Pharmexa's board of directors announces further information about the proposed combination of Affitech AS and Pharmexa A/S and answer some recently asked questions

On March 3, 2009, the boards of directors of Pharmexa A/S and Affitech AS
announced a conditional agreement to combine the two companies by means of a
share-for-share acquisition by Pharmexa A/S of Affitech AS. The combination is
contingent on subsequent shareholder approval in the two companies and is the
subject of an Extraordinary General Meeting in Pharmexa which has been called
for on May 5, 2009. Affitech's shareholders have already approved the
transaction, whereas on Pharmexa's side, the transaction requires the approval
of at least two-thirds (66.7%) of the votes at the General Meeting. 

Any decision to combine Pharmexa with another company ultimately rests with
Pharmexa's shareholders. The role of Pharmexa's board of directors is to
propose what the board believes is the best way forward, seen from the
shareholder's point of view, but it remains a proposal until the shareholders
decide for or against it. 

At the recent Annual General Meeting in Pharmexa, the Affitech transaction was
discussed at length, although it was not on the agenda for that meeting. From
this discussion it is clear that there is a need for continuous information
about the Affitech transaction and the alternative. The board of directors of
Pharmexa fully acknowledges its responsibility in providing this information.
Two stock exchange releases have been issued on March 3, 2009 (Pharmexa
announcement number 5) and on April 7, 2009 (announcement number 9). To read
these releases, please go to Pharmexa's website www.pharmexa.com. These
announcements describe the rationale for the combination with Affitech as well
as the strategy and strengths of the proposed combined company. Announcement
number 9 also describes what alternatives to the combination Pharmexa's board
of directors has considered and set forth the arguments why a combination with
Affitech in the board's opinion is the best way forward. 

Irrespective of this information, a number of questions have come up, either
through direct contact to Pharmexa's management or at the recent Annual General
Meeting that the board of directors believes should be made available to all
Pharmexa's shareholders: 

How did the boards of directors of Pharmexa and Affitech arrive at an ownership
split of 30/70? 
While Pharmexa is a publicly traded company on the NASDAQ OMX Copenhagen and
therefore has a price that in essence equals the number of outstanding shares
times the current stock price, Affitech is a private company whose shares are
not listed. Arriving at a fair price for Affitech has therefore been an
integral part of Pharmexa's due diligence investigations throughout the
negotiations with Affitech. Affitech's assets and liabilities have been
carefully assessed just as Pharmexa has analyzed in depth the scientific and
commercial merits of the technologies and product candidates that Affitech
brings to the new combined company. To arrive at an actual value of Affitech,
Pharmexa has carried out a so-called risk adjusted discounted cash flow
analysis of Affitech's most important projects and Pharmexa's board of
directors believes this valuation fully supports the ownership split arrived
at. 

It is a legal requirement in a transaction such as this that a third party can
verify to Pharmexa's shareholders that the valuation arrived at is fair and
this third party opinion must be made available to all Pharmexa's shareholders.
For this transaction, Pharmexa's board of directors asked the accounting firm
of Ernst & Young to provide such a valuation report. The opinion can be found
on Pharmexa's website www.pharmexa.com. As is the case for Pharmexa's board and
management, Ernst & Young likewise conclude that the negotiated value of
Affitech is fair. 

Why do we not create a dormant company and simply wait for the results from the
phase III trial of GV1001 (the so-called TeloVac trial)? 
The board of directors of Pharmexa believes that the only feasible alternative
to a combination with Affitech is to create a dormant company whose only assets
would be the agreement with the Korean company KAEL concerning GV1001 and the
agreement with H. Lundbeck concerning a new Alzheimer's vaccine. Pharmexa's
board evaluated that alternative and as previously argued found this
alternative inferior to the proposed combination with Affitech. 

Nevertheless a number of private investors have argued that the best course of
action is to await additional data from the TeloVac trial, since, if these data
are positive, with hindsight the company would regret that it had allowed
itself to be diluted through the combination with Affitech. This line of
argument assume a knowledge of the future that currently does not exist and
though it is off course theoretically possible that such a scenario could
occur, the board of directors of Pharmexa remains convinced that Pharmexa's
shareholders stand a better chance of realizing real gains in the value of
their shares through the combination with Affitech. Reference is made to
Pharmexa's announcement number 9 which can be found on the company's website. 

It should be emphasized that although it is currently impossible to predict the
eventual outcome of the TeloVac trial, it is possible to say that it is
unlikely that this outcome will be known for the next several years since only
approximately 400 out of 1,100 patients have been recruited to date. If a
dormant company was created, it would in all likelihood have to stay dormant
well into the next decade. The company does not currently have the financial
resources to sustain itself through a long dormant period and would therefore
sooner or later have to raise additional capital. During these years,
Pharmexa's shareholders would stand little chance of realizing any value from
their investments. 

Last but not least, a dormant company may not be able to retain key personnel.
Thus a dormant Pharmexa may not be able to continue to support the TeloVac
trial under the current agreement with KAEL, which could have an adverse effect
on the timely completion of the trial. 

