Untitled

2021

Cantargia AB (publ.) 556791-6019

Annual Report

CANTARGIA AB (PUBL) 556791-6019

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ANNUAL REPORT 2021

TABLE OF CONTENTS

INTRODUCTION

3 Cantargia at a glance

4 Vision, business model and strategy

5 2021 ‑ A summary of the year and coming steps

7 Chief executive’s review

10 Cantargia advances the clinical development of

nadunolimab in pancreatic cancer

12 Interview with PanCAN CEO Julie M. Fleshman

14 Background to Cantargia’s projects

15 Nadunolimab – Cantargia’s most advanced project

19 CAN10 – Cantargia’s project in autoimmunity and

inflammation

20 CANxx – Cantargia’s IL1RAP‑based platform

21 Summary of the clinical progress in 2021

22 Clinical strategy

23 Patent protection

MARKET OVERVIEW

26 Cancer – A global challenge

28 Cantargia’s market focus

28 The market for pancreatic cancer treatment

28 The market for lung cancer treatment

30 The market for breast cancer treatment

30 The market for Cantargia’s other indication areas

30 CAN10 – Treatment of systemic sclerosis and

myocarditis

31 The potential of nadunolimab for combination

with immunotherapy and other cancer treatments

33 Drug development – From discovery to launch

DIRECTORS’ REPORT

36 Operations

36 Five‑year comparison

37 Significant events during the financial year

38 Significant events after the end of the financial year

38 Revenues

38 Operating expenses and operating profit or loss

38 Net financial income/expense

38 Earnings

38 Financial position

38 Cash flow and investments

38 Share‑based incentive schemes

39 Risks and risk management

40 Employees

40 Research and development

40 Environmental impact

41 Guidelines for remuneration and other terms of

employment for senior executives 2021

42 Outlook for 2022

42 Appropriation of retained earnings

SHAREHOLDER INFORMATION

44 Shareholder information

FINANCIAL STATEMENTS

48 Statement of comprehensive income

49 Statement of financial position

50 Statement of changes in equity

51 Statement of cash flows

52 Notes

71 Signatures

AUDITOR’S REPORT

72 Report on the annual accounts

74 Report on other legal and regulatory requirements

CORPORATE GOVERNANCE

77 Corporate governance report

82 The auditors’ examination of the corporate

governance report

84 Board of directors, senior executives and auditors

89 Annual general meeting and financial calendar

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ANNUAL REPORT 2021

A requirement for tumor growth is that the tumor is not detected by the immune system. For such immunologically “cold” tumors, immunotherapy has

become established as first-line treatment which converts the tumor into a “hot” tumor, i.e., a tumor that is attacked by immune cells. In cases where

immunotherapy is insufficient for killing or reducing the tumor, chemotherapy or targeted agents are administered. All these treatments are counteracted

by various resistance mechanisms, for example by recruitment of immune suppressive cells (so-called MDSC), or release of interleukin-1 alpha. IL1RAP

plays a central role in these resistance mechanisms, making it an attractive therapeutic target.

Cantargia’s research and development were born out of

an important discovery at Lund University where research

on leukemic stem cells showed that the IL1RAP molecule

is present on the cell surface of immature cancer cells.

Further research demonstrated that this molecule is also

found on cancer cells from a large number of tumor types.

Modern drug development is based on identifying unique

targets against which pharmaceutical substances can be

directed, and in this research, IL1RAP has proved to be

a highly interesting target. Cantargia’s most advanced

program, the IL1RAP-targeting antibody nadunolimab

(CAN04), is unique as it has a dual mechanism of action

which involves killing of cancer cells and blocking signals

which contribute to tumor development and growth.

The clinical development of nadunolimab has initially fo-

cused on non-small cell lung cancer and pancreatic cancer.

Lung cancer is the form of cancer that causes the largest

number of deaths and non-small cell lung cancer is the

most common form of the disease. Pancreatic cancer is

very difficult to treat, and few effective therapies have so

far been developed. The development of nadunolimab has

more recently been broadened to also include additional

forms of cancer, including triple-negative breast cancer.

Targeted antibody-based treatments such as nadunolimab

increase the odds of achieving an effective treatment with

fewer side effects for patients. Cantargia’s objective with

nadunolimab is to develop a new drug which, individually

or in combination with other therapies, can become an

important part of cancer treatment in the future. Naduno-

limab is particularly suitable for this as IL1RAP is involved

in several resistance mechanisms against established

treatments of cancer.

In parallel with nadunolimab, Cantargia is developing other

IL1RAP-targeting antibodies outside the field of cancer.

One such project is CAN10 where the initial focus is on

two severe autoimmune and inflammatory diseases:

systemic sclerosis and myocarditis. Cantargia’s goal is to

initiate the first clinical trial with CAN10 in early 2023.

Cantargia at a glance

Cantargia is a Swedish biotech company that develops antibody-based treatments for cancer and other

life-threatening diseases, and operates in the borderland between immunotherapy and targeted therapies.

Owing to significant research advances in recent years, these have become established as new comple-

mentary treatments for cancer in addition to surgery, radiation and chemotherapy. The research in this

area is intense and many new treatment options will likely be made available in the coming years.

INTRODUCTION

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ANNUAL REPORT 2021

WE CONTRIBUTE TO THE DEVELOPMENT OF SAFER

AND MORE EFFECTIVE TREATMENTS FOR LIFE-THREAT-

ENING DISEASES

Vision, business model

and strategy

Cantargia’s vision is to develop a new generation of antibody-based treatments

aimed at IL1RAP, with the potential to become an important part of future treat-

ments for life-threatening diseases with better efficacy and safety.

Cantargia’s business model and scientific strategy are based on partnerships and

Cantargia has established agreements with several companies, hospitals, and ac-

ademic research groups. Currently, around 50 international and local players are

involved with research and development related to Cantargia’s most advanced pro-

gram, nadunolimab. In a similar fashion, Cantargia is establishing partnerships in

the CAN10 project.

Cantargia’s strategy is based on advancing the development of each drug can-

didate in-house until the stage where a development or commercialization

agreement is reached.

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ANNUAL REPORT 2021

In 2020, Cantargia raised new funds in two financing rounds that enabled the company to build long-term

value in its project portfolio. For this reason, Cantargia has been able to advance the development of nadu-

nolimab in the main indications while simultaneously broadening its development activities to cover other

disease areas. For CAN10, the funding allowed for taking the final steps leading up to the start of clinical

studies. Despite the global challenges resulting from the COVID pandemic, Cantargia reached many mile-

stones in 2021 with continued strong results.

•

Positive results in pancreatic cancer and

non‑small cell lung cancer

In 2021, great progress was made in Cantargia’s

most advanced program nadunolimab. In September,

positive data in pancreatic cancer and non-small cell

lung cancer from the CANFOUR trial were presented at

the major ESMO congress. Although these are early re-

sults, they indicated that nadunolimab combined with

chemotherapy has good safety as well as higher effi-

cacy than would be expected with chemotherapy alone.

In June 2022, Cantargia will present updated data from

CANFOUR at two poster discussions at ASCO, one of

the world’s largest cancer research conferences.

In pancreatic cancer, Cantargia initiated a collabo-

ration with the United States organization PanCAN

in early 2022 where nadunolimab will be included

in PanCAN’s ongoing phase II/III clinical trial Preci-

sion Promise

, a potentially registrational trial.

Nadunolimab also received orphan drug status for

treatment of pancreatic cancer in the United States

and Europe. For non-small cell lung cancer, which is

a more segmented market, the decision was taken

to focus further clinical development mainly on the

non-squamous subtype where initial results indi-

cated a strong effect. The CANFOUR and CIRIFOUR

trials were therefore expanded to include additional

patients with this subtype of lung cancer. Meanwhile,

preparations began for a randomized study in this

patient group, expected to start in early 2023.

•

Broadening of clinical development to

include new forms of cancer and combi‑

nation therapies

During the year, Cantargia broadened the clini-

cal development of nadunolimab with the start of

the CAPAFOUR, CESTAFOUR and TRIFOUR trials.

These trials and the CIRIFOUR trial were designed

to evaluate safety and preliminary efficacy in addi-

tional forms of cancer or combination therapies and

will allow for opportunities in seven segments not

covered by CANFOUR. The first results are expected

in 2022, which will enable Cantargia to prioritize

among these segments.

•

Preclinical results provide support for na‑

dunolimab’s unique mechanism of action

New results were presented that provided further

support for nadunolimab’s unique mechanism of ac-

tion. In a preclinical tumor model, nadunolimab, which

blocks both the alpha and beta form of the signalling

molecule interleukin-1, was shown to potentiate the

effect of the chemotherapy docetaxel. This was not

achieved with an antibody that only blocks interleukin-1

beta. The results also showed that docetaxel increases

the release of interleukin-1 alpha by tumor cells, which

may underlie the synergistic effect between nadunolimab

and chemotherapy.

•

CAN10 advancing towards clinical trial

Cantargia’s second project, CAN10, also advanced in

2021. At the AAI IMMUNOLOGY 2021 conference,

efficacy data for CAN10 in a disease model of myo-

carditis were presented. In early 2022, further results

were presented at the 7th Systemic Sclerosis World

Congress which showed that CAN10 reduces disease

progression in a model of systemic sclerosis and normal-

izes levels of several biomarkers that are also affected in

patients with this disease. Progress was also reported

for the manufacturing development of CAN10 along with

good safety in initial toxicity studies. The first clinical trial

with CAN10 is scheduled to start in early 2023.

– A summary of the year and

coming steps

INTRODUCTION

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ANNUAL REPORT 2021

•

Oppositions against Cantargia’s strong

patent protection

Cantargia has a broad patent protection for IL1RAP-

binding antibodies and their use in the treatment and

diagnosis of cancer. Globally, Cantargia’s patent portfo-

lio consists of over one hundred granted patents in key

commercial territories. Parts of the company’s strong

patent protection have been challenged by competitors.

During the year, an opposition initiated in 2019 against

one of Cantargia’s European patents for the treatment

of solid tumors, was rejected by the European Patent

Office and Cantargia’s patent remained unchanged. This

decision was appealed by the opponent in early 2022. In

addition, new oppositions were submitted against an-

other European patent owned by Cantargia, which pro-

vides broad protection against anti-IL1RAP antibodies

with similar functional properties as nadunolimab.

•

Management team and Board

strengthened

Since its inception, Cantargia has advanced from

early research phase towards registrational drug

studies. As a consequence, changes have been made

to the company’s management team and Board of

Directors. In 2021, the Board was strengthened

when Magnus Nilsson and Damian Marron, both

with extensive industry experience, were elected

as new Directors at the Annual General Meeting.

Nedjad Losic was recruited as VP Biometrics with

responsibility for statistics and data management.

In 2022, Cantargia’s expertise on the medical side

was also strengthened when Dr. Roger Belusa was

appointed as interim CMO while the former CMO, Dr.

Ignacio Garcia-Ribas, took on a new role focusing on

ongoing clinical studies.

INTRODUCTION

”Despite the global challen-

ges resulting from the COVID

pandemic, Cantargia reached

many milestones in 2021 with

continued strong results.”

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ANNUAL REPORT 2021

The past year was marked by many successes in our projects. We presented new clinical data that

added further weight to the potential of nadunolimab in the treatment of both pancreatic cancer

and lung cancer. These results have formed the basis of a very important collaboration with the

US-based Pancreatic Cancer Action Network (PanCAN) as nadunolimab was selected to be

included in PanCAN’s ongoing clinical phase II/III trial Precision Promise

Chief executive’s review

As planned, we also broadened the development of nadu-

nolimab to cover additional forms of cancer in order to ful-

ly exploit its potential and reduce risk during development.

The CAN10 project has shown strong preclinical results in

various disease models, as well as very favorable safe-

ty in initial toxicity studies. From a broader perspective,

2021 continued to be overshadowed by the pandemic and

uncertain market outlook. However, this had a relatively

limited impact on Cantargia, including somewhat reduced

patient recruitment rate and delays in parts of the CAN10

project. In this situation, the two capital raisings complet-

ed in 2020 have given Cantargia both security and room

for manoeuvre. This financial strength has enabled us to

take bold, long-term action. Despite the challenging envi-

ronment, we made significant progress in 2021.

Great progress was made in our most advanced program,

nadunolimab, and new results were presented in the

spring and at the major ESMO congress in the autumn.

Over the last few years, we have generated results which

suggest that nadunolimab may potentiate and prolong

the effect of cancer treatment by chemotherapy. We are

seeing such signals in the treatment of patients with

pancreatic cancer as well as non-small cell lung cancer,

and we have been able to map the mechanisms behind

these results in preclinical cancer models. Taken together,

these results have encouraged us to continue the devel-

opment of nadunolimab in two dimensions. Firstly, we

are continuing our development activities in pancreatic

cancer and lung cancer towards randomized and poten-

tially registrational studies. Secondly, we have started to

broaden our development activities to cover additional

combination therapies and forms of cancer. The objective

is to obtain more information on which combinations and

diseases provide the best opportunities. We expect that

these studies will generate many new and hopefully ex-

citing results in both 2022 and 2023. The largest effort

in the broadening of our development activities is done in

collaboration with the Spanish Breast Cancer Group, GEI-

CAM, in the TRIFOUR trial, which also includes a control

group receiving standard treatment without nadunolimab.

In our clinical development of nadunolimab, we now have

ten separate tracks, and we are strategically employing

various processes for selecting the most promising options

as more data is generated.

To advance our development activities in pancreatic cancer,

we are preparing the start of a treatment arm with naduno-

limab in Precision Promise

, an extensive phase II/III trial

where several different treatments are evaluated in paral-

lel. This study will be administered and funded in part by

PanCAN with the aim to develop new effective treatments

for pancreatic cancer. The decision by PanCAN to include

nadunolimab is very rewarding for Cantargia and clearly

shows that there is interest in our results. We are currently

engaged in activities to complete the clinical study pro-

tocol and are conducting discussions with the regulatory

authorities to obtain approval for patient treatment in the

trial. Our development activities in pancreatic cancer have

advanced quickly and efficiently. At the time of writing, we

have treated more than 70 patients with nadunolimab and

chemotherapy and will present new results at the ASCO

Annual Meeting in the second quarter. In 2021, naduno-

limab also received orphan drug status for the treatment

of pancreatic cancer in both the United States and Europe.

This will benefit our development activities in several

ways, notably in the form of tax breaks, reduced fees, and

seven and ten years of market exclusivity in the United

States and Europe, respectively. It will also simplify our

contacts and discussions with the regulatory authorities

during the process.

The lung cancer field is very interesting, partly because

of the great market potential and partly because we have

presented early but promising data. However, competition

in this field is fierce and the market is becoming increas-

ingly segmented. It is therefore encouraging that we have

detected early signals of a strong effect in one of these

segments, the non-squamous subtype of non-small cell

lung cancer, which is the most common form of this type of

cancer. We intend to continue recruiting patients with this

form of lung cancer in the CANFOUR trial in order to obtain

robust data before proceeding to a controlled study. We

are also evaluating combination with the immunotherapy

Keytruda® (pembrolizumab) in the CIRIFOUR trial and with

the chemotherapy drug docetaxel in the CESTAFOUR trial.

INTRODUCTION

CANTARGIA AB (PUBL) 556791-6019

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ANNUAL REPORT 2021

”Cantargia has developed tremendously since its IPO

in 2015. We have gone from being a company with

limited cash and an antibody in research phase to

a stage where, based on positive results in clinical

studies, we are completing the final preparations for

our first pivotal trial.”

Göran Forsberg

INTRODUCTION

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ANNUAL REPORT 2021

For these studies, the data generated is not yet mature,

but as the studies are still ongoing there will be many

opportunities to present updated results both this and

the following year. Updated results will be presented for

the non-small cell lung cancer patients in the CANFOUR

trial, as well as for the patients in the first stage of the

CIRIFOUR trial, at the ASCO Annual Meeting in the second

quarter. As we obtain more data in the different groups,

we will decide on possible expansions.

Nadunolimab has a broad and unique mechanism of ac-

tion that is made possible by the fact that the antibody is

directed against IL1RAP. As a result of this, nadunolimab

blocks both forms of interleukin-1, alpha and beta, which

is a key advantage over many competitors who have

designed their products to block only one of these. Al-

though there are scenarios where it may be sufficient to

block only one form of interleukin-1, our data unambigu-

ously show that blocking both the alpha and beta forms

in combination with standard chemotherapy drugs in the

treatment of cancer has great benefits. This is because

chemotherapy increases the release of both forms of

interleukin-1 in the tumor, which reduces the effective-

ness of the therapy. The results of our own early clinical

studies show precisely that nadunolimab in combination

with chemotherapy provides a more effective treatment

of the tumor than would be expected with chemotherapy

alone. Results reported by Novartis from two phase III

clinical trials in 2021 lend further weight to our hypoth-

esis on the importance of blocking both forms of inter-

leukin-1. These studies assessed an antibody against the

beta form of interleukin-1 combined with chemotherapy

in the treatment of lung cancer and neither of the two

studies achieved their goals. This is in line with our own

preclinical data and provides further support for the sig-

nificance of blocking both forms of interleukin-1.

Our second project, CAN10, has great potential in sev-

eral autoimmune and inflammatory diseases. We have

initially chosen to develop CAN10 for two diseases with

a great medical need – myocarditis and systemic scle-

rosis. For both of these, we have shown strong efficacy

data in preclinical models, and currently, a GLP toxicity

study remains to be completed before we can apply for

authorization to start studies in humans. The COVID pan-

demic and demand for new drugs and vaccines against

the disease have led to a shortage of raw materials for

production of drugs, as well as insufficient global capac-

ity for toxicity studies. This has forced us to adjust our

timelines, but in the meantime, we have made additional

preclinical advances that will enable the clinical studies to

start based on stronger supportive results.

Cantargia’s patents came under the spotlight in 2021 as

several competitors filed oppositions against some of

our European patents. Cantargia has patent protection

for nadunolimab, as well as broader protection for IL-

1RAP as a target for the treatment of leukemias and sol-

id tumors. However, it is not Cantargia’s vital patents for

nadunolimab that are being challenged; the oppositions

instead concern the broader patents related to IL1RAP-

targeting antibodies that create obstacles for competi-

tors to develop their own substances. To date, all rulings

on oppositions have been in Cantargia’s favor, which is

in line with our view that the oppositions have no basis.

Although Cantargia is primarily associated with naduno-

limab, there are tremendous commercial opportunities in

many different diseases in the platform that we have es-

tablished, not only in the field of cancer but in many other

inflammatory disease areas. There are great opportuni-

ties in, for example, autoimmunity and cardiovascular

and neurological diseases. In our CANxx project, we have

created a foundation for gradually entering new areas.

The possibilities include new antibodies with properties

that differ from nadunolimab and CAN10 and that are de-

signed for the treatment of other diseases. There are also

opportunities to develop our antibodies as “antibody drug

conjugates”, or bispecific antibodies. The point is that we

can be opportunistic, identify new possibilities and tailor

new treatment concepts. It is clear that other companies

have realized the potential of these commercial oppor-

tunities, which is one of the reasons for the oppositions

against our patents. But it is equally obvious that after

many years of research and development, Cantargia is

the frontrunner and the world-leading IL1RAP company.

In conclusion, I would like to say that I am very pleased

with how Cantargia is continuously evolving, even though

the past year has had its challenges. None of these, how-

ever, were related to Cantargia’s performance, but were

due to changes in our operating environment caused by

the pandemic or the actions of our competitors. Cantargia

has developed tremendously since its IPO in 2015. We have

gone from being a company with limited cash and an an-

tibody in research phase to a stage where, based on posi-

tive results in clinical studies, we are completing the final

preparations for our first pivotal trial that will be conducted

in collaboration with PanCAN, a renowned US organization.

We are well-financed and have many interesting mile-

stones ahead of us. I would like to thank everyone who

has been involved and helped make this journey possible.

Hopefully the best is still yet to come.

Göran Forsberg

Lund, April 2022

INTRODUCTION

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ANNUAL REPORT 2021

Cantargia advances the clinical

development of nadunolimab in

pancreatic cancer

PanCAN is a US-based organization that funds research,

provides patient and caregiver support, conducts commu-

nity outreach and advocates for increased federal research

funding for those affected by pancreatic cancer. PanCAN

was founded in 1999 by a group of pancreatic cancer

survivors and caregivers. As part of its current mission,

PanCAN funds grants for biomedical research in order to

better understand the causes of pancreatic cancer and to

advance its prevention, detection, treatment and cure. In

2021, PanCAN invested 28 million USD into different R&D

projects and has invested 149 million USD in total in clini-

cal research since 2003. PanCAN also has a Scientific and

Medical Advisory Board that provides scientific and clinical

expertise to guide PanCAN in planning and implement-

ing research initiatives. The board is composed of leading

cancer scientists, clinicians, and healthcare professionals

Cantargia has evaluated multiple opportunities for advancing the clinical development of nadu-

nolimab in pancreatic cancer. At the start of 2022, it was decided that nadunolimab would take

part in the adaptive clinical phase II/III trial Precision Promise

, conducted by the Pancreatic

Cancer Action Network (PanCAN).

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ANNUAL REPORT 2021

from institutions across the United States who specialize

in pancreatic cancer. In addition to receiving financial sup-

port for their research projects, grantees participate in the

organization’s Community for Progress, which consists of

researchers working together to accelerate scientific and

medical advances.

Launched in 2019, the Precision Promise

adaptive clini-

cal trial platform aims to accelerate pancreatic cancer drug

development, de-risk industry participation and increase

clinical trial enrollment for pancreatic cancer patients.

This patient-centric study represents a fundamental shift

in drug development for pancreatic cancer in the United

States and aims to become the largest phase II/III registra-

tional trial ever launched in this disease. The trial contains

an adaptive design intended for the parallel evaluation of

multiple new treatments for pancreatic cancer. Precision

Promise

currently evaluates pamrevlumab, an antibody

inhibiting the activity of connective tissue growth factor,

in combination with chemotherapy.

The trial is currently being conducted in the United States at

15 leading clinical centers, including Dana-Farber/Harvard

Cancer Center, Johns Hopkins Medicine, Weill Cornell Medi-

cine, Perelman School of Medicine, University of Pennsyl-

vania, UC San Francisco Helen Diller Family Comprehensive

Cancer Center, and The University of Texas MD Anderson

Cancer Center.

The Precision Promise

trial utilizes adaptive randomiza-

tion along with several trial design and Bayesian statistical

innovations. With the adaptive design, only 175 patients

per experimental arm are required to initiate a regulatory

registration, altogether resulting in both time saving and a

30-50 per cent cost saving compared to traditional study

designs. The statistical design of Precision Promise

was

led by renowned statistician Dr. Donald Berry, who de-

signed the I-SPY breast cancer trials and has published

over 400 peer-reviewed scientific articles.

In the trial, patients will be randomized to receive experi-

mental therapy of nadunolimab combined with gemcitabine

and nab-paclitaxel, or a standard of care chemotherapy

regime alone. Depending on the arm’s results at the time,

successful completion of a 100-patient adaptively ran-

domized first stage of the trial may be followed seamlessly

by a transition to a 75-patient fixed-randomized second

stage. All patients undergo pre- and on-treatment biopsies

with state-of-the-art genomic, transcriptomic, and im-

mune analysis, along with collection of blood samples for

research purposes throughout the study. Trial results for

the nadunolimab arm are expected to be available in 2027

or earlier.

Before treatment of patients in the nadunolimab arm is

started, additional meetings with regulatory authorities

will take place, followed by regulatory submission of a pre-

IND for this experimental arm. The pre-IND is planned to

be submitted to the US FDA in the second quarter of 2022.

Cantargia will fund the nadunolimab arm and will be re-

sponsible for supplying the drug.

INTRODUCTION

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ANNUAL REPORT 2021

Interview with PanCAN CEO

Julie M. Fleshman

What motivated PanCAN to launch the

Precision Promise

adaptive clinical trial?

Pancreatic cancer is the world’s deadliest cancer with

a five-year survival rate of just 11 per cent and, cur-

rently, there simply are not enough effective treatment

options for this disease. All pancreatic cancer treat-

ments available today have been approved through a

clinical trial, however, standard trials are slow, costly

and have had a dismal success rate over the last 20

years, making it a risky space for pharmaceutical com-

panies. PanCAN saw the opportunity to design a trial

that would help de-risk the pancreatic cancer drug de-

velopment process for industry partners. As a nonprofit

organization, we have a unique perspective that allows

us to bring together all key stakeholders – investiga-

tors, clinicians, industry, pancreatic cancer thought-

leaders, expert biostatisticians, regulatory authorities,

and patients – to help accelerate the development of

new pancreatic cancer treatment options.

Can you elaborate on the adaptive nature

of the Precision Promise

clinical trial?

PanCAN’s novel clinical trial platform is designed to en-

able the development of new treatments more efficiently

than standard pancreatic cancer trials by testing mul-

tiple experimental therapies simultaneously. The concept

makes it possible to test investigational drugs for their

effectiveness and safety in treating patients with meta-

static pancreatic cancer while requiring fewer patients to

understand if a potential new therapy is working, with the

intention to make drug development quicker and more

cost-effective. Through the adaptive nature of PanCAN’s

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As President and Chief Executive Officer for PanCAN,

Julie Fleshman has been leading the organization

since 2004 and oversees PanCAN’s fundraising for

medical research and vital resources in support of

patients and their families.

Fleshman’s commitment to fight against pancreatic

cancer began after she lost her father to the dis-

ease, only four months after his diagnosis. Under

her leadership, PanCAN has grown to a staff of over

150, and a budget of over 40 million USD. Her col-

laborative leadership style enabled the organization

to launch ground-breaking initiatives such as Pan-

CAN’s Precision Promise

trial. Fleshman holds her

JD and MBA degrees from Santa Clara University

and a BA from the University of California, Santa

Barbara, where she graduated Magna Cum Laude.

She serves on the boards of several cancer care and

research committees and organizations. She recent-

ly served as a National Cancer Research Advocate for

the National Cancer Institute. In addition, Fleshman is

the Chair of the World Pancreatic Cancer Coalition, an

international group of pancreatic cancer patient advo-

cacy groups with a mission to drive transformational

change for all those affected by the disease.

Julie M. Fleshman, CEO at PanCAN

Precision Promise

, data will be constantly monitored,

and treatment arms can be discontinued if results do not

look promising.

What made you include Cantargia’s naduno‑

limab in the Precision Promise

clinical trial?

The arm selection committee was tasked with evaluating

the preclinical and early clinical data presented by Cantargia

and recommended this arm to be included in Precision

Promise

℠based on that information. There was a particu-

lar interest to evaluate immune-based interventions such as

Cantargia’s nadunolimab.

What are the critical milestones of the trial?

Critical milestones for bringing the Cantargia arm into

the trial include finalizing the appendix and submitting it

to the FDA for review and approval. Once approval is re-

ceived, we will begin activating the investigational arm at

our consortium sites across the United States. As Precision

Promise

℠is a registrational trial, the primary endpoint of

this phase II/III trial is overall survival.

You are collaborating with some of the

most premier cancer treatment institutions

across the US; what is the significance of

that for the trial?

