Interim Report January-September 2009

Key figures, SEK thousands • Net sales 508 (275) • Operating earnings -9,226 (-13,970) • Net profit/loss for the period -9,390 (-10,134) • Earnings per share SEK -0.7 (-1) • Comprehensive income -9,395 (-10,013) • Comprehensive Income per share SEK -0.7 (-0.98) • Cash flow from current operations -16,742 (-13,568)

Important events during the quarter •Genovis’ board and management have decided to halt the planned divestment of the so called protein portfolio, and will instead collaborate with partners for production and gobal sales of products derived from antibody modifying enzymes. •Genovis has a distribution agreement with Bulldog Bio Inc. Bulldog Bio is focusing on selling products using their own technical expertise combined with instant support, and to build new trademarks on the American market. •Genovis has completed negotiations regarding shortage of labour in accordance with the Swedish MBL Act, which means that three individuals leave their positions at Genovis. Through this action the staff costs are expected to be reduced with approx. 37%. •Genovis’ new share issue closed on the 30th of September and was over-subscribed with 102%. The directed share issue of 7 033 233 shares was subscribed at 61% based on subscription rights. Through this share issue Genovis received approx. MSEK 7 before the costs of the share issue, the number of shares increased from 14 066 466 to 21 099 699 and the share capital from SEK 5 626 586,40 to SEK 8 439 879,60. Events after Q3 •Genovis has as of October 30 acquired all shares in Eijdo research AB. The acquisition is an essential step in Genovis’ strategy and it strengthens the company’s opportunities to build a market for its nanoparticles in medical research. The capital contributed in kind the company received against payment of partly SEK thousand 200, and partly newly issued shares, has an estimated value of SEK million 4,7 and will be entered at that value in the balance sheet of Genovis AB. The non-cash issue of 1,690,140 shares related to the acquisition of Eijdo research AB is has been registered at the Swedish Companies Registration Office. This non-cash issue means that the number of shares increases from 21,099,699 to 22,789,839 and the share capital increases from SEK 8,439,879.6 to SEK 9,115,935.6. •Genovis has signed an agreement with QED Bioscience for distribution of products from the protein portfolio. The agreement means that QED Bioscience will sell all products for modifying antibodies in the US and through 17 distributors in Europe and Asia, which gives Genovis a broad base to increase visibility and customer contacts. QED is based in California, USA, which is the single most important market for Antibody Engineering in preclinical research. QED Bioscience is expected to generate sales in during 2010. CEO comments During the period we have executed the organizational changes required following our resolved cost reductions and the strategic decisions. We have also looked ahead through by integrating Eijdo research AB into our operation, so that we can, as of 1st October; function as one team within the business areas where we see distinct synergy advantages. As regards sales during the period, which is still at a modest level, we gave priority to increasing distribution of all our products on the American market through our partners, Bulldog Bio and Finnzymes, while we at the same time decided not to operate through a subsidiary of our own in the US. In Q309 Genovis management took the strategic decision not to divest the rights to the so called protein portfolio. This decision has led to, among other things, a newly signed agreement with QED Bioscience regarding non-exclusive global distribution of these products which offers a focused effort to reach the defined customer group and to increase sales, while we at the same time maintain the rights to the products and to their development potential. During the period we also carried out a new share issue which was heavily over-subscribed, and I am very happy to have received that support from our shareholders. It means a lot in times when it’s has been difficult to finance the business and I hope that Genovis will have the same support in the future. Lund, 12th November 2009 Sarah Fredriksson Business operation Genovis is a nanobiotechnology company that both develops and markets novel technologies functioning as efficient tools in medical research and development. The products marketed by the company today can be divided into two main groups; proteins for antibody fragmentation and antibody modification (Antibody Engineering), and nanoparticles (NIMT®) for medical imaging and transfection/delivery. Business Development and sales Genovis has pursued the objective to find partners for production and non-exclusive distribution of the product group Antibody Tools (the protein portfolio). As a first step the company has entered an agreement with QED Bioscience Inc., which will sell all products for the modification of antibodies in the US and through 17 distributors in Europe and Asia. QED Bioscience develops novel antibody products for use in academia and in biotech, diagnostic and pharmaceutical companies. The company produces and markets more than 1500 different antibodies. The company produces under cGMP and in addition to catalogue