Interim Report January-September 2016

Strong Zubsolv® and Abstral® revenue growth.

Third quarter 2016

  · Total net revenues MSEK 181.9 (139.5).
  · Zubsolv net revenue MSEK 142.8 (110.8).
  · Net earnings MSEK 36.0 (-46.1).
  · Earnings per share, before and after dilution, SEK 1.04 (-1.33).
    · Cash flow from operating activities MSEK 31.2 (-79.5).
    · Cash and cash equivalents MSEK 276.9 (201.2).
    · The US Department of Health and Human Services (HHS) announced an increase
in buprenorphine patient cap from 100 to 275.
    · The Congress signed CARA1into law which among others will expand the
prescription rights to nurse practitioners and physicians assistants.
    · Completion of 1,080 patient REZOLV study and reported on improved
treatment of opioid dependent patients.

January - September 2016

  · Total net revenues MSEK 521.2 (415.0).
  · Zubsolv net revenue MSEK 419.5 (296.4).
  · Net earnings MSEK 6.5 (-146.2).
  · Earnings per share, before and after dilution, SEK 0.19 (-4.24).
    · Cash flow from operating activities MSEK 73.7 (-108.5).
    · Cash and cash equivalents MSEK 276.9 (201.2).
    · AstraZeneca acquired all rights to Orexo´s OX-CLI project for MUSD 5 (MSEK
40.8).
    · Zubsolv was selected by the State of Maryland as the exclusive preferred
buprenorphine/naloxone agent for the FFS Medicaid Formulary effective July 1,
2016.
    · A license agreement was signed with Mundipharma, which obtains Rest of the
World rights to Zubsolv.

Important events after the period

  · Orexo together with Mundipharma made first EU regulatory submission of a
Marketing Authorisation Application (MAA) for Zubsolv for the treatment of
opioid dependence.
  · FDA approved a new unique low 0.7mg/0.18mg dosage of Zubsolv.

MSEK                           2016     2015     2016     2015     2015
                            Jul-Sep  Jul-Sep  Jan-Sep  Jan-Sep  Jan-Dec
Net revenues                 181.9    139.5    521.2    415.0    643.3
EBIT                          43.0    -39.4     29.1   -124.7   -169.0
EBITDA                         50.9    -33.9     48.8   -113.1    -88.3
Net Earnings                  36.0    -46.1      6.5   -146.2   -198.0
Earnings per share, before    1.04    -1.33     0.19    -4.24    -5.74
  and after dilution, SEK
Cash flow from operating      31.2    -79.5     73.7   -108.5   -102.2
activities
Cash and cash equivalents    276.9    201.2    276.9    201.2    198.1


    Teleconference
    CEO Nikolaj Sørensen and CFO Henrik Juuel will present the report at a
teleconference on October 20, 2016, at 2:00pm CET.
    Presentation slides are available via the link and on the website.
    Internet: https://wonderland.videosync.fi/2016-10-20-orexo-q3-report
    Telephone: +46 8 566 426 62 (SE), +44 20 300 898 04 (UK) or +1 855 753
2236 (US).

For further information, please contact:
Nikolaj Sørensen, CEO and President, or Henrik Juuel, EVP and CFO
Tel: +46 (0)18 780 88 00, E-mail: ir@orexo.com

CEO’s comments

I am pleased with the positive EBIT and cash flow result of the third quarter.
The result is primarily driven by positive Zubsolv® and Abstral® revenue growth
with 30 percent versus Q3 2015. However, this quarter we also benefited from
inventory built up in Maryland, lower expenses than expected and favorable
currency development. In addition to the positive financial results the quarter
has been highlighted by two significant events, the patient cap lift in the US
and the progression towards launching Zubsolv in Europe as well.

In July the US Government ruled to take action and expand access to treatment of
opioid dependence. I am encouraged to see over 1,500 physicians have received
the certification to expand to 275 patients as of mid-October. Our ambition is
to win a disproportionate share of the new patients in the regions where Zubsolv
is reimbursed and have market access comparable to our main branded competitors.
Though early in the process I am pleased to find this is beginning to occur
especially with physicians covered by our field force today. With regards to
market access we have maintained or improved our position with all major
insurance plans and we have strengthened our position in all payer segments,
both winning new contracts and renewing existing ones. Although encouraged by
the improving market access especially in the public segment, an increased
importance of the public segment will increase the average rebate level for
Zubsolv US.

In Europe we took a first important step to be able to launch Zubsolv. We have
worked intensively in collaboration with Mundipharma throughout the quarter to
finalize the bio-equivalence study required to complete the European filing and
prepare the dossier. Earlier than expected, on October 3rd, we submitted the
file and expect approval in Q4 2017.

Apart from the progression of our commercialization of Zubsolv, the court case
against Actavis has required a lot of our attention during the quarter and 2016.
We maintain a high degree of confidence in the strengths of our patents i.e.
they are valid and Actavis is infringing. In parallel with the court case our
patent portfolio around Zubsolv has continued to expand and this has led to
additional litigation processes against Actavis. The first decision from the
court is expected in the fourth quarter of 2016.1)

In August we finalized the REZOLV study and in early October, we announced the
approval of a new low dosage of Zubsolv. These announcements mark the completion
of the pharmaceutical and clinical development program for Zubsolv. With the
finalization of the Zubsolv development programs we are now ready to look ahead
and strengthen our long term product pipeline beyond Zubsolv. We are currently
working on some early internal projects and are evaluating our opportunities
moving forward together with the Board of Directors. My colleagues at Orexo and
I are looking forward to the continued positive evolution of the company with
confidence of an exciting future for Orexo.

Nikolaj Sørensen
CEO and President

1) For detailed information about the litigation processes against Actavis
please see page 11