Karolinska Development celebrates financial results

Karolinska Development, the investment firm established by Karolinska Institute, booked an annual profit of SEK303m ($32.4m) in 2019, a sharp increase from $3.4m in the previous year.
The profit reflects a $41m portfolio gain for the fourth quarter largely attributed to the listing of Karolinska Institute-founded cancer drug developer Aprea Therapeutics, which completed a $97.8m initial public offering in October 2019.
Other highlights included a licence and collaboration deal between drug maker Novartis and its University of Turku-founded gynaecological therapy investment Forendo Pharma.
Karolinska Development’s total portfolio value reached $166m at the end of the period, an increase of $57.9m quarter-on-quarter and $64.4m on an annual basis.
The unit invested just $5.2m in its portfolio companies over the course of 2019, compared with $14.1m in 2018. Its annual revenues grew slightly from $350,000 to $364,000.
The performance represents further good news for Karolinska Development after the unit announced last month it had managed to renegotiate its debt load.
Under the agreement, Karolinska Development paid a nominal sum of $2.1m to clear a $53.3m convertible loan issued in 2015, having satisfied the remainder with a directed share issue.
In addition, Karolinska Development’s cash position has significantly improved having teetered on the verge of distress last year, climbing by $3.8m over the course of the quarter to reach $5.6m, although that was still down from $9.2m at the end of 2018.
Viktor Drvota, chief executive of Karolinska Development, said: “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.”