Interim Report January - March 2001

5/14/2001 11:59 AM EST

The Active Biotech Group


· Both key projects, SAIK-MS and TTS, are proceeding to Phase II
clinical trials

· Increased focus on research projects in Lund

· Financing through partnerships, possible sale of operations and
new share issue

· Operating loss of SEK -87.6 million for the period (SEK -51.5
million), adjusted pro forma year 2000 to SEK -67.8 million

· Vaccine sales of SEK 46.7 million (SEK 53.4 million)

Active Biotech plans to separate and further streamline its operations,
investing heavily in the project portfolios while focusing on a partner
strategy.

The operations of Active Biotech currently focus on the development of
pharmaceuticals and vaccines.

In Lund, the company conducts pharmaceutical research and development
and has very promising projects, particularly in the fields of MS and
cancer.

The company's operations in Stockholm involve developing, manufacturing
and marketing vaccines against diseases such as polio, cholera and
tourist diarrhoea (ETEC).

The ongoing development of these operations requires a variety of
strategies and skills, and the co-ordination gains to be made between
the operations in Lund and Stockholm are therefore limited.

At today's meeting, the Board of Directors of Active Biotech decided
that the operations should be streamlined and divided into two clearly
defined subsidiaries, Active Biotech Research and SBL Vaccin, each with
its own management team and separate organisation. A smaller Group-wide
management team will be responsible for overall co-ordination of the
Active Biotech Group.

The main focus of both units' strategies was approved. For both units,
it involves explicit partner strategies. The company plans to allocate
considerable resources and investments to the project platforms
described below. The initiative is to be financed through partnership
agreements and the possible sale of the SBL operations. The company will
also start preparations for a potential new share issue.
Active Biotech Research

The general view is that the best way of promoting future value growth
at the Active Biotech Group is through a broader, dynamic initiative
focusing on the activities conducted at Active Biotech Research in Lund.
On the basis of the decision made at today's Board meeting, operations
will be reorganised into three platforms. The idea is to clarify the
company's strategy and goals and facilitate the establishment of joint
efforts the company has either already agreed or will be seeking in a
variety of areas. One of the three platforms, the TTS platform, focuses
on biologicals (biotechnology products), while the so-called Q and B
platforms focus on the development of small molecules (low molecular
weight chemicals).

The Q Platform
The company's Q platform forms a basis for the development of
pharmaceuticals used in the treatment of both inflammatory autoimmune
diseases and cancer. The project that has made most progress in this
platform area focuses on developing a drug in tablet form for use in
treating multiple sclerosis, SAIK-MS.

Active Biotech announced at the end of April that the clinical goal of
the Phase I study of SAIK-MS had been attained in a highly satisfactory
manner.

The study was conducted in the form of a dose escalation study aimed at
determining the highest dose that can safely be administered to MS
patients. The study included 35 healthy volunteers and 11 MS patients,
and the Maximum Tolerable Dose (MTD) was set at 1.2 mg/day, after
patients showed uniform signs of inflammatory reactions to the higher
dose of 2.4 mg/day. This means that the safety margin for SAIK-MS is
good, since the estimated therapeutic dose level is 0.03-0.3 mg/day.

Discussions are being held with potential partners with the aim of
initiating joint efforts centering on SAIK-MS. There is considerable
interest in this project. Since development is still at a relatively
early stage, it is important to find the right partner and the right
form of co-operation so as to ensure optimal value growth. Alongside
these discussions, a Phase II study is also being planned to ensure that
the project work proceeds without losing momentum.

Within the framework of the Q platform activities, a co-operation
agreement was reached on April 17, 2001 between Active Biotech and Dr.
John T. Isaacs of the Johns Hopkins University in Baltimore (U.S.) with
the aim of developing a product candidate for use in the treatment of
prostate cancer.

Prostate cancer is the form of cancer with the highest mortality rate
after lung cancer. At the early stages, when the disease is hormone-
dependent, treatment usually involves orchiectomy or chemical
castration. When the disease progresses and is no longer hormone-
dependent, there are currently no effective treatment methods available.

The co-operation will involve the Johns Hopkins University using
experimental models of prostate cancer to evaluate the effect of a
series of substances developed by Active Biotech. A product candidate
will be selected on the basis of this work. Active Biotech has submitted
patent applications for the relevant substances and their use in the
treatment of prostate cancer.

Other activities based on the Q platform aim to develop product
candidates for use in treating other inflammatory/autoimmune diseases
and to define molecules and mechanisms that interact with the Q
substances to produce their biological effects.

The TTS Platform
The cancer project known as TTS (Tumor Targeted Superantigens) was
previously conducted in the form of contract research on behalf of
Pharmacia. At the end of 1999, all rights to the project were acquired
with the aim of taking the project to the evaluation stage under the
company's own auspices.

