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

Welcome to Cantargia Q3 Report 2025 Presentation. [Operator Instructions] Now I will hand the conference over to the speakers: CEO, Hilde Steineger; and CFO, Patrik Renblad. Please go ahead.

Thank you. Can you see the slides? I can't see. All right. Good afternoon, everyone, and thank you for joining this presentation of our financial report for the third quarter and an update from the company. My name is Hilde Steineger, and as you probably are aware, newly appointed as CEO of Cantargia. Next slide. Patrik, may I ask you to change the slides? All right. Slide 2, safe harbor. And Slide 3? Patrik? Okay. Let me just finish. With me today, we have our newly appointed Medical Officer, Dr. Wolfram Dempke; and our CFO, Patrik Renblad. Slide 4. We reported this morning our interim report for the third quarter and the first 9 months of the year. It has indeed been a transformative period for the company, with the Otsuka transaction as the main event. About the same time -- about the same period, we communicated the primary endpoint from our TRIFOUR Phase II study on the objective response rate, ORR. And the results show no difference in ORR between the controlled group treated with chemotherapy and the patients treated with nadunolimab in combination with chemo. We are awaiting the mature overall survival data, which is expected around yearend 2025. I joined Cantargia as CEO on September 1, and I have extensive experience from leadership roles in the pharmaceutical R&D and business development, as well as background in the financial sector as an analyst and venture capitalist. I'm also very happy to introduce Dr. Dempke, who's joined Cantargia as Chief Medical Officer. And I would like to hand it over to Dr. Dempke for a brief introduction of himself.

Thank you, Hilde, and thank you very much for inviting me here. It's a pleasure for me attending this meeting. So my name is Wolfram Dempke. Just a brief overview about my career. I'm born and raised in Germany, holding a German passport. I studied medicine in Germany, in Essen. And I'm a fully qualified and both certified hematologist and oncologist. I'm also holding an MBA in International Financing. I've worked in the industry for quite a while, and I'm still seeing patients at Munich University and from time to time at Cambridge University, as I'm a full professor at Munich University Hematology/Oncology, and in Cambridge, I'm a Senior Lecturer. I'm also holding a passport in the U.K. So I worked at several pharmaceutical companies and I have an extensive experience in clinical drug development. And just to give you a few examples, I was responsible for bringing dasatinib, Sprycel, to the market while working at Bristol-Myers Squibb for the CML indication. I was the mastermind behind ipilimumab for malignant melanoma. I was responsible for the relaunch of gefitinib, Iressa, in 2014 while working for AstraZeneca, and at least in part, let's say, 50%, for the launch of Tagrisso, which is osimertinib. I was the European representative for mogamulizumab while working at KHK. I was responsible for the launch of capmatinib from Novartis. At that time, I was working at Incyte, and Novartis had hired me to get capmatinib, which is a c-Met inhibitor, to the market. And lastly, I was responsible, I'm in a way responsible at the moment as I'm a Board Member at Moleculin, I'm responsible -- I was responsible for bringing Moleculin from Phase 0, if you like, to the currently active Phase III. My last role was at Otsuka, especially at Taiho. And therefore, I was responsible for the development of zipalertinib, which is an EGF mutant TKI. And the drug is currently in Phase III, and the filing will be at some stage next year. My research focus is, as you can see, mainly on GI tumors, especially on pancreatic carcinomas. I did my PhD on RAS in England quite some time ago. And for the last 2 decades, I worked on non-small lung cancers and acute leukemias. From a clinical perspective, I'm seeing pancreatic carcinoma patients on a regular basis. I'm actually treating them. I do know how these patients are suffering from their disease, as pancreatic carcinomas are a very tough disease. And I'm now overlooking 35 years in medical oncology and hematology. And during that time, I've seen everything, every trend on the market, including CAR-T cells. I'm treating patient CAR-T cells, autologous and allogeneic transplantations. And it is [ a mad idea of my heart ] to point out that nadu is definitely the best drug I've ever seen for patients with pancreatic carcinomas. And therefore, I was really keen joining Cantargia and to bring that drug to the market as soon as possible. And that is my driver and that is something that drives me and that is very important for the sake of the critical-ill patients. Thank you.

