Welcome to the Cantargia Q2 Report 2025 presentation. During the questions and answers session, participants are able to ask questions by dialing #KEY-5 on their telephone keypad. Now, I will hand the conference over to the speakers. CEO Damian Marron, CFO Patrik Renblad, and CBO Ton Berkien, please go ahead.
Hello everybody, and welcome to this presentation today of our 2Q and first half interim report 2025. Moving straight on, we have our safe harbor statement. We are, of course, a listed company on the Nasdaq Stockholm Exchange. As has just been mentioned, you have three speakers here today: myself, Interim CEO Damian Marron, our Chief Business Officer Ton Berkien, and Patrik Renblad, our Chief Financial Officer. Moving to the events of the second quarter and the events since the end of that period as well. In the second quarter, we appointed Morten Lind Jensen as our Chief Medical Officer. We then moved on to select treatment-resistant atopic dermatitis as the second indication for our CAN10 phase II program, CAN10 being our anti-IL-1RAP antibody for immune inflammatory disorders.
We also announced that the pharmacokinetic modeling of CAN10 confirmed the choice of every four-week dosing in phase II , coming from our first-in-human study that has been running for some time and is now nearing its end. Also importantly, during the quarter, the U.S. FDA awarded to nadunolimab, our most advanced product in oncology, a fast-track designation for the treatment of patients expressing high levels of IL-1RAP in combination with chemotherapy to treat patients with PDAC, metastatic pancreatic ductal adenocarcinoma. Finally, we signed a loan facility of SEK 50 million, that to provide us with extra flexibility as we held deal discussions, which I'm sure everybody now knows about.
In fact, the first significant event after the reporting period was indeed that we announced that Otsuka Pharmaceutical had acquired CAN10 for an upfront of $33 million, plus an additional $580 million in potential milestone payments and an ounce on future sales. That deal is expected to close in Q3 2025, and Ton will give you further details as we go through the presentation. We also announced preliminary results from the TRIFOUR phase II study in TNBC. They showed that we did not demonstrate in the second part of this study a difference in the overall response rate between nadunolimab in combination with chemotherapy and the reference group on chemotherapy alone. That study continues on, and we will have overall survival data around the end of this year. I'll say a few more words about that as well as we get further into the presentation.
Finally, we announced on Monday evening this week that we'd appointed Dr. Hilde Steineger as our new CEO effective from September 1st, 2025. This will be my last results call with you, and in the future, you will be hearing from Hilde and the team. We're absolutely delighted to have Hilde on board, it has to be said. I'll give you a bit more on Hilde's background later in the presentation. Moving now to just a few words on CAN10 and why CAN10 is such an interesting product and became the subject of our transaction with Otsuka . CAN10 provides really a unique opportunity to block IL-1 super family signaling across multiple diseases and multiple therapy areas.
The IL-1 family of ligands and receptors is associated with acute and chronic inflammation, and there's very strong evidence of IL-1 family cytokines, that's IL-1 alpha and beta, IL-33, and IL-36 alpha, beta, and gamma, driving multiple different inflammatory diseases. What's been seen in the clinic to date is that individual blockade of these IL-1 family members has resulted in a degree of efficacy, but probably not the sort of efficacy that you really want to see across diverse immune inflammatory diseases. We really believe that CAN10's broader mechanism can be highly relevant in the treatment of such diseases, be they dermatological, fibrotic, cardiovascular, or even others in various barrier tissues in the respiratory tract, for instance, or in joints and in the intestine. There really is a huge potential for this mechanism and for CAN10.
As I mentioned a few moments ago, we've been conducting a first-in-human study for some time, single ascending dose and then multiple ascending dose. We completed the single ascending dose a while ago, 10 different cohorts, and moved on into the multiple ascending dose where we have performed two dose cohorts in healthy volunteers controlled by placebo, where we gave subcutaneous doses on day one and seven, then every 14 days. This study is the study that will allow us to move into phase II , or I say us to move into phase II as it now is. It will be, of course, Otsuka who will be handling that following the transaction with them. What we have shown is that we can achieve full IL-1RAP occupancy on different immune cells and that we have complete blockade of IL-1 family cytokines.
