Earnings Release • Nov 18, 2022
Earnings Release
Open in ViewerOpens in native device viewer
Karolinska Development (Nasdaq Stockholm: KDEV) is an investment company which offers a unique opportunity to participate in the growth in value of a number of Nordic life sciences companies with substantial commercial opportunities. All of the portfolio companies are developing potentially groundbreaking treatments for medical conditions with a substantial need for improved therapies, including leukaemia, serious viral infections, sepsis and systemic inflammation, bone defects, and hepatic encephalopathy. To date, two of the companies have launched their first products.
For further information, see www.karolinskadevelopment.com
Karolinska Development announced its participation in a seed financing of Henlez, a privately owned Danish company focusing on a development project directed towards the chronic dermatological condition hidradenitis suppurativa. The global market for treatments of hidradenitis suppurativa is projected to reach USD 1.8 billion by 2028 (October 2022).
"The ability of our portfolio companies, AnaCardio and Umecrine Cognition, to complete funding rounds for SEK 150 million and SEK 41 million, respectively – given the prevailing gloomy market climate – is a sign of strength and underlines the innovative excellence of their development projects."
For further information, please contact:
Viktor Drvota, Chief Executive Officer +46 73 982 52 02 [email protected]
Hans Christopher "HC" Toll, Chief Financial Officer +46 70 717 00 41 [email protected]
Karolinska Development has established an extensive international network and a strong reputation amongst other specialist investors over the years, enhancing our potential for attracting and investing with expert operators in our portfolio companies. This ability acquires extra importance in times such as these when the financial market is characterized by high levels of uncertainty. Karolinska Development was involved in both AnaCardio's and Umecrine Cognition's processes for attracting capital for the ongoing development of their candidate drugs over the past quarter. The ability of these two companies to complete funding rounds for SEK 150 million and SEK 41 million, respectively – given the prevailing gloomy market climate – is a sign of strength and underlines the innovative excellence of their development projects.
After successfully raising SEK 33 million in capital earlier this year, our portfolio company, AnaCardio, raised a further SEK 150 million in September this year to finance a clinical phase 1b/2a study of their AC01 candidate drug. Karolinska Development took part in the financing round, which was led by Flerie Invest and Industrifonden. Other investors include 3B Health Ventures and Fredrik and Ann-Helene Ljungström.
Ground-breaking research by the Karolinska Institute has shown that AC01's unique mechanism has the potential to improve the functioning of the heart muscle. The candidate drug has already undergone clinical trials and AnaCardio expects to be able to launch the planned phase 1b/2a study, which will be conducted in patients with heart failure, as early as this year. Heart failure is a potentially fatal disease and the most common cause of hospital admissions. Around 100 million people are estimated to be affected worldwide.
In July, Karolinska Development went ahead with its investment in PharmNovo who is developing a completely new type of drug for the treatment of neuropathic pain – a condition that can result in a substantial reduction in quality of life for the individual and enormous costs to society. The global market for drugs to treat neuropathic pain is estimated at almost USD 6 billion and is continuing to grow, but the analgesics currently in use are not always sufficiently effective. They are also often associated with severe side effects and a risk of developing an addiction. PharmNovo's PN6047 candidate drug has shown convincing effects in well-established, preclinical disease models for neuropathic pain and a clinical phase 1 program, which is scheduled for completion in mid-2023, was launched in August.
In September, we welcomed Anders Karlsson as the new CEO of our portfolio company, Umecrine Cognition. Anders succeeds Magnus Doverskog, who after ten successful years as the CEO, can now focus exclusively on the company's research and development operations. The recruitment was designed to strengthen and expand the management group through the injection of additional expertise in business development and commercialization ahead of the next phase in the company's development.
Q3 saw Umecrine Cognition present new preclinical results that provide further support for the company's advanced candidate drug, golexanolone, for the treatment of primary biliary cholangitis (PBC) – a chronic autoimmune disease that attacks the bile ducts and can result in cirrhosis of the liver. The level of inflammation in the brain increases as the liver is attacked, which can lead to personality changes, confusion, reduced levels of consciousness, and extreme fatigue. There is currently no curative treatment
for this disease. The new results show that golexanolone has a significantly positive effect on extreme fatigue in a validated test model.
Umecrine Cognition is planning to launch a clinical phase 2b study of golexanolone in patients suffering from PBC shortly. The company raised SEK 41 million in funds in the form of a convertible loan during the quarter, in order to finance this important next step in the development of golexanolone. Karolinska Development's involvement comprised SEK 15 million.
Svenska Vaccinfabriken presented the results of preclinical disease models during the past quarter, showing that the company's therapeutic candidate vaccine against hepatitis B (SVF-001) and the prophylactic candidate vaccine against SARS-CoV-2 (SVF-002) can generate convincing T and B cell immunity. These positive results, which have been published in highly respected scientific journals, underline Svenska Vaccinfabriken's ability to develop both effective therapeutic vaccines and broader prophylactic vaccines offering longer term protection in the management of serious infectious diseases. The clinical development of the SVF-002 candidate vaccine is being partially financed by the EU under Karolinska Institute sponsorship, and a clinical phase 1 study is expected to launch before the end of the year.
In September, an independent clinical research group in New York published clinical results from the biggest US case study to date of patients treated with OssDsign's patient-specific cranial implant. The study comprised 18 patients and demonstrated that the implant was successful in all cases. No implant-related complications were observed during a median follow-up period of six months. Modus Therapeutics also presented significant progress during the quarter: recruitment for their phase 1b study of sevuparin in a model for sepsis/septic shock was completed in just one month and the results are expected to be available before the end of the year.
After the end of the reporting period, we invested in the Danish company Henlez, which focuses on a development project aimed at the chronic dermatological condition hidradenitis suppurativa. The global market for hidradenitis suppurativa treatments is estimated to reach \$1.8 billion in 2028. The investment portfolio now compromises eleven life science companies with innovative excellence and significant commercial potential.
HC Toll was recruited as the new CFO of Karolinska Development in early October, succeeding Per Aniansson, who had held the role of CFO in parallel with an engagement as Investment Director. HC Toll holds a degree in Business Administration and Economics from the Stockholm School of Economics and has previously worked as a CFO and Business Controller in numerous listed and unlisted companies. The fact that Per now has the opportunity to focus exclusively on his duties as an Investment Director will further expand our resources when it comes to supporting the portfolio companies while, at the same time, evaluating new investment opportunities – the core business that is the basis for our long-term value generation.
Solna, 18 November 2022
Viktor Drvota Chief Executive Officer
Karolinska Development's investments in therapeutic companies are conducted in syndicates with other professional life science investors, normally until proof-of-concept is demonstrated in phase 2 trials, at which point different exit options are evaluated. When engaging in medtech companies, the business model is to finance the companies until they show a positive operating profit.
The portfolio currently consists of eleven companies focused on developing innovative treatment methods for diseases that are life-threatening or involve a risk of severe disabilities and other medical conditions. Nine of the portfolio companies have drug candidates in ongoing or planned clinical trials and two companies have medtech products in early commercial phases. During the period 2022–2024, four portfolio companies are expected to present data from phase 1 studies and three portfolio companies are expected to present data from phase 2 studies. These study results have the potential to significantly increase the opportunities for attractive divestments or license transactions. Comparable drug candidates have in recent years been out licensed or sold at contract values that have amounted to billions for the individual projects.
Over the years, the portfolio companies have been strengthened with team members with a documented ability to close international business deals in the life sciences sector.
In addition to the portfolio companies, Karolinska Development has interests in two other life science companies, Forendo Pharma and Oncopeptides, in the form of earn out agreements.
Project (First-in class) ATR inhibitor ATRN-119 ATR inhibitor ATRN-W1051
Primary indication Solid tumor malignancies
Development phase Preclinical
Holding in company* KDev Investments 2%
Vanguard Group Kennedy Capital Management Renaissance Technologies Morgan Stanley BlackRock Geode Capital Management
Origin Karolinska Institutet
More information
aprea.com
* Fully-diluted ownership based on current investment plans.
Aprea Therapeutics (Boston, USA and Stockholm, Sweden) is focused on developing and commercializing novel drugs to combat various types of cancer by affecting the proteins involved in the ability of tumours to repair damage to their DNA.
During the second quarter of 2022, Aprea completed the acquisition of Atrin Pharmaceuticals, a biopharmaceutical company focused on developing novel cancer therapeutics targeting proteins in the DNA damage response (DDR).
With the acquisition of the Atrin programs, the company's focus is now on development of the ATR inhibitor ATRN-119, which will be studied as both a monotherapy and in combination with standard of care in Phase 1/2a clinical trials in solid tumor malignancies. ATRN-119 is an orally-bioavailable, highly potent and selective small molecule inhibitor of ATR, a protein with key roles in response to DNA damage. ATRN-119 has received FDA approval for a first-in-human clinical trial for cancer patients and this trial is expected to begin in the third quarter of 2022.
