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                                   PYROSEQUENCING AB
                       Pyrosequencing AB Reports Half-Year Results
                             for Period Ended June 30, 2003
    Pyrosequencing acquires Personal Chemistry AB (see separate press release)
              Jeff Bork, Chairman of the Board, appointed new CEO
                  New cost-savings program in Pyrosequencing


Uppsala, Sweden, August 7, 2003. Pyrosequencing AB (Stockholm: PYRO A) today reported
results for the first six months and the second quarter 2003. Erik Walldén, President of
Pyrosequencing, said:

“During the first six months sales increased by 13 percent compared to the same period last
year. Excluding currency effects, the increase was 30 percent. The cost-savings program
introduced last fall has had the intended effect and has resulted in a reduction of total expenses,
excluding the net effect of balanced development costs, amounting to 53.6 MSEK or 35 percent
compared to the same period last year. The integration of Corbett products has proceeded
according to plan and in July the sales of these products started also in major European
markets. We have today initiated an additional cost-savings program that will further reduce our
operating expenses by approximately 70 MSEK on an annual basis from 2004. The Company
has also focused development resources on products for sequencing of short DNA stretches, an
area that we believe has a potential for growth in the coming years.”

 Highlights of the period include:
(Figures in brackets refer to the same period 2002)
- Sales increased by 13 percent to 41.2 MSEK (36.3 MSEK) during the first six months 2003.
- Profit after tax for the period amounted to –72.7 MSEK (–82.5 MSEK).
- Earnings per share amounted to –2.08 SEK (–2.37 SEK) in the first six months of 2003.
- A new cost-savings program implemented to lower the annual operating expenses by approx. 70
    MSEK.
- Pyrosequencing acquired an ownership share of 17.5 % in Bio-Molecular Holdings, the holding
    company of Corbett Research and Corbett Robotics, at a total cost of 45.4 MSEK.
- The distribution agreement for Corbett’s products was extended to cover also major European
    markets.




PYROSEQUENCING AB                                         U.S. Subsidiary:
VALLONGATAN 1, SE-752 28 UPPSALA, SWEDEN                  2200 West Park Drive, Westborough, MA 01581
PHONE +46 18 56 59 00, FAX +46 18 59 19 22                PHONE 1 877 797 6767, FAX 1 508 898 3306
info@pyrosequencing.com, www.pyrosequencing.com           info@pyrosequencing.com, www.pyrosequencing.com
                                                                                                                           2
Summary financial group data (in millions except percentages)


                                                  Six months ended June 30              Three months ended June 30
                                                  2003        2003     2002               2003       2003       2002
                                                  USD**       SEK      SEK              USD**         SEK       SEK

Net sales                                             5.0     41.2      36.3                 2.0              17.0          16.3
Gross profit                                          2.9     24.1      25.4                 0.9               7.7          11.0
Gross margin, %                                       59       59        70                  45                45            67
Operating result                                   (10.0)   (83.4)    (79.4)               (5.9)            (49.1)        (44.6)
Results after financial items                       (8.7)   (72.6)    (68.6)               (5.1)            (42.6)        (43.2)
Net results                                         (8.7)   (72.7)    (82.5)               (5.1)            (42.7)        (50.3)

Net sales are divided between
 the following markets
Japan                                                0.4       3.3      3.0                   0.0               0.1         1.2
Europe                                               1.2      10.3     15.6                   0.5               4.1         7.8
U.S.                                                 3.2      26.3     17.6                   1.4              12.1         7.2
Rest of the world                                    0.2       1.3      0.1                   0.1               0.7         0.1
Total                                                5.0      41.2     36.3                   2.0              17.0        16.3

                                                             As of June 30, 2003           As of December 31, 2002
                                                             USD**           SEK             USD**              SEK
Cash and short-term investments*                               12.1            97.1              11.0                     97.3
Other high-grade debt securities held as
financial assets**                                             33.8          271.4               42.2                    374.4
Other assets                                                   27.2          218.7               23.3                    206.3
Total assets                                                   73.1          587.2               76.5                    678.0


