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

Good afternoon, and welcome to Cantargia's presentation of the Second Quarter and First Half Year Report for 2026. My name is Hilde Steineger, Chief Executive Officer at Cantargia, and I'm joined today by our Chief Financial Officer, Patrik Renblad. Today, I will take you through the operational and strategic progress during the quarter, including our clinical development plans and pipeline priorities. Patrik will then present the financial results for the second quarter and the first 6 months of 2026 before I return with a brief summary, and we open up for questions. The central theme of today is how Cantargia continues to build on its leadership in IL1RAP antibody development with nadunolimab as our lead oncology asset and with new opportunity emerging both in pancreatic cancer and hematologic malignancies. Next slide. Before we begin, I'd like to remind everybody that today's presentation contains forward-looking statements. These statements are subject to risks and uncertainties, and actual results may differ from those expressed or implied. We, therefore, encourage you to read through the safe harbor statement and the risk factors described in Cantargia's public disclosures. Next slide, please. Today's presentation will be structured in 3 parts, as mentioned. I will first summarize the key events and then review our pipeline. Next slide. The second quarter was a pivotal one for Cantargia with meaningful progress on both the financial and clinical development fronts. First, we strengthened our balance sheet. The rights issue combined with a loan facility from Fenja Capital delivered gross proceeds of SEK 132 million. This capital is earmarked for our key strategic clinical priorities of nadunolimab, most notably the planned combination study with a RAS inhibitor daraxonrasib in pancreatic ductal adenocarcinoma or PDAC. Second, we extended nadunolimab's clinical footprint with a new investigator-initiated study at Mount Sinai. In this immuno prevention trial, the first patient, a high-risk smoker has now been dosed with nadunolimab. Third, we published new scientific data reinforcing nadunolimab's mechanistic rationale in PDAC. These findings published by JCI Insight in collaboration with the Sylvester Comprehensive Cancer Center at University of Miami, further validate IL1RAP as both a therapeutic target and a potential predictive biomarker, strengthening our scientific and competitive positioning in PDAC. Finally, and perhaps most notably, we saw early but highly encouraging results from our ongoing investigator initiated Phase Ib/IIa trial in high-risk myelodysplastic syndrome, or MDS and AML, acute myeloid leukemia. All 5 evaluable patients in the high-risk MDS cohort achieved complete remission and at the reported data cut with the 6 patients still pending, a signal that we view as a clinically meaningful and potential new value driver for nadunolimab. Taken together, these developments show Cantargia executing on multiple fronts at once, strengthening our financial position, advancing nadunolimab through key clinical milestones and expanding the scientific case of IL-1RAP as a validated target across both solid tumors and hematologic malignancies. This slide provides an overview of our IL-1RAP focused pipeline, and I've highlighted the initiatives that are currently the most active. Nadunolimab remains our lead oncology asset. In PDAC, we are advancing our planned combination study with the RAS inhibitor daraxonrasib, positioning nadunolimab within a rapidly evolving PDAC treatment landscape as new agents and combination approach reshape the standard of care. In hematologic malignancies, specifically MDS and AML, the program is being run as an investigator-initiated study at MD Anderson Cancer Center funded by the U.S. Department of Defense. This we see as a third-party validation of the underlying science that comes at no additional cost for us. Beyond nadunolimab, we're building our broader IL-1 platform, that includes CANxx, our proprietary engine for developing unique IL-1RAP antibodies as well as IL-1RAP know-how and CAN14, our bispecific antibody program in autoimmune diseases, which is the program that has advanced the most. We have still CAN10 as an important part of our portfolio of our autoimmune franchise. And CAN10, as you all know, is partnered with Otsuka, which is funding its continued development following the 2025 acquisition. The key takeaway of this slide is that Cantargia is not a single asset company. We're building a focused with broad IL-1RAP antibody platform with multiple shots at goal across both oncology and autoimmune diseases. And importantly, several of these programs are funded or partnered by third parties, which extends our capital efficiency. Let us now move into the oncology part of the presentation. In oncology, our focus is on the diseases where IL1RAP biology may be particularly relevant and where there is a significant unmet medical need. The 2 main areas I will discuss today are PDAC and MDS and AML. Next slide. We'll start with PDAC, one of the most aggressive and difficult-to-treat forms of cancer. PDAC remains a disease where -- with very high unmet medical need and Cantargia's strategy is to position nadunolimab in combination where I1 blockade may complement other emerging treatment approaches. We're responding proactively to the recent second-line PDAC data for daraxonresib. In the Phase III RASolute 302 trial, daroxonresib showed a meaningful improvement in overall survival versus chemotherapy, a result that is important for those patients that have very few options at this stage of the disease. This reinforce our rationale for combining nadunolimab with a RAS inhibitor. And here, we outlined our planned Phase Ib study evaluating in combination in second-line PDAC. The study is designed as an open-label Phase Ib trial evaluating the safety and tolerability of nadunolimab combined with daraxonrasib in patients with metastatic PDAC who has previously progressed on first-line standard of care. The planned study population is approximately 15 patients. The proposed regimen pairs nadunolimab at 5 milligram per kilogram at every 2 weeks with daraxonrasib at roughly -- or at 300 milligram once daily. The primary objective is to determine safety and tolerability. Secondary objectives will include preliminary signs of clinical effect with exploratory objectives covering inflammatory, immune and tumor microenvironment-related parameters in both circulation and tumor tissue. The study is expected to be initiated in the first quarter of '27, subject to regulatory approval and daraxonrasib availability. The rationale for combining nadunolimab with daraxonrasib rests on the interaction between IL-1RAP-driven inflammatory signaling and KRAS-driven tumor biology. KRAS fuels IL-1-dependent tumor inflammation and IL-1 signaling through IL1RAP contributes to the self-sustaining inflammatory circuits in the tumor microenvironment, involving both myeloid cells and cancer-associated fibroblast. Importantly, nadunolimab acts through a pathway that runs parallel to rather than overlapping with the KRAS pathway, offering a complementary mechanism of action alongside RAS inhibition. Together, this brings a strong biological rationale to explore whether IL-1RAP blockade with nadunolimab can add further benefit in combination with a RAS inhibitor. The scientific rationale is further supported by survival data showing that high IL-1RAP RNA expression in PDAC tumors correlates with poor survival. Importantly, this relationship holds not only across all comers, but specifically also in patients with KRAS mutation, indicating that IL-1RAP prognostic value is not diminished by RAS status. For