Aprea also is developing ATRN-W1051, an orally-bioavailable, highly potent and selective small molecule inhibitor of WEE1, a key regulator of multiple phases of the cell cycle. ATRN-W1051 is currently in preclinical development, and the company anticipates commencing studies enabling application for first-in-human clinical trials in the second half of 2022.
Aprea is listed on the NASDAQ Global Select Market in the USA since October 2019.
Targeting DNA Damage Repair, several commercially available Poly ADP-ribose polymerase (PARP) inhibitors induced substantial objective response in patients with DNA repair defects and received FDA Breakthrough Designation for several cancer indications. The notable commercial success of these PARP inhibitors has made DNA Damage and Response a clinically and commercially validated therapeutic approach. Targeting ataxia telangiectasia and Rad3-related protein (ATR) represents an emerging strategy to treat a broad spectrum of cancers, most notably those that currently lack fully effective treatments. There are currently three ATR-inhibitors in Phase 1/2 clinical trials, developed by Merck KGaA, AstraZeneca and Bayer.
Project (First-in-class) Sevuparin
Primary indication Sepsis/Septic shock
Development phase Phase 1
Holding in company* Karolinska Development 38% KDev Investments 17%
Other investors John Öhd Nordnet Pensionsförsäkring Hans Wigzell
Origin Karolinska Institutet Uppsala University
More information modustx.com
*Fully-diluted ownership based on current investment plans
Modus Therapeutics (Stockholm, Sweden) is developing sevuparin as a treatment of sepsis/septic shock, a potentially life-threatening condition that currently lacks efficient pharmaceutical therapies. Patients that are affected by sepsis are exposed to a risk of developing multi-organ failure and – in severe cases – death. Data from pre-clinical animal models as well as in vitro human cell models has revealed that sevuparin was able to protect blood vessels and counteract lung plasma leakage during systemic inflammation. Previous clinical trials in other patient groups have shown that sevuparin is well tolerated and has a favourable safety profile.
In May 2022, Karolinska Development provided bridge financing of up to SEK 11.5 million to maintain the momentum in the clinical development of the company's lead asset.
In September 2022, the company completed its recruitment for the clinical phase 1b study of sevuparin. The randomized, placebo-controlled study will evaluate the effect of sevuparin on the symptoms in healthy individuals who have had the bacterial toxin lipopolysaccharide (LPS) injected into the skin (local inflammation) and into the blood (systemic inflammation). Data from the phase 1b study will form the basis for the design of a phase 2 study with sevuparin in patients with sepsis, with a planned start in 2023.
Septic shock is a leading cause of death in intensive care units, with mortality rates typically exceeding 30 per cent. There is currently no specific pharmaceutical treatment available for the treatment of sepsis. As a result, it is one of the costliest conditions to treat in the hospital care setting. In 2019, US healthcare costs for patients with sepsis were estimated at USD 22 billion. Sepsis/septic shock is triggered by an infection and causes the same form of severe uncontrolled inflammation that can occur in conjunction with extensive surgery, trauma, burns and autoimmunity.
Project (First-in-class) Tafoxiparin
Primary indication Labor induction Preeclampsia
Development phase Phase 2b
Holding in company* Karolinska Development 1% KDev Investments 30%
Other investors The Foundation for Baltic and East European Studies Opocrin Praktikerinvest Rosetta Capital Lee's Pharmaceutical
Origin Karolinska Institutet
More information dilafor.com
* Fully-diluted ownership based on current investment plans.
Dilafor (Solna, Sweden) is developing tafoxiparin for obstetric indications, with particular reference to protracted labor and associated complications. About one quarter of all pregnant women undergo induction in labor. In just over half of all cases, the induction fails, leading to protracted labor that entails an increased risk for both mother and child due to medical complications. Between 25 and 40 per cent of women who experience protracted labor eventually require an emergency caesarean section. Surgical intervention always entails not only a risk to the patient, but substantial health care costs. Tafoxiparin could eliminate patient suffering and save valuable health care resources.
In 2021, the results of a placebo-controlled phase 2b study were presented which show that tafoxiparin has a significant positive effect on cervical ripening in first-time mothers who receive treatment to initiate labor. The study included 170 first-time mothers with immature cervixes, which are treated to ripen the cervix and thereby facilitate the onset of labor. Patients were treated with either a subcutaneous injection of tafoxiparin or a placebo once daily for up to one week prior to scheduled initiation. The primary objective of the study was to document the effect of tafoxiparin on cervical ripening measured as the degree of ripening according to an internationally established scale, the Bishop score.
The study results showed that tafoxiparin affected the ripening of the cervix compared to placebo, with a difference that was statistically significant (p <0.009). Based on the positive results, Dilafor plans to extend the phase 2b study, in order to document the effect of tafoxiparin also in two lower doses than what has been studied thus far. Based on an external valuation, Karolinska Development increased the book value of its holding in the portfolio company by SEK 450 million as a result of the positive results in the phase 2b study.
Approximately one quarter of all pregnant women require labor induction. The current standard treatment includes administration of prostaglandins and oxytocin, but in over 50 per cent of cases, the induction fails, leading to protracted labor, emergency caesarean sections, or other maternal and foetal complications. Market analyses show that a drug with a good effect on the ripening of the cervix has the potential to reach annual sales over USD 1 billion in the US market alone.
Dilafor enrolled the first patient in a clinical Phase 2a study with tafoxiparin in pregnant women diagnosed with preeclampsia (October 2021).
Continued phase 2b study with lower dosage according to plan.
Project (First-in-class) Golexanolone (GR3027)
Primary indications Hepatic encephalopathy Primary biliary cholangitis
Development phase Phase 2a
Holding in company* Karolinska Development 66%
Other investors Norrlandsfonden Fort Knox Förvaring AB PartnerInvest
Origin Umeå University
More information umecrinecognition.com
* Fully-diluted ownership based on current investment plans.
Umecrine Cognition (Solna, Sweden) is developing golexanolone (GR3207) – a candidate drug in a new class of pharmaceuticals that affect the GABA system (gamma-aminobutyric acid, the chief inhibitory neurotransmitter in the central nervous system). An over-activation of the inhibitory GABA system is suspected in conjunction with liver disease, causing very serious clinical symptoms. The over-activation is also thought to lay behind certain cognitive impairments and sleep disturbances. GABAA-receptor modulating steroid antagonists, such as golexanolone, counter the increased activation of the GABA system and has been shown to restore different types of neurological impairments in experimental models. The candidate drug enters the brain and works by reversing the inhibitory effects of the neurosteroid allopregnanolone.
Umecrine Cognition has conducted a clinical phase 2a study of golexanolone in patients with hepatic encephalopathy (HE) – a serious neuropsychiatric and neurocognitive condition that occurs in conjunction with acute and chronic hepatic damage with underlying cirrhosis. The results showed that the candidate drug was well-tolerated, that the safety profile was good, and that the pharmacokinetic profile was favourable. One of the effect parameters – a well-established and sensitive form of EEG study – demonstrates that the candidate drug has a significant effect on brain signaling, with a correlated positive effect on extreme daytime fatigue. Based on these study results, the company has established a plan for the further development of the candidate drug in HE and primary biliary cirrhosis (PBC).
HE is a serious disease with a large unmet need that affects up to 1 per cent of the population in the USA and EU. 180,000– 290,000 patients are hospitalised every year in the USA due to complications of HE. Once HE develops, mortality reaches 22–35 per cent after five years. HE is also associated with substantial societal costs.
The development work continues according to plan both in the HE and PBC studies.
Project (First-in-class)
SVF-001
Primary indication Hepatitis B and D SARS-CoV-2 and other Coronaviruses
Development phase Preclinical
Holding in company* Karolinska Development 31%
Origin Karolinska Institutet
More information
svenskavaccinfabriken.se
*Fully-diluted ownership based on current investment plans
Svenska Vaccinfabriken (SVF, Solna, Sweden) develops therapeutic proteins and DNA vaccines against hepatitis B and D, as well as vaccines to prevent infections by SARS-CoV-2 and potential future Coronaviruses. Therapeutic vaccines, unlike preventative vaccines, have the potential to cure already infected patients.
Despite the availability of preventative vaccines and antiviral treatments, over 250 million people live with a chronic hepatitis B infection. One million chronic carriers die each year due to complications caused by the virus, such as liver cirrhosis and liver cancer. The closely related hepatitis D virus infects 15-25 million hepatitis B carriers and exacerbates the progression of the disease.
Svenska Vaccinfabriken uses an in-house developed vaccine platform to produce a specific form of antibodies that blocks the ability of the hepatitis virus to invade human cells. The company has generated promising efficacy data in a preclinical animal model regarding hepatitis and is now continuing its preclinical development with the goal of enabling a phase 1 study to be initiated in 2023.
Although Coronavirus infections are usually mild, some virus types can lead to life-threatening conditions. To respond to and to prevent severe infections, SVF has also developed a platform that is expected to enable an opportunity to quickly develop and produce vaccines against both current and new forms of Coronasviruses. The company has granted patents for chimeric genes and peptides that elicit an immune response against chronic hepatitis B and D infections and has filed a patent application linked to a potential covid-19 vaccine.
