Cantargia AB (publ) (CANTA) Earnings Call Transcript & Summary

Welcome to the Cantargia Q2 2023 Report. [Operator Instructions] Now I will hand the conference over to the speaker, CEO, Goran Forsberg and CFO, Patrik Renblad. Please go ahead.

Thank you so much. It's a pleasure to present Cantargia H1 report after what I believe has been a very strong period, as well as a very nice summer with a good news flow. So to take you into the details then, so starting out with significant events during or after this period or during the summer. We have presented new data both in pancreatic cancer, as well as non-small cell lung cancer for a lead program, nadunolimab and more specifically, it's been in chemotherapy combinations and the presentations have been made at the 2 major cancer conferences, AACR and ASCO and we're coming back to all these data. But in essence, they are certainly strong and have created lots of external interest and attention around our programs. But based on these results, we're now also planning for randomized controlled clinical phase IIb trial in pancreatic cancer, where patients will get nadunolimab with chemotherapy or chemotherapy alone. And as we progress with the planning, there will be much more details around this trial. Besides the new clinical results, we also finalized the enrollment in the CANFOUR trial in non-small cell lung cancer and we can conclude that the safety continues to be very favorable and this last piece of information was done in nadunolimab with carbo/pemetrexed and it wasn't really a difference compared to the good safety observed with our platinum doublets. During the summer, when we got approval from German authorities to start the CAN10 phase I clinical trial and the final details and final preparations are ongoing and I'll present more in this presentation. And finally, there has been patent opposition, another one I have to say, again, with the favorable outcome for Cantargia and this time it related to kind of on nadunolimab variants, but the European patent office ruled that discussion should remain in force with an updated patent scope as has been communicated. So going into the project status then, just to remind you a little bit about our pipeline. So lead program, nadunolimab is in phase II for pancreatic cancer in first line with gemcitabine Abraxane. It's studied in triple-negative breast cancer in first or second-line metastatic patients in combination with carboplatin gemcitabine and this trial is -- is advancing well and it's also our first randomized trial. And finally, in non-small cell lung cancer, a phase II part which I said has been fully recruited and we're now working with the data to decide on what potential next steps should be. Outside the lead program, CAN10, which is our autoimmune program, an antibody directed against the same molecular target that's nadunolimab IL1RAP, but on a different epitope and we'll come back to that as well. It is starting to face the clinical Phase I trial as I said. And we're also working to some extent in our preclinical assets in the CANxx programs to identify novel opportunities with IL1RAP targeting antibodies, which are not competing directly with nadunolimab or CAN10 development. So going into the new data So in pancreatic cancer, we have treated 73 rate case or we have evaluated efficacy in 73 patients receiving nadunolimab in combination with gem/Abraxane first-line setting. And if we start here to the left, we can see that the waterfall diagram, which shows the tumor or anti tumor effect on each individual patients, contains large number of patients that have responses or in very good responses with 50% or higher tumor reduction. So clearly, an outcome which is much better than you would expect from chemotherapy alone. And that can then be translated into good survival, which is 12.9 months at this interim analysis and a good progression-free survival of 7.2 months. This compares favorably to historical control data regardless if we were made in the original gem/Abraxane trial or recent trials, where survival is somewhere in 8.5 to 9 months region and the PFS is in the 5.5 months. So basically extending the PFS with about 1 CT-scan and extending survival with 3 to 4 months compared to historical control. What we discovered later on was that the patients that are getting the strongest benefit here are actually the patients that have highest levels of the molecular target IL1RAP where survival is higher than 14 months in this survival analysis compared to about 10.6 months in the low IL1RAP group. And you can also see at the waterfall here to the right that the patients with the high IL1RAP has much, much deeper and they also have more durable responses. So clearly, this is giving us another dimension in the development now where we can go for either all comers or we can try to enrich for patients most likely to respond and that's one of the factors we're going to address in the phase II trial, which is upcoming. In non-small cell lung cancer, again, it's a similar story. If you look at the waterfall here to the left, you can see that we have a very high fraction of patients with -- in the range of 50% or better tumor response, tumor reductions. And we see good responses regardless if it's, let's say, first-line, second-line patients treated with gemcitabine cisplatin or if they get pemetrexed carboplatin, they still get very good responses. We even see some patients that are third-line or beyond that are getting very good response rates. So overall, we see response rates of 50% or higher, which is about twice as high as you would expect from