We are proud to have the opportunity to work some of

the best pancreatic cancer specialists in the United States,

including medical oncologists, surgeons, clinical trialists,

translational science experts and supportive care special-

ists, among others. Our initial 15 sites cover many of the

most renowned institutions. We are in the process now

of adding 15 additional sites with a focus on diversity of

geographical regions and patient populations, including

specifically selecting locations that will help us reach un-

derserved communities.

Do you have any concerns regarding the

prospects of recruiting patients to the trial

considering the risk of a continued COVID

pandemic?

Throughout the pandemic, we have learned to adapt to new

ways of implementing clinical trials and monitoring pa-

tients. In fact, we began activating sites in 2020 at the very

start of the pandemic. We anticipate that the COVID pan-

demic will continue to impact the conduct of clinical trials,

however, we feel well-positioned to handle this challenge.

Given a positive outcome of the trial, will

PanCAN be involved in other actions con‑

nected to bringing the drug candidate to the

market after the trial is concluded?

In case of a positive outcome of an investigation arm, it is

our responsibility to provide the clinical study report and

relevant data to our biopharma partners; and it is the bio-

pharma partner’s responsibility to initiate the regulatory

process of filing for a new drug or biologics application. We

would be eager to collaborate with our biopharma partner

to make this registration successful. Ultimately, our goal is

— together with all our collaborators — to bring innovative

treatment options to patients in the shortest possible time.

INTRODUCTION

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ANNUAL REPORT 2021

Nadunolimab (CAN04)

The development of Cantargia’s first drug candidate, the IL-

1RAP-binding antibody nadunolimab, has progressed quickly

and has demonstrated promising clinical and preclinical data

in the treatment of cancer. In addition to locating cancer cells

and stimulating our natural immune system to destroy such

cells, nadunolimab also blocks signals which contribute to

tumor development and growth. In a large number of tumor

diseases, the tumor growth benefits from the so-called inter-

leukin-1 system, which contributes to an environment favor-

able to tumors. The interleukin-1 system is dependent on IL-

1RAP for transferring signals to cells and blockade of IL1RAP

by nadunolimab prevents this signaling.

In a short period of time, Cantargia has advanced naduno-

limab to the clinical phase IIa stage where the current focus

is on treatment of non-small cell lung cancer and pancreatic

cancer. Over the past year, promising interim data have been

presented from patients receiving nadunolimab in combination

with chemotherapy. These data indicate a stronger efficacy than

would be expected from chemotherapy alone.

Currently, the next steps in late-stage clinical development in

pancreatic cancer are being prepared as nadunolimab will be

included in PanCAN’s ongoing adaptive clinical phase II/III trial

Precision Promise

. At the same time, preparations are also

ongoing for a randomized study in non-squamous non-small

cell lung cancer. Cantargia has more recently also broadened

the development to include additional forms of cancer such

as triple-negative breast cancer.

CAN10

IL1RAP is also an interesting target in many diseases outside

the field of cancer. In the CAN10 project, Cantargia is develop-

ing a new IL1RAP-targeting antibody which has a unique ca-

pability of blocking signaling not only by interleukin-1, but also

interleukin-33 and interleukin-36. Blockade of all three of these

cytokines has great potential in the treatment of several auto-

immune and inflammatory diseases. The initial focus is on two

severe diseases, systemic sclerosis and myocarditis, where

CAN10 has shown very strong preclinical data.

CAN10 is currently in late-stage preclinical development and the

goal is to initiate the first clinical trial with CAN10 in early 2023.

CANxx

In the CANxx project, Cantargia is expanding its knowledge

of IL1RAP and develops new antibodies that complement

nadunolimab and CAN10. The goal is to identify new anti-

body-based IL1RAP-targeting drugs with properties that

differ from those of nadunolimab and CAN10 and are thus

specifically designed for the treatment of new diseases.

Background to Cantargia’s projects

Modern drug development is based on identifying unique targets against which pharmaceutical

substances can be directed. Cantargia’s research has shown that IL1RAP is a promising target

for treatment of cancer as well as autoimmune and inflammatory diseases.

INTRODUCTION

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ANNUAL REPORT 2021

Nadunolimab

– Cantargia’s most advanced project

The IL1RAP molecule is present on tumor cells from several forms of cancer. Antibodies targe-

ting IL1RAP, such as Cantargia’s nadunolimab, can thus potentially be used in the treatment

of several types of cancer. In 2017, the first cancer patients were treated with nadunolimab

in the phase I/IIa clinical trial CANFOUR. Since then, additional clinical trials with nadunolimab

have been initiated – CIRIFOUR, CAPAFOUR, CESTAFOUR and TRIFOUR.

INTRODUCTION

NADUNOLIMAB’S DUAL MECHANISM OF

ACTION

Nadunolimab is unique in that it has a dual mechanism

of action. Nadunolimab can effectively kill cancer cells

and block signals that promote tumor development and

growth.

In the human body, nadunolimab acts as a guided missile

that seeks out and binds its target, IL1RAP, which is pres-

ent to a high degree on cancer cells. By binding IL1RAP,

nadunolimab stimulates the body’s so-called Natural Kill-

er cells to seek out and kill the cancer cells. During devel-

opment, nadunolimab has also been optimized such that

its ability to stimulate these killer cells is further improved.

IL1RAP is found not only on cancer cells within the tu-

mor, but also on several cell types that support the tumor

growth. In this context, IL1RAP is involved in transmitting

signals from the interleukin-1 molecule that promote tu-

mor development and survival. These signals can, for ex-

ample, strengthen the tumor’s defences against various

types of immune cells that can attack and kill the tumor,

but also stimulate blood vessel formation in the tumor.

Nadunolimab blocks the signalling of the two forms of in-

terleukin-1, alpha and beta, both of which create an envi-

ronment that favors tumor development and growth.

Nadunolimab can also inhibit the development of metas-

tases. This effect is also dependent on its dual mechanism

of action: the ability of nadunolimab to activate killer cells

to kill the metastatic cancer cells and block signals that

promote the development and growth of metastases.

Nadunolimab stimulates so-called NK

cells to kill cancer cells, an effect known

as ADCC. Nadunolimab also blocks signals

which promote tumor development and

survival. This leads to, for example, reduced

blood vessel formation (angiogenesis) and

reduced infiltration of immune suppressor

cells in the tumor.

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NADUNOLIMAB SYNERGIZES WITH

CHEMOTHERAPY

Another important function of nadunolimab is its ability to

potentiate the effect of chemotherapy drugs, which are es-

tablished standard treatments in a variety of cancer types.

Cantargia has in preclinical studies been able to demon-

strate that nadunolimab has a very good antitumor efficacy

in combination with chemotherapy. When nadunolimab was

combined with platinum-based chemotherapy, an antitumor

effect was achieved that was much stronger than the effect

of the individual therapies. Preliminary clinical data point to

similar effects in cancer patients.

Previous research as well as Cantargia’s own studies have

shown that treating cancer cells with chemotherapy trig-

gers the cancer cells to release interleukin-1 alpha. This in

turn stimulates the release of interleukin-1 beta from sur-

rounding cells in the tumor. The presence of both the alpha

and beta forms of interleukin-1 in the tumor increases the

tumor’s ability to develop resistance to chemotherapy. As

nadunolimab blocks the signalling of both forms of inter-

leukin-1, it is very well-suited for combination with chemo-

therapy.

In 2021, Cantargia presented further preclinical data sup-

porting this function of nadunolimab. The data showed

that the combination of nadunolimab and the chemo-

therapy docetaxel produces a stronger antitumor effect

than docetaxel alone, or docetaxel combined with an anti-

body that blocks only interleukin-1 beta. This strengthens

the hypothesis that a broader effect on the interleukin-1

system, which is achieved when nadunolimab binds to

IL1RAP, is necessary to reduce the tumor’s resistance to

chemotherapy. Blocking only one form of interleukin-1 is

thus not sufficient to achieve this effect.

Chemotherapy triggers the release of interleukin-1 alpha in the tumor, which

in turn stimulates the release of interleukin-1 beta. The presence of both

forms of interleukin-1 contributes to the tumor’s resistance to chemotherapy.

Nadunolimab blocks signaling by both forms of interleukin-1 and can thus

break the chemoresistance of the tumor.

Cantargia’s experiments have shown a stronger antitumor

effect of nadunolimab in combination with the chemotherapy

docetaxel, compared to docetaxel in combination with an

antibody which only blocks the beta form of interleukin-1.

This highlights the advantage of nadunolimab’s capability

to block both forms of interleukin-1.

IL-1β

Pancreatic

cancer cells

CAF

Macrophage

Monocyte

Myofibroblastic

Endothelial cells

IL-1α

Chemotherapy

IL1R1

IL1RAP

IL1R1

IL1RAP

IL1R1

IL1RAP

IL1R1

IL1RAP

IL1R1

IL1RAP

IL1R1

IL1RAP

IL1R1

IL1RAP

Macrophage

Monocyte

IL1R1

IL1RAP

IL1R1

IL1RAP

IL1R1

IL1RAP

IL-1β

Bukspottkörtel-

cancerceller

CAF

Macrophage

Monocyte

Myofibroblastic

Endotelceller

IL-1α

Cellgifter

IL1R1

IL1RAP

IL1R1

IL1RAP

IL1R1

IL1RAP

IL1R1

IL1RAP

IL1R1

IL1RAP

IL1R1

IL1RAP

IL1R1

IL1RAP

Makrofag

IL1R1

IL1RAP

IL1R1

IL1RAP

IL1R1

IL1RAP

NADUNOLIMAB STANDS OUT

AMONG OTHER STRATEGIES

FOR BLOCKING THE INTER‑

LEUKIN‑1 SYSTEM

Various types of treatment based on

blockade of the interleukin-1 system are

currently being investigated in a number

of clinical studies with different types of

disease. These treatments are either de-

signed to block signalling of only interleu-

kin-1 alpha or interleukin-1 beta, or they

lack the ability to stimulate killer cells to

destroy cancer cells.

Cantargia’s nadunolimab stands out com-

pared to these treatments by being the

only that is directed against the target

IL1RAP. The major advantage of this is

that nadunolimab thereby has a broader

mechanism of action that likely contrib-

utes to a stronger antitumor effect and

synergy with chemotherapy.

INTRODUCTION

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CANFOUR

Cantargia’s first clinical trial, CANFOUR, is a phase I/IIa

trial which primarily evaluated the safety and dosage of

nadunolimab in the phase I stage. In the ongoing phase IIa

stage, the focus is on combination therapy with standard

treatments for non-small cell lung cancer and pancreatic

cancer.

The phase I results were very encouraging and showed

that nadunolimab has good safety up to 10 mg/kg and de-

creases the biomarkers IL-6 and CRP. The decrease in these

biomarkers is important for two reasons, partly as there

is a connection between elevated levels of these mark-

ers and rapid disease progression, and partly as these are

classic markers of inflammation and the decrease is a sign

that nadunolimab works as intended. The results from the

phase I part of CANFOUR were published during the year in

the peer-reviewed British Journal of Cancer.

Based on the positive results of the safety evaluation in

phase I, phase IIa was initiated in early 2019. This part,

which is still ongoing, has focused on combinations with

standard treatments for the studied diseases. Nadunolim-

ab is thus combined with the chemotherapy regimens cis-

platin and gemcitabine in first-line treatment of non-small

cell lung cancer, or with gemcitabine and nab-paclitaxel in

first-line treatment of pancreatic cancer.

Positive interim results from the phase IIa part show

clear signals of efficacy for both these combination treat-

ments as stronger effects have been observed compared

to what would be expected for chemotherapy alone. Pa-

tients with non-small cell lung cancer showed a response

of 48 per cent, resulting in a median progression-free sur-

vival of 7.2 months, which is an improvement compared to

historical control data. Moreover, an even higher response

was achieved in a group of patients with non-squamous

non-small cell lung cancer. In patients with pancreatic can-

cer, long-term responses or pseudoprogression have been

observed, resulting in a median progression-free survival of

7.2 months and a median total survival of over 12.7 months.

To date, over one hundred patients have been treated in the

phase IIa part of CANFOUR. For pancreatic cancer, patient

recruitment to an extension part has recently been com-

pleted. The results from these patients will provide a more

robust picture of the relationship between dose, efficacy

and safety and will be presented at the ASCO Annual Meet-

ing in the second quarter of 2022. Additional patients with

non-squamous non-small cell lung cancer are currently

being recruited in the CANFOUR trial, where they will be

treated with a combination of nadunolimab and the che-

motherapy drugs carboplatin and pemetrexed in the first

line of treatment. This is a first step in a focused clinical

development strategy for late-stage non-small cell lung

cancer and these patients are prioritized as they are most

likely to achieve the strongest benefit from treatment with

nadunolimab and chemotherapy.

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CIRIFOUR

In 2020, Cantargia initiated a second clinical trial, the phase

Ib trial CIRIFOUR, in which nadunolimab is combined with the

checkpoint inhibitor Keytruda® (pembrolizumab), an immu-

notherapy established as standard of care for several can-

cer forms assessed in the trial: non-small cell lung cancer,

head and neck cancer, malignant melanoma and bladder

cancer. There is a considerable body of research indicating

that treatment with nadunolimab and immunotherapy may

be synergistic.

CIRIFOUR is conducted at three clinical centers in the United

States with University of Pennsylvania being the lead center.

In the first stage of CIRIFOUR, patients treated with immu-

notherapy, but no longer responding to the treatment, re-

ceived nadunolimab as an add-on.

The patient recruitment to the first stage of CIRIFOUR has

been finalized and a total of 15 patients have started treat-

ment. The primary objective of this study is to assess the

safety of nadunolimab in combination with pembrolizumab

and to establish a recommended dose of nadunolimab in this

combination. Preliminary results show that the combination

has a very favorable safety profile. Efficacy and biomarker

data will also be presented at the ASCO Annual Meeting in

the second quarter of 2022.

Pembrolizumab is frequently utilized for first-line combina-

tion with the platinum-based chemotherapy drugs carbo-

platin and pemetrexed for treatment of non-squamous non-

small cell lung cancer. In the second stage, the CIRIFOUR trial

will therefore be expanded to include an additional arm to

study safety, biomarkers and efficacy of the combination of

nadunolimab, pembrolizumab, carboplatin and pemetrexed

in first-line non-squamous non-small cell lung cancer pa-

tients.

CAPAFOUR, CESTAFOUR AND TRIFOUR

During 2021, three new clinical trials were started with

the aim to broaden the clinical program for nadunolimab to

include additional forms of cancer or combination therapies.

One of these three studies is the phase Ib trial CAPA-

FOUR where nadunolimab is evaluated in combination

with the chemotherapy regimen FOLFIRINOX for first-

line treatment of metastatic pancreatic cancer. In the

initial part of this trial, a safety evaluation will be per-

formed in approximately 15 patients. The trial will then

be expanded at a suitable dose level in approximately 15

additional patients. The primary endpoint is safety and

important secondary endpoints include effects on bio-

markers and antitumor activity.

The phase I/II trial CESTAFOUR and the phase Ib/II trial

TRIFOUR were also started. In CESTAFOUR, naduno-

limab is investigated in combination with chemotherapy

frequently used for treatment of three forms of can-

cer: non-small cell lung cancer, biliary tract cancer and

colorectal cancer. In the initial dose escalation phase,

performed in approximately 15 patients for each indica-

tion/combination, the primary objective is to assess the

safety of nadunolimab in combination with each of the

three chemotherapy regimens. In the phase II part, the

primary objective is to assess antitumor efficacy. The

phase II part will include approximately 40 patients for

each of the three indications.

In TRIFOUR, the focus is on triple-negative breast cancer,

where nadunolimab is also evaluated in combination with

the chemotherapy drugs carboplatin and gemcitabine.

TRIFOUR will be performed in Spain in collaboration with

the Spanish Breast Cancer Group, GEICAM, and will include

over one hundred patients. If prespecified milestones are

reached in the initial open-label phase I part, the trial will be

expanded into a randomized phase II part to investigate the

antitumor activity of the nadunolimab combination, com-

pared to a control group receiving the chemotherapy alone.

The patient treatment in these trials was started dur-

ing the second half of 2021 or at the start of 2022. The

initial safety studies are expected to be completed during

the second half of 2022 at which point a first evaluation

will be performed to determine which patient groups or

combinations that show the most promising results.

INTRODUCTION

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In the CAN10 project, an antibody

blocking IL-1, IL-33 and IL-36

signaling is developed and is in-

tended for treatment of the life-

threatening disorders systemic

sclerosis and myocarditis.

In a disease model of myocarditis, CAN10 was shown to

counteract the deterioration in cardiac function. This effect

was stronger compared to an antibody which only blocks the

beta form of interleukin-1.

The CAN10 project was started in 2019 with the goal of developing an IL1RAP-targeting antibody

for the treatment of autoimmune or inflammatory disorders. CAN10 is thus being developed for

a disease segment that complements nadunolimab and will broaden Cantargia’s activities and

diversify the risks in the company’s project portfolio.

IL1RAP plays an important role in inflammatory process-

es and is necessary for transferring signals from the interleu-

kin-1 molecule as well as the interleukin-33 and interleukin-36

molecules. These molecules can trigger inflammation and play

a central role in several severe autoimmune and inflammatory

disorders. Cantargia has developed the CAN10 antibody which,

by binding to IL1RAP, can block all these signalling pathways si-

multaneously. This function provides CAN10 with great poten-

tial for the treatment of several diseases where CAN10 could

achieve a broader and stronger effect compared to treatments

aimed at the individual signalling pathways.

CAN10 is in late-stage preclinical development and the goal is to

start the first clinical trial with CAN10 in early 2023.

CAN10 – Cantargia’s project in

autoimmunity and inflammation

PROMISING PRECLINICAL DATA

After an extensive review of a large number of disor-

ders, Cantargia chose to initially focus CAN10 on sys-

temic sclerosis and myocarditis. These diseases are

severe and difficult to treat and there is a great medical

need for new treatments. In the past year, Cantargia

presented preclinical data that support the develop-

ment of CAN10 for treating these disorders.

The disease progression in myocarditis is driven by in-

flammation and subsequent fibrosis of the heart mus-

cle, which leads to impaired heart function. In a model

of myocarditis, a surrogate CAN10 antibody reduced

both inflammation and fibrosis and counteracted the

deterioration in cardiac function due to the disease.

This effect was stronger compared to other anti-in-

flammatory treatments, such as an antibody targeting

interleukin-1 beta only.

INTRODUCTION

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ANNUAL REPORT 2021

Cantargia was the first company to develop drugs target-

ing IL1RAP and has built up a knowledge and technology

platform in the area. Within CANxx, Cantargia has devel-

oped over one hundred unique antibodies that bind IL1RAP

and have different properties. CANxx enables Cantargia to

quickly develop novel antibodies with unique properties

that can be used for the treatment of different diseases.

The development of novel drugs also depends on analyses

and diagnostics, and CANxx is a valuable source of anti-

bodies also for these purposes.

CANxx is a technology platform that harnesses Cantargia’s extensive knowledge of IL1RAP as a drug

target. Within CANxx, a large antibody library has been built which can be used for development of new

drugs or for diagnostic purposes or other analyses. CANxx is a source of new antibodies and consoli-

dates Cantargia’s strong position for the future.

CANxx – Cantargia’s IL1RAP-

based platform

In a disease model of systemic sclerosis, CAN10 was shown to reduce skin thickening as well as the uncontrolled

scar tissue formation, so-called fibrosis, in the lungs. These are both typical symptoms for this disease.

Systemic sclerosis is a severe disorder that leads to fibrosis of

the skin and internal organs. CAN10 has also shown strong

effects in a model of systemic sclerosis that clearly mimics

the disease symptoms, where the surrogate CAN10 anti-

body reduced both skin and lung fibrosis. Further analyses

of the skin also showed that CAN10 normalized the levels

of several disease-related biomarkers that are altered in

skin biopsies from patients with systemic sclerosis. This

indicates that blocking IL1RAP with CAN10 may lead to

similar effects in the treatment of patients suffering from

this disease.

PREPARATION OF CAN10 FOR CLINICAL TRIALS

In the next step in the development of CAN10, Cantargia

will perform GLP toxicology studies, which are a key ele-

ment in the process leading to the start of clinical trials.

Initial non-GLP toxicology and pharmacokinetics studies

have not shown any toxicologically relevant changes for

either intravenous or subcutaneous dosing of CAN10. The

favorable safety profile of CAN10 has been confirmed also

for repeated intravenous dosing. Moreover, subcutane-

ously dosed CAN10 has high bioavailability and a desir-

able pharmacological half-life. Cantargia’s plan is to start

the first clinical trial with CAN10 in early 2023.

INTRODUCTION

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ANNUAL REPORT 2021

Summary of the clinical

progress in 2021

The development of nadunolimab reached several important milestones in 2021 in the form of new

results and the start of new clinical trials. The most advanced stages have been reached in pancreatic

cancer and non-small cell lung cancer, where the focus is on combination treatments.

For pancreatic cancer, Cantargia presented new results

during the year for the 33 patients treated in the first part

of the CANFOUR trial. Patients received a combination of

nadunolimab and the chemotherapy drugs gemcitabine

and nab-paclitaxel. The results are promising, in particu-

lar the median survival of 12.7 months, which is approxi-

mately three months longer than would be expected with

chemotherapy alone. In 2021, an additional 40 patients

were included in the trial. The recruitment of these patients

was quickly completed despite the ongoing pandemic, in-

dicating that there is great interest in participating in the

trial. Based on the results presented so far, Cantargia es-

tablished contact with PanCAN, an organization that sup-

ports the development of novel drugs for pancreatic cancer

in collaboration with leading hospitals in the United States.

As a result of these contacts, nadunolimab will be included

in PanCAN’s phase II/III clinical trial Precision Promise

and patient treatment will be initiated as soon as the on-

going administrative and regulatory activities have been

completed.

Alongside new data in pancreatic cancer, Cantargia also

presented new clinical results in the treatment of lung can-

cer with nadunolimab in combination with the chemother-

apy drugs gemcitabine and cisplatin. Although the results

are not yet as mature as for pancreatic cancer, they show

positive signs, for example a response rate of 48 per cent,

which is higher than would be expected for chemotherapy

alone. Further patients are currently being recruited to the

CANFOUR trial, which in 2021 was focused towards non-

squamous non-small cell lung cancer, where the most

pronounced effects had been observed.

In other clinical studies, important milestones were

reached in the form of study start or patient recruitment.

These milestones were reached largely in accordance with

the timelines defined at the beginning of the year. The first

part of the CIRIFOUR trial, which evaluates nadunolimab

in combination with the immunotherapy pembrolizumab,

was fully recruited and preliminary results show a very

good safety profile for the combination. The next part of

CIRIFOUR will therefore assess the addition of chemother-

apy to this combination. The new trials CAPAFOUR, CES-

TAFOUR and TRIFOUR received approval to start and the

first patients were enrolled in 2021, and in early 2022 in

the case of TRIFOUR.

In the next step, updated results will be presented for both

the pancreatic cancer and non-small cell lung cancer pa-

tients in the CANFOUR trial, as well as for the patients in the

first stage of the CIRIFOUR trial. This update will take place

at ASCO, one of the world’s largest cancer research confe-

rences, in the second quarter of 2022.

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Clinical strategy

In addition to the launch of Precision Promise

together with PanCAN, Cantargia

intends to initiate a randomized study in non-small cell lung cancer in early 2023.

The design of this study will be based on the results obtained from the CANFOUR

trial for this patient group. The goal for Cantargia is thus to advance its development

activities in both disease areas to later stages of the drug development process.

The objective of the studies that are still in earlier stages is to obtain initial

results in additional cancers such as triple-negative breast cancer, biliary tract

cancer, colorectal cancer and head and neck cancer, as well as with additional

combination therapies. The purpose is to detect signals that identify cancer

types and combination therapies where the potential for nadunolimab to

achieve a strong synergistic effect is most likely. Cantargia will then be able

to prioritize among its various activities and focus on areas with the highest

probability of obtaining marketing authorization.

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Patent protection

PATENT FAMILY

PATENT APPLICATION APPROVED PATENTS VALIDITY

Leukemias (Treatment) Europe, US Europe (France, Germany, UK), US 2029

Hematological cancers (Treat-

ment/Diagnosis)

Australia, Canada, China, Europe,

Israel, Japan, Mexico, South Africa, US

Australia, Canada, China, Europe (France,

Germany, Great Britain, Italy, Netherlands,

Spain, Switzerland), Israel, Japan, Mexico,

South Africa, US

2030

Solid tumors (Treatment/Diag-

nosis)

Australia, Brazil, Canada, China,

Europe, Japan, Mexico, Russia, South

Korea, US

Australia, Canada, China, Europe (Austria,

Belgium, Czech Republic, Denmark, Finland,

France, Germany, Great Britain, Ireland, Italy,

Netherlands, Norway, Poland, Spain, Sweden,

Switzerland), Japan, Mexico, Russia, South

Korea, US

2032

CAN04 (Product) Australia, Brazil, Canada, China,

Europe, India, Israel, Japan, Mexico,

Russia, Singapore, South Africa, South

Korea, US

Australia, China, Europe (Austria, Belgium,

Czech Republic, Denmark, Estonia, France,

Germany, Great Britain, Ireland, Italy, Latvia,

Lithuania, Netherlands, Poland, Portugal,

Spain, Sweden, Switzerland, Turkey), Israel,

Japan, Mexico, Russia, Singapore, South

Africa, US

2035

CAN03 (Product) China, Europe, Japan, US China, Japan, US 2035

Anti-IL1RAP antibodies (Product) Australia, Canada, China, Europe,

India, Japan, US

Japan, US 2037

Biepitopic antibody (Product) China, Europe, Japan, US 2039

CAN10 (Product) PCT, US 2041

TWO LAYERS OF PROTECTION

Cantargia’s patent protection can be divided into two

layers. The first layer consists of patents whose primary

purpose is to protect Cantargia’s drug candidates, nadu-

nolimab and CAN10. The second layer consists of patents

which mainly serve to extend Cantargia’s protection to an-

ti-IL1RAP antibodies with broader functional or structural

properties, or for the treatment or diagnosis of a particular

type of disease. One purpose of this second layer of pro-

tection is to limit the ability of potential competitors to

develop drug candidates targeting IL1RAP.

Oppositions against two patents included in the second

protective layer have been filed by several competitors.

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ANNUAL REPORT 2021

OPPOSITIONS AGAINST TWO OF

CANTARGIA’S PATENTS

In 2019, a third party, MAB Discovery, filed an opposition

against one of Cantargia’s European patents that grants

Cantargia broad protection for anti-IL1RAP antibodies for

the treatment of solid tumors. In September, oral proceed-

ings were held at the European Patent Office, where the

Opposition Division confirmed the validity of this patent and

rejected the opposition. This means that Cantargia’s pat-

ent remained completely unchanged. In early 2022, MAB

Discovery filed an appeal against this decision and will in

the next step submit grounds for its appeal.

In November 2021, oppositions from three different com-

petitors were filed against another European patent owned

by Cantargia. This patent grants Cantargia broad protection

for anti-IL1RAP antibodies with similar functional properties

as nadunolimab. However, the product patent for naduno-

limab is not affected. This opposition process is expected to

be completed within one to two years.

