Thank you so much. It's a pleasure to present Cantargia's Q4 report. If we go to slide number three, just say that besides myself, my CFO, Bengt Jöndell, will present the financials. If we go to slide number four, I will give a quick update on the significant events we have passed during the fourth quarter and during first quarter this year. It's very much related to clinical trials. First of all, we started a trial in the U.S. where we combined CAN04 with pembrolizumab, and we first started treatment. I will come back a little bit on where we are right now when I present the clinical pipeline. We also finalized recruitment of the pancreatic cancer arm in the CAN04 trial, and we presented updated positive interim results.
We also had an extra EGM in October where we strengthened our board with Flavia Borellini, who has a very strong experience in development of oncology drugs. She is based in California. Finally, in December, we completed a share issue and raised approximately SEK 565 million . We will obviously spend quite a lot of time in the presentation later on explaining how we're going to use these proceeds. During the first quarter this year, we started an expansion phase of CAN04 trial in pancreatic cancer, very much to generate more data on, let's say, some fine-tuning things around the dosing and when to optimally start chemotherapy in relation to CAN04. That's done in parallel while we are getting more data on long-term efficacy on the first patient group.
If we continue in the presentation to slide six, this is Cantargia's pipeline, and as you well know CAN04 is our main project. It's being developed in pancreatic cancer and non-small cell lung cancer in phase II settings and focuses very much around chemotherapy combinations. We also have just started phase I development where we combine with immune checkpoint inhibitors, Keytruda. We know that we have the potential to broaden the pipeline and go into new cancer forms and new combinations, and very much of our activity during Q1 or Q2 this year will be relating to the start of the activities. We have our second project, CAN10, which is an antibody against the same molecular target, but having a different mechanism of action since it's blocking the activity of additional cytokine.
It's being developed for systemic sclerosis, myositis, entering phase I next year. Finally, we have a platform project called CANxx, where we can generate novel antibody or antibody-like molecules to really complement the CAN04 and CAN10 development. Before I go into the details of this pipeline, I would like to go to slide number seven and just remind everyone on what data we have in combination therapy with chemo. In pancreatic cancer, the data we presented in October was an interim analysis based on 20 patients. In non-small cell lung cancer, we presented data in September based on nine patients. Overall, we see the same pattern in both indications. We can see that much more patients than you would expect from chemotherapy alone have objectively responded to the therapy. It's around 40% in pancreatic cancer. It's 67% in non-small cell lung cancer.
Most of the patients get tumor shrinkage, which is also good. The patients that have been in the trial for longest period of time, it's more than 12 months in this analysis, they are still in response. There are signs that the response is durable as well. When it comes to safety, we, in principle, receive the same type of side effects that you would expect from chemotherapy alone or with CAN04. We see one toxicity which is, let's say, more pronounced when you do the combination, and that's neutropenia. It can be treated with G-CSF or dose reductions, and that's one of the things we are actually fine-tuning right now. If we go to the next slide, this is really showing the status of the chemo combination CAN04, where we are combining with gemcitabine and ABRAXANE or nab-paclitaxel as it is called.
We have recruited 31 patients. We are currently letting the data mature and are planning to present results during first half this year, which will then include progression-free survival and duration of responses. We have started the extension phase, which will include the 20-40 patients, where we will vary the doses a little bit and the dosing regimens. We expect to finalize recruitment within six months of when first patients started. We are about to start a first-line combination trial, where we instead of combining with the gemcitabine ABRAXANE or combining with FOLFIRINOX, this is really to complement the activities we are doing with gemcitabine ABRAXANE. As you all know, about 50% of first-line patients in Europe and U.S. who get ABRAXANE, the other 50% get FOLFIRINOX, and we like to cover both market segments. Next slide, please.
We're on slide number nine. In non-small cell lung cancer and the chemo combination, again, we think that's very encouraging interim data. Recruitment are still ongoing, and as we have said previously, it has been a little bit more challenging to recruit the non-small cell lung cancer patients, especially in this COVID climate, where basically the hospital resources treating lung cancer are very much the same resources that's treating COVID, and therefore it has slowed down, but not zero. We do get patients in the trial, and we believe that we should be able to finish it during first half this year. The good thing is that since we know that we have good data, we have pretty good control of the safety.
