Welcome to the Q2 report from Flerie. I welcome you from all your different locations around the world and Sweden from your holiday locations. Thank you for joining. For those of you who are Swedish speakers, perhaps you had the chance to see the interview with Dagens Industri Television this morning as well. Let us get right into it. We, of course, have the usual disclaimer that I hope you will all follow. Today we're talking about not only the Q2 report, but the fact that it is in fact an anniversary of our IPO. We have done a lot. We have much to show. The 27th of June was our one-year anniversary exactly going on to the main market after the reverse merger that we did earlier that month in June 2024.
There has been a lot of portfolio progress and also some financial innovation, I think, that we would like to share with you, something quite unique that some of you have asked us about. We're happy to answer questions on any details you are curious about. Let's go straight into the current net asset value and firepower. I think we have not only held, but actually strengthened our position as a top-tier European investment company with very significant assets totaling SEK 4.1 billion. That's a SEK 52.78 per share net asset value per share. We have SEK 737 million in cash and cash equivalents. I think we have managed to cash very, very well since our IPO a year ago. We still have SEK 9.44 per share out of the SEK 52.78, which is cash. We will invest that and continue to invest that in our exciting portfolio.
Over time, as you will see on the following slides, to keep that diverse portfolio, we will also make new investments. This is our portfolio at the moment. There's been significant progress in the portfolio. As you can see, actually 93%, if you look at the lowest row there, 93% of our fair value lies in the clinical and commercial stages. Again, I want to highlight that we are a mature investor with a mature portfolio when it comes to venture and early commercial growth investments. Before I go into some of the clinical stage and commercial, I want to point out Strike Pharma on the left, which is a preclinical company, because recently there have been big M&As announced for AstraZeneca and AbbVie. They bought Eso Biotec in Capstan for $2.1 billion in an area that actually Strike Pharma is active in.
Even though we pride ourselves in having a mature portfolio, it is important to start early with companies like Strike Pharma to identify the correct areas where there is interest from global pharma and to develop those companies over time. That is how you get the best return of investment in our view. Let's go over into the clinical-stage phase one. I'd like to highlight Microbiotica and Prokarium. These are actually our two U.K. investments. They both happen to be microbial therapies, and they're actually the only two true microbial therapies in the portfolio, an area that was actually hyped a long time ago, especially microbiome. We never followed that hype in the sense that we exploited or went in during the hype of, for example, the microbiome investments. We actually focus on those companies that have very, very good science, have done things systematically.
Microbiotica and Prokarium are certainly two cases of that. Microbiotica was originally spun out of the Wellcome Sanger Institute in the U.K. That's a very reputable institute where they did a very systematic approach to looking at how microbes and microbial therapy can influence oncology, but also ulcerative colitis. We continue the trend of working on ulcerative colitis for those of you who have invested in that space before. Prokarium has also progressed and now dosed four cohorts in their bladder cancer study. Both companies are in the oncology space and Microbiotica is also in the ulcerative colitis space, two hot areas where there's a lot of global pharma interest. We continue to work with them and all of our other portfolio companies to have interactions with pharma. Let's also move over into phase II. I want to highlight EpiEndo.
That actually is an Icelandic company with some team members in the U.K. as well. They have managed very well with their cash to actually do a phase II study without needing to raise further funding. I'm very proud of all of our companies in that regard, having actually done a lot with very little. I think that's one of our strengths as a European entity. Many of our companies are European, all but three actually. I also want to highlight Empros Pharma. That's our Swedish metabolic company, one of two Swedish metabolic companies that we have. Empros has started their phase III preparatory study and done something quite unique. They have been very tough in their sort of clinical development, meaning they have set themselves high bars to reach compared to some of their competitors.
I think that's important in a small company because you want to get to a clear answer quickly. What Empros is now doing is they're actually taking back some of the patients from the previous study that had side effects. I want to remind everyone that the great majority of patients did not see these side effects. Empros again is doing a tough thing. They're actually bringing back those patients that had side effects, meaning the patients that had the worst time on the previous clinical trial. That's a feat in itself to attract those, to convince those patients, please come back, do the same thing again. This time we're going to remove your side effects. That is the data that we hope to get later in the autumn. Empros is also in an exciting phase. We will talk a little about Xspray later.
