Year-End Report - January-December 2019

STOCKHOLM – 13 February 2020. Karolinska Development AB (Nasdaq Stockholm: KDEV) today publishes its Year-End Report - January-December 2019 with the company’s best ever full-year result. The full report is available on the Company's website.

“Karolinska Development’s financial situation over the past year has been extremely strained but we have now, after extensive and strenuous efforts, solved the company’s substantial indebtedness, secured our short-term financing needs, and reported the company’s best ever results. And while we achieved all this, the development rate in our portfolio companies continued to be very high throughout the year. Significant progress was recently also made by several of the companies, including Aprea Therapeutics’ IPO in the USA and Forendo Pharma’s licence and collaboration agreement with Novartis. Coverage of Karolinska Development’s progress in these areas has, however, been somewhat overshadowed by the substantial financial challenges we have faced, and it is very satisfying to be able to report that we are now in a position where we can once again focus fully on our investments and on the further development of our business model.”, says Viktor Drvota, CEO, Karolinska Development. 

Significant events during the fourth quarter

• Aprea Therapeutics completed its IPO on Nasdaq Global Select Market in the US. The Company received a total gross amount, before deductions for the guarantors' discounts and commissions and other transaction costs, of approximately USD 97.75 million (October 2019).
• OssDsign announced that the company has been granted 510(k) clearance by the US Food and Drug Administration (FDA) to market OssDsign Cranial PSI Accessories in the US. The products are a set of 3D-printed patient specific surgical accessories designed to support and expand the use of the company's cranioplasty implants that have previously been approved in the United States. (October 2019). 
• The subscription period for the directed issue to the Company's convertible bond holders was extended in several steps during the fourth quarter until December 16 (October–December 2019).
• Karolinska Development divested its indirect holding of 1 % in the portfolio company Asarina Pharma. The divestment had only a limited impact on Karolinska Development’s net earnings (October 2019).
• Karolinska Development announced that unconditional subscription- and repurchase commitments corresponding to set-off and repurchase of 94.2 per cent of the Company’s convertible loan, corresponding to SEK 438.4 million including accrued interest at June 30, 2019, had been entered in the then ongoing directed new share issue.
• Karolinska Development published a prospectus supplement for the then ongoing directed new share issue to the holders of the Company’s convertible loan (November 2019).
• OssDsign released updated outcome data which revealed that the rate of infections leading to implant removal of OSSDSIGN Cranial PSI remained low (2.4%) after a median follow-up time of 17 months. (November 2019).
• The result of the first partial registration in the then ongoing directed new share issue showed that holders of the convertible had subscribed for shares corresponding to an amount of SEK 208 million of the convertible loan in nominal terms or 63.3% of the remaining convertible loan at the time of the announcement of the Directed Issue (November 2019).
• Karolinska Development announced a change of number of shares and votes in the Company. As a result of the first a partial registration of the then ongoing directed share issue there were 143,189,323 shares, representing a total of 156,717,205 votes outstanding in the Company, with 15,030,980 votes for shares of series A and 141,686,225 votes for shares of series B (November 2019).
• Aprea Therapeutics presented results from two Phase Ib/II clinical which evaluated the safety and efficacy of APR-246 in combination with azacitidine for the treatment of TP53 mutated Myelodysplastic Syndrome (MDS) and Acute Myeloid Leukemia (AML) (December 2019)
• Forendo Pharma has entered a license and collaboration agreement with the global pharmaceutical company Novartis to develop new drugs for the treatment of chronic liver diseases (December 2019).
• Sino Biopharmaceutical and Chia Tai Resources divested their remaining convertibles equivalent to SEK 85 million in nominal terms, corresponding to SEK 121 million including accrued interest until 30 June 2019, to Worldwide International Investments Limited. Worldwide also committed to set-off its convertibles by subscribing for shares in the then ongoing directed share issue (December 2019).
• Umecrine Cognition announced that the enrollment was completed in its Phase 2a study in patients with liver cirrhosis and hepatic encephalopathy (December 2019).
• Karolinska Development announced that the share price in Aprea as of 12 December of USD 39.37 would mean a net profit effect for Karolinska Development of approx. SEK 422 million in the fourth quarter. At the same time, it was announced that a prospectus supplement had been published relating to the then ongoing directed share to the holders of the Company's convertible loan (December 2019).
• The result of the final partial registration in the directed share issue to the holders of the Company’s convertible loan was published. Holders of the convertible had subscribed for shares equivalent to an additional SEK 85.9 million of the Company’s convertible loan in nominal terms. Following the final partial registration, SEK 13.6 million of the Company's convertible loan in nominal terms or SEK 20.0 million including accrued interest until December 31, was outstanding (December 2019).
• The Company’s short-term financing needs were secured through a loan from Sino Biopharmaceutical amounting to SEK 70 million (December 2019).
• Umecrine Cognition announced Notice of Allowance from USPTO for a patent protecting lead compound golexanolone (December 2019).
• The number of series B shares increased by 32,476,086 shares as a result of the final partial registration of the directed share issue, The total number of shares in the Company now amounts to 175,665,409 shares, distributed among 1,503,098 shares of series A and 174,162,311 shares of series B (December 2019).

