THIRD QUARTER REPORT 2017 PHOTOCURE GROUP

Highlights for third quarter and the first nine months 2017

(Numbers in brackets and comparisons are for the corresponding period in 2016.)

Investments in US commercial organization driving continued strong Cysview sales revenue growth, up 45% in the third quarter
In-market unit sales increased 3% in the third quarter. Unit sales growth was 39% in the US and 6% in Nordic, while partner unit sales declined 1%
Hexvix/Cysview sales revenue increased 12% to NOK 35.5 million in the third quarter. Year to date revenue growth was 10% (12% in constant currency)
Following the investments in US, commercial segment EBITDA was NOK -0.2 million (NOK 8.0 million) for the third quarter and NOK 9.4 million (NOK 19.3 million) year to date
In November, CMS (United States Centers for Medicare & Medicaid Services) issued the Final Rule stating that it will reimburse hospital outpatient departments for certain Blue Light Cystoscopy (BLC) with Cysview procedures beginning January 1, 2018
In October, the U.S. Food and Drug Administration (FDA) granted priority review status to Photocure's supplemental New Drug Application (sNDA) for Cysview

Figures in NOK million	Q3 2017	Q3 2016	Change	YTD 2017	YTD 2016	Change	FY 2016
Hexvix/Cysview revenues	35.5	31.6	12 %	109.6	99.4	10 %	131.0
Other sales & milestone revenues	0.2	3.6		1.9	6.2		12.7
Total revenues	35.6	35.2	1 %	111.5	105.5	6 %	143.6
Operating expenses	42.2	34.7	22 %	121.2	106.6	14 %	142.3
EBITDA recurring	-9.6	-1.6		-18.3	-7.7		-8.0
EBITDA commercial franchise	-0.2	8.0		9.4	19.3		30.0
EBITDA development portfolio	-9.4	-9.7		-27.7	-27.0		-38.1
EBIT (Operating result)	-13.9	-3.2		-31.1	-12.5		-15.9
Profit/loss (-) before tax	-13.5	-3.3		-28.4	-11.3		12.8
Net Profit/loss (-)	-10.1	0.1		-21.7	17.5		35.3
Earnings per share, diluted (NOK)	-0.47	0.00		-1.01	0.81		1.64
Cash & cash equivalents				123.1	93.9		169.2

Key figures:

President & CEO Kjetil Hestdal, M.D. Ph.D. comments:

"Our third quarter report demonstrates continued significant progress in our US business. The new reimbursement of Blue Light Cystoscopy with Cysview for Medicare patients, as well as the potential to expand Cysview's label in the US show our commitment to this important market. It also confirms our desire to deliver patients better access to bladder cancer treatment. We expect the new reimbursement to drive significant growth in the future."

Operational review

Photocure's strategy is to create a specialty pharmaceutical company maximizing its commercial presence and the opportunity of its flagship brand Hexvix®/Cysview® in urology. In addition, the Company will continue to leverage its competence in its proprietary Photodynamic Technology Platform and expertise and capacity in urology to explore, alone or in partnership with others, new product opportunities targeting unmet medical needs in urology.

Update commercial segment

The commercial segment continued to deliver strong revenues from own sales, particularly US, however total revenues were negatively impacted by lack of growth in partner revenues and no milestone revenues compared to last year.

Total Hexvix/Cysview revenue increased 12% to NOK 35.5 million (NOK 31.6 million) in the third quarter. Own revenues, Nordic and US, increased 23%, while partner revenues, Ipsen, increased 1%. Year to date Hexvix/Cysview revenue increased 10% to NOK 109.6 million (+12% in constant currencies).

In-market unit sales increased 3% in the third quarter, of which own unit sales increased 17% and partner unit sales declined 1%. Year to date in-market unit sales increased 4%.

Operating expenses increased 31% to NOK 32.8 million (NOK 25.0 million) in the third quarter and 17% to NOK 93.5 million (NOK 79.6 million) year to date. This was mainly driven by the planned increase in sales and marketing efforts in US as well as increased expenses related to flexible cystoscopy in Nordic.

Year to date EBITDA was NOK 9.4 million (NOK 19.3 million). With increased investment in marketing and sales in the US as well as reduced milestone revenues, the decline compared to the same period last year was expected. The EBITDA margin was 8%, compared to 18% last year.

Q3 '17	YTD '17	YTD '16

9.0	30.4	29.4
11.3	32.3	22.4
15.2	47.0	47.5
35.5 12 %	109.6 10 %	99.4
0.2	1.9	6.2
35.6	111.5	105.5
1 %	6 %
32.6 -32.8	102.9 -93.5	98.9 -79.6
		Photocure – Results for third quarter and the first nine months 2017

Hexvix® /Cysview®

Global in-market sales of Hexvix/Cysview increased 8% to NOK 61 million (NOK 57 million) in the third quarter. Year to date in-market sales were NOK 193 million (NOK 181 million). Global in-market unit sales increased 3% in the third quarter compared to the same period in 2016. Sales development in US was strong with a unit sales increase of 39%. Consolidated volume growth was impacted by a reduction in our partner business of 1% in the quarter. Year to date in-market unit sales increased 4%.

US Cysview sales

Third quarter revenues in the US grew 45% to NOK 11.3 million (NOK 7.8 million), driven by volume growth and price increases. The improvement reflects increased productivity as well as expanded sales resources. In-market unit growth in the third quarter was 39%.

Year to date US revenues increased 44% to NOK 32.3 million (NOK 22.4 million), with unit growth of 35%. There was no significant impact from currency translation year to date.

The volume growth was driven both by the number of permanent blue light cystoscopes (BLCs) installed at leading US hospitals and by increased average usage per center. The total number of permanent BLCs installed at leading US hospitals at the end of third quarter was 96, an increase of 13 units compared to the number of BLCs installed at the end of 2016.

Photocure is in the process of expanding its salesforce in US to increase penetration of Cysview in hospitals and urology practices. We are on target to double our US sales organization by the end of 2017.

In November, the United States Centers for Medicare & Medicaid Services (CMS) released the Final Rule stating that it will reimburse hospital outpatient departments for certain Blue Light Cystoscopy (BLC)

with Cysview procedures from January 1, 2018. CMS has created a new set of codes specific to Blue Light Cystoscopy allowing for improved reimbursement for those procedures. The Company expects this to increase the installed base of BLC's and drive revenue growth from 2018.

Nordic Hexvix sales

Nordic revenues increased 3% to NOK 9.0 million (NOK 8.7 million) in the third quarter, driven by increased sales in Sweden and Finland. Following the reorganization of hospitals in Copenhagen which led to a decline in revenue at the end of last year and early 2017, the Danish market has returned to level with last year in the third quarter. Photocure's inmarket unit sales in the Nordic region in third quarter increased 6%.

Year to date Nordic revenues increased 3% (+5% in constant currencies) to NOK 30.4 million (NOK 29.4 million). Year to date in-market unit sales were level compared to last year.

Hexvix/Cysview partner sales

Partner revenue increased 1% to NOK 15.2 million (NOK 15.1 million) in the third quarter, negatively impacted by a 1% reduction in in-market unit sales. Third quarter in-market unit sales declined in all markets excluding Germany and Austria.