We'll also talk about some of the other companies in the following slides. The commercial growth, I want to point out that Nanologica has had several orders, mostly from Asian customers, but also customers from other areas. I will talk a little bit about Symcel in the slides to come. Last but not least, Frontier, that's our collaboration with KKR. I'm sure many of you have heard of KKR. That's one of the biggest private equity houses in the world. We're looking at several interesting opportunities where our partner, Mark Quick, and our Chairman, Thomas Eldred, are involved in looking at interesting opportunities to invest. Let's first talk about Toleranzia. That's actually a financial innovation that I'm very proud of. The team has done a good job doing this in a very methodical way, but also a very innovative way.
In May, Flerie and Toleranzia shareholders approved a merger plan between the two companies. That's an innovation in itself. If you look at the right-hand side, this is a share-for-share merger. Toleranzia shareholders receive one newly issued share for every 88 Toleranzia shares. There are zero transaction fees here. Normally, when you do an M&A, you will have to pay some cash. You will have to pay banks and so on. We've actually been able to do an innovative, very effective way of taking Toleranzia from the public market, delisting Toleranzia in what I call a take-private maneuver. That take-private maneuver is something that many people speak about, but few people actually do because there are companies that really shouldn't be on the public markets because they're too small. They don't get onto the radar of the big public market investors. That was the issue with Toleranzia.
We wanted Toleranzia to be able to raise funding for their clinical trial. That's what they now will hopefully be able to do. We think they have a much better chance of doing so. To the left-hand side, we value the company at $136 million. That was a 50% premium on the pre-announcement trading price. We will have it all done by the 19th of August. That's when the shareholders of Toleranzia will become Flerie shareholders. Toleranzia will be a wholly owned Flerie subsidiary and be able to raise money in a private manner. We know that there are investors who are interested in Toleranzia, but who were not able to invest in Toleranzia as a public entity.
It's very exciting also to announce, and this is written in our quarterly report released this morning, of course, that current and new investors were able to essentially invest in Flerie and will become Flerie investors on the 19th of August. We were able to sell both during the quarter and shortly after the quarter, a total of over SEK 65 million of our holdings in Toleranzia. This has been a very effective, cost-effective way of raising money. We actually raised SEK 65 million when our deployment into the portfolio was SEK 58 million, where our deployment in total during the quarter was around SEK 65 million. Overall, a neutral cash position for the quarter. Again, a testament to our ability to manage our cash in an innovative way. Let's look at the core of what we do. The significant R&D events during the quarter were Atrogi, KAHR , and Lipum.
There are many more, just choosing three here to highlight. Atrogi's research was published in Cell. Cell and Nature are basically the two top-ranking scientific journals in the world. Usually, these are not reserved, but usually it's the top-tier academics that are able to publish in those journals. Here you have a company, a relatively small company in Sweden, that has something so innovative that they were able to publish in that journal. That is, of course, their muscle-targeted therapy platform for treating metabolic diseases. It's an exciting time for Atrogi. It's a new mechanism of action. That's why it's gained so much attention. Keep your eyes peeled for Atrogi. KAHR is our company in the Middle East and in Israel, to be particular. They have announced positive phase II results for DSP107. That's a name for their colorectal cancer therapy.
They're presented at the prestigious ASCO conference, a conference where you rarely get presentation abilities unless you are really cutting edge. Last but not least on this slide, Lipum completed a phase I trial. This is a Swedish company, a listed Swedish company in rheumatoid arthritis. They actually are also continuing their mechanism of action studies with the Karolinska Institute. For those of you who are dialing in internationally, I'm sure you've heard of the Karolinska Institute. Lipum is a not-so-well-known publicly listed company in Sweden doing very exciting research and now standing in front of basically a phase II development program. Now let's go into financing events. Two that I want to highlight. Symcel raised SEK 80 million. We invested SEK 18 million out of those SEK 80 million. This is an example of how our syndication, our networking abilities actually really pay off.
