As Filed with the Securities and Exchange Commission on June 28, 2002

                     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, 2001

                       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, 2001.

                Title of Class                               Number of Shares
                --------------                               ----------------
                Ordinary Shares                              23,753,800

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|



                              TABLE OF CONTENT

             INTRODUCTION                                              Page

Item 1.      Not Applicable

Item 2.      Not Applicable

Item 3.      Forward-Looking Statements                                     2
             Key Information                                                3
             3.A. Selected financial data                                   3
             3.B. Not applicable                                            6
             3.C. Not applicable                                            6
             3.D  Risk Factors                                              6
Item 4.      Information on the Company                                     9
             4.A History and development of Biora                           9
             4.B. Business Overview                                        10
             Research & Development                                        14
             Business Strategy                                             22
             Market Overview                                               23
             Marketing                                                     23
             4.C Organizational Structure                                  27
             4.D Property, plants and equipment                            27
             Competition                                                   28
             Intellectual Property                                         29
             Raw Materials                                                 30
             Government Regulation                                         30

Item 5.      Operating and Financial Review and Prospects                  33
             Overview                                                      33
             5.A.Operating results                                         34
             5.B. Liquidity and Capital Resources                          35
             5.C. Research and development, patents and licenses           40
             5.D. Trend information                                        41

Item 6.      Directors, Senior Management and Employees                    41
             6.A. Directors and Senior Management                          41
             6.B. Compensation                                             43
             6.C. Board Practice                                           46
             6.D. Employees                                                46
             6.E. Share Ownership                                          46

Item 7.      Major Shareholder and Related Transactions                    47
             7.A. Major shareholders                                       47
             7.B. Related Party Transactions                               47
             7.C. Interests of experts and counsel                         48

Item 8.      Financial Information                                         48
             8.A. Consolidated statements and other financial information  48
             8.B. Significant changes                                      48

Item 9.      The Offer and Listing                                         48
             9.A. Offer and listing details                                48
             9.B. Plan of distribution                                     49
             9.C. Markets                                                  49

Item 10.     Additional Information                                        52
             10. A. Share Capital                                          52
             10. B. Memorandum and Articles of Association                 52
             10. C. Material Contracts                                     52
             10. D. Exchange Controls                                      53
             10  E. Taxation                                               53
             10. G. Statements by experts                                  56
             10. H. Documents on display                                   56
             10. I. Subsidiary info                                        56

Item 11.     Quantitative and Qualitative Disclosures About Market Risk    57

Item 12.     Not Applicable

Item 13      Not Applicable

Item 14      Not Applicable

Item 18.     Financial Statements
             Consolidated Financial Statements                            F-1



INTRODUCTION
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 4 - Information on the
Company and Item 5 - Operating Financial Review and Prospects 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.

ITEM 3. KEY INFORMATION
3.A. SELECTED FINANCIAL DATA

         The following selected consolidated financial data as at December
31, 1997, 1998, 1999, 2000 and 2001 and for each of the years ended
December 31, 1997, 1998, 1999, 2000 and 2001 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, 1999, 2000 and 2001 and for each of the years then ended is
set forth in Note 22 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,
                                      ---------------------------------------------------------------
                                             1997        1998        1999     2000     2001     2001
                                            (SEK)       (SEK)       (SEK)    (SEK)    (SEK)     $(1)

                                              (In thousands, except per share data) (2) (7)

Income Data:

Swedish GAAP:
<S>                                        <C>         <C>         <C>      <C>     <C>       <C>
       Net sales                           16 499      50 119      73 556   89 160  110 677   10 584
       Cost of goods sold (3)              -5 533     -10 864     -15 470  -21 148  -22 797   -2 180
                                      ---------------------------------------------------------------
       Gross profit                        10 966      39 255      58 086   68 012   87 880    8 404

       Selling expenses                   -64 830     -89 622     -90 783  -78 387  -76 998   -7 363
       Administrative expenses            -18 173     -22 133     -18 505  -25 437  -22 880   -2 188
       Research and development costs(4)  -20 293     -39 980     -41 597  -42 789  -26 787   -2 562
       Other operating income               2 368      42 898       4 001      643   16 049    1 535
       Other operating expenses            -2 843      -1 946      -3 007     -753   -3 728     -357
                                      ---------------------------------------------------------------
       Loss from operations               -92 805     -71 528     -91 805  -78 711  -26 464   -2 531

Net loss                                  -75 358     -59 998     -86 739  -76 149  -25 095   -2 400
Basic and diluted EPS
       Net loss per Ordinary Share(8)       -3,66       -2,83       -4,09    -3,59    -1,14    -0,11
       Net loss per ADS (8)                 -7,33       -5,66       -8,18    -7,18    -2,28    -0,22
Weighted average
shares outstanding(5)                      20 571      21 204      21 204   21 204   22 014   22 014

U.S. GAAP:
       Product sales                       16 499      50 119      73 556   89 160  110 677   10 584
       Contract revenue                       818         224           -        -        -
                                      ---------------------------------------------------------------
       Total revenues                      17 317      50 343      73 556   89 160  110 677   10 584

       Cost of goods sold (3)              -5 533     -10 864     -15 470  -21 148  -22 797   -2 180
                                      ---------------------------------------------------------------
       Gross profit                        11 784      39 479      58 086   68 012   87 880    8 404

       Selling expenses                   -64 830     -89 622     -90 783  -78 387  -76 998   -7 363
       Administrative expenses            -18 173     -22 133     -18 505  -25 437  -22 880   -2 188
       Research and development costs(4)  -23 744     -37 233     -32 653  -32 795  -25 925   -2 479
       Other operating income               1 550      42 674       4 001      393   16 299    1 559
       Other operating expenses            -2 843      -1 946      -3 659     -375   -3 811     -364
                                      ---------------------------------------------------------------
       Loss from operations               -96 256     -68 781     -83 513  -68 589  -25 435   -2 432

Net loss                                  -78 809     -57 251     -78 447  -66 027  -24 066   -2 301
Basic and diluted EPS
       Net loss per Ordinary Share(8)       -3,83       -2,70       -3,70    -3,11    -1,09    -0,10
       Net loss per ADS (8)                 -7,66       -5,40       -7,40    -6,23    -2,19    -0,21
Weighted average
shares outstanding(5)                      20 571      21 204      21 204   21 204   22 014   22 014

Consolidated Balance Sheet Data:

Swedish GAAP:

Cash and cash equivalents                 286 310     187 048     112 804   53 755   51 471    4 922
Total assets                              339 334     247 186     162 736   91 224   92 122    8 810
Long-term borrowings                        5 642       5 872       5 949    8 167      305       29
Advances received(6)                       39 375           -           -        -        -        -
Shareholders' equity / deficit            277 935     213 970     127 406   50 915   55 870    5 343

Share capital                                 848         848         848      848      950       91
Number of shares (in thousands)            21 204      21 204      21 204   21 204   23 754        -

U.S. GAAP:

Total assets                              313 430     224 030     148 524   86 756   88 767    8 489
Shareholders' equity / deficit            249 841     188 779     110 537   44 169   44 648    4 270

(1) Solely for convenience, krona amounts have been translated into U.S.
    dollars at the Noon Buying Rate on December 31, 2001 of U.S. $1.00 =
    SEK 10.4571

(2) Amounts may not total due to rounding.

(3) The royalty payments to Astra of 2.5 percent on sales of Emdogain was
    reclassified starting in 1998 as a cost of goods sold instead of
    Research and Development cost in previous years. In this presentation
    the prior year has been adjusted for comparison purposes.

(4) Total research and development costs incurred were SEK 23.7 million,
    SEK 37.2 million, SEK 32.7 million, SEK 32.8 million and SEK 25.9
    million for the years ended December 31, 1997, 1998, 1999, 2000 and
    2001 respectively. The royalty payments to Astra of 2.5 percent on
    sales of Emdogain, has been reclassified from an R&D expense to a 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 the effect of Ordinary Shares subscribed from the date
    such shares were paid for. The effect of the convertible debentures has
    not been included in the computation of loss per Ordinary Share as it
    would be 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 ("MHW") did not
    approve Emdogain for sale in Japan. Consequently, Biora through the end
    of 1997 treated the $5 million as a liability. The MHW approved
    Emdogain 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.
</TABLE>


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.

<TABLE>
<CAPTION>
                                            Krona/Dollar Exchange Rates
                                                (Krona per Dollar)

                                           Period End       Average(1)         High           Low
                                           ----------       ---------          ----           ---
      Year ended December 31,
<S>            <C>                          <C>              <C>             <C>           <C>
               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                         8.5050           8.3007          8.6500        7.7060
               2000                         9.4440           9.2324         10.1238        8.6350
               2001                        10.4571          10.4328         11.0270        9.3250

                                          Period End      Average (2)         High           Low
             Jan, 31, 2002                  10.6720         10.4561         10.7280        10.2690
             Feb, 28, 2002                  10.4700         10.5500         10.6800        10.4360
             March, 29, 2002                10.3630         10.3324         10.5000        10.1975
             April, 30, 2002                10.2800         10.3070         10.3820        10.2220
             May, 31, 2002                   9.7445         10.0647         10.2950        9.7210

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

</TABLE>


<TABLE>
<CAPTION>

                                   Krona/Euro Exchange Rates
                                       (Krona per Euro)

                                        Period End       Average(1)         High           Low
                                        ----------       ----------         ----           ---
     Year ended December 31,
<S>          <C>                         <C>              <C>             <C>           <C>
              1997                        8.7000           8.6249          8.9100        8.3300
              1998                        9.4700           8.9288          9.7100        8.4500
              1999                        8.5635           8.8076          9.5400        8.5500
              2000                        8.8570           8.4465          8.8740        8.0850
              2001                        9.4190           9.2516          9.9410        8.8400

                                        Period End       Average(2)         High           Low
          Jan, 31, 2002                   9.1745           9.2292          9.2885        9.1570
          Feb,28, 2002                    9.0865           9.1869          9.2620        9.0750
          March, 28,2002                  9.0290           9.0600          9.1420        8.9980
          April, 30 2002                  9.2275           9.1331          9.2445        9.0235
          May, 31, 2002                   9.1200           9.2235          9.3600        9.1180

Represents the average of Buying Rates for 250 quotes per year by Ranteborsen AB during the relevant period.
(2) Represents the average of the Noon Buying rates in each day during the relevant period.

</TABLE>


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.


3.D. RISK FACTORS

BIORA'S COMPETITORS MAY DEVELOP TECHNOLOGIES AND PRODUCTS THAT ARE MORE
EFFECTIVE THAN THOSE BEING DEVELOPED BY BIORA.

Competitors of Biora - engaged in all areas of health care in the United
States, Europe and Japan - are numerous and include, among others, major
pharmaceutical and chemical companies, specialized biotechnology firms,
universities and other research institutions. There can be no assurance
that Biora's competitors will not succeed in developing technologies and
products that are more effective than any which have been or are being
developed by the Company or which would render Biora's technology and
products obsolete and/or noncompetitive. Many of Biora's competitors have
substantially greater financial and technical resources and production and
marketing capabilities than the Company. In addition, many of the Company's
competitors have greater experience than Biora in undertaking pre-clinical
testing and clinical trials of therapeutic products and obtaining
applicable regulatory approvals of such products for use in health care.

Additionally, competitors of Biora may succeed in obtaining applicable
regulatory approvals for other periodontal products. The relative speed
with which Biora can develop products, complete clinical testing and obtain
regulatory approvals and supply commercial quantities of products is
expected to have an impact on Bioras competitive position. To the extent
that other companies succeed in developing similar products that are more
effective or are produced and marketed more effectively, the commercial
success of EmdogainGel and Biora's other products under development may be
materially and adversely affected, which could have a material adverse
effect upon Biora's business, financial condition, prospects and results of
operations. See "Competition."


TECHNOLOGICAL CHANGES IN THE TREATMENT OF PERIODONTAL DISEASE MAY PUT
EMDOGAINGEL AND THE COMPANY'S OTHER PRODUCTS AT A COMPETITIVE DISADVANTAGE.

Significant resources are being expended to develop new and improved
methodologies for the treatment of periodontal disease. Accordingly, the
market acceptance and commercial success of EmdogainGel and Biora's other
products will depend not only on its effectiveness, but also on the
relative safety and effectiveness of alternative treatments or approaches.
There can be no assurance that superior treatments for periodontal disease
will not be developed by Biora's current competitors or others, or that
alternative approaches, including preventative alternatives, will not
render Biora's technology or products under development obsolete or
non-competitive, any of which could have a material adverse effect on
Biora's business, financial condition, prospects and results of operations.


BIORA DEPENDS ON A SINGLE MANUFACTURING FACILITY.

The production activities performed by Biora take place in a single
facility located at Biora's headquarters in Malmo, Sweden. A major
disturbance at Biora's facility in Malmo or at its subcontractors
facilities could result in a prolonged interruption of Biora's business and
potential loss of customers and sales, which could have a material adverse
effect upon Biora's business, financial condition, prospects and results of
operations. Biora has begun to sub-contract parts of the production process
(e.g. filling of the pre-filled syringes and final packaging). See
"Description of Property."


BIORA'S DEPENDENCE ON PATENTS AND OTHER PROPRIETARY TECHNOLOGY, AND THE
DEGREE TO WHICH SUCH PROPRIETARY TECHNOLOGY WILL BE PROTECTED IS
UNPREDICTABLE IN MANY JURISDICTIONS.

Biora'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. As of May 1, 2002, Biora owned six United States patents,
four European patents, two Japanese patents and 77 patents in various other
countries. Biora is at present reviewing some of its older patents in low
priority markets. The patent positions of firms involved in the development
and manufacture of biology-based products, including Biora, are uncertain
and involve complex legal and technical questions for which important legal
principles are largely unresolved. For example, no consistent policy has
emerged regarding the breadth of biotechnology patent claims that are
granted by the United States Patent Office or enforced by the federal
courts. In addition, there can be no assurance that any patents granted to
Biora will not be challenged, invalidated or circumvented. Moreover, there
can be no assurance that any patent applications filed by Biora will result
in patents being issued, or that any patents issued will afford meaningful
protections against competitors with similar technology. Litigation, which
could result in substantial costs to Biora, may be necessary to enforce any
patents issued to Biora or to determine the scope and validity of the
proprietary rights of others.

In addition, competitors of Biora may obtain patents claiming products or
processes that are necessary for or useful to the development use or
manufacture of Biora's products. Such competitors can bring legal actions
against Biora claiming infringement and seeking damages and injunctive
relief. While Biora believes that its current and proposed future
activities will not infringe any valid patent heretofore issued, there can
be no assurance that such activities will not be challenged in the future,
that additional patents containing claims materially constraining the
proposed activities of Biora will not be issued or that Biora will not
become involved in costly, time-consuming litigation regarding patents,
including actions brought to challenge or invalidate Biora's own patent
rights. Such litigation or proceedings, if adversely determined, could
subject Biora to significant liabilities to third parties, could require
Biora to seek licenses from third parties and could prevent Biora from
manufacturing or selling its products, any of which could have a material
adverse effect on Biora's business, financial condition, prospects and
results of operations.

Biora also relies upon unpatented proprietary manufacturing technology.
Biora's proprietary manufacturing technology is generally protected from
unauthorized disclosure under confidentiality agreements with the parties
involved. No assurance can be given that others will not independently
develop substantially equivalent technology or techniques or otherwise gain
access to Biora's proprietary manufacturing technology or disclose such
technology or that Biora can meaningfully protect its rights with respect
to such unpatented proprietary manufacturing technology. In addition, there
can be no assurance that these agreements will provide meaningful
protection for Biora's proprietary manufacturing technology or adequate
remedies in the event of unauthorized use or disclosure of such
information. Further, disputes may arise as to the ownership of proprietary
rights to the extent that outside collaborators or consultants apply
technological information developed independently by them or others to
Company projects or apply Company technology to other projects, and, if
adversely determined, such disputes could have a material adverse effect on
Biora's business, financial condition, prospects and results of operations.
The loss of trade secret protection of any of Biora's key proprietary
manufacturing technologies would materially and adversely affect Biora's
competitive position and could have a material adverse effect on Biora's
business, financial condition, prospects and results of operations. See
"Intellectual Property."


GOVERNMENT AUTHORITIES HEAVILY REGULATE BIORA'S PRODUCTS, AND THERE CAN BE
NO ASSURANCE THAT BIORA WILL NOT BE REQUIRED TO OBTAIN ADDITIONAL
REGULATORY APPROVALS FOR ITS CURRENT AND FUTURE PRODUCTS.

Biora's principal products EmdogainGel and PrefGel are, and the Company's
products/projects under development will be, subject to regulation by the
FDA and comparable agencies in Europe, Japan and elsewhere around the
world. In the United States, the FDA enforces, where applicable,
development, testing, registration, clearance or approval, labeling,
manufacturing, notification, marketing, distribution, record keeping and
reporting requirements for new drugs, medical devices, biologics and
cosmetics. 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, the refusal by the
U.S. government to approve or clear product approval applications, the
withdrawal of previously approved product applications, and criminal
prosecution. Similar remedies exist in other countries in which Biora's
products may be sold. While Biora has received approval for the marketing
of EmdogainGel as a medical device in Europe, Japan and the United States,
respectively, there can be no assurance that Biora will be able to comply
with additional requirements or that other proposed products that may be
developed by Biora will be able to satisfy the current or future
requirements and regulations of applicable regulatory authorities. There
can be no assurance that government regulations applicable to the Company's
products or the interpretation of those regulations will not change, and
thereby prevent Biora from marketing some or all of its products
temporarily or permanently, the occurrence of which could have a material
adverse effect on Biora's business, financial condition, prospects and
results of operations. See "Government Regulation."


THE TESTING, MARKETING AND SALE OF HUMAN HEALTH CARE PRODUCTS ENTAIL AN
INHERENT RISK OF ALLEGATIONS OF PRODUCT LIABILITY, AND THERE CAN BE NO
ASSURANCE THAT PRODUCT LIABILITY CLAIMS WILL NOT BE ASSERTED AGAINST BIORA.

The testing, marketing and sale of the Company's products involve an
inherent risk of product liability claims. The Company has purchased
product liability insurance that covers all of its products. Specifically,
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 Company's insurance policies also contain 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.


BIORA'S CONTINUING OPERATIONS MAY NOT GENERATE SUFFICIENT CAPITAL AND THE
COMPANY MAY BE REQUIRED TO UNDERTAKE ADDITIONAL FINANCING, THE TERMS AND
SUCCESS OF WHICH CANNOT BE ASSURED.

Although Biora anticipates that revenue from sales of EmdogainGel and its
current cash balances will be sufficient to finance the Company's
operations through at least the end of 2002, there can be no assurance that
the Company will not require additional financing. However, while the
Company believes that current trends in its revenues and costs support that
the Company will break-even from a cash flow perspective without requiring
additional financing, there can be no assurances that such trends will
continue. At its annual meeting in May 2001, Biora's shareholders
authorized the Company's board of directors, if deemed necessary and on
market conditions, to increase the Company's share capital by a maximum of
SEK 220,l00 through a new share issue of up to 5,500,000 shares at a
nominal value of SEK 0.04. In accordance with this authorization, the
Company completed in August, 2001 a new share issuance of SEK 26.5 million,
which improved the Group's cash balance by SEK 25.0 million net of issuing
expenses paid. In addition, the Company's cash position increased by
net SEK 7.6 million through the licensing of an R&D project. Biora's future
liquidity and capital requirements and its revenue and cost structure will
depend upon numerous factors, including the extent to which EmdogainGel
continues to gain market acceptance, the timing and cost involved in the
clinical testing of and obtaining regulatory approval for its other
products and projects under development, as well as the cost and success of
the Company's strategy to find partners for Biora BioEx projects.


A SIGNIFICANT PART OF BIORA'S BUSINESS IS CONDUCTED THROUGH INTERNATIONAL
SALES AND OPERATIONS.

Biora intends to continue to sell its products throughout the world,
principally in Western Europe, the United States and Japan. A number of
risks are inherent in international transactions. International sales and
operations may be limited or disrupted by the imposition of governmental
controls, regulation of medical devices and products, political
instability, trade restrictions, changes in tariffs, and difficulties in
managing international operations. There can be no assurance that
regulations, geopolitical factors and other factors will not adversely
affect Biora's business, financial condition, prospects and results of
operations.


BIORA HAS NOT PAID DIVIDENDS, NOR DOES IT INTEND TO FOR THE FORESEEABLE
FUTURE.

Biora has not paid any cash dividends on the Ordinary Shares since its
inception. Furthermore, Biora does not anticipate paying cash dividends in
the foreseeable future.

The Company currently intends to retain future 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 ($718,665)
through the conversion of outstanding loans, including accrued interest,
made to Biora in the aggregate principal amount of SEK 7,160,419 ($685,207)
and accrued interest of SEK 349,633 ($33,45). 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.


ITEM 4. INFORMATION ON THE COMPANY

BUSINESS OF BIORA

4.A. History and Development of Biora

Biora AB (publ) is a public company, with indefinite life, incorporated
under the laws of the Kingdom of Sweden on December 16th, 1986. The address
of the Company's registered office is SE 205 12, Malmo, Sweden, Telephone
Number +46-40-32 13 33.

Biora has one class of stock-ordinary shares and has 23,753,800 of such
ordinary shares outstanding as of May 31, 2002. Biora conducted an initial
public offering of 7,475,000 of its ordinary shares in February 1997. These
shares are listed on the "O-list" of the Stockholm Stock Exchange in Sweden
and are quoted on the OTC Market (in the form of American Depositary Shares
("ADSs") ) in the United States.

The Company's principal capital expenditures for the past three years
include patent applications SEK 1.7 million 2001 ($0.2 million) for 2001,
SEK 3.6 million ($0.3 million) for 2000, and SEK 1.0 million ($0.1 million)
for 1999.

