Good day, and welcome to the Cantargia Q3 report conference call. Today, all participants will be in a listen-only mode. Should you need assistance during today's call, please signal for a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad for audio questions. To withdraw your question, please press star then two. Please note that today's event is being recorded. At this time, I would like to turn the conference over to Göran Forsberg. Please go ahead.
Thank you so much. It's a pleasure to be here and present Cantargia's Q3 report. It's been an eventful and very interesting period, which we'll go into more details on, and we'll also explain a little bit where we are and where we are going. If we go to slide number two, we have this information. With slide number three, I would just say that besides myself, the presentation will also be given by Bengt Jöndell, our CFO. Moving into slide number four, you can see that there has been lots of things happening during this period. Most importantly, we performed a significantly oversubscribed rights issue during the summer and raised approximately SEK 250 million before transaction costs.
This has really been important to make sure that we can progress with our key programs. Besides that, there's also been scientific progress, and especially in preclinical translation data in both our projects. On nadunolimab, we made a very important publication around the anti-tumor effect in combination with chemotherapy, and also very important data presented in this paper to show the importance of our mechanism of action blocking both IL-1 alpha and IL-1 beta compared to concepts which are blocking only interleukin-1 beta. We could also present new data later on the effects in pancreatic cancer and the effects on pancreatic cancer stromal cells, which we believe is very important for the positive results we've seen in the clinic in pancreatic cancer.
Finally, very recently, a presentation is going to be given later on this week at SITC. We have documented that our antibody is affecting or down-regulating tumor-promoting chemokines. In the CAN10 project, we have shown efficacy data in both several models of myocarditis, which is obviously a very difficult to treat disease, and in three different models of systemic sclerosis, which we are very proud to present in an oral presentation later on this week as well at the American College of Rheumatology. We have also received a notice of allowance for our CAN10 antibody, and the patent has been issued later on in the U.S. Obviously a very important milestone here as well. We also strengthened the management team.
Dominique Tersago was recruited and appointed as Chief Medical Officer at Cantargia during the summer. Finally, as you may know, we've had a quite broad program when it comes to clinical trials, and we have always had a strategy that we were going to prioritize the opportunities being most promising. We continue to see strong results in non-small cell lung cancer and pancreatic cancer. Therefore, we decided it was a good time point to stop recruitment or halt recruitment in the other trials and just let patients continue therapy and read out the results later on, and then decide on the next step. The plan is very clear now that based on positive results we already have, move the program into randomized clinical trials.
I would like to move to slide number six, which is showing the main program, nadunolimab and what we're trying to show what we are achieving. The problem with chemotherapy is, and chemotherapies are really cornerstone in cancer therapy today and will be for foreseeable future, that even though patients if you have a tumor in the lung, which you can see here up in the left, if you start treatment with chemotherapy, you often can get the tumor shrinkage, but you will stimulate the tumor to upregulate the various resistance mechanisms. The interleukin-1 system, including both interleukin-1 alpha and interleukin-1 beta have been shown that they are strongly contributing to this resistance mechanism.
That means that once you have gotten into this stage, the tumor is no longer responsive and the primary tumor starts to grow again, and it starts to spread with metastasis, as you can see at the bottom left. If you move to the right, you can see what we're trying to achieve. We're trying to make sure that the chemotherapy continue to work, but can also have an additional effect and that we generate a synergy here. If we then move to the right here, what we can see is that we believe that the data we have so far is really indicating a synergy between our antibody and the chemotherapy, which results in lots of patients getting durable responses or very durable stable disease in patients during first-line treatment of pancreatic cancer.
Very few patients progressing on a therapy, which you can see the few patients with the tumors increase in the orange ones. Moving to slide number seven. The pipeline now is focused on pancreatic cancer, with the first-line gemcitabine/Abraxane combination being fully recruited since a while, and we're now preparing for the next randomized trial, which is planned to be a phase II/III trial. We are also doing activities with the other first-line combination for FOLFIRINOX. As I said, we've got recruitment on and are now letting the results mature. The other active program is then in non-small cell lung cancer, where we see very strong synergies with platinum doublets. We are continuing more patients in the subgroup of nonsquamous non-small cell lung cancer. Once fully.
This trial is fully recruited. We will advance into a randomized phase as well. Further down, in orange, we also are recruiting patients in triple-negative breast cancer with carboplatin gemcitabine combination. We will come back to that trial, but it is something we're very excited about since this trial has a lead in, and once we have advanced a little bit further, we will start a randomized phase. In CAN10, which is the second project here in gray, we are developing a drug for myocarditis and systemic sclerosis. We are in the final stage with the GLP tox study. Once ready and once all documentation is in place, we will submit a clinical trial application as soon as possible. Moving into slide number eight then.