I remind everyone that we have managed well to support our companies not only with our own cash, but also by us working within our network to attract both money from internals in the case of Symcel, but also in many companies we have attracted new investors. That was the case with NorthX Biologics. In fact, there we attracted the New York-based Cigna Healthcare Partners. They're active within pharma services. Not only did we not invest more cash or new cash ourselves, but actually this was an up-round in a very tough fundraising climate, as you know. A testament to the team at NorthX Biologics and to the board members who are working from Flerie 's side on NorthX. Staying with NorthX, it's one of the three that has had the most change in value.
NorthX in an ascending order here, SEK 13 million, Mendus SEK 19 million, and XSpray a whopping SEK 134 million up during the quarter. Back to NorthX, this is now a fair value of SEK 202 million. That's 6.5% of our fair value or portfolio value. Mendus is SEK 92 million fair value, 3% of our fair value in total. XSpray is now one of our, it's actually the second largest company in our portfolio now with SEK 326 million and a share of fair value of 10.5%. Now I leave it to Cecilia to go into some more details on the numbers. Hey, Cecilia.
Thanks. Yes, thank you, Ted. I will take you through the financial development in the quarter. Those of you who already read the report know that the quarter is characterized by positive share price development for almost all our listed companies. Also, as Ted just mentioned, there was an increased valuation for a private portfolio company. Let's look at the numbers. Thank you. Our net asset value was SEK 4.121 billion at the end of Q2 and SEK 3.947 billion at the end of Q1. That's an increase of SEK 174 million in the quarter, mainly a result of the share price development for the listed portfolio companies. NAV per share was SEK 52.78 as compared to SEK 50.56 at the end of the last quarter. That's an increase of SEK 2.22 per share.
As you can see in the chart to the far right, the portfolio value went from SEK 2.9 billion in Q1 to almost SEK 3.1 billion at the end of Q2, an increase of SEK 220 million. The increase is explained by, firstly, a positive change in fair value, SEK 175 million. That, of course, increases the portfolio value. We also had divestments, as Ted mentioned, that decreased the portfolio value by SEK 20 million in the quarter. We've also made investments in the portfolio of a total of SEK 65 million into the three segments. With that, let's look at the segments in more detail. In the boxes, we highlight the key numbers for the three segments: product development, commercial growth, and limited partnerships.
The total fair value of the product development or PD segment at the end of the quarter was SEK 2.453 billion as compared to SEK 2.270 billion at the beginning. That's an increase of SEK 182 million. The change in fair value in the segment was positive, SEK 163 million. The changes come from our listed companies where we could see positive development for all six listed companies in the segment, with the largest increase, as we already saw, from XSpray and Mendus, for which the value increased by SEK 134 million and SEK 19 million respectively. We've also made investments into the segment in the quarter. The most significant ones were in Atrogi, SEK 21 million, and SEK 10 million in AnaCardio. Then we've had divestments of Toleranzia shares that decreased the portfolio value by SEK 20 million.
Continuing to the commercial growth or CG segment, we see a total fair value at the end of Q2 of SEK 545 million as compared to SEK 518 million at the beginning of the quarter, an increase of SEK 27 million. We saw positive value changes in the quarter, SEK 8 million in total for the segment. This was primarily related to, as we heard, the higher valuation for the private company NorthX Biologics following their share issue in May, which was an up round. That increased our fair value of the company by $13 million. Meanwhile, the share price development for Nanologica, a listed company, was slightly negative, decreasing the segment fair value by $5 million. We also made investment into this segment in the quarter, mainly in Symcel by $19 million.
Finally, we have the limited partnership segment, the smallest one, 3% in terms of fair value. At the end of the quarter, the fair value was $96 million. We've made investments into our funds by $7 million in the quarter, and the fair value increase was $4 million. That ramps up the financial performance in the quarter. We can continue with a few words on our redemption program for which we've now had the first conversion period. As you most probably know, since last year, we provide a share redemption scheme where up to 5% of all the shares can be redeemed annually at the value of the latest NAV per share. At the end of June, we had the first conversion period, and the outcome showed a participation rate of 4.73%. This is below the maximum, but shows a strong interest from shareholders.
