2008 REPORT. Agreement on the breast cancer test signed with SRL Ranbaxy. Indian multi-centre breast cancer study completed

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1 Q2 28 REPORT 1ST HALF-YEAR HIGHLIGHTS: Agreement on the breast cancer test signed with SRL Ranbaxy Indian multi-centre breast cancer study completed NOK 44.8 million share issue European patent granted for Alzheimer's disease HIGHLIGHTS FOLLOWING QUARTER END: Patent granted in Japan for use of gene expression in diagnosis of several diseases Research grant awarded by the EU Commission

2 Q2 report 2 Research and development Breast cancer DiaGenic is on schedule for a commercial launch in India. The multi-centre clinical study in India that involved the collection of blood samples from 9 different hospitals has been completed. The study included blood samples from a total of 742 women.the samples consisted of both the early and advanced stages of breast cancer, and an age range comprising both pre and post-menopausal women. The study population consisted of two groups; one group used for test calibration and another independent group used for documentation. In the latter group overall level of accuracy on all analysed samples was fulfilling the clinical needs and in accordance with earlier studies. More detailed studies show good levels of accuracy across the different stages of breast cancer. In younger women the accuracy was more than 5 percentage points better than among older women. Mammography has reduced sensitivity for breast cancer in young females. The study has thus confirmed that DiaGenic's gene selection from Europe and the USA has retained its diagnostic accuracy in another ethnic population in India and can detect both early and advanced forms of cancer in all age groups. Following the quarter end the results were presented to DiaGenic's partner in India SRL Ranbaxy and support their preparations for the commercial launch. Prior to the launch SRL Ranbaxy's logistical chain for blood tube collection and transport is to be documented through a small technical study. DiaGenic expects the launch in India to take place soon after this study is carried out. In a separate study where samples from Europe were sent to India for analysis demonstrated correspondingly high levels of accuracy for women with interlobular cancer (ILC). This is a rarer type of cancer that is difficult to detect with normal mammography. Alzheimer's disease During the first half year DiaGenic has carried out an extensive follow-up study comprising of statistical analyses of historical samples used in the development of the current prototype. Available patient information has been updated by the collaborating hospitals with a more detailed clinical diagnosis (such as a breakdown of the stage of the disease). Information on the development of the disease from the sample date until now are assessed against the gene expression analysis from the initial sample. These analyses have been presented at several international congresses, including the 5th International Pharmaco-Economic Conference on Alzheimer's Disease (IPECAD) in Newark, USA, the 18th Alzheimer's Europe Conference in Oslo and, following the quarter end, the International Conference on Alzheimer's Disease (ICAD) in Chicago, USA. This study demonstrates that the prototype Alzheimer's test gives the same accuracy irrespective of the degree of the disease and that it is a very useful tool for the detection of mild to moderate Alzheimer's disease. Some patients with the disease Mild Cognitive Impairment (MCI) will subsequently develop Alzheimer's disease. It is important that these are identified for early pharmaceutical intervention. This has been confirmed in meetings with leading pharmaceutical companies. The above-mentioned data analyses indicate that gene expression analysis may provide a prognosis for Alzheimer's disease in an MCI population In order to secure a broad range of AD (and MCI) samples cooperation has been established during the first half year with several leading universities and institutes in Europe, through research collaboration under the EU supported project EDAR ( Beta amyloid oligomers in the early diagnosis of AD and as markers for treatment response )). As a result DiaGenic now receives blood samples from several European countries. This supports the ongoing multi-centre study with FUGE funding in Norway and Sweden.

3 Parkinson's disease Development of a test for the early diagnosis of Parkinson's disease was started during the first quarter with funding from the Michael J. Fox Foundation.