Year to date partner revenue declined 1% to NOK 47.0 million (NOK 47.5 million), negatively impacted by lower sales in several markets and to some extent currency translation. In constant currencies, revenue was level compared to last year. In-market unit sales increased 2%. Sales in the new markets, Canada and Australia, have commenced, however volume has been negatively impacted by timing of outplacement of scopes by the third-party suppliers and timing of health system funding approvals. Juno Pharmaceuticals completed the registration of Hexvix in New Zealand in October.

In November 2016, new French National Guidelines for the management of Bladder Cancer were introduced. The French guidelines recommend BLC with Hexvix for the first bladder cancer resection (TURBT) in essentially all patients and for consecutive TURBT's in the majority of patients. However, Hexvix has been removed from the "Listeen-sus" in France and has lost reimbursement from second quarter 2017. This resulted in a negative volume development in the second and third quarter, but limited financial impact at the EBITDA level. Ipsen is working on securing a separate Blue Light DRG code in France.

Hexvix/Cysview publications

In July, a study investigating the use of Blue Light Flexible Cystoscopy with Hexvix in patients with Carcinoma in Situ (CIS) was published in the Scandinavian Journal of Urology. The results showed that bladder examinations and biopsies of lesions performed with Blue Light Flexible Cystoscopy in the outpatient setting were equivalent to those performed in the inpatient setting with rigid scopes in the operating room and the patient under general anaesthesia. Furthermore, there were significant Quality of Life benefits for the patients in the outpatient setting versus the inpatient setting.

In August, The World Journal of Urology published a prospective controlled study investigating the introduction of BLC with Hexvix at first presentation in patients with non-muscle invasive bladder cancer (NMIBC) in routine clinical practice. The study showed that the overall recurrence rates at 3 years were significantly less in patients who received BLC with Hexvix (39.0%) compared to an optimized White Light Cystoscopy resection (53.3%; p=0.02). The benefit on the recurrence rate was most pronounced in patients with high-risk disease (52.1% recurrence at year 3 with BLC with Hexvix versus 80% with White Light Cystoscopy; p=0.01).

Update development portfolio

Hexvix® /Cysview® – expansion opportunities

Hexvix/Cysview is currently used to optimize patient management through improved diagnosis and bladder cancer resection (TURB) in a surgical procedure using rigid cystoscopes. After patients are initially diagnosed and treated by TURB, they undergo cystoscopic examinations every 3-9 months. This surveillance is performed in the outpatient/office setting using flexible cystoscopes to detect any suspicious new lesions requiring referral for additional TURBs. An expansion of the use of Hexvix/Cysview into the surveillance patient segment will open a market segment estimated to have a total market size of 2-3 times the current segment.

A US phase 3 clinical study examining bladder cancer detection rates using Blue Light Flexible Cystoscopy with Cysview vs white light flexible cystoscopy began in the fourth quarter of 2015. The positive results from this study were presented at the AUA meeting in Boston, May 2017.

Based on these positive results, we filed a supplemental NDA with the FDA in August. In October, FDA provided us with the notification that they accepted the supplemental New Drug Application (sNDA) for Cysview on a priority review

basis. We expect a decision on the approval by the FDA during the first half of 2018.

Visonac® and Cevira®– late stage clinical non-urology development products

In April, the Company announced that it will assess further strategic alternatives for its non-urology assets, Cevira and Visonac, in parallel with ongoing partner search.

The decision to initiate a broad review of possible strategic alternatives for Cevira and Visonac follows a non-conclusive comprehensive partnering process. Photocure has experienced interest with several possible partners having recognized the unmet medical need in the target therapeutic areas, and has engaged in thorough discussions and due diligence for both Cevira and Visonac. However, at this stage remaining development risk is expressed as a concern for establishing an optimal partnership for Cevira, while the current combination of drug and device is an expressed commercial concern for Visonac.

Financial review

engaged in thorough discussions and due diligence for both Cevira and Visonac. However, at this stage				to date.
remaining development risk is expressed as a concern for establishing an optimal partnership for Cevira, while the current combination of drug and device is an expressed commercial concern for Visonac.				Other revenues Pharmaceutical Ingredients Milestone revenues. 2016 revenues were driven by revenue deferrals as well as milestones that are not repeated in the current year. 2017 revenues relate to	include (API)	sale of and	Active Signing/
Based on the input received in the partnering process, Photocure is in the process of assessing further strategic alternatives for Cevira and Visonac.				Bellus Medical, a cosmetic dermatology company. In April, Photocure and Bellus Medical signed an asset purchase and licensing agreement dermatology product Allumera. Under the terms of	privately-owned for	US Photocure's	based cosmetic
Financial review				this agreement, Photocure received USD 200,000 at signing.
(Numbers in brackets are for the corresponding period in 2016; references to the prior year refer to a comparison to the same period 2016, unless otherwise stated).				Operating costs Total operating costs, excluding one-off items, depreciation and amortization, were NOK 42.2 million
				(NOK 34.7 million) in the third quarter, an increase of 22%. Year to date the increase was 14% to NOK
Hexvix/Cysview revenues	35.5	109.6	99.4	121.2 million (NOK 106.6 million).
Other revenues Total revenues	0.2 35.6	1.9 111.5	6.2 105.5	The increase in operating costs was mainly driven by
Gross profit	32.6	102.9	98.9	planned investments in US sales and marketing
Operating expenses	-42.2	-121.2	-106.6	operations.
EBITDA recurring One-Off items	-9.6 -	-18.3 -4.0	-7.7 -
Depreciation & Amort	-4.3	-8.8	-4.8
EBIT	-13.9	-31.1	-12.5
Net financial items	0.4	2.7	1.2
Earnings before tax	-13.5	-28.4	-11.3
Tax expenses Net earnings	3.5 -10.1	6.7 -21.7	28.7 17.5
Photocure's operational results in the third quarter				excl one-off
and year to date were driven by continued strong
growth in its activities in US. Added resources have

Photocure's operational results in the third quarter and year to date were driven by continued strong growth in its activities in US. Added resources have had an impact on revenue growth as well as operational costs in line with our strategic objectives.

Revenues

Total revenues in the third quarter were NOK 36.6 million, an increase of 1% from the third quarter last year (NOK 35.2 million). Year to date revenues were NOK 111.5 million (NOK 105.5 million), an increase of 6%.

Hexvix/Cysview sales revenues for the third quarter were NOK 35.5 million, an increase of 12% from last year (NOK 31.6 million). The increase was driven by strong sales in US. Sales revenue growth was however partly offset by lower performance in the quarter for our partner business. Year to date Hexvix/Cysview revenues were NOK 109.6 million (NOK 99.4 million), an increase of 10%. In constant currencies, Hexvix/Cysview revenues grew 12% year to date.