Shareholders equity                                            67.6          543.5               69.5                    616.1

Provisions and other liabilities                                5.4            43.7                 7.0                   61.9
Total shareholders equity, provisions and
liabilities                                                    73.1          587.2               76.5                    678.0

*Total cash and marketable securities = $45.8 million or 368.5 MSEK

**Exchange rate applied                          2003                               2002
Balance sheet date (Balance sheet items), $1     8.04 SEK                           8.86 SEK
Average rate (Income statement items), $1 8.31 SEK




PYROSEQUENCING AB                                                      U.S. Subsidiary:
VALLONGATAN 1, SE-752 28 UPPSALA, SWEDEN                               2200 West Park Drive, Westborough, MA 01581
PHONE +46 18 56 59 00, FAX +46 18 59 19 22                             PHONE 1 877 797 6767, FAX 1 508 898 3306
info@pyrosequencing.com, www.pyrosequencing.com                        info@pyrosequencing.com, www.pyrosequencing.com
                                                                                                              3
Financial Position
For the six months ended June 30, 2003, the Company’s net sales increased by 13 percent to
41.2 MSEK ($5 million), compared to 36.3 MSEK for the corresponding period last year.
Excluding currency effects, net sales amounted to 47.3 MSEK, an increase of 30 percent.

In the second quarter of 2003, the Company’s net sales increased by 4 percent to 17.0 MSEK
($2 million), compared to 16.3 MSEK for the corresponding period last year. Excluding currency
effects net sales would have amounted to 19.3 MSEK, an increase of 18 percent, compared to
the same period last year.

Gross margins for the first six months of 2003 amounted to 59 percent, compared to 70 percent
for the same period last year. In the second quarter 2003 gross margins amounted to 45
percent, compared to 67 percent for the same period of 2002. During the second quarter the
gross margins have been negatively affected primarily by negative production variations that are
believed to be temporary and are caused by technical disturbances in production. The decrease
is also attributable to the sales of Corbett products given our distributor margin. Sales in the U.S.
developed strongly. Excluding the effects of the dollar, gross margins for the first six months
would have been 64 percent.

Operating expenses, excluding the net effect of capitalized development costs, amounted to
100.7 MSEK ($12.1 million) in the first six months of 2003, compared to 154.3 MSEK for the
same period last year, a decrease of 35 percent. Of this sum, 52.4 MSEK reflects second
quarter figures, compared to 81.1 MSEK for the same period last year.

As a consequence of the cost-savings program initiated in 2002, costs have decreased in all
areas of operation during the period. The program is expected to result in an annual cost
reduction of 70 MSEK. The weakening of the US dollar compared to the Swedish krona had a
positive effect on the conversion of the costs in the US subsidiary.

In 2002, a new accounting principle was adopted, involving the capitalization of development
costs. During the first six months of 2002, the Company capitalized development costs
amounting to 49.4 MSEK ($6.1 million). Of this sum, 25.5 MSEK referred to the second quarter.
No costs were amortized in the second quarter, as none of the products related to these costs
were commercially available. During the first six months of 2003, the Company capitalized
development costs amounting to 2.6 MSEK, 0.4 MSEK referring in the second quarter.
Previously capitalized costs of 9.4 MSEK were amortized, half of this sum referring to the
second quarter. The reason for the high capitalization in 2002 was that the company finalized a
number of large development projects that became marketable. After July 1, 2002 the
capitalization has been considerably lower, as the main focus has been on developing and
improving existing products. Projects under development are not capitalized.

Pyrosequencing reported a net loss of 72.7 MSEK ($8.7 million), or 2.08 SEK per share, for the
first six months of 2003, compared to a net loss of 82.5 MSEK (2.37 SEK per share) for the
same period last year. During the second quarter the net loss was 42.7 MSEK, slightly better
than the same period in 2002, when the loss was 50.3 MSEK.