products QED Bioscience offers a range of services in the design of completely new antibodies as well as the production and modification of the antibodies according to specific customer needs. The acquisition of Eijdo research AB opens up a new business area; preclinical feasibility tests. All knowledge and experience possessed by Eijdo research in the area of magnetic resonance will together with Genovis’ nanostructures offer customers new dimensions in preclinical testing and the possibility to perform longer projects in animal models. Genovis designs nanostructures and Eijdo performes studies combined with interpretation of the images. Together the companies offer a completely new approach having its starting-point in the needs of customers. For the customer it may be the basis for a decision on an extended study, and Genovis contribution can increase the accuracy and reduce the costs of the customers’ preclinical research. Following the initial study, Genovis can deliver nanostructures and support; alternatively, the project work can be extended and Genovis/Eijdo performs contract research and development for the customer in question. Research and Development The development projects pursued by the company have over the last year been directed mainly towards the use of magnetic nanoparticles for so called medical imaging for preclinical purposes. Magnetic nanostructures make up an ideal platform for performing multimodal imaging. First of all, the iron oxide core with its magnetic properties is easily made visible with MRT (Magnetic Resonance Tomography); secondly, to the magnetic core can be added different biocompatible surfaces which each one can be used with techniques, or modalities, such as PET, SPECT, fluorescence and others. Today Genovis is working with two in vivo/imaging projects together with Lund University. The one is the development of nanostructures for use in diagnostics (medical imaging) of very small tumours that can appear in lymph nodes in breast cancer patients. The other project concerns nanoparticles as delivery vehicles of small molecules to cells in the brain. Genovis also supports several customer projects in which the customer either uses Genovis’ products for either medical imaging or for tracing stem cells. The Product Porfolio Imaging Imaging is a rapidly growing market segment and a technique used by researchers for in vivo and ex vivo studies. To visualize what is happening within a cell and to trace a cell in an animal model, the cell must be labelled in one way or the other. By introducing magnetic nanoparticles in the cell, NIMT®FeOlabel, it is possible to detect and fo0llow the cell using MRT (Magnetic Resonance Tomography). Transfection/Delivery There is a big market for techniques to deliver molecules (e.g. DNA or genes) into cells; NIMT®FeOfection is such a technique showing high efficiency and low toxicity compared to competitive products. RNAi is another segment that is growing rapidly and where researchers among other things are interested in techniques that silence the activities of genes, aiming at future treatments of virus infections, cardio-vascular disease, cancer and metabolic disease. NIMT®FeOfection is very useful in such studies, with its high efficiency and low toxicity. Antibody Tools In the design of targeting drugs and nanostructures are often used antibodies that can detect a detail on a cell surface or some other small structure in the body. At times the whole antibody cannot be used, but only parts thereof. To modify and cleave antibodies is called antibody engineering, and it requires various tools. In the spring of 2007 Genovis captured the opportunity to acquire patent rights to such a tool. In 2008-2009 the company extended its patent portfolio and can now offer four different products for antibody engineering - FabRICATOR®, FabRICATOR®KIT, IgGZERO™ och FcDOCKER™. These products launched by Genovis are used by researchers at pharmaceutical and biotech companies or in the academic research community. Geographic markets and marketing strategy Genovis sells to distributors and retailers who in turn sell to companies and/or end-users in different regional markets. The distributors have good knowledge about the business opportunities for Genovis’ nanostructures in their respective regions, and today the revenues are mainly derived from sales of proteins and nanoparticles as consumables. The company has currently distributors in thirteen countries with geographic coverage from the US to Europe and to the Far East. To a certain extent Genovis sell directly to end-users in those countries where there are no appointed distributors. Today revenues are generated from sales of nanoparticles and proteins as consumables, but there are also revenues generated from consultancy services combining sales of nanoparticles for applications that do not belong to Genovis’ standard product sortiment. During 2009-2010 one objective is also to generate revenues through OEM like sales or sales of licenses, where either Genovis is responsible for production but sales are performed under the trademark of a partner or the contracted partner takes on responsibility for production as well. In the latter case the revenues could be split between advance payment and royalty per unit sold. In both these cases the partner assumes responsibility for all