Other revenues include sale of Active Pharmaceutical Ingredients (API) and Signing/ Milestone revenues. 2016 revenues were driven by revenue deferrals as well as milestones that are not repeated in the current year. 2017 revenues relate to Bellus Medical, a privately-owned US based cosmetic dermatology company. In April, Photocure and Bellus Medical signed an asset purchase and licensing agreement for Photocure's cosmetic dermatology product Allumera. Under the terms of this agreement, Photocure received USD 200,000 at signing. MNOK Q3 '17 YTD '17 YTD '16 Hexvix/Cysview revenues 35.5 109.6 99.4 Other revenues 0.2 1.9 6.2 Total revenues 35.6 111.5 105.5 MNOK Q3 '17 YTD '17 YTD '16 Research & Development 4.7 13.3 12.2 YoY growth 18 % 9 %

Operating costs

Bellus Medical, a cosmetic dermatology company. In April, Photocure and Bellus Medical signed an asset purchase and licensing agreement dermatology product Allumera. Under the terms of this agreement, Photocure received USD 200,000 at signing.	privately-owned for	repeated in the current year. 2017 revenues relate to US Photocure's	based cosmetic
Operating costs Total operating costs, excluding one-off items, depreciation and amortization, were NOK 42.2 million (NOK 34.7 million) in the third quarter, an increase of 22%. Year to date the increase was 14% to NOK 121.2 million (NOK 106.6 million). The increase in operating costs was mainly driven by planned investments in US sales and marketing
operations.
MNOK	Q3 '17	YTD '17	YTD '16
Research & Development YoY growth	4.7 18 %	13.3 9 %	12.2
Sales & Marketing YoY growth	25.6 34 %	73.0 23 %	59.2
Other Opex YoY growth	12.0 3 %	34.9 -1 %	35.2
Operating expenses excl one-off	42.2	121.2	106.6
YoY growth	22 %	14 %
	0.0	4.0 125.2	0.0 106.6
Nedax write-down Operating expenses	42.2
YoY growth Depreciation & Amort. YoY growth	22 % 4.3 165 %	17 % 8.8 83 %	4.8

Third quarter research and development (R&D) costs were NOK 4.7 million (NOK 3.9 million). R&D costs year to date were NOK 13.3 million (NOK 12.2 million). The R&D costs relate mainly to regulatory work and maintenance and expansion of our intellectual property. Expenses related to the Cysview Phase 3 market expansion trial, excluding internal resources, are capitalized and amortized.

Sales and marketing costs increased 34% to NOK 25.6 million (NOK 19.1 million) in the third quarter. Sales and marketing costs year to date were NOK 73.0 million (NOK 59.2 million). The increase was in line with our strategic plans and was driven by activities in US. As announced in the fourth quarter 2016 report Photocure will increase expenses in US operations in 2017 and 2018.

Year to date other operating expenses, which includes supply chain, business development and general/ administration, was level compared to last year.

One-off items relate to write off of parts and finished goods inventory for Nedax, the light source used with Visonac. As announced in April 2017, following nonconclusive partnering discussions for Cevira and Visonac, Photocure is in the process of assessing other strategic alternatives for these two opportunities in parallel to ongoing partner search.

Financial results

EBITDA was negative NOK 9.6 million (NOK -1.6 million) for the third quarter. Year to date EBITDA, before one-off items, was negative NOK 18.3 million (NOK -7.7 million). Currency translation had a negative effect on the year to date EBITDA of less than NOK 1 million.

EBITDA in the commercial segment was NOK 9.4 million year to date compared to NOK 19.3 million the prior year. The development portfolio had EBITDA, before one-off items, of negative NOK 27.7 million year to date (NOK -27.0 million).

Year to date depreciation and amortization was NOK 8.8 million (NOK 4.8 million). The increase from prior year was mainly driven by amortization on the investments in intangible assets related to the Phase 3 market expansion trial for Cysview.

Net financial items were NOK 2.7 million (NOK 1.2 million) year to date.

Photocure had a net loss before tax of NOK 13.5 million in the third quarter (net loss of NOK 3.3 million) and a net loss of NOK 28.4 million year to date (net loss of NOK 11.3 million). Tax expenses in the third quarter were a net income of NOK 3.5 million (net income NOK 3.3 million) and year to date a net income of NOK 6.7 million (net income of NOK 28.7 million). Prior year net tax income was mainly driven by a change in transfer pricing method.

Net loss was NOK 10.1 million in the third quarter (profit of NOK 0.1 million) and NOK 21.7 million year to date (profit of 17.5 million).

Cash flow and statement of financial position

Net cash flow from operations was negative NOK 3.4 million in the third quarter (negative NOK 8.6 million) and negative NOK 31.1 million year to date (negative NOK 30.7 million). The impact from changes to working capital year to date was negative NOK 10.7 million (negative NOK 22.9 million).

Net cash flow from investments was negative NOK 10.6 million in the third quarter (negative NOK 2.9 million) and negative NOK 15.1 million year to date (negative NOK 11.1 million). This was mainly driven by investments related to the Phase 3 market expansion trial for Cysview.

Third quarter net change in cash was negative NOK 13.9 million (negative NOK 10.5 million). Year to date net change in cash was negative NOK 46.1 million (negative NOK 40.1 million). Cash and cash equivalents were NOK 123.1 million at the end of the third quarter.

Shareholders' equity was NOK 230.7 million at end of third quarter, an equity ratio of 89%.

As of 30 September 2017, Photocure held 809 own shares.

Risks and uncertainty factors

Photocure is exposed to risk and uncertainty factors, which may affect some or all of the Company's activities. Photocure has financial risk, market risk as well as operational risk and risk related to development of new products.

The most important risks the Company is exposed to are associated with market development for Hexvix/Cysview, progress of partnering activities, as well as financial risks related to interest rates, liquidity and currency fluctuations.

There are no significant changes in the risks and uncertainty factors compared to the descriptions in the Annual Report for 2016.

Outlook

Photocure has built considerable experience in the urology sector through its Hexvix/Cysview franchise

and sees significant long-term value creation potential in this market segment. The Company aims to capitalize on the inclusion in the AUA guidelines, as well as the increased patient awareness and the changes to reimbursement of Cysview in the outpatient setting, to significantly increase penetration in the US market.

CMS (United States Centers for Medicare & Medicaid Services) released in November the Final Rule stating that it will reimburse hospital outpatient departments for certain Blue Light Cystoscopy (BLC) with Cysview procedures beginning January 1, 2018.

Photocure believes that in order to increase market shares in the US, an investment in the US commercial and medical infrastructure is required. As stated previously, the Company plans to double its salesforce from 2016 and increase sales and marketing expenses towards the end of 2017. The goal of these efforts is to quadruple the revenues from the US operations to a range of USD 15 million by 2020 before impact of Medicare reimbursement. The added reimbursement will have a positive effect on future revenues, however, the full implications of this positive change are not expected to be fully known before second half of 2018. Currently the Company estimates that the added reimbursement will drive the US revenues in 2020 to a range of USD 20–25 million. The Company will update the market on this outlook in 2018 when there is better visibility of effects of the new reimbursement situation.

As a result of the increased activity level in US, the added operating expenses will contribute to an EBITDA decline for the group in 2017 and 2018. The Company is fully funded for this market strategy.

