Bruno Lucidi, CEO, comments: “My appointment as CEO of Karolinska Development coincides with the announcement of a new strategy for the future investments in our portfolio. I am convinced that these strategic measures will be a good foundation for our continued efforts to realize value in the portfolio.
Our portfolio companies have been selected into a Strategic and an Opportunistic Portfolio that we further specify in this report. We will focus our financial and managerial efforts in the Strategic Portfolio and develop those towards important near-to mid-term value inflection point within specialized care areas and orphan diseases such as Dilaforette’s program in sickle-cell disease or OssDsign’s advanced implant technology. At the same time we will utilize a more differentiated investment strategy depending on the properties of the programs within the portfolio. In order to maximize value and future returns, the investment horizon for each asset will for example vary depending on the optimal exit strategy within the specific therapeutic fields.
We were pleased to announce Forendo Pharma’s licensing agreement granting Apricus Bioscience US development and commercialization rights for fispemifene after the reporting period. The agreement does not only signify the Forendo team’s expert abilities in developing drug candidates that targets organ specific hormone mechanisms, but also exemplifies the value potential in our portfolio of carefully selected innovations based on outstanding science. According to the deal terms, Forendo is entitled to a total of USD 310 million in milestone and upfront payments, common shares in Apricus and tiered double-digit royalties on US net sales. The fispemifene development program will focus on hypogonadism, a condition that results in low testosterone levels in men, where two Phase II studies has shown therapeutic potential. In addition, Apricus will expand the development into other urological conditions where the fispemifene mode of action is believed to able to ameliorate symptoms.
It is important to emphasize that the Opportunistic Portfolio also hold a considerable value potential. During the third quarter, Umecrine Mood presented final data from the company’s exploratory Phase I/II study in patients with premenstrual dysphoric disorder (PMDD). While the study’s primary endpoint was not met, as we announced during the summer, post-hoc analyses correcting for some important issues identified in the study, shows significant reductions in symptoms compared to placebo. Should these data be confirmed in new studies, UC1010 could make a profound difference to the millions of women who suffer from PMDD. Based on these data, Umecrine Mood are now in the process of finding a partner to continue the clinical development of UC1010.
In October, Athera Biotechnologies passed an important milestone in the development of
PC-mAb for the treatment of cardiovascular disease when the first patients were dosed in a Phase I study. In addition, Clanotech received orphan drug designation in the EU for the development of the company’s lead candidate within glaucoma surgery. Furthermore, OssDsign received 510(k) clearance by the US FDA for the burr hole plug Cranioplug.
In our continuous effort to evaluate the portfolio, the fair value of Biosergen has written down as the company has not been able to secure external financing to the systemic fungal infection in preclinical development.
I am looking forward to leading Karolinska Development in this decisive period for the company. With a new strategy in place, we will move forward determinately to unlock the value in our portfolio. Our belief that investing in outstanding life science innovations will shape future treatments for patients that today are not offered adequate treatment options. The management in our portfolio companies are key to the success of our ambitions. The new strategy will also take into consideration the specific needs within the portfolio of accountable and experienced leadership.”
Summary of significant events during the third quarter 2014
- Klaus Wilgenbus appointed as acting CEO
- Umecrine Mood announced final results from an exploratory Phase I/II study with UC1010 in premenstrual dysphoric disorder
- Bruno Lucidi appointed as CEO in Karolinska Development oncology companies
Summary of significant events after the third quarter 2014
- Bruno Lucidi appointed as new CEO of Karolinska Development
- Forendo Pharma announced the US licensing of fispemifene to Apricus Biosciences
- Clanotech received orphan drug designation in the EU
- OssDsign’s Cranioplug received marketing approval in the US
- Athera initiated Phase I study with cardiovascular antibody PC-mAb
- Karolinska Development presented an updated strategy
- Danske Bank appointed as financial advisor
Financial summary
| SEKm |
2014 Jul-Sep |
2013 Jul-Sep (restated) |
2014 Jan-Sep |
2013 Jan-Sep (restated) |
2013 (restated) |
| Condensed Income Statement | |||||
| Change in fair value of portfolio companies | -107.7 | -80.6 | -291.1 | -16.6 | -140.0 |
| Net profit/loss | -128.1 | -91.6 | -336.0 | -58.1 | -157.3 |
| Condensed Balance sheet | |||||
| Cash, cash equivalents and short-term investments | 112.3 | 232.1 | 200.7 | ||
| Share information | |||||
| Earnings per share, weighted average, before and after dilution (SEK) | -2.65 | -1.90 | -6.96 | -1.20 | -3.25 |
| Net asset value per share (SEK) | 33.9 | 42.6 | 40.7 | ||
| Equity per share (SEK) | 33.6 | 42.6 | 40.5 | ||
| Share price, last trading day in the reporting period (SEK) | 13.0 | 31.0 | 30.9 | ||
| Portfolio information | |||||
| Portfolio companies´net cash¹) | -2.8 | 186.9 | 111.6 | ||
| Investments in portfolio companies | 7.2 | 2.7 | 56.5 | 176.9 | 266.2 |
| Of which investments not affecting cash flow | 0.0 | 0.0 | 6.7 | 3.8 | 68.1 |
| Fair value of portfolio holdings | 1,494.0 | 1,767.8 | 1,729.5 |
¹) Portfolio companies' net cash is comprised of sum of cash, cash equivalents and short-term investments less external loans in portfolio companies regardless of Karolinska Development's ownership interest (cash, cash equivalents and short-term investments amounting to SEK 92.7m less external loans amounting to SEK -95.5m)
For further information, please contact:
Bruno Lucidi, CEO, Karolinska Development AB
Phone: +46 72 245 9892, e-mail: bruno.lucidi@karolinskadevelopment.com
Christian Tange, CFO, Karolinska Development AB
Phone: +46 (0)73 712 14 30, e-mail: christian.tange@karolinskadevelopment.com
TO THE EDITORS
About Karolinska Development AB
Karolinska Development aims to create value for patients, researchers, investors and society by developing innovations from world class science into differentiated products that can be partnered. The business model is to: SELECT the most commercially attractive medical innovations that can potentially satisfy unmet medical needs; 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. 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.
