As Filed with the Securities and Exchange Commission on June 30, 2000
------------------------------------------------------------------------------


                     SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C. 20549

                                 FORM 20-F

              ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                    THE SECURITIES EXCHANGE ACT OF 1934

                For the fiscal year ended December 31, 1999

                       Commission file number 0-29076

                              BIORA AB (publ)
           (Exact name of Registrant as specified in its charter)

                             BIORA CORPORATION
              (Translation of Registrant's Name into English)

                           THE KINGDOM OF SWEDEN
              (Jurisdiction of incorporation or organization)

                                 SE-205 12
                               MALMO, SWEDEN
                  (Address of principal executive offices)

           Securities registered or to be registered pursuant to
                         Section 12(b) of the Act.

                                    None

     Securities for which there is a reporting obligation pursuant to
                         Section 12(g) of the Act.

                              Ordinary Shares
                              (Title of Class)

           Securities registered or to be registered pursuant to
                         Section 15(d) of the Act.

                                    None

     Indicate the number of outstanding shares of each of the issuer's
        classes of capital or common stock as of December 31, 1999.

            Title of Class                     Number of Shares
            --------------                     ----------------
            Ordinary Shares                       21,203,800

Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for much shorter period that the
Registrant was required to file such reports) and (2) has been subject to
such filing requirements for the past 90 days.

                  Yes: |X|                      No: | |

Indicate by check mark which financial statement item the Registrant has
elected to follow.

                  Item 17: | |                 Item 18: |X|

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                             TABLE OF CONTENTS

                                                                          Page
                                                                          ----
 PART I......................................................................3
      Item 1.   Description of Business......................................3
      Item 2.   Description of Property.....................................28
      Item 3.   Legal Proceedings...........................................29
      Item 4.   Control of the Registrant...................................29
      Item 5.   Nature of Trading Market....................................30
      Item 6.   Limitations Affecting Security Holders......................33
      Item 7.   Taxation....................................................33
      Item 8.   Selected Consolidated Financial Data........................37
      Item 9.   Management's Discussion and Analysis of Financial
                  Condition and Results of Operations.......................41
      Item 10.  Directors and Officers of the Registrant....................50
      Item 11.  Compensation of Directors and Officers......................55
      Item 12.  Options to Purchase Securities from Registrant..............56
      Item 13.  Interest of Management in Certain Transactions..............57

 PART II....................................................................60
      Item 14.  Description of Securities to be Registered..................60

 PART III...................................................................60
      Item 15.  Defaults upon Senior Securities.............................60
      Item 16.  Changes in Securities and Changes in Security for
                  Registered Securities.....................................60

 PART IV....................................................................60
      Item 17.  Financial Statements........................................60
      Item 18.   Financial Statements.......................................60
      Item 19.   Financial Statements and Exhibits..........................60



      Unless otherwise indicated, references to "SEK" are to kronor, or
krona in the singular, and references to "U.S. dollars," "US$," "dollars"
or "$" are to the lawful currency of the United States. Solely for the
convenience of the reader, this Annual Report contains translations of
certain krona amounts into U.S. dollars at specified rates. Unless
otherwise stated, the translations of kronor into U.S. dollars have been
made at the noon buying rate of dollars in terms of kronor in New York City
for cable transfers in kronor as certified for customs purposes by the
Federal Reserve Bank of New York (the "Noon Buying Rate") in effect on
December 31, 1999, which was $1.00 = SEK 8.505. No representation is made
that krona amounts have been, could have been or could be converted into
dollars at the rates indicated or at any other rates.

      As used herein, "Biora" or the "Company" refers to Biora AB and its
consolidated subsidiaries, unless the context indicates otherwise.

      Emdogain(R) and PrefGel(TM) are registered trademarks of the Company.

                    -----------------------------------


                                   PART I

ITEM 1.   DESCRIPTION OF BUSINESS

GENERAL

      Biora develops, manufactures, markets and sells products primarily
for treatment of diseases in the mouth. The overall goal is to use the
Company's patented technologies and biological knowledge to develop biology
based products primarily for treatment of diseases in the mouth. During
1999, Biora continued to grow the market penetration in North America,
Europe and Japan In the marketing and operational areas, Biora had, by the
end of 1999, launched Emdogain, the Company's principal product, in 28
countries and grew from 85 to 92 employees, most of whom were recruited
into Biora's international sales organization. Simultaneously Biora's
efforts in research concerning matrix proteins have continued. This
investment has produced results during 1999 and 2000 that indicate some new
areas of use for Emdogain and other enamel matrix proteins. In 1999, the
Food and Drug Administration (FDA) approved Emdogain, for use as an adjunct
to a minimally invasive surgical technique. The FDA approval indicates that
Emdogain could be utilized in conjunction with scaling and root planing for
the treatment of periodontal intrabony defects. The approval is for teeth
in the "aesthetic zones".

      Emdogain is an innovative treatment for defects caused by periodontal
disease based on findings relating to natural tooth development by the
founders of Biora in conjunction with the Karolinska Institute, a renowned
center for medical research in Stockholm, Sweden. Periodontal disease
causes the progressive loss of the supporting soft and hard tissues
surrounding the tooth. Emdogain, which is applied in gel form on the
tooth-root surface during periodontal flap surgery, promotes the regain of
such tooth-supporting tissues and hence reattachment of the tooth. In
Biora's controlled clinical trials, use of Emdogain as an adjunct to
periodontal flap surgery resulted in significant regain of tooth-supporting
tissues as compared to conventional periodontal flap surgery alone. Regain
of attachment was observed in patients within the first year of treatment
with Emdogain and increased throughout the three-year follow-up period. In
addition, Biora believes that Emdogain will provide the Company with a
platform to develop new products and indications based on the protein that
gives Emdogain its unique properties. Biora submitted a patent application
relating to new, positive biological effects of Emdogain-related proteins
for woundhealing in February 1998 (the "XP11 project"), and pre-clinical
studies started in Denmark, Norway and Sweden in 1998. Clinical pilot
studies are to begin in Scandinavia during 2000. Research in the area of
enamel matrix proteins indicates that these proteins can play a large role
in the treatment of several disease conditions, both inside and outside the
oral cavity. For indications outside the mouth, such as treatment of
chronic wounds and bone formation the Company intends to seek collaboration
with other companies.

      Emdogain received regulatory approval in 1995 in the European
Economic Area (the "EEA") (which comprises the European Union ("EU") member
countries as well as Norway, Iceland and Liechtenstein) pursuant to a CE
Mark and was introduced on a limited basis in selected European countries
in 1996. Emdogain received approval in the United States from the FDA in
September 1996 and in Japan from the Ministry of Health and Welfare (the
"MHW") in January 1998.

      United States surveys have estimated that advanced periodontal
destruction affects about one in eight people. Advanced destruction
increases with age, reaching a prevalence of over one-third among people
aged over 55. Treatment of the initial stages of periodontal disease
includes oral hygiene measures and scaling. Defects associated with the
more advanced stages of periodontal disease require additional treatment,
including surgical procedures and antibiotics. Based on industry
statistics, there were approximately five million periodontal flap surgery
procedures performed worldwide in 1995. The Company believes that most of
the patients undergoing such surgeries could be candidates for Emdogain
treatment. In an attempt to improve upon the results of conventional
periodontal flap surgery, periodontists and dentists specializing in
advanced dental treatment ("periodontal specialists") currently utilize
adjunctive mechanical treatments in approximately one out of seven
periodontal flap surgeries performed. In contrast to these treatments,
Emdogain offers a biology-based treatment of periodontal defects with
predictable results, rapid post-operative clinical healing, little
discomfort, ease of use and no increase in chair time. Consequently, the
Company believes that periodontal specialists and patients will prefer
Emdogain to, and use Emdogain more extensively than, currently available
treatments used in conjunction with conventional periodontal flap surgery.

      Biora is also developing other novel biology-based products,
including additional products based on Emdogain technology. These products
are at various stages of clinical and pre-clinical development and have yet
to be approved by applicable regulatory authorities.

      o     The Company is currently performing pilot studies in Sweden,
            United States and other parts of the world with Emdogain for
            local application to accelerate the healing and following non
            surgical treatment of defects caused by periodontal disease.

      o     The Company has tested Emdogain WT in clinical trials in
            Sweden. Final results from the Swedish study are not
            conclusive. Improvements were seen in periodontal probing but
            not in bone gain after one year. Emdogain WT is specifically
            intended to be used in conjunction with complicated wisdom
            tooth extractions to eliminate or reduce periodontal lesions
            that typically afflict neighboring teeth. Based on industry
            statistics, there are approximately ten million complicated
            tooth extractions performed annually in the United States. The
            Company estimates that at least half of these procedures could
            potentially benefit from the application of Emdogain WT. While
            Biora is still conducting research relating to Emdogain WT, the
            Company has postponed clinical trials in the United States for
            this indication in order to prioritize research on Emdogain for
            non-surgical treatment.

      o     Dry mouth is like periodontitis, a widespread disease. There is
            a great need for better ways to help those who are afflicted
            with this disease. The professors Jorgen Ekstrom and Herbert
            Helander had in their research found a very innovative method
            as well as promising pre-clinical and clinical work results. At
            the beginning of 2000 the Company acquired the rights to their
            patented discovery that could lead to a new drug for dry mouth.

      o     Cell studies show that growth of certain cancer cells
            (carcinoma) is inhibited by Emdogain. The discovery is
            supported by the knowledge of Emdogain's mechanism of action
            that Biora has previously reported, that is, that Emdogain
            promotes growth of connective tissue cells while certain
            epithelial cell experience so-called programmed cell death.
            Biora has submitted an application for global patent protection
            for the discovery. The first clinical studies will test
            Emdogain as an adjunct to traditional cancer treatment and will
            begin during the year 2000.

      o     In new pilot studies Biora has found that certain enamel matrix
            proteins stimulate local formation of new bone. The continuing
            work is intended to document the effect and to determine future
            areas for indications. Biora is heading a collaboration project
            with four European universities, which among other things is
            applying for funding within the fifth frame program of the
            European Commission. The goal is to prove that enamel matrix
            proteins can be as or even more effective then the growth
            factors being developed today. The speed of this project is
            depending on the success of the application for funding.

      Given the relatively small number of periodontal specialists and the
need for a highly specialized sales force, Biora continues to market and
sell its products primarily through its own marketing and sales
organization. In 1999, Biora concentrated its resources in markets in which
Emdogain has already been introduced to increase penetration in these
markets. Since 1997, the Company used a portion of the net proceeds
received from the Company's initial public offering of Ordinary Shares in
February 1997 (the "IPO") to develop marketing and sales activities in the
United States and Europe, and the Company intends to continue using such
proceeds to strengthen its marketing and sales activities in especially in
the United States, Germany and Japan in 2000. Currently, Emdogain is sold
through Biora AB and subsidiaries in 15 countries and through distributors
in an additional 13 countries and the Company estimates that approximately
170,000 patients have been treated with Emdogain worldwide as of April 30,
2000, as compared to 100,000 patients as of April 30, 1999. New distributor
agreements have been signed in South Korea, Taiwan, Puerto Rico and
Colombia. The distributor agreement with Colombia also includes the markets
Venezuela, Peru, Ecuador and Panama. In the April 2000 a distributor
agreement has been signed with Brazil. Regulatory work has been started to
get Emdogain approved in these markets.

      In 1999, the Food and Drug Administration (FDA) approved Emdogain,
for use as an adjunct to a minimally invasive surgical technique. The FDA
approval indicates that Emdogain could be utilized in conjunction with
scaling and root planing for the treatment of periodontal intrabony
defects. The approval is for teeth in the "aesthetic zones". While Biora
currently is not marketing Emdogain for use in minimally invasive surgical
techniques, the Company is evaluating its options for marketing Emdogian
for use in conjunction with these minimally invasive surgical techniques.

      Before the product is used the dentist mixes both components. Biora's
global marketing strategy is to establish Emdogain among specialists in
their respective countries in order to subsequently reach out to a broader
customer group. Emdogain has since its market launch been delivered as two
components, one with the freeze dried protein and the other with a
solution, a "gel". To simplify use Biora has developed a new formulation of
Emdogain. The product is stabilized as a premixed gel and filled in a
syringe that can only be used once. The product, Emdogain Gel, has been
launched in Europe during the second quarter of 2000 and will be launched
in the United States and Canada, subject to FDA approval, which the Company
expects during the second half of 2000.

      As of December 31 of 1999, the number of United States periodontists
that purchased Emdogain at least once increased to 2,550 , of which 1250
have made repeat purchases from 1,720 by the end of 1998. However, Biora's
market share in the United States is less then two percent. Biora's
penetration of the U.S. market has initially been hindered by Emdogain
receiving less exposure than originally anticipated when it was launched in
April 1997, partly as a result of delays in the publication of reviews in
industry journals. Biora's sales in the United States increased following
publication of the seven articles on Emdogain in The Journal of Clinical
Periodontology in September 1997 and the exposure received by Emdogain at
the Conference of the American Academy of Periodontology (the "AAP") in
October 1997. The single largest marketing activity in the United States is
the Annual Meeting of the American Academy of Periodontology. In 1999 the
meeting was held in San Antonio, Texas, and several American and
international specialists reported both new data regarding their own
positive clinical experience utilizing Emdogain in periodontal surgery as
well as results from clinical trials. The meeting attracted approximately
6,000 periodontists and dentists from around the world. During the year
Biora Inc. Conducted 40 educational seminars for dental professionals,
during which clinicians shared their experience utilizing Emdogain.

      Biora began marketing Emdogain in 1996 through its own sales force in
Sweden and wholly-owned subsidiaries in Germany and The Netherlands. As of
April 30, 2000, Biora's market share in Sweden was five percent and in
Germany was almost seven percent of the estimated total number of flap
surgeries performed in each of the markets. In Sweden, approximately 90
percent of the approximately 500 specialized clinics in the country that
treat advanced periodontitis have purchased Emdogain at least once,
approximately 70 percent of which have made repeat purchases. Germany is at
present the biggest market for Emdogain in Europe. As of December 31, 2000
An increasing number of dentists perform surgical interventions to treat
periodontitis in Germany. Sales in Germany began in 1996, and during 1998
sales in Germany and Austria more than doubled compared to 1997. During
1999 Biora GmbH sales increased by 16 percent over 1998. At the end of
March, 2000 Biora had sold Emdogain to approximately 7,000 customer in
Germany. The sales development in Germany was lower then expectations. The
stagnation of sales on the German market was mainly caused by a defocus and
deviation from Biora strategy. Local management was removed at the end of
1999. After a period of refocus and education a new General Manager was
appointed in June 2000. Biora markets Emdogain (i) through its own sales
force in Denmark, Finland, Iceland, Norway and Sweden, (ii) through
wholly-owned subsidiaries in Germany (covering Austria, Germany and
Switzerland), Italy, The Netherlands (covering Belgium, Luxembourg and The
Netherlands) the United Kingdom (covering the United Kingdom and Ireland)
and the United States, and (iii) through distributors in Canada, Japan,
Israel, France, Spain, Portugal, Greece, the Czech Republic, Poland,
Mexico, Puerto Rico, The Philippines and South Africa.

      The Company believes that its present lead product, Emdogain, offers
its customers a more efficacious, cost-effective and convenient solution to
the treatment of defects caused by periodontal disease than existing
treatments and thereby will serve as an entry vehicle for the Company's
other innovative products for the dental therapy market. The key elements
of the Company's strategy are to (i) expand its marketing and sales force,
(ii) develop new products and indications based upon patented Emdogain
technology and (iii) identify and develop new patentable biology-based
products for the dental therapy market and even for general therapeutic
indications outside the oral cavity.

      Biora was founded in 1986 for the purpose of commercializing the
results of research conducted by its founders. Biora's America Depositary
Shares are listed on the NASDAQ National Market in the United States and
Biora's ordinary shares are listed on the O-list of the Stockholm Stock
Exchange in Sweden.

      The address of Biora's principal executive offices is SE-205 12
Malmo, Sweden and its telephone number at such offices is +46-40-32-13-33.

PERIODONTAL DISEASE AND CONVENTIONAL TREATMENT

      Periodontal disease is an infection caused by bacterial accumulation
on the teeth and along the adjacent gums. The mildest form, clinically
termed gingivitis (bleeding gums), is reversible and can be eliminated by
means of professional dental care and adequate oral hygiene measures.
However, in many individuals in whom gingivitis is not controlled, the
disease progresses into periodontitis. Effective treatment of periodontitis
is possible only through professional intervention.

      A healthy tooth attachment apparatus is made up of the root cementum,
the outer layer of the root; the periodontal ligament, which both anchors
the root to the jaw bone and cushions the tooth; and the jaw bone, which
serves to hold the teeth. During the course of periodontitis, the gums
become detached from the tooth-root surface as the attachment apparatus is
gradually destroyed as a consequence of bacterial infection and the
accompanying inflammatory process. As detachment progresses, a periodontal
pocket forms between the tooth root and the gums. The depth of the pocket
(usually measured in millimeters) indicates the severity of the disease. A
periodontal pocket may deepen so that the tooth is no longer properly
supported, leading to deteriorated function and eventually tooth loss.

      Professional intervention to treat periodontitis includes periodic
professional cleaning, such as root planing and scaling. Root planing and
scaling involve the removal of hard and soft bacterial deposits on the root
surfaces within the periodontal pocket. For serious cases where a
significant amount of jaw bone has been lost, the additional use of
surgical procedures is warranted. The standard surgical technique used in
these cases is periodontal flap surgery. This involves the incision and
reflection (folding back) of the gums in order to expose the root surface
below the gum margin and the jaw bone to allow for extensive mechanical
debridement (the removal of granulation tissue as well as soft and hard
deposits from the root surface) of these normally unreachable areas. The
gums are then repositioned and sutured in close proximity to the tooth and
surrounding jaw bone in order to reduce or eliminate pockets.

      When successful, conventional periodontal flap surgery merely arrests
further deterioration of the attachment apparatus. Typically, this means
that there is no regain of lost periodontal attachment structures and
deepened periodontal pockets may remain. Consequently, the results of
conventional treatment are often unsatisfactory to the patient and to the
periodontal specialist. The patient often complains of cosmetic and
aesthetic problems, such as longer looking teeth and open gaps between
teeth. The periodontal specialist is often dissatisfied because while the
disease has been controlled, there has not been a "cure"; the tooth has not
been returned to its original form and function.

PRODUCTS AND TECHNOLOGY; RESEARCH AND DEVELOPMENT

Research & Development Process

      The emphasis on research and development within Biora continues, both
in the search for new biologically based methods and to develop Emdogain
for use in treatment of other diseases in the mouth. This emphasis during
1999 provided new knowledge that supports marketing efforts for Emdogain
and which at the same time gives Biora possibilities to develop a broader
commercial platform.

      The research in enamel matrix proteins, which led to the principle
product Emdogain, gives Biora a platform to develop new biology based
products to be used both in and outside the mouth. Biora expects that
during the year 2000, the company will be able to launch two indications;
treatment of evulsed teeth (trauma), and exposed root surfaces (recession
defects). The Trauma indication will be launched during an international
Trauma Conference in Oslo, Norway in June 2000. The Recession defect
indication will be launched in the 3rd or 4th quarter of 2000, following
the reports from clinical studies. The studies are expected to be ready in
June/July and the reports are expected in September. The subsidiary Biora
BioEx AB was established to perform research regarding indications outside
the mouth, for example wound healing and local bone formation.

      Conducting the clinical studies necessary for marketing approval for
new indications generally takes two to three years. The time frame for the
development of new products is considerably longer, generally ranging from
five to 15 years depending upon the complexity of the indication or product
and the length of the clinical trials. Prior to receiving marketing
approval for new products, (i) initial trials must be conducted that form
the basis for patenting; (ii) studies must be conducted (both in the
laboratory and in simulated models) to document the effects and safety of
the product; and finally (iii) clinical trials must be authorized and
conducted. Biora's pre-clinical research consists of three parallel
operations:

      o     Tissue Components. Tissue components-particularly matrix
            proteins-are prepared and characterized.

      o     Effects. The biological effects of the product are tested in
            the laboratory.

      o     Formulation. A formulation for the product is developed that
            provides for optimal handling and efficacy.


      While either a clinical trial or new product development is being
conducted, a production method must be established and the appropriate
pharmaceutical formulation (e.g., tablet, gel or aerosol) must be developed
prior to the final stages of the clinical studies. Finally, the results of
the clinical trials and the new product development and related
documentation must be approved by the regulatory authorities in the markets
in which Biora intends to market the new indication or product.

Products

      The Company currently has two products approved for marketing
(Emdogain and PrefGel) and several products and new indications under
development. Emdogain was developed by Biora during the period from 1988 to
1995 and the Company intends to expand Emdogain technology to develop and
commercialize new formulations as well as new indications for Emdogain.
PrefGel is a more tissue-friendly product for conditioning and cleaning
tooth surfaces than presently utilized acids and is intended to further
strengthen the biology-based approach to periodontal therapy.

      The Company's two approved products and products under development
and their respective applications/indications and status are shown in the
following table. Products under development are listed in order of such
product's expected approval for marketing in Europe and the United States.
With respect to the products under development, no assurance can be given
that the Company will be successful in developing these new products,
obtaining approvals or clearance to market such products, or in marketing
such products.


<TABLE>
<CAPTION>
PRODUCTS AND NEW                                                                   STATUS
INDICATIONS UNDER         ----------------------------------------------------------------------------------------------
   DEVELOPMENT                    INDICATION                      UNITED STATES                   REST OF WORLD
-----------------                 ----------                      -------------                   -------------
<S>                       <C>                              <C>                             <C>
Emdogain                  Topical application for the      FDA approval(1) obtained in     European approval (the "CE
                          regain of tooth attachment       September 1996; marketing       Mark") received in June
                          lost to periodontal disease.     commenced in the second         1995; marketing commenced
                                                           quarter of 1997.                in Europe in 1996; Japanese
                                                                                           approval received in January
                                                                                           1998, marketing commenced in
                                                                                           April 1998.

PrefGel(2)                Topical gel that cleans          FDA amended marketing           CE Mark received February
                          and conditions tooth-root        clearance obtained in May       1998; marketing commenced
                          surface.                         1998; marketing commenced       second quarter 1998. Not
                                                           in 1998.                        approved in Japan under
                                                                                           current classification.

Emdogain Gel              New formulation of Emdogain      Application submitted to        European approval in March
                          packaged in a ready-to-use       FDA in March 2000.              2000. Regulatory process will
                          syringe.                                                         start in Japan during 2000.

Emdogain WT               New indication of Emdogain       Clinical trials postponed       Clinical trials in Sweden
                          for the treatment of damage      until further notice since      completed in 1999. Results
                          caused by complicated            results from Swedish            not conclusive.
                          extractions of wisdom teeth.     trials not conclusive.

Emdogain Recession        New indication of Emdogain       Clinical trials started         Final report from clinical
                          as a local application to        1999. Expected to be            trials in June Launch
                          treat receded gums.              finished during second          expected in second half of
                                                           half of 2000.                   2000.

Emdogain Trauma           New indication of Emdogain       Clinical trials began in        Market launch will take
                          for the regain of tooth          1999.                           in June 2000 at an place
                          attachment in connection                                         international Trauma
                          with reimplantation of                                           convention in Oslo.
                          evulsed teeth.

Emdogain Non surgical     Subgingival application of       Clinical trials started         Pilot studies commenced in
                          Emdogain to achieve              second half of 1999.            1997 and continuing to
                          periodontal regain without       Approval received by FDA as     develop application
                          surgical intervention.           Minimally Invasive surgery      methods.
                                                           in 1999. Launch subject to
                                                           good results from clinical
                                                           trials in late 2000.

Woundhealing XP11         Local application of             Clinical trials commenced       Pilot studies commenced in
                          Emdogain to accelerate the       in 1999.                        1997; clinical trials
                          postoperative healing                                            commenced in 1998. Clinical
                          process following oral                                           trials to begin in 2000.
                          surgery.

Emdogain Endodontics      New indication of Emdogain       Pilot studies started in        Pilot studies in Sweden
                          for root canal treatments.       1999.                           commenced in 1996. Clinical
                                                                                           trials started in 2000.
</TABLE>

(1)   Specifically, the FDA-approved indication for use appearing on
      Emdogain's package insert reads as follows: Emdogain is intended as
      an adjunct to periodontal surgery for topical application onto
      exposed surfaces to treat intrabony defects without furcations
      resulting from loss of tooth support due to moderate or severe
      periodontitis.

      Under the XP11 project, Biora submitted a patent application relating
to new, positive biological effects of Emdogain-related proteins for
woundhealing in February 1998, and pre-clinical studies are being planned
in the Scandinavian countries (Denmark, Norway and Sweden) in 1998 and
1999. In addition, Biora is preparing a patent application based on studies
of the effects of new protein combinations (the "XP20 project"). In
December 1997, Biora acquired the patent rights for a new protein patent
that formed the basis of the XP20 project from the Center for Oral Biology
("COB"), a research foundation formed in 1986 by the Karolinska Institute
in Stockholm, Sweden. The protein is present during normal tooth
development in humans and Biora intends to investigate the potential of
this protein combination for use in dental surgery. Biora also relinquished
its rights to a patent for a duo- ceramic implant developed by COB in
December 1997. The patent was relinquished to enable the Company to focus
greater resources on the expansion of its core biology-based products
program.

Emdogain

      Emdogain is an innovative treatment for periodontal defects caused by
periodontal disease. It is applied in gel form on the tooth-root surface
during periodontal flap surgery to help promote the regain of
tooth-supporting periodontal tissues and hence reattachment of the tooth in
patients suffering from loss of periodontal attachment due to periodontal
disease or trauma. Emdogain simulates one step of the biological process in
nascent tooth development. This step involves the deposit of a protein
matrix layer on the developing root, thereby providing for the formation of
the attachment apparatus. With time, the treatment results in the regain of
the lost tooth support and function.

      Patients qualifying for Emdogain treatment typically have periodontal
pockets deeper than six millimeters with marked loss of jaw bone. In
Biora's controlled clinical trials, adult patients with periodontal disease
who had lost most of the attachment achieved regain of jaw bone within 16
months of treatment with Emdogain to about two-thirds of normal levels, as
compared to unchanged levels for a different, but comparable, site on the
same patients treated with conventional periodontal flap surgery.

      The preparation and application of Emdogain are relatively simple
and, in contrast to currently used mechanical approaches to treatment, not
particularly technique sensitive. Emdogain, which must be refrigerated
during storage, comes as a freeze-dried powder, together with a liquid
"vehicle" solution. One milliliter of the vehicle is added to the powder
and the residual gel is applied, by means of a syringe, onto the exposed
and cleaned root surfaces in connection with periodontal flap surgery.

      Emdogain received the CE Mark in the EEA in June 1995, FDA approval
in the United States in September 1996 and from the MHW in Japan in January
1998. The Company began marketing Emdogain in Europe in 1996, in the United
States in the second quarter of 1997 and in Japan in April 1998.

PrefGel

      PrefGel was originally developed under the name EDTAgel, and received
European approval under the name PrepHgelTM (before being changed to
PrefGel) in February 1998. A prior version of PrefGel received marketing
clearance from the FDA in September 1994, but Biora did not market the
product in the United States at that time. Biora subsequently developed a
new version of PrefGel and consequently, filed a request for an amended
marketing clearance from the FDA for the product prior to its being
marketed in the United States (which Biora received in May 1998). The
Company began marketing of the product in Europe in the second quarter 1998
and in the United States during the third quarter 1998. PrefGel was not
approved in Japan under the current classification. Biora is considering
but has not yet decided to submit a new application. PrefGel is meant to
replace the strong acids periodontists presently use to clean the root
surface during periodontal surgery. Because of its neutral pH, PrefGel does
not damage the root surface or surrounding soft tissues, and the Company
believes that PrefGel will afford periodontists a greater complement of
products for use during invasive oral surgical procedures.

Emdogain Gel

      Emdogain Gel is a stabilized formulation of Emdogain dissolved in the
vehicle. Thus, the product can be shipped and stored in a pre-packed
ready-to-use applicator. The actual indication is identical to that for
Emdogain. Biora believes that Emdogain gel is more simple and user-friendly
than Emdogain, enhancing the appeal of the product to practitioners,
especially in "first-use" situations. The Company has received approval in
Europe to market Emdogain Gel but not yet in the United States. As it has
the same contents as Emdogain, Biora does not believe that regulatory
authorities will require additional safety studies. Biora has conducted
clinical trials in Europe, which were completed in the beginning of 1999.
Emdogain Gel has been launched in some markets in Europe in April.
Registration documentation is compiled and submitted for the United States
in March. Biora is planning start the registration process For Emdogain Gel
together with its distributor Seikagaku for the Japanese market as soon
approval from FDA is available, probably before the end of 2000.

Emdogain WT

      Emdogain WT involves the use of Emdogain for a new
indication--complicated wisdom tooth extractions. Through evolutionary
processes jaw bones are becoming smaller, resulting in less room for wisdom
teeth. As a consequence, normal eruption of wisdom teeth is hindered and
the teeth must often be extracted. Despite successful completion of this
complicated form of surgery, periodontal pockets often form on the adjacent
surface of the neighboring second molar. Emdogain WT, applied in
conjunction with surgical extraction of an impacted wisdom tooth, may
eliminate or at least reduce the development of neighboring periodontal
pockets. Biora has completed clinical trials for Emdogain WT in Sweden
during 1999. Based on the results from the trials in Sweden, the Company
has postponed clinical trials in the United States for this indication in
order to prioritize research on Emdogain for non-surgical treatment.

Emdogain Recession

      Biora is developing a new indication of Emdogain as a local
application to treat receded gums. In many people, gum tissue recedes to
expose the root surface of teeth (often on teeth at the front of the
mouth). These gum defects, known as "recession defects", many times are
caused by gum inflammation or incorrect or excessively hard tooth-brushing.
Biora is conducting multi-center clinical trials in Sweden, Belgium, The
Netherlands and Germany to determine if the surgical procedure used to
cover exposed root surfaces has a better effect when conducted in
conjunction with the use of Emdogain. The twelve-month follow-up on these
studies is expected to be completed during the second half of 2000. Biora
started clinical trials in the United States in 1999 and results are
expected in the middle on 2001.

Emdogain Trauma

      Biora is developing a new indication of Emdogain for the regain of
tooth attachment in connection with reimplantation of evulsed teeth (i.e.,
teeth that have been dislodged completely without breaking). Biora received
the CE Mark to market Emdogain Trauma in 1995, and started clinical trials
in Canada in 1999. The indication will be launched to the European and
Canadian markets during an international Trauma convention in Oslo in June
2000.

Emdogain Nonsurgical

      Emdogain was approved in 1999 in the U.S. as an adjunct treatment in
mild periodontitis in the area of the front teeth. The American Food and
Drug Administration approved Emdogain for use with minimal invasive
periodontal surgery. This means that Emdogain can be used in connection
with conventional treatment of periodontitis, such as scaling and root
planing to treat periodontal intrabony defects in aesthetic zones to
optimize tissue height. Biora intends to further document the use of
Emdogain in conjunction with different types of manual and mechanical
"scaling and root planing". This documentation is expected to be finished
for evaluation in the beginning of 2001.

Woundhealing

      When Emdogain was launched in Europe in 1996 the company received
reports from periodontists that wounds from oral surgery healed more
quickly. Since then, similar observations were reported from all new
markets where Emdogain was launched. Subsequently, the study of Emdogain's
wound healing effect has become an important pre-clinical project for
Biora.

      Biora has shown in cell culture studies that Emdogain-covered
surfaces inhibit certain bacteria, especially some of the pathogens behind
caries (e.g. Streptococcus mutans) or periodontal disease (e.g.
Actinobacillus actinomycetemcomitans). Another interesting bacteria is
Staphylococcus, which is common in e.g. "hospital disease".

      This implies that an Emdogain-treated area is kept free from
pathogens, which improves healing without need for prescription of local or
general antibiotics. While several of the pathogenic bacteria area are
inhibited but not killed in contact with Emdogain, there are other, less
harmful bacteria, that are not affected or perhaps even favored. This type
of modulating effect on bacteria opens for the possibility to use Emdogain
also for other indications.

      The wound healing effect is believed to rest not only with the
contact inhibition on bacteria but also with the increased production of
favorable growth factors by connective tissue cells. New studies are
directed at the interaction between these cells and the epithelial cells,
which will cover the wound.