What I'm doing very quickly now is to go through the clinical trials and the current status. In the CANFOUR trial, we're looking at first-line pancreatic cancer with gemcitabine ABRAXANE. As you know, we presented the interim data on the 73 patients with ASCO. We are preparing for next stage in the second arm, which is non-small cell lung cancer. We presented results from 30 patients at ASCO and continue recruitment in nonsquamous non-small cell lung cancer. Both these results presented at ASCO were still interim analysis. Sometimes during Q1 or Q2 next year, we are planning to present updated data. It depends a little bit how quickly they are maturing and when we think they are, let's say, relevant to give an update.
If we go to the next slide number nine. The CIRIFOUR trial, this is something which is also very exciting, to do combinations with immune therapy, where we also believe that there is a strong rationale. We presented the results on combination with Keytruda in patients that have already received and relapsed on IO. The results were presented at ASCO, and the next step is then to combine the Keytruda chemotherapy and nadunolimab. The initial plan was to do this within the CIRIFOUR trial. We now decided to do this in a different trial instead, and there is more to come once we have advanced in those discussions. If we go to slide number 10.
CAPAFOUR and CESTAFOUR, as we said, it is pancreatic cancer or in solid tumors and novel chemotherapy combinations. Altogether, 54 patients were recruited in these two trials. The safety looks very much as expected, so no novel side effects were observed besides what's expected from chemotherapy or nadunolimab. Results are currently maturing, and we hope to be in position to present results during first half next year. In the TRIFOUR trial, which is the triple-negative breast cancer, and that's slide number 11, we are combining with carboplatin gemcitabine in patients first-line or second-line patients. The initial phase here is lead-in, which is ongoing.
Once we are through with this lead-in phase, we are starting a randomized phase, and we believe that all this will happen in Q1. Obviously, we'll present what we have at that point in time. Finally, slide 12, the Precision Promise. This is obviously the next randomized trial, which is a potential pivotal trial, which we are doing together with PanCAN. We are currently in regulatory discussions with the FDA and EMA. Once we are through with the regulatory discussions, we plan to submit the protocol. This trial is designed to include up to 350 patients with first-line pancreatic cancer receiving gemcitabine Abraxane and nadunolimab or a control arm of gemcitabine Abraxane. That's where we are with the clinical trials in nadunolimab.
I will quickly go through what's happening in the CAN10 project because there has been significant progress here. That's slide number 13. Just to remind you of what CAN10 is and what the difference is to nadunolimab. CAN10 is binding the same target as the nadunolimab IL1RAP. The difference is that CAN10 is not only blocking the interleukin-1 system, it's also blocking what's called IL-33 and IL-36. And this opens up completely unique opportunities for treatment of autoimmune inflammatory diseases, as there are several diseases driven by interleukin-1 and/or interleukin-33 or interleukin -36. Typically, IL-33 has been documented in asthma allergy, IL-36 in skin diseases, and IL-1 is a general inflammatory cytokine. We have decided to work in myocarditis and systemic sclerosis.
We recently or earlier presented data, as you can see up to the right here, in autoimmune myocarditis, where you can see that we have an effect or the other way around. What you've done is that you immunize these mice with the heart muscle cells. If you don't treat them, the heart function will deteriorate very quickly, as you can see in the gray line here. If you treat with the CAN10, basically the heart function is unaffected by this immunization. If you try to block interleukin-1 beta only, there is a partial effect, as you can see on the blue line here. Clearly showing that the more complex inhibition of several pathways here is advantageous.
Below to the right, you can see a few bars, and this is from a recent presentation in collaboration with Johns Hopkins, where the myocarditis was induced by viruses, so this virus caused myocarditis. The red bar you can see here shows that if you treat these mice with CAN10, the heart function is not affected, while it gets worse if you do not treat at all, PBS or isotype, or even if you treat with an IL-1 blocker, anakinra, you do not see the same treatment effect as you do with CAN10. Again, showing that this more sophisticated mechanism of action has advantages compared to blocking IL-1 only. If we go to slide 14, finally, I hinted that we are presenting more new data this week.