We're already now preparing for the next step in development of CAN04 plus chemotherapy, platinum doublets, and we're also planning to include combination with docetaxel in late-stage patients, in non-small cell lung cancer in an upcoming dose trial. That will be one of the arms in that trial. Next slide is just to comment a little bit on the monotherapy. The monotherapy we performed has primarily been done because we need to have monotherapy safety data. We are also interested to get more biomarker data on the monotherapy. The challenge is that the trial is done in late-stage patients, pancreatic cancer and non-small cell lung cancer. All these analyses are ongoing right now, and especially what's time limiting is that we're taking biopsies from all these patients in the trial, both before and during therapy.
COVID has delayed the biopsy analysis, but it's ongoing right now. Once we have the results, we will obviously present that to the market. If we go to the next slide, which is slide 11. We're now into combination with immunotherapy. As you can see, all the strategies so far has been to circumvent chemo resistance and have the CAN04 as a chemo sensitizer. We also have reason to believe that CAN04 can counteract resistance against the immunotherapy. Therefore, we have started this trial where we are combining CAN04 with pembrolizumab in patients that have already, let's say, progressed on or initially responded and later on progressed on pembrolizumab. The first group of patients started last year. There is a, let's say, safety dose escalation part of the trial, which is ongoing.
The goal is to recruit up to 18 patients for the initial analysis. We are in line with our timelines right now. We expect to have results second half this year. We are also thinking about the next steps. Once we have a better understanding of how well the CAN04 and the pembrolizumab combine, we would be ready to initiate trials where we combine CAN04 immunotherapy and chemotherapy. If we go to the next slide, which is really where we are spending lots of activities now, I think this is going to be a very important part for the company during 2021, is the broadening we are foreseeing. Since we have good reason to believe that the CAN04 can act as a chemo sensitizer to certain chemotherapies, we obviously like to broaden our development right now.
We want to include more cancer forms than pancreatic and non-small cell lung cancer to see where we have good chance of success. We'd also like to test a few more chemotherapies. There will be much more around this trial once protocol has been finalized, but we already now know that triple-negative breast cancer is going to be a very important cancer form to study. It is a cancer form where the interleukin-1 system, which we are blocking, seems to be very much involved in disease progression, and it's treated with platinum compounds, where we know that we have synergistic effects in preclinical models. Based on what we see in non-small cell lung cancer, we believe that we can have synergy with as well in patients.
The submission will be done during Q2, and well ahead of that we will give more information about indications and trial design. Go to slide 13, which is around CAN10. CAN10 is progressing well. It's in late preclinical development phase. We are performing safety and efficacy studies right now, and we will give updates as soon as those studies have been finalized. We did sign a production agreement with BioInvent last year, and the CMC development is ongoing according to plan, and we are looking forward to initiate clinical trials early next year. The main indications will be systemic sclerosis and myositis, even though phase I may be looking at include other types of diseases or healthy volunteers as quickly as possible to get into these, let's say, the indications of focus.
Thereby, I would like to hand over to Bengt to go through the finances.
Okay. Thank you, Johan. Let's move to page 15, please. Cantargia's operating expenses increased by 56% in 2020 to a total SEK 173.9 million. As you can see in the graph at the left, was this increase related to increased investments in R&D. In 2020, R&D accounted for 91% of operating expenses. The increased R&D investments was related to Cantargia's main project, CAN04, and especially the ongoing clinical studies and CMC development. Preclinical studies in CAN10 also increased. The number of employees increased from 11- 18 during 2020. This increase was related to R&D. Cash flow from operating activities was negative. However, the total change in cash for 2020 was positive, SEK 653.1 million due to the financing activities. Page 16, please. Cantargia has a very strong financial position after two successful direct share issues. Total raised capital during 2020 was close to SEK 1 billion.
The solidity was 96% at the end of the year, and available funds almost SEK 1 billion . This concludes the financial overview, and back to Johan.
Thank you so much, Bengt. We will finalize my part here before questions with just slide 17. What I would like to point out is that we believe that we have a very strong and interesting news flow in front of us, both relating to results in CAN04 in pancreatic cancer and non-small cell lung cancer, but also the start of a new clinical trial and later on results here as well. CAN10 on the preclinical progress and development milestones in front of us. To round off, I'm very enthusiastic about the upcoming year, and I'm very glad that 2020 went so well and was really a great year for Cantargia. With that, I would very much like to invite you for questions.