Svenska Vaccinfabriken is currently focusing its innovative vaccine platform on the market for therapeutic vaccines for hepatitis B and D, and preventative vaccines for respiratory viral diseases, such as Covid-19. The 2017 KuicK research report, "Global Hepatitis Drug Market & Clinical Trials Insight 2023" estimated the value of the annual global market for hepatitis B at between USD 4-5 billion, growing to USD 5-6 billion by 2023. The annual global market for hepatitis D, by contrast, is estimated at around USD 1 billion. Investors' interest in early vaccine companies and platforms similar to Svenska Vaccinfabriken's has increased markedly in recent years. This is thought to be due to an increased awareness of the potential for the commercialisation of vaccines based on next generation technology, such as RNA vaccines and DNA vaccines. Interest in therapies to treat hepatitis B and D has further intensified – two areas in which the unmet medical need is still significant.
Project (First-in-class) Peptide
Primary indication Heart failure
Development phase Phase 2a
Holding in company' Karolinska Development 21%
Other investors Flerie Invest Industrifonden 3B Health Ventures
Origin Karolinska Institutet Karolinska University Hospital
More information anacardio.com
*Fully-diluted ownership based on current investment plans
AnaCardio (Stockholm, Sweden) is developing a new form of drug concept that protects cardiac tissue in conjunction with heart failure. Heart failure occurs when the heart's ability to pump sufficient blood to meet the body's needs has deteriorated. The underlying condition often involves a weakening of the heart's musculature, resulting in an inability to pump the blood out of the heart's chambers. The condition arises as a sequela of previous cardiovascular complications, such as high blood pressure or vasoconstriction. Chronic heart failure often presents with diffuse symptoms, such as tiredness or breathlessness, and delayed diagnosis is consequently a common problem. Acute heart failure results in an individual's health status becoming critical, necessitating hospitalization. At the same time, one of the major issues with existing pharmaceuticals is that they are not designed for long-term treatment.
AnaCardio's clinical candidate drug is being developed to restore the heart's normal muscular function and blood circulation with ground-breaking and safer technique. The Company's goal is to develop an oral drug that in contrast to existing treatments can affect the underlying cause of disease. The drug candidate is based on research by Professor Lars Lund at Karolinska Institutet.
In September 2022, a series A financing round of SEK 150 million was closed in which Karolinska Development participated together with a group of reputable investors to finance a clinical phase 1b/2a study of the drug candidate AC01 in patients with heart failure.
An estimated 26 million people suffer from chronic heart failure globally, and around 3 million people are hospitalized to treat it every year. The risk of developing cardiovascular disease increases with age, and 10-20 per cent of the elderly population is now estimated to suffer from chronic heart failure, which is now the most common reason for hospitalization amongst the elderly. Heart failure not only causes considerable individual suffering, it also has significant economic consequences for society in the form both of direct costs from in-patient care and of indirect costs such as productivity losses and reductions in tax revenues. The increased medical need is reflected in the sales value of heart failure treatments, which is expected to increase from USD 3.8 billion to USD 16.1 billion by 2026 in the world's seven largest pharmaceutical markets.
Start of phase 1b/2a study of the drug candidate AC01.
Project (First-in-class) PN6047
Primary indication Allodynia/ Hyperalgesia
Development phase Phase 1
Holding in company' Karolinska Development 13%
Origin Start-up
More information pharmnovo.com
*Fully-diluted ownership based on current investment plans
PharmNovo (Lund, Sweden) is developing innovative drugs for the treatment of nerve pain (neuropathic pain). Neuropathic pain is one of the most prevalent types of chronic pain and affects up to 10per cent of the population. Common causes include nerve damage from type 2 diabetes, shingles and can also arise from trauma (including surgery), cancer and cancer treatments. PharmNovo's lead candite, PN6047, focuses on allodynia and hyperalgesia, two common forms of nerve pain, affecting 15-20 per cent of neuropathic pain patients. Allodynia is pain due to a stimulus that does not usually provoke pain, while hyperalgesia is increased pain from a stimulus that usually provokes pain. These types of pain have highly detrimental effects on the quality of life; it impairs everyday activities and social functioning and has harmful physical effects (e.g., due to lack of mobility, energy and appetite, sleep deprivation etc.). Current treatment options are deemed ineffective and are also associated with significant side-effects; particularly cardiovascular and suicide risks with antidepressants and drug abuse potential with gabapentinoids or conventional opioids.
PharmNovo's novel drug candidate, based on a drug development project at AstraZeneca targets a different receptor than conventional opioid drugs; the delta opioid receptor, and thus reduces chronic pain without any of the unwanted effects of currently marketed opioids (constipation, physical dependence and, potentially, fatal respiratory depression). PN6047 has been tested in various mechanistic in vitro models and in animal models for neuropathic pain states, as well as for short term tolerance and dependence liability. In addition, initial safety pharmacology, pharmacokinetics, and regulatory toxicology studies have been performed.
The need for improved treatments for nerve pain is enormous. Around 10 per cent of the world's population currently suffers from conditions characterized by this form of pain, leading to a severely reduced quality of life for the individual and substantial costs for society – estimated at nearly EUR 440 billion annually in Europe alone. The estimated global market value for nerve pain drugs is nearly USD 6 billion and the market for allodynia alone is around USD 1.25 billion and is expected to continue growing driven by an aging population and increased cancer survival.
Phase 1 study with PN6047 is ongoing and a first read out is planned in Q2 2023.
Project (First-in-class) HEN-001
Primary indication Hidradenitis suppurativa
Development phase Preclinical
Holding in company* Karolinska Development 13%
Other investors Eir Ventures
Origin Start-up
More information henlez.com
* Fully-diluted ownership based on current investment plans.
Henlez (Copenhagen, Denmark) is a privately owned company developing a topical enzyme-based treatment of hidradenitis suppurativa. The company was founded 2019 by former Novozymes A/S scientist and current CEO Jeppe Mouritsen.
Henlez's pre-clinical lead development program, HEN-001, is an enzyme-based, topical application directed towards hidradenitis suppurativa – a highly stigmatizing and chronic inflammatory condition characterized by severe pain, malodorous drainage and permanent scarring of the armpits and groin. Despite an increasing number of drug trials, the available treatment options are still insufficient. Patients and key opinion leaders unanimously identify a large unmet need for novel treatments, a problem Henlez is poised to meet.
In October 2022, the company raised EUR 1 million in seed financing from Nordic venture capital firms Eir Ventures and Karolinska Development. The proceeds will cover the formulation development of topical HEN-001 to facilitate a forthcoming clinical evaluation of the product as well as an expansion of the patent portfolio.
An estimated 1% of the world's population is affected by hidradenitis suppurativa. The global market for therapeutic treatments of the disease is projected to reach USD 1.8 billion by 2028. Available medical treatment options for the condition mainly comprise repurposed, palliative drugs for systemic administration that are limited in both numbers, safety, and effect.
In October 2022, Karolinska Development's seed financing of Henlez was made in syndication with the Nordic venture capital firm Eir Ventures, where both parties have contributed EUR 0.5 million.
Project OSSDSIGN® Cranial PSI and OSSDSIGN® Catalyst
Primary indication Cranial implants Bone grafts
Development phase Marketed
Holding in company* Karolinska Development 10%**
Other investors SEB Venture Capital Fouriertransform
Origin Karolinska University Hospital,Uppsala University
More information
ossdsign.com
* Fully-diluted ownership based on current investment plans
** Includes indirect holdings through KCIF Co-Investment Fund
OssDsign (Uppsala, Sweden) is an innovative company that designs and manufactures implants and material technology for bone regeneration. The Company is focused on two particularly challenging areas where the success rate is far from acceptable today: cranial and spinal surgeries.
OssDsign Cranial PSI is an implant used for patients who have lost a large part of the cranium. The implant is constructed from 3D printed medical-grade titanium covered by a regenerative calcium phosphate composition. Long term follow-up data from over 1000 patients with OssDsign Cranial PSI implants, show an exceptional performance. Many cranial implant technologies are associated with high rates of costly complications and patient suffering. Multiple studies report infection rates above 10 per cent, leading to the removal of many implants. In comparison, the observed rate of explanations due to infections in patients who received OssDsign Cranial PSI was only 1.6 per cent at a median follow-up time of 22 months. OssDsign Cranial PSI has regulatory approvals in Europe, USA and Japan.
Approximately 20 per cent of surgeries for treating lower back pain are unsuccessful due to the lack of proper fusion between the implant and the spine. When surgeons perform the procedure, they use a combination of hardware to fixate the vertebrae and bone replacement material to stimulate bone growth. OssDsign Catalyst is an innovative synthetic bone graft composed of a proprietary nanocrystalline structure of calcium phosphate. Similar to the body's own bone mineral architecture, OssDsign Catalyst provides a favorable bone biology environment for rapid and reliable bone formation.