4.B. Business Overview

         Biora develops, manufactures, and markets biology-based products
and its objective is to be the market leader within the field of
biology-based products that provide improved solutions to dentists in the
treatment and care of their patients. The Company's primary sales target
groups are specialists in the field of periodontology and dentists who
treat patients with periodontal disease. At December 31, 2001, Biora had a
total of 83 employees. The corporate headquarters is located in Malmo,
Sweden and the two largest subsidiaries are in the United States and in
Germany. Biora has built its business on enamel matrix proteins and
Emdogain(R)Gel, the Company's principal product, is developed from this
technology platform. Enamel matrix proteins play an important role in tooth
development and in the formation of tooth-supporting structures. By coating
the surface of an exposed dental root with EmdogainGel during periodontal
surgery, new tooth-supporting structures are formed. By the end of 2001,
EmdogainGel had been launched in approximately 25 countries. During 2000
the Company began focusing more on its existing customers in the key
markets (United States, Germany and Japan) with the greatest growth
opportunity. In Japan, Biora collaborates with its partner Seikagaku
Corporation. EmdogainGel was approved in Japan in January 2001. A new
product within the Emdogain family, EmdogainGel TS, was launched in certain
markets during the fourth quarter of 2001. EmdogainGel TS provides dentists
with an improved solution for treating patients with wide periodontal
defects in the surrounding bone tissue. Research and development at Biora
focuses on developing novel proprietary products for the dental market and
on expanding the indications for EmdogainGel. Biora's subsidiary, BioEx,
was formed in the spring of 1999 in order to develop enamel matrix
protein-based products for indications outside the oral cavity.

         The Company believes that its present lead product, EmdogainGel,
offers its customers a more efficacious, cost-effective and convenient
solution to the treatment of defects caused by periodontal disease than
existing treatments. The key elements of the Company's strategy are to (i)
focus on key markets i.e. Germany, US and Japan, (ii) develop new
indications for EmdogainGel, (iii) license projects with non-dental
indications to partners, (iv) complement our existing product offering
through business development.

         Emdogain is an innovative treatment for defects caused by
periodontal disease based on findings relating to natural tooth development
made 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. EmdogainGel, 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. 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.

         American 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 and root planing. 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 the majority 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 e.g.
membranes, bone filling materials and EmdogainGel in approximately 15-20%
of the periodontal flap surgeries performed. In contrast to membranes and
bone filling materials, EmdogainGel offers a biology-based treatment of
periodontal defects with predictable results, rapid post-operative clinical
healing, little patient discomfort, ease of use and no increase in
treatment time. Consequently for these reasons, the Company believes that
periodontal specialists and patients will prefer EmdogainGel and use the
product more extensively than currently available treatments. In 1999, the
Food and Drug Administration (FDA) also 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 FDA
approval is for teeth in the "aesthetic zones", but Biora is currently not
marketing Emdogain for use in minimally invasive surgical techniques.

         Since its market launch Emdogain been delivered as two components,
one with the freeze-dried protein and the other with a solution, a "gel".
Before the original Emdogain is used the dentist had to mix both
components. To simplify use Biora developed a new formulation of Emdogain.
The product, EmdogainGel, is stabilized as a pre-mixed gel and filled in a
syringe and offers the dentists a simplified solution, which is easy to use
and saves time. EmdogainGel was launched in Europe during the second
quarter of 2000, in the US during the first quarter 2001, and in Japan
during the first quarter 2002, following the approval by MHW in December
2001. EmdogainGel has today replaced the original Emdogain in all markets.

         Biora markets EmdogainGel (i) through its own sales force in
Sweden, Norway and Finland (ii) through wholly-owned subsidiaries in the
United States and Germany (covering Austria as well), and (iii) through
distributors in Denmark, Canada, Japan, Italy, Israel, France, Spain,
Portugal, Greece, the Czech Republic, Poland, Mexico, Puerto Rico, Brazil,
Colombia, South Africa, Taiwan, Korea and Switzerland. Biora's
International Customer Service is responsible for customer service in the
Nordic Countries, the BeNeLux countries (the Netherlands, Belgium and
Luxemburg) and the United Kingdom.

         Given the relatively small number of periodontal specialists and
the need for a highly specialized sales force, Biora markets and sells its
products through its own marketing and sales organization in United States,
Germany and in the Nordic Markets. In 2001, Biora continued to concentrate
its resources in two key markets, United States and Germany to increase the
penetration of EmdogainGel in these markets. In Japan, another key market
for EmdogainGel, the product was approved in December 2001. Since 1997, the
Company used a portion of the net proceeds received from the Company's
initial public offering of Ordinary Shares (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 especially in the United States, Germany and Japan
(through Seikagaku Corporation). Currently, EmdogainGel is sold through
Biora AB and subsidiaries in 9 countries and through distributors in an
additional 19 countries. The Company estimates that approximately 400,000
patients have been treated with Emdogain or EmdogainGel worldwide as of
March 2002, as compared to 250,000 patients as of December 31, 2000. In
December 2000, a distribution agreement was signed for Switzerland. At the
end of 2001, Biora signed a distribution agreement with Dental Trey in
Italy.

         As of December 31, 2001 approximately 3000 American periodontists
have bought Emdogain/ EmdogainGel at least once since its introduction.
Biora's penetration of the U.S. market was 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 articles on Emdogain in The Journal of Clinical
Periodontology in September 1997 and through 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 remains the Annual Meeting of the American Academy of Periodontology.

         Germany is at present the biggest market for Emdogain in Europe.
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
2000, Biora GmbH sales decreased by 13 percent over 1999. A lack of
managerial focus caused the stagnation of sales in the German market and
local management was removed. After a period of refocus, new strategic
direction and education of the sales force, a new General Manager was
appointed in June 2000. Sales in 2001 amounted to SEK 23.9 million, an
increase of 42 percent in SEK and 31 percent in local currency compared
with 2000.

         Biora began marketing Emdogain in 1996 through its own sales force
in Sweden and via a wholly owned subsidiary in Germany. As of April 30,
2002, Biora's penetration in percent of the estimated total number of flap
surgeries performed in each of the markets was approximately ten percent in
Sweden and approximately eight to ten percent in Germany. In Sweden,
approximately 90 percent of the approximately 500 specialist and
"perio-aware" customers in the country that treat advanced periodontitis
have purchased Emdogain.

         Biora is also developing other indications for EmdogainGel,
primarily for the U.S. market. The Company is also involved in projects
aimed at developing novel biology-based products based on its enamel matrix
protein technology. 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. Biora
BioEx was formed in the Spring 1999 when international patent applications
for wound healing with matrix proteins were being submitted. The intention
was that Biora BioEx would develop products or indications outside the oral
cavity. During 2000, the Swedish Industrial Development Fund granted a
conditional loan of SEK 15 million to finance one of the projects within
BioEx - the wound-healing project. The wound-healing project outside the
oral cavity was licensed to Molnlycke Health Care in December 2001. The
loan from the Swedish Industrial Development Fund was repaid at the same
time. The Company intends to divest or seek collaboration with other
companies for projects within BioEx. Biora's ability to sell or find a
partner for one or several projects within BioEx on terms and conditions
favorable to the Company depend on the availability of interested
buyers/partners and other market conditions. If these efforts are not
successful, alternative strategies will be considered.

         Biora's ongoing projects are at various stages of development.
Some of the projects listed below have recently been completed.

         New dental products/indications

         --       The Company has recently completed a series of clinical
                  studies using Emdogain to improve the result in patients
                  with exposed root surface (recession defects). Many
                  people lose part of the gum on the front side of the
                  teeth, for example due to an inflammation or an improper
                  tooth-brushing technique. These gum defects often cause
                  increased sensitivity and shooting pains in the teeth.
                  The Company plans to submit an application to the FDA for
                  this indication.

         --       The Company has been completed a series of studies in
                  dental trauma in order to further strengthen the
                  documentation of this indication. The dental trauma
                  indication is approved in Europe, Canada and Brazil. The
                  Company has at present no plans to submit an application
                  of this indication to the FDA.

         --       The Company has recently completed a series of studies
                  with Emdogain to investigate the possibility of using
                  Emdogain in patients with severe periodontal defects
                  between the dental roots, so-called furcation
                  involvement, in a molar with several roots. The Company
                  plans to submit an application to the FDA for this
                  indication.

         --       The Company has initiated a new project aimed at the
                  development of a new product for endodontic therapy
                  (treatment of the dental pulp). When a dentist removes
                  infected hard tissue during treatment for caries, the
                  dental pulp is often exposed, with injury to the pulp as
                  a result. In repeated pre-clinical studies Emdogain has
                  been shown to stimulate formation of hard tissue bridges
                  over the pulpal wounds. During the latter part of 2001, a
                  phase 1 study was initiated to gain additional data for
                  this indication.

         --       Dry mouth (xerostomia) 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 have 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. During the first quarter 2001, Biora
                  entered into a license agreement with a British
                  biomedical development company, Medpharma, under which
                  Biora retains the right to develop and market the product
                  to dentists, while Medpharma receives the right to
                  develop and market the product to target groups outside
                  the dental area. Under the agreement Biora receives a
                  number of installments as well as a royalty based on
                  future sales once the drug has been introduced to the
                  market. Biora and Medpharma will collaborate and share
                  development costs for the project up to and including
                  early clinical tests (phase II). The agreement covers
                  the entire world, except Japan. The project is in a phase
                  I study.

         --       Last year the Company also initiated a project aimed at
                  developing a new enamel matrix based product to reduce
                  pain and discomfort following scaling and root planing of
                  periodontal pockets in patients with mild periodontitis.
                  This project was terminated during Q1 2002 due to the
                  result of a phase II study, which was unable to
                  demonstrate clinical significance in the efficacy
                  parameters compared with conventional treatment.

                  New non-dental projects

         --       The Company submitted a patent application for wound
                  healing with matrix proteins in 1998 (the XP11 project),
                  and pre-clinical studies started in 1998. During
                  2000 the Swedish Industrial Development Fund granted a
                  conditional loan of SEK 15 million to finance the
                  wound-healing project outside the oral cavity. The
                  project was licensed to Molnlycke Health Care in December
                  2001. The license agreements provides Molnlycke the
                  exclusive rights to develop and market the wound-healing
                  product worldwide excluding Japan. Biora received a lump
                  sum of SEK 10 million as well as the right to a number of
                  payments when certain defined goals are achieved. In
                  addition, Biora will also receive a royalty payment from
                  each sale of the wound-healing product. This project is
                  now in an early phase III study.

         --       In pilot studies Biora has found that certain enamel
                  matrix proteins stimulate local formation of hard tissue
                  formation. The MATRIX project focuses on identifying new
                  matrix protein-based products for selective growth of
                  hard tissue such as dentin and bone. Biora, together with
                  four European University Research Groups specializing in
                  matrix bio-mineralization, has been awarded a EURO 2.5
                  million research grant over four years from the European
                  Commission. The aim is to perform a proof-of-principle
                  study of one candidate product within that time frame.

         --       Finally, cell studies show that growth of certain cancer
                  cells (carcinoma) are inhibited by Emdogain. The discovery
                  is supported by the knowledge of Emdogain's mechanism of
                  action that Biora has previously reported, which is, that
                  Emdogain promotes growth of connective tissue cells while
                  certain epithelial cell experience so-called programmed
                  cell death. Biora has submitted two applications for
                  global patent protection for the discovery. No clinical
                  study has yet started.

Periodontal Disease and Conventional Treatment

         Periodontal disease is caused by a bacterial infection, which
affects the soft and hard tissues surrounding the tooth. 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. Locally applied
antibiotics are used to control the bacterial infection. Effective
treatment of severe periodontitis with defects affecting the tooth
attachment tissues 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 jawbone and cushions the tooth; and the jawbone,
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 scaling and root planing. Scaling and root
planing 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 jawbone 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 jawbone 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 jawbone 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, open gaps between teeth
and increased sensitivity in the 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.

RESEARCH & DEVELOPMENT

         The emphasis on research and development within Biora continues
both in the search for new novel proprietary biologically based products
and to develop EmdogainGel for use in treatment of other diseases in the
mouth. The emphasis during 2001 was on research projects that support the
use of EmdogainGel.

         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 2002, the Company will be able to submit a registration
file to the FDA for the indications recession type defects and furcation
(periodontal defects between the dental roots and to launch the indication
later during this year or early next year. Two new projects were initiated
during the fourth quarter 2000; (i) new product for endodontic therapy
(treatment of the dental pulp) and (ii) wound healing in conjunction with
scaling and root planing procedures. This latter project was terminated
during the first quarter 2002 due to the result of a phase II study that
was unable to demonstrate clinical significance in the efficacy parameters
compared with conventional treatment. The subsidiary Biora BioEx AB was
established to perform research regarding indications outside the mouth,
for example wound healing and local bone formation. During 2000, the
Swedish Industrial Development Fund granted a conditional loan of SEK 15
million to finance the wound-healing project. In December 2001, Biora
licensed the BioEx wound-healing project outside the oral cavity to
Molnlycke Health Care. The loan to the Swedish Industrial Fund was repaid
in conjunction with this agreement.

         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:

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

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

         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 and ongoing projects under development

         The Company currently has two products approved for marketing
(EmdogainGel/EmdogainGel TS and PrefGel) and ongoing projects aimed at
developing new indications or new products. Biora developed Emdogain during
the period from 1988 to 1995 and the Company intends to expand the usage of
EmdogainGel by developing and commercializing new product line extensions
as well as new indications for EmdogainGel. 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. Another product under
development is the xerostomia-project to treat dry mouth.

         The Company's two approved products and projects under development
and their respective applications/indications and status are shown in the
following table. With respect to the projects 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>

-----------------------------------------------------------------------------------------------------------------------
                                                                                Status
Products and New                                            -----------------------------------------------------------
Indications Under            Indication
   Development                                                 United States                  Rest of World
-----------------------------------------------------------------------------------------------------------------------

<S>                         <C>                             <C>                           <C>
Emdogain                    Topical application for the     FDA approval(1) obtained      European approval (the "CE
                            regain of tooth attachment      in September 1996;            Mark") received in June
                            lost to periodontal             marketing commenced in        1995, marketing commenced in
                            disease                         commenced second quarter      Europe in 1996; Japanese
                                                            of 1997                       approval received in January
                                                                                          1998, marketing commenced in
                                                                                          April 1998. Biora's partner
                                                                                          in Japan recalled the
                                                                                          product in November 2000 in
                                                                                          order to follow the
                                                                                          guidelines from regulatory
                                                                                          authorities.

-----------------------------------------------------------------------------------------------------------------------
EmdogainGel                 New formulation of Emdogain     Application submitted to      European approval in March
                            packaged in a ready-to-use      FDA in March 2000. FDA        2000. Launch in June 2000.
                            syringe                         approval in January 2001      Approval in Japan during
                                                            and launch in February        December 2001 and launch in
                                                            2001.                         March 2002.

-----------------------------------------------------------------------------------------------------------------------
EmdogainGel TS              EmdogainGel combined with a     Not available.                Approved in all EU markets.
                            synthetic bone graft                                          Launched in Germany, Italy
                            material which offers                                         and the Nordic Markets
                            additional tissue support                                     during Q4, 2001.

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

-----------------------------------------------------------------------------------------------------------------------
 Emdogain Recession         New indication of Emdogain      Submission of registration    Result from European study
 type defects               as a local application to       file to FDA planned during    did not demonstrate
                            treat receded gums              the second or third           significant improvement in
                                                            quarters 2002.                the soft tissue covering
                                                                                          the exposed root surface.
                                                                                          Biora has at present no
                                                                                          plans to submit this
                                                                                          indication to markets
                                                                                          outside the U.S.

--------------------------------------------------------------------------------------------------------------------
 Emdogain Trauma            New indication of Emdogain      Clinical trials to further    Approved indication in
 avulsed teeth)             for the regain of tooth         strengthen the                Europe, Canada and Brazil.
                            attachment in connection        documentation began in        Market launch in June 2000
                            with reimplantation of          1999 in Canada. The study     at an International Trauma
                            avulsed teeth                   was completed end of 2001.    Convention in Oslo.
                                                            No plan to submit an FDA
                                                            registration file for this
                                                            indication.

-----------------------------------------------------------------------------------------------------------------------
 New Enamel Matrix          Local application of a new      N/A                           A phase II study was completed
 Protein based product      EMP based product for                                         during Q1, 2002. The study
 for wound healing in       reducing patient discomfort                                   was unable to demonstrate
 conjunction with           and improving wound healing                                   clinical significance in the
 scaling and root           in conjunction with scaling                                   efficacy parameters compared
 planing (XP11)             and root planing procedures.                                  with conventional therapy.
                                                                                          The project has been terminated.

-----------------------------------------------------------------------------------------------------------------------
 New product for            New indication of enamel        N/A                           Pre-clinical studies show
 endodontic therapy         matrix protein-based                                          new dentin formation in
 (treatment of the          product to stimulate                                          pulp capping and
 dental pulp)               formation of hard tissue                                      pulpotomy. A phase I
                            bridges to protect the                                        study was initiated during
                            dentalpulp                                                    the latter part of 2001.

-----------------------------------------------------------------------------------------------------------------------
 Xerostomia project         Local application to treat      N/A                           The development of a
     (dry mouth)            dry mouth disease.                                            formulation is in final
                                                                                          phase and a phase I trial
                                                                                          is ongoing.

-----------------------------------------------------------------------------------------------------------------------
Emdogain - Non surgical     Subgingival application of      Clinical trials started       Pilot studies commenced in
cleaning of the dental      Emdogain to achieve             second half of 1999.          1997. Clinical studies
root                        periodontal regain without      Approval received by FDA      ready 2001. The results
                            surgical intervention.          as Minimally Invasive         show that Emdogain has no
                                                            Surgery in 1999.              significantly improved
                                                                                          effect on regeneration of
                                                                                          bone and tooth supporting
                                                                                          tissues compared to
                                                                                          traditional treatment of
                                                                                          these mild defects. The
                                                                                          studies confirmed the good
                                                                                          wound healing features of
                                                                                          Emdogain.
                                                                                          No plan to submit a
                                                                                          registration application
                                                                                          for this indication.

-----------------------------------------------------------------------------------------------------------------------
Emdogain WT                 New indication of Emdogain      Further studies in this       Clinical trials in Sweden
                            for the treatment of damage     indication have been          completed in 1999. Results
                            caused by complicated           deferred since results        not conclusive. Positive
                            extractions of wisdom           from Swedish trials not       effect on wound healing.
                            teeth                           conclusive.                   Further studies in this
                                                                                          indication have been
                                                                                          deferred.
-----------------------------------------------------------------------------------------------------------------------
(1)      Specifically, the FDA-approved indication for use appearing on
         EmdogainGel's package insert reads as follows: EmdogainGel 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.
</TABLE>

         Under the XP11 project, Biora has submitted several patent
applications relating to new, positive biological effects of enamel matrix
proteins for wound healing in February 1998, and pre-clinical studies have
been performed in the Scandinavian countries (Denmark, Norway and Sweden)
since 1998. 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 continuous to investigate the
potential of this protein combination for use in dental surgery.

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
supporting tissues 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 a marked loss of
jawbone. In Biora's controlled clinical trials, adult patients with
periodontal disease who had lost most of the attachment achieved regain of
jawbone 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 is 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.
EmdogainGel has now replaced Emdogain (vials) in all markets.


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
whether 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 to use
during invasive oral surgical procedures.


EmdogainGel

         EmdogainGel is a stabilized formulation of Emdogain dissolved in
the vehicle (gel). 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 EmdogainGel is simpler and more
user-friendly than Emdogain, enhancing the appeal of the product to
practitioners, especially in "first-use" situations. The Company has
received approval in Europe and in the US to market Emdogain Gel. Biora has
conducted clinical trials in Europe, which were completed in the beginning
of 1999. Emdogain Gel has been launched in Europe during April - June 2000
and in February 2001 in the US. In Japan, Emdogain Gel was submitted to the
regulatory authorities during Q1 2001 and was approved in December 2001.


EmdogainGel TS

         EmdogainGel TS is a new product that complements EmdogainGel and
provides the dentist with an improved solution for treating patients with
wide periodontal defects in the surrounding bone tissue. By combining
EmdogainGel with a synthetic bone graft material (PerioGlas) the
regenerative capacity of EmdogainGel is maintained and additional support
is provided to the surrounding soft tissues in order to achieve a superior
aesthetic outcome for those types of defects. An agreement between Biora
and USBiomaterials gives Biora the distribution rights to a product that
combines EmdogainGel with PerioGlas. The EmdogainGel TS agreement is for
the whole world except for North America. The product is approved for EU
markets and the product was launched in Germany, Italy and the Nordic
Markets during Q4, 2001. EmdogainGel TS is currently not avialable in the
United States.


Emdogain - Recession Type Defects

         Biora is developing a new indication of Emdogain as a local
application to treat receded gums. The Company plans to submit a
registration file to the FDA during the second or third quarter 2002. 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", are often caused by gum inflammation or incorrect or excessively
hard tooth brushing. Biora has been 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 better results
when conducted in conjunction with the use of Emdogain. Biora started
clinical trials in the United States in 1999 for this indication. Two
different study designs were used in Europe and the United States due to
traditional differences in the treatment of recession defects. Results from
Europe demonstrated a more rapid healing of soft tissues and less pain and
discomfort with Emdogain compared to conventional therapy. However it was
not possible to demonstrate significant improvement for the soft tissue
covering the exposed root surface. Results from the study design used in
the United States showed that treatment with Emdogain provided clear
advantages and also resulted in a more rapid soft tissue healing compared
to the control. As a result, FDA submission is expected in 2002.


Emdogain Trauma (avulsed teeth)

         Biora is developing a new indication of Emdogain for the regain of
tooth attachment in connection with re-implantation of avulsed 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 was launched in the European and Canadian
markets during International Trauma Convention in Oslo in June 2000.
Further studies have been completed. Biora has at present no plans to
submit a FDA application for this indication.


