Medivir divests its pharmaceutical company BioPhausia (Nordic Brands) to Karo Pharma

Stockholm, Sweden — Medivir AB (Nasdaq Stockholm: MVIR) today announces that the
company has entered into an agreement with Karo Pharma AB regarding the sale of
Medivir’s subsidiary BioPhausia AB (Nordic Brands) to Karo Pharma. The purchase
price will be SEK 908 million on a cash and debt free basis, including a
normalized working capital. The transaction is expected to close by mid-December
2016.

Background and rationale
As previously communicated through press releases in June and August 2016, the
Board of Directors of Medivir tasked the management to investigate a separation
of the group’s operations into two independent companies, with the aim to
separately list the commercial operations. In the meantime, the Nordic Brands
portfolio (BioPhausia AB) has attracted significant interest from several
prospective buyers. In a structured process of evaluating a sale versus a
separate listing, the Board of Directors of Medivir has concluded that a
divestment of BioPhausia AB to Karo Pharma is the best alternative for
BioPhausia, Medivir and its shareholders.

Nordic Brands in brief
BioPhausia consists of thirteen established pharmaceutical drugs with strong
brand names. For the period of Q3-2015 to Q2-2016, BioPhausia generated revenues
of SEK 189 million.

Transaction details
The transaction entails a divestment of 100 per cent of the shares in Medivir’s
wholly owned subsidiary BioPhausia AB for a purchase price of SEK 908 million on
a cash and debt free basis including normalized working capital. Transaction
costs are estimated to approximately SEK 25 million. The separation process and
operational realignment as a consequence of the sale will result in additional
one off costs of approximately SEK 15 million. The employees that today serve
this operation are not part of the transaction, and approximately 10 employees
will therefore unfortunately have to leave Medivir after the transaction.

Closing of the transaction is subject to customary provisions. The purchase
price will be paid in cash only.

Financial impact for Medivir and its shareholders
Based on the purchase price of SEK 908 million, the transaction will increase
the net result for the consolidated Medivir and the parent company Medivir AB
with approx. SEK 530 million and approx. SEK 300 million respectively.
Furthermore, the transaction will strengthen the cash position, after setting
aside an escrow amount during warranty period of twelve months, with approx. SEK
780 million.

The Board of Director’s intention is to recommend, following a review of the
capital need, that excess proceeds as a result of the divestment should, to the
extent possible, be distributed to the shareholders, by way of dividend or
otherwise. The Board of Directors will present its recommendations and
proposals, which are subject to Medivir shareholder approval, not later than in
connection with the year-end report.

Niklas Prager, CEO of Medivir, commented: “I am convinced that this sale of the
Nordic Brands portfolio to Karo Pharma is the best way to maximize the value for
our shareholders. The commercial portfolio can continue its positive development
in an organization with a strong focus on specialty pharmaceuticals, while
Medivir can focus fully on its transformation to an oncology focused and
effective R&D company with an exciting portfolio of projects in different stages
of development.”

Advisers
Medivir has engaged Carnegie Investment Bank as financial adviser and Vinge as
legal adviser in connection with the transaction.

For further information, please contact:
Niklas Prager, CEO Medivir AB, phone +46 (0)8-407 64 30
Ola Burmark, CFO Medivir AB, mobile: +46 (0) 725 480 580

This information is information that Medivir AB is obliged to make public
pursuant to the EU Market Abuse Regulation. The information was submitted for
publication, through the agency of the CFO set out above, at 08.00 CET on 1
November, 2016.

About Medivir
Medivir is a research based pharmaceutical company with a research focus on
oncology and infectious diseases. We have a leading competence within protease
inhibitor design and nucleotide/nucleoside science and we are dedicated to
develop innovative pharmaceuticals that meet great unmet medical need. Our
commercial organization provides a portfolio of specialty care pharmaceuticals
on the Nordic market. Medivir is listed on the Nasdaq Stockholm, Mid Cap.