Annual Report • Feb 25, 2022
Annual Report
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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, endometriosis, 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
The full-year result for the change in the fair value of the portfolio amounted to SEK 223.2 million (SEK -215.4 million during 2020).
The total fair value of the portfolio was SEK 1,293.1 million at the end of December 2021, an increase from SEK 933.2 million at the corresponding date in 2020. The net portfolio fair value was SEK 950.2 million, an increase by SEK 179.9 million from SEK 770.3 million at the corresponding date in 2020.
The portfolio company Umecrine Cognition has presented new scientific results showing that the innate neurosteroid allopregnanolone plays an important role in the development of cognitive symptoms observed in patients with primary biliary cholangitis (PBC). Since Umecrine Cognition's drug candidate golexanolone could potentially impact allopregnanolone the company has, based on the novel clinical results and other supportive data, initiated preparations for a Phase 2 clinical study in PBC (November 2021).
The portfolio company Modus Therapeutics has received approval from the regulatory authorities in the Netherlands to carry out a clinical Phase 1b-study with sevuparin, a potential new treatment of sepsis/septic shock (November 2021).
The terms in the Rights Issue constituted that ten (10) existing shares (regardless of share class) give the right to subscribe for seven (7) newly issued shares of the same class as the subscription right refers to, at a subscription price of SEK 4.00 per share. The rights issue was secured to 75 percent through subscription commitments and underwriting commitments. To enable the Board and management to participate in the Rights Issue, publication of the year-end report is postponed to February 25, 2022. Furthermore, Director Tse Ping resigned from his position at the Extraordinary General Meeting and Philip Duong was elected as a new Board member for the period until the next Annual General Meeting. Furthermore, Tse Ping and Hans Wigzell have been appointed Senior Strategic Advisors at Karolinska Development. They will assist with strategic advice to the Company's board and management team (December 2021).
The portfolio company Svenska Vaccinfabriken has appointed Richard Bethell as new CEO. He will assume the position immediately. Richard Bethell holds a D.Phil in Biological Chemistry from the University of Oxford, has thirty years of experience in the biopharmaceutical industry and has worked primarily in the development of new products for the treatment and prophylaxis of infectious diseases (January 2022).
The subscription price in the rights issue was SEK 4.00 per share. Through the rights issue, the share capital in Karolinska Development increases by SEK 944,121.85, through the issue of 1,052,163 shares of class A and 93,360,022 shares of class B, to a total of SEK 2,700,775.94 allocated to 270,077,594 shares, of which 2,555,261 shares are of class A and 267,522,333 shares are of class B (February 2022).
"We saw a strong performance by many of our portfolio companies during the fourth quarter and completed the successful divestment of Forendo Pharma. A new rights issue that will enable us to accelerate our value creation was completed after the quarter-end, and we also welcomed highly skilled new colleagues to our investment team. The strength of Karolinska Development's business strategy is becoming increasingly clear, and we look forward to continuing to assist in the development of ground-breaking medical innovations."
For further information, please contact:
Viktor Drvota, Chief Executive Officer +46 73 982 52 02 [email protected]
Per Aniansson, Chief Financial Officer CEO +46 70 866 04 29 [email protected]
The divestment of Forendo Pharma to the global pharmaceutical company, Organon – one of the world's leading pharmaceutical companies in the area of women's health – was completed during the fourth quarter of 2021. The transaction could result in revenues of up to USD 945 million for Forendo Pharma's shareholders, making it one of the biggest transactions ever in the Nordic biotech sector. We have been supporting Forendo Pharma's successful development of candidate drugs with the potential to improve life for millions of women worldwide for many years now, and those efforts have now resulted in an extremely healthy financial return on the capital invested. The value creation within Forendo is an excellent example of Karolinska Development's long-term business strategy.
Several of our portfolio companies have reported important progress recently. The fourth quarter saw Modus Therapeutics' launch of a clinical phase 1b study of its candidate drug, sevuparin, which is being developed for the treatment of sepsis/septic shock. Dilafor, meanwhile, expanded its clinical development programme by initiating a phase 2 study in the neglected medical area of preeclampsia, while in January, the Umecrine Cognition portfolio company presented the results of a preclinical study demonstrating that their candidate drug, golexanolone, has a suppressive effect on neuroinflammation in the cerebellum, leading to the cessation of disease-related motor disturbances. These new preclinical results support the further development of golexanolone as a potential treatment for inflammatory diseases of the CNS.
A new rights issue of ca. SEK 378 million was recently implemented in order to finance the development of our existing portfolio companies, create scope for new investments, and finance general corporate objectives. Increased financial muscle will enable us to provide stronger support for our existing portfolio companies. It will also boost our ability to make new investments with a clear focus both on pharmaceutical projects that have shown signs of proof of concept in clinical studies and on companies with medicotechnical products that have overcome regulatory barriers and are in the early launch phase. We evaluate on the order of 200 companies every year, with twenty or so of them subjected to a more in-depth examination. In the vast majority of cases, we syndicate our investments with other reputable specialist investors, giving us access to additional expertise, a broader capital base, and an expanded international network of potential licensing and commercial partners. We have seen the valuation of many companies' valuations progress recently in a way that gives rise to interesting investment opportunities.
We are absolutely delighted to welcome on board two new colleagues who will enhance our ability to support the portfolio companies and evaluate potential new investment objects. Linda Spahiu, our new Investment Manager, who has an MS in Engineering and is a Doctor of Medicine, has 13 years' experience in the life sciences sector. Her CV includes everything from academic and laboratory work to structuring marketing strategies and conducting commercial due diligence processes. She joins Karolinska Development from a position as CEO of VOC Diagnostics, a Swedish company operating in the area of oncology diagnostics, prior to which, she was a strategic commercial advisor at Boston Consulting Group, working exclusively on life science industry projects. We have also recruited a new analyst, Mikaela Sörman, who has almost 10 years' experience of the health and medical sector. Mikaela has a Master of Public Health and, like Linda Spahiu, has a background in commercial advisory work in the life sciences field at Boston Consulting Group.
