In the past year, investment company Flerie Invest has almost doubled the number of life science companies in its portfolio, which currently holds about 30 companies. A driving factor is that the man behind the company – Thomas Eldered – sold his entire holding in the successful company Recipharm in 2021, thereby freeing up significant capital for new investments. BioStock talked to Thomas Eldered about his investment strategy.
Flerie Invest is an investment company based in Stockholm and London with active ownership in growth-stage life science companies. Flerie Invest is controlled by Thomas Eldered, co-founder and former CEO of Recipharm – a global leading Contract Development and Manufacturing Organisation (CDMO) in the pharmaceutical industry. Since Recipharm was sold to EQT in 2021, Eldered has focused on investing in new potentially successful companies.
Flerie Invest’s portfolio includes both unlisted companies such as Atrogi, Empros Pharma and Symcel as well as listed companies such as Toleranzia, Nanologica, Egetis Therapeutics, Eurocine Vaccines, XSpray Pharma, Lipum and Xintela.
Mentioned earlier in BioStock
BioStock has previously mentioned Flerie Invest on several occasions, for example when the company chose to acquire all of Almi Invest‘s shares in Lipum in 2021. The same year, Flerie Invest also became owner in Toleranzia via a directed share issue, which Thomas Eldered commented on in an article.
In September this year, Flerie Invest decided to increase its holding in Lipum via a directed issue where they subscribed for shares corresponding to approximately 25 million SEK. Flerie Invest is thereby the largest shareholder in Lipum with approximately 28,3 per cent of the shares and votes.
Shortly before that, Flerie Invest also increased its holding in Xintela to 34 per cent, and thereby exceeded the limit for mandatory bidding. A public takeover bid was announced at the end of August, but the Board of Directors in Xintela advised shareholders to decline due to the company’s future potential and that Flerie Invest did not have the ambition to acquire all shares. As a result, only 6.7 per cent of the shares and votes were tendered in the offering. Flerie Invest’s holding in Xintela thus amounts to 40.7 per cent.
Investments in NorthX Biologics’ innovation hub
Another of Flerie Invest’s major investments is NorthX Biologics, which develops and produces advanced biological drugs, such as gene and cell therapies. BioStock recently interviewed NorthX Biologics’ newly appointed CEO Helena Strigård at Nordic Life Science Days in Malmö – watch the interview here.
NorthX Biologics was established following Flerie Invest’s 455 million SEK acquisition of Cobra Biologics facility in Matfors from Charles River Laboratories in October 2021.The pharmaceutical facility has a production area of 7000 sqm and is specialised in DNA and protein production.
The company constitutes an innovation hub for process development and large-scale production of drugs in collaboration with biotech companies and research groups, which strengthens Sweden’s position in life science according to Jenni Nordborg, National Coordinator for Life Sciences, in a press release:
»Through the investment in the innovation hub in Matfors, we will be able to maintain the production and development of new drugs in Sweden, which is an important piece of the puzzle for building Sweden’s position as a leading nation in life science.«
Swedish innovation agency Vinnova has also supported the establishment of the innovation hub with approximately 50 MSEK.
Invests in solutions to medical problems
Flerie Invest not only invests in Swedish companies – the portfolio also consists of companies based in the US and other countries in Europe and Israel. These include Vitara Biomedical, which is developing a fluid-filled incubator for premature infants, and Geneos Therapeutics developing personalised cancer vaccines, both US companies. The portfolio also includes two Dutch companies: Amarna Therapeutics, which develops gene therapies, including treatments for haemophilia, based on a completely new viral vector that can enable repeated dosing, and Synerkine Pharma which is developing a novel class of drugs with application in chronic pain, osteoarthritis and other areas.
With a total of 32 companies in the portfolio, Flerie Invest seems to have covered potential solutions to some of today’s biggest medical challenges. Flerie Invest can contribute to their success by providing the companies with the financial resources and expertise required to take their projects further.
BioStock contacted Thomas Eldered to find out more about Flerie Invest’s investments.
Flerie Invest continuously invests in new projects, more than usually in 2022. Is this solely due to the capital injection from the sale of Recipharm, or are there other reasons for your accelerated investment rate?