      Biora has submitted several patent applications for the new findings
and the first results will be published during this year, in cooperation
with the dental schools in Oslo in Norway, Gothenburg in Sweden and Ulm in
Germany, and from the dental school ACTA in Amsterdam.

      Continued work with wound healing indications outside the oral cavity
is planned to be conducted by Biora's new subsidiary Biora BioEx AB.

      Biora is presently in the early stages of testing the local
application of Emdogain to accelerate the postoperative healing process
following oral surgery. Pilot studies commenced in Europe in 1997 and
clinical trials commenced in Europe in 1998. Clinical trials commenced in
1999 in the United States. Further clinical trials are planned to start in
Denmark and Norway during second half of 2000.

      Emdogain has already been tested for safety for application in wounds
from surgery, and has been used on more than 170,000 patients since selling
began.

Emdogain Endodontic

      Biora is presently developing an Emdogain-based product for use in
connection with Endodontics. Following unsuccessful root canal therapy, an
endodontic lesion at the tip of the root can develop, which indicates the
continued presence of an infection in the root canal that is associated
with the destruction of the periodontal ligament and the jaw bone
surrounding the root tip. Such lesions may be treated by means of a
surgical approach and the Company believes that Emdogain Endodontic could
potentially improve the healing process through the regain of lost
structures. Pilot studies commenced in Sweden in 1996 and clinical trials
started in 2000. Interest has also been shown in the possibility of using
Emdogain with conventional root canal filling.

Xerostomia (Dry mouth)

      As a further step in Biora's concentration on diseases in the mouth,
Biora has during February 2000 acquired the rights to a new
patent-protected pharmaceutical project for treating dry mouth
(Xerostomia). A normal flow of saliva plays a decisive role in the health
of the mouth, and therefore in the individual's well being. A greatly
reduced flow of saliva is accompanied by difficulty in swallowing and
causes great discomfort. In addition, dry mouth increases the risk for
various diseases in the oral cavity, such as caries and infections in the
mucous membrane.

      Just as periodontitis, dry mouth is a very common disease that
primarily affects a large number of the older population. Research in
Sweden show that dry mouth is estimated to affect approximately 15 percent
of 50 year olds and approximately 40 percent of those over 80. Dry mouth is
also a common side effect of many medicines and radiation treatment.

      The acquired process is based on local application of a
cholinesterase-inhibitor, to stimulate the production of saliva from
thousands of small salivary glands in the oral mucous membrane.

      Preliminary clinical studies on healthy volunteers as well as
patients with dry mouth have shown good results. The remaining work is to
develop a final formulation and clinical studies.

Research and Development Organization and Collaborative Agreements

      Biora's new research laboratory, which was opened in Malmo, Sweden in
December 1997, is equipped for biochemistry, molecular biology and cell
biology research. As of April 30, 2000, Biora employed ten biochemists,
five of whom have completed their doctoral theses. The biochemists at the
Malmo facility also conduct studies in close cooperation with the
Experimental Laboratory of the University Hospital in Malmo, Sweden, the
University of Oslo, Norway, the University of Leeds, U.K. and the
University of Ulm, Germany. The research network within oral biology also
includes other universities in Europe, U.S.A., Japan and Australia.

      The Company's expenditures on research and development, including
expenditures related to clinical trials and costs in connection with
product approvals, amounted to SEK 21.6 million ($2.5 million), SEK 37.2
million ($4.4million) and SEK 32.7 million ($3.8million) in 1997, 1998 and
1999, respectively. However, the majority of the Company's research and
development activities are conducted in collaboration with third parties.

      Biora's pre-clinical research has historically been performed in
close collaboration with research institutions affiliated with the
Karolinska Institute in Stockholm, Sweden. The basis for the Company's
principal product, Emdogain, was research findings by scientists at the
Karolinska Institute, primarily Dr. Hammarstrom. Pursuant to an agreement
with COB, Biora has the rights to commercialize the results of all COB
research in return for royalties. Dr. Hammarstrom left his position as
Director of COB in 1998. Most of the Company's collaboration efforts have
been with Dr. Hammarstrom, who currently gives the Company's research
organisation support from his position as Director of the Board in the
Company. Pre- clinical research cooperation agreements were entered into
with the University of Michigan in the United States, the University of
Leeds in the United Kingdom, the University of Queensland in Australia and
the University of Ulm in Germany.

      In 1996, Biora and COB entered into a cooperation agreement which was
to remain in force until December 31, 2001, after which time it is to be
automatically renewed for successive one-year periods unless terminated by
either party on at least six months' written notice before the end of the
relevant calendar year. Pursuant to the agreement, COB granted Biora a
first priority right to acquire all technology and products that are
developed by COB during the term of the cooperation agreement. The
agreement was terminated during 1999.

      Biora submitted a patent application relating to new, positive
biological effects of Emdogain- related proteins for woundhealing in
February 1998, and supplementary information from pre-clinical studies were
added to final application in February 1999 under the woundhealing project
and pre-clinical studies have been postponed and are now being planned in
the Scandinavian countries (Denmark, Norway and Sweden) in the second half
of 2000.

      In December 1997, Biora acquired the patent rights for a new protein
patent that formed the basis of the XP20 project from COB. The protein is
present during normal tooth development in humans and Biora intends to
investigate the potential of this protein for use in dental surgery. Biora
also relinquished its rights to a patent for a duo-ceramic implant
developed by COB in December 1997. The patent was relinquished to enable
the Company to focus greater resources on the expansion of its
biology-based products program.

      During 1997, a five-year research collaboration agreement was signed
with the University of Gothenburg (Sweden) to be led by Professor Jan
Lindhe. Professor Lindhe will direct the early-stage clinical research for
new indications of Emdogain, as well as test new products and technologies
for the Company. A similar research agreement was entered into with the
University of Texas to be led by Professor David Cochran.

      Pre-clinical safety assessments of Biora's products have been
performed by contract laboratories in Europe and Japan, as well as by Astra
Safety Assessment in Sweden. Kinetic studies, which monitor Emdogain over
time, have been performed in collaboration with the University of Lund in
Sweden and the Institute of Surface Chemistry in Stockholm. Clinical safety
assessments have been performed in close collaboration with the Karolinska
Hospital in Stockholm, Sweden. The Company performs chemical development,
including protein chemistry and process development, internally. All of the
Company's manufacturing and quality control, including the ISO
9000-certified quality system, is performed by Biora's own employees.
Although not officially certified under ISO 9000 the company works as if
even the R&D were certified.

      The clinical effectiveness and safety of Emdogain have been tested
through a program of controlled randomized trials in Sweden and the United
States run by Biora and Astra AB ("Astra"), a Swedish pharmaceutical
company that participated in the funding of Biora's research and
development between 1989 and 1992. In December 1992, Biora, Astra and
certain other shareholders of Biora entered into an agreement pursuant to
which Astra terminated its commitment to fund the research and development
of products relating to Emdogain as well as all licensing agreements which
Biora and Astra had previously entered into. As part of the agreement,
Astra was granted a royalty through December 31, 2009, of 2.5 percent of
commercial income (other than deductions for VAT and customs duties) from
the dental application of two patents held by the Company relating to
Emdogain: "binding-inducing composition" and "composition inducing a
binding." See "Description of Business--Patents and Proprietary Rights" and
"Interest of Management in Certain Transactions."

MARKET OVERVIEW

Periodontitis

      It has been reported by the National Institute of Dental Research
that, based on a survey done in 1985-86, approximately 44 percent of
employed adults in the United States have some form of periodontal disease.
Based on World Health Organization statistics, European countries have
similar incidence levels of periodontal disease. According to a 1990
American Dental Association report (the "ADA Report") (the most recent
publicly available source of information on the subject), of those
Americans suffering from periodontal disease, almost 14 million receive
root planing and scaling treatment from private dental practitioners.
Although all of the patients treated for periodontal disease undergo root
planing and scaling, only a portion of those seeking treatment will undergo
periodontal flap surgery. According to the ADA Report, there were
approximately two million flap surgeries performed in 1990 in the United
States. The Company believes that most of those persons undergoing flap
surgery have cases that would call for some sort of adjunctive procedure
aimed at repair of tooth attachment, yet only one out of seven actually
undergo such treatment. This low rate can be explained by the fact that
current additional adjunctive techniques do not adequately address the
users' needs, such as ease of use, comfort to the patient, predictability
and rapid healing. The Company believes that Emdogain could be used to
promote the regain of tooth attachment in substantially all of those cases
where the patient would benefit from any adjunctive technique.

      The market for the Company's Emdogain technology for the treatment of
defects caused by periodontitis is comprised predominantly of periodontal
specialists, who either have their own private practices or clinics or who
are associated with universities or dental maintenance organizations.
According to the ADA Report, 90% of all flap surgeries carried out in 1990,
by private practitioners were performed by periodontists in private
practice. Based on industry statistics, there are approximately 4,000
periodontists in the United States. The Company estimates that there are
approximately 4,500 periodontal specialists in Europe and approximately
2,000 periodontal specialists in Japan. In addition, a growing number of
general dentists are specializing in Periodontology in Europe and Japan.

Wisdom Teeth Extractions

      According to the ADA Report, there are approximately ten million
complicated tooth extractions performed annually in the United States. The
Company believes that Emdogain WT would be suitable in at least half of
such procedures to eliminate or reduce the formation of pockets on teeth
adjacent to the extracted wisdom teeth.

      The target market for Emdogain WT, if, and when, the product reaches
commercialization, will be comprised primarily of oral surgeons, who either
have their own private practices and clinics or who are associated with
hospitals. Based on industry statistics, there are approximately 5,000 oral
surgeons in the United States.

COMPETITION

      The conventional surgical technique used in patients with advanced
periodontal disease is flap surgery, without any adjunctive technique.
Several clinical studies have demonstrated that flap surgery alone results
in minimal regain of periodontal tissues. In Biora's controlled clinical
trials, adult patients with periodontal disease who had lost most of the
attachment achieved regain of jaw bone within 16 months of treatment with
Emdogain to about two-thirds of normal levels, as compared to unchanged
levels for control sites in the same patient (treated with conventional
periodontal flap surgery).

      At present, the most widely used adjunctive technique in conjunction
with flap surgery is guided tissue regeneration ("GTR"). GTR was introduced
about ten years ago with the aim of using a non-resorbable or bioresorbable
physical barrier to prevent cells lining the gum tissue from growing into
the healing wound after periodontal flap surgery. If a non-resorbable
barrier is used, a second surgical procedure is required to remove the
barrier at a follow-up visit. GTR barriers have been developed by several
companies, the most significant of which is William L. Gore Company. The
Company estimates that GTR is used in approximately 10 percent to 15
percent of the flap surgery procedures performed in the United States and
Western Europe.

      Bone grafting, which involves the surgical implantation of living or
synthetic bone and marrow into the periodontal defect, has been shown in
clinical and non-clinical studies to add to the bulk of bone tissue around
the affected tooth. However, studies have not demonstrated that grafting
results in regain of the cementum and periodontal ligament and certain
studies on bone grafting have indicated that cells lining the gum tissue
will repopulate the area between the added bone and the root surface,
blocking the formation of a new periodontal ligament.

      The Company believes that Emdogain technology has many advantages
over existing adjunctive techniques. First, it represents a biology-based
approach to the treatment of defects caused by periodontal disease, which
provides predictable regain of tooth supporting structures in contrast to
existing mechanical treatments. Second, as a gel, Emdogain is significantly
easier and more convenient to use than the current technique-sensitive
treatments, and can be applied independent of tooth topography.
Additionally, the Company believes that patients will prefer Emdogain
because it causes less discomfort and has better healing characteristics
than existing adjunctive techniques treatments and requires less chair
time.

      Certain pharmaceutical companies, such as the Genetic Institute
(owned by American Home Products) and Creative Biomolecules (owned by
Stryker Corp.), have begun testing the applicability of growth factors and
bone morphogenetic proteins to the regain of attachment lost due to
periodontal disease. Pre-clinical studies have demonstrated that growth
factors and bone morphogenetic proteins may in fact regrow jaw bone. While
the testing of growth factors and bone morphogenetic proteins as a proposed
regenerative treatment is still in its early phases, they may eventually
prove to be commercially viable products that could compete with Emdogain.

      Biora may also compete with companies developing and marketing
treatments for periodontitis through the subgingival controlled release
delivery of antimicrobial agents. However, the indicated use for
antimicrobial agents is as an adjunctive treatment to root planing and
scaling, and the Company does not believe such agents will reduce the need
for procedures that promote the regain of periodontal tissues.

      The competition on the woundhealing market is large with many of the
largest pharmaceutical companies as participants. However, Emdogain is a
product that has been tested for safety for application in wounds from
surgery, and has been used on more than 170,000 patients since selling
began. The first product for wound healing with growth factors began to be
marketed in the U.S. in 1998, but the concept of using a matrix protein
such as Emdogain has not yet been exploited.

MARKETING

      The primary target markets for Biora's products are periodontists and
periodontal specialists. Based on industry statistics, there are
approximately 4,000 periodontists in the United States, approximately 4,500
periodontal specialists in Europe and approximately 2,000 periodontal
specialists in Japan. Given the relatively small number of periodontal
specialists and the need for a highly specialized sales force, Biora
intends to market and sell its products primarily through its own marketing
and sales organization. An estimated five million operations involving flap
surgery are performed worldwide each year (with about 2 million, or 40
percent, of these surgeries being performed in the United States).

      The Company has been selling Emdogain to periodontal specialists in
Europe at an average price of approximately Euro 150 per unit for a Multi
defect size(sufficient for the treatment of three teeth) and Euro 100 per
unit for a Single defect unit. Biora has priced Emdogain at a similar price
level in the United States and other markets.

      While Biora believes that Emdogain has considerable potential, the
periodontists and periodontal specialists comprising the Company's target
market have indicated that they want to see results from their own patients
before they are prepared to accept Emdogain as the preferred therapy.
Results are usually evaluated between 10 and 12 months after treatment. A
number of case studies show that the results continue to improve on average
at least until 36 months. Positive results on as much as ten year and eight
year data were presented at the Europerio Exhibition in Geneva in June 2000.

Biora.com

      With the launch in June 2000 of Biora.com, Biora has been creating an
interactive Internet service. The goal is to create an effective sales and
communication channel for existing and new customer groups over the
Internet as well as to be able to publish ad distribute marketing material
and information electronically. The portal www.biora.com creates a flexible
entryway, which enables specialists to register with Biora by creating a
personal search profile. Registered specialists can use Biora.com to
download clinical information, professional articles regarding Biora's
products and information regarding surgical techniques. In addition,
patients who are considering having Emdogain used in their surgical
procedures can review information regarding those procedures. With
Biora.com, Biora's goal is to improve total customer service in a
cost-effective way. In addition, with an emphasis on electronic information
and eventually electronic commerce, Biora hopes to be able to reach both
additional and larger target groups.

Europe

      The Company has established a sales force to cover the Nordic market
(Denmark, Finland, Iceland, Norway and Sweden). Biora's Nordic operation,
which commenced marketing Emdogain in Sweden in 1996, currently has six
employees (of which four are marketing representatives). In Sweden,
approximately 90 percent of the approximately 500 specialized clinics in
the country that treat advanced periodontitis have purchased Emdogain at
least once, approximately 70 percent of which have made repeat purchases.
The customer base is now increasing with general dentists performing
Emdogain treatment. Biora's market share in Sweden is approximately 5
percent. The current increase in Biora's customer base in Sweden is to a
large extent general dental practitioners who perform flap surgery. In all
of the Nordic countries, Biora continues to focus its marketing efforts on
increasing usage of Emdogain among periodontists and general dentists
specializing in Periodontology through participation in specialist
conventions, seminars and educational programs together with universities
with dental programs.

      Biora also has continued to expand its customer base in the rest of
Europe. Biora established two subsidiaries in the fourth quarter of 1995,
both of which commenced operations in the first quarter of 1996: Biora GmbH
(which had 16 employees by the end of 1999) to conduct marketing and sales
activities in Germany, Austria and Switzerland, and Biora Benelux Dental
Products B.V. (which had four employees by the end of 1999) to conduct
marketing and sales activities in the Benelux countries (Belgium, The
Netherlands and Luxembourg). Germany is at present the biggest market for
Emdogain in Europe. The number of dentists who perform surgical
interventions to treat periodontitis on a more regular basis are about
5,000. Sales in Germany began in 1996, and during 1999 sales in Germany and
Austria increased by 16 % compared to 1998. Increase in sales was under
expectation, which resulted in a change of management in the German
subsidiary. The marketing focus has shifted from simply adding new
customers to a more systematic approach on increasing use within the
existing customer base.

Biora entered into a new distributor agreement for Poland during 1999.

North America

      Biora conducts sales and marketing operations in the United States
through its Chicago, Illinois- based subsidiary, Biora, Inc. Donna Janson,
serves as President of the U.S. subsidiary. During 1999, Biora increased
the size of its United States operations from 21 to 26 employees.

      The market for the Company's Emdogain technology for periodontal
treatment is comprised predominantly of periodontal specialists, who either
have their own private practices or clinics or who are associated with
universities or dental maintenance organizations. According to the ADA
Report, 90 percent of all flap surgeries done in the United States in 1990
by private practitioners were performed by periodontists in private
practice.

      Sales increased for the twelve month period ended December 1999 by
89% compare to the same period 1998. Approximately 650 new customers
purchased Emdogain for the first time during 1999 bringing the total number
of customers to 2,550 at the end of 1999 compared to 1.720 by the end of
1998. The number of customers that have purchased Emdogain more than once
totaled 1,250 by year-end 1999. However, Biora's market share in the United
States is less than two percent. Biora's penetration of the U.S. market has
been hindered by Emdogain receiving less exposure than originally
anticipated when it was launched in April 1997, partly as a result of
delays in the publication of reviews in industry journals. Biora's sales in
the United States increased following publication of the seven articles on
Emdogain in The Journal of Clinical Periodontology in September 1997 and
the exposure received by Emdogain at the Conference of the AAP in October
1997. Biora has entered into agreements with several U.S. periodontists and
several U.S. universities, including the University of Texas, to develop
U.S.-based data and test results for Emdogain. Such results generally take
from six to 18 months to be developed. During September 1999 AAP meeting in
San Antonio, Texas and several American and international specialists
reported both new data regarding their own positive clinical experience
utilizing Emdogain in periodontal surgery as well as results from clinical
trials. The meeting attracted approximately 6,000 periodontists and
dentists from around the world. During the year Biora Inc. Conducted 40
educational seminars for dental professionals, during which clinicians
shared their experience utilizing Emdogain. During 1999 several articles
were published with new clinical data from the U.S. and Europe. In February
of 1999 the first book was published about treatment with Emdogain in the
U.S. The author, Dr. Tom Wilson, is a leading American periodontist who
documents in his book, "Periodontal Regeneration Enhanced", his own
experience with different types of procedures.

Japan

      The Company has also entered into certain marketing and distribution
arrangements with local or regional partners in other parts of the world.
On September 1, 1996, the Company entered into an agreement with Seikagaku
Corporation ("Seikagaku") pursuant to which Biora appointed Seikagaku as
its exclusive distributor in Japan. The agreement expressly covers the
indication of Emdogain relating to the use of the product for the regain of
tooth support due to periodontal disease (the "Initial Indication") and
also provides that the agreement will be amended to provide analogous terms
for future indications for the Japanese market. The agreement also gives
Seikagaku a right of first refusal for such market with respect to any
other dental product developed by Biora. In addition, in June 1998, Biora
and Seikagaku signed a letter of intent to expand the agreement to cover
PrefGel, and the launch of PrefGel in Japan is expected for the third
quarter of 1999, subject to regulatory approval. Biora received an
aggregate of $5 million from Seikagaku through September 1996 for entering
into the Emdogain agreement. The agreement provides that Seikagaku may,
under certain circumstances, request Biora to refund the $5 million payment
in the event the MHW does not approve Emdogain for sale in Japan by June
1999 and grants Seikagaku a security interest in Biora's Japanese patent
and trademark rights to secure such potential repayment obligations.
Consequently, the $5 million was treated as a liability by Biora through
the end of 1997. Biora submitted an application for the registration of
Emdogain with the MHW in September 1996, which was approved in January
1998. With approval from the MHW, the amount was recognized as other
operating income during the first quarter 1998. Marketing of Emdogain in
Japan commenced in April 1998. Under the agreement, Biora shall supply all
of Seikagaku's requirements for Emdogain for the Initial Indication at a
unit price which is the higher of (i) 35 percent of the reimbursement rate
for Emdogain set by the MHW and (ii) 4,000 Japanese yen. Each of Biora and
Seikagaku has agreed to use its best efforts to establish a reimbursement
rate for Emdogain in Japan of no less than 17,000 Japanese yen. A filing
with the MHW for reimbursement was made in March 1998. The price has been
set at 26,000 Japanese yen, giving a sales price from Biora to Seikagaku of
9,100 Japanese Yen. Seikagaku is responsible for costs relating to
post-marketing studies of Emdogain for its initial indication and for
clinical trials to obtain government approval for the sale of Emdogain for
additional indications in Japan. In accordance with the agreement Biora and
Seikagaku have established a joint steering committee, consisting of two
Biora and two Seikagaku representatives, to meet and issue non-binding
recommendations relating to the commercialization of Emdogain and other
activities in Japan. See "Description of Business--Government Regulation."

      At December 31, 1999 approximately 1,100 periodontists and dentists
had bought Emdogain, of which approximately 500had purchased the product
more 27 of the 29 dental universities in Japan have begun to use Emdogain
in their training in 1999.

Rest of the World

      Biora also began marketing Emdogain in South Africa in June 1997
through a subsidiary, but decided in 1998 to sign a distributor agreement
with a well established distributor in the dental industry for that market.
At the beginning of 2000, Biora entered into distribution agreements with
distributors for the markets Brazil, Colombia, Ecuador, Panama, Peru,
Puerto Rico, South Korea, Taiwan and Venezuela. Sales and marketing efforts
will start subject to regulatory approvals in each of these markets.

Biora.com

      Electronic information and marketing are growing in importance, even
within our market segment. A well-developed "marketplace" would enable
Biora to inform new customer groups and patients cost effectively. The
first step of upgrading of biora.com was introduced in early June of 2000
in connection with the Europerio 2000 exhibition.

RAW MATERIALS

      Biora purchases raw materials and primary packaging materials from
suppliers or subcontractors evaluated and approved by the Company in
accordance with the requirements of ISO 9000 regulations. The Company is
situated in an agricultural region where the biological raw material,
porcine dental tissues, can be obtained from several commercial meat
producers. At present, Biora has approved only Sweden's largest commercial
meat producer as a supplier for a one year term running from January 2000
through January 2001. The Company plans to enter into contracts with
alternative suppliers provided they meet the EU standards for Class III
medical devices, in addition to United States and European food
regulations. All other raw materials, including chemicals or packaging
materials, are purchased as pharmaceutical grades or from suppliers with
ISO 9000 certificates. The cost of raw materials accounts for approximately
5 percent of the sales price of Emdogain in European markets. See
"Description of Business--Government Regulation."

BUSINESS STRATEGY

      The Company's strategic objective is to use the Company's patented
technologies and biological knowledge to develop biology based products
primarily for treatment of diseases in the mouth.

      The Company believes that its present lead product, Emdogain, offers
its customers a more efficacious, cost-effective and convenient solution to
the treatment of defects caused by periodontal disease than existing
treatments and thereby serves as an entry vehicle for the Company's other
innovative products for the dental therapy market. With the introduction of
Emdogain, the Company is in the process of gaining experience in
identifying, targeting and selling to its primary market, which is
comprised of periodontal specialists. The Company believes that its
combination of direct sales force and distributor arrangements will enable
it to reach the market with its initial products, and continue to penetrate
the market with product upgrades, new products and long-term support. The
key elements of the Company's strategy are as follows:

      o     A highly qualified, proprietary sales organization. The launch
            and market introduction of Emdogain for treatment of severe
            periodontitis has had an obvious scientific emphasis. Biora's
            overall marketing strategy has been to establish the products
            with a number of prominent specialists within their respective
            countries, in order to later reach a broader customer group,
            including both specialists and general dentists. Biora
            considers this a correct procedure in order to achieve the
            support from leading clinicians and opinion leaders which is
            required to establish a new potential preferred treatment. The
            focus in marketing is now moving from adding new customers to
            increase the share of operations that are performed with
            Emdogain in the clinics that have begun to use the product. An
            important condition for this strategy is a well-trained and
            specialized marketing organization. Biora has therefore chosen
            to establish its own subsidiaries and sales organizations on
            the most important markets in Europe and North America. In
            Japan Biora is working with a local partner through cooperation
            and distribution agreements

      o     Enamel matrix proteins- Biora's platform. The emphasis on
            research and development within Biora continues to be
            intensive, both in the search for new biologically based
            methods and to develop Emdogain for use in treatment of other
            diseases in the mouth. This emphasis during 1999 provided new
            knowledge that supports marketing efforts for Emdogain and
            which at the same time gives Biora possibilities to develop a
            broader commercial platform. The research in enamel matrix
            proteins, which led to the principal product Emdogain, gives
            Biora a platform to develop new biology based products to be
            used both in and outside the mouth. Biora expects that during
            the year 2000, the company will be able to launch two new
            indications; treatment of evulsed teeth (trauma) and exposed
            root surfaces (recession defects). The subsidiary Biora BioEx
            AB was formed to establish research regarding indications
            outside the mouth, for example wound healing and local bone
            formation.

      o     Emdogain regenerates a natural tooth attachment. Biora's
            principal product is Emdogain. The active ingredient is the
            enamel matrix protein amelogenin and the product has been
            launched in North America, Europe and Japan for treatment of
            patients who suffer from severe periodontitis (the precursor to
            tooth loss). Emdogain provides patients the possibility to
            regenerate the tooth supporting tissue that the patient lost
            due to periodontitis in a natural and predictable way.

      Important issues for Biora's future are (1) to increase both
penetration and repeat purchase frequency by periodontists in the three
important markets North America, Europe and Japan through skilled and
continuous marketing (2) to develop products from Biora's platform, enamel
matrix proteins in order to give the Company a broader commercial platform;
and (3) to increase both the preclinical and the clinical research on other
biological products primarily for treatment of diseases of the mouth.

      Although the Company anticipates that revenue from sales of Emdogain
and its current cash balances (including the net proceeds from the IPO)
will be sufficient to finance the Company's operations and the projected
expansion of its operations for the foreseeable future, there can be no
assurance that the Company will not require financing or that financing
will be available on acceptable terms, or at all.

THIRD PARTY REIMBURSEMENT

      The Company's primary customers for Emdogain are, and for its other
products will be, periodontal specialists and oral surgeons. Certain of
these customers may seek reimbursement for the Company's products from
third-party payers, such as governmental and private health insurance
plans, for all or part of the costs associated with the treatment of
patients. Reimbursement schemes for the treatment of periodontal disease
vary from one country to another, and potential customers in several of the
Company's targeted markets may be influenced by the type of third-party
payer coverage available for procedures using the Company's products. The
Company will consider reimbursement rates when deciding on market
approaches and strategies for pricing its products.

      In the United States, as in most major European countries,
reimbursement for additional treatments used in conjunction with
periodontal flap surgery is generally not available, and most patients,
with or without dental insurance, pay the cost of such treatment themselves
without assistance from third-party payers. The Company believes that
certain third-party payers provide reimbursement at a specified rate for
periodontal surgeries, without additional reimbursement if an additional
interventive technique, such as Emdogain, is used. In addition, according
to a 1995 industry report, less than half of the population of the United
States (approximately 95 million people) are covered by dental insurance.
Patients who lack dental insurance or who have insurance that puts a set
cap on amounts that will be reimbursed for periodontal flap surgery, and
therefore must pay the cost of any additional treatment themselves, may
elect to forego the use of an additional interventive treatment. However,
the Company believes that the relatively low cost of Emdogain treatment as
compared to the stand-alone cost of conventional periodontal flap surgery
along with the potential benefits offered by Emdogain treatment will
largely offset patients' concerns about paying for Emdogain treatment
themselves.

      In Japan, the Company expects that sales volume and prices of the
Company's products will be more dependent on the availability of
reimbursement than in the United States and Europe. Under the terms of
Biora's agreement with its distributor in Japan, Seikagaku is responsible
for submitting an application for Emdogain to the MHW for approval of a
reimbursement rate. The agreement also provides that the price per unit
paid by Seikagaku to Biora for Emdogain shall fluctuate based upon the
reimbursement price approved by the MHW. There can be no assurance that
reimbursement approval will be obtained in Japan in a timely manner, if at
all. Failure to receive a reimbursement approval could have the effect of
delaying the initial acceptance of the Company's products in Japan. See
"Description of Business-- Marketing."

PATENTS AND PROPRIETARY RIGHTS

      The Company's success will depend in part on its ability to obtain
patent protection for its products and processes, to preserve its trade
secrets and to operate without infringing or violating the proprietary
rights of third parties. It is the Company's policy to protect its
proprietary technology by, inter alia, filing patent applications. The
Company's general procedure is to first file a priority application in
Denmark followed by an application under the Patent Corporation Treaty
("PCT") designating all major countries with a significant involvement in
the fields of oral health care and bioscience, including the member-nations
of the EU, the United States and Japan. Subsequently, the Company files
regional European patent applications derived from the PCT application in
accordance with the European Patent Convention.

      As of June 1, 2000, the Company had been issued four U.S. patents,
two European patents, two Japanese patents and 77 patents in various other
countries. In the United States, the duration of patents that were granted
prior to June 8, 1995 is the longer of 17 years from the date of issuance
or 20 years from the date of filing. The same applies to patents filed
before June 8, 1995 and issued on or after June 8, 1995. The duration of
patents based on applications, including confirmation applications, filed
after June 8, 1995 and issued after such date is 20 years from the date of
filing. The duration of patents elsewhere in the world is generally 20
years from the date of filing.

      The Company's current Emdogain related patent portfolio may be
divided into five families: the "binding-inducing composition" family, the
"composition inducing a binding" family, the "surface etching" family, the
XP11 family and the XP20 family. The "binding-inducing composition" family
and the "composition inducing a binding" family form the basis for the
patent protection of Emdogain.

      The "binding-inducing composition" family relates to a precursor to
dental enamel--the so-called enamel matrix. At present, 39 patents in this
family have been granted to the Company and two applications are still
pending. Patents in this family have been issued in most target markets,
including the United States, Canada, Australia and most European countries.
The expiration date for this patent in the United States is 2012 and in
most European countries is 2007.

      The "composition inducing a binding" family relates to a protein
fraction originating from a precursor to dental enamel. At present, 33
patents in this family have been granted to the Company and two
applications are still pending. Patents in this family have been issued in
most target markets including the United States, Australia and most
European countries. The expiration date for the patents in the United
States are 2008 and 2009 respectively and in most European countries the
expiration date is 2009.

      The "surface etching" family relates to tooth-root conditioning with
PrefGel. The Company has been granted four patents in this family including
one in the U.S. The Company's application under the PCT with respect to
this family has received a positive international preliminary examination
report and has entered the national phase in Canada, Japan and several
European countries, and in the regional phase at the EPO.

      Under the XP11 project, Biora submitted a patent application relating
to new, positive biological effects of Emdogain-related proteins for
woundhealing in February 1998, and supplementary information from
pre-clinical studies were added to final application in February 1999. In
March 1999, two priority applications were filed relating to the use of
Emdogain-related proteins for other areas. In December, 1997, Biora
acquired the patent rights for a new protein that formed the basis of the
XP20 project from COB. The protein is present during normal tooth
development in humans and Biora intends to investigate the potential of
these protein combinations for use in dental surgery. No patents have been
issued yet on these applications. Biora relinquished its rights to a patent
for a duo-ceramic implant developed by COB in December, 1997. The patent
was relinquished to enable the Company to focus greater resources on the
expansion of its core biology-based products program.

      In January 1989, Biora transferred all of its rights, including
patent rights, relating to Emdogain technology (the "Assigned Property"),
to its wholly owned Dutch subsidiary, Bioventures BV ("Bioventures").
Bioventures subsequently transferred the Assigned Property to Bioventures
NV ("BNV"), a wholly owned Netherlands Antilles subsidiary of Bioventures.
Pursuant to the transfer, Biora retained the exclusive right to manufacture
all products developed with the use of Emdogain technology and any future
developments thereof and, in consideration for the transfer, Bioventures
agreed to pay Biora a royalty on payments received from third parties with
respect to the licensing, use or transfer of the Assigned Property. This
royalty obligation expired in December 1995. Bioventures maintained the
exclusive license to market and distribute products developed with the use
of Emdogain technology in return for a royalty to be paid to BNV.
Bioventures liquidated BNV in 1997 and the Assigned Property was
transferred back to Bioventures. Starting 1998 Biora and Bioventures have
entered into a royalty agreement, giving Bioventures a 7.5 percent royalty
on all external sales of Emdogain for the treatment of periodontal disease
up to December 31, 2009.