Thank you, Wolfram. So let me then go into detail a bit into the Otsuka transaction that we now announced in July and closed in September. As I said, it was, in many ways, transformational for Cantargia because it provided us with the financial flexibility that has enabled us to reinvest into the next generation of anti-IL1RAP antibodies. But equally important, the company sees the deal as a validation of both the target and the technological and commercial value of Cantargia's antibody platform. So when the deal closed, Cantargia received $33 million, and we are eligible for receiving up to USD 613 million in upfront and milestones, in addition to up to double-digit royalties. Now let me review our pipeline and our strategic priorities. Bringing nadunolimab forward in pancreatic ductal adenocarcinoma, or PDAC, remains our key strategic focus based on very compelling Phase II data, which I will elaborate a little bit later on in this presentation. We have observed promising results in non-small cell lung cancer, particularly in a subgroup of patients receiving second-line treatment following immunotherapy, more specifically in those with non-squamous tumor types. While these findings are encouraging, they are derived from a limited sample size of only 11 patients. So at present, there are no plans to pursue further development based on these preliminary data. Regarding triple-negative breast cancer, as mentioned, we have previously shared the results from our primary endpoint ORR this summer. We are now anticipating more mature overall survival data and expect to provide an initial readout before the end of the year. As mentioned, Otsuka did provide the means to invest in our very promising pipeline. With CAN14, we intend to develop an anti-IL1RAP bispecific antibody for inflammatory and/or autoimmune disease. We are in parallel exploring the options related to anti-IL1RAP antibody drug conjugates, or ADCs, also as a next step in oncology under our CANxx umbrella and platform project. Last but not least, CAN10 remains a very important asset in our portfolio. Even though it's in very capable hands of Otsuka Pharmaceutical, we will continue to follow and report on the asset as it progresses through development and, hopefully, later on for -- in approval and commercialization. If successful in all of these steps, the product will provide important non-diluting funding for Cantargia in the future. So let's dive into nadunolimab in PDAC. And once again, I want to emphasize that nadunolimab in PDAC remains our primary strategic focus. A crucial link between our target, IL1RAP, and patient is analyzed both with us and several other groups. Several studies have shown that high tumor expression levels of IL1RAP serves as a marker of prognosis, as demonstrated here in the 3 graphs. On the left, the data from Cancer Genome Atlas mRNA database shows a connection between high IL1RAP levels and poor survival. In addition, the middle figure from PanCAN shows the same. And our own study together with [ Gävle ] University on biopsies, we could also show the results from protein expression that show the same pattern. Interestingly also, we were approached by an AI company who has access to a large RNA database. They have identified IL1RAP as an interesting marker of disease and saw that 2 genes in 2 networks enriched for IL1RAP correlated with worse overall survival. So to us, these studies confirm that elevated levels of our target molecule, IL1RAP, in PDAC form the basis for our convictions and are strongly linked to poor patient survival outcomes. PDAC is a devastating disease, often diagnosed at an advanced stage when treatment options beyond chemotherapy are extremely limited. The prognosis remained poor with median survival between 9 and 12 months. Current chemotherapy regimens have been standard of care for decades, and unfortunately, there has been little progress in improving these outcomes. That said, the field is seeing promising new agents in development, and there has been significant recent investments driving innovation in PDAC. And these emerging therapies provide hope for meaningful advances and improved survival for patients in the coming years. In our Phase Ib/IIa CAN04 study, we enrolled 73 patients with first-line metastatic PDAC, who received a combination of nadunolimab and gemcitabine + nab-paclitaxel, or GN. We observed deep and durable tumor responses, as shown in the figure to the right, which translated into a median overall survival of 13.2 months. Although this was a single-arm study, comparison with historical controls, marked here in gray line, indicate that expected medium overall survival with chemotherapy alone is approximately 8 to 9 months. These findings suggest a meaningful improvement in outcomes with the addition of nadunolimab. Then our scientific team analyzed tumor biopsies from 49 patients to assess the expression levels of IL1RAP. These analyses revealed 2 distinct groups: 29 patients with high IL1RAP expression, while 20 was deemed as low expressers. When we then correlated these expression levels with overall survival, the findings were remarkable. Patients in the high IL1RAP group demonstrated statistically significant median overall survival of 14.2 months, compared to 10.6 in the low expression group. As shown in the previous slide, the high IL1RAP expression in PDAC tumor is clearly associated with poor patient survival, reinforcing the significance of targeting this molecule and the overall survival in patient population. In this study, the data suggests that IL1RAP expression is associated with better clinical outcomes, underscoring the therapeutic promise of targeting IL1RAP with nadunolimab. By selecting patients with elevated IL1RAP levels who are most likely to benefit from nadunolimab treatment, we hypothesize that we will be able to maximize the potential with clinical impact. So in conclusion, nadunolimab has now been investigated in over 300 patients, and the accumulated data continue to demonstrate promising safety and efficacy profiles. Clinical results strongly point to a potential unique first-in-class opportunity for nadunolimab in PDAC and also in non-small cell lung cancer. Notably, PDAC patients with high IL1RAP expression who traditionally have a poor prognosis respond best to nadunolimab in combination with GN. Over the last 1.5 years, our team has developed a robust assay to test IL1RAP in tumor biopsies, which we intend to use in the next pivotal study to test and select patients that are expected to respond the best. Importantly, we shared our results and discussed our next steps with the FDA this summer, which led to the Fast Track Designation for nadunolimab in patients -- in PDAC patients with high IL1RAP. Building on these foundations, we plan to advance nadunolimab into a pivotal trial which, pending funding and regulatory approval, is anticipated to commence mid-'26. Now let me spend a few moments outlining our existing early pipeline, which we are further investing in. As previously discussed, our CANxx platform continues to offer robust opportunities for antibody innovation. CAN14 is the next initiative emerging from this platform, and we intend to build on the preclinical and clinical experience gained through our CAN10 program. And we are advancing an anti-IL1RAP bispecific antibody for CAN14. For intellectual property and competitive reasons, the second target remains undisclosed, but we anticipate it will address inflammation or autoimmune disease mechanisms. We expect to select a formal drug candidate of CAN14 around yearend 2026. Earlier this year, our scientists shared also a promising preclinical data on antibody drug conjugate, or ADCs. And this approach combines cytotoxic payload with targeted IL1RAP binding, which may offer higher efficacy with reduced side effects. We continue to evaluate this ADC concept within our CANxx project. And we will assess to move forward with this dedicated progress after evaluating the preclinical results. With this overview, I'm pleased then to hand over to our financial update, to Patrik.