Our ongoing efforts to identify interesting new investment opportunities and to support the portfolio companies in their development and commercialisation of new pharmaceuticals and medicotechnical products are the tools we use in our endeavours to improve and extend the lives of millions of patients worldwide. The capital contribution from the rights issue, and the strengthening of our team, improve our potential to achieve our goals and thereby create significant value for our shareholders.
Solna, 25 February 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. For medtech companies, the business model is to finance the companies beyond break-even before realizing the investments.
Karolinska Development has a focused portfolio of therapeutic and medtech companies with significant value-generating potential. The portfolio companies are developing highly differentiated and commercially attractive products that have the potential to deliver compelling clinical and health economic benefits, as well as attractive returns on investment.
During the past years, Karolinska Development has optimized the clinical programs of the portfolio companies to reach clinically meaningful value-inflection points. The majority of Karolinska Development's portfolio companies are well-financed for their ongoing development and commercialisation work and are well-positioned to meet decisive value-generating milestones over the next two years. The ongoing pandemic has affected the portfolio companies to varying degrees, but the majority have been able to develop in accordance with previously set timetables.
In addition to its active value creation in eight portfolio companies, Karolinska Development has passive investments in one portfolio company, Biosergen, and interests in two other life science companies, Forendo Pharma and Oncopeptides, in the form of earn-out agreements.
Project (First-in class) APR-246
Primary indication MDS
Development phase Phase 3
Holding in company* KDev Investments 5.5%
HealthCap, Consonance Capital, Versant Ventures, Redmile Group, Fidelity Management & Research Co
Origin Karolinska Institutet
More information aprea.com
* Fully-diluted ownership based on current investment plans.
Aprea Therapeutics (Boston, USA and Stockholm, Sweden) develops novel anticancer drugs targeting the tumour suppressor protein, p53. Mutations of the p53 gene occur in around 50% of all human tumours and are associated with poor overall survival. Aprea's candidate drug, eprenetapopt (APR-246), has shown an ability to reactivate mutant p53 protein, inducing programmed cell death in many cancer cells. The company has received a breakthrough therapy and orphan drug designation from the American Food and Drugs Administration, the FDA for eprenetapopt.
In 2020, positive results were reported from a phase 2 study of eprenetapopt in combination with azacitidine as post-transplant maintenance therapy in patients with p53-mutated MDS and acute myeloid leukaemia (AML). The relapse free survival at 1-year post-transplant was 58% and the overall survival was 79%.
In August 2021, FDA issued a clinical hold for Aprea Therapeutics clinical program. The issue caused a pause in the patient enrolment for the company's clinical trials. On 9 December, the FDA removed the full clinical hold. In the near future, the company will primarily focus on conducting a pivotal study on MDS/AML post transplantation patients. Aprea is listed on the NASDAQ Global Select Market in the USA since October 2019.
Eprenetapopt has the potential for use in many different types of cancer as mutations in p53 are found in around 50% of all diagnosed cancers. The lead target indications thus far include blood tumours such as MDS and AML. MDS is an orphan disease and represents a spectrum of hematopoietic stem cell malignancies. Approximately 30-40% of MDS patients progress to AML and mutations in p53 are found in up to 20% of MDS and AML patients, which is associated with poor overall prognosis.
The results from the phase 1 study of APR 548 are expected in the second half of 2022.
Project (First-in-class) Sevuparin
Primary indication Sepsis/Septic shock
Development phase Phase 2
Holding in company* Karolinska Development 38% KDev Investments 17%
Other investors The Foundation for Baltic and East European Studies, Ergomed, Praktikerinvest
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 is currently lacking efficient pharmaceutical therapies. Patients that are affected by sepsis are exposed to a risk of developing multi-organ failure and – in severe cases – decease. Sevuparin is a polysaccharide drug candidate with a multimodal mechanism of action, including anti-inflammatory, anti-adhesive and anti-aggregate effects. It acts by interfering with the harmful agents generated by white blood cells during systemic inflammation. This interference could potentially break the molecular chain of events that lead to vascular damage and plasma leakage in patients with sepsis/septic shock and other systemic inflammatory manifestations. Data from pre-clinical animal 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. The sepsis programme is financed though the rights issue that was conducted in connection with the listing at the Nasdaq First North Growth Market. Modus also continues to collaborate with academic partners, for example, this is seen in the collaboration that began with Imperial College, London in May, where the intention is for sevuparin to be tested in patients with severe malaria who also constitute a condition with systemic inflammation.
Septic shock is a leading cause of death in intensive care units, with mortality rates typically exceeding 30%. 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. 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. An analysis by Carlsquare in December estimated the future market at USD 27 billion, with the potential market share of sevuparin estimated to be 10%.
Project (First-in-class) Tafoxiparin
Primary indication Labor induction
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.
USD 397 million Velo Bio (seller) & AMAG Pharmaceuticals (buyer) 2018
USD 465 million Palatin Technologies (licensor) & AMAG Pharmaceuticals (licensee) 2017
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% 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.
Subcutaneous administration of tafoxiparin in an earlier phase 2a study showed a significantly positive effect with a shortened time to delivery and an enhanced ripening of the cervix in patients delivered after induction. A soft and ripe cervix is a prerequisite of successful labor induction.
Approximately one quarter of all pregnant women require labor induction. The current standard treatment includes administration of prostaglandins and oxytocin, but in over 50% of cases, the induction fails, leading to protracted labour, emergency caesarean sections, or other maternal and foetal complications.
Continued phase 2b study with lower dosage according to plan.
