Karolinska Development
Nanna Svartz väg 6A, Solna, Stockholms Län, 171 65, Sweden
Overview
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. Karolinska Development has developed a well-structured selection process to identify the most commercially attractive medical innovations screened by KIAB. Pharmaceutical development is a high-risk enterprise. In most cases, development projects fail because of side effects or insufficient efficacy. Successful selection of innovations is fundamental to Karolinska Development’s business model, which makes the inflow of new projects crucial. One key to success lies in selecting those innovations that can be developed from scientific findings to products and have significant commercial potential. To date, over 1,300 projects have been screened by KIAB. The portfolio companies are often founded together with the innovators and are initially operated as virtual companies with few or no employees. During the first six to twelve months, the companies normally have minimal fixed costs and technological development is outsourced. The innovator, who is often employed at an academic institution, normally participates as a board member and scientific advisor. The CEO of a portfolio company cooperates closely with a representative of Karolinska Development, who in most cases is also a board member of the company. The companies are capitalized to reach their next milestone, usually within a period of six to eighteen months. Development projects are continuously monitored, and those that do not meet their stipulated targets are discontinued. In the first three to four years, a portfolio company’s operating expenses are often limited to a few million Swedish kronor per year, which cover the cost of external studies and the salary of the staff. In subsequent years, Karolinska Development and other investors play an important role recruiting key expertise to the companies Karolinska Development intends to realize value by exiting portfolio companies or through out-licensing of projects. Such transactions (especially out-licensing) are often structured as single upfront payments followed by payments based on predetermined milestones and royalties on sales. Although Karolinska Development has a flexible exit strategy, pharmaceutical products are, for two reasons, preferably exited at Phase II. First a successful Phase II study indicates that the pharmaceutical has an effect on patients, which is an important value-enhancing factor when negotiating out-licensing or sales. Secondly, finalizing product development and undertaking Phase III clinical trials frequently requires very large patient populations. In many cases this requires much greater resources than those available at Karolinska Development but these can be found in established pharmaceutical companies. Several licensing deals were closed in 2011 involving projects with a similar focus and development phase to Karolinska Development's projects.
- Total investments
- 19
- Lead investments
- 6
- Investments · 12mo
- 0
- Active investors
- 2
Sector focus
- Biotechnology
- Medical
- Therapeutics
Investment portfolio
- PharmNovo
Participated · Convertible Note · Jan 2024
PharmNovo is a clinical-stage biotechnology company developing PN6047, a drug candidate that is advancing toward a Phase II study. The company recently completed a financing round of roughly 39 million kronor to fund that planned Phase II trial. KDventures AB, which holds PharmNovo in its portfolio, announced the capital raise and concurrently wrote down the book value of its holding to 5 million kronor. The financing included participation from external investors, though specific investor names beyond KDventures were not disclosed. No revenue, user metrics, or prior funding round details were provided in the articles.
- Umecrine Cognition
Participated · Convertible Note · Nov 2023
Umecrine Cognition is a portfolio company of Karolinska Development advancing golexanolone, its lead drug candidate. The company is financing the ongoing Phase 2 clinical trial of golexanolone in primary biliary cholangitis and covering working capital needs. It recently presented strong preclinical data supporting the candidate. The latest funding was implemented as a convertible loan with attached share options and totals SEK 30.4 million. Karolinska Development participates in the investor consortium and currently holds a 73% stake in Umecrine Cognition. Upon full exercise of the new and two earlier convertible loans with similar terms, Karolinska Development's holding would decrease to 62%. Umecrine Cognition is a portfolio company of Karolinska Development focused on developing the drug candidate golexanolone. The company has secured additional financing to advance a clinical Phase 2 trial of golexanolone in primary biliary cholangitis (PBC) and to fund preclinical studies in Parkinson’s disease. The financing was implemented as a convertible loan with attached share options totaling SEK 31.6 million. An investor consortium comprising Karolinska Development, AB Ility and Ribbskottet AB provided the funding, and Karolinska Development participated