Earnings Call: Q4 2020

Feb 25, 2021

Thank you so much. It's a pleasure to present KantarGA's Q4 report. And if we go to Slide number 3, let's say that besides myself, my CFO, Benk Jan Der will present our financials. And if we then go to Slide number 4, I will give a quick update on the significant events we have passed during the Q4 and during the Q1 of this year. It's very much related to clinical trials where we and in first of all, we started a trial in the U. S. Where we combined Kano4 with pembrolizumab, and we first started treatment. And I will come back a little bit on where we are right now in group when I present the clinical pipeline. We also finalized recruitment of the pancreatic cancer arm in the KAM4 trial, and we presented updated positive interim results. We also had an extra an EGM in October where we strengthened our Board with Flavia Barolini, who has a very strong experience in development of oncology drugs. She is based in California. And finally, in December, we completed a share ratio and raised approximately NOK 505,000,000. And we will obviously spend quite a lot of time on in the presentation later on explaining how we're going to use these proceeds. And during the Q1 this year, we started an extension phase of cancer trial in pancreatic cancer very much to generate more data on, let's say, some fine tuning things around dosing and when to optimally start chemotherapy in relation to Cano 4. And that's done in parallel while we are getting more data on long term efficacy on the first patient group. So if we then continue in the presentation to Slide number 6, this is Kantargh's pipeline. And as you well know, Kano4 is our main project. It's being developed in pancreatic cancer and non small cell lung cancer in the Phase 2 setting and focus is very much around female therapy combination. But we also expect to start with Phase 1 development where we combine the immune checkpoint inhibitors, Sigrulda. And we know that we have the potential to broaden the pipeline and going to new cancer funds and new combinations. And very much of our activities during Q1 1 or Q2 this year would be relating to the start of the activities. And then we have our second project, the CHAN10, which is an antibody against a similar target but having a different mechanism of action since it's blocking the activity of additional cytokines. And it's being developed for systemic growth myocarditis entering Phase 2 over Phase 1 next year. And finally, we have a platform project called CanXx, where we can generate novel antibody or antibody like molecules to really complement the Kano4 and 10.10 development. Before I go into the details of this pipeline, I would like to go to Slide number 7 and just remind everyone what data we have in combination therapy with chemo. And in pancreatic cancer, the data we presented in October was an interim analysis based on 20 patients. Non small cell lung cancer, we presented data in September based on 9 patients. But 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 percent in non small cell lung cancer. Most of the patients get tumor shrinkage, which is also good. And the patients that have been in the trial for longest time, it's more than 12 months in this analysis. They are still in response. So there are signs that the responses are durable as well. When it comes to safety, we, in principle, we see the same type of side effects that you would expect from chemotherapy alone or with KAN04. We see one toxicity, which is, let's say, more pronounced when you do a combination of neutropenia, it can be treated with the Q3 is there for dose reductions, and that's one of the things we are actually fine tuning right now. And then if we go to the next slide, this is really showing the status of the chemo combination can occur where we are combining with gemcitabine and abrextane or nad paclitaxel as it is call. We have recruited 31 patients and we are currently, let's say, letting the data mature and outstanding results during first half of this year, which will then include the progression of risk survival and duration of responses. We are have started the extension phase, which would include the 20 to 40 patients, which will vary the doses a little bit and the dosing regime. And we expect to finalize recruitment within 6 months at some of those prices started. And then we are about to start a first line combination trial where we instead of combining with GEMCYTABINA BERKSTEN or combining with FOLFIRNOX unless it's really to complement activities we are doing with Gemcitabine Abraxane. As you all know, about 50% of first time patients in Europe and the United States who get the the same, the other 50% get from ClearNOCs, and we'd like to cover both market segments. Next slide, please. Now we're on Slide number 9. 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 trans cell lung cancer patients, especially in this COVID climate where basically hospital resources the hospital resources treating lung cancer, other, I must say, resources that's treating COVID. And therefore, it had slowed down, but not 0. We'll do to get patients in the trial. And we really believe what we should be able to finish it past year and first half of this year. And but the good thing is that if we know that we have good data, we have pretty good control of the safety. We're already now preparing for the next that in development of Canopor Plus chemotherapy, platinum doublet. And we're also planning to include combination with docetaxel in late stage patients in osmocell lung cancer in an upcoming BARSA trial. So that would be one of the arms in that trial. So next slide is just to comment a little bit on the monotherapy. So the monotherapy we performed has primarily been done because we need to have monotherapy set to date there. We are also interested to get more biomarker data on monotherapy. The challenge is that the trial is done in late stage patients pancreatic cancer and non small cell lung cancer. And then 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 now that this study is ongoing right now, and once we have the results, we will obviously present that to