go ahead.
Hi, good afternoon. Rene here, from Kempen. Yeah, just following up on some of the findings that you had on one of the earlier slides. You showed a breakdown of responses between patients in the squamous and the non-squamous NSCLC groups. I was just wondering, have you also looked into the differences in baseline characteristics between both subgroups? Could it, for instance, be that the squamous NSCLC subgroup was just a tougher patient group to start with?
Yes, you're absolutely right there, Rene, but we are looking into these parameters as well. Our finding is that we do really see a big difference in efficacy in the non-squamous patient population. We do not exclude that we can have benefit in squamous. It's just that during next step development in squamous and non-squamous patients are treated differently. We need to make a choice of which one to go for or have two paths being developed in parallel. With just a much stronger or pronounced signal in non-squamous, we thought it's much better to go ahead in that direction. Obtain more. As we obtain more data in squamous and learn more, we will be able to decide on how what the next step of development will be in squamous.
Right. That's clear.
It's not that it's more, let's say, pause and wait and learn more.
Yeah. A quick question for Bengt. What is the expectation of operating costs for next year?
Yeah, for next year. Sorry, I didn't get the start. Did you say estimates for next year?
What are your expectations for operating costs or R&D costs in specific? Because that's probably the most important lever of your operating costs for next year. Will that increase on a similar pace as it has in 2021, or will it slow down a little bit? Can you give us some more sense on that?
Yeah. I tried to do that. Of course, we don't give any formal estimate, but as you can have seen this year, we have had an increase quarter by quarter. What we can foresee is some kind of that we have reached a certain level now after quarter three. Some kind of estimate should be that we keep more or less that level during next year. That also be the same for the rough estimate of outgoing cash that we gave earlier.
Yeah. Okay. That's it for my questions for today. Thank you very much.
As a reminder, if you do wish to ask a question, please press zero one on your telephone keypad. We have no further questions. I hand back the word to our speakers.
Yeah. We have received some questions through the web, and the first one is, what are the main triggers for the share coming up during Q4 call?
Yeah. I think the main triggers would be the new clinical results and also more clarifications around our development paths going forward.
Thank you. Another one is, how big is the addressable market for Cantargia, taking into account both CAN04 and CAN10?
Obviously, if CAN04 turns out to be, let's say, a general way of increasing the efficacy of chemotherapy in general or just the platinum-based chemotherapy where we have the strongest pre-clinical results, and it's also what we see in non-small cell lung cancer. I think we're talking somewhere around $10 billion. It's very tough to estimate, but we're getting up there. I think the pancreatic cancer market itself in U.S. only is somewhere $1 billion-$2 billion. The segment in non-small cell lung cancer, which we're addressing, would be a billion-dollar market in the U.S. only. Adding all of this up and adding, let's say, territories outside the U.S., it's huge. For CAN10 is, let's say, more a niche product being developed in smaller indications. We don't have an accurate market estimate, but again, it's in the billion-dollar ranges for sure.
Thank you. Another one is, do you have any prognosis on when to start making revenues for the company?
I think there are two parts to this. The revenues can be obtained in different ways. Our strategy is not to develop the drug all the way until registration ourselves, but we're not completely dependent or desperate to get a partner on board either. Once we, let's say, can sign a deal with the partner, that's really triggering revenue. We will do that at a time point when we think this is best for, let's say, shareholders on long-term basis rather than go ahead and do it too quickly and too cheaply. We strongly believe in our drug, and we would like to get the right value for it.
Are there any sort of estimates on the yearly rates of revenues when you get to that stage?
No, we don't have that, those types of estimates right now. I think like in all these businesses if our revenues they are going to be very high at that point in time because the potential in our drugs are so huge, but then there are always the risks on the way.
The last question is connected to the pancreatic study. The first one is related to the ongoing studies. What do you expect to see in the company releases around these studies?
I think when it comes to the actual data, I cannot really go out and guide what we expect to see. What type of data you expect to see is that obviously in the next one, it should be all patients have been treated for more than a year or have been followed for more than a year at that point in time. It would be a robust package of the survival data or on the earlier clinical endpoint. Then we are presenting follow-up data on the extension phase next year. We will not have the robust survival data at that point in time. It would be too early. What we will have obviously response rates, so we will have safety data, and we will probably have some initial signals of what the PFS would be looking at.
Yeah. Looking into the phase III study connected to pancreatic cancer, what is needed in order to start such a study, and when do you expect that to happen? Or when do you expect to hand in the application for a phase III study product?
Yeah. No, I think it could be a phase III, but I prefer to call it some kind of potentially pivotal trial because it doesn't necessarily have to be. It can be what was called phase IIb, which is more designed for an accelerated approval. It could be a phase III trial which contains some kind of interim analysis along the way, or it could be a phase III trial. And the exact nature of these things are what we're discussing with KOLs and regulatory authorities right now and in the next couple of months. I need to come back on all this once it's ready.
Yeah. I've received another question. It's have you dismissed any partnerships lately?
I cannot comment on that.
Thank you. I think that was all in terms of questions coming in from the web.
We have no further questions through the telephone, so please go ahead.
Thank you so much for your attention, and I look forward to continue the dialogue with the investment community. I have a interesting product here, and I can assure you that I look forward to the rest of the year and next year.