IL1RAP Platform Will Unlock Long Term Value Through PDAC And Autoimmune Expansion

Catalysts

About Cantargia

Cantargia is a clinical stage biotech company developing IL1RAP targeted antibody therapies for oncology and inflammatory or autoimmune diseases.

What are the underlying business or industry changes driving this perspective?

• Advancing nadunolimab into a pivotal PDAC trial in a setting with few effective options positions Cantargia to participate in a rapidly expanding market for innovative pancreatic cancer treatments. This could materially increase future product revenues if outcomes replicate the current survival advantage signal.
• Fast Track Designation for nadunolimab in high IL1RAP PDAC, combined with a validated biomarker assay for patient selection, supports a potentially faster regulatory path and a more efficient, responder-enriched trial design. This can accelerate time to first sales and improve risk adjusted returns on R&D spend.
• The global push to develop targeted and biologic therapies for difficult solid tumors, including PDAC, is attracting substantial capital and partner interest. Cantargia’s first in class IL1RAP positioning and extensive clinical dataset in over 300 patients can underpin premium pricing and higher gross margins if approved.
• The Otsuka partnership on CAN10, with up to USD 613 million in milestones and double digit royalties, together with Cantargia’s SEK 339 million cash and runway into 2028, provides non dilutive funding potential and balance sheet flexibility. This can reduce financing risk and support earnings growth as milestones are achieved.
• Expansion of the IL1RAP platform into CAN14 for inflammatory or autoimmune disease and IL1RAP targeted ADCs in oncology leverages rising demand for biologics and bispecifics across multiple indications. This creates a broader portfolio that can diversify revenue streams and enhance long term earnings power.

Assumptions

This narrative explores a more optimistic perspective on Cantargia compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts. How have these above catalysts been quantified?

• The bullish analysts are assuming Cantargia's revenue will decrease by 65.9% annually over the next 3 years.
• The bullish analysts are not forecasting that Cantargia will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate Cantargia's profit margin will increase from 45.3% to the average SE Biotechs industry of 18.0% in 3 years.
• If Cantargia's profit margin were to converge on the industry average, you could expect earnings to reach SEK 2.2 million (and earnings per share of SEK 0.01) by about December 2028, down from SEK 139.9 million today.
• In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 2246.4x on those 2028 earnings, up from 7.3x today. This future PE is greater than the current PE for the SE Biotechs industry at 32.8x.
• The bullish analysts expect the number of shares outstanding to grow by 7.0% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 5.12%, as per the Simply Wall St company report.

Risks

What could happen that would invalidate this narrative?

• The failure of the TRIFOUR Phase II triple-negative breast cancer study to show any improvement in objective response rate over chemotherapy raises the possibility that nadunolimab’s mechanism is not broadly effective across solid tumors. This could undermine confidence in its differentiation in PDAC and weaken long term revenue potential if subsequent trials in core indications also disappoint, ultimately suppressing earnings.
• Cantargia’s strategy depends heavily on a single pivotal PDAC trial starting around mid 2026 in a first line setting where standard of care and competing targeted agents, such as those from Revolution Medicines and other PDAC innovators, are evolving rapidly. Any shift in treatment paradigms, slower than expected recruitment, or failure to demonstrate a clear survival benefit in high IL1RAP patients could delay or prevent approval and materially reduce future product revenues and cash flows.
• The company’s current cash runway into 2028 explicitly excludes the cost of a pivotal nadunolimab program and assumes no additional Otsuka milestones in that period. This means Cantargia may need substantial external financing or new partnerships for Phase III PDAC, exposing shareholders to dilution, higher financing costs, or delayed development that would pressure net margins and depress earnings per share over time.
• While the Otsuka deal validates the IL1RAP platform, Cantargia is now dependent on a partner-controlled CAN10 program where it has no operational control and limited visibility. Any strategic reprioritisation, development setbacks, or slower than anticipated progress at Otsuka could defer or eliminate milestone and royalty income that investors might be counting on to support long term revenue growth and profitability.
• The pipeline expansion into CAN14 for autoimmune diseases and IL1RAP targeted ADCs introduces long duration, high risk projects in competitive and scientifically complex fields where there are currently no approved bispecifics for autoimmune conditions. Setbacks in candidate selection, safety, or efficacy, or being outpaced by larger players, could lead to extended R&D spending without commercial returns, weighing on operating expenses, net margins and long run earnings power.

Valuation

How have all the factors above been brought together to estimate a fair value?

• The assumed bullish price target for Cantargia is SEK14.0, which represents up to two standard deviations above the consensus price target of SEK10.5. This valuation is based on what can be assumed as the expectations of Cantargia's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
  
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of SEK14.0, and the most bearish reporting a price target of just SEK7.0.
  
• In order for you to agree with the more bullish analyst cohort, you'd need to believe that by 2028, revenues will be SEK12.2 million, earnings will come to SEK2.2 million, and it would be trading on a PE ratio of 2246.4x, assuming you use a discount rate of 5.1%.
  
• Given the current share price of SEK4.09, the analyst price target of SEK14.0 is 70.8% higher. Despite analysts expecting the underlying business to decline, they seem to believe it's more valuable than what the market thinks.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.