the market. If we go to next slide, which is Slide 11, we're now into combination with the immunotherapy. And as you can say, all the the strategy still far has been to circumvent chemo resistance and have the Canopor as a chemo sensitizer. But we also have reason to believe that Canofor can counteract resistance against immune therapy. So therefore, we have started this trial where we are combining TANO4 with pembrolizumab in patients that have already, let's say, progressed on for initially responded and later on progressed on pembrolizumab. The first group of patients started last year, that is, let's say, a safety dose escalation part of the trial, which is ongoing. But the goal is to recruit up to 18 patients for the initial analysis, and we are in line with our time lines right now, and we expect to have results second half this year. And we are also thinking about next steps. So once we have a better understanding of how the Kano4 and pembrolizumab combined, we would be ready to initiate trials by the combined Kano4 immunotherapy and chemotherapy. And then if we go to the next slide, which is really where we are spending lots of activities now, and I think this is going to be a very important part for the company in 2021, is the broadening we are foreseeing. So since we have good reason to believe that we can afford and access a chemosensitizer to certain chemotherapies, we obviously would like to broaden our development right now. So we want to include more cancer forms and pancreatic and non cell line cancer to see where we have good chance of success. And we also like to test a few more chemotherapies. So there will be much more around this trial once protocol has been finalized, but we already now know that crystal negative breast cancer is going to be a very important cancer from the study. It is a cancer form where the Interleukin-one system, which we are blocking, seems to be very much involved in disease progression. 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 SVED in patients. So the submission will be done during Q2. And well, ahead of that, we will give more information about indications and trial design. So then to go to Slide 13, which is around 10.10. So 10.10 is progressing well. It's in late preclinical development phase. We are performing safety and efficacy that is right now, and we will give updates as soon as those studies have been finalized. We did sign a production agreement with Baim Vend last year. And the CMC development is ongoing, going to plan. And we are looking forward to initiate the clinical trials early next year. The main indications will be systemic sclerosis and myocarditis, even though Phase 1 may be looking at our production, the safety report has the volunteers as quickly as possible to get into these, let's say, the indications are of focus. So thereby, I would like to hand over to Bengt to go through the finances. Okay. Thank you, Jern. Let's move to Page 15, please. Cantarga's operating expenses increased by 56% 2020 to, in total, SEK 100 and SEK 73,900,000. As you can see in the graph at the left, was this increase related to increased investments in R and D? In 2020, R and D accounted for 91% of operating expenses. The increased R and D investments was related to Kantagia's main project, Kano IV, and especially the ongoing clinical studies CMC developments. Preclinical studies in Chem 10 also increased. The number of employees increased from 11 to 18 during 2020. This increase was related to R and D. Cash flow from operating activities was negative. However, the total change in cash for 2020 was positive, SEK 653,100,000 due to the financing activities. Page 16, please. Kantagie has a very strong financial position after 2 successful direct share issues. Total raised capital during 2020 was close to SEK 1,000,000,000. The solidity was 96% at the end of the year and available funds almost SEK 1,000,000,000. And this concludes the financial overview. And back to Jan. Thank you so much, Bengt. And then 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 KANO4 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. And then can turn on the preclinical progress and development milestones in front of us. So just to round off, I'm very enthusiastic about the upcoming year, and I'm very glad that 2020 went so well and was really great year for KantarGA. So by that, I we'll very much like to invite Q4 questions. Our first question comes from Jonas Bracelinas from Pat, please go ahead. Hi, good afternoon. Thank you for taking my questions. So many recognize by now that moieties and its antibody, canakinabab, should be watched closely by those interesting Contagia. Can you remind us in your own words the key features how Ken Ho 4 is similar and different on that matter from Kenekinib? Yes, of course. Thanks for the question. So kinakinumab is an antibody directed against 1 of the 2 forms of interleukin 1, so interleukin 1 beta. And canakinumab has generated, let's say, very interesting data in early stages of disease development of lung cancer and is currently in 3 different Phase III trials in non small cell lung cancer. Channel 4 is clearly differentiated because we are instead of binding cytokine, we are binding receptor and thereby we block both forms of IL-one, so both IL-one and IL-one beta. And we also have an ADPC component. So in principle, we since IL-one and IL-one beta often works in pairs, we have a broader mechanism of action and we also have the ability to stimulate immune system to eradicate cancer cells. Okay. Thank you. I suppose closely related question would be that Novartis will start publishing data from Chase the program, obviously, it's an important milestone for them. And again, closely watched by investors in Kantarvia. Would What is data impacting your strategic decisions in any way? So let's say, in case of Poisson data, would you would it give you confidence To speed up the development, for example. So yes, I think there are several aspects that the canakinumab data will influence our strategies. So first of all, obviously, positive results will, let's say, strengthen our view that the IL-one system