Hansa Medical Year-End Report 2014

Significant events

Fourth quarter 2014

  · Net sales in the Group amounted to TSEK 841 for the fourth quarter 2014,
compared with TSEK 762 for the fourth quarter 2013 and TSEK 392 for the fourth
quarter 2012.
  · Consolidated net profit for the the Group for the fourth quarter 2014
amounted to TSEK -12,771, compared with TSEK -4,206 for the fourth quarter 2013
and TSEK -3,574 for the fourth quarter 2012.
  · Operating profit in the Group for the fourth quarter 2014 amounted to a
total of TSEK -8,558, compared with TSEK -4,282 for the fourth quarter 2013 and
TSEK -3,913 for the fourth quarter 2012.
  · Earnings per share before and after dilation for the fourth quarter 2014
amounted to SEK -0.51, compared with SEK -0.18 for the fourth quarter 2013 and
SEK -0.15 for the fourth quarter 2012.

  · On 1 October 2014, Birgit Stattin Norinder was appointed Chairwoman of Hansa
Medical after Bo Håkansson’s death on 29 September 2014.
  · On 25 November 2014, Fredrik Lindgren was appointed new Chief Executive
Officer.

January - December 2014

  · Net sales in the Group amounted to TSEK 4,716 for the financial year 2014,
compared with TSEK 1,727 for the financial year 2013 and TSEK 2,619 for the
financial year 2012.
  · Consolidated net profit for the Group for the financial year 2014 amounted
to TSEK -29,042, compared with TSEK -17,562 for the financial year 2013 and TSEK
-16,468 for the financial year 2012.
  · Operating profit in the Group for the financial year 2014 amounted to a
total of TSEK -24,709, compared with TSEK -17,629 for the financial year 2013
and TSEK -16,798 for the financial year 2012.
  · Earnings per share before and after dilation for the financial year 2014
amounted to SEK -1.16, compared with SEK -0.75 for the financial year 2013 and
SEK -0.75 for the financial year 2012.

  · On 27 January 2014, the Company reported on successful completion of the
Phase I IdeS study. The study showed that IdeS degraded antibodies safely,
quickly and effectively.
  · On 3 March 2014, the Company applied for and on 6 May 2014, the Company
received approval from the Swedish Medical Products Agency to initiate a Phase
II IdeS study.
  · In March-April 2014, the Company carried out a preferential rights issue
which contributed MSEK 35.6 to the Company, after share issue expenses.
  · On 9 July 2014, the Company announced that it commenced a clinical Phase II
IdeS study in highly-sensitized patients on the waiting list for a kidney
transplant.
  · The Company announced on 18 August 2014, that the second patient included in
the clinical Phase II study was successfully transplanted.
  · Bo Håkansson, Hansa Medical’s Chairman and founder, passed away on 29
September 2014, after a motorcycle accident.

Significant events after the end of the financial year 2014

  · On 7 January 2015, the Company reported that the final patient had been
included and dosed in the clinical Phase II IdeS study in highly-sensitized
patients on the waiting list for a kidney transplant.
  · On 20 January 2015, the Company reported preliminary results from the
clinical Phase II study showing that IdeS quickly and effectively reduces the
levels of HLA antibodies.
  · Göran Arvidson was appointed as CFO on 27 January 2015.
  · On 29 January 2015, the Company announced the formation of a medical
advisory committee for IdeS in anti-GBM (Goodpasture syndrome).
  · Hansa Medical raised on 2 February 2015, a loan of MSEK 20 from the majority
shareholder, Nexttobe AB. The purpose of the loan was to strengthen the
Company’s financial sustainability. The loan incurs a market interest rate and
the lender has the right to demand repayment at the end of 2015.
  · The Company announced on 5 February 2015, that Dr Stanley Jordan has been
appointed as medical advisor in the USA and that approval has been granted by
the American FDA to clinically test IdeS in sensitized transplantation patients
in the USA.
  · The Company announced on 12 February 2015, that it is developing and
submitting a patent application regarding a second generation IdeS molecule
aiming to enable repeated dosage and potentially provide IdeS with a role within
chronic autoimmune disease.
  · The Company announced on 12 February 2015, that a preliminary application
has been submitted regarding admission to trade on Nasdaq Stockholm.
  · The Board of Directors proposed that no dividend is to be distributed for
the financial year 2014.

Message from the CEO

Dear shareholders and other stakeholders of Hansa Medical,

On 28 September 2014, Hansa Medical’s Chairman and founder, Bo Håkansson, died
in a motorcycle accident. Bo is sorely missed, not only by his family and
friends, but also by many business acquaintances on whom he made a lasting
impression during his many years in the Swedish business sphere, and by Hansa
Medical’s employees and Directors. I, myself, had the privilege of working for,
and with, Bo Håkansson for nearly 20 years. That is how, as early as the mid
-1990s, I came into contact with the researchers, headed by Lars Björck, and
research behind Hansa Medical, which at that time was being conducted as a
project in Active Biotech. Since then, I have followed the project through its
establishment as an independent company in 2001 and was CEO of Biolin Scientific
in 2007, when it spun off its subsidiary Hansa Medical to its shareholders. For
a number of years now, I have been back at Hansa Medical, first as a Board
member and, since 25 November 2014, as CEO.