chemotherapy alone. And if we then look into more detailed analysis, we can see that the sub-group, which is strongly driving this tumor response is the non-squamous group, where the survival of 15.9 months is 4 to 5 months longer than you would expect from chemotherapy alone based on historical data. So clearly indicating that nadunolimab is making a difference. Progression-free survival is much longer 7.3 months versus about 5 months for chemo alone. But what's really notable here is that we have actually 2 patients with complete response, which is very rare in non-small cell lung cancer, even if they get pembrolizumab with chemotherapy, you still expect less than 1% to get complete responders. And in this small data set, we have 2 out of 16 patients with non-small cell lung cancer, so it's actually more than 10% of patients with complete response. And we're now working to understand more on how to identify these patients, so we can really do a good clinical trial in the patient group that is most likely to respond and this is clearly due to competition where you need to advance in the most promising subgroups. The third indication is triple-negative breast cancer. We have not presented any new data during the period, but just to remind you that, again, we have very good response rates here when combined with chemotherapy in this case, gemcitabine carboplatin. This is data from a phase I part of the ongoing phase I/II trial. Based on the positive outcome here, we -- the trial was moved into the phase II part, which is a randomized part of 2 times 49 patients. And we expect the first data set from a randomized trial during Q4, where we have an interim futility analysis planned. And we also will present updated phase I data from the 15 patients with obviously long-term efficacy at a conference during second half of this year. So if we then have a quick look into the clinical trials, where we have investigated nadunolimab, so a CANFOUR trial, which is obviously the biggest trial where we have the most data to date and it was done in both pancreatic and non-small cell lung cancer. We have presented results recently, but there is still much more to squeeze out from these trials. And so we are planning for more data during H2 and/or '24. And based on the PDAC results, we're now preparing for a phase IIb trial as communicated. In the other trials outside CANFOUR, CIRIFOUR CAPAFOUR CESTAFOUR you may recall that these trials were stopped or [ start ] recruitment last year or early this year and this data sets are now maturing and due to, let's say relatively small number of patients, we want to have full control of data before we go out and present anything. But our plan is that during H2, we should probably have data that are mature enough to be meaningful to be presented and we like to be transparent and that's the plan for these 3 trials as well. But the final trial which is a TRIFOUR trial in triple-negative breast cancer as I said, we have presented promising early data. There is much more to come during second half, both the interim analysis in Q4, as well as update of the phase I part in 15 patients. So moving now from nadunolimab to CAN10 and autoimmunity. So CAN10 is -- it's really unique antibody, it's binding-IL1RAP, but it's binding in a way, so it is a very potent blocker of not only IL1 signaling previous receptor, but also IL33 and IL36. And all of this cytokines IL1, IL33 and IL36 are driving disease severity in a large number of autoimmune/inflammatory diseases. And sometimes we also work together to drive these diseases and that's really the segment where we believe that we can have major advantage and our lead indications selected have been systemic sclerosis and myocarditis and the story behind is that its diseases with great medical need and it's also diseases that from independent research are clearly driven by at least 2 or all 3 of these cytokines. So as an example, you can look at biology here to the left, where you can see that there are several different immune cells that are activated by via -- these different forms of inflammatory cycle cancer IL1 is driving one part of a disease, IL33 another part and IL36 a third part. But what all results is an inflammatory response, which is later becoming more severe and ending up in a fibrotic response, which can be lethal in both myocarditis and systemic sclerosis. And what you can see to the right is anal data showing that we have good treatment effects in both the viral form of myocarditis, in the autoimmune form of myocarditis that the CAN10 antibody is more potent in the treatment effect than just blocking IL1 alone, for instance, here to the left with anakinra or to the right with an antibody against interleukin-1 beta. And in systemic sclerosis, which is a very severe disease and difficult to treat in animal models, we see effects on both skin thickness and lung fibrosis in several different models. So, we are super excited to have advanced with this program through the GLP tox study earlier this year and through a successful clinical trial application in Germany. And we got the approval last week and are now basically doing all preparations and screening of healthy volunteers for [indiscernible] a single dose part to be followed by a multiple-dose part in psoriasis patients. And altogether this protocol allows for up to 8 individuals to be investigated. And beside safety, we will also look into pharmacokinetics and also biomarkers to get early evidence of biological activity and also some kind of mechanistic proof of concept. So by that, I would like to hand over to Patrik and the finance part.

