Interim Report 1 January - 30 September 1999

11/24/1999 9:11 AM EST

Interim Report
1 January - 30 September 1999

* The new annual forecast shows a considerably better result. Sale of the
property in Solna expected to be completed before the end of the year

* New organisation - annual savings totalling SEK 75m

* ETEC vaccine - Phase III clinical trials in final stage.
Efficacy data published during Q1, 2000

* Great export potential for Dukoral travel vaccine.
Record sales in Sweden, +70%

* SAIK-MS in extended Phase I - great interest from partners

* Extended research partnership with OXiGENE

* Available liquid funds: SEK 648m, equivalent to SEK 58 per share

* Shareholders' equity SEK 90 per share

RESULTS FOR '99 - CONSIDERABLY BETTER THAN PREVIOUSLY FORECAST
The 1999 results will be considerably improved compared with the estimated
loss of approximately SEK -115m previously forecasted. There are three reasons
for the improvement: savings measures already effective this year, an improved
net financial result and an anticipated higher capital gain on the sale of the
property in Solna.

The property negotiations with several parties are in an intensive final
phase. For this reason a forecast figure for the whole year is not given,
pending a final agreement. There has been enormous interest in the SBL
property, with its 100,000 sq m land and 26,000 sq m of building area.

No comparison figures are given for the corresponding period last year. These
are misleading due to the changes in the business and the specialisation into
biotechnology through the tax-free Wilh. Sonesson distribution in June. The
Swedish National Tax Board has assessed the acquisition value after
distribution to be allocated 93% to Active Biotech and 7% to Wilh. Sonesson.


NEW ORGANISATION - ANNUAL SAVINGS AMOUNTING TO SEK 75M
Active Biotech has now been organised into an operating unit with a cost-
effective and functional organisation with clearly defined responsibilities
and tasks.

All preclinical research activities have been brought together in Lund. The
group is focusing on, and making further investments in, its three priority
products: the cholera vaccine, the ETEC vaccine and SAIK-MS.
The resources of SBL Vaccin in Solna are concentrated on marketing, the
distribution of vaccines in the Nordic market and production of the cholera
and ETEC vaccines.

The medical, clinical research and registration functions have been
strengthened.

The announced annual cost reduction of SEK 75m proceeds as planned, and
SEK 20m of this goal has already been achieved during 1999.

ETEC VACCINE - EFFICACY DATA DURING Q1, 2000
Together with our partner SmithKline Beecham, we have started the final part
of the Phase III clinical trials in Guatemala/Mexico. The study now involves
batches of vaccine produced according to commercial production methods.

The first phase in Guatemala/Mexico, with approximately 750 patients, has
ended. Efficacy data are expected to be published during Q1, 2000. The vaccine
is drinkable, and protects against the intestinal bacterium ETEC (so-called
tourist diarrhoea). No vaccine against the illness is currently available on
the market. The first market launch is expected in 2001.

According to the World Tourism Organisation, there were approximately 49
million tourist journeys in 1996, excluding business travel, from Europe,
Japan, the USA and Australia to high risk areas for the ETEC bacterium, and
approximately 120 million to medium/low risk areas.

GREAT EXPORT POTENTIAL FOR DUKORAL TRAVEL VACCINE
RECORD SALES IN SWEDEN, +70%

The travel vaccine Dukoral against cholera is sold in Sweden and Norway, and
the vaccine is also approved in these countries for ETEC indications. Dukoral
is a drinkable vaccine with the same mode of operation as the ETEC vaccine,
which is in the final phase of clinical trials. The protective effect is
approximately 85% for 6 months against cholera and approximately 60% for
approximately 3 months against ETEC.

Sales in Sweden during the period were 93,000 doses, compared with 56,000 for
the same period in the previous year. It is estimated that approximately
800,000 Swedes visit areas at risk of cholera and tourist diarrhoea every
year, which gives a penetration for Dukoral of only approximately 10-15% in
Sweden so far. Currently, Dukoral is sold only on prescription and at
vaccination centres. An application for OTC registration may be considered
shortly. The product has been on the market for five years, and no side
effects have been reported.

