Interim Report, 1 January - 30 September 2011

Interim Report, 1 January - 30 September 2011

Operating profit/loss of SEK 156.0 m

Huddinge, Sweden—Today, Medivir AB (OMX: MVIR), a research-based
specialty pharmaceutical company focused on infectious diseases, is
publishing its Interim Report for the period 1 January - 30 September
and its operational report for the third quarter of 2011.

Unless otherwise stated all figures are for the group and comparisons in
this Interim Report are with the corresponding period of 2010.

Interim period (January - September)

  · Net sales were SEK 566.8 (53.6) m
  · Profit/loss after tax amounted to SEK 166.9 (-77.7) m
  · Basic and diluted earnings per share were SEK 5.58 (-3.30)
  · Cash flow from operating activities amounted to SEK 44.7 (-35.0) m;
cash and cash equivalents and investments in securities etc. amounted to
SEK 550.0 (421.8) m at the end of the period

Third quarter (July - September)

  · Net sales were SEK 122.2 (17.9) m
  · Profit/loss after tax amounted to SEK -53.4 (-27.3) m
  · Earnings per share were SEK -1.71 (-1.04)

Business highlights in the third quarter

  · Maris Hartmanis was appointed as Medivir's new Chief Executive
Officer in September and in addition the company's management was
strengthened
  · Patient enrolment was completed in the three global phase 3 studies
on TMC435
  · TMC435 was granted Fast Track status by the FDA in the USA
  · Medivirs partner Tibotec will conduct a combination study involving
TMC435 and Pharmasset's PSI-7977 for hepatitis C genotype 1 patients
  · Four TMC435 abstracts, one of which is an oral presentation of the
final analysis, including SVR24 data, from the TMC435 phase 2b PILLAR
study have been accepted for presentation at the AASLD Meeting in San
Francisco on 4-8 November
  · Medivir's subsidiary, BioPhausia, divested its generics business,
BMM Pharma AB

“We are standing on a solid foundation for taking the company forward
towards its goal of becoming a profitable pharmaceutical company”

CEO's comment
At the end of September, I accepted the invitation from the Board of
Directors and my predecessor, Ron Long, to take on the responsibility of
becoming Chief Executive Officer of Medivir. Under Ron Long's
leadership, the company has gained a clear commercial focus and took
important steps towards its goal of becoming a profitable pharmaceutical
company. Accordingly, we are now standing on a solid foundation for
driving and enhancing the assets we possess in our project portfolio and
continuing to build on our commercial platform.

In September, we also executed changes to our management team to
strengthen Medivir operationally and strategically in its R&D
activities. Bertil Samuelsson was appointed as Chief Scientific Advisor,
and simultaneously, Charlotte Edenius took over as Executive Vice
President of R&D. We also strengthened our clinical development segment
by appointing Jens D. Kristensen as Executive Vice President of
Clinical.

The company's business operations
Since the acquisition of BioPhausia, Medivir has been organized into two
business segments, Pharmaceuticals and Parallel Import.

The Pharmaceuticals business segment includes the group's research and
development portfolio, the cold sore product Xerclear® and the original
pharmaceuticals owned by BioPhausia. In the third quarter of 2011, our
generics business, BMM Pharma, was sold to Bluefish Pharmaceuticals. The
divestment was a natural step in the strategic refocusing of BioPhausia
that commenced in 2010.

Net sales from pharmaceutical sales in the quarter were SEK 47.4 (0) m,
and SEK 0.0 (17.1) m from outlicensing and collaboration agreements.
EBITDA for the third quarter not adjusted for accounting estimates for
the acquisition of BioPhausia amounts to SEK -27.8 m, equivalent to a
margin of -58.4%.

Our business segment for parallel import, Cross Pharma, imports,
packages and sells original pharmaceuticals. At the beginning of the
quarter, Cross Pharma's net sales were somewhat weaker than expected,
but staged a recovery at the end of the period. The business area
continued to grow in year-on-year terms. In the third quarter, a number
of products with insufficient market potential were identified,
resulting in a SEK 5.8 m inventory impairment loss. EBITDA for the third
quarter not adjusted for inventory impairment and accounting estimates
for the acquisition of BioPhausia amounts to SEK 4.6 m, equivalent to a
margin of 6.2%

R&D
Within Infectious Diseases, the hepatitis C portfolio is continuing its
positive progress. This applies to in-house preclinical projects and the
clinical projects, where TMC435 is our leading investigational candidate
drug (CD). In November, we will be presenting final efficacy data from
TMC435 phase 2b study on treatment-naïve patients, C205 (PILLAR) in a
late breaker oral presentation at the AASLD conference in San Francisco
4-8 November.

In other disease areas, we are developing Cathepsin K against skeletal
disorders and Cathepsin S against neuropathic pain. Cathepsin K,
MIV-711, is currently in a number of preclinical safety studies
including mapping its safety profile. If the outcome of these studies is
positive for the project, the next step is to commence clinical
development. The next milestone in the Cathepsin S project will be to
designate a CD.

Future
Myself and the Medivir team are looking forward to continuing to develop
Medivir towards the company's stated objective of becoming a profitable
pharmaceutical company. Our challenge is to work on a goal-oriented
basis to create the best possible prospects of developing the company's
research and development projects and pharmaceutical products. We expect
to be able to report further data from clinical studies through the
coming quarters that corroborate the potential of TMC435.

We will continue to drive high-quality and innovative pharmaceutical
research and exploit the commercial opportunities of the products we
received in the acquisition of BioPhausia. Medivir has a solid financial
position, and the strategy the Board and my predecessor set remains in
place—to become a profitable Nordic research-based specialty
pharmaceutical company focusing on infectious diseases.

Maris Hartmanis
CEO and President

For more information, please contact
Rein Piir, EVP Corporate Affairs & IR, mobile: +46 (0)70 53 72 92
Maris Hartmanis, CEO, phone: +46 (0)8 5468 3113