Thank you for that, Goran. Good afternoon, good morning to you and I'm happy to hear now after Goran's introduction share the financial highlights from our interim report for the second quarter and first 6 months of 2023 as we reported this morning European time. Our operating expenses in the quarter decreased by 35% from the previous -- from the same period last year to SEK 63 million from SEK 96 million. And this reduction is driven by the strategic decision to focus the development of nadunolimab to randomized clinical trials in the fewer cancer indications that Goran mentioned earlier, mainly PDAC, triple-negative breast cancer. And our Cantargia's R&D investments amounted to SEK 57 million in the quarter and that comprises 90% of the total operating expenses when general and administration were kept at SEK 4 million with SEK 2 million in other operating expenses, totaling SEK 6 million for admin and other. We have realized and reported positive net financial items from interest income, exchange rate gains and gains from selling short-term investments of SEK 6 million, which improved the reported loss of the quarter to SEK 56 million, which is 40% better than Q2 of 2022. For the first 6 months, our operating expenses amounted to SEK 140 million, 36% lower than the first half of 2022 and the same explanations apply for the year-to-date period as I gave you for the quarter. We reported net financial items of SEK 8 million year-to-date, implying a total reporting loss of SEK 132 million, down by 37% from the same period last year. If we then move to the next Slide, which is showing our available funds and Cantargia's available funds consists of cash and bank balances as defined by IFRS and short-term investments, which is basically bond mutual funds and fixed interest accounts. And by end of June, our cash and cash equivalents amounted to SEK 159 million and short-term investments were at SEK 128 million, totaling SEK 287 million in available funds, a decrease by SEK 66 million in the quarter and on the graph here, you see the development of total available funds for the past 5 quarters. The current available funds will enable Cantargia runway to mid-2024. We have flexibility built into our plans that could enable extension of the runway through prioritizations by at least 2 quarters. And as Goran alluded to, the team is now preparing for a randomized phase IIb clinical trial with nadunolimab in PDAC, importantly, budget financial plans and we will come back with more information once those plants have matured. And with that, I hand over to Goran for the upcoming news flow. Thank you.

Thank you so much. So obviously, we come from a situation -- we're very, very happy to have strong signals of activity of our lead program, nadunolimab in both pancreatic cancer and non-small cell lung cancer and triple-negative breast cancer. And obviously, it's very exciting to know that we also have a rich news flow around these programs both in PDAC with new translational data with a new trial. And obviously, with the goal of getting randomized data in pancreatic cancer as quickly as possible. But also, we have more data to present in non-small cell lung cancer as the last set of patients, the efficacy data are maturing and we're also doing much more work on biomarkers to identify the patients that are let's say, the real winners when it comes to this combination therapy with chemo. In triple-negative breast cancer, as I said a few times, randomized trial is already ongoing and we expect first data set in Q4. And also we expect mature phase I data during second half this year. And then, it is a great moment to know that we're now not completely dependent on nadunolimab, but we actually have 2 clinical programs, 2 clinical legs to stand on in the development. And we really believe that the CAN10 program is feeling a very important medical need and we have a unique mechanism of action here. And again, we like to be transparent on what's happening here and once we have meaningful data in 2024, we will certainly start to present that. And then we have these other trials and as well as translational and preclinical research, where we again like to be transparent and present more data. So by that I would like to say that I'm very happy about where we are right now and also very much looking forward to the upcoming quarters. And by that, I'm very happy to take questions together with Patrik.

[Operator Instructions] The next question comes from Viktor Sundberg from Nordea.

So I have 2, if I may. So one for me on costs first, as you mentioned, you have a lower R&D cost base now, but I just wanted to understand how you or how we should extrapolate this going forward. You will start a couple of trials here in PDAC and for the CAN10 program. So I just wonder how you see this going forward? Do you need more cash on hand to be comfortable to start the PDAC program, for example. So I think I'll start with that one.

So I can start and then if need Patrik fill in. So [ 7 ] trial is obviously not fully funded yet. We are working on, let's say, different alternatives on how to do this. And once we have a final trial design, we can probably address your question much better. So I have to say more to come.

