Algeta Signs Exclusive Worldwide License with Affibody for Two Proprietary Molecules for use in New Tumor-targeted Alpha-pharmaceuticals based on Thorium

Oslo, Norway, 5 May 2011 - Algeta ASA (OSE: ALGETA), a company focused on the development of novel targeted cancer therapeutics, announces that it has entered into an exclusive research, development and commercialization agreement with Affibody (Stockholm, Sweden) to develop tumor-targeting alpha-pharmaceuticals based on thorium-227 Under the terms of the agreement, Algeta gains access to two proprietary Affibody(®) molecules for use in cancer therapy. These molecules are able to bind to two validated tumor targets: HER-2, which is present on aggressive breast tumors, and PDGFR-beta, which plays a significant role in angiogenesis associated with solid tumor growth and development. Affibody(®) molecules are a novel class of small targeting molecules with antibody-like properties that have the potential to be excellent carriers of therapeutic payloads and may in addition have efficacy, safety and pharmacokinetic benefits. Algeta and Affibody will collaborate on a defined technical program to determine whether the two Affibody(®) molecules covered by this agreement can be effective carrier targeting molecules for Algeta's thorium-227 payload. Algeta will pay a signing fee to Affibody and make further payments based upon the achievement of certain milestones and commercial success. Algeta has an exclusive worldwide license for both HER-2 and PDGFR-beta in its chosen field.  If the initial research collaboration is successful, Algeta will be responsible for all preclinical and clinical development of any development candidates that result from this collaboration, and commercialization. As part of the collaboration, Algeta also gains access to Affibody's proprietary Albumod(TM) platform applied to the two Affibody(®) targeting molecules. This is designed to enhance their efficacy by extending their circulatory half-life. Thomas Ramdahl, Executive Vice President and Chief Technology Officer, said: "Affibody has unique antigen-binding molecules that could be well suited to creating tumor targeted alpha-pharmaceuticals with thorium-227. We have already obtained interesting results using conventional antibodies and are now looking to broaden the potential utility of our thorium platform by combining our thorium-227 technology with Affibody's carrier molecules." About the Thorium platform Thorium-227 is an element (radionuclide) that emits high-energy alpha particles. Such elements are of considerable interest in the treatment of cancer as they are potent at killing tumor cells and have a highly localized effect as a result of the very short range of the alpha particle (2-10 cell diameters). Current top-selling cancer drugs are based on 'naked' monoclonal antibodies, but it is clear that next-generation products will require cancer-killing payloads to maximize the effectiveness of therapy. Thorium-227 is linked to tumor- targeting molecules, such as monoclonal antibodies, to reach its target. By conjugating thorium-227 to a number of such molecules, each with a different tumor target, Algeta is exploring the potential to create a pipeline of new- generation alpha-pharmaceuticals that specifically seek and destroy cancers while minimizing damage to surrounding healthy tissues. Importantly, the direct tumor cell killing action of alpha-pharmaceuticals potentially overcomes drug-resistance mechanisms. In addition, they cause a localized 'bystander effect', whereby tumor cells adjacent to those bound by the alpha-pharmaceutical may also be destroyed even if they do not bind the drug themselves. The short range of the alpha particle means that damage to healthy cells and side effects may be minimized. ### For further information, please contact Algeta Andrew Kay, CEO +47 2300 7990 / +47 4840 1360 (mob) Øystein Soug, CFO +47 2300 7990 / +47 9065 6525 (mob) International media enquiries: +44 207 638 9571 Mark Swallow/David Dible Citigate Dewe Rogerson US investor enquiries: +1 646 378 2928 Jessica Lloyd The Trout Group Affibody David Bejker, CEO +46 (70) 645 49 48 About Algeta Algeta is a company focused on developing novel targeted therapies for patients with cancer based on its alpha-pharmaceutical platform. Algeta's lead product Alpharadin (based on radium-223) is a first-in-class, highly targeted alpha-pharmaceutical under clinical evaluation to improve survival in patients with bone metastases from advanced cancer. Its localized action helps preserve the surrounding healthy tissue thereby limiting side- effects. The development of bone metastases represents a serious development for cancer patients as they are associated with a dramatic decline in patient health and quality of life, ultimately leading to death. Bone metastases represent a major unmet medical need, occurring in up to 90% of certain late-stage cancers, e.g. prostate, breast and lung. Alpharadin is being developed under a development and commercialization agreement with Bayer Schering Pharma AG, a major pharmaceutical company, and is in a global phase III clinical trial (ALSYMPCA) to treat bone metastases resulting from castration-resistant prostate cancer (CRPC). Alpharadin is also under investigation in phase IIa clinical trials as a potential new treatment for bone metastases in endocrine-refractory breast cancer patients, and in a phase I/IIa trial in combination with docetaxel chemotherapy in for bone metastases CRPC patients. Algeta also aims to develop a future pipeline of tumor-targeting alpha- pharmaceutical candidates based on the alpha particle emitter thorium-227, through selective in-licensing and/or acquiring innovative technologies and tumor-targeting molecules. The Company is headquartered in Oslo, Norway, and was founded in 1997. Algeta listed on the Oslo Stock Exchange in March 2007 (Ticker: ALGETA). Alpharadin and Algeta are trademarks of Algeta ASA. About Affibody Affibody is a Swedish biotech company focused on developing next generation biopharmaceuticals based on its unique proprietary technology platforms: Affibody® molecules and Albumod(TM). Affibody is developing a portfolio of innovative drug projects and, in addition, offers the half-life extension technology, Albumod(TM), for outlicensing. Affibody has ongoing commercial relationships with several companies including Amylin, Swedish Orphan Biovitrum, GE, and Thermo Fisher. Affibody was founded in 1998 by researchers from the Royal Institute of Technology and the Karolinska Institute and is based in Stockholm, Sweden. Major shareholders in the Company include HealthCap and Investor Growth Capital. Further information can be found at: Forward-looking Statement This news release contains forward-looking statements and forecasts based on uncertainty, since they relate to events and depend on circumstances that will occur in the future and which, by their nature, will have an impact on results of operations and the financial condition of Algeta. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. These factors include, among other things, risks associated with technological development, the risk that research & development will not yield new products that achieve commercial success, the impact of competition, the ability to close viable and profitable business deals, the risk of non-approval of patents not yet granted and difficulties of obtaining relevant governmental approvals for new products. This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act. Press release: This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients. The owner of this announcement warrants that: (i) the releases contained herein are protected by copyright and other applicable laws; and (ii) they are solely responsible for the content, accuracy and originality of the information contained therein. Source: Algeta ASA via Thomson Reuters ONE [HUG#1512592]