Except for the historical information presented herein, matters discussed in this quarterly report are forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements, e.g. unforeseen exchange rate and interest rate fluctuations, delayed or unsuccessful development projects. Statements that are not historical facts, including statements preceded by, followed by, or that include the words “believes”; “anticipates”; “plans”; “expects”; “estimates”; or similar statements are forward-looking statements. Serodus is not under an obligation to up-date statements regarding the future following the publication of this release; nor to confirm such statements in relation to actual results, unless this is required by law.

SERODUS ASA

Report for the third quarter of 2016 and subsequent events

(Un-audited) Oslo, 27 October 2016

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ABOUT SERODUS

Serodus is a Scandinavian biotech company focusing on the development within the diabetic therapeutic area to fulfill the unmet clinical need in treatment of diabetes and its comorbidities. The company has made a strategic choice to be a multi-compound company and has today four compounds being developed in five indications. Serodus is advancing a broad pipeline of proprietary or in-licensed assets, including two clinical and two preclinical drug candidates. The pipeline at the end of Q3 2016 reflects Serodus therapeutic focus.

The cardiovascular drug candidates for the treatment of Acute Myocardial Infarction that will in particular be explored also in diabetic patients, two rare subgroups of Pulmonary Hypertension and Therapy Resistant Isolated Systolic Hypertension as shown below. The latter is awaiting development of a patient friendly route of administration. These programs will be developed when financials are secured.

The company's business model is based on in-licensing of promising drug candidates from universities and biotech companies, maturing the candidates and ultimately establishing partnerships with international pharmaceutical companies. More information can be found at 30TUwww.serodus.com U30T.

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HIGHLIGHTS FOR THE THIRD QUARTER 2016 (Comparative figures for the same period 2015 are shown in brackets)

SER150 Diabetic Nephropathy o Randomization of patients to cohort 2 is behind schedule. Expected to end

enrolment late October.

SER100 Pulmonary Hypertension o Orphan Drug Designation granted in US

Finance and Investor Relations o Finalized the private placement of MNOK 10 o Serodus is evaluating and testing a delisting from the Norwegian Stock

Exchange among larger shareholders.

OUTLOOK

The on-going Phase 2a study in patients with Diabetic Nephropathy is behind schedule and expected to complete enrolment in October 2016. Serodus has randomized 33 of the total 36 patients in cohort 2 at the date of this report. The delay is due to a slower start up during and after summer. Serodus visited all centres just after summer to overcome a slow start in recruitment. Serodus was granted Orphan Drug Designation for SER100 in pulmonary arterial hypertension. Subject to financing, Serodus will plan for the first clinical study either in a Phase IIa study or as an adaptive Phase IIa/III (a combination of IIa and III) study in patients with PAH. For several months, management has tried to raise additional funding to secure a continued development of the pipeline. Fortunately, two private placements have raised funds but larger investment are needed to continue SER150 development and move the other pipeline candidates forward. As a consequence Serodus has concluded that a de-listing from Oslo Stock Exchange will be in the best long-term interest of the shareholders and the company. As a private company, Serodus will be able to seek new funding from international life science funds. Thus, Serodus will be able to continue the development of SER150 through the Phase 2b dose-finding study and mature other projects in the pipeline

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Operational Review – SER150 for Diabetic Nephropathy (DN) Following the successful data evaluation of cohort 1 data by the Ethical Committee and the Independent Data Safety Monitoring Board enrolment into cohort 2 dosing SER150 at 30mg twice daily for one month began in June. However, the holiday season has caused an initial delay of the recruitment.

Cohort 2 of the Phase 2a clinical safety study in Diabetic Nephropathy is now enrolling patients dosing at 30mg twice daily for one month. Currently 33 out of 36 patients have been enrolled. The enrolment is expected to complete in October. So far only one SAE has been reported, classified as ‘unlikely related to study drug’ by both the investigator and the sponsor.

Other development projects

Serodus has a priority to bring the lead program first through Phase 2a, and later

through Phase 2b. The company will seek to develop also the other product candidates

as these have an equally scientific interesting profile and market potential. Small

preparations and development steps are being taken. However, for these candidates to

be developed with the same timeline and effort as the lead candidate the company

needs to strengthen the current financial platform.

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FINANCIAL RESULTS Q3 2016

The financial statement has been finalized according to IAS 34. Serodus ASA has used the same accounting principles in Q3 2016 as those used in the financial statement for 2015.

Year-to-date Serodus had at the end of Q3 2016 an operating profit of minus MNOK 6.0 compared to minus MNOK 7.7 at end of Q3 2015. Year-to-date the company has had an operating profit of minus MNOK 20.7 versus minus MNOK 19.6 for the same period in 2015. The total assets were MNOK 16.6 at the end of Q3 2016 compared to MNOK 36.7 for the same period in 2015. The company has a cash balance of MNOK 9.1 at the end of Q3-2016 compared to MNOK 27.3 at the end of Q3 2015. The company completed a private placement of MNOK 10 at the end of Q2 2016 with a payment date 1. August 2016. The total equity was MNOK 11.3 which gave an equity percentage of 68.1%.