GOVERNMENT REGULATION

      All products currently manufactured and marketed by Biora are subject
to regulation by the FDA in the United States, by authorized bodies under
EU Directive 93/42/EEC (the Medical Device Directive ("MDD")) in the EU, by
the MHW in Japan, and by other regulatory authorities throughout the world.
In addition, all of the products currently under development will require
regulatory approvals from these authorities prior to marketing. Regardless
of the regulatory classifications assigned to Biora's products, all human
therapeutic products are subject to rigorous testing. The process of
obtaining clearance or approvals from the FDA and other regulatory
authorities can be costly, time consuming and subject to unanticipated
delays. Except for Emdogain, which has been approved in the United States,
the EU and Japan; and PrefGel, which has received an amended marketing
clearance in the United States and approval in Europe, there can be no
assurance that the FDA, the EU regulatory authorities, the MHW and other
authorities will approve any of Biora's products for marketing or, if they
are approved, that they will be approved on a timely basis, the failure of
which could have a material adverse effect upon the Company's business,
financial condition, prospects and results of operations.

United States

      The FDA has regulated medical devices since 1976, when the Medical
Devices Amendments to the Food, Drug and Cosmetic Act ("FDCA") were
enacted. Under the FDCA, the FDA regulates the clinical testing,
manufacture, labeling, packaging, marketing, distribution and record
keeping for medical devices in order to ensure that medical devices
distributed in the United States are safe and effective for their intended
use. Noncompliance with applicable requirements can result in civil
penalties, including product recalls, injunctions or product seizure, an
inability to import products into the United States, refusal to approve or
clear product approval applications, the withdrawal of previously approved
product applications and criminal prosecution. The FDA also has the
authority to request repair, replacement or refund of the cost of any
device manufactured or distributed by the Company.

      The Company's two products approved for commercial distribution,
Emdogain and PrefGel, are registered as medical devices under the FDCA and
FDA regulations. The primary department within the FDA responsible for the
pre-market review of medical devices is the Office of Device Evaluation
(the "ODE"), within the Center for Devices and Radiological Health. Dental
devices are reviewed by the Dental Devices Branch within the ODE.

      The FDCA provides that, unless exempted by regulations, devices may
not be commercially distributed in the United States unless they have been
approved or cleared by the FDA. The regulatory requirements for the
approval or clearance of a device vary according to the type of product and
the degree of risk associated with it. One avenue for clearance is through
the 510(k) pre-market clearance process in which devices are evaluated
according to their substantial equivalence to devices marketed prior to the
legislative enactment date of the Medical Devices Amendments to the FDCA in
1976 in terms of materials, indication statements and labeling claims. A
510(k) notification must contain information to support a claim of
substantial equivalence, which may include laboratory test results or the
results of clinical studies of the device in humans. Commercial
distribution of a device for which a 510(k) clearance is required can begin
only after the FDA issues an order finding the device to be "substantially
equivalent" to a predicate device. Many devices specifically intended to
treat periodontal diseases, including GTR barriers, have progressed through
the 510(k) process based on their substantial equivalence to the predicated
devices. This regulatory approach was also successfully used for the
Company's PrefGel, which is now cleared for marketing in the United States.

      New devices that incorporate technologies that are not substantially
equivalent to predicate devices require that a pre-market approval ("PMA")
application be filed with the FDA and that the device's safety and
effectiveness must be established on its own without reference to any
previously approved products. The first step in the PMA approval process is
the submission to the FDA of the results of pre-clinical laboratory and
animal studies. A device that poses a significant risk to human patients
must undergo clinical evaluation under an investigational device exemption
("IDE") that is granted by the FDA to permit testing of the device in a
limited number of humans in clinical trials conducted at a restricted group
of clinical sites. Results from clinical trials are presented to the FDA in
a PMA application. In addition to the results of clinical investigations,
the applicant must submit other information relevant to the safety and
effectiveness of the device, including the results of non-clinical trials,
a full description of the device and its components, a full description of
the methods, facilities and controls used for manufacturing and proposed
labeling. Such submissions are extremely detailed and complex, often
involving thousands of pages. The FDA staff then reviews the submitted
application and determines whether or not to accept the application for
filing.

      Once the submission is accepted for filing, the FDA begins an
in-depth review of the PMA application. Based upon industry and FDA
publications, the Company believes that an FDA review of a PMA application
generally takes one to three years from the date the PMA application is
accepted for filing, but may take significantly longer. The PMA process can
be expensive, uncertain and lengthy, and a number of devices for which FDA
approval has been sought by other companies have never been approved for
marketing.

      Emdogain was approved through a PMA application in September 1996.
The PMA route is also intended to be used for Biora's products under
development which incorporate essentially the same composition as Emdogain.
PMA applications for new products such as Emdogain Gel, Emdogain WT,
Emdogain Endodontic and Emdogain Woundhealing will be filed as amended
versions of the original PMA application for Emdogain which, the Company
believes, will reduce the review time by the FDA.

      Any devices manufactured or distributed by the Company pursuant to
FDA clearance or approvals are subject to pervasive and continuing
regulation by the FDA and certain state agencies, including record keeping
requirements and reporting of adverse experiences with the use of the
device.

      Labeling and promotional activities are subject to scrutiny by the
FDA and, in certain circumstances, by the Federal Trade Commission. FDA
enforcement policy strictly prohibits the marketing of FDA cleared or
approved medical devices for unapproved or "off-label" uses. The Company
also is subject to numerous federal, state and local laws relating to such
matters as safe working conditions, manufacturing practices, environmental
protection, fire hazard control and disposal of hazardous or potentially
hazardous substances. There can be no assurance that the Company will not
be required to incur significant costs to comply with such laws and
regulations in the future or that such laws or regulations will not have a
material adverse effect upon the Company's business, financial condition,
prospects and results of operations.

      The Company received an amended marketing clearance to market PrefGel
in the United States in May 1998.

      The FDA approved Emdogain, for use as an adjunct to a minimally
invasive surgical technique(previously referred to as Emdogain non
surgical). This indicates that Emdogain can be utilized in conjunction with
scaling and root planing for the treatment of periodontal intrabony
defects. The approval is for teeth in the "aesthetic zones".

Europe

      In order for a medical device to be marketed in the EU and the EEA,
it must receive a CE Mark. The CE Mark is a symbol of adherence to quality
assurance standards and compliance with the EU's MDD.

      In order to obtain a CE Mark, a product must be manufactured,
analyzed and marketed in accordance with ISO 9000 standards and the
specific European standards (EN 46000) applicable to medical devices. The
ISO 9000 standards, which are published by the International Organization
for Standardization based in Geneva, Switzerland, and have been adopted by
the EU, comprise standards that provide quality management guidance and
quality assurance requirements for manufacturers and service providers. In
addition, a product must meet the Essential Requirements as defined under
the MDD relating to safety and performance, and the Company must
successfully undergo verification of its regulatory compliance ("conformity
assessment") by a "Notified Body" selected by the Company. There are
several European regulatory bodies in EU member countries whose
determinations are accepted for regulatory approval purposes in all 18
countries of the EEA and Switzerland and are designated as Notified Bodies.
The nature of any Notified Body's assessment will depend on the regulatory
class of the product. Depending on classification, the clinical data will
have to provide evidence that the product meets the performance
specifications claimed and sufficient evidence of adequate safety
assessment and that the benefits to the patients outweigh the risks
associated with the product. The Company will be subject to continued
supervision by the Notified Body and will have to report any serious
adverse incidents to the appropriate authorities. The Company will also
have to comply with additional national requirements that are beyond the
scope of the MDD.

      Biora received a CE Mark for Emdogain in 1995 from the British
Standards Institution ("BSI"), a Notified Body. The latest continuing
assessment by BSI was performed, without any nonconforming results, in
February 2000. Biora expects to continue to comply with the CE Mark
requirements. Failure to do so would mean that the Company would be unable
to sell its products in the EEA, which could have a material adverse effect
upon the Company's business, financial condition, prospects and results of
operations.

      The Company received the CE Mark for PrefGel in February 1998.

      The Company received approval for Emdogain Gel from BSI, a notified
body, in February 2000.

Japan

      Japan has medical device regulations similar to those of the EU and
the United States. Biora received the approval to market Emdogain in Japan
as a medical device in January 1998. Biora's Japanese distributor has
agreed to defray certain expenses relating to any post-marketing studies
that may be required by the MHW, the notified body for Japan..

Rest of the World

      Biora expects that many authorities throughout the world will
regulate Emdogain as a medical device, and that these authorities will
acknowledge the precedential value of approvals already received in places
such as the United States, Europe and Japan. An exception is the Republic
of South Africa, where Emdogain is regulated as a dental pharmaceutical.

      The progress of harmonization efforts between the United States, the
EU and Japan in terms of tripartite International Conference on
Harmonization guidelines are expected to have beneficial consequences for
acceptance of foreign clinical trials and of inspections by foreign
regulatory authorities.

PRODUCT LIABILITY INSURANCE

      The testing, marketing and sale of the Company's products involve an
inherent risk of product liability claims. The Company has product
liability insurance that covers all of its products. The Company currently
maintains product liability insurance providing worldwide coverage against
liabilities in connection with the manufacture and marketing of oral health
care products in the amount of SEK 50 million per incident and SEK 100
million on an annual aggregate basis. The Company believes that its product
liability insurance is adequate for its current operations. The above
insurance includes also a worldwide cover in connection with clinical
trials. There can be no assurance that the coverage limits of the Company's
insurance will be sufficient to offset potential claims or that potential
claims will not arise which are not covered by the Company's existing
policies. Product liability insurance is expensive and difficult to procure
and may not be available in the future on acceptable terms or in sufficient
amounts, if available at all. A successful claim against the Company in
excess of its insurance coverage or with respect to which the Company lacks
coverage could have a material adverse effect upon the Company's business,
financial condition, prospects and results of operations.

EMPLOYEES

      As of March 31, 2000, the Company had 84 full-time employees,
including seven in administration and finance, 55 in marketing and sales,
twelve in research and development and ten in manufacturing and quality
assurance. As is standard in Sweden, many of the Company's employees are
members of trade unions. The significant majority of the Biora employees in
Sweden are party to or effected by collective bargaining agreements. Biora
pays certain health and welfare charges, known as social costs, for its
employees. The Company has never experienced a work stoppage and believes
its employee relations to be good.

      The Company's future success will depend on its ability to attract,
train, retain and motivate highly qualified employees. The Company is
particularly reliant for its continued success on the services of several
key employees.

ITEM 2.   DESCRIPTION OF PROPERTY

      The Company's executive offices and development, manufacturing and
testing operations are located in Malmo, Sweden under a lease expiring on
September 30, 2001. The lease is renewable for successive two year terms
unless terminated by either party at least twelve months before the
expiration of the lease term. Under the terms of the lease, the total
annual rent is currently approximately SEK 2.9 million ($0.3 million),
which may be adjusted upwards based upon certain increases in the Swedish
consumer price index. The manufacturing facilities cover an area of
approximately 600 square meters and during 1997 the production capacity has
been increased from 200,000 to 400,000 units of Emdogain. After converting
completely to the manufacturing process for Emdogain Gel the capacity
increase to at least 600,000 units. The Company is currently investigating
the possibility of expanding the production capacity further in its current
manufacturing facility. Plans also exist to build an additional production
facility at an estimated cost of SEK 30 million ($3.5 million) to increase
annual production capacity to one million units but this expansion is not
contemplated in the short term.

      The manufacturing process of the newly formulated Emdogain Gel
includes out-sourcing of the filling of the syringes at Statens Serum
Institut (SSI) in Copenhagen, Denmark.

      The Company has out-sourced the manufacturing and packaging of
PrefGel to Miwana AB, which is located in Gallivare, Sweden. Miwana AB are
in receipt of the ISO 9002 and EN 46002 certifications for their facilities
since October 1998. Biora expects that Miwana AB will be able to meet
Biora's production requirements for PrefGel for the foreseeable future.

      Biora's production facilities generally are subject to health and
quality standards set by the various governmental authorities that regulate
its products, and to inspection and monitoring by such authorities. Among
the conditions for FDA approval of a medical device is the requirement that
the manufacturer's quality control and manufacturing procedures conform to
Good Manufacturing Practices ("GMP"), which must be followed at all times.
GMP regulations impose certain procedural and documentation requirements
upon a company with respect to manufacturing and quality assurance
activities. In 1994, the FDA inspected Biora's plant and confirmed that the
Company's quality control and manufacturing procedures conformed to GMP.
GMP controls every phase of production from the receipt of raw materials to
the labeling of the finished product, and follow-up and reporting of
complaint information. At a recent FDA-inspection (March 1997) the new
Quality System Requirement (QSR) was also applied, and no written comments
were received. For an approval under the EU's MDD, the Company's quality
system must comply with ISO 9000 and EN 46000 requirements (the latter are
European standards specific for medical devices), which are broader than
the GMP regulations. Biora obtained certification in compliance with ISO
9002 and EN 46002 in 1995 and is audited annually by BSI. As part of the
ongoing review by the Japanese authorities, an inspection was performed in
February 1997. In complying with standards set forth in the GMP and ISO
regulations, as well as in other applicable regulations, the Company will
be required to continue to expend time, money and effort in the area of
production and quality control to ensure full technical compliance. See
"Description of Business- -Government Regulation."

ITEM 3.   LEGAL PROCEEDINGS

      From time to time, the Company may become involved in legal
proceedings arising out of the ordinary course of its business. The Company
is not aware of any pending or threatened legal proceedings to which the
Company is a party or to which the property of the Company is subject.

ITEM 4.   CONTROL OF THE REGISTRANT

      The Company has been informed that The Swedish 6th Pension Fund owns
22.2 percent and Euroventures Nordica owns of 19.2 percent of the
outstanding Ordinary Shares. The Company does not believe that it is
directly or indirectly controlled by the Swedish 6th Pension Fund,
Euroventures Nordica or by any other corporation or by any foreign
government as of June 15, 2000.

      The following table sets forth certain information regarding the
beneficial ownership of the Ordinary Shares known by the Company as of
March 22, 2000. The Company believes, based on information furnished by
such owners, that, except as otherwise indicated, the owners listed below
have sole investment and voting power with respect to such shares.

                                      NUMBER OF
                                      ORDINARY        PERCENT
PRINCIPAL SHAREHOLDERS:             SHARES OWNED     OF CLASS

Swedish 6th Pension Fund              4,715,940        21.5
Euroventures Nordica I BV(1)          4,074,140        18.5
Pioneering                            2,120,380         9.7
Mercury                               2,038,133         9.3
Lars Hammarstrom and family             815,900         3.7
Messieurs Pictet & Cie                  250,420         1.1
Reabone Life Science                    250,000         1.1
Warburg Pincus                          225,000         1.0
All directors and officers as
a group (fourteen persons)            1,386,670(2)      6.3

(1)   Euroventures Nordica is a venture capital fund managed by Quintus
      Management Ltd. ("Quintus") The board of management of Euroventures
      Nordica has the power to vote and dispose of the 4,074,140 Ordinary
      Shares held by Euroventures Nordica.

(2)   Includes (i) 815,900 Ordinary Shares beneficially held by Lars
      Hammarstrom (ii) 560,000 Ordinary Shares issuable upon exercise of
      warrants subscribed for pursuant to the Key Employee Incentive Plan
      (as defined herein) and (iii) 200,000 Ordinary Shares issuable upon
      exercise of warrants subscribed for pursuant to the Warrant Program
      (as defined herein). See "Options to Purchase Securities from
      Registrant's Key Employee Incentive Plan" and "Options to Purchase
      Securities from Registrant's Warrant Program."

      The Company does not know of any arrangements that might result in a
change of control.

      As of June 15, 2000, the Company had 21,203,800 Ordinary Shares
outstanding.

ITEM 5.   NATURE OF TRADING MARKET

      The principal non-United States trading market for Biora's Ordinary
Shares is the Stockholm Stock Exchange. American Depositary Shares
("ADSs"), each representing two Ordinary Shares, are quoted on the Nasdaq
National Market under the symbol "BIORY". The ADSs are evidenced by
American Depositary Receipts ("ADRs") issued by The Bank of New York, as
depositary (the "Depositary"). The Depositary has advised Biora that as of
April 30, 2000, there were 349,326 ADSs outstanding. Additionally, the
Depositary has advised Biora that as of April 30, 2000, there were 10
holders of record. A significant number of the ADSs are held of record by
broker nominees. The number of beneficial owners is unknown but is
considered to be materially higher than the 10 record holders. On the basis
of this information, the ADSs held on such date in the United States
represented approximately 3.3 percent of Biora's outstanding Ordinary
Shares.

TRADING ON THE STOCKHOLM STOCK EXCHANGE

      Shares traded on the Stockholm Stock Exchange (the "SSE") comprise
shares quoted on three different lists; the "A-list," the "OTC-list" and
the "O-list," the latter being primarily intended for smaller companies,
companies with a short track record and companies wishing to be listed on
the A-list in the future but which temporarily do not satisfy the
requirements for such listing. Biora's Ordinary Shares are listed on the
O-list. The requirements for a listing on the O-list, are, inter alia, at
least 300 shareholders, each of whom holds shares of a value not less than
one round lot (approximately SEK 9,000) and an ownership structure under
which at least ten percent of the shares and voting rights of the company
are held by the general public.

      Trading on the SSE is conducted on behalf of clients by banks and
brokers. While banks and brokers are permitted to act as principal in
trading both on and off the SSE, they generally engage in transactions as
agent. There are no market maker or specialist systems on the SSE.

      Trading on the SSE begins each morning at 9:00 a.m. (Stockholm time)
at an opening price determined by the Stockholm Automated Exchange System
("SAX"), a computerized order-matching system, based on orders entered by
SSE members, and continues at prices based on market demand until 5:30 p.m.
(Stockholm time). Buy and sell orders are registered on the system in round
lots, typically of 100, 200 or 500 shares, and odd lots are matched
separately at the last price for round lots.

      The SSE is a fully electronic marketplace. Member firms of the SSE
are able to operate from an optional geographic location via advanced data
communications. The brokers' representatives are able to trade via work
stations that have been developed by the SSE or via their own electronic
data processing systems which are linked to SAX.

      In addition to official trading on the SSE, there is also trading off
the SSE during and after official trading hours. Trades in excess of 20
round lots can be effected off the SSE if the transaction price lies within
the spread then appearing on SAX, and trades in excess of 500 round lots
(for shares on the "Most Traded Shares" list of the SSE) or 250 round lots
(for all other shares) may, however, be effected off the SSE without regard
to such spread. Trades after official SSE trading hours must normally be
effected at a transaction price that lies within the spread appearing on
SAX at the time of the closing. If there are no orders in SAX at such time,
the trade may be effected at a price that otherwise reflects the market
situation at such time. If the market situation changes after the closing
of SAX, trades may be effected outside the spread, provided that it can be
shown that the transaction price reflected the market situation prevailing
at the time of the trade. Trading on the SSE tends to involve a higher
percentage of retail clients, while trading off the SSE whether through
intermediaries or directly often involves larger Swedish institutions,
banks arbitrating between the Swedish market and foreign markets, and
foreign buyers and sellers purchasing shares from or selling shares to
Swedish institutions.

      The table below sets forth, for the periods indicated, the high and
low sales prices for the Ordinary Shares on the SSE, as reported by the
SSE.

                                               PRICE PER ORDINARY SHARE
                                                                    QUARTER'S
                                               HIGH       LOW       CLOSE
CALENDAR PERIOD                                SEK
1997
First Quarter (from February 10, 1997)         91.0       66.0      79.5
Second Quarter                                 79.5       67.5      72.0
Third Quarter                                  76.0       63.0      71.0
Fourth Quarter                                 85.0       67.0      82.0
1998
First Quarter                                  106.0      74.0      102.0
Second Quarter                                 145.0      99.0      105.0
Third Quarter                                  119.0      70.0      80.0
Fourth Quarter                                 76.0       46.0      54.5
1999
First Quarter                                  69.5       48.0      57.5
Second Quarter                                 58.0       48.5      51.5
Third Quarter                                  50.0       25.1      41.5
Fourth Quarter                                 48.0       29.1      43.4
2000
First Quarter                                  86.0       35.0      67.0
Second Quarter (through May 18, 2000)          69.0       41.0      41.5


      The average daily volumes of Ordinary Shares traded in the SSE from
January 1, 1999 through May 10, 2000 was 96,409 based on total turnover
statistics (supplied by the Stockholm Stock Exchange).

TRADING ON THE NASDAQ NATIONAL MARKET

      The table below sets forth for the periods indicated the high and low
sales prices quoted for the ADSs on the Nasdaq National Market:

                                             PRICE PER ADS
                                                                     QUARTER'S
                                             HIGH        LOW         CLOSE
                                             US$
CALENDAR PERIOD
1997
First Quarter (from February 4, 1997)        22.875      17.750      20.000
Second Quarter                               20.875      17.750      17.875
Third Quarter                                19.000      16.250      18.750
Fourth Quarter                               21.750      18.375      20.750
1998
First Quarter                                26.500      18.375      25.000
Second Quarter (through May 29, 1998)        36.125      24.750      26.250
Third Quarter                                30.625      17.250      20.875
Fourth Quarter                               20.250      10.625      13.000
1999
First Quarter                                19.000      11.500      13.130
Second Quarter                               14.00       7.88        8.00
Third Quarter                                12.13       6.5         10.00
Fourth Quarter                               11.75       7.00        9.00
2000
First Quarter                                36.42       7.63        14.75
Second Quarter (through April 30, 2000)      16.00       10.25       10.25


      The average daily volumes of ADS from January 1, 1999 through May 31,
2000 was 8,264.

      The Depositary for the Company's ADSs has advised the Company that as
of May 31, 2000, there were 349,326 ADSs outstanding. Additionally, the
Depositary has advised the Company that as of March 31, 2000, there were 10
holders of record. A significant number of the ADSs are held of record by
broker nominees. The number of beneficial owners is unknown but is
considered to be materially higher than the 10 record holders. On the basis
of this information, the ADSs held on such date in the United States
represented approximately 3.3 percent of the Company's outstanding Ordinary
Shares.

ITEM 6.   LIMITATIONS AFFECTING SECURITY HOLDERS

      In order to be entitled to attend and vote at a general meeting of
shareholders, a shareholder must be registered in the register of
shareholders ten days prior to the date of the meeting. The Articles of
Association provide that the shareholder must give notice to Biora of the
intention to attend the meeting not later than the date specified in the
notice convening the meeting (a date not earlier than the fifth weekday -
including Saturday - preceding the meeting). A shareholder may attend and
vote at the meeting in person or by proxy. A person designated on the
register as a nominee (including the depositary of the ADRs) is not
entitled to vote at a general meeting, nor is a beneficial owner whose
share is registered in the name of a nominee (including the depositary of
the ADRs) unless the beneficial owner first arranges to have such owner's
own name entered in the register of shareholders. At any general meeting,
each shareholder may cast the full number of votes represented by such
holder's shares.

      There are no Swedish governmental laws, decrees or regulations that
restrict the export or import of capital or that affect the remittance of
dividends or other payments to non-residents of Sweden who hold Biora
shares. There have been no limitations imposed by Swedish law or Biora's
Articles of Association on the right of non-residents of Sweden or
non-citizens of Sweden to hold or vote Biora shares.

ITEM 7.   TAXATION

      The following general discussion sets forth the material Swedish and
United States federal income tax consequences that are applicable to
holders of ADSs or Ordinary Shares who hold such ADSs or Ordinary Shares as
capital assets ("U.S. Holders"): (i) individuals who are citizens or
residents of the United States for U.S. federal income tax purposes; (ii)
corporations created or organized in or under the laws of the United States
or any political subdivision thereof; (iii) estates the income of which is
includible in gross income for United States federal income tax purposes
regardless of source; and (iv) trusts if a court within the United States
is able to exercise primary supervision over the administration of the
trusts and one or more U.S. persons have the authority to control all
substantial decisions of the trusts. This discussion does not consider (a)
all aspects of United States federal income taxation that may be relevant
to particular U.S. Holders based on their particular circumstances
(including potential application of the alternative minimum tax), (b)
certain U.S. Holders subject to special treatment under the United States
federal income tax laws or foreign individuals or entities, for example, an
investor subject to special tax rules (e.g., partnerships, banks, thrifts,
real estate investment trusts, regulated investment companies, insurance
companies, dealers in securities or currencies, expatriates, tax-exempt
investors or holders whose functional currency is not the U.S. dollar) (c)
U.S. Holders owning directly or by attribution 10 percent or more of the
Ordinary Shares, or (d) any aspect of United States federal estate or gift
taxation or of state, local or tax laws of a country other than the United
States or Sweden.

      The statements of Swedish and United States federal income tax laws
set forth below are based on the laws in force as of the date of this
Annual Report, including the United States Internal Revenue Code (the
"Code") and the conventions presently in force between the United States
and Sweden for the avoidance of double taxation with respect to income
taxes (the "Income Tax Treaty") and with respect to estate, inheritance and
gift taxes (the "Estate Tax Treaty"), and may be subject to subsequent
changes in U.S. or Swedish law or in any of the conventions. In addition,
the following discussion assumes that the Depositary will perform its
obligations in accordance with the terms of the Deposit Agreement and any
related agreements.

      In general, for purposes of the Code, the Income Tax Treaty and the
Estate Tax Treaty, a U.S. Holder of ADSs will be treated as the owner of
the Ordinary Shares represented by those ADSs.

SWEDISH TAXATION

Taxation of Dividends

      In general, under Swedish tax law, dividends paid by a Swedish
corporation such as the Company to non-residents of Sweden are subject to
Swedish withholding tax at a rate of 30 percent. Pursuant to the Income Tax
Treaty, however, dividends paid by the Company to a U.S. Holder will
generally be subject to Swedish withholding tax at a reduced rate of 15
percent, provided that the U.S. Holder is a resident of the U.S. pursuant
to the Income Tax Treaty and does not have a permanent establishment or a
fixed base in Sweden. U.S. Holders of ADSs or Ordinary Shares may be
required to provide documentary evidence that such holder is entitled to
the reduced 15 percent withholding tax rate under the Income Tax Treaty.
The Depositary or the Custodians will, to the extent practicable,
facilitate all administrative actions necessary to obtain the reduced 15
percent Swedish withholding tax rate at source or obtain refunds of Swedish
withholding taxes for U.S. Holders of ADSs.

Tax on Sale or Other Disposition of Ordinary Shares or ADSs

      In general, under Swedish tax law, a U.S. Holder will not be subject
to Swedish tax on any gains derived from the sale or other disposition of
Ordinary Shares or ADSs, provided that the U.S. Holder is not a resident of
Sweden and does not have a permanent establishment or a fixed base in
Sweden. Special rules may, however, apply to individuals who have been
residents of Sweden at any time within the ten-year period immediately
preceding such sale or other disposition.

Estate and Gift Taxes

      Under Swedish tax law, a transfer of an Ordinary Share or an ADS by
gift or by reason of the death of the owner may be subject to Swedish gift
or inheritance tax, respectively, with the applicable progressive rates
varying from 10 percent to 30 percent of the taxable amount (determined
after certain deductions), depending on the relationship of the donee or
beneficiary to the donor or decedent. Transfers of Ordinary Shares or ADSs
will be subject to Swedish inheritance tax if the decedent at the time of
death is a resident in Sweden or, if not resident in Sweden, is a Swedish
citizen or is married to a Swedish citizen and has emigrated from Sweden
within ten years prior to death. Transfers of Ordinary Shares or ADSs will
also be subject to gift tax if, at the time of gift, the donor or donee is
resident in Sweden or, if not resident in Sweden, is a Swedish citizen or
is married to a Swedish citizen and has emigrated from Sweden within ten
years prior to the gift. Gifts of Ordinary Shares or ADSs made by or to
Swedish legal entities are also subject to gift tax.

      Under the Estate Tax Treaty, the transfer of an Ordinary Share or an
ADS by an individual U.S. Holder, by gift or by reason of the death of such
holder, will not be subject to Swedish gift or inheritance tax, provided
that the U.S. Holder is domiciled in the U.S. pursuant to the Estate Tax
Treaty and the Ordinary Share or ADS does not form part of the business
property of a permanent establishment in Sweden or pertain to a fixed base
in Sweden used for the performance of independent personal services. In
cases where such a transfer is subject to both Swedish inheritance or gift
tax and U.S. estate or gift tax, the Estate Tax Treaty generally provides
that the United States will allow as a credit against the U.S. tax an
amount equal to the tax paid to Sweden.

Transfer and Net Wealth Taxes

      Currently there are no Swedish transfer taxes or similar taxes
imposed on sales of Ordinary Shares.

      A U.S. Holder who is not an individual is not subject to Swedish net
wealth tax. A U.S. holder who is an individual, and who is not resident in
Sweden at the end of the taxable year is not subject to Swedish net wealth
tax, with respect to its Ordinary Shares or ADSs.

UNITED STATES TAXATION

Taxation of Dividends

      Distributions made by the Company (other than certain pro rata
distributions of Ordinary Shares or Ordinary Share rights) with respect to
the Ordinary Shares or ADSs (including the amount of any Swedish taxes
withheld therefrom) will generally be includible in the gross income of a
U.S. Holder as foreign source dividend income to the extent that such
distributions are paid out of the Company's current or accumulated earnings
and profits as determined for U.S. federal income tax purposes.
Distributions in excess of the Company's current and accumulated earnings
and profits will be applied against and will reduce the U.S. Holder's tax
basis in its Ordinary Shares or ADSs to the extent thereof, and, to the
extent in excess of such tax basis, will be treated as capital gain from
the sale or exchange of property. The amount of any cash distribution paid
in Swedish kronor will be equal to the U.S. dollar value of the kronor on
the date of receipt (which, in the case of ADSs, will be the date of
receipt by the Depositary) regardless of whether the payment is in fact
converted into U.S. dollars at that time. After such date of receipt, gain
or loss, if any, realized by a U.S. Holder on a sale or other disposition
of kronor will generally be treated as United States source ordinary income
or loss. Distributions by the Company will not qualify for the
dividends-received deduction available to corporations.

      Subject to certain limitations, the 15 percent Swedish tax withheld
in accordance with the Income Tax Treaty will be eligible for credit
against a U.S. Holder's United States federal income tax liability. The
limitation on foreign taxes eligible for credit is calculated separately
with respect to specific classes of income. For this purpose, dividends
paid with respect to Ordinary Shares or ADSs will generally constitute
"passive income" or, in the case of certain U.S. Holders, "financial
services income." Because the rules relating to the determination of such
foreign tax credits are complex, a U.S. Holder should consult his tax
advisor to determine whether and to what extent he would be entitled to a
credit. A U.S. Holder that does not elect to claim a foreign tax credit may
instead claim a deduction for Swedish income tax withheld if the U.S.
Holder takes this approach with respect to all foreign income taxes paid
during that tax year.

Disposition of ADSs or Ordinary Shares

      A U.S. Holder that sells or otherwise disposes of ADSs or Ordinary
Shares (including as a result of a sale of Ordinary Shares by the
Depositary) will generally recognize gain or loss in an amount equal to the
difference between the amount realized by the U.S. Holder and the U.S.
Holder's tax basis in the ADSs or Ordinary Shares. Such gain or loss will
be a capital gain or loss and will be long-term if the U.S. Holder has held
such ADSs or Ordinary Shares for more than one year. Long-term capital
gains of individuals are eligible for reduced rates of U.S. taxation. Under
most circumstances, any gain recognized will be treated as United
States-source for foreign tax credit purposes, losses will generally be
allocated against U.S. source income.

Passive Foreign Investment Company Considerations

      For United States federal income tax purposes, the Company will be
considered a "passive foreign investment company" (a "PFIC") beginning in
any taxable year in which either (i) 75 percent or more of the Company's
gross income is passive income or (ii) the average value of the Company's
"passive assets" (generally assets that produce passive income or are held
for the production of passive income) is 50 percent or more of the average
value of all of the Company's assets for such year. For this purpose,
passive income includes dividends, interest, certain royalties, rents,
annuities and the excess of gains over losses from the disposition of
assets which produce passive income.