New Enamel Matrix Protein based product for wound healing in conjunction
with scaling and root planing

         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 were 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. 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 these new
findings in cooperation with the dental schools in Oslo in Norway,
Gothenburg in Sweden and Ulm in Germany, and with the dental school ACTA in
Amsterdam.

         At the end of last year, Biora commenced a project with a new
product based on enamel matrix protein with a potential for a positive
effect on soft tissue healing. A formulation of this product was developed
and a phase II study was initiated in the middle of 2001. The study was
completed during Q1, 2002. The study was not able to demonstrate clinical
significance in the efficacy parameters compared with conventional
treatment and thereforethe project has been terminated.


New product for endodontic therapy (treatment of the dental pulp)

         Biora is presently developing an enamel matrix protein-based
product for use in connection with endodontics. When the dentist removes
infected hard tissue during treatment for caries the dental pulp is often
exposed, with injury to the pulp as a result. In repeated pre-clinical
studies Emdogain has been shown to stimulate formation of hard tissue
bridges over the pulp wounds. During the latter part of 2001, a phase I
study was initiated to gain additional data for this indication. The study
is still ongoing.


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.

         During the first quarter 2001, Biora entered into a license
agreement with a British biomedical development company, Medpharma, under
which Biora retains the right to develop and market the product to dentists
while Medpharma receives the right to develop and market the product to
target groups outside the dental practice area. Under the agreement Biora
receives a number of installments as well as a royalty based on future
sales once the drug has been introduced to the market. Biora and Medpharma
will collaborate and share development costs for the project up to and
including early clinical tests (phase IIa). The license agreement covers
the entire world except Japan.


Emdogain -  Non-surgical cleaning of the dental root

         Emdogain was approved in 1999 in the U.S. as an adjunct treatment
in minimal invasive periodontal surgery in the aesthetic zones i.e. in the
area of the front teeth. 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. In June 2001 Biora completed two European clinical
studies concerning Emdogain's effect in treating mild periodontitis without
surgical intervention. The patients in these studies had shallow pockets.
After scaling and root planing, Emdogain was placed directly into the
periodontal pocket. The result showed that Emdogain had no significantly
improved effect on the regeneration of bone and tooth supporting tissues
compared to traditional treatment of these mild defects. The studies
confirmed the wound healing features of Emdogain. Biora has at present
no plans to initiate new studies in this indication.


Emdogain WT

         Emdogain WT involves the use of Emdogain for a new indication -
complicated wisdom tooth extractions. Through evolutionary processes
jawbones 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 showing primarily positive effects on
the healing of the wound, further studies of this indication are required.
These studies have been deferred as priority has been given to other
indications.


Research and Development Organization and Collaborative Agreements

         Biora's present 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, 2002, Biora employed fourteen
biochemists, five of which 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 and U.S.A.

         The Company's expenditures on research and development, including
expenditures related to clinical trials and costs in connection with
product approvals, amounted to SEK 32.7 million ($3.1 million), SEK 32.2
million ($3.1 million) and SEK 25.9 million ($2.5 million) in 1999, 2000
and 2001, respectively. A significant part 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 (Centre of Oral Biology), 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 organization support from his position as Chairman
of the Biora Scientific Advisory Board. 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, 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 wound healing in
February 1998, and supplementary information from pre-clinical studies were
added to final application in February 1999 under the wound healing project
and clinical studies started 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. 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 has been involved in 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. The
contract with Professor Cochran came to an end during year 2001.

         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. Biora has
adopted a quality policy that states the Company shall manufacture products
that meet requirements of the appropriate authorities, including Good
Manufacturing Practice (GMP) and Quality System Regulation (QSR). For
manufacturing and marketing EmdogainGel in EU, Biora complies with "Medical
Device Directive 93/42EEC and quality systems ISO9002/EN46002.

         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."


BUSINESS STRATEGY

BIORA develops, manufactures and sells biology-based products to enable
dentists to restore and improve the oral health and esthetics for their
patients. Biora will generate value for its customers by providing quality
products and services and through long term sales and profit development
create shareholder value.

Objectives

Biora's goal is to be a market leader within the field of biology-based
products that provide improved solutions to dentists in the treatment and
care of their patients.

EmdogainGel - Biora's principal product

EmdogainGel, a further development of Emdogain which offers a simpler and
less time consuming treatment, is Biora's principal product and the
platform on which Biora will continue to build its business. The product
offers dentists a ready mixed product, which similar to Emdogain,
regenerates a natural tooth supporting structure. EmdogainGel was launched
in Europe during June 2000 and has had a positive reception from dentists.
A registration of Emdogain Gel in the U.S. was received in January 2001 and
in Japan in December 2001.

Focusing on key markets

The U.S. and Germany together made up for more than 75 per cent of Biora's
total sales during 2001. In the U.S. and Germany, Biora has marketing
organizations to effectively cultivate its target groups. These marketing
companies will also able to market and sell other products from Biora's
future product portfolio. In Japan, EmdogainGel is marketed and sold by
Biora's Japanese partner, Seikagaku Corporation. Biora desires to secure a
leading position in these three key markets and continue to increase sales
through the use of partners in markets which have a strong sales growth
potential.

Focusing on established customers with large sales potential

Experience from Emdogain and EmdogainGel sales shows that customers who
learn to use the product correctly and who have used it repeatedly are
satisfied with the results of treatment. Biora's selling and marketing goal
is to increase existing client's use of EmdogainGel. Biora will attempt to
increase the use within the existing customer-base through a more customer
focused strategy and by expanding the indications for EmdogainGel.

Focusing on new indications for EmdogainGel

Research and Development within Biora will be concentrated on product line
extensions and dental indications that can be expected to expand the use of
EmdogainGel such as recession type defects and furcation (both indications
primarily for the U.S. market). R&D at Biora will also concentrate on
developing novel proprietary products for the dental market.

Licensing projects outside the dental indications to partners

As a step in focusing the business, Biora intends to license or find an
alliance partner for projects within Biora BioEx, that is, that part of the
R&D portfolio that is directed towards products within non-dental
indications. Several interesting indications for enamel matrix proteins,
such as, wound healing and stimulation of bone formation, are included in
BioEx portfolio as well as the patent application relating to inhibition of
certain cancer cells based on early cell studies. The wound-healing project
outside the oral cavity was licensed to Molnlycke Health Care in December 2001.

Business Development

In order to take advantage of Biora's marketing and sales resources in
Biora's marketing subsidiaries, Biora is actively seeking new products
within dental indications. Biora acquired the rights to a patent protected
pharmaceutical project against dry mouth. In order to maximize the market
potential for this product a licensing agreement was signed in March 2001
with Medpharma, an UK company, regarding the rights to Biora's
xerostomia project. Medpharma will market and sell this product to target
groups other than dentists. In June 2001, Biora also signed an agreement
related to a product line extension of EmdogainGel (EmdogainGel TS) for all
markets outside the oral cavity. EmdogainGel TS complements EmdogainGel and
provides dentists with an improved solution for treating patients with wide
periodontal defects in the surrounding defects.

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.
Advanced destruction affects about one in eight and the disease increase
with age, reaching a prevalence of over one-third among people aged over
55. 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 more than 50% 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 EmdogainGel 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. In Germany, the
target group for EmdogainGel is perio-aware General Practitioner dentists.
Both Japan and the Nordic Markets have been specialty markets but a growing
numbers of dentists are now specializing in Periodontology.

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. Given the
relatively small number of periodontal specialists and the need for a
highly specialized sales force, Biora markets and sells its products
through its own marketing and sales organization in the U.S. market. 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 sells EmdogainGel to periodontal specialists in Europe
at an average price of approximately Euro 150 per unit for a multi defect
size (0.7 ml) (sufficient for the treatment of three defects) and Euro 125
per unit for a single defect unit (0.3 ml). In the United States and Japan
the price of EmdogainGel is somewhat higher than in Europe. 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 EmdogainGel 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 after treatment. Positive results with ten year and eight
year data were presented at the Europerio Exhibition in Geneva in June 2000.

         Based on a telephone interview in 2001 made by GFK on behalf of
Biora with 219 periodontists in the United States, Germany, Italy and the
Nordic Markets, EmdogainGel meets the practitioners' key factors for
choosing a regenerative therapy i.e. regeneration capacity,
complication-free wound healing and extensive documentation. The most
frequently mentioned reason for using EmdogainGel is the favorable results
based on personal clinical experience.


Biora.com and ICC

         With the launch in June 2000 of Biora.com, Biora has been creating
an interactive Internet service. The goal is to create an effective
communication channel for existing and new customer groups over the
Internet. Registered specialists can use Biora.com to request clinical
information, professional articles regarding Biora's products and
information regarding surgical techniques. With Biora.com, Biora's goal is
to improve total customer service in a cost-effective way.

         In November 2000, Biora opened its International Customer Center
(ICC). This center provides Biora's customers with an improved service
by, among other things, enabling customers in markets where Biora does not
have its own market organizations to order EmdogainGel directly and to have
the product delivered to their offices.


Europe

         Germany is at present the biggest market for EmdogainGel in
Europe. The number of dentists who perform surgical interventions to treat
periodontitis on a more regular basis are about 8,000. Sales in Germany
began in 1996. Sales during the first half year 2000 were under
expectation, which resulted in a change of management in the German
subsidiary. The marketing approach has changed from simply adding new
customers to a strong customer focus and a systematic approach on
increasing use within the existing customer base. Sales in 2001 amounted to
SEK 23.9 million ($2.3 million), an increase of 42 percent in SEK and 31
percent in local currency. The number of customers in Germany year 2001 was
approximately 3,100.

         The Company has established a sales force to cover the Nordic
market (Norway and Sweden). Biora's Nordic operation, which commenced
marketing Emdogain in Sweden in 1996, currently has three employees (of
which two are sales representatives). In Sweden, approximately 90 percent
of the 500 specialist and perio-aware customers in the country that treat
advanced periodontitis have purchased EmdogainGel at least once. The
customer base is now increasing with general dentists performing
EmdogainGel treatment. Biora's penetration in Sweden is approximately 10
percent of all flap surgery procedures performed. The current increase in
Biora's customer base in Sweden is to a large extent based on the increase
of general dental practitioners who perform flap surgery. In all of the
Nordic countries, Biora continues to focus its marketing efforts on
increasing usage of EmdogainGel among periodontists and general dentists
specializing in periodontology through participation in specialist
conventions, seminars and educational programs together with universities
with dental programs.

         In order to focus on the key markets, Biora has also reduced its
sales organization in other European markets. The UK Market Company closed
its offices in February 2000 and the BeNeLux Market Company closed its
offices during the beginning of year 2001. At the end of 2001, Biora signed
a distribution agreement with Dental Trey for coverage of the Italian
market. Dental Trey is one of the largest dental product distributors in
Italy. Biora's managing director in Italy will work closely with Dental
Trey to provide marketing and sales support. Customer service and
distribution of products are managed from the International Customer Center
in Malmo (ICC). Biora entered into a new distributor agreement for Poland
during 1999 and a distribution agreement with Globopharm for Switzerland
during Q4 2000.


North America

         Biora conducts sales and marketing operations in the United States
through its Chicago, Illinois-based subsidiary, Biora, Inc.  Christopher
Pallotto, serves as President of the U.S. subsidiary. During the fiscal
year 2001, Biora, Inc. had 27 employees.

         The market for the Company's products 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 during 2001 amounted to SEK 60.8 million ($5.8 million), an
increase of 39 percent in SEK and 23 percent in local currency compared
with 2000. As of December 31, 2001, approximately 3000 American
periodontists have bought Emdogain at least once since its introduction.
The number of customers for the year 2001 was approximately 2,100. Biora's
market share as a percentage of the total estimated flap surgery procedures
performed in the United States is approximately three to four percent.
Biora's penetration of the U.S. market was initially hindered by Emdogain
receiving less exposure than originally anticipated when it was launched in
April 1997 which was, partly as a result of delays in the publication of
reviews in industry journals. Biora believes that the continued strong
sales growth during year 2001 is a result of a more efficient regional
sales organization and a more focused sales strategy to increase the
product usage within the current customer base. In addition, EmdogainGel
has become more established due to the Company's continued presence at
scientific meetings and through publication of a number of articles about
the product in professional journals. 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.


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 the Japanese
market with respect to any other dental product developed by Biora. Biora
received an aggregate of $5 million from Seikagaku through September 1996
for entering into the Emdogain agreement. The agreement provided that
Seikagaku could, under certain circumstances, request Biora to refund the
$5 million payment in the event the MHW did not approve Emdogain for sale
in Japan by June 1999 and granted Seikagaku a security interest in Biora's
Japanese patent and trademark rights to secure such potential repayment
obligations. Consequently, Biora through the end of 1997, treated the $5
million as a liability. Biora submitted an application for the registration
of Emdogain with the MHW in September 1996, which was approved in January
1998. With theapproval from the MHW, the $5 million payment was recognized
as other operating income during the first quarter 1998. Marketing of
Emdogain in Japan commenced in April 1998. Under the agreement, Biora will
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 of Emdogain was made in March
1998. No filing for reimbursement of EmdogainGel TS has yet been made.
Seikagaku was responsible for costs relating to post-marketing studies of
Emdogain for the initial indication and for clinical trials to obtain
government approval for the sale of Emdogain for additional indications in
Japan.

         In November 2000, Seikagaku Corporation, Biora's marketing and
sales partner in Japan, recalled all deliveries of Emdogain to comply with
the registration authority's guidelines which required the same changes to
be made to the production process for deliveries to Japan as had previously
been implemented for other markets. Discussions with the Japanese
registration authority resulted in the decision to accelerate the
registration process for EmdogainGel. The application for registration of
EmdogainGel was submitted to the Japanese registration authority during the
first quarter of 2001 and the product was approved in December 2001. The
initial launch of EmdogainGel to key opinion leaders through a series of
seminars by Biora's partner took place in March 2002. The official
launch of EmdogainGel took place during mid April 2002 in conjunction with
The Japanese Association of Clinical Periodontology, one of the largest
congresses in Japan for dentists who treat patients with periodontal
disease. Biora's initial delivery of EmdogainGel to Seikagaku took
place during the first quarter 2002 and amounted to SEK 4.2 million.

         At December 31, 2000 approximately 1,100 periodontists and
dentists had bought Emdogain, of which approximately 500 had purchased the
product more than once. 27 of the 29 dental universities in Japan have
begun to use Emdogain in their training in 1999. Since EmdoaginGel was
launched in March 2002, it is too early to make an estimate of the number
of EmdogainGel customer in Japan.


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 distribution 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. EmdogainGel was launched in
Taiwan during 2001 and in Korea early 2002. Sales and marketing efforts
will start subject to regulatory approvals in each of these markets.


Third Party Reimbursement

         The Company's primary customers for Emdogain are, and for its
other products will be, periodontal specialists and perio-aware General
Practitioners. 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 EmdogainGel, 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
EmdogainGel 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
EmdogainGel treatment themselves. In Germany, several private insurance
companies have agreed to fully or partly reimburse patients for the cost of
treatment with Emdogain Gel.

         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. At present, EmdogainGel is not
reimbursed in Japan and there can be no assurance that reimbursement
approval will be obtained. 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."

4.C. ORGANIZATIONAL STRUCTURE

Biora AB is a public company incorporated in Sweden.

Significant subsidiaries are Biora Inc., in the US and Biora GmbH, in
Germany. Biora Inc. is incorporated in Delaware in the United States and
Biora AB owns 100% of its stock. Biora GmbH is incorporated in the Federal
Republic of Germany and Biora AB owns 100% of its stock.

4.D. PROPERTY, PLANTS AND EQUIPMENT

         The Company's executive offices and development, manufacturing and
testing operations are located in Malmo, Sweden under a lease expiring on
September 30, 2004. 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. The current period expires at the end of
September 2004. Under the terms of the lease, the total annual rent is
currently approximately SEK 3.0 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 was increased from
200,000 to 400,000 units of Emdogain per year. After completing the
conversion of the manufacturing process for EmdogainGel, the capacity has
increased to at least 600,000 units per year. The Company is currently
investigating the possibility of expanding the production capacity further
in its current manufacturing facility.

         The manufacturing process of the newly formulated EmdogainGel
includes out-sourcing of the filling of the syringes at Statens Serum
Institut (SSI) in Copenhagen, Denmark. The blister packaging and final
packaging is out-sourced to Orifice Medical AB, Ystad, Sweden.

         The Company has out-sourced the manufacturing and packaging of
PrefGel to Miwana AB, which is located in Gallivare, Sweden. Miwana AB is
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. 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. In 1994, the FDA inspected Biora's
plant and confirmed that the Company's quality control and manufacturing
procedures conformed to GMP. At an FDA-inspection (March 1997) the new
Quality System Requirement (QSR) was also applied, and no written comments
were received. In Q1 2000, the FDA made a pre-approval inspection for
EmdogainGel and in Q1 2002 the FDA made an inspection of Biora's facilities
as well as of the subcontractor's facilities. For an approval under the
EU's MDD ( Medical Device Directive) 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 (British Standard
Institution). 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."

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 jawbone 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 in Germany 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. 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, with the exception of the autogenous bone and DFDBA (
Demineralized Freeze Dried Bone Allograft), the use of bone replacement
graft will not result 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. In the
United States, the primary alternative for regenerative treatment is the
use of bone graft materials.

         The Company believes that EmdogainGel 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 EmdogainGel
because it causes less discomfort and has better healing characteristics
than existing adjunctive technique treatments and requires less chair time.

         Certain pharmaceutical companies, such as the Genetic Institute
(owned by Wyeth, Inc) 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 jawbone. 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 wound healing 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 400,000 patients (as of March 2002)
since selling began. The first rival 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 similarly exploited.

INTELLECTUAL PROPERTY

         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 April, 2002, the Company had been issued six U.S. patents,
four European patents, two Japanese patents and 77 patents in various other
countries. Biora is at present reviewing some of its older patents in low
priority markets. 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, 40 patents in
this family have been granted to the Company and one application is 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 nine patents in this family
including one in the U.S. and fourteen patents are still pending.

         Under the XP11 project, Biora submitted a patent application
relating to new, positive biological effects of Emdogain-related proteins
for wound healing in February 1998. Two patents have been issued and the
patent is also approved for grant in the U.S. and by European Patent
Office. Six 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. Three patents have been issued and 22 applications are pending.

         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.

         In 2000, Biora acquired a patent covering local use of
cholinesterase inhibitors in the treatment of xerostomia from scientists in
Gothenburg. The US patent has since been issued and the European patent was
granted in April 2002. Other applications are pending.

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 November 2001.
This contract will be automatically renewed by one year unless one party
notifies the other party at the end of each year. 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."

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 products approved for commercial distribution,
Emdogain/EmdogainGel 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. The Dental Devices Branch within the ODE reviews
dental devices.

         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
and EmdogainGel in January 2001. 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 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. However, in
November, 2000, Seikagaku Corporation, Biora's marketing and sales partner
in Japan, recalled all deliveries of Emdogain to comply with the
registration authority's guidelines which required the same changes to
be made to the production process for deliveries to Japan as had previously
been implemented for other markets. Discussions with the Japanese
registration authority have resulted in the decision to accelerate the
registration process for Emdogain Gel. The application for registration of
Emdogain Gel was submitted to the Japanese registration authority during Q1
2001 and was approved in December 2001.

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.


ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

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 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 EmdogainGel 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 EmdogainGel in North
America, the most important markets in Europe and in Japan. For its ongoing
R&D projects outside the core business, the Company intends to license or
co-develop them together with a partner. This business might contribute to
the Company's revenue in the future. The Company has sustained losses in
each year of its operations and expects to incur additional losses during
2002. The Company's loss from operations for the year ended December 31,
2001, was SEK 26,5 million ($2.5 million) as compared to SEK 78,7 million
($7.5 million) for the year ended December 31, 2000. This is due partly to
the increase in sales and partly to a decrease in operating costs together
with licensing revenue of SEK 15.0 ($1.4 million). Selling expenses were
reduced by SEK 1.4 million ($0.1 million) and research and development
costs were reduced by SEK 16.0 million ($1.5 million). The capitalized R&D
costs were completely amortized as of December 31, 2000. The reduction in
administration expenses from SEK 25.4 million ($2.4 million) to SEK 22.9
million ($2.2 million) is due to the fact that costs in connection with the
licensing of the wound-healing project were allocated to other operating
expenses for SEK 1.4 million ($0.1 million). The Company's loss from
operations for the first quarter of 2002 was SEK 1.0 million ($0.1 million)
compared to the loss from operations of SEK 9.0 million ($0.9 million) for
the first quarter of 2001.

         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
proceeds to the Company, after deducting underwriting discounts and
offering expenses payable by the Company, were SEK 372 million ($35.6
million). In August 2001, the Company issued 2,550,000 new shares at a
subscription price of SEK 10.40 per share. The Company's cash was increased
by net SEK 25.0 million ($2.4 million). The Company is using the net
proceeds received from the IPO and the 2001 share issue 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. Between 1993 and 1997
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. Capitalized
research and development costs were fully amortized at December 31, 2000.
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. See Notes 1 and 22 of Notes to the Consolidated Financial
Statements.

5.A. OPERATING RESULTS

YEAR ENDED DECEMBER 31, 2001 COMPARED TO YEAR ENDED DECEMBER 31, 2000

         Net sales for the year ended December 31, 2001 equaled SEK 110.7
million ($10.6 million), an increase of 24 percent over net sales for the
year ended December 31, 2000, which equaled SEK 89.2 million ($8.5
million). The increase is attributable to increased sales of EmdogainGel in
the United States and Germany as well as in certain distributor markets.

         Gross Profit equaled SEK 87.9 million ($8.4 million) for 2001
compared to SEK 68.0 million ($6.5 million) for the year 2000, an increase
of profit margin from 76.3% to 79.4% between the two periods.

