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Interim Report - January-September 2020

Karolinska Development AB (publ)
·7-min read

STOCKHOLM – 11 November 2020. Karolinska Development AB (Nasdaq Stockholm: KDEV) today publishes its Interim Report - January-September 2020. The full report is available on the Company's website.

“Several of our portfolio companies have reported new advances during the past quarter and we are now looking forward with great anticipation to clinical results from Aprea, Dilafor and Forendo Pharma, which are scheduled for presentation at the end of this year or the beginning of 2021. It will, of course, be particularly interesting to see Aprea’s topline results from the phase 3 study of eprenetapopt, which is the candidate drug closest to market registration and which has the potential to revolutionise the treatment of the deadly cancer, myelodysplastic syndrome.”, says Viktor Drvota, CEO, Karolinska Development.

Significant events during the third quarter

  • Karolinska Development sold part of its holding in the portfolio company Aprea Therapeutics. KCIF Co-investment Fund KB – a holding company that is jointly owned by the European Investment Fund and Karolinska Development – divested shares in Aprea as part of the same transaction. The transaction accounted for a total of 1% of all outstanding shares in Aprea and yielded a net total of approximately SEK 39 million for Karolinska Development. Karolinska Development retains an unchanged indirect holding in Aprea through KDev Investment after the transaction, comprising approximately 9.5% of the total number of shares outstanding (July 2020).

  • Aprea Therapeutics decided to expand the enrolment of patients in its clinical phase 1 study evaluating eprenetapopt in TP53-mutant acute myeloid leukaemia (AML). Once the study’s initial safety evaluation has been completed, the first expansion cohort will evaluate a combination of eprenetapopt with venetoclax and azacitidine in front line treatment of TP53-mutant AML (July 2020).

  • Karolinska Development’s Chairman of the Board, Hans Wigzell, resigned his position for personal reasons. The process of appointing a new Chairman has been initiated (August 2020).

  • The portfolio company, OssDsign presented positive interim results from a study in which patients with bone defects in the oral cavity were treated with the company’s patented calcium phosphate material. It is thought that this will open up opportunities for OssDsign’s implant technology in new indication areas (August 2020).

  • Magnus Persson left his position as a Member of the Board of Karolinska Development at his own request, due to his role as a founding partner in Eir Ventures, a recently started fund for investments in the life science sector (August 2020).

  • The portfolio company, Promimic, announced that the company’s partner, INNOVASIS Inc., had received a 501(k) FDA clearance for a 3D-printed spinal implant. The implant, which will be the first of its kind on the market, is treated using Promimic’s bioactive HAnano Surface® technology that improves the integration process and stimulates new bone formation and bone ongrowth to the implant (August 2020).

  • The portfolio company, Umecrine Cognition, announced that it will present the results of the recently conducted clinical phase IIa study of the candidate drug, golexanolone, at The Liver Meeting Digital Experience™ 2020 on November 13-16, 2020. Golexanolone is being developed for the treatment of hepatic encephalopathy (HE) (September 2020).

  • Karolinska Development announced that the company’s CFO and Deputy CEO, Fredrik Järrsten, has resigned from his position with the company. He will remain in his current role until a successor has been appointed, but no later than 7 March 2021 (September 2020).

  • The portfolio company, OssDsign, has received a notice of allowance from the USA Patent and Trademarks Office for a patent related to the design of the company’s Cranial PSI product. The notice of allowance strengthens the patent protection for OssDsign’s technology in the company’s most important geographical market (September 2020).

  • Karolinska Development announced that the company’s result for the third quarter of 2020 will be negatively affected by approximately SEK 190 million as a result of the recent share price development in the listed portfolio company, Aprea Therapeutics. The effect on the result will have no effect on Karolinska Development’s cash flow (September 2020).

Significant post-period events

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

  • A scientific article describing the portfolio company OssDsign's unique regenerative implants has been 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 has acquired the bone graft substitute company Sirakoss Ltd. The acquisition, which is expected to immediately provide OssDsign with a five times larger addressable market, is partly financed by a heavily over-subscribed 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).

Financial update

  • The net profit/loss for the third quarter was SEK -169.4 million (SEK -14.6 million in the third quarter of 2019). Earnings per share totalled SEK -1.0 (SEK -0.2 in the third quarter of 2019). Net profit/loss for the period January – September 2020 amounted to SEK -293.4 (-25.8) million.

  • The result of the Change in fair value of shares in portfolio companies for the third quarter amounted to SEK -173.9 million (SEK 10.4 in the third quarter of 2019). The result was largely attributable to the downturn in share price of the listed holding Aprea Therapeutics. The result of the Change in fair value of shares in portfolio companies for the period January – September 2020 amounted to SEK -289.2 (415.1) million.

  • The total fair value of the portfolio was SEK 1,024.1 million at the end of September 2020, corresponding to a decrease of SEK 307.7 million from SEK 1,331.8 million at the end of the previous quarter. The net portfolio fair value at that time was SEK 675.8 million, corresponding to a decrease of SEK 209.5 million from SEK 885.2 million at the end of the previous quarter.

  • Net sales totalled SEK 0.4 million during the third quarter of 2020 (SEK 0.7 million during the third quarter of 2019). Net sales for the period January – September 2020 totalled SEK 2.1 (2.7) million.

  • Karolinska Development invested a total of SEK 4.0 million in portfolio companies during the third quarter. Third quarter investments in portfolio companies by Karolinska Development and other specialised life sciences investors totalled SEK 29.1 million.

  • Cash and cash equivalents increased by SEK 25.0 million during the third quarter, totalling SEK 71.1 million on 30 September 2020.

  • The Parent Company equity totalled SEK 714.4 million on 30 September 2020.

The Interim Report for Karolinska Development AB for the period January-September 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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