is involved in cancer development and being a good target. Then we obviously need to go into the scientific details, which I think are extremely interesting to see to learn more because we are 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 drag. But I need to emphasize that there are several diseases that seem to be driven by both IL-one alpha and IL-one beta, while perhaps the data Novartis generated more points on the action of IL-1B. So that does not really teach us anything if it's if IL-one alpha is contributing as well and the loss in both would be the better approach. So 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. One question on the financials. Obviously, very solid cash position now. But at the same time, R and D costs are increasing naturally you're now broadening your R and D pipeline in terms of indications and potentially new Jack's coming in. But can you comment, if there's any comments on cash reach or what kind of periods discovered by existing budget now? Bjorn, at Bengt, for me. Yes. Thank you. I can take that one. About 2 years with present plans put speed ahead. Okay. That's very clear. Yes. I think thank you then. That's it from my side for now. I'll jump back in the queue. Our next question is Sam Arvid Nagander from Carnegie. Please go ahead. Okay. Good afternoon, Johan and Bengt, and thanks for taking my questions. So a couple of questions from me. First off, how close are you to submitting the protocol for the Fulferi NOC study? And could you also just inform us a little bit on the scale of this trial and whether you think generated data, assuming that it read out well could be enough to move into a pivotal trial with this regimen? Yes, of course. So now we are it's really got the final touches before we can submit the clinical trial application of the pancreatic cancer can afford for Phelanox combination trial. So but let's say, it will have been during March sometime we've obviously left the market now on what it has happened. Then we have not disclosed all details about the trial yet. So we will do that in conjunction with the submission. But basically, it is the safety and early efficacy trial of Cano 4 together with full clearing option. There is nothing that fits the heckler about the design, it is a standard design with dose escalation phase into the new combination and then followed by an expansion of Phase 2 dose. If data looks promising in FOLFIRNOX, we obviously need to discuss those data with regulatory authorities and understand exactly how the pivotal trial may look like. What is a little bit special about Volpyrinox is that it is combination which is used in a standard way for treatment, but there is no official label for the combination in pancreatic cancer. So obviously, we need to have a discussion on, hopefully, with the FDA and EMA how to handle that. Okay. That's very helpful. And then on that, will you wait for data from this trial to emerge in order to be able to include both the Zolkerinox and gensitabineabergsen regimens in the potentially pivotal trials? Or you see these as 2 separate studies given that Duo Advanced Aster, presumably with Gamzetabine and Abraxane? No, no, so the plan A is really to advance the enzyme, I think, the same combination on its own. So the status right now is that we are we're assuming that the data will continue to look good, so we're coming for success. We are having discussions with various experts and advisory boards around the data set which is being generated right now is for what critical is that PFS and curational responses look at standard finger response rates. But if that looks all good, we will continue and have an end of Phase 2 meeting with the FDA and similar efforts with EMA as quickly as possible afterwards and to start Phase III trial on its own. And then if we, in parallel, get strong data when combined with Fulphurinoxacel, it's a pleasant problem, but we will address that at that point in time. But we have no plans right now to delay start of the pivotal weekend, Abraxane, Cabby wait for Q1 straight then. Okay. That's great. And then as it was noted just now, we're to the first readout for the Canakinumab Phase 3 program with the second line of Staxel combination study being first in line, you have very much emphasized the synergistic profile of Kansy or 4 together with platinum based chemo. So on the back of that, could you tell us a bit more about the rationale for combining with ATAXANE? And also how you view the risk in the 2 lung cancer studies that you're pursuing? Yes. So the first try or at least following the communication from Novartis, the first Phase III trial to read out is the CANOPHIE II trial, which is canakinumab combined with the docetaxel in late stage non small cell lung cancer, so typically a second or third line patients. And I think it's a very important trial. I think Novartis has clearly shown that the IL-one beta system is very relevant in early stages of lung cancer. And it will be very exciting to see if there is the 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 regular survival one data yet. And we have a very heterogeneous group of patients, which is it's a very challenging group as well as there are really no treatment alternatives left except for docetaxel. So I think we obviously all want that trial to be positive. But it is there are challenges, as I said, and there are unknown. So I don't want to speculate anything around the chances and what our next steps are. I think regardless of this Targa will obtain valuable information about how to take next steps. Okay. Yes. Thanks for that. And then 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 cancer 4. And at some point, I suppose chemo becomes the limitation, especially with the quite toxic gensitabine plus abracene regimen. So since we've seen monotherapy activity with cancer 4, as you also alluded to, are you aiming to combine Or to continue KAN-four monotherapy after chemotherapy tolerance worsens in upcoming studies. And on the back of that, do you see a potential for better durability than what perhaps could be indicated by results from the Canfor Yes. That's a great