We also, of course, very importantly, have seen no safety concerns. As I mentioned, our pharmacokinetic results support four-weekly dosing. We have a linear PK profile with high bioavailability, and the simulations performed on all the patients we have treated show that we can stay above the minimum level that we need to occupy all the receptors and block those cytokines over a period of four weeks. That leaves us to the transaction with Otsuka , and I'll hand you over here to our CBO, Ton Berkien, to tell you more about that. Over to you, Ton. You may not be on mute, Ton.
Thank you, Damian. Obviously, very happy to tell you a little bit about the Otsuka deal. Obviously, and as mentioned, we are very pleased of having this agreement signed with Otsuka on our CAN10 program. I think it's fair to say that the team of Cantargia has done a great job to get this over the finish line in an environment which is actually quite challenging with respect to deal making. For some context, for the ones who are not very familiar with Otsuka, Otsuka is a Japanese well-established pharmaceutical company, mainly active in CNS and oncology, where the company has, in particular, immunology strongly earmarked as a growth area. As you will see, Otsuka has been on a strong growth trajectory over the last couple of years to focus on the growth in immunology.
As for the transaction, as we communicated mid-July, the transaction is structured as an asset transaction, which includes the rights to CAN10, which is our phase I program, and a preclinical backup. Otsuka will have the rights, obviously, but also the obligations to develop, to register, and commercialize the programs. As Damian already alluded to, the financials include $33 million upfront, complemented with $580 million in milestone payments, making the total deal value $630 million. The earned out payments are, of course, on top of that, and they will end up as tiered up to double-digit payments. As mentioned, also, of course, touching upon the deal rationale, beyond the established franchises as oncology and CNS, Otsuka has strongly commercialization and BD focus on immunology and connective tissue disorders, for which they have products on the market or very close to commercialization.
Indications you can think of of interest can include, of course, large indications such as rheumatoid arthritis or atopic dermatitis, but also smaller specialty indications such as systemic sclerosis or lupus, for instance. Besides the short-term revenue generations that Otsuka has, Otsuka has also been building an early and mid-stage clinical pipeline of growth programs. As you can see, of course, on the slide as well, the latter is mainly driven by a various number of BD activities over the last couple of years, where the company has acquired a number of companies to build up antibody platform competencies from 2018 on, as well as know-how, of course, and have acquired a number of antibody programs, including CAN10, of course, to fill the pipeline, the early-stage pipeline, to move that towards commercialization.
We believe that Otsuka has interest in looking maybe further into follow-up programs. That is why we have a potential option in the agreements where Otsuka can follow Cantargia's efforts and potentially have the rights to maybe additional programs, which, of course, for Cantargia brings perspective also for the near-term future. For Cantargia, it was of essence to have a partner with the ambitions to develop CAN10 as broad as possible, as the indications that you could see on a previous slide, which we believe, of course, supports our mechanism of action. With that brief growth strategy overview and explaining high level the deal rationale, I will hand over and hand back to Damian for further updates.
Many thanks, Tom. Let me second your thanks to our team and yourself for really bringing this deal through. Against a very challenging background, as you said, that really is a fantastic achievement. We're really all looking forward to working with Otsuka to take CAN10 forward. Of course, we do have the rest of our portfolio. I'm going to say a few words now about news on nadunolimab in the last quarter. Talking first about the TRIFOUR preliminary results, the first and very important thing to say in this first controlled data set that we've generated with nadunolimab is that we see no signal of added toxicity when adding nadunolimab to chemotherapy. That's a very important and positive finding for us. We saw a very similar overall response rate, that is, in both the nadunolimab and in the reference chemotherapy-only arms.