Thank you. If you wish to ask an audio question, you may do so by pressing zero one on your telephone keypad. If you wish to withdraw from your question, please do so by pressing zero two two. Once, please zero one on your telephone for questions to be registered. Our first question comes from [Jonas Berselius] from Please go ahead.
Hi. Good afternoon. Thank you for taking my questions. Many recognize by now that Novartis and its antibody canakinumab should be watched closely by those interested in Cantargia. Can you remind us, in your own words, the key features, how CAN04 is similar and different, for that matter, from canakinumab?
Yes, of course. Thanks for the question. Canakinumab is an antibody directed against one of the two forms of interleukin-1, so it's interleukin-1 beta. Canakinumab has generated very interesting data in early stages of the disease development of lung cancer, and is currently in three different phase III trials in non-small cell lung cancer. CAN04 is clearly differentiated because we are, instead of binding cytokine, we are binding receptor, and thereby we block both forms of IL-1, so both IL-1 alpha and IL-1 beta, and we also have an ADCC component. In principle, since IL-1 alpha and IL-1 beta often work in pairs, we have a broader mechanism of action, and we also have the ability to stimulate the immune system to eradicate cancer cells.
Okay, thank you. I suppose closely related question would be now that Novartis will start publishing data from its phase III program. Obviously, it's an important milestone for them, and again, closely watched by investors in Cantargia. Would Novartis data impact your strategic decisions in any way? Let's say, in case of positive data, would it give you confidence to speed up the development, for example?
Yes, I think there are several aspects that the canakinumab data will influence our strategies. First of all, obviously, positive results will, let's say, strengthen our view that the IL-1 system is involved in cancer development and being a good target. We obviously need to go into the scientific details, which I think are extremely interesting to see, to learn more because regardless of what Novartis presents, if it's positive or negative, we are going to learn a lot about how to continue our development and position our drug. I need to emphasize that there are several diseases that seem to be driven by both IL-1 alpha and IL-1 beta.
While perhaps the data Novartis is generating more pointed on the action of IL-1 beta, that does not really teach us anything if IL-1 alpha is contributing as well, and blocking both would be a better approach. We are very much looking forward to Novartis data, and as we understand, the first data set would be presented during Q2 this year.
Okay, thank you. Thank you for that. Just one question on the financials. Obviously, very solid cash position now, at the same time, R&D costs are increasing naturally as you're now broadening your R&D pipeline in terms of indications and potentially new drugs coming in. Can you comment if there's any comments on cash reach or what kind of period is covered by existing budget now?
Yeah. Bengt, will you?
Yes. Thank you. I can take that one. About two years with the present plans, and good speed ahead.
Okay. Well, that's very clear and very useful.
Yeah.
Thanks. Yeah. I think thank you then. That's it from my side for now. I'll jump back in the queue.
Thank you. Just as a reminder, please press zero one on your telephone keypad if you would like to ask a question. That's zero one if you would like to ask a question. Our next question is from Arvid Necander from Carnegie. Please go ahead.
Okay. Good afternoon, Johan and Bengt. Thanks for taking my question. A couple of questions from me. First off, how close are you to submitting the protocol for the FOLFIRINOX study? Could you also just inform us a little bit on the scale of this trial, and whether you think generated data, assuming that its readouts well, could be enough to move into a pivotal trial with this regimen?
Yes, of course. Now we are just the final touches before we can submit the clinical trial application of the pancreatic cancer CAN04 FOLFIRINOX combination trial. Let's say it will happen during March sometime, and we will obviously let the market know once it has happened. We have not disclosed all details about the trial yet, we will do that in conjunction with the submission. Basically, it is a safety and early efficacy trial of nadunolimab together with FOLFIRINOX, there is nothing spectacular about the design. It is a standard design with the dose escalation phase in this new combination, then followed by an expansion phase of the phase II dose. If data looks promising in FOLFIRINOX, we obviously need to discuss those data with the regulatory authorities and understand exactly how a pivotal trial may look like.
