Karolinska Development AB – Interim Report January - September 2015

STOCKHOLM - November 17, 2015. Karolinska Development AB (Nasdaq Stockholm: KDEV) today publishes its interim report January - September 2015. The Company will host a conference call and webcast today at 14.00 CET - details below. The full report is available on the Company’s website.

Jim Van heusden, CEO, comments: “We are making significant progress in executing our strategy as we work towards our medium-term goal of becoming a leading Nordic Venture Capital company.

“I am also pleased with the progress being made by our current portfolio companies. Both Dilaforette and Aprea have announced important clinical development milestones, while Promimic is starting to demonstrate the value of its unique coating technology for implants with its recent deals with S.I.N and Amendia. We also participated in the new financing round of OssDsign - a clear statement of our continued belief in the company as well as an important example of our core strategy to pro-actively syndicate our investments with recognized specialist investors in important medical innovations. Over the remainder of the year I am confident that we will continue to report further important developments from our portfolio companies as we work to demonstrate and realise the true value of Karolinska Development’s portfolio.”

Karolinska Development – Q3 Highlights

• Continuing to execute our strategy, which is focused on transforming Karolinska Development into a leading Nordic Venture Capital Company.

• Karolinska Development announced in July that it has adopted a more prudent and representative approach to reporting the fair value of its portfolio, which was implemented in the Q2 report.

• Total Fair Value of the portfolio increased by SEK 44.4 million to SEK 723.2 million during Q3, reflecting the investments made by Karolinska Development during the period. When adjusted for potential distribution to Rosetta Capital IV LP, Net Fair Value increased by SEK 31.9 million to SEK 351.8 million.

• Following the divestment of Pharmanest and XSpray Microparticles, the streamlining of our portfolio has further progressed, allowing resources to be used to support the portfolio companies with the best chances of delivering attractive returns to our shareholders, such as the follow-on financing of OssDsign announced in November.

Portfolio Developments – Q3 Highlights

• Divestment of Pharmanest in July to an investment consortium comprising Östersjöstiftelsen, Recipharm Venture Fund and Praktikerinvest in an earn-out agreement. Consortium will finance Pharmanest to obtain market approval of its localized pain management product.

• Umecrine Cognition announced the publication of preclinical results of the candidate drug GR3027 aimed for the treatment of hepatic encephalopathy (HE), demonstrating a unique reversal of key neurological symptoms in two preclinical HE animal models of the disease.

• Divestment of XSpray Microparticles in September to an investment consortium led by Östersjöstiftelsen and Recipharm Venture Fund in an earn-out agreement. Consortium will finance XSpray Microparticles to its next value inflection point.

• Aprea strengthened its Board by electing Bernd R. Seizinger as Executive Chairman in July.

• In September, Promimic, announced a strategic partnership with Sistema de Implante Nacional (S.I.N.), a leading provider of dental implants in Brazil. The collaboration includes an extensive development program and a license to S.I.N. to use Promimic’s innovative HAnano Surface technology with their dental implants.

Post period events

• Dilaforette initiated a Phase II clinical trial with sevuparin in patients with sickle-cell disease (SCD) in October. The Phase II study is a multi-center, double-blind, placebo-controlled study in hospitalized SCD patients experiencing a vaso-occlusive crisis. The trial results are anticipated in H2 2016.

• In October, Promimic signed a strategic agreement with Amendia Inc. (US) that will allow Amendia to develop Promimic’s HAnano Surface technology for use with its patient-focused spinal implants.

• Aprea presented updated preliminary data from its ongoing Phase Ib/II clinical study in ovarian cancer at the European Society for Gynaecological Oncology congress (ESGO) in Nice, France, in October. The data presented suggest that APR-246 can be combined with standard chemotherapy and the preliminary efficacy data indicate that the combination regimen has encouraging activity in the treatment of recurrent ovarian cancer.

• OssDsign raised SEK 93 million in an equity financing led by new investors SEB Venture Capital and Fouriertransform with continued investment from Karolinska Development and KCIF Co-Investment Fund. The proceeds will be used for the European market expansion of OssDsign’s product line of unique craniofacial implants based on an innovative material technology with excellent biological and biomechanical properties. The recent financing round in OssDsign will have a modest positive impact on Karolinska Development’s Total Fair Value, which will be reflected in the 2015 Year-end Report. Furthermore, Karolinska Development retains a significant ownership (28%), illustrating our strong belief in the company.

Financial Update

• Investments in portfolio companies during Q3 amounted to SEK 44.0 million.

• Cash, cash equivalents and short term liquidity investments decreased by SEK 55.0 million during Q3 and amounted to SEK 328.4 million as of end September 2015.

• Total Fair Value of the portfolio increased by SEK 44.4 million to SEK 723.2 million in Q3, reflecting the investments made by Karolinska Development during the period. When adjusted for potential distribution to Rosetta Capital IV LP, Net Fair Value increased by SEK 31.9 million to SEK 351.8 million.

• Net loss amounted to SEK 27.5 million during Q3 (SEK – 119.2 million during Q3 2014).

Conference Call and Webcast

The Company will host a conference call and webcast today at 14.00 CET. Please dial in at one of the following numbers a few minutes before the start of the conference call:

• From Sweden: +46 (0) 8 505 564 74
• From the US: +1 855 753 22 30
• From the UK: +44 (0) 20 336 453 74

The presentation will also be webcast and can be accessed from the following web address: http://edge.media-server.com/m/p/f2tn96kp Host: Jim Van heusden, CEO.

For further information, please contact:
Jim Van heusden, CEO, Karolinska Development AB
Phone: +46 72 858 32 09, e-mail: jim.van.heusden@karolinskadevelopment.com

Christian Tange, CFO, Karolinska Development AB
Phone: +46 73 712 14 30, e-mail: christian.tange@karolinskadevelopment.com

David Dible/Mark Swallow/Pip Batty, Citigate Dewe Rogerson
Phone: +44 20 7638 9571, e-mail: kdev@citigatedr.co.uk

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