Bactiguard strengthens the organization for the next development phase

Third quarter (July-September 2014)

  · Revenues amounted to SEK 28.1 (32.5) million, a decrease of 14 % over the
corresponding quarter last year
EBITDA amounted to SEK 2.2 (4.7) million, a decrease of 53 % over the
corresponding quarter last year
  · Reported net profit for the quarter amounted to SEK -15.7 (-5.1) million,
corresponding to SEK   -0.47 (-0.26) per share. Net profit for the quarter has
been negatively affected by market valuation of the bond with SEK -6.8 million
(+9.0 million). This effect is of an accounting nature, and has no affect on
cash flow.
  · Operating cash flow for the quarter amounted to SEK -21.8 (0.5) million,
corresponding to SEK   -0.66 (0.02) per share (major payments related to the IPO
on Nasdaq Stockholm have had a negative effect on operating cash flow)

Nine-month period (January-September 2014)

  ·
Revenues for the period amounted to SEK 93.8 (83.2) million, an increase of 13 %
over the corresponding period last year

  ·
EBITDA for the period, excluding costs related to the IPO, amounted to SEK 17.2
(14.8) million, an increase of 16 %

  ·
Net profit for the period amounted to SEK -79.4 (-22.3) million, corresponding
to SEK -3.17       (-1.12) per share and has been negatively affected by costs
associated with the IPO and market valuation of the bond totalling SEK 48
million. Market valuation of the bond has no effect on cash flow and is of a
pure accounting nature

  ·
Operating cash flow amounted to SEK -12.4 (-9.1) million, corresponding to SEK
-0.5 (-0.46) per share

Key events during the third quarter

  · Bactiguard expands in Europe through a new distributor agreement regarding
Portugal

Key events after the end of the third quarter

  · Strengthening of the marketing organization
  · Repurchase of bonds in the market

Bactiguard’s CEO Johan Rugfelt, comments on the quarter:

Bactiguard is in a development phase, where we expand our market presence,
invest in our sales- and marketing organization, develop our product portfolio
and explore the possibilities of adding new licensing businesses. We have a
solid platform in our current licensing business, which generates revenues of 80
-90 million SEK per annum, and an interesting growth business in our own
portfolio of solutions for infection prevention in healthcare. Sales generated
by our own portfolio are initially much more volatile and will, in the ramp up
period, fluctuate significantly between quarters. As deliveries to more markets
commence and repeat orders are generated, we will enter a more stable growth
phase.

Market activity was somewhat slow in the third quarter due to seasonality. In
terms of revenues and earnings, the third quarter was weaker than the same
period last year. During the third quarter 2013, Bactiguard made a substantial
delivery to Iraq, which led to a very strong quarter and affects the comparison.
We are currently in intense negotiations in Iraq to secure deliveries in a
longer term perspective. The need for infection prevention solutions is
substantial but, given the political situation in the country, the timing of
future deliveries is difficult to assess.

One of our strategic priorities is investing in the sales- and marketing
organization to support our distributors and develop direct sales. Since the end
of June, we have strengthened competence in the company by recruiting a regional
sales director for Europe and a marketing director, who will also focus on
developing direct sales in the Swedish market. Preparations for the start of
sales in new markets are intense. We have developed our sales training modules
and conducted training activities in South America, India and the Middle East.
The market launch in South America is now ongoing, with focus on Brazil.

To expand our market presence in Europe is another strategic priority. We review
our current distributors and look into alternative ways of doing business in new
markets. Recently, we signed a new distribution agreement for Portugal. We have
also entered an agreement with a distributor in Iran and an initial order,
comprising all products in our portfolio, was shipped in the third quarter.

In order to pave the way for market expansion, we systematically work to get our
products approved in more markets and engage in clinical studies. Product
approval processes are for example ongoing in China. The Chinese process has
been ongoing for a long time and in the summer of 2014 we reached an important
milestone by receiving approval from an expert panel, based on a technical and
clinical review. An administrative examination is now ongoing and once this
process has been completed, which we expect before the end of this year, a
decision on final product approval will be made. We continuously engage in
clinical studies and in the near term plan to initiate studies in for example
India and Sweden. At the same time, we develop our existing product portfolio by
adding new variants and initiating development of closely related products,
based on market needs.

The pre-study phase in the collaboration with MAQUET Critical Care, which was
initiated in the summer with the aim of developing Bactiguard® coated catheters
for patients in intensive care, has been completed with positive results. Next
step in the process will be entering a development agreement, but this has been
pushed back in time due to other project priorities at MAQUET.

Through the IPO in June, we achieved an important goal, namely refinancing the
company and securing financial flexibility for expansion and growth. The net
debt of the company was significantly reduced and annual interest costs were
halved, from 50 to 25 million SEK. Since then, both in the third and fourth
quarter, Bactiguard has repurchased bonds in the market and further reduced the
outstanding bond loan by a nominal amount of 38.5 million SEK. This will reduce
annual interest costs by 4 million SEK and we still maintain a healthy liquidity
and financial flexibility.

Bactiguard has never been stronger. At the beginning of December, we will move
into our new, integrated head office, production and R&D facility, located next
to the Karolinska University Hospital south of Stockholm This step will make us
even better equipped to continued developing our business.

Johan Rugfelt

CEO

The interim report for Bactiguard Holding AB (publ) for the period January
-September 2014 is available as a PDF.

This is information that Bactiguard Holding AB (publ) is required to publish in
compliance with the Swedish Securities Market Act and/or the Financial
Instruments Trading Act. The information was submitted for publication on 14
November 2014, at 08:00.

A telephone conference for analysts and media will be held at 10:00 CET today,
where CEO Johan Rugfelt and CFO Fredrik Järrsten will present the interim report
and answer questions.

The interim report and a presentation will be available for download at
www.bactiguard.com.

To participate in the conference, please dial +46 8 519 990 30

For further information, please contact:

Johan Rugfelt, CEO, switchboard: +46 8 440 58 80

Fredrik Järrsten, CFO, mobile: +46 725 500 089

Cecilia Edström, Director of Communications, mobile: +46 722 262 328

About Bactiguard

Bactiguard is a Swedish medtech company with a business concept of preventing
healthcare-related infections, reducing the use of antibiotics and saving lives
by developing and supplying infection prevention solutions for the healthcare
industry. The company’s patented coating prevents healthcare-associated
infections by reducing bacterial adhesion and growth on medical devices.
Bactiguard®-coated urinary catheters are market leading in the US and Japan, and
in recent years the company has developed its own product portfolio of coated
catheters for the urinary and respiratory tract and the blood stream. Bactiguard
is currently in a strong expansion phase, focused on new markets in the EU,
Middle East, Asia and South America. The company reported sales of approximately
SEK 130 million in 2013 and has 60 employees, headquarters in Stockholm and
production facilities in Sweden and Malaysia. The Bactiguard share is listed on
Nasdaq Stockholm. Read more about Bactiguard at www.bactiguard.se.