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Currency in SEK
Last close As at 09/06/2023
SEK4.64
▲ 0.03 (0.65%)
Market capitalisation
SEK775m
Research: Healthcare
Cantargia has presented new data concerning its IL1RAP-targeting antibody, nadunolimab (CAN04), which demonstrates the drug’s ability to reduce levels of tumour-promoting molecules in a pancreatic cancer (PDAC) microenvironment model. Similar reductions have been observed in PDAC and non-small cell lung cancer (NSCLC) patients treated with nadunolimab. Importantly, an IL-1β targeting antibody showed no such effect (nadunolimab blocks both IL-1α and IL-1β activation). Investors will recall the failure of Novartis’s canakinumab (an anti-IL-1β antibody) to demonstrate meaningful survival benefits in Phase III trials for the treatment of NSCLC in October 2021. In our view, the newly presented data provide encouraging differentiation for nadunolimab’s mechanism of action (complete IL-1 pathway abrogation) in oncology. Our valuation of Cantargia is unchanged at SEK7.35bn or SEK44.0 per share.
Cantargia |
New data support differentiation of nadunolimab |
Clinical update |
Pharma and biotech |
8 November 2022 |
Share price performance
Business description
Analysts
Cantargia is a research client of Edison Investment Research Limited |
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Cantargia has presented new data concerning its IL1RAP-targeting antibody, nadunolimab (CAN04), which demonstrates the drug’s ability to reduce levels of tumour-promoting molecules in a pancreatic cancer (PDAC) microenvironment model. Similar reductions have been observed in PDAC and non-small cell lung cancer (NSCLC) patients treated with nadunolimab. Importantly, an IL-1β targeting antibody showed no such effect (nadunolimab blocks both IL-1α and IL-1β activation). Investors will recall the failure of Novartis’s canakinumab (an anti-IL-1β antibody) to demonstrate meaningful survival benefits in Phase III trials for the treatment of NSCLC in October 2021. In our view, the newly presented data provide encouraging differentiation for nadunolimab’s mechanism of action (complete IL-1 pathway abrogation) in oncology. Our valuation of Cantargia is unchanged at SEK7.35bn or SEK44.0 per share.
Year end |
Revenue (SEKm) |
PBT* (SEKm) |
EPS* |
DPS |
P/E |
Yield |
12/20 |
0.0 |
(173.1) |
(1.94) |
0.0 |
N/A |
N/A |
12/21 |
0.0 |
(370.3) |
(3.70) |
0.0 |
N/A |
N/A |
12/22e |
0.0 |
(393.8) |
(2.95) |
0.0 |
N/A |
N/A |
12/23e |
0.0 |
(367.5) |
(2.20) |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
The new data, due to be presented at the Society for Immunotherapy of Cancer (SITC) conference 2022, demonstrate that full blockade of the IL-1 pathway by nadunolimab reduces the release of important, immunosuppressive molecules, such as CXCL1 and CXCL5, in PDAC models. As blood samples taken from PDAC and NSCLC patients treated with nadunolimab in the Phase I/IIa CANFOUR trial also showed reduced levels of CXCL1 and CXCL5, we believe this supports the rationale for the drug’s use in both these indications. As a reminder, the updated interim results of 30 patients (presented at the American Society of Clinical Oncology annual meeting 2022) from the Phase IIa CANFOUR study of nadunolimab in combination with gemcitabine and cisplatin in NSCLC showed an overall response rate of 53%, an 83% disease control rate, median progression-free survival of 6.8 months and overall survival of 13.7 months.
Cantargia confirmed in a recent announcement that it is prioritising the development of nadunolimab in a potentially significant Phase II/III randomised study in PDAC (in collaboration with the Pancreatic Cancer Action Network) and in NSCLC, for which the company is planning a randomised trial in 2023. After the announcement by Novartis in October 2021 that its Phase III CANOPY-1 trial of canakinumab in first-line NSCLC did not meet primary survival co-endpoints, the effectiveness of anti-IL1β drugs in NSCLC treatment was brought into question. However, the new data to be presented at SITC provide evidence, in our opinion, that a complete IL1 pathway inhibition clearly differentiates nadunolimab from canakinumab, which is a point management has made consistently.
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Research: Investment Companies
Templeton Emerging Markets Investment Trust (TEMIT) has experienced a difficult period of performance in recent quarters as investors have focused on the tough macroeconomic backdrop rather than on individual company fundamentals. However, managers Chetan Sehgal (lead manager) and Andrew Ness are confident in the long-term strategy of investing in companies with sustainable earnings power that are trading at a discount to their estimated intrinsic values. They believe emerging markets are under-owned and undervalued; hence, it is a compelling time to consider an allocation to the regions. The global asset allocation to emerging markets is 6.5% versus an 11.0% index weighting, which has declined by 40% over the last 10 years. Also, in aggregate, the valuation of emerging market shares is almost at a historic low discount to those in developed markets, while they are very inexpensive compared with their own history.
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