Thank you, Hilde. Our quarter 3 was indeed transformational. For the first time ever, Cantargia reported revenues and profits. When the Otsuka payment had been duly recognized and converted into Swedish krona, our revenues amounted to SEK 308.6 million. With operating expenses of SEK 41.7 million in the quarter, our operating profit amounted to SEK 267 million. From that, we deducted SEK 1.5 million in net financial items, to reach a profit for the quarter of SEK 265.5 million. It is worth noting that despite reporting a profit, no tax will be triggered due to our accrued tax losses. Our reported earnings per share were SEK 1.07 per share. For the full reporting period, year-to-date, our revenues were obviously the same. With operating expenses amounting to SEK 126.2 million, we reported operating profit of SEK 182.5 million. Net financial items at SEK 3.2 million, leading to a net profit of SEK 179.3 million. Corresponding to earnings per share of SEK 0.72. Looking at our operating expenses. Both quarter and year-to-date overall costs were similar to their respective comparison periods, with the comment that our R&D costs were significantly lower both in the quarter and in year-to-date due to a ramp-down both for nadunolimab and CAN10. This was then obviously offset by increased spend in general and administration, driven by our transformation both in regards to transaction-related costs, but also the leadership transformation that we have reported earlier in the year. Our end-of-September available funds amounted to SEK 339 million. And we estimate a cash runway into 2028 with our current and ongoing commitments on nadunolimab and the investments that Hilde mentioned for CAN14 and CANxx, but excluding a pivotal program for nadunolimab and also excluding any potential milestone payments payable to Cantargia from Otsuka in that time frame. And with that, I hand the word back to Hilde for closing remarks.

