26 August 2009: The Q2-09 report from NorDiag emphasizes the effects of the newly established Olerup International AB with the Swedish companies LinkMed AB and SSP Primers AB. Olerup International AB will be consolidated as a subsidiary into the accounts of NorDiag. The company has growth expectations for the "Arrow" instrument due to currently back orders of 24 instruments, and launch of a range of new applications for both the "Bullet" and the "Arrow" instrument.  All of this will contribute to estimated revenue of approx. NOK 60 million in 2009. Furthermore, the Company reports that a customer has started routine use of the "Bullet" instrument and kits from NorDiag to test for Swine Influenza. NorDiag will need additional funding to reach cash breakeven, and new share issue is planned in Q4-2009.

NorDiag had operating revenues of NOK 8.0 million and other revenues/grants of NOK 0.7 million in the first half of 2009, compared with NOK 6.6 million and NOK 1.7 million in 1H-2008. Corresponding figures in Q2-2009 were NOK 3.8 million and NOK 0.4 million, and in Q2-2008 NOK 3.2 million and 0.6 million respectively. Lower operating revenues in Q2-2009, compared with Q1-2009 (NOK 4.2 million), are due to longer commercialization processes than expected with new customers of Bullet, and change of supplier for Arrow.  "We are not satisfied with the delays in the instrument sales this quarter, but the foundation for increased sales going forward should now be in place", comments CEO Mårten Wigstøl.

The Company had NOK 24.9 million in total operating expenses in the first half of 2009, an increase of 1.8 million compared to NOK 23.0 million in 1H-2008. All of the increase in expenses is related to option and warrants costs with no cash effect. The figure for Q2-2009 was NOK 12.1 million compared with NOK 10.5 million in the same quarter last year. As stated in the Q4-08 report, cost-reduction measures implemented will have an effect of up to NOK 7 million in 2009 compared with 2008. The effect on operating expenses will be larger in H2 2009 than in H1 2009 since several of the employment and consultancy contracts expired in May 09.

The Company expects that the sales of "Arrow" instrument will contribute to strong growth going forward. Currently back orders accounts for 24 instruments. NorDiag has also seen strong interest for potential OEM-relationships also beyond the field of clinical diagnostics. Kit's sales will gradually be growing as more instruments are out in the market. The Company also expects increased income from the German and the UK-market in the coming quarters related to the Bullet instrument and kits. The Arrow instruments and kits will be sold to all countries where NorDiag is represented.

NorDiag has supplied its first automated sample preparation solutions for testing of H1N1 (Swine Influenza). Two "Bullet" instruments and NorDiag's virus kit is as of this date in routine use for H1N1 testing in a laboratory in Germany (self accreditation). The virus kit is currently sold as a research use kit only, validation is in progress and it will be CE marked in Q3-09.

Partnership with LinkMed and SSP Primers will increase revenue and reduce cash burn "But the most important news for NorDiag at this point is the new partnership with LinkMed and SSP Primers", says Wigstøl. Post, quarter, early in July, NorDiag established a Joint Venture (Olerup International AB) with the Swedish companies LinkMed AB and SSP Primers AB. Olerup International AB will be consolidated as a subsidiary into the accounts of NorDiag. Olerup is a world leading provider of HLA-typing, which is used to match patients and donors in connection with transplantations. The joint venture will on an exclusive basis sell Olerup SSP products and XM-ONE® products in the field of HLA/tissue typing, as well as the Arrow instrument in the same field.

The immediate effects for NorDiag of the new cooperation are a substantial increase of income and sharing of distribution costs. The opportunities in the new partnership also include entrance to new markets for NorDiag's technology and products as they are complementary to the JV partner's products. "This partnership adds a new dimension to NorDiag's business going forward", says Wigstøl.

Cancer segment: Will focus entirely on sample preparation going forward "We have decided to discontinue the launch of Genefec III, the integrated cancer test for colorectal cancer (CRC)", continues Wigstøl.  We have tried to identify a strategic partner that can take Genefec III to the market - but the attempt has not been successful. We will now focus entirely on sample preparation in this field, and in that respect we still have ambitions in this market, Wigstøl points out.

New share issue planned in Q4-2009 NorDiag had a net cash position of NOK 22.1 million at the of Q2-09. Although steps have been taken to increase runrate of income and further cost reduction, there will be a need for additional funding during second half of 2009. The net proceeds from the rights issue in January 2009 were NOK 31.6 million which was approximately NOK 20 million less than the previous goal of NOK 50.0 million. New share issue is planned in Q4-2009.

Complete first half and second quarter of 2009 report and presentation are attached.

Contact:
CEO Mårten Wigstøl, phone +47 911 65775

About NorDiag:
NorDiag is a biotechnology company developing, manufacturing and marketing automated solutions (instruments and tests), for sample preparation of bacterial and human DNA from difficult biological samples. DNA diagnostics give a more rapid and precise answer, and are the fastest growing market within diagnostics. The Company 's applications are today used  in connection with STI, Tuberculosis, MRSA, respiratory pathogens and viruses on instruments for large and small laboratories. NorDiag was founded in 2003 and has its headquarters in Oslo - Norway. The Company has offices and laboratories in Stockholm - Sweden, West Chester (PA) - USA and Vienna - Austria. The group has today 40,1 man years. NorDiag is listed on Oslo Stock Exchange with the ticker NORD.

For further information - www.nordiag.com.

Find the enclosed presentation and report here

Read the notice in Norwegian here