This is a multicenter, single-arm, phase II study of nivolumab in combination with regorafenib in subjects with locally-advanced rectal cancer who are eligible for a curative treatment including pre-operative SCRT and TME(or watch & wait approach). The study is based on the Simon's two-stage design and a maximum of 60 subjects will be enrolled. In addition to the standard efficacy interim analysis according to the statistical design, a safety interim analysis will be performed on the first 6 subjects who have completed the study treatment to ensure safe continuation of the study investigation.

Eligible subjects will be treated according to the following sequential treatment plan:

• Induction treatment: This consists of treatment with nivolumab (240 mg intravenously, on day 1 and 15) and regorafenib (60 mg/day orally, from day 1 to 14)
• Standard SCRT: This consists of 25 Gy delivered in 5 fractions (from day 22 to 26)
• Consolidation treatment: This consists of treatment with nivolumab (240 mg intravenously, on day 29, 43 and 57) and regorafenib (60 mg/day orally, from day 29 to 49)
• Surgery: Surgical resection will be performed according to the principles of TME (between day 74 and 87, i.e., between 7 to 8 weeks after completion of SCRT). As an alternative to surgery, subjects who achieve cCR can be offered a watch & wait approach.
• Adjuvant chemotherapy: Administration of adjuvant chemotherapy will be left to the discretion of the treating physician

The study also includes translational procedures (i.e. collection of tumour biopsies, blood samples and stool samples at pre-specified time points) for exploratory molecular and immune contexture analyses. These are mandatory for all study subjects.

Inclusion Criteria:

1. Female or Male
2. Age ≥ 18 years old
3. Eastern Cooperative Oncology Group (ECOG) performance status ≤ 1
4. Histologically or cytologically verified adenocarcinoma of the rectum
5. Tumour with distal border below the peritoneal reflection and within 15 cm from the anal verge
6. Stage cT3/T4a and Nany or cT1-2 and N+ as documented by baseline pelvic MRI
7. Absence of distant metastases as shown by baseline computed tomography (CT) of the thorax-abdomen or CT scan of the thorax and MRI of the abdomen
8. Adequate haematological function as defined by absolute neutrophil count (ANC) ≥1.5 × 109/L, platelet count ≥100 × 109/L, and haemoglobin ≥9 g/dL
9. Adequate hepatic function as defined by a total bilirubin level ≤1.5 × the upper limit of normal (ULN) range (excluding subjects with known Gilbert's syndrome) and alanine aminotransferase (ALT) levels ≤2.5 × ULN
10. Adequate renal function as defined by an estimated creatinine clearance ≥30 mL/min according to the Cockcroft-Gault or Wright formula
11. Negative serum pregnancy test at screening (up to 7 days before treatment start) for women of childbearing potential
12. Women of childbearing potential must agree to use of one highly effective method of contraception prior study entry, during the course of the study and at least 5 months after the last administration of study treatment.
13. Men with childbearing potential partner must agree to use condom during the course of this study and for at least 5 months after the last administration of the study treatment.
14. Absence of any psychological, familial, sociological or geographical condition potentially hampering compliance with the study protocol and follow-up schedule; those conditions should be discussed with the patient before registration in the trial
15. Absence of clinical conditions that, in the opinion of the investigator, would contraindicate neoadjuvant therapy and/or surgery
16. Life expectancy of at least 3 months
17. Completion of all necessary screening procedures within 28 days prior to enrolment.
18. Signed Informed Consent form (ICF) obtained prior to any study related procedure.

Exclusion Criteria:

1. Any prior or concurrent surgery, chemotherapy, radiotherapy, immunotherapy, biologic or hormonal therapy for rectal cancer. Concurrent use of hormones for noncancer-related conditions (i.e., insulin for diabetes and hormone replacement therapy) is acceptable.

2. Any contraindication to pelvic irradiation as evaluated by the investigator

3. Prior organ transplantation, including allogeneic stem cell transplantation

4. Clinically significant acute or chronic infections including, among others:

   • known history of testing positive test for human immunodeficiency virus (HIV) or known acquired immunodeficiency syndrome (AIDS)
   • known history of testing positive for hepatitis B virus (HBV) surface antigen or anti-hepatitis C virus (HCV) antibody and confirmatory HCV ribonucleic acid (RNA) test

5. Active autoimmune disease that might deteriorate when receiving an immunostimulatory agent (subjects with diabetes type I, vitiligo, psoriasis, hypo- or hyperthyroid disease not requiring immunosuppressive treatment are eligible)

6. Systemic corticosteroids administered as hormone replacement or as immunosuppressants at doses exceeding 10 mg/day of prednisone or equivalent. Other immunosuppressive medications including, but not limited to methotrexate, azathioprine, and TNF-α blockers. Use of immunosuppressive medications for the management of treatment-related AEs or in subjects with contrast allergies is acceptable. A temporary period of steroids is allowed for different indications, at the discretion of the investigator (i.e., chronic obstructive pulmonary disease, radiation, nausea, etc.). Administration of steroids through a route known to result in a minimal systemic exposure [topical, intranasal, intro-ocular, or inhalation] is acceptable.

7. Known severe hypersensitivity reactions to the investigational treatments, or any excipients or non-investigational medicinal products or concomitant medications

8. Pregnant and/or lactating women

9. Clinically significant (i.e., active) cardiovascular disease: cerebral vascular accident/stroke, myocardial infarction, unstable angina, congestive heart failure, uncontrolled arterial hypertension, or serious cardiac arrhythmia requiring medication

10. Prior myocarditis

11. Known history of immune colitis, immune pneumonitis, pulmonary fibrosis or other medical conditions (for example, inflammatory bowel disease, uncontrolled asthma), which, in the opinion of the Investigator, might impair the subject's tolerance of trial treatment

12. Vaccination within 28 days of the first dose of study treatment and while on trial (except for administration of inactivated vaccines)

13. Other invasive malignancy within 2 years except for non-invasive malignancies such as cervical carcinoma in situ, non-melanomatous carcinoma of the skin or ductal carcinoma in situ of the breast that has/have been surgically cured. Anti-neoplastic treatment received in the past for malignancies cured 2 or more years before enrolment are permitted.

14. Any investigational anti-cancer therapy other than the protocol specified therapies.

15. Strong inhibitors of CYP3A4 activity (e.g. clarithromycin, grapefruit juice, itraconazole, ketoconazole, posaconazole, telithromycin and voriconazole), strong UGT1A9 inhibitors (e.g. mefenamic acid, diflunisal, and niflumic acid), and strong inducers of CYP3A4 (e.g. rifampicin, phenytoin, carbamazepine, phenobarbital and St. John's wort) from 28 days before study enrolment up to the end of study treatment.

16. Major surgery within 28 days of the first dose of study treatment

17. Presence of gastrointenstinal perforation of fistula