– The increased pace has been possible due to the strengthening of the Flerie team. Carl-Johan Spak, PhD and I built up Flerie Invest from 2011 and onwards, but in 2021 and 2022 the team was strengthened with Ted Fjällman, PhD, Karl Elmqvist, MD and Mark Quick, MBA. Together with a network of external specialists, we can now do deeper and broader due diligence activities and with that, we can be active owners in more companies.
– The team has seen many opportunities over the past year and especially in the recent period when valuations have gone down in many companies despite very promising development projects. It has been difficult for many development companies to find new investors. Our access to capital has made it possible to help companies in this situation and make more investments than we would otherwise have done.
»The team has seen many opportunities over the past year and especially in the recent period when valuations have gone down in many companies despite very promising development projects«
How much has Flerie Invest invested so far in 2022?
– Just over 1 billion SEK in new and existing companies in our portfolio. We are now happy with our 32 companies in the portfolio, so the investment rate will go down slightly.
What are your criteria when investing in a life science company?
– The scientific basis and the degree of innovation are very important. We are mainly looking for projects or companies that are pioneers in an important area. It should be in an area that we feel comfortable with or where we have access to experts in our network who can help us to evaluate. For example, we do not make any investments in digital health as it is an area in which we know very little about and which also has a completely different business model. Our main focus is drug development, but we have also made some investments in medtech/diagnostics lately, however, in areas that follow a similar development plan as pharmaceutical companies.
»The scientific basis and the degree of innovation are very important. We are mainly looking for projects or companies that are pioneers in an important area.«
– The team is very important. Competence, achievements and experience can often be crucial. Perseverance and drive are important qualities that make the team cope when times are tougher. Our industry is a long-term industry.
– We are also looking at other investors and owners in the company. We like to invest together with like-minded investors, Swedish as well as foreign. Normally, we aim for a 10-40 per cent stake, enough to take a board seat – we are not a passive investor.
– It is an advantage if we can see collaboration opportunities or synergies between companies. A clear example is NorthX Biologicals, which already helps sister companies with process development and GMP manufacturing.
– We would like to invest in more commercially growing companies – i.e. companies that have passed the development stage and started selling their product or service. This commercial growth segment balances our large product development segment to some extent.
What investment horizon do you generally have when investing in a company?
– Our strength, compared to for example VC funds, is that we invest from our balance sheet without a general investment horizon and thus can be long-term value creators. But it is important to point out that we are impatient. Innovative medicines can be revolutionary for patients and we would like to look for ways to speed up development. We want to build solid companies that can be taken all the way to the market and to the patient, even if an acquisition by big pharma and exit is necessary.
»Our strength, compared to for example VC funds, is that we invest from our balance sheet without a general investment horizon and thus can be long-term value creators.«
Are there companies in your portfolio that you want to highlight a little extra, and if so, why?
Atrogi – a brand new mechanism of action for treating type 2 diabetes – huge market but with competition, partnering deal is possible after phase I results. Can become a completely new class of drugs.
Empros Pharma – has developed an oral treatment for obesity that is in late clinical development phase. The treatment provides equally good weight loss and has few side effects compared to competitors, that in many cases need to be injected.
EpiEndo Pharmaceuticals – clinically tested new molecule that can be applied to many chronic lung diseases by strengthening the lung epithelium.
Prokarium – has developed a bacteria that counteracts bladder cancer in the early stages and that can completely replace today’s standard of care (BCG).
Symcel – a medtech company that has developed an instrument that can measure bacterial metabolism and thus identify different bacteria much faster than today’s methods – great application in hospitals (and in research labs).
What will your investment strategy look like going forward?
– We will continue to invest in Sweden and abroad, thereby attracting foreign capital to Sweden to benefit the ecosystem and our existing companies through co-investments.
»We will continue to invest in Sweden and abroad, thereby attracting foreign capital to Sweden to benefit the ecosystem and our existing companies through co-investments.«
– Compared to 2022, we will have more focus on building value in the existing portfolio in 2023, but there will probably be some new investments in innovative companies.
– We see that the manufacturing of biological drugs is an industry of the future, in particular cell and gene therapy. Therefore, we will continue to invest in NorthX Biologics to meet the needs in process development and manufacturing in Sweden and the Nordic region, but also attract customers from other countries in the world. This will benefit the entire pharma ecosystem in Sweden.