Yesterday morning, NeuroVive Pharmaceutical could release the biggest news of the year so far in the form of a financial show of strength. The company announced that leading life science investor Hadean Ventures is investing 20 million SEK in the company through a directed rights issue. BioStock took the opportunity to speak with NeuroVive’s CEO Erik Kinnman to hear more about the background to the investment and what it means for NeuroVive’s continued development.
NeuroVive Pharmaceutical, whose focus is on primary mitochondrial diseases (PMD), has decided to issue up to 27,892,888 shares in a directed issue of 20 million SEK to one of the real heavy weights on the Nordic life science scene. Hadean Ventures has undertaken to subscribe for the new shares at a subscription price that will range between SEK 0.70 – 0.75, and thus invest up to 20 million SEK.
NeuroVive raises nearer to 100 million SEK
In April, NeuroVive will also carry out a rights issue of circa 74 million SEK and that is guaranteed at 90 per cent of the value. The aim is to advance the company’s clinical development. It is thus worth noting that in what can only be described as a very unstable market, NeuroVive is able to raise almost 100 million SEK through the two issues, something that must be seen as a real show of strength.
In yet another sign of confidence in the company, yesterday also saw the announcement that NeuroVive’s board and management subscribe for shares in the ongoing issue. The decision to carry out a directed issue to Hadean Ventures also means that the subscription period in the current rights issue has been extended to April 29 (the initial closing date was April 24).
Investment from a big player
For NeuroVive, yesterday’s news also means that the company now can count one of the major players in Nordic life science among its owners. Founded in 2014, Hadean Ventures invests in life science companies throughout Europe but with a particular focus on the Nordic countries. The head office is in Oslo, but the firm also has an office in Stockholm.
The company manages capital from leading European and American private and institutional investors and also has partnerships with reputable academic institutions and start-up clusters in the Nordic countries.
Active owner and a new board member
Hadean Venture’s intention is to be an active owner in NeuroVive and it has been proposed that Dr Roger Franklin be elected as a new board member at the Annual General Meeting in May. In Dr Franklin, NeuroVive gains another experienced and reputable board member. Dr Franklin, who is also a partner in Hadean Ventures, studied biochemistry at the University of Oxford. He completed doctoral studies in oncology at the University of Cambridge and has more than a decade of experience in the venture capital, finance and consulting industries.
In a press release, Roger Franklin stated that he looks forward to the collaboration and sees great potential for NeuroVive:
We at Hadean are extremely excited to be making this announcement today. We believe NeuroVive has huge potential to address the very significant unmet need for effective treatments in the primary mitochondrial disease space where patients currently have few options. With the lead program already in human clinical studies and a Phase II study due to start next year, as well as a second asset due to enter the clinic in 2021, this is a time of major opportunity for the company. During our evaluation, I have been impressed with both the programs and the management team and look forward to working with Erik and the team to build NeuroVive into a major player in the PMD space.
Seal of quality for NeuroVive’s work
Hadean’s decision to invest in NeuroVive comes after a careful evaluation of the potential of both the company and its individual projects. Hadean was obviously impressed with what they found, and for NeuroVive the investment is undoubtedly an important mark of quality for the work they have done so far and for the updated strategy they announced last autumn.
In October, NeuroVive announced that instead of spreading its resources over a number of projects, going forward it will focus mainly on its two projects within primary mitochondrial diseases. This was a natural choice as the company has long been a leader in mitochondrial medicine and, with twenty years of experience in the field, possesses considerable internal expertise.
The company’s main project KL1333, against MELAS and similar conditions, already has orphan drug designation in both the US and Europe and the plan is to initiate a phase II study in 2021. The other candidate, NV354, against Leigh syndrome, has shown positive results in preclinical studies and the goal is to enter the clinical phase next year. Hadean Venture’s investment not only indicates that NeuroVive is on the right track with its focus on mitochondrial medicine, but also means that the company now has even greater opportunities to advance its candidates to market.
BioStock took the opportunity to ask CEO Erik Kinnman a few questions about Hadean Ventures’ investment.
Erik, first and foremost, congratulations on the good news! Can you tell us a little about how and why NeuroVive caught the eye of Hadean Ventures?
-Thank you! Yes, we have had interactions with Hadean for some time. They have done a thorough deep dive into NeuroVive, our strategy, and, above all, our projects KL1333 and NV354 in primary mitochondrial disease. Their analyses have obviously been positive and resulted in an investment decision.
Hadean Ventures’ investment and the ongoing rights issue mean that you intend to raise almost SEK 100 million in total. How will the money be distributed?
– The main part will go to KL1333 to complete the ongoing phase Ia/b study, and to prepare KL1333 for phase II, which we plan to start in the first half of next year. The remainder will be spent on preparing NV354 for a first phase I study next year, and other costs in the business.
Hadean Ventures is a well-established player in the life science industry. What does it mean to you that they have now validated your work in this way?
– It’s obviously a signal of strength for us that an actor like Hadean makes the decision to invest. That we will now have a reputable and long-term specialist in life science as an owner and on the board is positive for the company’s development and for how other institutional investors view us.
In addition to Hadean’s apparent interest in you and drug development within mitochondrial disease, Astellas has also recently demonstrated its interest in the field through the acquisition of Nanna Therapeutics, whose platform will be used to advance Astella’s work in mitochondrial biology. What does this tell you about the progression of the mitochondrial area in general?
– For several years, we have seen that the interest in drug development related to mitochondrial function has increased rapidly in both common and rare diseases. Astella’s acquisition of British Nanna Therapeutics and previously of American Mitobridge confirms this.
Right now, you are also carrying out a rights issue. Will the targeted issue be in any way affected by the outcome of the rights issue?
– The targeted issue is conditional on the subscription rights issue being subscribed to at least 90 per cent (it is guaranteed at 90 per cent).
What happens if the volume weighted average share price falls below SEK 0.70 during the period June 1 and June 12?
– Hadean can still invest at SEK 0.70, or we can renegotiate the terms.
Hadean Venture’s investment also means that you will get a new board member in the form of Roger Franklin. Was this a mutual decision, and what do you expect Dr Franklin to contribute to the board’s work?
– We have recently gotten to know Roger and we are very impressed by his knowledge and his interest. His experience, expertise, and network will be a strong addition to the board and will help develop the company and our projects, as well as build value.
Finally, what milestones can we expect from NeuroVive in the coming year?
– Our nearest milestone, which we are really looking forward to, is the initiation of the patient part in the ongoing KL1333 phase Ia/b study, provided that the Covid-19 situation has stabilised. Furthermore, we continue to prepare KL1333 for the start of phase II, and prepare NV354 for the start of phase I. Finally, we are working on getting non-dilutive financing of NeuroSTAT’s phase II and to start a subsidiary in the USA around the project.
The content of BioStock’s news and analyses is independent but the work of BioStock is to a certain degree financed by life science companies. The above article concerns a company from which BioStock has received financing.