Price per share has varied between NOK 1.49 and NOK 1.06 during third quarter. Price per share at the end of third quarter was NOK 1.46. The 20 largest shareholders own 72.7% of the shares.

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Information about individual drug candidates, the diseases, and the market

SER150 for Diabetic Nephropathy (DN)

13TSER150 is an anti-inflammatory compound

with a novel mode of action both inhibiting

thromboxane synthase as well as blocking

the thromboxane (TP) receptor. SER150 is

expected to specifically inhibit or stop the

inflammatory processes in the renal

arterioles and glomeruli and halt the

progression of renal impairment whereby

the amount of protein excreted in urine will

decrease or cease. Treatment with ACE-

inhibitor antihypertensives is the golden

treatment standard in diabetic nephropathy.

However, that treatment does not inhibit the

fundamental causes of renal damage nor

does it cure the disease.

Since the inflammation is a progressive

process causing loss of the renal function,

SER150 could potentially become a very

significant combination (add-on) therapy as

standard daily treatment in patients with

diabetic nephropathy. It is expected that

SER150 treatment stop progression or even

prevents development of the disease.

Consequently, SER150 has a blockbuster

market potential.

Disease

In diabetic nephropathy the kidneys are

gradually destroyed and not able to

maintain normal function. It becomes

symptomatic in patients after several years

with diabetes, but the process probably

starts quite early in the disease. The

condition is characterized by increased

amount of protein in the urine. Protein is a

marker of inflammatory processes in the

renal arterioles and glomeruli. If the

inflammation is not treated, the kidney

function deteriorates and the patient will

eventually require chronic dialysis or even a

kidney transplant. Patients with diabetic

nephropathy have a high morbidity and

mortality.

Standard treatment of diabetic nephropathy

is antidiabetics in addition to an anti-

hypertensive drug, such as an ACE inhibitor

or an angiotensin receptor blocker. This

therapeutic combination has demonstrated

a significant decrease in urinary loss of

protein and prolonged the time until dialysis.

However, when the diabetic inflammatory

process develops further, protein will once

again be found in the urine as marker of the

disease progression in diabetic

nephropathy.

Next Step

SER150 will finalize the ongoing Phase 2a

study with safety as primary endpoint and

proteinuria and thromboxane excretion as

secondary endpoints. The Phase 2b dose

finding study will be a double blinded,

randomized, placebo controlled parallel

group design. Primary endpoint will be

proteinuria and some additional supportive

endpoints, secondary endpoint will be

safety.

Market

Today there are 20 million patients suffering

from diabetic nephropathy in the seven

major markets (USA, Japan and 5 major

European markets) with an annual growth

rate of 4 %. These patients are today

insufficiently treated with antidiabetics and

ACE inhibitors, and are expected to end up

with dialysis treatment.

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SER140 for Type 2 Diabetes (T2D) SER140 is an anti-inflammatory compound

which is expected to prevent cell death

(apoptosis) of the insulin-secreting cells (β-

cells) in pancreas. SER140 is an IL-1beta

receptor antagonist and acts by blocking the

binding of the endogenous pro-inflammatory

compound IL-1beta to its receptor.

Treatment with SER140 is expected to

delay or stop progression of T2D. SER140

may even bring T2D in remission. SER140

will be the first disease modifying anti-

diabetic drug candidate.

Disease

T2D is an inflammatory progressive disease

involving insulin producing β-cells in

pancreas and all arteria in the body. T2D

can be a “silent" disease for many years

without notable symptoms and is often

revealed by chance. T2D is characterized

by persistently high blood glucose

concentrations. If not adequately controlled,

T2D patients will develop severe vascular

inflammatory changes leading to a

number of complications including stroke,

blindness, amputation, kidney failure and

heart attack. Each of these complications is

a debilitating burden to the patient and a

huge health economic burden to the society.

A careful diagnose, control of blood glucose

and medical treatment is of importance.

SER140 focuses on treating the progression

of T2D, by preventing β-cell decline and

hereby maintaining insulin production.

Furthermore, SER140 will improve insulin

receptor sensitivity. All of these effects are

related to the anti-inflammatory effect of

SER140.

SER140 will be developed as a compound

to be given in combination with other

antidiabetics in the early phases of the

disease.

Next step

SER140 will to be tested in relevant

diabetes test models in order to identify the

optimal treatment schedule before entering

into Regulatory required safety and

tolerability studies.