us, this is a meaningful data point. It reinforces IL-1RAP not only as a therapeutic target, but as a marker of aggressive tumor biology in PDAC, including the KRAS-mutated patients, which is the most relevant patient population to our planned combination with daraxonrasib. Nadunolimab and daraxonrasib have complementary mechanism of action, each addressing a different compartment of the tumor. Nadunolimab targets IL-1RAP acting on both immune compartment, dampening IL-1-driven inflammatory signaling along myeloid and T cells and the stromal compartment where it may help address the dense drug-limiting stroma characteristic of PDAC. Daraxonrasib, by contrast, targets RAS signaling directly within the tumor cells where KRAS mutation is a key driver of disease progression. By combining these approaches alongside standard chemotherapy, the aim is to address multiple interacting components of PDAC biology rather than a single pathway in isolation. It is, therefore, not simply an empirical combination. It's based on a mechanistic hypothesis that blocking IL1RAP-driven inflammation and stromal effects may complement RAS pathway inhibition and potentially improve outcomes for a patient population with very limited treatment options. I'll now move from solid tumor to hematologic malignancies, specifically MDS and AML. This is an increasing important area for Cantargia because IL1RAP biology is highly relevant in leukemic stem cells and because the medical need in high-risk MDS and AML remains substantial. The ongoing investigator-initiated Phase Ib/IIa study at MD Anderson Cancer Center is evaluating nadunolimab in exactly this patient population. The principal investigator is Gautam Borthakur, and the study is supported by a grant of the U.S. Department of Defense. The study started in 2025. It includes 2 arms; arm 1 enrolls patients with intermediate high or very high-risk MDS and arm 2 enrolls patients with relapsed or refractory AML in first or second salvage. The Phase I part has been completed, and the study is progressing into a Phase IIa. Nadunolimab in combination with azacitidine or with azacitidine and venetoclax was generally well tolerated, both -- across both patient groups with an acceptable safety profile. Most notably that in the high-risk MDS cohort, 5 out of 5 evaluable patients achieved complete remissions with the sixth patient pending at the January 2026 data cut. These are early data and the numbers of patients are still small, but the results are highly encouraging and support continued evaluation of nadunolimab in high-risk MDS. The clinical observation in this study as shown here, is also reinforcing IL-1RAP as a high-risk marker. IL1RAP is overexpressed in leukemic diseases and is linked to adverse inflammatory and signaling profiles. In AML, higher IL-1RAP expression has been associated with poor outcome as we saw in our PDAC clinical studies. This provides rationale for targeting IL-1RAP in patients with particularly high unmet need, including high-risk and AML. Now IL-1RAP sits at the center of the disease biology in both MDS and AML at the level of the leukemic stem cell itself. MDS originates from IL-1RAP-positive leukemic stem cells in the bone marrow, which produce immature nonfunctional blood cells. And in MDS, blasts remain below 20% of the bone marrow cells. And MDS is classified into low, intermediate and high-risk category and high-risk MDS is likely to transform into AML within 2 years. AML, in turn, is defined by blasts exceeding 20% of the bone marrow also rising from IL-1 positive leukemic stem cells. It remains a highly lethal blood cancer with survival rates of only 10% to 30% after 5 years. Current treatment relies on chemotherapy and stem cell transplantation with only a limited number of targeted therapy available for specific genetic subtypes. Importantly, higher IL1RAP expression is also independently associated with poor survival in AML, reinforcing its relevance not just as a disease driver, but also as a clinically meaningful biomarker, much like the one we discussed for PDAC. In short, IL-1RAP is closely related to the biology of both diseases at the stem cell level, which is exactly what makes it an attractive therapeutic market. A central challenge in MDS and AML is that leukemic stem cells can escape current chemotherapy strategies, thereby creating a reservoir for relapse. It is, therefore, a very strong medical need for therapies that target leukemic stem cells with specificity. IL-1RAP fits that need. It's expressed on leukemic stem cells in AML and high-risk MDS, but not on normal hematopoietic stem cells. Nadunolimab targets IL-1RAP in these leukemic stem cells, aiming to block proliferation and label cells for killing through antibody-dependent cellular cytotoxicity or ADCC. This is core to the therapeutic concept, targeting disease-driving cells through a mechanism that is biologically differentiated from standard cytotoxic treatment. High-risk MDS represents a meaningful clinical and commercial opportunity for Cantargia. Globally, there are approximately 400,000 MDS patients with high-risk patients representing around 35% of that population. Median survival in high-risk MDS is just 1 to 2 years. Current backbone treatment relies on hypomethylating agents or HMAs, such as Vidaza, Dacogen and Inqovi. Yet a significant unmet need remains. Stem cell transplantation is the only intervention with curative potential, but 70% of patients are not eligible for this. In addition, about half of the patients do not respond to HMA therapy and effective post-HMA options are lacking. Median overall survival in this setting with HMA resistance is only 5 to 6 months. The global high-risk MDS population is approximately [ 150 patients ] and this market is estimated to be approximately $4.5 billion in 2028 and projected to grow to around $11.2 billion in 2034. For Cantargia, the strategic case is clear. High-risk MDS combines a strong biologic rationale in IL1RAP targeting, a high unmet need and a potential significant market opportunity. Beyond nadunolimab, we are also advancing our next-generation IL-1RAP therapeutics. CANxx is our program for new therapeutics and reagents built on our deep knowledge of IL-1RAP and its role in disease biology. That knowledge base includes a library of approximately now reaching up to 500 anti-IL-1RAP antibodies and clones developed within the CANxx platform. These antibodies binds to different domains of IL-1RAP and carries different functional properties, giving us a broad toolkit to pursue multiple therapeutic strategies rather than a single mechanism of action. CAN10 was the first program to originate from this platform and CAN14 is the second, adding new features to IL-1RAP blockade. Together, they illustrate the broader value of our IL-1RAP platform, and we're not developing a single antibody, we're building a pipeline of differentiated IL-1RAP directed therapeutic strategies. Our next-generation strategy builds on the observation that IL-1RAP blockade is a potent way to block inflammation in preclinical and translational ex vivo models. We're exploring bispecific antibodies, which can add new functionalities to IL1RAP blockade and to be tailored to specific disease. We're also exploring antibody drug conjugates or ADCs, which combines cytotoxicity and IL1RAP targeting in one single molecule to increase efficacy and concentrate the effect. The broader rationale holds across both approaches. IL-1RAP is expressed in a large number of solid and hematologic tumors with limited expression in normal tissue. This concludes the operational and pipeline section. I'll now hand over to Patrik, who will take us through the financial results of the quarter and the first 6 months. Patrik, over to you.