      Based on the Company's current and projected income, assets and
activities, the Company believes that it will not be classified as a PFIC
for its taxable year ending December 31, 1999 or any subsequent taxable
year. However, there can be no assurances that the Company will not in fact
be considered a PFIC for its taxable year ending December 31, 1999 or any
subsequent taxable year because (i) the determination of whether or not the
Company is a PFIC will be based on the composition of the income and assets
of the Company and can be definitively made only after the end of each
taxable year, and (ii) the application of the relevant rules is not
entirely clear in all respects.

      Unless a U.S. Holder makes a mark-to-market election as discussed
below, if the Company becomes a PFIC for any taxable year, then (i) a U.S.
Holder would be required to allocate income recognized upon receiving
certain excess dividends and gain recognized upon the disposition of such
U.S. Holder's ADSs or Ordinary Shares ratably over the U.S. Holder's
holding period for the ADSs or Ordinary Shares, (ii) the amount allocated
to each year other than the year of the excess dividend payment or
disposition would be subject to tax at the highest rate of individual or
corporate tax, as the case may be, and an interest charge for the deemed
deferral benefit would be imposed with respect to the resulting tax
attributable to each such year, and (iii) gain recognized upon the
disposition of ADSs or Ordinary Shares would be taxable as ordinary income.

      If the Company becomes a PFIC for any taxable year and a U.S. Holder
makes a mark-to-market election with respect to its ADSs or Ordinary
Shares, in lieu of the tax treatment described in the preceding paragraph,
the U.S. Holder generally will include in income each year an amount equal
to the excess, if any, of the fair market value of the ADSs or Ordinary
Shares as of the close of the taxable year over the U.S. Holder's adjusted
tax basis therein. In the event that the U.S. Holder's adjusted tax basis
in the ADSs or Ordinary Shares exceeds their fair market value at the close
of the taxable year, the U.S. Holder may take a deduction in an amount
equal to such excess. Such deduction, however, will be limited to the net
mark-to-market gains that the U.S. Holder has included in income with
respect to such ADSs or Ordinary Shares in prior years. A U.S. Holder's
adjusted tax basis in its ADSs or Ordinary Shares will be adjusted to
reflect amounts included or deducted under this election.

      Amounts included in income pursuant to a mark-to-market election,
including gain on the actual sale or other disposition of ADSs or Ordinary
Shares, are treated as ordinary income. Ordinary loss treatment also
applies to the deductible portion of any mark-to-market loss on the ADSs or
Ordinary Shares, including any loss realized on the actual sale or other
disposition of such ADSs or Ordinary Shares to the extent that the amount
of such loss does not exceed the net mark-to-market gains previously
included in income with respect to such ADSs or Ordinary Shares.

Information Reporting and Backup Withholding

      Dividend payments in respect of the Ordinary Shares or ADSs and
payments from the sale of Ordinary Shares may be subject to information
reporting to the United States Internal Revenue Service and possibly United
States backup withholding tax at a 31 percent rate. Backup withholding will
not apply, however, to a holder who furnishes a correct taxpayer
identification number or certificate of foreign status and makes any other
required certification or who is otherwise exempt from backup withholding.
Generally, a U.S. Holder will provide such certification on Form W-9
(Request for Taxpayer Identification Number and Certification) and other
holders will provide such certification on Form W-8 (Certificate of Foreign
Status). The Treasury Department has issued new regulations which make some
modification to the withholding and information reporting rules. The new
regulations attempt to unify certifications requirements and modify
reliance standards and will generally be effective for payments made after
December 31, 2000, subject to some transition rules. Prospective investors
are urged to consult their tax advisors regarding the new regulations.

ITEM 8.   SELECTED CONSOLIDATED FINANCIAL DATA

      The following selected consolidated financial data as at December 31,
1995, 1996, 1997, 1998 and 1999 and for each of the years ended December
31, 1995, 1996, 1997, 1998 and 1999 have been derived from, and are
qualified by reference to, the Company's Consolidated Financial Statements
and Notes thereto appearing elsewhere in this Annual Report. The Company's
Consolidated Financial Statements are prepared in accordance with Swedish
GAAP, which differs in certain significant respects from U.S. GAAP. A
reconciliation of differences that significantly affect the determination
of consolidated results of operations and shareholders' equity as at
December 31, 1997, 1998 and 1999 and for each of the years then ended is
set forth in Note 23 of Notes to the Consolidated Financial Statements. The
following data should be read in conjunction with the Company's
Consolidated Financial Statements and Notes thereto and Management's
Discussion and Analysis of Financial Condition and Results of Operations,
which are included elsewhere herein.

<TABLE>
<CAPTION>
                                                                YEAR ENDED DECEMBER 31,
                                    ---------------------------------------------------------------------
                                      1995        1996        1997        1998        1999         1999
                                    --------    --------    --------    --------    --------     --------
                                     (SEK)       (SEK)       (SEK)        (SEK)      (SEK)          $(1)
                                                            (IN THOUSANDS, EXCEPT PER SHARE DATA) (2) (7)
<S>                                 <C>         <C>         <C>         <C>         <C>          <C>
INCOME DATA:

SWEDISH GAAP:
   Net sales                            936       4,561      16,499      50,119      73,556       8,649

   Cost of goods sold(3)               (142)     (4,513)     (5,533)    (10,864)    (15,470)     (1,819)
                                    --------    --------    --------    --------    --------     --------
   Gross Margin                         794          48      10,966      39,255      58,086       6,830

   Selling expenses                  (6,08)     (21,220)    (64,830)    (89,622)    (90,783)    (10,674)
   Administrative expense            (4,054)     (6,956)    (18,173)    (22,133)    (18,505)     (2,176)
   Research and development
      cost(4)                        (2,743)     (6,825)    (20,293)    (39,980)    (41,597)     (4,891)
   Other operating income             2,765         902       2,368      42,898       4,001         470
   Other operating expenses                      (1,782)     (2,843)     (1,946)     (3,007)       (354)
                                    --------    --------    --------    --------    --------     --------
   LOSS FROM OPERATIONS              (9,319)    (35,833)    (92,805)    (71,528)    (91,805)    (10,794)

Net Loss                            (10,930)    (37,073)    (75,358)    (59,998)    (86,739)    (10,199)
Basic EPS
   Net loss per Ordinary
      Shares(8)                       (1.01)      (2.61)      (3.66)      (2.83)      (4.09)      (0.48)
   Net loss per ADS                   (2.02)      (5.22)      (7.33)      (5.66)      (8.18)      (0.96)
   Weighted average shares
     outstanding(5)                  10,819      14,207      20,571      21,204      21,204      21,204

U.S. GAAP(5):
   Product sales                        936       4,561      16,499      50,119      73,556       8,649
   Contract revenue                   2,765         526         818         224
                                    --------    --------    --------    --------    --------     --------
   TOTAL REVENUES                     3,701       5,087      17,317      50,343      73,556       8,649

   Cost of goods sold (3)              (142)     (4,513)     (5,533)    (10,864)    (15,470)     (1,819)
   GROSS MARGIN                       3,559         574      11,784      39,479      58,086       6,830

   Selling expenses                  (6,081)    (21,220)    (64,830)    (89,622)    (90,783)    (10,674)
   Administrative expense            (7,490)     (6,956)    (18,173)    (22,133)    (18,505)     (2,176)
   Research and development
     cost(4)                         (9,347)    (11,157)    (23,744)    (37,233)    (32,653)     (3,839)
   Other operating income                          (376)     (1,550)     42,674       4,001         470
   Other operating expenses                      (1,782)     (2,843)     (1,946)     (3,659)       (430)
                                    --------    --------    --------    --------    --------     --------
   LOSS FROM OPERATIONS             (19,359)    (40,165)    (96,256)    (68,781)    (83,513)     (9,819)

   Net loss                         (23,448)    (41,680)    (78,809)    (57,251)    (78,447)     (9,224)
   Basic and diluted EPS
       Net loss per Ordinary
          Share(8)                    (2.17)      (2.93)      (3.83)      (2.70)      (3.70)      (0.43)
       Net loss per ADS               (4.33)      (5.87)      (7.66)      (5.40)      (7.40)      (0.87)
Weighted average shares
  outstanding(5)                     10,819      14,207      20,571      21,204      21,204      21,204


CONSOLIDATED BALANCE SHEET DATA:

SWEDISH GAAP:
Cash and cash equivalents             3,107       5,342     286,310     187,048     112,804      13,263
Total assets                         27,739      53,947     339,334     247,186     162,736      19,134
Long-term borrowings                 16,148      19,090       5,642       5,872       5,949         699
Advances received (6)                            34,475      39,375
Shareholders' equity / deficit        7,986     (18,437)    277,935     213,970     127,406      14,980

U.S. GAAP:
Total assets                          9,248      31,494     313,430     224,030     148,524      17,463
Shareholders' equity (deficit)      (12,983)    (48,400)    249,841     188,779     110,537      12,997
</TABLE>


(1)   Solely for convenience, krona amounts have been translated into U.S.
      dollars at the Noon Buying Rate on December 31, 1999 of U.S. $1.00 =
      SEK 8.505

(2)   Amounts may not total due to rounding.

(3)   Biora's activities up until 1995 have been almost exclusively devoted
      to research and development of Emdogain. As a result, the majority of
      the Company's production costs, with the exception of costs relating
      to the sale of Emdogain on a test basis during 1995, were classified
      as research and development. With Emdogain becoming commercially
      available in 1996, the Company, beginning in 1996, has accounted for
      production costs as cost of goods sold, with the exception of costs
      directly related to research and development. The royalty payments to
      Astra of 2.5 percent on sales of Emdogain has been reclassified
      starting 1998 as cost of goods sold instead of Research and
      development cost in previous years. In this presentation all previous
      years have been adjusted for comparison purposes.

(4)   Total research and development costs incurred were SEK 9.3 million,
      SEK 11.2 million, SEK 23.7 million, SEK 37.2 million and SEK 32.7
      million for the years ended December 31, 1995, 1996, 1997 , 1998 and
      1999, respectively. The royalty payments to Astra of 2.5 percent on
      sales of Emdogain, has been reclassified from R&D expense to cost of
      goods sold. In accordance with the Company's accounting principles
      under Swedish GAAP, a portion of research and development costs were
      capitalized commencing in 1993. Under U.S. GAAP such amounts would
      have been expensed as incurred.

(5)   The weighted average number of Ordinary Shares outstanding for each
      year includes (i) the effect of Ordinary Shares subscribed from the
      date such shares were paid for and (ii) the effect of the issuance of
      three bonus shares for each Ordinary Share and a 25-for-1 share split
      of the Ordinary Shares that occurred prior to October 31, 1996. The
      effect of the convertible debentures has not been included in the
      computation of loss per Ordinary Share as it would be considered
      antidilutive.

(6)   On September 1, 1996 the Company entered into an agreement with
      Seikagaku. Biora received $5 million for entering into the agreement.
      The agreement provided that Seikagaku could, under certain
      circumstances, request Biora to refund the $5 million payment in the
      event that the Japanese Ministry of Health and Welfare did not
      approve Emdogain for sale in Japan. Consequently, the $5 million was
      treated as a liability by Biora through the end of 1997. Emdogain was
      approved by the MHW in January 1998 and consequently, Biora
      transferred the $5 million payment to Other Operating Income during
      the three month period ended March 31, 1998.

(7)   In 1998, Swedish companies were required to revise the presentation
      of their financial statements in accordance with the Swedish Annual
      Accounts Act (the "SAAA"). Accordingly, the Company's Consolidated
      Financial Statements have been prepared in accordance with the SAAA
      and amounts for all prior referenced periods have been restated in
      conformance with the SAAA. The changes effect disclosures of
      individual line items, but do not effect results of operations or
      shareholders' equity. See "Management's Discussion and Analysis of
      Financial Condition and Results of Operations--Change in Presentation
      of Financial Statements."

(8)   The impact of the Company's common stock equivalents has not been
      considered in the computation of net loss per share as the effect
      would be antidilutive.


DIVIDENDS

      The Company has never paid any cash dividends on its Ordinary Shares.
The Company currently intends to retain earnings, if any, for use in its
business and does not anticipate paying any cash dividends in the
foreseeable future.

      In September 1996, Euroventures Nordica made a conditional
contribution to the shareholders' equity of Biora in the amount of SEK
7,510,052 ($883,016) through the conversion of outstanding loans, including
accrued interest, made to Biora in the aggregate principal amount of SEK
7,160,419 ($841,907) and accrued interest of SEK 349,633 ($41,109). To the
extent that the Company has funds available for dividends, and subject to
the approval by the general shareholders' meeting of the Company, the
Company will make repayments out of such funds to Euroventures Nordica in
full satisfaction of its conditional contribution prior to making any
dividend payments to other holders of Ordinary Shares and ADSs.

      Under the Swedish Companies Act, only a general meeting of
shareholders may authorize the payment of dividends, which may not exceed
the amount recommended by the Board of Directors (except to a limited
extent in the event of a demand by holders of at least 10 percent of the
total number of shares outstanding) and which may be paid only from funds
available for dividends. Under Swedish law, no interim dividends may be
paid in respect of a financial period as to which audited financial
statements have not been adopted by the Annual General Meeting of
shareholders. The normal practice in Sweden is for dividends to be paid
only annually.

EXCHANGE RATE INFORMATION

      The following table sets forth, for the periods and dates indicated,
the exchange rate for the U.S. dollar against the krona based on the Noon
Buying Rate.

                        KRONA/DOLLAR EXCHANGE RATES
                             (KRONA PER DOLLAR)

                               PERIOD END   AVERAGE(1)    HIGH        LOW
                               ----------   ----------    ----        ---
Year ended December 31,
         1991                    5.5550      6.0456      6.6280      5.4420
         1992                    7.0790      5.8787      7.1150      5.0885
         1993                    8.3400      7.8778      8.4835      7.1740
         1994                    7.4295      7.6654      8.3840      7.0640
         1995                    6.6290      7.1072      7.5510      6.5045
         1996                    6.8250      6.7129      7.0300      6.5455
         1997                    7.9400      7.6446      8.0825      6.8749
         1998                    8.1030      7.9148      8.1440      7.5800
         1999                     8.505      8.3007      8.6500      7.7060
 2000 (through May 31)           8.9870      8.7870      9.2220      8.3530


(1)   Represents the average of the Noon Buying Rates on the last business
      day of each full month during the relevant period.

      Because a substantial portion of the Company's revenues and expenses
is expected to be denominated in currencies other than kronor, results of
operations and cash flows may be materially affected by movements in the
exchange rate between the krona and the respective currencies to which the
Company is exposed. For information regarding the effects of currency
fluctuations on Biora's results. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations--Impact of Currency
Fluctuations and Inflation."

      Fluctuations in the exchange rate between the krona and the dollar
will affect the dollar equivalent of the krona price of the Ordinary Shares
traded on the Stockholm Stock Exchange and, as a result, could affect the
price of the ADSs in the United States. Such fluctuations will also affect
the dollar amounts received by holders of Ordinary Shares and ADSs on
conversion of cash dividends, if any, paid in kronor on the Ordinary
Shares. The Company does not anticipate paying cash dividends on its
Ordinary Shares in the foreseeable future.

ITEM 9.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS

SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS

      This Annual Report contains various forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. Such
statements are contained in Item 1 Description of Business and Item 9
Management's Discussion and Analysis of Financial Condition and Results of
Operations and may be identified by the use of forward-looking terminology
such as may, will, intend, expect, anticipate, estimate, believe, plan or
other variations thereon or other comparable terminology, and include
statements concerning strategies and objectives of management for future
operations and assumptions related thereto. These statements are based upon
management's current expectations and beliefs concerning future events as
they may affect the Company and therefore are subject to numerous
uncertainties, many of which are beyond the control of the Company. The
Company cautions that these statements are subject to important factors
that could cause actual results to differ materially from those expressed
or implied in such forward-looking statements, including, without
limitation: (i) the timing and cost involved in the pre-clinical and
clinical testing of and obtaining regulatory approval for the Company's
products under development, (ii) market acceptance of the Company's
technologies and products, (iii) the cost and success of the Company's
strategy to expand its own marketing and sales force, (iv) competitive
pressures arising from changes in technology or product development, or
changes in competitor's pricing for products, (v) changes in the degree of
protection created by the Company's patents and other intellectual property
rights, (vi) changes in general economic conditions, including inflation or
fluctuations in interest or foreign exchange rates, (vii) the ability of
the Company to expand its production capabilities and (viii) changes in
business strategy.

      The Company assumes no obligation to update any particular
forward-looking statement in light of future events.

OVERVIEW

      The Company commenced operations in 1987 and, from 1991 through 1995,
generated revenue primarily from contracts to freeze-dry medical products
developed by unaffiliated third parties at Biora's sterile facilities. The
Company entered into such contracts primarily to keep its manufacturing
facilities operational, as required by certain quality control and
manufacturing regulations applicable to the Company. In June 1995, the
Company received approval in the EEA pursuant to a CE Mark to market its
initial product, Emdogain, and the Company began selling Emdogain to
dentists who participated in clinical trials on a test basis in selected
European countries later that year. In September 1996, the Company received
approval from the FDA to market Emdogain in the United States and from the
Ministry of Health and Welfare of Japan in January 1998 to market the
product in Japan. The Company received the CE Mark for PrefGel in February
1998 and an amended marketing clearance from the FDA in May 1998 to market
the product in the United States. From its inception until the
commercialization of its initial product, the Company was engaged primarily
in research and development activities, obtaining EU and FDA approval for
Emdogain, and establishing a sales and marketing organization.
Consequently, the Company has a limited operating history upon which an
evaluation of the Company's prospects and performance can be made. The
Company's prospects must be considered in light of the risks, expenses,
difficulties and delays frequently encountered in connection with the
formation and early phase of operation of a new business, the development
and commercialization of new products based on innovative technology and
the rapid technological change and the high level of competition in the
health care industry.

      The Company believes that sales of Emdogain will be its primary
source of revenues for the next several years. The Company intends to focus
its marketing efforts in order to increase sales of Emdogain in North
America, the most important markets in Europe and in Japan and complete
development of, and obtain approval for the marketing of, its new products.

      The Company has sustained losses in each year of its operations and
expects to incur additional losses over the next several years. The
Company's loss from operations for the year ended December 31, 1999, was
SEK 91.8 million ($10.8 million) as compared to SEK 71.5 million ($8.4
million) for the year ended December 31, 1998 due to increased costs for
product development, commercial distribution activities, regulatory affairs
and general administrative affairs associated with Emdogain and, commencing
in 1996, the amortization of previously capitalized costs. The Company's
loss from operations for the first quarter of 2000 was SEK 17.7 million
($2.1) compared to the loss from operations of SEK 22.8 million ($2.7
million) for the first quarter of 1999.

      In February 1997 Biora completed the IPO of 7,475,000 Ordinary Shares
at a price to the public of SEK 60.13 per Ordinary Share. The net proceeds
to the Company, after deducting underwriting discounts and offering
expenses payable by the Company, were SEK 372 million ($43.7 million). The
Company is using the net proceeds received from the IPO for marketing and
sales activities, research and product development, capital expenditures
and for working capital and general corporate purposes.

CAPITALIZATION OF RESEARCH AND DEVELOPMENT COSTS

      The Swedish Accounting Act (bokforingslagen) and Swedish GAAP allow
certain research and development costs and costs incurred in the related
product approval process to be capitalized if it is probable that the
product will generate future economic benefits. The Company has capitalized
research and development costs and costs related to the product approval
process incurred by the Company in connection with the development of
Emdogain, net of revenue from contract sales and research grants. The
capitalization of such costs commenced in connection with the completion of
clinical studies and the submission of the application by the Company to
regulatory authorities in the United States for approval for sale and
production of Emdogain. All research and development costs incurred in
earlier periods have been expensed as incurred.

      In addition, in 1996 the Company commenced the amortization of
capitalized research and development costs in line with projected levels of
sales subject to an amortization period not to exceed five years commencing
from the date of the commercialization of Emdogain in 1996. Research and
development costs (other than equipment expense which is capitalized for
the purpose of Swedish GAAP) incurred in connection with additional
products based on Emdogain technology and re- formulations of Emdogain are
expensed as incurred. Product approval costs are also expensed as incurred.
These factors will have the effect of increasing the amounts expensed by
the Company as compared to its historical expense levels and will have a
negative impact on the Company's results of operations for the foreseeable
future. See Notes 1 and 23 of Notes to the Consolidated Financial
Statements.

RESULTS FROM OPERATIONS

YEAR ENDED DECEMBER 31, 1999 COMPARED TO YEAR ENDED DECEMBER 31, 1998

      Net sales for the year ended December31, 1999 equaled SEK 73.6
million ($8.7 million), an increase of 47 percent over net sales for the
year ended December 31, 1998, which equaled SEK 50.1 million ($ 5.9
million). The increase is attributable to increased of sales of Emdogain in
all markets in which the company operates, particularly in the United
States, which had an increase of sales of 88 percent.

      Gross Profit equaled SEK 58.1 million ($ 6.8 million) for 1999
compared to SEK 39.3 million ($ 4.6 million) for the year 1998, a slight
increase of profit margin from 78.3% to 79.0% between the two periods.

      Loss from operations equaled SEK 91.8 million ($ 10.8million) for the
year ended December 31, 1999 compared to an operating loss of SEK 71.5
million ($ 8.4 million) for the period ended December 31, 1998. In the
first quarter of 1998 a SEK 39.4 million ($ 4.6million) payment from
Seikagaku Corporation was included in the other operating income. This was
the payment for the right to represent Biora in the Japanese market. The
loss from operations, excluding this nonrecurring income was SEK 110.9
($13.0million) The reduction in loss is caused by increased sales and a
decrease in administrative expense partially offset by a slight increase in
R&D expense.

      Net financial items equaled SEK 5.2 ($ 0.6 million) for the year
ended December 31, 1999 as compared to SEK 11.6 million ($1.4 million) for
the same period in 1998, a decrease of 55 %. Net financial items mainly is
mainly interest on the Company's liquid assets in 1999. The reason for the
decrease is less liquid assets to invest as well as lower interest rates in
Europe during 1999.

      Net loss equaled SEK 86.7 million ($10.2 million) for the year 1999
as compared to a net loss of SEK 60.0 million ($ 7.1 million) for the year
ended December 31, 1998. Excluding the one time SEK 39.4 million ($ 4.6
million) payment that Biora received from Seikagaku Corporation the
reduction of net loss equaled SEK 99.4 million ($ 11.7 million). The
reasons for this improvement are described above, with the addition of the
change in the financial net between the two years.

YEAR ENDED DECEMBER 31, 1998 COMPARED TO YEAR ENDED DECEMBER 31, 1997

      Net sales for the year ended December 31, 1998 equaled SEK 50.1
million ($ 5.9m), an increase of slightly more than 300 % over consolidated
net sales for the year ended December 31, 1997, which equaled SEK 16,5
million ($1.9m). The increase is attributable to increase of sales of
Emdogain in all markets in which the Company operates, and in Germany, the
United States and Italy in particular, as well as through its distributor
in Japan. Sales to Japan has amounted to SEK 4,0 million ($0.5m) since the
initial deliveries in February 1998 and the launch of the product in April
1998.

      Gross profit equaled SEK 39,3 million ($4,6m) for the year ended
December 31, 1998 compared to SEK 11,0 million ($1,3m) for the year 1997,
an increase of Profit margin from 66.5% in 1997 to 78.3 % in 1998. This
increase is principally the result of increased production volumes
resulting from increased sales, which had a positive effect on the unit
cost of goods sold. Compared to 1997, Cost of goods sold have been
increased by 2.5 % of sales, as a result of a reclassification of the
royalty owed to Astra, which previously have been classified as R&D
expense. All previous period figures have been adjusted accordingly in
order to provide comparability between periods.

      Loss from operations equaled SEK 71,5 million ($8,4m) for the year
ended December 31, 1998 compared to an operating loss of SEK 92,8 million
($10,9m) for the year ended December 31, 1997. This improvement primarily
resulted from a SEK 39.4 million ($4.6m) payment that Biora received from
Seikagaku Corporation for the right to represent Biora in the Japanese
market. Since Emdogain was approved for sales in Japan in January 1998, the
advance payment was booked as Other Operating Income in the first quarter
of 1998. The reduction in loss as a result of this payment as well as the
improvement in gross profit due to increased sales were partially offset by
by increased costs associated with building marketing organizations in
North America and Europe and intensified research and development efforts.

      Net financial items equaled SEK 11,6 ($1.4m) for the year ended
December 31, 1998 as compared to SEK 17,4 million ($2.0) for the year of
1997, a decrease of 33 %. Net financial items mainly comprise interest on
the Company's liquid assets in 1998. The 1997 amount includes exchange
gains on the Company's liquid funds in dollars of SEK 5,0 million ($0.6m).

      Net loss equaled SEK 60,0 million ($7,1m) for the year ended December
31, 1998 as compared to a net loss of SEK 75,4 million ($8,9m) for the year
ended December 1997, a decrease of 20 %. The reasons for this improvement
are described above, with the addition of the change in the financial net
between the two years. Net loss per share equaled SEK 2,83 ($0.33) for the
year 1998 compared to a net loss per share of SEK 3,66 ($0.43) for the year
1997, based on the average number of shares outstanding.

YEAR ENDED DECEMBER 31, 1997 COMPARED TO YEAR ENDED DECEMBER 31, 1996

      Net sales. Net sales, all of which were attributable to sales of the
Company's principle product, Emdogain, were approximately SEK 16.5 million
($1.9 million) for 1997, compared to SEK 4.6 million ($0.5 million) in
1996.

      Loss from operations. The loss from operations was SEK 92.8 million
($10.9 million) for 1997, compared to SEK 35.8 million ($4.2 million) for
1996. Cost of goods sold increased to SEK 5.1 million ($0.6 million) in
1997, from SEK 4.4 million ($0.5 million) in 1996. As a percent of sales,
cost of goods sold decreased to 31 percent in 1997 from 96 percent in 1996,
principally because production volumes reached more economical levels.
Selling expenses increased to SEK 64.8 million ($7.6 million) in 1997 from
SEK 21.2 million ($2.5 million) in 1996 as a result of the expansion of the
Company's marketing organization. Administrative expenses were SEK 18.2
million ($2.1 million) in 1997, compared to SEK 7.0 million ($0.8 million)
in 1996. This increase is due primarily to the Company's transition from a
privately held research company in the early stages of commercialization to
a more fully integrated public company. Research and development costs
increased to SEK 20.7 million ($2.4 million) in 1997 from SEK 6.9 million
($0.8 million) in 1996, primarily as a result of an intensified focus on
R&D including reinforcement of Biora's internal R&D resources, the Company
entering into new R&D agreements with outside parties and the commencement
of new clinical trials for documentation of new indications for Emdogain.

      Net profit (loss). The Company's net loss increased to SEK 75.4
million ($8.9 million) in 1997, from a net loss of SEK 37.1 million ($4.4
million) in 1996 due to the adverse effects described above partly
compensated for by the positive impact of financial items. Net interest
income was SEK 17.4 million ($2.0 million) in 1997 compared to net interest
expense of SEK 1.5 million ($0.2 million) in 1996. This improvement is
entirely due to the cash proceeds from the IPO in February of 1997.

YEAR ENDED DECEMBER 31, 1996 COMPARED TO YEAR ENDED DECEMBER 31, 1995

      Net sales. The Company's principal product, Emdogain, became
commercially available in 1996. Net sales, all of which were attributable
to sales of Emdogain, were approximately SEK 4.6 million ($0.5 million) for
1996, compared to SEK 0.9 million ($0.1 million) in 1995.

      Loss from operations. Loss from operations was SEK 35.8 million ($4.2
million) for 1996 compared to SEK 9.3 million ($1.1 million) for 1995. Cost
of goods sold increased to SEK 4.4 million($0.5 million) in 1996 from SEK
0.1 million ($0.01 million) for 1995. Biora's activities until 1995 were
almost exclusively devoted to research and development with respect to
Emdogain. As a result, the majority of the Company's production costs, with
the exception of costs relating to the sale of Emdogain on a test basis
during 1995, were classified as research and development costs. With
Emdogain becoming commercially available in 1996, the Company, beginning in
1996, accounted for production costs as costs of goods sold, with the
exception of costs directly related to research and development. Selling
expenses increased to SEK 21.2 million ($2.5 million) in 1996 from SEK 6.1
million ($0.7 million) in 1995 as a result of increased expenses in 1996 in
connection with the commercial launch of Emdogain in 1996. Administrative
expenses were SEK 7.0 million ($0.8 million) in 1996, compared to SEK 4.1
million ($0.5 million) in 1995, reflecting a general increase in activity.
Research and development costs increased to SEK 6.9 million ($0.8 million)
in 1996 from SEK 2.8 million ($0.3 million) in 1995, primarily as a result
of increased costs relating to the approval process for Emdogain in the
United States and Japan. The amount of research and development costs
capitalized by the Company was SEK 4.1 million ($0.5 million) in 1996,
compared to SEK 6.6 million ($0.8 million) in 1995, and thus these amounts
were not reflected in the Company's results. With the full
commercialization of Emdogain, the Company no longer capitalizes research
and development costs relating to Emdogain. However, costs related to the
approval process in Japan were capitalized.

      Net profit (loss). As a result of the foregoing factors, the
Company's net loss increased to SEK 37.1 million ($4.4 million) in 1996,
from a net loss of SEK 10.9 million ($1.3 million) in 1995.

LIQUIDITY AND CAPITAL RESOURCES

      The Company's financial requirements for the three years prior to the
IPO in February 1997, were met primarily through funds generated by
issuances of equity securities (approximately SEK 16.0 million ($1.9
million), and convertible debt securities (approximately SEK 3.0 million
($0.4 million) (which were converted into Ordinary Shares in full in
January 1996), loans from the Swedish Industrial Fund (Industri-och
nyforetagarfonden) ("IF") aggregating a total of SEK 19 million ($2.2
million) and revenues relating to contract work for third parties. The
Company's loan from the IF was repaid from the proceeds of the IPO. Of the
approximately SEK 19 million ($2.2 million) in total equity and convertible
debt financing received by the Company during the three years prior to the
IPO. Euroventures Nordica provided an aggregate of SEK 11.2 million ($1.3
million) in both equity and debt financing to the Company, substantially
all of which was initially funded through loans to the Company and then
converted into equity or convertible debt. On September 30, 1996,
outstanding loans to the Company from Euroventures Nordica in the principal
amount of SEK 7,160,419 ($841,907), plus accrued interest were converted
into a conditional contribution to the shareholders' equity of Biora. To
the extent that the Company has funds available for dividends, and subject
to approval by the general shareholders' meeting of the Company, the
Company will make repayments out of such funds to Euroventures Nordica in
satisfaction of its conditional contribution prior to making any dividend
payments to other holders of Ordinary Shares or ADSs. The Company currently
has no outstanding loans from Euroventures Nordica. The company has no
other borrowings.

      The Company had SEK 112.8 million ($13.3 million) in cash at December
31, 1999 compared to SEK 187.0 million ($22.0 million) at December 31,
1998.

      The Company generated negative cash flow from operating activities of
SEK 74.2 million ($8.7 million) during the year 1999. The negative net
result for the year of SEK 86.7 million ($10.2 million) was compensated by
the depreciation of capitalized R&D of SEK 8.6 million ($1.0 million) and a
positive change of working capital of SEK 2.4 million ($0.3 million). Cash
flow during the full year 1998 was negative SEK 99.3 million ($11.7
million).

      Biora's shareholders' equity equaled to SEK 127.4 million ($15.0
million) at December 31, 1999 as compared to SEK 214.0 million ($25.2
million) at December 31, 1998.

      Biora's capital expenditures for the year 1999 amounted to SEK 4.3
million ($0.5 million) compared to SEK 5.8 million ($0.7 million) for the
full year 1998. The reason for maintaining the low level of capital
expenditure is related to all major capital expenditures for the present
capacity level of production, as well as build up of sales offices were
mainly done in earlier years.

      Although the Company anticipates that revenue from sales of Emdogain
and its current cash balances (including the net proceeds from the IPO)
will be sufficient to finance the Company's operations and the projected
expansion of its operations through at least 2000, there can be no
assurance that the Company will not require additional financing. The
Company's future liquidity and capital requirements will depend upon
numerous factors, including the extent to which Emdogain gains market
acceptance, the timing and cost involved in the clinical testing of and
obtaining regulatory approval for its products under development, the cost
and success of the Company's strategy to expand its own marketing and sales
force, the costs and timing of expansion of its manufacturing capacity and
other factors. There can be no assurance that the Company, if required,
will be able to raise additional financing on acceptable terms, or at all,
the failure of either of which could have a material adverse effect upon
the Company's business, financial condition, prospects and results of
operations.

