Interim Report 1 January – 30 June 2005

- Clinical phase I/IIa studies have been started for the drug candidate BI-201 against HIV infection. - Preclinical data further supports the claim that BI-201 minimises the risk of resistance development. Extended in vitro tests show that BI-201 did not allow resistance to develop after having inhibited the virus for 30 weeks. - Through a licensing agreement with Cambridge Antibody Technology, BioInvent has secured the right to use phage display technology to develop products from n-CoDeR. - Production of material for the toxicology programme within the thrombosis project has started. - Net revenues for January-June 2005: SEK 14.8 million (29.0). - Cash flow from current operations and investment activities for January – June 2005: SEK -52.3 million (-54.1). Liquid funds at the end of the period: SEK 122.7 million (214.6). - Loss after tax for January – June 2005 amounted to SEK -78.4 million (-44.7) and the loss after tax per share was SEK -2.66 (-1.52). Comments by the CEO We have reported several important events during this period; each of them representing important milestones for the Company. In June the first patients received the first dose of BI-201 for the treatment of HIV infection. This phase I/IIa study encompasses HIV infected individuals that have not yet received any other form of treatment. The primary objective is to study the safety of the drug candidate BI-201, how well it is tolerated and its pharmacokinetic properties. Another important objective of the tests is to study the effects of BI-201 on the level of the virus in the patients’ blood. We expect the results of the studies to be presented during the second quarter next year. Through the design of the study we may within a year, at a cost manageable for the Company, have an important indication of how effective BI-201 may be. There is a great need for new approaches to effectively meet the challenge that HIV represents. BI-201 has the potential to be developed into just such an alternative. To avoid the Company becoming too dependent on the success of any one individual project, we have deliberately moved our other projects forward in the value chain. We are currently running six projects based on various biological mechanisms. Apart from BI-201, drug candidates have been selected for the toxicology programmes in two other projects. Within the thrombosis project the development of the cell line that will produce the material is complete and production of the material for the toxicology programme has begun. We are sticking to our plan of initiating these studies during the second half of the year. Through the licensing agreement we entered into in June with Cambridge Antibody Technology combined with the licenses we acquired earlier, we have secured the right to use all relevant parts of phage display technology to develop products from n-CoDeR. These agreements mean that we have eliminated the risk that could have arisen if the objections we raised at the European Patent Office against the patents licensed at this time had not had a successful outcome. We can now focus all of our resources on the commercialisation of our products and technology. With the terms we managed to negotiate, this alternative proved to be very attractive. Moving our projects forward in the value chain will have a negative impact on our results in the short term due to the increased costs associated with our development activities. The result in the second quarter is also affected by a success-related milestone payment to the originator of the patents that protect BI-201.