Organon acquires Karolinska Development’s portfolio company Forendo Pharma at a total purchase price of USD 945 million provided fulfilment of all milestones
11 November 2021 - 10:30PM
Organon acquires Karolinska Development’s portfolio company Forendo
Pharma at a total purchase price of USD 945 million provided
fulfilment of all milestones
STOCKHOLM SWEDEN – November 11, 2021. Karolinska Development AB
(Nasdaq Stockholm: KDEV) announces today that the global
pharmaceutical company Organon is acquiring its portfolio company
Forendo Pharma. Forendo Pharma's shareholders will receive an
initial payment of USD 75 million and are entitled to additional
future payments totaling USD 870 million upon the achievement of
certain development, registration and commercial milestones
pertaining to Forendo Pharma's drug candidates. The total purchase
price, if all milestones are met, amounts to USD 945 million.
Forendo Pharma's most advanced drug candidate, FOR-6219, is a
clinical stage asset being developed for the treatment of
endometriosis – a chronic disease associated with severe abdominal
pain and infertility, affecting up to 1 in 10 women of childbearing
age.
Under the acquisition agreement, the shareholders of Forendo
Pharma will receive an initial payment of USD 75 million. In
addition, there are conditional payments totaling USD 270 million
linked to milestones in the development and registration processes
for the company's drug candidates, and additional payments totaling
USD 600 million linked to commercial milestones. The completion of
the transaction is subject to review by competition authorities and
other customary conditions. The transaction is expected to close in
December 2021.
“Organon's acquisition of Forendo Pharma is one of the largest
biotech transactions in the Nordic region, hence emphasizing the
strength of Karolinska Development's long-term strategy for value
creation. We are pleased and very proud to have contributed to
Forendo Pharma's successful development of drug candidates with
potential to improve the lives of millions of women worldwide. The
fact that Organon, one of the leading global women’s health
companies, has chosen to invest large resources in taking these
drug candidates further towards the market underlines the
scientific height and quality of the company's projects,” comments
Karolinska Development's CEO Viktor Drvota.
Karolinska Development estimates the risk-adjusted net present
value (rNPV) of future cash flows, including the initial payment,
from the transaction at SEK 114 million, with a positive effect on
net profit of SEK 70 million and a consequential increase in the
portfolio company's fair value of SEK 70 million in the third
quarter 2021. The additional purchase consideration is expected to
be paid during the period 2024–2034, and renewed rNPV valuations
will be performed continuously in connection with Karolinska
Development's future quarterly reporting.
Organon & Co. (NYSE: OGN) is a global pharmaceutical company
focusing on improving the health of women throughout their lives
and was formed through a spin-off in May 2021 from Merck, (NYSE:
MRK) known as MSD outside of the United States and Canada. Organon
is headquartered in the United States with approximately 9,000
employees and the company's sales revenue in 2020 amounted to
approximately USD 6.5 billion.
Karolinska Development's total ownership in Forendo Pharma,
including indirect holdings via KCIF Co-Investment Fund, amounts to
9.7%.
For further information, please
contact:
Viktor Drvota, CEO, Karolinska Development AB Phone: +46 73 982
52 02, e-mail: viktor.drvota@karolinskadevelopment.com
Johan Dighed, General Counsel and Deputy CEO, Karolinska
Development ABPhone: +46 70 207 48 26, e-mail:
johan.dighed@karolinskadevelopment.com
TO THE EDITORS
About Karolinska Development ABKarolinska
Development AB (Nasdaq Stockholm: KDEV) is a Nordic life sciences
investment company. The company focuses on identifying breakthrough
medical innovations in the Nordic region that are developed by
entrepreneurs and leadership teams. The Company invests in the
creation and growth of companies that advance these assets into
commercial products that are designed to make a difference to
patients' lives while providing an attractive return on investment
to shareholders.
Karolinska Development has access to world-class medical
innovations at the Karolinska Institutet and other leading
universities and research institutes in the Nordic region. The
Company aims to build companies around scientists who are leaders
in their fields, supported by experienced management teams and
advisers, and co-funded by specialist international investors, to
provide the greatest chance of success.
Karolinska Development has a portfolio of ten companies
targeting opportunities in innovative treatment for
life-threatening or serious debilitating diseases.
The Company is led by an entrepreneurial team of investment
professionals with a proven track record as company builders and
with access to a strong global network.
For more information, please visit
www.karolinskadevelopment.com.
This information is information that Karolinska Development AB
(publ) (Nasdaq Stockholm: KDEV) is obliged to make public
pursuant to the EU Market Abuse Regulation. The information was
submitted for publication, through the agency of Viktor Drvota, at
12:30 CET, November 11, 2021.
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