IMPACT OF CURRENCY FLUCTUATIONS AND INFLATION

      The Company expects to have significant export sales from Sweden that
are invoiced in currencies other than the krona. Also, the Company will
incur a significant portion of its expenses in kronor, due, in part, to the
amortization of certain costs relating to research and development
activities capitalized by the Company in accordance with Swedish GAAP.
Accordingly, the Company's results of operations, expressed in kronor, may
be adversely affected by the fluctuations in the exchange rates between the
krona and any other currencies in which the Company invoices.

      Prior to November 1992, the krona was pegged to the European Currency
Unit ("ECU"). On November 19, 1992, the Bank of Sweden decided to
discontinue pegging the krona to the ECU and permitted the krona to float
against other currencies. By the end of 1993, the value of the krona had
fallen by approximately 20 percent against the ECU and approximately 29
percent against the U.S. dollar from November 1, 1992. In the two-year
period ended December 31, 1995, the krona appreciated approximately 10
percent against the ECU and 21 percent against the U.S. dollar. In 1996,
the year-end krona-ECU exchange rate was substantially unchanged from the
rate at the beginning of the year and the krona appreciated approximately 3
percent against the U.S. dollar. Against the ECU the difference between the
high and low krona month-end values during 1996 was approximately 4
percent, and against the U.S. dollar the difference between the high and
low krona month-end values during this period was also approximately 5
percent. In 1997, the year-end krona-ECU exchange rate was substantially
unchanged from the exchange rate at the beginning of the year and the krona
depreciated by approximately 15 percent against the U.S. dollar. Because of
such fluctuations in the value of the krona relative to other currencies,
the Company's reported sales in krona may not necessarily represent changes
in sales volumes or prices in local currencies. In 1999, the year-end krona
was about six percent lower against the U.S. dollar the one year earlier
and the average rate for 1999 was about four percent lower then in 1998.

      The effects of inflation on Biora's results of operations have not
been significant. However, inflation in Sweden may have a negative effect
on the profitability of contracts under which the Company is to receive
payments in dollars or other non-Swedish currencies, unless such inflation
is offset by a depreciation of the krona against such currencies. During
the last couple of years the inflation has been reduced in Europe in
general. During 1998 and 1999, the inflation rate in Sweden was less than
one percent.

      To compensate for changes in the relative value of the krona compared
to other currencies in which the Company does business, the Company has
entered into forward currency contract with respect to monetary assets
denominated in non-Swedish currencies. The Company invested the net
proceeds of the IPO in investment grade, interest-bearing obligations
pending application of such proceeds. There can be no assurance, however,
that any such future activities undertaken by the Company will eliminate
the potential negative financial impact of currency fluctuations.

PRIMARY MARKET RISKS AND HOW THEY ARE MANAGED

      The Company's consolidated cash flows and earnings are subject to
changes in foreign currency exchange rate. The Company attempts to limit
its exposure to changing foreign exchange rates through operational and
financial market actions.

      The Company sells its products, carries out research collaborations
and performs clinical trials in a number of locations around the world,
resulting in a diversified revenue and cost base that is exposed to
fluctuations in U.S. and European currencies. This diversified base of
foreign currency revenues and costs serves to create a natural hedge that
limits the Company's net exposure to fluctuations in these foreign
currencies.

      Short term exposures to changing currency exchange rates are managed
by financial market transactions, principally through the purchase of
forward exchange contracts, to offset the earnings and cash flow impact of
the nonfunctional currency denominated receivables, payables and forecasted
transactions of the Company's foreign subsidiaries. Foreign exchange
forward contracts are denominated in the same currency as the receivable or
payable being covered, and the term and amount of the foreign exchange
contract substantially mirrors the term and the amount of the underlying
receivable or payable. The Company covers the majority of all known and
measurable exposed receivables and payables denominated in foreign
currencies that have a liquid, cost effective forward exchange market. The
receivables and payables being covered arise from trade and inter-company
transactions of and among the Company's foreign subsidiaries and
inter-company loans between the Company and its foreign subsidiaries.

      The Company does not have any significant exposure, to fluctuations
in interest rates because of the low levels of marketable securities and
there are no debts on the Company's balance sheet. The Company does not
undertake any specific actions to cover its exposure to interest rate risk
and the Company is not party to any interest rate risk management
transactions.

SENSITIVITY OF MARKET RISKS AND DISCLOSURES ABOUT MODEL AND ITS LIMITATIONS

      The following tables provides information about the Company's
derivative financial instruments and related balance sheet items by foreign
currency and presents such information in Swedish kronor equivalents. The
tables summarizes information on instruments and related underlying
transactions, including forecasted transactions, that are sensitive to
foreign currency exchange rates, including foreign currency forward
exchange contracts, inter-company borrowings and nonfunctional foreign
currency denominated receivables and payables. The net amount that is
exposed to changes on foreign currency rates then is subjected to a
specific change in the value of the foreign currency versus Swedish kronor
calculated over a period not exceeding the average expected maturity of the
related foreign exchange contract. This selected change in the value of
foreign currencies is expected to reflect reasonably possible near term
changes in the foreign currencies' exchange rates. If the actual change in
the value of foreign currencies is substantially different then expected,
the net impact of foreign currency exchange rate risk on the Company's
earnings may be materially different than that disclosed below. If the
amounts of the actual nonfunctional foreign currency denominated forecasted
transactions is materially different than that estimated by the Company,
the net impact of the foreign currency exchange rate risk on the Company's
earnings may be different than that disclosed.

      Table I presents the impact on the Company's earnings of a 10%
appreciation and a 10 % depreciation of the Swedish kronor against the
indicated foreign currencies.

<TABLE>
<CAPTION>
                                                          Table I
                                                   At December 31, 1999

                      Swedish kroner       Net underlying     Net Exposure   Foreign          Foreign
                      Value of Net         Foreign currency   Currency       Exchange Loss    Exchange Loss
                      Foreign exchange     Transaction        Position       from             from Depreciation
                      Assets (Liability)   Exposure                          Depreciation     Swedish kroner
                      Contracts                                              Swedish kroner
                                           SEK in millions
Currency

<S>                       <C>                    <C>            <C>              <C>               <C>
U.S. Dollar               (10.2)                 9.0            (1.3)            (0.1)             0.1
Euro                      (10.3)                 6.3            (4.0)            (0.4)             0.4
South African Rand                               0.1             0.1              0.01            (0.01)
Japanese yen              (26.9)                29.0             2.1              0.2             (0.2)
Total                     (47.4)                44.4            (3.0)            (0.3)             0.3


<CAPTION>
                                                          Table II
                                                   At December 31, 1999

                      Swedish kroner       Net underlying     Net Exposure   Foreign          Foreign
                      Value of Net         Foreign currency   Currency       Exchange Loss    Exchange Loss
                      Foreign exchange     Transaction        Position       from             from Depreciation
                      Assets (Liability)   Exposure                          Depreciation     Swedish kroner
                      Contracts                                              Swedish kroner
                                           SEK in millions
Currency

<S>                       <C>                    <C>              <C>            <C>              <C>
German Marks              0                      0.2              0.2            0.02             (0.02)
</TABLE>


ECONOMIC AND MONETARY UNION

      On January 1, 1999 a single European currency, the Euro, was
introduced. While currently Sweden was not in the first group of countries
initially adopting the Euro, the Company is unable to predict the nature or
extent of the impact that the adoption of the Euro by other member states
of the European Union may have on the Company. So far no there have been no
noticeable effects. The Swedish currency "Kronor" started off very weak
against the Euro, since the Swedish government has been unclear about its
plans whether or not to join the monetary union. A few months after the
introduction of the Euro the Swedish currency has strengthened
approximately ten percent against the exchange rate as of January 1, 1999.
In 2000 the Swedish currency has continued to strengthen against the Euro.

YEAR 2000 COMPLIANCE

      Biora's information system experienced no incidents as a result of
the transition to year 2000.

U.S. GAAP RECONCILIATION

      Biora prepares its Consolidated Financial Statements in accordance
with Swedish GAAP, which differs in certain significant respects from U.S.
GAAP. Under U.S. GAAP, the net loss for the year ended December 31, 1999
amounted to SEK 78.4 million ($9.2 million) as compared to SEK 86.7 million
($10.2 million) under Swedish GAAP. Net loss per Ordinary Share for the
year ended December 31, 1999 was SEK 3.70 ($0.43) under U.S. GAAP, compared
with SEK 4.09 ($0.48) under Swedish GAAP. Shareholders equity at December
31, 1999 under U.S. GAAP was SEK 110.5 million ($13.0 million) as compared
to shareholders equity of SEK 127.4 million ($15.0 million) under Swedish
GAAP.

      The difference between results of operations and shareholders' equity
(deficit) under U.S. GAAP and Swedish GAAP results primarily from differing
accounting treatments of research and development costs, compensation
expense resulting from the issuance of certain share options to management,
convertible loans, the differing accounting treatments of Euroventures
Nordica's capital contribution and the differing principles concerning
amortization of patents. Under Swedish GAAP, the Company has capitalized
certain research and development costs for Emdogain and related product
approval costs incurred in 1993 and subsequent periods. For U.S. GAAP
purposes, such costs are expensed as incurred. See Note 17 of Notes to
Consolidated Financial Statements for a reconciliation of results of
operations and shareholders' equity in accordance with Swedish GAAP to
approximate results of operations and shareholders' deficit in accordance
with U.S. GAAP and for a description of the differences between U.S. GAAP
and Swedish GAAP that significantly affect Biora.

ITEM 10.   DIRECTORS AND OFFICERS OF THE REGISTRANT

      Under the Swedish Companies Act (aktiebolagslagen), the Board of
Directors of the Company (the "Board of Directors" or "Board") has ultimate
responsibility for the organization of the Company and the management of
the Company's affairs. The Company's Articles of Association provide for a
Board of Directors elected by its shareholders of not fewer than five nor
more than nine directors and not fewer than one nor more than three deputy
directors. In addition, pursuant to the Swedish 1987 Act on Board
Representation for Employees in Private Employment (lagen om
styrelserepresentation for de privatanstallda), the employees of the
Company, under certain conditions, may be represented on the Board. Under
Swedish law, the President and at least half of the Board members must be
resident in an EEA country unless the Swedish government or an authority
appointed by the Swedish government grants an exemption. All directors
(except directors elected by the employees, if any) are elected by
resolution of a general meeting of shareholders. The term of office of a
director (except directors elected by the employees, if any, whose term of
office must not be more than four fiscal years) is one year, but a director
may serve any number of consecutive terms. Directors may be removed from
office by a general meeting of shareholders at any time, and vacancies on
the Board, except when filled by a deputy director, may only be filled by
shareholder resolution. Each year, one director is elected Chairman of the
Board by resolution of the Board at the first meeting of the Board
following its appointment.

DIRECTORS AND EXECUTIVE OFFICERS

      As of May 31, 2000, the directors and executive officers of the
Company are as follows:

Name                     Age      Position

Per Wahlstrom            53       Chairman of the Board of Directors
Svein Eskedal            48       Director
Dr. Lars Hammarstrom     63       Director
Dr. Bertil Koch          67       Director
Per Lojdquist            51       Director
Lars Inglemark           51       Director
Toni  Weitzberg          49       Director
Tomas Hammargren         48       Director, President & Chief Executive
                                    Officer through August 14, 2000
Rickard Soderberg        42       Chief Executive Officer as of August 14, 2000
Lennart Jacobsson        44       Deputy Director
Anders Agering           49       Executive Vice President & Chief Financial
                                    Officer and Production
Dr. Stina Gestrelius     51       Vice President of Pre-Clinical Research &
                                    Development
Dr. Lars Heijl           55       Vice President of Clinical Research &
                                    Development and Medical Director
Helen Svahnqvist         33       Vice President of International Marketing
                                    and Sales
Mikael Sjoblom           43       Vice President of Corporate Communications
Kerstin Palsson          42       Group Controller

      Per Wahlstrom has served as the Chairman of the Board of Directors of
Biora since 1994 and as a Director since 1987. From 1986 through June 30,
1998, Mr. Wahlstrom has served as the Managing Director and Chairman of the
Board of Euroventures Management AB, an investment advisor for various
venture capital funds with over SEK 1,200 million under management. Prior
thereto, Mr. Wahlstrom was the Managing Director of six regional venture
capital companies within the Swedish Industry Establishing Company (Svetab)
group from 1982 through 1985. From 1980 to 1982, Mr. Wahlstrom served as
the Managing Director of Svetab Ost, a regional venture capital company
belonging to the Svetab group. Mr. Wahlstrom was the Chairman of the Board
of Euroventures Management AB until June 30, 1998. In addition, he is a
member of the boards of directors of Louis Gibeck AB, Studsvik Holding AB,
Studsvik AB, Studsvik Rad Waste AB, Kirk Acoustics AS, Swedestart
Management AB, Volvo Technology Transfer AB and Euroventures Advisors AS.
As of June 1998, the investment advisor to Euroventures Nordica will be
Quintus, a company beneficially owned by Mr. Wahlstrom.

      Svein Eskedal has served as a Director of Biora since April 1997. Mr.
Eskedal is the owner of Eskedal Consult A/S and works as a consultant
specializing in mergers and acquisitions and corporate management on behalf
of major Norwegian and European shareholders and companies. Mr. Eskedal is
a Director of a number of Norwegian private companies and has previously
been a Director of such Norwegian public companies as Aker Brygge A/S, Hag
A/S and Bird Technology A/S.

      Lars Hammarstrom co-founded Biora in 1986 and has served as one of
its directors since that time. Dr. Hammarstrom also served as President of
Biora from 1990 to 1994. Dr. Hammarstrom was the director of COB at the
Karolinska Institute from 1992 to 1998, and he has served as professor of
Oral Pathology at the Karolinska Institute since 1975. Prior thereto, Dr.
Hammarstrom was the dean of the Dental School at the University of Lund
from 1974 through 1975. Dr. Hammarstrom holds a D.D.S. in Dentistry and a
Ph.D. in Pharmacology from the Karolinska Institute's School of Dentistry.

      Bertil Koch has served as a Director of Biora since 1994. Dr. Koch is
the former director of dental care for the County of Stockholm and is now
working as a consultant in dental care administration. Dr. Koch has also
served as the representative of Sweden's county council organization on a
commission on dental fees established by the Swedish State Insurance agency
in 1990. From 1982 to 1988, Dr. Koch served as district chief and assistant
director of dental care for the County of Stockholm. Dr. Koch received his
degree in dentistry from the Karolinska Institute. Dr. Koch is also a
director of COB.

      Per Lojdquist has served as a Director of Biora since 1997. Mr.
Lojdquist is a member of the Group Executive Committee of AB Volvo and has
been the Head of Corporate Communication and Investor Relations of AB Volvo
since 1997. Prior to that he had a number of senior management positions
within AB Volvo.

      Lars Ingelmark is a Board member since 1999. He holds a graduate in
medicine and had from 1974 to 1984 several marketing and sales positions in
Ciba Geigy Pharmaceuticals, and was Head of the Pharmaceutical division
1983-84. From 1985 to 1986 he was CEO of Janssen Pharma in Sweden and
Norway. During 1987 and 1998 he held several positions in the Management
Group of Kabi, Kabi- Pharmacia and Pharmacia & Upjohn, such as deputy CEO,
Head of Pharmaceutical Division, Responsible for the Asian region and
Senior Vice President, Corporate Projects. Since 1998 he is Head of AP Life
Science Ventures at Swedish National Pensions Insurance Fund, 6th Fund
Board. Other Board positions: Board member of A+ Science Invest AB, Health
Cap AB, Clinical Data Care AB, KaroBio AB (publ), Meda AB, Molnlycke Health
Care AB and Nobel Biocare AB (publ).

      Toni Weitzberg has served as a Director of Biora since April 1998. He
is Chariman of the Board of Nycomed Pharma A/S and responsible for Nordic
Capital's activities within the health care area. Mr. Weitzberg has been
Senior Vice President Europe and member of the Operations Group of
Pharmacia & Upjohn from1997 to 1999, with overall responsibility for the
company's operations in Europe, the Middle East and Africa. Prior thereto,
from 1996 to 1997, Mr. Weitzberg was President of the Italian Market
Company, Pharmacia & Upjohn S.p.A.. From 1994 to 1995, Mr. Weitzberg was
President of Pharmacia Biopharmaceuticals and member of the Pharmacia AB
Corporate Management Group.

     Tomas Hammargren has served as the President of Biora since 1994
through August 14, 2000 and has also served as a Director of Biora since
that time. Prior thereto, Mr. Hammargren was the Industrial Counselor in
the Swedish Ministry of Industry and Commerce from 1991 to 1994. From 1989
to 1991, Mr. Hammargren was a Strategic Management Consultant at
SIAR-Bossard where he was responsible for projects and strategy development
in Japan and Europe. From 1986 to 1989, Mr. Hammargren was President of
Nobel Medica AB, a pharmaceutical and medical device production and
distribution company within the Nobel Group that also represented ten
United States and European companies in the Scandinavian markets. Mr.
Hammargren served as Vice President of Pharmacia KK (Japan) from 1983
through 1986, as well as Marketing Manager for Pharmacia Ophthalmics, where
he was responsible for the international launch of Healon, from 1979
through 1983.

      Lennart Jacobsson has served as a Deputy Director of Biora since
1987. Since 1986, Mr. Jacobsson has served as the Investment Manager of
Euroventures Management AB. Mr. Jacobsson has also been the Managing
Director of Swedestart AB since 1995. Prior thereto, Mr. Jacobsson was the
Investment Manager of Svetab Ost from 1983 to 1985, and in 1983 was head of
the accounting department of Stockholms Badhus. In addition, he is a member
of the Boards of Directors of Euroventures Management AB, Euroventures
Management AS, Euroventures Advisors AS, Selcom AB, 3i Systems AB, Cecap
AB, LG Products AB, Metronor AS, Read Soft AB, Universal Access AB and
Swedestart Management AB.

      Rickard Soderberg has been appointed President and Chief Executive
Officer of Biora starting Augst 14, 2000. Mr Soderberg is currently holding
the position as President of Hassle Lakemedel, a company in the Astra
Zeneca group since 1997. 1996-1997 Mr Soderberg served as President of
Pharmacia & Upjohn in Austria. Prior therto Mr Soderberg held various
senior management positions in the Pharmacia and Kabi organizations,
predominantly in marketing and sales.

      Anders Agering has served as Executive Vice President and Chief
Financial Officer since May 1, 1998. From 1990 through May 1998, Mr.
Agering served as Chief Financial Officer and other financial and operating
responsibilities in the Business Area Rail of the Cardo Group. From 1988 to
1990, Mr. Agering was Group Controller at Provendor AB (Volvo's Food Group)
and from 1980 to 1988, was the Group Controller at Scan Coin AB.

      Stina Gestrelius has served as the Vice President of Pre-Clinical
Research & Development and Production of Biora since 1990, as the Head of
Research & Development and Production from 1988 as well as a Deputy
Director of Biora from 1988 through 1997. From 1983 to 1988, Dr. Gestrelius
was the Section Head of Peptide Synthesis Research at Ferring
Pharmaceuticals in Malmo, Sweden, and from 1977 to 1982 was the Section
Head of Enzyme Immobilization R&D at Novo Nordisk A/S in Copenhagen,
Denmark. Dr. Gestrelius holds a Master of Sciences in Chemical Engineering
as well as a Ph.D. in Biochemistry from the University of Lund. Dr.
Gestrelius is the Swedish expert and delegate of CEN/Technical Committee
316, which writes European standards for tissue-derived medical devices.
Dr. Gestrelius received the Gosta Virding Award for Entrepreneur of the
Year in 1995 relating to her work at Biora with Emdogain. Dr. Gestrelius
has also served as a member of the Board of COB since 1993.

      Lars Heijl has served as the Vice President of Clinical Research &
Development and Medical Director of Biora since 1996. Dr. Heijl has also
acted as a Dental Consultant at Astra Pain Control AB since April 1996.
Prior thereto, Dr. Heijl served as a Dental Medical Advisor and Project
Leader at Astra Pain Control AB from March 1993 through March 1996 and the
Project Leader at Astra Pain Control AB from January 1990 through February
1993. From 1986 to 1989, Dr. Heijl served as Associate Director of
Toxicology at Astra Hassle AB. Prior to 1986, Dr. Heijl also held
appointments as an Associate Professor in the School of Dental Hygiene and
the Department of Periodontology at the University of Gothenburg in Sweden
and was an instructor in periodontology from 1975 to 1976 with the
Department of General Dentistry at the Eastman Dental Center in Rochester.
Dr. Heijl received his D.D.S. from the University of Gothenburg, his M.Sc.
in Dental Research from the University of Rochester and his Ph.D. in
Odontology from the University of Gothenburg.

      Helen Svahnqvist has served as International Marketing Manager of
Biora since January 1, 2000. Prior thereto, Ms. Svahnqvist served as
marketing manager for the Nordic area within Biora since 1995. Previosly
she has been a pharmaceutical consultant with Jansen-Cilag AB.

      Mikael Sjoblom has served as Vice President, Corporate
Communications, since September 1997. Prior thereto, Mr. Sjoblom filled a
similar position in Peab AB construction company, from 1996 to 1997. From
1992 to 1996 Mr. Sjoblom was Chief Information Officer for the Gas, Heating
and Service business sectors of the Sydkraft Group.

      Kerstin Palsson has served as Group Controller since March 1997.
Prior thereto, Ms Palsson served as Public Accountant with the BDO audit
group from October 1980 and as a Chartered Public Accountant from 1986
until February 1997 with the same company.

OTHER KEY PERSONNEL

      NAME                         AGE    POSITION

      Donna Janson (prev. Jenks)   45     President, Biora Inc., USA
      Vartan Gianighian            53     President, Biora S.r.l, Italy
      Ann-Christin Johansson       43     Quality Assurance Manager, Biora AB
      Dirk Jan Braakman            50     President, Biora Benelux Dental
                                            Products B.V., Belgium,
                                            Netherlands and Luxembourg
      Wolfgang Muller         35          General Manager, Germany and Austria

      Donna Janson (prev. Jenks) has been the Chief Executive Officer of
Biora USA since August 1996. Prior thereto, Ms. Janson acted as the Vice
President of Marketing at Nobel Biocare USA Inc. from 1993 through August
1996, the Vice President and General Manager of the Central Division for
Nobelpharma USA from 1991 through 1993 and the National Sales Manager for
Nobelpharma Canada Inc. from 1987 through 1991.

      Vartan Gianighian has served as the President of Biora S.r.l., Italy
since April 1997. Prior thereto, Mr. Gianighian was the Managing Director
of Amgen in Italy from 1996 to 1997. From 1991 to 1995 he was the Executive
Vice President of Pharmacia's Pharmaceutical Products division. From 1989
to 1990, he was the Director of the Pharmaceutical Division of Formenti, a
family owned Italian company.

      Ann-Christin Johansson has served as Quality Assurance Manager of
Biora since 1990 and as a research chemist with Biora since 1988. Prior
thereto, Ms. Johansson was employed as a research chemist at Ferring
Pharmaceuticals in Malmo. Ms. Johansson holds a Master of Sciences in
Chemical Engineering from the University of Lund.

      Dirk Jan Braakman has served as President of Biora Benelux Dental
Products B.V. (Belgium, Netherlands and Luxembourg) since July 1995. Prior
thereto, Mr. Braakman was a practicing dentist in Italy and The
Netherlands. Mr. Braakman received his dentistry degree from the University
of Utrecht.

      Wolfgang Muller was appointed General Manager for Biora GmbH in June
2000. He rejoined Biora after one year in the real estate business.
Previous to that he served as Sales and Marketing Director for Biora
Germany and Austria for three years.

AUDIT COMMITTEE

      The Company's audit committee consists of three directors who are not
officers or employees of the Company ( Svein Eskedal , Bertil Koch and Toni
Weitzberg) and generally advises the Company's board of directors in
matters relating to the adequacy of the Company's financial reporting and
internal controls, reviews the Company's financial statements and other
financial information (including information filed with or furnished to the
United States Securities and Exchange Commission), consults with and
reviews the compensation of the Company's independent auditors and reviews
and proposes changes to the Company's accounting and financial reporting
policies.

ITEM 11.   COMPENSATION OF DIRECTORS AND OFFICERS

      The following table sets forth the aggregate compensation paid to or
accrued on behalf of all directors and officers of Biora as a group for the
year ended December 31, 1999:

                                          Salaries,              Pension,
                                       Director's Fees          Retirement
                                         Commissions            and Similar
                                         and Bonuses             Benefits
                                      ----------------       ----------------
                                      SEK in thousands       SEK in thousands

All non-executive directors
  as a group (8 persons)                    1,285                      0

All executive officers as a
  group (7 persons)                         5,668                  2,028
                                      ----------------       ----------------
      Total                                 6,953                  2,028


      In 1999, the Chairman of the Board of Directors received a fee of SEK
150,000, and the non- executive Directors received a fee of SEK 100,000,
and the Deputy Director a fee of SEK 50,000. In addition to the director's
fee, Bertil Koch received SEK 25,000, Toni Weitzberg SEK 25,000 and Svein
G. Eskedal received SEK 40,000 as compensation for their services as
members of the Audit Committee. Lars Hammarstrom received a research and
development consultation fee of SEK 205,000 and Eskedal Consult A/S
received SEK 190,000 for consultancy assignments.

      Mr. Tomas Hammargren, the President of Biora received SEK 1,200,000
in salary and SEK 346,000 in other benefits in 1999.

MANAGEMENT EMPLOYMENT AGREEMENTS

      The Company has entered into employment agreements with each of Mr.
Hammargren, Mr. Agering, Dr. Gestrelius, Dr. Heijl, Mr. Edgren, Mr. Sjoblom
and Mrs Palsson. These agreements are continuously in force until
terminated by (i) the individual party thereto, at which point the
individual would be required to remain employed as an officer of the
Company for a period ranging from three to six months or (ii) the Company,
at which point the individual would be permitted to remain employed as an
officer of the Company for a period ranging from 5 to 18 months. Among
other items, these agreements contain non-compete and confidentiality
provisions. According to the terms of the non- compete clause, such
officers agreed not to conduct any business directly competing with the
Company's during the term of the employment agreement (with the exception
of Messrs. Heijl and Sjoblom and Mrs. Palsson) and for an additional year
thereafter without the Company's prior written consent.

      The Company has guaranteed a loan for Mr. Sjoblom in the amount of
SEK 201,000 ($24,806). The guarantee expires upon the termination of the
loan on January 31, 2001.

ITEM 12.   OPTIONS TO PURCHASE SECURITIES FROM REGISTRANT

KEY EMPLOYEE INCENTIVE PLAN

      On January 24, 1997, the Company's Board of Directors, acting in
accordance with the authorization of the shareholders of the Company,
approved the issuance of an aggregate of SEK 500,000 principal amount of
subordinated debentures at an interest rate of 7 percent with 560,000
accompanying warrants to Euroventures Nordica at a premium which reflects
the value of the accompanying warrants. On the same date, Biora and
Euroventures Nordica entered into an agreement (the "Key Employee Incentive
Plan") pursuant to which Euroventures Nordica agreed to offer all the
warrants at a price which reflects the premium to officers and other key
employees of Biora and certain of its subsidiaries (the "Participants") to
provide them with appropriate incentives to encourage them to continue in
the employ of Biora and to acquire a proprietary interest in the long-term
success of Biora. Each warrant entitles the holder to acquire one Ordinary
Share of the Company, at an exercise price of SEK 70.00. Under Swedish law
a corporation cannot issue warrants separately from debentures, but
accompanying warrants may be detached from the debentures. The principal
amount of the debentures issued was de minimis in comparison to the
estimated value of the attached warrants. As of June 15, 1998, all of the
560,000 warrants issued to Euroventures Nordica had been subscribed for by
the Participants. The warrants are exercisable for Ordinary Shares at any
time up until January 31, 2001.

      The warrants have been granted to the following board members and
employees of the Company:

      NAME                      NUMBER

      Donna Jenks               150,000
      Stina Gestrelius          100,000
      Tomas Hammargren          50,000
      Bengt Sahlberg            50,000
      Lars Heijl                40,000
      Anders Larsson            40,000
      Vartan Gianighian         40,000
      Magnus Pelles             40,000
      Anders Agering            20,000
      Stefan Edgren             10,000
      Mikael Sjoblom            10,000
      Per Lojdquist              4,000
      Kerstin Palsson            3,000
      Mats G. Ringesten          2,000
      Toni Weitzberg             1,000

      Total                   560,000

      All of these 560,000 warrants had been granted by December 31, 1999.

WARRANT PROGRAM

      At a meeting on April 23, 1998, the Company's shareholders approved
the issuance of an aggregate of SEK 50,000 principal amount of subordinated
debentures with 200,000 accompanying warrants to Biora Option AB (the
"Warrant Program"), a wholly-owned subsidiary of Biora, at a premium which
reflects the value of the accompanying warrants. On the same date, Biora
and Biora Option AB entered into an agreement pursuant to which Biora
Option AB agreed to offer all the warrants at a price which will reflect
the fair market value of the warrant to certain employees of Biora and its
subsidiaries (who are determined by the Company's Board of Directors) (the
"Participants") to provide them with appropriate incentives to encourage
them to continue in the employ of Biora and to acquire a proprietary
interest in the long-term success of Biora. Each warrant entitles the
holder to acquire one Ordinary Share of the Company, at an exercise price
of SEK 130.00. Under Swedish law a corporation cannot issue warrants
separately from debentures, but accompanying warrants may be detached from
the debentures. The principal amount of the debentures issued were de
minimis in comparison to the estimated value of the attached warrants. Of
the 200,000 warrants issued to Biora Option AB, 71,250 have been subscribed
for by 54 employees. All employees in the group, that did not previously
hold any options or warrants in the company, were invited to participate in
the warrant program. The warrants are exercisable for Ordinary Shares at
any time during May 2002.

ITEM 13.   INTEREST OF MANAGEMENT IN CERTAIN TRANSACTIONS

AGREEMENT WITH ASTRA

      From 1989 through 1992, Astra was a principal shareholder in Biora
and participated in the funding of the early research and development of
Emdogain. On December 31, 1992, Biora, Astra and certain shareholders of
Biora entered into an agreement pursuant to which Astra terminated its
commitment to fund the research and development of products relating to
Emdogain as well as all licensing agreements which Biora and Astra had
previously entered into. Under the terms of the agreement, Astra also
transferred all of the Ordinary Shares held by it in Biora to certain other
principal shareholders of Biora. As part of the agreement, Astra was
granted a royalty, up to and including December 31, 2009, of 2.5 percent of
commercial income (other than deductions for VAT and customs duties) from
the dental application of two patents held by the Company relating to
Emdogain: "binding-inducing composition" and "composition inducing a
binding." The Company will reflect costs incurred pursuant to the terms of
the royalty agreement as an expense in its statements of operations. See
"Description of Business--Patents and Proprietary Rights."

1994 SHARE ISSUANCE

      In October 1994, the principal shareholders of Biora, including Leif
Blomlof, Lars Hammarstrom, Sven Lindskog, Euroventures Nordica,
Euroventures Benelux I BV ("EB I"), Euroventures Benelux II BV ("EB II"),
Euroventures Switzerland I ("ES I") and Euroventures Switzerland II ("ES
II") entered into a shareholders agreement (the "Shareholder Agreement").
Pursuant to the Shareholders Agreement, Biora issued 2,030,000 Ordinary
Shares and gave Euroventures Nordica, EB I, EB II, ES and ES II the right
of priority to subscribe for such shares. Euroventures Nordica subscribed
for 1,110,000 Ordinary Shares, EB II subscribed for 460,000 Ordinary Shares
and ES II subscribed for 460,000 Ordinary Shares, each at the subscription
price of SEK 2.95 per Ordinary Share. The subscription price for the
Ordinary Shares subscribed for by Euroventures Nordica was paid by the
cancellation of a portion of the principal amount of loans made by
Euroventures Nordica to the Company, and each of EB II and ES II paid for
their Ordinary Shares in cash.

