Karolinska Development AB (publ) ― Interim report January - June 2013

STOCKHOLM – August 22, 2013. Karolinska Development AB (publ) announces
publication of its Interim report January-June, 2013. A conference call will be
held today at 15.00 CET. Participant access numbers: SE: +46 (0) 8 506 307 79,
UK: +44 (0) 1452 555 131, or US: +1 866 682 8490. The full report and a link to
the webcast are available on the company's website.
Torbjörn Bjerke, CEO, comments: ”The progress in Karolinska Development’s active
company portfolio remains strong. Since the first quarter 2013, positive
clinical data have been presented for four projects. Our focus on business
development continues to produce results. During the second quarter, Athera
Biotechnologies signed an option agreement with Boehringer Ingelheim on the
innovative preclinical antibody program PC-mAb for prevention of secondary
events in patients with acute coronary syndrome, where Athera has granted
Boehringer Ingelheim an exclusive option to acquire the entire program. Combined
with the EU grant Athera received during the second quarter, the project is now
fully financed through Phase I trials and thus to the point where Boehringer
Ingelheim’s option can be exercised. Moreover, we have launched new academic
collaborations with Ospedale San Raffaele in Italy and the Medical University of
Graz in Austria, aiming to further improve our access to interesting projects.

Among the positive clinical advances in our development projects during the
second quarter were Axelar’s preliminary Phase II study results, which showed
that the lead compound, AXL1717, may be effective in second line treatment of
patients with non-small cell lung cancer (NSCLC). Thus, the company assesses
that it has sufficient data to support further development of AXL1717 and will
therefore finalize the current study with fewer patients than initially planned.
Furthermore, Umecrine Mood announced that dosing has been initiated in a Phase
I/II study of a treatment for patients with premenstrual dysphoric disorder
(PMDD), a severe and disabling form of PMS. The current treatment options
consist primarily of antidepressant drugs, which are not always effective and
often associated with side effects. There is a definite unmet medical need for
an effective and safe treatment.

After the end of the second quarter, Pergamum reported positive follow-up data
from a Phase II clinical trial for prevention of post-surgical adhesions after
hand surgery, a major medical problem. Given Pergamum’s results, we are
optimistic that the treatment has the potential to become the first drug
approved for this indication. Pergamum also reported positive preliminary
efficacy results from a Phase I/II study in patients with venous leg ulcers, an
area in great need of new treatment methods. Pergamum’s proprietary gel has the
potential to be an important treatment in this area. OssDsign (formerly Oss-Q)
initiated the first clinical study of its bioceramic skull implant, OssDsign
Cranio PSI, for patients with severe skull injuries where previous treatments
have failed. In addition, Pharmanest met both primary and secondary efficacy
endpoints in its Phase II study where its lead product named SHACT was tested as
pain management in connection with intrauterine device (IUD) insertion. No
difference in adverse events between treated group and placebo were reported.
These positive data clearly show that SHACT has the potential to become the
first safe and effective pain relief product for millions of women during IUD
insertion.

In total, it was another quarter in which we began to see the results of our
long-term investments and the strength of our business model: to create a
broader base for selecting medical innovations through university
collaborations, drive the development in the project portfolio and find external
funding and commercial partners for our portfolio companies.”
Summary of significant events during and after the second quarter 2013

  · Preliminary Phase II data indicates that Axelar’s AXL1717 is efficacious in
2nd line treatment of patients with lung cancer
  · Bo Jesper Hansen was elected as new Director at the AGM 2013 and will take
over as Chairman of the Board on October 1, 2013
  · The first patient was dosed in the Phase I/II study of Umecrine Mood’s
candidate drug for PMDD, a severe form of PMS

  · The EU decided to grant EUR 6m for the development of Athera’s novel
antibody therapy PC-mAb for acute coronary syndrome patients and Athera entered
an option agreement with Boehringer Ingelheim on the same antibody program

  · Karolinska Development finalized an initial investment in Forendo Pharma Oy,
which is developing a treatment for endometriosis

  · Karolinska Development initiated collaborations with Ospedale San Raffaele
and Medical University of Graz with the objective to gain access to more life
science innovations

  · Pergamum reported positive follow-up data from a Phase II clinical trial of
PXL-01 showing a significant improvement in functional hand recovery after hand
surgery compared with placebo

  · Pergamum met the primary safety and tolerability endpoint and reported
positive preliminary efficacy results from a Phase I/II study of LL-37 in
patients with venous leg ulcers showing a significant improved healing rate
compared with placebo

  · Karolinska Development increased its holdings in OssDsign from 16% to 26% in
a share issue and OssDsign started a clinical study

  · Pharmanest reported positive Phase II data with SHACT showing a significant
reduction in pain in connection with IUD insertion

Financial Summary

Group                                2013     2012     2013     2012
Amounts in SEKm                   Apr-Jun  Apr-Jun  Jan-Jun  Jan-Jun

Income statement
Revenue                               2.6      3.1      4.6      5.5
Profit/loss after tax                 2.5   -100.1    391.9   -189.2
Balance sheet
Cash and cash equivalents                             173.0    170.3
Short-term investments                                 91.3    291.1
Total cash, cash equivalents and                      264.3    461.4
short-term investments (Note 3)
Share information
Earnings per share before and        0.08    -1.83     8.23    -3.52
after dilution (SEK)
Net asset value per share (SEK)                        44.8     42.5
(Note 1)
Share price, last trading day in                       27.2     19.5
the reporting period (SEK)
Portfolio information
Investments in portfolio            158.8     37.7    174.4    115.7
companies
Of which investments not              0.0      0.0      3.8      0.0
affecting cash flow
Valuation of total portfolio                        1,845.9  1,564.4
holdings (Note 2)

For further information, please contact:
Torbjörn Bjerke, CEO, Karolinska Development AB
Phone: +46 (0)72 744 41 23, e-mail: torbjorn.bjerke@karolinskadevelopment.com

Robin Wright, CFO, Karolinska Development AB
Phone: +44 (0)7720 30 00 25, e-mail: robin.wright@karolinskadevelopment.com

Benjamin Nordin, IRO, Karolinska Development AB
Phone: +46 (0)73 093 60 80, e-mail: benjamin.nordin@karolinskadevelopment.com

TO THE EDITORS

About Karolinska Development AB
Karolinska Development aims to create value for patients, researchers, and
investors by developing innovations from world class science into products that
can be sold or out-licensed with high returns. The business model is to: SELECT
the most commercially attractive medical innovations; DEVELOP innovations to the
stage where the greatest return on investment can be achieved; and COMMERCIALIZE
the innovations through the sale of companies or out-licensing of products. An
exclusive deal flow agreement with Karolinska Institutet Innovations AB, along
with other cooperation agreements with leading universities, delivers a
continuous flow of innovations. Today, the portfolio consists of 35 projects, of
which 16 are in clinical development. For more information, please visit
www.karolinskadevelopment.com.

Karolinska Development is listed on NASDAQ OMX. Karolinska Development may be
required to disclose the information provided herein pursuant to the Securities
Markets Act.