question. So what we have so we're doing 2 different chemotherapy combinations right now. So in non small cell lung cancer, gemcitabine cystoplatin. And as you main of that therapy given for between 4 to 6 cycles, each cycle being a 3 week cycle. And so in this protocol was once patients have fulfilled the chemotherapy, they are only staying on TANO for monotherapy as some kind of maintenance treatment. And 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 can afford monotherapy without progress being a response and not progressing. It's a different story in pancreatic cancer where Gemcitabine Abraxane is used. That's a more continuous chemotherapy combination. And what we have seen is that some over 2 plus patients have been treated for more than a year with gemcitabine and Braxton, which for COVID patients, it's becoming more and more of a challenge because it is toxic and it's, let's say, it's not, let's say, the nicest way for TACION to continue on Q and A over and over again. And the protocol didn't really have a good solution on this, let's say, very nice probably because it is a nice and unexpected problem that patients have been in response for such a long time that we cannot really continue with chemotherapy or the investigators are hesitant to continue. But as I foresee it in the future, Canophord could very well be good monotherapy option as a maintenance therapy for these patients. So there are opportunities here to prolong the durability, but it's not part of this study. Right. Understand. Okay. Thanks very much, guys. I'll jump back in line. Our next question is from Niklas Elhammer from Radei. Please go ahead. Okay. Karl, thank you. I guess most of my questions have been answered already. I just wonder if you maybe you could share your views. You were you said that you were thinking about the next step for channel 4 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? Yes, absolutely. So yes, the 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 CanoFo to the chemo. It's not the majority of patients. It is a smaller group of first line patients getting KTRUDA monotherapy. But on the other hand, it is a segment where, let's say, competition is lower. It's a segment that is, let's say, slowly getting smaller because more and more treatment changes occurring in the first line. And we need to understand, let's say, how big this segment would be in the future. So that's one of the things we are doing right now. But there are no signs that this segment will disappear. So it is a good place for us to do development in. And then there are lots of other opportunities. We are looking into dose ataxel combination. We would be looking into combined with immune checkpoint inhibitors and chemo and there are also, let's say, more and more targeted agents being approved. And these patients have very core, let's say, second line opportunities. So here is a market which is actually growing, where combining KANO4 with platinum agents, they may be a really good option for these patients. So yes, dynamic market, but lots of opportunities. Okay, great. And 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. And should we expect same level or increase or even increased activity in 2021 for these kind of activities. Henk, will you take that? Yes. I would say, yes, we will see increased activity in all areas within the R and D in 2021. That's also, of course, the main reason why we say that the actual available funds will last about 2 years. Okay. Thank you. And our next question is from Rune Wouter from Kempen. Please go ahead. Yes. Thank you for taking my questions as well. My first question is on the the neutropenia finding that you had in both the NSCLC and the PDEC interim data results, can you elaborate a little bit on these findings? And in particular, do you see this in all patients? When do you see this happening? And how quickly does it resolve do you reduce the dose in these patients? Yes. So the neutropenia, it differs a little bit between different patients. So you would expect Grade 3 or higher nicotine somewhere around 30% with chemotherapy. And obviously, we have more patients that getting a Grade 3 in neutropenia. It's a little bit different than ethics with the different in Chemotherapies. And we are we need more data before I can let them go into details and answer your question. But 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 GCFF and the new set as we see it right now. And then how those reductions is the second strategy to, let's say, counteract the new patina. It's work in progress. So it is obviously something which could have been better if it positive impact. But on the other hand, it was an expected side effect since IL-one blockade. And Lithuania has been reported beforehand and is part the label of IL-one locking agents and it's also part of chemotherapy mechanisms. So we're getting there. Okay. That's helpful. And then 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 Cana4? Just your general remarks about that would be helpful. Yes, absolutely. So probably ConTARG 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. If we since pancreatic cancer is the indication where we have advanced the most and if we assume that data will look good and we will get into the pivotal trial, we believe it's in the shareholders' interest to start a Phase 3 trial and sign the partnership in parallel with the Phase 3 try and with the course report going on on the market. And then, of course, it can target and keep some co marketing rights in strategic markets, I think that could be really interesting. But 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 the type of line tuning, but the short answer is that right now, we're not, let's say, prioritizing the partner. We are in very strong cash position, and we are really sure that we can continue to build shareholder value before partnership. But obviously, for Q4, all the big pharma companies are fully aware about that. All right. Thank you very much. And 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 into this Q4 report. And I look forward to continue to meet with you during 2021. Thanks.