OssDsign Catalyst is a high margin and scalable product with a large potential in the market for standard procedures, enabling extensive growth. OssDsign Catalyst received FDA clearance in 2020 and was launched in the U.S. in August 2021.
The global market for cranial implants is estimated to USD 2.5 billion with an expected CAGR of 7 per cent between 2021–2025, whereof the addressable market for OssDsign's implant products is estimated to USD 350 million. The U.S. market for synthetic bone grafts in spinal surgeries is valued at USD 1.8 billion.
Financing for continued roll-out of the products internationally.
Project HAnano Surface
Primary indication Implant surface coatings
Development phase Marketed
Holding in company* Karolinska Development 2%
KDev Investments 14%
Other investors K-Svets Ventures ALMI Invest Chalmers Ventures
Origin Chalmers University of Technology
More information promimic.com
*Fully-diluted ownership based on current investment plans
Promimic (Gothenburg, Sweden) is a biomaterials company that develops and markets a unique coating for medical implants called HAnano Surface, which increases their integration into bone and anchoring strength. HAnano Surface is a nanometre-thin coating that helps stimulate the growth of bone cells and thereby improves healing. The coating is unique because it can be applied to any implant geometry and material, including porous materials and 3D structures. The technology on which HAnano is based is FDAapproved, which means that a new implant coated with HAnano Surface can receive marketing approval through the 510(k) route and reach a new market quickly. Since 2021 eight such approvals were granted for spinal cages.
Promimic has an established sales operation in the USA and a series of development and commercial partnerships, including one with Sistema de Implante Nacional (S.I.N), a leading provider of dental implants in Brazil, which is commercializing dental implants coated with HAnano Surface, and one with Danco Anodizing, which has established a manufacturing facility for implants with HAnano Surface, targeting the US and Chinese markets. Promimic has gradually strengthened its position in the orthopedic market by entering collaboration with Onkos Surgical and INNOVASIS Inc. The collaboration with Onkos Surgical includes the development and commercialization of products treated with HAnano Surface technology for hip cancer surgery. INNOVASIS Inc. Manufactures and sells 3D-printed spinal implants treated with HAnano Surface® in order to improve osseointegration and stimulate new bone formation and bone growth on the implant surface.
Promimic AB
Promimic focuses on two main segments, namely the markets for orthopedic and dental implants. Together, these segments represent a global market opportunity for Promimic worth up to USD 600- 800 million in 2025. Within these segments, the company's target group is medium to large sized implant companies and the main market is the United States.
The following financial reporting is divided into one financial reporting for The Parent Company and one for The Investment Entity. The Parent Company and The Investment Entity are the same legal entity, but the reporting is divided to meet legal reporting requirements.
The Parent Company is reporting in accordance with the guidelines under the Swedish Annual Accounting Act and Swedish Financial Accounting Standards Council, RFR 2. The Investment Entity is required to meet the reporting requirements of listed companies and thus in accordance with IFRS adopted by the EU and the Swedish Annual Accounts Act
Amounts with brackets refer to the corresponding period previous year unless otherwise stated.
| SEKm | 2022 Jul-Sep |
2021 Jul-Sep |
2022 Jan-Sep |
2021 Jan-Sep |
2021 Full-year |
|---|---|---|---|---|---|
| Condensed income statement | |||||
| Change in fair value of shares in portfolio | |||||
| companies | -50.3 | 27.5 | -91.4 | 240.0 | 223.2 |
| Net profit/loss | -46.6 | -1.2 | -98.1 | 190.3 | 170.8 |
| Balance sheet information | |||||
| Cash and cash equivalents | 207.0 | 45.3 | 207.0 | 45.3 | 92.4 |
| Net asset value (Note 1) | 1,237.7 | 995.2 | 1,237.7 | 995.2 | 978.0 |
| Net debt (Note 1) | -207.0 | 77.3 | -207.0 | 77.3 | 32.2 |
| Share information | |||||
| Earnings per share, weighted average | |||||
| before dilution (SEK) | -0.2 | 0.0 | -0.4 | 1.1 | 1.0 |
| Earnings per share, weighted average after | |||||
| dilution (SEK) | -0.2 | 0.0 | -0.4 | 1.1 | 1.0 |
| Net asset value per share (SEK) (Note 1) | 4.6 | 5.7 | 4.6 | 5.7 | 5.6 |
| Equity per share (SEK) (Note 1) | 4.6 | 5.6 | 4.6 | 5.6 | 5.5 |
| Share price, last trading day in the reporting | |||||
| period (SEK) | 1.8 | 2.9 | 1.8 | 2.9 | 5.3 |
| Portfolio information | |||||
| Investments in portfolio companies | 61.8 | 21.1 | 94.7 | 69.2 | 69.2 |
| Of which investments not affecting cash flow | 0.3 | 5.6 | 0.7 | 16.4 | 16.4 |
| Portfolio companies at fair value through | |||||
| profit or loss | 953.0 | 1,075.5 | 953.0 | 1,075.5 | 950.2 |
Investments (comparable numbers 2021)
Investments in the portfolio in the third quarter 2022 by external investors and Karolinska Development amounted to SEK 180.6 (106.1) million, whereof 66% (80%) by external investors.
Karolinska Development invested during the third quarter SEK 61.9 (21.1) million, of which SEK 61.5 (15.5) million was cash investments. Investments were made in PharmNovo SEK 20.0 million, AnaCardio SEK 15.3 million, Umecrine cognition SEK 15.0 million and in Modus Therapeutics with SEK 11.6 million. Non-cash investments (accrued interest on loans) amounted to SEK 0.3 (5.6) million.
Investments by external investors in the portfolio companies during the third quarter amounted to SEK 118.7 (85.0) million and were made in PharmNovo, AnaCardio and Umecrine Cognition.
During the year, Karolinska Development and external investors have made investments in the portfolio companies as follows:
| SEKm | Karolinska Development |
External Investors | Total Invested Q1-Q3 2022 |
|---|---|---|---|
| AnaCardio1 | 26.7 | 108.0 | 134.7 |
| PharmNovo | 20.0 | 6.7 | 26.7 |
| Umecrine Cognition | 15.0 | 26.0 | 41.0 |
| Dilafor | 12.9 | 19.6 | 32.5 |
| Modus Therapeutics | 11.6 | 0.0 | 11.6 |
| Promimic | 5.0 | 75.0 | 80.0 |
| Svenska Vaccinfabriken Produktion | 3.5 | 0.0 | 3.5 |
| Total | 94.7 | 235.3 | 330.0 |
1This years total investments in AnaCardio consist of convertible loan from January 2022 of SEK 34.7 million and the first tranche of SEK 100 million (of total SEK 150 million) in a series-A finance from September 2022.
Fair Value of the portfolio companies owned directly by Karolinska Development had a net increase by SEK 15.1 million during the third quarter 2022. The main reason was the investments in PharmNovo, AnaCardio, Umecrine Cognition and Modus Therapeutics but also the increased value in AnaCardio. Fair value was reduced by the dilutive effect of the transaction in Umecrine Cognition and the downturn in share price in all listed holdings.
Fair Value of the portfolio companies owned indirectly via KDev Investments decreased by SEK 6.0 million during the third quarter 2022.The main reasons for the decrease in Fair value of the portfolio companies was the downturn in share price in all listed holdings.
Total Fair Value from portfolio companies owned directly by Karolinska Development and indirectly via KDev Investments increased by SEK 9.1 million in the third quarter 2022.
As a consequence of the decrease in Fair Value of the part of the portfolio owned via KDev Investments, the potential distribution to Rosetta Capital decreased by SEK 2.1 million, resulting in Net Portfolio Fair Value increasing by SEK 11.3 million in the third quarter 2022.
| SEKm | 30 Sep 2022 | 30 Jun 2022 | Q3 2022 vs Q2 2022 |
|---|---|---|---|
| Karolinska Development Portfolio Fair Value (unlisted companies) | 696.1 | 679.6 | 16.5 |
| Karolinska Development Portfolio Fair Value (listed companies) | 49.4 | 50.8 | -1.4 |
| KDev Investments Portfolio Fair Value | 537.8 | 543.9 | -6.0 |
| Total Portfolio Fair Value | 1,283.4 | 1,274.2 | 9.1 |
| Potential distribution to Rosetta Capital of fair value of KDev | |||
| Investments | -330.4 | -332.5 | 2.1 |
| Net Portfolio Fair Value (after potential distribution to Rosetta Capital) | 953.0 | 941.7 | 11.3 |
During the third quarter 2022, Karolinska Development's revenue amounted to SEK 0.5 (0.5) million and consists primarily of services provided to portfolio companies.