The TTS project was evaluated during 2000, and a Phase I clinical trial
on a product candidate for use in the treatment of renal cancer and non
small-cell lung cancer was completed. We are now awaiting the final
report on the study, but the preliminary data looks promising. In
addition, extensive development work is under way on the next generation
of TTS products. Since TTS as a concept can be used against other forms
of cancer, work is also under way to develop TTS products for other
indications.

The company is now actively proceeding with the TTS project and is
entering Phase II, and renewed efforts and investments are being devoted
to it. Active Biotech intends to begin negotiations during the year with
Pharmacia pursuant to the options agreement previously reached.

The upcoming clinical Phase II trials are being planned in co-operation
with the Karolinska Hospital in Stockholm and Christie Hospital in
Manchester and are expected to start during the second half of 2001.

The B Platform
In the B platform area in 2000, Active Biotech produced a new basis for
the development of pharmaceuticals for use in the treatment of
autoimmune/inflammatory diseases and cancer. One patent application has
been submitted thus far in this platform area, and additional
applications are being prepared.

The two most advanced subprojects in the B platform area aim to develop
pharmaceutical candidates for use in the treatment of inflammatory bowel
disease (IBD) and rheumatoid arthritis (RA). These two chronic diseases
affect a large group of people in the West.

Other Projects
In addition to the above platforms, other projects are proceeding as
planned.

SBL Vaccin (SBL)

Compared to Active Biotech Research, the operations in Stockholm have
reached a far higher level of maturity, with a number of products on the
market or in late development phases (ETEC, Phase III). Ongoing efforts
will focus on generating maximal sales of existing and upcoming
products. The company will continue to develop its market position in
the Nordic region and to broaden its international market penetration
through close co-operation with major international companies with
strong market organisations. Joint efforts have already been introduced
in some markets, with Aventis Pasteur (international markets) and
Aventis Pasteur MSD (the Nordic region).
Apart from the expenses involved in the current Phase III studies of a
new vaccine against tourist diarrhoea (ETEC), SBL has no plans for any
major investments in new projects or manufacturing plants. The company's
expenses will mainly be attributable to product manufacturing, as well
as marketing and sales in the Nordic region. Income from sales is
expected to increase rapidly now that the SBL Cholera Vaccine and
Dukoral are being launched in new markets, while cost increases will be
limited.

The intent is for SBL to find joint efforts in areas other than those
devoted solely to the marketing of existing products. Among other
things, SBL intends to seek partners for the ETEC project and for the
completion of the Phase III study, as well as for the international
registration and launch of this product, which has a highly interesting
market potential. Joint projects are also planned for the development of
a paediatric indication for use in third-world countries. Further
efforts in the ETEC project, however, await approval of SBL's
application to change the definition of the goal of the study currently
under way by U.S. FDA registration authorities.

Diarrhoea Vaccines
The process involved in WHO registration of the SBL Cholera Vaccine has
now reached the final phase and is expected to be completed during Q4
2001. One of the reasons for this registration is to allow UN organs to
use the vaccine and to build up emergency stocks. Médecins sans
Frontières (MSF) has already built up a small, contingency stock.

In a recent WHO publication, WHO renewed its recommendation of the SBL
Cholera Vaccine as the only vaccine providing effective protection
against cholera. The organisation emphasised that the SBL Cholera
Vaccine is well tolerated and verifies the fact that the vaccine also
provides good protection against ETEC infection.

New Co-operation Agreements
On April 1, a new joint effort was entered into with Aventis Pasteur MSD
on vaccines in the Swedish market.
Since April 1, SBL is also the Danish Statens Seruminstitut's (SSI)
distributor in Sweden and Norway.

Financial Information

Net Sales
The launch of the SBL Cholera Vaccine initiated last year and the
changes to the agreements on agency and distribution operations in
Sweden and Norway have had a major impact on the sales outcome during Q1
2001 compared with the previous year.

Jan. - Sales (%)
Mar.
Vaccine sales 2001 2000 Change 2001 2000
(%)
Vaccines
manufactured in-house
Dukoral 12,3 11,5 6%
SBL Cholera Vaccine 0,0 6,9 neg
Other products 2,6 3,6 -28%
TOTAL 14,9 22,0 -32% 32% 41%
AGENCY PRODUCTS 0,1 10,6 neg 0% 20%
Distribution orders 31,7 20,7 53% 68% 39%
Total vaccine sales 46,7 53,4 -13% 100.0% 100.0%
INCOME FROM CONTRACT 0,0 10,0
RESEARCH
Other income 0,7 1,1
Total net sales 47,4 64,5 -26%

Sales of Dukoral in the Nordic market rose only 6 percent compared with
the previous year as a result of distributors' stock adjustments. Sales
to end customers in Sweden and Norway are continuing to perform well,
reporting an increase of 17 and 38 percent respectively.

