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3rd QUARTER REPORT 2009 Pharmaceuticals:

Treatment follow-up completed and databases locked in both phase III studies for diabetic ulcer

Preparations ongoing for filing of Market Authorisation

Patient enrolment completed in first phase III study for oral mucositis

Net R&D cost NOK 58 million first 9M’09 – full-year guiding reiterated at NOK 85 - 90 million

Settled patent dispute with Biothera - obtained freedom to operate in the US market

Non-Pharmaceuticals:

Continued strong growth in Biotec Marine Biochemicals AS

Slower consumer demand affecting revenue in Immunocorp Consumer Health

(NOKm) Q309 Q308 9M09 9M08 2008 Q209 Revenues 11.1 11.9 34.8 37.6 51.7 11.4 EBITDA -29.7 -18.8 -67.4 -48.7 -87.9 -20.8 Profit before tax -30.1 -18.0 -66.8 -45.7 -83.0 -20.6 Net profit discontinued - 27.2 - 27.2 26.6 - Net profit -30.1 13.4 -66.8 -14.3 -52.2 -20.6

Segment EBITDA (NOKm) Q309 Q308 9M09 9M08 2008 Q209 Non-pharmaceuticals -0.6 1.0 -1.2 -3.2 -5.6 0.2 R&D -22.1 -15.6 -58.1 -36.1 -72.0 -20.1 Unallocated expenses -7.1 -4.3 -8.2 -9.4 -10.3 -0.9 Total EBITDA -29.7 -18.8 -67.4 -48.7 -87.9 -20.8 Note: Historical figures have been restated to reflect divestment of Animal Health in Q3 2008

Outlook Diabetic foot ulcers:

Study results expected to be ready by the end of November

Submission of Market Authorisation Application planned for July 2010

Oral mucositis:

Treatment follow-up to be completed in first phase III program during Q4; study results expected to be ready in Q1 2010

Further study schedule dependent on results from first phase III study

Partnering:

Actively seeking partners – seeking to secure partnership deal(s) in 2010

Non-pharmaceuticals:

Biotec Marine Biochemicals likely to exceed full-year revenue target of NOK 15 million

Taking cost measures to align activity to softer demand in Immunocorp Consumer Health

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Company Overview Pharmaceuticals

Technology platform Disease area Therapeutic area Clinical phase

Diabetic Ulcers Phase III Ulcers and wounds

Oral Mucositis Phase III

Neuroblastoma Phase I/II

Breast Cancer Phase I/II

SBG (soluble beta-glucan) which stimulates the

immune system Immunotherapy of cancer

Non-Hodgkin’s Lymphoma

Phase I/II

Please see the final page of this report for a description of the different disease indications and market opportunities.

Biotec Pharmacon ASA is a bio-pharmaceutical company that develops new pharmaceutical products for treatment of immune related diseases. The company’s bioactive compound SBG (soluble beta- 1,3/1,6-glucan) binds to certain types of immune cells and initiates mechanisms that strengthens the ability of the immune system to repair skin and mucosal ulcers and attack and destroy cancer cells when given together with monoclonal antibodies.

Biotec Pharmacon’s clinical development program focuses on SBG in the treatment of chronic ulcers and on immunotherapy of cancer in combination with monoclonal antibodies. The company is in clinical phase III with SBG in two indications; (1) treatment of diabetic foot ulcer and (2) prevention and treatment of oral mucositis. The immunotherapy of cancer program is in clinical phase I/II.

The company is actively seeking partnering opportunities for commercialisation of its SBG pharmaceutical portfolio, for all disease indications and in all major geographical markets. The extent and timing of such partnering agreements will be subject to commercial decisions aimed at maximising shareholder value.

As previously communicated, Biotec Pharmacon decided to await the results from its two phase III studies with SBG for treatment of diabetic foot ulcer before entering into negotiations with potential partners for that indication. However, the company has put a lot of efforts into marketing activities this year, and laid down the groundwork for future discussions with potential partners at a series of international partnering events and one-on-one meetings.

