Interim Report Nine months ended September 30, 1999

Interim Report Nine months ended September 30, 1999 *A convertible debenture loan totalling SEK 24,992,261 underwritten by AB Traction (publ) will be issued. *Rescue Flow® wins final approval for sale in eight EU countries; negotiations continue with several presumptive distributors and licensees *Preliminary agreement reached concerning transfer of Krillase® project. *Net result for the period amounted to a loss of SEK19,514,000 (loss35,738,000)of which research and development costs amounted to SEK 14,368,000 (26,053,000). *New market-oriented organization now under development. Convertible debenture loan The Board of Directors of BioPhausia AB (publ) resolved on October 29, 1999, in accordance with authority granted by a Special General Meeting of shareholders on August 26, 1999, to raise a convertible debenture loan in a nominal amount not to exceed SEK 24,992,261 through an issue of convertible debentures. The loan will carry an average interest of 10% and falls due for payment on January 1, 2004. The conversion price has been fixed at SEK 4.25. The conversion period extends from July 1, 2000 through December 1,2003. At full conversion, the company's share capital will be increased by a maximum of SEK 14,701,330 through the issue of not more than 5,880,532 shares with a par value of SEK 2.50 each. A prospectus will be sent to shareholders during the week beginning November 29,1999. Complete terms and conditions of the loan are available at BioPahusias homepage, www.biophausia.se, and may also be ordered from the company RescueFlow® Final comfirmation of marketing approval for Rescue Flow® has now been received in Finland, Denmark, the United Kingdom, The Netherlands, France, Germany and Austria. Including Sweden, the product is now approved for sale in eight EU countries. Krillase® BioPahusia does not have the financial resources to conduct required studies to continue its pursuit of the Krillase® project. Ownership transfer of the project is subject to approval by Indutrifonden (the Swedish Industrial Development Fund). A preliminary agreement has been reached to transfer ownership to another company, and Industrifonden has expressed approval of the transfer. BioPhausia's agreement with Industrifonden regarding a conditional loan totalling SEK 20M, which was raised to finance the Krillase® project, is expected to be settled in conjunction with the project's ownership transfer. Negotiations regarding final agreements between the buyers and BioPhausia, and the buyers and Industrifonden, have not yet been completed. ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/1999/11/24/19991124BIT00220/bit0001.doc http://www.bit.se/bitonline/1999/11/24/19991124BIT00220/bit0002.pdf