Karolinska Development AB (publ) - Interim report January - June, 2011

STOCKHOLM - August 25, 2011. Karolinska Development AB (publ) announces publication of its Interim Report January - June, 2011. The full report is available on the company's website.

Torbjörn Bjerke, CEO, comments: "In April, Karolinska Development completed a public listing and a new share issue. The Group has SEK 740m in liquid assets, which is a strength given the renewed turbulence in the financial market.

During the second quarter, Karolinska Development made a number of significant investments, amongst other in Axelar, Akinion and Umecrine Mood. The plans for commercialization of the projects within the portfolio companies which we presented during the Spring remain firm. In Axelar, one of our companies in cancer treatment, intensive work is now under way to launch a clinical Phase II study in the Fall of this year, which is according to plan.

As a result of our continuous evaluation of the portfolio companies, resources are being shifted to priority projects. At the same time, the holdings in the preclinical companies IMED and Eribis Pharmaceuticals are being discontinued, as the projects in these companies failed to achieve the study results we had set out as a requirement and therefore no longer meet our criteria for further investment. Business development has been bolstered with additional resources, and discussions with potential partners and licensees for selected portfolio companies have been intensified. I look forward to continuing the progress of Karolinska Development and our portfolio companies that, according to plan, are estimated to reach several milestones during the second half of this year."

Today, Karolinska Development will host a conference call at 14.00 CET. Participant access numbers: +46 (0)8 505 136 43, UK: +44 (0)20 713 662 85, confirmation code: 6714371. The conference call can also be followed as an audiocast on www.karolinskadevelopment.com.

Significant events during the second quarter and after the end of the reporting period

• Karolinska Development was listed on NASDAQ OMX Stockholm on 15 April 2011 and issued shares - generated proceeds of SEK 608.0 m before issue costs.
• Axelar announced positive interim data from a Phase I/II study and after the end of the current reporting period, successful completion of the same study. During the reporting period, Axelar secured funding for its upcoming Phase II program in lung cancer and an additional share issue was approved in Axelar, after which Karolinska Development's interest in the company will be 49.8 percent. A new shareholder agreement gives Karolinska Development controlling influence in Axelar, which is consolidated as of the second quarter.
• Karolinska Development participated in a new share issue by Pergamum and Kurma Biofund co-invested with Karolinska Development in Umecrine Mood.
• The portfolio companies IMED, Eribis Pharmaceuticals and HBV Theranostica did not reach their required targets and were fully written down. Pergamum's associated company Omnio Healer was closed and fully written down. As a whole, this affected operating profit by SEK -66.2m and the financial net result by SEK -12.0m.

Group

*Investments affecting cash flow amount to SEK 131.7m for the reporting period and SEK 102.0m for the second quarter. Investment activity not affecting cash flow during the reporting period consists of SEK 84.1m in receivables which have been offset against shares and SEK 10.4m in investments which have been transferred to the associated company KCIF Co - Investment Fund KB.

 
For further information, please contact:
Torbjörn Bjerke, CEO, Karolinska Development
Phone: +46 (0)72 744 41 23, e-mail: torbjorn.bjerke@karolinskadevelopment.com

Gunnar Casserstedt, CFO, Karolinska Development
Phone: +46 (0)73 068 37 00, e-mail: gunnar.casserstedt@karolinskadevelopment.com

Benjamin Nordin, IR Director, Karolinska Development
Phone: +46 (0)73 093 60 80, e-mail: benjamin.nordin@karolinskadevelopment.com

TO THE EDITORS

About Karolinska Development
Karolinska Development aims to create value for investors, patients, and researchers by developing innovations from world class research 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 these 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. This will result in upfront payments, milestone payments and royalties.

An exclusive deal flow agreement with Karolinska Institutet Innovations AB, along with other cooperation agreements with leading Nordic universities, delivers a continuous flow of innovations.

Karolinska Development's flexible exit strategy enables projects to be exited at whichever stage of development offers the greatest return on investment, usually after Phase II clinical trials have indicated the desired pharmaceutical effect on patients - this being an important value enhancing step.

Today, the portfolio consists of over 35 projects at various stages, from concept development to Phase II clinical trials, twelve projects are in clinical trials. The portfolio is particularly strong in the areas of cancer, dermatology, inflammation, cardiovascular disease, women's health and diseases that affect the central nervous system. www.karolinskadevelopment.com