REPORT FOR FOURTH QUARTER 2008

A quarter dedicated to progress on CE studies and launch of BCtect™ in India

The fourth quarter report for 2008 was approved by the Board of Directors on February 18th. Please find the report and an investor presentation attached.

Highlights from the report:
- Launched breast cancer test BCtect in India in November
- Secured agreement for DNAVision to be first European testing laboratory
- Completed sourcing of all patient blood samples for our CE studies
- Presented research results in Japan, UK and US

BCtect was launched in New Delhi, India in November in cooperation with our Indian partner Super Religare Laboratories Limited (SRL). Super Religare Laboratories Limited (SRL) has decided to launch the product in a focused stepwise fashion. The initial phase with scientific marketing targeting gynaecologists and oncologists in Delhi has commenced and in the fourth quarter SRL began targeting doctors and SRL reported the first tests ordered. Any new technology has its incubation period and we are confident in SRL’s commitment, priorities and abilities.

The appointment of DNAVision SA in Belgium as the DiaGenic central reference laboratory has received positive acceptance among our partners and potential distributors. DNAVision has already performed substantial tasks for DiaGenic, such as analysing the samples needed in our CE studies for ADtect.

Development of the BCtect and ADtect are proceeding according to plan. Blood samples have been received from sites in Norway, Sweden, in other European countries and in the US, providing diversity of ethnicity and geography. More than 1100 samples have been analysed to document both the clinical and technical performance of the test. Upon completion of the statistical data analysis and compiling of necessary documents a self declaration of CE compliance will be issued. DiaGenic expects to finalise CE marking of ADtect and BCtect within a few months.

Good progress on building a distribution network for Europe is being made. Advanced discussions, under confidentiality agreements, are ongoing with selected distributors covering the Nordic countries, Germany, Belgium, and Southern Europe. Further progress will follow pending the evaluation of market potentials in the private payer segment and on the finalisation of the CE product specifications. Both the BCtect and ADtect are new, innovative tests that require targeted scientific marketing to gain market acceptance in different countries. Distributor agreements in selected markets are expected to be signed before CE marking of our tests.

Net Income totalled NOK -10.6 million for the fourth quarter in 2008 compared with NOK -7.5 million in the corresponding period in 2007. Total operating costs for the fourth quarter 2008 amounted to NOK 11.3 million compared with NOK 7.8 million in the fourth quarter 2007. The company’s liquid assets totalled NOK 28 million at 31 December 2008. Burn rate for first half of 2009 expected to remain in the same territory as second half of 2008.

Highlights post quarter end:
After the end of the quarter DiaGenic has been granted NOK 6 million by the Norwegian Research Council to develop a diagnostic test for Parkinson's disease.


Attachments: The Fourth Quarter report and presentation

Contact:
MD PhD Erik Christensen, Managing Director
Telephone: +47 95939918
e-mail: erik.christensen@diagenic.com