Two of Sweden’s national pension buffer funds have invested in a biotech firm developing a treatment for cancer.

AP1 and AP4 have backed Cantargia, a Swedish company that is working on an antibody treatment for cancer, via a directed share issue.

AP1 confirmed that it would subscribe for shares equivalent to SEK30.9m (€3.1m) in the company, as part of a total directed share issue of SEK101m.

The biotech firm is raising new capital via two parallel rights issues, with the first of these in the form of a directed share issue, inviting specific non-shareholders to participate.

The other leg of the rights issue is aimed at raising SEK131m, with previous owners entitled to subscribe for new shares.

In the first issue, AP1, AP2 and AP4, along with Nordic Cross Asset Management and Handelsbanken Läkemedelsfond, have been invited to participate, according to a notification from Cantargia.

Jannis Kitsakis, portfolio manager at AP4, confirmed that it took part in the share issue, describing it as a fairly small investment in an early phase of the company. AP4 would hold less than 5% of the company.

“The investment is made into our internally-managed small cap portfolio,” he said.

AP4’s small cap mandate spanned across sectors with no particular focus on biotech, he added.

“However, we are constantly looking out for promising investments across sectors, and during the most recent years, there has been an inflow to the stock market of promising, well run and well capitalised companies within the biotech sector,” Kitsakis said.

A spokeswoman for AP1 said biotech was not necessarily a particular focus for the pension fund, but it invested broadly across sectors globally.

“We believe that Cantargia has a strong early-stage product candidate, that in combination with a strong patent position creates an interesting investment proposition,” she said.

In August, Cantargia obtained patent approval in Europe for the antibody CAN04 in development for the treatment of cancer.

AP2 has not commented on whether it will participate in the share issue.