At this point in time, it's only the abstracts that are available, but once published, we will publish these on our webpage. It is a presentation at SITC, which is ongoing right now, where we have documented novel effects of nadunolimab on tumor-promoting cytokine CXCL1 and CXCL5. That these are, let's say, thought to be stimulated by cancer tissue and promoting the tumor. We can block here this upregulation in blood cells here, but also in cancer-associated fibroblasts. Very interestingly, this is a unique effect from the combined IL-1 alpha, IL-1 beta blockade and not seen with an IL-1 and anti-IL-1 beta antibody. For the CAN10 to the right then, which is presenting later on this week at ACR, we've seen very potent effects on systemic sclerosis in three different models.
We believe that this is really unique and really exciting. Obviously, this led to this abstract being selected for oral presentation, which is obviously something we are very, very proud of. By that, I would like to hand over to Bengt to go through the financial results. Okay. We have a technical problem here, but Bengt is joining now. If we go to slide 16.
Okay, thank you. Let's have a look at the year-to-date figures first. As you can see, the year-to-date figures increased with 10% compared to last year, up to SEK 291.8 million. As seen on the graph to the left, the increase of investment is related mainly to R&D. 95% of the operating expenses is R&D. The main reason for the increase is, as early this year, the broadening of the clinical program. In this case, as main cost driver, TRIFOUR in the Precision Promise doing clinical trials. Personnel, end of September, 27 FTEs this year compared to 24 FTEs last year. Next page, please. If we have a look at the quarter three only, you can see a decrease of 29% compared to last year to a total of SEK 74.2 million.
This decrease of cost is mainly related to the clinical and CMC costs as a result of the focusing of the clinical program. Next page, please. Looking at the financial position end of September 30, the available funds close to SEK 500 million, and this give us a runway to approximately mid-2024 with the present plans. Then I hand back to Göran again. Thank you.
Thank you, Bengt. We will move over to a final slide, which is number 20. What I will just say is that I'm very excited about what we have achieved during Q3. There's been good progress in the projects, and we also managed to make the prioritization to move forward into randomized trials in nadunolimab and made some very significant findings in the CAN10 program. I also expect much more to come in our news flow over the coming quarters. We are going to, as I said, update the results we have generated in pancreatic cancer, non-small cell lung cancer, so the interim data can go towards more final data.
We are obviously very much looking forward to the upcoming phase II/III trial in pancreatic cancer together with PanCAN in Precision Promise. We are working quite hard to understand more about the translational research and what's happening, for instance, in the tumor tissue in patients. This is continuous work, but both these types of results as well as preclinical results is something we try to be very transparent about. It's all obviously both interesting, but it's also very much value-adding for to fully understand the reason behind the clinical data we present.
There are a lot of new clinical results in, let's say, the programs outside the core, so in pancreatic cancer with FOLFIRINOX, the solid tumors, as well as the triple-negative breast cancer trial. CAN10, again, preclinical progress, the development milestones, and then the, let's say, initiation of the clinical trial as soon as we are ready to do that and able to. First step, obviously, submission. By that, I'd like to thank you for your attention, and we are very happy to take questions.
We will now begin the audio portion of the question-and-answer session. Once all audio questions have been asked, we will move to the webcast portion of the question-and-answer session. Today's first question via audio comes from Luísa Morgado with Kempen. Please proceed.
Hi, this is Luísa dropping in for Sebastian from Kempen. Thank you for taking our question. I have a few. First, just to start off, you announced a number of changes in the pipeline, and we were wondering how will this impact the current spending, and do you anticipate a significant reduction in R&D for the next year?
Okay. Clearly you can say that if we hadn't done these changes, and since some of these trials will include an expansion, we would probably have increased our burn. Now instead, we're expecting the burn to slowly decrease instead. There are still patients being treated, so the cost for each trial is not going down to zero immediately.
Clear. Now you also have some more knowledge on the nadunolimab compound. I was wondering, do you maybe have any idea on what drives the synergies with the platinum-based chemotherapy?
One thing we notice when we treat, let's say, both mice as well as patients with the platinum-based chemotherapy is that there is upregulation of interleukin-1 alpha. It's clear from our publications that interleukin-1 alpha contributes to resistance of several chemotherapies. In our hands, platinum has been, let's say, the strongest inducer of interleukin-1 alpha. That's where we see, let's say, a doubling of response rates in non-small cell lung cancer. We believe that this is a contributing factor, the interleukin-1 alpha upregulation.
Just a final question. Regarding the business development progress and maybe having a partnership for the randomized non-small cell lung cancer trial, can you indicate us something about where you are now at this point with the partnership discussions, and what topics are these discussions centered on, and what would be, in your view, the most ideal setting to test the compound going forward?
