LUNDBECKFONDEN BIOCAPITAL

BioCapital is the Foundation’s evergreen life science venture fund. The fund creates and finances biotech companies based on pioneering research with the potential to deliver significant innovation to patients in areas of high unmet medical need.

After 10 years of operating two independent biotech investment units, each with its own mandate and investment focus, 2022 saw the creation of a new, combined unitLundbeckfonden BioCapital. BioCapital has a new and larger investment mandate, a portfolio of 20 Danish and international companies, and a focus on creating and investing in Danish biotech companies.

2022 was a challenging year for the biotech industry as a whole. While valuation of BioCapital’s portfolio suffered, many companies continued to perform well, reaching important clinical or regulatory milestones, with others successfully raising capital to continue the development of their pipelines.

In an eventful year, NMD Pharma secured Orphan Drug Designation for its lead compound, reported positive top-line data from a Phase I/IIa study in myasthenia gravis patients, and raised EUR 35m in a new financing round. The funds will enable the company to expand into other neuromuscular diseases, including spinal muscular atrophy. Finally, the year ended with NMD Pharma winning the ‘EY Entrepreneur of the Year 2022’ award in the life sciences category.

Elsewhere in the portfolio, IO Biotech initiated a pivotal study in first-line treatment for advanced melanoma, building on its successful Phase II study. Expanding the range of indications, the company also initiated a clinical trial in several other solid cancers. Both studies are being conducted in collaboration with Merck. Capping off a successful year, Mai-Britt ZoccaIO Biotech’s CEO - won the women-led-business award at the European Lifestars Awards.

SNIPR Biome reached a significant milestone by dosing its first human subjects in a Phase I clinical trial with its lead product, an orally administered CRISPR-based therapeutic to prevent bloodstream infections caused by fluoroquinoloneresistant E. coli. Meanwhile, Vesper progressed its lead candidate - a small molecule sortilin inhibitor - into preclinical development, with the first-in-human studies expected to commence in 2023.

Lundbeckfonden BioCapital continued to support the international portfolio, which also performed well, with several companies providing positive updates from regulatory submissions or ongoing studies, or raising capital from the public and/or private markets, despite the challenging market conditions.

During the year, scPharmaceuticals received FDA approval for FUROSCIX® (furosemide injection), the first selfadministered, subcutaneous loop diuretic for at-home treatment of congestion in chronic heart failure. The FDA approval was followed by a successful public fundraising of USD 50m and additional loan financing to fund the US launch of the product. Meanwhile, Trevi Therapeutics presented positive and statistically significant results from Phase II studies in two separate indications: chronic cough in idiopathic pulmonary fibrosis, and prurigo nodularis - a chronic inflammatory skin disease characterised by extreme itching. Building on these successes, Trevi raised a combined USD 113m in a subsequent financing round.

Aura Biosciences, Lexeo, Reneo and Enterome all presented positive updates from ongoing studies in choroidal melanoma, Alzheimer’s disease, fatty acid oxidation disorders, and glioblastoma, respectively. Aura Biosciences capitalised on positive interim results from its ongoing Phase IIb study in choroidal melanoma by raising USD 87m, which will fund a pivotal study. Demonstrating the versatility of its platform, Enterome built on its successful oncology programmes and added a strategic R&D collaboration and licence agreement with Nestlé Health Science. The deal included EUR 40m in a combined upfront payment and equity investment.

Finally, 2022 also witnessed two corporate transactions involving companies from the portfolio. In March, Acacia accepted an offer to be acquired by Eagle Pharmaceuticals. Eagle will continue to market Acacia’s two products Barhemsys, for post-operative nausea and vomiting, and Byfavo, for procedural sedation. Later in the year, Imara Therapeutics, a Nasdaq-listed company, merged with Enliven, a private, clinical-stage company developing small molecule cancer drugs. The merger followed the sale of Imara’s lead compound to Cardurion Pharmaceuticals.

Financial Results

BioCapital’s investments in existing companies amounted to DKK 276m. The net return for the year was DKK -565m, versus DKK -141m in 2021. The negative result reflected the substantial negative share price development during the year in the US public biotech market.

At year-end, the BioCapital portfolio comprised 20 companies, of which, eight were listed. The fair market value of the portfolio was DKK 1,682m at 31 December 2022, compared to DKK 2,478m at the end of 2021. The complete portfolio is listed to the right and on the following page.

Public Portfolio Companies

Aura’s first product candidate, the laseractivated AU-011, is currently being investigated in a Phase IIb study for the treatment of patients with small-tomedium primary ocular melanoma.

Markets a portfolio of drugs in oncology and critical care, including two drugs developed by Acacia: Barhemsys, for post-operative nausea and vomiting, and Byfavo, for procedural sedation.

Enliven is focused on developing small molecule kinase inhibitors to treat cancer. The company currently has two compounds in Phase I.

IO Biotech develops disruptive cancer immune therapies, directing the immune system to target cells expressing so-called ‘checkpoints’. This allows the immune system to directly engage with otherwise ‘cloaked’ malignant cells. The combination of the company’s lead programmes, IO102 and IO103, currently in late-stage clinical development, has been granted US Food and Drug Administration (FDA) ‘breakthrough therapy’ designation in combination with anti-PD-1 antibodies for patients with unresectable metastatic melanoma.

In clinical trials in genetic mitochondrial diseases with a drug that enhances mitochondrial function and potentially increases the number of mitochondria.

Launching a proprietary subcutaneous furosemide formulation for heart failure diuresis that is delivered via an easy-tooperate, on-body infusion pump

A multi-asset, clinical-stage pharmaceutical company, focused on identifying, developing and commercialising novel treatments for multi-drug resistant (MDR) bacterial infections.

Trevi Therapeutics is engaged in the latestage development of Haduvio™ (nalbuphine ER) for the treatment of pruritus in prurigo nodularis, and in chronic cough for patients with idiopathic pulmonary fibrosis.

“The launch of Lundbeckfonden BioCapital is a key step for us to deliver on our ambitious 2030 strategy. The new fund will enable us to increase our impact on the Danish Biotech ecosystem, building on the strong foundation created by entrepreneurs, scientists and investors such as the Lundbeck Foundation over the last couple of decades.”

CHRISTIAN