Provided that the study results with SBG for diabetic foot ulcer are positive and confirmatory, Biotec Pharmacon expects to submit a Marketing Authorisation Application for this indication in Europe in July 2010. Allowing for a review period of 12-18 months, this would indicate a commercial launch in the second half of 2011

Choosing the right partner will be one of the key criteria for a successful commercial entry. The company believes it would be optimal to have secured a partner at least one year ahead of a commercial launch. Ideally, a partnership agreement should thus be entered during the second half of 2010, and the company expects to further entertain discussions with a number of potential partners in the quarters to come.

For oral mucositis the company expects results from a phase III study in the first quarter 2010, which will be important for deciding on potential additional clinical studies as well as partnership considerations. Similarly, the company is currently evaluating the next steps in its clinical program with SBG for immunotherapy of cancer.

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Non-pharmaceuticals

Biotec Pharmacon also has a commercial non-pharmaceutical operation, involving manufacturing and sales of products aimed at strengthening the human immune system (Immunocorp Consumer Health), as well as DNA-modifying enzymes of marine origin for use in gene technology research and diagnostics (Biotec Marine Biochemicals).

The consumer health activities in Immunocorp are built around the nbg®24:7 product family, which comprises a range of dietary supplements and skin creams and lotions based on particulate beta glucan (Norsk Beta Glukan, nbg).

The marine biochemicals activities comprise a broad range of marine enzymes for DNA/RNA-analysis and diagnostics, including SAP (shrimp alkaline phosphatase), Cod-UNG and DNase. In June 2009, the marine enzymes activities were organized in a separate company – Biotec Marine Biochemicals AS. Mr. Jan Buch Andersen was hired as CEO of the new subsidiary.

As the pharmaceutical portfolio nears a commercial phase, Biotec Pharmacon is considering structural opportunities which can untie funds and management resources tied up in non-pharmaceutical businesses. The company is working with advisors which will assist in preparing for potential structural transactions.

Operational Review

DIABETIC FOOT ULCER - Indicative timetable of clinical phase III trials 2008 2009 2010

Clinical phase Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Phase III, Nottingham, UK Phase III, Europe/Eastern Europe

Grey area represents period of patient inclusion, black area represents study completion and reporting.

Biotec Pharmacon has two clinical phase III studies with SBG for the treatment of diabetic foot ulcer. Patient inclusion was completed in both studies in the second quarter 2009, and treatment follow-up was concluded during the third quarter. Study databases were recently locked and study results are now expected to be ready before the end of November 2009, and the completion of these first two phase III studies represents a major milestone in the company’s research and development program.

Both studies are double-blinded studies, where SBG is studied with a non-active comparator (“placebo”) as control agent on top of general wound care. The primary endpoint in the studies is defined as the proportion of patients with target ulcers that heal within 8 weeks, with the secondary endpoints being (i) proportion of patients with target ulcers that heal within 12 weeks, (ii) time to healing of target ulcers, (iii) percent change in target ulcer area, and (iv) recurrence of healed target ulcers within 12 weeks post healing.

Provided that the study results are positive and confirmatory, Biotec Pharmacon intends to submit a Marketing Authorisation Application in Europe next year, and is working together with a regulatory CRO (Clinical Research Organisation) to compile and prepare the necessary information.

The company in July 2009 received notice from the Medicines and Healthcare product Regulatory Agency (MHRA) in the UK that it had been allocated a slot to submit the application in July 2010. UK will act as Reference Member State in the decentralised procedure and coordinate the review of the application submitted simultaneously in EU/EEA member states. Biotec Pharmacon expects the MHRA review to take 12-18 months, meaning that a commercial launch at the earliest can be expected in the second half of 2011.

With phase III data available, and freedom-to-operate in the US market, Biotec Pharmacon will in the first half of 2010 also seek to set up meetings with the FDA to prepare the ground for a filing in USA.

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ORAL MUCOSITIS - Indicative timetable of clinical phase III trials 2008 2009 2010

Clinical phase Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Phase III, Europe Phase III, Eastern Europe 2nd study put on hold awaiting results from the 1st study

Grey area represents period of patient inclusion, black area represents study completion and reporting.

Biotec Pharmacon also has one phase III study ongoing with SBG for prevention and treatment of oral mucositis, where SBG is being measured in a double blinded study with a non-active comparator (“placebo”) as control agent.

