Overview

Our Approach is to capture the hidden value in academic research and exploit its unrealized potential for the betterment of human health through commercial development.

As an early investor we aim to be the lead investor and to maintain a significant position in our portfolio companies until exit, capitalizing on the value appreciation generated by bringing very early projects at seed stage to proof of concept. For a pharmaceutical product this may mean taking it through clinical phase II and for a medical technology product, taking it to the market before partnering it out. Each exit strategy and timing will be unique to the product and business situation. We do not have predetermined exit points; we are able to make further investments if appropriate, to achieve the optimum exit point, for both owners and innovators.

We have one of Europe’s largest life science portfolios containing around 40 companies of which three already have products on the market; four have compounds at phase II; and six at phase I. The aim is to list Karolinska Development AB on the stock market at a suitable time after 2010 pending market conditions.

We are an active investor, providing both industrial experience and competence, along with the capacity to provide financing for both the very early seed stage and the later development phases. We also take an active role in the companies in which we invest.

Being the leading investor in most of the companies in our portfolio, we are an important investor, and members of the Karolinska Development management team are heavily engaged in the management of these companies. We are not a silent investor. We are a very active owner; we support and influence our portfolio companies significantly.

We are able to draw on a wide network of experts from the pharmaceutical industry both in Sweden and abroad, with many hundreds of experienced people with backgrounds from drug discovery, development and clinical trials. This network of consultants is continually growing and can be used over and over again in our companies ensuring the companies are run by business experts and enabling the researchers to focus on the science.

During the early stages, portfolio companies are managed as virtual organizations using professional product management, where competencies are acquired on a task related need basis.  The progress of the portfolio companies is overseen by a board consisting of the inventors, industry professionals, with both commercial and technical experience and an investment manager from Karolinska Development.

Financing of the portfolio companies is milestone driven, investments being earmarked for particular goals. By operating as a lean organization with a deep understanding, both commercially and technically, of our portfolio companies and their markets, we are able to make fast, competent decisions.

This is a highly cost effective development model, functioning through a vast network of individuals with both management and operational skills, these individuals work very much ‘hands on’ in the portfolio companies, minimizing development time and inefficiencies, and avoiding excessive costs.

We welcome co-investment with other investment organizations, and aim to secure long range financing to ensuring thriving companies and a rewarding return on investment.

The system for the commercialization of scientific discoveries that we have created is unique in the world and is designed to create new job opportunities and to have scientific research put to practical use in the healthcare sector.

The Karolinska Development organization shows that it is living up to our goals, bringing projects to the clinic quickly and cheaply. With investments in around 40 companies, and about 50 per cent ownership of most of them, we have not invested more than 450 MSEK [€48m]. Three of these companies are in the process of marketing their first products, while eight companies are carrying out clinical trials.

We will expand our portfolio of companies by five or six new companies each year, while on average two companies each year will be wound down.

The risk in each of our projects is limited by the business expertise within Karolinska Development, our structure and having a significant portfolio. This structure also creates consolidation opportunities, with five projects in wound healing, eight projects in cancer, and six in inflammation we can utilize the know-how from a scientific, a development and a commercial point of view in these general areas.

The knowledge economy is emerging globally as a primary economic driver; we will enable a continuous stream of new commercially viable companies to develop based on products, resulting from Nordic academic research and innovation. This will provide a whole range of job opportunities, which will in turn improve both the local and national economy.