Aventis Pasteur is now preparing the launch of the SBL Cholera Vaccine
in markets outside the EU/U.S. The registration process is proceeding
and applications have been submitted in around 25 countries, with sales
expected to start during the second half of the year. During the
corresponding period the previous year, a single order totalling SEK 6.9
million was invoiced to Mozambique.

Agency operations. The windup of the GlaxoSmithKline partnership at the
end of 2000 and the agreement with Aventis Pasteur MSD that came into
force on April 1, 2001, led to a short-term decline in sales during Q1,
when no invoicing was registered. Sales have begun very well for the
Aventis Pasteur MSD travel-vaccination program.

Distribution orders are displaying excellent growth, with sales jumping
53 percent to SEK 31.7 million. The increase in sales is mainly
attributable to volume growth for existing and new operations.

Group Financial Results

The accounting principles used to report research expenses in the Group
were harmonised at the end of the year. This has entailed booking all
expenses related to the diarrhoea-vaccine projects as costs as they
arise. In the corresponding period the previous year, the expenses
involved in these projects were capitalised.

As a consequence of the take-over of all rights to the TTS project from
Pharmacia, continued clinical development is being conducted in-house
and previous agreements concerning contract research ceased to apply as
of December 2000.

The operating loss before financial items totalled SEK -87.6 million
(SEK -51.5 m), while the adjusted pro forma loss for the corresponding
period the previous year was SEK -67.8 million. The change in the
financial result can be attributed mainly to the fall in income from
contract research in the TTS cancer project (SEK 10 million) after the
Pharmacia agreement ceased at year end, as well as to higher research
expenses as the prioritised projects proceed to new clinical phases
according to plan.

The short-term decline in sales income during Q1 is attributable to the
fact that Aventis Pasteur took over the international marketing of the
SBL Cholera Vaccine and that the GlaxoSmithKline agency agreement ended
on December 31, 2000. Despite this, the gross profit and the gross
profit margin on vaccine sales improved, compared with the corresponding
period the previous year.

Operating expenses, excluding the cost of goods sold, rose 13 percent to
SEK 102 million (SEK 74 million). The adjusted pro forma figure is SEK
91 million. The difference is attributable to the continued positive
performance of the prioritised research projects, SAIK-MS, TTS and ETEC,
which have, as expected, led to increased costs, since SAIK-MS and TTS
have now completed Phase I tests and the ETEC project is proceeding to
Phase III.

Altogether, sales, administrative and other income/expenses have fallen
marginally.

The Group's net financial items fell from SEK 76.5 million in 2000 to
SEK 1.0 million this year. This reflects realised profits made in the
Zenit hedge fund during Q1 last year. The operating loss after net
financial items totalled SEK -86.6 million (SEK 25.0 million), while the
previous year's adjusted pro forma profit came to SEK 8.7 million.

Financial Status

The Group's equity/assets ratio on March 31, 2001, was 69.3 percent
(74.3 percent on December 31, 2000). The company had no loans at the end
of Q1.

Cash flow for Q1 came to SEK -89 million (SEK 37 million), which is
explained by the financial result for the period, as well as investments
in production facilities designed to meet future sales growth, and a
positive change in operating capital.

The Group's liquid assets totalled SEK 319 million at the end of the
reporting period (SEK 408 million on December 31, 2000). In addition,
credit lines have been granted, but not utilised, in a total amount of
SEK 30 million.

Shareholders' equity in the Group totalled SEK 547 million at the end of
the reporting period (SEK 646 million on December 31, 2000).

The company currently has no plans to publish a forecast for the full
year 2000, as it will be influenced by the outcome of ongoing business
discussions.

Accounting and Valuation Principles
This Interim Report has been drawn up pursuant to the same principles as
those used in the latest Annual Report.

Upcoming Financial Information

- Q2 Interim Report August 8
- Q3 Interim Report November 6
- The preliminary yearend report for 2001 will be published on
February 14, 2002.

Lund May 9, 2001
Active Biotech AB (publ)

Sven Andréasson
President & CEO

The company's auditors have not reviewed this Interim Report.

Active Biotech is a biotechnology company focusing on research in and
development of pharmaceuticals and vaccines. Our expertise lies in our
in-depth knowledge of the human immune system. We have a high-quality
project portfolio with significant value potential. Important products
and projects include drugs for use in treating multiple sclerosis (SAIK)
and cancer (TTS), as well as the cholera vaccine, SBL Cholera Vaccine
and the tourist diarrhoea vaccines, Dukoral and ETEC. Active Biotech's
net sales in 2000 totalled SEK 280 million.

Active Biotech AB
Box 724, S-220 07 Lund, Sweden
Tel +46 46-19 20 00
Fax +46 46 19 20 50
E-mail