Proposal for distribution and separate listing of BioGaia’s subsidiary Infant Bacterial Therapeutics

The board of directors of BioGaia AB (publ) (“BioGaia”) has resolved to propose
to an Extraordinary General Meeting in BioGaia on 18 March 2016 to distribute
the shares in the subsidiary Infant Bacterial Therapeutics AB (publ) (“IBT”) to
the shareholders of BioGaia. In connection with the execution of the dividend,
IBT will apply for a listing of its series B shares on Nasdaq First North. To
finance IBT’s first clinical trial, the company has, as previously communicated,
a capital need of approximately SEK 100 million, which is planned to be raised
through a rights issue with preferential rights for IBT’s shareholders during
the second quarter 2016.
It is the opinion of the board of directors of BioGaia that a separate listing
of IBT would be beneficial for BioGaia’s shareholders as it would highlight the
value of the pharmaceutical project managed by IBT and also result in a
streamlining of the respective businesses. A separate listing would also enable
BioGaia’s shareholders to invest directly in IBT. The board of directors of
BioGaia has therefore resolved to propose to an Extraordinary General Meeting in
BioGaia to distribute all shares in IBT currently held by BioGaia to its
shareholders. BioGaia’s ownership share in IBT amounts to 94.5 percent, with the
remaining shares being held by management and board members of IBT. The dividend
is intended to be made in accordance with the so called Lex Asea rules, by which
the dividend is tax free in Sweden for both BioGaia and BioGaia’s Swedish
shareholders. For more information on the board of director’s dividend proposal,
please refer to the separate notice from BioGaia to the Extraordinary General
Meeting. More detailed information regarding the dividend will also be made
available on BioGaia’s website.

BioGaia’s largest shareholder, Annwall & Rothschild Investments AB, that
controls approximately 8.6 percent of the capital and 34 percent of the votes in
BioGaia, is positive to the separate listing and dividend of IBT and also
intends to subscribe for its pro-rata share in the upcoming rights issue. In
addition, major shareholders representing 5.9 percent of the capital and 4 per
cent of the votes have stated that they are supportive of the proposal.

Important dates

  · 18 March 2016 - Extraordinary General Meeting regarding the board of
director’s proposal to distribute the shares in IBT
  · 21 March 2016 - Last day of trading in BioGaia’s shares including the right
to receive shares in IBT
  · 21 March 2016 - Publication of company description for listing on Nasdaq
First North
  · 22 March 2016 - First day of trading in BioGaia’s shares excluding the right
to receive shares in IBT
  · 23 March 2016 - Record date for right to receive shares in IBT
  · 29 March 2016 - Shares in IBT available on VP-accounts for shareholders who
are directly registered in the shareholders' register¹
  · 29 March 2016 - First day of trading in IBT’s shares on Nasdaq First North

Carnegie Investment Bank is financial advisor and Advokatfirman Vinge is legal
advisor to BioGaia and IBT.

Latest press releases from BioGaia
2016-02-12 BioGaia AB Year-end report 2015
2016-01-11 New meta-analysis confirms effectiveness of BioGaia’s probiotic for
infant colic
2016-01-08 BioGaia’s subsidiary IBT has US IND open and Swedish CTA approved for
clinical study in the USA and Sweden

BioGaia has published this information in accordance with the Swedish Securities
Market Act. The information was issued for publication on 12 February 2016, 8:00
CET.

¹ Euroclear Sweden AB will send a VP notice indicating the number of shares that
have been registered on the recepient’s VP account. Notification to shareholders
whose holdings are nominee-registered will take place in accordance with the
practice of each nominee.
For additional information please contact
Peter Rothschild, CEO, BioGaia: 46 8 555 293 00
Staffan Strömberg, CEO, IBT: 46 8 410 145 55

BioGaia is a healthcare company that develops, markets and sells probiotic
products with documented health benefits. The products are primarily based on
the lactic acid bacterium Lactobacillus reuteri, which has probiotic, health
-enhancing effects. The class B share of the Parent Company BioGaia AB is quoted
on the Mid Cap list of the NASDAQ OMX Nordic Exchange Stockholm. www.biogaia.com