Nadunolimab + Docetaxel

Anti-IL-1beta + Docetaxel

Nadunolimab

LEUKEMIAS

SOLID TUMORS

CAN04

HEMATOLOGICAL

CANCERS

Patent family

Parent patent

Patent based on div or

cont application

Opposed patent

Pending patent application

EP US CN EP JP US CN EP JP US CN EP JP US

Part of Cantargia’s patent portfolio.

INTRODUCTION

MARKET OVERVIEW

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Cancer – A global challenge

Cancer is one of the most common causes of death in the

world, accounting for around 20 per cent of deaths in the

West. Globally, more than 19 million people are diagnosed

with cancer each year and nearly 10 million lose their lives

due to cancer-related diseases

. Despite significant advances

in treatment and diagnosis, there is a great need for new

treatment methods.

There are around 200 known types of cancer, all of which

have in common that cells, somewhere in the human body,

start to divide and grow uncontrollably. Research indicates

that two independent events are required for a cancer to de-

velop: normal cells are damaged, which results in rapid and

uncontrolled cell growth; and cells are located in an inflam-

matory microenvironment, which acts as a breeding ground

and provides protection from attacks from the body’s own

immune system. The chart above shows the distribution of

cancer incidence and cancer mortality in the world by type

of cancer and major region in 2020.

The number of cancer cases is set to increase continuously,

and the forecast by WHO is that, by 2040, over 27.5 million

new cases will be diagnosed annually

. Another significant

factor behind the growing incidence of cancer is the aging

of the population. By 2040, people over 65 are expected to

account for more than 75 per cent of all people diagnosed

with cancer

. A further contributing factor is our Western

lifestyle as smoking, alcohol consumption, unhealthy diets,

low physical activity, overweight, obesity and unhealthy sun

habits become more widespread.

Globocan 2020

Macmillan Statistics Fact Sheet, Macmillan Cancer Support, 2019

49%

23%

13%

58%

20%

Asia

Europe

North America

Latin America & the Caribbean

Africa

Oceania

Incidence

Mortality

Source: WHO Global Cancer

Observatory 2020

MARKET OVERVIEW

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MARKET OVERVIEW

Iqvia Institute, Global Oncology Trends 2021, Outlook to 2025

RTTNews, Top 10 Blockbuster Drugs In 2021

Iqvia Institute, Global Oncology Trends 2021, Outlook to 2025

As more people are diagnosed with cancer and as additional

new drugs are approved, the total spending on cancer drugs

has risen sharply, reaching USD 184 billion by 2021

. An im-

portant factor behind the rising costs is that more innovative,

and thus costly, treatments are becoming available in combi-

nation with more patients having access to these. In addition,

there is a strong focus on early diagnosing and thus treating

patients at earlier stages. Half of the ten best-selling drugs

globally in 2021 were drugs for cancer treatment, accounting

for about half of the total turnover for the ten best-selling

pharmaceuticals

The cost of cancer drugs 2017 ‑ 2025

100

150

200

250

2017 2021 2025

USD 109

USD 184

USD 269

40-44

12-16

26-30

30-34

95-105

300

EU5 (France, Germany, Italy,

Spain, UK). Pharmerging

(China, Brazil, India, Russia,

Poland, Argentina, Turkey,

Mexico, Venezuela, Romania,

Saudi Arabia, Colombia,

Vietnam, South Africa, Algeria,

Thailand, Indonesia, Egypt,

Pakistan, Nigeria, Ukraine).

USA

EU5

Japan

Pharmerging

The rest of the world

Source: Iqvia Institute, Global Oncology Trends 2021

Billions of USD

As the number of cancer cases is expected to increase sharp-

ly, the market is also forecast to grow rapidly. In addition to

the increase in the number of cancer cases, the approval of

additional immunotherapies also contributes to this growth.

In the coming years, over one hundred new cancer drugs are

expected to become approved

. It is also estimated that the

development of focused precision drugs and biomarker-driv-

en treatments will accelerate.

Globally, the cost of cancer drugs is expected to increase to

approximately USD 270 billion by 2025, corresponding to

an annual growth rate of approximately 10 percent

. This

growth rate is assessed to be slightly lower than previously

estimated as additional biosimilars, i.e., generics of biological

drugs, will be approved.

Pancreatic cancer

Lung cancer

2000

2008

1995

2003

2011

1993

2001

2009

1997

2005

2013

1994

2002

2010

1998

2006

2014

1996

2004

2012

1999

2007

2015

2016

2017

2018

Breast cancer

100

120

140

Source: SEER Cancer

Statistics Review

Number of new cancer cases in the US per 100,000 inhabitants

CANTARGIA AB (PUBL) 556791-6019

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ANNUAL REPORT 2021

American Cancer Society

Globocan 2020

American Cancer Society, Cancer Facts & Figures 2021

Reportlinker.com, Pancreatic Cancer Treatment Market Research Report - Global Forecast to 2026

Globocan 2020

CANTARGIA’S MARKET FOCUS

Cantargia has initially focused its development of naduno-

limab on non-small cell lung cancer and pancreatic cancer.

Pancreatic cancer is very difficult to treat and few effective

treatments have been developed to date. Lung cancer is the

form of cancer that causes the largest number of deaths and

non-small cell lung cancer is the most common form of the

disease. For the further clinical development of nadunolim-

ab in non-small cell lung cancer, Cantargia will focus on the

non-squamous subgroup, the largest subgroup of non-small

cell lung cancer.

As IL1RAP, the target molecule of nadunolimab, is found on

multiple different solid tumors, there is potential to utilize

Cantargia’s immuno-oncology platform for treatment of

several additional forms of cancer. For this reason, the clini-

cal program for nadunolimab has recently been broadened

with studies in additional forms of cancer, and five clinical

trials with nadunolimab are currently conducted in multiple

indications.

The TRIFOUR study focuses on triple-negative breast cancer,

a disease that is aggressive and difficult-to-treat. This type of

breast cancer constitutes approximately 10-15 percent

of all

breast cancer cases, and the medical needs are high unless

patients are diagnosed at an early stage of the disease devel-

opment at which point cure may still be achieved by surgery

In Cantargia’s CIRIFOUR trial, which evaluates combination

with a checkpoint inhibitor, the first part of the study assessed

lung cancer, head and neck cancer, malignant melanoma, and

bladder cancer. These cancers all express IL1RAP and immu-

notherapy is today part of the standard treatment for these

diseases. Head and neck cancer is the sixth most common

type of cancer globally and is increasing as a consequence of

tobacco and alcohol use. For melanoma, the deadliest form of

skin cancer, annual cases have increased by almost 50 percent

over the past decade to about 325,000 cases by 2020

. Blad-

der cancer is the sixth most common form of cancer in men

and increases by just over 2 percent annually.

The broadening to additional forms of cancer is also achieved

with Cantargia’s CESTAFOUR trial which evaluates treat-

ment with nadunolimab also in patients with biliary tract

cancer or colon cancer. Biliary tract cancer is a minor indica-

tion with few treatment options, while colon cancer is the

third most common form of cancer globally and the second

most deadly.

Cantargia and its founders have also studied leukemia and

shown that IL1RAP is expressed both on leukemic stem cells

and on mature cancer cells.

In parallel with nadunolimab, Cantargia is also developing the

project CAN10 which is aimed at harnessing the full potential

of IL1RAP as a molecular target. In CAN10, the ambition is

to develop a novel antibody for the treatment of systemic

sclerosis and myocarditis. The medical need is high for both

disorders with few approved drugs currently available.

THE MARKET FOR PANCREATIC CANCER

TREATMENT

Worldwide, approximately 495,000 new cases of pancreatic

cancer were diagnosed in 2020. In the same year, 466,000

people died from the disease

. In the United States, the

number of people diagnosed with the disease has increased

by nearly 13 per cent over the past 20 years and pancreatic

cancer is today the third most common cause of cancer-re-

lated deaths in the United States

. Considering that pancre-

atic cancer is difficult to diagnose, pancreatic cancer is also

difficult to treat, as it is often well advanced by the time it is

discovered.

Pancreatic cancer treatment was valued at approximately

USD 2.4 billion in the eight largest markets in 2021 and is

expected to grow to approximately USD 4.2 billion by 2026

This corresponds to an annual growth rate of just over 8 per-

cent during these years. The growth in this market is mainly

caused by an increasing number of cancer cases. The num-

ber of people diagnosed with pancreatic cancer is estimat-

ed to increase by 70 percent by 2040

. The increase in the

number of cases is in turn caused by an aging population

and the increasing incidence of diabetes, which are both

risk factors for developing pancreatic cancer. Improved

diagnostics are another factor that contributes to the

expected market growth as these increase the likelihood

of discovering pancreatic cancer at an earlier stage, thus

enabling treatment. Pancreatic cancer treatment is main-

ly based on chemotherapy, often less costly generic drugs.

The growth in the market for the treatment of pancreatic

cancer will also be further driven by the approval of new

drugs with novel mechanisms of action, in several treat-

ment lines, to meet the great unmet medical need.

THE MARKET FOR LUNG CANCER

TREATMENT

In 2020, around 2.3 million cases of lung cancer were diag-

nosed globally and more than 1.8 million people died as a

result of the disease

. Around 85 per cent of all lung cancers

MARKET OVERVIEW

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ANNUAL REPORT 2021

Annual global incidences

Frac�on of cancer incidence

Annual global mortali�es

Frac�on of cancer mortality

Five-year survival rate

Treatment: Surgery, Radiaon,

Chemotherapy, Immunotherapy

2.3m

12%

1.8m

18%

19%

Annual global incidences

Frac�on of cancer incidence

Annual global mortali�es

Frac�on of cancer mortality

Five-year survival rate

Treatment: Chemotherapy, Surgery,

Radiaon

0.5m

Non-Small Cell Lung Cancer Pancreatic cancer

Incidence

46%

10%

12%

11%

Mortality

40%

18%

Lung

Breast

Bowel

Prostate

Stomach

Liver

Cervix

Other

of which;

Throat 3%

Lung

Breast

Bowel

Stomach

Liver

Larynx

Cervix

Other

of which;

Prostate 4%

are non-small cell lung cancer

. Non-small cell lung cancer

is subdivided into the squamous and non-squamous sub-

groups, where the latter is the largest and corresponds to

70-80 percent of all cases

. In the United States, the num-

ber of people diagnosed with lung cancer has declined by

approximately 27 percent over the past 20 years, while the

number of people diagnosed with this disease is increasing

in countries such as China and India, and in European coun-

tries such as Hungary, Denmark and Serbia. Non-squamous

lung cancer consists of two main types; adenocarcinoma and

large cell lung cancer (a diagnosis used when classification

into any other specific subgroup is not possible). As lung can-

cer is increasing among women and decreasing among men,

adenocarcinoma has become the most common subgroup in

both men and women and accounts for about 40 percent of

all cases of non-small cell lung cancer

. Adenocarcinoma

occurs in cells called pneumocytes, which line the inside

of the lungs. Adenocarcinoma is usually found in the outer

parts of the lung, which increases the likelihood of detection

before spreading of the cancer. The most common cause of

adenocarcinoma is long-term smoking.

Sales of drugs for non-small cell lung cancer totalled USD 20

billion in 2020 and are projected to increase to USD 45 bil-

lion by 2027

. Sales are being driven mainly by increasing

use of various antibody-based immunotherapies. A common

mechanism for these therapies is that they block the signals

used by the tumor to escape the immune system, allowing

the immune system to recognize the tumor and destroy it.

Another important factor driving the growth of the global

market is the increasing incidence of lung cancer in many

countries, as mentioned above.

MARKET OVERVIEW

Source: WHO, The Global Cancer Observatory 2020,

Cancer.gov (National Cancer Institute, Sep-20),

American Cancer Society, Nov-17

https://www.lungcancer.org/find_information/publications/163-lung_cancer_101/268-types_and_staging

Paz-Ares et al, N Engl J Med 2018; 379:2040-2051

Heathline, An Overview of Large Cell Lung Carcinoma

Reportlinker, Global Non-Small Cell Lung Cancer (NSCLC) Therapeutics Industry

CANTARGIA AB (PUBL) 556791-6019

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THE MARKET FOR BREAST CANCER

TREATMENT

Breast cancer is currently the most common form of cancer.

In 2020, approximately 2.3 million new cases were reported,

and approximately 685,000 women died from the disease

In 2040, around 3.2 million women are expected to be diag-

nosed with the disease and just over one million will die as

a consequence of the disease. The risk of developing breast

cancer increases with age up to the age of 70. In the United

States, the median age for developing breast cancer is 62

years

. According to a study conducted on American women,

increases in BMI and the fact that women on average give

birth to fewer children, are likely to contribute to the increase

in cases in the United States between 1980 and 2018

The global market for breast cancer treatment amounted

to approximately USD 15 billion in 2021 and is expected to

increase to USD 20 billion by 2025, corresponding to an an-

nual growth rate of approximately 13 percent

. The market

growth is primarily caused by an increased incidence of the

disease, but also the need for preventive measures and early

treatment. Market growth is also expected to be driven by

the launch of new drugs. In breast cancer, Cantargia focuses

on triple-negative breast cancer. The term triple-negative

refers to cancer cells that do not have oestrogen or proges-

terone receptors or express the HER2 protein. This means

that the growth of the cancer is not fuelled by the hormones

oestrogen and progesterone or by the HER2 protein, and

triple-negative breast cancer therefore does not respond

to hormone therapy or drugs that target HER2 receptors.

Triple-negative breast cancer tends to be more common in

women under the age of 40, African-American women and

women with a BRCA1 mutation. Approximately 10-15 per

cent of breast cancer cases are triple-negative breast can-

cer. The market for the treatment of triple-negative breast

cancer is expected to be worth over USD 820 million by 2027

following an annual growth rate of approximately 4.5 per-

cent between 2020 and 2027

THE MARKET FOR CANTARGIA’S OTHER

INDICATION AREAS

In addition to studies on the indications described above,

Cantargia is also conducting studies of nadunolimab in other

indications. These are head and neck cancer, melanoma, blad-

der cancer, biliary tract cancer, colon cancer and acute myeloid

leukemia. The incidence, mortality and estimated current and

future market size of these indications are accounted for below.

CAN10 – TreATmeNT of sysTemiC

SCLEROSIS AND MYOCARDITIS

In Cantargia’s second project, CAN10, the objective is to de-

velop a novel antibody primarily for the treatment of sys-

temic sclerosis and myocarditis.

Systemic sclerosis is a chronic autoimmune disease that is

mainly characterized by inflammation and fibrosis of the skin

and subcutaneous tissue, as well as blood vessels and inter-

nal organs such as the lungs, heart, and kidneys. Systemic

sclerosis is a complex, heterogeneous disease that can occur

with a variety of clinical manifestations ranging from minor

to life-threatening.

MARKET OVERVIEW

Indication

Incidence 2020 Incidence 2040 Mortality

Current market

size (bn USD)

Future market

size (bn USD)

Head and neck cancer 878,000 1,290,000 444,000 2.1 (2020) 5.2 (2030)

Melanoma 325,000 510,000 57,000 3.5 (2021) 7.2 (2027)

Bladder cancer 573,000 991,000 213,000 2.0 (2021) 4.5 (2026)

Biliary tract cancer 211,000* - 175,000* 0.2 (2021) 0.4 (2028)

Colon cancer 1,932,000 3,158,000 935,173 8.2 (2020) 9.9 (2026)

Acute myeloid leukemia 190,000

†

- 147,000

†

0.5 (2020) 1.0 (2026)

* Refers to 2017

†

Refers to 2015

Globocan 2020

American Cancer Society

Pfeiffer RM, Webb-Vargas Y, Wheeler W, Gail MH. Proportion of U.S. Trends in Breast Cancer Incidence Attributable to Long-term Changes in

Risk Factor Distributions. Cancer Epidemiol Biomarkers Prev. 2018;1:1

Research and Markets, Breast Cancer Drugs Global Market Report 2021

FutureWise, Triple Negative Breast Cancer Treatment Market By Drug Type, 2020-2027

ResearchAndMarkets, Global Head and Neck Squamous Cell Carcinoma Drug Market Analysis and Forecasts, 2021-2030; Market Data

Forecast, Global Melanoma Therapeutics Market - Industry Forecast; Reportlinker, Bladder Cancer Drugs Global Market Report 2022; Coherent

Market Insights, Bile Duct Cancer Market Size, Trends and Forecast to 2021 – 2028; Market Study Report, Report on Global Colorectal Cancer

Drugs Market; ResearchAndMarkets, Acute Myeloid Leukemia (AML) Therapeutics - Global Market Trajectory & Analytics

CANTARGIA AB (PUBL) 556791-6019

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ANNUAL REPORT 2021

The estimated annual incidence of systemic sclerosis is ap-

proximately 1.4 per 100,000 according to a new systematic

review

. The main cause of death in patients with systemic

sclerosis is interstitial lung disease and the medical need is

particularly high in these patients. The worth of the pharma-

ceutical market for systemic sclerosis was estimated to ap-

proximately USD 500 million in 2020 and is expected to grow

to USD 1.8 billion by 2030 in the seven major markets

. This

corresponds to an average annual growth rate of 14 percent.

Myocarditis is characterized by inflammation of the mus-

cular tissues of the heart (myocardium) arising from, for

example, various types of infections. Regardless of its eti-

ology, myocarditis is characterized by initial acute inflam-

mation that can progress to subacute and chronic stages,

resulting in tissue remodelling, fibrosis, and loss of myo-

cardium architecture and contractile function. The estimat-

ed incidence of myocarditis is about 22 per 100,000 (1.7

million)

, and globally the disease accounts for about 0.6

deaths per 100,000 (46,400) annually

. The medical need

is high for subgroups of patients with fulminant myocar-

ditis (acute disease) and dilated cardiomyopathy (chronic

disease), where mortality is very high in certain immune

subtypes. For these patients, heart transplantation is cur-

rently the only definitive treatment.

THE POTENTIAL OF NADUNOLIMAB FOR

COMBINATION WITH IMMUNOTHERAPY

AND OTHER CANCER TREATMENTS

With increasing knowledge of the immune system, there is

also a growing understanding of its ability to detect and kill

certain tumors. In the mid-1990s, it was recognized that

certain molecules could act as a brake, with capacity to in-

hibit activation of the immune system. Researchers estab-

lished that if this brake was released, the immune system

could be activated and subsequently attack the tumor. The

discoveries related to this function led to the development

of immunotherapies, in particular so-called checkpoint in-

hibitors. The first checkpoint inhibitor was approved by the

US FDA in 2011 for the treatment of melanoma.

Today, immunotherapies are also used to treat lung cancer,

kidney cancer, lymphoma, and skin cancer. Although im-

munotherapy has led to positive long-term effects in many

patients, a large number of patients still do not respond to

treatment. These therapies have also led to unexpected

side effects and some major clinical failures. It is not yet

known why the currently available immunotherapies only

show efficacy in some patients. Thus, there is still consider-

able scope for increasing the effectiveness of existing im-

munotherapies.

Performing treatments with a single drug at a time usu-

ally results in the targeting of only one signalling pathway

in the cancer cell, despite deregulation of several signalling

pathways as a consequence of the disease. This allows

the tumor to escape treatment, for example by activat-

ing and switching to alternative signalling pathways or by

further mutations which render the tumor less sensitive

to treatment. Combination therapies are thus regarded as

an important strategy, allowing for targeting of more than

one signalling pathway and resulting in durable treatment

responses. The downside is unfortunately that some com-

binations cause serious side effects. Future combination

therapies could, for example, include a combination of dif-

ferent immunotherapies, or of immunotherapies and more

traditional treatment forms such as chemotherapy, target-

ed drugs, and radiotherapy.

By combination of various therapies, it is also possible to

develop increasingly individualized treatment strategies

based on various characteristics of the individual’s immune

system and tumor. For this reason, extensive resources are

being devoted into research with the focus of increasing

our understanding of the relationship between various bio-

markers and the effect of treatments. This will contribute

to a better understanding of the types of treatments that

are suitable for each individual patient.

Cantargia operates in the borderland between immuno-

therapy and targeted treatments and is thus very much

involved in the effort of developing more effective treat-

ments that not only prolong the lives of patients but also

have the potential to cure the disease. In Cantargia’s stud-

ies, nadunolimab is combined with various established

treatments to improve treatment outcomes.

Among the new therapies that act by stimulating the im-

mune system to eliminate cancer cells, checkpoint inhibi-

tors, primarily the PD-(L)1 inhibitors, have had the great-

est impact on clinical use. The four immunotherapies that

have achieved the highest sales are Yervoy® (Bristol-Myers

Squibb), Opdivo® (BristolMyers Squibb), Keytruda® (Merck

& Co) and Tecentriq® (Roche). Together, the checkpoint

inhibitor market today is valued at approximately USD 25

billion. The largest PD-1 segments are non-small cell lung

cancer followed by melanoma and kidney cancer. Some of

the fastest growing indications for these drugs are small

cell lung cancer and bladder cancer where these drugs are

used in earlier treatment lines.

MARKET OVERVIEW

Bairkdar, Rossides, Westerlind, Hesselstrand, Arkema, Holmqvist, Incidence and prevalence of systemic sclerosis globally:

A comprehensive systematic review and meta-analysis, Rheumatology 2021:7

GlobalData, Systemic Sclerosis: Global Drug Forecast and Market Analysis to 2030

J Am Coll Cardiol. 2016 Nov 29;68(21):2348-2364

Lancet. 2018;392:1736-88

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ANNUAL REPORT 2021

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Drug development

– From discovery to launch

PRECLINICAL PHASE

The preclinical phase is characterized by activities con-

ducted by chemists, biologists and pharmacologists who

study and develop various substances in laboratories. With

the help of effective disease models, researchers can study

how various pharmaceutical substances behave and inter-

act. Individual substances are then selected for further stud-

ies in the laboratory and in animal models. Some questions

that are commonly addressed include: “Does the substance

have any treatment efficacy?”, “What dose of the substance

is appropriate?” and “Does the substance cause serious side

effects?” The purpose of the preclinical phase is to select a

candidate drug (CD) for which an application for clinical trials

in humans is submitted.

Before a candidate drug is allowed for testing in humans, a

large amount of work is required to ensure that the candi-

date drug is sufficiently safe and stable, and to establish how

it behaves in and how it leaves the human body. An appli-

cation to conduct clinical studies in humans is submitted to

the relevant drug regulator, which in Sweden is the Medical

Products Agency. In the United States, the clinical trial ap-

plication is called Investigational New Drug (IND) Application

and in the EU, Clinical Trial Application (CTA). Applications are

filed in countries where the clinical trial will be conducted

and are then evaluated by independent medical experts who

assess whether the trial can be initiated or whether further

documentation is required. Apart from obtaining permission

from the drug regulators, the company must also apply for

and receive permission from each country’s local and/or na-

tional ethics committee. The approval of an application is fol-

lowed by a long and complex process involving several years

of clinical studies before the company can apply to have the

product approved for general use.

CLINICAL PHASE

In the clinical phase, studies in humans are performed.

These studies are normally conducted at hospitals or health

centers and are formally divided into four phases – phase I,

II, III and IV – although the differences between the phases

are not always obvious in practice. To ensure that the studies

can be interpreted objectively, endpoints for the evaluation

of the studies are defined in advance. The design of the study

program for a particular drug should be continually evaluated

and regulatory approval is required for each sub-study.

Phase I

Phase I is the first stage where a new substance is admin-

istered to a human. The trial subjects are normally healthy

volunteers and are subject to constant medical monitoring.

In clinical studies in cancer, however, it is common for pa-

tients to be included already at this stage. Phase I studies

normally involve 20-100 individuals. The purpose of the

trial is to determine whether the trial subjects tolerate the

drug and whether its behavior in the body is the same as in-

dicated in the earlier animal studies and other research. The

purpose is also to identify safe dose levels and any potential

side effects. The initial dose is kept as low as possible but

should be sufficiently high to provide answers to the ques-

tions that the trial is designed to answer. If the procedure

progresses as planned, the dose can then gradually be in-

creased to the clinical use level. Phase I studies normally

take six months to a year to complete.

Phase II

Phase II is normally the first stage at which the new sub-

stance is administered to patients with the relevant disease.

At this stage, the test group is also larger and normally con-

sists of 100-500 subjects. The objective of this phase is to

show ‘proof of concept’, i.e., that the drug actually achieves

a treatment effect. Other objectives include studying how

the drug affects the disease or its symptoms and determin-

ing the dose to be used in large-scale trials. Phase II studies

can take between six months and two years to complete.

Phase III

Phase III is initiated only if the results from phase II are suf-

ficiently encouraging to justify further studies. In this phase,

the candidate drug is given to even larger groups, often

1,000-5,000 subjects. The new substance is tested against

an ineffective placebo or against another already approved

drug for the same disease condition. Patients are distributed

randomly between treatment groups and neither the physi-

cian nor the patients are informed of which substance has

been administered. This type of trial is known as a ‘double-

blind and randomized’ trial and is considered to be the meth-

od that produces the best and most objective evaluation.

Only once the trial has been completed is it revealed which

patients received the new substance and which received the

placebo. It is then possible to determine and evaluate what

effect the new drug had compared to the placebo. The stud-

ies provide a statistical basis, which means that the differ-

ence between the two products must be statistically evident.

MARKET OVERVIEW

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Phase III studies can take anywhere from one to four years to

complete depending on the disease, the length of time during

which the patients are studied, and the number of patients

included.

Phase IV

In phase IV, the therapeutic use of the drug is studied. After

the phase I-III studies have been completed and the drug has

been approved by the drug regulator and received market au-

thorization, further clinical studies are often conducted in the

area of use for which the product has already been approved.

These are known as phase IV studies and are aimed at study-

ing and monitoring the dose and effect relation, the impact

on additional simultaneous drug treatments, and any side

effects which may occur after the market launch. The overall

objective is to optimize the use of the drug.

REGISTRATION PHASE

If the drug appear to be promising and is well-tolerated by

patients, further trials are conducted to verify the results.

An application for approval is subsequently filed with the

relevant drug control authorities, which in Europe is the

European Medicines Agency (EMA). The application must

include all documentation describing the quality, safety

and effect of the drug and can span over thousands of

pages. It takes on average one year to examine an ap-

plication. The examination can result in the drug being

approved or rejected, or the regulator may demand that

further studies be conducted. An approval can also in-

volve the regulator approving a more limited indication

than was originally intended. Once regulatory approval

has been obtained, the drug can be marketed.

Research and development costs for drug development

are high, in the range of billions of Swedish krona, and

mainly comprise costs for research, development, pro-

duction and clinical studies of a drug. Of 10-15 prod-

ucts that are studied in phase I, on average, only one will

normally advance to regulatory approval. Approximately

35 new medical products are introduced in the Swedish

market every year.

MARKET OVERVIEW

DIRECTORS’ REPORT

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

The Board of Directors and Chief Executive Officer of

Cantargia AB (publ), corporate ID no. 556791-6019, here-

by present the annual report for the financial year 1 January

2021–31 December 2021. The company has its registered

office in Lund, Sweden. Amounts in the annual report are

expressed in thousands of Swedish kronor (kSEK) unless

otherwise indicated.

