As Filed with the Securities and Exchange Commission on June 30, 2003

                      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, 2002
                        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, 2002.

              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|


<page>

                               TABLE OF CONTENTS

                                                                      Page
INTRODUCTION

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 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 15.   Controls and Procedures                                      60

Certifications                                                          62

Item 18.   Financial Statements
           Consolidated Financial Statements                            F-1

Item 19.   Exhibits                                                     S-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 and
indications under development, (ii) market acceptance of the Company's
technologies, products and indications, (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,
1998, 1999, 2000, 2001 and 2002 and for each of the years ended December 31,
1998, 1999, 2000, 2001 and 2002 have been derived from, and are qualified by
reference to, the Company's Consolidated Financial Statements and Notes
thereto. 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, 2000, 2001 and 2002 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 the Operating and Financial Review
and Prospects Overview, which are included elsewhere herein.

<table>
<caption>

                                                                      Year Ended December 31,
                                            ----------------------------------------------------------------------------
                                                     1998           1999          2000      2001       2002        2002
                                                    (SEK)          (SEK)         (SEK)     (SEK)      (SEK)   US$(1)(2)

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

Income Data:

Swedish GAAP:

                                                <c>            <c>           <c>      <c>        <c>          <c>
       Net sales                                   50 119         73 556        89 160   110 677    129 736      16 885
       Cost of goods sold (3)                     -10 864        -15 470       -21 148   -22 797    -23 014      -2 995
                                            ----------------------------------------------------------------------------
       Gross profit                                39 255         58 086        68 012    87 880    106 722      13 890

       Selling expenses                           -89 622        -90 783       -78 387   -76 998    -68 982      -8 978
       Administrative expenses                    -22 133        -18 505       -25 437   -22 880    -21 474      -2 795
       Research and development costs(4)          -39 980        -41 597       -42 789   -26 787    -16 686      -2 172
       Other operating income                      42 898          4 001           643    16 049      2 275         296
       Other operating expenses                    -1 946         -3 007          -753    -3 728     -2 723        -354
                                            ----------------------------------------------------------------------------
       Loss from operations                       -71 528        -91 805       -78 711   -26 464       -868        -113

Net result                                        -59 998        -86 739       -76 149   -25 095        681          89
Basic EPS
       Net result per Ordinary Share(7)             -2.83          -4.09         -3.59     -1.14       0.03        0.00
       Net result per ADS (7)                       -5.66          -8.18         -7.18     -2.28       0.06        0.01
Weighted average
shares outstanding(5)                              21 204         21 204        21 204    22 014     23 754      23 754

U.S. GAAP:
       Product sales                               50 119         73 556        89 160   110 677    129 736      16 885
       Contract revenue                               224              -             -         -          -           -
                                            ----------------------------------------------------------------------------
       Total revenues                              50 343         73 556        89 160   110 677    129 736      16 885

       Cost of goods sold (3)                     -10 864        -15 470       -21 148   -22 797    -23 014      -2 995
                                            ----------------------------------------------------------------------------
       Gross profit                                39 479         58 086        68 012    87 880    106 722      13 890

       Selling expenses                           -89 622        -90 783       -78 387   -76 998    -68 982      -8 978
       Administrative expenses                    -22 133        -18 505       -25 437   -22 880    -21 474      -2 795
       Research and development costs(4)          -37 233        -32 653       -32 795   -25 925    -18 131      -2 360
       Other operating income                      42 674          4 001           393    16 299      2 275         296
       Other operating expenses                    -1 946         -3 659          -375    -3 811     -2 395        -312
                                            ----------------------------------------------------------------------------
       Loss from operations                       -68 781        -83 513       -68 589   -25 435     -1 985        -259

Net loss                                          -57 251        -78 447       -66 027   -24 066       -436         -57
Basic EPS
       Net loss per Ordinary Share(7)               -2.70          -3.70         -3.11     -1.09      -0.02       -0.00
       Net loss per ADS (7)                         -5.40          -7.40         -6.23     -2.19      -0.04       -0.00
Weighted average
shares outstanding(5)                              21 204         21 204        21 204    22 014     23 754      23 754

Consolidated Balance Sheet Data:

Swedish GAAP:

Cash and cash equivalents                         187 048        112 804        53 755    51 471     51 347       6 683
Total assets                                      247 186        162 736        91 224    92 122     86 634      11 275
Long-term borrowings                                5 872          5 949         8 167       305        269          35
Shareholders' equity / deficit                    213 970        127 406        50 915    55 870     56 215       7 316

Share Capital                                         848            848           848       950        950         124
Number of shares (in thousands)                    21 204         21 204        21 204    23 754     23 754      23 754

U.S. GAAP:

Total assets                                      224 030        148 524        86 756    88 767     81 834      10 651
Shareholders' equity / deficit                    188 779        110 537        44 169    44 648     43 876       5 710

(1)        Solely for convenience, kronor amounts have been translated into U.S. dollars at the Noon Buying Rate on
           June 13, 2003 of U.S. $1.00 = SEK 7.6835.

(2)        Amounts may not total due to rounding.

(3)        The royalty payments to AstraZeneca 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.

(4)        Total research and development costs incurred were SEK 40.0 million, SEK 41.6 million, SEK 42.8 million,
           SEK 26.8 million and SEK 16.7 million for the years ended December 31, 1998, 1999, 2000, 2001 and 2002
           respectively. The royalty payments to AstraZeneca 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 warrants has not been
           included in the computation of loss per Ordinary Share as it would be anti-dilutive.

(6)        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 in 1998 and thereafter have been prepared in accordance with the SAAA.

(7)        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 anti-dilutive.

</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 kronor based on the Noon Buying
Rate.

<table>
<caption>

                                                         Kronor/Dollar Exchange Rates
                                                             (Kronor per Dollar)

Period End                                      Average(1)            High          Low
----------------------------------------------------------------------------------------------

Year ended December 31,


                            <c>              <c>                <c>               <c>
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
2002                           8.6950           9.4820            10.7290            8.6950

</table>

<table>
<caption>

Period End                                    Average(2)            High            Low
---------------------------------------------------------------------------------------------


                           <c>              <c>                 <c>              <c>
Jan, 31, 2003                 8.6140           8.6368              8.7920           8.4750
Feb, 28, 2003                 8.5050           8.4837              8.5650           8.4100
Mar, 31, 2003                 8.4735           8.5440              8.7030           8.3650
Apr, 30, 2003                 8.1700           8.4313              8.6425           8.1700
May 30, 2003                  7.7654           7.9213              8.1470           7.7479
</table>

(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



The following table sets forth, for the periods and dates indicated, the
exchange rate for the Euro against the kronor.

<table>
<caption>
                                                       Kronor/Euro Exchange Rates
                                                           (Kronor per Euro)

Period End                                 Average(1)            High               Low
----------------------------------------------------------------------------------------------
Year ended December 31,


                         <c>            <c>                   <c>                <c>
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
2002                        9.1925         9.1627                9.5150             8.9765

----------------------------------------------------------------------------------------------
Period End                                 Average(2)             High              Low
----------------------------------------------------------------------------------------------

Jan, 31, 2003               9.1995         9.1775                 9.2480            9.0670
Feb, 28, 2003               9.1230         9.1499                 9.2545            9.0940
Mar, 31, 2003               9.2305         9.2221                 9.2955            9.1640
Apr, 30, 2003               9.1145         9.1585                 9.2450            9.1085
May 30, 2003                9.1415         9.1541                 9.1985            9.0860

</table>

(1)  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.



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 kronor and the respective currencies to which the
Company is exposed. For information regarding the effects of currency
fluctuations on Biora's results see "Quantitative and Qualitative Disclosure
about Market Risk -- Impact of Currency Fluctuations and Inflation."

Fluctuations in the exchange rate between the kronor and the dollar will affect
the dollar equivalent of the kronor price of the Ordinary Shares traded on the
Stockholm Stock Exchange. Such fluctuations will also affect the dollar
amounts received by holders of Ordinary Shares 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 Biora's 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, 2003, Biora owned seven United States patents, five
European patents and two Japanese patents, as well as several patents in
various countries. 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 U.S. Food and Drug Administration ("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, 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 2003, 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 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 non-dental 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 ($977,426) through the conversion of outstanding loans, including
accrued interest, made to Biora in the aggregate principal amount of SEK
7,160,419 ($931,922) and accrued interest of SEK 349,633 ($45,504). 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.


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 April 1, 2003. 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 were quoted on the OTC Market (in the form of American Depositary
Shares ("ADSs")) in the United States until December 9, 2002. (For more
information see "Offer and Listing Details").

         The Company's principal capital expenditures for the past three years
include patent applications SEK 2.7 million ($0.3 million) for 2002, SEK 1.7
million ($0.2 million) for 2001, and SEK 3.6 million ($0.5 million) for
2000.

         On April 7, 2003, Straumann Holding AG ("Straumann") announced a
public offer to the shareholders of and to the holders of warrants issued by
Biora. Straumann offered SEK 17 ($2.21) per ordinary share of Biora and SEK
1.50 ($0.20) for each employee warrant issued by Biora. Biora's Board of
Directors retained Enskilda Securities to evaluate the Straumann offer and
Enskilda Securities concluded that the Straumann offer was fair from a
financial standpoint. The offer by Straumann of SEK 17 per ordinary share
implied a premium of approximately 47 per cent compared to the average closing
price of Biora ordinary shares during the 30 trading days prior to the
announcement of the Straumann offer. Based on this premium, as well as the
fairness opinion provided by Enskilda Securities, the Board unanimously
recommended that Biora's shareholders and warrant holders accept the Straumann
offer.

         On June 12, 2003, Straumann announced that it has acquired
approximately 91 percent of the Ordinary Shares of Biora. Straumann has called
for the compulsory acquisition of the remaining outstanding Biora Ordinary
Shares. The Ordinary Shares will be de-listing from the "O-list" of the
Stockholm Stock Exchange at the close of business on July 4, 2003.


4.B. BUSINESS OVERVIEW

         Biora develops, manufactures, and markets biotechnology-based
products and its objective is to be the market leader within the field of
biotechnology-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, 2002, Biora had a total of
78 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 2002, 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.

         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
third-party partners, (iv) complement our existing product offering through
research and development ("R & D").

         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,
reduced 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.

         From its market launch Emdogain was delivered as two components --
one with the freeze-dried protein and the other with a solution, a "gel". When
the original Emdogain was 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 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,
(ii) through wholly-owned subsidiaries in the United States and Germany), and
(iii) through distributors in Austria, Denmark, Canada, Japan, Italy, Israel,
France, Spain, Portugal, Greece, the Czech Republic, Poland, Mexico, Norway,
Puerto Rico, Brazil, Colombia, South Africa, Taiwan, Korea and Switzerland.
Biora's International Customer Service is responsible for customer service in
the Sweden, Finland, 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 Sweden. In 2002, Biora continued to concentrate its resources
in two key markets, the United States and Germany in order to increase the
penetration of EmdogainGel in these markets. In Japan, another key market for
EmdogainGel, the product was approved in December 2001. The Company intends to
continue 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 7 countries and
through distributors in an additional 22 countries. The Company estimates that
approximately 500,000 patients have been treated with Emdogain or EmdogainGel
worldwide as of May 2003, as compared to 400,000 patients as of December 31,
2001. As of December 31, 2002 approximately 3200 American periodontists have
bought Emdogain/EmdogainGel at least once since its introduction. 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,
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 EmdogainGel 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 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 2002
amounted to SEK 27.2 million, an increase of 14 percent in SEK and 15 percent
in local currency compared with 2001.

         Biora began marketing Emdogain in 1996 through its own sales force in
Sweden and via a wholly owned subsidiary in Germany. As of May 1, 2003,
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 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
           received approval in EU for recession defects and has submitted an
           application to the FDA for this indication.

           -- The Company has completed a series of studies for the use of
           Emdogain 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 has approval for this indication in the US, the EU and
           Canada.

           -- 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. A phase I study has been finalized and is presently
           being evaluated.

           -- Dry mouth (xerostomia), like periodontitis, is 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 retained the right to develop and market the
           product to dentists, while Medpharma received the right to develop
           and market the product to target groups outside the dental area.
           Under the agreement Biora should have received a number of
           installments as well as a royalty based on future sales once the
           drug is introduced to the market. A phase-I dose-finding study in
           healthy volunteers has been completed. Medpharma and Biora have
           agreed to further develop the xerostomia product through the phase
           II clinical trial, which is planned to be initiated during the
           third quarter this year. In April this year, Biora received a
           partial license fee payment from Medpharma of USD 50,000. Biora has
           additional license fees due of approximately USD 450,000 that
           Medpharma has agreed to pay by June 13, 2003. At the date of filing
           this Annual Report Medpharma has not paid the outstanding amount of
           USD 450,000. Discussions with Medpharma regarding payment of the
           licensing fee are ongoing.

           -- In 2001, 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 agreement 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
           a 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.

           -- The aim of the SIMI (Surface Improvement of Metal Implants)
           project is to improve the quality and quantity of bone integration
           by surface treatment of metal implants, i.e. to induce a more rapid
           integration of such implants in bone. As with the MATRIX project,
           the SIMI project is partially financed by the European Commission
           with several university-based research groups and other commercial
           partners participating. The project was initiated during the first
           quarter 2001 and will run for three years. Biora's participation
           mainly includes producing proteins for surface coating and
           analyzing the protein-coated implants.

           -- The ETIF (Enabling Technology for Industrial Fermentation)
           project compares recombinant production methods, with one of the
           target products being a new Biora-patented enamel matrix protein,
           Amelin. Biora has demonstrated that recombinant Amelin can induce
           hard tissue formation in several experimental models. The project
           consortium consists of research groups and leading fermentation
           companies from the Oresund region, with completion of the project
           scheduled for first quarter 2004.

           -- 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 tooth 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, 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 2002 was on research projects that support the use of
EmdogainGel.

         The research in enamel matrix proteins, which led to the principal
product Emdogain, gives Biora a platform to develop new biology based products
to be used both in and outside the mouth. Biora expects that during the year
2003, the Company will be able to launch the indications for recession type
defects and furcation (periodontal defects between the dental roots) in the US.