Taking over Hansa Medical, I have the ultimate responsibility for a
pharmaceutical candidate, IdeS, which has significant medical and commercial
potential. I will have the privilege of entering the Company at a stage when
much of the arduous and time-consuming preparatory work in the form of
preclinical development and early clinical studies has been completed, and when
the project, now, enters its most exciting stage: developing the finished
product through pivotal clinical studies.

IdeS is a pharmaceutical candidate that is remarkable in many respects. IdeS
cleaves all IgG type antibodies quickly and effectively, without having any
other known activity in the human body. The cleaving process is the same each
time and the residual product is two antibody fragments. This is a spectacular
and dramatic effect. As IdeS is a natural enzyme from streptococcus bacteria, it
has had thousands of years to evolve and create its role, which is the
explanation for this specificity and efficacy. We have had the opportunity to
study IdeS activity in many different models, in test tubes and in animal and
human subjects. It is therefore well-documented that IdeS has its specific
effect in all humans, regardless of the presence of disease or other clinical
condition.

When IdeS was discovered in 2001, there were serious doubts about whether the
molecule could be turned into a drug. It seemed reasonable that a bacterial
enzyme with such a powerful effect would also have powerful, potentially
negative side effects. For that reason, IdeS was initially commercialised for
laboratory use, and is today used by the pharmaceutical industry to create
antibody fragments. It would take until 2007 before we dared embark on
pharmaceutical development of IdeS. Since that time we have studied IdeS’ safety
profile in a number of preclinical models, in two toxicological studies, in a
Phase I study in healthy volunteers and now, most recently, in a Phase II study
with eight severely ill transplantation patients. Having completed these
studies, we are ever more convinced that IdeS will prove both safe and tolerable
in the great majority of relevant patient groups and indications. And IdeS truly
has many potential medical applications. These include relatively rare and
serious, or even life-threatening, acute autoimmune diseases such as anti-GBM
(Goodpasture syndrome) and Guillain-Barré syndrome. IdeS may also be used to
degrade IgG in order to enable other forms of treatment, such as kidney
transplantation or treatment with blood factors which have lost their effect due
to antibody formation.

In 2014, when we published the results of our Phase I study – in which we showed
that IdeS is both safe and tolerable in effective doses – we attracted
substantial from external parties. Medical teams and clinical researchers around
the world see a potential for using IdeS in a large number of diseases and
clinical conditions. Some pharmaceutical companies see opportunities in using
IdeS in combination with their own drugs. Other pharmaceutical companies see an
opportunity to help develop IdeS in return for future commercial rights. Having
had the opportunity to personally meet a large number of stakeholders of various
kinds and in different parts of the world, I cannot characterise the interest
shown in IdeS as anything other enormous.

What we would now like to do is to complete the development of IdeS through a
number of pivotal development activities, before moving on to the
commercialisation phase. We would like to conduct several clinical studies in a
number of different diseases and clinical conditions. We also need to scale up
and quality-assure production of IdeS in preparation for a market launch. To
ensure an effective process for developing the finished product, we aim to build
support for our development plans through consultative and formal contacts with
regulators. If our current plans come to fruition, IdeS could obtain marketing
authorisation and be launched in as little as a few years.

If IdeS were to be approved only for those relatively rare diseases for which we
would initially like to develop it, the commercial potential is still several
hundred million US dollars in annual sales. If IdeS can reach out to many
indications, or even just a slightly broader palette, the sales potential can
run into the billions.

To achieve all of this, we need, in addition to time, expertise and capital.
Regarding expertise, I believe our organisation already has both ambition and
knowledge. We should of course continue to build our organisation. We have
succeeded in establishing ties with a very strong network of clinicians and
researchers. With regard to capital, we have engaged financial advisors to
determine the best options for funding our development plans, and we have
applied for listing on Nasdaq Stockholm. And as Bo Håkansson would have said,
“for good investments there is always plenty of capital”.

Thank you for your interest,

Fredrik Lindgren, CEO
For further information, please contact:
Hansa Medical AB
Fredrik Lindgren, President and CEO
Mobile: 46 705 61 61 77
E-mail: fredrik.lindgren@hansamedical.com
www.hansamedical.com
About Hansa Medical AB
Hansa Medical is a biopharmaceutical company focused
on novel immunomodulatory enzymes. Lead project IdeS is an antibody-degrading
enzyme in clinical development, with potential use in transplantation and rare
autoimmune diseases. Other projects include HBP (a market introduced diagnostic
marker for severe sepsis) and EndoS (an antibody-modulating bacterial enzyme in
pre-clinical development). The company is based in Lund, Sweden. Hansa Medical's
share (HMED) is listed on NASDAQ First North in Stockholm with Remium Nordic AB
as Certified Adviser. Major shareholders are Farstorps Gård AB and Nexttobe AB.