Algeta includes a Corporate Governance review in its annual report and has implemented a set of ethical guidelines.

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1 Corporate governance principles and review As a Norwegian public limited liability company, Algeta is subject to the regulation of the Public Limited Liability Companies Act of 1997, as amended (the Act ). The Company complies with the Act. The Board of Algeta has resolved as a main principle to follow the recommendations of the Norwegian Corporate Governance Code to the extent not considered unreasonable due to the size or situation of Algeta. If not fully implemented, Algeta will provide explanations of non-compliance to the market. Algeta includes a Corporate Governance review in its annual report and has implemented a set of ethical guidelines. Business The Company's business objective is to develop and commercialize pharmaceuticals against cancer as stated in the Articles of Association. The Company's Corporate Strategy is described earlier in the annual report and on the website. Equity and dividends As Algeta is a development stage company, the Company is equity financed. The Company does not expect to pay any dividends in the short or medium term as outlined in Algeta's Dividend Policy. The Board has received one authorization to issue up to 1,700,000 new shares for equity financing, mergers (cfr Section 13-5 of the Public Limited Companies Act) and acquisitions. The pre-emptive rights of the existing shareholders under Section 10-4 of the Public Limited Companies Act may be set aside and the authorization shall be valid until the next General Meeting. This authorization has not been utilized, and the Board will propose to the Ordinary General Meeting 2008 to replace the authorization with a similar authorization until the following Ordinary General Meeting. The purpose of the authorization is for the Board to be able to utilize business opportunities in order to develop the company. Furthermore, in connection with Algeta's Employee Stock Option Plan ( ESOP ), the Board has been granted authorizations to issue shares, which are valid for 24 months. The Board will propose to the Ordinary General Meeting 2008 to replace the authorization with a similar authorization, also valid for 12 months, in order to secure the issuance of shares under ESOP which is valid for several years. The Board does not have an option to acquire own (Company) shares. Equal treatment of shareholders and transactions with related parties Algeta has from the time of listing only one class of shares (Ordinary Shares). All shares hold equal rights.

2 The Company does not trade in its own shares. The Company currently has not entered into significant transactions or agreements with close associates. Should such agreements be entered into, the Board will ensure that an independent third-party evaluation is obtained. The Company has guidelines requiring employees and Board members to inform the Board if they are involved in transactions with the Company. Certain related party transactions need to be resolved by the Board. The Company has resolved formal Board instructions and instructions to the CEO, which obligates them to report of such interest to the Chairman of the Board. Freely negotiable shares The shares of the company are freely negotiable and there are no restrictions in the Articles of Association. General meeting The Board ensures participation by the shareholders in the General meetings by sending notice of a General meeting to all shareholders registered in the VPS no later than three weeks prior to the meeting. The notice is accompanied by explanatory statements in respect of the suggested resolutions. To participate, a shareholder is normally requested to notify the Company one to two working days prior to the meeting. Shareholders may participate in person or through a representative. The Board is always represented in a General meeting, but due to the residency of the Board members the whole Board is normally not present. The Auditor is present when the annual accounts are resolved. The Company does not have formal routines that ensure independent chairing of the General meeting. However, the Board has on an ad hoc basis evaluated independent chairing and in the past ensured such if considered necessary. Nomination Committee Algeta has appointed a Nomination Committee as a sub-committee of the Board of Directors, comprising four members of the Board. The Board of Algeta will propose to the AGM in 2008 that a Nomination Committee be laid down in the Articles of Association, and that the rules for such committee be approved by the general Meeting of Shareholders. Board of Directors composition and independence The Board comprises eight members and one deputy board member, and the composition should ensure that the shareholders' interests are maintained, and that the Company's need for a diversified and experienced Board with sufficient capacity is complied with.