3 3 Parkinson's disease Development of a test for the early diagnosis of Parkinson's disease was started during the first quarter with funding from the Michael J. Fox Foundation. Gene selection for this test is based on information on informative genes from both our partner in the USA (Dr Clemens Scherzer from Brigham and Women's Hospital and Harvard Medical School) and from DiaGenic's own research. The set of informative genes identified are being tested on a RTPCR based platform. Subsequently the selected gene set will be documented with RNA from Parkinson samples that are available from Harvard for the project. Regulatory During the first half year the first meeting was held with the American Food and Drug Administration (FDA). DiaGenic presented all the studies that have been completed or are ongoing. The purpose of the meeting was partly to obtain feedback on DiaGenic's proposal for the clinical use of the Alzheimer's disease test in the USA and partly to start planning for a multi-centre clinical study in the USA. This study is necessary for the FDA's approval of the test for diagnostic use in the USA and the study is expected to start in the first quarter of 29. Preparations for ISO certification of the company and European CE approval of the breast cancer and Alzheimer's disease tests are proceeding in parallel. Nye Patenter innvilget During the second quarter DiaGenic has received information from the European Patent Office that it will approve the patent application for the diagnosis of Alzheimer's disease using blood samples and the analysis of gene expression. When the patent is issued it will be valid in 19 European countries. The patent covers the diagnostic use of gene expression. The method for probe selection is general and not limited to a specific way to select probes. During the quarter the company has also been granted a patent for South Africa - the first country to grant a patent for patent group 3.This group covers a number of important gene families in cancer diagnosis, including breast cancer. Q2 report During the first half year DiaGenic was also granted patents in India and Australia. After the end of the quarter DiaGenic has received information that the patent application (no ) for Japan will be approved. The patent covers DiaGenic's method for generating data to diagnose disease by using blood samples and the analysis of gene expression. The patent includes among others Alzheimer's disease and various types of cancer, including breast cancer. The method for probe selection is general. Japan is an important and growing market for molecular diagnostic tests and the patent is important for our business development in this area. The company has also been informed since the end of the quarter that patent application (no. 5475) for New Zealand will be approved. The patent covers a set of gene sequences for the detection of disease using blood samples and gene expression analysis. The patent includes, among others, Alzheimer's disease and breast cancer. These recently awarded patents illustrate the breadth of DiaGenic's intellectual property rights and patent strategy.

Q2 report 4 Cooperation and partners DiaGenic has signed a distribution agreement for the breast cancer test in with SRL Ranbaxy Ltd.

Under the agreement SRL Ranbaxy will market and sell the test, and undertake the collection and distribution of blood samples.

Initial marketing will be focused on young females in the upper income tier and gynaecologists in this segment.

TM DiaGenic is participating in an extensive EU supported research programme called SPIDIA, under the framework programme FP7.

4 Q2 report 4 Cooperation and partners DiaGenic has signed a distribution agreement for the breast cancer test in with SRL Ranbaxy Ltd. SRL Ranbaxy is India's largest laboratory chain with more than 8 collection centres and laboratories, and more than 11 employees. Under the agreement SRL Ranbaxy will market and sell the test, and undertake the collection and distribution of blood samples. The agreement is exclusive and SRL Ranbaxy will make significant investments in marketing the test. The agreement also contains provisions on minimum volumes for years 2 and 3. Initial marketing will be focused on young females in the upper income tier and gynaecologists in this segment. A contract has also been signed for the analysis of blood samples by Labindia Instruments Pvt. Ltd. DiaGenic will receive a fee of 2,5 Indian Rupees for each test sold. TM DiaGenic is participating in an extensive EU supported research programme called SPIDIA, under the framework programme FP7. SPIDIA is an acronym for Standardisation and improvement of generic pre-analytical tools and procedures for in vitro diagnostics and is a major research programme over 4 years involving 4 biotech companies (Qiagen Gmbh, Dako Denmark AS, AROS Applied Biotechnology AS and DiaGenic ASA), 6 universities and research institutions and the official European Standardisation organisation (CEN).The project is an integrated cooperative project funded with EUR 9 million to improve, standardise and quality assure the molecular biological techniques used in blood and tissue based diagnostic testing. DiaGenic is, among other tasks, responsible for the development of blood based diagnostic methods, while DAKO and AROS are responsible for tissue based testing. This project supports DiaGenic's development of new tests, and improvements to existing tests, as well as enabling it to maintain a close dialogue with other important companies in this field.