         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:

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

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

         3) 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>
--------------------------------------------------------------------------------------------------------------------------------
Products and New
Indications Under                                             ------------------------------------------------------------------
Development                  Indication                                          Status
                                                              ------------------------------------------------------------------
                                                              United States                     Rest of World
--------------------------------------------------------------------------------------------------------------------------------
<S>                          <C>                              <C>                               <C>
Emdogain                     Topical application for the      FDA approval(1)                   European approval (the "CE
                             regain of tooth attachment       obtained in  September            Mark") received in June
                             lost to periodontal disease      1996; marketing commenced         1995; marketing commenced
                                                              in the second quarter             in Europe in 1996;
                                                              of 1997                           Japanese 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 FDA      European approval in March
                             packaged in a ready-to-use       in March 2000. FDA approval       2000. Launch in June 2000.
                             syringe                          in January 2001 and launch        Approval in Japan during
                                                              in February 2001.                 December 2001 and launch in
                                                                                                March 2002.
---------------------------------------------------------------------------------------------------------------------------------
EmdogainGel TS               EmdogainGel combined with a      Not available.                    Approved in all EU markets.
                             synthetic bone graft material                                      Launched in Germany, Italy and
                             which offers an additional                                         the Nordic Markets during Q4,
                             tissue support                                                     2001. Also launched in several
                                                                                                distributor markets.
---------------------------------------------------------------------------------------------------------------------------------
PrefGel                      Topical gel that cleans and      FDA amended                       CE Mark received February
                             conditions tooth-root surface    marketing clearance               1998; marketing commenced
                                                              obtained in May 1998;             second quarter 1998.
                                                              marketing commenced               Not approved in Japan
                                                              in 1998.                          under current classification.
---------------------------------------------------------------------------------------------------------------------------------
Emdogain Recession           New indication of Emdogain       Submission of                     Submission of registration
type defects                 as a local application to        registration filed to             filed to EU during October
                             treat receded gums               FDA during Q2, 2002.              2002. Approval in EU in
                                                                                                November 2002.
---------------------------------------------------------------------------------------------------------------------------------
Emdogain Furcation           New indication of Emdogain       Submission of                     Approved in EU, Canada
Defects                      as a local application to        registration filed to             and Brazil.
                             treat defects between            FDA during Q2, 2002.
                             the dental roots                 Approved by FDA during
                                                              May 2003.
---------------------------------------------------------------------------------------------------------------------------------
Emdogain Trauma              New indication of Emdogain       Clinical trials to further        Approved indication in Europe,
(avulsed teeth)              for the regain of tooth          strengthen the                    Canada and Brazil.
                             attachment in connection         documentation began in
                             with reimplantation of           1999 in Canada. The study
                             avulsed teeth                    was completed end of 2001.
                                                              No plan to submit a
                                                              FDA registration file
                                                              for this indication.
---------------------------------------------------------------------------------------------------------------------------------
New Enamel Matrix            Local application of a           N/A                               A phase II study was completed
Protein (EMP) based          new EMP based product for                                          during Q1, 2002. Due to that
product for wound            reducing patient discomfort                                        the study was unable to
healing in conjunction       and improves wound                                                 demonstrate clinical
with scaling and root        healing in conjunction                                             significance in the efficacy
planing (XP11)               with scaling and root                                              parameters compared with
                             planing procedures.                                                conventional therapy the project
                                                                                                has been terminated.
---------------------------------------------------------------------------------------------------------------------------------
New product for              New indication of enamel         N/A                               Pre-clinical studies show new
endodontic therapy           matrix protein-based                                               dentin formation in pulp
(treatment of the            product to stimulate                                               capping and pulpotomy. A
dental pulp)(XP12)           formation of hard tissue                                           phase I study has been
                             bridges to protect the                                             completed and analysis of
                             dental pulp                                                        the result is ongoing.
---------------------------------------------------------------------------------------------------------------------------------
Xerostomia project           Local application to treat       N/A                               The development of a
(dry mouth) (XP 30)          dry mouth disease                                                  formulation is in final phase
                                                                                                and a phase I trial showing
                                                                                                dose-response in healthy
                                                                                                volunteers was completed in Q3,
                                                                                                2002. A phase II trial is planned
                                                                                                to be initiated during Q3, 2003.
---------------------------------------------------------------------------------------------------------------------------------
Emdogain - Non surgical      Subgingival application          Clinical trials                   Pilot studies commenced in
cleaning of the dental       of Emdogain to achieve           tarted second half                1997. Clinical studies ready
root                         periodontal regain               of 1999. Approval                 2001. The results show that
                             without surgical                 received by FDA as                Emdogain has no significantly
                             intervention.                    Minimally Invasive                improved effect on
                                                              Surgery in 1999.                  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 for   Further studies in this           Clinical trials in Sweden
                             the treatment of damage caused   indication have been deferred     completed in 1999.  Results not
                             by complicated extractions of    since results from Swedish        conclusive. Positive effect on
                             wisdom teeth                     trials not conclusive.            wound healing. Further studies
                                                                                                in this indication have been
                                                                                                deferred.
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(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.



         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 XP20 protein is present during normal
tooth development in humans and Biora continues to investigate the potential
of this protein combination for use in dental surgery in the ETIF project.


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.
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, Japan and in the US to market Emdogain Gel. Biora conducted clinical
trials in Europe, which were completed in the beginning of 1999. Emdogain Gel
was 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. The product was launched in Japan
in April 2002.


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. The product
was also launched in several distributor markets. EmdogainGel TS is currently
not available in the United States.


Emdogain - Recession Type Defects

         Biora has developed a new indication of Emdogain as a local
application to treat receded gums. The documentation was submitted to FDA in
the third quarter of 2002 and to the European certification units (Notified
Bodies) in October 2002. An EU approval was received in November 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. 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. This
indication was submitted for FDA approval during Q2 2002.

Furcation Defects (Periodontal Defects between Dental Roots)

         Treatment of periodontal defects between the dental roots
(furcations) that occur in molar teeth which have more than one root is
another approved indication for EmdogainGel in Europe and Canada. An
application for this indication was submitted to the FDA during June 2002.
Biora received an approvable letter during the fourth quarter 2002 wherein
some further statistical information was requested. Biora submitted this
information to the FDA during the first quarter 2003 and US approval was
received in May 2003. EmdogainGel has been shown to regenerate
tooth-supporting structures in less severe periodontal defects between the
dental roots.


Emdogain Trauma (avulsed teeth)

         Biora has developed 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 an 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 was launched. Subsequently, the study of Emdogain's wound healing
effect 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 bacteria is Staphylococcus which is a common
"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.

         At the end of 2000, 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 therefore the
project has been terminated.


New product (XP12) 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 was completed during the fourth
quarter of 2002 and the results are now being analyzed.


Xerostomia (XP 30) (Dry mouth)

         As a further step in Biora's concentration on diseases in the mouth,
Biora acquired in February 2000 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 like periodontitis, dry mouth is a very common disease that
primarily affects a large number of older people. 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.

         Biora's acquired process is based on local application of a
cholinesterase-inhibitor, which stimulates 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.

         A phase I study in healthy volunteers was completed during the third
quarter 2003 showing a dose-response. The initiation of the phase II study is
planned to start during the third quarter 2003.


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 did confirm 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 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 May 1, 2003, Biora employed nine scientists, four
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 42.8 million ($5.6 million), SEK 26.8 million ($3.5
million) and SEK 16.7 million ($2.2 million) in 2000, 2001 and 2002,
respectively.

                                                    Year Ended December 31,
                                               ---------------------------------
                                                   2000        2001        2002
                                               ---------------------------------
Total research and development costs             42,789      27,146      16,715
Capitalized research and development costs            -           -           -
EU grants                                             -        -359         -29
                                               ---------------------------------
Net                                              42,789      26,787      16,686
                                               =================================


         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 Oslo in Norway, the University of Leeds in the United Kingdom,
the University of Ulm in Germany and the University of Jerusalem in Israel.

         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 testing new products and technologies
for the Company. A similar research agreement was entered into with the
University of Texas led by Professor David Cochran. The contract with
Professor Cochran came to an end during year 2001 and the contract with
Professor Lindhe came to an end during year 2002.

         Pre-clinical safety assessments of Biora's products have been
performed by contract laboratories in Europe and Japan, as well as by
AstraZeneca 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 the 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 AstraZeneca, a Swedish pharmaceutical company that
participated in the funding of Biora's research and development between 1989
and 1992. In December 1992, Biora, AstraZeneca and certain other shareholders
of Biora entered into an agreement pursuant to which AstraZeneca terminated
its commitment to fund the research and development of products relating to
Emdogain as well as all licensing agreements which Biora and AstraZeneca had
previously entered into. As part of the agreement, AstraZeneca 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 markets biotechnology-based products
to enable dentists to restore and improve the oral health of their patients.
Our committed team of professionals generates customer and shareholder value
through quality products and services, thereby fostering sustainable sales
growth and profitability.


Objectives

         Biora's goal is to be a market leader within the field of
biotechnology-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 accounted for approximately 75 per cent
of Biora's total sales during 2002. In the U.S. and Germany, Biora has
marketing organizations to effectively cultivate its target groups. These
marketing companies will also be 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 to 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 (FDA approval for
the furcation indication was received May 2003 and the recession indication is
pending FDA approval). 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 to 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.

         During the first quarter 2001, Biora entered into a license agreement
with a British biomedical development company, Medpharma, under which Biora
retained the right to develop and market the dry mouth (xerostomia) product to
dentists, while Medpharma received the right to develop and market the product
to target groups outside the dental area. Under the agreement Biora was to
have received a number of installment payments as well as a royalty based on
future sales once the drug has been introduced to the market. A phase-I
dose-finding study in healthy volunteers has been completed. Medpharma and
Biora have agreed to further develop the xerostomia product through the phase
II clinical trial, which is planned to be initiated during the third quarter
this year. In April this year, Biora received a partial license fee payment
from Medpharma of USD 50,000. Biora has additional license fees due of
approximately USD 450,000 that Medpharma had agreed to pay by June 13, 2003.
At the date of filing of this Annual Report, Medpharma has not paid the
outstanding amount of USD 450,000. Discussions with Medpharma payment of the
outstanding licensing fees are ongoing.


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 with
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 regarding the rights to Biora's xerostomia project. In June 2001,
Biora also signed an agreement related to a product line extension of
EmdogainGel (EmdogainGel TS) for all markets outside the North America.
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 increases 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 regenerative 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 in the U.S. were performed by periodontists in private practice.
In Germany, the target group for EmdogainGel is perio-aware General
Practitioner dentists.

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 128 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 their 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 will be
presented at the Europerio Exhibition in Berlin in June 2003.

         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 regular basis is 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 stronger customer
focus and a systematic approach on increasing use within the existing customer
base. Sales in 2002 amounted to SEK 27.2 million ($3.5 million), an increase
of 14 percent in SEK and 15 percent in local currency. The number of customers
in Germany for 2002 was approximately 3,200.

         The Company has appointed one territory manager to cover the Swedish
market. Biora signed a distribution agreement with Technomedics in Norway from
January 1, 2003 and in Denmark Biora's distributor is Dansk Nordenta a/s.
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 the 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 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. Biora entered into a distributor agreement
for Poland during 1999 and a distribution agreement with Globopharm for
Switzerland during Q4 2000. 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. During the second
quarter 2002, Biora signed a licensee agreement with Willvonseder & Marchesani
in Austria. Customer service and distribution of products are managed from the
International Customer Center in Malmo (ICC).


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
2002, Biora, Inc. had 28 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.
According to the ADA Report, 90 percent of all flap surgeries done in the
United States in 1990 were performed by periodontists in private practice.

         Sales in the United States during 2002 amounted to SEK 69.0 million
($ 9.0 million), an increase of 13 percent in SEK and 21 percent in local
currency compared with 2001. As of December 31, 2002, approximately 3,200
American periodontists have bought Emdogain at least once since its
introduction. The number of customers for the year 2002 was approximately
2,200. 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 2002 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 to develop U.S.-based data and
test results for Emdogain.


Japan

         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 submitted an application for
the registration of Emdogain with the MHW in September 1996, which was
approved in January 1998.

         In November 2000, Seikagaku, 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 delivery of EmdogainGel to Seikagaku during 2002
amounted to SEK 7.9 million ($1.0 million). Unit sales during 2002 from Biora
to Seikagaku have increased compared to previous years in which sales were
made. However, sales in value have not increased to the same degree due to an
unfavorable trend in exchange rates and the introduction of a smaller and
lower-priced EmdogainGel syringe (0.3 ml). Seikagaku has successfully
introduced EmdogainGel to existing customers and, in parallel, has been able
to gain a significant number of new customers. In order to increase market
penetration, Seikagaku has extended its collaboration with its distributor,
Yoshida, who is responsible for direct sales and marketing of EmdogainGel to
general dentists, as well as the physical distribution to customers. Seikagaku
will continue to provide support to Japanese universities and periodontal
opinion leaders and to co-ordinate educational activities. At the end of
December 2002, 65% of Seikagakus previous Emdogain customers who bought more
than 10 units during year 2000 have repurchased the product and 1,000 new
customers have bought the product.


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 in Brazil, Colombia, Ecuador, Panama, Peru,
Puerto Rico, South Korea, Taiwan and Venezuela. EmdogainGel was launched in
Taiwan during 2001 and in Korea early 2002.


Third Party Reimbursement

         The Company's primary customers for EmdogainGel 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. At present, EmdogainGel is not reimbursed
in Japan and there can be no assurance that reimbursement approval will be
obtained.


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 3.9 million ($0.5 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. The annual
production capacity of EmdogainGel are approximately 450,000 units per year.

         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 outsourced 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. 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. Several companies have developed GTR
barriers, the most significant of which is the 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 result in regain of the cementum and
periodontal ligament. Further, 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 500 000 patients (as of May 2003)
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, among other things, 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 May 1, 2003, the Company had been issued seven U.S. patents,
five European patents, two Japanese patents, as well as several patents in
various other countries. In the United States, the duration of patents that
were granted prior to June 8, 1995 is the longer of 17 years from the date of
issuance or 20 years from the date of filing. The same applies to patents
filed before June 8, 1995 and issued on or after June 8, 1995. The duration of
patents based on applications, including confirmation applications, filed
after June 8, 1995 and issued after such date is 20 years from the date of
filing. The duration of patents elsewhere in the world is generally 20 years
from the date of filing.

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

         The "binding-inducing composition" family relates to a precursor to
dental enamel, the so-called enamel matrix. At present, the Company holds 10
patents in this family. Patents in this family have been issued in most target
markets, including the United States, Canada, Japan and the largest 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 holds six patents in this family.

         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. 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. Biora is currently investigating a new raw material
supplier based in Denmark. All other raw materials, including chemicals or
packaging materials, are purchased as pharmaceutical grades or from suppliers
with ISO 9000 certificates. See below "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 notified 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 Gel, 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 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".

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


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 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 April
2002. 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 and it
was renewed in February 2003. 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 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.

         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's result from operations for the
year ended December 31, 2002, was a loss of SEK 0.9 million ($0.1 million) as
compared to a loss of SEK 26.5 million ($3.4 million) for the year ended
December 31, 2001. This improvement in the result is due to the increase in
sales and to a decrease in operating costs. Selling expenses were reduced by
SEK 8.0 million ($1.0 million) and research and development costs were reduced
by SEK 10.1 million ($1.3 million). The capitalized R&D costs were completely
amortized as of December 31, 2000. There was also a reduction in
administration expenses from SEK 22.9 million ($3.0 million) to SEK 21.5
million ($2.8 million).

         In February 1997, Biora completed its Initial Public Offering (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
($48.4 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 ($3.3 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, 2002 COMPARED TO YEAR ENDED DECEMBER 31, 2001

         Net sales for the year ended December 31, 2002 equaled SEK 129.7
million ($16.9 million), an increase of 17 percent over net sales for the year
ended December 31, 2001, which equaled SEK 110.7 million ($14.4 million). The
increase is attributable to a sale increase in the U.S. (13 percent), in
Germany (14 percent) and the introduction of EmdogainGel in Japan where sales
amounted to SEK 7.9 million ($1.0 million).

         Gross Profit equaled SEK 106.7 million ($13.9 million) for 2002
compared to SEK 87.9 million ($11.4 million) for the year 2001, an increase of
profit margin from 79.4% to 82.3% between the two periods. The increase is
partly explained by the fourth quarter 2002 review by the Company of its
current production capacity, which resulted in an increased absorption of the
fixed costs in inventory. This resulted in a positive impact on the gross
profit by SEK 1.0 million ($0.1 million).