Change in fair value of shares in portfolio companies of in total SEK -50.3 (27.5) million includes the difference between the change in Net Portfolio Fair Value during the third quarter 2022 with SEK 11.3 million, the investment in portfolio company of SEK 61.8 million. Change in fair value of other financial assets and liabilities amounted to SEK 8.5 (-25.6) million and are the consequence of changes in valuation of earn-out deals. For the period January - September 2022, the change in fair value of shares in portfolio companies amounted to SEK -91.4 (240.0) million and the change in fair value of other financial assets amounted to SEK 19.3 (-40.8) million.
During the third quarter 2022 other expenses amounted to SEK 1.3 (2.2) million and personnel costs amounted to SEK 4.4 (5.5) million. For the period January – September 2022 other expenses amounted to SEK 4.8 (5.6) million and personnel cost amounted to 20.6 (16.5) million
The operating profit/loss in the third quarter 2022 amounted to SEK -47.1 million compared to SEK -5.3 million in the third quarter 2021. The operating profit/loss for the period January - September 2022 amounted to -96.2 (178.2) million.
The financial net during the third quarter 2022 amounted to SEK 0.5 compared to SEK 4.1 million int the third quarter of 2021. The high financial net in the third quarter of 2021 was due to an adjusted interest income from loans to portfolio companies. For the period January - September 2022 the financial net amounted to SEK -1.9 (12.1) million.
The Investment Entity's Net profit/loss amounted to SEK -46.6 (-1.2) million in the third quarter 2022. Net profit/loss for the period January - September 2022 amounted to SEK -98.1 (190.3) million.
The Investment Entity's equity to total assets ratio amounted to 99% on 30 September 2022, compared to 88% on 30 September 2021.
The investment company's equity on 30 September 2022, amounted to SEK 1,231.4 million, compared to SEK 1,278.0 million on 30 June 2022. The decrease is a consequence of the profit/loss for the period of SEK -46.6 million.
The company has no interest-bearing liabilities as of 30 September 2022 (SEK 122.6 million as of 30 September 2021).
After paying operational costs and investments for the third quarter 2022, cash and cash equivalents (including short term investments) amounted to SEK 207.0 million on 30 September 2022 compared to SEK 45.3 million on 30 September 2021. Net debt (negative net debt/ net cash) amounted to SEK -207.0 million on 30 September 2022 compared to the net debt of SEK 77.3 million on 30 September 2021.
The company is going concern. The company's ability to continue operations (going concern) has strengthened. The report is prepared on the basis of the assumption of continued operation.
The Parent Company refers to Karolinska Development AB (comparable numbers 2021).
During the third quarter 2022, the Parent Company's Net profit/loss amounted to SEK -46.6 (-1.2) million. Net profit/loss for the period January - September 2021 amounted to SEK -98.1 (190.3) million.
The negative result for the third quarter of 2022 led to a decrease in equity of SEK -46.6 million from SEK 1,278.1 million as of 30 June 2022 to SEK 1,231.5 million 30 September 2022.
Trade in the Karolinska Development share takes place on Nasdaq Stockholm under the ticker symbol "KDEV". The last price paid for the listed B share on 30 September 2022 was SEK 1.76, and the market capitalization amounted to SEK 479 million.
The share capital of Karolinska Development on 30 September 2022 amounted to SEK 2.7 million divided into 2,555,261 A shares, each with ten votes (25,552,610 votes) and 267,522,333 B shares, each with one vote
(267,522,333 votes). The total number of shares and votes in Karolinska Development on 30 September 2022 amounted to 270,077,594 shares and 293,074,943 votes.
On 30 September 2022, Karolinska Development had 17,576 shareholders.
| Shareholder | A-Shares | B-Shares | Cap % | Vote % |
|---|---|---|---|---|
| invoX Pharma Ltd | 0 | 128,736,384 | 47.67% | 43.93% |
| Worldwide International Investments Ltd | 0 | 28,007,077 | 10.37% | 9.56% |
| Swedbank Robur Microcap fond | 0 | 8,750,000 | 3.24% | 2.99% |
| Stift För Främjande & Utveckling | 2,555,261 | 1,755,818 | 1.60% | 9.32% |
| Östersjöstiftelsen | 0 | 3,889,166 | 1.44% | 1.33% |
| Handelsbanken Fonder | 0 | 2,747,435 | 1.02% | 0.84% |
| Nyenburgh Hohlding B.V. | 0 | 2,580,000 | 0.96% | 0.94% |
| Coastal Investment Management LLC | 0 | 2,470,541 | 0.91% | 0.88% |
| SEB Investment Management | 0 | 1,662,069 | 0.62% | 0.57% |
| Adis Holding | 0 | 1,190,000 | 0.44% | 0.41% |
| Sum Top 10 Shareholders | 2,555,261 | 181,788,490 | 68.26% | 70.75% |
| Sum Other Shareholders | 0 | 85,733,843 | 31.74% | 29.25% |
| Sum All Shareholders | 2,555,261 | 267,522,333 | 100.00% | 100.00% |
Russia's invasion of Ukraine and the coronavirus's global spread affects the economy and society as a whole, including Karolinska Development and its portfolio companies. The value of listed companies can decline, delays in clinical trial programs may occur and the opportunities for refinancing can be hampered. The Board monitors the evolvement of the crises closely and Karolinska Development is working intensively to minimize the impact on the value of our investments and continues with different financing alternatives to secure the long-term capital requirement and thereby increase the degree of strategic and operational headroom for the future.
After the initial payment from the sale of Forendo Pharma which was received in December 2021 and the rights issue carried out in February 2022 the company's long-term financial situation has been strengthened.
For a detailed description of other risks and uncertainties, see the Annual report 2021.
Solna, 18 November 2022
Viktor Drvota CEO
Karolinska Development AB, corporate identity number 556707-5048
We have reviewed the condensed interim report for Karolinska Development AB, the Investment Entity, as at September 30, 2022 and for the nine months period then ended. The Board of Directors and the Managing Director are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.
We conducted our review in accordance with the International Standard on Review Engagements, ISRE 2410 Review of Interim Financial Statements Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and other generally accepted auditing standards in Sweden. The procedures performed in a review do not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, in accordance with IAS 34 and the Swedish Annual Accounts Act regarding the Investment Entity, and in accordance with the Swedish Annual Accounts Act regarding the Parent Company.
Solna, 18 November 2022
Ernst & Young AB
Oskar Wall
Authorized Public Accountant
| Year-End Report January – December 2022 | 17 February 2023 |
|---|---|
| Annual Report 2022 | 24 March 2023 |
| Interim Report January – March 2023 | 28 April 2023 |
| Annual meeting 2023 | 16 May 2023 |
| Interim Report January – June 2023 | 25 August 2023 |
| Interim Report January – September 2023 | 18 November 2023 |
Karolinska Development is required by law to publish the information in this interim report. The information was published on 18 november 2022.
This interim report, together with additional information, is available on Karolinska Development's website: www.karolinskadevelopment.com.
Note: This report is a translation of the Swedish interim report. In case of any discrepancies, the official Swedish version shall prevail.