At June 30, 2003 cash, cash equivalents and investments in high-grade debt securities, including
investments with maturity dates exceeding 12 months, totaled 368.5 MSEK ($45.8 million),
compared to 471.7 MSEK at December 31, 2002. During the half-year period Pyrosequencing
acquired a 17.5 percent ownership share of Bio-Molecular Holdings, the holding company of
Corbett Research and Corbett Robotics, at a total cost of 45.4 MSEK. This acquisition is a part of

PYROSEQUENCING AB                                           U.S. Subsidiary:
VALLONGATAN 1, SE-752 28 UPPSALA, SWEDEN                    2200 West Park Drive, Westborough, MA 01581
PHONE +46 18 56 59 00, FAX +46 18 59 19 22                  PHONE 1 877 797 6767, FAX 1 508 898 3306
info@pyrosequencing.com, www.pyrosequencing.com             info@pyrosequencing.com, www.pyrosequencing.com
                                                                                                            4
the previously announced agreement with Bio-Molecular Holdings. Pyrosequencing has no
debt financing.

New Cost-Savings Program
Pyrosequencing has today initiated an additional cost-savings program. Organizational changes
will be carried out, leaving the sales organization intact but entailing considerable cutbacks in
other parts of the Company, primarily in administration and R&D. Approximately 40 people in the
Group will be affected by the cost-savings program, out of which 35 have been given notice in
Uppsala, Sweden. The Pyrosequencing group currently has 130 employees, 93 of them in
Uppsala. The restructuring is expected to be completed by the end of the year and from 2004
the annual operating expenses are calculated to decrease by approximately 70 MSEK. The
restructuring charges are expected to amount to approximately 20 MSEK and will impact the
third quarter result.

Marketing and Sales
The second generation of systems based on Pyrosequencing’s proprietary technology was
introduced last year and now accounts for a significant part of the Company’s sales. The
PSQ™96MA System is very flexible, designed for a broad spectrum of applications. Having
been initially used for SNP (single nucleotide polymorphism) analysis, a growing number of
customers have begun using the PSQ 96MA System for sequence analysis due to its unique
traits for fast and accurate analysis of short and medium length stretches of DNA. The
PSQ™HS 96A System is designed to provide maximum performance in the analysis of SNPs
and mutations. This system requires only small volumes of sample and reagents and is
therefore very cost-effective. The systems meet the customers’ demands very well.

The market for the Company’s products has been characterized by prolonged decision-making
processes and postponed orders. During the second quarter, 24 new systems were recognized
as revenue, making a total of 51 systems recognized in the first six months of the year. Forty of
the 51 systems were Pyrosequencing systems and 11 were Corbett systems. During the first six
months of last year a total of 28 systems were recognized.

Pyrosequencing’s sales in the United States show healthy growth, but the development in
Europe is considerably slower. Staff changes in Pyrosequencing’s European sales organization
have contributed to the slow development in the second quarter. These changes are now
completed and the sales organization is fully staffed. External factors including war in Iraq and
the SARS epidemic slowed customer business activities, particularly in Asia. The order intake
from the industrial sector remained low, the majority of Pyrosequencing’s revenue came from
the academic sector.

Major customers that acquired Pyrosequencing’s systems in the second quarter include the
University of Iowa, (USA), Bayer Diagnostics, (USA), the Department of Genetics at Cologne
University, (Germany) and the Institute for Immunology at Essen University, (Germany). Several
existing customers have also bought additional systems from Pyrosequencing.

