Torbjörn Bjerke, CEO, comments: “The ongoing efforts to partner Axelar’s drug candidate AXL1717 following the results presented in December last year from the Phase II study in non-small cell lung cancer has so far not met our expectations. The timeline and near-term commercial value of the company has therefore been adjusted. As a consequence, the fair value of Axelar for the second quarter has therefore been written down, which has a significant effect on the interim fair value and net profit. Axelar remains active in finding a partner in order to move the project into the next clinical development steps.
During the second quarter, study results were reported in three of our portfolio companies’ drug development projects and another important clinical trial was initiated.
Our portfolio company Aprea has developed substances that can that can restore normal function to the p53 protein, which plays a decisive role in cancer cells’ programmed death (apoptosis). In around half of all tumor cells, p53 has mutated and no longer functions normally. As a result, the cancer cells survive, leading to rapid tumor growth. In April, Aprea initiated a clinical trial with its substance APR-246 in patients with relapsed platinum sensitive ovarian cancer, a disease with a very poor prognosis. About 60% of all ovarian cancer patients have mutated p53 and the survival of these patients is lower than those with wild type p53.
Dilaforette took a step forward during the quarter in the development of an effective treatment for malaria. The results of an exploratory Phase I/II clinical trial with the drug candidate sevuparin found it to be safe and well tolerated. Due to problems recruiting a sufficient number of patients, however, the study was prematurely terminated. No statistical significance was found between sevuparin and the current standard treatment with regards to the appearance of mature parasitized red blood cells in circulation, which was the primary end-point of the study. The results however, indicate that sevuparin can produce better blood circulation and hence an improved clinical effect. Based on these findings, Dilaforette intend to approach relevant stakeholders in the malaria community with the aim to progress the program into the intended patient group, patients with severe malaria.
Protein kinase inhibitors (PKI) are a class of drug that plays an important role in the treatment of various types of cancer and inflammation. Unfortunately, many PKIs have properties that make treatment unnecessarily complicated and in the worst cases can lead to a suboptimal effect or serious side-effects. Based on its proprietary HyNap drug delivery technology, XSpray Microparticles AB is developing a new formulation of the PKI nilotinib. The goal is to provide patients with a simpler and safer treatment. In May, the company presented study results clearly indicating that HyNap nilotinib has a better uptake in the body than the formulation of nilotinib used today. The results of the study also indicate that HyNap nilotinib uptake is not affected by food intake, one of the problems with current therapies. After these promising data, XSpray is evaluating strategies to fully capture the potential in the HyNap technology.
Premenstrual dysphoric disorder (PMDD) is a condition with a debilitating effect on the quality of life of about five percent of all women of child-bearing age. Umecrine Mood is the first company to develop substances that inhibit the metabolites believed to cause PMDD. In June, it reported data from an exploratory clinical trial that show positive treatment effects among patients with severe symptoms. While the primary end point in the study was not reached, the substance was well tolerated and further analyses will now be conducted before a decision is made whether to continue development.
We are continuously evaluating and developing the portfolio through our clearly defined selection criteria with the aim to develop differentiated pharmaceutical and technology products based on prominent research. Our efforts continue to invest in our portfolio companies and their further efforts to address major medical needs and thereby build significant value for patients and shareholders.”
Summary of significant events during the second quarter 2014
- Dosing initiated in Phase I/II clinical trial of APR-246 in patients with relapsed platinum sensitive ovarian cancer
- XSpray announced positive Phase I data for HyNap™ nilotinib, demonstrating better bioavailability than for the current formulation of nilotinib
- New Board Directors elected at the company’s Annual General Meeting
- Dilaforette presented results from exploratory Phase I/II clinical trial in uncomplicated malaria, demonstrating that sevuparin is safe and well tolerated but due to premature termination of the trial, no evidence on effect could be concluded
- Umecrine Mood reported preliminary data with UC1010 from exploratory Phase II study in premenstrual dysphoric disorder (PMDD), UC1010 was well tolerated but the trial did not reach its primary efficacy end point
- Due to the partnering progress not reaching expectations the value of Axelar was written down
Summary of significant events after the second quarter 2014
There were no significant events after the reporting period.
Financial summary
| 2014 | 2013 | 2014 | 2013 | ||
| Investment entity Amounts in SEKm | Apr-Jun | Apr-Jun (restated) | Jan-Jun | Jan-Jun (restated) | |
| Condensed Income statement | |||||
| Change in fair value of portfolio companies | -177.3 | 49.8 | -183.4 | 64.0 | |
| Net profit/loss | -189.5 | 35.8 | -207.9 | 33.5 | |
| Condensed Balance sheet | |||||
| Cash and cash equivalents | 29.8 | 156.1 | |||
| Short-term investments | 99.1 | 91.3 | |||
| Total cash, cash equivalents and short-term investments | 128.9 | 247.4 | |||
| Share information | |||||
| Earnings per share, weighted average, before and after dilution (SEK) | -3.92 | 0.74 | -4.31 | 0.69 | |
| Net asset value per share (SEK) | 36.4 | 44.5 | |||
| Equity per share (SEK) | 36.3 | 44.4 | |||
| Share price, last trading day in the reporting period (SEK) | 22.0 | 27.2 | |||
| Portfolio information | |||||
| Portfolio companies’ net cash¹ | 51.6 | 186.9 | |||
| Investments in portfolio companies | 33.8 | 158.8 | 49.3 | 174.4 | |
| Of which investments not affecting cash flow | 6.7 | 0.0 | 6.7 | 3.8 | |
| Fair value of portfolio holdings | 1,595.4 | 1,845.9 | |||
| ¹Portfolio companies’ net cash is comprised of the sum of cash, cash equivalents and short-term investments less external loans in 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
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. 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.