Thank you, Hilde. I will now take you through the financial results for the second quarter and the first 6 months, focusing on our profit and loss, operating expenses and cash flow and cash position. For the second quarter of 2026, our revenues amounted to SEK 100,000. Operating expenses were SEK 35.9 million, resulting in an operating loss of SEK 35.8 million. That was offset by positive net financial items amounting to SEK 3 million totaling a loss for the period of SEK 32.8 million. And our reported loss per share was SEK 0.13. Looking now at the first 6 months of the year. Our revenues amounted to SEK 0.6 million, all derived from the Otsuka collaboration. Our operating expenses were SEK 73.3 million, leading to an operating result of SEK 72.7 million. Again, here, we had that offset by positive net financial items amounting to SEK 6.9 million for the first half of the year and a loss for the period of SEK 65.8 million, corresponding to a loss per share of SEK 0.26. Diving a little bit deeper into our operating expenses. We reported a decrease compared with the corresponding period last year, both on a quarter and on a year-to-date basis. In the quarter, our operating expenses fell 9% from SEK 39.5 million in 2025 to SEK 35.9 million. And for the 6 months, our operating expenses were SEK 73.3 million compared with SEK 84.5 million in the first 6 months of 2025, corresponding to a decrease year-to-date of 13%. As expected for a clinical-stage biotech company, the operating expenses are primarily driven by research and development activities, together with the administrative expenses required to support our operations and our development programs. Now the decrease reflects relatively low R&D activity driven both from the CAN10 divestment. And here, as a reminder, CAN10 was still in our books in the comparison period, and we had both an ongoing clinical study as well as preparations for the next stage of the development of that asset in the results for the second quarter and the first half of 2025. It is also worth mentioning that nadunolimab activities are lower than what we had in the previous year, as preparations for NEXT clinical study, the combination study with daroxonresib, has only started now after the completion of the financing this summer. Now a few words on general and administration that admittedly has increased. First reason is that we are comparing it with a period last year where our main focus was the negotiation with Otsuka. So all other activities were basically put on hold at an unsustainably low level. During the first 6 months this year, we have incurred external costs, for example, related to contract negotiations supporting our -- both our program but classified as general and administration, making sure that we prioritize the activities that most -- that are most important for the development of nadunolimab and our IL1RAP platform. Turning to cash flow and cash position. Our operating cash flow in the second quarter was a negative SEK 37 million, compared to minus SEK 44 million in the second quarter of 2025. Perhaps more importantly, our available funds, excluding the proceeds from the rights issue and the loan that were booked and recognized after the end of the reporting period. Going back, our available funds amounted to SEK 222 million as of June 30, 2026, compared with SEK 82 million at the same time point in 2025. The current available funds plus the proceeds from the rights issue and the loan are expected to fund several key prioritized activities. I've listed them here, but I will also read them for completeness, so the planned Phase I study of nadunolimab in combination with the daraxonrasib in second-line metastatic PDAC is funded. The expansion of the Phase Ib/IIa investigator-initiated trial at MD Anderson in hematological malignancies is also funded. We have ongoing commitments related to nadunolimab. For example, the TRIFOUR study, which is -- has stopped recruiting but is not yet completed, is one such ongoing commitment. We have decided to invest into the next generation of anti-IL1RAP antibodies, including CAN14 and CANxx as Hilde just mentioned, and those are also funded by the rights issue. And we will keep the company funded to mid-2028. I will also like to mention that this cash runway and cash runway estimate excludes any potential milestones payable to us for Cantargia from Otsuka. And we will remain that principle will remain until that development program has reached a more mature and late-stage stage. With that, I will conclude my part and hand over to Hilde for closing remarks. Hilde over to you.