And one on CAN10 also. Is the main focus here going forward, I mean, looking beyond the psoriasis trial here on the myocarditis part of that disease in systemic sclerosis. I mean I've seen some data, for example on Rilonacept for example that did not show efficacy on skin endpoints. But on the other hand, anakinra and canakinumab has shown some effects on myocarditis and of course, I see your preclinical data here, but just wanted to understand the rationality and perhaps unmet needs, future trial design, et cetera that you would be going for here in systemic sclerosis or what kind of sub end points you would be looking for?

So again, we need to come back on details in this question. What we're currently doing is that we're working together with KOLs to, let's say, make sure that the phase II development is, let's say, according to the standard of the 2020s. And there are lots of things happening around both biomarkers, as well as thoughts around endpoints. So we will be much clearer on this, let's say, probably during 2024, well ahead of the trials are starting. We also need to decide if the first trial should be more based on a biomarker trial or if it should be, let's say, more trying to address the disease.

The next question comes from Richard Ramanius from Redeye.

I had a few questions, so let's start with economic one. Patrik mentioned that you have the flexibility of extending your run rate of at least 2 quarters. Could you define or specify how you would do that? Would that be by, for example, delaying the PDAC study?

No, it will be looking at non-clinical trials and phasing of those activities more than non-clinical trials, more than looking at our clinicals. But yes, yes.

I can fill in to say that we have lots of flexibility around the CMC development and when to take certain investments in both our programs.

I had some -- I wonder about the psoriasis patients you will include in the CAN10 trial, what's the purpose? And will you have any efficacy measures for these patients compared to the healthy volunteers?

So the rationale for using psoriasis patient, so obviously, we're looking at patients with mild to moderate psoriasis. So in a way, you could call them healthy subjects with mild psoriasis, but the idea is to get biopsies to get skin biopsies from these individuals to get a mechanistic proof-of-concept at a very early development stage.

I also wondered -- this is my last question about the analysis of biomarkers in non-small cell lung cancer. Could you expand on that, what kind of biomarkers are you looking at, I guess, IL1RAP would be included?

So we're doing a deeper analysis here on -- so I agree, IL1RAP is super important, but it's also what type of -- our proteins in the tumor cells or tumor microenvironment are working together with IL1RAP to, let's say, make these tumors more sensitive to nadunolimab. We're also trying to, let's say, take the other way around looking at patients with complete response or almost complete response to see are anything specific with these patients. We know, for instance, that we all non-squamous subtypes, but we would like to know more...

Okay.

Basically working from 2 different directions, one from, let's say, the biology and the other one from patients that are doing best.

The next question comes from Joseph Hedden from Rx Securities.

Just have a couple relating to the PDAC plan and phase IIb. Just wondering if we can get a couple of more details on the design of that. So is this to prove further the difference that you saw from previous data in IL1RAP high expressions, high treaters and low expresses or exclusively in the high expressing population? And then apologies if I missed this, but what proportion of the overall patient population in PDAC is expected to be IL1RAP positive?

So that's a great question. So the background for a Phase IIb trials, it's also 2 aspects. So the first one is to get a randomized or controlled data on patients with high versus low IL1RAP getting the combination therapy versus chemotherapy alone. The fraction -- so we believe that's slightly more than 50% of the patients are IL1RAP in the phase II previous phase II trial it was about 60% were in the high population. And it's also to get more robust and efficient development of an IL1RAP assay compared to what we have today. But second part is that we will study 2 different dose levels, which basically is a request from the FDA in relation to product optimus and do that in a randomized setting, which has been, let's say, the desire from them.

So you've been interacting with the FDA over the design of this?

So as you may recall, we were planning to do a phase II/III trial together with PanCAN and got the request from the FDA to start that trial with a lead randomized leading phase looking into 2 different dose levels. And it became very complex as that was a platform trial already up and running. And it just became too complicated to redesign the whole trial to build in these types of leading phases. So obviously, that was one part. But with the new data on IL1RAP, we thought that we could probably do this much, much better to really increase the likelihood of success in this program either in all comers or in a subgroup of patients by doing this in a really good phase IIb program.