Market

The prevalence of diagnosed type 2

diabetes for all age-groups in the 7 major

markets (USA, Japan and 5 major

European markets) was 56 million in 2016.

Worldwide, the total number of people with

diabetes (both diagnosed and not

diagnosed) is projected to rise from 171

million in 2000 to 642 million in 2040. A

large proportion of these are not treated

today.

.

SER130 for Acute Myocardial

Infarction (AMI)

SER130 is an anti-inflammatory compound

expected to counter balance pro-

inflammatory interleukins in the heart tissue

immediately after a coronary occlusion has

occurred. If patients with AMI are treated

with balloon dilatation a second wave of

these pro-inflammatory interleukins is

released from the ischaemic tissue due to

the increased blood flow after reopening of

the artery. SER130, an IL-4 receptor partial

agonist and “first in class” compound

mimics the effects of the endogenous anti-

inflammatory interleukin-4 protein and

consequently, reduces the amount of TNFα,

an important pro-inflammatory interleukin.

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SER130 is expected to minimise the area of

damaged heart tissue after an AMI.

Disease

In patients suffering from an AMI the blood

supply to an area of the heart is acutely

reduced or completely blocked, which

immediately initiates an inflammatory

process in the surrounding tissue. The

consequence of the inflammation is damage

of the heart muscle cells. This damage may

create the background for arrhythmias and

heart failure both in the acute phase and

later when the condition has stabilized and

become chronic.

Patients with AMI get acutely administered

pain killers such as morphine, are supported

with oxygen, and diuretic treatment.

ECG measurements and cardiac imaging

will create the background for treatment with

percutaneous coronary intervention (PCI)

and placement of a stent.

SER130 will be given as an intravenous

bolus injection followed by an infusion as

soon as the patient has arrived in hospital,

often within a few hours after the heart

attack.

Next step

The pre-clinical safety and tolerability test

program showed that SER130 is well

tolerated. The first clinical study is expected

to be a double blind, randomized, placebo

controlled, dose escalation study in patients

with AMI.

Market

Each year, approx. 1 million people

(incidence) suffer from AMI in the 7 major

markets (USA, Japan and 5 major

European markets).

No treatment is currently focusing on the

inflammatory processes causing further

damage to the cardiac tissue. SER130 will

be the first compound addressing the

inflammatory pathways in AMI.

SER100 Pulmonary

Hypertension (PH)

SER100 is an ORL-1 receptor agonist and

has two known mechanisms of actions.

Firstly SER100 decreases liberation of

noradrenalin from the nerve end and

decreases the tonus of muscles in the

pulmonary arteries ( i.e. vasodilation) .

Secondly SER100 stimulates eNOS, an

enzyme involved in synthesis of NO. Both

these effects will lead to a relaxation of the

arterial muscles in the pulmonary arteries

and reduce an elevated pulmonary pressure

which characterizes patients with pulmonary

hypertension and at the same time only

have minor effect on a normal systemic

blood pressure.

Pharmacological studies in relevant models

have been finalized and the results were

included in a provisional patent application,

filed in April 2015. A PCT patent application

has been filed in April 2016, which will

define the priority date.

Disease

Pulmonary Hypertension is a chronic,

progressive disease characterized by

elevated blood pressure in the pulmonary

arteries. This elevated pressure ultimately

results in right ventricular heart failure and

death.

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Patients are severely ill with a life

expectancy of few years after the first

symptoms have occurred. In the 1980’s, the

median survival time was 2-3 years, but

based on novel treatment schedules and

medication the survival time has doubled.

The first symptom of PH is usually

shortness of breath with everyday activities.

Fatigue, dizziness and fainting spells are

also symptoms often found. Swelling of the

ankles, abdomen or legs, bluish lips

(cyanosis), skin and chest pain may occur

as strain on the heart increases. It will

become difficult to carry out any physical

activities as the disease worsens.

Symptoms range in severity, however, and

a given patient may not have all of the

symptoms at the same time.

Pulmonary hypertension is a disease

related to the arteries in the lung. There are

several pathophysiological and ethological

explanations for the condition. WHO has

classified the disease into 5 subgroups:

Group 1 – Pulmonary arterial hypertension

(PAH), Group 2 – Pulmonary hypertension

due to left heart disease, Group 3 –

Pulmonary hypertension due to chronic lung

disease and/or hypoxemia, Group 4 –

Chronic thromboembolic pulmonary

hypertension (CTEPH) and Group 5 –

Pulmonary hypertension due to unclear

multifactorial mechanisms

Among the five sub-groups, group I and

group IV are rare diseases and may qualify

for Orphan Drug Designation. If SER100 for

PAH and CTEPH gets Orphan Drug

Designation Serodus will benefit by:

Reduced Regulatory fees

Regulatory assistance with

development strategy and designing

individual studies

10 years (US 7 years) exclusivity

after Market Authorization

SER100 reduces blood pressure in the right

sided heart ventricle via reduction of

pulmonary pressure and thereby diminishes

the acute worsening of heart failure, which

often causes acute admission to an

intensive care unit.

