Merger strengthens Toleranzia’s prospects
Toleranzia and its major shareholder Flerie are proposing a merger, with Toleranzia’s assets living on in an unlisted environment. The merger will improve the ability to finance the continued development of Toleranzia’s drug projects while providing shareholders with a more risk-balanced exposure to Flerie’s broad portfolio. BioStock contacted Charlotte Fribert, CEO of Toleranzia, and Ted Fjällman, CEO of Flerie, to learn more about the deal.
In February 2025, Toleranzia received clearance from the regulatory authorities in Sweden and Germany to initiate the first clinical trial of the company’s lead drug candidate, TOL2, which is being developed as a new treatment for the autoimmune disease myasthenia gravis. The study is a Phase I/IIa trial to be conducted at several trial centres in both countries and patient recruitment is expected to start in the third quarter of 2025.
In October 2024, Toleranzia raised approximately SEK 37 million through a series of warrants, but to finance the entire Phase I/IIa study, additional capital injections into the company will be needed.
– We are convinced of the potential of our projects, but there is a real risk that we will not succeed in financing the continued development as a listed company in the current stock market climate,says Toleranzia’s CEO Charlotte Fribert.
– We have evaluated several financing alternatives and conclude that Flerie’s offer increases Toleranzia’s opportunities to access a strong capital base that creates the conditions for long-term development and growth. Through the merger, Toleranzia’s shareholders can continue following the company’s development journey while also benefiting from the value growth of Flerie’s broad and diversified portfolio.
Sees great potential
Fleries CEO Ted Fjällman also sees great potential in Toleranzia’s drug candidate TOL2 as a new innovative treatment for patients with myasthenia gravis and emphasises that the technology behind TOL2 could also be highly interesting for other indications if the study now initiated generates positive results. However, as the head of a life science investment company, he recognises that the stock market is not always the right place for research companies and their various development phases.
– The challenge with developing such innovative technologies as Toleranzia does is that it often takes a very long time because there is no well-trodden path. Ensuring proper production of the drug substance is a challenge, and interactions with regulatory authorities are often time-consuming, says Ted Fjällman.
– This means that it takes a lot of capital from long-term and specialised investors to have the stamina to overcome all the obstacles along the way. Right now, it is clear that the stock market is not the best place to find such capital, however, we see an interest in investing in Toleranzia from investors who only invest in private companies.
Wide network to support
Flerie invests and co-invests mostly in unlisted companies and has a wide network of specialist investors who focus exclusively on private companies. By delisting Toleranzia and taking the company into a private environment, he hopes to improve the prospects for future financing
– The merger will enable Toleranzia to attract financing in a private environment through our established network of specialised investors, which we believe is necessary to ensure sufficient resources until Toleranzia shows positive cash flow. For Flerie, the merger represents an opportunity to secure long-term ownership and create conditions for the continued financing of Toleranzia on attractive terms, says Ted Fjällman.
– We have worked extremely hard in recent years to get the TOL2 project to where we are now and finally, we can start evaluating the treatment in patients, says Charlotte Fribert. Both we in Toleranzia’s management and the board see that we need a long-term ownership that allows us to focus on generating clinical data that shows that our promising concept works in practice.
– It has become increasingly clear to us that our type of development project is challenging to pursue in a listed environment, while there is interest from investors who focus on private companies.
Through the merger, Toleranzia’s shareholders will instead become shareholders in Flerie. Ted Fjällman, can you briefly describe Flerie for those who are not already familiar with you?
– Flerie has a broad portfolio of innovative life science companies, both in the development and commercial phases, and we therefore have a fairly large news flow with milestones reached in the various companies. The life science industry is a highly interesting market, but at the same time it is associated with a binary risk when investments are made in individual biotech companies, says Fjällman.
– The public market also expects more news flow than an individual early-stage biotech company can deliver. Investing in Flerie gives shareholders the opportunity to invest across different development phases and in a wide range of therapeutic areas, which both balances risk and maximises exposure to breakthrough innovations.
The realisation of the merger plans is subject to regulatory approvals and the extraordinary general meetings of the respective companies. A delisting of Toleranzia from Nasdaq First North Growth Market is expected to take place in the third quarter of 2025 at the earliest. The Board of Directors of Toleranzia has unanimously recommended shareholders to vote in favour of the proposal.
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.