         Loss from operations equaled SEK 0.9 million ($0.1 million) for the
year ended December 31, 2002 compared to SEK 26.5 million ($3.4 million) for
the year ended December 31, 2001. The improved result from operations is due
to increased sales and reduced operating expenses. The decrease of the R&D
expenses from SEK 26.8 million ($3.5 million) to SEK 16.7 million ($2.2
million) was primarily attributable to the completion of certain R&D projects
during 2001. Other operating income has decreased in 2002 compared to 2001 as
a result of a decrease in licensing fees. Decrease in other operating expenses
is explained by the fact that a royalty fee was paid to Industrifonden from
the Molnlycke licensing fee.

         Net financial items equaled SEK 1.6 million ($0.2 million) for the
year ended December 31, 2002 as compared to SEK 1.4 million ($0.2 million) for
the same period in 2001. Net financial items are mainly interest on the
Company's cash and cash equivalents in 2002.

         Net profit equaled SEK 0.7 million ($0.1 million) for the year 2002
as compared to a net loss of SEK 25.1 million ($3.3 million) for the year
ended December 31, 2001. The reasons for this improvement are described above.


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 ($14.4 million), an increase of 24 percent over net sales for the year
ended December 31, 2000, which equaled SEK 89.2 million ($11.6 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 ($11.4 million) for 2001
compared to SEK 68.0 million ($8.9 million) for the year 2000, an increase of
profit margin from 76.3% to 79.4% between the two periods. In year 2000, the
change-over from Emdogain (vials) to EmdogainGel resulted in the inventory
loss of Emdogain (vials) which is the principal explanation for the lower
profit margin year 2000.

         Loss from operations equaled SEK 26.5 million ($3.4 million) for the
year ended December 31, 2001 compared to an operating loss of SEK 78.7 million
($10.2 million) for the year 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 ($2.0 million). Selling expenses were
reduced by SEK 1.4 million ($0.2 million) and research and development costs
were reduced by SEK 16.0 million ($2.1 million). R&D costs for 2000 includes
amortization of capitalized R&D amounting to SEK 10.5 million ($1.4 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 ($0.3 million), R & D travel cost were reduced by SEK 1.2
million ($0.2 million), R & D market support cost were reduced by SEK 0.7
million ($ 0.09 million) and other R & D cost reduction by SEK 1.5 million
($0.2 million). The reduction in administration expenses during 2001 from SEK
25.4 million ($3.3 million) to SEK 22.9 million ($3.0 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 ($1.6 million) consists of installment payments for two license
agreements related to the development project for xerostomia (dry mouth) SEK
5.0 million ($ 0.7 million) and for the lump sum amount received from
Molnlycke Health Care AB SEK 10.0 million ($1.3 million) reduced by royalty
payments to Industrifonden SEK 1.2 million ($0.16 million) and administration
costs associated with the licensing of the wound healing project of SEK 1.4
million ($0.18 million).

         Net financial items equaled SEK 1.4 million ($0.18 million) for the
year ended December 31, 2001 as compared to SEK 2.7 million ($0.35 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 ($3.3 million) for the year 2001 as
compared to a net loss of SEK 76.1 million ($9.9 million) for the year ended
December 31, 2000.

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 ($2.1 million)), and
convertible debt securities (approximately SEK 3.0 million ($0.4 million))
which were converted into Ordinary Shares in January 1996), loans from the
Swedish Industrial Fund (Industri-och nyforetagarfonden) ("IF") aggregating a
total of SEK 19 million ($2.5 million) and revenues relating to contract work
for third parties. The Company's loan from the IF was repaid from the proceeds
of the IPO. Of the approximately SEK 19 million ($2.5 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 ($1.5 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 ($931,922) plus accrued interest was 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 51.3 million ($6.7
million) in cash and cash equivalents at December 31, 2002 compared to SEK
51.5 million ($6.7 million) at December 31, 2001.

         The Company generated negative cash flow of SEK 0.1 million ($0.01
million) during the year 2002, resulting in a decrease of cash and cash
equivalents from SEK 51.5 million ($6.7 million) to SEK 51.3 million ($6.7
million). Positive operating cash flows amounted to SEK 3.8 million ($0.5
million), mainly reflecting the net profit of SEK 0.7 million ($0.1 million),
net of non-cash depreciation and amortization charges of SEK 3.9 million ($0.5
million), and an increase in working capital of SEK 0.7 million ($0.1 million)
principally attributable to the higher level of sales recorded at the end of
2002 as compared to the end of 2001. Negative cash flows from investing
activities amounted to SEK 2.8 million ($0.4 million).

         Biora's shareholders' equity equaled to SEK 56.2 million ($7.3
million) at December 31, 2002 as compared to SEK 55.9 million ($7.3 million)
at December 31, 2001.

         Biora's capital expenditures net of proceeds from sales for the year
2002 amounted to SEK 3.0 million ($0.4 million) compared to SEK 2.9 million
($0.4 million) for the full year 2001. 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 2003, 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
December 31, 2002, Biora had a debt of SEK 9.7 million ($1.3 million) to
AstraZeneca related to accumulated royalty fees that had not been paid. Biora
repaid SEK 1.6 million ($0.2 million) during the first quarter 2003 and plans
to repay an additional SEK 4.9 million ($0.6 million) during 2003 and SEK 3.2
million ($0.4 million) during 2004. 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, 2002 are listed below (SEK
thousands):

Year            Rental of Offices               Other                    Total

2003                4,467                       1,513                    5,980
2004                1,213                         598                    1,811
2005                  424                         197                      621
                    -----                       -----                    -----
Total               6,104                       2,308                    8,412



The Company's other commercial commitments at December 31, 2002 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, 2002, pertaining to these agreements are SEK 720
         thousands for 2003 and SEK 0 thousands for 2004 or in total SEK 720
         thousands.

   o     From 1989 to 1992, AstraZeneca was a shareholder in the Company and
         contributed to the financing of the initial research behind and
         development of Emdogain. On December 31, 1992, AstraZeneca, the
         Company and certain of the Company's other shareholders signed an
         agreement under the terms of which AstraZeneca withdrew from its
         commitment to finance R&D for products relating to Emdogain, as well
         as other license agreements between the Company and AstraZeneca. As a
         part of the final settlement with AstraZeneca, it was agreed that,
         until December 31, 2009, AstraZeneca 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 2002
         the above royalty amounted to approximately SEK 3 thousands ($390)
         from the sale of Emdogain. As mentioned above, at December 31, 2002
         Biora had a debt of SEK 9.7 million ($1.3 million) to AstraZeneca
         related to accumulated royalty fees that had not been paid. Biora
         repaid SEK 1.6 million ($0.2 million) during the first quarter 2003
         and plans to repay an additional SEK 4.9 million ($0.6 million)
         during 2003 and SEK 3.2 million ($0.4 million) during 2004.

   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 ($3,384) and for 2002 SEK 11 thousands ($1,432).

   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 ($977,426) through the conversion of outstanding loans,
         including accrued interest, in the aggregate principal amount of SEK
         7,160,419 ($931,922) and accrued interest of SEK 349,633 ($45,504).
         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 ($0.3
         million) at December 31, 2000 and 0 on December 31, 2001 and December
         31, 2002. All liabilities were fully repaid in December 2001 in
         connection with the licensing of the wound-healing project to
         Molnlycke Healthcare. Further, the SEK 2.4 million ($0.3 million)
         represented the first payment of the total conditional loan of SEK 15
         million ($2.0 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. At December 31, 2002 the Company has not paid
              royalties totaling 167% of the loan and is therefore not
              entitled to the lower royalty rates.

         -    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. The loan from the
              Swedish Industrial Fund has been fully repaid.


Critical Accounting Policies

         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, judgments 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 (FRR60)
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.

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, 2002
amounted to SEK 0.4 million ($0.05 million) as compared to net profit SEK 0.7
million ($0.09 million) under Swedish GAAP. Net loss per Ordinary Share for
the year ended December 31, 2002 was SEK 0.02 ($0.003) under U.S. GAAP,
compared with a net profit of SEK 0.03 ($0.004) under Swedish GAAP.
Shareholders equity at December 31, 2002 under U.S. GAAP was SEK 43.9 million
($5.7 million) as compared to shareholders equity of SEK 56.2 million ($7.3
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. 143, Accounting for Asset
Retirement Obligations. 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 that 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
evaluating the impact of adopting SFAS No. 143 on its financial statements.

         In April 2002, the 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 amends existing guidance on reporting gains and
losses on the extinguishment of debt to prohibit the classification of the
gain or loss as extraordinary, as the use of such extinguishments have become
part of the risk management strategy of many companies. SFAS No. 145 also
amends SFAS No. 13 to require sale-leaseback accounting for certain lease
modifications that have economic effects similar to sale-leaseback
transactions. The provisions of the Statement related to the rescission of
Statement No. 4 are applied in fiscal years beginning after May 15, 2002.
Earlier application of these provisions is encouraged. The provisions of the
Statement related to Statement No. 13 were effective for transactions
occurring after May 15, 2002, with early application encouraged. The Company
is currently evaluating the impact of adopting SFAS No. 145 on its financial
statements.

         In June 2002, the FASB issued SFAS No. 146, Accounting for Costs
Associated with Exit or Disposal Activities. SFAS No. 146 addresses financial
accounting and reporting for costs associated with exit or disposal activities
and nullifies Emerging Issues Task Force (EITF) Issue 94-3, Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit
an Activity. The provisions of this Statement are effective for exit or
disposal activities that are initiated after December 31, 2002, with early
application encouraged. The Company is currently evaluating the impact of
adopting SFAS No. 146 on its financial statements.

         In November 2002, the FASB issued Interpretation No. 45, Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness to Others, an interpretation of FASB Statements No.
5, 57 and 107 and a rescission of FASB Interpretation No. 34. This
Interpretation elaborates on the disclosures to be made by a guarantor in its
interim and annual financial statements about its obligations under guarantees
issued. The Interpretation also clarifies that a guarantor is required to
recognize, at inception of a guarantee, a liability for the fair value of the
obligation undertaken. The initial recognition and measurement provisions of
the Interpretation are applicable to guarantees issued or modified after
December 31, 2002. The company is currently evaluating the impact of adopting
FIN No. 45 on its financial statements. The disclosure requirements are
effective for financial statements of interim or annual periods ending after
December 15, 2002. The required disclosures are included in the notes to the
consolidated financial statements.

         In December 2002, the FASB issued SFAS No. 148, Accounting for
Stock-Based Compensation - Transition and Disclosure, an amendment of FASB
Statement No. 123. This Statement amends FASB Statement No. 123, Accounting
for Stock-Based Compensation, to provide alternative methods of transition for
a voluntary change to the fair value method of accounting for stock-based
employee compensation. The Company continues to apply the provisions of APB
No. 25. In addition, this Statement amends the disclosure requirements of
Statement No. 123 to require prominent disclosures in both annual and interim
financial statements. Certain of the disclosure modifications are required for
fiscal years ending after December 15, 2002 and are included in the notes to
these consolidated financial statements.

         In April, 2003, the FASB issued FASB Statement No. 149, Amendment of
Statement 133 on Derivative Instruments and Hedging Activities, which amends
FASB Statement No. 133, Accounting for Derivative Instruments and Hedging
Activities, to address (1) decisions reached by the Derivatives Implementation
Group, (2) developments in other Board projects that address financial
instruments, and (3) implementation issues related to the definition of a
derivative. Statement No. 149 has multiple effective date provisions depending
on the nature of the amendment to Statement No. 133. The Company is currently
evaluating the impact of adopting Statement No. 149 on its financial
statements.

         In May, 2003, the FASB issued FASB Statement No. 150, Accounting for
Certain Financial Instruments with Characteristics of both Liabilities and
Equity. This Statement establishes standards for how an issuer classifies and
measures certain financial instruments with characteristics of both
liabilities and equity. It requires that an issuer classify a financial
instrument that is within its scope as a liability (or an asset in some
circumstances). Many of those instruments were previously classified as
equity. This Statement is effective for financial instruments entered into or
modified after May 31, 2003, and otherwise is effective at the beginning of
the first interim period beginning after June 15, 2003, except for mandatorily
redeemable financial instruments of nonpublic entities. It is to be
implemented by reporting the cumulative effect of a change in an accounting
principle for financial instruments created before the issuance date of the
Statement and still existing at the beginning of the interim period of
adoption. Restatement is not permitted. For nonpublic entities, mandatorily
redeemable financial instruments are subject to the provisions of this
Statement for the first fiscal period beginning after December 15, 2003. The
Company is currently evaluating the impact of adopting Statement No. 150 on
its financial statements.

         In January 2003, the FASB issued FASB Interpretation No. 46,
Consolidation of Variable Interest Entities. The objective of FIN 46 is to
improve financial reporting by companies involved with variable interest
entities. A variable interest entity is a corporation, partnership, trust or
any other legal structure used to conduct activities or to hold assets in
which either (a) the equity investment at risk is not sufficient to permit the
entity to finance its activities without additional subordinated financial
support from other parties, or (b) the equity investors lack (i) the ability
to make decisions about the entity's activities, (ii) the obligation to absorb
the expected losses of the entity if they occur, or (iii) the right to receive
the expected residual returns of the entity if they occur. Historically,
entities generally were not consolidated unless the entity was controlled
through voting interests. FIN 46 changes that by requiring a variable interest
entity to be consolidated by a company if that company is subject to a
majority of the risk of loss from the variable interest entity's activities or
entitled to receive a majority of the entity's residual returns or both. A
company that consolidates a variable interest entity is called the "primary
beneficiary" of that entity. FIN 46 also requires disclosures about variable
interest entities that a company is not required to consolidate but in which
it has a significant variable interest. The requirements of FIN No. 46 apply
immediately to variable interest entities created after January 31, 2003 and
to variable interest entities in which an enterprise obtains an interest after
that date. The requirements of FIN 46 apply in the first fiscal year or
interim period beginning after June 15, 2003 to variable interest entities in
which an enterprise holds a variable interest that is acquired before February
1, 2003. Also, certain disclosure requirements apply to all financial
statements issued after January 31, 2003, regardless of when the variable
interest entity was established. The Company is currently evaluating the
impact of adopting FIN No 46 on its financial statements.

         In November 2002, the Emerging Task Force issued its consensus on
EITF 00-21, Revenue Arrangements with Multiple Deliverables on an approach to
determine whether an entity should divide an arrangement with multiple
deliverables into separate units of accounting. According to the EITF in an
arrangement with multiple deliverables, the delivered item(s) should be
considered a separate unit of accounting if all of the following criteria are
met: (1) The delivered item(s) has value to the customer on a standalone
basis, (2) There is objective and reliable evidence of the fair value of the
undelivered item(s), (3) If the arrangement includes a general right of
return, delivery or performance of the undelivered item(s) is considered
probable and substantially in the control of the vendor. If all the conditions
above are met and there is objective and reliable evidence of fair value for
all units of accounting in an arrangement, the arrangement consideration
should be allocated to the separate units of accounting based on their
relative fair values. However, there may be cases in which there is objective
and reliable evidence of the fair value(s) of the undelivered item(s) in an
arrangement but no such evidence for one or more of the delivered items. In
those cases, the residual method should be used to allocate the arrangement
consideration. The guidance in this Issue is effective for revenue
arrangements entered into in fiscal years beginning after June 15, 2003.
Alternatively, entities may elect to report the change in accounting as a
cumulative-effect adjustment in accordance with Opinion 20. If so elected,
disclosure should be made in periods subsequent to the date of initial
application of this consensus of the amount of recognized revenue that was
previously included in the cumulative effect adjustment. The Company is
assessing the impact of the adoption of EITF 00-21 on its financial
statements.

