Cantargia - Sentiment affected, but fundamentals robust
Novartis reported negative data from its Phase III CANOPY-2 trial for canakinumab in 2nd/3rd-line NSCLC; canakinumab targets the same IL-1 pathway as CAN04, but in a more restricted way. This has triggered negative sentiment towards Cantargia’s share price. However, we note that the readout coincided with the ongoing correction in the European and US biotechnology subsectors as well as in the broader technology sector. Starting in mid-February 2021, the biotechnology indexes retreated by as much as 15%, which continues to keep pressure on Cantargia’s share price. Ultimately, we believe CAN04 is differentiated and Novartis’s results should add to the data that will help Cantargia define CAN04’s positioning. We value Cantargia at SEK6.86bn or SEK68.5/share.Cantargia AB is a Sweden-based company engaged in development of antibody therapeutics for the treatment of leukemia. The Company is engaged in the development of a therapy for the treatment of cancer by targeting a cell-surface receptor on malignant stem cells, through the development of antibody therapeutics for eradication of malignant stem cells. Cantargia AB uses the Interleukin-1 receptor accessory protein (IL1RAP), as the target for development of a novel antibody-based therapy for leukemia.
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