         Loss from operations equaled SEK 26.5 million ($2.5 million) for
the year ended December 31, 2001 compared to an operating loss of SEK 78.7
million ($7.5 million) for the period ended December 31, 2000. This is
partly due to the increase in sales and partly to a decrease in operating
costs together with licensing revenue of SEK 15.0 ($1.4 million). Selling
expenses were reduced by SEK 1.4 million ($0.14 million) and research and
development costs were reduced by SEK 16.0 million ($1.5 million). R&D
costs for 2000 includes amortization of capitalized R&D amounting to SEK
10.5 million ($1.0 million). The capitalized R&D costs were completely
amortized as of December 31, 2000. Furthermore the R & D cost of
preclinical and clinical trials were reduced by SEK 2.1 million ($0.2
million), R & D travel cost were reduced by SEK 1.2 million ($ 0.1
million), R & D market support cost were reduced by SEK 0.7 million ($ 0.07
million) and other R & D cost reduction by SEK 1.5 million ($ 0.14
million). The reduction in administration expenses during 2001 from SEK
25.4 million ($ 2.4 million) to SEK 22.9 million ($2.2 million) is due to
that costs in connection with the licensing of the wound-healing project
was allocated to other operating expenses. Other operating income and
expenses SEK 12.3 million ($1.2 million) consists of installment payments
for two license agreements related to the development project for
xerostomia (dry mouth) SEK 5.0 million ($ 0.5 million) and for the lump sum
amount received from Molnlycke Health Care AB SEK 10.0 million ($1.0
million) reduced by royalty payments to Industrifonden SEK 1.2 million
($0.1 million) and administration costs associated with the licensing of
the wound healing project of SEK 1.4 million ($0.1 million).

         Net financial items equaled SEK 1.4 million ($0.1 million) for the
year ended December 31, 2001 as compared to SEK 2.7 million ($0.3 million)
for the same period in 2000. Net financial items are mainly interest on the
Company's cash and cash equivalents in 2001. The reason for the decrease is
that a lower average balance of cash and cash equivalents was available to
the Company.

         Net loss equaled SEK 25.1 million ($2.4 million) for the year 2001
as compared to a net loss of SEK 76.1 million ($7.3 million) for the year
ended December 31, 2000.

YEAR ENDED DECEMBER 31, 2000 COMPARED TO YEAR ENDED DECEMBER 31, 1999

         Net sales for the year ended December 31, 2000 equaled SEK 89.2
million ($8.5 million), an increase of 21 percent over net sales for the
year ended December 31, 1999, which equaled SEK 73.6 million ($7.0
million). The increase is attributable to increased of sales of Emdogain in
the U.S. market.

         Gross Profit equaled SEK 68.0 million ($6.5 million) for 2000
compared to SEK 58.1 million ($5.6 million) for the year 1999, a decrease
of profit margin from 79.0% to 76.3% between the two periods. The decrease
is explained by increased costs in connection with the initial
manufacturing of the product EmdogainGel.

         Loss from operations equaled SEK 78.7 million ($7.5 million) for
the year ended December 31, 2000 compared to an operating loss of SEK 91.8
million ($8.8 million) for the period ended December 31, 1999. The reduced
loss from operations is due to the restructuring of the European marketing
organization, which has produced lower selling expenses during the year
while sales have increased by 21%. The increase of the administrative
expenses from SEK 18.5 million ($1.8 million) to SEK 25.4 million ($2.4
million) resulted from different business development projects as well as
severance pay compensation to Tomas Hammargren, the president of Biora
until mid-2000. R&D costs have decreased by about 2% after deduction for
depreciation of capitalized R&D.

         Net financial items equaled SEK 2.7 ($0.3 million) for the year
ended December 31, 2000 as compared to SEK 5.2 million ($0.5 million) for
the same period in 1999. Net financial items are mainly interest on the
Company's cash and cash equivalents in 2000. The reason for the decrease is
that a lower average of cash and cash equivalents were available to the
Company.

         Net loss after tax equaled SEK 76.1 million ($7.3 million) for the
year 2000 as compared to a net loss of SEK 86.7 million ($8.3 million) for
the year ended December 31, 1999. The reasons for this improvement are
described above.

5.B. 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 ($1.5
million)), and convertible debt securities (approximately SEK 3.0 million
($0.3 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 ($1.8
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 ($1.8 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 ($1.1
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 ($684,207), 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 had SEK
51.5 million ($4.9 million) in cash and cash equivalents at December 31,
2001 compared to SEK 53.8 million ($5.1 million) at December 31, 2000.

         The Company generated negative cash flow of SEK 2.3 million ($0.2
million) during the year 2001, resulting in a decrease of cash and cash
equivalents from SEK 53.8 million ($5.1 million) to SEK 51.5 million ($4.9
million). Negative operating cash flows amounted to SEK 25.5 million ($2.4
million), mainly reflecting the net loss of SEK 25.1 million ($2.4
million), net of non-cash depreciation and amortization charges of SEK 5.9
million ($0.6 million), and an increase in working capital of SEK 6.4
million ($0.6 million) principally attributable to the higher level of
sales recorded at the end of 2001 as compared to the end of 2000. Negative
cash flows from investing activities of SEK 1.0 million ($0.1 million),
reflecting capital expenditure of SEK 2.9 million ($0.3 million) and
proceeds from reimbursement of an employee loan of SEK 1.9 million ($0.2
million). Positive cash flows from financing activities of SEK 23.5 million
($2.2 million), due to the SEK 25.0 million ($2.4 million) proceeds from
issuance of shares (net of related expenses paid of SEK 1.5 million ($0.1
million)), the repayment of a SEK 2.4 million ($0.2 million) bank debt and
warrants premium received of SEK 0.9 million ($0.1 million).

         Biora's shareholders' equity equaled to SEK 55.9 million ($5.3
million) at December 31, 2001 as compared to SEK 50.9 million ($4.9
million) at December 31, 2000.

         Biora's capital expenditures net of proceeds from sales for the
year 2001 amounted to SEK 2.9 million ($0.3 million) compared to SEK 5.5
million ($0.5 million) for the full year 2000. The reason for the low
level of capital expenditure in recent years is that all major capital
expenditures for the present capacity level of production, as well as the
build up of sales offices, were mainly incurred in earlier years.

         Although Biora anticipates that revenue from sales of EmdogainGel
and its current cash balances will be sufficient to finance the Company's
operations through at least 2002, there can be no assurance that the
Company will not require additional financing. However, while the Company
believes that current trends in its revenues and costs support that the
Company will break-even from a cash flow perspective without requiring
additional financing, there can be no assurances that such trends will
continue. Biora's future liquidity and capital requirements and its revenue
and cost structure will depend upon numerous factors, including the extent
to which EmdogainGel gains further market acceptance, the timing and cost
involved in the clinical testing of and obtaining regulatory approval for
its projects under development and the success of the wound healing project
licensed to Molnlycke Health Care AB.

LONG-TERM FINANCIAL OBLIGATIONS AND OTHER COMMERCIAL COMMITMENTS

The Company leases certain plants and equipment in accordance with leasing
contracts that expire in the year 2005. All leases are operating leases.
The majority of the material leasing contracts concern the rental of
offices. The office rental agreements include conditions concerning
inflation index regulation of the rent and in some case regulation of the
rent due to increase in direct property expenses and taxes. There are
options to prolong all office rental agreements. Remaining leasing
contracts concern the leasing of cars, copying machines and other office
equipment. The total amounts of future minimum leasing commitments on
December 31, 2001 are listed below.

                Rental of
Year             offices       Other       Total
2002               4 430       1,642       6,072
2003               4 410       1,187       5,597
2004               1 206         279       1,485
2005                 429          30         459
              ----------- ----------- -----------
Total             10 475       3,138      13,613

The Company's other commercial commitments at December 31, 2001 include:

    o    The Company has entered into research and development agreements,
         agreements with sub-contractors and agreements concerning
         purchases of other services. The total amount of future expense
         commitments on December 31, 2001, pertaining to these agreements
         are SEK 6,713 thousands for 2002 and SEK 278 thousands for 2003 or
         in total SEK 6,991 thousands.
    o    From 1989 to 1992, Astra Pharmaceuticals ("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 2001 the above royalty amounted to
         approximately SEK 2,683 thousands from the sale of Emdogain.
    o    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
         15% of the invoiced sales of Biora to the new external distributor
         in South Africa during the years 1999-2001 and 10% royalty of
         these sales in the years 2002-2003. For 2001 this royalty amounted
         to approximately SEK 26 thousands.
    o    During the year 2000 the Company acquired the rights to a
         patent-protected pharmaceutical project for treating dry mouth
         (xerostomia). In the purchase agreement the Company made a
         commitment to pay 3% royalty of the Net Sales Price of the
         products based on the acquired rights. If the sales rights of the
         products are licensed, the royalty commitment of the Company
         amounts to 3% of the Net Sales Price of the licensees. There is
         currently no commercially available product based on the acquired
         patent.
    o    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 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.
    o    The liabilities to credit institutions are the only interest
         bearing liabilities of the Company, amounting to SEK 2.4 million
         at December 31, 2000 and 0 on December 31, 2001. These liabilities
         were fully repaid in December 2001 in connection with the
         licensing of the wound-healing project to Molnlycke Healthcare.
         The SEK 2.4 million represented the first payment of the total
         conditional loan of SEK 15 million, granted by the Swedish
         Industrial Fund for the project "Emdogain for extra-oral wound
         healing applications". . In addition to interest (at the official
         Swedish discount rate plus 2.5%) the Swedish Industrial Fund is
         entitled to royalty based on net sales as follows:
         - 3% of the net sales from the product, from raw material,
         chemicals, components,etc for the product and from services
         related to the product.
         - 12% of all revenues from agreements concerning option to or
         concerning grant of license to produce or sell the product,
         components, chemicals etc for the product as well as services
         related to the product.
         - When the Company has paid royalties totaling 167% of the loan
         obtained from the Swedish Industrial Fund the above mentioned
         royalty rates shall be reduced from 3% to 0,5% and from 12% to
         2.4% respectively.
         - The royalty right of the Swedish Industrial Fund expires four
         calendar years after the calendar year when the Company has repaid
         the outstanding loan including accrued interest, however, in any
         case not before December 30 2010.


Critical Accounting Polices

         Biora's Consolidated Financial Statements are prepared in
accordance with generally accepted accounting principles in Sweden (Swedish
GAAP), which differ in certain significant respects from generally accepted
accounting principles in the United States (U.S. GAAP). The principal
differences between Swedish GAAP and U.S. GAAP are further discussed in
Note 22 to the Consolidated Financial Statements.

         The preparation of Biora's Consolidated Financial Statements
requires the use of estimates, judgements and assumptions that affect the
reported amounts of assets, liabilities and provisions at the date of the
financial statements and the reported amounts of sales and expenses during
the periods presented. In accordance with the Financial Reporting Release
No. 60 (FR60) recently issued by the Securities and Exchange Commission of
the United States, registrants are required to provide additional
disclosure of accounting principles in which estimates, judgments and
assumptions are particularly sensitive and which, if actual results are
different, may have a material impact on the financial statements. The
accounting principles applied by Biora that are deemed to meet these
criteria are discussed below:

Asset impairment

         All long-lived assets, including intangible assets, are evaluated
for impairment yearly or whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable. An
impaired asset is written down to its estimated fair market value based on
the best information available.

         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.

Accounts receivable

         Accounts receivable are reported net of reserves for doubtful
accounts. Payment terms can vary depending on customary conditions for the
industry in the markets where the company is active. Doubtful accounts are
written off as soon as the probability of loss exceeds the probability of
future payment. Receivables that are more than 12 months past due are
normally fully reserved.

Pensions

           Provisions for pensions are dependent on assumptions used by
actuaries in calculating such amounts. The appropriate assumptions and
actuarial calculations are made separately for each population in the
respective countries of Biora's operations. The assumptions include
discount rates, inflation and salary growth. Actual results that differ
from our assumptions are accumulated and amortized over future periods.

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 they can be realized from
reversing deferred tax liabilities. Remaining deferred tax assets, which
include the tax effect of tax loss carried forward, are reduced by a
valuation allowance to the amount that it is "more likely than not" to be
realized.

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, 2001
amounted to SEK 24.1 million ($2.3 million) as compared to SEK 25.1 million
($2.4 million) under Swedish GAAP. Net loss per Ordinary Share for the year
ended December 31, 2001 was SEK 1.09 ($0.10 million) under U.S. GAAP,
compared with SEK 1.14 ($0.11 million) under Swedish GAAP. Shareholders
equity at December 31, 2001 under U.S. GAAP was SEK 44.6 million ($4.3
million) as compared to shareholders equity of SEK 55.9 million ($5.3
million) under Swedish GAAP.

         The difference between net loss and shareholders' equity (deficit)
under U.S. GAAP and Swedish GAAP results primarily from differing
accounting treatments of research and development costs, 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. Equipment solely intended for R&D purposes is reported as
tangible long-term assets. According to US GAAP R&D equipment costs with no
alternative future use are expensed as incurred. See Note 22 of Notes to
Consolidated Financial Statements for a reconciliation of results of
operations and shareholders' equity in accordance with Swedish GAAP to
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 the Company.

Recently issued accounting standards not yet adopted

         Biora has not adopted any new accounting principles for the financial
year 2002 under Swedish GAAP.

Recently issued US GAAP standards, which may impact US GAAP reconciliation
in future periods, are as follows:

         In June 2001, the FASB issued SFAS No. 141, Business Combinations,
(SFAS No. 141) and SFAS No. 142, Goodwill and Other Intangible Assets (SFAS
No. 142). SFAS No. 141 requires that the purchase method of accounting be
used for all business combinations. SFAS No. 141 specifies criteria that
intangible assets acquired in a business combination must meet to be
recognized and reported separately from goodwill. SFAS No. 142 will require
that goodwill and intangible assets with indefinite useful lives no longer
be amortized, but instead tested for impairment at least annually in
accordance with the provisions of SFAS No. 142. SFAS No. 142 also requires
that intangible assets with estimable useful lives be amortized over their
respective estimated useful lives to their estimated residual values, and
reviewed for impairment in accordance with SFAS No. 121 and subsequently,
SFAS No. 144 after its adoption.

         The Company adopted the provisions of SFAS No. 141 as of July 1,
2001 and SFAS No. 142 is effective January 1, 2002. Goodwill and intangible
assets determined to have an indefinite useful life acquired in a purchase
business combination completed after June 30, 2001 but before SFAS No. 142
is effected are not amortized. Goodwill and intangible assets acquired in
business combinations completed before July 1, 2001 continued to be
amortized and tested for impairment under SFAS no. 121 prior to the full
adoption of SFAS No. 142. The Company did not complete any purchase
business combinations after June 30, 2001 and prior to the adoption of SFAS
No. 142, thus there was no effect on the current year financial information
under US GAAP from the adoption of SFAS No. 141.

         Upon adoption of SFAS No. 142, the Company is required to evaluate
its existing intangible assets and goodwill that were acquired in purchase
business combinations, and to make any necessary reclassifications in order
to conform with the new classification criteria in SFAS No. 141. The
Company will be required to reassess the useful lives and residual values
of all intangible assets acquired, and make any necessary amortization
period adjustments. If an intangible asset is identified as having an
indefinite useful life, the Company will be required to test the intangible
asset for impairment in accordance with the provisions of SFAS No. 142.
Impairment is measured as the excess of carrying value over the fair value
of an intangible asset with an indefinite life.

         SFAS No. 142 requires the Company to perform a transitional
goodwill impairment evaluation to assess whether there is an indication
that goodwill is impaired as of the date of adoption. The Company must
identify its reporting units, as defined in SFAS No. 142 determine the
carrying value and fair value of each reporting unit, and compare those
values. To the extent the carrying amount of a reporting unit exceeds the
fair value, an indication exists that the reporting unit goodwill may be
impaired and the Company must perform the second step of the transitional
impairment test. In the second step, the Company must compare the implied
fair value of the reporting unit goodwill, which is determined by
allocating the fair value to all assets and liabilities in a manner similar
to a purchase price allocation prescribed by SFAS No. 141, with the
carrying amount of the reporting unit goodwill to determine whether any
transitional impairment loss should be recognized. The Company is currently
completing its determination of the effect of the adoption of SFAS No. 142.

         In June 2001, the FASB issued SFAS No. 143, Accounting for Asset
Retirement Obligations (SFAS No. 143). SFAS No. 143 requires the Company to
record the fair value of an asset retirement obligation as a liability in
the period in which it incurs a legal obligation associated with the
retirement of tangible long-lived assets that result from the acquisition,
construction, development and/or normal use of the assets. The Company also
records an addition to the corresponding asset which is depreciated over
the life of the asset. Subsequent to the initial measurement of the asset
retirement obligation, the obligation will be adjusted at the end of each
period to reflect the passage of time and changes in the estimated future
cash flows underlying the obligation. The Company is required to adopt SFAS
No. 143 on January 1, 2003. The Company is currently reviewing the impact
of the future adoption of SFAS No.143.

         In August, 2001, the FASB issued SFAS No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets (SFAS No. 144). SFAS No. 144
addresses financial accounting and reporting for the impairment or disposal
of long-lived assets. This Statement requires that long-lived assets be
reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable.
Recoverability of assets to be held and used is measured by a comparison of
the carrying amount of an asset to undiscounted future net cash flows
expected to be generated by the asset. If the carrying amount of an asset
exceeds its estimated undiscounted future cash flows, an impairment charge
is recognized for the amount by which the carrying amount of the asset
exceeds the fair value of the asset. SFAS No. 144 requires companies to
separately report discontinued operations and extends that reporting to a
component of an entity that either has been disposed of (by sale,
abandonment, or in a distribution to owners) or is classified as held for
sale. Assets to be disposed of are reported at the lower of the carrying
amount or fair value less costs to sell. The Company is required to adopt
SFAS No. 144 on January 1, 2002 and is currently completing its
determination of the effect of the adoption of the standard.

         In April 2002, the Financial Accounting Standards Board (FASB)
issued SFAS No. 145 "Rescission of FASB Statements No. 4, 44 and 64,
Amendment of FASB Statement No. 13, and Technical Corrections." SFAS No.
145 provides for the rescission of several previously issued accounting
standards, new accounting guidance for the accounting for certain lease
modifications and various technical corrections that are not substantive in
nature to existing pronouncements. SFAS No. 145 will be adopted beginning
January 1, 2003, except for the provisions relating to the amendment of
SFAS No. 13, which will be adopted for transactions occurring subsequent to
May 15, 2002. Adoption of SFAS No. 145 will not have a material impact on
the consolidated financial statements.

         Effective January 1, 2002, the Company adopted the provisions of
Emerging Issues Task Force (EITF) Issue No. 01-9, Accounting for
Consideration Given by a Vendor to a Customer or a Reseller of the Vendor's
Products. EITF Issue No.01-9 codifies and reconciles the Task Force
consensuses on all or specific aspects of EITF Issues No. 00-14,
"Accounting for Certain Sales Incentives," No.00-22, "Accounting for
'Points' and Certain Other Time-Based or Volume-Based Sales Incentives
Offers, and Offers for Free Products or Services to be Delivered in the
Future," and No. 00-25, "Vendor Income Statement Characterization of
Consideration Paid to a Reseller of the Vendor's Products" and identifies
other related interpretive issues. The company does not anticipate any
material reclassification or change in operating income when adopting EITF
Issue No. 01-9.


5.C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES

         For a Discussion of Research and Development See "Item 4. Business
Overview - Research & Development."

         For a Discussion of Patents and Licenses See "Item 4. Business
Overview - Intellectual Property."


5.D. TREND INFORMATION

         For a discussion of trend information see "Item 5. Operating and
Financial Review and Prospects - Operating Results."


ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

6.A. DIRECTORS AND SENIOR MANAGEMENT

         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 (European Economic Area) 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, 2002, the directors and executive officers of the
Company are as follows:

<TABLE>
<CAPTION>
Name                            Age            Position

<S>                             <C>            <C>
Per Wahlstrom                   55             Chairman of the Board of Directors
Nils Bohlin                     50             Director
Per Lojdquist                   53             Director
Lars Spongberg                  56             Director
Lars Inglemark                  53             Director
Christer Testen                 59             Director
Jan Kvarnstrom                  54             Director
Lennart Jacobsson               46             Deputy Director

Donna Janson                    48             President and Chief Executive Officer
Dr. Stina Gestrelius            53             Vice President, Research and Development
Dr. Lars Heijl                  57             Vice President, Medical Director
Christer Tingnell               37             Director of Marketing
Tommie Johansson                50             Vice President, Investor Relations and
                                               Corporate Communications
Kerstin Palsson                 44             Chief Financial Officer

</TABLE>

         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 is the Chairman of the Board
of Primus AB, and a board member of Studsvik AB and Volvo Technolgy
Transfer AB, among others.

         Nils Bohlin has been a member of Biora's Board of Directors since
January 2002. He is Executive Vice President at Arthur D. Little (ADL)
where he is involved on a global basis within the Health Care sector
focusing on strategies and organization. Nils Bohlin leads ADL's global
biotechnology initiative, which consists of a network of consultants in the
area of Life Science.

         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 Spongberg has been a member of the Board since January 2002.
He is a partner at Nordic Capital and is a board member of Allgons AB,
Munthers AB, Addtech AB, Skyways Holding AB, Gyros AB, Aero Crine AB as
well as in several Nordic Capital portfolio managers.

         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. He currently participates on several boards, Karo Bio AB, Capio AB,
Molnlycke Health Care AB, Nycomed A/S, and A. Carlsson Research AB.

         Christer Testen has served as a member of the Board since May
2001. Christer Testen has extensive experience of the pharmaceutical
industry, most recently as head of Astra Australia (1995 - 1999). Between
1976 and 1994, he held several senior positions in marketing, strategic
planning and licensing within the Astra Group. Christer Testen is also
Chairman of the Board of Arexis AB and Berzelius Science Park AB.