Project (First-in-class) GR3027
Primary indications Hepatic encephalopathy Idiopathic hypersomnia
Development phase Phase 2a
Holding in company* Karolinska Development 70%
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. An over-activation of the inhibitory GABA system in the CNS is suspected in conjunction with liver failure, causing very serious clinical symptoms. The overactivation is also thought to lay behind certain cognitive impairments and sleep disturbances. GABAreceptor modulating steroid antagonists, such as golexanolone, counter the increased activation of the GABA system and hence constitute a promising group of candidate drugs.
Golexanolone GR3027 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 on brain function in humans.
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 – was conducted during the last year. 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 signalling, with a correlated positive effect on extreme daytime fatigue. There was no significant effect, however, on other secondary outcome measures. In December, the company announced that, based on these study results, it had established a plan for the further development of the candidate drug.
HE is a serious disease with a large unmet need that affects up to 1% 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% after five years. HE is also associated with substantial societal costs.
The planned IPO in Q1 2022 may be delayed due to market sentiments. The development work continues according to plan.
Project (First-in-class)
SVF-001 Primary indication Hepatitis B and D SARS-CoV-2 and other Corona virus
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 Produktion AB ("SVF") develops therapeutic vaccines against hepatitis B and hepatitis 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. This has been the case in the outbreaks of SARS-CoV in 2003, MERS-CoV in 2012, and during the ongoing Covid-19 pandemic. SVF has also developed a platform to address and prevent severe infections of this kind and which is expected to afford the potential for quickly developing and producing vaccines against both existing and new forms of Coronaviruses. The company submitted a patent application specifically linked to a potential Covid-19 vaccine during 2021. A Phase 1 study is expected to be launched in 2022.
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 and 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. There is substantial competition between vaccine developers, who comprise both smaller biotech companies and international pharmaceutical companies. Svenska Vaccinfabriken's business model is based on guiding their vaccine projects to the clinical development phase and then licensing them out global pharmaceutical companies with established distribution networks.
The company appointed Richard Bethell as new CEO (January 2022).
Project (First-in-class) Peptide
Primary indication Heart failure
Development phase Phase 2a
Holding in company' Karolinska Development 21%
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 peptide drug 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 hospitalisation. One of the major issues with existing pharmaceuticals is that they are not designed for longterm treatment, due to a degree of toxicity that results in the breakdown of cardiac tissue and consequent side effects, such as arrythmia, low blood pressure, ischemia, and an increased risk of premature mortality.
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 based on research by Professor Lars Lund at Karolinska Institutet.
Heart failure is a global disease with a substantial unmet medical need for safe, effective drugs. Cardiovascular diseases are becoming more widespread as a result of the sedentary lifestyle and growing problems with obesity that are following in the wake of increasing global affluence. An estimated 20 million people suffer from chronic heart failure and around 3 million people are hospitalised to treat it every year. The risk of developing cardiovascular disease increases with age, and 10-20% of the elderly population is now estimated to suffer from chronic heart failure, which is now the most common reason for hospitalisation 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 in the form of 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.
Project OSSDSIGN® Cranial and OSSDSIGN® Facial
Primary indication Cranial implants
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. Its lead products, OSSDSIGN® Cranial and OSSDSIGN® Facial, are already being sold in several European markets, including Germany, the UK, and the Nordic region. The company is commercialising its cranial implant in the USA and is currently preparing commercial activities in Japan after the approval of the company's OSSDSIGN® Cranial PSI product. OssDsign acquired Sirakoss Ltd, a company operating in the field of bone graft substitutes in November 2020. This strategic acquisition means a fivefold increase in the company's addressable market.
During the year, the company worked intensively to increase sales. The US subsidiary has been actively working since 2019 on strengthening the company's position in the USA through long-term, sound customer relationships. A recent patent application from the US Patent Office further enhances OssDsign's potential for future growth in the USA.
OssDsign's clinically proven bone regeneration technology has better healing properties than similar products. The company uses cutting edge 3D printing, moulding, and regenerative medicine technology to customise solutions for individual patients. The result is a patient-specific, titanium-reinforced implant made from a ceramic material with regenerative properties that accelerates the natural tissue formation and enables permanent healing of a bone defects. The regenerative effect of the ceramic material helps ensure a shorter healing process and entails both reduced suffering for the patient and cost savings for hospitals.
OssDsign focuses on the market for craniomaxillofacial (CMF) implants. The total market size was estimated to USD 1.8 billion in 2016 and is expected to grow at an CAGR of 5-9% worldwide over the next five years. The market for OssDsign's lead product in cranioplasty alone is estimated to approximately USD 200 million. OssDsign's products target a well-defined patient population – the relevant type of operation is performed at a limited – and easily identifiable – number of hospitals worldwide. The price sensitivity is low, and the products are relatively easy to register in multiple markets.
Financing for continued roll-out of the product internationally and market introduction of the Sirakoss product.
Project HAnano Surface
Primary indication Implant surface coatings
Development phase Marketed
Holding in company* KDev Investments 20%
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 hydrophilic nanometre-thin coating that helps preserve the surface structure of the implant by reducing the risks of cracking. 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 FDA-approved, 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. The coating process is easy to implement in the industrial scale production of implants.
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 commercialising 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 strengthened its position in the orthopaedic market in 2019 and 2020 by entering partnerships with four new orthopaedic companies. The partnership includes the development and commercialisation of products within limb salvage surgery, knee implants and sports medicine treated with the HAnano Surface® technology. Many of these products are new and modern 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 is focusing on the markets for dental and orthopaedic implants, which collectively represent a worldwide market opportunity of USD 600 - 800 million. The competition amongst implant manufacturers is fierce and each market segment is dominated by four to eight global companies. Promimic's business model is centred on out-licensing the HAnano Surface technology to leading implant manufacturers.