Pyrosequencing has begun to execute its agreement concerning the distribution of Corbett
products in the U.S. and in major European markets. The Corbett product line consist of
instruments, accessories and software for sample preparation, amplification and detection of
DNA and RNA. Pyrosequencing is now able to offer a more comprehensive product range for
Applied Genomics. The distribution of the Corbett products in the U.S. started in the second
quarter and has proceeded according to plan. Distribution of these products in Germany, France
and Scandinavia by Pyrosequencing will start in the third quarter.
PYROSEQUENCING AB                                         U.S. Subsidiary:
VALLONGATAN 1, SE-752 28 UPPSALA, SWEDEN                  2200 West Park Drive, Westborough, MA 01581
PHONE +46 18 56 59 00, FAX +46 18 59 19 22                PHONE 1 877 797 6767, FAX 1 508 898 3306
info@pyrosequencing.com, www.pyrosequencing.com           info@pyrosequencing.com, www.pyrosequencing.com
                                                                                                            5

A new service product, the Assay Design Service, was introduced during the second quarter of
2003. Pyrosequencing offers to develop assays according to the specific requests of customers.
The demand for this service has been positive and has met with pronounced interest among
customers. The service has been primarily targeted at pharmacogenetics, and has recently
been supplemented with assay protocols for the identification of bacteria.

A special marketing campaign focused on molecular microbiology was launched after the
second quarter, following previous campaigns in the areas of pharmacogenomics and clinical
genetics during the first half of 2003. As a part of the new campaign, we took part in two major
conferences for microbiologists during the second quarter, the ECCMID (European Congress of
Clinical Microbiology and Infectious Diseases) and the ASM (American Society for
Microbiology). Significant attention was focused on Pyrosequencing™ technology, and a
number of leading experts emphasized the benefits of Pyrosequencing at both conferences.

Research and Development
A special variant of Pyrosequencing’s product, software and reagents kits for direct sequencing
of DNA is available on the market. The Company sees a great potential for this product variant
and a development project to improve the read length and other performance characteristics
continues. This will create possibilities for strong expansion in the short read sequencing market
segment. Applications of special interest include the identification and typing of bacteria and
other microorganisms and a number of other life science applications.

In addition, Pyrosequencing runs a number of projects aimed at further widening the
applications of the Pyrosequencing technology. An increasing number of development projects
are targeted at clinical research, including tuberculosis-related bacteria and intractable fungus
infections.

In order to further improve the quality and reduce the manufacturing costs for Pyrosequencing’s
reagents products, the Company has developed new production methods for internal
manufacturing of key components. These methods will be introduced in manufacturing during
the fall of 2003.

A new version of the PSQ 96MA System software has been introduced and facilitates the export
and import of data. The functionality is improved and the users can now better utilize the
information generated by the system.

The Applications Department has developed a catalog of standardized assay protocols for
several clinical research issues. These are available to the customers and can be requested
from the Company’s website.

Pyrosequencing’s product development projects are in all essentials running according to plan.

Patents
During the second quarter, Pyrosequencing’s trademark PSQ was registered in Europe. The
Company’s logotype was approved and registered in the U.S.

Pyrosequencing has extended its patent portfolio by acquiring from Roche a non-exclusive
license for a method for DNA sequencing using nucleotides where the labels are fissionable. In
combination with other non-exclusive patent rights, this acquisition places Pyrosequencing in a
good position to develop products for DNA sequencing through synthesis, e.g. on DNA chips.

PYROSEQUENCING AB                                         U.S. Subsidiary:
VALLONGATAN 1, SE-752 28 UPPSALA, SWEDEN                  2200 West Park Drive, Westborough, MA 01581
PHONE +46 18 56 59 00, FAX +46 18 59 19 22                PHONE 1 877 797 6767, FAX 1 508 898 3306
info@pyrosequencing.com, www.pyrosequencing.com           info@pyrosequencing.com, www.pyrosequencing.com
                                                                                                             6

The Company has also exercised an option to acquire an exclusive license from Bioimics AB.
With this license, new reagents and kits for the identification of bacteria can be developed, fully
in line with the marketing campaign now conducted in this area.