Thank you, Patrik. So as closing remark, we have a significant potential to become both first-in-class with an IL1RAP antibody in treatment of metastatic PDAC. The development is bolstered by a clear biomarker strategy that guides patient selection. We anticipate being ready to initiate a pivotal study by mid-2026, contingent upon securing necessary funding and regulatory approvals. In addition, strategic partnership with Otsuka has provided crucial external validation as well as financial flexibility, enabling us to reinvest in the development of the promising next generation of anti-IL1RAP antibodies. With these initiatives, we expect to achieve and report several key milestones in the near future. So thank you for your attention, and I now welcome any questions that you might have.

[Operator Instructions] The next question comes from Richard Ramanius from Redeye.

I'll start with a question about nadunolimab. How long would the proposed pivotal study take? Could you tell us something about what funding options you foresee?

We have yet to land on the exact design of the study and also the number of patients. So it's a bit difficult to commit to any time lines. This has also to be cleared with the FDA and EMA, of course, the design. But we -- if you look at our competitors, they spend around 3 years from -- 2.5 to 3 years in their pivotal trial. And with regards to funding, we will of course continuously explore all opportunities to support and accelerate our programs. While partnerships can play an important role in this funding strategy, we do not have any specific commitments for the moment. So we remain flexible on financial resources.

Okay. I noticed there is an increased -- to me, it seems you are focusing even more on the autoimmune space with CAN14. And okay, maybe if someone could confirm that there -- from what I've seen, there are no approved bispecific antibodies in that space. Is that correct? And would you say that this is a more attractive area for investment compared with oncology right now?

So maybe, Wolfram, do you want to comment on the oncology part, and I can take the bispecific afterwards?

Well, I'm not sure whether I got the question right. Was it the rule of bispecifics in this indication?

Yes. I mean I haven't seen any approved bispecifics for autoimmune diseases. Is that...

Yes, this is right. There are some early trials ongoing. But you are right, currently, no bispecifics are approved for autoimmune diseases. You are right. So that is new and that is, in a way, a land of opportunity for the company.

Yes. Great. That's just my thought, it seems like an open space with not so much competition in oncology. Yes. And my last question was about the significant increase in administrative costs compared with previous quarters. Could you expand on why that is?

Patrik, do you want to...

Yes. It's costs related to the transaction itself. So it's one-off costs to advisers and consultants and lawyers.

The next question comes from Sara Nik from H.C. Wainwright.

I just had one regarding the TRIFOUR study in the triple-negative breast cancer. I know as you stated, it didn't show difference in ORR versus chemo alone. And as we're awaiting more mature survival data, I was wondering if you could walk us through maybe how you interpret that data in context of pursuing your strategy in pancreatic and non-small cell lung cancer? And maybe specifically, if there are any key biological or clinical learnings and how those are shaping your development strategy going forward?

I'll leave that question to Wolfram.

Yes, I'm afraid. Yes. So first of all, there is no one fits it all. You can't lump all the tumors together. You can't say this is the drug and this drug is the panacea for everything. We have a very good signal in non-small lung cancers and we do have an excellent signal in pancreatic carcinomas. The biology of breast cancer is totally different. Breast cancer is normally a multicentric disease, as we call it, a systemic disease of the breast. It's a totally different biology. So we cannot expect that the drug is equally effective in all of these cancers tested. In addition, breast cancer is in a way an endocrine dependent cancer, and that might alter the effect of interleukin-1 RAP inhibitors as well. So we do see a signal; certainly, not strong enough to move on. But this is not our target cancer. And therefore, we are focusing on the other 2, as we do not expect that we see a negative result in all the other cancers and vice versa. Does that answer...

Yes. And just to clarify, although the primary endpoint was ORR, we are still awaiting the mature overall survival data. And the biology of this, that we can learn from this study, will of course help us to make a final decision.

And again, I think there are other logistic aspects here as well. This was a study in a single country, in a single -- or more or less single institution or few institutions, oligocentric. So that will explain some discrepancies in the result as well. It is not a standard Phase III trial with well-defined criteria.

The next question comes from [ Mirth Beinvort ] from Van Lanschot Kempen.

Could you provide any color or an estimate on how much the Phase III trial in PDAC is expected to cost?

Yes. Again, I think we -- as I alluded to with regards the question, we have not formally decided on the design, and we're not ready to share our design right now. We need to run this through our regulatory interactions both with the FDA and EMA. So stay tuned.