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Year-end Report - January-December 2020

Karolinska Development AB (publ)
·7-min read

STOCKHOLM – 11 February 2021. Karolinska Development AB (Nasdaq Stockholm: KDEV) today publishes its Year-end Report - January-December 2020. The full report is available on the Company's website.

“Whilst Aprea Therapeutics’ phase 3 trial failed to achieve its primary endpoint, it is too early to assess the consequences of this for the continued development of eprenetapopt in myelodysplastic syndrome. We are now looking forward to an in-depth data analysis and the results of other ongoing studies of the candidate drug. The quarter was otherwise characterised by the progress made by Umecrine Cognition, which has now established solid plans for the further clinical development of its candidate drug, and by Modus Therapeutics, with its intention to declare a new indication during the first quarter 2021.”, says Viktor Drvota, CEO, Karolinska Development.

Significant events during the fourth quarter

  • The US Food and Drug Administration (FDA) accepted an Investigational New Drug (IND) application by the Aprea Therapeutics portfolio company in respect of its novel candidate drug, APR-548, to treat TP53-mutant myelodysplastic syndrome (MDS). APR-548 is a next-generation reactivator of mutant p53 that is being developed for oral administration (October 2020).

  • An article describing the OssDsign portfolio company’s unique regenerative implants was published in the reputable scientific journal, PNAS (Proceedings of the National Academy of Sciences of the United States). The article describes how OssDsign’s implant concept and patented material composition contribute to bone regeneration and adhesion with existing bone (October 2020).

  • The portfolio company, OssDsign, acquired Sirakoss Ltd – a company operating in the field of bone graft substitutes. The acquisition, which is expected to give OssDsign immediate access to a five times larger addressable market, was partly financed by a heavily oversubscribed directed share issue of approximately SEK 65 million before transaction costs. A large number of Swedish and international investors took part in the issue (November 2020).

  • The portfolio company, Aprea Therapeutics, was granted Fast Track designation by the FDA for eprenetapopt in the treatment of patients with acute myeloid leukaemia (AML) (November 2020).

  • Aprea Therapeutics reported the results from a phase 3 study of eprenetapopt in myelodysplastic syndrome (MDS). The trial failed to meet its primary endpoint of complete remission (Complete response, CR). Analysis of the primary endpoint at this data cut demonstrated a higher CR rate in the experimental arm receiving eprenetapopt in combination with azacitidine versus the control arm receiving azacitidine alone, but did not reach statistical significance. Karolinska Development is now awaiting the forthcoming in-depth data analysis to gain a better understanding of the consequences for the further development of eprenetapopt in myelodysplastic syndrome and other potential indications (December 2020).

  • Karolinska Development AB announced that the company will, on the basis of an external valuation, increase the book value of its holding in the portfolio company, Umecrine Cognition, by SEK 234 million. The background to this is that Umecrine Cognition has now, based on previously communicated positive phase 2a results, established a plan for the continued clinical development of the candidate drug, golexanolone, within the field of hepatic encephalopathy (December 2020).

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Significant post-period events

·The shareholders of Karolinska Development AB (publ) are invited to the Extraordinary General Meeting, on Friday February 19, 2021.


Financial update

Fourth quarter

  • The net profit/loss for the fourth quarter was SEK 85.9 million (SEK 328.8 million in the fourth quarter of 2019). Earnings per share totalled SEK 0.5 (SEK 3.2 in the fourth quarter of 2019).

  • The result of the Change in fair value of shares in portfolio companies for the fourth quarter amounted to SEK 73.8 million (SEK 383.0 in the fourth quarter of 2019). The result is largely due to the positive change in the fair value of the holding in Umecrine Cognition attributable to a new external valuation and the negative development of the share price regarding the listed holding in Aprea.

  • The total fair value of the portfolio was SEK 933.2 million at the end of December 2020, corresponding to a decrease of SEK 90.9 million from SEK 1,024.1 million at the end of the previous quarter. The net portfolio fair value at that time was SEK 770.3 million, corresponding to an increase of SEK 94.5 million from SEK 675.8 million at the end of the previous quarter.

  • Net sales totalled SEK 0.5 million during the fourth quarter of 2020 (SEK 0.7 million during the fourth quarter of 2019).

  • Karolinska Development invested a total of SEK 20.7 million in portfolio companies during the fourth quarter. Fourth quarter investments in portfolio companies by Karolinska Development and other specialised life sciences investors totalled SEK 86.3 million.

  • Cash and cash equivalents increased by SEK 4.8 million during the fourth quarter, totalling SEK 75.9 million on 31 December 2020.

  • The Parent Company equity totalled SEK 800.3 million on 31 December 2020.

Full year

  • The full-year net profit/loss was SEK -207.5 million (SEK 303.0 million in 2019). Earnings per share totalled SEK -1.18 (SEK 4.10 in 2019).

  • The full-year result for the change in the fair value of the portfolio amounted to SEK -215.4 million (SEK 415.1 million during 2019).

  • The total fair value of the portfolio was SEK 933.2 million at the end of December 2020, a decrease from SEK 1,553.4 million at the corresponding date in 2018. The net portfolio fair value was SEK 770.3 million, a decrease from SEK 1,047.6 million at the corresponding date in 2019.

  • Revenue totalled SEK 2.7 million for the full year of 2020 (SEK 3.4 million in 2019).

  • Karolinska Development invested a total of SEK 40.0 (48.9) million in its portfolio companies during the full year. Full-year investments in the portfolio companies by Karolinska Development and other specialised life sciences investors totalled SEK 146.5 (445.7) million.

  • Cash and cash equivalents increased by SEK 23.7 million during the full year, totalling SEK 75.9 (52.2) million on 31 December 2020.

  • The Parent Company’s equity on 31 December 2020 was SEK 800.3 (1,007.8) million.

  • The Board will not propose any dividend for the financial year 2020.

The Year-end Report for Karolinska Development AB for the period January-December 2020 is available as a PDF at www.karolinskadevelopment.com.

For further information, please contact:

Viktor Drvota, CEO, Karolinska Development AB
Phone: +46 73 982 52 02, e-mail: viktor.drvota@karolinskadevelopment.com

Fredrik Järrsten, CFO and deputy CEO, Karolinska Development AB
Phone: +46 70 496 46 28, e-mail: fredrik.jarrsten@karolinskadevelopment.com

TO THE EDITORS

About Karolinska Development AB

Karolinska Development AB (Nasdaq Stockholm: KDEV) is a Nordic life sciences investment company. The company focuses on identifying breakthrough medical innovations in the Nordic region that are developed by entrepreneurs and leadership teams. The Company invests in the creation and growth of companies that advance these assets into commercial products that are designed to make a difference to patients' lives while providing an attractive return on investment to shareholders.

Karolinska Development has access to world-class medical innovations at the Karolinska Institutet and other leading universities and research institutes in the Nordic region. The Company aims to build companies around scientists who are leaders in their fields, supported by experienced management teams and advisers, and co-funded by specialist international investors, to provide the greatest chance of success.

Karolinska Development has established a portfolio of ten companies targeting opportunities in innovative treatment for life-threatening or serious debilitating diseases.

The Company is led by an entrepreneurial team of investment professionals with a proven track record as company builders and with access to a strong global network.

For more information, please visit www.karolinskadevelopment.com

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