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Karolinska Development AB (pub (0P3C)

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Thursday 30 April, 2020

Karolinska Development AB (pub

Interim Report - January-March 2020

Interim Report - January-March 2020

STOCKHOLM – 30 April 2020. Karolinska Development AB (Nasdaq Stockholm: KDEV) today publishes its Interim Report - January-March 2020. The full report is available on the Company's website.

“The first quarter results are characterised by the ongoing COVID-19 pandemic and its effect on the stock market. The value of our holdings, particularly those in Aprea Therapeutics and OssDsign, have been negatively affected, which is the principal explanation for our financial result for the quarter. We have, however, also seen a number of new opportunities emerge during the period. The quarter began with our repayment of the remainder of the 2015 convertible loan, enabling us to now focus 100% on the future. We have, for example, made an initial investment in line with our new strategy of taking Nordic innovations to Asia. We are also seeing an ability on the part of our portfolio companies to handle the setbacks posed and take advantage of the opportunities offered by the COVID-19 pandemic.”, says Viktor Drvota, CEO, Karolinska Development.

Significant events during the first quarter

  • Karolinska Development repaid the remaining SEK 20.0 million of the convertible loan, including accrued interest. The entire convertible loan, issued by Karolinska Development in January 2015 and which was due for payment on December 31, 2019 has consequently been resolved (January 2020).
  • Aprea Therapeutics was granted Breakthrough Therapy Designation by the FDA for its candidate drug, APR-246 in combination with azacitidine for the treatment of myelodysplastic syndrome (MDS) with a TP53 mutation. A Breakthrough Therapy Designation facilitates expedited development and a shorter regulatory review for the candidate drug (January 2020).
  • Karolinska Development appointed Johan Dighed as General Counsel. Johan Dighed has extensive experience from the banking sector and will take up his position at the company from 1 May 2020, replacing Ulf Richenberg, who is retiring (March 2020).
  • Karolinska Development announced that it had postponed the date for the Annual General Meeting to 15 June 2020, due to the risk of infection by the COVID-19 virus (March 2020).
  • Karolinska Development made an investment in Svenska Vaccinfabriken Produktion AB (SVF). SVF develops therapeutic proteins and DNA vaccines against hepatitis B, hepatitis D, and other viral diseases, as well as vaccines to prevent COVID-19 infections and potential future Corona viruses (March 2020).
  • The portfolio company, OssDsign, received regulatory approval in Japan and is preparing to launch its implant product, OssDsign Cranial PSI, there (March 2020).

Significant post-period events

  • Umecrine Cognition presented phase IIa data for its candidate drug, golexanolone, in patients at risk of developing hepatic encephalopathy. The candidate drug demonstrated a positive safety and tolerability profile, and favourable pharmacokinetics, but no indications of clinical effects.  Karolinska Development is awaiting a thorough analysis of the results before a decision can be taken on whether the continued clinical development of the candidate drug is merited (April 2020).
  • The portfolio company, Dilafor, entered into a partnership with Liverpool University to study the effects of the company’s candidate drug, tafoxiparin, as a treatment for COVID-19. The candidate drug is primarily being developed to reduce the incidence of protracted labour, but the substance   is also thought to potentially be effective in connection with certain viral infections (April 2020).
  • Karolinska Development and KCIF Co-investment Fund KB – a holding company jointly owned by the European Investment Fund and Karolinska Development – divested part of their holding in the portfolio company, Aprea Therapeutics. In total, the transaction comprises 1% of all outstanding shares in Aprea Therapeutics, and yielded net proceeds for Karolinska Development of approximately SEK 59 million. Karolinska Development’s remaining holding in Aprea Therapeutics, including the indirect holding through KCIF Co-investment Fund, amounts to approximately 1% of the total number of outstanding shares in Aprea. KDev Investments’ holding in Aprea remains unchanged at approximately 9.5% of the total number of outstanding shares in Aprea (April 2020).

             

Financial update

First quarter

  • The net profit/loss for the first quarter was SEK -126.1 million (SEK -18.6 million in the first quarter of 2019). Earnings per share totalled SEK -0.7 (SEK -0.3 in the first quarter of 2019).
  • The result of the Change in fair value of shares in portfolio companies amounted to SEK -122.7 million. The result was largely attributable to the decline in share price of the listed holdings Aprea, OssDsign and Lipidor.
  • The total fair value of the portfolio was SEK 1,369.6 million at the end of March 2020, corresponding to a decrease of SEK -183.8 million from SEK 1,553.4 million at the end of the previous quarter. The net portfolio fair value at that time was SEK 932.5 million, corresponding to a decrease of SEK 115.1 million from SEK 1,047.6 million at the end of the previous quarter.
  • Net sales totalled SEK 1.1 million during the first quarter of 2020 (SEK 0.9 million during the first quarter of 2019).
  • Karolinska Development invested a total of SEK 7.7 million in portfolio companies during the first quarter. First quarter investments in portfolio companies by Karolinska Development and other specialised life sciences investors totalled SEK 23.7 million.
  • Cash and cash equivalents decreased by SEK 43.1 million during the first quarter, totalling SEK 9.1 million on 31 March 2020.
  • The Parent Company equity totalled SEK 881.6 million on 31 March 2020.

The Interim Report for Karolinska Development AB for the period January-March 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: [email protected]

Fredrik Järrsten, CFO and deputy CEO, Karolinska Development AB                  
Phone: +46 70 496 46 28, e-mail: [email protected]

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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