OPERATIONS

Cantargia is a biotechnology company that develops anti-

body-based treatments for life-threatening diseases and

has established a platform based on the protein IL1RAP,

involved in a number of cancer forms and inflammatory

diseases. The lead project, the antibody nadunolimab

(CAN04), is being studied clinically in combination with

chemotherapy or immune therapy, with a primary fo-

cus on non-small cell lung cancer and pancreatic cancer.

Positive interim data from the combination with chemo-

therapy indicate stronger efficacy than would be expected

from chemotherapy alone. Cantargia’s second project, the

antibody CAN10, blocks signaling via IL1RAP in a different

manner than nadunolimab and addresses treatment of

serious autoimmune/inflammatory diseases, with initial

focus on systemic sclerosis and myocarditis.

Amounts in mSEK 2021 2020 2019 2018 2017

Net sales - - - - -

Loss after net financial income/expense -366.5 -173.1 -110.8 -91.2 -60.3

Cash and bank balances and liquid investments 247.3 693.4 39.9 76.5 149.8

Short-term investments 312.1 210.0 110.0 90.3 120.0

Equity 532.7 891.9 142.3 155.0 246.1

Total assets 600.2 925.5 166.1 171.4 274.5

Equity/assets ratio (%) 89% 96% 86% 90% 90%

Quick ratio (%) 887% 2,996% 669% 1,027% 958%

R&D costs -352.7 -158.4 -97.5 -77.0 -52.4

Project costs

-304.2 -121.9 -81.1 -66.2 -44.8

Total operating expenses -370.3 -173.9 -111.6 -93.3 -60.0

R&D costs as a percentage of total operating expenses 95% 91% 87% 82% 87%

Project costs as a percentage of total operating expenses 82% 70% 73% 71% 75%

Number of outstanding shares at 31 Dec

100,192,737 100,192,737 72,804,392 66,185,811 46,940,508

Number of outstanding warrants at 31 Dec

- - 85,000 85,000 85,000

Number of outstanding employee options at 31 Dec

3,170,333 1,740,000 - - -

Earnings per share before and after dilution (SEK)

-3.66 -1.94 -1.56 -1.36 -1.28

Equity per share (SEK) 5.32 8.90 1.95 2.34 5.24

Dividend (SEK) - - - - -

It should be noted that, as at 31 December 2017, 19,245,303 interim certificates had been issued, which were registered on 8 January 2018.

Cantargia has and had potential ordinary shares in the form of warrants during the period. These do not have a dilutive effect, however, as a con-

version of warrants into ordinary shares would result in a lower loss.

See also Note 19

FIVE‑YEAR COMPARISON

DIRECTORS’ REPORT

Definitions

Cash and bank balances and liquid investments

- Cash and available deposits with banks and other credit institutions

Equity/assets ratio - Adjusted equity as a percentage of total assets

Quick ratio - Current assets as a percentage of current liabilities

R&D costs - Total project costs plus allocated portion of personnel expenses and other external expenses

Project costs - The sum of external costs in Preclinical, Clinical, CMC, Regulatory and Patents

Earnings per share - Profit for the year divided by number of outstanding shares at end of period

Equity per share - Equity divided by number of shares at end of period

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

SIGNIFICANT EVENTS DURING THE

FINANCIAL YEAR

The following is a summary of events that took place in

the company during the year.

RESEARCH ACTIVITIES

Nadunolimab

Cantargia has five ongoing clinical trials evaluating na-

dunolimab in combination with chemotherapy and/or

immunotherapy:

CANFOUR

•

In February, the first pancreatic cancer patient was

treated in the phase IIa extension cohort of CANFOUR.

•

In May, positive interim results were announced from

the initial cohort of pancreatic cancer patients treated

with nadunolimab and chemotherapy in the ongoing

phase IIa part of CANFOUR.

•

In September, the development of nadunolimab was

expanded in non-squamous non-small cell lung cancer

by recruitment of additional patients to CANFOUR with

this form of cancer.

•

In September, positive interim results were presented

for the combination of nadunolimab with chemotherapy

in pancreatic cancer or non-small cell lung cancer pa-

tients at the ESMO Congress.

•

In September, patient recruitment to the phase IIa pan-

creatic cancer extension cohort in CANFOUR was

completed.

•

In December, Cantargia reported updated encouraging

survival data from CANFOUR for the combination of

nadunolimab with chemotherapy in pancreatic cancer

patients. The results showed stronger efficacy than ex-

pected from chemotherapy only.

CIRIFOUR

•

In August, patient recruitment to the combination arm

with pembrolizumab was completed in the first stage of

the phase Ib clinical trial CIRIFOUR, and CIRIFOUR was

expanded to also evaluate this combination with che-

motherapy in the subsequent stage.

CAPAFOUR

•

In March, an application was submitted to start the

phase Ib clinical trial CAPAFOUR for investigating nadu-

nolimab and FOLFIRINOX in pancreatic cancer. A regula-

tory approval to start this trial was received in June and

the first patient was treated in August.

CESTAFOUR

•

In June, an application was submitted to start the phase

I/II clinical trial CESTAFOUR for investigating naduno-

limab and chemotherapy in three forms of cancer. A

regulatory approval to start this trial was received in

September and the first patient was treated in October.

TRIFOUR

•

In July, an application was submitted to start the phase

Ib/II clinical trial TRIFOUR for investigating nadunolimab

and chemotherapy in triple-negative breast cancer. A

regulatory approval to start the study was received in

September.

OTHER

•

In September, it was announced that the US Food and

Drug Administration (FDA) had granted Orphan Drug

Designation in the US to nadunolimab for the treatment

of pancreatic cancer. In October, the corresponding ap-

proval was received in Europe from the European Medi-

cines Agency (EMA).

•

In December, two articles were published in peer-re-

viewed scientific journals. The first, published in British

Journal of Cancer, focuses on results from the phase I

part of the CANFOUR clinical trial. The second, published

in Frontiers in Immunology, focuses on findings related

to functional and structural analyses of the interactions

between nadunolimab and its target IL 1RAP.

CAN10

•

In March, positive preclinical safety and efficacy results

were reported for CAN10, which showed good safety as

intravenous treatment in initial toxicology studies.

•

In April, it was announced that new preclinical data on

CAN10 would be presented at a poster session at the AAI

IMMUNOLOGY2021 conference. In May, these data were

presented showing efficacy of CAN10 in multiple preclini-

cal disease models, including a model of myocarditis.

•

In November, progress in the manufacturing process

development was reported, as well as an update on the

preparations for the phase I clinical trial with CAN10 for

which the start was adjusted to Q3 2022.

•

In December, efficacy of CAN10 was also reported in a

preclinical model of systemic sclerosis.

•

In September, it was announced that Cantargia’s ex-

tensive patent protection for IL1RAP-targeting cancer

therapy would remain in force after the conclusion of an

opposition process, initiated by a third party in 2019.

•

In December, it was reported that oppositions had been

filed against another European patent owned by Cantargia

which provides broad protection for IL1RAP-binding anti-

bodies with similar properties as nadunolimab.

Organization

•

At the annual general meeting, Magnus Nilsson and

Damian Marron were elected as new board members

of the company.

•

In September, the management team was strength-

ened through the appointment of Nedjad Losic as VP

Biometrics.

DIRECTORS’ REPORT

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

FINANCING

•

No funding has been received in 2021.

SIGNIFICANT EVENTS AFTER THE END

OF THE FINANCIAL YEAR

•

Clinical development of nadunolimab in pancreatic can-

cer was advanced by including nadunolimab in Pancre-

atic Cancer Action Network’s (PanCAN) clinical phase II/

III trial Precision Promise

•

The first patient with non-squamous non-small cell

lung cancer was treated in a new arm in CANFOUR, and

the first triple-negative breast cancer patient in the

TRIFOUR trial.

•

Cantargia announced that new clinical data for naduno-

limab from the CANFOUR and CIRIFOUR studies would

be presented at ASCO in June.

•

Positive safety data were reported from the CIRIFOUR

trial with nadunolimab combined with pembrolizumab.

•

New encouraging results from non-GLP-regulated tox-

icology studies were reported for CAN10 and start of

the clinical phase I study was scheduled for early 2023.

•

Positive preclinical efficacy data were presented for

CAN10 in a model of systemic sclerosis at the 7th

Systemic Sclerosis World Congress.

•

A third party appealed the previous decision by the

European Patent Office to reject the opposition of one

of Cantargia’s patents for treatment of solid tumors.

•

The executive management was strengthened by

the appointment of Dr. Roger Belusa as interim Chief

Medical Officer.

REVENUES

Cantargia’s net sales in 2021 were SEK 0 (0) million.

OPERATING EXPENSES AND OPERATING

PROFIT OR LOSS

Research and development costs totaled SEK 352.7 (158.4)

million. The increase compared with the previous year is

primarily related to Cantargia’s main project, CAN04, and

the expansion of the clinical program with the studies CAN-

FOUR, CIRIFOUR, CAPAFOUR, CESTAFOUR, and TRIFOUR

as well as increased investments in production develop-

ment (CMC). Significant investments were also made in

2021 in the preclinical stage for CAN10.

Administrative expenses totaled SEK 15.3 (14.9) million for the

year. The increase compared with the previous year is mainly

related to the expanded workforce and related expenses.

Other operating expenses, which comprise foreign ex-

change differences on trade payables, amounted to SEK

-2.3 (0.6) million. The negative outcome for other operating

expenses is mainly related to the change in the value of the

Swedish krona against the euro.

The operating loss amounted to SEK -370.3 (-173.9) million

for the year.

NET FINANCIAL INCOME/EXPENSE

Net financial income/expense consists substantially of for-

eign exchange differences on the company’s EUR account

and interest earned on short-term investments in fixed-rate

accounts. Net financial income amounted to SEK 3.8 (0.9)

million for the year.

EARNINGS

Cantargia’s loss before tax, which is the same as the loss for

the year, was SEK -366.5 (-173.1) million.

As discussed above, the increased loss is mainly attributable

to an expansion of the company’s R&D activities, especially in

the company’s main project CAN04 and its clinical programme.

FINANCIAL POSITION

Cantargia’s equity/assets ratio at 31 December 2021 was

89 (96) percent and equity was SEK 532.7 (891.9) million.

The company’s cash and cash equivalents, which consist

of cash and demand deposits with banks and other credit

institutions, were SEK 247.3 (693.4) million at the balance

sheet date. In addition to cash and cash equivalents, the

company has short-term investments with banks and

in fixed income funds of SEK 312.1 (210.0) million. The

company’s liquidity (including short-term investments)

decreased by SEK -346.8 million in 2021. At the end of

the period, total assets totaled SEK 600.2 (925.5) million.

CASH FLOW AND INVESTMENTS

Cash flow from operating activities for the full year was SEK

-346.5 (-156.4) million. As part of cash flow from operating

activities, changes in working capital were SEK 14.4 (6.5)

million.

Cash flow from investing activities totaled SEK -102.4

(-109.0) million. For the full year 2021 as well as for the pre-

vious year, changes in short-term investments accounted

for the majority of cash flow from investing activities.

Cash flow from financing activities was SEK 0 (918.5) million.

The outcome in 2020 was related to two directed share

issues that were completed during the year.

The total change in cash and cash equivalents, including for-

eign exchange difference in cash and cash equivalents, was

SEK -448.9 (653.1) million.

SHARE‑BASED INCENTIVE SCHEMES

The purpose of share-based incentive schemes is to pro-

mote the company’s long-term interests by motivating and

rewarding the company’s senior executives and other em-

ployees.

DIRECTORS’ REPORT

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

At the Ordinary General Meeting in May 2020, it was

decided to introduce Employee Stock Option Scheme

2020/2023, which is one of the company’s active share-

based incentive scheme. At the Ordinary General Meeting

in May 2021, it was decided to introduced another Employee

Stock Option Scheme 2021/2024. For information on the

schemes, see Note 19.

In 2021, 1,481,000 employee stock options were granted

and 50,667 stock options were recalled. The options

granted at 31 December 2021 represent rights to purchase

3,170,333 shares.

The cost of the share-based incentive schemes was SEK

5.1 (7.3) million, of which SEK -2.2 (3.1) million refers to

provisions for social security contributions and SEK 7.3

(4.2) million to costs for share-based payments.

The cost has not affected cash flow. The company has is-

sued warrants to enable it to deliver shares in a simple

and cost-effective manner upon exercise of the issued

employee stock options.

RISKS AND RISK MANAGEMENT

Several risk factors can have a negative impact on the

operations of Cantargia. It is therefore important to take

account of relevant risks in addition to assessing the com-

pany’s growth prospects. A description of risk factors, not

in order of importance and not exhaustive, is given below.

For natural reasons it is not possible to assess all risk

factors without making a general assessment of the

company’s operations and external factors. See also Note

3, Financial risk management.

Research and development and dependence on

one candidate drug

The development of CAN04 is associated with significant

risks of failure and/or that the results will be such that con-

tinued research and development will be required. These

risks include that the company’s drug will prove to be inef-

fective, dangerous, toxic or otherwise fail to meet the ap-

plicable requirements or that the candidate drug will prove

to be difficult to develop into a commercially viable product

that generates revenue for the company. There is also a

risk that delays and unexpected difficulties in the develop-

ment (for example, production or clinical studies) could in-

cur additional costs for the company. In the event that the

development of CAN04 fails, this would have a significant

adverse impact on Cantargia’s operations, financial position

and results, and there is a risk that Cantargia would not be

able to continue its operations in the current form.

Implementation of preclinical and clinical studies

Results from early clinical studies are not always consis-

tent with the results of more comprehensive clinical stud-

ies. There is a risk that the planned studies will not indicate

levels of safety and efficacy that are sufficient to obtain the

required regulatory permits or to enable the company to li-

cense, establish partnerships for or sell its potential product.

Regulatory permits and registrations

To obtain the right to market and sell a drug, all candidate

drugs under development need to go through a comprehen-

sive registration process and be approved by the relevant

regulator in an individual market.

There is also a risk that the rules which currently apply for

registration, or interpretations of these rules, will be amend-

ed in a way that is to the disadvantage of Cantargia. In the

event that Cantargia does not obtain the required product

approvals or in the event that any future approvals are with-

drawn or limited, this could have significant negative effects

on Cantargia’s operations, financial position and results.

Changes in economic activity and the pricing of drugs

The pricing and demand for pharmaceutical drugs could be

adversely affected by a general economic decline in major

pharmaceuticals markets. In certain countries, the pricing

of drugs is determined at the regulatory level and, in case

of the launch of drugs, the pricing could thus be regulated

by authorities in several countries. A deterioration in gen-

eral economic conditions and/or regulatory decisions could

therefore result in a lower pricing of the drug projects than

expected by Cantargia, which could have a significant nega-

tive impact on the company’s operations, financial position,

and results.

Partnerships, licensing and marketing

Cantargia is and will in future be dependent on partnerships

in connection with the development of candidate drugs, pre-

clinical and clinical studies, and licensing/partnerships for

any future sale of drugs. In the event that these or future

partnerships were to be terminated, there is a risk that the

company would be unable, on short notice, to conclude con-

tracts with suitable new business partners, which could have

a significant negative impact on the company’s operations,

financial position and results.

In the future, Cantargia could also be dependent on external

parties for marketing and sales. If the company is not suc-

cessful in its attempts to conclude future or maintain exist-

ing partnership agreements for its product candidate, this

could have a significant negative impact on Cantargia’s op-

erations, financial position, and results.

Financing and capital requirements

Since starting its operations, Cantargia has been reporting

an operating loss and cash flow is expected to remain mainly

negative until Cantargia succeeds in generating revenue from

a launched product. Cantargia will also continue to need sig-

nificant capital for research and development in order to

conduct preclinical and clinical studies. If Cantargia, wholly or

partly, were to fail to acquire sufficient capital, or succeed in

DIRECTORS’ REPORT

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

doing so only on unfavourable terms, this could have a signifi-

cant negative impact on the company’s operations, financial

position and results.

Competition

If a competitor succeeds in developing and launching an ef-

fective cancer drug, this could have a negative impact on the

company’s ability to generate revenue. Furthermore, tech-

nology that is controlled by outside parties and that could

be of use for the company’s operations could be acquired

or licensed by Cantargia’s competitors, and thereby prevent

Cantargia from obtaining such technology on commercially

acceptable terms, or at all. Competitors with greater re-

sources could also successfully market a similar or even an

inferior drug and obtain wider recognition in healthcare in

general for such a drug, which could have a negative impact

on the company’s operations, financial position, and results.

Dependence on key individuals and employees

Cantargia is dependent on a number of key individuals for

the continued development of the company’s operations

and preclinical and clinical projects. There is, however, a

risk that one or several of the company’s employees will

terminate their employment with the company or that the

company will fail to recruit new individuals with relevant

knowledge, which could delay the company’s development

and commercialisation of its candidate drug.

Patents and other intellectual property rights

There is a risk that it will not be possible to obtain patent

protection for drugs and production methods developed

by Cantargia, that Cantargia will be unable to register and

complete all necessary or desirable patent applications

at a reasonable cost or that a future patent portfolio and

other intellectual property rights held by the company will

not provide adequate commercial protection. There is also

a risk that a patent will not create a competitive advantage

for the company’s drugs and/or methods or that competi-

tors will succeed in circumventing the company’s patents.

If Cantargia is forced to defend its patent rights against a

competitor, this could entail significant costs, especially in

any disputes with competitors with significantly greater re-

sources than Cantargia. If Cantargia in its own operations

uses or is alleged to be using products or methods which

are protected by patents or will be patented by another

party, the holder of these patents could accuse Cantargia

of patent infringement.

The failure to maintain its own, and/or any infringement of

other parties’, intellectual property rights could have a sig-

nificant negative impact on Cantargia’s operations, finan-

cial position and results.

Product liability

Cantargia’s operations are subject to various liability risks

that are common for companies engaged in drug research

and development. This includes the risk of product liabil-

ity that can arise in connection with production and clini-

cal studies where the participating patients can experience

side effects or fall ill during treatment. There is a risk that

product liability claims could have a significant negative

impact on Cantargia’s operations, financial position, and

results.

Insurance cover

Cantargia believes that the insurance cover for its current

operations is appropriate. There is, however, a risk that

such cover will prove insufficient for claims that could arise

in relation to product liability and other damage. There is

therefore a risk that insufficient or excessively expensive

insurance cover could have a significant negative impact on

the company’s operations, financial position, and results.

Currency risk

Assets, liabilities, income and expenses in foreign currency

give rise to currency exposures. A weakening of the Swed-

ish krona (SEK) against other currencies increases the rec-

ognised amounts of Cantargia’s assets, liabilities, income

and earnings while a strengthening of the SEK against

other currencies decreases these items. The company is

exposed to such changes, as some the company’s costs

are paid in EUR, USD and other international currencies and

because a part of the company’s future sales revenue may

be received in international currencies. A material change in

such exchange rates could have a negative impact on the

company’s financial statements, which in turn could have

negative effects on Cantargia’s financial position and re-

sults. See also Note 3.

EMPLOYEES

One of Cantargia’s key success factors is the company’s

employees. The average number of employees of the

company during the year was 22 (15), of whom 13 (9) are

women. The number of employees at year-end was 26 (18)

fulltime equivalents, of whom 15 (11) are women. The level

of education among the employees is generally high. Nearly

all employees hold Ph.Ds in medicine or natural sciences or

have higher university degrees.

In addition to its employees, Cantargia engages a number

of consultants who are tied to the business on a continu-

ous basis. The large network with which Cantargia works

ensures access to top-level expertise, flexibility, and cost

effectiveness.

RESEARCH AND DEVELOPMENT

The majority of the company’s resources, 95 (91) percent,

are used for research and development.

ENVIRONMENTAL IMPACT

Cantargia AB does not engage in activities requiring a per-

DIRECTORS’ REPORT

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

mit under the Swedish Environmental Code, as the company

does not engage in the production of pharmaceuticals or

pharmaceutical substances and does not handle solvents

and chemicals.

GUIDELINES FOR REMUNERATION AND

OTHER TERMS OF EMPLOYMENT FOR

SENIOR EXECUTIVES 2021

Under the Swedish Companies Act, guidelines for remu-

neration of the CEO and other senior executives must be

adopted by the shareholders’ meeting. A set of guidelines

were adopted at the Annual General Meeting on 27 May

2020. No deviations from these guidelines have been made.

The Board has not proposed that any changes be made

to the remuneration guidelines at the 2022 AGM and the

guidelines will therefore continue to apply in accordance

with the resolution of the 2021 AGM.

The guidelines do not cover remuneration or share-based

incentive schemes adopted or approved by the sharehold-

ers’ meeting.

The guidelines applying for 2022 are presented below. For

remuneration in 2021, see Note 18.

How the guidelines promote Cantargia’s business

strategy, long‑term interests and sustainability

Cantargia’s business model and scientific strategy are

based on partnerships, and Cantargia has concluded agree-

ments with a number of companies, hospitals and academic

groupings. A large number of international and local players

are currently engaged in research and development related

to Cantargia’s CAN04 and CAN10 antibodies. The strategy

is based on driving the development of product candidates

until an indication of clinical activity has been obtained. For

further information about Cantargia’s business strategy,

see www.cantargia.com.

To successfully implement its business strategy and safe-

guard its long-term interests, including its sustainability,

it is essential that Cantargia be able to recruit and retain

competent employees who work to achieve maximum

shareholder and customer value. To do so, Cantargia must

be able to offer competitive remuneration. These guide-

lines enable senior executives to be offered competitive

total remuneration.

Long-term incentive schemes have been established in

Cantargia. The schemes have been approved by the share-

holders’ meeting and are therefore not covered by these

guidelines. For the same reason, the share-based incentive

scheme and employee stock option scheme approved by

the 2020 and 2021 AGMs are also not covered.

Forms of remuneration, etc.

The remuneration paid to senior executives shall be mar-

ket-based and may consist of the following components: a

fixed cash salary, variable cash remuneration, pension ben-

efits and other benefits. The total remuneration paid to se-

nior executives shall comprise a balanced mix of the above

components. The Board shall annually evaluate whether

long-term incentive schemes should be proposed to the

shareholders’ meeting.

The fixed cash salary shall be individual and based on the senior

executive’s areas of responsibility, role, competence and position.

For the CEO, the variable cash remuneration shall not ex-

ceed 30 percent of the fixed annual cash salary. For other

senior executives, the corresponding remuneration shall

not exceed 20 percent of the executive’s fixed annual cash

salary. Variable cash remuneration can be pensionable if

this is provided for under mandatory provisions of a collec-

tive bargaining agreement.

Pension benefits shall be defined contribution benefits un-

less the executive is covered by a defined benefit plan un-

der mandatory provisions of a collective bargaining agree-

ment. Pension premiums for defined contribution pensions

shall not exceed 35 percent of the fixed annual cash salary.

Notwithstanding the above, the Board shall have the right

to instead offer other solutions that are equivalent from a

cost perspective for the company.

Other benefits may include benefits such as health insur-

ance and occupational health care. Such benefits must be

of limited value in relation to other remuneration and be

consistent with normal market practice in each geographi-

cal market. The combined value of other benefits shall not

exceed 10 percent of the fixed annual cash salary.

With regard to employment relationships that are subject

to other rules than Swedish rules, appropriate adjustments

may be made in respect of pension benefits and other

benefits in order to comply with mandatory rules or estab-

lished local practice, in which case the general purpose of

these guidelines shall be adhered to as far as possible.

Termination of employment

If employment is terminated by Cantargia, the notice period

shall not exceed six months. If employment is terminated by

the executive, the notice period shall not exceed six months

for the CEO and three months for other senior executives.

For the CEO, severance pay of up to twelve months’ fixed

cash salary and employment benefits may be paid, in ad-

dition to a fixed basic salary during the notice period. For

other senior executives, the sum of the fixed basic salary

during the notice period and severance pay shall not exceed

the amount of the executive’s annual fixed cash salary.

DIRECTORS’ REPORT

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

Criteria for payment of variable cash remuneration, etc.

Variable cash remuneration must be linked to predeter-

mined and measurable criteria, which may be financial or

non-financial and must be designed to promote the com-

pany’s long-term value creation. The criteria must relate

to development activities in the development projects in

which the company is engaged and the partnerships the

company enters into to accelerate the clinical development

process and advance towards commercialisation as well as

the remuneration resulting therefrom (e.g. one-time pay-

ments at the time of entering into agreements, milestone

compensation or royalties). The criteria must also be de-

signed to promote Cantargia’s business strategy and long-

term interests, including its sustainability.

Fulfilment of criteria for payment of variable cash remu-

neration shall be measured over a period of one year. When

the measurement period for meeting the criteria for pay-

ment of variable cash remuneration has ended, it shall be

determined to what extent the criteria have been met. The

assessment regarding variable cash remuneration of se-

nior executives shall be made by the Remuneration Com-

mittee. With regard to financial targets, the assessment

shall be based on the company’s most recently published

financial information.

Salary and terms of employment for employees

In preparing these proposed remuneration guidelines, the

Board has taken account of salaries and employment terms

for the company’s employees by including information on

employees’ total remuneration, the components of the

remuneration and the increase and rate of increase of the

remuneration over time in the decision basis used by the

Board to assess the reasonableness of the guidelines and

the limitations arising therefrom.

The decision‑making process for determining,

reviewing and implementing the guidelines

The Board has established a Remuneration Committee. The

committee’s duties include preparing the Board’s resolution

on the proposed guidelines for remuneration of senior ex-

ecutives. The Board shall prepare proposed new guidelines

at least every fourth year and submit its proposal for adop-

tion by the AGM. The guidelines shall apply until new guide-

lines have been adopted by the shareholders’ meeting. The

Remuneration Committee shall also monitor and evaluate

programmes for variable remuneration for management,

the application of guidelines for remuneration of senior ex-

ecutives, and applicable remuneration structures and remu-

neration levels in the company. The members of the Remu-

neration Committee are independent of the company and

management. During the Board’s deliberations and when

resolutions on remuneration-related matters are made, the

CEO or other members of management shall not be present,

insofar as they are affected by the matters concerned.

Deviation from the guidelines

The Board may decide temporarily to deviate, wholly or

partially, from the guidelines if in an individual case there

are special reasons therefor and such deviation is neces-

sary to safeguard Cantargia’s long-term interests, includ-

ing its sustainability, or to ensure Cantargia’s financial

viability. As stated above, it is part of the duties of the Re-

muneration Committee to prepare the Board’s resolutions

on remuneration matters, which includes resolutions on

deviations from the guidelines.

OUTLOOK FOR 2022

Cantargia’s goal is to develop drug candidates for treat-

ment of life-threatening diseases with a focus on cancer

as well as autoimmune and inflammatory diseases. The

strategy is to advance the development of these drug can-

didates in-house until the stage where a development or

commercialization agreement is reached with companies

within Cantargia’s business area.