| SEK 000 | Note | 2022 Jul-Sep |
2021 Jul-Sep |
2022 Jan-Sep |
2021 Jan-Sep |
2021 Full-year |
|---|---|---|---|---|---|---|
| Revenue | 527 | 497 | 1,738 | 1,701 | 2,170 | |
| Change in fair value of shares in portfolio companies Change in fair value of other financial assets and |
2,3 | -50,308 | 27,548 | -91,397 | 239,973 | 223,203 |
| liabilities | 8,490 | -25,567 | 19,346 | -40,845 | -33,891 | |
| Other expenses | -1,306 | -2,179 | -4,849 | -5,596 | -6,887 | |
| Personnel costs Depreciation of right-of |
-4,376 | -5,448 | -20,559 | -16,519 | -23,205 | |
| use assets | -172 | -172 | -517 | -517 | -690 | |
| Operating profit/loss | -47,145 | -5,321 | -96,238 | 178,197 | 160,700 | |
| Financial net | 522 | 4,126 | -1,906 | 12,116 | 10,119 | |
| Profit/loss before tax | -46,623 | -1,195 | -98,144 | 190,313 | 170,819 | |
| Taxes | - | - | - | - | - | |
| NET PROFIT/LOSS FOR THE PERIOD |
-46,623 | -1,195 | -98,144 | 190,313 | 170,819 |
| SEK 000 | Note | 2022 Jul-Sep |
2021 Jul-Sep |
2022 Jan-Sep |
2021 Jan-Sep |
2021 Full-year |
|---|---|---|---|---|---|---|
| Net profit/loss for the period |
-46,623 | -1,195 | -98,144 | 190,313 | 170,819 | |
| Total comprehensive income/loss for the period |
-46,623 | -1,195 | -98,144 | 190,313 | 170,819 |
| SEK | Note | 2022 Jul-Sep |
2021 Jul-Sep |
2022 Jan-Sep |
2021 Jan-Sep |
2021 Full-year |
|---|---|---|---|---|---|---|
| Earnings per share, weighted average before dilution Number of shares, |
-0.17 | -0.01 | -0.39 | 1.08 | 0.97 | |
| weighted average before dilution Earnings per share, weighted average after |
269,833,309 175,421,124 253,233,364 175,421,124 175,421,124 | |||||
| dilution Number of shares, weighted average after |
-0.17 | -0.01 | -0.39 | 1.08 | 0.97 | |
| dilution | 269,833,309 175,421,124 253,233,364 175,421,124 175,421,124 |
| SEK 000 | Note | 30 Sep 2022 | 30 Sep 2021 | 31 Dec 2021 |
|---|---|---|---|---|
| ASSETS | ||||
| Tangible assets | ||||
| Right-of-use assets | 862 | 862 | 690 | |
| Financial assets | ||||
| Shares in portfolio companies at fair value | ||||
| through profit or loss | 2,3 | 953,043 | 1,075,495 | 950,170 |
| Other financial assets | 4 | 78,045 | 0 | 61,799 |
| Total non-current assets | 1,031,950 | 1,076,357 | 1,012,659 | |
| Current assets | ||||
| Receivables from portfolio companies | 319 | 2,510 | 505 | |
| Other financial assets | - | 722 | - | |
| Other current receivables | 1,224 | 1,224 | 768 | |
| Prepaid expenses and accrued income | 1,035 | 895 | 2,940 | |
| Short-term investments, at fair value through | ||||
| profit or loss | 88,156 | - | 50,005 | |
| Cash and cash equivalents | 118,844 | 45,320 | 42,398 | |
| Total current assets | 209,578 | 50,671 | 96,616 | |
| TOTAL ASSETS | 1,241,528 | 1,127,028 | 1,109,275 | |
| EQUITY AND LIABILITIES | ||||
| Total equity | 1,231,416 | 990,601 | 971,086 | |
| Long-term liabilities | ||||
| Long-term liabilities to related parties | 5 | - | 122,611 | - |
| Total long-term liabilities | 0 | 122,611 | 0 | |
| Current liabilities | ||||
| Current interest liabilities to related parties | 5 | - | - | 124,603 |
| Other financial liabilities | 416 | 3,742 | 1,756 | |
| Accounts payable | 728 | 690 | 1,674 | |
| Liability to make lease payment | 922 | 880 | 732 | |
| Other current liabilities | 1,437 | 1,343 | 2,156 | |
| Accrued expenses and prepaid income | 6,609 | 7,161 | 7,268 | |
| Total current liabilities | 10,112 | 13,816 | 138,189 | |
| Total liabilities | 10,112 | 136,427 | 138,189 | |
| TOTAL EQUITY AND LIABILITIES | 1,241,528 | 1,127,028 | 1,109,275 |
| SEK 000 | Not | 2022-09-30 | 2021-09-30 | 2021-12-31 |
|---|---|---|---|---|
| Opening balance, equity | 971,086 | 800,267 | 800,267 | |
| Share capital | 2,701 | 1,757 | 1,757 | |
| Share premium | 2,735,903 | 2,378,373 | 2,378,373 | |
| Retained earnings | -1,507,188 | -1,389,529 | -1,409,044 | |
| Closing balance, equity | 1,231,416 | 990,601 | 971,086 |
| SEK 000 Note |
2022 Jan-Sep |
2021 Jan-Sep |
|---|---|---|
| Operating activities | ||
| Operating profit/loss | -96,238 | 178,197 |
| Adjustments for items not affecting cash flow | ||
| Depreciation | 517 | 517 |
| Change in fair value | 72,051 | -199,128 |
| Other items | -448 | - |
| Cash flow from operating activities before changes in | ||
| working capital and operating investments | -24,118 | -20,414 |
| Cash flow from changes in working capital | ||
| Increase (-)/Decrease (+) in operating receivables | -496 | -2,590 |
| Increase (+)/Decrease (-) in operating liabilities | -2,151 | 44,179 |
| Cash flow from operating activities | -26,765 | 21,175 |
| Investment activities | ||
| Part payment from earn-out deal | 1,956 | -2,370 |
| Acquisitions of shares in portfolio companies | -93,946 | 3,941 |
| Acquisitions of short-term investments | -40,000 | -52,759 |
| Cash flow from investment activities | -131,990 | -51,188 |
| Financing activities | ||
| Cash from rights issue | 254,911 | - |
| Prospectus costs | -19,175 | - |
| Amortization of lease liabilities | -535 | -536 |
| Cash flow from financing activities | 235,201 | -536 |
| Cash flow for the period | 76,446 | -30,549 |
| Cash and cash equivalents at the beginning of the year | 42,398 | 75,869 |
| CASH AND CASH EQUIVALENTS AT THE END OF THE | ||
| PERIOD | 118,844 | 45,320 |
| SEK 000 | Note | 2022 Jul-Sep |
2021 Jul-Sep |
2022 Jan-Sep |
2021 Jan-Sep |
2021 Full-year |
|---|---|---|---|---|---|---|
| Revenue | 527 | 497 | 1,738 | 1,701 | 2,170 | |
| Change in fair value of shares in portfolio companies Change in fair value of other financial assets and |
2,3 | -50,308 | 27,548 | -91,397 | 239,973 | 223,203 |
| liabilities | 8,490 | -25,567 | 19,346 | -40,845 | -33,891 | |
| Other expenses | -1,484 | -2,357 | -5,384 | -6,131 | -7,601 | |
| Personnel costs | -4,376 | -5,448 | -20,559 | -16,519 | -23,205 | |
| Operating profit/loss | -47,151 | -5,327 | -96,256 | 178,179 | 160,676 | |
| Financial net | 532 | 4,136 | -1,870 | 12,152 | 10,164 | |
| Profit/loss before tax | -46,619 | -1,191 | -98,126 | 190,331 | 170,840 | |
| Tax | - | - | - | - | - | |
| NET PROFIT/LOSS FOR THE PERIOD |
-46,619 | -1,191 | -98,126 | 190,331 | 170,840 |
| SEK 000 | Note | 2022 Jul-Sep |
2021 Jul-Sep |
2022 Jan-Sep |
2021 Jan-Sep |
2021 Full-year |
|---|---|---|---|---|---|---|
| Net profit/loss for the period | -46,619 | -1,191 | -98,126 | 190,331 | 170,840 | |
| Total comprehensive income/loss for the period |
-46,619 | -1,191 | -98,126 | 190,331 | 170,840 |
| SEK 000 | Note | 30 Sep 2022 | 30 Sep 2021 | 31 Dec 2021 |
|---|---|---|---|---|
| ASSETS | ||||
| Financial non-current assets | ||||
| Shares in portfolio companies at fair value | ||||
| through profit or loss | 2,3 | 953,043 | 1,075,495 | 950,170 |
| Other financial assets | 4 | 78,045 | - | 61,799 |
| Total non-current assets | 1,031,088 | 1,075,495 | 1,011,969 | |
| Current assets | ||||
| Receivables from portfolio companies | 319 | 2,510 | 505 | |
| Other financial assets | 4 | - | 722 | - |
| Other current receivables | 1,224 | 1,224 | 768 | |
| Prepaid expenses and accrued income | 1,035 | 895 | 2,940 | |
| Short-term investments at fair value through | ||||
| profit or loss | 88,156 | - | 50,005 | |
| Cash and cash equivalents | 118,844 | 45,320 | 42,398 | |
| Total current assets | 209,578 | 50,671 | 96,616 | |
| TOTAL ASSETS | 1,240,666 | 1,126,166 | 1,108,585 | |
| EQUITY AND LIABILITIES | ||||
| Total equity | 1,231,476 | 990,619 | 971,128 | |
| Long-term liabilities | ||||
| Long-term liabilities to related parties | 5 | - | 122,611 | - |
| Total long-term liabilities | 0 | 122,611 | 0 | |
| Current liabilities | ||||
| Current interest liabilities | 5 | - | - | 124,603 |
| Other financial liabilities | 416 | 3,742 | 1,756 | |
| Accounts payable | 728 | 690 | 1,674 | |
| Other current liabilities | 1,437 | 1,343 | 2,156 | |
| Accrued expenses and prepaid income | 6,609 | 7,161 | 7,268 | |
| Total current liabilities | 9,190 | 12,936 | 137,457 | |
| Total liabilities | 9,190 | 135,547 | 137,457 | |
| TOTAL EQUITY AND LIABILITIES | 1,240,666 | 1,126,166 | 1,108,585 |
| SEK 000 | Not | 30 Sep 2022 | 30 Sep 2021 | 31 Dec 2021 |
|---|---|---|---|---|
| Opening balance, equity | 971,128 | 800,287 | 800,287 | |
| Share capital2 | 2,701 | 1,757 | 1,757 | |
| Share premium reserve | 2,735,903 | 2,378,373 | 2,378,373 | |
| Retained earnings | -1,507,128 | -1,389,511 | -1,409,002 | |
| Closing balance, equity | 1,231,476 | 990,619 | 971,128 |
This report has been prepared in accordance with the International Accounting Standard (IAS) 34 Interim Financial Reporting and the Annual Accounts Act. The accounting policies applied to the Investment Entity and the Parent Company correspond, unless otherwise stated below, to the accounting policies and valuation methods used in the preparation of the most recent annual report.