3 All Board members, except the Chairman of the Board, are fully considered unrelated to the management and main business associations of Algeta. The Chairman of the Board works part time (approximately 2 days per month) as a consultant for the Company and has been allotted stock options. All board members except Mr. Samuelsson and Mr. Lee are independent of major shareholders (i.e. shareholder holding more than 10% of the issued shares). Non of the members of management is elected members of the Board. The Board members are elected for two-year terms. The Chairman and the Deputy Chairman of the Board have been elected by the board members. The Company expresses a positive attitude toward shareholding by its directors. The work of the Board The Board is actively supervising the activities of the Company through frequent board meetings and meetings with the management. The Board has adopted an annual plan for its work. The Board has furthermore resolved board instructions and instructions for the CEO detailing the work and responsibilities of the Board and the CEO, respectively. The Board has elected a Deputy Chairman who functions as Chairman if the Chairman is unable to function in his capacity. The Board continuously evaluates the need for subcommittees. Currently the Board has established a Remuneration Committee, a Nomination Committee and an Audit Committee as sub-committees of the Board. The Board has in 2008 conducted its first annual formal self-evaluation. Risk management and internal control As a company, Algeta faces several risk factors. For more information about these, reference is made to the listing Prospectus as of March The Board ensures that the level of internal control and risk management reflects the size and the nature of the activities of the Company. Internal control and risk management is continuously evaluated and not limited to an annual review. The Company's Values and Ethical guidelines have been resolved by the Board in connection with the listing of the Company's shares on Oslo Børs. For 2008, the internal control and risk management assessment of the Board will also include the Values and Ethical Guidelines. The Board has established an Audit Committee to ensure that Algeta has sufficient internal control systems and financial risk management. Algeta uses an experienced account company in order to ensure proper quarterly and annual financial reporting. Invoice and bank account approval mandates and professional management of the Company's liquid funds are important parts of Algeta's financial risk management. Development of pharmaceutical products must comply with extensive government regulations, and Algeta has in this respect implemented a quality assurance system. The system includes among others audits of critical activities, including activities performed by suppliers of services to Algeta.

4 Directors remuneration The remuneration of the Board reflects the competence, time spent by and the responsibilities of the Board members. At the Annual General meeting in 2007 the following compensation was resolved: the Board members received NOK 100,000 per year, the Deputy Chairman received NOK 150,000, and the Chairman received NOK 200,000. Algeta has entered into a consultancy agreement with John E. Berriman owing to his experience and competence in the field of the Company's activities. The consultancy arrangement was evaluated and resolved by the Board prior to John E. Berriman being elected Chairman of the Board. The maximum yearly fee payable under the terms of the consultancy agreement is NOK 192,000. The Chairman of the Board has been allotted share options due to his active role as a consultant to the company and his experience and competence in the pharmaceutical business, see note 19 to the Consolidated Financial Statements for Management remuneration The Board resolves the remuneration of the CEO in a Board meeting and the remuneration to the CEO is communicated to the shareholders through the annual financial accounts. The Board further provides the guidelines for the remuneration of other employees through the budgets, and specifically approves the remuneration to management. The Company has implemented an Employee Stock Option Plan in which all employees participate. The ultimate limits of the plan have been resolved by the shareholders through provision of an authorization to issue shares to the recipients of share options under the plan. The shareholders did not however resolve the details of the program and distribution of the share options. The Company complies with the regulations in the Act 6-16a in providing information to the general meeting about remuneration of management, and proposing guidelines for the coming financial year. See enclosure to the Directors' report for Information and communication The Board has established guidelines for Algeta's financial reporting and other information to the financial market in its Investor Relations Policy. Algeta will provide the financial markets equally with sufficient information, enabling a fair market valuation of the share. A financial calendar is available on the Company's website. Information sent to the shareholders is simultaneously posted on the Company's website.

5 Take-overs The Board has not implemented any defence-mechanisms against take-overs. Should the Company be subjected to take-over bids the Board intends to comply with the applicable statutory regulation and the guidelines of the Corporate Governance Code with an overall objective to treat all shareholders equally and maintain the best interests of the Company. Auditor The Auditor has presented an annual plan for his work to the Audit Committee, and the Auditor participates in the Board meeting approving the annual financial accounts. The Board has implemented guidelines for the management's use of the auditor's services outside the statutory audit. The Auditor has reviewed the internal control and met with the Audit Committee and the Board. The Auditor is provided with the possibility to meet with the Audit Committee and the Board without the presence of the management. The remuneration of the Auditor is included in the annual accounts, specifying auditor services and other services.