On June 30, 2003, Amersham Biosciences AB initiated arbitration proceedings against
Pyrosequencing AB relating to the basis for the calculation of a royalty according to a license
agreement. The license agreement between Amersham Biosciences AB and Pyrosequencing
AB among other things concerns Pyrosequencing’s use of patent rights on the European market
under a European patent (EP 371 437).

The initiation document states that Amersham Biosciences claims that a royalty shall be paid on
Pyrosequencing’s product, the PSQ™96 System. Amersham Biosciences has stated that the
value of the dispute is in the order of 4 MSEK. Pyrosequencing denies the claim in its entirety
and holds the opinion that Amersham Biosciences’ interpretation of the license agreement is
incorrect.

Human Resources
At June 30, 2003, the total number of employees in the Pyrosequencing group was 130,
compared to 156 at June 30, 2002, and 145 at December 31, 2002. The decrease in the number
of employees during the first six months of 2003 is a consequence of the Company’s cost-
savings program.

Parent Company
The parent company, Pyrosequencing AB (organization number 556539-3138) has fully owned
subsidiaries in the United States, United Kingdom, France and Germany. The parent company
conducts strategic business development, central marketing, research and development,
manufacturing and administrative functions for the group. For the period January – June, 2003
the parent company reported sales of 36.8 MSEK (33.3 MSEKin 2002) and the result before
taxes was –73.6 MSEK (-99.7 MSEK in 2002). Investments in long-term investments, intangible
and tangible assets during the period amounted to 5.1 MSEK (5.1 MSEK in 2002). Total cash
and marketable securities at the end of the period amounted to 346.0 MSEK (453.5 MSEK in
2002).

Next Report
The interim report for the first nine months of 2003 will be published on October 23, 2003.
Uppsala, Sweden 7 August 2003
The Board of Directors, Pyrosequencing AB
through Erik Walldén


Erik Walldén

The previously announced telephone conference for financial analysts at 16.00 CET today has
been cancelled and replaced by a press conference in Stockholm at 17.00 today. It is also
possible to take part via telephone.

Place:
Alfred Berg Fondkommission
Birger Jarlsgatan 7, Stockholm


PYROSEQUENCING AB                                          U.S. Subsidiary:
VALLONGATAN 1, SE-752 28 UPPSALA, SWEDEN                   2200 West Park Drive, Westborough, MA 01581
PHONE +46 18 56 59 00, FAX +46 18 59 19 22                 PHONE 1 877 797 6767, FAX 1 508 898 3306
info@pyrosequencing.com, www.pyrosequencing.com            info@pyrosequencing.com, www.pyrosequencing.com
                                                                                                                                                          7
Phone: +46 8-598 017 43


About Pyrosequencing AB
Pyrosequencing AB develops, manufactures and sells complete solutions for rapid applied
genetic analysis based on its proprietary Pyrosequencing™ technology, a broadly applicable
DNA sequencing technique. Pyrosequencing is a leader in the global market in Applied
Genomics with some 300 systems sold to major pharmaceutical and biotech companies and
prestigious research institutions worldwide. An agreement with Corbett Research enables
Pyrosequencing to offer a comprehensive product portfolio for applied genetic analysis.
Pyrosequencing actively collaborates with industry leaders to develop clinical applications of the
technology for disease diagnosis, clinical prognosis and pharmacogenomics testing.

Pyrosequencing products include the bench-top PSQ™96, PSQ™96MA and PSQ™HS 96A
Systems, all of which utilize proprietary software and reagent kits, and Rotor-Gene 3000, CAS
1200 and other products from Corbett. Among Pyrosequencing’s customers are AstraZeneca,
GlaxoSmithKline, Merck, Schering-Plough, Bristol-Myers Squibb, the National Institutes of
Health (NIH), the Centers for Disease Control and Prevention (CDC), the Karolinska Institute,
Genzyme Corp., Biogen, Oxagen, NASA, DuPont Agriculture, the Health Protection Agency
(HPA), and the Swedish University of Agricultural Sciences.