Karolinska Development AB (publ) ("Karolinska Development," "Investment Entity" or the "Company") is a Nordic life sciences investment company. The Company, with Corporate Identity Number 556707-5048, is a limited liability company with its registered office in Solna, Sweden. The Company focuses on identifying medical innovations and investing in the creation and growth of companies developing these assets into differentiated products that will make a difference to patients' lives and provide an attractive return on investment to its shareholders. Investments are made in companies whose sole purpose is to generate a return through capital appreciation and investment income. These temporary investments, which are not investment entities, are designated "portfolio companies" below.
No new or revised IFRS standards or recommendations from IFRS Interpretations Committee has had significant impact on the Investment Entity.
The bridge loans, including accrued interest, totalling SEK 124.9 million was converted into shares in Karolinska Development's rights issue in February 2022. No further transactions with owners.
Interim period: The period from the beginning of the financial year through the closing date.
Reporting period: January – September 2022.
The Company presents certain financial measures in the interim report that are not defined under IFRS. The Company believes that these measures provide useful supplemental information to investors and the company's management as they allow for the evaluation of the company's performance. Because not all companies calculate the financial measures in the same way, these are not always comparable to measures used by other companies. Therefore, these financial measures should not be considered as substitutes for measures as defined under IFRS.
Portfolio companies: Companies where Karolinska Development has made investments (subsidiaries, joint ventures, associated companies and other long-term securities holdings) which are active in pharmaceuticals, medtech, theranostics and formulation technology.
The Portfolio Fair Value is divided into Total Portfolio Fair Value and Net Portfolio Fair Value.
Total Portfolio Fair Value: The aggregated proceeds that would be received by Karolinska Development and KDev Investments if the shares in their portfolio companies were sold in an orderly transaction between market participants at the measurement date.
Net Portfolio Fair Value (after potential distribution to Rosetta Capital) is the net aggregated proceeds that Karolinska Development will receive after KDev Investments' distribution of proceeds to Rosetta Capital.
rNPV: "risk-adjusted net present value" is a method to value risky future cash flows. rNPV is the standard valuation method in the drug development industry, where sufficient data exists to estimate success rates for all R&D phases.
Equity per share: Equity on the closing date in relation to the number of shares outstanding on the closing date.
Net debt: Interest-bearing liabilities (SEK 0.0 million) reduced with cash and cash equivalents (including shortterm investments) (SEK 207.0 million).
Equity to total assets ratio: Equity divided by total assets.
Net asset value as of 30 September 2022:
| Number of shares |
Fair value | Part of Karolinska Developments' net asset value |
|||
|---|---|---|---|---|---|
| SEK 000 | SEK per share3 |
percentage | |||
| Listed assets | |||||
| Modus Therapeutics | 6,144,821 | 25,526 | 0.09 | 2.1% | |
| OssDsign | 5,812,638 | 20,257 | 0.08 | 1.6% | |
| Promimic | 312,500 | 3,656 | 0.01 | 0.3% | |
| Total listed assets | 49,438 | 0.18 | 4.0% | ||
| Unlisted assets | |||||
| AnaCardio | 45,138 | 0.17 | 3.6% | ||
| Dilafor | 24,026 | 0.09 | 1.9% | ||
| PharmNovo | 20,000 | 0.07 | 1.6% | ||
| Svenska Vaccinfabriken Produktion | 10,346 | 0.04 | 0.8% | ||
| Umecrine Cognition | 588,633 | 2.18 | 47.6% | ||
| KCIF Co-Investment Fund KB1 | 7,999 | 0.03 | 0.6% | ||
| KDev Investments1 | 207,462 | 0.77 | 16.8% | ||
| Total unlisted assets | 903,605 | 3.35 | 73.0% | ||
| Net of other liabilities and debts2 | 284,629 | 1.05 | 23.0% | ||
| Total net asset value | 1,237,672 | 4.59 | 100.0% |
1The company has both listed and unlisted assets.
2 Includes SEK 207.0 million cash and cash equivalents (including short-term investments).
3In relation to the number of shares outstanding (269,833,309) on the closing date.
| 2022 | 2021 | 2021 | |
|---|---|---|---|
| SEK 000 | Jan-Sep | Jan-Sep | Full-year |
| Result level 1 | |||
| Listed companies, realized | - | -433 | -433 |
| Listed companies, unrealized | -41,058 | -26,479 | -27,159 |
| Total level 1 | -41,058 | -26,912 | -27,592 |
| Result level 3 | |||
| Unlisted companies, realized | 402 | -936 | 7,243 |
| Unlisted companies, unrealized | -50,741 | 267,821 | 243,552 |
| Total level 3 | -50,339 | 266,885 | 250,795 |
| Total | -91,397 | 239,973 | 223,203 |
| SEK 000 | 2022-09-30 | 2021-09-30 | 2021-12-31 |
|---|---|---|---|
| Accumulated acquisition cost | |||
| At the beginning of the year | 950,170 | 770,320 | 770,320 |
| Investments during the year | 94,653 | 69,154 | 69,154 |
| Sales during the year | -389 | -3,952 | -112,507 |
| Changes in fair value in net profit/loss for the | |||
| year | -91,397 | 239,973 | 223,203 |
| Closing balance | 953,043 | 1,075,495 | 950,170 |
The table below shows financial instruments measured at fair value based on the classification in the fair value hierarchy. The various levels are defined as follows:
| SEK 000 | Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|
| Financial assets | ||||
| Shares in portfolio companies, at fair value through profit or loss |
49,438 | - | 903,605 | 953,043 |
| Other financial assets Cash and cash equivalents and short-term |
- | - | 78,045 | 78,045 |
| investments | 207,000 | - | - | 207,000 |
| Total | 256,438 | 0 | 981,650 | 1,238,088 |
| Financial liabilities | ||||
| Other financial liabilities | - | - | 416 | 416 |
| Total | - | 0 | 416 | 416 |
| SEK 000 | Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|
| Financial assets | ||||
| Shares in portfolio companies, at fair value through profit or loss |
74,601 | - | 1,000,894 | 1,075,495 |
| Loans receivable from portfolio companies | - | 2,510 | - | 2,510 |
| Other financial assets | - | - | 722 | 722 |
| Cash, cash equivalents and short-term | ||||
| investments | 45,320 | - | - | 45,320 |
| Total | 119,921 | 2,510 | 1,001,616 | 1,124,047 |
| Financial liabilities | ||||
| Other financial liabilities | - | - | 3,742 | 3,742 |
| Total | - | 0 | 3,742 | 3,742 |
| SEK 000 | Shares in portfolio companies |
Other financial assets |
Other financial liabilities |
|---|---|---|---|
| At beginning of the year | 876,250 | 61,799 | 1,756 |
| Acquisitions | 78,083 | - | - |
| Compensations | -389 | -2,082 | -324 |
| Gains and losses recognized through profit or loss | -50,339 | 18,328 | -1,016 |
| Closing balance 30 September 2022 | 903,605 | 78,045 | 416 |
| Realized gains and losses for the period included in profit or loss |
402 | - | - |
| Unrealized gains and losses in profit or loss for the period included in profit or loss |
-50,741 | 18,328 | 1,016 |
| SEK 000 | Shares in portfolio companies |
Other financial assets |
Other financial liabilities |
|---|---|---|---|
| At beginning of the year | 732,554 | 41,181 | 5,726 |
| Transfers from level 3 | -36,752 | - | - |
| Acquisitions | 38,207 | - | - |
| Compensations | - | - | -2,370 |
| Gains and losses recognized through profit or loss | 266,885 | -40,459 | 386 |
| Closing balance 30 September 2021 | 1,000,894 | 722 | 3,742 |
| Realized gains and losses for the period included in profit or | |||
| loss | -1,369 | - | - |
| Unrealized gains and losses in profit or loss for the period | |||
| included in profit or loss | 268,254 | -40,459 | 386 |
The Investment Entity recognizes transfers between levels in the fair value hierarchy on the date when an event or changes occur that give rise to the transfer.
| SEK 000 | Ownership | Market value | Valuation model1 |
|---|---|---|---|
| AnaCardio | 20.7% | 45,138 | Last post money |
| Dilafor | 1.5% | 24,026 | Last post money |
| PharmNovo | 13.1% | 20,000 | Last post money |
| Svenska Vaccinfabriken Produktion | 34.8% | 10,346 | Last post money |
| Umecrine Cognition | 72.6% | 588,633 | External valuation2 |
| KCIF Co-Investment Fund KB | 26.0% | 7,999 | A combination of share price listed company and fair value of financial asset3 |
| KDev Investments | 90.1% | 207,462 | A combination of last post money and share price listed company4 |
| Total level 3 | 903,605 |
1See The Annual Report 2021 Valuation of portfolio companies at fair value, for a description of valuation models. 2Risk adjusted external valuation by an independent valuation institute in December 2020. The external valuation resulted in an rNPV value which has been risk adjusted to reflect an assumed pricing in conjunction with an IPO and the need to secure development financing, the dilutive effect of the investment transaction also effects the value. See below. 3KCIF Co-Investment Fund KB holds listed shares which are valued in accordance with the closing rate on the final trading day of the period and a financial asset, at fair value through profit or loss, attributable to earn-out in the sale of Forendo Pharma. 4KDev Investments AB holds both listed shares which are valued in accordance with the closing rate on the final trading day of the period and unlisted shares which are valued in accordance with the most recent transaction (post-money valuation). Dilafor, which is an unlisted company, accounts for 91% of the total fair value in KDev Investments.