1994 ISSUANCE OF CONVERTIBLE NOTES

      In December 1994, Biora issued a convertible note in the principal
amount of SEK 1,652,000 to Euroventures Nordica, a convertible note in the
principal amount of SEK 678,500 to EB II and a convertible note in the
principal amount of SEK 678,500 to ES II. Each of the notes bore interest
at a rate of 2 percent over the Bank of Sweden's applicable discount rate.
Euroventures Nordica subscribed for its note in exchange for the
cancellation of outstanding loans made by Euroventures Nordica to Biora in
the principal amount of SEK 1,652,000. Each of EB II and ES II paid cash
for their respective notes. The exercise price for the convertible notes
was set at SEK 2.95, with the condition that if Biora had not received FDA
approval for Emdogain by June 30, 1995, the exercise price would be lowered
to SEK 1.62. In January 1996, each of the noteholders converted the entire
principal amount of their respective notes at a rate of SEK 1.62 per
Ordinary Share, at which time the shareholders forgave accrued interest on
the convertible notes. In connection with the conversion, Euroventures
Nordica received 1,020,000 Ordinary Shares and EB II and ES II each
received 420,000 Ordinary Shares.

1995 SHARE ISSUANCE

      In November 1995, the Company issued 1,666,500 Ordinary Shares at a
subscription price of SEK 6.00 per Ordinary Share. Euroventures Nordica
subscribed for 1,018,200 Ordinary Shares, the subscription price for which
was paid by the cancellation of loans made by Euroventures Nordica to the
Company in September and October of 1995. EB I subscribed for 33,600
Ordinary Shares, EB II subscribed for 227,200 Ordinary Shares, ES I
subscribed for 33,600 Ordinary Shares and ES II subscribed for 227,200
Ordinary Shares, in each case for cash. The remaining Ordinary Shares were
subscribed for by certain officers and consultants to the Company for cash.

LOANS FROM EUROVENTURES NORDICA

      From time to time since Euroventures became a principal shareholder
of Biora in 1987, Euroventures Nordica has assisted in the funding of
Biora's operations through advances. Through 1994 Euroventures Nordica had
advanced funds to Biora aggregating SEK 5 million (less accrued interest),
SEK 4.9 million of which was canceled in connection with Biora's issuance
of Ordinary Shares and convertible notes in October 1994. As of September
1, 1996, Biora owed an aggregate of SEK 7 million in principal amount to
Euroventures Nordica. On September 30, 1996 Euroventures made a conditional
contribution to the shareholders' equity of Biora by converting the entire
principal amount of and accrued interest on these loans into unrestricted
equity. See "Interest of Management in Certain Transactions-- Capital
Contribution from Euroventures Nordica."

CAPITAL CONTRIBUTION FROM EUROVENTURES NORDICA

      On September 30, 1996, Euroventures Nordica made a conditional
contribution to the shareholders' equity of Biora in the amount of SEK
7,510,052 through the conversion of outstanding loans, including accrued
interest, to Biora in the aggregate principal amount of SEK 7,160,419 and
accrued interest of SEK 349,633. The amount of the conditional contribution
was treated as unrestricted equity. The contribution was made to increase
total shareholders' equity as the change in the Company's accounting policy
with respect to the capitalization of costs related to the development of
Emdogain decreased statutory shareholders' equity. The contribution is
deemed "conditional" in that it is to be repaid to Euroventures Nordica
only to the extent that the Company has sufficient unrestricted equity
otherwise available for dividends, and such repayment is further subject to
the approval of any repayment by the general shareholders' meeting of the
Company. There can be no assurance, however, that the Company will ever be
profitable or that the Company will have sufficient positive unrestricted
equity to repay Euroventures Nordica's conditional contribution.

RELATIONSHIP WITH CENTER FOR ORAL BIOLOGY

      In May 1992, Biora entered into a cooperation agreement with COB that
expired in December 1995. COB is a foundation that was formed in 1986 by
the Karolinska Institute and Stockholm's City Council to carry on research
and product development activities in the area of dental therapy and oral
biology. Lars Hammarstrom, former president and current director of Biora,
was the president of COB through from 1992 though 1997. Due to Dr.
Hammarstrom's departure from COB, the Company's has terminated the
relationship with COB during 1999.

      Biora is preparing a patent application based on studies of the
effects of new protein combinations under the XP20 project. In December,
1997, Biora acquired the patent rights for a new protein patent that formed
the basis of the XP20 project from COB. The protein is present during
normal tooth development in humans and Biora intends to investigate the
potential of this protein combination for use in dental surgery. Biora also
relinquished its rights to a patent for a duo-ceramic implant developed by
COB in December 1997. The patent was relinquished to enable the Company to
focus greater resources on the expansion of its core biology-based products
program.

LOCAL HARD TISSUE FORMATION RESEARCH AGREEMENT WITH COB

      In June 1997, the Company and COB entered into an agreement under
which COB was to conduct research regarding local hard tissue formation. As
a result of the departure of Dr. Hammarstrom from COB, the Company and COB
amended the agreement in May 1998. Under the amended agreement, the Company
paid or will pay COB for research conducted from July 1997 through December
1998 as follows: SEK 275,000 was paid upon the signing of the amendment,
SEK 275,000 on March 31, 1998, and SEK 275,000 was paid on September 30,
1998 (prior to the amendment, Biora was to pay COB SEK 2,050,000 per year
for research services).

AGREEMENT REGARDING PREFGEL

      In October 1995, Sven Lindskog ("Lindskog") and Leif Blomlof
("Blomlof"), former officers and shareholders of Biora, entered into an
agreement with Biora pursuant to which Lindskog and Blomlof agreed to
transfer all intangible rights with respect to PrefGel to Biora. Under the
agreement, Lindskog and Blomlof agreed to continue to oversee ongoing
clinical trials on PrefGel until the conclusion of such trials and to keep
Biora informed about the progress of such trials. As consideration for the
transfer, Biora paid a total of SEK 3,730,000 to consultants commissioned
by Lindskog and Blomlof upon the completion of clinical trials relating to
PrefGel in November 1996.


                                  PART II

ITEM 14.  DESCRIPTION OF SECURITIES TO BE REGISTERED

      Not applicable.


                                  PART III

ITEM 15.  DEFAULTS UPON SENIOR SECURITIES

      None.

ITEM 16.   CHANGES IN SECURITIES AND CHANGES IN SECURITY FOR REGISTERED
           SECURITIES

      None.


                                  PART IV

ITEM 17.  FINANCIAL STATEMENTS

      Not applicable as financial statements are provided under Item 18.

ITEM 18.   FINANCIAL STATEMENTS

      See pages F-1 through F-28 included with this Form 20-F.

ITEM 19.   FINANCIAL STATEMENTS AND EXHIBITS

      (a) The following consolidated financial statements and related
schedule, are filed as part of this Annual Report:

                                                                         Page

Index to Consolidated Financial Statements . . . . . . . . . . . . . . .  F-1
Report of Independent Accountants. . . . . . . . . . . . . . . . . . . .  F-2
Consolidated Financial Statements:
Consolidated Statements of Operations for the years ended
         December 31, 1997, 1998 and 1999. . . . . . . . . . . . . . . .  F-3
Consolidated Balance Sheets as of December 31, 1997, 1998
         and 1999. . . . . . . . . . . . . . . . . . . . . . . . . . . .  F-4
Consolidated Statements of Cash Flows for the years ended
         December 31, 1997, 1998 and 1999. . . . . . . . . . . . . . . .  F-6
Notes to the Consolidated Financial Statements . . . . . . . . . . . . .  F-7

      All other schedules are omitted because they are not applicable or
because the required information is contained in the Consolidated Financial
Statements or Notes thereto.

      (b)   Documents filed as exhibits to this Annual Report:

      None.



                                 SIGNATURES

      Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant certifies that it meets all of the requirements
for filing on Form 20-F and has duly caused this Annual Report to be signed
on its behalf by the undersigned, thereunto duly authorized.


Date:  June 30, 2000                BIORA AB


                                    By:  /s/ Thomas Hammargren
                                       ----------------------------------
                                         Tomas Hammargren
                                         President & CEO


                                    By:  /s/ Anders Agering
                                       ----------------------------------
                                         Anders Agering
                                         Chief Financial Officer





                       INDEX TO FINANCIAL STATEMENTS

FINANCIAL STATEMENTS OF BIORA AB AND SUBSIDIARIES

Report of Independent Accountants . . . . . . . . . . . . . . . . . . .  F-2

Consolidated Financial Statements:

      Consolidated Statements of Operations for the years ended
            December 31, 1997, 1998 and 1999. . . . . . . . . . . . . .  F-3

      Consolidated Balance Sheets as of December 31, 1997, 1998
            and 1999. . . . . . . . . . . . . . . . . . . . . . . . . .  F-4

      Consolidated Statements of Cash Flows for the years ended
            December 31, 1997, 1998 and 1999. . . . . . . . . . . . . .  F-6

Notes to the Consolidated Financial Statements. . . . . . . . . . . . .  F-7


                         BIORA AB AND SUBSIDIARIES

                     REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholders of
BIORA AB

We have audited accompanying consolidated balance sheets of Biora AB and
its subsidiaries as of December 31, 1997, December 31, 1998 and December
31, 1999 and the related consolidated statements of operations and cash
flows for the years then ended. These consolidated financial statements are
the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.

We conducted our audit in accordance with Swedish and United States
generally accepted auditing standards. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.

In our opinion, the accompanying consolidated financial statements present
fairly, in all material respects, the financial position of Biora AB and
its subsidiaries at December 31, 1997, December 31, 1998 and December 31,
1999, and the result of their operations and cash flows for the years then
ended in conformity with Swedish generally accepted accounting principles.

Generally accepted accounting principles in Sweden vary in some respects
from generally accepted accounting principles in the United States.
Application of generally accepted accounting principles in the United
States would have affected results of operations and shareholders' equity
as at and for the years ended December 31, 1997, December 31, 1998 and
December 31, 1999 to the extent summarized in Note 24 to the consolidated
financial statements.

Malmo, Sweden

March 22, 2000



Alf Svensson
Authorized Public Accountant
KPMG Bohlins AB
Member of KPMG International


                   CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

                                                 YEAR ENDED DECEMBER 31,
                                       -----------------------------------------------
                                              1997     1998     1999              1999
                                       -----------------------------------------------
                                              SEK      SEK      SEK       U.S. DOLLARS
                                                                            (NOTE 1)

                                        (In thousands except per share amounts)
                                                                           (Unaudited)

<S>                                        <C>        <C>        <C>             <C>
Net sales                                  16,499     50,119     73,556          8,649
Cost of goods sold          Note 5         -5,533    -10,864    -15,470         -1,819
                                       -----------------------------------------------
GROSS PROFIT                               10,966     39,255     58,086          6,830

Selling expenses            Note 5        -64,830    -89,622    -90,783        -10,674
Administrative expenses     Note 5        -18,173    -22,133    -18,505         -2,176
Research and development
costs                       Note 4,5      -20,293    -39,980    -41,597         -4,891
Other operating income      Note 6          2,368     42,898      4,001            470
Other operating expenses    Note 6         -2,843     -1,946     -3,007           -354
                                       -----------------------------------------------
LOSS FROM OPERATIONS        Note 2,3      -92,805    -71,528    -91,805        -10,794

Interest income and similar profit/loss
items                                      18,126     11,576      5,231            615
Interest expense and similar profit/loss
items                                        -727         -4        -11             -1
                                       -----------------------------------------------
LOSS BEFORE INCOME TAXES                  -75,406    -59,956    -86,585        -10,180

Income taxes                Note 7           -101        -42       -154            -18
                                       -----------------------------------------------
LOSS BEFORE MINORITY INTEREST             -75,507    -59,998    -86,739        -10,199

Minority interest           Note 8            149          -          -              -
                                       -----------------------------------------------
NET LOSS                                  -75,358    -59,998    -86,739        -10,199
                                       ===============================================

NET LOSS PER ORDINARY SHARE Note 1          -3.66      -2.83      -4.09          -0.48
                                       ===============================================
</TABLE>



The accompanying notes are an integral part of these Consolidated Financial
Statements.




                         CONSOLIDATED BALANCE SHEET


ASSETS                                            AS OF DECEMBER 31,
------
                                       ----------------------------------------
                                             1997     1998    1999         1999
                                       ----------------------------------------
                                             SEK       SEK    SEK  U.S. DOLLARS
                                                                       (NOTE 1)
                                                    (In thousands)
Long-term assets            Note 9                                  (Unaudited)
----------------
INTANGIBLE ASSETS

Capitalized research and development
costs                                      22,033   19,109  10,514        1,236
Patents                                     5,941    6,228   6,059          712
                                       ----------------------------------------
TOTAL INTANGIBLE ASSETS                    27,974   25,337  16,573        1,949

TANGIBLE ASSETS
Plant and machinery                         1,574    1,937   2,248          264
Equipment, tools, fixtures and fittings     9,829   10,332   8,253          970
Advance payments for tangible assets          165        -     342           40
                                       ----------------------------------------
TOTAL TANGIBLE ASSETS                      11,568   12,269  10,843        1,275

FINANCIAL ASSETS
Other long-term receivables Note 10         2,554    2,571   2,534          298
                                       ----------------------------------------
TOTAL FINANCIAL ASSETS                      2,554    2,571   2,534          298
                                       ----------------------------------------
TOTAL LONG-TERM ASSETS                     42,096   40,177  29,950        3,521
                                       ----------------------------------------

Current assets
INVENTORIES
Raw materials and consumables                 593    1,064   1,200          141
Work in progress                            1,168    1,543   2,761          325
Finished products                             649    1,567   1,214          143
                                       ----------------------------------------
TOTAL INVENTORIES           Note 11         2,410    4,174   5,175          608

CURRENT RECEIVABLES
Accounts receivable - trade Note 12         2,600    6,313   9,281        1,091
Other current receivables   Note 13         1,681    2,417   2,769          326
Prepaid expenses and accrued
income                      Note 14         4,237    7,057   2,757          324
                                       ----------------------------------------
TOTAL CURRENT RECEIVABLES                   8,518   15,787  14,807        1,741

BANK DEPOSITS               Note 15       175,000  148,050  90,000       10,582
CASH AND BANKS              Note 15       111,310   38,998  22,804        2,681
                                       ----------------------------------------
TOTAL CURRENT ASSETS                      297,238  207,009 132,786       15,613
                                       ----------------------------------------

TOTAL ASSETS                              339,334  247,186 162,736       19,134
                                       ========================================

The accompanying notes are an integral part of these Consolidated Financial
Statements.




                    SHAREHOLDERS' EQUITY AND LIABILITIES


                                                  AS OF DECEMBER 31,
                                      -----------------------------------------
                                             1997     1998     1999        1999
                                       ----------------------------------------
                                              SEK      SEK     SEK  U.S.DOLLARS
                                                                       (NOTE 1)
                                                    (In thousands)
Shareholders' equity        Note 16                                 (Unaudited)
--------------------
Restricted equity
-----------------
Share capital                                 848      848      848         100
Share premium reserve                     371,976  325,526  222,386      26,148
Other restricted equity                     1,107    1,808      173          20
                                       ----------------------------------------
TOTAL RESTRICTED EQUITY                   373,931  328,182  223,407      26,268
                                       ----------------------------------------

Accumulated loss
Accumulated loss                          -20,638  -54,214   -9,262      -1,089
Net loss for the year                     -75,358  -59,998  -86,739     -10,199
                                       ----------------------------------------
TOTAL ACCUMULATED LOSS                    -95,996 -114,212  -96,001     -11,288
                                       ----------------------------------------
TOTAL SHAREHOLDERS' EQUITY                277,935  213,970  127,406      14,980
                                       ----------------------------------------

PROVISIONS
Provisions for pensions                       143      268      248          29
Other provisions                               56      129      196          23
                                       ----------------------------------------
TOTAL PROVISIONS                              199      397      444          52
                                       ----------------------------------------

Long-term liabilities
Other long-term liabilities Note 18         5,443    5,475    5,505         647
                                       ----------------------------------------
TOTAL LONG-TERM LIABILITIES                 5,443    5,475    5,505         647
                                       ----------------------------------------

Current liabilities
Accounts payable - trade                    5,026    8,742    7,600         894
Other current liabilities   Note 19        40,632    3,508    2,285         269
Accrued expenses            Note 20        10,099   15,094   19,496       2,292
                                       ----------------------------------------
TOTAL CURRENT LIABILITIES                  55,757   27,344   29,381       3,455
                                       ----------------------------------------

TOTAL SHAREHOLDERS' DEFICIT/EQUITY
LIABILITIES                               339,334  247,186  162,736      19,134
                                       ========================================

PLEDGED ASSETS AND CONTINGENT
LIABILITIES                 Note 27

Pledged assets                                None     None     None       None
Contingent liabilities                      17,187   10,415   10,201      1,199



The accompanying notes are an integral part of these Consolidated Financial
Statements.




                   CONSOLIDATED STATEMENTS OF CASH FLOWS



                                               YEAR ENDED DECEMBER 31,
                                      -----------------------------------------
                                            1997      1998    1999         1999
                                      -----------------------------------------
                                            SEK       SEK     SEK  U.S. DOLLARS
                                                                       (NOTE 1)
                                                    (In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES                                (Unaudited)
Net loss                                 -75,358   -59,998  -86,739     -10,199
ADJUSTMENTS TO RECONCILE NET LOSS TO
NET CASH FLOWS FROM OPERATING ACTIVITIES
Depreciation and amortization              4,377     5,156   5,552          653
Change in capitalized research and
development costs                           -915     2,924   8,595        1,011
Capital loss                                  74        44     221           26
Capital gain                                  -9         -       -            -
Effect of exchange rate changes in other
long-term receivables                          -       -11      49            6
Effect of exchange rate changes in
advances received                          4,900         -       -            -
Prepaid nonrecurring revenue                   -   -39,375       -            -
Change in provisions                         201       167      87           10
Changes in long-term liabilities
concerning option premium received             -         -      30            4
Current tax                                    -         -     154           18
Deferred tax                                 101        41       -            -
Minority interest                           -149         -       -            -
CHANGE IN ASSETS AND LIABILITIES
Accounts receivable - trade               -2,111    -3,405  -3,137         -369
Inventories                                 -759    -1,613  -1,031         -121
Other current assets                       8,023    -3,487   3,707          436
Accounts payable and other current
liabilities                                2,232     5,684   2,908          342
                                      -----------------------------------------
NET CASH USED IN OPERATING ACTIVITIES    -59,393   -93,873  -69,604      -8,184
                                      -----------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures                     -12,810    -6,225  -4,024         -473
Proceeds from sales of tangible assets       104       218      32            4
Change in advance payments for tangible
assets                                        57       165    -342          -40
Payments concerning long-term
receivables                                 -319         7     -29           -3
                                      -----------------------------------------
NET CASH USED IN INVESTING ACTIVITIES    -12,968    -5,835  -4,363         -513
                                      -----------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of new shares                   372,256        72       -            -
Payments of debt                         -19,090      -123       -            -
Issuance of debt                             123       155       -            -
                                      -----------------------------------------
NET CASH FROM FINANCING ACTIVITIES       353,289       104       -            -
                                      -----------------------------------------
Effect of exchange rate changes on
cash and cash equivalents                     40       342    -277          -33
                                      -----------------------------------------
NET CHANGE IN CASH AND CASH
EQUIVALENTS                              280,968   -99,262  -74,244      -8,729
                                      =========================================

Cash and cash equivalents, beginning
of year                                    5,342   286,310  187,048      21,993
Cash and cash equivalents, end of year   286,310   187,048  112,804      13,263
                                      -----------------------------------------
NET CHANGE IN CASH AND CASH
EQUIVALENTS                              280,968   -99,262  -74,244      -8,729
                                      =========================================

Cash received for interest                12,186     7,716   8,806        1,035
Cash paid for interest                       739         3      11            1
Cash paid for taxes                            -        19      41            5


The accompanying notes are an integral part of these Consolidated Financial
Statements.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in SEK 000s where not otherwise indicated)



-------------------------------------------------------------------------------
Note 1 Basis of presentation
-------------------------------------------------------------------------------

Nature of operations
Biora is a Swedish biotechnology company that develops, manufactures,
markets and sells products for treatment primarily of diseases in the
mouth. The principal product, Emdogain promotes the regain of
tooth-supporting tissues which have been lost due to a periodontal disease.
Emdogain is marketed in Europe, North and South America and Asia.

The accompanying Financial Statements present the financial position,
results of operations and cash flows of Biora AB (publ) ("Biora") and its
subsidiaries (Biora AB and subsidiaries collectively referred to as the
"Company") and have been prepared according to the Swedish Annual Accounts
Act, which means in accordance with generally accepted accounting
principles in Sweden ("Swedish GAAP"). These accounting principles differ
in certain significant respects from generally accepted accounting
principles in the United States ("U.S. GAAP"). See note 23 for a discussion
of the principal differences between Swedish GAAP and U.S. GAAP affecting
the Company's results of operations and shareholders' equity.

Financial Statements expressed in U.S. dollars
The consolidated financial statements are presented in Swedish kronor
("SEK"), and for the year 1999 are also presented in U.S. dollars, (the
latter being) which presentation is unaudited and being presented solely
for convenience of the reader, at the rate of SEK 8.5050 = USD 1.00, the
Noon Buying Rate of the U.S. Federal Reserve Bank of New York on December
31, 1999. Amounts may not total due to rounding.

Background
From the Company's inception in 1986 through 1995, the Company's activities
have been almost exclusively devoted to research and development relating
to products for the treatment of periodontal defects caused by periodontal
disease. The Company has incurred costs relating to start-up, research and
development activities and marketing, the establishment and operation of
sales companies in Germany and The Netherlands, and other costs related to
the issuance of debt and equity. In addition, the Company has generated
certain revenues from packaging products for customers using its
freeze-dryer. As of December 31, 1995, Euroventures Nordica I B.V.
("Euroventures Nordica") owned approximately 62% of the voting shares of
the Company (after taking into account the conversion of convertible loans
into Ordinary Shares in January 1996). In the opinion of management, the
accompanying Consolidated Financial Statements of the Company reflect all
costs of doing business.

Changes in the accounts
2.5% royalty to Astra on sales of Emdogain (see note 22) has been
reclassified from research and development costs to costs of goods sold in
1998, since the royalty expense is directly variable with sales. The
comparative figures have been adjusted accordingly. The part of option
premiums received, earlier disclosed as current liability, has been
disclosed as long-term liability. The comparative figures have been
adjusted accordingly.

Consolidation principles
The Consolidated Financial Statements comprise the financial accounts for
the Company. The Consolidated Financial Statements have been prepared in
accordance with the Swedish Financial Accounting Standards Council's RR
1:96 recommendation. Consolidation has been carried out in accordance with
the acquisition accounting method. Inter-company transactions have been
eliminated in the consolidation.

Translation of the accounts of foreign subsidiaries
The Company applies the Current Method, which means that the Balance Sheets
of the foreign operations have been translated at the average of the buy
and sell exchange rates prevailing at the end of the year, and their
Statements of Operations have been translated at the average exchange rate
for the fiscal year. Resulting translation differences have been recorded
directly to shareholders' equity, see note 16.

Revenue recognition
Revenue from the sale of goods is recorded upon delivery.

Cost of goods sold
With Emdogain becoming fully commercially available in 1996 the Company,
beginning in 1996, has accounted for production costs as costs of goods
sold, with the exception of costs directly related to research and
development. Cost of goods sold also includes 2.5% royalty to Astra on
sales of Emdogain (see note 22).

Research and development (R&D) costs
R&D costs consist of all costs attributable to the preclinical and clinical
divisions in Biora, including product development, costs relating to
product registration and costs for clinical studies. R&D costs also include
amortization of capitalized R&D costs and patents and depreciation of
equipment for R&D purposes.

Capitalized research and development (R&D) costs
The Swedish Accounting Act (bokforingslagen) and Swedish GAAP allow certain
research and development costs and costs incurred in the related product
approval process to be capitalized if it is probable that the product will
generate future economic benefits. The Company has capitalized research and
development costs and costs related to the product approval process
incurred by the Company in connection with the development of Emdogain, net
of revenue from contract sales and research grants. The capitalization of
such costs commenced in connection with the completion of clinical studies
and the submission of an application by the Company to the Food & Drug
Administration (the "FDA") in the United States for approval for sale and
production of Emdogain. All R&D costs previously incurred by the Company
were charged to the Statement of Operations. The Company reviews the
recoverability of the capitalized costs based upon projected future
undiscounted cash flows of the related product.

Capitalized costs are amortized over a five-year period, based on the
estimated sales revenue beginning in 1996 when Emdogain became fully
commercially available.

Research and development costs (other than equipment expense which is
capitalized for the purpose of Swedish GAAP) incurred in connection with
other products based on the Emdogain technology and to new formulations of
Emdogain are expensed as incurred. Product approval costs are expensed as
incurred with the exception of certain costs 1997 attributable to the
Japanese registration of Emdogain.

Net loss per share
Net loss per Ordinary Share - Basic (i.e., undiluted) is computed by
dividing net loss by the weighted average number of Ordinary Shares
outstanding for each year (20,571,167 for 1997 and 21,203,800 for 1998 and
1999.) The weighted average number of Ordinary Shares outstanding for each
year (i) includes the effect of Ordinary Shares subscribed from the date
such shares were paid for and (ii) the effect of the issuance of three
bonus shares for each Ordinary Share and a 25:1 split or the Ordinary
Shares that occurred prior to December 31, 1996. The effect of the
convertible debentures and the Company's Share Options has not been
included in the computation of Net loss per Ordinary Shares as it would be
anti-dilutive.

Patents
Patents have been reported at original acquisition cost less accumulated
amortization. Patents are amortized over the estimated ecomomic life of the
product to which the patent refers, which normally exceeds 5 years,
beginning when the product becomes fully commercially available. The
amortization period does neither exceed 10 years nor does it exceed the
period of validity of the various patents.

Machinery and equipment
Machinery and equipment are reported at original cost less accumulated
depreciation. Maintenance and repair costs are expensed as incurred. New
investments, improvements and major repurchases are capitalized. Machinery
and equipment are depreciated over an estimated useful life of five years.

Leasing agreements
The Company leases certain machinery and equipment under operating leases.

Receivables
Receivables are recorded at their expected net realizable value.

Inventories
Inventories are reported at the lower of cost and net realizable value. The
"first-in, first-out" ("FIFO") method has been applied for all inventories.
Provision has been made for obsolete inventories.

Cash equivalents
The Company considers Cash and banks and Bank deposits to be cash
equivalents. The cash equivalents have original maturity of 90 days or
less.

Income taxes
Deferred income taxes reflect the impact of temporary differences between
the amount of assets and liabilities recognized for financial reporting
purposes and such amounts recognized for tax purposes. Deferred tax assets
are recognized to the extent that it is more likely than not that an asset
will be realized. Tax legislation in Sweden offers companies the
opportunity to defer their current tax liability by making tax deductible
allocations to untaxed reserves. See note 7 and 23 (e).

Receivables and liabilities in foreign currency
Assets and liabilities denominated in foreign currencies have been
translated at the year-end exchange rate. Currency-hedged balances have
been translated at the spot rate when the balance occured with adjustment
for the accrued deduction or addition agreed upon in the hedge contract.
Exchange gains / losses pertaining to operating assets and liabilities are
included in other operating income by 1,488 for 1997, 3,147 for 1998 and
3,987 for 1999 and in other operating expenses by 2,471 for 1997, 547 for
1998 and 2,770 for 1999. Exchange gains pertaining to current financial
assets have been included in interest income by 5,047 for 1997, 872 for
1998 and 312 for 1999.

Hedging of future cash flows
Certain expected future cash flows in foreign currency concerning
anticipated transactions are hedged using forward exchange contracts.
Unrealized gains and losses on such financial instruments that are
designated as a hedge are deferred and are recognized as an adjustment of
the measurement of the transaction when it actually occurs. It is the
policy of Biora to hedge 75% of anticipated, budgeted future cash inflows
in foreign currency the following twelve months. Additionally part of the
anticipated cash inflows in YEN in the year 2001 has been hedged after
decision by the Board of Directors. To avoid currency risks in the net
receivables from the subsidiaries (receivables after deduction of
write-downs made) the Parent Company has, in accordance with this policy,
sold the main part of the net receivables in accordance with forward
exchange contracts. The forward exchange contracts prevailing on December
ber 31, 1999, had a duration up until March 31, 2000. Due to these forward
exchange contracts a deferred exchange loss of 52 as per December 31, 1999,
has not affected the net loss. During 1999 budgeted inflows in YEN were
hedged by foreign exchange contracts. The corresponding inflows budgeted
for the years 2000 and 2001 have been hedged by foreign exchange contracts.

Financial instruments
In order to qualify for deferral accounting of unrealized gains and losses
on financial instruments, such instruments must be designated as and
effective as a hedge of an underlying asset or liability, firm committment
or anticipatory transaction. Management reviews the correlation and the
effectiveness of its financial instruments on a periodic basis. Financial
instruments that do not meet the criteria for hedge accounting treatment
are marked- to-market with the resulting unrealized gain or loss recorded
as foreign exchange gain or loss in the income statement.

It is the Company's policy that terms and contractual maturities of
financial instruments that are designed to hedge foreign currency exposures
correspond to the terms and, where appropriate, the maturities of the
under- lying hedged transactions.

Realized gains and losses that result from the early termination of
financial instruments used for hedging purposes are deferred and are
included in (i) the determination of the carrying value of the underlying
asset or liability in the consolidated balance sheet or (ii) the income
statement when the anticipated transaction actually occurs. If an
underlying asset or liability is sold or settled, any unrelated financial
instrument is then marked- to-market and the resulting unrealized gain or
loss is recorded as part of gain or loss on sale or settlement of the
underlying item.

Premium paid for the sale of foreign currency are recorded among current
receivables or liabilities in the consolidated balance sheet and are
amortized as an adjustment of the underlying revenue or expense item.

Foreign exchange rate risk management
Forward exchange contract - Assets and liabilities that are covered by
qualifying hedges are translated at the rate specified in the forward
exchange contract.

Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.

A significant estimate made by management is in respect of the
capitalization and amortization of capitalized research and development
costs. The Company's accounting policy for the amortization of capitalized
research and development costs and the method used by management to
periodically assess the recoverability of such costs is described above in
this note under caption "Capitalized research and development (R&D) costs".
The estimate of future cash flows from the Company's primary product is
subject to inherent uncertainties. Significant factors which can affect
management's projections of future cash flows include, among other items,
the degree of acceptance of the Company's products in the dental community,
the pace of significant technological change in the health care industry,
the possible development by competitors of more effective technologies and
products, the inherent unpredictability of the Company's patent protection
for its products and change in government regulations applicable to the
Company's products. While the management of the Company believes that its
estimate of future cash flows and the estimated economic life of Emdogain
used in the determination of the capitalization and amortization of
capitalized research and development costs are reasonable, such estimates
of future cash flows and the remaining economic life of assets are affected
by the factors described above.

Reclassification
Certain amounts in the prior year's financial statements have been
reclassified to conform to the current year presentation format.



------------------------------------------------------------------------------
NOTE 2 PERSONNEL
-------------------------------------------------------------------------------


The average number of employees during the respective fiscal year at each
working site:
-------------------------------------------------------------------------------

<TABLE>
<CAPTION>

                                    YEAR ENDED DECEMBER 31,
                  ------------------------------------------------------------------
                    1997                    1998                   1999
                  ------------------------------------------------------------------
                  NUMBER OF  Of which     Number of  Of which    Number of  Of which

                  EMPLOYEES     men %     employees     men %    employees     men %



<S>                    <C>       <C>           <C>       <C>          <C>       <C>
Biora:                   27        32            37        32           40        26
                  ------------------------------------------------------------------
Subsidiaries:
Germany                  13        55            16        51           18        45
Switzerland               -         -             -         -            0        50
U.S.                     16        65            19        61           22        59
Italy                     1       100             2        67            2        50
Netherlands               3        36             2        43            3        47
UK                                                2        21            2         0
                  ------------------------------------------------------------------
Total subsidiaries       33        58            41        54           47        50
                  ------------------------------------------------------------------
CONSOLIDATED             60        47            78        43           87        39
                  ==================================================================
</TABLE>




Wages, salaries, other remuneration and social insurance costs during the
fiscal year:


<TABLE>
<CAPTION>

                                  YEAR ENDED DECEMBER 31,

                    1997                    1998                   1999
                 -------------------------------------------------------------------
                     WAGES,    Social        Wages,    Social       Wages,    Social
                   SALARIES insurance      salaries insurance     salaries insurance
                  AND OTHER  expenses     and other  expenses    and other  expenses
                    REMUNE- (of which       remune- (of which      remune- (of which
                     RATION   pension        ration   pension       ration   pension
                               COSTS)                  COSTS)                 COSTS)

<S>                  <C>        <C>          <C>        <C>         <C>        <C>
Biora                12,883     6,344        18,482     9,061       18,712     9,203
                               (2,299)*                (3,485)*               (3,695)*
Subsidiaries         17,447     2,674        24,462     4,083       29,346     4,765
                                 (570)                   (980)                  (897)
                 -------------------------------------------------------------------
Consolidated         30,330     9,018        42,944    13,144       48,058    13,968
                 -------------------------------------------------------------------
                               (2,869)**               (4,465)**              (4,592)**
                 ===================================================================
</TABLE>


*523 for 1997, 622 for 1998 and 781 for 1999 of Biora's pension cost refer
to the category Board of Directors and President. Biora did not have any
outstanding pension obligations neither at December 31, 1997 nor December
31, 1998 nor December 31, 1999.