5 5 Q2 report Finance Revenues and research grants DiaGenic had no operating revenues in the first half of 28. Research grants are entered net in the accounts. In the second quarter of 28 DiaGenic posted NOK 1,689k in research grants, compared with NOK 1,88k in the corresponding period in 27. For the first half of 28 the company posted NOK 3,379k in research grants compared with NOK 3,759k in the corresponding period in 27. Operating costs For the second quarter of 28 total operating costs after deducting government grants were NOK 8,33k compared with NOK 6,833k in the corresponding period in 27. Salaries and personnel costs amounted to NOK 3,187k of total operating costs in the second quarter compared with NOK 3,56k in the corresponding period in 27. Other operating costs for the second quarter of 28 were NOK 4,933k compared with NOK 3,598k in the corresponding period in 27. The main reason for the increase in other operating costs for the second quarter of 28 compared with the corresponding period in 27 is an increase in activity in relation to commercialisation in India. For the first half of 28 total operating costs after deducting government grants amounted to NOK 16,23k compared with NOK 14,264k in the corresponding period in 27. For the first half of 28 salaries and personnel costs totalled NOK 7,248k compared with NOK 6,547k in the corresponding period in 27. The rise mainly relates to an increase in staffing to cover an expansion in product development. Other operating costs amounted to NOK 8,538k of total operating costs against NOK 7,352k in the corresponding period in 27.The main reason for the increase in other operating costs is greater activity in relation to commercialisation in India. Balance sheet Equity at 3 June 28 was NOK 47,327k compared with NOK 34,95k at 3 June 27. Short-term debt at 3 June 28 amounted to NOK 4,792k compared with NOK 3,256k at 3 June 27. Long-term debt at the end of the second quarter of 28 was NOK 1,29k and relates to a lease of equipment for the company's laboratory. Cashflow Cashflow from operations for the second quarter of 28 was NOK -5,65k compared with NOK -1,718k in the corresponding period in 27.The most important reason for the change in cashflow from the second quarter of 27 to the second quarter of 28 is a change in receivables. Net cashflow from financing was NOK 41,494k in the second quarter of 28 compared with NOK 24,176k for the second quarter of 27, due to the fact that the share issue in the second quarter of 28 was larger than the issue in the second quarter of 27. Cashflow from operations for the first half of 28 was NOK -12,687k compared with - 17,229k for the first half 27.The main reason for the improvement in cashflow from the first half of 27 to the first half of 28 was a change in accounts payable. Net cashflow from financing was NOK 41,377k in the first half of 28 compared with NOK 24,117k in the first half of 27. The main reason for the change is that the share issue in the first half of 28 raised net proceeds (after deducting issue expenses) of NOK 41,585k while the issue in the first half of 27 raised NOK 24,257k in net proceeds.the company's liquid funds are held in bank deposits and amounted at 3 June 28 to NOK 48,172k. Financing and equity capital On 7 May 28 the company issued 8 million shares at a subscription price of NOK 5.6 per share. The gross proceeds from the issue amounted to NOK 44.8 million. As a result of the issue the share capital has increased by NOK 4k to NOK 2,587k. The half-year report has been prepared in accordance with IAS 34. The accounting principles used in this interim report correspond to those used in the annual accounts for 27. There are no material related party transactions for the first half of 28.