Website: www.pyrosequencing.com .


Certain statements in this press release are forward-looking. These may be identified by the use of forward-looking words or phrases such as
“believe,” “expect,” “intend,” and “should,” among others. These forward-looking statements are based on Pyrosequencing’s current expectations. The
Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for such forward-looking statements. In order to comply with the terms of the

safe harbor, Pyrosequencing notes that a variety of factors could cause actual results and experience to differ materially from the anticipated results
or other expectations expressed in such forward-looking statements. Such uncertainties and risks include, but are not limited to, risks associated with
management of growth and international operations (including the effects of currency fluctuations), variability of operating results, the commercial

development of the DNA sequencing and genomics market, nucleic acid-based molecular diagnostics market, and genetic vaccination and gene
therapy markets, competition, rapid or unexpected changes in technologies, fluctuations in demand for Pyrosequencing’s products (including
seasonal fluctuations), difficulties in successfully adapting the Company's products to integrated solutions and producing such products, and the

Company's ability to identify and develop new products and to differentiate its products from competitors.




For further information, please contact

Pyrosequencing AB
Erik Walldén                                                                       Mats-Olof Wallin
President                                                                          Chief Financial Officer
erik.wallden@pyrosequencing.com                                                    mats-olof.wallin@pyrosequencing.com
+46 18 56 59 00 or +46 70 326 98 70                                                +46 18 56 59 12 or +46 70 593 52 73

Susanna Gyllenbåga
Investor Relations
susanna.gyllenbaga@pyrosequencing.com
+46 18 56 59 74 or +46 70 225 52 07
Vallongatan 1, 752 28 Uppsala, Sverige


PYROSEQUENCING AB                                                                           U.S. Subsidiary:
VALLONGATAN 1, SE-752 28 UPPSALA, SWEDEN                                                    2200 West Park Drive, Westborough, MA 01581
PHONE +46 18 56 59 00, FAX +46 18 59 19 22                                                  PHONE 1 877 797 6767, FAX 1 508 898 3306
info@pyrosequencing.com, www.pyrosequencing.com                                             info@pyrosequencing.com, www.pyrosequencing.com
                                                                                                                            8

Pyrosequencing AB (publ)
Interim Report 1/1/03 - 6/30/03

INCOME                STATEMENTS
                                                                                Group
Amounts in SEK (in thousands)                        1/1/03-        1/1/02-                   4/1/03-            4/1/02-
                                                     6/30/03        6/30/02                   6/30/03            6/30/02

Net sales                                             41,155         36,301                    16,997             16,347
Cost of goods sold                                  (17,030)       (10,885)                    (9,300)            (5,376)
Gross profit                                         24,125         25,416                      7,697             10,971

Selling expenses                                    (39,704)       (53,718)                   (21,935)          (29,913)
Administrative expenses                             (20,389)       (27,035)                    (8,905)          (13,219)
Research and development costs**                    (42,008)       (20,124)                   (22,584)           (9,610)
Restructuring costs                                     (706)              -                         -                 -
Other operating income                                    855          1,800                       400             1,398
Other operating expenses                              (5,575)        (5,757)                   (3,799)           (4,215)
                                                   (107,527)      (104,834)                   (56,823)          (55,559)

Operating loss                                      (83,402)       (79,418)                   (49,126)          (44,588)

Result from financial investments
Result from other securities held as
  long-term financial assets                          10,353          9,063                      6,914              5,707
Other interest income                                    503          1,630                      (409)            (4,383)
Interest expense and similar profit/loss items           (27)            80                         (4)               105
Financial income (net)                                10,829         10,773                      6,501             1,429

Loss after financial items                          (72,573)       (68,645)                   (42,625)          (43,159)

Tax expense                                              (81)      (13,857)                        (26)           (7,108)
Net loss for the period                             (72,654)       (82,502)                   (42,651)          (50,267)