Okay. The BD progress, obviously, we are in contact and have discussions with most, if not all, relevant players here in the field, but I cannot really give, like, guidance of how these discussions are progressing. For, let's say, the ideal setting, I assume the ideal setting was in non-small cell lung cancer. Was that correct?
Yes.
Yeah. The data we have today, it's primarily in combination with platinum doublets. One very clear opportunity is patients that have high PD-L1 that has progressed on Keytruda monotherapy, and would be candidates for a platinum doublet in second line. And that's where we see the strongest synergies. This is the priority. On the other hand, there are other opportunities as well, and we are not excluding anything. It could be a very nice way to broaden this concept in non-small cell lung cancer.
Okay, thank you.
The next question is from Soo Romanoff with Edison Group.
Hi. Thank you for the presentation. Göran, I have a few questions here. It was nice to see the positive momentum in the readouts and the patient enrollment. Could you provide an update on the anticipated timeline for the planned randomized trial in pancreatic and non-small cell lung cancer, and any details on what randomized trial on non-small cell lung cancer might look like?
Okay. If we start with pancreatic cancer, as I said, we're in discussions with FDA and EMA. The very, let's say, in pancreatic, what has, let's say, is ongoing, and that's what you all know, is that there is this Project Optimus, which has to do with those findings. What we're doing right now is to combine the Project Optimus, let's say, how the FDA would like to apply that into the Precision Promise trial. Once we are, let's say, finished with those discussions, which are more technical than anything, we will start that trial. I hope to do it very quickly, but we all know that these discussions with regulatory authorities are quite formal.
Hopefully, we can see submission within the next couple of months. In non-small cell lung cancer, we are all still treating patients in the CANFOUR trial, and we will do that for a few more months. Based on the results in those trials, we will then be able to fully design the next trial. The plan is to start the lung cancer trial during 2023.
All right. What about what results would you be looking for in the ongoing CANFOUR trial to support further randomized trials in non-small cell lung cancer patients?
No. Our expectation is that we generated the data showing approximately 50% response rate in combination with pembrolizumab plus paclitaxel. And now we're looking into carboplatin pemetrexed, and we're doing that in a nonsquamous non-small cell lung cancer population. Obviously we're looking to get similar types of results.
Okay. That's great. The last one, it's a little bit of a follow on to that first set of questions here. There was, I think the focus has really helped on extending the cash runway, but we didn't really see all of it come through, which is kind of what your answer implied. It what approximately are the operating expenses that we should kind of look at on a run rate basis and maybe approximate timing or maybe we just see it all in the next quarter?
I think Bengt should comment on that. I think you should see, let's say, slow decrease. The one factor which is also coming into play here is when we do our production rounds, production is a significant cost, and there is still one or two slots coming up here. At the trend, you should see an expectation for decrease. You can probably model that since we believe that we have runway until end of 2023 or mid-2024. I don't know if you want to say anything else, Bengt, here.
No, no. Oh.
I think you expressed it very well, Göran . Thank you.
Yeah. No, thank you very much for taking my questions. Thanks, quarter.
Our next question is from Richard Ramanius with Redeye.
Hello, good afternoon. I want to start with the trial in breast cancer TRIFOUR. First of which, would that be a potentially pivotal trial that you will initiate the randomized trial? Secondly, who will finance this trial? Do you finance all by yourselves?
The TRIFOUR trial is as you correctly said, it's randomized. We are hopefully not too far away to get the first patient in the randomized part. I don't think it's going to be a pivotal trial. It's more designed as a proof of concept trial. It's carried out in Spain only together with the Spanish breast cancer group, GEICAM. It's fully financed by Cantargia.
I had a question about CAPAFOUR. Is there any reason for believing that FOLFIRINOX would work differently than nab-paclitaxel in pancreatic cancer? I mean, is there any reason we should expect any different outcome in this trial compared with CANFOUR?
FOLFIRINOX is obviously a very different type of chemotherapy. We believe it's very exciting because it contains oxaliplatin, which is a platinum-based chemotherapy, which is a group of chemotherapies where we do see synergies in, or let's say the strongest synergies in mice. The side effect profile is also different. For instance, one of the limitations with Abraxane today has to do with neuropathy. As you may recall, when we add nadunolimab to Abraxane, we seem to reduce the incidence of neuropathy leading to a better tolerability. It'll be interesting to see if we can pick up any such signals with FOLFIRINOX as well, which is generally regarded as a tougher treatment than gem/Abraxane.