6 Q2 report 6 Financial Statement- q2/ 28 PROFIT & LOSS ACCOUNT (figures NOK thousands) 28 Q2 27 Q Jan - 3 June 27 1 Jan - 3 June 27 1 Jan - 31 Dec Operating income Other income Total operating revenue Operating costs Wages and social costs Depreciation Other operating costs Total operating costs Operating profit (loss) Financial income Financial expenses Pre-tax profit (loss) Income tax costs (benefits) NET PROFIT (LOSS) Net profit per share (figures in NOK) Net profit per share after dilution -,16 -,16 -,13 -,13 -,34 -,34 -,31 -,31 -,66 -,66 BALANCE SHEET (figures NOK thousands) 28 3 June 27 3 June Dec ASSETS Fixed assets Goodwill Fixed assets Total non-current assets Current assets Other receivables Cash and cash equivalents Total current assets TOTAL ASSETS EQUITY AND LIABILITIES Equity Paid in equity Other equity Total equity Provisions Pension liabilities Total provisions Long term debt Other long term debt Total long term debt Liabilities Accounts payable Social security, VAT etc. payable Other current liabilities Total current liabilities TOTAL EQUITY AND LIABILITIES

7 7 Q2 report Financial Statement- q2/ 28 CASH FLOW STATEMENTS (figures NOK thousands) 28 Q2 27 Q Cash flow from operating activities Pre-tax profit (loss) Income taxes paid Ordinary depreciation Impairment of fixed assets Fair value granted options rights Loss on sale of fixed assets Change in pension scheme liabilities Change in inventories, accounts, receiveable and accounts payable Change in other short-term receivables and other short-term liabilities Net cash flow from operating activities Cash flow from investment activities Proceeds from sale of fixed assets Acquisitions of fixed assets Net cash flow from investing activities Cash flow from financing activities Contribution of share capital Payment of long term dept Net cash flow from financing activities Net change in cash and cash equivalents Cash and cash equivalents Changes in Equity and Number of Shares (figures in NOK/numbers) Share capital Share prem. reserve Other reserves Other equity Total equity Number of shares As at 1st January 27 Fair value granted subscription rights Increase of capital - 11th May 27 Net loss 1st January - 31 December 27 Allocation of net loss As at 31st December 27 Fair value granted subscription rights Increase of capital - 7 May 27 Net loss 1st January - 3 June 28 Allocation As at 3th June

8 Q2 report 8 Risk factors The information contained in this report includes certain forward looking statements that address activities, events or developments that the company expects, projects, believes in or anticipates will occur in the future. These statements are based on various assumptions made by the Company which are beyond the Company's control and subject to risk factors and uncertainties. The Company is exposed to a large number of risk factors including, but not limited to, market acceptance of the company's products, necessary approvals from the authorities and the clinical effectiveness of the company's products. Reference is made to the annual report for 27 for further information relating to risk factors. As a result of the above-mentioned or other risk factors actual events and the actual result may differ significantly from that indicated in the forward looking statements. For the second half of 28 key risks are considered evolve around product development activities, launch and sales progression of the breast cancer test in India in addition to financial risks related to foreign exchange rate fluctuations and interest rates. Outlook DiaGenic will actively support SRL Ranbaxy in the launch of the breast cancer test in India. Initial target group will be younger females and their gynaecologists. The Company will continue to prepare for a distribution network in Europe, focusing on countries where the private payer segment on healthcare and diagnostics is significant. The ongoing projects to ensure European CE approval for diagnostic use for the breast cancer and the Alzheimer's test continues. Declaration by Board and Chief Executive We declare to the best of our belief that the financial statements for the first half of 28, 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 belief, that the half-year report provides a fair view of the information required under 5-6 (4) of the Norwegian Securities Act. Oslo, 21 August 28 Håkon Sæterøy Chairman Gustav Ingemar Kihlsröm Deputy Chairman Ingrid Alfheim Board member Anna Malm Bernsten Board member Marie Skarbøvik Buchmann Board member Praveen Sharma Board member Erik Christensen Managing Director DiaGenic ASA Grenseveien 92 N-663 Oslo Phone: diagenic.com

INTERIM REPORT - Q1 2009

INTERIM REPORT - Q1 2009 FOR EARLIER DISEASE DETECTION 2 Highlights A quarter dedicated to progress on CE marking Highlights Finalized the necessary analytical work for CE marking of both BCtect and ADtect