Karolinska Development has published its Interim Report for the period January to March 2016.
Significant events during Karolinska Development’s first quarter this year include Aprea raising SEK 437 million in a Series B financing round from a syndicate of specialist international life science investors. This was the largest ever completed by a Karolinska Development portfolio company and by any private life science company in Sweden in over a decade (March 2016). In addition, Dilaforette signed an agreement with Arabian Gulf University (AGU) to support the Phase II proof of concept study with sevuparin in sickle cell disease patients. AGU will provide up to USD 1.2 million in non-dilutive funding and is assisting with patient recruitment (February 2016) and OssDsign received CE mark approval for Cranioplug, an innovative device for cranial fixation (January 2016). Promimic announced that its strategic partner Sistema de Implante Nacional had initiated the launch of the first dental implant coated with HAnano Surface (January 2016) and Promimic and Danco Anodizing signed a license agreement where Danco will invest in a production line for the HAnano Surface process. Danco will be the preferred process partner for Promimic for the USA and China medical implant market (March 2016). Umecrine Cognition completed a private financing round to support the clinical development of GR3027 for hepatic encephalopathy in liver disease patients (January 2016) and Akinion Pharmaceutical halted development of AKN-028, which was being evaluated in a Phase I/II clinical study for acute myeloid leukemia (AML), due to a number of patients experiencing severe liver toxicity (March 2016).
“I am very pleased with the progress that Karolinska Development has made in the first quarter of 2016 based on the foundation established in 2015. As a Nordic investment company, our strategy is to build on this foundation and create value for patients and shareholders through two key areas: our existing portfolio and new investments. We also anticipate that certain of our current earn-out agreements may deliver additional future value to our shareholders,” commented Jim Van heusden, CEO. “Already in 2016 we have seen some exciting progress with our portfolio, a key highlight being Aprea’s SEK 437 million financing, the largest ever completed by a Karolinska Development portfolio company and more broadly by any private life science company in Sweden in more than a decade. This financing involved a syndicate of leading international life sciences investors highlighting the global potential and value of the innovation that exists within our portfolio and originating from Karolinska Institutet.”
Financial summary
As a consequence of Akinion’s decision to stop further development of its lead product candidate AKN-028, the Total Fair Value of the company has been reduced from SEK 119.4 million to SEK 0.0 million in line with Karolinska Development’s valuation guidelines. With this reduction, the Total Fair Value of the portfolio end of March was SEK 476.8 million. Net Fair Value of the portfolio at the end of March 2016 was SEK 193.0 million, a decrease of SEK 75.0 million compared to the end of 2015 whereof SEK 78.0 million is related to Akinion, a KDev Investments portfolio company.
Net sales amounted to SEK 0.6 million in the first quarter (SEK 1.0 million in the first quarter 2015). Net loss amounted to SEK -100.0 million (SEK -250.9 million). Earnings per share amounted to SEK -1.9 (SEK -4.7). KDev Investments sold 33,677 shares in Inhalation Sciences Sweden AB to a syndicate of Swedish investors led by Stockholms Affärsänglar for SEK 1.0 million.
Karolinska Development’s investments in portfolio companies during the first quarter amounted to SEK 7.6 million. Total investments in portfolio companies by other specialized life science investors during first quarter amounted to SEK 380.7 million. Cash, cash equivalents and short term liquidity investments decreased by SEK 9.8 million during the first quarter and amounted to SEK 287.6 million as of March 31, 2016. Operational costs in the first quarter amounted to SEK 8.4 million, a reduction of 41% compared to SEK 14.2 million in first quarter 2015 as a consequence of the organizational restructuring undertaken during 2015.
“In terms of new investments, we are looking more broadly across the Nordic region to identify new opportunities, including more mature opportunities, where value can be generated and returns may be realized much more quickly,” said Jim Van heusden. “Karolinska Development has a portfolio of exciting prospects that are funded to deliver key value-generating milestones over the coming years, and an investment strategy designed to deliver further value from the most promising life science opportunities across the Nordic region. I look forward to providing further updates as we execute on our strategy.”
