Torbjörn Bjerke, CEO, comments: “In 2013 Karolinska Development made extensive commercial and scientific progress. In March, we completed the previously announced strategic transaction with Rosetta Capital, which acquired shares in a selection of our portfolio companies, at a premium to reported fair value, for SEK 220 million. A few months later, Boehringer Ingelheim agreed an option deal with Athera. The agreement, which provides Boehringer Ingelheim an option to license to the program on predetermined terms, is a concrete example of how we can create value in projects even in early development.
Our business strategy is to invest in world class innovation and to develop these to a point where we can do partnerships and thereby create value to our shareholders. The main focus for management in 2014 continues to be business development. Importantly, we advanced the clinical development of the project portfolio in 2013 and received positive clinical data from Pergamum, Pharmanest and Lipidor. The positive clinical data obtained from two of Pergamum´s projects and the very clear Phase II data from Pharmanest give us a good opportunity to create value through partnering or exits of the companies. We are currently in active discussions with potential partners on several of the companies in our portfolio.
Axelar presented final data from its Phase II study with AXL1717 against lung cancer. The trial did not demonstrate that AXL1717 was superior to the comparator docetaxel, which has affected the valuation of the project – and therefore Karolinska Development’s net result – negatively for the period. New and valuable data was generated during the study, which supports that AXL1717 potentially can be developed for patients with advanced lung cancer who currently have no treatment options. We are now seeking a partner that will explore this opportunity.
During the year, we also invested in a new portfolio company – Forendo Pharma, aiming at a cure for endometriosis – and Karolinska Development now has twelve projects, in its active portfolio, in clinical development for diseases with clear unmet medical needs.
In early 2014, we announced a collaboration agreement for NovaSAID which will help the company to take the project through the next development phases. We are looking forward to important clinical data from our portfolio during the first half of 2014. Data are expected from Umecrine Mood’s Phase I/II study with its candidate drug for severe premenstrual symptoms, from Dilaforette’s Phase I/II study with sevuparin against malaria, from the multiple ascending dose part of Akinion’s Phase I/II trial in acute myeloid leukemia, and from XSpray’s Phase I trial with its reformulation of a protein kinase inhibitor to treat cancer. Furthermore, during 2014, Aprea is expected to initiate and complete the first part of its Phase I/II study in ovarian cancer. Each of these potential medicines could change the life of patients with severe diseases around the world, this is the true value of investing in life science innovations.
In our ongoing efforts to create value for patients and for our shareholders, we will continuously seek partners to the portfolio companies for co-funding or development of projects in these companies to secure further advancement towards the market.”
Summary of significant events during the fourth quarter
- Axelar announced final data from Phase II study with AXL1717 in lung cancer
- The EU awarded research grants of more than EUR 1m to three of Karolinska Development’s portfolio companies
- Pergamum announced positive final data from Phase I/II study of LL-37 in patients with chronic leg ulcers
Summary of significant events after the reporting period
- Karolinska Development announced that Christian Tange has been appointed Chief Financial Officer, to replace Robin Wright
- NovaSAID initiated a partnership with Cadila Pharmaceuticals to develop innovative treatments in inflammation and pain management
Financial summary
| Group | 2013 | 2012 | 2013 | 2012 | |
| Amounts in SEKm | Oct-Dec | Oct-Dec | Full-year | Full-year | |
| Income statement | |||||
| Revenue | 2.6 | 2.6 | 9.9 | 9.9 | |
| Profit/loss after tax | -113.1 | 85.8 | 188.1 | -230.2 | |
| Balance sheet | |||||
| Cash and cash equivalents | 41.6 | 117.0 | |||
| Short-term investments | 165.3 | 174.2 | |||
| Total cash, cash equivalents and short-term investments | 206.9 | 291.2 | |||
| Share information | |||||
| Earnings per share before and after dilution (SEK) | -2.31 | 1.60 | 4.08 | -4.39 | |
| Net asset value per share (SEK) | 40.82 | 44.01 | |||
| Share price, last trading day in the reporting period (SEK) | 30.9 | 15.3 | |||
| Portfolio information | |||||
| Unconsolidated portfolio companies’ total net cash¹ | 111.6 | 118.6 | |||
| Investments in portfolio companies | 88.2 | 24.6 | 266.2 | 231.6 | |
| Of which investments not affecting cash flow | 64.3 | 4.5 | 68.1 | 77.8 | |
| Valuation of total portfolio holdings | 1,729.5 | 1,827.2 |
¹Net cash is comprised of the sum of cash, cash equivalents and short-term investments less external loans in unconsolidated portfolio companies regardless of Karolinska Development’s ownership interest.
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, investors and society 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 33 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.