In addition to Sweden and Norway, Dukoral is registered in six South American
countries. The registration application has been submitted in Switzerland and
is being prepared for several other countries.

Sales of Dukoral during the period totalled SEK 18.1m, representing increases
of +70% in Sweden and +405% in export turnover.

Registered only for cholera indication, an equivalent product to Dukoral is
marketed internationally under the name "SBL Cholera Vaccine". WHO has
recommended SBL Cholera Vaccine as the only available cholera vaccine in the
world with a documented protective effect.

A registration application has been submitted recently to WHO for "WHO
countries", in preparation for the creation of a stockpile of 1-2 million
doses. It will be possible to deliver the vaccine quickly in disaster areas,
e.g. countries affected by earthquakes. The selling price per dose is lower in
this instance, but still offers a considerable return due to the order volume.

The current production capacity in Solna and Matfors is 4 million doses per
year, which can be expanded considerably in the event of increased demand. At
higher production volumes, a greater conversion rate is achieved, and hence
significantly lower manufacturing costs.

SAIK-MS IN EXPANDED PHASE I - GREAT INTEREST FROM PARTNERS

Active Biotech's research areas are infectious, inflammatory and autoimmune
diseases. It is estimated that in the USA alone, more than 20 million people
suffer from autoimmune diseases with few satisfactory methods of treatment.
SAIK is the generic name for the company's various substances for the control
of human immune systems.

During the autumn SAIK-MS, a substance against multiple sclerosis, was tested
on a small scale, Phase I in humans, with very promising results. A new
application was submitted in November to the Medical Products Agency in Sweden
@Läkemedelsverket@. This will enable that an extended Phase I can be carried
out during the spring next year, with a larger number of patients and at
higher dosages.

SAIK-MS is expected to enter Phase II as early as Q4, 2000, which is faster
than planned.

Potential partners have shown substantial and increasing interest in the
product. The management, after studying research results obtained so far, has
decided not to make partnership agreements in the various markets until 2001.

To negotiate on the basis of Phase II results, "proof of concept", means
there will be better opportunities to obtain larger up-front payments,
milestones and royalties. Active Biotech has the financial strength to be able
to wait for the Phase II study of SAIK-MS.

Current sales of existing drugs against MS are SEK 5bn per year, and with
strong growth in excess of 50%. The number of patients, of whom only some can
be treated using current therapies, is increasing annually by more than
50,000.


EXTENDED RESEARCH PARTNERSHIP WITH OXiGENE

During the summer, Active Biotech and OXiGENE signed a research agreement in
the inflammatory diseases area. The initial aim of the partnership is that
Active Biotech will evaluate new drugs against inflammatory diseases based on
OXiGENE's patented technology around the benzamide group of substances in the
cancer area.

The partners are currently holding discussions about extending the partnership
by allowing OXiGENE to evaluate Active Biotech's patented SAIK substances in
order to identify candidate drugs in the cancer area. A positive outcome in
both of these areas will create increased resources for more rapid
commercialisation.

PRIORITISED PROJECTS WITH PARTNERS

Project (partner) 2000 2001

ETEC (SmithKline Beecham) Application/ Launch (1st
Tourist diarrhoea vaccine registration European
country)
SBL Cholera Vaccine (SmithKline Registration Launch
Beecham) (Europe)
Partnership agreement for the EU,
the USA, Australia; other countries
under our own management
Dukoral Registration/ Registratio
Cholera travel vaccine with ETEC launch in n/
indication. several launch in
Own sales in Sweden, Norway. Own countries several
export rights exc. EU, USA, countries
Australia
SAIK (Partner chosen in 2001) Phase I/Phase Phase II
MS drug II
Strep-A (Vaccine Solution PTY) Phase I Phase II
Tonsillitis vaccine
Dental - 1025 (UMDS) Phase I Phase II
Caries treatment
TTS (Contract research for Phase II/III Phase
Pharmacia & Upjohn) New drug II/III
Lung cancer drug candidate Phase I
Benzamides (OXiGENE) Drug Phase I
Autoimmune disease treatment candidate
chosen