And given the high unmet need even in the first line setting, do you think that this could be a potentially registrational study in terms of even if it's an accelerated approval and then you do go into the -- assuming it's still an option for you into the Precision Promise trial?

It's a great question and obviously it is a Phase IIb trial. But if you get good results, I guess, there is always an opportunity to get an accelerated approval. The medical need in pancreatic cancer is enormous and there is very little happening when it comes to new products or from what we see in late-stage development now as well. So it is a discussion that probably will take place once we have advanced [indiscernible] but then also that the trial is not designed for that, but with a great outcome, that's certainly a possibility.

The next question comes from Sebastiaan van der Schoot from Van Lanschot Kempen.

This is Luis dialing in for Sebastiaan. I have a couple of questions, the first one regarding the trial with nadunolimab in lung cancer, considering that you're still going to release data this year and next year, do you have an idea already when do you expect to make a decision regarding, well, the development of the drug in this setting?

We'll probably know much more later on. So I guess everything is data-driven. So if we can see that we have a well-defined sub-group where we can be competitive in the current landscape. Obviously, that could be good decision point for designing the next step trial [ even and around ] or together with a partner in the future. But I think we need to see those data exactly to have a good idea about the strategy around the next step. But in the end of the day, we know that our patients that are doing really well, so at some point in time there has to be a movement forward in the development.

And on the triple-negative breast cancer trial, could you provide a bit more color? So we have 2 sets of data coming out this year, right? And so could you provide a bit more color on what kind of data can we expect? And also the number of patients and that kind of details?

Sure. So the first data set is obviously an update of the 12 or 15 patients that were already presented during Q1, but it will now be efficacy data in all 15 patients. And they have been treated for or be treated or followed for, I would say, at least 6 months at that point in time. So we would probably have a good idea about both response rate, safety and PFS. And obviously, the depth and the durability of response. So I think a pretty mature data set, perhaps not survival data yet, but definitely all we have a relevant efficacy points. The second data set is the first randomized, so the interim analysis will be done once 2x 14 patients have been treated for at least or have been followed with at least 2 CT scans, which means at least 3 months treatment. So we will have an idea about safety and response rates in these patients or a relatively small subset, but at least it will give some signals of where we're going and it's designed as a futility analysis.

The next question comes from Sten Westerberg from Analysguiden.

Two questions on the TRIFOUR study. Yes, so I understand correctly, the interim analysis will be carried out after 14 patients treated in the active arm. Is that correct?

So 14 in each arm, yes.

Second question, if you please could remind us the patient setting in the TRIFOUR study, is it primarily second or first or second line metastatic TNB patients or can you give some more details about the status of the patients?

Absolutely, so -- and it's a good question. So the protocol allows for both first and second-line patients to be included. And obviously, they need to be with good performance data, so ECO 0 or 1. They -- what's happening right? So obviously, we're not the only one in treating patients in triple-negative breast cancer and there have been, for instance, recent approval of TRODELVY in the second line segment and we believe that the uptick of TRODELVY will have an impact on, let's say, recruitment rate, but we don't see that yet. So -- but it will, let's say, drive the patient population more towards first line in that case if TRODELVY received second line. If for some reason, TRODELVY is moving into first line, obviously, it would be a different situation. So we expect a good mix of first and second line patients and all metastatic.

[Operator Instructions] The next question comes from Matthew Biegler from Oppenheimer.

I also wanted to ask about the biomarker as you prepare for the PDAC trial. Can you just talk a little bit about its current date of validation? Have you defined boundaries for IL1RAP expression levels? And has that been validated? Or is that validation part of, I guess, the goal for this Phase II trial?

So the biomarker assay, right now, it's an assay which is developed and run at a central lab in Europe and various much -- so it's been, let's say, some validation done and it's [indiscernible] is done under GLP. But there is still work to do to get it more effective and to work more, let's say, at the bed side. So very certainly much more work before we have a real assay and that's something we will do in parallel with the phase IIb trial.

There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

And there's no questions coming from the web. So, I'll hand over to Goran for a final comment.

So by that, I would like to thank you all for the interest in our program and obviously for several very great questions, which I hope could be clarified. So I'd say look forward to continue the development of our lead programs and I'm sure it will be an exciting time at the next report as well. So thanks a lot for your attention.

Thank you very much.