Cantargia’s ambition for 2022 is to advance nadunolimab

towards late-stage clinical development in pancreatic can-

cer and non-small cell lung cancer. For pancreatic cancer,

the plan is to complete the administrative and regula-

tory activities required to include nadunolimab in Precision

Promise

, PanCAN’s adaptive phase II/III trial. The inten-

tion is also to conduct ongoing trials in the earlier clinical

stages to a point where an assessment can be made re-

garding which indications and combinations that appear to

be the most promising for further development. In addition,

the aim is to complete the final preparations for the start of

the first clinical trial for CAN10.

APPROPRIATION OF RETAINED EARNINGS

Proposed appropriation of retained earnings (see also Note

21). The Annual General Meeting is asked to decide on the

appropriation of the following:

The Board of Directors proposes that: SEK 524,729,554 be

carried forward.

For more information on the company’s results and financial

position, see the following income statement and balance

sheet and the additional disclosures.

Share premium account 1,404,594,653

Loss brought forward -513,361, 585

Loss for the year -366,503,514

524,729,554

DIRECTORS’ REPORT

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

SHAREHOLDER INFORMATION

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

SHAREHOLDER INFORMATION

Share information As of 25 September 2018, Cantargia’s shares have been listed on the main

list of Nasdaq Stockholm, under the stock symbol “CANTA”. At 31 December 2021, the number

of shares was 100,192,737 (100,192,737). At the balance sheet date, the total outstanding op-

tion scheme comprised 4,836,333 employee stock options, entitling the holders to subscribe for

4,836,333 shares, which would have a dilutive effect of approximately 4.7 per cent and increase

the share capital by SEK 386,907.

Share price performance in 2021

SHAREHOLDER INFORMATION

0.00

10.00

20.00

30.00

40.00

Jan-21 Feb-21 Mar-21 May-21 Jun-21 Jul-21Apr-21 Aug-21 Sep21 Oct-21 Nov-21 Dec-21

50.00

60.00

70.00

80.00

SHARE PRICE (SEK)

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

Holding

Number of

shareholders

Number of

Capital/Votes

(%)

Market Cap

(kSEK)

1 - 500 6,948 1,024,482 1.0% 18,912

501 - 1,000 1,553 1,250,505 1.2% 23,084

1,001 - 5,000 2,440 5,900,480 5.9% 108,923

5,001 - 10,000 563 4,170,239 4.2% 76,983

10,001 - 15,000 226 2,864,621 2.9% 52,881

15,001 - 20,000 128 2,288,571 2.3% 42,247

20,001 - 333 82,693,839 82.5% 1,526,528

Total 12,191 100,192,737 100.0% 1,849,558

Ownership Distribution size classes as of 31 December 2021

Owner Number of shares Capital/Votes (%)

Swedbank Robur Fonder 9,626,665 9.6%

Fjärde AP-fonden 8,846,347 8.8%

Alecta Pensionsförsäkring, Ömsesidigt 7,259,577 7.2%

Six Sis AG 6,997,319 7.0%

Första AP-fonden 6,324,244 6.3%

Försäkringsaktiebolaget, Avanza Pension 5,312,781 5.3%

SEB AB, Luxemburg Branch 3,492,124 3.5%

Unionen 2,000,000 2.0%

Andra AP-fonden 1,321,268 1.3%

KUDU VP AB 1,243,216 1.2%

Other 47,769,196 47.7%

Total 100,192,737 100.0%

Ownership distribution

SHAREHOLDER INFORMATION

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

Year Event Quotient value

Increase in no.

of shares

Increase in

share capital

Total no. of

Total share

capital

2009 Incorporation 1.00 100,000 100,000.00 100,000 100,000.00

2010 Issue of new shares 1.00 10,870 10,870.00 110,870 110,870.00

2011 Issue of new shares 1.00 14,130 14,130.00 125,000 125,000,00

2012 Issue of new shares 1.00 3,571 3,571.00 128,571 128,571.00

2012 Issue of new shares 1.00 7,143 7,143.00 135,714 135,714.00

2012 Issue of new shares 1.00 7,143 7,143.00 142,857 142,857.00

2013 Issue of new shares 1.00 3,572 3,572.00 146,429 146,429.00

2013 Issue of new shares 1.00 25,001 25,001.00 171,430 171,430.00

2014 Issue of new shares 1.00 12,500 12,500.00 183,930 183,930.00

2014 Bonus issue 2.96 - 360,502.80 183,930 544,432.80

2014 37:1 share split 0.08 6,621,480 - 6,805,410 544,432.80

2014 Debt-for-equity swap 0.08 789,464 63,157.12 7,594,874 607,589.92

2015 Issue 0.08 5,800,000 464,000.00 13,394,874 1,071,589.92

2015 Issue of new shares TO 2010:1 0.08 111,000 8,880.00 13,505,874 1,080,469.92

2016 Issue of new shares TO1/TO3 0.08 4,127,260 330,180.80 17,633,134 1,410,650.72

2016 Issue of new shares 2011/2016 0.08 46,250 3,700.00 17,679,384 1,414,350.72

2016 Issue of new shares TO2/TO4 0.08 3,237,816 259,025.28 20,917,200 1,673,376.00

2017 Issue of new shares 0.08 11,158,308 892,664.64 32 075 508 2,566,040.64

2017 Issue of new shares 0.08 14,865,000 1,189,200.00 46,940,508 3,755,240.64

2018 Issue of new shares 0.08 19,245,303 1,539,624.24 66,185,811 5,294,864.88

2019 Issue of new shares 0.08 6,618,581 529,486.48 72,804,392 5,824,351.36

2020 Issue of new shares 0.08 18,201,097 1,456,087.76 91,005,489 7,280,439.12

2020 Issue of new shares TO 2017/2020 0.08 86,700 6,936.00 91,092,189 7,287,375.12

2020 Issue of new shares 0.08 9,100,548 728,043.84 100,192,737 8,015,418.96

Share capital history

SHAREHOLDER INFORMATION

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

FINANCIAL STATEMENTS

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

STATEMENT OF COMPREHENSIVE INCOME

1 Jan 2021 1 Jan 2020

SEK thousand Note -31 Dec 2021 -31 Dec 2020

Operating income

Net sales - -

Other operating income

- -

Operating expenses 8, 24

Research and development costs 7, 18 -352,709 -158,396

Administrative costs 6, 7, 18 -15,309 -14,919

Other operating expenses 9 -2,249 -630

-370,267 -173,945

Operating profit -370,267 -173,945

Financial income and expense

Interest income and similar items 10, 12 3,766 860

Interest expense and similar items 10, 12 -3 -1

3,763 859

Profit before taxes -366,504 -173,085

Tax for the period 11 0 0

Loss for the period *) -366,504 -173,085

Earnings per share before and after dilution (SEK) based on average

number of shares

-3.66 -1.94

*) No items are reported in other comprehensive income, meaning total comprehensive income is consistent with the loss for the period.

FINANCIAL STATEMENTS

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

STATEMENT OF FINANCIAL POSITION

SEK thousand Note 31 Dec 2021 31 Dec 2020

ASSETS

Fixed assets

Intangible assets

Patent 6,459 7,360

27 6,459 7,360

Tangible assets

Machinery and equipment 3,097 5,262

26 3,097 5,262

Total fixed assets 9,556 12,622

Current assets

Other receivables 4,588 2,673

Prepaid expenses and accrued income 26,713 6,846

31,301 9,519

Short-term investments

Other short-term investments 14 312,064 210,019

312,064 210,019

Cash and bank balances

Cash and bank balances 15 247,322 693,354

247,322 693,354

Total current assets 590,688 912,892

TOTAL ASSETS 600,244 925,514

EQUITY AND LIABILITIES

Equity

Restricted equity

Share capital 16 8,015 8,015

8,015 8,015

Non-restricted equity

Share premium account 1,404,595 1,404,595

Retained earnings -513,362 -347,590

Loss for the year -366,504 -173,085

21 524,729 883,919

Total equity 532,745 891,935

Long-term liabilities

Provision for social security contributions, incentive program 13 892 3,111

892 3,111

Short-term liabilities

Trade payables 34,512 10,678

Tax liabilities 570 349

Other liabilities 1,105 859

Accrued expenses and deferred income 17 30,420 18,583

66,607 30,469

TOTAL EQUITY AND LIABILITIES 600,244 925,514

FINANCIAL STATEMENTS

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

STATEMENT OF CHANGES IN EQUITY

SEK thousand Restricted equity Non-restricted equity Total

1 Jan 2021 - 31 Dec 2021 Note Share capital

Paid-up not

regd share

capital

premium

account

Ret earnings

incl profit/loss

for year Total equity

Opening balance, 1 January 2021 8,015 - 1,404,595 -520,676 891,935

Loss for the period - - - -366,504 -366,504

Transactions with shareholders

Employee stock option program 19 - - - 7,314 7,314

- - - 7,314 7,314

Closing balance, 31 December

2021

8,015 - 1,404,595 -879,866 532,745

1 Jan 2020 - 31 Dec 2020

Opening balance, 1 January 2020 5,824 - 488,272 -351,823 142,273

Loss for the period - - - -173,085 -173,085

Transactions with shareholders

Issue of new shares for the year 2,184 - 971,575 - 973,759

Capital acquisition cost - - -56,214 - -56,214

Warrant program, TO 2017/2020 19 7 - 962 - 969

Employee stock option program 19 - - - 4,233 4,233

2,191 - 916,323 4,233 922,747

Closing balance, 31 December 2020 8,015 - 1,404,595 -520,676 891,935

FINANCIAL STATEMENTS

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

STATEMENT OF CASH FLOWS

1 Jan 2021 1 Jan 2020

SEK thousand Note -31 Dec 2021 -31 Dec 2020

Cash flow from operating activities

Operating loss -370,267 -173,945

Adjustments for non-cash items 23 8,541 10,592

Interest received etc. 10 927 501

Interest paid etc. 10 -3 -1

Cash flow from operating activities

before changes in working capital -360,802 -162,853

Changes in working capital

Change in receivables -21,782 -219

Change in trade payables 23,834 -1,943

Changes in other current liabilities 12,304 8,627

14,357 6 466

Cash flow from operating activities -346,445 -156,387

Investing activities

Acquisition of intangible assets 27 - -8 111

Acquisition of tangible assets 26 -383 -890

Increase in other short-term investments 14 -177,046 -225,000

Decrease in other short-term investments 14 75,000 125,000

-102,429 -109,002

Financing activities

Issue of new shares for the year 973,759

Capital acquisition cost -56,214

Warrant program, TO 2017/2020 969

- 918,514

Change in cash and cash equivalents -448,873 653,125

Cash and cash equivalents at beginning of period 693,354 39,870

Exchange rate difference in cash equivalents 10 2 839 359

Cash and cash equivalents at end of period *) 15 247,322 693,354

*) The company’s cash and cash equivalents consist of cash and disposable balances with banks and other credit institutions.

FINANCIAL STATEMENTS

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

Notes

NOTE 1

General information

Cantargia AB (publ), reg. no. 556791-6019, is a biotechnology

company that develops antibody-based treatments for life-

threatening diseases and has established a platform based

on the protein IL1RAP, involved in a number of cancer forms

and inflammatory diseases. The lead project, the antibody

nadunolimab (CAN04), is being studied clinically in combination

with chemotherapy or immune therapy in a series of clinical

studies – CANFOUR, CIRIFOUR, CAPAFOUR, CESTAFOUR and

TRIFOUR – with a primary focus on non-small cell lung cancer

and pancreatic cancer. Positive interim data from the combina-

tion with chemotherapy indicate stronger efficacy than would

be expected from chemotherapy alone. Cantargia’s second

project, the antibody CAN10, blocks signaling via IL1RAP in a

different manner than nadunolimab and addresses treatment

of serious autoimmune/inflammatory diseases, with initial

focus on systemic sclerosis and myocarditis.

Cantargia consists of one legal entity, Cantargia AB, corporate

ID number 556791-6019.

Cantargia is listed on Nasdaq Stockholm (ticker: CANTA) since

September 2018.

NOTE 2

Accounting policies and valuation principles

Significant accounting policies applied in preparing this an-

nual report are described in the following. Unless otherwise

stated, these policies have been applied consistently for all

the annual periods presented. This annual report was adopt-

ed by the Board of Directors on 29 April 2022.

2.1 Basis of preparation of financial statements

Cantargia AB has prepared its annual accounts in accor-

dance with the Swedish Annual Accounts Act and Recom-

mendation RFR 2 Financial Reporting for Legal Entities

of the Swedish Financial Reporting Board (RFR 2). RFR 2

states that a legal entity is required to apply the Interna-

tional Financial Reporting Standards (IFRS), as adopted by

the EU, insofar as this is possible under the Swedish Annual

Accounts Act and Pension Obligations Vesting Act and with

regard to the relationship between accounting and taxation.

The recommendation specifies the exemptions from and

the additional disclosures that are required in relation to

IFRS. The preparation of financial statements in compliance

with the applied regulations requires the use of critical ac-

counting estimates. Management is also required to make

certain judgements in applying the company’s accounting

policies. Areas which involve a high degree of judgement,

are complex or where assumptions and estimates have a

material impact are described in Note 4.

2.1.1 Changes to accounting policies and

disclosures

Standards, amendments, and interpretations of existing standards

that have entered into force during the financial year. No IFRS or

IFRIC interpretations that have not yet become effective are

expected to have a material impact on Cantargia.

2.1.2 Formats

The format prescribed in the Swedish Annual Accounts Act is

used for the income statement and balance sheet. The state-

ment of changes in equity is presented in the format pre-

scribed in IAS 1 Presentation of Financial Statements but must

contain the columns indicated in the Annual Accounts Act.

2.2 Segment reporting

Cantargia’s chief operating decision maker is the company’s

Chief Executive Officer (CEO), as it is primarily he who is respon-

sible for the allocation of resources and evaluation of results.

The CEO receives reports containing financial information for

Cantargia as a whole. Cantargia has not yet commercialized any

part of the development projects in which it is engaged and

therefore is not yet generating any income. All activities of

Cantargia are considered to constitute a single operating

segment.

2.3 Intangible assets

(i) Research and development costs

Cantargia is a research-based biotech company that is en-

gaged in research and development of antibody-based ther-

apy for severe diseases. All expenditure directly attributable

to the development and testing of identifiable and unique

products which are controlled by Cantargia is accounted for

as an intangible asset when the following criteria are met:

•

it is technically feasible to complete the product so that it

will be available for use,

•

Cantargia intends to complete the product for use or sale,

•

there is reason to expect that the company will be able to

use or sell the product,

•

it can be shown that the product will generate probable

future economic benefits,

•

adequate technical, economic and other resources are

available to complete the development of and use or

sell the product, and

•

the costs attributable to the product during its develop-

ment can be reliably measured.

FINANCIAL STATEMENTS

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

The overall risk in ongoing development projects is high. The

risk includes safety and efficacy risks that can arise in clinical

studies, regulatory risks related to applications and approval

for clinical studies and marketing authorization, as well as

IP risks related to approval of patent applications and the

maintenance of patents. All development work is therefore

deemed to be research, as the work does not meet the cri-

teria listed below. As of 31 December 2021 no development

costs had been recognized as intangible assets in the balance

sheet, as it was not considered that all of the above criteria

for capitalization had been met for any of the development

projects in which the company is engaged.

Research expenditure is expensed as incurred.

Capitalized development costs are recognized as intangible

assets and amortized from the date when the asset is ready

for use.

(ii) Patents, licenses, and similar assets

Intangible assets also include patents, licenses, and other

similar rights. Acquired such assets are reported at acquisi-

tion value and amortized on a straight-line basis over the

expected period of utilization, which normally coincides with,

for example, the patent’s validity period. The estimated use-

ful life for current patent is nine years.

2.4 Impairment of intangible assets

Intangible assets which are not ready for use (capitalized de-

velopment costs) are not amortized but are tested annually

for impairment. However, no capitalized development costs

are currently recognized in Cantargia’s balance sheet.

2.5 Leases

Cantargia has chosen not to apply IFRS 16 Leasing Agree-

ment, and has instead chosen to apply RFR2 IFRS 16

Leasing Agreement p.2-12, which means that all leasing

fees are reported as an expense on a straight-line basis

over the leasing period.

2.6 Foreign currency

Transactions in foreign currency are translated to the func-

tional currency at the exchange rates applying at the transac-

tion date or the date when the items were restated. Foreign

exchange gains and losses are recognized in the statement

of comprehensive income in other operating expenses (for-

eign exchange differences trade payables) and in net finan-

cial income/expense (foreign exchange differences currency

accounts).

2.7 Financial assets and liabilities

Recognition and derecognition in the balance sheet

A financial asset or financial liability is recognized in the bal-

ance sheet when the company becomes a party to the con-

tractual terms and conditions of the instrument. A financial as-

set is derecognized in the balance sheet when the contractual

right to the cash flow from the asset expires or is settled. The

same applies when the risks and benefits of ownership of the

asset have essentially been transferred to another party and

the company no longer has control over the financial asset. A

financial liability is derecognized in the balance sheet when the

contractual obligation is fulfilled or extinguished.

Measurement of financial instruments

Cantargia applies the exemption in RFR 2 under which IFRS 9

Financial Instruments is not applied. Instead, cost is applied in

accordance with the Annual Accounts Act.

Financial assets are initially measured at cost including any

transaction costs directly attributable to the acquisition of

the asset. After initial recognition, current financial assets are

measured at the lower of cost and net realizable value at the

balance sheet date.

Trade receivables and other receivables classified as current

assets are measured at acquisition value less expected credit

losses.

Measurement of financial liabilities

Short-term trade payables are recognized at cost.

2.8 Employee benefits

Retirement benefit obligations

Cantargia has both defined contribution and defined ben-

efit pension plans. Defined contribution pension plans are

post-employment benefit plans under which the com-

pany pays fixed contributions into a separate legal entity.

Cantargia has no legal or constructive obligations to pay

further contributions if this legal entity does not hold suf-

ficient assets to pay all employee benefits relating to em-

ployee service in the current and prior periods. The contri-

butions are recognized as personnel expenses when they

fall due.

Cantargia’s defined benefit pension plans consist of the

ITP 2 plan’s defined benefit pension obligations. The ITP

2 plan’s defined benefit pension obligations for retirement

and family pensions are secured through an insurance pol-

icy with Alecta. According to a statement from the Swed-

ish Financial Reporting Board, UFR 10 Recognition of the

ITP 2 Plan that is funded through an insurance policy with

Alecta, this is a defined benefit plan covering several em-

ployers. For the financial year 2021, Cantargia has not had

access to information that would enable it to account for

its proportionate share of the plan’s obligations, assets,

and expenses. It has therefore not been possible to rec-

ognize the plan as a defined benefit plan. The ITP 2 pen-

sion plan secured through an insurance policy with Alecta

is therefore accounted for as a defined contribution plan.

The contribution for defined benefit retirement and family

pensions is calculated individually and depends on factors

FINANCIAL STATEMENTS

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

such as salary, previously earned pension and expected

remaining period of service.

The collective funding ratio is defined as the market value

of Alecta’s assets as a percentage of its commitments to

policyholders calculated using Alecta’s actuarial methods

and assumptions, which do not comply with IAS 19. The

collective funding ratio should normally be permitted to

vary within a range of 125 and 175 per cent. If Alecta’s

collective funding ratio were to fall below 125 per cent or

exceed 175 per cent, it would be necessary to take mea-

sures that will enable the ratio return to the normal range.

In case of a low funding ratio, one measure that can be

taken is to raise the agreed price for new policies and the

expansion of existing benefits. If the funding ratio is high,

contributions can be reduced. At the end of the financial

year 2021, Alecta’s surplus, as defined by the collective

funding ratio, was 172 per cent (2020: 148 per cent).

Short-term benefits

Short-term benefits are employee benefits which are payable

within twelve months of the balance sheet date in the year in

which the employee earned the benefit, with the exception of

post-employment benefits and termination benefits.

Short-term benefits include

1. salaries, social security contributions and other payroll

costs,

2. paid short-term leave such as paid holiday and paid sick

leave,

3. bonuses, and

4. non-monetary benefits such as health care for current

employees.

Accounting treatment – paid short-term leave

Short-term benefits for paid leave that can be saved should

be accounted for as an expense and current liability when the

employees have performed the services which entitle them

to future paid leave. Short-term benefits for paid leave that

are not saved should be recognized as an expense when the

leave is taken.

Accounting treatment – bonus plans

The expected expense for profit sharing and bonuses

should be recognized only if

1. the company has a legal or constructive obligation as a

result of past events, and

2. the amount of the obligation can be reliably estimated.

Termination benefits

Termination benefits are paid when an employee’s employ-

ment has been terminated by the company before the normal

time of retirement or when an employee accepts voluntary

redundancy in exchange for such compensation. Cantargia

recognizes termination benefits at the earliest of the follow-

ing: (a) when the company can no longer withdraw the offer

of such benefits; and (b) when the company recognizes re-

structuring costs provided for under IAS 37 which involve the

payment of severance pay. If the company has made an of-

fer to encourage voluntary redundancy, termination benefits

are calculated based on the number of employees that are

expected to accept the offer. Benefits expiring more than 12

months after the end of the reporting period are discounted

to present value.

2.9 Tax

The tax on the profit for the year in the income statement con-

sists of current tax and deferred tax. Current tax is calculated

on the taxable profit for the period at the applicable tax rate.

The actual tax expense is calculated based on the tax rules

that have been enacted or substantively enacted by the bal-

ance sheet date.

Deferred tax liabilities are recognized for all taxable temporary

differences. However, deferred tax attributable to untaxed

reserves is accounted for separately, as untaxed reserves are

recognized as a separate item in the balance sheet. Deferred

tax liabilities are recognized to the extent that it is probable

that future taxable profits will be available against which the

temporary differences can be wholly or partially offset.

Deferred tax is calculated using tax rates (and laws) which

have been adopted or announced at the balance sheet date

and are expected to apply when the deferred tax asset is real-

ized or the deferred tax liability is settled.

As the company is not generating any profit, the deferred tax

asset on tax losses arising from tax losses presented in Note

11 has not been assigned any value.

2.10 Revenue

Interest income

Interest income is recognized using the effective interest

method.

2.11 Cash and cash equivalents and statement

of cash flows

The statement of cash flows is prepared using the indirect

method. The reported cash flow only includes transactions

involving incoming or outgoing payments. The company clas-

sifies cash, available deposits with banks and other credit in-

stitutions as cash and cash equivalents.

2.12 Share capital

Ordinary shares are classified as equity.

Transaction costs which are directly attributable to the issu-

ance of new shares or options are recognized, net of tax, in

equity less a deduction from the proceeds of the issue.

2.13 Earnings per share

(i) Earnings per share before dilution

Earnings per share before dilution are calculated by dividing:

FINANCIAL STATEMENTS

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

•

profit/loss for the year

•

with a weighted average number of outstanding ordinary

shares during the period

(ii) Earnings per share after dilution

To calculate earnings per share after dilution, the amounts

used in calculating earnings per share before dilution are

adjusted by taking into account:

•

the weighted average of those additional ordinary shares

that would have been outstanding on the conversion of

all potential ordinary shares.

2.14 Tangible Assets

Tangible assets consist of furniture, work machinery and pro-

duction equipment. These are reported at historical cost minus

cumulative depreciation and any impairments. The historical

cost includes the purchase price and any expenses directly at-

tributable to the asset for putting it in place and making it fit for

its intended purpose.

Depreciation of tangible assets is posted to expenses in such

a way that the value of the asset minus its estimated residual

value at the end of its service life is written down on a linear

basis over its expected service life, estimated at:

•

Machinery and other technical facilities, 3-5 years

•

Fixtures, tools and installations, 3-5 years

Estimated service lives, residual values and depreciation

methods are reviewed at least at the end of each accounting

period, and the effects of any changes in estimates are report-

ed in advance.

The reported value of a tangible asset is removed from the

statement of financial position when it is scrapped or sold, or

when no future economic benefits are expected from using or

scrapping/disposing of the asset. The gain or loss made from

scrapping or disposing of the asset is the difference between

any net income from the disposal and its reported value, post-

ed to the income statement in the period in which the asset is

removed from the statement of financial position.

2.15 Employee stock option program

The emoloyee stock option program is classified as an equity-

settled program. The fair value of the service entitling an em-

ployee to an allotment of options under Cantargia’s employ-

ee stock option scheme is recognized as a personnel expense

with a corresponding increase in equity. The total amount

expensed is based on the fair value of the allocated options:

•

including all market-related terms (e.g., target share price),

•

excluding any effect of service and non-market vesting

conditions (e.g., profitability and that the employee remain

an employee of the company for a specified period),

•

including the effect of non-vesting conditions (e.g., a re-

quirement that the employee save or hold the shares for

a specified period).

The total expense is recognized over the vesting period,

which is the period during which all of the specified vesting

conditions are to be satisfied. At the end of each reporting

period, the company reviews its assessments of how many

shares are expected to be vested based on the non-market

vesting conditions and service vesting conditions. Any de-

viations from the original assessments resulting from the

review are recognized in the income statement with corre-

sponding adjustments in equity.

As a basis for provisions for social security contributions, the

fair value of vested employee stock options is remeasured at

the end of each reporting period. Social security contributions

are accounted for as personnel expenses and a correspond-

ing provision is made in non-current or current liabilities de-

pending on the remaining term of each scheme.

NOTE 3

Financial risk management

Through its activities, Cantargia is exposed to a wide range of

financial risks: market risk (mainly currency risk), credit risk

and liquidity risk. Cantargia’s overall risk management pol-

icy focuses on the unpredictability of financial markets and

strives to minimize potential adverse effects on Cantargia’s

financial results.

(a) Market risk

(i) Currency risk

Cantargia is primarily exposed to EUR and USD currency risk.

Currency risks arise when future business transactions or

recognized assets or liabilities are expressed in a currency

that is not the functional currency of the unit. In Cantargia,

these transactions mainly comprise purchases and trade

payables in EUR and USD. Cantargia’s policy is to hedge 50%

of the anticipated cash flow in EUR. At the end of the re-

porting period, Cantargia had an exposure to EUR of kEUR

396 (184) and kUSD 22 (28) in the form of outstanding

trade payables.

In addition to trade payables in EUR and USD, the company

has EUR and USD currency accounts, which at 31 December

2021 had a balance of kEUR 18,523 (182) and kUSD 1,244

(190). If the Swedish krona had weakened/strengthened

by 10 percent against the EUR, the effect on profit/loss for

the year and equity on 31 December 2021 would have been

+/- 18.8 (0.2) MSEK. If the Swedish krona had weakened/

strengthened by 10 percent against the USD, the effect on

profit/loss for the year and equity on 31 December 2021

would have been +/- 1.07 (0.2) MSEK.

FINANCIAL STATEMENTS

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

(ii) Cash flow interest rate risk and fair value

The interest rate risk is considered to be limited as there is no

borrowing and the interest-bearing investments only include

low-risk funds. kSEK 237,064 (60,019) refers to invest-

ments in fixed income funds, where the return is dependent

on short-term interest rates.

(iii) Price risk

Cantargia is not exposed to any significant price risk.

(b) Credit risk

Credit risk in Cantargia arises through deposits and invest-

ments with banks and financial institutions. All bank deposits

and investments are held with counterparties with low credit

risk. Cantargia is not exposed to any significant credit risk, as

all counterparties are large, well-known banks.