THE NEW MILLENNIUM


A great amount of work has been done in the form of analysis, planning and
measures in the run-up to the year 2000. The risk of possible disruption to IT
systems and laboratory technical equipment is considered to have been
minimised.

NEXT REPORT

The final accounts announcement for the operating year 1999 will appear on 18
February 2000.

Lund, 22 November 1999

Active Biotech AB (publ)

Sven Andréasson
President and CEO

Active Biotech AB is a biotechnology company focusing on the research and
development of pharmaceuticals and vaccines. The core competence is knowledge
about human immune systems. We have a high quality project portfolio and
substantial financial resources. Important products are a vaccine against
cholera, a vaccine against tourist diarrhoea (ETEC) and a drug against MS
(SAIK). Active Biotech's turnover in 1998 was SEK 259m.

Active Biotech AB
Box 724, SE-220 07 Lund, Sweden
Tel +46 (0)46-19 20 00
Fax +46 (0)46-19 20 50
email  


(MSEK)
The Group's Profit and Loss Accounts Jan-
September 1999

Net 185,2
sales
Cost of sold goods -101,4
Gross Profit 83,8

Selling expenses -15,6
Administrative expenses -43,5
Research & Development costs -190,5
Items affecting comparability 15,0
Other operating income and costs -2,0
Operating profit/loss -152,8

Net financial items 36,2
Profit/loss before tax -116,6

The Group's balance sheet 30-09-1999 (MSEK)

Intangible fixed assets 299,9
Tangible fixed assets 277,3
Financial fixed assets 95,2
Total fixed assets 672,4
Inventories 60,4
Current receivables 106,4
Cash and bank balances (including short- 536,3
term invetstments)
Total current assets 703,1
Total assets 1375,5
Shareholders' equity 1009,5
Allocations* 26,9
Long-term liabilities** 167,3
Current liabilities*** 171,8

Total shareholders' equity and liabilities 1375,5

* Interest-bearing pension liabilities 30-09-1999
amount to 17.8 MSEK
** Interest-bearing long-term liabilities 30-09-1999
amount to 50.0 MSEK
*** Interest-bearing current liabilities 30-09-1999
amount to 18.7 MSEK

No comparative figures for the corresponding period for
last year are shown, due to change of operations.
In Active Biotech´s balance sheet for the first half
year of 1998, the Wilh. Sonesson companies were
included.


The Group's statement of changes in (MSEK)
financial
position 30-09-1999

Profit/loss before appropriations and tax -116,6
Depreciation 28,5
Change in working capital 204,7
Cash-flow before investments 116,6
Net investments in tangible assets -36,1
Net investments in intangible assets -18,5
Net investments in financial assets -53,9
Cash-flow after investments 8,1
Change in long-term liabilities -15,7
Distribution of goodwill Wilh. Sonesson -10,3
Other -3,9
Change in liquid funds -21,8

The above statement of changes in financial position
shows the development as if
Active Biotech had been restructured throughout the
whole period. All the
shares in Wilh. Sonesson AB were distributed on the
th
10 of June. The distribution, with
a total effect upon the Group's equity of -223.5 MSEK,
is thus not shown above.


Key figures 30-09-1999


Equity/share 90 SEK
Available liquid funds/share 58 SEK
Group equity/assets ratio 73,4 %
Parent Company equity/assets ratio 64,1 %
Average number of employees 349
Total number of shares 11 246 292


The Interim Report has not been subjected to separate
investigation by the
Company's Auditors.