What was the nature of Pharmexa's relationship with Affitech prior to the
combination discussion, and why did we recently sell our so-called diabody
technology to them? 
Pharmexa purchased the patent portfolio for the diabody- and liposome
technology from a bankrupt German biotech company called Vectron Therapeutics
in 2004 at a price of Euro 35,000. The patents were acquired because Pharmexa
believed that the patents, particularly those covering liposomes in the longer
run could be valuable in connection with Pharmexa's AutoVac technology.
However, following the purchases of GemVax and the Epimmune assets in 2005 and
the subsequent disappointing results from Pharmexa's AutoVac breast cancer
vaccine, Pharmexa's focus on the AutoVac technology decreased and neither the
diabody nor the liposome technologies ever came to be employed in the company.
On that basis Pharmexa's management decided in 2007 to enter into an agreement
with Affitech pursuant to which Affitech could market these technologies as
part of their product offering, while the two companies would share in the
returns. At that time, Pharmexa had not been able to outlicense the
technologies to any other third party. 

Towards the end of 2008, as part of the process to reduce Pharmexa's costs and
divest its non-core assets, if possible, the diabody part of the Vectron patent
portfolio was sold to Affitech (which expects to use this technology for their
next generation antibodies) at a price of Euro 100,000 and exceeded the price
paid for the entire patent portfolio in 2004. The amount, however, was not of a
magnitude where it would significantly affect Pharmexa's financial result for
2008. At the time of this divestment, these technologies had not been spoken of
as part of Pharmexa's product portfolio for several years and management
therefore concluded that this agreement was not significant enough to warrant a
separate announcement, and that it in any event was covered by the already
announced process to reduce Pharmexa's costs and divest non-core assets. 

Thus, the Vectron patent portfolio was never a key technology in Pharmexa, the
technologies were never employed in our laboratories or formed part of any
product candidate. Eventually, the patents were sold for more than they were
bought for. In short, Pharmexa has had an arms-length relationship with
Affitech since 2007 and it was this relationship which eventually led to active
discussions about an actual combination of the two companies. It may be worth
mentioning in this context that the diabody technology did not form part of the
above mentioned determination of the fair value of Affitech. 

Will the minority shareholders in Pharmexa be fairly treated after the
transaction? 
Pharmexa's board of directors is acutely aware of and acknowledges its
responsibility to Pharmexa's 14.000 shareholders, many of which are private
investors. If Pharmexa's shareholders decide to approve the combination with
Affitech, Affitech's current shareholders, which are predominantly large
Norwegian professional investors, will own a large majority of the shares in
the combined company. Certain shareholders in Pharmexa have voiced a concern
that these professional investors could with relative ease, bring themselves to
an ownership percentage of more than 90%, in which case they would be able to
squeeze out the remaining shareholders through a compulsory redemption and then
delist the company. 

In this context, however, it is important to bear in mind that for Affitech and
its shareholders, the attraction of a combination with Pharmexa is not least
driven by Pharmexa's listing on the NASDAQ OMX Copenhagen and its diverse
shareholder base. In short, the public listing is a key element of Affitech's
strategy in the years to come. And, as previously argued in announcement number
9, the board of directors of Pharmexa believes that the presence of a number of
larger shareholders carries with it benefits to the smaller shareholders which
on balance outweighs this theoretical risk. 

The board of directors of Pharmexa recommends a combination with Affitech
In summary, the board of directors of Pharmexa A/S believes that the proposed
combination of Affitech AS and Pharmexa A/S will create a company that is well
positioned in the very attractive market of monoclonal antibody therapeutics.
The company's proprietary technologies are at the forefront of the industry,
have been validated through numerous partnerships and resulted in several
product candidates for further clinical development. In the future, the
discovery engine will fuel a sustainable pipeline of both innovative products
against novel targets and products against clinically validated targets. These
products will be developed alone or in partnership with others. In contrast to
therapeutic vaccines, the monoclonal antibody field is already well established
and is expected by Datamonitor to grow by more than 10% per year over the next
five years. Consequently, for this and the other reasons stated above, the
board of directors has concluded that when one consider all the currently
available information, the creation of a dormant company that keeps GV1001 as
its main asset remains for Pharmexa's shareholders a high risk and an
unattractive alternative when compared to the board's proposal. 

The board of directors of Pharmexa believes that the proposed combination with
Affitech has the potential to create significantly more value for Pharmexa's
shareholders, both in the short, medium and long term, than the creation of a
dormant company. While Pharmexa's existing shareholders will be diluted under
the terms of the combination agreement with Affitech AS, the board of directors
of Pharmexa believes that the fair value of the Affitech business is in excess
of the market value of the shares to be issued in the transaction and that the
combination of the two businesses increases the likelihood of Pharmexa's
shareholders being able to realize enhanced value over the short to medium
term. 

On this basis, the board of directors and the senior management in Pharmexa
unanimously recommend that Pharmexa's shareholders at the Extraordinary General
Meeting on May 5, 2009 approves the board's proposal to combine Pharmexa A/S
with Affitech AS. 


Hørsholm, May 1, 2009


Ole Steen Andersen
Chairman of the board of directors, Pharmexa A/S


Additional information:
Claude Mikkelsen, Senior Vice President, Finance & Investor Relations, tel +45
4516 2525 or +45 4060 2558 
Achim Kaufhold, Chief Executive Officer, tel +45 4516 2525