Flerie Invest continues to support Lipum
Flerie Invest is Lipum’s largest shareholder and holds over half of the company’s shares. The investment company recently demonstrated continued support by participating in Lipum’s rights issue and subsequently granting a loan commitment of SEK 20 million. BioStock contacted Flerie Invest’s CEO Ted Fjällman and Senior Advisor Carl-Johan Spak to learn more.
Flerie Invest is a prominent investment company with active ownership in Swedish and global life science companies. The portfolio consists of around 30 companies, with Thomas Eldered as the majority owner, known as the co-founder of the contract manufacturer Recipharm.
Flerie Invest’s portfolio comprises both listed and unlisted companies in pharma and biotech. One of the companies is Lipum, listed on the Nasdaq First North Growth Market. Flerie Invest has been a major shareholder in Lipum since 2021 and has participated in all of the company’s capital raisings since then. Currently, the investment company owns approximately 56.7 per cent of the shares and votes in the company.
Intense phase
Lipum is developing a biologic drug candidate, SOL-116, with a novel mechanism of action for the treatment of chronic inflammatory diseases. Right now, the company is focusing on completing the clinical phase I study with SOL-116 and simultaneously preparing for phase II in patients with rheumatoid arthritis (RA). In addition, the company is exploring the target molecule Bile Salt-Stimulated Lipase (BSSL), its mechanism of action, and other potential indications for SOL-116.
To finance this, Lipum recently conducted a rights issue that was subscribed to 42.6 per cent, thereby raising approximately SEK 79.7 million. Flerie Invest subscribed to its pro rata share of the rights issue.
Loan commitment of SEK 20 million
Additionally, Flerie Invest has granted a loan commitment of 20 million SEK with a term of 12 months. The agreement has been signed on market terms and will take effect on June 1, 2024.
– We are in a very intense phase with the completion of the clinical phase I study as well as we intend to start the planning of a phase II study. At the same time, we run several preclinical initiatives where we need flexibility in optimising the execution. With this loan commitment, we get a security to carry out the activities without unnecessary delay. I am very pleased with the support we receive from our major shareholder Flerie Invest, says Lipum’s CEO Ola Sandborgh.
During the spring, Flerie Invest also passed the threshold for mandatory bid and thus made a public offer for the remaining shares for SEK 6.6 per share. Lipum’s Board of Directors recommended the shareholders to not accept the mandatory offer, and only 1.22 per cent of the shares were tendered in the offer.
Flerie Invest’s CEO Ted Fjällman responds
To find out more about Flerie Invest’s engagement in Lipum, we contacted Ted Fjällman, who has been CEO of Flerie Invest since the beginning of 2023.
Flerie Invest became a major shareholder in Lipum in 2021. How do you view the progress the company has made since then?
– Since 2021, Lipum has been delivering according to plan, successfully entering the clinical phase with very good results. It has been satisfying to witness the first part of phase I where the company has demonstrated that SOL-116 has a very good safety profile. We were also very pleased to see that SOL-116 can reduce the target protein BSSL to non-measurable levels. Now we eagerly await the final results from the multiple dose part of phase I and, of course, results from RA patients.
What led Flerie Invest to invest in Lipum?
– We found from the beginning, and still do, that Lipum has a very exciting concept aimed at truly helping patients with rheumatoid arthritis. Although there are many approved therapies in this area, there is a great need for new and improved treatments, and furthermore, Lipum’s technology can be adapted to similar diseases. Many patients still do not receive adequate help from current treatments. Additionally, we believed that Lipum’s research and development work was at a high scientific level. It should also be noted that this area within autoimmune diseases is receiving positive attention in terms of funding and M&A activity internationally.
You are now giving Lipum a loan commitment of SEK 20 million. Why have you choosen this solution over other forms of financing?
– The company has just completed a rights issue on favourable terms, and we took our pro rata share. Lipum received approximately SEK 80 million, which is sufficient to continue scaling up manufacturing in partnership with NorthX Biologics, and other activities. However, we would have preferred to see bit more capital raised to create flexibility as the company prepares its phase II programme. With this loan commitment, we wanted to provide a simple and fast solution so that Lipum’s team can continue according to plan and deliver good results in a timely manner, as they have done so far.
Earlier this spring, Flerie Invest made a public takeover offer for Lipum after having increased the shareholding and thus exceeded the mandatory bid threshold. Could you tell us a bit more about that decision?
– We have not had any ambition to take over the entire Lipum ownership. Since our shareholding was already above 30 per cent before the rights, it would require a waiver from the mandatory bid obligation at each subsequent financing opportunity. For practical reasons, we chose to make a bid to avoid this issue in the future. We were not particularly surprised that so few shareholders wanted to sell to us and that the board did not recommend our offer.
Carl-Johan Spak looks forward to final study results
BioStock also contacted Carl-Johan Spak, who is a senior advisor at Flerie Invest, and elected to Lipum’s board in 2023.
Carl-Johan, you have been on Lipum’s board since May 2023. How has it been working with Lipum’s board and management?
– It has been a pleasure working with both management and the Board. Lipum has a very competent management team with both strong scientific and business expertise. With Einar Pontén, Lipum had a very good CEO, and we achieved a very smooth transition with Ola Sandborgh taking over as the new CEO.
What are you looking forward to Lipum achieving in 2024?
– I am primarily looking forward to seeing the final results from Lipum’s phase I study, especially the part involving RA patients. Additionally, I hope to see a strong partnership develop between Lipum and its new CMC partner, NorthX Biologics.
Finally, how do you plan to continue supporting the company on its journey forward?
– I will do my very best as a board member, and I believe that my experience from numerous boards within Life Science/Biotech and a long career in the pharmaceutical industry can contribute to this.
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.