Photocure reported in May this year that the Phase 3 study of Hexvix/Cysview in the surveillance patient segment met its primary endpoint and other major endpoints. Based on this, the Company submitted a supplemental New Drug Application (sNDA) to the US FDA, and in October FDA accepted for review and granted priority review status to the sNDA for Cysview. We expect a decision on the approval by the FDA during the first half of 2018.

The Board of Directors and CEO Photocure ASA

Oslo, 7 November 2017

Jan Hendrik Egberts Chairperson

Johanna Holldack Director

Gwen Melincoff Director

Tom Pike Director

Xavier Yon Director

Synne H. Røine Director

Grannum R. Sant Director

Kjetil Hestdal President and CEO

Photocure Group Accounts for third quarter and the first nine months 2017

Photocure Group – Statement of comprehensive income

Photocure Group Accounts for third quarter and the first nine months 2017		Photocure – Results for third quarter and the first nine months 2017







Photocure Group – Statement of comprehensive income

		2017	2016	2017	2016	2016
(all amounts in NOK 1 000 except per share data)	Note	Q3	Q3	1.1-30.09	1.1-30.09	1.1-31.12
Sales revenues		35,644	31,639	109,772	99,353	136,186
Signing fees and milestone revenues		-	3,592	1,730	6,193	7,441
Total revenues		35,644	35,231	111,502	105,546	143,627
Cost of goods sold		-3,030	-2,168	-8,607	-6,621	-9,337
		32,614	33,063	102,895	98,925	134,291
Gross profit

Indirect manufacturing expenses	3	-2,719	-2,628	-7,615	-7,773	-10,386
Research and development expenses	3	-8,383	-5,249	-24,427	-15,033	-22,962
Marketing and sales expenses	3	-25,611	-19,130	-73,048	-59,756	-79,930
Other operating expenses	3	-9,814	-9,295	-28,865	-28,837	-36,874
Total operating expenses		-46,527	-36,302	-133,955	-111,399	-150,152
EBIT		-13,913	-3,239	-31,060	-12,473	-15,861
Financial income		1,258	2,007	4,495	4,500	32,427
Financial expenses		-865	-2,033	-1,842	-3,286	-3,787
Net financial profit/loss(-)		393	-26	2,654	1,214	28,640
Profit/loss(-) before tax		-13,520	-3,265	-28,406	-11,260	12,779
Tax expenses	4	3,450	3,320	6,712	28,717	22,530
Net profit/loss(-)		-10,070	55	-21,694	17,457	35,309
Other comprehensive income	5	-463	-602	-573	825	-366
Total comprehensive income Net profit/loss(-) per share, undiluted	6	-10,532 -0.47	-546 0.00	-22,267 -1.01	18,282 0.81	34,943 1.64

Photocure Group – Statement of financial position

			Photocure – Results for third quarter and the first nine months 2017
Photocure Group – Statement of financial position


(Amounts in NOK 1 000)	Note	30.09.2017	30.09.2016		31.12.2016
Non-currrent assets
Machinery & equipment		1,495	1,654		1,660
Intangible assets	7	34,849	20,810		26,390
Other investments		-	7,372		-
Deferred tax asset	4	52,732	52,207		46,020
Total non-current assets		89,076	82,043		74,070
Current assets
Inventories		14,869	16,416		17,955
Accounts receivable		16,040	14,434		12,323
Other receivables		16,479	50,520		12,750
Cash and short term deposits	8	123,092	93,905		169,239
Total current assets		170,480	175,276		212,268

Total assets Equity and liabilities		259,556	257,319		286,338
Equity
Share capital	9	10,779	10,773		10,779
Other paid-in capital		55,822	53,221		54,268
Retained earnings		164,123	170,083		186,895
Shareholders' equity		230,724	234,077		251,943
Long-term liabilities
Pension liabilities		4,524	3,417		3,758
Total long-term liabilities		4,524	3,417		3,758
Current liabilities		24,308	19,826		30,637
Total liabilities		28,832	23,243		34,395
Total equity and liabilities		259,556	257,319		286,338
Photocure Group – Changes in equity
		2017	2016	2017	2016	2016
(Amounts in NOK 1 000)		Q3	Q3	1.1-30.09	1.1-30.09	1.1-31.12
Equity at beginning of period		240,983	232,947	251,943	210,060	210,060
Capital increase			959		1,990	2,415
		273	717	1,049	2,762	3,300
Share-based compensation (share options employees)
Treasury shares decrease Comprehensive income		-10,532	-546	-22,267	984 18,282	1,225 34,943

Photocure Group – Changes in equity

	2017	2016	2017	2016	2016
(Amounts in NOK 1 000)	Q3	Q3	1.1-30.09	1.1-30.09	1.1-31.12

Photocure Group – Cash flow statement

	Photocure – Results for third quarter and the first nine months 2017






Photocure Group – Cash flow statement


(Amounts in NOK 1 000)	2017 Q3	2016 Q3	2017 1.1-30.09	2016 1.1-30.09	2016 1.1-31.12
Profit/loss(-) before tax	-13,520	-3,265	-28,406	-11,260	12,779
Depreciation and amortisation	4,285	1,620	8,799	4,797	7,853
Gain sale of financial assets	-	-	-	-	-27,280
Share-based compensation	273	714	1,049	2,760	3,541
Net interest income	-474	-607	-2,042	-2,109	-2,394
	-	-	-	-	37,193
Settlement deferred revenue Galderma
Changes in working capital	6,153	-7,177	-10,726	-22,906	-8,787
Other operational items	-91	73	239	-1,995	-3,713
Net cash flow from operations	-3,374	-8,642	-31,087	-30,714	19,193
Net investments in fixed assets	-212	-497	-367	-2,450	-3,148
Development expenditures	-10,817	-2,970	-16,735	-10,770	-18,567
Sales proceeds shares PCI Biotech Holding	-	-	-	-	33,213
Received interest payments	474	607	2,042	2,109	2,394
Cash flow from investments	-10,556	-2,860	-15,061	-11,111	13,892
Cash flow from financing activities	-	958	-	1,703	2,128
Net change in cash during the period	-13,929	-10,543	-46,147	-40,121	35,213
Cash & cash equivalents at beginning of period Cash & cash equivalents at end of period	137,021 123,092	104,448 93,904	169,239 123,092	134,026 93,904	134,026 169,239

Notes to the accounts for third quarter and the first nine months 2017

Note 1 – General accounting principles

General information

Photocure ASA is a public limited company domiciled in Norway. The business of the Company is associated with research, development, production, distribution, marketing and sales of pharmaceutical products and related technical medical equipment. The Company's shares are listed on the Oslo Stock Exchange (OSE: PHO). The Company's registered office is Hoffsveien 4, NO-0275 Oslo, Norway.

Photocure Group (Photocure) comprises Photocure ASA and the wholly owned subsidiary Photocure Inc. that is a US registered company.

Basis of preparation

These condensed interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting. These interim financial statements should be read in conjunction with the consolidated financial statements for the year ended 31 December 2016 (the Annual Financial Statements) as they provide an update of previously reported information. The accounting policies used are consistent with those used in the Annual Financial Statements. The presentation of the interim financial statements is consistent with the Annual Financial Statements. The interim report has not been subject to an audit. The Board of Directors approved the interim financial statements on 7 November 2017.

