Photocure and Galderma have agreed not to continue the current negotiations of a licence agreement for a new acne product for moderate to severe acne due to difference of opinion regarding the positioning of the product. Both parties will now focus on expanding the excellent relationship in making Metvix® a global brand for treatment of precancerous lesions and skin cancer.

Photocure will continue the development program of a treatment for moderate to severe acne independently, where we believe the product is best positioned. The market for treatment of moderate to severe acne is USD 1.4 billion/year.

Photocure plan to start the next phase II study of photodynamic therapy (PDT) for treatment of moderate to severe acne in the first quarter 2007. The study includes over 200 patients at 10 leading clinical sites in the US. The study is blinded and includes two arms with different dosages in addition to a placebo arm. The study protocol has been discussed with the US regulatory agency (FDA) and fulfills their requirements for a confirmatory phase II study.

Photocure is developing a new lamp as in order to meet the requirements for a full face illumination. The new lamp is scheduled to be ready before the first phase III clinical study starts in 2008.

Kjetil Hestdal, President & CEO of Photocure, says: "We have a solid technology protection, a highly competent development team and the financial resources necessary to develop an acne product. Our track record is two new products developed in 8 years, and we look forward to building on this success."

Acne is a common skin problem that has been reported to effect up to 85% of all adolescents. Of those who seek medical advice, about 50% have moderate and 20% have severe acne. Current therapies for these patients include oral antibiotics and isotretinoin, both products that may have significant adverse effects. There is thus a clear medical need for a safe and efficacious topical treatment for acne patients.

Photocure ASA is a Norwegian pharmaceutical company listed on the Oslo Stock Exchange. The company develops and sells pharmaceuticals and medical devices based on proprietary photodynamic technologies, targeting key dermatology and oncology markets.

Photocure has two products with sales and marketing approvals: Metvix®, which is a product developed for the treatment of skin cancer (basal cell carcinoma) and pre-cancerous skin lesions (actinic keratosis), and Hexvix®, which is developed for the detection of bladder cancer. Both products are based on the same photodynamic technology, combining the drug known as a photosensitiser with a light source that activates the photosensitiser. Photocure is currently testing both products for new indications and aims to develop a pipeline of follow-on products and technologies.

Photocure ASA

Hoffsveien 48, NO-0377 Oslo, Norway - www.photocure.com

Telephone: +47 22 06 22 10

Kjetil Hestdal (kh@photocure.no) - Mobile: +47 913 19 535

Christian Fekete (cf@photocure.no) - Mobile: +47 916 42 938