No, okay. No, thank you. Those are all my questions.
Thank you.
The next question comes from Arvid Necander with Carnegie. Please proceed.
Good afternoon. Thanks for taking my questions. Just a quick follow-up, first of all on the CAPAFOUR study. Can you say anything about the signals you've seen so far? Have you observed any responses or early tumor shrinkage in the study?
We have not disclosed any results from CAPAFOUR so far. FOLFIRINOX in itself is expected to give somewhere around 30% response rate. I think the benchmark is more if we can improve that number or not, and it's far too early to say anything about that.
Okay, fair enough. Just a second question on CAN10, which is starting to look quite promising. The only other molecule targeting IL1RAP that I'm aware of at least, was recently out-licensed to a biopharma players, aiming to evaluate it in autoimmune diseases. How does your partnering strategy look like for this asset? When are you targeting a deal for this asset? What do you believe you need to show to achieve this?
I think in one way we're always if the right partner is prepared to pay the right price, we are always interested to discuss our partnerships. Again, I'm reluctant to give any prognosis of when we can sign such a deal.
Okay. Fair enough.
I'm sorry if you want any, let's say, more thoughts around this, but I think.
I guess just.
Our focus right now is to get the phase one started. Obviously we're talking to several potential partners who are, let's say, following us, who obviously think it's interesting. From such discussions to a deal, it can go quick, and it can take very long time.
Right. Fair enough. No, I guess my question was, I mean, with nadunolimab, I think the target was to license the assets, after having established a proof of concept or completed phase two trials, if I remember right, at least, you know, initially when the company was founded. I was wondering if you had a different strategy for this asset. Fair enough. We'll have to wait and see. Those were all my questions. Thanks.
Thank you.
The next question comes from Sten Westerberg with Analysguiden.
Yes. Hello. Thank you for taking my questions. My first question, you seem to put a lot of effort now into differentiating your molecule, your dual-acting mode of action compared to single-binding substances such as canakinumab. The question I would have is it due to some kind of change in attitude from the industry that you are holding discussions with?
I assume you refer to canakinumab and the latest clinical results. You can probably regard this from two different ways. In one way, obviously canakinumab like the let's say the investments around canakinumab generated lots of interest in Cantargia. Obviously, when the canakinumab trials failed, it had some impact on that part. On the other hand, we note this as lots of curiosity around why did canakinumab show such promising effects in the beginning, and why did the results not really come out as positive?
Obviously, I have no insight into those results, but we noted that our effects on interleukin-1 alpha in the context of chemotherapy, which is the context where most trials in non-small cell lung cancer has been done, may be part of an explanation really showing a difference. There's no doubt that we generate an interest around that.
Okay. It's fair to say that your discussions with the pharma industry has changed in a way following the CANOPY results?
You can say that discussions with basically anyone who is following us has to take the canakinumab into context.
Yes. Yes. Last question. Regarding the FOLFIRINOX combination, is it possible, at this point in time, to include FOLFIRINOX in the PanCAN study before presenting the results from the CAPAFOUR study?
The plan is not to include the FOLFIRINOX in the PanCAN trial. The plan is really to focus on gemcitabine Abraxane combination in our arm and make sure that we have those patients in the control arm. You're right, there is an opportunity to do something with FOLFIRINOX as well. It's not something we consider right now.
Okay, thank you. That concludes my questions.
At this time, there are no further audio questions, and I will turn it over to [Diones Rodney] with the management team to ask any webcast questions.
Thank you. There is one question coming from the web, and that is, are you, applying for any accelerated approval, especially in pancreatic and lung cancer?
Of course, it would be great to be in position for accelerated approval. I strongly believe that we need some kind of randomized data to get into such discussions. It is certainly something we would be very open to. Since we're doing a combination therapy, it, you always will get the question of what is contributing with what. You need some kind of controlled material in the same trial to be able to differentiate the contribution of nadunolimab versus the chemotherapy.
Thank you. That were all questions coming from the web. I'll hand over to you, Göran, again to conclude the conference.
I'd like to thank everyone for your attention. I'm very enthusiastic about where we are, and I really look forward to continue with all the exciting products we have in front of us. There are lots of new interesting data to come during the next months or quarters. Look forward to be in touch again at the next quarterly report. Thanks a lot.
The conference is now concluded. Thank you for attending today's presentation, and you may now disconnect.