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 4. Business Overview".


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 1, 2003, the directors and executive officers of the Company are as
follows:

Name                         Age        Position

Per Wahlstrom                56         Chairman of the Board of Directors
Nils Bohlin                  51         Director
Per Lojdquist                54         Director
Lars Spongberg               55         Director
Lars Inglemark               54         Director
Christer Testen              60         Director


Donna Janson                 48         President and Chief Executive Officer
Dr. Stina Gestrelius         54         Vice President, Research and Development
Christian Johansson          40         Production Manager
Christer Tingnell            38         Director of Marketing
Svante Lundell               48         Chief Financial Officer

         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 Studsvik AB and Olai &
Lindgren Reklambyra AB and a board member of Volvo Technology 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, Aerocrine AB, Provexa AB, Intervalor 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 Life Science Ventures
at the Sixth Swedish National Pensions Fund. He currently participates on
several boards, Karo Bio AB, Capio AB, Molnlycke Health Care AB, 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 AstraZeneca Australia (1995-1999). Between 1976 and 1994,
he held several senior positions in marketing, strategic planning and
licensing within the AstraZeneca Group. Christer Testen is also Chairman of
the Board of Alimenta AB.


         Donna Janson (age 48) 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 (age 54) 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.

         Christer Tingnell (age 38) has been Director of Marketing since
January 2002, and previously held the position of Global Brand Director since
May 2001. He has held various marketing and sales positions in Sweden as well
as in the international arena for more than 10 years at companies such as
Novartis and AstraZeneca.

         Christian Johansson (age 41) joined Biora as Production Manager in
January 2003. He has a Master degree in chemical engineering and has worked in
the pharmaceutical industry since 1989. Mr Johansson started his career at
Ferring AB where he worked in synthesis development for a number of years.
Between 1999 and 2003, Mr. Johansson was responsible for the production at
Polypeptide Laboratories' facility in Malmo, Sweden.

         Svante Lundell (age 48) has been Chief Financial Officer since
September 2002. He has a Bachelor's degree in business administration from
the University of Lund, Sweden, and has previously held a number of executive
financial positions in Sweden and Europe for international companies. Before
joining Biora, he was Head of Finance, Europe at Hercules Inc., a US specialty
chemical company based in Brussels, Belgium.


Other Key Personnel

Name                             Age        Position

Christopher Pallotto             44         President, Biora Inc., USA
Ann-Christin Johansson           45         Quality Assurance Manager, Biora AB
Wolfgang Muller                  38         General Manager, Germany and Austria


         Christopher 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.

         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, 2002:

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

<S>                                    <C>                    <C>                <C>
All non-executive directors as a group (8 persons)            989                  --
All executive officers as a group (8 persons)               8,180                1,359
                                                            -----                -----
Total                                                       9,169                1,359

</TABLE>


         In 2002, the Chairman of the Board of Directors received a fee of SEK
150,000 ($19,522), and the non-executive Directors received a fee of SEK
100,000 ($13,015), and the Deputy Director a fee of SEK 50,000 ($6,507). The
three Board members appointed in January 2002 have received SEK 33,000
($4,295) each in addition to the ordinary fee. 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: Per Lojdquist SEK 40,000
($5,206), Lars Spongberg SEK 25,000 ($3,254) and Christer Testen SEK 25,000
($3,254).

         The salary expenses for Donna Janson, President of Biora were
US$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 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.
She is also entitled to a company car and a furnished apartment supplied by
Biora in Sweden.

Management Employment Agreements

         The Company has entered into employment agreements with each of Mrs.
Janson, Dr. Gestrelius, Mr. Johansson, Mr. Tingnell and Mr. Lundell. 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 business during the term of the employment agreement and for an
additional year thereafter without the Company's prior written consent.


Key Employee Incentive Plan

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 ($13,015) 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 ($2.21). 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, 2002, the employees of the Company
had subscribed for 255,500 warrants. Accordingly SEK 920,000 ($119,737) have
been accounted for as Consolidated restricted equity.

As per December 31, 2002, the Executive Officers have subscribed for 80,000
warrants of this program.

 -----------------------------------------------------------------------
|     Executive Officers              |        Number of warrants       |
|-------------------------------------|---------------------------------|
|                                     |                                 |
|     Donna Janson                    |        50,000                   |
|                                     |                                 |
|-------------------------------------|---------------------------------|
|     Stina Gestrelius                |        15,000                   |
|                                     |                                 |
|-------------------------------------|---------------------------------|
|     Svante Lundell                  |        10,000                   |
|                                     |                                 |
|-------------------------------------|---------------------------------|
|     Christer Tingnell               |        5,000                    |
|                                     |                                 |
 -----------------------------------------------------------------------

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, 2002, the Company had 78 full-time employees,
including nine in administration and finance, 52 in marketing and sales, eight
in research and development and nine 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 are a 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 ADSs) 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 ADSs) 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
19.9 percent of the outstanding Ordinary Shares. The Company does not believe
that it is directly or indirectly controlled by the Swedish 6th Pension Fund
or by any other corporation or by any foreign government as of April 1, 2003.

         The following table sets forth certain information regarding the
beneficial ownership of the Ordinary Shares known by the Company as of April
1, 2003. 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. No shareholder has
any special voting rights.

                                                  Number of Ordinary    Percent
                                                  Shares Owned          of Class
Principal Shareholders/ Investment holders:

Swedish 6th Pension Fund                          4 715 940              19.9
Bank of New York*                                 1 074 351              4.5
Lars Hammarstrom and family                       805 900                3.8
Euroventures BV                                   698 919                2.9
Deutsche Bank AG (GSC)*                           692 300                2.9
Briban Invest                                     669 000                2.8
Haandvaerkerbanken                                460 640                2.0
Holdingselskapet af 14.1 1944APS                  386 000                1.6
Volvokoncernens pensionsstiftelse                 354 000                1.5
Pensionskassan for Varkstedts                     300 000                1.3

All directors and officers as a group              76,200(a)             0.3
(thirteen persons)


*       Holding Shares on behalf of their Clients.

(a)     Includes (i) 63,400 Ordinary Shares held by Stina Gestrelius (ii)
        9,600 shares held by Christer Tingnell and (iv) 3,200 Ordinary
        Shares held by other Board of Directors or Biora's Executive Officers.

         As of April 1, 2003, the Company had 23,753,800 Ordinary Shares
outstanding held by approximately 10,600 shareholders.

         On April 7, 2003, Straumann Holding AG announced an offer to the
shareholders and the holders of warrants issued by Biora AB. Straumann offers
SEK 17 in cash for each Biora share and SEK 1.50 in cash for each outstanding
Biora warrant issued under the employee warrant program 2001/2004. The total
value of the offer amounts to approximately SEK 404 million ($52.6 million).
Based on the closing price of the Biora share on the O-list of the Stockholm
Stock Exchange on April 4th 2003, SEK 12.1 ($1.57), the shareholders of the
company will be offered a premium of 41 percent per Ordinary Share, and based
on the average closing price over the last 30 trading days prior to the offer,
SEK 11.6 ($1.51), a premium of 47 percent per share. The Board of Directors of
Biora unanimously recommends the Straumann offer.

         The offer is not being made, directly or indirectly, in or into the
United States of America, Canada, Australia or Japan, and it may not be
accepted in or from the United States of America, Canada, Australia or Japan.

         On June 12, 2003, Straumann announced that it has acquired
approximately 91 percent of the Ordinary Shares of Biora. Straumann has called
for the compulsory acquisition of the remaining outstanding Biora Ordinary
Shares. The Ordinary Shares will be de-listing from the "O-list" of the
Stockholm Stock Exchange at the close of business on July 4, 2003.


7.B. RELATED PARTY TRANSACTIONS

Agreement with AstraZeneca

         From 1989 through 1992, AstraZeneca was a principal shareholder in
Biora and participated in the funding of the early research and development of
Emdogain. On December 31, 1992, Biora, AstraZeneca and certain shareholders of
Biora entered into an agreement pursuant to which AstraZeneca terminated its
commitment to fund the research and development of products relating to
Emdogain as well as all licensing agreements which Biora and AstraZeneca had
previously entered into. Under the terms of the agreement, AstraZeneca also
transferred all of the Ordinary Shares held by it in Biora to certain other
principal shareholders of Biora. As part of the agreement, AstraZeneca 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 ($977,426) through the conversion of outstanding loans, including
accrued interest, to Biora in the aggregate principal amount of SEK 7,160,419
($931,922) and accrued interest of SEK 349,633 ($45,504). 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.


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 ("SSE"). (In light of the takeover by
Straumann Holdings AG announced on April 7, 2003, Biora will de-list its
Ordinary Shares from the SSE on July 4, 2003). 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 de-listed
its ADSs from NASDAQ Exchange on January 31st 2002, and from February 1st to
December 9, 2002, the ADSs were quoted on the Over-the-Counter Market. The bid
and asking prices on this market were 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, 2001. Due to the low trading volume of Biora's ADRs on the OTC Market and
the high costs relating to the ADR program, Biora terminated its ADR program
on December 9, 2002. As a result, Biora's ADRs ceased trading on the OTC
market in the United States. Current ADS holders should contact The Bank of
New York (ADR Division) regarding the terminated Biora ADR program.

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 have been listed on the O-list since 1997,
but will be de-listed on July 4, 2003 as a result of the Straumann takeover
announced on April 7, 2003.

         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
workstations 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.

                           Price Per Ordinary Share
-------------------------------------------------------------------------------
                                                     Quarter's
                                     High             Low                Close
-------------------------------------------------------------------------------
Calendar Period                                    SEK
-------------------------------------------------------------------------------

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                        69.0                 30.5            31.5
Third Quarter                         36.0                 19.5            25.7
Fourth Quarter                        28.0                  7.0            8.15

2001

First Quarter                         30.0                  8.0            12.3
Second Quarter                        18.4                  8.5            14.2
Third Quarter                         15.8                  9.7             8.5
Fourth Quarter                        13.9                  7.4            12.2

2002

First Quarter                         14.3                 11.1            13.9
Second Quarter                        11.4                 15.2            13.9
Third Quarter                          9.0                 14.0            11.4
Fourth Quarter                        10.0                 14.5            12.9

                                                         Month's
High/Low share price per month       High                  Low           Close
-------------------------------------------------------------------------------
Nov 2002                              11.2                 14.5            14.0
Dec 2002                              11.8                 14.0            12.9
Jan 2003                              12.4                 14.0            13.1
Feb 2003                              10.3                 13.5            11.6
March 2003                            10.7                 12.2            11.2
April 2003                            16.9                 10.9            16.7
May 2003                              17.0                 16.5            16.9


         The average daily volumes of Ordinary Shares traded in the SSE from
January 1, 2002 through May 2003 was 82,000 based on total turnover statistics
(supplied by the Stockholm Stock Exchange). On June 12, 2003, Straumann
announced that it has acquired approximately 91 percent of the Ordinary Shares
of Biora. Straumann has called for the compulsory acquisition of the remaining
outstanding Biora Ordinary Shares. The Ordinary Shares will be de-listing from
the "O-list" of the Stockholm Stock Exchange at the close of business on July
4, 2003.


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 January
1998 to January 31, 2002 and on the OTC Market from February 1, 2002 to
December 9, 2002:

Price Per ADS
                                        High         Quarter's Low       Close
US$
Calendar Period

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                           19.00          11.50            13.13
Second Quarter                          14.00           7.88             8.00
Third Quarter                           12.13           6.50            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
Second Quarter (OTC Market)              3.03           2.36             3.03
Third Quarter (OTC Market)               3.02           2.15             2.46
Fourth Quarter (to December 9,           2.95           2.20             2.56
2002 on the OTC  Market)


         No information regarding trading volumes after de-listing the Biora
ADSs from NASDAQ on January 31st, 2002 is available. As of March 1, 2003,
there were 152,500 ADSs outstanding.

         Additionally, the Depositary has advised the Company that as of March
1, 2003, there were 27 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 27 record holders. On the
basis of this information, the ADSs held on such date in the United States
represented approximately 1.3 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 making it public
through an announcement, 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 in a General Meeting must be
registered in a transcript of the share register that was 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 guests;
however, only if the shareholder gives notice hereof to the Company.

         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 Ordinary Shares once they reach a set 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 Ordinary
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 Biora shares.
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 Ordinary 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, 2002 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, 2002 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>
                                                                               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, 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

         The Company expects to have significant export sales from Sweden that
are invoiced in currencies other than the Swedish kronor. Accordingly, the
Company's results of operations, expressed in kronor, may be adversely
affected by the fluctuations in the exchange rates between the kronor and any
other currencies in which the Company invoices.

         At December 31, 2002, the Swedish kronor was about seventeen percent
higher against the U.S. dollar than on December 31, 2001 and the average rate
for 2002 was about nine percent higher than in 2001. At December 31, 2002, the
kronor was about two percent higher against the Euro than on December 31, 2001
and the average rate for 2002 was about one percent higher than in 2001.

         Approximately 98% of sales were invoiced in another currency than SEK
and approximately 55% of total costs were in other currency than SEK. Sales
increase during 2002 was 17%. Excluding effects of changes in exchange rates
sales increased by 22%. Losses from operations were reduced with 96.7%
during 2002. Excluding effects of changes in exchange rates loss from
operations was reduced with 97.4%.

         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 kronor 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, 2002 was approximately 2.5 percent.

         To compensate for changes in the relative value of the kronor 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 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 2002 the Kronor strengthened against the Euro after having weaken
during 2001.

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>

                             At December 31, 2002

<CAPTION>

                          Swedish kronor         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 kronor        Swedish kronor
                                                 --------------------
                                                 SEK in millions

Currency

<S>                                <C>                    <C>                  <C>                   <C>                  <C>
U.S. Dollar............            9.7                    9.0                  18.7                  1.9                  (1.9)

Euro...................             0                   (10.5)                (10.5)                (1.1)                  1.1

Pound Sterling.........             0                     0.6                   0.6                  0.1                  (0.1)

Swiss Francs...........             0                    (0.2)                 (0.2)                (0.0)                  0.0

Japanese yen...........           (2.6)                     0                  (2.6)                (0.3)                  0.3

Total..................            7.1                   (1.1)                  6.0                  0.6                  (0.6)

</TABLE>



ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not Applicable



ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

Not Applicable



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

Not Applicable



ITEM 15. CONTROLS AND PROCEDURES

 Evaluation of Disclosure Controls and Procedures.

         Biora's President and CEO and the Chief Financial Officer have
evaluated the effectiveness of the Company's disclosure controls and
procedures (as such term is defined in Rules 13a-14(c) and 15d-14(c) under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of a date
within 90 days prior to the filing date of this annual report (the "Evaluation
Date"). Based on such evaluation, such officers have concluded that, as of the
Evaluation Date, the Company's disclosure controls and procedures are
effective in alerting them on a timely basis to material information relating
to the Company (including its consolidated subsidiaries) required to be
included in the Company's periodic filings under the Exchange Act.

Changes in Internal Controls.

         Since the Evaluation Date, there have not been any significant
changes in the Company's internal controls or in other factors that could
significantly affect such controls.