Photocure has Norwegian kroner (NOK) as its functional currency and presentation currency. In the absence of any statement to the contrary, all financial information is reported in whole thousands. As a result of rounding adjustments, the figures in the financial statements may not add up to the totals.

Summary of significant accounting policies

IFRS 15 Revenue from contract with customers establishes a comprehensive framework for determining whether, how much and when revenue is recognized. The standard replaces IAS 18 Revenue and related interpretations. IFRS 15 is effective for annual reporting periods beginning on or after 1 January 2018. The new standard contains a new set of principles on when and how to recognize and measure revenue as well as new requirements related to presentation. The core principle in that framework is that revenue should be recognized dependent on the transfer of promised goods or services to the customer for an amount that reflects the consideration which should be received in exchange for those goods or services. The objective of the standard is to provide a five-step approach to revenue recognition that includes identifying contracts with customers, identifying performance obligations, determining transaction prices, allocating transaction prices to performance obligations, and recognizing revenue when or as performance obligations are satisfied.

The Group is continuing to assess the potential impact of IFRS 15. The adoption of IFRS 15 is not expected to have a significant impact on Photocure's recognition of sale of goods, but might affect the timing of the recognition of upfront payment and milestone fees.

Photocure is analyzing the impact of implementing IFRS 9 Financial Instruments and IFRS 16 Leases from 1.1.2019. Based on the financial assets and liabilities currently held by the Company these are not expected to have a significant impact on Photocure's financial statements.

The new and amended standards and interpretations from IFRS that were adopted by the EU with effect from 2017 did not have any significant impact on the reporting in 2017.

Important accounting valuations, estimates and assumptions

Preparation of the accounts in accordance with IFRS requires the use of judgment, estimates and assumptions that have consequences for recognition in the balance sheet of assets and liabilities, the estimation of contingent

Note 2 - Photocure Group – Segment information

					Photocure – Results for third quarter and the first nine months 2017


liabilities and recorded revenues and expenses. The use of estimates and assumptions is based on the best discretionary judgement of the Group management.
Note 2 - Photocure Group – Segment information

Photocure has two segments; Commercial Franchise and Development Portfolio. Commercial Franchise includes Hexvix/Cysview by sales channel, own sales and partner sales, and other sales, currently including sale of active ingredients. Development Portfolio includes development of commercial products and pipeline products.
1 Jan - 30 September 2017		Commercial Products				Development Products
(Amounts in NOK 1 000)	Hex/Cys Own Sales	Hex/Cys Partner	Other Sales	Total Sales	Hex/Cys Develop.	Pipeline	Total R&D	Grand Total
Sales revenues	62,651	46,956	166	109,772	-	-	-	109,772
Milestone revenues	-	-	1,730	1,730	-	-	-	1,730
Cost of goods sold	-2,529	-6,078	-	-8,607	-	-	-	-8,607
Gross profit	60,122	40,878	1,895	102,895	-	-	-	102,895
Gross profit of sales %	96 %	87 %	100 %	92 %				92 %
R&D	-	-	-	-	-2,214	-15,101	-17,315	-17,315
Sales & marketing	-63,992	-5,911	-	-69,904	-	-3,088	-3,088	-72,992
Other & allocations	-9,137	-13,881	-530	-23,548	-2,674	-8,628	-11,302	-34,850
Operating expenses	-73,129	-19,792	-530	-93,451	-4,888	-26,817	-31,705	-125,156
EBITDA	-13,008	21,086	1,366	9,444	-4,888	-26,817	-31,705	-22,261

1 Jan - 30 September 2016		Commercial Products				Development Products
(Amounts in NOK 1 000)	Hex/Cys	Hex/Cys	Other	Total	Hex/Cys		Total	Grand
	Own Sales	Partner	Sales	Sales	Develop.	Pipeline	R&D	Total
Sales revenues	51,879	47,474	-	99,353	-	-	-	99,353
Milestone revenues	-	2,311	3,882	6,194	-	-	-	6,194
Cost of goods sold	-1,906	-4,715	-	-6,621	-	-	-	-6,621
Gross profit	49,973	45,071	3,882	98,926	-	-	-	98,926
Gross profit of sales %	96 %	90 %		93 %				93 %
R&D	-	-	-	-	-2,286	-9,935	-12,221	-12,221
Sales & marketing	-51,499	-5,438	-	-56,936	-	-2,242	-2,242	-59,178
Other & allocations	-8,623	-13,547	-505	-22,674	-2,594	-9,935	-12,529	-35,203
Operating expenses	-60,122	-18,984	-505	-79,611	-4,880	-22,111	-26,991	-106,602
EBITDA	-10,149	26,087	3,378	19,316	-4,880	-22,111	-26,991	-7,675

1 Jan - 30 September 2016


Sales revenues	51,879	47,474	-	99,353	-	-	-	99,353
Milestone revenues	-	2,311	3,882	6,194	-	-	-	6,194
Cost of goods sold	-1,906	-4,715	-	-6,621	-	-	-	-6,621
Gross profit	49,973	45,071	3,882	98,926	-	-	-	98,926
Gross profit of sales %	96 %	90 %		93 %				93 %
R&D	-	-	-	-	-2,286	-9,935	-12,221	-12,221
Sales & marketing	-51,499	-5,438	-	-56,936	-	-2,242	-2,242	-59,178
Other & allocations	-8,623	-13,547	-505	-22,674	-2,594	-9,935	-12,529	-35,203
Operating expenses	-60,122	-18,984	-505	-79,611	-4,880	-22,111	-26,991	-106,602
EBITDA	-10,149	26,087	3,378	19,316	-4,880	-22,111	-26,991	-7,675

Q3 2017		Commercial Products				Development Products
(Amounts in NOK 1 000)	Hex/Cys	Hex/Cys	Other	Total	Hex/Cys		Total	Grand
	Own Sales	Partner	Sales	Sales	Develop.	Pipeline	R&D	Total
Sales revenues	20,261	15,218	166	35,644	-	-	-	35,644
Milestone revenues	-	-	-	-	-	-	-	-
Cost of goods sold	-839	-2,190	-	-3,029	-	-	-	-3,029
Gross profit	19,422	13,028	166	32,615	-	-	-	32,615
Gross profit of sales %	96 %	86 %	100 %	92 %				92 %
R&D	-	-	-	-	-734	-3,926	-4,660	-4,660
Sales & marketing	-22,586	-2,082	-	-24,669	-	-924	-924	-25,592

Other & allocations	-3,071	-4,894	-173	-8,138	-863	-2,988	-3,851	-11,989
Operating expenses	-25,658	-6,977	-173	-32,807	-1,597	-7,838	-9,435	-42,242
EBITDA	-6,236	6,051	-7	-192	-1,597	-7,838	-9,435	-9,627