Next step

The application for an Orphan Drug

Designation has been submitted. In the

meantime, the first clinical trial to patients

will be prepared for a discussion with FDA if

Orphan Drug Designation is achieved.

Market

SER100 will be administrated as an IV

infusion in severely ill hospitalized patients

with Pulmonary Hypertension. In the 7

major markets approximately 100.000

patients suffer from Group 1 and 4 PH.

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SER100 for Treatment Resistant Isolated Systolic Hypertension (TRISH)

TRISH is a large group of patients with

systolic blood pressure >140 mmHg and

diastolic blood pressure <90 mmHg, in

treatment with three or more different

antihypertensive drugs and still not having

normal blood pressure. It is estimated that

nearly 50 % of all incidences of stroke and

other cardiovascular events are caused by

high systolic blood pressure. SER100 is

expected to reduce the abnormally high

systolic blood pressure in patients already

treated with three antihypertensives and will

thus be an important additional medical

treatment.

SER100 is a small peptide and is administered subcutaneously. Market analysis has shown that an alternative route of administration would be more beneficial for the patient. Other forms of administration are being examined. Market According to estimates the global patient

population for TRISH is predicted to be

approximately 25 million. Thus with a

reasonable market share SER100 has a

blockbuster market potential.

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Interim financial statement

12

13

Cash Flow

14

Equity

15

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Note 1 - General information Serodus ASA (the company) is a public limited company incorporated with headquarter in Oslo, Norway. Serodus is a bio-medical company that works on the development of new and innovative medication for diabetes and diabetic comorbidities. The figures in this third quarter 2016 report are non-audited figures. This financial statement were discussed and approved for issue by the Board of Directors on 27 October 2016. Note 2 - Basis of preparation and significant accounting principles The financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU) and in compliance with additional requirements pursuant to the Norwegian Accounting Act. These principles have been consistently applied in all periods presented, and can be found in the Annual Report 2015. The functional currency is NOK. The company was listed on Oslo Axess in April 2013. The company has five employees. The going concern assumption is considered to exist and the financial statements have been prepared on this basis. Note 3 - Use of accounting estimates and assumptions The preparation of financial statements in compliance with IFRS requires the management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Future events could cause the estimates to change. Estimates and the underlying assumptions are reviewed on an ongoing basis. Changes to accounting estimates are recognized in the period the change occurs. If changes also apply to future periods, the effect is distributed across the current and future periods. Accounting items affected by estimates and assumptions are; a) Intangible assets Recognition and measurement of intangible assets: The application of the criteria for when development costs qualify for recognition as intangible assets are subject to the judgement of the management is stated in the Annual Report 2015 cf. note 2.4. Even though projects have been capitalized, there may exist uncertainty about the market and future margins, and consequently it is difficult to estimate the recoverable amount in relation to impairment tests. To determine whether an intangible asset is impaired, one must calculate the utility value of the asset or the cash generating unit. Calculation of utility value requires management to make estimates of future cash flows and to determine an appropriate discount rate to calculate present value. b) Share-based compensation

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Expenses related to share-based compensation is sensitive to assumptions used in the calculation of fair value, but the total expenses related to share-based compensation are small. Note 4 - Government grants Government grants are recognized as a reduction in costs over the period in which the Company accrues costs that the grants are intended to cover. During the period, the company has three ongoing SkatteFUNN projects. Recognition does not include marketing activities and does not cover experimental production and testing of products, services or production processes that can be used or modified in order to be used for industrial or commercial purposes. In other respects, the Research Council's minimum requirements for project management shall apply. The main objectives of the projects are development of medicine to reduce systolic blood pressure and the treatment of patients with heart failure.

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Note 5 – 10 largest shareholders

The largest shareholders per. 3. October 2016:

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Statement by the Board of Directors and the Chief Executive Officer We confirm to the best of our knowledge that the financial statements for the third quarter of 2016, that have been prepared in accordance with IAS 34 – Interim Reporting, gives a true and fair view of the Company’s assets, liabilities, financial position and results of operation. We also declare, to the best of our knowledge, that the quarterly report provides a fair view of the information required under § 5-6 (4) of the Norwegian Securities Act.

The Board of Directors and CEO Serodus ASA

Oslo, 27. October 2016

Svein S. Jacobsen Chairman

(sign.)

Terri B. Sebree Board member

(sign.)

Ole Peter Nordby Board member

(sign.)

Søren Elmann Ingerslev Board member

(sign.)

Merete Søby Board member

(sign.)

Eva Steiness CEO

(sign.)