in the round. Karolinska Development currently owns 73% of Umecrine Cognition; upon full exercise of the attached share options its holding would decrease to 63%. Karolinska Development expects the dilutive effect of the transaction to produce a negative earnings effect of SEK 19.7 million in Q1 2023. Company management highlights the treatment’s potential in both PBC and Parkinson’s disease, areas described as lacking adequate treatments. Umecrine Cognition is developing a new class of drugs to alleviate cognitive symptoms caused by liver disease. Its most advanced candidate, golexanolone, is being evaluated in patients with primary biliary cholangitis (PBC) and hepatic encephalopathy (HE). Previous clinical and preclinical studies indicate golexanolone can counteract inappropriate suppression of brain activity that produces fatigue, difficulty concentrating and impaired motor function. The company has secured SEK 41 million in funding implemented as a convertible loan with attached share options to enable the start of a Phase 2 study of golexanolone in PBC. Karolinska Development is investing SEK 15 million as part of an investor consortium that includes AB Ility. Karolinska Development currently owns 73% of Umecrine Cognition; upon full exercise of the share options its holding would decrease to 65%. Karolinska Development expects a negative earnings effect of SEK 49 million (7.7%) in Q3 2022 due to the dilutive transaction. Umecrine Cognition is developing golexanolone, a drug candidate with a novel mechanism of action that attenuates incorrect activation of the GABAA receptor in the brain. Positive phase 2 results in hepatic encephalopathy were published in the Journal of Hepatology, supporting initiation of late clinical‑phase studies and expansion into other disease areas. The company carried out a directed new share issue of SEK 35.1 million to broaden its ownership base and finance continued clinical development and IPO preparatory activities. Concurrently, Karolinska Development converted SEK 66.9 million of loans into shares at the same subscription price as the new issue. Following the transactions Karolinska Development’s ownership in Umecrine Cognition increased to 72.59 percent. Vator Securities acted as financial advisor in connection with the share issue, and the company planned an IPO on Nasdaq First Growth Market in Q4 2021. Umecrine Cognition is developing GR3027, a GABAA-receptor modulating steroid antagonist intended to treat sleep disorders. The company plans an explorative phase 2a study of GR3027 for idiopathic hypersomnia funded by the recent financing. GR3027 is also being developed as a potential treatment for hepatic encephalopathy and recently showed good results in a phase 1b trial. The phase 1b study reported that GR3027 was well tolerated, had no dose-limiting side effects, and exhibited a favorable pharmacokinetic profile. Idiopathic hypersomnia currently has no effective treatment, making the new indication potentially significant. To support the expanded clinical development, Umecrine Cognition closed a financing round raising SEK 20 million.
- OssDsign AB
Participated · Equity · Nov 2022
OssDsign develops and markets next-generation bone replacement products based on advanced material science, including patient-specific cranial implants and an off-the-shelf synthetic bone graft for spine surgeries. The company supports the body’s own healing capabilities to improve clinical outcomes across multiple orthopedic indications. OssDsign has a strong commercial presence in the US, Europe and selected Asian countries and its share is traded on Nasdaq First North Growth Market in Stockholm, Sweden. The company is pursuing expansion of its product portfolio and advancement of clinical programs. Recent financing was explicitly intended to fund its efforts to build a global bone graft business and accelerate growth in the US. The company is positioned to use the strengthened financial base to support commercialization and clinical development. OssDsign is a portfolio company of Karolinska Development that develops medical products for craniomaxillofacial indications and is broadening its focus to orthobiologics and spinal surgery. In early March the company presented a new corporate strategy, ASCENT25, intended to accelerate growth, value creation and innovation and achieve positive cash flow by 2025. To support that strategy OssDsign completed a rights issue with preferential rights for existing shareholders, which was oversubscribed. The board exercised an over‑allotment option to carry out a directed new issue, bringing total gross proceeds to SEK 270 million excluding transaction costs. The fundraising outcome is expected to enable strategic investments to expand the product portfolio and sales into additional orthopedic market segments. Karolinska Development, a long‑term investor, subscribed for its pro rata share in the new issue. OssDsign develops and sells regenerative implant solutions intended to improve healing of bone defects. The company intends to use new proceeds to expand sales in Europe and the US and to enter new