Orexo: Interim Report January-March 2016

Regulatory News:

Unless otherwise stated in this report, all data refers to the Group. Figures in parentheses relate to the corresponding period in 2015.

Orexo reports positive cash flow for the quarter

First quarter 2016

· Total net revenues MSEK 151.0 (149.0).

· Zubsolv® net revenue MSEK 98.4 (94.5).

· Earnings after tax MSEK -34.5 (-15.5).

· Earnings per share SEK -1.0 (-0.45).

· Cash flow from operating activities MSEK 22.5 (6.5).

· Cash and cash equivalents MSEK 233.0 (289.3).

· AstraZeneca acquired all rights to Orexo´s OX-CLI project for MUSD 5. The agreement also includes potential future royalties and milestone payments.

Teleconference

CEO Nikolaj Sørensen and CFO Henrik Juuel will present the report at a teleconference on April 21, 2016 at 2:00 p.m. CET (08:00 a.m. EDT).

Presentation slides are available via the link and on the website.

Internet: http://financialhearings.nu/?160421/orexo

Telephone: +46 8 566 426 62 (SE), +44 20 300 898 04 (UK), +1 646 502 5116 (US)

CEO’s comments

I am pleased to report a positive cash flow from operations, despite the CVS Caremark loss, for the first quarter of 2016. This even excludes the MUSD 5 from the agreement with AstraZeneca for OX-CLI which we will receive in the second quarter. I am also encouraged to see the amount of Zubsolv® in milligram prescribed increased by 7 percent in March compared with January. On an annual level our net sales for Zubsolv increased by 15 percent compared to first quarter last year when adjusted for inventory changes. The improvement in net sales is driven by a more favorable gross to net ratio, the price increase announced in January and the increase in the value per prescription due to higher average dosage strengths with the launch of three new dosages in 2015.

The highlight of the quarter has been the extensive work on a federal level in the US to improve access to treatment of opioid dependence, e.g. Zubsolv. During the quarter the Senate committee (HELP) responsible for improving treatment of opioid dependence proposed a legislation to increase the amount of patients each physician can treat from 100 to 500. Shortly thereafter the United States Department of Health and Human Services (HHS) proposed a new regulation increasing the number of patients from 100 to 200. Additionally, the House of Representatives is also in the process of proposing legislation to raise the cap potentially up to 450. All proposals are still being discussed, but it is clear that the question is no longer if improvements in patient access will happen, but how and when. This will have positive impact on our ability to continue growing the number of patients being treated, Zubsolv sales and market share. Our experience from the market tells us that Zubsolv is more successful capturing patients new to treatment, than converting existing patients from their current treatment. Thus, improvements in access to treatment will have positive effects on Zubsolv and Orexo.

We maintain a positive outlook for Orexo and Zubsolv in 2016 and beyond, reinforced by a positive sales trajectory excluding CVS Caremark, expected improvements in patient’s access to treatment in the US and good progress in the contract negotiations with a partner for Zubsolv outside the US. These negotiations are expected to be finalized in the second quarter. However, we also recognize the need to show financial strength and improvements in profitability. We are constantly assessing the optimal allocation of our resources and expect lower operating expenses in 2016 than 2015 with the current market conditions. As soon as we know how the anticipated positive changes, on a US federal level, affect the market conditions, we will assess our level of investments to ensure we are well positioned to fully capture these opportunities.

Nikolaj Sørensen

President and CEO

Please note

Orexo AB (publ) discloses the information provided herein pursuant to the Financial Instruments Trading Act and/or the Securities Market Act. The information was provided for public release on April 21, 2016, at 8:00 a.m. CET. This report has been prepared in both Swedish and English. In the event of any discrepancy in the content of the two versions, the Swedish version shall prevail.

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