With a participation rate of more than 5%, we would have had to reduce the number of shares to be redeemed, therefore not allowing the shareholders to redeem all their submitted shares. We are glad that that was not the case. We can see, from the outcome, that many smaller shareholders participated in the redemption. We know that we inherited many smaller shareholders from the reverse merger with Index. On the process, in the beginning of July, the board of Flerie resolved to convert all the submitted shares to C shares. Earlier today, the Flerie board also resolved to redeem all C shares. Therefore, all C shareholders will now receive a payment equivalent to the reported NAV per share at Q2. That is 52.78 SEK per share. As you can see, that was 16% above the share price at the same date.
With that, the redemption process is therefore almost completed. The record date for the redemption has been set to 13th of August, and the redemption proceeds will be started to be paid out on the 18th of August from that date. Thank you. This redemption scheme was created to provide for our shareholders the annual opportunity for liquidity. This is the first time we implemented the program, and the high participation shows that the opportunity was really well received. That wraps up the financial section, and I hand over back to you, Ted.
Thank you, Cecilia. Sorry, I moved that slide a little too early on you. Thank you for the walkthrough of the redemption scheme. We will soon get to the Q&A that will be led by our Investment Manager, Karl Elmqvist. Let me just finish on this slide and tell you about our share price development compared to two indices. Here on the slide, you can see in blue the Flerie line, in dark orange, the Nasdaq Biotechnology Index, and then in the more sort of lighter brown, sandy colored, the Swedish investment company index called IB Index. Just to explain a little bit, obviously, you can see here that we have outperformed both of these indices. The NBI actually includes biotech and pharma companies engaged in R&D as well as commercialization and is often used by investors around the globe to track the overall biotech sector performance based on U.S.
Nasdaq listed companies. I'm very happy to say that from the 27th of June, when we start this comparison to the end of June of this year, so 27th of June 2024 to 30th of June 2025, we have outperformed the National Biotech Index in the U.S. We have also outperformed the Swedish investment company index, IB Index. That is a different comparison because this compares investment companies across very different fields. These are not only life science investment companies, and actually, they are slightly larger than us, certainly on average, but also the minimum amount to be able to be included in the index itself is a $5.5 billion net asset value. Some investment companies there are actually smaller than $5.5 billion, but they're included in the index because they were above $5.5 billion in a previous time when they were included in the index.
Overall, I could say that I'm very proud of this. I think it's been a difficult year for very many, especially in this time where, in this macroeconomic time, when the interest rates are high, that usually impacts biotechnology negatively because investors tend to shy away from more risky assets during high interest times. I'm again proud to say that we've actually outperformed both of these indices over the year. This really completes our kind of coming out of the cradle, you know, having been a listed company for one year. I think we are now very happy in everything we do as a listed company. Let's go over to Q&A, and we will let Karl explain how you can get the microphone switched on.
Thank you, Ted, and welcome to today's Q&A session. If you have a question, please click on the raise your hand icon in the toolbar, and I will then activate your microphone so that you can ask your question. We'll start off with a question from Linus Sigurdson. Let me just activate your microphone.
Yes, thank you. I hope you can hear me all right.
Yes.
I just wanted to ask firstly on the second half of the year, and if you could talk about the visibility that you have on your own investments, but also investments from your co-investors, and if you see it as a higher or maybe a lower rate of investments as compared to the first half of the year. Thank you.
Okay, Cecilia, do you want to just comment on our investment rate? I'll fill in on the sort of overall outlook.
Certainly. We said many times, or at least through the year historically, that we aim to deploy around 10% of NAV. That's what we have been doing. This is over time. We can see now for the last 12 months that we have a deployment rate of around 8% of NAV. This is something that we are managing and looking at all the time. Currently, it's a bit lower.
As you could see in the last quarter, we invested SEK 65 million, or particularly SEK 58 million, into the portfolio other than the LP segment. During the quarter and shortly after the quarter, we sold Toleranzia shares worth SEK 65 million. When it comes to the actual quarter, in the sense of deployment, it's our most neutral quarter ever. We certainly have that within our toolbox, Linus, to manage our cash in that way. We do see that there are good opportunities to invest in our companies. In general, what we do is we invest our pro rata, and when it is a down round, we generally invest less than our pro rata. If it is an up round, that's a simple mechanics of how we want to function. We invest early in companies.