Patient inclusion commenced in October 2008 and was completed during the third quarter 2009. An interim analysis concluded in August prompted no adjustments for the planned patient population, although the total number has been increased from 120 to 130 patients due to a somewhat higher withdrawal rate than planned.

Discussions with EMEA have indicated that one study might be sufficient to apply for Marketing Authorisation, provided compelling results. For strategic reasons Biotec Pharmacon initially opted to run two studies in parallel, although this was later reversed for administrative and logistic reasons.

The second study has thus been put on hold, and the timing of filing for marketing authorisation is thus contingent on the robustness of the results from the first study, which is expected in the first quarter 2010.

IMMUNOTHERAPY OF CANCER Biotec Pharmacon’s clinical phase I/II study program within immunotherapy of cancer comprises three studies where oral administration of SBG is combined with injected monoclonal antibodies for treatment of cancers. Patient inclusion was completed in all the studies earlier in 2009, and SBG has so far been shown to be very well tolerated and safe in combination with the respective monoclonal antibodies.

Having built safety documentation, Biotec Pharmacon is currently evaluating its clinical program. The company is generating hypotheses for possible future studies and working on a future strategy for the development program.

A patent application filed together with Memorial Sloan Kettering Cancer Center was granted during the third quarter, for SBG in combination with monoclonal antibodies for certain types of cancer.

OTHER POTENTIAL INDICATIONS

The company has earlier published pre-clinical data on experimental data from animals with SBG in Inflammatory Bowel Disease (IBD), and has filed a patent application for use of SBG for this indication. The company has also filed a patent application for use of SBG in asthma, based on pre-clinical work done in collaboration with Mount Sinai Medical Center.

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FINANCIAL REVIEW, NON-PHARMACEUTICALS

NOKm Q309 Q3 08 9M 09 9M 08 2008 Q209 Marine Biochemicals 4.2 3.0 12.0 7.6 11.6 4.4 Consumer Health 6.7 9.3 22.0 29.9 38.9 6.8 Other 0.2 -0.4 0.7 0.2 1.1 0.1 Revenue non-pharma 11.1 11.9 34.8 37.6 51.7 11.4 Other operating expenses (net) -11.7 -10.9 -35.9 -40.9 -57.3 -11.2 EBITDA -0.6 1.0 -1.2 -3.2 -5.6 0.2 Depreciation -0.5 -0.5 -1.4 -1.5 -2.0 -0.5 EBIT -1.1 0.5 -2.6 -4.7 -7.7 -0.3

Note: The figures have been restated to account for sale of Animal Health in the third quarter 2008.

Revenue declined by seven percent in the third quarter, reflecting lower sales in the consumer health business. Driven by the negative revenue development in consumer health, the operating results were negative for the non-pharmaceutical activities in the third quarter. Cost measures are being implemented to align activity with the weaker demand in the consumer segment.

Revenue declined by eight percent in the first nine months 2009, even including a positive currency effect due to a stronger USD/NOK compared to the same period last year. A sharp increase in revenue in Biotec Marine Biochemicals was more than offset by lower revenue in Immunocorp Consumer Health.

Biotec Marine Biochemicals

Revenue is growing sharply in Biotec Marine Biochemicals, and increased by 42 percent compared to the third quarter last year and 59 percent in the first nine months. The strong growth is explained by higher deliveries of both shrimp alkaline phosphatise (SAP) enzymes and Cod-UNG compared to last year.

As previously communicated, the marine enzyme activities were in June 2009 organized in a separate company – Biotec Marine Biochemicals AS. For the full year 2009, revenue for this business has previously been forecasted to NOK 15 million and this target is likely to be exceeded. The EBITDA margin is estimated at 40 percent on a stand-alone basis, before allocation of Group overhead costs.

Biotec Pharmacon and the new management in Biotec Marine Biochemicals remain committed to the target of doubling revenue over the coming three years.

Immunocorp Consumer Health

Consumer Health revenue in the third quarter 2009 declined 29 percent year-on-year and 26 percent in the first nine months 2009.