Weighted average shares outstanding               34,770,100    34,770,100
Weighted average shares outstanding after full
dilution                                          34,885,169    35,655,068
Common shares outstanding                         34,770,100    34,770,100

Net loss per share                                     (2.08)         (2.37)
Net loss per share after full dilution*                (2.08)         (2.37)

*As the earnings per share would decrease the loss per share when considering dilution, as a result of shares
outstanding, the earnings per share have only been calculated without consideration of dilution
**Research and development costs in income
statement                                            (42,008)      (20,124)                (22,584)         (9,610)
Capitalization during the period                       (2,632)     (49,431)                   (351)        (25,534)
Amortization during the period                           9,414             -                  4,727               -
Research and development costs without net
capitalization                                       (35,226)      (69,555)                (18,208)        (35,144)



PYROSEQUENCING AB                                                     U.S. Subsidiary:
VALLONGATAN 1, SE-752 28 UPPSALA, SWEDEN                              2200 West Park Drive, Westborough, MA 01581
PHONE +46 18 56 59 00, FAX +46 18 59 19 22                            PHONE 1 877 797 6767, FAX 1 508 898 3306
info@pyrosequencing.com, www.pyrosequencing.com                       info@pyrosequencing.com, www.pyrosequencing.com
                                                                                                    9

Pyrosequencing AB (publ)
Interim Report 1/1/03 – 6/30/03

B A L A N C E S H E E TS

                                                                                Group
Amounts in SEK (in thousands)                             6/30/03                    12/31/02

ASSETS
Fixed assets
Intangible assets
Capitalized expenditure for development                    43,713                         50,495
Patents and license rights                                 22,862                         20,228
                                                           66,575                         70,723
Tangible assets
Leasehold improvements                                      16,244                        17,369
Plant and machinery                                         16,843                        18,063
Equipment, tools, fixtures and fittings                     13,545                        15,745
Construction in progress and advance
payments for tangible assets                                    1                             94
                                                           46,633                         51,271
Financial assets
Other securities held as financial assets                 316,910                        374,387
Other long-term receivables                                   133                            163
                                                          317,043                        374,550
Total fixed assets                                        430,251                        496,544

Current assets
Inventories
Raw materials and consumables                              10,897                         11,332
Semi-finished products                                      1,524                          1,836
Finished products and goods for resale                     19,611                         18,782
Work in progress in excess of down payment                    879                            933
                                                           32,911                         32,883
Current receivables
Accounts receivable - trade                                17,082                         28,328
Other receivables                                           4,846                          8,707
Prepaid expenses and accrued income                         4,978                         14,219
                                                           26,906                         51,254
Investments
Other short-term investments                               68,560                         71,700
                                                           68,560                         71,700

Cash and bank balances                                     28,558                         25,655
Total current assets                                      156,935                        181,492

TOTAL ASSETS                                              587,186                        678,036




PYROSEQUENCING AB                                 U.S. Subsidiary:
VALLONGATAN 1, SE-752 28 UPPSALA, SWEDEN          2200 West Park Drive, Westborough, MA 01581
PHONE +46 18 56 59 00, FAX +46 18 59 19 22        PHONE 1 877 797 6767, FAX 1 508 898 3306
info@pyrosequencing.com, www.pyrosequencing.com   info@pyrosequencing.com, www.pyrosequencing.com
                                                                            10
Pyrosequencing AB (publ)
Interim Report 1/1/03 – 6/30/03

B A L A N C E S H E E TS

                                                        Group
Amounts in SEK (in thousands)                6/30/03            12/31/02

EQUITY AND LIABILITIES

Equity

Restricted equity
Share capital                                  34,770              34,770
Restricted reserves/Share premium reserve   1,054,360           1,054,360
                                            1,089,130           1,089,130


Non-restricted equity
Accumulated deficit                         (472,969)           (304,591)
Net loss for the period                      (72,654)           (168,378)
                                            (545,623)           (472,969)