         Jan Kvarnstrom has been a member of the Board since January, 2002.
He is Chairman of the Board of Castellum AB. He is also a member of the
boards of Swedecarrier AB, Posten AB, Nobel Biocare AB, Geveke B.V. and
Doxa Certex AB among others. Jan Kvarnstrom was previously CEO of Securum
and Esselte.

         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. He is also a board member
of several other companies including Chairman of the Board of Multichannel
Instrument AB.

         Donna Janson has held the office of President and Chief Executive
Officer of Biora since January 2002. She began her tenure with the Company
in 1996 as President of Biora, Inc. Biora's Sales and Marketing
organization in the United States. Prior to her employment at Biora, Donna
Janson was Vice President of Marketing in the US for Nobel Biocare, and
Director of Sales at Nobelpharma Canada Inc.

         Stina Gestrelius has served as the Vice President and Director of
Research & Development 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 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 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 Project Leader at Astra Pain Control AB from 1990 through 1996. 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.

         Tommie Johansson has served as Vice President Investor Relations
and Corporate Communication at Biora since November 2000. He has been
active for more than 20 years in the pharmaceutical industry. During 1997-
1998 he served as Director Investor Relations at Pharmacia&Upjohn and
during 1998-2000 he served as Global Brand Director at AstraZeneca.

         Christer Tingnell has been Director of Marketing since January
2002 and he has held the position of Global Brand Director since May 2001.
He has held various marketing- and sales positions in the Swedish and
international pharmaceutical business for more than 10 years.

         Kerstin Palsson has been CFO since January 2002 and has previously
served as Group Controller since March 1997. Prior thereto, Ms Palsson
served as Public Accountant with the BDO audit group from 1980 and as a
Chartered Public Accountant from 1986 until 1997 with the same company.

Other Key Personnel

     Name                        Age      Position

     Christopher Pallotti        43       President, Biora Inc., USA
     Vartan Gianighian           55       President, Biora S.r.l, Italy
     Ann-Christin Johansson      45       Quality Assurance Manager, Biora AB
     Wolfgang Muller             37       General Manager, Germany and Austria

         Christoper Pallotto is a licensed dentist and since 1998 he has
been responsible for Biora, Inc's sales organization. He has worked in the
dental industry since 1989 and started working at Biora, Inc. in 1997.
Before Christopher Pallotto joined Biora he held various sales management
positions at Nobel Biocare's subsidiary in the U.S. Prior to that he worked
as a dentist for five years.

         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
and from 1989 to 1990 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.

         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.

6.B. COMPENSATION

         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, 2001:

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

<S>                                                               <C>                       <C>
All non-executive directors as a group (8 persons)                1,520                     0

All executive officers as a group (8 persons)                     7,949                   2,618
                                                              ============           =============
         Total                                                    9,469                   2,618

</TABLE>

         In 2001, 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 ordinary
fee three Board members have received a remuneration for their services as
members of the Audit Committee of Biora as follows: Svein G. Eskedal SEK
40,000, Per Lojdquist-SEK 25,000 and Christer Testen SEK 25,000.
Additionally, Eskedal Consult A/S has received SEK 730,000 for consultancy
assignments.

         The salary expenses for Rickard Soderberg, President of Biora
during 2001, amounted to SEK 2,059,000. In addition he received pension
benefits paid by Biora in accordance with an individual plan prepared by
Forsakringsbolaget Skandia, for which the Company expensed SEK 455,000. In
accordance with the contract, Mr. Soderberg was entitled to a 6-month
mutual period of notice. In addition he was entitled to a severance pay
equal to 18 months salary.

         According to the employment agreement, which is limited to 3
years, Donna Janson, President of Biora as from January 1, 2002 is entitled
to an annual salary, including social security expenses, of approximately
$300,000. In addition, she is eligible to an annual bonus amounting to a
maximum of 25% of her annual salary. She is also entitled to pension
benefits for which the Company will pay approximately $6,000 annually. The
Company may terminate her position by giving a minimum of six months and a
maximum of twelve months notice beginning no earlier than January 1, 2003.
She is also entitled to severance pay equal to one years salary, which may
also be paid in the case of a change in the control of Biora. Ms Janson is
entitled to purchase 150,000 warrants according to the program approved on
June 1, 2001. She is also entitled to a furnished apartment supplied by
Biora in Sweden.

         The salary expensed for Anders Agering, Executive Vice President
of Biora during 2001, amounted to SEK 964,000. In addition he received
pension benefits paid by Biora in accordance with an individual plan
prepared by SPP Liv, for which the Company expensed SEK 297,000. In
accordance with the employment contract, Anders Agering was entitled to
severance pay equal to 18 months salary. Other senior executives employed
by the Biora AB are also entitled to a severance pay not exceeding 18
months salary. Future pension benefits are based on individual plans.

Management Employment Agreements

         The Company has entered into employment agreements with each of
Mrs. Janson, Dr. Gestrelius, Dr. Heijl, Mr. Johansson, Mr. Tingnell 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 6 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 Dr. Heijl and Mrs. Palsson) and
for an additional year thereafter without the Company's prior written consent.

Key Employee Incentive Plan

Warrant Program 2001

         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 were 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 Janson                                           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 issued warrants expired unexercised on January 31, 2001.

Warrant Program 2002

         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, 89,250 have
been subscribed for by 59 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 were exercisable for
Ordinary Shares at any time during May 2002 but none were exercised.

Warrant Program 2004

On June 12th, 2001, 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 100,000 principal amount of subordinated
debentures with 800,000 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 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 date using the Black-Sholes valuation model.
Employees of the Company have subscribed for 255,500 warrants of this
program. Each warrant entitles the holder to acquire one Ordinary Share of
the Company, at an exercise price of SEK 17.00. The warrants are
exercisable for Ordinary Shares from October 1, 2003 to September 30, 2004.
If all of these warrants are fully exercised the total number of shares
outstanding will increase to 24,009,300. As per December 31, 2001, the
employees of the Company had subscribed for 255,500 warrants. Accordingly
SEK 920,000 have been accounted for as Consolidated restricted equity.


6.C. Board practice

Audit Committee

         The Company's audit committee consists of three (3) directors who
are not officers or employees of the Company (Per Lojdquist, Lars Spongberg
and Christer Testen) 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.


6.D. EMPLOYEES

As of December 31, 2001, the Company had 83 full-time employees, including
ten in administration and finance, 53 in marketing and sales, ten 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 Biora's employees in Sweden is 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.


6.E. SHARE OWNERSHIP

         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. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

7.A. MAJOR SHAREHOLDERS

         The Company has been informed that The Swedish 6th Pension Fund
owns 20.0 percent and Euroventures Nordica owns 6.1 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 March 1, 2002.

         The following table sets forth certain information regarding the
beneficial ownership of the Ordinary Shares known by the Company as of
March 1, 2002. 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 Shares   Percent
                                                Owned             of Class
                                                ---------------   --------

Principal Shareholders/ Investment holders:

Swedish 6th Pension Fund                         4,715,940           20.0
Euroventures BV(a)                               1,451,919            6.1
RBSI Custody Bank                                1,072,721            4.5
Lars Hammarstrom and family                        815,900            3.8
Christiania Bank of Kreditkasse                    732,543            3.0
Bank of New York (as ADR Depositary)               507,758            2.4
Pensionskassan for Verksteds                       300,000            1.3
Holdingselskapet af 14.1 1944                      275,000            1.2
Haandvaerkerbanken                                 264,140            1.1
Reabourne Melin Life Science                       250,000            1.1

All directors and officers as
a group (thirteen persons)                          96,700(b)         0.4

    (a)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 1,451,919 Ordinary
    Shares held by Euroventures Nordica. On May 16th 2001, the investment
    fund Euroventures Nordica I BV made a distribution in kind to its
    shareholders of all the fund's shares in Biora. The shareholders of
    Euroventures Nordica I BV are Carlsberg, Christiania Bank, Den Danske
    Bank, Norsk Hydro, Nokia, Fortum Oil, Storebrand, Euroventures BV and
    Skytrack Investment.

    (b) Includes (i) 63,400 Ordinary Shares held by Stina Gestrelius (ii)
    20,000 Ordinary Shares beneficially held by Vartan Ghianighian (iii)
    9,600 shares held by Christer Tingnell (iv) 500 shares held by Kerstin
    Palsson and 3,200 Ordinary Shares held by other Board of Directors or
    Biora Senior Management

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

    As of March 1, 2002, the Company had 23,753,800 Ordinary Shares
outstanding.


7.B. RELATED PARTY 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."

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.

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 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).

7.C. INTERESTS OF EXPERTS AND COUNSEL

Not applicable.


ITEM 8. FINANCIAL INFORMATION

8.A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION

The information called for by this item commences on page F-1.

8.A. 7. 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.

8.B. SIGNIFICANT CHANGES

Not applicable.

ITEM 9. THE OFFER AND LISTING

9.A. OFFER AND LISTING DETAILS

         The principal trading market for Biora's Ordinary Shares is the
O-list of the Stockholm Stock Exchange. Biora shares were also listed on
the US Nasdaq National Market where two shares were represented by one
American Depositary Share (ADS) under the symbol "BIORY". Biora delisted
its ADSs from Nasdaq Exchange on January 31st 2002, and since February 1st,
the ADRs are quoted on the Over-the-Counter Market. The bid and asking
prices on this market are published and distributed by Pink Sheet LLC. The
principal reason for voluntarily delisting from the Nasdaq National Market
was that the Company did not comply with Nasdaq's new quantitative listing
standards for minimum equity requirements, which became effective June 29,
2002. Biora is a registrant under the US Securities Exchange Act of 1934.
The ADSs are evidenced by American Depositary Receipts ("ADRs") issued by
The Bank of New York, as depositary.

9.B. PLAN OF DISTRIBUTION

Not applicable.

9.C. MARKETS

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 9:30 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.

         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.

<TABLE>
<CAPTION>
                                                                    Price Per Ordinary Share
--------------------------------------------------------------------------------------------------------------------
                                                                                                     Quarter's
                                                                    High             Low             Close
--------------------------------------------------------------------------------------------------------------------

Calendar Period                                                     SEK
--------------------------------------------------------------------------------------------------------------------
1997

<S>                                                                 <C>              <C>             <C>
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                                                      69               30.5            31.5

Third Quarter                                                       36               19.5            25.7

Fourth Quarter                                                      28               7               8.15

2001
First Quarter                                                       30               8               12.3

Second Quarter                                                      18.4             8.5             14.2

Third Quarter                                                       15.8             9.7             8.50

Fourth Quarter                                                      13.9             7.4             12.2

2002
First Quarter                                                       14.3             11.1            13.9


High/Low share price per months                                     High             Low             Month's Close
--------------------------------------------------------------------------------------------------------------------
Dec 2001                                                            13.9             9.6             12.2

Jan 2002                                                            13.6             11.4            11.9

Feb 2002                                                            12.9             11.2            11.8

March 2002                                                          14.3             11.1            13.9

April 2002                                                          15.2             11.4            14.2

May 2002                                                            15.2             13.5            13.7
</TABLE>


         The average daily volumes of Ordinary Shares traded in the SSE
from January 1, 2001 through April 2002 were 138,369 based on total
turnover statistics (supplied by the Stockholm Stock Exchange).

Trading on the Nasdaq National Market/Over the Counter ("OTC") 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 from
February 1999 to January 31, 2002 and on the OTC Market from February 1,
2002:

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
                                                                 Price Per ADS
--------------------------------------------------------------------------------------------------------------------
                                                                                                    Quarter's
                                                                 High             Low               Close
--------------------------------------------------------------------------------------------------------------------
                                                                 US$
--------------------------------------------------------------------------------------------------------------------

Calendar Period

1997

<S>                                                              <C>              <C>               <C>
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                                                   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                                                   16.00             7.00              7.00

Third Quarter                                                     8.75             3.88              5.00

Fourth Quarter                                                    5.75             1.31              1.44

2001
First Quarter                                                     7.75             1.50              2.19

Second Quarter                                                    3.45             1.80              2.75

Third Quarter                                                    3.37             1.25              1.45

Fourth Quarter                                                   2.87             1.25              2.12

2002
First Quarter (NASDAQ/OTC Market)                                2.74             2.05              2.70


High/Low share price per months                                  High            Low                Month's Close
--------------------------------------------------------------------------------------------------------------------
Dec 2001                                                         2.87            1.70               2.12

Jan 2002                                                         2.70            2.05               2.15

Feb 2002                                                         2.41            2.16               2.27

March 2002                                                       2.74            2.19               2.70

April 2002                                                       2.93            2.36               2.78

May 2002                                                         2.95            2.69               2.81
--------------------------------------------------------------------------------------------------------------------
</TABLE>

         The average daily volumes of ADS from January 1, 2001 to December
31, 2001 was 5,661. No information regarding trading volumes after
de-listing the Biora ADRs from Nasdaq on January 31st, 2002 is available.
The Depositary for the Company's ADSs has advised the Company that as of
April, 2002, there were 244,437 ADRs . Additionally, the Depositary has
advised the Company that as of April 30, 2002, there were 17 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 17 record holders. On the basis of this
information, the ADSs held on such date in the United States represented
approximately 2.1 percent of the Company's outstanding Ordinary Shares.


ITEM 10. ADDITIONAL INFORMATION

10.A. Share Capital

Not applicable.

10.B. Memorandum and Articles of Association

Biora AB is a public company incorporated under the laws of Sweden. The
Company is registered with the Swedish Patent and Registration Office, with
the corporate identity number 556289-8998. The Company's purpose is to
develop, manufacture and market pharmaceuticals and treatment equipment as
well as pursue other compatible business.

An annual General Meeting of shareholders must be convened at least once
per year on a date set by the Company's board of directors. A notice
convening an General Meeting must be published in the Swedish Official
Gazette (Post- och Inrikes Tidningar), Sydsvenska Dagbladet and in Svenska
Dagbladet or Dagens Nyheter. A notice convening an Ordinary General Meeting
and an Extraordinary General Meeting to decide upon the alteration of the
Articles of Association must take place at the earliest six and at the
latest four weeks prior to the meeting. A notice convening another
extraordinary general meeting must take place at the earliest six and at
the latest two weeks prior to the meeting. A notice convening an
Extraordinary General Meeting must take place by mailed letters to all
shareholders registered in the share register, at the earliest four and at
the latest two weeks prior to the meeting. The General Meeting must be held
in Malmo, Sweden.

A shareholder who wants to take part of a General Meeting must be
registered in a transcript of the share register relating to the facts that
were recorded ten days before the General Meeting and must give notice to
the company not later than the day mentioned in the notice convening the
meeting, before 4 p.m. The last-mentioned day must not be a Sunday, any
other public holiday, a Saturday, Midsummer Eve, Christmas Eve or New
Year's Eve and must not fall earlier than on the fifth weekday (Sw. vardag)
before the General Meeting. At the General Meeting, a shareholder is
entitled to be accompanied by one or two assistants; however, only if the
shareholder gives notice hereof to the Company according to what is
prescribed in the notice.

         Biora Articles of Association do not have any provisions relating
to voting by directors where there is a potential conflict of interest, and
there is no requirement that individuals disclose their percentage
ownership of Biora owning stock once they reach a percentage. All votes
affecting the rights of shareholders, including the creation of new classes
of stock, is by majority vote.

         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.

10.C. Material contracts

Not applicable.


10.D. Exchange controls

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
Biorashares. In addition, since January 1, 1993, 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.


10.E. Taxation

         The following general discussion sets forth certain Swedish and
United States federal income tax consequences that are applicable to U.S.
Holders (as defined below ) of ADSs or Ordinary Shares who hold such ADSs
or Ordinary Shares as "capital assets" within the meaning of Section 1221
of the United States Internal Revenue Code of 1986, as amended (the
"Code"). For purposes of this discussion, a "U.S. Holder" is a beneficial
owner of ADSs or Ordinary Shares that is for U.S. federal income tax
purposes (i) a citizen or resident of the United States; (ii) a corporation
created or organized under the laws of the United States or any political
subdivision thereof; (iii) an estate the income of which is includible in
gross income for United States federal income tax purposes regardless of
its source; or (iv) a trust if a court within the United States is able to
exercise primary supervision over the administration of the trust and one
or more U.S. persons have the authority to control all substantial
decisions of the trust. This discussion does not consider all aspects of
United States federal income taxation that may be relevant to a particular
U.S. Holder based on its particular circumstances, such as holders that are
subject to special treatment (e.g., partnerships, banks, thrifts, real
estate investment trusts, regulated investment companies, insurance
companies, dealers in securities or currencies, expatriates, tax-exempt
investors, holders whose functional currency is not the U.S. dollar,
holders holding ADSs or Ordinary Shares as part of a straddle, hedge,
conversion transaction or other integrated transaction or holders owning
directly or by attribution 10 percent or more of the Ordinary Shares), nor
does it address alternative minimum taxes, United States federal estate or
gift taxation or 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 Code and the conventions between the
government of Sweden and the government of the United States of America for
the avoidance of double taxation and the prevention of fiscal evasion with
respect to taxes on income (the "Income Tax Treaty") and with respect taxes
on estates, inheritance and gifts (the "Estate Tax Treaty"), and may be
subject to subsequent changes in U.S. or Swedish law or either 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.

         The tax treatment of each U.S. Holder of ADSs depends in part on
such persons' specific situation. Particular tax consequences which are not
set forth below may arise for certain categories of subjects. Each U.S.
Holder of ADSs should consult a tax advisor for information on the
particular tax consequences that may be relevant to such person, including
applicability and effect of foreign income tax rules, the provision of
double taxation treaties and other rules in general.

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 that 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, 2001 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, 2001 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 30% rate for payments made in 2002 and
2003 (which rate will gradually be reduced to 28% effective 2006 and then
return to 31% effective 2011). Backup withholding will not apply, however,
to a holder who furnishes a correct taxpayer identification number 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).


10.G. Statement by experts

Not applicable.

10.H. Documents on Display

Documents made public by the Company are available for inspection at the
registered office of the Company at SE 205 12, Malmo, Sweden during normal
business hours.

10.I. Subsidiary information

<TABLE>
<CAPTION>
                                                                          percent holding

<S>                                        <C>                                  <C>
Bioventures B.V.,                          Amsterdam, Netherlands               100%

Biora Benelux Dental Products B.V.         Amsterdam, Netherlands               100%

Biora GmbH                                 Bad Homburg, Germany                 100%

Biora S.A.                                 Johannesburg, South Africa           100%

Biora, Inc.                                Chicago, IL, U.S.A.                  100%

Biora S.r.l.                               Milano, Italy                        100%

Biora Limited                              London, United Kingdom               100%

Biora AG                                   Zurich, Switzerland                  100%

Biora Option AB                            Malmo, Sweden                        100%

Biora BioEx AB                             Malmo, Sweden                        100%
</TABLE>


ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

Major Risks

Impact of Currency Fluctuations and Inflation

         The Company expects to have significant export sales from Sweden
that are invoiced in currencies other than the Swedish krona. Also, the
Company will incur a significant portion of its expenses in kronor.
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.

         At December 31, 2001, the krona was about eleven percent lower
against the U.S. dollar than on December 31, 2000 and the average rate for
2001 was about 13 percent lower than in 2000. At December 31 2001, the
krona was about six percent lower against the Euro than on December 31,
2000 and the average rate for 2001 was about nine percent lower than in 2000.

         Approximately 95% of sales were invoiced in another currency than
SEK and approximately 55% of total costs were in an other currency than
SEK. Sales increase during 2001 was 24%. Excluding effects of changes in
exchange rates sales increased by 12%. Loss from operations was reduced
with 66% during 2001. Excluding effects of changes in exchange rates loss
from operations was reduced by 63%.

         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. The inflation rate in Sweden for the year ending December 31, 2001
was approximately 3 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 exchange contracts with respect
to receivables denominated in non-Swedish currencies 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 at December 31, 2001. 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.

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 there have been no
noticeable effects. A few months after the introduction of the Euro the
Swedish currency has strengthened approximately ten percent compared to the
exchange rate as of January 1, 1999. In the beginning of 2000 the Swedish
currency continued to strengthen against the Euro and from mid year
weakened again. In 2001 the Kronor began to weaken against the Euro.


Sensitivity of market risks and disclosures about model and its limitations

         The following table 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
table 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 than 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>
                                              At December 31, 2001

                      Swedish kroner      Net underlying       Net Exposure    Foreign            Foreign
                      Value of Net        Foreign currency     Currency        Exchange(Loss)/    Exchange (Loss)/
                      Foreign exchange    Transaction          Position        Gain from          Gain from
                      Assets (Liability)  Exposure                             Depreciation       Appreciation
                      Contracts                                                Swedish kroner     Swedish kroner
                                          ---------------------
                                           SEK in millions
Currency
<S>                         <C>                  <C>              <C>               <C>                 <C>
U.S. Dollar.........        (15.0)               11.8             (3.2)             (0.3)               0.3

Euro................         (4.3)                3.8             (0.5)             (0.1)               0.1

Pound Sterling......          0                   0.7              0.7               0.1               (0.1)

Swiss Francs........          0                   0.3              0.3               0.0               (0.0)

Japanese yen........         (2.8)                0               (2.8)             (0.3)               0.3

Total...............        (22.1)               16.6             (5.5)             (0.6)               0.6

</TABLE>


ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not Applicable


ITEM 13. DEFAULTS, DVIDEND ARREARAGES AND DELINQUENCIES

Not Applicable


ITEM 14. MATERIAL MODIFICATION TO THE RIGHTS OF SECURITY HOLDERS AND USE
OF PROCEEDS

Not Applicable



ITEM 15. (RESERVED)



ITEM 16. (RESERVED)



                                 SIGNATURE

         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,
in Malmo, Sweden.