The Norwegian operations showed a slight sales decline for both the third quarter and for the first nine months, with more or less flat sales of skin care products but lower dietary supplements sales.

As the company has not achieved the expected sales growth, new product launches of skin care products in the Norwegian market has been postponed.

Revenue from the US market has declined significantly, both in the third quarter and for the first nine months, mainly reflecting lower marketing activities and weak demand for the skin care products. Dietary supplements sales have kept up well.

Given the soft demand in the consumer market, the establishment of new distribution agreements in international markets are also taking longer than expected.

Although Consumer Health already planned for a reduction in overall sales and marketing costs in 2009, the company will take further cost measures to compensate for the revenue decline. This is expected to take effect from the first quarter 2010.

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FINANCIAL REVIEW, RESEARCH & PHARMACEUTICAL DEVELOPMENT NOKm Q3 09 Q3 08 9M09 9M08 2008 Q2 09 Revenue pharmaceuticals 0 0 0 0 0 0 Other operating expenses (net) -22.1 -15.6 -58.1 -36.1 -71.9 -20.1 EBITDA -22.1 -15.6 -58.1 -36.1 -71.9 -20.1 Depreciation -0.3 -0.3 -0.9 -1.0 -1.4 -0.3 EBIT -22.4 -15.9 -59.0 -37.1 -73.3 -20.4

Biotec Pharmacon’s pharmaceutical product portfolio is still in research and/or development stages, and does not yet generate any sales revenue. Increased R&D activities generated an EBITDA of NOK -22.1 million in the third quarter and NOK -58.1 million in the first nine months 2009 in line with expectations.

Biotec Pharmacon reiterates its estimate that net R&D costs for the full year 2009 will increase to approximately NOK 85-90 million from NOK 72 million in 2008.

The high level of R&D expenditures in 2009 reflects that the company has three ongoing phase III studies, as well as costs related to preparation for filing for market authorisation of its first pharmaceutical product. Biotec Pharmacon has also incurred costs related to changes to its SBG production plant and introducing quality assurance systems according to Good Manufacturing Practice (GMP) for commercial products. This is a prerequisite to obtain a Manufacturing Producer Authorisation during the first half of 2010, which will be included as part of the filing of an application for Market Authorisation in July 2010.

Unallocated costs Unallocated operational costs amounted to NOK 7.1 million in the third quarter 2009 and to NOK 8.2 million for the first nine months 2009. This compares to NOK 4.3 million in the third quarter 2008 and NOK 9.4 million in the first nine months 2008.

The cost escalation in the third quarter reflects both increased costs related to preparations for a trial in the patent dispute with Biothera, and the settlement costs when Biotec Pharmacon and Biothera reached an out-of-court agreement in August. As a result of the settlement, the company now has freedom to operate in the US market. With exception of some minor costs related to the closure of some processes related to the patent case in the fourth quarter 2009, the company does not expect any unallocated costs going forward.

BIOTEC PHARMACON – GROUP FIGURES Overall EBITDA was NOK -29.8 million in the third quarter 2009 and NOK -67.4 million in the first nine months 2009. This compared to NOK -18.8 million and NOK -48.7 million in the third quarter 2008 and first nine months 2008, respectively.

EBIT was NOK -30.5 million in the third quarter and NOK -69.7 million in the first nine month 2009. Net financial items were a positive NOK 0.5 million in the third quarter and NOK 2.9 million in first nine months, which was a decline from NOK 1.6 million and NOK 5.5 million in the corresponding periods last year. As a result, profit before tax for continuing operations declined to NOK -30.1 million in the third quarter 2009 and NOK -66.8 million in the first nine months 2009, from NOK -13.8 million and NOK -41.5 million in the third quarter 2008 and first nine months 2008, respectively.

Discontinued operations Immunocorp Animal Health AS and related patents and trademarks were divested in the third quarter 2008, and thus did not influence the Income Statement for the first nine months 2009. The divestment gain was accounted for in the Balance Sheet as per 30 September, 2008. The results and divestment gain are included on one line in the Income Statement for the full year 2008, as result after tax from discontinued operations of NOK 26.6 million. Comparable figures for

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previous accounting periods have been restated accordingly, with a profit after tax from discontinued operations of NOK 27.2 million both for the third quarter 2008 and the first nine months 2008.