Since starting its operations, Cantargia has been reporting an

operating loss and cash flow is expected to remain mainly

negative until Cantargia succeeds in generating revenue from

a launched product. The company’s planned preclinical and

clinical studies will entail significant costs and the compa-

ny’s development of its product candidate could prove more

time- and cost-consuming than planned. Cantargia will also

continue to need significant capital for research and develop-

ment in order to conduct preclinical and clinical studies with

CAN04 and for its continued research into and development

of CAN10, CANxx and IL1RAP. Access to and the terms and

conditions for further financing are affected by several fac-

tors, such as the possibility of concluding partnership agree-

ments and general access to risk capital. If Cantargia, wholly

or partly, were to fail to acquire sufficient capital, or succeed

in doing so only on unfavorable terms, this could have a sig-

nificant negative impact on the company’s operations, finan-

cial position and results.

Cantargia uses rolling forecasts to ensure that the company

has sufficient cash assets to meet its operational require-

ments. This monitoring takes the form of reporting to the

Board, whereby outcomes and forecasts are compared with

the three-year business plan that is produced and approved

by the Board each year.

Surplus liquidity in Cantargia, in excess of what is required

to manage working capital requirements, is invested in in-

terest-bearing current accounts. At the balance sheet date,

Cantargia had short-term investments in three- and twelve

month fixed-rate accounts of kSEK 0 and kSEK 75,000, re-

spectively (kSEK 75,000 and kSEK 75,000, respectively), and

kSEK 237,064 (kSEK 60,019) invested in a short-term fixed

income fund. In addition to this, Cantargia had bank deposits

of kSEK 247,322 (kSEK 693,354) at the balance sheet date.

The following table shows an analysis of Cantargia’s financial

liabilities by remaining maturity from the balance sheet date.

The amounts indicated in the table are the contractual, un-

discounted cash flows.

Less than 2

months

More than

2 months

Total

31 December 2021

Trade payables 34,512 - 34,512

Other liabilities 1,105 - 1,105

Total 35,617 - 35,617

Less than 2

months

More than

2 months

Total

31 December 2020

Trade payables 10,678 - 10,678

Other liabilities 859 - 859

Total 11,537 - 11,537

FINANCIAL STATEMENTS

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

(d) Management of capital

To maintain or adjust its capital structure, Cantargia can

choose to return capital to the shareholders, issue new

shares or sell assets to reduce its liabilities.

In 2021, Cantargia’s strategy, which remained unchanged

from 2020, was to secure the company’s ability to conti-

nue as a going concern by running the company’s research

projects in an optimal manner and thereby generate re-

turns for its shareholders and benefits for other stakehol-

ders. Cantargia also aims to maintain an optimal capital

structure in order to keep its capital costs down with a low

to minimal risk. Cantargia is mainly engaged in research

and development. Prior to the listing of the company’s

shares on the main list of Nasdaq Stockholm on 25 Sep-

tember 2018, the company’s activities were financed th-

rough a number of share offerings. Equity is therefore re-

garded as the company’s capital.

NOTE 4

Critical accounting estimates and judgements

The preparation of financial statements and application of ac-

counting policies are often based on judgements, estimates

and assumptions made by management that are deemed rea-

sonable at the time when they are made. The estimates and

assumptions applied are based on historical experience and

other factors which are deemed reasonable under current cir-

cumstances. The results of these are then used to determine

carrying amounts of assets and liabilities that are not readily

apparent from other sources. Actual outcomes may differ from

these estimates and assessments.

Estimates and assumptions are reviewed regularly. Any

changes are recognized in the period in which the change is

made if the change affects only that period, or in the period

in which the change is made and future periods if the change

affects both the current and future periods.

Capitalization of development costs

The most critical judgement in Cantargia’s financial report-

ing refers to the date of capitalization of development costs.

Based on the accounting policies that are presented in Note

2, all development activities in which Cantargia is engaged are

currently classified as research, for which costs should not be

capitalized. The achievement of positive results in phase III

clinical trials is the earliest point at which the criteria for capi-

talization can be considered to be met.

Tax losses

There is no expiration date which limits the use of the com-

pany’s tax losses. It is, however, uncertain at what point

in time it will be possible to use these tax losses to offset

taxable profits, as the company has not yet generated any

profits. The deferred tax asset arising from the tax loss has

therefore not been assigned any value. Changes in owner-

ship and historical and potential future capital acquisitions

may limit the amount of tax losses that can be used in future.

Incentive program (employee stock option program)

The company has an incentive program in the form of an

employee stock option program. The accounting principles

for this are described in Note 2. The cost of remuneration

reported in a period depends on the original valuation made

at the time of the agreement with the option holder, the

number of months the participant must serve to be entitled

to his options (accrual over this time), the number of op-

tions expected to be earned by the participants according to

the terms of the plans and a continuous revaluation of the

value of the tax benefit for the participants in the plans (as

a basis for allocation for social costs). The estimates that

affect the cost in a period and the corresponding increase

in equity are primarily input data in the valuations of the

options. The models used for this purpose are the so-called

Black & Scholes model and Monte Carlo simulation. Impor-

tant assumptions in these valuations are set out in Note 19.

In addition to the valuations, the cost is affected for a period

by an estimate of the number of people who are expected

to earn their options. Through mainly the history of staff

turnover, the company management has a very good basis

for estimating the number of participants who will com-

plete the program.

COVID-19

In recent years, the COVID-19 pandemic has developed in a

way that has put a heavy strain on society. The greatest risk

for Cantargia is considered to concern clinical studies where

the increased burden on healthcare may lead to delays in pa-

tient recruitment, or that patients are affected by travel- or

visitor restrictions and therefore cannot attend the expected

visits. However, given that COVID-19 has developed with

variable aggressivity in different countries and that hospitals

are adapting different strategies for conducting clinical stud-

ies, the risks for major delays or major quality problems are

considered to be limited. Moreover, the high demand on CO-

VID-19 vaccines and treatments has placed a high demand on

the global capacity for drug development, which has led to a

shortage of raw materials and consumables for the manufac-

ture of substances for clinical use. Nevertheless, the proactive

measures taken by Cantargia have limited the impact of the

challenges posed by the pandemic. Cantargia continues to fol-

low the infection spread and its consequences.

NOTE 5

Segment information

Cantargia’s chief operating decision maker is the company’s

Chief Executive Officer (CEO), as it is primarily he who is re-

sponsible for the allocation of resources and the evaluation

of results. The CEO receives reports containing financial in-

formation for Cantargia as a whole. Cantargia has not yet

commercialised any part of the development projects in

which it is engaged and therefore is not yet generating any

income. All activities of Cantargia are considered to consti-

tute a single operating segment. All fixed assets are located

in Sweden.

FINANCIAL STATEMENTS

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

2021

Salaries and other benefits

(of which bonuses)

Retirement

benefit costs

Directors, CEO and other senior executives 21,225 3,774

Other employees 11,427 1,781

Total 32,652 5,554

(2,641)

NOTE 7

Employee benefits, etc.

Salaries and other benefits and social security contributions (for employees)

2021 2020

Salaries and other benefits *) 29,608 20,906

Social security contributions **) 2,531 6,661

Retirement benefit costs, defined contribution 5,554 3,895

Other personnel expenses 270 248

Total employee benefits 37,964 31,711

*) Whereof share-based incentives 7,314 (4,233)

**)Whereof share-based incentives -2,219 (3 111)

2020

Salaries and other benefits

(of which bonuses)

Retirement

benefit costs

Directors, CEO and other senior executives

16,554 3,124

Other employees

6,254 771

Total 22,808 3,895

(2,363)

2021 2020

PwC

Audit engagement* 339 269

Audit services in addition to audit engagement - 107

Tax advisory services 167 257

Other services 58 15

Total 564 648

* Audit engagement refers to fees for the statutory audit, i.e. work that has been necessary to produce the auditor’s report.

NOTE 6

Auditors’ fees and expenses

Expensed audit fees for the financial year and expensed fees for other services provided by the

company’s auditors are presented in the following.

FINANCIAL STATEMENTS

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

Average number of employees

2021 2020

Number of

employees

Of which

men

Number of

employees

Of which

men

Sweden 22 9 15 6

Total

22 9 15 6

Gender distribution for Directors and other senior executives

2021 2020

Number at

balance sheet day Of which men

Number at

balance sheet day Of which men

Directors 8 5 7 4

CEO and other senior executives

9 7 8 6

Total 17 12 15 10

The contract between the company and CEO is subject to six months’ notice by either party.

Disclosures on benefits for the CEO, Directors and other senior executives are presented in Note 18.

NOTE 8

Leases

2021 2020

Lease payments expensed during the financial year 1,513 1,135

The distribution of the nominal value of future minimum lease payments under non-cancellable leases is as follows:

2021 2020

Due within one year 2,039 1,281

Due after more than one year but within five years 6,563 2,296

Due after more than five years - -

Total 8,602 3,577

Lease expenses refer to rent for premises and office equipment.

NOTE 9

Other operating expenses

2021 2020

Foreign exchange losses, trade payable -2,249 -630

Total -2,249 -630

FINANCIAL STATEMENTS

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

NOTE 10

Financial income and expense

2021 2020

Interest income and similar income

Interest income 927 501

Gain/loss on sale of short-term investments - -

Profit on sale of other long-term securities holdings *) - -

Foreign exchange gains, currency accounts 2,839 359

Total 3,766 860

2021 2020

Interest expense and similar charges

Other interest expense -3 -1

Total -3 -1

NOTE 11

Income tax

2021 2020

Current tax

Current tax on profit for the year - -

Adjustments relating to prior years - -

Total current tax/income tax - -

The difference between the reported tax expense and the applicable tax rate is explained by the following table.

2021 2020

Reconciliation of reported tax for the year

Loss before tax -366,504 -173,085

Reported tax for the year

Tax at applicable tax rate 20,6 (2020: 21,4)% 75,500 37,040

Tax effect of non-deductible expenses -154 -159

Tax effect of non-taxable income - -

Tax effect of deductible expenses recognised directly in equity - 12,030

Tax losses for which no deferred tax asset has been recognised -75,346 -48,912

Reported tax for the year 0 0

2021 2020

Tax losses

Unused tax losses for which no deferred tax asset has been recognised 982,734 616,978

Potential tax benefit, 20,6% (2020: 20,6%) 202,443 127,097

There is no expiration date which limits the use of the tax losses. It is, however, uncertain at what point in time it will be possible

to use these tax losses to offset taxable profits. The deferred tax asset arising from the tax loss has therefore not been assigned

any value.

*) See Note 13

FINANCIAL STATEMENTS

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

NOTE 12

Net foreign exchange difference

Foreign exchange differences have been recognised in the statement of comprehensive income as follows:

2021 2020

Other operating expenses (Note 9) -2,249 -630

Interest expense and similar charges (Note 10) 2,839 359

Total 590 -271

NOTE 14

Short‑term investments

31 Dec 2021 31 Dec 2020

Fixed-rate account, Sparbanken Skåne 75,000 150,000

Liquidity funds, Sparbanken Skåne 237,064 60,019

Total 312,064 210,019

Fixed-rate account, Sparbanken Skåne, 31 Dec 2021, 75 MSEK fixed 12 months, 0.30% interest.

Fixed-rate account, Sparbanken Skåne, 31 Dec 2020, 75 MSEK fixed 3 months, 0.20% interest and 75 MSEK fixed

12 month, 0.20% interest.

Liquidity funds, Sparbanken Skåne, low risk category 2

NOTE 15

Cash and cash equivalents

Cash and cash equivalents in the statement of

cash flows include the following: 31 Dec 2021 31 Dec 2020

Available bank deposits

SEK 45,149 689,852

EUR 189,477 1,950

USD 11,254 1,552

GBP 571 -

CHF 458 -

NOK 413 -

Total 247,322 693,354

NOTE 13

Long‑term liabilities

31 Dec 2021 31 Dec 2020

Provision for social security contributions, incentive program 892 3,111

Total 892 3,111

FINANCIAL STATEMENTS

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

NOTE 16

Share capital

Ordinary shares Number of shares (thousands) Share capital

1 January 2020 72,804 5,824

Issue of new shares 27,388 2,191

31 December 2020 100,193 8,015

1 January 2021 100,193 8,015

Issue of new shares - -

31 December 2020 100,193 8,015

At 31 December 2021, the share capital consisted of 100,192,737 shares with a quotient value of SEK 0.08 per share.

Each share carries one vote. At 31 December 2020, the share capital consisted of 100,192,737 shares with a quotient

value of SEK 0.08 per share. Each share carries one vote. All shares issued by the parent company are fully paid up.

(a) Sale of services 2021 2020

Lunds Universitet (Thoas Fioretos) 0 463

Lunds Universitet (Gunilla Westergren-Thorsson) 650 500

Total 650 963

The following transactions have been made with related parties:

NOTE 17

Accrued expenses and deferred income

31 Dec 2021 31 Dec 2020

Accrued salaries and social security contributions 1,926 1,322

Capital acquisition cost 0 1,264

Project expenses *) 23,358 10,708

Other accrued expenses 5,135 5,289

Total 30,420 18,583

NOTE 18

Related party disclosures

Related parties comprise senior executives of the company, i.e. the Board of Directors and management team and their

family members.

Cantargia has a a research agreement with Lund University, where Gunilla Westergren-Thorsson, Professor of Lung

Biology, is engaged in research. Under the agreement, Gunilla Westergren-Thorsson, who is a related party of an insider

at Cantargia, will conduct a project aimed at expanding knowledge about IL1RAP as part of her employment at Lund

University. Under the agreement, Cantargia has the right to use and, if applicable, take over all research results from

the projects free of charge.

The company considers that the above agreements have been concluded on market terms.

FINANCIAL STATEMENTS

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

Remuneration of senior executives

2021 2020

Salaries and other short-term benefits *) 18,180 14,652

Post-employment benefits 3,428 3,124

Other long-term benefits - -

Termination benefits - -

Total 21,608 17,776

*) Whereof share-based incentives 4,562 (3,175)

Guidelines for executive remuneration

Fees are paid to the Chairman and members of the Board of Directors in accordance with the resolution of the Annual General

Meeting. A separate fee is paid for committee work. In essence, the guidelines for remuneration and other terms of employment

for management, which are adopted by the shareholders’ meeting, stipulate that the company shall offer its senior executives

a normal market remuneration, that resolutions on remuneration shall be prepared by a special Remuneration Committee of

the Board and that the applicable criteria shall comprise the senior executive’s responsibilities, role, expertise and position. De-

cisions on remuneration of senior executives are made by the Board excluding any Directors who are in a dependent position in

relation to the company and management. The guidelines must be applied to new contracts, or to changes to existing contracts

that are entered into with senior executives after the adoption of the guidelines and until new or revised guidelines are adopted.

Complete guidelines for 2021 and the ones proposed for 2022 are described in the Director’s report.

Salaries and remuneration for the year

Salaries, remuneration, social security contributions and retirement benefit costs have been paid in the following amounts.

Please note that under the heading ”Variable remuneration” are in addition to variable remuneration, incentive programs

decided by the Annual General Meeting also included (see Note 19). The outcome for AGM-decided incentive programs

regarding the CEO and senior executives for the year 2021 amounted to SEK 925 (707) thousand.

2021 Fee Basic salary

Variable

remuneration

Retirement

benefit cost

Other

benefits

Share-based

incentives

Social sec

contribu-

tions Total

Magnus Persson, Chairman 620 - 195 815

Thoas Fioretos, Director 270 - - - - - 85 355

Karin Leandersson, Director 290 - - - - - 91 381

Patricia Delaite, Director 340 - - - - - 47 387

Anders Martin-Löf, Director 345 - - - - - 108 453

Flavia Borellini, Director 520 - - - - - - 520

Damian Marron, Director 330 - - - - - - 330

Magnus Nilsson, Director 330 - - - - - - 330

Göran Forsberg, CEO - 2,236 737 927 38 1,219 -102 5,056

Total, Board and CEO 3,045 2,236 737 927 38 1,219 424 8,627

Other senior executives (8 persons) - 8,946 1,699 2,846 81 3,343 373 17,288

Total 3,045 11,182 2,436 3,774 119 4,562 797 25,915

*) Social security contributions for the CEO and other senior executives has been affected positivly in 2021 as the reserve for

social secutiry contribution related to the employee option program has decreasd under 2021, due to a falling share price. The

positive effect amounts to SEK 453 thousand for the CEO and SEK 1,228 thousand for other senior executives.

FINANCIAL STATEMENTS

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

2020 Fee Basic salary

Variable

remuneration

Retirement

benefit cost

Other

benefits

Share-based

incentives

Social sec

contribu-

tions Total

Magnus Persson, Chairman 465 - - - - - 146 611

Claus Asbjorn Andersson, Director 230 - - - - - - 230

Thoas Fioretos, Director 230 - - - - - 72 302

Karin Leandersson, Director 230 - - - - - 72 302

Patricia Delaite, Director 215 - - - - - 32 247

Anders Martin-Löf, Director 270 - - - - - 85 355

Flavia Borellini, Director

262 - - 262

Göran Forsberg, CEO - 2,197 688 843 25 855 1,271 5,879

Total, Board and CEO 1,902 2,197 688 843 25 855 1,679 8,188

Other senior executives (7 persons) - 7,310 1,281 2,281 105 2,320 3,997 17,295

Total 1,902 9,507 1,969 3,124 130 3,175 5,676 25,484

Pensions

The retirement age for the CEO is 65 years.

The pension contribution for the CEO is 35 per cent of the pensionable salary. Pensionable salary refers to the fixed monthly

salary multiplied by 12.2.

For other employed senior executives, the retirement age is currently 65 years, in accordance with the applicable ITP

Agreement. The pension contribution is calculated in accordance with Section 2 of the ITP Agreement and its contribution

tariffs, which are determined by Alecta.

Term of notice and severance pay

The term of notice in case of termination by Cantargia shall be no more than six months for the Chief Executive Officer and no

more than six months for other senior executives. The term of notice in case of termination by the employee shall be at least

six months for the CEO and at least three months for other senior executives. In addition to the term of notice, severance pay

may be paid to the CEO up to a maximum of twelve months’ salary and employment benefits.

Directors’ fees

The Directors’ fees approved at the Annual General Meeting on 26 May 2021 are SEK 550,000 to the Chairman of the Board

and SEK 250,000 to each of the other Directors. For the Remuneration Committee, a fee of SEK 40,000 is paid to the commit-

tee chairman and SEK 20,000 to each of the other members, and for the Audit Committee SEK 95,000 is paid to the committee

chairman and SEK 40,000 to each of the other members. It was also resolved that, for each physical Board meeting (up to a

maximum of six meetings) that is held in Sweden and attended by the Director, a meeting fee of SEK 20,000 be paid to each

Director living outside the Nordic region. The full amount of Directors’ fees has been charged to earnings in 2021.

FINANCIAL STATEMENTS

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

NOTE 19

Share‑based incentive programs

Cantargia’s incentive program aims to create a long-term commitment to the company, create opportunities to attract and

retain expertise and deliver long-term shareholder value.

Incentive scheme

At the Annual General Meeting of the Company on 26 May 2021, the shareholders decided to introduce a variable share-based

incentive scheme for 2021 to senior executives and key employees of the Company. The scheme is based on the incentive scheme

adopted at the 2019 Annual General Meeting which has been designed to promote investment in and ownership of the

Company’s shares.

The scheme is designed as a variable long-term remuneration scheme under which participants commit to use distributed

variable cash remuneration to acquire shares of the Company. The scheme is based on that or those annual bonus targets

which are defined by the board for the Company and which refer to the Company’s activities, financial key performance

indicators and internal processes. Target achievement will be assessed by the Company’s board of directors in connection

with the adoption of the annual report for each year. When the target achievement has been determined by the Company’s

board of directors, the amount due to each participant in the scheme is distributed, whereupon acquisition of shares by the

participants should be made as soon as possible.

Participants are required to use their whole remuneration under the scheme, net of tax, to acquire shares of Cantargia on

the stock market.

The maximum payout to each participant in the scheme for 2021 is capped at 10 per cent of his or her fixed annual salary.

The total size of the scheme for 2021 is capped at SEK 1 800,000, excluding social security contributions. In case of partial

target achievement, a portion of the maximum payout will be distributed.

The outcome for incentive programs decided by the AGM regarding the CEO and senior executives for the year 2021

amounted to SEK 1,462 (707) thousand.

Warrant program , TO 2017/2020

At the Annual General Meeting on 30 May 2017, the shareholders approved a private placement of warrants of series

2017/2020, entitling the holders to subscribe for new shares of Cantargia. The offering, in which the pre-emption rights of

existing shareholders were waived, comprised a maximum of 85,000 warrants of series 2017/2020. All warrants were sub-

scribed by the Chairman of the Board, Magnus Persson. The warrants were issued at a price of SEK 0.85 per warrant, which

represents the market value of the warrants (warrant premium), as calculated using the Black-Scholes model at 21 July 2017.

The calculation of the issue price was made by an independent valuation expert. On 8 January 2018, Cantargia completed a

rights issue, which resulted in a restatement of TO 2017/2020.

After restatement, each warrant entitles the holder to subscribe for 1.02 new shares of the company at an exercise price

of SEK 11.18 per share. Subscription of shares with the support of the warrants could take place during the period from 23

June 2020 to 14 July 2020. In July 2020, Magnus Persson exercised his right to subscribe for shares in accordance with the

program, increasing the number of shares by 86,700 shares. and the share capital increased by SEK 6,936. This corresponded

to a dilution of approximately 0.1 percent of the shares and votes. TO 2017/2020 is thus completed.

2021 2020

Average exercise

price per warrant

(SEK)

Number of

warrants

Average exercise

price per warrant

(SEK)

Number of

warrants

1 January

- - 11.40

85,000

Allocated during the year

- - - -

Exercised during the year

- - 11.40

85,000

Unexercised warrants expired during the year

- - - -

31 December

- - -

Exercisable at 31 December

- - - -

FINANCIAL STATEMENTS

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

Employee Stock Option Scheme 2020/2023

At the Annual General Meeting on 27 May 2020, the shareholders approved the introduction of Employee Stock Option

Scheme 2020/2023. The options will be offered to employees of or consultants to the company and will be allocated to the

participants free of charge. The options have a three-year vesting period (1/3 per year) from the date of allocation, provided,

with the usual exceptions, that the participant remains an employee of or continues to provide services to Cantargia. Once

vested, the options can be exercised during a two-year period. Each vested option gives the holder the right to purchase one

share of the company at a pre-defined price. The price per share will be determined as 150 percent of the volume weighted

average price of the company’s shares traded on Nasdaq Stockholm during the ten trading days preceding the allocation date.

Employee Stock Option Scheme 2021/2024

At the Annual General Meeting on 26 May 2021, the shareholders approved the introduction of Employee Stock Option

Scheme 2021/2024. The options will be offered to employees of or consultants to the company and will be allocated to the

participants free of charge. The options have a three-year vesting period from the date of allocation, provided, with the usual

exceptions, that the participant remains an employee of or continues to provide services to Cantargia. Once vested, the op-

tions can be exercised during a two-year period. Each vested option gives the holder the right to purchase one share of the

company at a pre-defined price. The price per share will be determined as 150 percent of the volume weighted average price

of the company’s shares traded on Nasdaq Stockholm during the ten trading days preceding the allocation date.

Summary of total cost for incentive programs

2021 2020

Share-based remuneration -7,314 -4,233

Provision for social security contributions, incentive programs 2,219 -3,110

Total -5,095 -7,343

Summary of provisions for social security contributions for share-based remuneration *)

Long-term liabilities 2021 2020

Amount at the start of the year 3,110 -

Provisions for the year -2,219 3,110

Total long-term liabilities 892 3,110

*) All provisions have a term of more than 1 year, which is why all provisions are long-term.

FINANCIAL STATEMENTS

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

Calculation of fair value of employee option programs

The fair value on the allotment date was calculated using the Black & Scholes valuation model, which takes into considera-

tion the exercise price, the term of the options, share price on the allotment date, expected volatility in the share price, and

risk-free interest

for the term of the options.

Employee option

program

Allotment/

start date

Maturity

date

Fair value

upon issue

of the option

program,

SEK

Exercise

price, SEK

Volatility

Number of

options

Vested

2020/2023:1 2020-06-09 2025-06-09 7.15 31.71 50% 1,680,000 77%

2020/2023:2 2020-07-10 2025-07-10 7.44 33.15 50% 60,000 74%

2020/2023:3 2021-02-04 2026-02-04 16.55 87.55 50% 80,333 61%

2020/2023:4 2021-02-24 2026-02-24 15.57 85.00 50% 40,000 52%

2021/2024:1 2021-09-17 2026-09-17 7.28 36.66 53% 1,240,000 9%

2021/2024:2 2021-11-10 2026-11-10 5.48 24.48 55% 70,000 5%

Changes in existing incentive programs during 2020 (number of options)

2021 2020

1 January 1,740,000 86,700

Granted instruments

Employee stock option program 2021/2024 1,334,000 -

Employee stock option program 2020/2023 147,000 1,740,000

Exercised instruments

Warrant program TO 2017/2020 *) -86,700

Lapsed instruments

Employee stock option program 2021/2024 -24,000 -

Employee stock option program 2020/2023 -26,667 -

Total change 1,430,333 1,653,300

31 December 3,170,333 1,740,000

Number of shares granted instruments may entitle to

2021-12-31 2020-12-31

Warrant program, TO 2017/2020 *) - -

Employee stock option program 2021/2024 1,310,000 -

Employee stock option program 2020/2023 1,860,333 1,740,000

Number of shares granted instruments may entitle to 3,170,333 1,740,000

*) The company’s Chairman of the Board, Magnus Persson, exercised in July his right

to subscribe for shares in accordance with the 2017/2020 warrant program.

The risk-free interest rate is zero in the model.

The weighted average exercis price for the options amounts to 35.20 SEK.

The expected volatility in the share price is based on the historical volatility over a five-year period.

Refers to the number of outstanding options net after deduction of revoked options.

FINANCIAL STATEMENTS

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

NOTE 20

Earnings per share

Earnings per share are calculated by dividing the profit/loss for the year by a weighted average number of outstanding ordinary shares

during the period.

To enable the Company to deliver shares to participants in Employee Stock Option Scheme 2020/2023 as well as 2021/2024 in a

simple and cost-effective manner, the AGM resolved to approve a directed issue of 4,900,000 warrants to the Company. One warrant

represents one potential ordinary share. The warrants do not have a dilutive effect for 2021 or 2020, as a conversion of warrants into

ordinary shares would result in a lower loss per share.

2021 2020

Profit/loss for the period attributable to parent company shareholders

Total -366,504 -173,085

Weighted average number of outstanding ordinary shares (thousands) 100,193 89,380

Earnings per ordinary share, SEK -3.66 -1.94

NOTE 21

Appropriation of retained earnings

The Annual General Meeting is asked to decide on the appropriation of the

following earnings (SEK).

Loss brought forward -513,361,585

Share premium account 1,404,594,653

Loss for the year -366,503,514

The Board of Directors proposes that the following sum be carried forward: 524,729,554

The Board of Directors proposes that no dividend be paid for the financial year 2021.