Thank you, Patrik. To summarize, the financial position supports our ability to execute on the most important value-driving activities in the portfolio, advancing nadunolimab in PDAC, continuing development in hematologic malignancy and investing selectively in the next generation of IL-1RAP therapeutics. With that, I'll open up for questions.

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

I have a few questions on the PDAC program. Starting with the financial part, you raised around SEK 130 million gross from the rights issue plus loan. How much of that goes to the Phase I with 15 patients? It sounds like that should be more than...

I can start and Patrik, maybe you can chime in. We will start with the Ib first, and then we will advance into a IIa setting. So -- but for now, our first milestone will be a Ib. So the bulk of the rights issue is targeted towards this study.

Okay. And I also wanted to ask about the status of the IL-1RAP diagnostic assay. Is it approaching readiness?

Well, right now, we are not investing in a full-blown Phase III-ready diagnostic kit. We will not proactively select patients in our Ib/IIa study. We will measure IL-1RAP retrospectively. So we have put that on a low burner until we get further into the development path.

Okay. Then the last question. Revolution Medicines obviously produces daraxonrasib, which you use in your Phase I study. Have you had any discussions about them -- with them about any kind of pushing like, for example, it would be nice, I guess, to have a substance agreement, for example.

So of course, we discuss with a lot of different partners on different levels. However, we are not dependent on drug supply from daraxonrasib in our study. We expect daraxonrasib to be approved quite soon in the near future and will, therefore, be a part of standard of care that the patients will receive at the different sites and clinics that we will be part of our study. And yes, we have an agreement with the Revolution Medicine would be good, but we are not dependent on that.

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

We'll continue with some of the questions coming in through the web. And the first one is regarding hematology timing. In the report, it guides that the completion of the Phase IIa portion is to mid-2027. Is an interim disclosure at venue such as the ASH 2026 contemplated in the interim. Also, it's an investigator-initiated trial, but could you give any colors on the enrollment pace towards the 40 patient target, that would be helpful.