Balance Sheet, Cash Flow and Shareholder Matters Total equity was NOK 92.6 million at 30 September, 2009, a decline of NOK 30.6 million during the quarter and a decline of NOK 66.7 million during the first nine months 2009. The decline reflects the net losses in the period as a result of R&D expenses in the pharmaceutical activities. The equity ratio of 80 percent compares to 85 percent at the end of 2008.

The total number of outstanding shares was 23,637,910 at 30 September, 2009, which was unchanged from 31 December, 2008. The total number of options granted was 1,535,500 including options granted in the second quarter of 410,500. Biotec Pharmacon holds no own shares.

Net cash flow from operating activities was NOK -29.6 million in the third quarter 2009 and NOK -71.0 million in the first nine months 2009. Total net cash flow amounted to NOK -30.2 million in the third quarter and NOK -74.8 million in the first nine months 2009. Including currency conversion differences, cash and cash equivalents declined to NOK 49.5 million at 30 September, 2009, from NOK 79.8 million at the end of the second quarter and NOK 121.1 million at the end of 2008. The company also retains an unused credit facility of NOK 10 million.

Biotec Pharmacon will in the final quarter of the year continue the work to increase financial flexibility and secure funding through 2010. As previously announced the company has sought additional funding from government-backed loan and guarantee institutions, and has obtained a lending commitment of NOK 15 million from Innovation Norway. Final terms and conditions are yet to be settled.

The company is also working with different structural opportunities which are expected to untie funds currently tied up in its non-pharmaceutical activities, and is working with advisors that will assist in preparing for potential structural transactions. As described above, Biotec Marine Biochemicals AS represents a profitable growth opportunity, targeting revenue of more than NOK 15 million in 2009 and a doubling over the coming three years, whereas Immunocorp Consumer Health offers a product portfolio within skin care and dietary supplements with a broad distribution network. Cost measures are being taken to compensate for current negative revenue development in a soft consumer market.

Outlook The clinical program with SBG has developed very positively so far this year. The company has completed patient enrolment and treatment follow-up in both phase III studies for diabetic ulcers and look forward to receiving study results before the end November 2009.These results will be of crucial importance for the future development of the SBG portfolio.

Provided that the results are positive and confirmatory the studies will form the basis for the application for market authorisation that is scheduled to be submitted to the UK authorities in July 2010. UK will act as Reference Member State in a decentralised procedure and coordinate a simultaneous review of the application in EU/EEA member states.

During the fourth quarter, Biotec Pharmacon will complete treatment follow-up in a phase III study for oral mucositis, and expects results from this study in the first quarter of 2010. The strength or robustness of these results will determine the development path and the timeline to an application for market authorisation with SBG for this indication.

The clinical studies, particularly the diabetic ulcer studies, will obviously be key elements in upcoming discussions with potential partners. The company will consider partnering opportunities in all geographic markets for diabetic ulcers as well as for other indications, and work to enter into partnership(s) during 2010.

In line with previous communication, Biotec Pharmacon expects overall research and development costs of approximately NOK 85-90 million in 2009.

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Notes to the interim accounts for Q3 2009 Note 1 - Basis of preparation of financial statements These financial statements are the unaudited interim consolidated financial statements (hereafter “the Interim Financial Statements”) of Biotec Pharmacon ASA and its subsidiaries (hereafter “the Group”) for the period ended 30 September 2009. The Interim Financial Statements are prepared in accordance with the International Accounting Standard 34 (IAS 34). These Interim Financial Statements should be read in conjunction with the Consolidated Financial Statements for the year ended 31 December 2008 (hereafter “the Annual Financial Statements”), as they provide an update of previously reported information. The accounting policies used in the Interim Financial Statements are consistent with those used in the Annual Financial Statements. The presentation of the Interim Financial Statements is consistent with the Annual Financial Statements. Where necessary, the comparatives have been reclassified or extended from the previously reported Interim Financial Statements to take into account any presentational changes made in the Annual Financial Statements or in these Interim Financial Statements. The Group does not experience significant seasonal or cyclical variations in total sales during the financial year. Income tax expense or benefit is recognized based upon the best estimate of the weighted average income tax rate expected for the full financial year. Note 2 - Discontinued operation The subsidiary company Immunocorp Animal Health AS was sold as of 01.09.2008 together with patents and trademarks associated to the animal health business. The accounts for previous periodes are regrouped according to IFRS 5, now presenting operating profit and loss including profit related to the sale of animal health business as "Profit after tax, discontinued operation". The sale of the animal health business gave a net profit after transaction cost of NOK 32.6 mill, of which NOK 16.6 mill is related to IP, and NOK 16.0 mill is profit from sale of the shares.