Dated:  June 27, 2002                    BIORA AB


                                         By:  /s/ Kerstin Palsson
                                              ------------------------------
                                              Name:   Kerstin Palsson
                                              Title:  Chief Financial Officer

<PAGE>

                         Biora AB and Subsidiaries

                     REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholders of
BIORA AB


We have audited the accompanying consolidated balance sheets of Biora AB
and its subsidiaries as of December 31, 1999, 2000 and 2001 and the related
consolidated statements of operations and cash flows for each of the years
in the three-year period ended December 31, 2001. 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 audits in accordance with generally accepted auditing
standards in the United States of America. 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 audits provide 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, 1999, 2000 and 2001, and the results of
their operations and cash flows for each of the years in the three-year
period ended December 31, 2001 in conformity with generally accepted
accounting principles in Sweden.

As discussed in Note 1 to the consolidated financial statements, the
Company changed its method of accounting for warrant premiums received.

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 for each of the years in
the three-year period ended December 31, 2001 and shareholders' equity as
at December 31, 1999, 2000 and, 2001 to the extent summarized in Note 22 to
the consolidated financial statements.

Malmo, Sweden

March 18, 2002


/s/ Alf Svensson
-------------------------
Alf Svensson
Authorized Public Accountant
KPMG Bohlins AB
Member of KPMG International


<PAGE>
<TABLE>
<CAPTION>

CONSOLIDATED STATEMENTS OF OPERATIONS

                                                                                      Year Ended December 31,
                                                                        ----------------------------------------------------
                                                                               1999         2000        2001           2001
                                                                        ----------------------------------------------------
                                                                                SEK          SEK         SEK    U.S. Dollars
                                                                                                                    (Note 1)
                                                                              (In thousands except per share amounts)
                                                                                                                 (Unaudited)
<S>                                                                          <C>          <C>        <C>             <C>
Net sales                                                                    73,556       89,160     110,677         10,584
Cost of goods sold                                 Note 5                   -15,470      -21,148     -22,797         -2,180
                                                                        ----------------------------------------------------
Gross profit                                                                 58,086       68,012      87,880          8,404

Selling expenses                                   Note 5                   -90,783      -78,387     -76,998         -7,363
Administrative expenses                            Note 5                   -18,505      -25,437     -22,880         -2,188
Research and development costs                     Note 4,5                 -41,597      -42,789     -26,787         -2,562
Other operating income                             Note 6                     4,001          643      16,049          1,535
Other operating expenses                           Note 6                    -3,007         -753      -3,728           -357
                                                                        ----------------------------------------------------
Loss from operations                               Note 2,3                 -91,805      -78,711     -26,464         -2,531

Interest income and similar profit/loss items                                 5,231        3,095       1,630            156
Interest expense and similar profit/loss items                                  -11         -365        -227            -22
                                                                        ----------------------------------------------------
Loss before income taxes                                                    -86,585      -75,981     -25,061         -2,397

Income taxes                                       Note 7                      -154         -168         -34             -3
                                                                        ----------------------------------------------------
Net loss                                                                    -86,739      -76,149     -25,095         -2,400
                                                                        ====================================================

Net loss per Ordinary Share                        Note 1                     -4.09        -3.59       -1.14          -0.11
                                                                        ====================================================






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

</TABLE>



<PAGE>
<TABLE>
<CAPTION>

CONSOLIDATED BALANCE SHEETS



ASSETS
------
                                                                                        As of December 31,
                                                                        ----------------------------------------------------
                                                                               1999         2000        2001           2001
                                                                        ----------------------------------------------------
                                                                                SEK          SEK         SEK   U.S. Dollars
                                                                                                                    (Note 1)
                                                                                      (In thousands)
Long-term assets                                   Note 8                                                        (Unaudited)
----------------
Intangible assets
<S>                                                                          <C>
Capitalized research and development costs                                   10,514            -           -              -
Patents                                                                       6,059        7,112       6,948            664
                                                                        ----------------------------------------------------
Total intangible assets                                                      16,573        7,112       6,948            664

Tangible assets
Plant and machinery                                                           2,248        2,160       1,373            131
Equipment, tools, fixtures and fittings                                       8,253        4,282       2,365            226
Advance payments for tangible assets                                            342            -           -              -
                                                                        ----------------------------------------------------
Total tangible assets                                                        10,843        6,442       3,738            357

Financial assets
Other long-term receivables                        Note 9                     2,534        2,553         634             61
                                                                        ----------------------------------------------------
Total financial assets                                                        2,534        2,553         634             61
                                                                        ----------------------------------------------------
Total long-term assets                                                       29,950       16,107      11,320          1,083
                                                                        ----------------------------------------------------

Current assets
--------------
Inventories
Raw materials and consumables                                                 1,200        1,172       1,294            124
Work in progress                                                              2,761          666       1,059            101
Finished products                                                             1,214        5,040       5,483            524
                                                                       ----------------------------------------------------
Total inventories                                  Note 10                    5,175        6,878       7,836            749

Current receivables
Accounts receivable - trade                        Note 11                    9,281        9,173      12,942          1,238
Other current receivables                          Note 12                    2,769        2,618       3,411            326
Prepaid expenses and accrued income                Note 13                    2,757        2,693       5,142            492
                                                                        ----------------------------------------------------
Total current receivables                                                    14,807       14,484      21,495          2,056

Bank deposits                                      Note 14                   90,000       40,000      25,951          2,482
Cash and banks                                     Note 14                   22,804       13,755      25,520          2,440
                                                                        ----------------------------------------------------
Total current assets                                                        132,786       75,117      80,802          7,727
                                                                        ----------------------------------------------------

Total assets                                                                162,736       91,224      92,122          8,810
                                                                        ====================================================



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

</TABLE>




<PAGE>
<TABLE>
<CAPTION>

SHAREHOLDERS' EQUITY AND LIABILITIES
------------------------------------
                                                                                          As of December 31,
                                                                        ----------------------------------------------------
                                                                               1999         2000        2001           2001
                                                                        ----------------------------------------------------
                                                                                SEK          SEK         SEK    U.S.Dollars
                                                                                                                    (Note 1)
                                                                                      (In thousands)
Shareholders' equity                               Note 15                                                       (Unaudited)
--------------------
Restricted equity
<S>                                                                             <C>          <C>         <C>             <C>
Share capital                                                                   848          848         950             91
Share premium reserve                                                       222,386      144,559      89,494          8,558
Other restricted equity                                                         173          303         510             49
                                                                        ----------------------------------------------------
Total restricted equity                                                     223,407      145,710      90,954          8,698
                                                                        ----------------------------------------------------

Accumulated loss
Accumulated loss                                                             -9,262      -18,646      -9,989           -955
Net loss for the year                                                       -86,739      -76,149     -25,095         -2,400
                                                                        ----------------------------------------------------
Total accumulated loss                                                      -96,001      -94,795     -35,084         -3,355
                                                                        ----------------------------------------------------
Total shareholders' equity                                                  127,406       50,915      55,870          5,343
                                                                        ----------------------------------------------------

Provisions
Provisions for pensions                                                         248          233         261             25
Other provisions                                                                196           28          44              4
                                                                        ----------------------------------------------------
Total provisions                                                                444          261         305             29
                                                                        ----------------------------------------------------

Long-term liabilities
---------------------
Liabilities to credit institutions                                                -        2,400           -              -
Other long-term liabilities                        Note 17                    5,505        5,506           -              -
                                                                        ----------------------------------------------------
Total long-term liabilities                                                   5,505        7,906           0              0
                                                                        ----------------------------------------------------

Current liabilities
-------------------
Accounts payable - trade                                                      7,600        8,973       7,522            719
Income tax liability                                                              -          150         168             16
Other current liabilities                          Note 18                    2,285        2,150       4,175            399
Accrued expenses                                   Note 19                   19,496       20,869      24,082          2,303
                                                                        ----------------------------------------------------
Total current liabilities                                                    29,381       32,142      35,947          3,438
                                                                        ----------------------------------------------------

Total shareholders'  equity and
liabilities                                                                 162,736       91,224      92,122          8,810
                                                                        ====================================================

Pledged assets and contingent liabilities          Note 26
Pledged assets                                                                 None         None        None           None
Contingent liabilities                                                       10,201        9,136       8,618            824


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

</TABLE>


<PAGE>
<TABLE>
<CAPTION>

CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                                      Year Ended December 31,
                                                                        ----------------------------------------------------
                                                                               1999         2000        2001           2001
                                                                        ----------------------------------------------------
                                                                                SEK          SEK         SEK   U.S. Dollars
                                                                                                                    (Note 1)
                                                                                        (In thousands)
Cash flows from operating activities                                                                             (Unaudited)
<S>                                                                          <C>          <C>         <C>             <C>
Net loss                                                                    -86,739      -76,149     -25,095         -2,400
Adjustments to reconcile net loss to
net cash flows from operating activities
Depreciation of tangible assets and
and amortization of patents                                                   5,552        8,852       5,939            568
Change in capitalized research and
development costs                                                             8,595       10,514           -              -
Capital loss                                                                    221          257          13              1
Changes in other long-term receivables                                           49          -16          15              1
Changes in provisions                                                            87         -190          27              3
Changes in long-term liabilities concerning option premium received              30            1           -              -
Current tax                                                                     154          168          34              3
Deferred tax                                                                      -            -           -              -
Change in assets and liabilities
Accounts receivable - trade                                                  -3,137          616      -3,040           -291
Inventories                                                                  -1,031       -1,340        -628            -60
Other current assets                                                          3,707          284      -3,138           -300
Accounts payable and other current liabilities                                2,908          545         393             38
                                                                        ----------------------------------------------------
Net cash used in operating activities                                       -69,604      -56,458     -25,480         -2,437
                                                                        ----------------------------------------------------
Cash flows from investing activities
Capital expenditures (tangible assets and patents)                           -4,024       -5,740      -2,907           -278
Proceeds from sales of tangible assets                                           32          242          35              3
Advance payments for tangible assets                                           -342            -           -              -
Payments concerning other long-term receivables                                 -29            6       1,920            184
                                                                        ----------------------------------------------------
Net cash used in investing activities                                        -4,363       -5,492        -952            -91
                                                                        ----------------------------------------------------
Cash flows from financing activities
Issuance of new shares                                                            -            -      24,980          2,389
Payments of debt                                                                  -            -      -2,400           -230
Issuance of debt                                                                  -        2,400
Warrant premiums received                                                         -            -         920             88
                                                                        ----------------------------------------------------
Net cash from financing activities                                                -        2,400      23,500          2,247
                                                                        ----------------------------------------------------
Effect of exchange rate changes on cash and
cash equivalents                                                               -277          501         648             62
                                                                        ----------------------------------------------------
Net change in cash and cash equivalents                                     -74,244      -59,049      -2,284           -218
                                                                        ====================================================

Cash and cash equivalents, beginning of year                                187,048      112,804      53,755          5,141
Cash and cash equivalents, end of year                                      112,804       53,755      51,471          4,922
                                                                        ----------------------------------------------------
Net change in cash and cash equivalents                                     -74,244      -59,049      -2,284           -218
                                                                        ====================================================

Cash received for interest                                                    8,806        2,926       1,507            144
Cash paid for interest                                                           11          392         214             20
Cash paid for taxes                                                              41           42          43              4



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

</TABLE>

<PAGE>
-------------------------------------------------------------------------------
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, and the Swedish Financial Accounting Standards Council's
recommendations, which represent 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 22 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 2001 are also presented in U.S. Dollars which
presentation is unaudited and being presented solely for convenience of the
reader and reflects the translation from SEK, at the rate of SEK 10.4571 =
USD 1.00, the Noon Buying Rate of the U.S. Federal Reserve Bank of New York
on December 31, 2001. Amounts may not total due to rounding.

CHANGE IN ACCOUNTING PRINCIPLE
In the annual accounts of 2001 the warrant premiums received, earlier
disclosed as long-term liability, were reclassified to equity. Warrant
premiums for warrants matured not exercised were reclassified to
accumulated loss and warrant premiums received for warrants not matured
were classified as restricted equity. Going forward warrant premiums
received will be presented as restricted equity.
In all other respects the accounting principles have been kept unchanged as
compared to the earlier year.

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
1:00 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 15.

REVENUE RECOGNITION
Revenue from the sale of goods is recorded upon delivery.
Revenue from outlicensing is recognized when the license is delivered and
the collectibility of the license fee is reasonably assured.

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.

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 used 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.

The capitalized costs are fully amortized in connection with the year end
closing 2000. They have been 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.

PATENTS
Patents are reported at original acquisition cost from third party less
accumulated amortization. Patents are amortized over the estimated economic
life of the product to which the patent refers, which normally exceeds 5
years, commencing when the product becomes fully commercially available.
The amortization period does not 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 acquisition cost less
accumulated depreciation. Maintenance and repair costs are expensed as
incurred. New investments, improvements and major purchases are
capitalized. Computer equipment is depreciated over an estimated useful
life of three years. Other machinery and equipment are depreciated over an
estimated useful life of five years.

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 an 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 they can be realized from reversing
deferred tax liabilities. Remaining deferred tax assets, which include the
tax effect of tax loss carried forward, are reduced by a valuation
allowance to the amount that it is more likely than not to be realized.

The 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 22 e).

RECEIVABLES AND LIABILITIES IN FOREIGN CURRENCY
Assets and liabilities denominated in foreign currencies have been
translated at the year-end exchange rate. Assets and liabilities that are
covered by qualifying hedges are translated at the rate specified in the
forward exchange contract.

Exchange gains / losses pertaining to operating assets and liabilities are
included in Other operating income for 3,987 in 1999, 198 in 2000 and 401
in 2001 and in Other operating expenses for 2,770 in 1999, 484 in 2000 and
848 in 2001. Exchange gains pertaining to current assets have been included
in Interest income for 312 in 1999, 127 in 2000 and 107 in 2001.

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 ( 21,203,800 for 1999 and 2000, 22,014,000 for
2001). The effect of the Company's Warrants has not been included in the
computation of Net loss per Ordinary Shares as it would be anti-dilutive.
Therefore, basic and diluted net loss per ordinary share are equal.

HEDGING OF FUTURE CASH FLOWS
Certain 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 for the
following twelve months.

Additionally part of the anticipated cash inflows in YEN in the year 2001 was
hedged at December 31, 1999, 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) Biora has, in accordance
with this policy, hedged the main part of the net receivables with forward
exchange contracts. The forward exchange contracts prevailing on December 31,
2001, had a duration up until March 27, 2002. During 1999, 2000 and 2001
budgeted inflows in YEN were hedged by foreign exchange contracts.
Additionally the first payment for delivery to Japan in 2002 was hedged by a
foreign exchange contract. The remaining deliveries to Japan in 2002 will be
hedged when a delivery plan has been received from Seikagaku.

The contract installments in USD from Medpharma in 2001 and 2002 were hedged
by foreign exchange contracts in 2001.

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 commitment
or anticipated 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 related financial
instrument is then marked- to-market and the resulting unrealized gain or
loss is recorded as part of the gain or loss on sale or settlement of the
underlying item.

The difference between the forward rate and the spot rate at the inception
of the contract 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.

WARRANT PROGRAMS
Warrants issued to employees have been sold at a price reflecting the fair
market value of the warrant. Warrant premiums received are recorded as
restricted equity. At the exercise of a warrant the share capital will
increase with SEK 0.04 and the remaining amount paid for the share by the
employee will be recorded as restricted equity.

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.


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

The average number of employees during the respective fiscal year at each
working site was as follows:

<TABLE>
<CAPTION>
                                       Year Ended December 31,
                   --------------------------------------------------------------------------
                      1999                     2000                    2001
                   --------------------------------------------------------------------------
                     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:                      40          26           38          24          37           28
                   --------------------------------------------------------------------------
Subsidiaries:
Germany                     18          45           13          48          14           58
Switzerland                  0          50            -           -           -            -
U.S.                        22          59           26          54          27           55
Italy                        2          50            1           7           1            -
Netherlands                  3          47            4          54           0           71
UK                           2           0            -           -           -            -
                   --------------------------------------------------------------------------
Total subsidiaries          47          50           44          51          42           55
                   --------------------------------------------------------------------------
Consolidated                87          39           82          38          79           42
                   ==========================================================================
</TABLE>



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

<TABLE>
<CAPTION>
                                            Year Ended December 31,
                   --------------------------------------------------------------------------
                      1999                     2000                    2001
                   --------------------------------------------------------------------------
                        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                   18,712       9,203       17,721       9,225      18,416        9,433
                                    (3 695)*                 (3 490)*                 (3 581)*
Subsidiaries            29,346       4,765       25,157       3,071      27,587        3,551
                                      (897)                    (715)                    (779)
                   --------------------------------------------------------------------------
Consolidated            48,058      13,968       42,878      12,296      46,003       12,984
                                    (4 592)**                (4 205)**                (4 360)**
                   ==========================================================================

*   781 for 1999, 1,434 for 2000 and 928 for 2001of 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, 1999 nor
    December 31, 2000 nor December 31, 2001.

**  1,260 for 1999, 1,623 for 2000 and 1,079 for 2001of the consolidated
    pension cost refer to the category Board of Directors and President. The
    consolidated outstanding pension obligations to this category amounted to
    248 as at December 31, 1999, 233 as at December 31, 2000, and 261 as at
    December 31, 2001.

</TABLE>



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

<TABLE>
<CAPTION>
                                            Year Ended December 31,
                   --------------------------------------------------------------------------
                      1999                     2000                    2001
                   --------------------------------------------------------------------------
                      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:                   3,165      15,547        4,893      12,828       3,880       14,536
                   --------------------------------------------------------------------------
Subsidiaries:
Sweden                      25           -            -           -           -            -
Germany 1)               2,600       8,435         -135       5,528       1,136        5,682
Switzerland                340         182            -           -           -            -
U.S.                     1,623      12,408        1,800      14,895       2,245       18,236
Italy 2)                   972         189           81         175           -          270
Netherlands 3)             843         782        1,916         897           -           18
UK                           -         947            -           -           -            -
                   --------------------------------------------------------------------------
Total subsidiaries       6,403      22,943        3,662      21,495       3,381       24,206
                   --------------------------------------------------------------------------
Consolidated             9,568      38,490        8,555      34,323       7,261       38,742
                   ==========================================================================

1)   Severance pay amounting to 1,382 was included in the remuneration to the
     President in Germany 1999. The final settlement resulted in two instead
     of twelve months severance pay. Accordingly the year 2000 remuneration
     to the President has been reduced by 1,105.

2)   The employment contract with the President in Italy was transformed into
     a consultancy agreement as from February 1, 2000.

3)   Severance pay amounting to 1,316 was included in the year 2000
     remuneration to the employees in Holland, including 1,154 for the President.

</TABLE>


Information below regarding benefits expensed for senior executives refers to
2001 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 Wahlstrom, Chairman of the Board
of Biora.

In addition to their 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, Per Lojdquist 25, Christer Testen 25.
Additionally Eskedal Consult A/S, a company controlled by Svein. G. Eskedal,
has received 730 for consultancy assignments.

The salary expensed for Rickard Soderberg, President of Biora during 2001,
amounted to 2,059. In addition he received pension benefits paid by Biora in
accordance with an individual plan prepared by Forsakrings AB Skandia, for
which the Company expensed 455. In accordance with the employment contract,
Rickard Soderberg was entitled to a 6-month mutual period of notice. In
addition he was entitled to a severance pay equal to 18 months' salary.

According to the employment agreement, which is limited in time to 3 years
Donna Janson, President of Biora as from January 1, 2002, is entitled to an
annual salary, including social security expenses, of approximately 3,137
(USD 300,000). In addition, she is entitled to an annual bonus amounting to
a maximum of 25% of her annual salary. She is also entitled to pension
benefits for which the company will pay approximately 63 (USD 6,000)
annually. The Company may terminate her position by giving a minimum of six
months' notice and a maximum of twelve months' notice, beginning no earlier
than January 1, 2003. She is also entitled to severance pay equal to one
year's salary, which may also be paid in the case of a change in the
control of Biora. Ms. Janson is entitled to purchase 150,000 warrants
according to the program approved on June 1, 2001; please see note 15. She
is also entitled to a furnished apartment supplied by Biora in Sweden.

The salary expensed for Anders Agering, Executive Vice President of Biora
during 2001, amounted to 964. In addition he received pension benefits paid
by Biora in accordance with an individual plan prepared by SPP Liv, for which
the Company expensed 297. In accordance with the employment contract, Anders
Agering was entitled to severance pay equal to 18 months' salary.

Other senior executives employed by the Parent Company are also entitled to a
severance pay not exceeding 18 months' salary. Future pension benefits are
based on individual plans.


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

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

                                              Year Ended December 31,
                                        -------------------------------------
                                            1999        2000        2001
                                        -------------------------------------
Audit assignments                            461         423         497
Other assignments                            658         338         266
                                        -------------------------------------
Total                                      1,119         761         763
                                        =====================================



-------------------------------------------------------------------------------
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,
                                          -------------------------------------
                                                  1999        2000        2001
                                          -------------------------------------
Total research and development costs            41,597      42,789      26,787
Capitalized research and development costs           -           -           -
                                          -------------------------------------
Net                                             41,597      42,789      26,787
                                          =====================================

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




-------------------------------------------------------------------------------
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,
                                        -------------------------------------
                                                1999        2000        2001
                                        -------------------------------------
Cost of goods sold                               844       1,072         962
Selling expenses                               2,049       3,235       1,616
Administrative expenses                          358         552         342
Research and development costs                10,896      14,507       3,019
                                        -------------------------------------
Total                                         14,147      19,366       5,939
                                        =====================================

Included in depreciation / amortization accounted for as research and
development costs are amortization of capitalized R&D costs amounting to
8,595 for 1999, 10,514 for 2000 and 0 for 2001. In the year 2000
depreciation / amortization is included a write-down of the Amelin-patent by
1,430. The corresponding depreciation/amortization for year 2001 includes
write-downs of the patents for apoptosis and breast regeneration.