What is a little bit special about FOLFIRINOX is that it is a combination which is used in a standard way for treatment, but there is no official label for the combination in pancreatic cancer. Obviously we need to have a discussion on both with the FDA and EMA how to handle that.
Okay. Thanks. That's very helpful. On that, will you wait for data from this trial to emerge in order to be able to include both the FOLFIRINOX and gemcitabine ABRAXANE regimens in the potentially pivotal trials? Do you see these as two separate studies, given that you advance faster, presumably with gemcitabine and ABRAXANE?
No. So plan A is really to advance the gemcitabine ABRAXANE combination on its own. The status right now is that we're assuming that the data will continue to look good, so we're counting for success. We are having discussions with the various experts and advisory boards around the data set which is being generated right now. What's critical is that the PFS and duration of responses look as promising as the response rates. If that looks all good, we will continue and have an end of phase II meeting with the FDA and similar efforts with the EMA as quickly as possible afterwards, and to start a phase III trial on its own. If we in parallel get strong data when we combine with FOLFIRINOX as well, it's a pleasant problem, but we will address that at that point in time.
We have no plans right now to delay start of the pivotal gem ABRAXANE study and wait for FOLFIRINOX data.
Okay. That's great. As it was noted just now, we're closing the first readout for the canakinumab phase III program, with the second-line docetaxel combination study being first in line. You have very much emphasized the synergistic profile of CAN04 together with platinum-based chemo. On the back of that, could you tell us a bit more about the rationale for combining with a taxane and also how you view the risk in the two lung cancer studies that you're pursuing?
Yeah. The first trial, or at least following the communication from Novartis, the first phase III trial to read out is the CANOPY-2 trial, which is canakinumab combined with docetaxel in late stage non-small cell lung cancer, so typically a second or third line patients. I think it's a very important trial. I think Novartis has clearly shown that the IL-1 beta system is very relevant in early stages of lung cancer. It will be very exciting to see if there is a role of IL-1 beta in late stage cancer as well. What may be a bit challenging for here is that we don't know the relevance of IL-1 beta yet, and we have a very heterogeneous group of patients, which is a very challenging group as well as there are really no treatment alternatives left except for docetaxel.
I think we obviously all want that trial to be positive, but there are challenges as well, and there are unknowns. I don't want to speculate anything around the chances and what are our next steps. I think regardless of result, Cantargia will obtain very valuable information about how to take next steps.
Okay. Yeah. Thanks for that. Lastly from my side, as you said, you've had some patients that's been on treatment for a long time now, more than 12 months with CAN04. At some point, I suppose chemo becomes the limitation, especially with the quite toxic gemcitabine plus ABRAXANE regimen. Since we've seen monotherapy activity with CAN04, as you also alluded to, are you aiming to combine or to continue CAN04 monotherapy after chemotherapy tolerance worsens in upcoming studies? On the back of that, do you see a potential for better durability than what perhaps could be indicated by results from the CAN04 study? Yeah.
That's a great question. We're doing two different chemotherapy combinations right now. In non-small cell lung cancer, gemcitabine plus cisplatin. As you may know, that's the therapy given between four- six cycles, each cycle being a three-week cycle. In this protocol, once patients have fulfilled the chemotherapy, they are only staying on CAN04 monotherapy as some kind of maintenance treatment. Since there are patients that have been on the trial for more than a year, they have been basically more than half a year on CAN04 monotherapy without progress, being in response and not progressing. It's a different story in pancreatic cancer where gemcitabine ABRAXANE is used. That's a more continuous chemotherapy combination.
What we have seen is that some of over two-plus patients have been treated for more than a year with gemcitabine ABRAXANE, which for a patient is becoming more and more of a challenge because it is toxic and it's not the nicest way for a patient to continue on chemo over and over again. The protocol didn't really have a good solution on this very nice problem because it is a nice and unexpected problem that patients have been in response for such a long time that they cannot really continue with chemotherapy or the investigators are hesitant to continue. As I foresee it in the future, CAN04 could very well be a good monotherapy option as a maintenance therapy for these patients. There are opportunities here to prolong the durability, but it's not part of this protocol.
Right. Understand. Okay. Thanks very much, guys. I'll jump back in line.
Just as a reminder, if you do wish to ask a question, please press zero one on your telephone keypad now. Our next question is from Niklas Elmhammer from Redeye. Please go ahead.