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Note 4 – Change in Q3 2008 Revenue for Q3 2008 has been reduced by NOK 961,000 due to accounting error related to elimination of income from divested activity, cf note 3 in the Q4 2008 interim report.

Oslo 12 November, 2009

The Board of Directors of Biotec Pharmacon ASA

Svein Mathisen Jan Gunnar Hartvig Kari Stenersen Ingrid Alfheim Styreleder Arne Handeland Ingrid Wiik Morten Elde

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FACT SHEET – Disease indications and SBG applications

Diabetic foot ulcers: Diabetic patients are prone to develop foot and leg ulcers, most likely due to impaired immune functions. The ulcers frequently develop into a chronic condition with high risk of infection. Foot and leg ulcers are a frequent cause of amputation in patients with diabetes.

Prevalence: On an annual basis, an estimated 3.5 million of a total 70 million diabetes patients in the OECD-area develop foot and leg ulcers.

Treatment options: No established standard treatments today beyond general wound care. Some products available in certain markets at drug cost of up to USD 1,200 per treatment.

Biotec Pharmacon’s concept:

SBG reactivates immune cells in the skin and thereby enhances the body’s own wound healing capabilities.

Oral mucositis: Oral mucositis is a common and potentially serious side effect of radiotherapy (often given in combination with chemotherapy), in particular for head and neck cancers and leukaemia, but also in other malignancies. Oral mucositis develops as a result of damage to both epithelial cells and immune cells inflicted by the therapies.

Prevalence: Approximately 400,000-600,000 incidents per year in the OECD area.

Treatment options: No established standard treatment. Some products available for a limited indication in certain markets at drug cost of up to USD 8,000 per treatment.

Biotec Pharmacon’s concept:

SBG stimulates the immune system to prevent development of oral mucositis and support healing by enhancing the body’s own wound healing capabilities.

Cancers: Cancer develops when cells of the body grow in an uncontrolled way, infiltrating surrounding tissues and spreading to other organs. If not eliminated by the immune system, they may subsequently develop into a malignant cancer.

Prevalence: There are an estimated 5 million new patients diagnosed with cancer annually in the OECD countries.

Treatment options: Most patients undergo conventional cancer treatments such as surgery, chemotherapy and radiotherapy. Development of monoclonal cancer antibodies (prefabricated antibodies against cancer cells) for several different cancer types has made immunotherapy of cancer one of the fastest growing segments of the pharmaceutical industry. Typical treatment costs could be in the range of USD 20-45,000 per patient.

Biotec Pharmacon’s concept:

Injected monoclonal antibodies tag cancer cells by binding to surface markers on the malignant cells. Tagged cancer cells are perceived as alien by the immune system. SBG renders the immune system more effective in establishing an adequate immune response and in killing of tagged cancer cells.

Non-pharmaceuticals: The non-pharmaceutical business segment consists of the product areas Consumer Health and Marine Biochemicals. The Animal Health business was divested in Q3 2008.

Immunocorp Consumer Health:

Product portfolio consisting of nbg® 24:7 dietary supplement and skin lotions. The products are based on NBG (Norwegian Beta Glucan), which has a positive effect on the immune system. The products are sold in North America and Norway.

Biotec Marine Biochemicals:

Product portfolio based on DNA/RNA-modifying enzymes. Current products include SAP (Shrimp Alkaline Phosphatase), Cod UNG (cod uracil-DNA-glycosylase) and DNase. The enzymes’ main advantage compared to other enzymes is that they can be inactivated by moderate heat treatment rather than eliminated by a separate process.