Due to the computer equipment being depreciated over an estimated useful life
of 3 years as from 2000, the depreciations are approximately SEK 1.7 million
larger year 2000 than would have been the case if the useful life had still
been estimated to 5 years.

See note 8 concerning the distribution of depreciation / amortization between
the different kinds of long-term assets.



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

Installments for license agreements regarding a development project for
xerostomia to Medpharma are included in the year 2001 operating income at
4,965. The Other operating income for the year 2001 also includes a lump sum
amounting to 10,000 for a license agreement with Molnlycke regarding a
development project in non dental wound-healing. The Other operating expenses
for the year 2001 include 1,200 in royalty expenses to the Swedish Industrial
Fund for the latter license agreement as well as 1,447 in expenses in
connection with the outlicensing of the wound-healing project.

A pension fee surplus at SPP of 446 has been recorded as Other operating
income during year 2000. Other operating income and expenses also include
foreign exchange gains and losses, as described in Note 1.



-------------------------------------------------------------------------------
Note 7 INCOME TAXES
-------------------------------------------------------------------------------

The loss before income taxes consists of the following:

                                            Year Ended December 31,
                                      -------------------------------------
                                              1999        2000        2001
                                      -------------------------------------
Sweden                                     -87,649     -88,449     -21,132
Foreign                                      1,064      12,468      -3,929
                                      -------------------------------------
Total                                      -86,585     -75,981     -25,061
                                      =====================================

Income taxes are distributed as follows:

                                            Year Ended December 31,
                                      -------------------------------------
                                              1999        2000        2001
                                      -------------------------------------
Current
 Sweden                                          -          -4          -4
 Foreign                                      -154        -164         -30
                                      -------------------------------------
Total                                         -154        -168         -34
                                      =====================================
Deferred
 Sweden 1)                                       0           -           -
 Foreign                                         -           -           -
                                      -------------------------------------
Total                                         -154        -168         -34
                                      =====================================


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

Deferred tax assets on tax losses carried forward have not been recognized
due to a history of losses from operations of the Company.

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

                                                Year Ended December 31,
                                          -------------------------------------
                                                  1999        2000        2001
                                          -------------------------------------
Expected income tax benefit 1)                  24,244      21,275       7,017
Effect of:
Difference in tax rates for
   foreign subsidiaries                           -369      -1,645         720
Losses not currently utilized                  -24,825     -23,091      -8,176
Utilized losses from earlier years               2,065       5,585       1,378
Non-deductible items                            -1,273      -2,294        -976
Non-taxable income                                   4           2           3
                                          -------------------------------------
Actual tax according to Statements
   of Operations                                  -154        -168         -34
                                          =====================================

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 and U.S., that amounted to 208,649 at December 31, 2001.
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, 37% in Germany, 40% in Italy, 30% in UK, 25% in Switzerland and
40% in U.S.

The Company had tax loss carried forward in Sweden that amounted to 279,559
at December 31, 2001. 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, Italy, UK and Sweden tax
losses carried forward do not expire. In Switzerland the time limit is 7
years and in U.S. 15 years for fiscal year started before August 5, 1997 and
20 years for fiscal year beginning after August 5, 1997. This means that 366
will expire in 2004, 366 in 2005, 808 in 2006, 114 in 2007, 9548 in 2012,
22010 in 2018, 65 in 2019, 56 in 2020 and 8494 will expire in 2021.


<TABLE>
<CAPTION>

-------------------------------------------------------------------------------
NOTE 8 ACQUISITION VALUE OF LONG-TERM ASSETS, ETC.
-------------------------------------------------------------------------------

CAPITALIZED R&D COSTS
                                                                        As of December 31,
                                                                -------------------------------------
                                                                       1999         2000        2001
                                                                -------------------------------------
<S>                                                                  <C>          <C>             <C>
Accumulated acquisition cost, beginning and end of year              23,094       23,094           -
                                                                -------------------------------------
Accumulated amortization, beginning of year                          -3,985      -12,580           -
Amortization for the year                                            -8,595      -10,514           -
                                                                -------------------------------------
Accumulated amortization, end of year                               -12,580      -23,094           -
                                                                -------------------------------------
Net book value, end of year                                          10,514            -           -
                                                                =====================================


PATENTS
                                                                         As of December 31,
                                                                -------------------------------------
                                                                       1999         2000        2001
                                                                -------------------------------------
Accumulated acquisition cost, beginning of year                       7,571        8,463      12,084
Capital expenditures for the year                                     1,040        3,589       1,654
Translation differences for the year                                   -148           32          52
                                                                -------------------------------------
Accumulated acquisition cost, end of year                             8,463       12,084      13,790
                                                                -------------------------------------
Accumulated amortization, beginning of year                          -1,343       -2,404      -4,972
Amortization for the year                                            -1,103       -1,132      -1,170
Write-downs for the year                                                  -       -1,430        -697
Translation differences for the year                                     42           -6          -3
                                                                -------------------------------------
Accumulated amortization, end of year                                -2,404       -4,972      -6,842
                                                                -------------------------------------
Net book value, end of year                                           6,059        7,112       6,948
                                                                =====================================


PLANT AND MACHINERY
                                                                         As of December 31,
                                                                -------------------------------------
                                                                      1999         2000        2001
                                                                -------------------------------------
Accumulated acquisition cost, beginning of year                       4,931        6,013       6,940
Capital expenditures for the year                                     1,181          984         175
Sales / disposals                                                      -134          -50         -35
Reclassification                                                         35           -7           -
                                                                -------------------------------------
Accumulated acquisition cost, end of year                             6,013        6,940       7,080
                                                                -------------------------------------
Accumulated depreciation, beginning of year                          -2,994       -3,765      -4,780
Sales / disposals                                                        87           50          35
Reclassification                                                        -14            7           -
Depreciation of the year                                               -844       -1,072        -962
                                                                -------------------------------------
Accumulated depreciation, end of year                                -3,765       -4,780      -5,707
                                                                -------------------------------------
Net book value, end of year                                           2,248        2,160       1,373
                                                                =====================================


EQUIPMENT, TOOLS, FIXTURES AND FITTINGS
                                                                         As of December 31,
                                                                -------------------------------------
                                                                       1999         2000        2001
                                                                -------------------------------------
Accumulated acquisition cost, beginning of year                      17,463       18,507      19,542
Capital expenditures for the year                                     1,802        1,510       1,080
Sales / disposals                                                      -688       -1,217      -1,152
Reclassification                                                        -35            7           -
Translation differences for the year                                    -35          735         937
                                                                -------------------------------------
Accumulated acquisition cost, end of year                            18,507       19,542      20,407
                                                                -------------------------------------
Accumulated depreciation, beginning of year                          -7,131      -10,254     -15,260
Sales / disposals                                                       464          718       1,105
Reclassification                                                         14           -7           -
Depreciation of the year                                             -3,586       -5,218      -3,111
Translation differences for the year                                    -15         -499        -776
                                                                -------------------------------------
Accumulated depreciation, end of year                               -10,254      -15,260     -18,042
                                                                -------------------------------------
Net book value, end of year                                           8,253        4,282       2,365
                                                                =====================================
</TABLE>



<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
NOTE 9  OTHER LONG-TERM RECEIVABLES
-------------------------------------------------------------------------------

                                                                        As of December 31,
                                                                -------------------------------------
                                                                        1999         2000        2001
                                                                -------------------------------------
<S>                                                                   <C>          <C>         <C>
Opening balance                                                       2,571        2,534       2,553
Employee loans repaid                                                     -            -      -1,920
Deposits repaid                                                         -39           -6           -
Deposits expensed                                                       -51          -14           -
Capital value of paid pension insurance fees in Germany                  68           30         -15
Translation differences for the year                                    -15            9          16
Reclassification                                                          -            -           -
                                                                 -------------------------------------
Closing balance                                                       2,534        2,553         634
                                                                -------------------------------------
</TABLE>



------------------------------------------------------------------------------
NOTE 10 INVENTORIES
------------------------------------------------------------------------------

                                                    As of December 31,
                                         -------------------------------------
                                                1999         2000        2001
                                         -------------------------------------
Raw materials                                  1,237        1,208       1,294
Work in progress                               2,846          687       1,059
Finished products                              1,223        5,183       5,704
                                         -------------------------------------
                                               5,306        7,078       8,057
Obsolescence reserve                            -131         -200        -221
                                         -------------------------------------
Total                                          5,175        6,878       7,836
                                         =====================================


Schedule of movements in the inventory obsolescence reserve in the Biora
Group for the years ended December 31, 1999, 2000 and 2001:

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

1999         127                4             -                 -           131
2000         131               69             -                 -           200
2001         200               21             -                 -           221




------------------------------------------------------------------------------
NOTE 11 ACCOUNTS RECEIVABLE - TRADE
------------------------------------------------------------------------------

Schedule of movements in allowance for doubtful accounts and reserves in the
Company for the years ended December 31, 1998, 1999 and 2000:

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

1999              654            76           -46         -43          641

2000              641          -171            24          43          537

2001              537          -100            38          -5          470
                                               (A)         (B)

(A) Foreign exchange differences
(B) Write-offs and collections of bad debts as well as additional accruals



-------------------------------------------------------------------------------
NOTE 12 OTHER CURRENT RECEIVABLES
-------------------------------------------------------------------------------

                                                   As of December 31,
                                          -------------------------------------
                                                 1999         2000        2001
                                          -------------------------------------
Tax receivables                                   292          678          74
V.A.T.                                          2,133        1,548       3,212
Receivables from employees                         77           59          16
Receivable from SPP                                 -          250           -
Other current receivables                         267           83         109
                                          -------------------------------------
Total                                           2,769        2,618       3,411
                                          =====================================



-------------------------------------------------------------------------------
NOTE 13 PREPAID EXPENSES AND ACCRUED INCOME
-------------------------------------------------------------------------------

                                                       As of December 31,
                                                 -------------------------------
                                                    1999         2000      2001
                                                 -------------------------------

Prepaid leasing and property rental expenses         947        1,012     1,111
Prepaid insurances                                   674          482       642
Prepaid marketing expenses                           579          352       255
Prepaid travel expenses                              144           60        72
Other prepaid expenses                               405          739       780
Accrued installment for license agreement*             -            -     2,263
Accrued interest income                                8           48        19
                                                 -------------------------------
Total                                              2,757        2,693     5,142
                                                 ===============================

*Payment received in January 2002 relating to a payment due December 31, 2001.



-------------------------------------------------------------------------------
NOTE 14 CASH AND CASH EQUIVALENTS
-------------------------------------------------------------------------------

                                                   As of December 31,
                                          -------------------------------------
                                                 1999         2000        2001
                                          -------------------------------------

Bank deposits                                  90,000       40,000      25,951
Cash and banks                                 22,804       13,755      25,520
                                          -------------------------------------
Total                                         112,804       53,755      51,471
                                          =====================================


As at December 31, 2001, the following amounts were invested short-term at a
fixed rate of interest:

CURRENCY                       PERIOD                                   AMOUNT
Foreningssparbanken AB         December 21, 2001 - January            16,25,951
                                                                   ------------
TOTAL                                                                    25,951
                                                                   ------------

As at December 31, 1999 TSEK 80,000 were invested short-term with Svenska
Handelsbanken AB and TSEK 10,000 were invested short-term with Nordbanken
(certificate of deposit), both at a fixed rate of interest.

As at December 31, 2001 as well as at December 31, 2000 and at December 31,
1999 Biora GmbH had unutilized bank overdraft facilities amounting to 283
(TDEM 30).



-------------------------------------------------------------------------------
NOTE 15 SHAREHOLDERS' EQUITY
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                               Restricted equity                             Accumulated loss
                                                 ------------------------------------------------   -------------------------------
                                                                 Share        Other      Transla-   Accumu-      Transla-
                                      Number of      Share     premium   restricted   tion diffe-   lated     tion diffe-
                                         shares    capital     reserve      equity        rences    loss           rences     Total
                                    -----------  ------------------------------------------------   -------------------------------
<S>                                  <C>               <C>     <C>           <C>           <C>       <C>            <C>    <C>
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           -        173       -92,023     -3,978     127,406
-----------------------------------------------------------------------------------------------------------------------------------
Disposition of loss in the
  Parent Company                                               -77,827                               77,827                      0
Change in translation differences                                                         130                     -472        -342
Net loss for the year                                                                               -76,149                -76,149
-----------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 2000         21,203,800        848     144,559           -        303       -90,345     -4,450      50,915
-----------------------------------------------------------------------------------------------------------------------------------
Disposition of loss in the
  Parent Company                                               -79,874                               79,874                      0
Earlier received warrant
  premiums matured                                                                                    5,320                  5,320
Warrant premiums received*                                       1,106                                                       1,106
Issuance of new shares                2,550,000        102      23,703                                                      23,805
Change in translation differences                                                         207                     -388        -181
Net loss for the year                                                                               -25,095                -25,095
-----------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 2001         23,753,800        950      89,494           0        510       -30,246     -4,838      55,870
-----------------------------------------------------------------------------------------------------------------------------------

*186 out of 1,106 were included in long-term liabilities as of December 31, 2000, see note 17

</TABLE>


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, 1999, 2000 and 2001 there was no
unrestricted equity available for dividends.

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 .

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, then a shareholder of the Company. 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 date 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 were exercisable for Ordinary Shares at any time up until
January 31, 2001. None of the warrants were exercised. See also note 17.

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 AB entered into an agreement pursuant to which Biora
Option AB agreed to offer all the warrants at a price which reflects the fair
market value of the warrants 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 date using the Black-Sholes valuation model.
Employees of the Company have subscribed for 89,250 (71,250 as at December
31, 1999 and 59,750 as at December 31, 1998) 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 was exercisable for Ordinary Shares at any time during May 2002.

On June 12, 2001, 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 100 principal amount of subordinated debentures with
800,000 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 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 255,500 warrants of this program.

Each warrant entitles the holder to acquire one Ordinary Share of the
Company, at an exercise price of SEK 17,00. The warrants are exercisable for
Ordinary Shares from October 1, 2003, to September 30, 2004. If all of these
warrants are fully exercised, the total number of shares outstanding will
increase to 24,009,300. 920 in warrant premiums was received for this warrant
program of 800,000 warrants a' SEK 3,60 of which the employees of the Company
had subscribed for 255,500 warrants.

On August 24, 2001 the Company made a cash issue for 2,550,000 shares. The
share price was SEK 10.40 and the issue raised 26,520. The issuing expenses
amounted to 2,715 of which 1,540 was paid at year end.


-------------------------------------------------------------------------------
NOTE 16 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, 1998, 1999 and
2000, respectively, are shown in the following table.

                                                   Year Ended December 31,
                                             ---------------------------------
                                                 1999        2000        2001
                                             ---------------------------------
Social security                                 1,452       2,204       2,198
Swedish national multi-employer plan            1,364         901       1,103
Individual                                      3,145       3,194       3,295
                                             ---------------------------------
Total pension costs                             5,961       6,299       6,596
                                             =================================

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



-------------------------------------------------------------------------------
NOTE 17 OTHER LONG-TERM LIABILITIES
-------------------------------------------------------------------------------

                                                  As of December 31,
                                         -------------------------------------
                                           1999           2000           2001
                                         -------------------------------------
Liabilities to credit institutions (a)        -          2,400              -
Other long-term liabilities (b)           5,505          5,506              -
Total                                     5,505          7,906              -

(a)  The liabilities to credit institutions are the only interest bearing
     liabilities of the Company, amounting to 2,400 on December 31, 2000 (0
     on December 31, 1999).

     The 2,400 represented the first payment of the total conditional loan of
     15,000, granted by the Swedish Industrial Fund for the project "Emdogain
     for extra-oral woundhealing applications". These liabilities were fully
     repaid in December 2001 in connection with the outlicensing of the
     woundhealing project to Molnlycke Helthcare.

     In addition to interest (at the official Swedish discount rate
     plus 2.5%) the Swedish Industrial Fund is entitled to royalty based on
     net sales as follows:

     '- 3% of the net sales from the product, from raw material, chemicals,
     components etc for the product and from services related to the product.

     '- 12% of all revenues from agreements concerning option to or
     concerning grant of license to produce or sell the product, components,
     chemicals etc for the product as well as services related to the product.

     '- When the Parent Company has paid royalties totaling 167% of
     the loan obtained from the Swedish Industrial Fund the above mentioned
     royalty rates shall be reduced from 3 to 0,5% and from 12 to 2,4%
     respectively.

     '- The royalty right of the Swedish Industrial Fund expires four
     calendar years after the calendar year when the Company has repaid the
     outstanding loan including accrued interest, however not before December
     30, 2010.


(b)  Other long-term liabilities amounting to 5,320 as of December 31, 1999
     and 2000 apply to warrant premiums received from the warrant program
     approved in January 1997, 560,000 warrants at SEK 9.50. None of these
     warrants were exercised as per January 31, 2001, hence the 5,320 were
     transferred to non-restricted equity. Other long-term liabilities
     amounting to 185 as of December 31,1999 and to SEK 186 as of December
     31, 2000, apply to warrant premiums received from the warrant program
     approved in April 1998. The amount, 186, have been reclassified to
     unrestricted equity as per December 31, 2001, see note 15.



-------------------------------------------------------------------------------
NOTE 18 OTHER CURRENT LIABILITIES
-------------------------------------------------------------------------------

                                                        As of December 31,
                                             ----------------------------------
                                                 1999         2000        2001
                                             ----------------------------------
Employee withholding taxes                      1,282        1,138       1,321
V.A.T.                                            418          767       2,589
Liabilities to customers                          447          161         203
Other current liabilities                         138           84          62
                                             ----------------------------------
Total                                           2,285        2,150       4,175
                                             ==================================

Biora did not have any short-term interest bearing liabilities neither on
December 31, 1999, on December 31, 2000 nor on December 31, 2001.



-------------------------------------------------------------------------------
NOTE 19 ACCRUED EXPENSES
-------------------------------------------------------------------------------

                                                       As of December 31,
                                             ----------------------------------
                                                 1999         2000        2001
                                             ----------------------------------
Accrued personnel-related expenses              8,879        8,971       6,102
Accrued administrative expenses                 2,604        2,574       3,814
Accrued R&D costs                               3,794        2,104       3,265
Accrued marketing expenses                      1,845        2,477       1,771
Accrued royalty expenses                        1,737        4,062       8,276
Other accrued expenses                            637          681         854
                                             ----------------------------------
Total                                          19,496       20,869      24,082
                                             ==================================



-------------------------------------------------------------------------------
NOTE 20 OPERATING LEASES
-------------------------------------------------------------------------------

The Company leases certain plants and equipment in accordance with leasing
contracts which expire in the year 2005. The majority of the material leasing
contracts concern rental of offices. The total amount of future minimum
rental commitments on December 31, 2001, pertaining to office rental
agreements is detailed below.

YEAR

2002                                           4,430
2003                                           4,410
2004                                           1,206
2005                                             429
                                            ---------
TOTAL                                         10,475
                                            =========


The corresponding office rent expenses amounted to SEK 5,404,000 for the year
ended December 31, 2001, SEK 5,472,000 for the year ended December 31, 2000,
and SEK 5,714,000 for the year ended December 31, 1999.

The office rental agreements include conditions concerning index regulation
of the rent and in some case regulation of the rent due to increase in direct
property expenses and taxes. There are options to prolong all office rental
agreements.

Remaining leasing contracts concern leasing of cars, copying machines and
other office equipment. The total amounts of future minimum rental
commitments on December 31, 2001, pertaining to car and office equipment
leasing agreements are listed below.

YEAR

2002                                           1,642
2003                                           1,187
2004                                             279
2005                                              30
                                            ---------
TOTAL                                          3,138
                                            =========

The corresponding leasing expenses amounted to SEK 2,005,000 for the year
ended December 2001, SEK 1,702,000 for the year ended December 31, 2000 and
SEK 2,151,000 for the year ended December 31, 1999.


-------------------------------------------------------------------------------
NOTE 21 COMMITMENTS
-------------------------------------------------------------------------------

In addition to the agreements concerning operating leases mentioned in note
20, the Company has entered into research and development agreements,
agreements with sub-contractors and agreements concerning purchases of other
services. The expenses for these agreements amounted to approximately SEK
17,575,000 for the year ended December 31, 2001, approximately SEK 17,505,000
for the year ended December 31, 2000 and approximately SEK 14,085,000 for the
year ended December 31, 1999.

The total amount of future expense commitments on December 31, 2001,
pertaining to these agreements are listed below.

             YEAR
             2002                                                6,713
             2003                                                  278
                                                             ----------
             TOTAL                                               6,991
                                                             ----------

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 2001 the above royalty amounted to approximately SEK 2,683,000
(2000 SEK 2,167,000 and 1999 SEK 1,779,000) regarding normal sales of Emdogain.

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 15% of the invoiced sales of Biora to the new
external distributor in South Africa during the years 1999-2001 and 10%
royalty of these sales in the years 2002-2003. For 2001 this royalty amounted
to approximately SEK 26,000 (2000 SEK 16,000 and 1999 SEK 12,000).

During the year 2000 the Company acquired the rights to a patent-protected
pharmaceutical project for treating dry mouth (xerostomia). In the purchase
agreement the Company made a commitment to pay 3% royalty of the Net Sales
Price of the products based on the acquired rights. If the sales rights of
the products are out licensed, the royalty commitment of the Company amounts
to 3% of the Net Sales Price of the licensees.

See note 17 (a) concerning commitments in connection with the conditional
loan from the Swedish Industrial Fund.

Biora's activities are affecting the environment through the waste of organic
material and degradable solvent into water. As a result, the Company falls
under the jurisdiction of the County Environmental Agency and is exposed to
the possibility of judicial or administrative actions for remediation and/or
penalties brought by the agency.