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 in order 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 | 2021 Oct-Dec |
2020 Oct-Dec |
2021 Full-year |
2020 Full-year |
|---|---|---|---|---|
| Condensed income statement | ||||
| Change in fair value of shares in portfolio | ||||
| companies | -16.8 | 73.8 | 223.2 | -215.4 |
| Net profit/loss | -19.5 | 85.9 | 170.8 | -207.5 |
| Balance sheet information | ||||
| Cash and cash equivalents | 92.4 | 75.9 | 92.4 | 75.9 |
| Net asset value (Note 1) | 978.0 | 805.8 | 978.0 | 805.8 |
| Net debt (Note 1) | -32.2 | 0.0 | -32.2 | 0.0 |
| Share information | ||||
| Earnings per share, weighted average before dilution (SEK) |
-0.1 | 0.5 | 1.0 | -1.2 |
| Earnings per share, weighted average after | ||||
| dilution (SEK) | -0.1 | 0.5 | 1.0 | -1.2 |
| Net asset value per share (SEK) (Note 1) | 5.6 | 4.6 | 5.6 | 4.6 |
| Equity per share (SEK) (Note 1) | 5.5 | 4.6 | 5.5 | 4.6 |
| Share price, last trading day in the reporting period (SEK) |
5.3 | 1.8 | 5.3 | 1.8 |
| Portfolio information | ||||
| Investments in portfolio companies | 0.0 | 20.7 | 69.2 | 40.0 |
| Of which investments not affecting cash flow | 0.0 | 0.2 | 16.4 | 0.9 |
| Portfolio companies at fair value through profit | ||||
| or loss | 950.2 | 770.3 | 950.2 | 770.3 |
Karolinska Development and other specialised life science investors made no investments in the portfolio companies during the fourth quarter.
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-Q4 2021 |
|---|---|---|---|
| OssDsign | 28.4 | 242.2 | 270.5 |
| Dilafor | 15.8 | 25.7 | 41.5 |
| Modus Therapeutics | 12.6 | 30.4 | 43.0 |
| Umecrine Cognition | 6.4 | 35.0 | 41.4 |
| AnaCardio | 3.0 | 3.0 | 6.0 |
| Svenska Vaccinfabriken Produktion | 3.0 | 0.0 | 3.0 |
| Biosergen | 0.0 | 50.0 | 50.0 |
| Total | 69.2 | 386.3 | 455.5 |
Fair Value of the portfolio companies owned directly by Karolinska Development decreased by SEK 108.4 million during the fourth quarter 2021. The main reason for the decrease in fair value was the sale of Forendo Pharma to Organon, which was successfully completed in December.
Fair Value of the portfolio companies owned indirectly via KDev Investments decreased by SEK 39.2 million during the fourth quarter 2021.The main reasons for the decrease in Fair value of the portfolio companies was the downturn in share price in the listed holding Aprea Therapeutics but also through a further partial sale of shares in Aprea Therapeutics.
Total Fair Value from portfolio companies owned directly by Karolinska Development and indirectly via KDev Investments decreased by SEK 147.6 million in the fourth quarter 2021.
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 22.2 million, resulting in Net Portfolio Fair Value decreasing by SEK 125.4 million in the fourth quarter 2021.
| SEKm | 31 Dec 2021 | 30 sep 2021 | Q4 2021 vs Q3 2021 |
|---|---|---|---|
| Karolinska Development Portfolio Fair Value (unlisted companies) | 652.4 | 760.1 | -107.7 |
| Karolinska Development Portfolio Fair Value (listed companies) | 73.9 | 74.6 | -0.7 |
| KDev Investments Portfolio Fair Value | 566.8 | 606.0 | -39.2 |
| Total Portfolio Fair Value | 1,293.1 | 1,440.6 | -147.6 |
| Potential distribution to Rosetta Capital of fair value of KDev Investments |
-342.9 | -365.1 | 22.2 |
| Net Portfolio Fair Value (after potential distribution to Rosetta Capital) | 950.2 | 1,075.5 | -125.4 |
During the fourth quarter 2021, Karolinska Development's revenue amounted to SEK 0.5 (0.5) million and consists primarily of services provided to portfolio companies. For the full-year 2021, the revenue amounted to SEK 2.2 (2.7) million.
Change in fair value of shares in portfolio companies of in total SEK -16.8 (73.8) million includes the difference between the change in Net Portfolio Fair Value during the fourth quarter 2021 with SEK -125.4 million and the divestment of a portfolio company of SEK 108.7 million. Change in fair value of other financial assets and liabilities amounted to SEK 7.0 (19.3) million and are the consequence of changes in valuation of earn-out deals. For the full-year 2021, the change in fair value of shares in portfolio companies amounted to SEK 223.2 (-215.4) million and the change in fair value of other financial assets amounted to SEK -33.9 (43.1) million.
During the fourth quarter 2021 other expenses amounted to SEK 1.3 (2.0) million and personnel costs amounted to SEK 6.7 (4.3) million. The main reason for the increase in personnel costs compared to the fourth quarter 2020 is the outcome of bonus scheme related to exit of portfolio companies. For the full-year 2021 other expenses amounted to SEK 6.9 (8.5) million and personnel cost amounted to 23.2 (23.6) million.
The operating profit/loss in the fourth quarter 2021 amounted to SEK -17.5 million compared to SEK 87.2 million in the fourth quarter 2020. The operating profit/loss for the full-year 2021 amounted to 160.7 (-202.4) million.
The financial net during the fourth quarter 2021 amounted to SEK -2.0 (-1.3). For the full-year 2021 the financial net amounted to SEK 10.1 (-5.1) million. The improved financial net during the full year 2021 are partly due to a financing fee of SEK 10 million from Modus Therapeutics, but also from adjusted interest income from loans to the portfolio company Umecrine Cognition of SEK 5.6 million.