Q3 2017








R&D	-	-	-	-	-734	-3,926	-4,660	-4,660
Sales & marketing	-22,586	-2,082	-	-24,669	-	-924	-924	-25,592
Other & allocations	-3,071	-4,894	-173	-8,138	-863	-2,988	-3,851	-11,989
Operating expenses	-25,658	-6,977	-173	-32,807	-1,597	-7,838	-9,435	-42,242







































(Amounts in NOK 1 000)










EBITDA	-12,465	32,793	9,719	30,047	-7,401	-30,654	-38,055	-8,008

1 Jan - 31 December 2016







R&D	-	-	-	-	-4,215	-13,437	-17,652	-17,652
Sales & marketing	-68,230	-7,541	-	-75,771	-	-3,555	-3,555	-79,326
Other & allocations	-11,037	-16,802	-632	-28,472	-3,187	-13,661	-16,848	-45,320
Operating expenses	-79,268	-24,343	-632	-104,243	-7,401	-30,654	-38,055	-142,298
EBITDA	-12,465	32,793	9,719	30,047	-7,401	-30,654	-38,055	-8,008
Note 3 – Income statement classified by nature
				2017	2016	2017	2016	2016
(Amounts in NOK 1 000)				Q3	Q3	1.1-30.09	1.1-30.09	1.1-31.12
Sales revenues				35,644	31,639	109,772	99,353	136,186
Signing fees and milestone revenues Cost of goods sold				- -3,030	3,592 -2,168	1,730 -8,607	6,193 -6,621	7,441 -9,337
Gross profit				32,614	33,063	102,895	98,925	134,291

Payroll expenses				-26,946	-20,191	-71,838	-63,044	-82,385
R&D costs excl. payroll expenses/other operating exp.				-1,889	-1,597	-9,606	-5,062	-7,542
Ordinary depreciation and amortisation				-4,285	-1,620	-8,799	-4,797	-7,853
Other operating expenses Total operating expenses				-13,407 -46,527	-12,894 -36,302	-43,713 -133,955	-38,496 -111,399	-52,373 -150,152

Note 3 – Income statement classified by nature

Note 3 – Income statement classified by nature
(Amounts in NOK 1 000)	2017	2016	2017	2016	2016
Sales revenues	Q3 35,644	Q3 31,639	1.1-30.09 109,772	1.1-30.09 99,353	1.1-31.12 136,186
Signing fees and milestone revenues	-	3,592	1,730	6,193	7,441
Cost of goods sold	-3,030	-2,168	-8,607	-6,621	-9,337
Gross profit	32,614	33,063	102,895	98,925	134,291
Payroll expenses	-26,946	-20,191	-71,838	-63,044	-82,385
R&D costs excl. payroll expenses/other operating exp.	-1,889	-1,597	-9,606	-5,062	-7,542
Ordinary depreciation and amortisation	-4,285	-1,620	-8,799	-4,797	-7,853
Other operating expenses	-13,407	-12,894	-43,713	-38,496	-52,373
Total operating expenses EBIT	-46,527 -13,913	-36,302 -3,239	-133,955 -31,060	-111,399 -12,473	-150,152 -15,861

Note 4 – Tax

		Photocure – Results for third quarter and the first nine months 2017





Note 4 – Tax


(Amounts in NOK 1 000)	30.09.2017	31.12.2016
Income tax expense
Tax payable	-	-
Changes in deferred tax	-6,712	-22,530
Total income tax expense	-6,712	-22,530

Tax base calculation

Profit before income tax	-34,780	18,685
Permanent differences	-2,630	-27,426
Temporary differences	30,722	19,044
Utilisation of tax loss carried forward	-	-10,303
Change in tax loss carried forward	6,688	-
Tax base	0	0

Temporary differences:
Total	-91,546	-122,268
Tax loss carried forward	320,813	314,019
Net temporary differences	229,267	191,751
Unrecognised deductible temporary differences
and tax losses
Deferred tax benefit	229,267	191,751
Deferred tax asset	52,731	46,020

Temporary differences are recognized for the parent company only and the note disclosure for the Group is of this reason identic to the disclosure for parent company.

The parent company has recognized a deferred tax asset regarding net temporary differences. Accumulated tax asset in the parent company at the end of September 2017 is NOK 52.7 million compared to NOK 46.0 million at end of 2016. There is no expiry on losses to be carried forward in Norway. The basis for recognition of a tax asset in Norway are the predicted future profit according to the business plan for all major markets and that temporary differences for the coming years will be reversed. The deferred tax asset is of this reason increased by NOK 6.7 million as of 30 September 2017. The basis for the recognition of the tax asset is the assessment that there is convincing evidence that the deferred tax benefit will be utilized. Market value adjustment PCI Biotech Holding ASA -490 1,439 - Currency translation -463 -112 -573 -615 -366 Total other comprehensive income -463 -602 -573 824 -366

Note 5 – Other comprehensive income

	2017	2016	2017	2016	2016
(Amounts in NOK 1 000)	Q3	Q3	1.1-30.09	1.1-30.09	1.1-31.12

Items may be subsequently reclassified to profit or loss.

Note 6 – Earnings per share

	Photocure – Results for third quarter and the first nine months 2017


Note 6 – Earnings per share
Earnings per share is calculated on the basis of the profit/loss for the year after tax but excluding other comprehensive income. The result is divided by the weighted average number of outstanding shares over the year, reduced by acquired treasury shares. The diluted earnings per share is calculated by adjusting the average number of outstanding shares with the number of employee options that can be exercised. Antidilution effects are not taken into consideration.
	2017	2016
(Figures indicate the number of shares)	1.1-30.09	1.1-31.12
Issued ordinary shares 1 January	21,557,910	21,476,295
Effect of treasury shares	-809	-809
Effect of share options exercised	-	-54,730
Effect of shares issued	-	81,615
Weighted average number of shares	21,557,101	21,502,371
Effect of outstanding share options Weighted average number of diluted shares	12,890 21,569,991	128,971 21,631,342

Earnings per share in NOK	-1.01	1.64
Earnings per share in NOK diluted	-1.01	1.64


Note 7 – Fixed Assets
	Machinery &
(Amounts in NOK 1 000)	equipment	Intangible
Net book value 31.12.16	1,660	26,390
Net investments 30.09.17 Depreciation and amortization	358 -523	16,735 -8,276

Note 7 – Fixed Assets

	Machinery &
(Amounts in NOK 1 000)	equipment	Intangible


Depreciation and amortization	-523	-8,276
Net book value 30.09.17	1,495	34,849

Photocure has from 2015 carried out a clinical study in US for the approved product Cysview in order to file a supplemental NDA. Related to this study Photocure has capitalized, net after amortization, NOK 30.8 million as of end September 2017 compared to NOK 21.1 million as of 31 December 2016. The investment is amortized on a straight-line basis in the profit and loss from the start of the project and over the remaining patent period for the approved product and indication.

The remaining intangible assets consist of capitalized software and a project for new solvent device.

Note 8 – Fair value

The table below analyses financial assets recognized in the balance sheet at fair value according to the valuation method.

The different levels have been defined as follows:

Level 1: Noted prices in active markets for corresponding assets or liabilities Level 2: Available value measurements other than the noted prices classified as Level 1, either directly observable in the form of agreed prices or indirectly as derived from the price of equivalent.