In connection with the change in environmental laws in Sweden in 1999,
Biora was required to apply for an environmental permit. The application was
submitted during 2000.

The Company has been and will be responsible for any costs related to its
compliance with, or remediation resulting from, environmental regulations.

There are currently no identified environmental projects of which the costs
can be reasonably estimated. However, the continuation of present
investigations, more extensive investigation over time, or changes in
regulatory requirements could result in future liabilities. The Company is
insured by third-party insurance companies for liabilities arising from its
operations, including loss of or damage to third-party property, death or
injury to third parties, statutory workers compensation protection, and
pollution caused by sudden and accidental occurrence. Although there can be
no assurance that the amount of insurance carried by the Company is
sufficient to protect the Company fully in all events, all such insurance is
carried at levels of coverage and deductibles that the Company considers
financially prudent. A successful liability claim for which the Company would
be underinsured or uninsured could have a material adverse effect on the
Company.


-------------------------------------------------------------------------------
NOTE 22 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,
                                                      ---------------------------------------------------
                                                           1999                2000                 2001
                                                      ---------------------------------------------------
<S>                                                      <C>                 <C>                  <C>
Net loss under Swedish GAAP                             -86,739             -76,149              -25,095
Capitalization of certain R&D costs (a)                    -462              -1,355                 -589
Reversal of R&D expenses (b)                              9,406              11,349                  932
Amortization of patents  ('c)                                 -                   -                  519
Hedging of future cash flows (g)                           -652                 378                  -83
Receivable on SPP concerning pension fee surplus (i)          -                -250                  250
NET LOSS UNDER U.S. GAAP                                -78,447             -66,027              -24,066
                                                      ===================================================
BASIC EPS (D)
Net loss per Ordinary Share                               -3.70               -3.11                -1.09
                                                      ===================================================
Net loss per ADS                                          -7.40               -6.23                -2.19
                                                      ===================================================
DILUTED EPS (D)
Net loss per Ordinary Share                               -3.70               -3.11                -1.09
                                                      ===================================================
Net loss per ADS                                          -7.40               -6.23                -2.18
                                                      ===================================================


                                                                       As of December 31,
                                                      ---------------------------------------------------
                                                           1999                2000                 2001
                                                      ---------------------------------------------------
Shareholders' equity under Swedish GAAP                 127,406              50,915               55,870
Capitalization of certain R&D costs (a)                 -12,497              -2,503               -2,159
Amortization of patents ('c)                             -1,715              -1,715               -1,196
Conditional shareholders' contribution (f)               -7,510              -7,510               -7,510
Hedging of future cash flows (g)                           -652                -274                 -357
warrant premiums received (h)                             5,505               5,506                    -
Receivable on SPP concerning pension fee surplus (i)          -                -250                    -
SHAREHOLDERS' EQUITY UNDER U.S. GAAP                    110,537              44,169               44,648
                                                      ===================================================

</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 and capitalized R&D
equipment 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 and equipment recorded for Swedish GAAP purposes 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

Net loss per Ordinary Share has been calculated on the basis of the weighted
average number of shares outstanding, 22,014,211 (21,203,800 number of shares
for 1999 and 2000).

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

The impact of warrants (see note 15) 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 temporary 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,
                                       ------------------------------------------------------
                                               1999                2000                 2001
                                       ------------------------------------------------------
GROSS DEFERRED TAX ASSETS:
<S>                                         <C>                 <C>                  <C>
Tax loss carried forward                    110,273             136,916              153,641
Capitalized costs for tax purposes            2,944                   -                    -
                                        ------------         -----------          -----------
TOTAL                                       113,217             136,916              153,641
Less valuation allowance                   -113,217            -136,916             -153,641
                                        ------------         -----------          -----------
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 the Company has marked to market and
therefore hedge accounting has not been applied for derivative financial
instruments.

h) WARRANT PREMIUMS RECEIVED
As per December 31, 2000, warrant premiums received regarding not yet
exercised warrants were accounted for as long-term liabilities. As per
December 31, 2001, warrant premiums received regarding not matured and not
yet exercised warrants were reclassified to restricted equity.
Under U.S. GAAP warrant premiums are disclosed as equity.

(i) RECEIVABLE ON SPP CONCERNING PENSION FEE SURPLUS
A pension fee surplus at SPP has been disclosed as Other operating income in
accordance with Swedish GAAP. Under U.S. GAAP such pension fee surplus can
only be accounted for as income if cash has been received by the Company, or
the surplus is available to reduce contributions due by the Company for the
current fiscal year.

(j) COMPREHENSIVE INCOME/LOSS

<TABLE>
<CAPTION>
                                                                            Accumulated Other
                                                    Comprehensive           Comprehensive
                                                    income / loss           income / loss
                                                    ------------------------------------------
<S>                                                     <C>                       <C>
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
Comprehensive loss:
Net loss                                                -76,149
Currency translation adjustment                            -342                     -342
                                                                            -------------
                                                    ------------
Total comprehensive loss                                -76,491
                                                    ============

BALANCE AT DECEMBER 31, 2000                                                      -4,147
                                                                            =============

Comprehensive loss:
Net loss                                                -25,095
Currency translation adjustment                            -181                     -181
                                                                            -------------
                                                    ------------
Total comprehensive loss                                -25,276
                                                    ============

BALANCE AT DECEMBER 31, 2001                                                      -4,328
                                                                            =============
</TABLE>



-------------------------------------------------------------------------------
Note 23 U.S. GAAP Condensed Information
-------------------------------------------------------------------------------

As a result of the U.S. GAAP differences described in Note 22, 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,
                                                                  --------------------------------------------------------------
                                                                          1999                    2000                     2001
                                                                  --------------------------------------------------------------
<S>                                                                     <C>                     <C>                     <C>
Product sales                                                           73,556                  89,160                  110,677
Contract revenue                                                             -                       -                        -
                                                                  --------------------------------------------------------------
TOTAL REVENUES                                                          73,556                  89,160                  110,677

Cost of goods sold                                                     -15,470                 -21,148                  -22,797
                                                                  --------------------------------------------------------------
GROSS PROFIT                                                            58,086                  68,012                   87,880

Selling expenses                                                       -90,783                 -78,387                  -76,998
Administrative expenses                                                -18,505                 -25,437                  -22,880
Research and development costs                                         -32,653                 -32,795                  -25,925
Other operating income                                                   4,001                     393                   16,299
Other operating expenses                                                -3,659                    -375                   -3,811
                                                                  --------------------------------------------------------------
LOSS FROM OPERATIONS                                                   -83,513                 -68,589                  -25,435

Interest income                                                          5,231                   3,095                    1,630
Interest expense                                                           -11                    -365                     -227
                                                                  --------------------------------------------------------------
LOSS BEFORE INCOME TAXES                                               -78,293                 -65,859                  -24,032

Income taxes                                                              -154                    -168                      -34
                                                                  --------------------------------------------------------------
NET LOSS                                                               -78,447                 -66,027                  -24,066
                                                                  ==============================================================




CONDENSED CONSOLIDATED BALANCE SHEETS - U.S. GAAP BASIS

ASSETS                                                                                 As of December 31,
                                                                  --------------------------------------------------------------
                                                                          1999                    2000                     2001
                                                                  --------------------------------------------------------------
Cash and cash equivalents                                              112,804                  53,755                   51,471
Accounts receivable - trade                                              9,281                   9,173                   12,942
Other current assets                                                    10,701                  11,939                   16,389
                                                                  --------------------------------------------------------------
Total current assets                                                   132,786                  74,867                   80,802
                                                                  --------------------------------------------------------------

Patents                                                                  4,344                   5,397                    5,752
Property, machinery and equipment - net                                  8,518                   3,939                    1,579
Other long-term receivables                                              2,876                   2,553                      634
                                                                  --------------------------------------------------------------
Total long-term assets                                                  15,738                  11,889                    7,965
                                                                  --------------------------------------------------------------

Total assets                                                           148,524                  86,756                   88,767
                                                                  ==============================================================


LIABILITIES AND SHAREHOLDERS' EQUITY
                                                                                 As of December 31,
                                                                  --------------------------------------------------------------
                                                                          1999                    2000                     2001
                                                                  --------------------------------------------------------------
Accounts payable - trade                                                 7,600                   8,973                    7,522
Other current liabilities                                               22,433                  23,443                   28,782
                                                                  --------------------------------------------------------------
TOTAL CURRENT LIABILITIES                                               30,033                  32,416                   36,304
                                                                  --------------------------------------------------------------

Other long-term liabilities                                              7,954                  10,171                    7,815
                                                                  --------------------------------------------------------------
TOTAL LONG-TERM LIABILITIES                                              7,954                  10,171                    7,815
                                                                  --------------------------------------------------------------

SHAREHOLDERS' EQUITY                                                   110,537                  44,169                   44,648
                                                                  --------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                             148,524                  86,756                   88,767
                                                                  ==============================================================
</TABLE>



-------------------------------------------------------------------------------
NOTE 24 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,
                                      --------------------------------------------------------------
                                              1999                    2000                     2001
                                      --------------------------------------------------------------
SALES:
<S>                                          <C>                     <C>                      <C>
Sweden                                       2,215                   2,546                    2,989
Other Nordic countries                       2,544                   2,516                    3,064
Germany / Austria                           31,204                  23,787                   33,943
Switzerland                                  1,781                   1,914                    1,430
U.S.                                        47,773                  67,656                   85,518
Canada, Mexico                               1,308                   2,239                    3,302
Italy                                        8,337                   9,632                    9,410
Benelux countries                            5,329                   4,847                    3,503
U.K.                                         1,357                   1,914                    1,460
Japan                                        6,902                   6,034                        0
Other countries                              1,449                   3,329                    5,141
Inter-area elimination                     -36,643                 -37,254                  -39,083
                                      --------------------------------------------------------------
TOTAL SALES                                 73,556                  89,160                  110,677
                                      ==============================================================


                                                         Year Ended December 31,
                                      --------------------------------------------------------------
                                              1999                    2000                     2001
                                      --------------------------------------------------------------
LONG-TERM ASSETS:
Sweden                                      10,586                   8,803                    5,952
Germany / Austria                            1,470                     944                      624
Switzerland                                      -                       -                        -
U.S.                                         2,254                   1,150                      583
Italy                                          337                     119                       89
Benelux countries                            1,040                     873                      717
U.K                                             50                       -                        -
Other countries                                  -                       -                        -
                                      --------------------------------------------------------------
TOTAL LONG-TERM ASSETS                      15,737                  11,889                    7,965
                                      ==============================================================
</TABLE>



(ii) EXPORT SALES

<TABLE>
<CAPTION>

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

                                                         Year Ended December 31,
                                      --------------------------------------------------------------
                                              1999                    2000                     2001
                                      --------------------------------------------------------------
<S>                                          <C>                     <C>                      <C>
Other Nordic countries                       2,544                   2,516                    3,064
Canada and Mexico                            1,308                   2,196                    3,302
Greece                                         265                     383                      547
Israel                                         231                     705                    1,144
Japan                                        6,902                   6,034                        0
France                                         320                   1,218                    1,003
Spain                                          318                     466                      676
Poland                                         207                     246                      517
Taiwan                                           -                       -                      861
Other countries                                108                     290                      274
                                      --------------------------------------------------------------
Total export sales                          12,203                  14,054                   11,388
                                      ==============================================================
</TABLE>


(iii) MAJOR CUSTOMERS

No single customer represents 10% of sales for any of the periods presented.


(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,
                                      --------------------------------------------------------------------------
                                              1999                    2000                     2001
                                      --------------------------------------------------------------------------
                                          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             47           0          29            0          22           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, 2001. 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,
                                      --------------------------------------------------------------------------
                                              1999                    2000                     2001
                                      --------------------------------------------------------------------------
                                               Buy        Sell         Buy         Sell         Buy        Sell
                                      --------------------------------------------------------------------------
                                                               (SEK in million)
<S>                                             <C>         <C>          <C>          <C>         <C>        <C>
USD                                              -          10           -            9           -          15
EUR                                              -          10           -            8           -           4
JPY                                              -          27           -           12           -           3
                                      --------------------------------------------------------------------------
Total                                            -          47           -           29           -          22
                                      ==========================================================================
</TABLE>



(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. At December 31, 1999, 2000, and at
December 31, 2001, the fair value of the Company's financial instruments were
insignificant.


(vi) NEW ACCOUNTING PRONOUNCEMENTS

Biora has not adopted any new accounting principles for the financial year
2002 under Swedish GAAP.

In June 2001, the FASB issued SFAS No. 141, Business Combinations, (SFAS No.
141) and SFAS No. 142, Goodwill and Other Intangible Assets (SFAS No. 142).
SFAS No. 141 requires that the purchase method of accounting be used for all
business combinations. SFAS No. 141 specifies criteria that intangible assets
acquired in a business combination must meet to be recognized and reported
separately from goodwill. SFAS No. 142 will require that goodwill and
intangible assets with indefinite useful lives no longer be amortized, but
instead tested for impairment at least annually in accordance with the
provisions of SFAS No. 142. SFAS No. 142 also requires that intangible assets
with estimable useful lives be amortized over their respective estimated
useful lives to their estimated residual values, and reviewed for impairment
in accordance with SFAS No. 121 and subsequently, SFAS No. 144 after its
adoption.

The Company adopted the provisions of SFAS No. 141 as of July 1, 2001 and
SFAS No. 142 is effective January 1, 2002. Goodwill and intangible assets
determined to have an indefinite useful life acquired in a purchase business
combination completed after June 30, 2001 but before SFAS No. 142 is adopted
are not amortized. Goodwill and intangible assets acquired in business
combinations completed before July 1, 2001 continued to be amortized and
tested for impairment prior to the full adoption of SFAS No. 142. The company
did not complete any purchase business combinations after June 30, 2001 and
prior to the adoption of SFAS No. 142, thus there was no effect on the
current year financial statements from the adoption of SFAS No. 141.

Upon adoption of SFAS No. 142, the Company is required to evaluate its
existing intangible assets and goodwill that were acquired in purchase
business combinations, and to make any necessary reclassifications in order
to conform with the new classification criteria in SFAS No. 141. The Company
will be required to reassess the useful lives and residual values of all
intangible assets acquired, and make any necessary amortization period
adjustments. If an intangible asset is identified as having an indefinite
useful life, the Company will be required to test the intangible asset for
impairment in accordance with the provisions of SFAS No. 142. Impairment is
measured as the excess of carrying value over the fair value of an intangible
asset with an indefinite life.

SFAS No. 142 requires the Company to perform a transitional goodwill
impairment evaluation to assess whether there is an indication that goodwill
is impaired as of the date of adoption. The Company must identify its
reporting units, determine the carrying value and fair value of each
reporting unit, and compare those values. To the extent the carrying amount
of a reporting unit exceeds the fair value, an indication exists that the
reporting unit goodwill may be impaired and the Company must perform the
second step of the transitional impairment test. In the second step, the
Company must compare the implied fair value of the reporting unit goodwill,
which is determined by allocating the fair value to all assets and
liabilities in a manner similar to a purchase price allocation prescribed by
SFAS No. 141, with the carrying amount of the reporting unit goodwill to
determine whether any transitional impairment loss should be recognized. The
Company is currently completing its determination of the effect of the
adoption of SFAS No. 142.

In June 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement
Obligations (SFAS No. 143). SFAS No. 143 requires the Company to record the
fair value of an asset retirement obligation as a liability in the period in
which it incurs a legal obligation associated with the retirement of tangible
long-lived assets that result from the acquisition, construction, development
and/or normal use of the assets. The Company also records a corresponding
asset which is depreciated over the life of the asset. Subsequent to the
initial measurement of the asset retirement obligation, the obligation will
be adjusted at the end of each period to reflect the passage of time and
changes in the estimated future cash flows underlying the obligation. The
Company is required to adopt SFAS No. 143 on January 1, 2003. The Company is
currently reviewing the impact of the future adoption of SFAS No.143.

In August, 2001, the FASB issued SFAS No. 144, Accounting for the Impairment
or Disposal of Long-Lived Assets (SFAS No. 144). SFAS No. 144 addresses
financial accounting and reporting for the impairment or disposal of
long-lived assets. This Statement requires that long-lived assets be reviewed
for impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Recoverability of assets
to be held and used is measured by a comparison of the carrying amount of an
asset to future net cash flows expected to be generated by the asset. If the
carrying amount of an asset exceeds its estimated future cash flows, an
impairment charge is recognized by the amount by which the carrying amount of
the asset exceeds the fair value of the asset. SFAS No. 144 requires
companies to separately report discontinued operations and extends that
reporting to a component of an entity that either has been disposed of (by
sale, abandonment, or in a distribution to owners) or is classified as held
for sale. Assets to be disposed of are reported at the lower of the carrying
amount or fair value less costs to sell. The Company is required to adopt
SFAS No. 144 on January 1, 2002 and is currently completing its determination
of the effect of the adoption of the standard.

In April 2002, the Financial Accounting Standards Board (FASB) issued SFAS
No. 145 "Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB
Statement No. 13, and Technical Corrections." SFAS No. 145 provides for the
rescission of several previously issued accounting standards, new accounting
guidance for the accounting for certain lease modifications and various
technical corrections that are not substantive in nature to existing
pronouncements. SFAS No. 145 will be adopted beginning January 1, 2003,
except for the provisions relating to the amendment of SFAS No. 13, which
will be adopted for transactions occurring subsequent to May 15, 2002.
Adoption of SFAS No. 145 will not have a material impact on the consolidated
financial statements.

Effective January 1, 2002, the Company adopted the provisions of Emerging
Issues Task Force (EITF) Issue No. 01-9, Accounting for Consideration Given
by a Vendor to a Customer or a Reseller of the Vendor's Products. EITF Issue
No.01-9 codifies and reconciles the Task Force consensuses on all or specific
aspects of EITF Issues No. 00-14, "Accounting for Certain Sales Incentives,"
No.00-22, "Accounting for 'Points' and Certain Other Time-Based or
Volume-Based Sales Incentives Offers, and Offers for Free Products or
Services to be Delivered in the Future," and No. 00-25, "Vendor Income
Statement Characterization of Consideration Paid to a Reseller of the
Vendor's Products" and identifies other related interpretive issues. The
company does not anticipate any material reclassification or change in
operating income when adopting EITF Issue No. 01-9.


-------------------------------------------------------------------------------
Note 25 U.S. GAAP WARRANTS
-------------------------------------------------------------------------------

As described in Note 15 the Company has issued a number of warrant programs.

<TABLE>
<CAPTION>
           Warrants activity during the years ended December 31 1999, 2000 and 2001 is as follows:

                                                1999                            2000                               2001
                                    ----------------------------   ------------------------------   ------------------------------
                                    Warrants    Weighted Average    Warrants     Weighted Average    Warrants     Weighted Average
                                                  Exercise Price                   Exercise Price                   Exercise Price
                                    ----------------------------   ------------------------------   ------------------------------
<S>                                  <C>            <C>             <C>               <C>             <C>                 <C>
Outstanding at beginning
  of year                            619.750         75.78          631.250            76.77          649.250             78.25
Granted                               11.500        130.00           18.000           130.00          255.500             17.00
Exercised                                  -             -                -                -                -                 -
Forfeited                                  -             -                -                -          560.000             70.00
                                    ----------------------------   ------------------------------   ------------------------------
Outstanding at end of year           631.250         76.77          649.250            78.25          344.750             46.25
                                    ============================   ==============================   ==============================
Exercisable at end of year           560.000         70.00          560.000            70.00              N/A               N/A
                                    ============================   ==============================   ==============================

Weighted average fair value of
warrants granted during the year                      0.05                              0.05                                3.6
                                    ============================   ==============================   ==============================

</TABLE>

Warrants outstanding at December 31, 2001 are as follows:

<TABLE>
<CAPTION>
                                                         Warrants Outstanding
                                    -------------------------------------------------------------------
                                          Warrants               Remaining               Exercise Price
Exercise price                                                 Contractual life
                                    -------------------------------------------------------------------
<S> <C>                                     <C>                       <C>                       <C>
SEK 130.00                                  89.250                    0.42                      130.00
SEK 17.00                                  255.500                    2.75                       17.00
                                    ---------------
                                           344.750
                                    ===============
</TABLE>


None of these outstanding warrants are exercisable as of December 31, 2001.
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 for the purposes of the US GAAP reconciliation.
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 under U.S. GAAP 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.

Net loss under US GAAP            1999               2000               2001
                             ----------        -----------         ----------

Reported                       (78,447)           (66,027)           (24,066)
Proforma                       (78,447)           (66,027)           (24,066)


The fair value of the Biora warrants 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:

                              1999-10-29       2000-12-12           6/27/01
                            -------------    --------------      -----------
Risk free interest                 5.00%             5.00%            4.90%
Expected life term            2002-05-31        2002-05-31          9/30/04
Expected volatility                  26%               26%              40%
Expected dividend yield                0                 0                0



-------------------------------------------------------------------------------
NOTE 26 PLEDGED ASSETS AND CONTINGENT LIABILITIES
-------------------------------------------------------------------------------

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 27 ACQUISITIONS OF SHAREHOLDINGS IN SUBSIDIARIES
-------------------------------------------------------------------------------

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 28 SUBSEQUENT EVENTS - UNAUDITED
-------------------------------------------------------------------------------

Biora AB delisted from the Nasdaq National Market January 31, 2002. Biora's
ADR's are quoted on the Over- the-Counter ("OTC") Market with bid and ask
prices published and distributed by Pink Sheets LLC as of February 1, 2002.

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 28 SUBSEQUENT EVENTS - UNAUDITED
-------------------------------------------------------------------------------

Biora AB delisted from the Nasdaq National Market January 31, 2002. Biora's
ADR's are quoted on the Over-the-Counter ("OTC") Market with bid and ask
prices published and distributed by Pink Sheets LLC as of February 1, 2002.