NOTE 22

Events after the end of the reporting period

•

Clinical development of nadunolimab in pancreatic cancer was advanced by including nadunolimab in

Pancreatic Cancer Action Network’s (PanCAN) clinical phase II/III trial Precision Promise

•

The first patient with non-squamous non-small cell lung cancer was treated in a new arm in CANFOUR,

and the first triple-negative breast cancer patient in the TRIFOUR trial.

•

Cantargia announced that new clinical data for nadunolimab from the CANFOUR and CIRIFOUR studies

would be presented at ASCO in June.

•

Positive safety data were reported from the CIRIFOUR trial with nadunolimab combined with pembro-

lizumab.

•

New encouraging results from non-GLP-regulated toxicology studies were reported for CAN10 and start

of the clinical phase I study was scheduled for early 2023.

•

Positive preclinical efficacy data were presented for CAN10 in a model of systemic sclerosis at the 7th

Systemic Sclerosis World Congress.

•

A third party appealed the previous decision by the European Patent Office to reject the opposition of

one of Cantargia’s patents for treatment of solid tumors.

•

The executive management was strengthened by the appointment of Dr. Roger Belusa as interim

Chief Medical Officer.

FINANCIAL STATEMENTS

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

NOTE 23

Adjustments for non‑cash items

2021 2020

Depreciation -3,446 -3,248

Employee option program -5,095 -7,344

Total -8,541 -10,592

NOT 24

Costs by nature of expense

2021 2020

Project costs -304,229 -121,897

Other external expenses -22,378 -15,985

Personnel expenses -37,966 -32,185

Other operating expenses -2,249 -630

Depreciation -3,446 -3,248

Total -370,267 -173,945

As of the year-end report 2018, operating expenses are presented based on a classification into the functions “Research

and development costs”, “Administrative expenses” and “Other operating expenses”. On a “by nature” basis, the sum of

expenses by function is distributed as follows.

NOT 25

Agreements for cooperation

Patheon Biologics B.V. (part of ThermoFischer Scientific)

In May 2019, Cantargia signed an agreement with Patheon Biologics B.V. (”Patheon”) on future production of the antibody

CAN04 (nadunolimab). This agreement complements the earlier agreement with Celonic AG (previous Glycotope Biotech-

nology Gmbh). This agreement secures Cantargia’s additional production capacity for future clinical trials. Initially, CAN04

focused on the treatment of patients with non-small cell lung cancer or pancreatic cancer. However, during 2020 and 2021

the focus has been broadened to include additional cancer types. In preparation for later phases of clinical development, an

increase in production capacity is part of the development plan. Patheon has manufacturing facilities in both Europe and the

US, and during 2021 Patheon scaled up the process to 2,000 liters. Patheon is under the agreement entitled to compensation

for ongoing work, but no part of future sales revenue for CAN04.

Specialized Medical Services-oncology BV

In May 2016, Cantargia entered into a framework agreement with Specialized Medical Services-oncology BV (”SMS Onco-

logy”) on the execution of clinical studies as a so-called CRO. The parties have subsequently agreed under the framework

agreement that SMS-oncology should act as CRO for the company’s first clinical phase I/IIa study with CAN04.

BioWa Inc.

Cantargia signed a licensing agreement with BioWa Inc. (”BioWa”) in 2015. Under the agreement, Cantargia is granted a non-

exclusive license to use the technology platform POTELLIGENT® for the manufacture of the drug candidate CAN04. For the

license, Cantargia pays an annual fixed fee and step-by-step sales-based royalties. In addition, BioWa also has the right to

so-called “milestone payments” when fulfilling certain clinical, regulatory, and commercial targets.

PanCAN

Cantargia has initiated a collaboration with Pancreatic Cancer Action Network (PanCAN) to include nadunolimab in combination

with chemotherapy as first-line experimental therapy in metastatic pancreatic cancer (PDAC), in the clinical phase II/III study

Precision Promise

. The trial utilizes a Bayesian platform designed by PanCAN in collaboration with the US Food and Drug

Administration (FDA) to provide a basis for marketing approval of therapies in PDAC. The primary endpoint for the trial is

overall survival. PanCAN’s plan is to submit a pre-IND application to the FDA in Q2 2022 for including the nadunolimab

treatment arm as an experimental arm in Precision Promise

. Trial results for the nadunolimab arm are expected to be

available in 2027 or earlier.

FINANCIAL STATEMENTS

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

2021 2020

Ingoing accumulated acquisition value 7,070 6,379

Investments - 691

Outgoing accumulated acquisition value 7,070 7,070

Ingoing accumulated depreciation -2,357 -

Depreciation -2,357 -2,357

Outgoing accumulated depreciation -4,714 -2,357

Closing balance 2,356 4,713

Tangible assets

Machinery and other technical facilities

NOTE 26

2021 2020

Ingoing accumulated acquisition value 701 501

Investments 383 200

Outgoing accumulated acquisition value 1,084 701

Ingoing accumulated depreciation -152 -12

Depreciation -190 -140

Outgoing accumulated depreciation -342 -152

Closing balance 742 548

Fixtures, tools and installations

Patent

2021 2020

Ingoing accumulated acquisition value 8,111 -

Investments - 8,111

Outgoing accumulated acquisition value 8,111 8,111

Ingoing accumulated depreciation -751 -

Depreciation -901 -751

Outgoing accumulated depreciation -1,652 -751

Closing balance 6,459 7,360

Intangible assets

NOTE 27

FINANCIAL STATEMENTS

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

Signatures

The annual accounts have been prepared in accordance with generally accepted accounting standards and

provide a true and fair view of the company’s financial position and results. The Directors’ Report for the

company gives a true and fair overview of the performance, financial position and earnings of the company,

and describes significant risks and uncertainties faced by the company. The income statement and balance

sheet will be presented for adoption at the Annual General Meeting on 23 May 2022.

We presented our auditor’s report on 29 April 2022.

Öhrlings PricewaterhouseCoopers AB

Ola Bjärehäll

Authorised Public Accountant

Magnus Persson

Chairman

Karin LeanderssonMagnus Nilsson

Anders Martin‑Löf

Thoas Fioretos Patricia Delaite

Lund, 29 April 2022.

Damian Marron

Flavia Borellini

Göran Forsberg

Chief Executive Officer

FINANCIAL STATEMENTS

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

AUDITOR’S REPORT

Report on the annual accounts

Opinions

We have audited the annual accounts of Cantargia AB (publ)

for the year 2021. The annual accounts of the company are

included on pages 35-71 in this document.

In our opinion, the annual accounts have been prepared in ac-

cordance with the Annual Accounts Act and present fairly, in

all material respects, the financial position of Cantargia AB

(publ) as of 31 December 2021 and its financial performance

and cash flow for the year then ended in accordance with the

Annual Accounts Act. The statutory administration report is

consistent with the other parts of the annual accounts.

We therefore recommend that the general meeting of share-

holders adopts the income statement and report on financial

position for Cantargia AB (publ).

Our opinions in this report on the annual accounts are consis-

tent with the content of the additional report that has been

submitted to the company’s Board of Directors in accordance

with the Audit Regulation (537/2014) Article 11.

Basis for Opinions

We conducted our audit in accordance with International

Standards on Auditing (ISA) and generally accepted auditing

standards in Sweden. Our responsibilities under those stan-

dards are further described in the Auditor’s Responsibilities

section. We are independent of Cantargia AB (publ) in accor-

dance with professional ethics for accountants in Sweden

and have otherwise fulfilled our ethical responsibilities in ac-

cordance with these requirements. This includes that, based

on the best of our knowledge and belief, no prohibited ser-

vices referred to in the Audit Regulation (537/2014) Article

5.1 have been provided to the audited company or, where

applicable, its parent company or its controlled companies

within the EU.

We believe that the audit evidence we have obtained is

sufficient and appropriate to provide a basis for our opinions.

Our audit approach

Audit scope

We designed our audit by determining materiality and as-

sessing the risks of material misstatement in the consoli-

dated financial statements. In particular, we considered

where management made subjective judgements; for

example, in respect of significant accounting estimates

that involved making assumptions and considering future

events that are inherently uncertain. As in all of our audits,

we also addressed the risk of management override of

internal controls, including among other matters consid-

eration of whether there was evidence of bias that repre-

sented a risk of material misstatement due to fraud.

We tailored the scope of our audit in order to perform

sufficient work to enable us to provide an opinion on the

consolidated financial statements as a whole, taking into

account the structure of the company, the accounting pro-

cesses and controls, and the industry in which the com-

pany operates.

Materiality

The scope of our audit was influenced by our application of

materiality. An audit is designed to obtain reasonable assur-

ance whether the financial statements are free from mate-

rial misstatement. Misstatements may arise due to fraud

or error. They are considered material if individually or in

aggregate, they could reasonably be expected to influence

the economic decisions of users taken on the basis of the

financial statements.

To the general meeting of the shareholders of Cantargia AB (publ), corporate identity

number 556791-6019

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

AUDITOR’S REPORT

Based on our professional judgement, we determined certain

quantitative thresholds for materiality, including the overall

materiality for the financial statements as a whole as set out

in the table below. These, together with qualitative consid-

erations, helped us to determine the scope of our audit and

the nature, timing and extent of our audit procedures and to

evaluate the effect of misstatements, both individually and in

aggregate on the financial statements as a whole.

Key audit matters

Key audit matters of the audit are those matters that, in our

professional judgment, were of most significance in our audit

of the annual accounts of the current period. These matters

were addressed in the context of our audit of, and in forming

our opinion thereon, the annual accounts as a whole, but we

do not provide a separate opinion on these matters.

Key audit matter

How our audit considered the Key audit

matter

Research and development expenses- cut-off and

completeness

The expenses for the company´s research and development

activities during the financial year 2021 totaled approxima-

tely SEK 353 million, which corresponds to approximately

95% of the company´s total.

The expenses consist of mainly personnel related expen-

ses and external expenses for the clinical work that is being

conducted. In our audit we have focused on these expenses

since they are material amounts and that there is a risk re-

garding the completeness, the cut-off and the accuracy in

the expenses.

Our audit of the expenses of research and development has

included, but is not limited to, the following measures:

•

Obtained an understanding of the company´s rou-

tines, business monitoring and internal control.

•

Testing of internal controls for approval of payment

of invoices and salaries.

•

Checked and performed detail testing against invoices

and other supporting financial documentation.

•

Based on samples requested and received external con-

firmations from suppliers of the year´s purchases and

size of outgoing accounts payable as per December 31,

2021.

•

Performed detailed testing of salaries. Analyzed

costs based on our knowledge of the business and

follow up of the company´s internal reports.

Other Information than the annual accounts

This document also contains information other than the an-

nual report and can be found on page 1-34 and 76-88. The

other information also includes the Remuneration Report

which we received before the signing date of this Auditor’s

report. It is the Board of Directors and the President who are

responsible for this other information.

Our statement regarding the annual report, it is our respon-

sibility to read the information identified above and consider

whether the information is to a significant extent incompat-

ible with the annual report.

In connection with our audit of the annual accounts and con-

solidated accounts, our responsibility is to read the informa-

tion identified above and consider whether the information is

materially inconsistent with the annual accounts and consoli-

dated accounts. In this procedure we also consider our knowl-

edge otherwise obtained in the audit and assess whether the

information otherwise appears to be materially misstated.

If, based on the work done on this information, we conclude

that the other information contains a material misstatement,

we are required to report it. We have nothing to report in that

regard.

Responsibilities of the Board of Director’s and the

Managing Director

The Board of Directors and the Managing Director are re-

sponsible for the preparation of the annual accounts and that

they give a fair presentation in accordance with the Annual

Accounts Act. The Board of Directors and the Managing Di-

rector are also responsible for such internal control as they

determine is necessary to enable the preparation of annual

accounts that are free from material misstatement, whether

due to fraud or error.

In preparing the annual accounts, The Board of Directors and

the Managing Director are responsible for the assessment of

the company’s ability to continue as a going concern. They

disclose, as applicable, matters related to going concern and

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

using the going concern basis of accounting. The going con-

cern basis of accounting is however not applied if the Board

of Directors and the Managing Director intend to liquidate

the company, to cease operations, or has no realistic alterna-

tive but to do so.

The Audit Committee shall, without prejudice to the Board of

Director’s responsibilities and tasks in general, among other

things oversee the company’s financial reporting process.

Auditor’s responsibility

Our objectives are to obtain reasonable assurance about

whether the annual accounts as a whole are free from mate-

rial misstatement, whether due to fraud or error, and to issue

an auditor’s report that includes our opinions. Reasonable

assurance is a high level of assurance, but is not a guarantee

that an audit conducted in accordance with ISAs and gener-

ally accepted auditing standards in Sweden will always de-

tect a material misstatement when it exists. Misstatements

can arise from fraud or error and are considered material if,

individually or in the aggregate, they could reasonably be ex-

pected to influence the economic decisions of users taken on

the basis of these annual accounts.

A further description of our responsibility for the audit of the

annual accounts is available on Revisorsinspektionen’s

website: www.revisorsinspektionen.se/revisornsansvar.

This description is part of the auditor´s report.

Report on other legal and regulatory

requirements

Opinions

In addition to our audit of the annual accounts, we have also

audited the administration of the Board of Director’s and the

Managing Director of Cantargia AB (publ) for the year 2021 and

the proposed appropriations of the company’s profit or loss.

We recommend to the general meeting of shareholders that

the profit dealt with in accordance with the proposal in the

statutory administration report and that the members of the

Board of Director’s and the Managing Director be discharged

from liability for the financial year.

Basis for Opinions

We conducted the audit in accordance with generally ac-

cepted auditing standards in Sweden. Our responsibilities

under those standards are further described in the Auditor’s

Responsibilities section. We are independent of Cantargia AB

(publ) in accordance with professional ethics for accountants

in Sweden and have otherwise fulfilled our ethical responsi-

bilities in accordance with these requirements.

We believe that the audit evidence we have obtained is suf-

ficient and appropriate to provide a basis for our opinions.

Responsibilities of the Board of Director’s and the

Managing Director

The Board of Directors is responsible for the proposal for ap-

propriations of the company’s profit or loss. At the proposal

of a dividend, this includes an assessment of whether the

dividend is justifiable considering the requirements which the

company’s type of operations, size and risks place on the size

of the company’s equity, consolidation requirements, liquid-

ity and position in general.

The Board of Directors is responsible for the company’s or-

ganization and the administration of the company’s affairs.

This includes among other things continuous assessment

of the company’s financial situation and ensuring that the

company´s organization is designed so that the accounting,

management of assets and the company’s financial affairs

otherwise are controlled in a reassuring manner. The Manag-

ing Director shall manage the ongoing administration accord-

ing to the Board of Directors’ guidelines and instructions and

among other matters take measures that are necessary to

fulfill the company’s accounting in accordance with law and

handle the management of assets in a reassuring manner.

Auditor’s responsibility

Our objective concerning the audit of the administration, and

thereby our opinion about discharge from liability, is to obtain

audit evidence to assess with a reasonable degree of assur-

ance whether any member of the Board of Directors or the

Managing Director in any material respect:

•

has undertaken any action or been guilty of any omis-

sion which can give rise to liability to the company, or

•

in any other way has acted in contravention of the Com-

panies Act, the Annual Accounts Act or the Articles of

Association.

Our objective concerning the audit of the proposed appro-

priations of the company’s profit or loss, and thereby our

opinion about this, is to assess with reasonable degree of

assurance whether the proposal is in accordance with the

Companies Act.

Reasonable assurance is a high level of assurance, but is

not a guarantee that an audit conducted in accordance with

generally accepted auditing standards in Sweden will always

detect actions or omissions that can give rise to liability to

the company, or that the proposed appropriations of the

company’s profit or loss are not in accordance with the Com-

panies Act.

A further description of our responsibility for the audit of the

administration is available on Revisorsinspektionen’s web-

site: www.revisorsinspektionen.se/revisornsansvar. This de-

scription is part of the auditor’s report.

AUDITOR’S REPORT

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

The auditor’s examination of the ESEF report

Opinion

In addition to our audit of the annual accounts, we have also

examined that the Board of Directors and the Managing

Director have prepared the annual accounts a format that en-

ables uniform electronic reporting (the Esef report) pursuant

to Chapter 16, Section 4(a) of the Swedish Securities Market

Act (2007:528) for Cantargia AB (publ) for the financial year

2021.

Our examination and our opinion relate only to the statutory

requirements.

In our opinion, the Esef report has been prepared in a for-

mat that, in all material respects, enables uniform electronic

reporting.

Basis for Opinions

We have performed the examination in accordance with

FAR’s recommendation RevR 18 Examination of the Esef

report. Our responsibility under this recommendation is

described in more detail in the Auditors’ responsibility sec-

tion. We are independent of Cantargia AB (publ) in accor-

dance with professional ethics for accountants in Sweden

and have otherwise fulfilled our ethical responsibilities in

accordance with these requirements.

We believe that the evidence we have obtained is sufficient

and appropriate to provide a basis for our opinion.

Responsibilities of the Board of Director’s and the

Managing Director

The Board of Directors and the Managing Director are re-

sponsible for ensuring that the Esef report has been prepared

in accordance with the Chapter 16, Section 4(a) of the Swedish

Securities Market Act (2007:528), and for such internal control

that the Board of Directors and the Managing Director deter-

mine is necessary to prepare the Esef report without material

misstatements, whether due to fraud or error.

Auditor’s responsibility

Our responsibility is to form an opinion with reasonable as-

surance whether the Esef report is in all material respects

prepared in a format that meets the requirements of Chap-

ter 16, Section 4(a) of the Swedish Securities Market Act

(2007:528), based on the procedures performed.

RevR 18 requires us to plan and execute procedures to

achieve reasonable assurance that the Esef report is pre-

pared in a format that meets these requirements.

Reasonable assurance is a high level of assurance, but it is

not a guarantee that an engagement carried out according

to RevR 18 and generally accepted auditing standards in

Sweden will always detect a material misstatement when it

exists. Misstatements can arise from fraud or error and are

considered material if, individually or in aggregate, they could

reasonably be expected to influence the economic decisions

of users taken on the basis of the ESEF report.

The audit firm applies ISQC 1 Quality Control for Firms that

Perform Audits and Reviews of Financial Statements, and

other Assurance and Related Services Engagements and ac-

cordingly maintains a comprehensive system of quality con-

trol, including documented policies and procedures regarding

compliance with professional ethical requirements, profes-

sional standards and legal and regulatory requirements.

The reasonable assurance engagement involves obtaining

evidence, through various procedures, that the Esef report

has been prepared in a format that enables uniform electron-

ic reporting of the annual accounts. The procedures selected

depend on the auditor’s judgment, including the assessment

of the risks of material misstatement in the report, whether

due to fraud or error. In carrying out this risk assessment,

and in order to design procedures that are appropriate in the

circumstances, the auditor considers those elements of in-

ternal control that are relevant to the preparation of the Esef

report by the Board of Directors and the Managing Director,

but not for the purpose of expressing an opinion on the ef-

fectiveness of those internal controls. The reasonable assur-

ance engagement also includes an evaluation of the appro-

priateness and reasonableness of assumptions made by the

Board of Directors and the Managing Director.

The procedures mainly include a technical validation of the

Esef report, i.e. if the file containing the Esef report meets

the technical specification set out in the Commission’s Del-

egated Regulation (EU) 2019/815 and a reconciliation of the

Esef report with the audited annual accounts.

Öhrlings PricewaterhouseCoopers AB, 113 97 Stockholm,

was appointed auditor of Cantargia AB by the general meet-

ing of the shareholders on 30 April 2021 and has been the

company’s auditor since 13 January 2010.

Stockholm 29 April 2022

Öhrlings PricewaterhouseCoopers AB

Ola Bjärehäll

Authorized Public Accountant

AUDITOR’S REPORT

CORPORATE GOVERNANCE

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

Corporate governance report

CANTARGIA AB (publ) (“Cantargia” or “the Company”) is a

Swedish public limited company listed on Nasdaq Stockholm.

Cantargia’s corporate governance is based on Swedish law,

Nasdaq Stockholm’s rules for issuers and internal rules and

regulations. The Company also applies the Swedish Corpo-

rate Governance Code (“the Code”). The Code is available at

www.bolagsstyrning.se

APPLICATION OF THE CODE

The Code applies to all Swedish companies whose shares are

listed on a regulated market in Sweden. The Company is not

required to comply with all rules in the Code, as the Code it-

self allows for deviations from the rules, provided that any

such deviations, and the chosen solution, are described and

the reasons for the deviation are explained in the corporate

governance report (in accordance with the ‘comply or explain’

principle). The Company has currently not identified any de-

viations from the Code.

SHAREHOLDERS

Cantargia’s shares have been listed for trading on Nasdaq

Stockholm since 25 September 2018 (mid-cap as of 2021).

At 31 December 2021, the total number of shares and vot-

ing rights in the Company was 100,192,737, represented

by 12,191 shareholders. For further information on the

Company’s ownership structure and major shareholders,

see page 45 of the annual report.

SHAREHOLDERS’ MEETINGS

In accordance with the Swedish Companies Act, the share-

holders’ meeting is the Company’s highest decision-making

body. At a shareholders’ meeting, the shareholders exercise

their voting rights on key issues, such as the adoption of in-

come statements and balance sheets, the appropriation of

the Company’s earnings, release from liability for the mem-

bers of the Board and the Chief Executive Officer, the elec-

tion of Directors and auditors, and remuneration of Directors

and auditors’ fees. Under Cantargia’s Articles of Association,

notice of a shareholders’ meeting is given by advertisement

in Post- och Inrikes Tidningar and through publication of the

notice on the Company’s website. When notice is given, this

must be advertised simultaneously in Svenska Dagbladet.

Shareholders who wish to participate in the negotiations at

a shareholders’ meeting must be registered in the share re-

gister maintained by Euroclear Sweden AB six business days

before the meeting and register to attend the shareholders’

meeting with the Company by the date indicated in the notice

of the meeting. Shareholders can attend the meeting perso-

nally or by proxy and can be assisted by up to two persons. A

shareholder has the right to vote all shares held. Each share

in Cantargia entitles the holder to one vote. Shareholders

who wish to request that a particular issue be addressed at a

shareholders’ meeting must submit a written request to the

Board of Directors.

NOMINATION COMMITTEE

Under a resolution of the Annual General Meeting of Cantargia

on 26 May 2021, the Chairman of the Board is required, prior

to the Annual General Meeting 2022, to convene, based on

the ownership of Cantargia at 30 September 2021, a

Nomination Committee consisting of one representative

for each of the three largest shareholders of the Company

as well as the Chairman of the Board. In accordance with these

principles, the following Directors have been appointed:

•

Marianne Nilsson, appointed by Swedbank Robur fonder

•

Jannis Kitsakis, appointed by the Fourth Swedish Natio-

nal Pension Fund (AP4)

•

Mikael Wiberg, appointed by Alecta Pensionsförsäkring

Ömsesidigt

•

Magnus Persson, Chairman of the Board

The Nomination Committee has appointed Marianne Nilsson

as its chairman.

The Nomination Committee is required to perform the duties

assigned to it under the Code and held 4 meetings prior to the

Annual General Meeting 2022. The Nomination Committee’s

complete proposals for the 2022 AGM will be published in

connection with the notice of AGM.

CORPORATE GOVERNANCE

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

Responsibilities and work of the Board

Under the Companies Act, the Board of Directors is responsi-

ble for the Company’s administration and organisation, which

means that it is responsible for adopting goals and strate-

gies, ensuring that procedures and systems for evaluating

adopted goals are put in place, monitoring the Company’s

results and financial position, and evaluating its operational

management. Under the Code, the Chairman of the Board

shall be elected by the AGM and hold a special responsibility

for leading the work of the Board and ensuring that the Board

operates in an organised and effective manner.

The Board of Directors operates in accordance with written

rules of procedure which are reviewed and adopted annually

at the inaugural Board meeting. The rules of procedure regu-

late Board practices, functions, and the division of responsi-

bilities between the Board and CEO, and between the Board

and its committees. In connection with the inaugural Board

meeting after each Annual General Meeting, the Board also

adopts the terms of reference for the Chief Executive Officer,

which include instructions for financial reporting. The Board

convenes in accordance with a schedule that is defined an-

nually. In addition to these Board meetings, further meetings

can be convened to address issues which cannot be deferred

to the next regular meeting.

In 2021, the Board convened on 12 occasions, including

through 11 online meetings or meetings by correspon-

dence. The Directors’ attendance is shown in the table

above. The activities of the Board in 2021 were dominated

by discussions and strategic decisions on matters relating

to the Company’s product development, in particular its

main project CAN04 and its successor, CAN10/CANxx. The

Board also adopted resolutions regarding the business plan

with financial targets, risk management, dividend policy

and financial reports.

Independence of Attendance

Total Director´s

fee 2021, TSEK

Name Position

Member

since

The Company and

management

Major share‑

holders

Board

meetings

Audit

Committee

meetings

Remu‑

neration

Committee

meetings

Drug de‑

velopment

Committee

meetings

Magnus Persson Chariman 2016 Yes Yes 12/12 - 2/2 1/1

620

Patricia Delaite Director 2017 Yes Yes 11/12 - 1/1 1/1

340

Thoas Fioretos Director 2010 Yes Yes 12/12 3/3 1/1 -

270

Karin Leandersson Director 2016 Yes Yes 12/12 5/5 - -

290

Anders Martin‑Löf Director 2018 Yes Yes 12/12 5/5 - -

345

Flavia Borellini Director 2020 Yes Yes 12/12 - - 1/1

520

Damian Marron

Director 2021 Yes Yes 5/5 - 1/1 -

330

Magnus Nilsson

Director 2021 Yes Yes 5/5 2/2 - -

330

Claus Asbjørn

Andersson

Director 2013 Yes Yes 7/7 - 1/1 -

Elected to the Board at the Annual General Meeting 26 May 2021.

Board member until the Annual General Meeting 26 May 2021.

BOARD OF DIRECTORS

Under Cantargia’s Articles of Association, the Board of Direc-

tors shall, insofar as it is elected by the shareholders’ meet-

ing, consist of not less than three and not more than eight

Directors, with no deputies. Currently, the Company’s Board

of Directors consists of eight ordinary Directors, including

the Chairman, who have been elected by the shareholders’

meeting until the period of the end of the 2022 AGM. The

composition of Cantargia’s Board of Directors is considered

to meet the requirements of the Code in respect of indepen-

dence from the Company and from the Company’s major

shareholders. For a detailed presentation of the Directors,

see page 84 of the annual report.

CORPORATE GOVERNANCE

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

Board committees

The Board has established an Audit Committee, a Remune-

ration Committee, and a Drug Development committee. The

members of the committees are appointed at the inaugural

Board meeting and the committees’ activities and authority

are regulated in the committees’ terms of reference. The

matters addressed at the meetings of the committees are

minuted and a report is presented at the following meeting

of the Board.

