Karolinska Development

Another quarter of delivery


Update | 23 November 2016

Share this note

Karolinska Development’s turnaround maintained its momentum in Q316. Portfolio companies, Promimic and Dilafor, raise a total of SEK75m (including commitments) with SEK53m already invested by third-party investors; and Umecrine Cognition has since completed a SEK45m fundraising. On the operation front, BioArctic has formed a collaboration with AbbVie; and after the period end, following the publication of very promising Phase I data in ovarian cancer, Aprea has advanced APR-246 into Phase II. Our valuation of Karolinska, based on its four main assets, is unchanged at SEK9.10 per share.

Year-end: December201420152016E2017E
Sales (SEKm)
Adj. PBT (SEKm)(67.2)(78.2)(66.8)(63.6)
Net Income (SEKm)(371.5)(1,054.7)(207.9)(63.6)
Adj. EPS (SEK)(1.4)(1.5)(1.3)(1.2)
Cash (SEKm)141.3297.2253.7224.3
EBITDA (SEKm)(61.6)(43.6)(28.9)(30.0)
Source: Trinity Delta Note: Adjusted numbers exclude changes in the fair value of portfolio companies and exceptionals.
  • Continued execution of the new strategy Consistent with the disciplined strategy of the management, Promimic, Dilafor and Umecrine Cognition have raised sufficient capital to take them to the next value inflection points with the support of specialist life sciences investors. Karolinska Development also divested Clanotech to focus its resources on its most promising assets, while retaining upside from an earn-out agreement.
  • Companies making good clinical progress Aprea reported an objective response rate (ORR) of 50% in the Phase Ib trial with APR-246 in high grade serous ovarian cancer, this data highlights the potential of the drug, which has been advanced into the Phase II stage of the trial. Umecrine Cognition’s GR-3027 was well tolerated with target engagement in the Phase I study and is set to advance into Phase Ib/II in H117 for hepatic encephalopathy.
  • Novartis acquisition raises hopes for Modus Therapeutics Novartis has acquired Selexys for up to $665m for its sickle cell drug, SelG1, after reducing crises by half in a Phase II study. The ability of Modus’ sevuparin to reduce the time to resolve crises is being assessed in a Phase II trial, with data now due in H118 (without interim data). The likelihood of an exit comparable to that of Selexys for Modus will depend on the clinical data, but the Novartis deal shows that big pharma could be interested in buying Modus.
  • Share price yet to reflect advances by portfolio Our DCF valuation of Karolinska Development remains at SEK473m (SEK9.10 per share). This is a conservative valuation based on the investments in Aprea, OssDsign, Modus Therapeutics, and Promimic, with upside from the other six investments and earn-out agreements. There are no changes to our estimates.


23 November 2017

Price (SEK)6.10
Market Cap (SEKm)317.0
Enterprise Value (SEKm)443.8
Shares in issue51.7m
12 month range5.25-10.00
Free float100%
Primary exchangeOMX
Other exchangesN/A
Company CodeKDEV
Corporate clientYes

Company description

Karolinska Development has been successfully transformed into a leading life sciences investment company that is notably active in the Scandinavian region.


Mick Cooper PhD
+44 (0) 20 3637 5042

Franc Gregori
+44 (0) 20 3637 5041

Exhibit 1: Summary of financials
Source: Karolinska Development, Trinity Delta Note: Adjusted numbers exclude changes in the fair value of portfolio companies and exceptionals. Forecasts exclude potential investments or divestments.


Trinity Delta Research Limited (“TDRL”; firm reference number: 725161), which trades as Trinity Delta, is an appointed representative of Equity Development Limited (“ED”). The contents of this report, which has been prepared by and is the sole responsibility of TDRL, have been reviewed, but not independently verified, by ED which is authorised and regulated by the FCA, and whose reference number is 185325.

ED is acting for TDRL and not for any other person and will not be responsible for providing the protections provided to clients of TDRL nor for advising any other person in connection with the contents of this report and, except to the extent required by applicable law, including the rules of the FCA, owes no duty of care to any other such person. No reliance may be placed on ED for advice or recommendations with respect to the contents of this report and, to the extent it may do so under applicable law, ED makes no representation or warranty to the persons reading this report with regards to the information contained in it.

In the preparation of this report TDRL has used publically available sources and taken reasonable efforts to ensure that the facts stated herein are clear, fair and not misleading, but make no guarantee or warranty as to the accuracy or completeness of the information or opinions contained herein, nor to provide updates should fresh information become available or opinions change.

Any person who is not a relevant person under section of Section 21(2) of the Financial Services & Markets Act 2000 of the United Kingdom should not act or rely on this document or any of its contents. Research on its client companies produced by TDRL is normally commissioned and paid for by those companies themselves (‘issuer financed research’) and as such is not deemed to be independent, as defined by the FCA, but is ‘objective’ in that the authors are stating their own opinions. The report should be considered a marketing communication for purposes of the FCA rules. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and it is not subject to any prohibition on dealing ahead of the dissemination of investment research. TDRL does not hold any positions in any of the companies mentioned in the report, although directors, employees or consultants of TDRL may hold positions in the companies mentioned. TDRL does impose restrictions on personal dealings. TDRL might also provide services to companies mentioned or solicit business from them.

This report is being provided to relevant persons to provide background information about the subject matter of the note. This document does not constitute, nor form part of, and should not be construed as, any offer for sale or purchase of (or solicitation of, or invitation to make any offer to buy or sell) any Securities (which may rise and fall in value). Nor shall it, or any part of it, form the basis of, or be relied on in connection with, any contract or commitment whatsoever. The information that we provide is not intended to be, and should not in any manner whatsoever be, construed as personalised advice. Self-certification by investors can be completed free of charge at www.fisma.org. TDRL, its affiliates, officers, directors and employees, and ED will not be liable for any loss or damage arising from any use of this document, to the maximum extent that the law permits.

Copyright 2016 Trinity Delta Research Limited. All rights reserved.t