Market value hierarchy
(Amounts in NOK 1 000)	Level 1	Level 2	Level 3	Total
Financial assets available for sale:
- Money market funds	105,705	-	-	105,705
Total	105,705	-	-	105,705

Note 9 – Share capital

Level 2:	Available value measurements other than the noted prices classified as Level 1, either directly observable in the form of agreed prices or indirectly as derived from the price of equivalent.
Level 3:	Value measurements of assets or liabilities that are not based on observed market values

	Market value hierarchy
(Amounts in NOK 1 000)		Level 1	Level 2	Level 3	Total
	Financial assets available for sale:
- Money market funds		105,705		-	- 105,705
Total		105,705		-	- 105,705

	Note 9 – Share capital

	Registered share capital in Photocure ASA amounts to:
				Nominal	Share
			No. of	value per	capital in
			shares	share	NOK
	Share capital at 31 December 2016		21,557,910	NOK 0.50	10,778,955
	Share capital at 30 September 2017		21,557,910	NOK 0.50	10,778,955
Treasury shares:
	Holdings of treasury shares at 31 December 2016		809		405
	Buy-back of treasury shares		-	NOK 0.50	-
Share option exercise			-	NOK 0.50	-
	Holdings of treasury shares at 30 September 2017		809		405

	The table below indicates the status of authorizations at 30 September 2016:
			Purchase, treasury	Ordinary share issue	Employee share
	(Figures indicate the number of shares)		shares		issues
	Authorisation issued at the General Meeting on 27 April 2017		2,155,791	2,155,791	1,077,895
	Share issues after the General Meeting on 27 April 2017		-	-	-
	Purchase of treasury shares		-	-	-
	Remaining under authorisations at 30 September 2017		2,155,791	2,155,791	1,077,895

(Figures indicate the number of shares)	Purchase, treasury shares	Ordinary share issue	Employee share issues

Shares owned, directly or indirectly, by members of the board, the President and CEO and senior management and their closely related associates as of 30 September 2017:

		No. of	No. of subscription
Name	Position	shares	rights
Kjetil Hestdal	President and CEO	133,873	93,500
Ambaw Bellete	Head, US Cancer Commercial Operations	2,000	76,600
Erik Dahl	Chief Financial Officer	1,000	93,500
Inger Ferner Heglund	Vice President Research and Development	8,200	90,580
Grete Hogstad	Vice President Strategic Marketing	10,500	77,800
Espen Njåstein	Head, Nordic Cancer Commercial Operations	5,000	80,450
Gry Stensrud	Vice President Technical Development & Operations	1,845	73,850

Tom Pike Note 10 – Share options	Board member	3,400	-
	At 30 September 2017, employees in Photocure had the following share option schemes:

Year of allocation Option programme	2017 2016 2015 2015 2017 2016	2014 2014	2012 2012
Number	76,900 302,200 277,169	96,334	207,092
Exercise price (NOK)	38.06 40.15 32.78	27.39	38.50

Note 10 – Share options

Year of allocation	2017	2016	2015	2014	2012

Number	76,900	302,200	277,169	96,334	207,092

Year of allocation	2017		2016	2015	2014	2012

Number	76,900	302,200	277,169		96,334	207,092


		30.09.2017	Average		31.12.2016	Average
		No. of	exercise	No. of		exercise
		shares	price (NOK)	shares	price (NOK)
Outstanding at start of year		951,955	36.10	1,119,543		37.00
Allocated during the year		90,100	38.06	354,100		40.15
Become invalid during the year		79,693	37.16	234,987		40.75
Exercised during the year		2,667	27.39	116,282		29.22
Expired during the year		-	-	170,419		48.75
Outstanding at end of period Exercisable options at end of period		959,695 807,681	36.22 35.61	951,955 620,772		36.10 35.28

Note 11 – Shareholders

Note 11 – Shareholders



Overview of the major shareholders at 30 September 2017:

	Account		No of
Shareholder	type	Citizen	shares	%
HIGH SEAS AS		NOR	2,525,000	11.80 %
FONDSFINANS NORGE		NOR	1,305,000	6.10 %
KLP AKSJE NORGE VPF		NOR	1,202,195	5.62 %
KOMMUNAL LANDSPENSJONSKASSE		NOR	948,789	4.43 %
RADIUMHOSPITALETS FORSKNINGSSTIFTELSE		NOR	743,319	3.47 %
MP PENSJON PK		NOR	660,000	3.09 %
J.P. MORGAN CHASE BANK N.A. LONDON	NOM	GBR	643,009	3.01 %
DANSKE INVEST NORSKE INSTIT. II.		NOR	407,503	1.90 %
VERDIPAPIRFONDET EIKA NORGE		NOR	405,009	1.89 %
FONDSFINANS GLOBAL HELSE		NOR	400,000	1.87 %
VICAMA AS		NOR	329,530	1.54 %
DANSKE INVEST NORSKE AKSJER INST		NOR	324,514	1.52 %
INTERTRADE SHIPPING BERGEN KOMMUNALE PENSJONSKASSE		NOR NOR	300,000 300,000	1.40 % 1.40 %
POLAR CAPITAL GLOBAL HEATHCARE GROWTH		GBR	254,537	1.19 %
RUL AS		NOR	244,451	1.14 %
DANSKE BANK A/S	NOM	DNK	240,269	1.12 %
EGELAND HOLDING AS		NOR	230,000	1.08 %
KLP AKSJENORGE INDEKS		NOR	217,036	1.01 %
MYNA AS		NOR	205,000	0.96 %
Total 20 largest shareholders			11,885,161	55.13 %
Total other shareholders			9,672,749	44.87 %
Total number of shares
			21,557,910	100.00 %

Photocure Group – Alternative Performance Measures

EBITDA & EBIT

(Information provided based on Guidelines on Alternative Performance Measures (APMs) for listed issuers by The European Securities and Markets Authority - ESMA)
Photocure reports certain performance measures that are not defined under IFRS but which represent additional measures used by the Board and management in assessing performance as well as for reporting both internally and to shareholders. Photocure believes that the presentation of these non-IFRS performance measures provides useful information which provides readers with a more meaningful understanding of the underlying financial and operating performance of the Company when viewed in conjunction with our IFRS financial information.
Photocure uses the following alternative performance measures.
EBITDA & EBIT
We regard EBITDA as the best approximation to pre-tax operating cash flow and reflects cash generation before working capital changes. EBITDA is widely used by investors when evaluating and comparing businesses, and provides an analysis of the operating results excluding depreciation and amortisation. The non-cash elements depreciation and amortization may vary significantly between companies depending on the value and type of assets.
The definition of EBITDA is "Earnings Before Interest, Tax, Depreciation and Amortization".
The reconciliation to the IFRS accounts is as follows:
(all amounts in NOK 1 000)	2017 Q3	2016 Q3	2017 1.1-30.09	2016 1.1-30.09	2016 1.1-31.12
Gross profit Operating expenses excl amortization & depreciation	32,614 -42,242	33,063 -34,683	102,895 -125,157	98,925 -106,602	134,291 -142,298
EBITDA	-9,628	-1,620	-22,262	-7,676	-8,008
Amortization & depreciation	-4,285	-1,619	-8,798	-4,797	-7,853