ITEM 16.  (RESERVED)

ITEM 18.  FINANCIAL STATEMENTS       (Consolidated Financial Statements
                                     commence at F-1)

ITEM 19.  EXHIBITS - Exhibit 10 (a) ss. 906 Sarbanes-Oxley Certificate




                                  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 30, 2003


BIORA AB

By:  /s/ Svante Lundell
     ----------------------
Name:    Svante Lundell
Title:   Chief Financial Officer



<PAGE>

                                CERTIFICATIONS
                                --------------

I, Donna Janson, President and CEO, certify that:

1.         I have reviewed this annual report on Form 20-F of Biora AB;

2.         Based on my knowledge, this annual report does not contain any
           untrue statement of a material fact or omit to state a material
           fact necessary to make the statements made, in light of the
           circumstances under which such statements were made, not misleading
           with respect to the period covered by this annual report;

3.         Based on my knowledge, the financial statements, and other
           financial information included in this annual report, fairly
           present in all material respects the financial condition, results
           of operations and cash flows of the registrant as of, and for, the
           periods presented in this annual report;

4.         The registrant's other certifying officers and I are responsible
           for establishing and maintaining disclosure controls and procedures
           (as defined in Exchange Act Rules 13a-14 and 15d-14) for the
           registrant and have:

           (a)  designed such disclosure controls and procedures to ensure
                that material information relating to the registrant,
                including its consolidated subsidiaries, is made known to us
                by others within those entities, particularly during the
                period in which this annual report is being prepared;

           (b)  evaluated the effectiveness of the registrant's disclosure
                controls and procedures as of a date within 90 days prior to
                the filing date of this annual report (the "Evaluation Date");
                and

           (c)  presented in this annual report our conclusions about the
                effectiveness of the disclosure controls and procedures based
                on our evaluation as of the Evaluation Date;

5.         The registrant's other certifying officers and I have disclosed,
           based on our most recent evaluation, to the registrant's auditors
           and the audit committee of registrant's board of directors (or
           persons performing the equivalent function):

           (a)  all significant deficiencies in the design or operation of
                internal controls which could adversely affect the
                registrant's ability to record, process, summarize and report
                financial data and have identified for the registrant's
                auditors any material weaknesses in internal controls; and

           (b)  any fraud, whether or not material, that involves management
                or other employees who have a significant role in the
                registrant's internal controls; and

6.         The registrant's other certifying officers and I have indicated in
           this annual report whether or not there were significant changes in
           internal controls or in other factors that could significantly
           affect internal controls subsequent to the date of our most recent
           evaluation, including any corrective actions with regard to
           significant deficiencies and material weaknesses.



Date: June 30, 2003                                         /s/ Donna Janson
                                                            ----------------
                                                              Donna Janson
                                                            President and CEO

<PAGE>



I, Svante Lundell, Chief Financial Officer, certify that:

1.         I have reviewed this annual report on Form 20-F of Biora AB;

2.         Based on my knowledge, this annual report does not contain any
           untrue statement of a material fact or omit to state a material
           fact necessary to make the statements made, in light of the
           circumstances under which such statements were made, not misleading
           with respect to the period covered by this annual report;

3.         Based on my knowledge, the financial statements, and other
           financial information included in this annual report, fairly
           present in all material respects the financial condition, results
           of operations and cash flows of the registrant as of, and for, the
           periods presented in this annual report;

4.         The registrant's other certifying officers and I are responsible
           for establishing and maintaining disclosure controls and procedures
           (as defined in Exchange Act Rules 13a-14 and 15d-14) for the
           registrant and have:

           (a)  designed such disclosure controls and procedures to ensure
                that material information relating to the registrant,
                including its consolidated subsidiaries, is made known to us
                by others within those entities, particularly during the
                period in which this annual report is being prepared;

           (b)  evaluated the effectiveness of the registrant's disclosure
                controls and procedures as of a date within 90 days prior to
                the filing date of this annual report (the "Evaluation Date");
                and

           (c)  presented in this annual report our conclusions about the
                effectiveness of the disclosure controls and procedures based
                on our evaluation as of the Evaluation Date;

5.         The registrant's other certifying officers and I have disclosed,
           based on our most recent evaluation, to the registrant's auditors
           and the audit committee of registrant's board of directors (or
           persons performing the equivalent function):

           (a)  all significant deficiencies in the design or operation of
                internal controls which could adversely affect the
                registrant's ability to record, process, summarize and report
                financial data and have identified for the registrant's
                auditors any material weaknesses in internal controls; and

           (b)  any fraud, whether or not material, that involves management
                or other employees who have a significant role in the
                registrant's internal controls; and

6.         The registrant's other certifying officers and I have indicated in
           this annual report whether or not there were significant changes in
           internal controls or in other factors that could significantly
           affect internal controls subsequent to the date of our most recent
           evaluation, including any corrective actions with regard to
           significant deficiencies and material weaknesses.


Date: June 30, 2003                                    /s/ Svante Lundell
                                                       ------------------
                                                         Svante Lundell
                                                     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
subsidiaries as of December 31, 2000, 2001 and 2002 and the related
consolidated statements of operations and cash flows for each of the years in
the three-year period ended December 31, 2002. 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 Sweden and 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 referred to
above present fairly, in all material respects, the financial position of
Biora AB and subsidiaries at December 31, 2000, 2001 and 2002, and the results
of their operations and cash flows for each of the years in the three-year
period ended December 31, 2002 in conformity with generally accepted
accounting principles in Sweden.

Generally accepted accounting principles in Sweden vary in certain significant
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, 2002 and shareholders' equity as at
December 31 2000, 2001 and 2002 to the extent summarized in Note 22 to the
consolidated financial statements.

Malmo, Sweden

March 7, 2003



/s/ Alf Svensson
------------------------

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



<PAGE>
                             FINANCIAL STATEMENTS
<TABLE>

CONSOLIDATED STATEMENTS OF OPERATIONS

<CAPTION>
                                                                                        Year Ended December 31,
                                                                        ----------------------------------------------------
                                                                               2000         2001        2002           2002
                                                                        ----------------------------------------------------
                                                                                SEK          SEK         SEK   U.S. Dollars
                                                                                                                    (Note 1)
                                                                              (In thousands except per share amounts)
                                                                                                                 (Unaudited)
<S>                                                                          <C>         <C>         <C>             <C>
Net sales                                                                    89,160      110,677     129,736         16,885
Cost of goods sold                                 Note 5                   -21,148      -22,797     -23,014         -2,995
                                                                        ----------------------------------------------------
Gross profit                                                                 68,012       87,880     106,722         13,890

Selling expenses                                   Note 5                   -78,387      -76,998     -68,982         -8,978
Administrative expenses                            Note 5                   -25,437      -22,880     -21,474         -2,795
Research and development costs                     Note 4,5                 -42,789      -26,787     -16,686         -2,172
Other operating income                             Note 6                       643       16,049       2,275            296
Other operating expenses                           Note 6                      -753       -3,728      -2,723           -354
                                                                        ----------------------------------------------------
Loss from operations                               Note 2,3                 -78,711      -26,464        -868           -113


Interest income and similar profit/loss items                                 3,095        1,630       1,785            232
Interest expense and similar profit/loss items                                 -365         -227        -220            -29
                                                                        ----------------------------------------------------
Result before income taxes                                                  -75,981      -25,061         697             91

Income taxes                                       Note 7                      -168          -34         -16             -2
                                                                        ----------------------------------------------------
Net result                                                                  -76,149      -25,095         681             89
                                                                        ====================================================

Net result per Ordinary Share                      Note 1                     -3.59        -1.14        0.03           0.00
                                                                        ====================================================




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

</TABLE>
<PAGE>


<TABLE>
<CAPTION>

CONSOLIDATED BALANCE SHEETS



ASSETS                                                                                     As of December 31,
                                                                        ----------------------------------------------------
                                                                               2000         2001        2002           2002
                                                                        ----------------------------------------------------
                                                                                SEK          SEK         SEK   U.S. Dollars
                                                                                                                    (Note 1)
                                                                             (In thousands)
<S>                                                                           <C>          <C>         <C>            <C>
Long-term assets                                   Note 8                                                        (Unaudited)
Intangible assets
Capitalized research and development costs                                        -            -           -              -
Patents                                                                       7,112        6,948       8,001          1,041
                                                                        ----------------------------------------------------

Total intangible assets                                                       7,112        6,948       8,001          1,041

Tangible assets
Plant and machinery                                                           2,160        1,373         754             98
Equipment, tools, fixtures and fittings                                       4,282        2,365       1,163            151
Advance payments for tangible assets                                              -            -           -              -
                                                                        ----------------------------------------------------
Total tangible assets                                                         6,442        3,738       1,917            249

Financial assets
Other long-term receivables                        Note 9                     2,553          634         217             28
                                                                        ----------------------------------------------------
Total financial assets                                                        2,553          634         217             28
                                                                        ----------------------------------------------------
Total long-term assets                                                       16,107       11,320      10,135          1,319
                                                                        ----------------------------------------------------

Current assets
Inventories
Raw materials and consumables                                                 1,172        1,294       1,135            148
Work in progress                                                                666        1,059       2,696            351
Finished products                                                             5,040        5,483       7,130            928
                                                                        ----------------------------------------------------
Total inventories                                  Note 10                    6,878        7,836      10,961          1,427

Current receivables
Accounts receivable - trade                        Note 11                    9,173       12,942      10,203          1,328
Other current receivables                          Note 12                    2,618        3,411       1,412            184
Prepaid expenses and accrued income                Note 13                    2,693        5,142       2,576            335
                                                                        ----------------------------------------------------
Total current receivables                                                    14,484       21,495      14,191          1,847

Bank deposits                                      Note 14                   40,000       25,951           0              0
Cash and banks                                     Note 14                   13,755       25,520      51,347          6,683
                                                                        ----------------------------------------------------
Total current assets                                                         75,117       80,802      76,499          9,956
                                                                        ----------------------------------------------------

Total assets                                                                 91,224       92,122      86,634         11,275
                                                                        ====================================================


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

</TABLE>
<PAGE>



<TABLE>
<CAPTION>


SHAREHOLDERS' EQUITY AND LIABILITIES                                                       As of December 31,
                                                                        ----------------------------------------------------
                                                                               2000         2001        2002           2002
                                                                        ----------------------------------------------------
                                                                                SEK          SEK         SEK    U.S.Dollars
                                                                                                                    (Note 1)
                                                                             (In thousands)
<S>                                                                         <C>           <C>         <C>             <C>
Shareholders' equity                               Note 15                                                       (Unaudited)
Restricted equity
Share capital                                                                   848          950         950            124
Share premium reserve                                                       144,559       89,494      71,238          9,272
Other restricted equity                                                         303          510         313             41
                                                                        ----------------------------------------------------
Total restricted equity                                                     145,710       90,954      72,501          9,436
                                                                        ----------------------------------------------------

Accumulated loss
Accumulated loss                                                            -18,646       -9,989     -16,967         -2,208
Net loss for the year                                                       -76,149      -25,095         681             89
                                                                        ----------------------------------------------------
Total accumulated loss                                                      -94,795      -35,084     -16,286         -2,120
                                                                        ----------------------------------------------------
Total shareholders' equity                                                   50,915       55,870      56,215          7,316
                                                                        ----------------------------------------------------

Provisions
Provisions for pensions                            Note 16                      233          261         269             35
Other provisions                                                                 28           44           0              0
                                                                        ----------------------------------------------------
Total provisions                                                                261          305         269             35
                                                                        ----------------------------------------------------

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

Current liabilities
Accounts payable - trade                                                      8,973        7,522       5,918            770
Income tax liability                                                            150          168          55              7
Other current liabilities                          Note 18                    2,150        4,175       1,836            239
Accrued expenses                                   Note 19                   20,869       24,082      22,341          2,908
                                                                        ----------------------------------------------------
Total current liabilities                                                    32,142       35,947      30,150          3,924
                                                                        ----------------------------------------------------

Total shareholders' equity and
liabilities                                                                  91,224       92,122      86,634         11,275
                                                                        ====================================================

Pledged assets and contingent liabilities          Note 26
Pledged assets                                                                 None         None        None           None
Contingent liabilities                                                        9,136        8,618       9,930          1,292



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,
                                                                        ----------------------------------------------------
                                                                               2000         2001        2002           2002
                                                                        ----------------------------------------------------
                                                                                SEK          SEK         SEK   U.S. Dollars
                                                                                                                    (Note 1)
                                                                             (In thousands)
<S>                                                                      <C>             <C>           <C>        <C>
Cash flows from operating activities                                                                             (Unaudited)
Net (Loss) Income                                                           -76,149      -25,095         681             89
Adjustments to reconcile net loss to
net cash flows from operating activities
Depreciation of tangible assets and
and amortization of patents                                                   8,852        5,939       3,618            471
Change in capitalized research and
development costs                                                            10,514            -           -              -
Capital loss                                                                    257           13           0              0
Changes in other long-term receivables                                          -16           15         260             34
Changes in provisions                                                          -190           27         -29             -4
Changes in long-term liabilities concerning option premium received               1            -           -              -
Current tax                                                                     168           34          16              2
Deferred tax                                                                      -            -           -              -
Change in working capital
Accounts receivable - trade                                                     616       -3,040       1,657            216
Inventories                                                                  -1,340         -628      -3,572           -465
Other current assets                                                            284       -3,138       4,450            579
Accounts payable and other current liabilities                                  545          393      -3,255           -424
                                                                        ----------------------------------------------------
Net cash (used in) provided by operating activities                         -56,458      -25,480       3,826            498
                                                                        ----------------------------------------------------
Cash flows from investing activities
Capital expenditures (tangible assets and patents)                           -5,740       -2,907      -2,953           -384
Proceeds from sales of tangible assets                                          242           35           4              1
Advance payments for tangible assets                                              -            -           -              -
Payments concerning other long-term receivables                                   6        1,920         190             25
                                                                        ----------------------------------------------------
Net cash used in investing activities                                        -5,492         -952      -2,759           -359
                                                                        ----------------------------------------------------
Cash flows from financing activities
Issuance of new shares                                                            -       24,980           0              0
Payments of debt                                                                  -       -2,400           0              0
Issuance of debt                                                              2,400
Warrant premiums received                                                         -          920           0              0
                                                                        ----------------------------------------------------
Net cash from financing activities                                            2,400       23,500           0              0
                                                                        ----------------------------------------------------
Effect of exchange rate changes on cash and
cash equivalents                                                                501          648      -1,191           -155
                                                                        ----------------------------------------------------
Net change in cash and cash equivalents                                     -59,049       -2,284        -124            -16
                                                                        ====================================================

Cash and cash equivalents, beginning of year                                112,804       53,755      51,471          6,699
Cash and cash equivalents, end of year                                       53,755       51,471      51,347          6,683
                                                                        ----------------------------------------------------
Net change in cash and cash equivalents                                     -59,049       -2,284        -124            -16
                                                                        ====================================================

Cash received for interest                                                    2,926        1,507       1,854            241
Cash paid for interest                                                          392          214          11              1
Cash paid for taxes                                                              42           43          80             10



The accompanying notes are an integral part of these Consolidated Financial Statements.
</TABLE>

<PAGE>

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


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

Nature of operations

Biora is a Swedish biotechnology company that develops, manufactures, markets
and sells products for treatment primarily of diseases in the mouth. The
principal product, EmdogainGel promotes the regain of tooth-supporting tissues
which have been lost due to a periodontal disease. EmdogainGel is marketed in
Europe, North America and Asia. The parent company Biora AB (publ) is located
in Malmo, Sweden.