** 858 for 1997, 1,198 for 1998 and 1,260 for 1999 of the consolidated
pension cost refer to the category Board of Directors and President. The
consolidated outstanding pension obligations to this category amounted to
143 as at December 31, 1997, 268 as at December 31, 1998, and 248 as at
December 31, 1999.

Wages, salaries and other remuneration at each working site distributed
between Biora and the Subsidiaries and between Board members, etc., and
other employees:


<TABLE>
<CAPTION>

                                    YEAR ENDED DECEMBER 31,
                 -------------------------------------------------------------------
                    1997                    1998                   1999
                 -------------------------------------------------------------------
                   Board of     Other      Board of     Other     Board of     Other
                  Directors  Employees     Directors  Employees   Directors  Employees
                      and                     and                    and
                  President               President              President

<S>                   <C>       <C>           <C>      <C>           <C>      <C>
Biora:                3,224     9,659         3,224    15,258        3,165    15,547
                 -------------------------------------------------------------------
Subsidiaries:
Sweden                    -         -             -         -           25         -
Germany 1)            1,214     5,358         1,443     7,097        2,600     8,435
Switzerland               -         -             -         -          340       182
U.S.                  1,450     7,266         1,529    10,613        1,623    12,408
Italy                   785         -         1,077       114          972       189
Netherlands             798       515           721       785          843       782
UK                       55         6           331       752            -       947
                 -------------------------------------------------------------------
Total subsidiaries    4,302    13,145         5,101    19,361        6,403    22,943
                 -------------------------------------------------------------------
CONSOLIDATED          7,526    22,804         8,325    34,619        9,568    38,490
                 ===================================================================
</TABLE>


1) Severance pay amounting to 1,382 is included in the remuneration to the
President in Germany 1999.



Information below regarding benefits expensed for senior executives refers
to 1999 and has been reported in accordance with the recommendation of the
Swedish Industry and Commerce Stock Exchange Committee.

A fee of 150 has been expensed regarding Per Wahlstroom, Chairman of the
Board of Biora.

In addition to the ordinary fee three Board members have received
remuneration for their services as members of the Audit Committee of Biora
as follows: Svein G. Eskedal 40, Bertil Koch Konsult AB 25, Toni Weitz-
berg 25. Additionally Eskedal Consult A/S has received 190 for consultancy
assignments and Lars Hammarstroom has received 205 for his contribution to
the Company's R&D operations.

The salary expensed for Tomas Hammargren, President of Biora, amounted to
1,200 in 1999. In addition he received pension benefits paid by Biora in
accordance with an individual plan prepared by Foorsaakrings AB Skandia.

Future pension benefits are based on the ITP supplementary pension plan for
salaried employees, for which the Company expensed 346 in 1999. In
accordance with the employment contract, Tomas Hammargren is entitled to
severance pay equal to 18 months' salary.

The salary expensed for Anders Agering, Executive Vice President of Biora,
amounted to 913 in 1999. In addition he received pension benefits paid by
Biora in accordance with an individual plan prepared by SPP Liv. Future
pension benefits are based on the ITP supplementary pension plan for
salaried employees, for which the Company expensed 288 in 1999. In
accordance with the employment contract, Anders Agering is entitled to
severance pay equal to one year's salary plus a further six months salary
after the age of 50.

Other senior executives employed by Biora are also entitled to a severance
pay not exceeding 18 months' salary. Future pension benefits are based on
the ITP supplementary pension plan for salaried employees.

SPP has notified Biora of a pensionfee surplus of 446, which has not been
included in the accounts for 1999.



-------------------------------------------------------------------------------
NOTE 3 REMUNERATION TO THE AUDITORS OF THE COMPANY
-------------------------------------------------------------------------------


The following remuneration to the auditors of the Company, KPMG, are
included in the 1999 Loss from operations:

                                           CONSOLIDATED                Biora

Audit assignments                                   461                  215
Other assignments                                   658                  159
                                           ------------                -----
TOTAL                                             1,119                  374
                                           ============                =====



-------------------------------------------------------------------------------
NOTE 4 RESEARCH AND DEVELOPMENT (R&D) COSTS
-------------------------------------------------------------------------------


In the Statements of Operations, R&D costs have been reported as net
amounts, after deductions for costs capitalized during the year, in
accordance with the following:



                                                 YEAR ENDED DECEMBER 31,
                                              ------------------------------
                                                   1997       1998      1999
                                              ------------------------------
Total research and development costs             21,207     39,980    41,597
Capitalized research and development costs         -914          -         -
                                              ------------------------------
NET                                              20,293     39,980    41,597
                                              ==============================


In research and development costs 1998 are included SEK 6.3 million in
remuneration to Eastham Corporation Ltd in connection with the
registration of Emdogain in the U.S.

Concerning progressive amortization of capitalized R&D costs included in
research and development costs, SEE NOTE 5.

2.5% royalty to Astra on sales of Emdogain (SEE NOTE 22) has been
reclassified from research and development costs to cost of goods sold in
1998. The comparative figures have been adjusted accordingly.



-------------------------------------------------------------------------------
NOTE 5 DEPRECIATION / AMORTIZATION
-------------------------------------------------------------------------------


In the Statements of Operations, the following depreciation / amortization
has been included in the cost of goods sold, selling expenses,
administrative expenses and research and development costs:



                                                     YEAR ENDED DECEMBER 31,
                                                ----------------------------
                                                   1997       1998      1999
                                                ----------------------------
Cost of goods sold                                  623        724       844

Selling expenses                                  1,499      1,920     2,049

Administrative expenses                             279        309       358

Research and development costs                    1,976      5,128    10,896
                                                ----------------------------
TOTAL                                             4,377      8,081    14,147
                                                ============================


Included in depreciation / amortization accounted for as research and
development costs are amortization of capitalized R&D costs amounting to
951 for 1997, 2,924 for 1998 and 8,595 for 1999.

SEE NOTE 9 concerning the distribution of depreciation / amortization
between the different kinds of long- term assets.



-------------------------------------------------------------------------------
NOTE 6 OTHER OPERATING INCOME AND OTHER OPERATING EXPENSES
-------------------------------------------------------------------------------


A conditional advance from Seikagaku Corporation, who has been appointed
Biora's exclusive distributor of Emdogain in Japan, was received in 1996.
The advance amounted to USD 5 million and would have had to be repaid if
the Japanese authorities had not registered Emdogain in Japan before the
end of June 1999. The advance, SEK 34,475,000, has been recorded for 1996
under Other long-term liabilities. As of December 31, 1997, the advance was
reported under Other current liabilities (SEK 39,375,000).

Since Emdogain has been approved for sale in Japan in January 1998, the
nonrecurring revenue of SEK 39.4 million is included in the 1998 Other
operating income and royalty expense to Astra of SEK 1.0 million on this
revenue is included in the 1998 Other operating expenses. With the 1998
approval for sale of Emdogain in Japan the payment is nonrefundable and is
not tied to any performance measures or any other contingencies that would
require repayment.

Concerning exchange rate differences, SEE NOTE 1.



-------------------------------------------------------------------------------
NOTE 7 INCOME TAXES
-------------------------------------------------------------------------------


The loss before income taxes consists of the following:



                                                 YEAR ENDED DECEMBER 31,
                                             -------------------------------
                                                   1997       1998      1998
                                             -------------------------------
Sweden                                          -40,109   -103,034   -78,465
Biora's write downs / reversals of
write downs regarding the subsidiaries                -     84,827    -9,184
Foreign                                         -35,297    -41,749     1,064
                                             -------------------------------
TOTAL                                           -75,406    -59,956   -86,585
                                             ===============================


Income taxes are distributed as follows:



                                                    YEAR ENDED DECEMBER 31,
                                                ----------------------------
                                                   1997       1998      1999
                                                ----------------------------
CURRENT
Sweden                                                -         21         -
 Foreign                                              -        -22      -154
                                                ----------------------------
Total                                                 -         -1      -154
                                                ============================
DEFERRED
Sweden 1)                                          -395        395         0
Foreign                                             294       -436         -
                                                ----------------------------
TOTAL                                              -101        -42      -154
                                                ============================


1) Deferred tax liability concerning untaxed reserves has been resolved by
430 in 1999. In 1998 this deferred tax liability was netted against
deferred tax asset from non utilized tax losses carried forward.


The foreign income taxes are state taxes and federal "Alternative Minimum
Tax" in the U S and local tax ("IRAP") in Italy.

Deferred taxes on losses have not been recorded.

A reconciliation of the nominal tax expected, 28 %, compared with the
Company's effective tax is shown below:

                                                   YEAR ENDED DECEMBER 31,
                                               -----------------------------
                                                   1997       1998      1999
                                               -----------------------------
Expected income tax benefit 1)                   21,114     16,788    24,244
Effect of:
Difference in tax rates for foreign subsidiaries  5,696      4,365      -369
Losses not currently utilized                   -26,683    -26,035   -28,929
Non-deductible items                               -127     -1,732    -1,273
Non-taxable income                                    -        434         4
Tax amortization                                      -      6,179     6,169
Deferred tax                                       -101        -41         -
                                               -----------------------------
Actual tax according to Statements of Operations   -101        -42      -154
                                               =============================


1) Expected income tax benefit is determined by applying the statutory
federal Swedish tax rate of 28% to the net loss before tax.

The Company had tax loss carried forward in The Netherlands, Germany,
Italy, UK, Switzerland, U.S. and South Africa, that amounted to 166,718 at
December 31, 1999. These tax losses carried forward are, however, still
subject to audit and approval by the relevant tax authorities.

The applicable tax rates for the foreign subsidiaries are 35% in The
Netherlands, 45% in Germany, 37% in Italy, 31% in UK, 25% in Switzerland,
35% in U.S. and 30% in South Africa. The Company had tax loss carried
forward in Sweden that amounted to 178,701 at December 31, 1999. This tax
loss carried forward is, however, also subject to audit and approval by the
Swedish tax authorities.

Under the tax laws of The Netherlands, Germany, UK, South Africa and Sweden
tax loss carried forward do not expire. For Italy the time limit is 5
years, for Switzerland 7 years and U.S. 15 years.



-------------------------------------------------------------------------------
NOTE 8 MINORITY INTEREST
-------------------------------------------------------------------------------


During 1996 a joint company was formed in South Africa by Biora (50%) and
Arne and Lena Widerstroom (50%). The minority interest in loss of 149 for
1997 (none for 1998 and 1999) is disclosed as Minority interest. (The
minority interest in equity was none for 1997, 1998 and 1999.) The minority
interest consisted of Arne and Lena Widerstroom's participation in Biora
S.A, Ltd, South Africa.

In September 1998 Biora acquired the remaining 50% of the shares (180,000)
in Biora SA Ltd for a price of SEK 0. At the same time the marketing
activities in South Africa were transferred to an external distributor.



-------------------------------------------------------------------------------
NOTE 9 ACQUISITION VALUE OF LONG-TERM ASSETS, ETC.
-------------------------------------------------------------------------------

<TABLE>
<CAPTION>

CAPITALIZED R&D COSTS

                                                                              AS OF DECEMBER 31,
                                                                   ---------------------------------
                                                                        1997        1998        1999
                                                                   ---------------------------------
<S>                                                                   <C>         <C>         <C>
Accumulated acquisition cost, beginning of year                       22,180      23,094      23,094
Capitalization for the year                                              914           -           -
                                                                   ---------------------------------
Accumulated acquisition cost, end of year                             23,094      23,094      23,094
                                                                   ---------------------------------
Accumulated amortization, beginning of year                             -110      -1,061      -3,985
Amortization for the year                                               -951      -2,924      -8,595
                                                                   ---------------------------------
Accumulated amortization, end of year                                 -1,061      -3,985     -12,580
                                                                   ---------------------------------
NET BOOK VALUE, END OF YEAR                                           22,033      19,109      10,514
                                                                   =================================
</TABLE>


Patents
<TABLE>
<CAPTION>

                                                                             AS OF DECEMBER 31,
                                                                   ---------------------------------
                                                                        1997        1998        1999
                                                                   ---------------------------------

<S>                                                                    <C>         <C>         <C>
Accumulated acquisition cost, beginning of year                        5,166       6,376       7,571
Capital expenditures for the year                                      1,225       1,300       1,040
Sales / Disposals                                                          -        -214           0
Translation differences for the year                                     -15         109        -148
                                                                   ---------------------------------
Accumulated acquisition cost, end of year                              6,376       7,571       8,463
                                                                   ---------------------------------
Accumulated amortization, beginning of year                             -268        -435      -1,343
Disposals                                                                  -         214           -
Amortization for the year                                               -167      -1,100      -1,103
Translation differences for the year                                       -         -22          42
                                                                   ---------------------------------
Accumulated amortization, end of year                                   -435      -1,343      -2,404
                                                                   ---------------------------------
NET BOOK VALUE, END OF YEAR                                            5,941       6,228       6,059
                                                                   =================================
</TABLE>

<TABLE>
<CAPTION>

Property

                                                                            AS OF DECEMBER 31,
                                                                   ---------------------------------
                                                                        1997        1998        1999
                                                                   ---------------------------------

<S>                                                                    <C>            <C>        <C>
Accumulated acquisition cost, beginning of year                        2,122           -           -
Capital expenditures for the year                                          -           -           -
Sales                                                                 -2,122           -           -
                                                                   ---------------------------------
Accumulated acquisition cost, end of year                                  0           -           -
                                                                   ---------------------------------
Accumulated depreciation, beginning of year                              -12           -           -
Sales                                                                     32           -           -
Depreciation for the year                                                -20           -           -
                                                                   ---------------------------------
Accumulated depreciation, end of year                                      0           -           -
                                                                   ---------------------------------
NET BOOK VALUE, END OF YEAR                                                0           -           -
                                                                   =================================
</TABLE>

<TABLE>
<CAPTION>

PLANT AND MACHINERY


                                                                             As of December 31,
                                                                   ---------------------------------
                                                                        1997        1998        1999
                                                                   ---------------------------------

<S>                                                                    <C>         <C>         <C>
Accumulated acquisition cost, beginning of year                        2,457       3,911       4,931
Capital expenditures for the year                                      1,498       1,089       1,181
Sales / disposals                                                        -39         -69        -134
Reclassification                                                          -5           -          35
                                                                   ---------------------------------
Accumulated acquisition cost, end of year                              3,911       4,931       6,013
                                                                   ---------------------------------
Accumulated depreciation, beginning of year                           -1,758      -2,337      -2,994
Sales / disposals                                                         39          68          87
Reclassification                                                           5           -         -14
Depreciation of the year                                                -623        -725        -844
                                                                   ---------------------------------
Accumulated depreciation, end of year                                 -2,337      -2,994      -3,765
                                                                   ---------------------------------
NET BOOK VALUE, END OF YEAR                                            1,574       1,937       2,248
                                                                   =================================
</TABLE>

<TABLE>
<CAPTION>

Equipment, tools, fixtures and fittings

                                                                             AS OF DECEMBER 31,
                                                                   ---------------------------------
                                                                        1997        1998        1999
                                                                   ---------------------------------

<S>                                                                    <C>        <C>         <C>
Accumulated acquisition cost, beginning of year                        3,846      13,688      17,463
Capital expenditures for the year                                     10,245       3,967       1,802
Sales / disposals                                                       -345        -441        -688
Reclassification                                                        -118           -         -35
Translation differences for the year                                      60         249         -35
                                                                   ---------------------------------
Accumulated acquisition cost, end of year                             13,688      17,463      18,507
                                                                   ---------------------------------
Accumulated depreciation, beginning of year                           -1,453      -3,859      -7,131
Sales / disposals                                                         80         181         464
Reclassification                                                         122           -          14
Depreciation of the year                                              -2,607      -3,396      -3,586
Translation differences for the year                                      -1         -57         -15
                                                                   ---------------------------------
Accumulated depreciation, end of year                                 -3,859      -7,131     -10,254
                                                                   ---------------------------------
NET BOOK VALUE, END OF YEAR                                            9,829      10,332       8,253
                                                                   =================================
</TABLE>



-------------------------------------------------------------------------------
NOTE 10 OTHER LONG-TERM RECEIVABLES
-------------------------------------------------------------------------------

<TABLE>
<CAPTION>

                                                                             AS OF DECEMBER 31,
                                                                   ---------------------------------
                                                                        1997        1998        1999
                                                                   ---------------------------------

<S>                                                                      <C>       <C>         <C>
Opening balance                                                          123       2,554       2,571
Deposits paid                                                            203           -           -
Deposits repaid                                                         -121         -57         -39
Deposits expensed                                                          -           -         -51
Receivable from employee at sale of Biora's residential property        2300           -           -
Excess pension payments in Germany                                        49          68          68
Translation differences for the year                                       -          19         -15
Reclassification                                                           -         -13           -
                                                                   ---------------------------------
CLOSING BALANCE                                                        2,554       2,571       2,534
                                                                   =================================
</TABLE>



-------------------------------------------------------------------------------
Note 11 Inventories
-------------------------------------------------------------------------------

<TABLE>
<CAPTION>

                                                                            AS OF DECEMBER 31,
                                                                   ---------------------------------
                                                                        1997        1998        1999
                                                                   ---------------------------------

<S>                                                                      <C>       <C>         <C>
Raw materials                                                            611       1,097       1,237
Work in progress                                                       1,204       1,591       2,846
Finished products                                                        662       1,613       1,222
                                                                   ---------------------------------
                                                                       2,477       4,301       5,305
Obsolescence reserve                                                     -67        -127        -131
                                                                   ---------------------------------
TOTAL                                                                  2,410       4,174       5,174
                                                                   =================================
</TABLE>


Schedule of movements in the inventory obsolescence reserve in the Biora
Group for the years ended December 31, 1997, 1998 and 1999:

<TABLE>
<CAPTION>


Year                        Balance at        Charged       Charged     Additions or    Balance at
                            beginning     (credited) to  (credited) to   Deductions    end of period
                              year          costs and   other accounts
                                            expenses
----------------------------------------------------------------------------------------------------

<S>                         <C>             <C>             <C>            <C>        <C>

1997                            48              19             -              -          67
1998                            67              60             -              -         127
1999                           127               4             -              -         131
</TABLE>



-------------------------------------------------------------------------------
NOTE 12 ACCOUNTS RECEIVABLE - TRADE
-------------------------------------------------------------------------------


Schedule of movements in allowance for doubtful accounts and reserves in
the Company for the years ended December 31, 1997, 1998 and 1999:


<TABLE>
<CAPTION>

                                                         Charged
YEAR                         Balance at  Charged to    (credited)      Additions     Balance
                             Beginning   Costs and      to Other          or        at End of
                             of Period    expenses      accounts      Deductions      period
---------------------------------------------------------------------------------------------
<S>                          <C>            <C>            <C>         <C>          <C>

1997                            -                 -             -           -           -

1998                            -               746            35        -127         654

1999                           654               76           -46         -43         641
                                                              (A)         (B)


(A) Foreign exchange differences
(B) Write-offs of bad debts
</TABLE>




-------------------------------------------------------------------------------
NOTE 13 OTHER CURRENT RECEIVABLES
-------------------------------------------------------------------------------


                                                      AS OF DECEMBER 31,
                                              ------------------------------
                                                1997        1998        1999
                                              ------------------------------

Deferred taxes                                    41           -           -
Tax receivables                                   15         174         292
V.A.T.                                         1,242       1,866       2,133
Receivables from employees                       133         103          77
Other current receivables                        250         274         267
                                              ------------------------------
TOTAL                                          1,681       2,417       2,769
                                              ==============================



-------------------------------------------------------------------------------
Note 14 Prepaid expenses and accrued income
-------------------------------------------------------------------------------



                                                        AS OF DECEMBER 31,
                                               --------------------------------
                                                   1997        1998        1999
                                               --------------------------------

Prepaid leasing and property rental expenses      1,549       1,226         947
Prepaid insurances                                  673         665         674
Prepaid marketing expenses                          312         626         579
Prepaid travel expenses                               -         112         144
Other prepaid expenses                              810         519         405
Accrued interest income                             893       3,909           8
                                               --------------------------------
TOTAL                                             4,237       7,057       2,757
                                               ================================




-------------------------------------------------------------------------------
Note 15 Cash equivalents
-------------------------------------------------------------------------------


                                                       AS OF DECEMBER 31,
                                               --------------------------------
                                                   1997        1998        1999
                                               --------------------------------

Bank deposits                                   175,000     148,050      90,000
Cash and banks                                  111,310      38,998      22,804
                                               --------------------------------
TOTAL                                           286,310     187,048     112,804
                                               ================================



As at December 31, 1999, the following amounts were invested short-term at
a fixed rate of interest:



CURRENCY                               PERIOD                         AMOUNT
Svenska Handelsbanken AB               991230-000330                  80,000

Nordbanken, certificate of deposit     991020-000119                  10,000
                                                                    --------
TOTAL                                                                 90,000
                                                                    ========


As at December 31, 1997, TSEK 175,000 and as at December 31, 1998 TSEK
140,000 plus TUSD 1,000 were invested short-term with Svenska Handelsbanken
AB at a fixed rate of interest.

As at December 31, 1999, Biora GmbH had unutilized bank overdraft
facilities amounting to TDEM 30.



-------------------------------------------------------------------------------
NOTE 16 SHAREHOLDERS' EQUITY
-------------------------------------------------------------------------------

<TABLE>
<CAPTION>

                                                     Restricted Equity                       Accumulated Loss
                                            ----------------------------------------------------------------------
                                                     Share     Other
                                  Number of   Share   premium  restricted  Translation   Accumulated   Translation
                                    shares   capital  reserve    equity    differences      loss       differences          Total
                                  ---------  ----------------------------------------    --------------------------      --------
<S>                             <C>           <C>  <C>        <C>             <C>        <C>             <C>             <C>
BALANCE AT DECEMBER 31, 1996     14,206,500    568             44,315          29        -63,920          571            -18,437
Issuance of new shares            6,997,300    280  371,976                                                              372,256
Utilization of
statutory reserve                                             -44,315                     44,315                               0
Equity part of change in
foreign exchange reserve                                        1,016                     -1,016                               0
Change in translation
 differences                                                                   62                        -588               -526
Net loss for the year                                                                    -75,358                         -75,358
BALANCE AT DECEMBER 31, 1997     21,203,800    848  371,976     1,016          91        -95,979          -17            277,935
Adjustment of issue expenses                             72                                                                   72
Disposition of loss in the
Parent Company                                      -46,522                               46,522                               0
Equity part of change in
foreign exchange reserve                                           89                        -89                               0
Change in translation
 differences                                                                  612                      -4,651             -4,039
Net loss for the year                                                                    -59,998                         -59,998
BALANCE AT DECEMBER 31, 1998     21,203,800    848  325,526     1,105         703       -109,544       -4,668            213,970
Disposition of loss
in the Parent Company                              -103,140                              103,140                               0
Equity part of change in
foreign exchange reserve                                       -1,105                      1,105                               0
Change in translation
 differences                                                                 -530             15          690                175
Net loss for the year                                                                    -86,739                         -86,739
-------------------------------------------------------------------------------------------------------------------      -------
BALANCE AT DECEMBER 31, 1999     21,203,800    848  222,386         0         173        -92,023       -3,978            127,406
===================================================================================================================      =======



The par value of an Ordinary Share is SEK 0.04.

The Ordinary Shares are not restricted as to voting power or participation
in equity. Restricted equity is not available for distribution of dividends
but is required to be held to meet statutory requirements in Sweden.


Distribution of dividends is limited to the lesser of the unrestricted
shareholders' equity (unrestricted equity and current period net income)
included in either the consolidated or the Biora balance sheets after
proposed appropriations to restricted shareholders' equity (capital stock
and restricted equity).

As at December 31, 1997, 1998 and 1999 there was no unrestricted equity
available for dividends.

In February 1997 a total of 6,997,300 new shares were offered to the
general public and institutions. The issue was fully subscribed and
generated approximately SEK 372,256,000 after issue expenses, approximately
SEK 280,000 of which has been added to share capital and the remainder has
been reported as a share premium reserve within Restricted shareholders'
equity.

On January 24, 1997, the Company's Board of Directors, acting in accordance
with the authorization of the shareholders of the Company, approved the
issuance of an aggregate of 500 principal amount of subordinated debentures
at an interest rate of 7% with 560,000 accompanying warrants to
Euroventures Nordica. On the same date, Biora and Euroventures Nordica
entered into an agreement (the "Key Employee Incentive Plan") pursuant to
which Euroventures Nordica agreed to offer all the warrants to officers and
other key employees of the Company. These key employees were required to
purchase the warrants at their fair value at the grant using the
Black-Sholes valuation model. All of the 560,000 warrants have been
subscribed for. Also non-employee members of the Board of Directors hold
warrants.

Each warrant entitles the holder to acquire one Ordinary Share of the
Company, at an exercise price of SEK 70.00. Under Swedish law a corporation
cannot issue warrants separately from debentures, but accompanying warrants
may be detached from the debentures.

The warrants are exerciseable for Ordinary Shares at any time up until
January 31, 2001. If all these warrants are fully exercised, the total
number of shares outstanding will increase to 21,763,800. SEE ALSO NOTE 18.

On April 23, 1998, the Company's Board of Directors, acting in accordance
with the authorization of the shareholders of the Company, approved the
issuance of an aggregate of 50 principal amount of subordinated debentures
with 200,000 accompanying warrants to Biora Option AB. On the same date,
Biora and Biora Option ABentered into an agreement pursuant to which Biora
Option AB agreed to offer all the warrants at a price which reflects the
premium to employees of the Company to provide them with appropriate
incentives to encourage them to continue in the employ of the Company and
to acquire a proprietary interest in the long-term success of Biora.
Accordingly the employees were required to purchase the warrants at their
fair value at the grant using the Black-Sholes valuation model. Employees
of the Company have subscribed for 71,250 (59,750) warrants of this
program.

Each warrant entitles the holder to acquire one Ordinary Share of the
Company, at an exercise price of SEK 130.00.

The warrants are exerciseable for Ordinary Shares at any time during May
2002. If also all these warrants are fully exercised, the total number of
shares outstanding will increase to 21,963,800. SEE ALSO NOTE 18.



-------------------------------------------------------------------------------
NOTE 17 PENSION PLANS
-------------------------------------------------------------------------------


The majority of the Company's employees participate in a state-sponsored
multiemployer pension plan that provides defined benefits to its employees
as well as certain disability and survivor benefits.

Payments are made through non-participating insurance arrangements.

The Company's pension costs for the years ended December 31, 1997, 1998 and
1999, respectively, are shown in the following table.

                                                YEAR ENDED DECEMBER 31,
                                              -------------------------
                                                1997      1998     1999
                                              -------------------------
Social security                                2,090     2,345    1,452
Swedish national multi-employer plan             678     1,091    1,364
Individual                                     1,653     3,293    3,145
                                              -------------------------
TOTAL PENSION COSTS                            4,421     6,729    5,961
                                              =========================


Payments for individual pensions are also made to insurance companies. The
Company has no further obligations once such payments are made.



-------------------------------------------------------------------------------
NOTE 18 OTHER LONG-TERM LIABILITIES
-------------------------------------------------------------------------------


                                                     AS OF DECEMBER 31,
                                             -------------------------------
                                              1997          1998        1999
                                             -------------------------------
Other long-term liabilities (a)              5,443         5,475       5,505
TOTAL                                        5,443         5,475       5,505


(a) On December 31, 1997, the consolidated liability to the minority owners
    of Biora SA Ltd amounted to approximately SEK 123,000. This liability
    has been amortized when Biora acquired the remaining 50% of the shares
    in September 1998.

    Other long-term liabilities amounting to SEK 5,320,000 as of December
    31, 1997, 1998 and 1999 apply to option premiums received from the
    warrant program approved in January 1997, 560,000 warrants aa SEK 9.50.

    Other long-term liabilities amounting to approximately SEK 155,000 as
    of December 31, 1998 and approximately SEK 185,000 as of December
    31,1999, apply to the warrants which so far have been subscribed for by
    the employees of the Company, 59,750 warrants aa SEK 2.60 as of
    December 31, 1998 and 71,250 warrants aa SEK 2.60 as of December 31,
    1999.


Biora did not have any interest bearing liabilities neither on December 31,
1997, on December 31, 1998 nor on December 31, 1999.



-------------------------------------------------------------------------------
NOTE 19 OTHER CURRENT LIABILITIES
-------------------------------------------------------------------------------


</TABLE>
<TABLE>
<CAPTION>

                                                                        AS OF DECEMBER 31,
                                                               -----------------------------
                                                                   1997        1998     1999
                                                               -----------------------------
<S>                                                              <C>         <C>       <C>
Advances received from Seikagaku Corporation                     39,375           -        -
Employee withholding taxes                                        1,146       1,130    1,282
V.A.T.                                                               33         327      418
Accrual accounting of forward cover                                   -       1,977        -
Liabilities to customers                                              -          13      447
Other current liabilities                                            78          61      138
                                                               -----------------------------
TOTAL                                                            40,632       3,508    2,285
                                                               =============================
</TABLE>


When Emdogain was approved for sale in Japan in January 1998, the advance
was recorded as revenue, SEE NOTE 6.

Biora did not have any interest bearing liabilities neither on December 31,
1997, on December 31, 1998 nor on December 31, 1999.



-------------------------------------------------------------------------------
NOTE 20 ACCRUED EXPENSES
-------------------------------------------------------------------------------



                                                      AS OF DECEMBER 31,
                                               -----------------------------
                                                   1997        1998     1999
                                               -----------------------------
Accrued personnel-related expenses                2,684       4,612    8,879
Accrued administrative expenses                   2,559       1,015    2,604
Accrued R&D costs                                 2,144       3,363    3,794
Accrued marketing expenses                          998       3,187    1,845
Accrued royalty expenses                            407       2,397    1,737
Other accrued expenses                            1,307         520      637
                                               -----------------------------
TOTAL                                            10,099      15,094   19,496
                                               =============================



-------------------------------------------------------------------------------
NOTE 21 OPERATING LEASES
-------------------------------------------------------------------------------


The Company leases certain plants and equipment in accordance with leasing
contracts which expire in the beginning of the year 2005. The most material
leasing contracts concern rent of offices. The total amount of future
minimum rental commitments on December 31, 1999, pertaining to office
rental agreements with original or remaining non-cancellable conditions of
more than one year's duration are listed below:



           YEAR

           2000                  5,421
           2001                  4,548
           2002                  1,358
           2003                    165
           2004                    165
                                ------
           TOTAL                11,657
                                ======


The corresponding office rent expenses amounted to approximately SEK
5,714,000 for the year ended 1999, approximately SEK 5,259,000 for the year
ended December 31, 1998 and approximately SEK 4,236,000 for the year ended
December 31, 1997.



The office rental agreements include conditions concerning index regulation
of the rent and in some cases regulation of the rent due to increase in
direct property expenses and taxes. There are possibilities to prolong all
office rental agreements. There are no restrictions in consequence of the
office rental agreements.

Remaining leasing contracts concern leasing of cars, copying machines and
other office equipment. The total amount of future minimum rental
commitments on December 31, 1999, pertaining to car and office equipment
leasing agreements with original or remaining non-cancellable conditions of
more than one year's duration are listed below.


           YEAR
           2000                 1,372
           2001                   543
           2002                   293
           2003                    87
           2004                    80
           2005                    10
                               -------
           TOTAL                2,385


The corresponding leasing expenses amounted to approximately SEK 2,151,000
for the year ended 1999, approximately SEK 3,029,000 for the year ended
December 31, 1998 and approximately SEK 2,135,000 for the year ended
December 31, 1997.



