CORTENDO AB Acquires Remaining Shares in BioPancreate Inc.

Transaction strengthens Cortendo’s position in diabetes research

Göteborg, Sweden-October 29, 2013. Cortendo AB [ticker: CORT on NOTC-A] today provided an update on its existing collaboration and ownership position of BioPancreate Inc., a developer of novel oral treatment modalities for insulin and non-insulin dependent diabetes. From its current ownership position of 49%, Cortendo has triggered its option to acquire the remaining Founders’ shares in BioPancreate in a cashless share exchange for 3,697,500 Cortendo shares, which Cortendo shareholders approved at the annual general meeting on May 13 2013. Cortendo will have 86.6 million shares outstanding post the completion of the share exchange. With this transaction, Cortendo will assume control of BioPancreate Inc. that will become a US subsidiary of Cortendo AB, with BioPancreate Inc. retaining its US offices and all operations in the US.

BioPancreate is developing a potential breakthrough oral treatment for type 1 and type 2 diabetes
BioPancreate is developing a novel, orally-delivered biological therapeutic approach utilizing modified probiotic human bacteria. These modified human bacteria expressing an active agent, deliver such agents to the small intestine, which trigger the transformation of intestinal endocrine cells into glucose-responsive insulin secreting cells. The net effect is to create a ‘surrogate pancreas’ in the gut. The lead compound is currently in pre-clinical development. BioPancreate’s goal is to file an IND in 2014.

Based on modifying naturally occurring human probiotic bacteria
BioPancreate’s biopharmaceutical products under development for diabetes are modifications to the naturally occurring probiotic bacteria that exist in the human gastrointestinal tract. Natural probiotics have been shown to be not only safe, but in many ways, beneficial when taken orally. The BioPancreate technology advances this approach into a distinct therapeutic application for diabetes by utilizing these bacteria to both produce and deliver an active agent to induce insulin formation in the small intestine.

The insulin market is large and growing strongly and still has significant unmet need
The global market for insulin products is approximately $18 billion and has shown 13% growth over the last ten years. The incidence and prevalence of diabetes is now at pandemic levels with nearly 300 million diabetics anticipated worldwide by 2030. Approximately 1 in 12 people in the Unites States now have been reported to have diabetes. The direct medical costs in the US are estimated to be in excess of $ 200 billion. 

Patients with type 1 diabetes and late stage type 2 diabetes generally become insulin dependent. Even if patients manage their disease with injected insulin, many are unable to achieve even close-to-normal glucose metabolism. Despite all of the new therapeutic advances, diabetes remains the leading cause of blindness, amputations, and kidney failure leading to shortened life expectancy. Diabetes-related heart disease, stroke, amputations and kidney failure have risen over the past decade, despite all of the new medications and new types of insulin available.

Cortendo believes that the diabetes market remains attractive from an investment perspective in particular as to innovative therapies. The market is large and growing rapidly, driven by significant longer-term trends that are increasing the number of patients that could be served by new products like those under development at BioPancreate.

For further information, please contact:
Alexander Lindström
Chief Financial Officer
Office : +1 610 254 9200
Mobile : +1 917 349 7210
E-mail : alindstrom@cortendo.com

Risk and uncertainty
The development of pharmaceuticals carries significant risk. Failure may occur at any stage during development and commercialization due to safety or clinical efficacy issues. Delays may occur due to requirements from regulatory authorities not anticipated by the company. 

About Cortendo
Cortendo AB is a biopharmaceutical company headquartered in Göteborg, Sweden. Its stock is publicly traded on the NOTC-A-list (OTC) in Norway. Cortendo is a pioneer in the field of cortisol
inhibition and has completed early clinical trials in patients with Type 2 diabetes. The lead drug candidate NormoCort™, the 2S,4R-enantiomer of ketoconazole, is expected to enter into a Phase 3 study during Q4’2013 for Cushing’s Syndrome. The company’s strategy is to focus its resources to opportunities where the path to commercialization or partnership is clear and relatively near-term. Strategically, Cortendo’s business model is to commercialize relevant opportunities in the United States while partnering its assets ex-US. Backed by a highly experienced leadership team Cortendo has plans to continue to implement its pipeline expansion efforts in osteoarthritis and diabetes, as
well as other near term revenue opportunities.

Cortendo Forward-looking Statements
This press release contains forward-looking statements concerning Cortendo that involve a number of risks and uncertainties. All statements other than statements of historical facts included in this press release, including, without limitation, statements regarding the Company’s future financial position, strategy, anticipated investments, costs and results, plans, projects to enhance efficiency, outcomes of products development, future capital expenditures, liquidity requirements and objectives of management for future operations, may be deemed to be forward looking statements. These forward looking statements involve known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, performance or achievements or industry results to be materially different from those contemplated, projected, forecasted, estimated or budgeted, whether expressed or implied, by these forward looking statements. Given these risks and uncertainties, investors should not place any undue reliance on forward-looking statements as a prediction of actual results. None of these forward-looking statements constitutes a guarantee of the future occurrence of such facts and data or of actual results. These statements are based on data, assumptions and estimates that the Company believes are reasonable. The forward-looking statements contained in this document are made only as of the date hereof. The Company expressly disclaims any obligation or undertaking to release publicly any updates of any forward-looking statements contained in this press release to reflect any change in its actual results, assumptions, expectations or any change in events, factors, conditions or circumstances on which any forward- looking statement contained in this press release is based.

Cortendo AB (publ)

Sweden:
Box 47
SE-433 21 Partille
Tel. / Fax: +46 (0)31-263010

USA:
555 East Lancaster Ave
Suite 510
Radnor, PA 19087
Tel: +1 610-254-9200
Fax: +1 610-254-9245