Okay, Thank you. I guess most of my questions have been answered already. I just wonder if maybe you could share your views. You said that you were thinking about the next step for CAN04 and platinum in lung cancer. Maybe if you could share your views on the positioning of such a treatment given the dynamics of lung cancer?
Absolutely. Yes, non-small cell lung cancer is a very dynamic market, and there are probably 100 different trials that more or less can affect the first-line or second-line segments. We have really been focusing the development on one of these second-line segments, which are patients that have been treated with Keytruda monotherapy, relapsed, and then would normally get chemotherapy, and then we add CAN04 to the chemo. It's not the majority of patients. It is a smaller group of first-line patients getting KEYTRUDA monotherapy. On the other hand, it is a segment where the competition is lower. It's a segment that is slowly getting smaller because more and more treatment changes occur in the first line, and we need to understand how big this segment will be in the future. That's one of the things we are doing right now.
There are no signs that this segment will disappear, it is a good place for us to do development in. There are lots of other opportunities. We are looking into docetaxel combination. We will be looking into combining with the immune checkpoint inhibitors and chemo. There are also more and more targeted agents being approved, and these patients have very poor second-line opportunities. Here is a market which is actually growing, where combining CAN04 with platinum agents may be a really good option for these patients. Yes, dynamic market, but lots of opportunities.
Okay, great. Also, just a financial question. I guess you maybe alluded to that before, but during 2020, you invested quite a lot in CMC and preclinical development. Should we expect the same level or even increased activity in 2021 for these kind of activities?
Bengt, will you take that?
Yes. I would say yes, we will see increased activity in all areas within the R&D in 2021. That's also, of course, the main reason why we say that the actual available funds will last about two years.
Okay. Thank you.
Our next question is from Remy Wouters from Kempen. Please go ahead.
Yeah. Thank you for taking my questions as well. My first question is on the neutropenia finding that you had in both the NSCLC and the PDAC interim data results. Can you elaborate a little bit on these findings? In particular, do you see this in all patients? When do you see this happening, and how quickly does it resolve after you reduce the dose in these patients?
The neutropenia, it differs a little bit between different patients. You would expect grade 3 or higher neutropenia somewhere around 30% with chemotherapy. Obviously we have more patients than that getting a grade 3 neutropenia. It's a little bit different kinetics with the different chemotherapies, and we need more data before I can let that go into details and answer your question. What we see is that the patients do seem to respond to G-CSF, so it's more a question of how do we introduce G-CSF and use it as it is right now. Dose reduction is the second strategy to, let's say, counteract the neutropenia. It's work in progress. It is obviously something which could have been better if it wasn't there.
On the other hand, it was an expected side effect since IL-1 blockade and neutropenia has been reported beforehand and is part of the label of IL-1 blocking agents, and it's also part of chemotherapy mechanism. We're getting there.
Okay. That's helpful. Second question is on, as you are moving forward into a later stage clinical biotech company, moving into larger phase III trials, potentially, how do you look at partnering for the further development of CAN04?
Yeah.
General remarks about that would be helpful?
Absolutely. Obviously Cantargia, even if we're growing, we will not be able to build up global marketing organizations, so we need a partnership at some point in time. Since pancreatic cancer is the indication where we have advanced the most, and if we assume the data will look good and we will get into pivotal trials, we believe it's in the shareholders' interest to start a phase III trial and find partnerships in parallel with the phase III trial, the process that was going on on the market. Then of course with Cantargia can keep some co-marketing rights in strategic markets. I think that could be really interesting. I think in the end of the day, it depends more on the partner and what makes sense in a deal before you, let's say, do this type of fine-tuning.
The short answer is that right now we're not, let's say, prioritizing a partner. We are in very strong cash position, and we are really sure that we can continue to build shareholder value before partnership. Obviously we talk to all the big pharma companies, so they're aware about us.
All right. Thank you very much.
Just as a final reminder, if you do wish to ask a question, please press zero one on your telephone keypad now. There seem to be no further audio questions. I will hand the word back to the speakers.
There's no other online question as well.
Okay. In that case, I would like to take the opportunity to thank you for listening in to this Q4 report, and I look forward to continue to meet with you during 2021. Thanks.