marketing and sales activities, and this is the business model Genovis aims to pursue in the coming 2-3 years. As regards sales of custom-made nanoparticles for primarily in vivo studies and imaging the company will itself handle design, production and delivery to end-users and/or distributors also in the future. Sales Q3 Orders received during the third quarter were SEK thousand 238 (SEK thousand 124). The company has noted a marked increase in sales of above all its antibody modifying enzymes, for which several customers are found among the bigger pharmaceutical companies. In the consolidated income statement for the third quarter of 2008, the two items Net sales and Raw materials and consumables have been adjusted owing to a classification error, but this does not have any influence on the result. January – September Net sales during the period were SEK thousand 508 (SEK thousand 275). Net Result Q3 The operating loss during the first quarter of the year was SEK thousand 3,010 (loss: SEK thousand 4,257). Genovis is carrying out a cost savings programme by which the operative costs of the company will be further reduced during the fourth quarter, and the full effect of the programme is expected during the first quarter of 2010. Depreciation and amortization during the quarter were SEK thousand -260 (SEK thousand -229) including SEK thousand -182 (SEK thousand -136) for tangible assets and SEK –78 (SEK thousand -93) for intangible assets. The loss after financial items was SEK thousand 3,050 (loss: SEK thousand 4,271). Deferred tax during the quarter was SEK 0 (SEK thousand 1,226). January – September The operating loss during the period of the year was SEK thousand 9,266 (LOSS: SEK thousand 13,970). Depreciation and amortization during the quarter were SEK thousand -776 (-666) including SEK thousand -419 (SEK thousand -433) for tangible assets and SEK –357 (SEK thousand -233) for intangible assets. The loss after financial items was SEK thousand 9,390 (loss: SEK thousand 14,080. Deferred tax during the quarter was SEK 0 (SEK thousand 3,946). Cash Flow and Financial Position Q3 Cash flow from operating activities was SEK thousand –9,260 (SEK thousand -3,738). Cash flow from change in working capital totaled SEK thousand –7,758 (SEK thousand 273). This includes the non registered new share issuing of 7,035 million SEK . At the end of the period cash and cash equivalents amounted to SEK thousand 12. The Group's net investments during the period totaled SEK 25 (6). January – September Cash flow from operating activities was SEK thousand –16,742 (SEK thousand -13,538). Cash flow from change in working capital totaled SEK thousand –8,128 (SEK thousand -154). The Group's net investments during the period totaled SEK 72 (SEK 6). Net investments included SEK 47 (6) for tangible assets. The new share issue that was closed on 30th September brought in approx. MSEK 7. In the share issue were submitted cover notes at a total value of MSEK 14. Organization and staff Third quarter Genovis’ organization consists of Genovis AB and the fully owned suibsidiary Eijdo research AB. The operation in Genovis Inc., USA, has been phased out and the company is legally dismantled. All activities are handled by Genovis AB in Lund, having responsibility for the centrally coordinated functions of economy and finance, production, research and development, marketing/customer support and sales support. The CEO and the COO have the comprehensive responsibility for the corporate operation. On the 30th of September the number of employees were nine; 6 employed by the mother company and 3 by Eijdo research, to be compared with 11 in the mother company and 1 in the US during the same period last year. Other information Debts to related parties Genovis AB was financed through a bridging credit arranged as loans from the major owners Farstorp Invest AB and Sarah Fredriksson. On the 30th of September the debts amounted to SEK 920 000. No securities were provided for the loans. The credit has been fully repaid after the period closed and there are no remaining transactions involving related parties. Risks and uncertainties Genovis general view on the financial risks that may influence the business operation has not changed compared to the description given in the latest Annual Report. The assessment of the board is that despite the executed and ongoing cost savings and the authorization to issue new shares, there is uncertainty whether the company has sufficient liquid means to pursue the company projects. There is no guarantee that new capital can be raised, as mandated by the General Annual Meeting, if there is the need arises or that such new capital can be raised on favourable terms. For a detailed review of the company’s financial risks is referred to Genovis Annual Report 2008, page 28. Stock option program The company has 187,000 warrants issued. The warrants may be exercised for subscription of shares between February 28, 2012 and May 31, 2012. When all warrants are fully exercised the company's share capital will increase by a total of SEK 74,800 through the issue of 187,000 shares, each with a par value of SEK 0.40. The Genovis share is traded on First North, part of the OMX Nordic Exchange. is the Company's Certified Adviser is Thenberg & Kinde Fondkommission AB and Mangold Fondkommission is the liquidity guarantor.