EBIT	-13,913	-3,239	-31,060	-12,473	-15,861
Recurring EBITDA equals EBITDA before one-off items. One-off items are accounting items of a significant and extraordinary nature. In the first quarter Photocure identified the write off of parts and finished goods inventory for Nedax as an on-off item, in total NOK 4.0 million. Revenue growth in constant currency Photocure's business is conducted internationally and in respective local currency. Less than 90% of the revenue is conducted in Norwegian kroner, our functional currency. Fluctuations in foreign exchange rates may have a significant impact on reported revenue in Norwegian kroner. To eliminate the translational effect of foreign
exchange and to better understand the revenue development in the various regions we provide calculated revenue growth information by region and total for the Company.
The average exchange rates used to translate revenues as per the reporting dates were as follows:
	2017	2016	2017	2016	2016
	Q3	Q3	1.1-30.09	1.1-30.09	1.1-31.12
USD (NOK per 1 USD) EUR (NOK per 1 EUR)	7.96 9.35	8.32 9.29	8.31 9.23	8.41 9.38	8.40 9.29
DKK (NOK per 100 DKK)	125.69	124.82	124.16	125.93	124.81

Revenue growth in constant currency

Recurring EBITDA equals EBITDA before one-off items. One-off items are accounting items of a significant and extraordinary nature. In the first quarter Photocure identified the write off of parts and finished goods inventory for Nedax as an on-off item, in total NOK 4.0 million.


Revenue growth in constant currency Photocure's business is conducted internationally and in respective local currency. Less than 90% of the revenue is conducted in Norwegian kroner, our functional currency. Fluctuations in foreign exchange rates may have a significant impact on reported revenue in Norwegian kroner. To eliminate the translational effect of foreign exchange and to better understand the revenue development in the various regions we provide calculated revenue growth information by region and total for the Company. The average exchange rates used to translate revenues as per the reporting dates were as follows:


USD (NOK per 1 USD)	7.96	8.32	8.31	8.41	8.40
EUR (NOK per 1 EUR) DKK (NOK per 100 DKK)	9.35 125.69	9.29 124.82	9.23 124.16	9.38 125.93	9.29 124.81

Photocure Group – Other Measures

In-market sales

	Photocure – Results for third quarter and the first nine months 2017

Photocure Group – Other Measures
In-market sales
A significant share of Photocure's sales of Hexvix/Cysview, i.e. all sales classified as partner sales and all sales in the Nordic region, goes through partners and distributors. These partners and distributors carry inventory of Hexvix/Cysview. Photocure's billing and revenue therefore does not necessarily reflect the demand from end users / hospitals at a given point in time as inventory levels may vary over time. Furthermore, Photocure's revenue does not reflect the full value of the product in the market, as partners pay a royalty or a purchase price for the product below the price charged the end user.
To capture end user demand the Company's partners and distributors report their revenue to end users in terms of number of units invoiced and in terms of revenue achieved. Photocure collects this data and consolidate to get
the group total in-market sales, in units and in Norwegian kroner.
(all amounts in NOK 1 000)	2017 Q3	2016 Q3	2017 1.1-30.09	2016 1.1-30.09	2016 1.1-31.12

Photocure Group – Our Products

Hexvix/Cysview

Hexvix/Cysview (hexaminolevulinate hydrochloride) is a drug that is taken up selectively by cancer cells in the bladder making them glow bright pink during Blue Light Cystoscopy (BLC). BLC with Hexvix improves the detection of tumors and leads to more complete resection, less residual tumors and better management decisions.

Hexvix is the tradename in Europe, Australia and New Zealand, Cysview in the US and Canada. Photocure is commercializing Hexvix/Cysview directly in the US and the Nordic region, and has strategic partnerships for the commercialization of Hexvix/Cysview in Europe, Canada, Australia and New Zealand.

Bladder cancer ranks as the ninth most common cancer worldwide with 430,000 new cases and more than 165,000 deaths annually. 75% of all bladder cancer cases occur in men¹ . It has a high recurrence rate with an average of 61% in year one and 78% over five years² . Bladder cancer has the highest lifetime treatment costs per patient of all cancers³ .

Bladder cancer is a costly, potentially progressive disease for which patients have to undergo multiple cystoscopies due to the high risk of recurrence. There is an urgent need to improve both the diagnosis and the management of bladder cancer for the benefit of patients and healthcare systems alike.

Bladder cancer is classified into two types, non-muscle invasive bladder cancer (NMIBC) and muscle-invasive bladder cancer (MIBC), depending on the depth of invasion in the bladder wall⁴ . NMIBC remains in the inner layer of cells lining the bladder. These cancers are the most common (75%) of all bladder cancer cases and include the subtypes Ta, carcinoma in situ (CIS) and T1 lesions. MIBC is when the cancer has grown into deeper layers of the bladder wall. These cancers, including subtypes T2, T3 and T4, are more likely to spread and are harder to treat⁵ .

Globocan. Incidence/mortality by population. Available at: http://globocan.iarc.fr/Pages/bar_pop_sel.aspx
Babjuk M, Burger M, Zigeuner R, Shariat SF, van Rhijn BW, Compérat E, et al. EAU Guidelines on non-muscle-invasive bladder cancer (Ta,

T1 and CIS). Eur Urol. 2016 Guidelines Edition:1-40. 3. Sievert KD et al. World J Urol 2009;27:295–300

Bladder Cancer. American Cancer Society. http://www.cancer.org/acs/groups/cid/documents/webcontent/003085-pdf.pdf. Accessed April 2016.
Bladder Cancer. American Cancer Society. http://www.cancer.org/acs/groups/cid/documents/webcontent/003085-pdf.pdf. Accessed April 2016

Visonac

Visonac (methyl aminolevulinate 80mg/g) is in development for the treatment of moderate to severe acne. Acne is the single most common skin disease worldwide and affects up to 85% of all 12-24 year olds. There is a high unmet medical need for patients with moderate to severe acne, where the current mainstay of treatment is oral antibiotics and/or retinoids. By avoiding the risks of increased antibiotic resistance from long term exposure and providing a better tolerated alternative than systemic retinoids, Visonac has the potential to satisfy a high unmet medical need.

Cevira

Cevira is in development as an intravaginal drug-device combination for photodynamic therapy of cervical persistent oncogenic human papilloma virus (HPV) infections and precancerous lesions. This treatment modality is based on our highly selective technology targeting the diseased area. Cevira is a treatment modality aiming to preserve the competence of the cervix, an improvement over surgical procedures frequently used today.

For more information, please contact:

Kjetil Hestdal, President and CEO Mobile: +47 913 19 535 E-mail: [email protected]

Erik Dahl, CFO Mobile: +47 450 55 000 E-Mail: [email protected] Photocure ASA

Hoffsveien 4, NO – 0275 Oslo, Norway

Telephone: +47 22 06 22 10 Fax: +47 22 06 22 18

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Photocure ASA

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