Both arms report slightly higher than historical benchmark for these types of patients. This is data that we have to live with. We have subgroup analyses ongoing. We made the overall survival data, and it's important to say that in triple-negative breast cancer, which is what the TRIFOUR study was in, overall response rates are not necessarily indicative of what you will see in overall survival. This is the case in many cancer indications, and it's definitely the case here. We do await these overall survival data with great interest. In the meantime, just not to overinterpret these top-line data. Finally, I should say that the safety data I mentioned is supportive of our development across indications such as PDAC, which is our lead indication for nadunolimab, but also in other indications, particularly other indications that, like PDAC, are very sensitive to IL-1RAP.
What we also achieved in Q2 was a fast-track designation in PDAC. This was granted by the FDA on the basis of the data that we have generated to date and granted for the treatment of patients with metastatic PDAC who have IL-1RAP expression levels and for the treatment of those patients with nadunolimab in combination with chemotherapy. This reflects a very high medical need in metastatic PDAC, where there have not been any new product approvals for a long time. It also reflects, we believe, the strength and interest of the data that we've generated to date. Importantly, it also facilitates further development of nadunolimab with more frequent interactions with the FDA and eligibility for accelerated approval and priority review as we go forward. We also have, of course, our platform CANxx. During the quarter, we also released some very interesting data from the platform.
CANxx, as a platform overall, offers multiple development opportunities to create products such as antibody-drug conjugates, ADCs, and bispecific compound antibodies as well. That is both for immunology and for oncology. We have a library of over 200 anti-IL-1RAP antibodies within this platform that can serve as a source of new drug candidates, and we're very excited about the potential to do so. In terms of looking at oncology, both chemotherapy and existing ADCs induce IL-1 in tumors, which can lead to chemo resistance, and blocking IL-1 pathways, as we know that our anti-IL-1RAP antibodies can do. Therefore, it means we could get better efficacy of these chemotherapy agents and ADCs. We have published this data showing an IL-1RAP targeting antibody-drug conjugate. It targets both the tumor cells and the microenvironment around the tumor.
What we were able to see was that conjugating the chemotherapeutic toxin to our IL-1RAP antibody did not reduce our binding to IL-1RAP. That's very important. We saw very good efficacy in different in vivo models here. This is clearly something which can be of great interest as we go forward. We also have in the platform antibodies that have full blocking activity, like CAN10, that we have just transacted around with Otsuka , as you've heard. We also have antibodies that can block only certain parts of the IL-1RAP-mediated pathways if we want, which means we can generate antibodies that deepen or widen the IL-1 family blocking inflammation. We have lots of exciting opportunities here to continue to build our inflammatory and oncology platform as we move forward. Now to the appointment of our new CEO. We're absolutely delighted that we have been able to appoint Dr.
Hilde Steineger as our new CEO. That's going to be effective from September 1st . Hilde has great experience as a biotech executive, but also a proven track record across financial analysis in the life sciences, involved in the founding and running of a life science venture capital firm, and also in business development. Hilde is a two-time CEO. She joins Cantargia from North Sea Therapeutics, where she has been the Co-Founder and Chief Operating Officer since 2017, as well at the same time being the CEO of Stratton Biotechnology during that same period. There, Hilde led a $480 million deal with Novo Nordisk. Hilde will be our CEO to lead us on from the Otsuka transaction and to continue to build value with nadunolimab and with our platform. I have had the most wonderful time in the last seven months as the CEO of Cantargia as the Interim CEO.
It was always intended that I would step down and move back to the board. That is what is now going to happen. I'm really looking forward to supporting Hilde and our dedicated and talented team as they take Cantargia forward. Now let's take a quick look at our milestones. In Q3, already in this year, we've had a lot of milestones already achieved. The initial phase I MAD results. We had phase II MAD results as well around CAN10 and the closing of the Otsuka transaction will be in Q3. We achieved the PDAC fast-track designation. We've obviously spoken about TRIFOUR. We also started a study with the MD Anderson Cancer Center in Texas, U.S., around AML. We will have other new preclinical and translational results coming through during the rest of this year. We will continue to have an extensive news flow right through 2025.
Now I'll hand you over to Patrik Renblad, our CFO, to take you through the financial results. Patrik.
