The deal saw Recipharm stump up SEK8m (just under $1m) for a quarter share in Pharmanest. Co-investors Östersjöstiftelsen and Praktikerinvest paid previous owner Pharmanest owner Karolinska Development a further SEK20m.
The driver for the investment is topical formulation on the local anaesthetic lidocaine – known as SHACT – that Pharmanest is developing for the treatment of inter uterine device (IUD) pain.
Pharmanest CEO Gunilla Lundmark told us SHACT uses a proprietary thermogelling formulation that "minimizes leakage from application site. A proprietary single-use applicator allows for easy application of product in the cervix and the uterus just before the IUD insertion.
She went on to say it is "in late-stage development for lead indication in IUD insertion and the Phase II study demonstrated statistically significant pain reduction during IUD insertions" adding that "other indications such as hysteroscopies are also explored."
According to Pharmanest, the investment will fund submission of the drug for regulatory approval in Europe.
Recipharm was hired to produce commercial suppliers of both SHACT and an application device in July last year.
As a result of the investment, the Swedish contract manufacturing organisation (CMO) will receive pre-commercial revenues by providing Pharmanest with technical transfer and scale up services for future commercial manufacturing in its Karlskoga facility.
This was confirmed by Lundmark, who told us "Recipharm is Pharmanest’s development partner and tech transfer and scale up activities have been initiated."
Karolinska Development – founded as the investment arm of Sweden’s Karolinska Institute – has divested all its holdings in the firm, although it retains an economic interest through an earn-out agreement.