markets. OssDsign is preparing for a market introduction in Japan, running pre-marketing activities in parallel with the regulatory process and with ethical committee approval in place for surgeons to start building experience. The company is preparing for a listing on Nasdaq First North in 2019, with Erik Penser Bank acting as financial advisor. Karolinska Development is a major backer, holding 25% on a fully diluted basis. The recent financing is intended to support commercialization and geographic expansion rather than research-stage development. OssDsign develops regenerative implants to improve healing of bone defects and deficits in skull, facial and other types of surgery. Its product portfolio includes Craniomosaic for cranioplasty and Sculpter for facial reconstruction. The products are currently available in Germany, the United Kingdom and the Nordic countries, with further expansion in Europe scheduled for 2016. The company is working with regulatory authorities to expand access in new key markets and expects clearance in the US in 2016. Led by CEO Anders Lundqvist, OssDsign plans to use new funding to accelerate market expansion of its craniofacial implant line. The company recently completed an equity financing to support these plans. OssDsign develops patient-specific bioceramic implants for bone healing, starting with its OssDsign Cranio PSI product for skull reconstruction. The company has a registration certificate for production and sales of patient-specific implants and reports very positive results in treated patients to date. After completing a SEK 13.7m rights issue, OssDsign has initiated a clinical multi-center study evaluating clinical outcomes, quality of life, and health economics; first patients have been treated at Karolinska University Hospital. The company is developing a new bioceramic material with a chemical composition similar to bone and aims to transform that technology into differentiated products for bone replacement. Its strategy is to build a niche orthopedics company beginning with sales in skull surgery and extend applications to other areas such as fracture healing. The market for bone replacement products was reported as worth EUR 1bn in 2012.
- Henlez
Led · Seed · Oct 2022
Henlez is advancing a pre-clinical program called HEN-001, an enzyme-based topical application intended to treat hidradenitis suppurativa. The company is developing HEN-001 to address a chronic, stigmatizing inflammatory skin condition characterized by severe pain, malodorous drainage and scarring. Henlez plans to use recent funding to further develop the topical candidate and facilitate a forthcoming clinical evaluation. The company also intends to expand its patent portfolio with the proceeds. Henlez was founded in 2019 by Jeppe Mouritsen, a former Novozymes A/S scientist who serves as CEO. The startup is described in the article as Danish.
- AnaCardio
Participated · Series A · Sep 2022
AnaCardio is a privately held Swedish clinical-stage biopharmaceutical company founded in 2017 and based on research from Karolinska Institutet. Its lead candidate, AC01, is a first-in-class oral ghrelin receptor agonist designed to enhance cardiac contractility without the adverse effects typical of conventional inotropes. The company reported positive results from an initial study showing safety, target engagement, and improved contractility. Funds from the recent financing will support completion of the phase 1b/2a GOAL-HF1 study, including a 28-day cohort expansion planned for early 2025. Management positions the data and funding as enabling advancement to proof-of-concept and progression toward late-stage clinical development. AnaCardio AB is a Swedish clinical-stage biopharmaceutical company focused on developing novel therapies for heart failure. Its lead asset, AC01, is being developed for patients with heart failure and reduced ejection fraction (HFrEF). The company plans a clinical phase 1b/2a study of AC01 in HFrEF patients, expected to begin at selected centers in several European countries in fall/winter 2022. Proceeds from the recent financing will fund that planned study. AnaCardio was founded on research from Karolinska Institutet showing improved contractility of the heart muscle through a unique and differentiated mechanism. The company frames heart failure as a potentially fatal disease and the most common cause of hospitalization. AnaCardio AB is a privately held Swedish clinical-stage biopharmaceutical company developing novel drugs to treat heart failure based on research from Karolinska Institutet. Its lead asset, AC01, targets improved contractility of the heart muscle through a unique and differentiated mechanism. The company completed a fundraising to progress clinical development and is preparing to start a phase 1b/2a study with AC01 in 2022. The new capital enables AnaCardio to complete those preparations and advance its clinical plans. Karolinska Development is a strategic investor and has direct ownership interest amounting to 21 percent. The financing structure and participation signal continued backing from the Nordic life-sciences ecosystem.