Thank you, Damian. In the second quarter, we, of course, had a lot of focus on the Otsuka transaction and preparing and getting ready for that. In parallel, our teams were focused on continuing the development of CAN10 and nadunolimab and the preclinical portfolio. You can see that as there is not really a change in activity between the second quarter this year and the previous comparison period, just a 10% reduction in our overall operating expenses, slightly below also for R&D. The quarter's increase in admin expenses is a result of the activities around the Otsuka transaction. The same applies when we look at the first six months. Basically, no change, no surprises happening there, with a slight increase in our administrative expenses, as I alluded to, for the Otsuka transaction and the organizations that we have had on the staff of the company.
We had SEK 82 million of cash by the end of the second quarter after a cash outflow of SEK 44 million. We, of course, are looking forward to, actually, the first time in the company's history to recognize revenue and receive non-dilutive funding here in the third quarter. When we do that, we intend to repay the short-term loan that we obtained, as Damian alluded to, to secure the short-term operations and our negotiation with Otsuka. We intend to repay that and be on a very much more stable financial position than we were before. With that, I hand back over to you, Damian.
Thank you, Patrik. As you've seen, we've had a very busy Q2 and immediate period just after Q2. A momentous time for the company with the Otsuka Pharmaceutical transaction and with the appointment of Hilde Steineger as our new permanent CEO to lead the company forward. With that, I will say thank you to everybody, and we are now open for questions.
If you wish to ask a question, please dial #KEY-5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial #KEY-6 on your telephone keypad. The next question comes from Richard Ramanius from Redeye. Please go ahead.
Good afternoon. I have a few questions. Starting where you left off in your presentation, could you comment on the possibility of generating income from the CAN10 deal through clinical milestones? Could you say approximately when such a milestone, the first of such milestones, could be received?
Thanks, Richard, for your question. Unfortunately, no, we cannot divulge that information. We have agreed with Otsuka when we released the details when the transaction was signed that we would release the level of detail that we did at that time, and we would give no further details on that. Unfortunately, I can't give you any timing on when we're likely to receive a development milestone.
Sure, I get it. What about the remaining costs for the phase I study? Who will pay for that, and when exactly does Otsuka take over CAN10?
I'll ask perhaps Ton and Patrik to comment on that one.
Sure, I can do that. Obviously, we are in a period that we work towards the finalization of the transaction. We signed it on the 15th of July . From that point, Otsuka will take over all the costs of progressing the program. With respect to the timing of how they pursue the studies further, that's obviously in Otsuka's hands. We cannot state anything on that, irrespective of whether we knew it or not. We are finalizing this project and, of course, maintain to be in contact with Otsuka Pharmaceutical on practicalities around the deal and support them where needed. That is what we also have agreed in the agreement.
Yeah, and it's Patrik here. I think, Richard, that we did the deal overall is that Otsuka takes over the responsibility and the cost from closing. From Q4, basically, we shouldn't have any cost for CAN10.
Okay, I understand. My last question. How will the TRIFOUR results affect the plans for nadunolimab? Maybe I should add, do you have to wait for the full readout before you really decide the next step with nadunolimab?
Thanks, Richard. Yes, indeed. We will wait for the full results, but not before deciding the next steps in nadunolimab, but certainly before deciding the next steps of what we might do in TNBC. As I mentioned, the safety data is very strong, and that actually encourages us to move forward in those other indications, PDAC particularly, where we see this very strong association between high IL-1RAP and nadunolimab treatment and benefit to patients, and indeed patients whose prognosis is normally worse when they express high IL-1RAP. To that extent, the data from TRIFOUR has no incidence on our thinking other than we're very happy that the safety data makes us believe that nadunolimab will be a very well-tolerated product, and we expect to be active in PDAC.
Great. Thanks for answering my questions.
You're welcome, Richard. Thank you.
The next question comes from Luísa Morgado from Van Lanschot Kempen. Please go ahead.