Audit Committee

The Company’s Audit Committee consists of three members:

Anders Martin-Löf (Chairman), Magnus Nilsson, and Karin

Leandersson. The Audit Committee shall, without prejudice

to other responsibilities and duties of the Board, monitor

the Company’s financial reporting, monitor the effectiveness

of the Company’s internal control, internal auditing and risk

management, keep itself informed on the audit of the an-

nual accounts and consolidated financial statements, and

on the conclusions presented in the quality control report

of the Swedish Inspectorate of Auditors, assess and moni-

tor the impartiality and independence of the auditor, paying

particular attention to whether the auditor provides other

services than auditing to the Company, and assist in drafting

proposed resolutions on the choice of auditors for adoption

by the shareholders’ meeting.

Remuneration Committee

The Company’s Remuneration Committee consists of

three members: Damian Marron (Chairman), Magnus Pers-

son and Thoas Fioretos. The Remuneration Committee is

tasked with preparing proposals for remuneration princi-

ples, and remuneration and other terms of employment for

the CEO and other senior executives.

Drug development Committee

The Board has established a Drug Development Commit-

tee consisting of three members: Flavia Borellini (chairman),

Magnus Persson and Patricia Delaite. The Drug Develop-

ment Committee shall act as an advisor and discussion part-

ner for the company management in scientific and strategic

issues concerning the development of the company’s project

portfolio.

Remuneration

Fees and other remuneration of Directors, including the

Chairman, are determined by the shareholders’ meeting. At

the Annual General Meeting on 26 May 2021, it was resolved

that Directors’ fees of SEK 550,000 to the Chairman of the

Board and SEK 250,000 to each of the other ordinary Direc-

tors be paid for the period until the end of the Annual General

Meeting 2022. It was also resolved that the Chairman of the

Audit Committee should receive SEK 95,000 and the other

members of the Audit Committee SEK 40,000 each, and

that the Chairman of the Remuneration Committee receive

SEK 40,000 and the other members of the Remuneration

Committee SEK 20,000 each and that the Chairman of the

Drug development Committee should receive SEK 230, 000

and the other members of the Drug development Commit-

tee SEK 50,000 each. It was further resolved that, for each

physical Board meeting (up to a maximum of six meetings)

that is held in Sweden and attended by the Director, a meet-

ing fee of SEK 20,000 be paid to each Director living outside

the Nordic region.

Evaluation

The Chairman of the Board ensures that an annual evalua-

tion of the work of the Board is carried out in which the Direc-

tors are given an opportunity to present their views on Board

practices, Board meeting materials, their own and other Di-

rectors’ contributions as well as the scope of the duties. The

results of the evaluation have been discussed by the Board

and presented by the Chairman of the Board to the Nomina-

tion Committee. It is considered that the combined expertise

of the Board is appropriate for the Company’s activities and

goals. The Board is considered to function very well, with all

members making constructive contributions to discussions

on strategy as well as the governance of the Company. The

dialogue between the Board and management is also con-

sidered to be good. The Board continually evaluates the work

of the Chief Executive Officer by monitoring the Company’s

progress towards the defined goals.

CHIEF EXECUTIVE OFFICER AND

MANAGEMENT

The Chief Executive Officer reports to the Board of Directors

and is responsible for the Company’s day-to-day manage-

ment and the operations of the group. The division of re-

sponsibilities between the Board and CEO is defined in the

rules of procedure for the Board and the terms of reference

for the CEO. Under the instructions for financial reporting,

the CEO is responsible for financial reporting in the Company

and is therefore required to ensure that the Board receives

sufficient information to enable it continuously to evaluate

the Company’s financial position.

The CEO shall keep the Board continuously informed about

the development of the Company’s business, its sales perfor-

mance, earnings and financial position, its liquidity and credit

situation, significant business events and any other event, and

any other event, circumstance or relationship that may be of

material importance to the Company’s shareholders.

To assist him in his activities, the CEO has appointed a man-

agement team. For a more detailed presentation of the CEO

and other members of the management team, see page 86.

Remuneration

At the Annual General Meeting on 27 May 2020, it was re-

solved to adopt guidelines for remuneration of the CEO and

other senior executives in accordance with what is stated on

page 41 of the annual report.

For information on the remuneration paid to the CEO and

other senior executives in the financial year 2021, see Note

18 on page 62 of the annual report.

CORPORATE GOVERNANCE

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

AUDITOR

The auditor is tasked with examining the Company’s annual

report and accounts as well as the Board of Directors’ and

CEO’s management of the Company. Under the Company’s

Articles of Association, the Company may have up to two

auditors with or without deputy auditors. The Company’s

auditors are Öhrlings PricewaterhouseCoopers AB with Ola

Bjärehäll as auditor-in-charge.

For information on the remuneration paid to the auditor in

the financial year 2021, see Note 6 on page 58 of the annual

report.

AUTHORISATION TO ISSUE SHARES

At the Annual General Meeting of the Company on 26 May

2021, it was resolved to authorise the Board, during the pe-

riod until the next AGM, on or one or several occasions and

with or without pre-emption rights for existing shareholders,

to decide to issue new shares, provided that such issuance

not comprise more than ten per cent of the number of out-

standing shares of the Company on the day of the AGM. It

shall also be possible to stipulate that such new shares be

issued for non-cash consideration or paid for by means of

set-off or subject to other terms and conditions.

SHARE‑BASED INCENTIVE SCHEMES

At the end of 2021, Cantargia had three incentive schemes

for senior executives and key personnel of the Company. The

incentive schemes have been introduced to provide longer-

term incentives for the Company’s management and em-

ployees and to promote investments in and ownership of the

Company’s shares.

Incentive scheme

At the Annual General Meeting of the Company on 26 maj

2021, it was decided to introduce a variable share-based in-

centive scheme for 2021, aimed at senior executives and key

personnel of the Company, based on the incentive scheme

adopted at the 2020 AGM.

The scheme is designed to offer the participants variable long-

term remuneration in the form of a group bonus that must be

used to acquire shares of the Company. The scheme is based

on that or those annual bonus targets which are defined by the

Board for the Company, and which refer to the Company’s ac-

tivities, financial key performance indicators and internal pro-

cesses. Target achievement will be assessed by the Company’s

Board of Directors in connection with the adoption of the an-

nual report for each year. When the target achievement has

been determined by the Board of Directors, the amount due to

each participant in the scheme will be paid out, and the parti-

cipant will then be required to acquire shares as soon as pos-

sible. Participants must use the full amount of remuneration

received under the scheme to acquire shares of the Company

in the stock market. It is the intention of the Board that the

scheme be a recurring annual scheme.

For further information about the scheme, see Note 19 on

page 65 of the annual report.

Employee Stock Option Scheme 2020/2023

At the Annual General Meeting on 27 May 2020, it was

resolved to introduce Employee Stock Option Scheme

2020/2023 for employees of the Company, comprising not

more than 1,900,000 employee stock options. The purpose

of the scheme is to enable the Company to retain skilled per-

sonnel through a long-term incentive scheme.

The employee stock options will be offered to employees

of or consultants to the Company and will be granted to the

participants free of charge. The employee stock options have

a three-year vesting period (1/3 per year) calculated from

the grant date, provided, with the usual exceptions, that the

participant is still employed by or otherwise engaged in the

Company and that the participant has not terminated his or

her employment or engagement in the Company as at the

vesting date. Once vested, the employee stock options can

be exercised over a two-year period.

Each vested employee stock option entitles the holder the

right to purchase one share of the Company at a predeter-

mined price. The price per share is determined as 150 per

cent of the weighted average price of the Company’s shares

traded on Nasdaq Stockholm during the ten trading days

preceding the grant date.

For further information about the scheme, see Note 19 on

page 65 of the annual report.

Employee Stock Option Scheme 2021/2024

At the Annual General Meeting on 26 May 2021, the share-

holders approved the introduction of Employee Stock Option

Scheme 2021/2024, compromising not more than 3,000,000

employee stock options. The purpose of the scheme is to en-

able the company to retain skilled personnel through a long-

term incentive scheme.

The options will be offered to employees of or consultants

to the company and will be allocated to the participants free

of charge. The options have a three-year vesting period from

the date of allocation, provided, with the usual exceptions,

that the participant remains an employee of or continues to

provide services to Cantargia. Once vested, the options can

be exercised during a two-year period.

Each vested option gives the holder the right to purchase

one share of the company at a pre-defined price. The price

per share will be determined as 150 percent of the volume

weighted average price of the company’s shares traded on

Nasdaq Stockholm during the ten trading days preceding the

allocation date.

For further information about the scheme, see Note 19 on

page 65 of the annual report.

CORPORATE GOVERNANCE

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

Dilution

To enable the Company to deliver shares to participants

in Employee Stock Option Scheme 2020/2023 as well as

2021/2024 in a simple and cost-effective manner, the AGM

resolved to approve a directed issue of 4,900,000 warrants

to the Company (i.e. Cantargia AB (publ)).

If fully exercised, the warrants would dilute the Company’s

share capital and voting rights by approximately 4.7 per cent.

INTERNAL CONTROL IN RESPECT OF

FINANCIAL REPORTING

The Board of Directors is responsible for ensuring that

Cantargia has good internal control and adequate, for-

malised procedures for ensuring compliance with adopted

principles for financial reporting. The general purpose of

the internal control system is to obtain reasonable assur-

ance that the Company’s operational strategies and goals

are monitored and that the owners’ investments are pro-

tected. The internal control system should also ensure with

a reasonable degree of certainty that the Company’s exter-

nal financial reports are reliable and correct and have been

prepared in accordance with generally accepted accounting

policies, applicable laws, and regulations as well as other

requirements applying to companies listed on Nasdaq

Stockholm.

The Company monitors, follows and manages any risks in

accordance with a risk management and corporate gov-

ernance policy that is evaluated on an ongoing basis and

adopted annually by the Board of Directors. Cantargia has

decided to adopt the COSO

framework, which is the most

widely accepted internal control framework for financial

reporting. The framework consists of five components:

control environment, risk assessment, control activities,

information and communication, and monitoring.

Control environment and risk assessment

The Board of Directors has adopted several policies, govern-

ing documents, and instructions with the aim of creating

and maintaining a functioning control environment. This is

achieved mainly through the rules of procedure for the Board

of Directors, the terms of reference for the Chief Executive

Officer, the rules of procedure for the Audit Committee, the

instructions for financial reporting, the Company’s account-

ing manual and the authorisation manual. The Company’s

policies and governing documents are evaluated on an on-

going basis and adopted annually by the Board of Directors.

The Board has also established an Audit Committee, which,

among other duties, is tasked with monitoring the Compa-

ny’s financial position and the effectiveness of the internal

control as well as internal auditing and risk management.

Responsibility for the day-to-day internal control activities

in respect of financial reporting has been delegated to the

Company’s Chief Executive Officer.

Cantargia’s Board of Directors is also required to carry out an

annual risk assessment in respect of strategic, operational,

legal, and financial risks to identify potential issues and as-

sess the Company’s risk exposure. The Audit Committee is

responsible for evaluating the Company’s risk situation on an

ongoing basis and shall assist the Board by submitting pro-

posals for the management of the Company’s financial risk

exposure and risk management.

Information and communication, and control activities

The Company’s information and communication paths are

aimed at ensuring the accuracy of financial reporting and

enabling reporting and feedback from the business to the

Board and management, for example be ensuring that gov-

erning documents in the form of internal policies, guide-

lines and instructions for financial reporting are made avail-

able to and are known by the employees concerned. With

regard to external communications, guidelines have been

prepared to ensure that the Company meets the relevant

disclosure requirements. The CEO is responsible for exter-

nal communications.

The Board is responsible for control and monitoring of the

CEO’s risk management activities. This is done through

reviews and monitoring of the Company’s governing

documents related to risk management and, for example,

through reviews and assessments by the Board of adopt-

ed decisions. The effectiveness of the control activities is

evaluated annually, and the results of these evaluations

are reported to the Board and Audit Committee.

Monitoring

The CEO ensures that the Board receives regular reports on

the results of the risk assessment, identified financial risks

and processes, and the development of the Company’s

business. The Board also follows up the assessment of the

internal control system, partly through contacts with the

Company’s auditor.

Committee of Sponsoring Organizations of the Threadway Commission.

CORPORATE GOVERNANCE

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

The auditors’ examination of the

corporate governance report

To the general meeting of the shareholders of Cantargia AB (publ), org.nr 556791-6019

Engagement and responsibility

The Board of Directors is responsible for the Corporate Governance Report for the year 2021 on

pages 76-81 of the printed version of this document having been prepared in accordance with

the Annual Accounts Act.

The scope of the audit

Our examination of the corporate governance report is conducted in accordance with FAR’s

auditing standard RevU 16 The auditor’s examination of the corporate governance report. This

means that our examination of the corporate governance report is different and substantially

less in scope than an audit conducted in accordance with International Standards on Auditing

and generally accepted auditing standards in Sweden. We believe that the examination has

provided us with sufficient basis for our opinions.

Opinions

A corporate governance report has been prepared. Disclosures in accordance with Chapter 6,

Section 6, the second paragraph, points 2-6 of the Annual Accounts Act are consistent with the

other parts of the annual accounts and are in accordance with the Annual Accounts Act.

Stockholm, April 29, 2022

Öhrlings PricewaterhouseCoopers AB

Ola Bjärehäll

Authorized public accountant

Auditor in charge

CORPORATE GOVERNANCE

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

CORPORATE GOVERNANCE

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

Board of directors, senior

executives and auditors

BOARD OF DIRECTORS

Under Cantargia’s Articles of Association, the Board of Directors shall consist of at least three and no

more than eight Directors. At the Annual General Meeting on 26 May, 2021, it was resolved that the

Board should consist of eight ordinary Directors with no deputies. The board members are elected for

the period until the end of the 2022 Annual General Meeting.

Magnus Persson

Chairman of the Board since 2016, born 1960. Member of the Remu‑

neration Committee and the Drug Development Committee. Number

of shares: 131,676

Magnus Persson is MD and associate professor in physiology at the Karolinska

Institute in Stockholm. Persson has extensive experience of financing within the

fields of medicine, life sciences and biotech. Persson has previously led develop-

ment teams in clinical phase II and phase III programmes in the pharmaceutical

industry and has founded and led private as well as public biotech and medtech

companies, either as Chairman or Member of the Board, in Europe and the US.

Persson has also been involved in multiple IPOs.

Persson is Chairman of the Board of Attgeno AB, Initiator Pharma AS, Eir Ventures

Partners AB and associated companies and Board Member of Avalo Inc.

Independent in relation to the Company and its management and the Company’s

major shareholders.

Karin Leandersson

Board Member since 2016, born 1972. Member of the Audit Committee.

Number of shares: 1 500

Karin Leandersson is professor in Tumour Immunology at the Medical Faculty

of Lund University. Leandersson has gained a wide range of cancer research ex-

perience in the fields of tumour immunology and tumour inflammation in solid

tumours, mainly in breast cancer. Leandersson has also authored around 50

scientific publications in international journals.

Independent in relation to the Company and its management and the Company’s

major shareholders.

Thoas Fioretos

Board Member since 2010, born 1962. Member of the Remuneration

Committee. Number of shares: 482 600

Thoas Fioretos is professor and physician at the Department of Clinical Genetics at

Lund University. Fioretos’ research focuses on molecular and functional stu-

dies of genetic changes in leukaemia and how such changes can be used for

diagnostic and therapeutic purposes. Fioretos has authored over 130 scientific

publications and is one of the founders of Cantargia AB and the bio-IT com-

pany Qlucore AB. Fioretos is Board Member in Qlucore AB and alternate Board

Member in Neodos AB.

Independent in relation to the Company and its management and the Company’s

major shareholders.

CORPORATE GOVERNANCE

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

Patricia Delaite

Board Member since 2017, born 1963. Member of the Drug Development

Committee. Number of shares: 0

Patricia Delaite is MD and has an MBA from University of Geneva and Lau-

sanne. Delaite is currently Chief Medical Officer at Nouscom in Basel, and has

had leading positions at AMAL Therapeutics, Incytes International Biosciences,

ARIAD Pharmaceuticals, Novartis, and Eli Lilly. Delaite also has 10 years of

experience in clinical management from the University Hospital in Geneva.

Independent in relation to the Company and its management and the Company’s

major shareholders.

Flavia Borellini

Board Member since 2020, born 1959. Chairman of the Drug Development

Committee. Number of shares: 0

Flavia Borellini holds a PhD in Pharmaceutical Chemistry and Technology from

the University of Modena in Italy.

Borellini has broad experience in oncology and other therapeutic areas and has

held senior positions at Astra Zeneca (Global Franchise Head, Hematology and

Vice President, Global Product and Portfolio Strategy), Acerta Pharma (CEO),

ONYX Pharmaceuticals (Vice President, Program Leadership), and Roche/Genetech

(Lifecycle Leader).

Borellini serves as a Member of the Board of Directors of Kartos Therapeutics,

Revolution Medicines and Viracta.

Independent in relation to the Company and its management and the Company’s

major shareholders.

Anders Martin‑Löf

Board Member since 2018, born 1971. Chairman of the Audit Committee.

Number of shares: 24 000

Anders Martin-Löf has extensive experience as CFO for companies listed on the

Stockholm stock exchange and has served as CFO for Oncopeptides AB, Wilson

Therapeutics AB and RaySearch Laboratories AB. Martin-Löf has also held the

position of Head of Investor Relations and different positions within business

development at Swedish Orphan Biovitrum and is currently Board Member of

Affibody Medical AB. Martin-Löf holds an MSc in Engineering Physics from the

Royal Institute of Technology and a BSc in Business Administration and

Economics from Stockholm University.

Independent in relation to the Company and its management and the Company’s

major shareholders.

Magnus Nilsson

Board Member since 2021, born 1956. Member of the Audit Committee.

Number of shares: 25 000

Magnus Nilsson is founder, previously President and CEO, and since 2020

Senior Advisor at XVIVO Perfusion. Nilsson has also been President and CEO

of Vitrolife and held prior to that various positions as Project Manager for

drug development projects at Pharmacia & Upjohn, Pharmacia, and Karo

Bio. Nilsson serves as a Member of the Board of Directors of Corline Bio-

medical. Nilsson is Doctor of Medicine (Med Dr Sc) from Uppsala University

and has published over twenty scientific articles.

Independent in relation to the Company and its management and the Company’s

major shareholders.

CORPORATE GOVERNANCE

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

Damian Marron

Board Member since 2021, born 1962. Chairman of the Remuneration

Committee. Number of shares: 0

Damian Marron has extensive experience as a Board Member and CEO within

the life science industry, with a successful track record of leadership and value

creation in public and private biotechnology companies. Marron has held posi-

tions as CEO and Executive Vice President in several biotech companies. He is

currently Chairman of the Board of Targovax ASA, Imophoron Ltd, CytoseeK Ltd

and Board Member of Bone Therapeutics and Resolys Bio, and Head of Biopharma

at Treehill Partners.

Marron holds a BSc degree in Pharmacology from the University of Liverpool.

Independent in relation to the Company and its management and the Company’s

major shareholders.

MANAGEMENT

Göran Forsberg

CEO employed since 2014, born 1963. Holdings: 120,648 shares and

575,000 options

Göran Forsberg has a PhD in biochemistry and is an associate professor and the

author of over 40 scientific publications. For more than 30 years he has had

different positions in research and development, business development and

investor relations at pharmaceutical and biotechnology companies, including

KabiGen, Pharmacia, Active Biotech and the University of Adelaide, Australia.

Forsberg has extensive experience in leading drug development and clinical

trials, with a special focus on oncology. Forsberg is a board member of Guard

Therapeutics International AB (publ).

Liselotte Larsson

COO employed since 2014, born 1963. Holdings: 31,600 shares and

205,000 options

Liselotte Larsson has a PhD in biotechnology and has more than 20 years of

experience in various management positions in pharmaceutical and biotech-

nology companies including BioGaia Fermentation, Novozymes Biopharma

and Camurus. Larsson’s main fields of expertise are business development,

marketing & sales/out licensing, ISO certification, good manufacturing practice

(GMP) and overall project management.

Lars Thorsson

VP Clinical Development employed since 2015, born 1961.

Holdings: 75,622 shares and 205,000 options

Lars Thorsson graduated with a Ph.D. in clinical pharmacology in 1998 and has

extensive experience from the pharmaceutical industry, including leading roles in

clinical studies and project management in a large number of development phases

at AstraZeneca and Novo Nordisk A/S. Thorsson has been responsible for evalua-

tion and documentation of new substances and has the experience of regulatory

activities and interactions with health authorities.

CORPORATE GOVERNANCE

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

David Liberg

VP Research employed since 2015, born 1969. Holdings: 11,200 shares

and 205,000 options

David Liberg graduated with a Ph.D. in 2001 and has over twenty years of re-

search experience within immunology and tumour biology. Liberg has worked

within the pharmaceutical industry for the last fiftheen years, with responsibility

for early research projects and activities in tumour immunology. He has extensive

experience of pre-clinical phase cancer projects. His most recent position was

at Active Biotech AB, where he worked as Project Manager Drug Development

as well as Head of Cell Biology and Biochemistry. Liberg has also carried out re-

search at Imperial College in the UK and at Lund University, Sweden.

Bengt Jöndell

CFO employed since 2017, born 1960. Holdings: 104,000 shares

Bengt Jöndell has a BSc in Business Administration and a MSc in Chemical

engineering. Jöndell has extensive experience in various executive financial

functions such as CFO and Chief Executive Officer at BTJ Group AB, Senior

Financial Advisor for BoneSupport, CFO/Administrative manager at Inpac,

Business Controller at Pharmacia & Upjohn Consumer Healthcare, Pharmacia,

Pharmacia Consumer Pharma and Pharmacia Nicorette. Jöndell’s most recent

position was CFO for Enzymatica AB.

Peter Juul Madsen

VP CMC employed since 2020, born 1969. Holdings: 4,100 shares

and 205,000 options

Peter Juul Madsen has a M.Sc. in Chemical Engineering from the Technical Uni-

versity of Denmark. He has more than 20 years of experience in managing

CMC development including process & analytical development and manufactur-

ing of biological products. Madsen was most recently CMC Project Director at

Lundbeck and has extensive experience from outsourcing to contract manufac-

turing organizations from different CMC project managing positions in e.g. Lund-

beck, Genmab and Zealand Pharma.

Susanne Lagerlund

VP Regulatory Affairs employed since 2020, born 1968.

Holdings: 2,300 shares and 205,000 options

Susanne Lagerlund has a Master of Science in Chemical Engineering and has

more than 25 years’ experience from the pharmaceutical industry in leading

positions at LEO Pharma and AstraZeneca, mainly within Regulatory Affairs.

Her most recent role was as Director, Established Portfolio Management at

LEO Pharma, where she had responsibility for strategic and tactical manage-

ment of commercialized portfolios. Lagerlund has also during the last couple

of years been responsible within LEO Pharma R&D for the integration of a

number of acquired dermatology projects into the commercial portfolio.

CORPORATE GOVERNANCE

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

Nedjad Losic

VP Biometrics employed since 2021, born 1969.Holdings: 0 shares

and 100,000 options

Nedjad Losic holds an M.Sc. in Mathematics and a diploma in Management of

medical product innovation (SIMI). He has more than 25 years’ experience of

providing biostatistics expertise in clinical drug development, mostly in anti-

body development and oncology. He has been directly involved in the planning

and obtaining market approvals for several biological drugs when at Genmab and

Y-mAbs. He has held managerial positions for Ferring, Spadille and Genmab and

most recently, as Senior Project Biostatistician in Y-mAbs.

Roger Belusa

CMO employed since 2022, born 1966. Holdings: 1,870 shares

Roger Belusa has an MD (1996) and a PhD (2001) from Karolinska Institute

with a focus on oncology and clinical pharmacology. Belusa has previously

held the position as CMO and has also worked in the biotech/pharma industry

during the last twenty years in different positions within pharmacovigilance,

clinical operations, competitive intelligence, and medical affairs for companies

such as BioSeeker, Avaris, Nanologica, Ipsen and Pfizer. Belusa serves as a

member of the Board of Directors for Doctors of the World Sweden.

Other disclosures on Directors and senior

executives

There are no family connections among any Directors

or senior executives. There are no conflicts of interest or

potential conflicts of interest between the Directors’ and

senior executives’ undertakings to the Company and their

private interests and/or other undertakings. As shown

above, some Directors and senior executives have finan-

cial interests in the Company in the form of shareholdings.

None of the Directors or senior executives has in the last

five years participated or been involved in any bankruptcy,

liquidation or administration proceedings in the capacity of

Director or senior executive of a company. None of the Di-

rectors or senior executives has in the last five years been

accused of and/or been subject to any sanction from a pub-

lic authority, professional association or similar body, been

disqualified from engaging in business activities or other-

wise been disqualified by a court from acting as a member

of the administrative, management or supervisory bodies

of or from acting in the management or conduct of the af-

fairs any company. There exist no special agreements on

post-employment benefits for the current Directors or se-

nior executives. All Directors and senior executives can be

contacted at the Company’s address: Scheelevägen 27,

SE-223 63 Lund, Sweden.

Auditors

At the Annual General Meeting on 26 May 2021, Öhrlings

PricewaterhouseCoopers AB were re-appointed as audi-

tors for the Company for the period until the end of the An-

nual General Meeting 2022. Ola Bjärehäll (born 1974) is au-

ditor-in-charge. He is an Authorised Public Accountant and

a member of FAR, the professional institute for accountants

in Sweden. Ola Bjärehäll has been the Company’s auditor-in-

charge since the 2018 AGM.

CORPORATE GOVERNANCE

CANTARGIA AB (PUBL) 556791-6019

•

ANNUAL REPORT 2021

ANNUAL GENERAL MEETING AND FINANCIAL CALENDAR

Cantargia’s Annual General Meeting will be held on Monday 23 May 2022. Shareholders may exercise

their voting rights at the AGM only by voting in advance, i.e. by postal vote in accordance with Section

22 of the Act on Temporary Exemptions to Facilitate the Execution of General Meetings in Companies

and Associations (2020:198).

Shareholders who wish to participate in the Annual General Meeting must be registered in the

share register maintained by Euroclear Sweden AB as of Friday 13 May 2022, and notify the

company of their intention to participate in the meeting no later than Tuesday 17 May 2022, in

writing to Cantargia AB, Scheelevägen 27, SE-223 63 Lund. Shareholders can also register by

telephone on +46 (0)46-27 56 260 or by e-mail at info@ cantargia.com. Registration is effected

by casting an early ballot using a special form that will be available at www.cantargia.com.

Shareholders whose shareholding is registered with a nominee must, to be entitled to participate

in the AGM, ensure that their shareholding is temporarily re-registered in their own name with

Euroclear Sweden AB so that the shareholder is registered in the share register as of 13 May 2022.

Such registration may be temporary (registration of voting rights) and must be requested from the

nominee in accordance with the nominee’s procedures by the deadline specified by the nominee.

Voting rights registered no later than the second business day after 13 May 2022 will be entered

in the share register.

23 May 2022 Interim report 1

23 May 2022 Annual General Meeting

18 Aug 2022 Half-year report

10 Nov 2022 Interim report 3

22 Feb 2023 Year-end report for 2022

CORPORATE GOVERNANCE