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 2002 are also presented in U.S. dollars, the latter being
unaudited and is being presented solely for convenience of the reader, at the
rate of SEK 7.6835 = USD 1.00, the Noon Buying Rate of the U.S. Federal
Reserve Bank of New York on June 13, 2003. Amounts may not total due to
rounding.

Change in accounting principles

In the annual accounts of 2001 the warrant premiums received, earlier
disclosed as long-term liability, were re-classified 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 Groups' foreign operations consists of independent operations which have
been translated in accordance with the current rate method. The current rate
method 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.
On the disposal of foreign operations, all accumulated translation differences
(net of the effect of any hedging activities) are recognised as income or
expense in the group income statement.

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 resonably assured. When recognized as
revenue licensing fees are included in Other operating income.

Cost of goods sold

With Emdogain becoming fully commercially available in 1996 the Company,
beginning in 1996, has accounted for production costs as costs of goods sold,
with the exception of costs directly related to research and development. Cost
of goods sold also includes 2.5% royalty to AstraZeneca on sales of Emdogain,
see Note 21.

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 ecomomic
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 repurchases 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.

Leasing agreements

The Company leases certain machinery and equipment under operating leases.

Receivables

Receivables are recorded at their expected net realizable value.

Inventories

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

Cash equivalents

The Company considers cash and banks and bank deposits to be cash equivalents.
The cash equivalents have 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.

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. Currency-hedged balances have been translated
at the spot rate when the balance occured with adjustment for the accrued
deduction or addition agreed upon in the hedge contract.

Exchange gains / losses pertaining to operating assets and liabilities are
included in Other operating income by 198 in 2000, 401 in 2001 and 1,589 in
2002 and in Other operating expenses by 484 in 2000, 848 in 2001 and 966 in
2002. Exchange gains and losses pertaining to current financial assets have
been included in Interest income by 127 in 2000, 107 in 2001 and (173) in
2002.

Net loss per ordinary share

Net loss per Ordinary Share - Basic (i.e., undiluted) is computed by dividing
net loss by the weigthed average number of Ordinary Shares outstanding for
each year ( 21,203,800 for 2000, 22,014,000 for 2001 and 23,753,800 for 2002).
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.

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 three months.

Additionally part of the anticipated cash inflows in YEN in the year 2001 was
hedged as per December 31, 1999, pursuant to a 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 in
accordance with forward exchange contracts. The forward exchange contracts
prevailing on December 31, 2002, had a duration up until March 27, 2003.

During 2000, 2001 and 2002 budgeted inflows in YEN were hedged by foreign
exchange contracts. Additionally the first payment for delivery to Japan in
2003 was hedged by a foreign exchange contract. The remaining deliveries to
Japan in 2003 will be hedged when a delivery plan has been received from
Seikagaku. The contracted 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 committment 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 gain or loss
on sale or settlement of the underlying item.

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

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.

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,
                           2000                       2001                      2002
                          ------------------------------------------------------------------------------
                          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:                           38            24           37           28           35            24
                          ------------------------------------------------------------------------------
Subsidiaries:
Germany                          13            48           14           58           15            64
U.S.                             26            54           27           55           28            51
Italy                             1             7            1            -            -             -
Netherlands                       4            54            0           71            -             -
                          ------------------------------------------------------------------------------
Total subsidiaries               44            51           42           55           43            56
                          ------------------------------------------------------------------------------
Consolidated                     82            38           79           42           78            41
                          ==============================================================================
</TABLE>


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

                                              Year Ended December 31,
                          ------------------------------------------------------------------------------
                           2000                       2001                      2002
                          ------------------------------------------------------------------------------
                             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                        17,721         9,225       18,416        9,433       17,959         8,556
                                           (3 490)*                  (3 581)*                   (2 567)*
Subsidiaries                 25,157         3,071       27,587        3,551       27,549         3,481
                                             (715)                     (779)                      (809)
                          ------------------------------------------------------------------------------
Consolidated                 42,878        12,296       46,003       12,984       45,508        12,037
                                           (4 205)**                 (4 360)**                  (3 376)**
                          ==============================================================================
</TABLE>

*   1,434 for 2000, 928 for 2001 and 58 for 2002 of Biora's pension cost refer
    to the category Board of Directors and President. Biora did not have any
    outstanding pension obligations neither at December 31, 2000 nor December
    31, 2001 nor December 31, 2002.

**  1,623 for 2000, 1,079 for 2001 and 172 for 2002 of the consolidated pension
    cost refer to the category Board of Directors and President. The
    consolidated outstanding pension obligations to this category amounted to
    233 as at December 31, 2000, 261 as at December 31, 2001, and 269 as at
    December 31, 2002.

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

<TABLE>
<CAPTION>
                                                                 Year Ended December 31,
                           --------------------------------------------------------------------------------------------
                                           2000                           2001                           2002
                           --------------------------------------------------------------------------------------------
                                 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:                              4,893          12,828          3,880          14,536          3,677         15,571
                           --------------------------------------------------------------------------------------------
Subsidiaries:
Germany 1)                           -135           5,528          1,136           5,682          1,166          6,009
U.S.                                1,800          14,895          2,245          18,236          1,621         18,753
Italy 2)                               81             175              -             270              -              -
Netherlands 3)                      1,916             897              -              18              -              -
                           --------------------------------------------------------------------------------------------
Total subsidiaries                  3,662          21,495          3,381          24,206          2,787         24,762
                           --------------------------------------------------------------------------------------------
Consolidated                        8,555          34,323          7,261          38,742          6,464         40,333
                           ============================================================================================

1) Severance pay amounting to 1,382 was included in the remuneration to the President of Biora GmbH in Germany in 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 of Biora S.r.L. 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 of Biora Benelux Dental Products B.V.
</TABLE>

Information below regarding benefits expensed for Board of Directors,
President and management team refers to 2002 and has been reported in
accordance with the recommendation of the Swedish Industry and Commerce Stock
Exchange Committee.

Fees to the Chairman of the Board and the other Board members have been paid
according to the recommendations from the annual shareholders meeting as
follows:

Per Wahlstrom, the chairman of the Board has received 150. The other six Board
members have each received a fee of 100. The three Board members appointed in
January 2002 have received 33 each in addition to the ordinary fee. Deputy
Lars Jacobsson has received a fee of 50. In addition to the ordinary fee,
three Board members have received remuneration for their services as members
of the Audit Committee of Biora as follows: Per Lojdquist 40, Lars Spongberg
25 and Christer Testen 25.

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 USD
300,000. Additionally she is entitled to an annual salary bonus amounting to
maximum 25% of the annual salary as well as pension benefits paid, for which
the Company's annual cost will be approximately USD 6,000. Donna Janson is
entitled to a period of notice of minimum 6 months and maximum 12 months,
starting not earlier than January 1, 2003. In addition she is entitled to a
severance pay equal to an annual salary, which can also be realized in the
event of change of control of Biora. Donna Janson is entitled to acquire
150,000 warrants of the Program decided in June, 2001 - see note 15. She is
also entitled to a company car and a furnished apartment.

Bonus has not been paid in the Parent company during 2002 neither 2001. The
incentive schemes for the President of Biora and the management team are based
on turnover and calculated as an percentage of turnover with a maximum of 20
basic amount (758 as of 2002).

Other senior executives employed by the Parant Company have a period of notice
of 6-18 months. 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 statements of operations:


                                         --------------------------------------
                                                 Year Ended December 31,
                                         --------------------------------------
                                              2000          2001          2002
                                         --------------------------------------
Audit assignments                              423           497           716
Other assignments                              338           266           895
                                         --------------------------------------
Total                                          761           763         1,611
                                         ======================================


-------------------------------------------------------------------------------
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 utilized EU grants during the year, in accordance with
the following:

                                         --------------------------------------
                                                 Year Ended December 31,
                                         --------------------------------------
                                            2000          2001          2002
                                         --------------------------------------
Total research and development costs        42,789        27,146        16,715
EU grants                                        -          -359           -29
                                         --------------------------------------
Net                                         42,789        26,787        16,686
                                         ======================================


Concerning amortization of patent and licence 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 cost of goods sold, selling expenses, administrative expenses
and research and development costs as follows:

                                         --------------------------------------
                                                  Year Ended December 31,
                                         --------------------------------------
                                              2000          2001          2002
                                         --------------------------------------
Cost of goods sold                           1,072           962           675
Selling expenses                             3,235         1,616           675
Administrative expenses                        552           342           163
Research and development costs              14,507         3,019         2,105
                                         --------------------------------------
Total                                       19,366         5,939         3,618
                                         =====================================


Included in depreciation / amortization accounted for as research and
development costs are amortization of capitalized R&D costs amounting to
10,514 for 2000 and 0 for 2001 and 2002. In the year 2000 depreciation /
amortization included a write-down of the Amelin-patent by 1,430. The
corresponding depreciation/amortization 697 for year 2001 includes write-downs
of the patents for apoptosis and connective tissue. The corresponding
depreciation/amortization for year 2002 were 205 and write-down of the EMD
patent for inhibitation of epithelium growth by 225.

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

Payments from Molnlycke referring to a development project in non dental
wound-healing are included in Other operating expenses by 360 in the year
2002.

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 administrative
expenses in connection with the outlicensing of the wound-healing project.

A pensionfee 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 result before income taxes consists of the following:

                                         --------------------------------------
                                                  Year Ended December 31,
                                         --------------------------------------
                                             2000          2001          2002
                                         --------------------------------------
Sweden                                     -88,449       -21,132        -8,026
Foreign                                     12,468        -3,929         8,723
                                         --------------------------------------
Total                                      -75,981       -25,061           697
                                         ======================================

Income taxes are distributed as follows:

                                         --------------------------------------
                                                Year Ended December 31,
                                         --------------------------------------
                                             2000          2001          2002
                                         --------------------------------------
Current
Sweden                                        -4            -4             -
 Foreign                                    -164           -30           -16
                                         --------------------------------------
Total                                       -168           -34           -16
                                         ======================================
Deferred
Sweden                                         -             -             -
Foreign                                        -             -             -
                                         --------------------------------------
Total                                       -168           -34           -16
                                         ======================================



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

Deferred tax assets on not yet utilized losses have not been recorded.

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

                                         --------------------------------------
                                                Year Ended December 31,
                                         --------------------------------------
                                             2000          2001          2002
                                         --------------------------------------
Expected income tax benefit/(expense) 1)    21,275         7,017          -195
Effect of:

Difference in tax rates for foreign
subsidiaries                                -1,645           720        -1,243

Losses not currently utilized              -23,091        -8,176          -821

Utilized losses from earlier years           5,585         1,378         2,902

Non-deductible items                        -2,294          -976          -662

Non-taxable income                               2             3             3

Deferred tax                                     -             -             -
                                         --------------------------------------
Actual tax according to Statements of
Operations                                    -168           -34           -16
                                         ======================================



         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 has tax loss carry forwards in The Netherlands, Germany, Italy,
UK, Switzerland and U.S., that amounted to 182,430 at December 31, 2002. These
tax loss carry forwards 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 has tax loss carry forwards in Sweden that amounted to 287,313 at
December 31, 2002. This tax loss carry 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 loss
carry forwards do not expire. In Switzerland the time limit is 7 years and in
U.S. 15-23 years.

This means that 3,166 will expire after period 2012, 18,585 after period 2018,
55 after period 2019, 48 after period 2020, 7,172 after period 2021.



<TABLE>
<CAPTION>

-------------------------------------------------------------------------------
Note 8 Acquisition value of long-term assets, etc.
-------------------------------------------------------------------------------

Capitalized R&D costs
                                                                                     As of December 31,
                                                                      -----------------------------------------
                                                                              2000          2001          2002
                                                                      -----------------------------------------
<S>                                                                         <C>            <C>            <C>
Accumulated acquisition cost, beginning and end of year                     23,094             -             -
                                                                      -----------------------------------------
Accumulated amortization, beginning of year                                -12,580             -             -
Amortization for the year                                                  -10,514             -             -
                                                                      -----------------------------------------
Accumulated amortization, end of year                                      -23,094             -             -
                                                                      -----------------------------------------
Net book value, end of year                                                      -             -             -
                                                                      =========================================

Patents
                                                                                     As of December 31,
                                                                      -----------------------------------------
                                                                              2000          2001          2002
                                                                      -----------------------------------------
Accumulated acquisition cost, beginning of year                              8,463        12,084        13,790
Capital expenditures for the year                                            3,589         1,654         2,682
Translation differences for the year                                            32            52           -17
                                                                      -----------------------------------------
Accumulated acquisition cost, end of year                                   12,084        13,790        16,455
                                                                      -----------------------------------------
Accumulated amortization, beginning of year                                 -2,404        -4,972        -6,842
Amortization for the year                                                   -1,132        -1,170        -1,182
Write-downs for the year                                                    -1,430          -697          -430
Translation differences for the year                                            -6            -3             -
                                                                      -----------------------------------------
Accumulated amortization, end of year                                       -4,972        -6,842        -8,454
                                                                      -----------------------------------------
Net book value, end of year                                                  7,112         6,948         8,001
                                                                      =========================================


Plant and machinery
                                                                                     As of December 31,
                                                                      -----------------------------------------
                                                                              2000          2001          2002
                                                                      -----------------------------------------
Accumulated acquisition cost, beginning of year                              6,013         6,940         7,080
Capital expenditures for the year                                              984           175            56
Sales / disposals                                                              -50           -35             -
Reclassification                                                                -7             -             -
                                                                      -----------------------------------------
Accumulated acquisition cost, end of year                                    6,940         7,080         7,136
                                                                      -----------------------------------------
Accumulated depreciation, beginning of year                                 -3,765        -4,780        -5,707
Sales / disposals                                                               50            35             -
Reclassification                                                                 7             -             -
Depreciation of the year                                                    -1,072          -962          -675
                                                                      -----------------------------------------
Accumulated depreciation, end of year                                       -4,780        -5,707        -6,382
                                                                      -----------------------------------------
Net book value, end of year                                                  2,160         1,373           754
                                                                      =========================================


Equipment, tools, fixtures and fittings
                                                                                     As of December 31,
                                                                      -----------------------------------------
                                                                              2000          2001          2002
                                                                      -----------------------------------------
Accumulated acquisition cost, beginning of year                             18,507        19,542        20,407
Capital expenditures for the year                                            1,510         1,080           211
Sales / disposals                                                           -1,217        -1,152          -207
Reclassification                                                                 7             -             -
Translation differences for the year                                           735           937        -1,354
                                                                      -----------------------------------------
Accumulated acquisition cost, end of year                                   19,542        20,407        19,057
                                                                      -----------------------------------------
Accumulated depreciation, beginning of year                                -10,254       -15,260       -18,042
Sales / disposals                                                              718         1,105           207
Reclassification                                                                -7             -             -
Depreciation of the year                                                    -5,218        -3,111        -1,331
Translation differences for the year                                          -499          -776         1,272
                                                                      -----------------------------------------
Accumulated depreciation, end of year                                      -15,260       -18,042       -17,894
                                                                      -----------------------------------------
Net book value, end of year                                                  4,282         2,365         1,163
                                                                      =========================================
</TABLE>

<TABLE>
<CAPTION>

-------------------------------------------------------------------------------
Note 9 Other long-term receivables
-------------------------------------------------------------------------------