Hi team. Thank you for taking my questions. Maybe to start off, for the triple-negative breast cancer program, what should we take as a benchmark here for the survival data? Are you looking to top the chemo combination alone at the rate of 11 months, or should we compare those to the drugs in development? Also, for the TRIFOUR study, did you pre-specify this subgroup analysis? If so, can you tell us on which parameters? Thank you.
Thanks a lot, Luisa. Thank you for your questions. In terms of what we would look to see, obviously, we would want to see for overall survival an improvement over the reference chemotherapy arm alone. That's for sure. In terms of the strategic thinking, if you do see that, first of all, then yes, of course, you're then going to benchmark that against what is happening in what is quite a fast-changing field to see whether you think that the result that we get is competitive. That comparison can only be made once we see the result, once we see whether the result is different from what we've seen already. In other words, that in overall survival, we are looking better than the reference group. We will look, as I say, to see where our competitive position is in that overall landscape.
In terms of subgroup analyses, which particular subgroup analysis might you be referring to there, Luisa?
Not sure, but I thought that you had mentioned earlier that there would be some subgroup data to be shared also before year end.
That is absolutely true. We did indeed. Yes, okay, thanks. I thought you might have had a specific analysis.
No, no, no.
Yes, we have a number of subgroup analyses going on that were pre-specified. They're being worked through, and yes, we will expect to provide data on those. You know that may be at a scientific conference, or it may be that we will make an announcement about that, but that work is still ongoing.
Okay. Perfect. Maybe one last question on the appointment of Dr. Hilde as CEO. Just wondering, which of her strengths here are you looking to add to sort of guide Cantargia's strategy for the coming time?
I think you know what we're looking at is that Hilde has a very broad and deep experience. You know when you think that she's a very experienced biotech executive and leader, a very strong and inspiring leader, you add to that strong business development skills, that she's been a financial analyst, and that she has also worked in venture capital and has a wide range of contacts throughout the investment industry and the industry in general. That overall profile is exactly the sort of profile that we want as a Board of the company to take the company forward. We're absolutely delighted that Hilde is excited and enthusiastic to join us and take the company forward.
Okay. Perfect. Thank you so much.
You're welcome.
There are no more questions at this time. I hand the conference back to the speakers for any written questions and any closing comments.
Yeah, there's a couple of written questions. The first one relates to suspected systematic market manipulation of the share, where observers have seen that someone is trying to push down the share price at the end of each trading day. Do you have any insights to this?
Patrik, I asked me to answer that.
We can't really comment on that. That's the simple answer.
Thanks. The second one is regarding the Otsuka deal. Is anything else apart from CAN10 and 3G5 included? What about other antibodies that you study and might turn out to have more advantageous properties than CAN10?
Tom, would you like to answer that?
Of course. Thank you for the question. A very relevant one. No, the deal with Otsuka is CAN10 and 3G5. The agreement also provides us flexibility in developing, of course, in the areas that we would like to develop. That, of course, includes immunology and oncology. Oncology more relates to, of course, our CAN04 program. As mentioned, we also would like to give Otsuka some insights in what we want to establish. That's why we, of course, also included an option for a period of two years. Otsuka , if they see something that they like, we definitely will continue the discussion and potentially, of course, act upon it. That is subject, of course, to what we are going to develop from our CANxx platform. Obviously, as I mentioned, Otsuka is very interested in building up an immunology franchise.
I think that is very much in line also with what we would like to establish through our CANxx platform, besides, of course, potential other opportunities that may arise.
Thank you. That was all the written questions. I hand back to Damian.
Damian, if you could unmute yourself.
Thank you, Jonas. Yes, thank you indeed, Jonas. As I was saying, thank you to everybody. Thank you for your time and your attention today to listen to this presentation. Thank you for the questions. We are always open to receiving questions from our shareholders and, of course, our analysts as well. As a final word, I would just like to say it really has been an enormous privilege and pleasure to have led Cantargia these past seven months. I thank everybody within the team, the board, and all the shareholders who support Cantargia. Thank you very much. I'm looking forward to remaining, of course, in touch with the company on the board and to watching Hilde and the team take the company to new heights. Thank you very much. Goodbye.