Umecrine Cognition is one of KDventures’ largest holdings; what makes the company unique?
What makes Umecrine Cognition particularly interesting is its focus on central fatigue and cognitive impairment. These highly burdensome symptoms occur across many diseases, but there is still a lack of effective treatment options. Central fatigue is a pronounced form of exhaustion and brain fog that cannot be relieved by rest. The company’s work is based on the hypothesis that these symptoms are driven by neuroinflammation. In preclinical models of PBC and Parkinson’s disease, the company has shown that it can reverse neuroinflammation, supporting further clinical development. The ongoing PBC study is therefore an important proof-of-concept study, both for the drug candidate and for the broader treatment concept.
KDventures is participating in Umecrine Cognitions new share issue, and in connection with that, writing down the book value of the portfolio company. Why is that?
This is fundamentally a question of how we, in accordance with our valuation principles, should report unlisted holdings. In connection with the current financing round, an external and independent valuator has provided an assessment regarding the instruments used in the round. Based on this, we are adjusting the book value of the underlying share.
At the same time, it is important to be clear that the write-down is not due to any negative company-specific development. Umecrine Cognitions' study is progressing according to plan, and the company is expected to complete the study shortly. Our view is therefore that the adjustment primarily reflects accounting and valuation principles related to the financing round, rather than a changed view of the company's operational development.
What will the financing be used for?
The financing is intended to take Umecrine Cognition through the ongoing clinical study to data readout. In companies at the clinical development stage, it is common for capital to be raised in stages, as the need can change during the course of the study, depending on factors such as recruitment rate, study design, or other practical considerations.
In this case, the study is continuing according to plan, and our assessment is that the round should cover the remaining needs to complete the study and generate data, provided that work continues to progress as well as it has so far, and that the interim analysis, which ensures statistical power, at the end of June does not show that the study needs to be expanded.
When are top-line results from the ongoing study expected, and what is your strategy for realizing value in the company?
Our primary focus right now is to complete the ongoing study, which primarily means enrolling the required number of patients.
Regarding value realization, the strategy is to first create as strong and clear a data package as possible. If the study shows positive results, we expect significant external interest in the company. Umecrine Cognition addresses an area with major medical need, and there is also potential in several other indications, either with the same drug substance or with related substances based on the same treatment concept.
In such a scenario, value could be realized in several ways, for example by licensing the substance to an industry partner or through a sale of the entire substance or project. Our assessment is therefore that a clear and positive clinical data package is the key value driver for opening up such strategic opportunities.