Total equity                                 543,507             616,161

Provisions
Other provisions                                 344                 370
                                                 344                 370

Current liabilities
Accounts payable – trade                      11,290              18,419
Other liabilities                              6,383               7,335
Accrued expenses and deferred income          25,662              35,751
                                              43,335              61,505

TOTAL EQUITY AND LIABILITIES                 587,186             678,036

Pledged assets
Chattel mortgage                                 150                 150
Contingent liabilities                             -                   -
                                                          11

Pyrosequencing AB (publ)
Interim Report 1/1/03 – 6/30/03

CHANGES IN EQUITY

                                          Group
Amounts in SEK (in thousands)         2003      2002


Balance brought forward 1/1         616,161    784,983


Issue expenses                             -     (444)

Net loss for the period 1/1 –6/30   (72,654)   (82,502)
Balance carried forward 6/30        543,507    702,037
                                                                         12

Pyrosequencing AB (publ)
Interim Report 1/1/03 – 6/30/03

STATEMENTS OF CASH FLOWS

                                                        Group
Amounts in SEK (in thousands)                     1/1/03-     1/1/02-
                                                  6/30/03     6/30/02

Operating activities
Operating loss after financing items              (72,573)    (68,645)
Adjustments for items not affecting cash flow
Depreciation                                       16,706       8,073
Other items                                           446       1,250
Cash used in operating activities before
changes in working capital                        (55,421)    (59,322)

Changes in working capital
Increase in inventories                               (28)       (714)
Decrease in accounts receivable - trade             10,753      14,859
Decrease in other current assets                    13,102       5,496
Decrease in other current liabilities             (18,170)     (8,279)
Cash used in operating activities                 (49,764)    (47,960)

Investing activities
Purchase of intangible assets                       (6,135)   (49,431)
Purchase of tangible assets                         (1,845)    (5,065)
Purchase of long-term investments                 (45,447)
Sale of tangible assets                                   -       602
Sale of short-term investments                        3,140    50,035
Sale of long-term investments                      102,924     55,550
Decrease of long-term receivables                        30        43
Cash provided by investing activities               52,667     51,734


Net change in cash and cash equivalents             2,903       3,774
Cash and cash equivalents beginning of year        25,655      27,923
Cash and cash equivalents end of year              28,558      31,697
Cash, cash equivalents and investments in high-
 grade debt securities end of period              368,582     563,392
                                                                                               13
Accounting Principles
The accounting principles used in preparation of these financial statements are consistent with
those used in the Company’s latest Annual Report, with addition of the 2003 Swedish Financial
Standards Council (Redovisningsrådet) recommendations which are presented below. These
recommendations were implemented by the Company beginning on January 1, 2003.

Recommendation number 22, Presentation of Financial Statements
This recommendation has no significant effect on the interim reports.

Recommendation number 25, Segment Reporting – Branches and Geographical Areas
The Company considers all its business to be one segment, as the risks and opportunities are
similar in the whole business. Net sales are divided into four geographic areas, however.

Recommendation number 26, Events after the Balance Sheet Date
When appropriate, the Company communicates substantial events that have taken place
between the balance sheet date and the date for signing the financial statements.

Recommendation number 27, Financial Instruments: Disclosure and Presentation
The Company will provide information according to this recommendation in the Annual Report
2003.

Other 2003 recommendations have not been included in these comments, as they have no
significant effect on the financial statements.

Review report
As the appointed auditors of Pyrosequencing AB we have reviewed this interim report for the
half-year results, ended June 30 2003, in accordance with the recommendation issued by FAR.
A review is considerably limited in scope compared with an audit. Nothing has come to our
attention that causes us to believe that the interim report does not comply with the requirements
of the Exchange and Clearing Operations Act and Annual Accounts Act.

Uppsala August 7, 2003

Deloitte & Touche AB



Lars-Gunnar Nilsson
Authorized Public Accountant

				
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