                                                                                     As of December 31,
                                                                      -----------------------------------------
                                                                              2000          2001          2002
                                                                      -----------------------------------------
<S>                                                                          <C>           <C>             <C>
Opening balance                                                              2,534         2,553           634
Employee loans repaid                                                            -        -1,920          -380
Deposits repaid                                                                 -6             -           -39
Deposits expensed                                                              -14             -             -
Capital value of paid pension insurance fees in Germany                         30           -15             9
Translation differences for the year                                             9            16            -7
                                                                      -----------------------------------------
Closing balance                                                              2,553           634           217
                                                                      =========================================
</TABLE>

<TABLE>
<CAPTION>

--------------------------------------------------------------------------------
Note 10 Inventories
--------------------------------------------------------------------------------

                                                                                     As of December 31,
                                                                      -----------------------------------------
                                                                              2000          2001          2002
                                                                      -----------------------------------------
<S>                                                                          <C>           <C>           <C>
Raw materials                                                                1,208         1,294         1,170
Work in progress                                                               687         1,059         2,779
Finished products                                                            5,183         5,704         7,332
                                                                      -----------------------------------------
                                                                             7,078         8,057        11,281
Obsolescence reserve                                                          -200          -221          -320
                                                                      -----------------------------------------
Total                                                                        6,878         7,836        10,961
                                                                      =========================================
</TABLE>

Schedule of movements in the inventory obsolescence reserve in the Biora Group
for the years ended December 31, 2000, 2001 and 2002:
<TABLE>
<CAPTION>

Year                                       Balance at        Charged           Charged     Additions or       Balance at
                                            beginning      (credited)        (credited)      Deductions    end of period
                                                 year        to costs          to other
                                                         and expenses          accounts
-------------------------------------------------------------------------------------------------------------------------
<S>                                               <C>             <C>                                                <C>
2000                                              131             69                  -               -              200
2001                                              200             21                  -               -              221
2002                                              221             99                  -               -              320
</TABLE>


-------------------------------------------------------------------------------
Note 11 Accounts receivable - trade
-------------------------------------------------------------------------------

Schedule of movements in allowance for doubtful accounts and reserves in the
Company for the years ended December 31, 2000, 2001 and 2002:

<TABLE>
<CAPTION>

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

<S>                                               <C>            <C>                 <C>             <C>             <C>
2000                                              641           -171                 24              43              537

2001                                              537           -100                 38              -5              470

2002                                              470            373                -17               -              826
                                                                                     (A)             (B)
</TABLE>

(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,
                                        ----------------------------------------
                                                2000          2001         2002
                                        ----------------------------------------
Tax receivables                                  678            74          239
V.A.T.                                         1,548         3,212          846
Receivables from employees                        59            16            -
Receivable from SPP                              250             -            -
Other current receivables                         83           109          327
                                        ----------------------------------------
Total                                          2,618         3,411        1,412
                                        ========================================



-------------------------------------------------------------------------------
Note 13 Prepaid expenses and accrued income
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                      As of December 31,
                                                       ----------------------------------------
                                                               2000          2001         2002
                                                       ----------------------------------------
<S>                                                           <C>           <C>          <C>
Prepaid leasing and property rental expenses                  1,012         1,111        1,146
Prepaid insurances                                              482           642          604
Prepaid marketing expenses                                      352           255          331
Prepaid travel expenses                                          60            72           46
Other prepaid expenses                                          739           780          449
Accrued installment for license agreement                         -         2,263            -
Accrued interest income                                          48            19            -
                                                       ----------------------------------------
Total                                                         2,693         5,142        2,576
                                                       ========================================
</TABLE>


-------------------------------------------------------------------------------
Note 14 Cash and Cash equivalents
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>

                                                                      As of December 31,
                                                       ----------------------------------------
                                                               2000          2001         2002
                                                       ----------------------------------------
<S>                                                          <C>           <C>         <C>
Bank deposits                                                40,000        25,951            -
Cash and banks                                               13,755        25,520       51,347
                                                       ----------------------------------------
Total                                                        53,755        51,471       51,347
                                                       ========================================
</TABLE>

As per December 31, 2002 as well as per December 31, 2001 and as per December
31, 2000 Biora GmbH had unutilized bank overdraft facilities amounting to
15,339 EUR (30,000 DEM).


-------------------------------------------------------------------------------
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, 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
Warrants premiums received*                           1,106                                                    1,106
Issuance of new shares 23,805  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
---------------------------------------------------------------------------------------------------------------------
Disposition of loss in the
Parent Company                                      -22,050                            22,050                      0
Disposition of profit in
the subsidaries                                          20                               -20
Re-classification                                     3,774                            -3,774                      0
Change in translation
differences                                                                   -197                   -139       -336
Net result for the year                                                                   681                    681
---------------------------------------------------------------------------------------------------------------------
Balance at December 31, 2002  23,753,800      950    71,238          0         313    -11,309      -4,977     56,215
---------------------------------------------------------------------------------------------------------------------
</TABLE>



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

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, 2000, 2001 and 2002 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. On the same date, Biora and Euroventures Nordica entered into an
agreement (the "Key Employee Incentive Plan") pursuant to which Euroventures
Nordica agreed to offer all the warrants to officers and other key employees
of the Company. These key employees were required to purchase the warrants at
their fair value at the grant using the Black-Sholes valuation model. All of
the 560,000 warrants have been subscribed for. Also non-employee members of
the Board of Directors hold warrants. Each warrant entitles the holder to
acquire one Ordinary Share of the Company, at an exercise price of SEK 70.00.
Under Swedish law a corporation cannot issue warrants separately from
debentures, but accompanying warrants may be detached from the debentures. The
warrants were exerciseable 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 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 89,250 (89,250
per December 31, 2001 ) 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 exerciseable for Ordinary Shares at any time during May 2002.
None of the warrants were exercised.

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 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 appropiate 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 24,553,800. 920 in warrant
premiums was received for this warrant program of 800,000 warrants at SEK 3.60
of which the employees of the Company had subscibed for 255,500 warrants.

On August 24, 2001 the Company made a share 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 the year end of 2001 and 1,175
was paid in the beginning of 2002.


-------------------------------------------------------------------------------
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, 2000, 2001 and
2002, respectively, are shown in the following table.

                                                  Year Ended December 31,
                                              ---------------------------------
                                                   2000       2001        2002
                                              ---------------------------------
Social security                                   2,204      2,198       2,095
Swedish national multi-employer plan                901      1,103       1,151
Individual                                        3,194      3,295       2,549
                                              ---------------------------------
Total pension costs                               6,299      6,596       5,795
                                              =================================

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,
                                              --------------------------------
                                                    2000       2001      2002
                                              --------------------------------
Liabilities to credit institutions (a)             2,400          -         -
Other long-term liabilities (b)                    5,506          -         -
Total                                              7,906          -         -

(a)  The liabilities to credit institutions are the only interest bearing
     liabilities of the Company, amounting to SEK 2,400,000 on December 31,
     2000. These liabilities were fully repaid in December 2001 in connection
     with the outlicensing of the woundhealing project to Molnlycke Helthcare.
     The 2,400 represented the amount paid out of the total conditional loan
     of SEK 15 million, granted by the Swedish Industrial Fund for the project
     "Emdogain for extra-oral woundhealing 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 licence 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.

     At December 31, 2002 the Company has not paid royalties totaling 167% of
     the loan and is therefore not entitled to the lower royalty rates.

     - 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, 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 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,
                                                --------------------------------
                                                    2000       2001        2002
                                                --------------------------------
Employee withholding taxes                         1,138      1,321       1,251
V.A.T.                                               767      2,589         469
Liabilities to customers                             161        203           -
Other current liabilities                             84         62         116
                                                --------------------------------
Total                                              2,150      4,175       1,836
                                                ================================

Biora did not have any short-term interest bearing liabilities neither on
December 31, 2000, on December 31, 2001 nor on December 31, 2002.


-------------------------------------------------------------------------------
Note 19 Accrued expenses
-------------------------------------------------------------------------------

                                                          As of December 31,
                                                 -------------------------------
                                                     2000       2001        2002
                                                 -------------------------------
Accrued personnel-related expenses                  8,971      6,102       3,961
Accrued administrative expenses                     2,574      3,814       1,692
Accrued R&D costs                                   2,104      3,265       3,773
Accrued marketing expenses                          2,477      1,771         827
Accrued royalty expenses                            4,062      8,276      10,139
Other accrued expenses                                681        854       1,949
                                                 -------------------------------
Total                                              20,869     24,082      22,341
                                                 -------------------------------


-------------------------------------------------------------------------------
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, 2002, pertaining to office rental agreements is
detailed below.

Year

2003                                                             4,467
2004                                                             1,213
2005                                                               424
                                                            -----------
Total                                                            6,104
                                                            ===========


The corresponding office rent expenses amounted to 5,338 for the year ended
December 31, 2002, 5,404 for the year ended December 31, 2001, and 5,472 for
the year ended December 31, 2000.

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. There are no restrictions in consequence of the office rental
agreements.

Remaining leasing contracts concern leasing of cars, copying machines and
other office equipment. The total amount of future minimum rental commitments
on December 31, 2002, pertaining to car and office equipment leasing
agreements are listed below.

Year

2003                                                             1,513
2004                                                               598
2005                                                               197
                                                            -----------
Total                                                            2,308
                                                            ===========

The corresponding leasing expenses amounted to 2,324 for the year ended
December 31, 2002, 2,005 for the year ended December 31, 2001 and 1,702 for
the year ended December 31, 2000.


-------------------------------------------------------------------------------
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 7,012
for the year ended December 31, 2002, approximately 17,575 for the year ended
December 31, 2001 and approximately 17,505 for the year ended December 31,
2000.

The total amount of future expense commitments on December 31, 2002,
pertaining to these agreements are listed below.

            Year
            2003                                        720
            2004                                          -
                                                  ----------
            Total                                       720
                                                  ==========

From 1989 to 1992, AstraZeneca was a shareholder in the Company and
contributed to the financing of the initial research behind and development of
Emdogain. On December 31, 1992, AstraZeneca, the Company and certain of the
Company's other shareholders signed an agreement under the terms of which
AstraZeneca withdrew from its commitment to finance R&D for products relating
to Emdogain, as well as other license agreements between the Company and
AstraZeneca. As a part of the final settlement with AstraZeneca, it was agreed
that, until December 31, 2009, AstraZeneca 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 2002 the above royalty amounted to
approximately 3,128 (2001 2,683 and 2000 2,167) 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 2002 this royalty amounted
to approximately 11 (2001 26 and 2000 16).

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,
                                                  --------------------------------------------------------
                                                       2000                   2001                   2002
                                                  --------------------------------------------------------
<S>                                                  <C>                    <C>                       <C>
Net loss under Swedish GAAP                         -76,149                -25,095                    681
Capitalization of certain R&D costs (a)              -1,355                   -589                 -1,309
Reversal of R&D expenses (b)                         11,349                    932                    402
Amortization of patents  (c)                              -                    519                   -538
Hedging of future cash flows (g)                        378                    -83                    328
Receivable on SPP concerning pension fee surplus (i)   -250                    250                      -
                                                  ----------           ------------           ------------
Net loss under U.S. GAAP                            -66,027                -24,066                   -436
                                                  ========================================================
Basic EPS (d)
Net loss per Ordinary Share                           -3.11                  -1.09                  -0.02
                                                  ========================================================
Net loss per ADS                                      -6.23                  -2.18                  -0.04
                                                  ========================================================
Diluted EPS (d)
Net loss per Ordinary Share                           -3.11                  -1.09                  -0.02
                                                  ========================================================
Net loss per ADS                                      -6.23                  -2.18                  -0.04
                                                  ========================================================

                                                                      As of December 31,
                                                  --------------------------------------------------------
                                                       2000                   2001                   2002
                                                  --------------------------------------------------------
Shareholders' equity under Swedish GAAP              50,915                 55,870                 56,215
Capitalization of certain R&D costs (a)              -2,503                 -2,159                 -3,066
Amortization of patents (c)                          -1,715                 -1,196                 -1,734
Conditional shareholders' contribution (f)           -7,510                 -7,510                 -7,510
Hedging of future cash flows (g)                       -274                   -357                    -29
Warrant premiums received (h)                         5,506                      -                      -
Receivable on SPP concerning pension fee surplus (i)   -250                      -                      -
                                                  ----------           ------------           ------------
Shareholders' equity under U.S. GAAP                 44,169                 44,648                 43,876
                                                  ========================================================
</TABLE>


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

(a) Capitalization of certain R&D costs

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

(b) Reversal of R&D expenses

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

(c) Amortization of patents

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

(d) Basic / Diluted EPS

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

Net loss per Ordinary Share has been calculated on the basis of the weighted
average number of shares outstanding, 23,753,800 (22,014,211 number of shares
2001 and 21,203,800 for 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 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,
                                        --------------------------------------------
                                             2000             2001             2002
                                        --------------------------------------------
<S>                                     <C>             <C>              <C>
Gross deferred tax assets:
Tax loss carried forward                  136,916          153,641          145,734
Capitalized costs for tax purposes              -                -                -
                                        ----------       ----------       ----------
Total                                     136,916          153,641          145,734
Less valuation allowance                  136,916          153,641          145,734
                                        ----------       ----------       ----------
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 in the same period that the hedged transaction is recognized. Under
U.S. GAAP such unrealized gains and losses may be deferred only for firm
commitments.