The Investment Entity's Net profit/loss amounted to SEK -19.5 (85.9) million in the fourth quarter 2021. Net profit/loss for the full-year 2021 amounted to SEK 170.8 (-207.5) million.
The Investment Entity's equity to total assets ratio amounted to 88% on 31 December 2021, compared to 90% on 31 December 2020.
The investment company's equity on December 31, 2021, amounted to SEK 971.1 million, compared to SEK 990.6 million on September 30, 2021. The decrease is a result of the net profit/loss of SEK -19.5 million for the fourth quarter of 2021.
Interest-bearing liabilities consisted of bridge loans including accrued interest amounting to SEK 124.6 million on 31 December 2021, compared to SEK 75.9 million on 31 December 2020.
After paying operational costs for the fourth quarter 2021, cash and cash equivalents (including short term investments) amounted to SEK 92.4 million on 31 December 2021 compared to SEK 75.9 million on 31 December 2021. Net debt amounted to SEK 32.2 million on 31 December 2021 compared to SEK 0.0 million on 31 December 2020.
The company is going concern. The company's ability to continue operations (going concern) was strengthened not only with the initial payments from the sale of Forendo Pharma which was received in December 2021 but also with the rights issue carried out in February 2022. The company's long-term financial situation has been strengthened. The report is prepared on the basis of the assumption of continued operation.
The Parent Company refers to Karolinska Development AB (comparable numbers 2020).
During the fourth quarter 2021, the Parent Company's Net profit/loss amounted to SEK -19.5 (85.9) million. Net profit/loss for the full-year 2021 amounted to SEK 170.8 (-207.5) million.
Due to the negative result for the fourth quarter 2021, the equity decreased from SEK 990.6 million as of 30 September 2021 to SEK 971.1 million 31 December 2021.
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 31 December 2021 was SEK 5.32, and the market capitalization amounted to SEK 935 million.
The share capital of Karolinska Development on 31 December 2021 amounted to SEK 1.8 million divided into 1,503,098 A shares, each with ten votes (15,030,980 votes) and 174,162,311 B shares, each with one vote (174,162,311 votes). The total number of shares and votes in Karolinska Development on 31 December 2021 amounted to 175,665,409 shares and 189,193,291 votes.
Jan – Dec 2021
On December 31, 2021, Karolinska Development had 19,585 shareholders.
| Shareholder | A-Shares | B-Shares | Cap % | Vote % |
|---|---|---|---|---|
| invoX Pharma Ltd | 0 | 75,727,285 | 43.11% | 40.03% |
| Worldwide International Investments Ltd | 0 | 28,007,077 | 15.94% | 14.80% |
| Stift För Främjande & Utveckling | 1,503,098 | 2,079,836 | 2.04% | 9.04% |
| Östersjöstiftelsen | 0 | 3,889,166 | 2.21% | 2.06% |
| Coastal Investment Management LLC | 0 | 2,470,541 | 1.41% | 1.31% |
| SEB Investment Management | 0 | 1,142,011 | 0.65% | 0.60% |
| Adis Holding AB | 0 | 700,000 | 0.40% | 0.37% |
| Gålöstiftelsen | 0 | 668,661 | 0.38% | 0.35% |
| Zhang, Qiuyue | 0 | 654,000 | 0.37% | 0.35% |
| Synskadades riksförbund | 0 | 494,939 | 0.28% | 0.26% |
| Sum Top 10 Shareholders | 1,503,098 | 115,833,516 | 66.80% | 69.17% |
| Sum Other Shareholders | 0 | 58,328,795 | 33.20% | 30.83% |
| Sum All Shareholders | 1,503,098 | 174,162,311 | 100.00% | 100.00% |
| 1On October 4, 2021, Sino Biopharmaceutical transferred its holding in Karolinska Development to the wholly owned subsidiary |
invoX Pharma Ltd.
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 2020.
Solna, 25 February 2022
Viktor Drvota CEO
This report has not been reviewed by the Company's auditors.
| Annual Report 2021 | 25 March 2022 |
|---|---|
| Interim Report January – March 2022 | 29 April 2022 |
| Annual meeting 2022 | 12 May 2022 |
| Interim Report January – June 2022 | 19 August 2022 |
| Interim Report January – September 2022 | 18 November 2022 |
Karolinska Development is required by law to publish the information in this interim report. The information was published on 25 February 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 | 2021 Oct-Dec |
2020 Oct-Dec |
2021 Full-year |
2020 Full-year |
|---|---|---|---|---|---|
| Revenue | 469 | 528 | 2,170 | 2,651 | |
| Change in fair value of shares in portfolio companies Change in fair value of other financial assets and liabilities |
2,3 | -16,770 6,954 |
73,832 19,320 |
223,203 -33,891 |
-215,378 43,077 |
| Other expenses | -1,291 | -2,039 | -6,887 | -8,466 | |
| Personnel costs Depreciation of right-of-use |
-6,686 | -4,266 | -23,205 | -23,620 | |
| assets | -173 | -162 | -690 | -690 | |