Significant post-period events

• Karolinska Development announced that the Company has repaid SEK 20.0 million of the convertible loan that was outstanding, including accrued interest until December 31, 2019. With that the whole convertible loan which was issued by Karolinska Development in January 2015 and was due for payment on December 31, 2019, was resolved (January 2020).
• Aprea Therapeutics was granted Breakthrough Therapy Designation for APR-246 in combination with azacitidine for the treatment of myelodysplastic syndrome (MDS) with a TP53 mutation (January 2020).

Financial update

Fourth quarter

• The net profit/loss for the fourth quarter was SEK 328.8 million (SEK 14.9 million in the fourth quarter of 2018). Earnings per share totalled SEK 3.20 (SEK 0.2 million in the fourth quarter of 2018). 
• The result of the Change in fair value of shares in portfolio companies amounted to SEK 383,0 million. The result is largely due to the result of the change in fair value regarding the listed holding in Aprea Therapeutics.
• The total fair value of the portfolio was SEK 1,553.4 million at the end of December 2019, corresponding to an increase of SEK 540,9 million from SEK 1,012.5 million at the end of the previous quarter. The net portfolio fair value at the end of December 2019 was SEK 1,047.6 million, corresponding to an increase of SEK 377.9 million from SEK 669.7 million at the end of the previous quarter.
• Net sales totalled SEK 0.7 million during the fourth quarter of 2019 (SEK 0.9 million during the fourth quarter of 2018).
• Karolinska Development invested a total of SEK 6.8 million in portfolio companies during the fourth quarter. Fourth quarter investments in portfolio companies by Karolinska Development and other specialised life sciences investors totalled SEK 35.6 million.
• Cash and cash equivalents increased by SEK 31.3 million during the fourth quarter, totalling SEK 52.1 million on 31 December 2019.
• The Parent Company’s equity on 31 December 2019 was SEK 1,007.8 million.

Full year

• The full-year net profit was SEK 303.0 million (SEK 30.5 million in 2018). Earnings per share totalled SEK 4.10 (SEK 0.48 in 2018). 
• The full-year result for the change in the fair value of the portfolio amounted to SEK 415.1 million (SEK 58.5 million during 2018).
• The total fair value of the portfolio was SEK 1,553.4 million at the end of December 2019, an increase from SEK 952.3 million at the corresponding date in 2018. The net portfolio fair value was SEK 1,047.6 million, an increase from SEK 668.9 million at the corresponding date in 2018.
• Revenue totalled SEK 3.4 million for the full year of 2019 (SEK 3.1 million in 2018).
• Karolinska Development invested a total of SEK 48.9 million in its portfolio companies during the full year. Full-year investments in the portfolio companies by Karolinska Development and other specialised life sciences investors totalled SEK 445.7 million.
• Cash and cash equivalents decreased by SEK 33.7 million during the full year, totalling SEK 52.1 million on 31 December 2019.
• The Parent Company’s equity on 31 December 2019 was SEK 1,007.8 million.
• The Board will not propose any dividend for the financial year 2019.

The Year-End Report for Karolinska Development AB for the period January-December 2019 is available as a PDF at .

For further information, please contact:

Viktor Drvota, CEO, Karolinska Development AB

Phone: 2, e-mail:

Fredrik Järrsten, CFO and deputy CEO, Karolinska Development AB                  

Phone: +46 70 496 46 28, e-mail:

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 nine 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

This information is information that Karolinska Development AB (publ) (Nasdaq Stockholm: KDEV) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of Viktor Drvota, at 07:55 am CET on 13 February 2020.

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