The fair value of the holding in Umecrine Cognition, as of 30 September 2022, totaled SEK 588.6 million (SEK 623.0 million as of 30 September 2021) and comprised 62% (58% as of 30 September 2021) of the portfolio's fair value.
After Umecrine Cognition presented positive phase 2a data in 2020 and established a plan for the continued clinical development of the golexanolone candidate drug in the field of hepatic encephalopathy, Karolinska Development has valued its holding in Umecrine Cognitions at the share of the rNPV produced by an external independent valuation institute. The external valuation is based on, amongst other things, pharmaceutical reference prices, market size, and market share, which have been discounted and resulted in an rNPV value. The rNPV value was then risk-adjusted to reflect both an assumed pricing in conjunction with a market flotation and the need to secure development financing.
In connection with Umecrine Cognition securing funding of SEK 41 million before the start of a phase 2 study of the drug candidate golexanolone in primary biliary cholangitis, (PCB, a condition that occurs when the bile ducts in the liver are slowly destroyed) in the form of a convertible loan with a convertible loan with attached share options, where of Karolinska Development invested SEK 15 million, which increases the fair value but the fair value reduces by SEK 49 million as a result of the dilution effect in the event that the options in the transaction are exercised.
The discount rates for the valuation conducted in 2020 are 13% – a fixed, standard parameter and one which takes into account the phase of the study in question. Karolinska Development is of the opinion that, after the discount rate – which is set in a standard way based on the then current project phase – the candidate drug price (which comprises prices from reference groups in the market) is the second most significant nonobservable input data in the valuation model. The market size and market share have equivalent effects, but as these parameters are similarly proportional in the sensitivity analysis, the effect of all of these parameters can be grasped through the lens of the valuation date sensitivity, by simulating increases and decreases in the assumed price. The sensitivity analysis therefore relates to the change in the discount rate and the price of the candidate drug and shows the effect on Karolinska Development's value for Umecrine Cognition of various changes in the discount rate and the price. See tables below.
The amounts refer to changes in fair value in Umecrine Cognition:
Discount rate of 11, 12, 14 respectively 15% (13% is used in the valuation)
| 11% | 12% 14% |
15% | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Result/ equity | Result/ equity Result/ equity |
Result/ equity | |||||||||
| MSEK | SEK/share | MSEK | SEK/share | MSEK | SEK/share | MSEK | SEK/share | ||||
| Effect of a change in the discount rate1 |
154,984 | 0.88 | 48,577 | 0.28 | -41,638 | -0.24 | -120,286 | -0.69 |
1Sensitivity on the fair value (from the rNPV value which has been risk adjusted to reflect an assumed pricing in conjunction with an IPO and the need to secure development financing, the dilution effect in the new funding also effects the value, see above) on performed external valuation based on a change of +/- 1 respectively +/- 2 percentage points. The discount rate used in the valuation amounts to 13%.
| 5% | -5% | +/- 15% | +/- 30% | |||||
|---|---|---|---|---|---|---|---|---|
| Result/ equity | Result/ equity Result/ equity Result/ equity |
|||||||
| MSEK | SEK/share | MSEK | SEK/share | MSEK | SEK/share | MSEK | SEK/share | |
| Effect of a change in the price of the drug candidate2 |
32,385 | 0.18 | -30,072 | -0.17 | +/- 94,841 | +/- 0.54 | +/- 189,682 | +/- 1.08 |
2Sensitivity on fair value (from the rNPV value which has been risk adjusted to reflect an assumed pricing in conjunction with an IPO and the need to secure development financing, the dilution effect in the new funding also effects the value, see above) on performed external valuation based on a change in the assumed sales price (reference price) of the drug candidate which has been used in the valuation, the sensitivity analysis shows change at +/- 5%, +/- 15% and +/- 30% respectively.
In the table below, "Total Portfolio Fair Value" is as defined in Note 1.
"Potential distribution to Rosetta Capital", SEK 330.4 million, is the amount that KDev Investments according to the investment agreement between Karolinska Development and Rosetta Capital is obligated to distribute to Rosetta Capital from the proceeds received by KDev Investments (KDev Investments Fair Value). The distribution to Rosetta Capital will only happen when KDev Investments distribute dividends. KDev Investments will only distribute dividends after all eventual payables and outstanding debt has been repaid. Following dividends from KDev Investments during 2021 and 2022, all additional investments totalling SEK 44.2 million have been repaid to Rosetta Capital. In addition, SEK 1.3 million has been distributed, which reduce the first SEK 220 million in the waterfall structure. See also the annual report for 2021, note 17, for a description of the agreement with Rosetta Capital.
"Net Portfolio Fair Value (after potential distribution to Rosetta Capital)" is as defined in Note 1.
| SEK 000 | 30 Sep 2022 | 30 Sep 2021 | 31 Dec 2021 |
|---|---|---|---|
| Karolinska Development Portfolio Fair Value (unlisted companies) | 696,143 | 760,051 | 652,377 |
| Karolinska Development Portfolio Fair Value (listed companies) | 49,438 | 74,601 | 73,920 |
| KDev Investments Portfolio Fair Value | 537,843 | 605,988 | 566,807 |
| Total Portfolio Fair Value | 1,283,424 | 1,440,640 | 1,293,104 |
| Potential distribution to Rosetta Capital of fair value of KDev | |||
| Investments | -330,381 | -365,145 | -342,934 |
| Net Portfolio Fair Value (after potential distribution to Rosetta Capital) | 953,043 | 1,075,495 | 950,170 |
| SEK000 | 30 Sep 2022 | 30 Sep 2021 | 31 Dec 2021 |
|---|---|---|---|
| Other financial assets, non-current | |||
| Earn-out agreement Forendo Pharma1 | 78,045 | - | 61,799 |
| Earn-out agreement Oncopeptides2 | 0 | 0 | 0 |
| Total | 78,045 | 0 | 61,799 |
| Other financial assets, current | |||
| Receivable Rosetta Capital | - | 722 | - |
| Total | - | 39,996 | - |
1Karolinska Development is entitled to earn-out payments according to the agreement with Organon regarding the sale of Forendo Pharma, se below.
2Karolinska Development is entitled to a 5% earn-out payment according to an agreement with Industrifonden. The earn-out payment is received when Industrifonden divests its holding in Oncopeptides. The value is estimated as of the balance sheet date at SEK 0.0 million. Maximum residual value amounts to KSEK 40,459.
Karolinska Development estimates the risk-adjusted net present value (rNPV) of future cash flows (earn-outs), after the initial payment in December 2021 and a minor payment in May 2022, to SEK 78.0 million. The earnouts are expected to be paid during the period 2023–2034, and renewed rNPV valuations will be performed continuously. Forendo Pharma's previously shareholders are entitled to additional future payments totalling USD 870 million (approximate SEK 7,560 million) upon the achievement of certain development, registration and commercial milestones pertaining to Forendo Pharma's drug candidates.
| SEK 000 | 30 Sep 2022 | 30 Sep 2021 | 31 Dec 2021 |
|---|---|---|---|
| Long-term liabilities to related parties | |||
| InvoX Pharma Ltd1 | 70,000 | - | |
| InvoX Pharma Ltd2 | 42,500 | - | |
| Accrued interest Sino Biopharmaceutical | 10,111 | - | |
| Current interest liabilities | |||
| invoX Pharma Ltd1 | - | - | 70,000 |
| invoX Pharma Ltd2 | - | - | 42,500 |
| Accrued interest Sino Biopharmaceutical | - | - | 12,103 |
| Total | 0 | 122,611 | 124,603 |
The bridge loans and accrued interest, in total SEK 124.9 million, was converted into shares in Karolinska Development's rights issue in February 2022.
Related parties refer to the main owner invoX Pharma Ltd, which in turn is a wholly owned subsidiary of the former main owner Sino Biopharmaceutical Ltd.
| SEK 000 | 30 Sep 2022 | 30 Sep 2021 | 31 Dec 2021 |
|---|---|---|---|
| Pledge assets | |||
| Contingent liabilities | |||
| Investment agreement in portfolio company | 7,580 | 12,927 | 12,927 |
| Summa | 7,580 | 12,927 | 12,927 |
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.