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. As per December 31,
2002 there were no warrant premiums. 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, 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
                                                              ===========

Comprehensive loss:
Net result                                    681
Currency translation adjustment              -336                   -336
                                       -----------            -----------
Total comprehensive result                    345
                                       ===========

Balance at December 31, 2002                                      -4,664
                                                              ===========
</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,
                                                  --------------------------------------------------------
                                                       2000                   2001                   2002
                                                  --------------------------------------------------------
<S>                                                  <C>                   <C>                    <C>
Product sales                                        89,160                110,677                129,736
Contract revenue                                          -                      -                      -
                                                  --------------------------------------------------------
Total revenues                                       89,160                110,677                129,736

Cost of goods sold                                  -21,148                -22,797                -23,014
                                                  --------------------------------------------------------
Gross profit                                         68,012                 87,880                106,722

Selling expenses                                    -78,387                -76,998                -68,982
Administrative expenses                             -25,437                -22,880                -21,474
Research and development costs                      -32,795                -25,925                -18,131
Other operating income                                  393                 16,299                  2,275
Other operating expenses                               -375                 -3,811                 -2,395
                                                  --------------------------------------------------------
Loss from operations                                -68,589                -25,435                 -1,985

Interest income                                       3,095                  1,630                  1,785
Interest expense                                       -365                   -227                   -220
                                                  --------------------------------------------------------
Loss before income taxes                            -65,859                -24,032                   -420

Income taxes                                           -168                    -34                    -16
                                                  --------------------------------------------------------
Net loss                                            -66,027                -24,066                   -436
                                                  ========================================================
</TABLE>

<TABLE>
<CAPTION>

Condensed Consolidated Balance Sheets - U.S. GAAP Basis

ASSETS                                                                 As of December 31,
                                                  --------------------------------------------------------
                                                       2000                   2001                   2002
                                                  --------------------------------------------------------
<S>                                                  <C>                    <C>                    <C>
Cash and cash equivalents                            53,755                 51,471                 51,347
Accounts receivable - trade                           9,173                 12,942                 10,203
Other current assets                                 11,939                 16,389                 14,949
                                                  --------------------------------------------------------
Total current assets                                 74,867                 80,802                 76,499
                                                  --------------------------------------------------------

Patents                                               5,397                  4,427                  3,651
Property, machinery and equipment - net               3,939                  2,904                  1,467
Other long-term receivables                           2,553                    634                    217
                                                  --------------------------------------------------------
Total long-term assets                               11,889                  7,965                  5,335
                                                  --------------------------------------------------------

Total assets                                         86,756                 88,767                 81,834
                                                  ========================================================

LIABILITIES AND SHAREHOLDERS'
EQUITY                                                   As of December 31,
                                                  --------------------------------------------------------
                                                       2000                   2001                   2002
                                                  --------------------------------------------------------
Accounts payable - trade                              8,973                  7,522                  5,918
Other current liabilities                            23,443                 28,782                 24,261
                                                  --------------------------------------------------------
Total current liabilities                            32,416                 36,304                 30,179
                                                  --------------------------------------------------------

Other long-term liabilities                          10,171                  7,815                  7,779
                                                  --------------------------------------------------------
Total long-term liabilities                          10,171                  7,815                  7,779
                                                  --------------------------------------------------------
Shareholders' equity                                 44,169                 44,648                 43,876
                                                  --------------------------------------------------------

Total liabilities and shareholders' equity           86,756                 88,767                 81,834
                                                  ========================================================
</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,
                             --------------------------------------------------------------------------------
                                        2000                            2001                            2002
                             --------------------------------------------------------------------------------
<S>                                    <C>                             <C>                             <C>
Sales:
Sweden                                 2,546                           2,989                           2,630
Other Nordic countries                 2,516                           3,064                           2,676
Germany / Austria                     23,787                          33,943                          38,890
Switzerland                            1,914                           1,430                             950
U.S.                                  67,656                          85,518                          94,478
Canada, Mexico                         2,239                           3,302                           3,430
Italy                                  9,632                           9,410                           8,115
Benelux countries                      4,847                           3,503                           2,762
U.K.                                   1,914                           1,460                           1,634
Japan                                  6,034                               0                           7,833
Other countries                        3,329                           5,141                           7,096
Inter-area elimination               -37,254                         -39,083                         -40,758
                             --------------------------------------------------------------------------------
Total sales                           89,160                         110,677                         129,736
                             ================================================================================

                                                                 As of December 31,
                             --------------------------------------------------------------------------------
                                        2000                            2001                            2002
                             --------------------------------------------------------------------------------
Long-term assets:
Sweden                                 8,803                           5,952                           4,229
Germany / Austria                        944                             624                             365
Switzerland                                -                               -                               -
U.S.                                   1,150                             583                             176
Italy                                    119                              89                              22
Benelux countries                        873                             717                             543
U.K                                        -                               -                               -
Other countries                            -                               -                               -
                             --------------------------------------------------------------------------------
Total long-term assets                11,889                           7,965                           5,335
                             ================================================================================

(ii) Export sales

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

                                                                 Year Ended December 31,
                             --------------------------------------------------------------------------------
                                        2000                            2001                            2002
                             --------------------------------------------------------------------------------
Other Nordic countries                 2,516                           3,064                           2,676
Canada and Mexico                      2,196                           3,302                           3,430
Switzerland                                -                           1,270                             950
Greece                                   383                             547                             543
Israel                                   705                           1,144                           1,511
Japan                                  6,034                               0                           7,833
France                                 1,218                           1,003                             909
Spain                                    466                             676                             938
Poland                                   246                             517                             465
Taiwan                                     -                             861                           1,367
Rep Korea                                  -                               -                             828
Other countries                          290                             274                             230
                             --------------------------------------------------------------------------------
Total export sales                    14,054                          12,658                          21,680
                             ================================================================================
</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 face 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
counterparty to the off-balance-sheet financial instruments do not perform
according to the terms of the contract. In the opinion of management, the
counterparty 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,
                                     --------------------------------------------------------------------------------
                                                 2000                        2001                       2002
                                     --------------------------------------------------------------------------------
                                        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            29             0            22            0             7        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, 2002. 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,
              ------------------------------------------------------------------------------
                    2000                        2001                       2002
              ------------------------------------------------------------------------------
                     Buy          Sell           Buy         Sell           Buy        Sell
              ------------------------------------------------------------------------------
                                            (SEK in million)
<S>              <C>              <C>           <C>          <C>           <C>         <C>
USD                    -             9             -           15            10           -
EUR                    -             8             -            4             -           -
JPY                    -            12             -            3             -           3
              ------------------------------------------------------------------------------
Total                  -            29             -           22            10           3
              ==============================================================================
</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, 2000, 2001, and at December 31, 2002, the
fair value of the Company's financial instruments were 274, 356 and 29 below
the book value under Swedish GAAP.

(vi) New Accounting Pronouncements

In June 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement
Obligations. 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 that 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 evaluating the
impact of adopting SFAS No. 143 on its financial statements.

In April 2002, the 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 amends existing guidance on reporting gains and losses on the
extinguishment of debt to prohibit the classification of the gain or loss as
extraordinary, as the use of such extinguishments have become part of the risk
management strategy of many companies. SFAS No. 145 also amends SFAS No. 13 to
require sale-leaseback accounting for certain lease modifications that have
economic effects similar to sale-leaseback transactions. The provisions of the
Statement related to the rescission of Statement No. 4 is applied in fiscal
years beginning after May 15, 2002. Earlier application of these provisions is
encouraged. The provisions of the Statement related to Statement No. 13 were
effective for transactions occurring after May 15, 2002, with early
application encouraged. The Company is currently evaluating the impact of
adopting SFAS No. 145 on its financial statements.

In June 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated
with Exit or Disposal Activities. SFAS No. 146 addresses financial accounting
and reporting for costs associated with exit or disposal activities and
nullifies Emerging Issues Task Force (EITF) Issue 94-3, Liability Recognition
for Certain Employee Termination Benefits and Other Costs to Exit an Activity.
The provisions of this Statement are effective for exit or disposal activities
that are initiated after December 31, 2002, with early application encouraged.
The Company is currently evaluating the impact of adopting SFAS No. 146 on its
financial statements.

In November 2002, the FASB issued Interpretation No. 45, Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness to Others, an interpretation of FASB Statements No.
5, 57 and 107 and a rescission of FASB Interpretation No. 34. This
Interpretation elaborates on the disclosures to be made by a guarantor in its
interim and annual financial statements about its obligations under guarantees
issued. The Interpretation also clarifies that a guarantor is required to
recognize, at inception of a guarantee, a liability for the fair value of the
obligation undertaken. The initial recognition and measurement provisions of
the Interpretation are applicable to guarantees issue or modified after
December 31, 2002. The Company is currently evaluating the impact of adopting
FIN No. 45 on its financial statements. The disclosure requirements are
effective for financial statements of interim or annual periods ending after
December 15, 2002. The required disclosures are included in the notes to the
consolidated financial statements.

In December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based
Compensation - Transition and Disclosure, an amendment of FASB Statement No.
123. This Statement amends FASB Statement No. 123, Accounting for Stock-Based
Compensation, to provide alternative methods of transition for a voluntary
change to the fair value method of accounting for stock-based employee
compensation. The Company continues to apply the provisions of APB No. 25. In
addition, this Statement amends the disclosure requirements of Statement No.
123 to require prominent disclosures in both annual and interim financial
statements. Certain of the disclosure modifications are required for fiscal
years ending after December 15, 2002 and are included in the notes to these
consolidated financial statements.

In April 2003, the FASB issued FASB Statement No. 149, Amendment of Statement
133 on Derivative Instruments and Hedging Activities, which amends FASB
Statement No. 133, Accounting for Derivative Instruments and Hedging
Activities, to address (1) decisions reached by the Derivatives Implementation
Group, (2) developments in other Board projects that address financial
instruments, and (3) implementation issues related to the definition of a
derivative. Statement No. 149 has multiple effective date provisions depending
on the nature of the amendment to Statement No. 133. The Company is currently
evaluating the impact of adopting Statement No. 149 on its financial
statements.

In May 2003, the FASB issued FASB Statement No. 150, Accounting for Certain
Financial Instruments with Characteristics of both Liabilities and Equity.
This Statement establishes standards for how an issuer classifies and measures
certain financial instruments with characteristics of both liabilities and
equity. It requires that an issuer classify a financial instrument that is
within its scope as a liability (or an asset in some circumstances). Many of
those instruments were previously classified as equity. This Statement is
effective for financial instruments entered into or modified after May 31,
2003, and otherwise is effective at the beginning of the first interim period
beginning after June 15, 2003, except for mandatorily redeemable financial
instruments of nonpublic entities. It is to be implemented by reporting the
cumulative effect of a change in an accounting principle for financial
instruments created before the issuance date of the Statement and still
existing at the beginning of the interim period of adoption. Restatement is
not permitted. For nonpublic entities, mandatorily redeemable financial
instruments are subject to the provisions of this Statement for the first
fiscal period beginning after December 15, 2003. The Company is currently
evaluating the impact of adopting Statement No. 150 on its financial
statements.

In January 2003, the FASB issued FASB Interpretation No. 46, Consolidation of
Variable Interest Entities. The objective of FIN 46 is to improve financial
reporting by companies involved with variable interest entities. A variable
interest entity is a corporation, partnership, trust or any other legal
structure used to conduct activities or to hold assets in which either (a) the
equity investment at risk is not sufficient to permit the entity to finance
its activities without additional subordinated financial support from other
parties, or (b) the equity investors lack (i) the ability to make decisions
about the entity's activities, (ii) the obligation to absorb the expected
losses of the entity if they occur, or (iii) the right to receive the expected
residual returns of the entity if they occur. Historically, entities generally
were not consolidated unless the entity was controlled through voting
interests. FIN 46 changes that by requiring a variable interest entity to be
consolidated by a company if that company is subject to a majority of the risk
of loss from the variable interest entity's activities or entitled to receive
a majority of the entity's residual returns or both. A company that
consolidates a variable interest entity is called the "primary beneficiary" of
that entity. FIN 46 also requires disclosures about variable interest entities
that a company is not required to consolidate but in which it has a
significant variable interest. The requirements of FIN 46 apply immediately to
variable interest entities created after January 31, 2003 and to variable
interest entities in which an enterprise obtains an interest after that date.
The requirements of FIN 46 apply in the first fiscal year or interim period
beginning after June 15, 2003 to variable interest entities in which an
enterprise holds a variable interest that is acquired before February 1, 2003.
Also, certain disclosure requirements apply to all financial statements issued
after January 31, regardless of when the variable interest entity was
established. The Company is currently evaluating the impact of adopting FIN
no. 46 on its financial statements.

In November 2002, the Emerging Task Force issued its consensus on EITF 00-21,
Revenue Arrangements with Multiple Deliverables on an approach to determine
whether an entity should divide an arrangement with multiple deliverables into
separate units of accounting. According to the EITF in an arrangement with
multiple deliverables, the delivered item(s) should be considered a separate
unit of accounting if all of the following criteria are met: (1) The delivered
item(s) has value to the customer on a standalone basis, (2) There is
objective and reliable evidence of the fair value of the undelivered item(s),
(3) If the arrangement includes a general right of return, delivery or
performance of the undelivered item(s) is considered probable and
substantially in the control of the vendor. If all the conditions above are
met and there is objective and reliable evidence of fair value for all units
of accounting in an arrangement, the arrangement consideration should be
allocated to the separate units of accounting based on their relative fair
values. However, there may be cases in which there is objective and reliable
evidence of the fair value(s) of the undelivered item(s) in an arrangement but
no such evidence for one or more of the delivered items. In those cases, the
residual method should be used to allocate the arrangement consideration. The
guidance in this Issue is effective for revenue arrangements entered into in
fiscal years beginning after June 15, 2003. Alternatively, entities may elect
to report the change in accounting as a cumulative-effect adjustment in
accordance with Opinion 20. If so elected, disclosure should be made in
periods subsequent to the date of initial application of this consensus of the
amount of recognized revenue that was previously included in the cumulative
effect adjustment. The Company is currently evaluating the impact of the
adoption of EITF 00-21 on its financial statements.


-------------------------------------------------------------------------------
Note 25 U.S. GAAP Warrants
-------------------------------------------------------------------------------


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

Warrants activity during the years ended December 31 2000, 2001 and 2002 is as
follows:
<TABLE>
<CAPTION>

                                                  2000                          2001                         2002
                             ---------------------------------------------------------------------------------------------------
                                   Options       Weighted Average   Options      Weighted Average  Options     Weighted Average
                                                   Exercise Price                 Exercise Price                 Exercise Price
                             ---------------------------------------------------------------------------------------------------
<S>                              <C>            <C>                <C>          <C>             <C>            <C>
Outstanding at beginning
of year                            631,250            76.77         649,250             78.25      344,750                46.25
Granted                             18,000           130.00         255,500             17.00            -                    -
Exercised                                -                -               -                 -            -                    -
Forfeited                                -                -         560,000             70.00       89,250               130.00
                             ---------------------------------------------------------------------------------------------------
Outstanding at end of year         649,250            78.25         344,750             46.25      255,500                17.00
                             ===================================================================================================
Exerciseable at end of year        560,000            70.00             N/A               N/A          N/A                  N/A
                             ===================================================================================================

Weighted average fair value of
options granted during the year                        0.05                               3.6                                 -

</TABLE>

<TABLE>
<CAPTION>

Warrants outstanding at December 31, 2002

                                           Warrants Outstanding                               Warrants Exercisable
                             -------------------------------------------------------------------------------------------------
                                   Options           Remaining      Exercise Price      Options              Weighted Average
Exercise price                                Contractual life                                                 Exercise Price
                             -------------------------------------------------------------------------------------------------
<S>                             <C>                    <C>                <C>        <C>                     <C>
SEK 17.00                          255,500                1.75               17.00             N/A

                             --------------                                          -------------
                                   255,500                                                      NA
                             ==============                                          =============
</TABLE>


None of these outstanding warrants are excerisable as of December 31, 2002,
Biora adopted the disclosure provisions of Statement of Financial Accounting
Standard 123, "Accounting for Stock-Based Compensation" but continues to
measure stock-based compensations cost in accordance with APB Opinion 25 and
its related interpretations. If Biora had measured compensation cost for the
Biora stock options granted 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)                2000                    2001                   2002
                      ------------           -------------          ------------

Reported               (66,027)                (24,066)                  (436)
Proforma               (66,027)                (24,066)                  (436)


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          2001-06-27
                           -----------------------------------     -------------
Risk free interest                 5.00%              5.00%              4.90%
Expected life term            2002-05-31         2002-05-31         2004-09-30
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 7,510 through the
conversion of outstanding loans, including accrued interest, in the aggregate
principal amount of 7,160 and accrued interest of 350. 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
-------------------------------------------------------------------------------

There has been no aquisitions during the period 2000 to 2002 of shareholdings
in subsidiaries



-------------------------------------------------------------------------------
Note 28 Subsequent events - unaudited
-------------------------------------------------------------------------------

On June 12, 2003 Straumann AG Holdings ("Straumann") announced that it has
acquired approximately 91 percent of the Ordinary Shares of Biora AB pursuant
to its public offer. Straumann has called for the compulsory acquisition of
the remaining outstanding Biora Ordinary Shares. Biora's Ordinary Shares will
be de-listed from the "O-list" of the Stockholm Stock Exchange on Friday July
4, 2003.