We stay with the companies as long as we provide value in terms of our board engagement and helping the companies to have conversations with global pharma and so on. We get out of the company when we've done our job, they've reached a major inflection point. I think key new deployments into a lot of new companies will happen when we have an exit out of our companies. Having said that, right at the beginning of our slideshow today, I mentioned that we have this collaboration with KKR. We are actively looking at opportunities to invest with KKR into more of the sort of private equity pharma services type of investments. Yes, we do continue to make new investments as well. Does that answer your question?
Yes, I appreciate those comments. My second question was, I thought it was interesting what you said in the report around Strike Pharma and the acquisitions that you highlight in the market. Could you just expand a bit on sort of how similar or dissimilar the potential is there to those acquisitions that you mentioned? Thank you.
Yeah, sure, with pleasure. They're both in the sort of cell biology, cell therapy, and biologics space. Strike Pharma is an Uppsala-based company that's also changed their labs to the south of Sweden. They're doing a lot of work in the space of sort of, and they have a new platform, you could say, that's similar to an antibody platform, but actually an improved, what's called an ADAC platform. What they're able to do is actually to deliver various things. For example, they could deliver nanoparticles for RNA delivery. They can deliver peptides. They have actually a platform ability to deliver things, which is not that different from this kind of silencing siRNA that's being delivered by Capstan. Eso Biotech is also in a similar space. I would say like this, I think antibodies have obviously come into a mature field.
You know, antibody investments are now sort of run-of-the-mill investments. There are a lot of people who will just invent another antibody for a similar target, and there might be actually a space for that in a new therapy area. What is really, really exciting is the delivery ability of things that are otherwise not easy to be delivered. In the case of Capstan, they fetched such a big price because they're able to do intracellular delivery. For those of you who are not biologists in the audience, you know, you can deliver drugs into the body and it circulates, but actually delivering a drug that enters into an individual cell is quite a hot area at the moment. Actually being able to even change then the cells that you go into, so you're essentially modifying the very cells.
You're getting a cell therapy, but without having to take the cells out of the human body and then put them back in, which is very expensive and very cumbersome. That's a very hot area, and Strike Pharma is able to act within that area. That's why we think it's just a case in point that we're investing in the future areas that are of interest to global pharma.
Okay, thank you very much. Those were all of my questions.
Thank you, Linus. Do we have any other questions?
While we wait on the other questions, I think we could, Cecilia, maybe say something about Nanologica. It's something we haven't commented that much on, but there have been some questions about the bid that we've made on Nanologica. Do you want to explain to the audience while they're waiting?
Absolutely. Yeah, sure. In April, we bought a few extra shares in Nanologica, and thereby we triggered a mandatory bid. Flerie previously had an exemption from the mandatory bid that could arise from participation in a rights issue of units that Nanologica carried out back in 2024. Just by buying these extra shares, this exemption lapsed, and we had to submit a mandatory bid, which we did in May, of SEK 1 per share. The offer period ended after the quarter ends. It ended in mid-July, and it resulted in less than 300,000 shares being submitted for purchase. In July, we have paid SEK 300,000 for those extra shares, and we are very pleased with the outcome. The move of buying shares and triggering this mandatory bid was entirely made for us to obtain more flexibility.
We did not intend to increase our holdings in Nanologica, but we wanted to be more flexible as a shareholder going forward. We will still remain positive about the company and look forward to following them on the journey to growth and profitability.
That's precisely it. We think that Nanologica has a bright future, and sometimes we are prevented, if we are large shareholders in a company, to act in any way possible to join a future round and so on. I think we've done this before. I know we've done this before, so I just want to mention we've done it in Lipum. We've done it in Centella. We've done it in Toleranzia even. This is actually a mechanistic way of, of course, following the rules, but essentially trying to correct what we think makes a large and active shareholder like us unable to act in the best interest of the company because of the rules preventing us from having to do a mandatory bid. If this happens again, I think you will see that we are acting in the best interest of the company when we do this kind of thing.
We're very happy, as Cecilia said, that it worked out the way it did for Nanologica and for Flerie. Any other questions in the audience? Otherwise, I think that we're actually at the end of the time. I thank you very much for your questions and wish you a continued pleasant summer.
Thank you.