| Operating profit/loss | -17,497 | 87,213 | 160,700 | -202,426 | |
| Financial net | -1,997 | -1,294 | 10,119 | -5,061 | |
| Profit/loss before tax | -19,494 | 85,919 | 170,819 | -207,487 | |
| Taxes | - | - | - | - | |
| NET PROFIT/LOSS FOR THE PERIOD |
-19,494 | 85,919 | 170,819 | -207,487 |
| SEK 000 | Note | 2021 Oct-Dec |
2020 Oct-Dec |
2021 Full-year |
2020 Full-year |
|---|---|---|---|---|---|
| Net profit/loss for the period | -19,494 | 85,919 | 170,819 | -207,487 | |
| Total comprehensive income/loss for the period |
-19,494 | 85,919 | 170,819 | -207,487 |
| SEK | Note | 2021 Oct-Dec |
2020 Oct-Dec |
2021 Full-year |
2020 Full-year |
|---|---|---|---|---|---|
| Earnings per share, weighted average before dilution |
-0.11 | 0.49 | 0.97 | -1.18 | |
| Number of shares, weighted average before dilution |
175,421,124 | 175,421,124 | 175,421,124 | 175,421,124 | |
| Earnings per share, weighted average after dilution |
-0.11 | 0.49 | 0.97 | -1.18 | |
| Number of shares, weighted average after dilution |
175,421,124 | 175,421,124 | 175,421,124 | 175,421,124 |
| SEK 000 | Note | 31 Dec 2021 | 31 Dec 2020 |
|---|---|---|---|
| ASSETS | |||
| Tangible assets | |||
| Right-of-use assets | 690 | 690 | |
| Financial assets | |||
| Shares in portfolio companies at fair value through | |||
| profit or loss | 2,3 | 950,170 | 770,320 |
| Other financial assets | 4 | 61,799 | 0 |
| Total non-current assets | 1,012,659 | 771,010 | |
| Current assets | |||
| Accounts receivable | - | 3 | |
| Receivables from group company | - | 80 | |
| Receivables from portfolio companies | 505 | 243 | |
| Other financial assets | 4 | - | 41,181 |
| Other current receivables | 768 | 768 | |
| Prepaid expenses and accrued income | 2,940 | 929 | |
| Short-term investments at fair value through profit or | |||
| loss | 50,005 | - | |
| Cash and cash equivalents | 42,398 | 75,869 | |
| Total current assets | 96,616 | 119,073 | |
| TOTAL ASSETS | 1,109,275 | 890,083 | |
| EQUITY AND LIABILITIES | |||
| Total equity | 971,107 | 800,267 | |
| Current liabilities | |||
| Current interest liabilities to related parties | 5 | 124,603 | 75,864 |
| Other financial liabilities | 1,756 | 5,726 | |
| Accounts payable | 1,674 | 617 | |
| Liability to make lease payment | 711 | 711 | |
| Other current liabilities | 2,156 | 1,373 | |
| Accrued expenses and prepaid income | 7,268 | 5,525 | |
| Total current liabilities | 138,168 | 89,816 | |
| Total liabilities | 138,168 | 89,816 | |
| TOTAL EQUITY AND LIABILITIES | 1,109,275 | 890,083 |
| SEK 000 | Not | 2021-12-31 | 2020-12-31 |
|---|---|---|---|
| Opening balance, equity | 800,267 | 1,007,732 | |
| Net profit/ loss for the period | 170,819 | -207,487 | |
| Closing balance, equity | 971,107 | 800,267 |
Condensed statement of cash flows for the Investment Entity
| SEK 000 | Note | 2021 Full-year |
2020 Full-year |
|---|---|---|---|
| Operating activities | |||
| Operating profit/loss | 160,700 | -202,426 | |
| Adjustments for items not affecting cash flow | |||
| Depreciation | 690 | 690 | |
| Change in fair value | -189,312 | 172,301 | |
| Other items | - | -45 | |
| Cash flow from operating activities before changes in | |||
| working capital and operating investments | -27,922 | -29,480 | |
| Cash flow from changes in working capital | |||
| Increase (-)/Decrease (+) in operating receivables | -1,461 | 29,988 | |
| Increase (+)/Decrease (-) in operating liabilities | 46,084 | -33,708 | |
| Cash flow from operating activities | 16,701 | -33,200 | |
| Investment activities | |||
| Part payment for earn-out deal | -3,121 | -5,093 | |
| Proceeds from sale of shares in portfolio companies | 56,427 | 101,853 | |
| Acquisitions of shares in portfolio companies | -52,759 | -39,154 | |
| Acquisitions of short-term investments¹ | -50,005 | - | |
| Cash flow from investment activities | -49,458 | 78,171 | |
| Financing activities | |||
| Amortization of lease liabilities | -714 | -669 | |
| Cash flow from financing activities | -714 | -669 | |
| Cash flow for the period | -33,471 | 23,737 | |
| Cash and cash equivalents at the beginning of the year | 75,869 | 52,132 | |
| CASH AND CASH EQUIVALENTS AT THE END OF | |||
| THE PERIOD | 42,398 | 75,869 |
¹Surplus liquidity in the Investment Entity is invested in interest-bearing instruments and is recognized as short-term investments with a maturity exceeding three months. These investments are consequently not reported as cash and cash equivalents and are therefore not included in the statement of cash flows from operating activities. Cash and cash equivalents and short-term investments amounts to SEK 92.4 million at the end of the period.