-------------------------------------------------------------------------------
NOTE 22 COMMITMENTS
-------------------------------------------------------------------------------


In addition to the agreements concerning operating leases mentioned in NOTE
22, the Company has entered into research and development agreements and
agreements concerning purchases of services.

The expenses for these agreements amounted to approximately SEK 14,085,000
for the year ended 1999, approximately SEK 21,395,000 for the year ended
December 31, 1998 and approximately SEK 6,342,000 for the year ended
December 31, 1997.

The total amount of future expense commitments on December 31, 1999,
pertaining to these agreements with original or remaining non-cancellable
conditions of more than one year's duration are listed below.



           YEAR
           2000                 10,748
           2001                  4,623
           2002                  1,503
                                ------
           TOTAL                16,874
                                ======


From 1989 to 1992, Astra was a shareholder in the Company and contributed
to the financing of the initial research behind and development of
Emdogain. On December 31, 1992, Astra, the Company and certain of the
Company's other shareholders signed an agreement under the terms of which
Astra withdrew from its commitment to finance R&D for products relating to
Emdogain, as well as other license agreements between the Company and
Astra. As a part of the final settlement with Astra, it was agreed that,
until December 31, 2009, Astra would receive a royalty of 2.5% of all
commercial revenues (minus deductions for V.A.T. and customs duty) from the
dental application areas of the two patents pertaining to Emdogain owned by
the Company as at December 31, 1992. For 1999 the above royalty amounted to
approximately SEK 1,779,000 (1998 SEK 1,234,000 and 1997 SEK 410,000)
regarding normal sales of Emdogain and to 0 (1998 approximately SEK
1,007,000 and 1997 0) regarding the non-recurring revenue from Seikagaku.

In September 1998 Biora acquired the remaining 50% of the shares in Biora
SA Ltd for the price of SEK 0.

Concurrently a royalty agreement with the former minority owners was
signed. It was agreed that the former minority owners would receive a
royalty of totally 15% of the invoiced sales of Biora to the new external
distributor in South Africa during the years 1999-2001 and totally 10%
royalty of these sales in the years 2002-2003. For 1999 this royalty
amounted to approximately SEK 12,000 (1998 none).



-------------------------------------------------------------------------------
NOTE 23 U.S. GAAP INFORMATION
-------------------------------------------------------------------------------



The accompanying consolidated financial statements have been prepared in
accordance with Swedish GAAP, which differs in certain significant respects
from U.S. GAAP. The following is a summary of the adjustments to the
reported consolidated net loss and shareholders' equity that would have
been required if U.S. GAAP had been applied instead of Swedish GAAP in the
preparation of the consolidated financial statements.

<TABLE>
<CAPTION>

                                                           AS OF DECEMBER 31,
                                            ------------------------------------------------
                                                1997               1998                 1999
                                            ------------------------------------------------
<S>                                           <C>                <C>                  <C>
Net loss under Swedish GAAP                  -75,358            -59,998              -86,739
Capitalization of certain R&D costs (a)       -3,897               -856                 -462
Reversal of R&D expenses (b)                   1,774              3,607                9,406
Amortization of patents  ('c)                 -1,328                 -4                    -
Hedging of future cash flows (g)                   -                  -                 -652
                                            ------------------------------------------------
NET LOSS UNDER U.S. GAAP                     -78,809            -57,251              -78,447
                                            ================================================
BASIC EPS (D)
Net loss per Ordinary Share                    -3.83              -2.70                -3.70
                                            ================================================
Net loss per ADS                               -7.66              -5.40                -7.40
                                            ================================================
DILUTED EPS (D)
Net loss per Ordinary Share                    -3.83              -2.70                -3.70
                                            ================================================
Net loss per ADS                               -7.66              -5.40                -7.40
                                            ================================================
Shareholders' equity under Swedish GAAP      277,935            213,970              127,406
Capitalization of certain R&D costs (a)      -24,193            -21,441              -12,497
Amortization of patents (c)                   -1,711             -1,715               -1,715
Conditional shareholders' contribution (f)    -7,510             -7,510               -7,510
Hedging of future cash flows (g)                   -                  -                 -652
Option premiums received (h)                   5,320              5,475                5,505
SHAREHOLDERS' DEFICIT/EQUITY UNDER U.S. GAAP 249,841            188,779              110,537
                                            ================================================
</TABLE>


Those differences which have a significant effect on the consolidated net
loss and shareholders' equity are described as follows:


(a) Capitalization of Certain R&D Costs

In accordance with Swedish GAAP, the Company has capitalized certain R&D
costs. Equipment solely intended for R&D purposes is reported as tangible
long-term assets. According to U.S. GAAP, R&D costs are expensed as
incurred.

(b) Reversal of R&D Expenses

According to Swedish GAAP, capitalized R&D costs are amortized over their
estimated useful lives. Since such costs have been previously expensed for
U.S. GAAP purposes, amortization of capitalized R&D costs recorded for
Swedish GAAP puposes is reversed in the reconciliation to U.S. GAAP.

(c) Amortization of Patents

The Company commences the amortization of patents when the products
relating to the patents are fully commercially available. Under U.S. GAAP
amortization of patents should commence at the date of acquisition.

(d) Basic / Diluted EPS

In March 1997 the Financial Accounting Standards Boards ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per
Share," which established new standards for computing and presenting
earnings per share. SFAS No. 128 has been applied in the computation of net
loss per Ordinary Share (basic EPS), net loss per ADS and net loss per
Ordinary Share (diluted EPS).

Net loss per Ordinary Share has been calculated on the basis of the
weighted average number of shares outstanding, 20,571,167 for 1997 and
21,203,800 for 1998 and 1999 respectively.

Net loss per ADS is based upon a ratio of two Ordinary Shares to each ADS.

The impact of options (SEE NOTE 16) has not been taken into consideration,
as the effect would be antidilutive.

(e) Income Taxes

The Company does neither account for any deferred tax liability resulting
from untaxed reserves nor account for any other deferred taxes, since the
amounts concerned are immaterial. The Company has not recorded any deferred
tax benefits from tax loss carry forwards and does not have any deferred
tax liabilities recognized for Swedish purposes. Under U.S. GAAP, deferred
taxes are established on all differences between the book basis and the tax
basis of assets and liabilities. Deferred tax assets, which include the tax
effect of tax loss carried forward, are reduced by a valuation allowance to
the amount that is "more likely than not" to be realized.

There is no effect on earnings or shareholders' equity of the Company due
to differences between Swedish GAAP and U.S. GAAP for deferred income
taxes. A valuation allowance has been established for U.S. GAAP purposes
for all of the Company's gross potential deferred tax assets (including the
tax effect of U.S. GAAP adjustments) due to a history of losses from
operations of the Company. The following table summarizes the components of
the Company's deferred taxes for U.S. GAAP purposes:


<TABLE>
<CAPTION>

                                                              AS OF DECEMBER 31,
                                            ------------------------------------------------
                                                1997               1998                 1999
                                            ------------------------------------------------
GROSS DEFERRED TAX ASSETS:
<S>                                           <C>                <C>                 <C>
Tax loss carried forward                      50,513             88,002              110,273
Capitalized costs for tax purposes             6,169              5,351                2,944
                                            ------------------------------------------------
TOTAL                                         56,682             93,353              113,217
Less valuation allowance                     -56,682            -93,353             -113,217
                                            ------------------------------------------------
NET DEFERRED TAX ASSETS                            -                  -                    -
                                            ================================================
</TABLE>


(f) Conditional Shareholders' Contribution

The conditional shareholders' contribution increases shareholders' equity
under Swedish GAAP. Under U.S. GAAP such shareholders' contribution is
classified outside of Shareholders' equity due to the conditional nature of
the potential repayment.

(g) Hedging of Future Cash Flows

Under Swedish GAAP unrealized gains and losses on forward exchange
contracts that are used to hedge anticipated transactions are deferred and
are recognized as an adjustment of the measurement of the transaction when
it actually occurs. Under U.S. GAAP such unrealized gains and losses may be
deferred only for firm commitments.

(h) Option Premiums Received

Option premiums received are accounted for as long-term liabilities until
the options are exercised. Under U.S. GAAP option premiums are disclosed as
equity.

(i) Comprehensive Income/loss
<TABLE>
<CAPTION>

                                                                      Accumulated Other
                                                     Comprehensive     Comprehensive
                                                     Income / Loss     Income / Loss
                                                    -----------------------------------


BALANCE AT DECEMBER 31, 1996                                                    600
Comprehensive loss:
<S>                                                     <C>                   <C>
Net loss                                               -75,358
Currency translation adjustment                           -526                 -526
                                                    -----------                -----
Total comprehensive loss                               -75,884

BALANCE AT DECEMBER 31, 1997                                                     74
Comprehensive loss:
Net loss                                               -59,998
Currency translation adjustment                         -4,039               -4,039
                                                    -----------                -----
Total comprehensive loss                               -64,037
                                                    ===========

BALANCE AT DECEMBER 31, 1998                                                 -3,965
Comprehensive loss:
Net loss                                               -86,739
Adjustment of currency translation adjustment                -                  -15
Currency translation adjustment                            175                  175
                                                    -----------                -----
Total comprehensive loss                               -86,564
                                                    ==========
BALANCE AT DECEMBER 31, 1999                                                 -3,805
                                                                             ======
</TABLE>



-------------------------------------------------------------------------------
NOTE 24 U.S. GAAP CONDENSED INFORMATION
-------------------------------------------------------------------------------


As a result of the U.S. GAAP differences described in NOTE 23, certain
statement of operations and balance sheet captions in the Company's
Consolidated Financial Statements would be different on a U.S. GAAP basis.
The following schedules present the Condensed Consolidated Income
Statements and Balance Sheets of the Company in conformity with U.S. GAAP.


<TABLE>
<CAPTION>

CONDENSED CONSOLIDATED INCOME STATEMENTS - U.S. GAAP BASIS

                                                         YEAR ENDED DECEMBER 31,
                                            ------------------------------------------------
                                                1997               1998                 1999
                                            ------------------------------------------------
<S>                                           <C>                <C>                  <C>
Product sales                                 16,499             50,119               73,556
Contract revenue                                 818                224                    -
                                            ------------------------------------------------
TOTAL REVENUES                                17,317             50,343               73,556


Cost of goods sold                            -5,533            -10,864              -15,470
                                            ------------------------------------------------
GROSS PROFIT                                  11,784             39,479               58,086



Selling expenses                             -64,830            -89,622              -90,783
Administrative expenses                      -18,173            -22,133              -18,505
Research and development costs               -23,744            -37,233              -32,653
Other operating income                         1,550             42,674                4,001
Other operating expenses                      -2,843             -1,946               -3,659
                                            ------------------------------------------------
LOSS FROM OPERATIONS                         -96,256            -68,781              -83,513


Interest income                               18,126             11,576                5,231
Interest expense                                -727                 -4                  -11
                                            ------------------------------------------------
LOSS BEFORE INCOME TAXES                     -78,857            -57,209              -78,293


Income taxes                                    -101                -42                 -154
                                            ------------------------------------------------
LOSS BEFORE MINORITY INTEREST                -78,958            -57,251              -78,447


Minoroty interest                                149                  -                    -
                                            ------------------------------------------------
NET LOSS                                     -78,809            -57,251              -78,447
                                            ================================================
</TABLE>


CONDENSED CONSOLIDATED BALANCE SHEETS - U.S. GAAP
BASIS
<TABLE>
<CAPTION>

ASSETS                                                     AS OF DECEMBER 31,
                                            ------------------------------------------------
                                                1997               1998                 1999
                                            ------------------------------------------------
<S>                                          <C>                <C>                  <C>
Cash and cash equivalents                    286,310            187,048              112,804
Accounts receivable - trade                    2,600              6,313                9,281
Other current assets                           8,328             13,648               10,701
                                            ------------------------------------------------
TOTAL CURRENT ASSETS                         297,238            207,009              132,786
                                            ------------------------------------------------

Patents                                        4,230              4,513                4,344
Property, machinery and equipment - net        9,243              9,937                8,518
Other long-term receivables                    2,719              2,571                2,876
                                            ------------------------------------------------
TOTAL LONG-TERM ASSETS                        16,192             17,021               15,738
                                            ------------------------------------------------

TOTAL ASSETS                                 313,430            224,030              148,524
                                            ================================================
</TABLE>

<TABLE>
<CAPTION>

LIABILITIES AND
SHAREHOLDERS' EQUITY                                         AS OF DECEMBER 31,
                                            ------------------------------------------------
                                                1997               1998                 1999
                                            ------------------------------------------------
<S>                                            <C>                <C>                  <C>
Accounts payable - trade                       5,026              8,742                7,600
Other current liabilities                     50,731             18,602               22,433
                                            ------------------------------------------------
TOTAL CURRENT LIABILITIES                     55,757             27,344               30,033


Other long-term liabilities                    7,832              7,907                7,954
                                            ------------------------------------------------
TOTAL LONG-TERM LIABILITIES                    7,832              7,907                7,954
                                            ------------------------------------------------

                                            ------------------------------------------------
SHAREHOLDERS' EQUITY                         249,841            188,779              110,537
                                            ------------------------------------------------
                                            ------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   313,430            224,030              148,524
                                            ================================================
</TABLE>



-------------------------------------------------------------------------------
NOTE 25 ADDITIONAL U.S. GAAP DISCLOSURES
-------------------------------------------------------------------------------



The Company's single operating segment is research, production and
marketing of products for treatment of diseases in the oral cavity. The
Company's manufacturing facilities are located in Sweden.


(i) Geographic Segment Information

The following geographic segment data is presented on a U.S. GAAP basis.
Sales are reported by location of customer.


<TABLE>
<CAPTION>
                                                        YEAR ENDED DECEMBER 31,
                                            ------------------------------------------------
                                                1997               1998                 1999
                                            ------------------------------------------------
SALES:
<S>                                            <C>                <C>                  <C>
Sweden                                         2,184              2,536                2,215
Other Nordic countries                         1,037              2,037                2,544
Germany / Austria                             12,410             27,403               31,204
Switzerland                                      188              1,653                1,781
U.S.                                           8,595             25,865               47,773
Canada, Mexico                                     -                794                1,308
Italy                                          1,432              6,633                8,337
Benelux countries                              1,626              3,535                5,329
U.K.                                             232                860                1,357
Japan                                              -              4,036                6,902
Other countries                                  688              1,138                1,449
Inter-area elimination                       -11,075            -26,147              -36,643
                                            ------------------------------------------------
TOTAL SALES                                   17,317             50,343               73,556
                                            ================================================
</TABLE>



<TABLE>
<CAPTION>

                                                          YEAR ENDED DECEMBER 31,
                                            ------------------------------------------------
                                                1997               1998                 1999
                                            ------------------------------------------------
LONG-TERM ASSETS:
<S>                                           <C>                <C>                  <C>
Sweden                                        10,674             10,602               10,586
Germany / Austria                                679              1,653                1,470
Switzerland                                       13                  -                    -
U.S.                                           3,315              2,865                2,254
Italy                                            381                471                  337
Benelux countries                              1,068              1,322                1,040
U.K.                                              57                107                   50
Other countries                                    5                  1                    -
                                            ------------------------------------------------
TOTAL LONG-TERM ASSETS                        16,192             17,021               15,737
                                            ================================================
</TABLE>


(ii) Export Sales


Export sales from Sweden to unaffiliated customers by destination are as
follows:


<TABLE>
<CAPTION>

                                                          YEAR ENDED DECEMBER 31,
                                            ------------------------------------------------
                                                1997               1998                 1999
                                            ------------------------------------------------
<S>                                            <C>                <C>                  <C>
Other Nordic countries                         1,037              2,037                2,544
Canada and Mexico                                  -                683                1,308
Greece                                           205                241                  265
U.K.                                             170                 11                    -
Israel                                           124                 31                  231
Japan                                              -              4,036                6,902
France                                            21                688                  320
Spain                                             32                 68                  318
Poland                                             -                 43                  207
Other countries                                   14                 15                  108
                                            ------------------------------------------------
TOTAL EXPORT SALES                             1,603              7,853               12,203
                                            ================================================
</TABLE>


(iii) Major Customers
<TABLE>
<CAPTION>

                                                          YEAR ENDED DECEMBER 31,
                                            ------------------------------------------------
                                                1997               1998                 1999
                                            ------------------------------------------------
<S>                                               <C>             <C>                 <C>
Customer A                                         -                  -                    -
Customer B                                         -                  -                    -

</TABLE>




(iv) Financial Instruments and Risk Management



The Company has operations and assets in a number of countries.
Consequently the company's revenues and expenses are affected, when
measured in Swedish kronor, by fluctuations in foreign currency exchange
rates, primarily to the US dollars (USD), Euro (EUR) and Japanese Yen
(JPY). When the Swedish kronor appreciates against other currencies the
Company's income from foreign operations reported in Swedish kronor may
decrease. Likewise, when the Swedish kronor declines against other
currencies, the Company's profit from foreign operations reported in
Swedish kronor may increase. The Company addresses these risks through a
risk management program that includes the use of financial instruments. The
Company's hedging activities are initiated within the guidelines of risk
management policies.


Notional Amounts and Credit Exposure

The notional amounts of off-balance-sheet financial instruments presented
in this Note represent fact or contractual amounts and thus are not a
measure of the exposure of the Company through its use of such financial
instruments. The actual amounts exchanged are calculated on the basis of
the notional amounts and the other terms of the financial instruments,
which are related to foreign currency exchange rates.

The Company is exposed to credit related losses in the event that the
counterpart to the off-balance-sheet financial instruments do not perform
according to the terms of the contract. In the opinion of management, the
counterpart to the financial instruments is a creditworthy financial
institution and the Company does not expect any significant loss to result
from non-performance. The credit exposure of foreign exchange contracts is
represented by the fair value of contracts with a positive fair value at
the end of each period by the effects of master netting arrangements.


Foreign Currency Risk Management

The Company is exposed to the risk of fluctuations in foreign currency
exchange rates due to the international nature and scope of its operations.
A substantial portion of the Company's revenues and expenses are
denominated in foreign currency. The Company's foreign currency risk arises
from fluctuations in foreign currency exchange rates on the value of the
Company's sales and purchases in foreign currencies (transaction exposure)
and certain financial assets and liabilities (translation exposure).
Management regularly reviews the Company's assets and liabilities that are
denominated in foreign currency and determines the net amount that is
subject to risk adverse foreign currency fluctuations. The Company uses
forward foreign exchange contracts to manage its foreign currency risk.

The following table presents the notional amounts and credit exposure of
financial instruments used for foreign currency risk management.


<TABLE>
<CAPTION>

                                                               AS OF DECEMBER 31,
                                            ------------------------------------------------------------
                                                1997               1998                 1999
                                            ------------------------------------------------------------
                                            Notional    Credit   Notional    Credit   Notional   Credit
                                             Amount    Exposure   Amount    Exposure   Amount   Exposure
                                                                 (SEK in million)
<S>                                           <C>        <C>      <C>       <C>      <C>        <C>

Forward foreign exchange contracts                 -         -       75           0       41        0

</TABLE>


The forward foreign exchange contracts described in the table above are
used by the Company primarily to manage its foreign currency risk with
respect to anticipated transactions and assets and liabilities denominated
in foreign currencies.

The following table summarizes by major currency the contractual amounts of
the Company's forward exchange contracts in Swedish kronor. Foreign
currency amounts are translated at rates prevailing at December 31, 1999.
The "buy" amounts represent Swedish kronor equivalents of commitments to
purchase foreign currencies, and the "sell" amounts represent the Swedish
kronor equivalent of commitments to sell foreign currencies. Amounts in the
table below include forward exchange contracts designed to hedge foreign
currency risks from both future cash flows from anticipated transactions
and the translation of receivables and liabilities denominated in foreign
currencies.

<TABLE>
<CAPTION>

                             AS OF DECEMBER 31,
  --------------------------------------------------------------------
                 1997               1998                 1999
  --------------------------------------------------------------------
                  Buy      Sell      Buy        Sell      Buy     Sell

                               (SEK in million)
<S>               <C>      <C>       <C>        <C>       <C>     <C>
   USD             -        -         -          41        -       10
   DEM             -        -         -          27        -        -
   EUR             -        -         -           -        -       10
   JPY             -        -         -           7        -       27
   Total           -        -         -          75        -       47
  ====================================================================
</TABLE>




AA + TABELLER

(v) Fair Value of Financial Instruments

FASB Statement No. 107 "Disclosures about Fair Value of Financial
Instruments" requires the disclosure of estimated fair values for all
financial instruments, both on- and off-balance-sheet, for which it is
practicable to estimate fair value. The Company had no derivative financial
instruments in 1997. At December 31, 1998, and at December 31, 1999, the
fair value of the Company's financial instruments were insignificant.









(vi) New Accounting Pronouncements

In June 1998, the FASB issued Statement of Financial Accounting Standard
No. 133, "Accounting for Derivative Instruments and Hedging Activities".
This statement establishes accounting and reporting standards for
derivative instruments, including certain derivative instruments embedded
in other contracts which are collectively referred to as derivatives, and
for hedging activities. It requires that an entity recognize all
derivatives as either assets or liabilities in the statement of financial
position and measure those instruments at fair value. The Company is
currently assessing the effects of adopting SFAS No. 133, and has not yet
made a determination of the impact on its financial position or result of
operations. SFAS No. 137,"Deferral of the Effective Date of FASB Statement
No. 133", issued in June 1999, delays the effective date of SFAS No. 133.
Accordingly SFAS No. 133 will be effective for the Company's first quarter
of fiscal year 2001.

In June 1999, the Swedish Financial Accounting Standards Council issued
Recommendation RR 9, "Income taxes". This recommendation establishes
accounting standards for income taxes, including paid taxes and deferred
taxes. The Company is currently assessing the effects of adopting RR 9, and
has not yet made a determination of the impact on its financial position or
result of operations. The RR 9 recommendation will be effective for the
Company's first quarter of fiscal year 2001.



-------------------------------------------------------------------------------
NOTE 26 U.S. GAAP STOCK OPTIONS
-------------------------------------------------------------------------------



In October 1995, Euroventures Nordica entered into separate option
agreements with certain officers, a former director, consultants and other
employees of the Company, pursuant to which Euroventures Nordica granted to
such persons options to purchase an aggregate of 990,000 of the Company's
Ordinary Shares from Euroventures Nordica. To be entitled to exercise such
options, the individuals' that were party to the option agreement had to
pay an amount equal to SEK 0.15 for each Ordinary Share subject to an
option under the agreement, which amount was payable no later than dates
ranging from May to December 1995. The options were exerciseable at any
time until March 31, 1997 and the purchase price per Ordinary Share upon
exercise of such options ranged from SEK 2.95 to SEK 8.00, payable to
Euroventures Nordica upon transfer of such Ordinary Shares to the
exercising optionee. The options have been exercised.

On January 24, 1997, the Company's Board of Directors, acting in
accordance with the authorization of the shareholders of the Company,
approved the issuance of an aggregate of SEK 500,000 principal amount of
subordinated debentures at an interest rate of 7% with 560,000 accompanying
warrants to Euroventures Nordica. On the same date, Biora and Euroventures
Nordica entered into an agreement (the "Key Employee Incentive Plan")
pursuant to which Euroventures Nordica agreed to offer all the warrants to
officers and other key employees of Biora and certain of its subsidiaries
(the "Participants"). These key employees were required to purchase the
warrants at their fair value at the grant using the Black-Sholes valuation
model. All of the 560,000 warrants have been subscribed for. Also
non-employee members of the Board of Directors hold warrants. Each warrant
entitles the holder to acquire one Ordinary Share of the Company, at an
exercise price of SEK 70.00. Under Swedish law a corporation cannot issue
warrants separately from debentures, but accompanying warrants may be
detached from the debentures. The warrants are exerciseable for Ordinary
Shares at any time up until January 31, 2001. If all these warrants are
fully exercised, the total number of shares outstanding will increase to
21,763,800. SEE ALSO NOTE 16.

On April 23, 1998, the Company's Board of Directors, acting in accordance
with the authorization of the shareholders of the Company, approved the
issuance of an aggregate of SEK 50,000 principal amount of subordinated
debentures with 200,000 accompanying warrants to Biora Option AB. On the
same date, Biora and Biora Option AB entered into an agreement pursuant to
which Biora Option AB agreed to offer all the warrants at a price which
reflects the premium to employees of Biora and its subsidiaries (the
"Participants") to provide them with appropriate incentives to encourage
them to continue in the employ of the Company and to acquire a proprietary
interest in the long-term success of Biora. Accordingly the employees were
required to purchase the warrants at their fair value at the grant using
the Black-Sholes valuation model. Employees of the Company have subscribed
for 71,250 (59,750) warrants of this program. Each warrant entitles the
holder to acquire one Ordinary Share of the Company, at an exercise price
of SEK 130.00. Under Swedish law a corporation cannot issue warrants
separately from debentures, but accompanying warrants may be detached from
the debentures. The warrants are exerciseable for Ordinary Shares at any
time during May 2002. If also all these warrants are fully exercised, the
total number of shares outstanding will increase to 21,963,800. SEE ALSO
NOTE 16.



<TABLE>
<CAPTION>

                                        1997                    1998                         1999
                            ---------------------------------------------------------------------------------
                              Options          Weighted        Options    Weighted       Options     Weighted
                                               Average                    Average                     Average
                                               Exercise                   Exercise                    Exercise
                                               Price                      Price                       Price
                            -----------     ------------  ------------  ----------  ------------  -----------

<S>                         <C>              <C>            <C>           <C>         <C>            <C>
Outstanding at
beginning of year                   -                 -       560.000       70.00       619.750        75.78

Granted                       560.000             70.00        59.750      130.00        11.500       130.00

Exercised                           -                 -             -           -             -            -

Forfeited                           -                 -             -           -             -            -
                            ----------        ----------    -----------   ---------   -----------   -----------
Outstanding at
 end of year                  560.000             70.00       619.750       75.78       631.250        76.77
                            ==========        ==========    ===========   =========   ===========   ===========
Exerciseable at
 end of year                  560.000             70.00       560.000       70.00       560.000        70.00
                            ==========        ==========    ===========   =========   ===========   ===========

Weighted average
fair value of
options granted
during the year                     -              9.50             -        2.60             -         0.05

                            ==========        ==========    ===========   =========   ===========   ===========
</TABLE>

<TABLE>
<CAPTION>

Stockoptions outstanding at December 31, 1999

                                     Options Outstanding                         Options Exercisable
                            -------------------------------------------          --------------------------
                              Options      Remaining     Exercise Price          Options        Weighted
                                                                                                 Average
Exercise price                         Contractual life                                      Exercise Price
                            -------------------------------------------          --------------------------
<S>                          <C>              <C>            <C>                <C>              <C>
SEK 70.00                     560.000          1.08           70.00              560.000          70.00
SEK 130.00                     71.250          2.42          130.00

                            ---------                                            --------
                              631.250                                            560.000
                            =========                                            ========
</TABLE>


Biora adopted the disclosure provisions of Statement of Financial
Accounting Standard 123, "Accounting for Stock-Based Compensation" but
continues to measure stock-based compensations cost in accordance with APB
Opinion 25 and its related interpretations. If Biora had measured
compensation cost for the Biora stock options granted in 1997 and 1998
under the fair value based method prescribed by FASB 123, net loss would
have changed to the pro forma amounts set forth below. The employees are
required to purchase the warrants at their fair value at the grant using
the Black-Sholes valuation model. Accordingly, under the provisions of FASB
123, no compensation expense results.

<TABLE>
<CAPTION>

Net (Loss)                                                1997               1998            1999
                                                       -------         ----------        --------
<S>                                                    <C>               <C>             <C>
Reported                                               (75,358)          (59,998)        (86,739)
Proforma                                               (75,358)          (59,998)        (86,739)
</TABLE>


The fair value of the Biora stock options granted to Biora Employees used
to compute pro forma net loss disclosures were estimated on the date of the
grant using the Black-Sholes options-pricing model based on the following
weighted average assumptions by Biora:

<TABLE>
<CAPTION>

                                              1997-02-05         1998-10-19                1999-10-29
                                     ----------------------  --------------------     ------------------
<S>                                               <C>                <C>                       <C>
Risk free interest                                5.84%              4.55%                     5.00%
Expected life                                2001-01-31         2002-05-31                2002-05-31
Expected volatility                                 20%                26%                       26%
Expected dividend yield                               0                  0                         0
</TABLE>



-------------------------------------------------------------------------------
NOTE 27 PLEDGED ASSETS AND CONTINGENT LIABILITIES
-------------------------------------------------------------------------------



In June 1994, Bioventures NV and Eastham Corporation Ltd. signed an
agreement under which Eastham undertook to act as Bioventures NV's
non-exclusive authorized agent to handle contacts with the relevant public
authorities in the U.S. Regarding Emdogain. As remuneration for the
undertaking, if the total sales of products based on the Company's existing
patent exceed USD 5 million during a 12-month period, Eastham was entitled
to USD 825,000 (approximately SEK 6,685,000) from Bioventures NV. Eastham
provided consulting services, with no remuneration other than for direct
expenses, to Bioventures NV from 1988 through May 1995, at which time a new
company was engaged to act as authorized agent in the U.S. In connection
with the liquidation of Bioventures NV, Bioventures BV assumed the
commitments described above. In December 1998 Bioventures BV paid USD
825,000 to Eastham Corporation Ltd, SEE NOTE 4.

On September 30, 1996, Euroventures Nordica made a conditional contribution
to the shareholders' equity of Biora in the amount of SEK 7,510,052 through
the conversion of outstanding loans, including accrued interest, in the
aggregate principal amount of SEK 7,160,419 and accrued interest of SEK
349,633. The amount of the conditional contribution was treated as
unrestricted equity. The contribution was made to increase total share-
holders' equity as the change in the Company's accounting policy with
respect to the capitalization of costs related to the development of
Emdogain decreased statutory shareholders' equity. The contribution is
deemed "conditional" in that it is to be repaid to Euroventures Nordica
only to the extent that the Company has sufficient unrestricted equity
otherwise available for dividends, and such repayment is further subject to
the approval of any repayment by the general shareholders' meeting of the
Company.

-------------------------------------------------------------------------------
NOTE 28 ACQUISITIONS OF SHAREHOLDINGS IN SUBSIDIARIES
-------------------------------------------------------------------------------

The wholly owned subsidiary Bioventures B.V., 's-Hertogenbosch, The
Netherlands, was established at the year-end 1988. Bioventures B.V. owns
the patents regarding Emdogain. The sales company Biora Benelux Dental
Products B.V., Amsterdam, The Netherlands, is a wholly-owned subsidiary of
Bioventures B.V., that was established in August 1995. The wholly-owned
subsidiary of Bioventures B.V. on the Netherlands Antilles has been
liquidated.

In October 1995 the wholly owned subsidiary Biora GmbH, Bad Homburg,
Germany, was established to market and sell Emdogain on the German and
Austrian market.

In August 1996 the wholly owned subsidiary Biora Inc, Chicago, U.S., was
established to market and sell the Company's main product on the North
American market.

In October 1996 50% of Biora S.A. Ltd., Johannesburg, South-Africa was
acquired. In September 1998 Biora acquired the remaining 50% of the shares.
SEE NOTE 8.

In April 1997 the wholly owned subsidiary Biora Srl, Milano, Italy, was
established to market and sell Emdogain on the Italian market.

In October 1997 the wholly owned subsidiary Biora AG, Zurich, Switzerland,
was established to market and sell Emdogain on the Swiss market.

In December 1997 the wholly owned subsidiary Biora Limited, London, U.K.,
was established to market and sell Emdogain on the markets within Great
Britain and Ireland.

In March 1998 the wholly owned subsidiary Biora Option AB was established
in connection with the resolution by the general meeting of shareholders in
Biora on April 23, 1998, to give the employees of the Company opportunity
to subscribe for warrants in Biora. Biora Option AB shall subscribe for,
transfer and acquire warrants and other securities issued by the Company.

In February 1999 the wholly owned subsidiary Biora BioEx AB was established
for research and development of products for treatment of wounds and
infections outside the oral cavity.

-------------------------------------------------------------------------------
NOTE 29 SUBSEQUENT EVENTS
-------------------------------------------------------------------------------

On March 30, 2000, the Company informed that the new formulation of its
prinicipal product Emdogain, named EmdogainGel, had been approved for sale
in Europe by BSI, British Standards Institution, and in Canada by Health
Canada (Santee Canada).