| SEK 000 | Note 2021 Oct-Dec |
2020 Oct-Dec |
2021 Full-year |
2020 Full-year |
|---|---|---|---|---|
| Revenue | 469 | 528 | 2,170 | 2,651 |
| Change in fair value of shares in portfolio companies |
-16,770 | 73,832 | 223,203 | -215,378 |
| Change in fair value of other financial assets and liabilities |
6,954 | 19,320 | -33,891 | 43,077 |
| Other expenses | -1,470 | -2,217 | -7,601 | -9,180 |
| Personnel costs | -6,686 | -4,266 | -23,205 | -23,620 |
| Operating profit/loss | -17,503 | 87,197 | 160,676 | -202,450 |
| Financial net | -1,988 | -1,287 | 10,164 | -5,016 |
| Profit/loss before tax | -19,491 | 85,910 | 170,840 | -207,466 |
| Tax | - | - | - | - |
| NET PROFIT/LOSS FOR THE PERIOD |
-19,491 | 85,910 | 170,840 | -207,466 |
| SEK 000 | Note | 2021 Oct-Dec |
2020 Oct-Dec |
2021 Full-year |
2020 Full-year |
|---|---|---|---|---|---|
| Net profit/loss for the period | -19,491 | 85,910 | 170,840 | -207,466 | |
| Total comprehensive income/loss for the period |
-19,491 | 85,910 | 170,840 | -207,466 |
| SEK 000 | Note | 31 Dec 2021 | 31 Dec 2020 |
|---|---|---|---|
| ASSETS | |||
| Financial non-current assets | |||
| Shares in portfolio companies at fair value through profit | |||
| or loss | 2,3 | 950,170 | 770,320 |
| Other financial assets | 4 | 61,799 | - |
| Total non-current assets | 1,011,969 | 770,320 | |
| Current assets | |||
| Accounts receivable | - | 3 | |
| Receivables from group companies | - | 80 | |
| Receivables from portfolio companies | 505 | 243 | |
| Other financial assets | 4 | - | 41,181 |
| Other current receivables | 768 | 768 | |
| Prepaid expenses and accrued income | 2,940 | 929 | |
| Short-term investments at fair value through profit or | |||
| loss | 50,005 | - | |
| Cash and cash equivalents | 42,398 | 75,869 | |
| Total current assets | 96,616 | 119,073 | |
| TOTAL ASSETS | 1,108,585 | 889,393 | |
| EQUITY AND LIABILITIES | |||
| Total equity | 971,128 | 800,288 | |
| Current liabilities | |||
| Current interest liabilities | 5 | 124,603 | 75,864 |
| Other financial liabilities | 1,756 | 5,726 | |
| Accounts payable | 1,674 | 617 | |
| Other current liabilities | 2,156 | 1,373 | |
| Accrued expenses and prepaid income | 7,268 | 5,525 | |
| Total current liabilities | 137,457 | 89,105 | |
| Total liabilities | 137,457 | 89,105 | |
| TOTAL EQUITY AND LIABILITIES | 1,108,585 | 889,393 |
| SEK 000 | Not | 31 Dec 2021 | 31 Dec 2020 |
|---|---|---|---|
| Opening balance, equity | 800,288 | 1,007,753 | |
| Net profit/ loss for the period | 170,840 | -207,466 | |
| Closing balance, equity | 971,128 | 800,288 |
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.
In September 2021 Sino Biopharmaceutical transferred the bridge loan of SEK 70 million and the credit facility of SEK 42.5 million (plus accrued interest) to their subsidiary invoX Pharma. Same condition applies.
The bridge loans from invoX Pharma (subsidiary of Sino Biopharmaceutical) total SEK 112.5 million plus accrued interest of SEK 12.1 million falls due on 31 December 2022.
The bridge loans, including accrued interest, was converted into shares in Karolinska Development's rights issue in February 2022.
Karolinska Development has, in addition to the bridge loans, the opportunity to utilize a credit facility from invoX Pharma of up to approximately SEK 85 million (EUR 8.5 million), interest rate of 5% on utilized amount and falls due on 31 December 2022, to cover a possible short-term liquidity need. The credit facility was canceled in connection with Karolinska Development's rights issue in February 2022.
On October 4, 2021, the former main owner Sino Biopharmaceutical transferred its entire holding in Karolinska Development to the wholly owned subsidiary invoX Pharma Ltd.
Interim period: The period from the beginning of the financial year through the closing date.
Reporting period: January – December 2021.
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 124.6 million) reduced with cash and cash equivalents (including short-term investments) (SEK 92.4 million).
Equity to total assets ratio: Equity divided by total assets.
| 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 | 23,350 | 0.13 | 2.4% |
| OssDsign | 5,812,638 | 50,570 | 0.29 | 5.2% |
| Total listed assets | 73,920 | 0.42 | 7.6% | |
| Unlisted assets | ||||
| AnaCardio | 3,389 | 0.02 | 0.3% | |
| Dilafor | 12,014 | 0.07 | 1.2% | |
| Svenska Vaccinfabriken Produktion | 6,827 | 0.04 | 0.7% | |
| Umecrine Cognition | 623,048 | 3.55 | 63.7% | |
| KCIF Co-Investment Fund KB1 | 7,099 | 0.04 | 0.7% | |
| KDev Investments1 | 223,873 | 1.28 | 22.9% | |
| Total unlisted assets | 876,250 | 5.00 | 89.6% | |
| Net of other liabilities and debts2 | 27,843 | 0.16 | 2.8% | |
| Total net asset value | 978,013 | 5.58 | 100.0% |
1The company has both listed and unlisted assets.
2 Includes SEK 92.4 million cash and cash equivalents (including short-term investments).
3In relation to the number of shares outstanding (175,421,124) on the closing date.
| 2021 | 2020 | |
|---|---|---|
| SEK 000 | Full-year | Full-year |
| Result level 1 | ||
| Listed companies, realized | -433 | -12,109 |
| Listed companies, unrealized | -27,159 | -24,542 |
| Total level 1 | -27,592 | -36,651 |
| Result level 3 | ||
| Unlisted companies, realized | 7.243 | 8,215 |
| Unlisted companies, unrealized | 243,552 | -186,942 |
| Total level 3 | 250,795 | -178,727 |
| Total | 223,203 | -215,378 |
| SEK 000 | 2021-12-31 | 2020-12-31 |
|---|---|---|
| Accumulated acquisition cost | ||
| At the beginning of the year | 770,320 | 1 047,600 |
| Investments during the year | 69,154 | 39,954 |
| Sales during the year | -112,507 | -101,856 |
| Changes in fair value in net profit/loss for the year | 223,203 | -215,378 |
| Closing balance | 950,170 | 770,320 |
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 |
73,920 | - | 876,250 | 950,170 |
| Other financial assets Cash and cash equivalents and short-term |
- | - | 61,799 | 61,799 |
| investments | 92,403 | - | - | 92,403 |
| Total | 166,323 | - | 938.049 | 1,104,372 |
| Financial liabilities | ||||
| Other financial liabilities | - | - | 1,756 | 1,756 |
| Total | - | 0 | 1,756 | 1,756 |
| SEK 000 | Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|
| Financial assets | ||||
| Shares in portfolio companies, at fair value through profit or loss |
37,766 | - | 732,554 | 770,320 |
| Other financial assets | - | - | 41,181 | 41,181 |
| Cash, cash equivalents and short-term investments |
75,869 | - | - | 75,869 |
| Total | 113,635 | 0 | 773,735 | 887,370 |
| Financial liabilities | ||||
| Other financial liabilities | - | - | 5,726 | 5,726 |
| Total | - | 0 | 5,726 | 5,726 |
| 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 | 56,079 | - |
| Compensations | -108,554 | -722 | -3,121 |
| Gains and losses recognized through profit or loss | 250,795 | -34,739 | -849 |
| Closing balance 31 December 2021 | 876,250 | 61,799 | 1,756 |
| Realized gains and losses for the period included in profit or loss |
6,810 | 0 | 0 |
| Unrealized gains and losses in profit or loss for the period included in profit or loss |
243,985 | -34,739 | 849 |
| 1Refers to portfolio company, which was listed during the period. |
| SEK 000 | Shares in portfolio companies |
Other financial assets |
Other financial liabilities |
|---|---|---|---|
| At beginning of the year | 884,830 | 62,620 | 46,851 |
| Acquisitions | 39,952 | - | - |
| Compensations | -13,500 | -28,484 | -5,094 |
| Gains and losses recognized through profit or loss | -178,727 | 7,045 | -36,032 |
| Closing balance 31 December 2020 | 732,554 | 41,181 | 5,725 |
| Realized gains and losses for the period included in profit or loss |
8,215 | - | - |
| Unrealized gains and losses in profit or loss for the period included in profit or loss |
-186,943 | 7,045 | -41,125 |
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.
| SEK000 | Ownership | Fair value SEK000 |
Valuation model1 |
|---|---|---|---|
| AnaCardio | 20.9% | 3,389 | Last post money |
| Dilafor | 0.7% | 12,014 | Last post money |
| Svenska Vaccinfabriken Produktion | 30.8% | 6,827 | Last post money |
| Umecrine Cognition | 72.6% | 623,048 | External valuation2 |
| KCIF Co-Investment Fund KB | 26.0% | 7,099 | A combination of share price listed company and fair value of financial asset4 |
| KDev Investments | 90.1% | 223,873 | A combination of last post money and share price listed company5 |
| Total level 3 | 876,250 |
1See The Annual Report 2020 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.
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 86% of the total fair value in KDev Investments.
In the table below, "Total Portfolio Fair Value" is as defined in Note 1.
"Potential distribution to Rosetta Capital", SEK 342.9 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 amount includes repayment of SEK 2.4 million that Rosetta Capital currently has invested in KDev Investments' portfolio companies and the distribution of dividends from Rosetta Capital's common and preference shares. 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.
"Net Portfolio Fair Value (after potential distribution to Rosetta Capital)" is as defined in Note 1.
| SEK 000 | 31 Dec 2021 | 31 Dec 2020 |
|---|---|---|
| Karolinska Development Portfolio Fair Value (unlisted companies) | 652,377 | 732,554 |
| Karolinska Development Portfolio Fair Value (listed companies) | 73,920 | 37,766 |
| KDev Investments Portfolio Fair Value | 566,807 | 162,916 |
| Total Portfolio Fair Value | 1,293,104 | 933,236 |
| Potential distribution to Rosetta Capital of fair value of KDev | ||
| Investments | -342,934 | -162,916 |
| Net Portfolio Fair Value (after potential distribution to Rosetta Capital) | 950,170 | 770,320 |
*SEK 2.4 million repayment of investments in KDev Investments made by Rosetta Capital and SEK 340.5 million distribution of dividends to preference shares and common shares.
| SEK 000 | 2021-12-31 | 2020-12-31 |
|---|---|---|
| Other financial assets, non-current | ||
| Earn-out agreement Forendo Pharma1 | 61,799 | - |
| Earn-out agreement Oncopeptides2 | 0 | - |
| Total | 61,799 | 0 |
| Other financial assets, current | ||
| Earn-out agreement Oncopeptides2 | - | 40,459 |
| Total | 0 | 40,459 |
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. 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, to SEK 56 million. The earn-outs are expected to be paid during the period 2024–2034, 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 | 2021-12-31 | 2020-12-31 |
|---|---|---|
| Current interest liabilities | ||
| invoX Pharma Ltd1 | 70,000 | 70,000 |
| invoX Pharma Ltd2 | 42,500 | - |
| Accrued interest invoX Pharma Ltd | 12,103 | 5,864 |
| Total | 124,603 | 75,864 |
1Bridge loan from Sino Biopharmaceutical has during September 2021 been transferred to the wholly owned subsidiary invoX Pharma Ltd (with the same conditions), expiry date is 31 December 2022. The interest rate amounts to 8% and falls due on 31 December 2022.
2Bridge loan from invoX Pharma Ltd (Sino Biopharmaceutical has transferred the credit facility to the wholly owned subsidiary invoX Pharma Ltd. Expiry date is 31 December 2022. The interest rate amounts to 5% and falls due on 31 December 2022.
The bridge loans, including accrued interest, 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 | 2021-12-31 | 2020-12-31 |
|---|---|---|
| Pledge assets | ||
| Contingent liabilities | ||
| Investment agreement in portfolio company | 12,927 | - |
| Summa | 12,927 | 0 |
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