Section 161 (I) (1) of the German Stock Corporation Act (AktG) requires the Executive and the Supervisory Boards of a listed stock corporation to declare annually that the recommendations of the "Government Commission on the German Corporate Governance Code" published by the Federal Ministry of Justice in the official section of the electronic Federal Gazette have been and are complied with, and which recommendations have not been or are not being applied, and for what reason. The public has to be given permanent access to this declaration on the company's website, pursuant to section 161 (II) of the German Stock Corporation Act.

In addition to the presentation of the applicable German Stock Corporation Act, the German Corporate Governance Code (”Code”) also includes recommendations from which a company may deviate. However, any deviation has to be disclosed and accounted for annually.

For the period starting December 11, 2010, the declaration on hand refers to the Code as amended on May 26, 2010 and published in the electronic Federal Gazette on July 2, 2010.
    
The Executive and Supervisory Boards declare compliance with the Code since the issue of the preceding declaration of compliance on December 10, 2010, with the following exceptions, and declare their intention to comply in the future as follows:

1. Absentee voting

In its next Annual General Meeting, the company will refrain from making use of the alternative of absentee voting granted by the Articles of Incorporation (point 2.3.3 (II) of the Code).

Both the Executive and Supervisory Boards of Medigene AG believe that the existing voting methods are adequate and provide sufficient options for the shareholders to vote on the respective items of the agenda.

2. Deductible in the case of D&O insurances

The D&O insurance (so-called directors’ and officers’ liability insurance) taken out by Medigene AG for its Supervisory Board members does not provide for any deductible (compare point 3.8 (III) of the Code).

Medigene AG does not intend to agree a general deductible for its Supervisory Board members with its D&O insurance carrier. Since July 1, 2010, the legal obligation to adapt D&O insurance contracts pursuant to section 93 (II) (3) of the German Stock Corporation Act (AktG) in conjunction with section 23 (I) (1) of the Introductory Act to the German Stock Corporation Act (EGAktG) is applicable only to Executive Board members. In section 116 (I) of the German Stock Corporation Act, the legislator did not require any deductible for Supervisory Board members, but expressly excluded the Supervisory Board instead. The Executive and Supervisory Board of Medigene AG believe that the nature of the position as a Supervisory Board member, which is also emphasized by the different remuneration, calls for a distinction between D&O insurances for Executive and Supervisory Board members. Both the Executive and Supervisory Boards also believe that the motivation and sense of responsibility applied by the members of the Supervisory Board of Medigene AG in the fulfillment of their duties are fully guaranteed without any general deductible as recommended under the Code.

3. Age limits for Executive and Supervisory Board members

The German Corporate Governance Code recommends in points 5.1.2 (II) and 5.4.1 that age limits be set for Executive Board and Supervisory Board members. There is no age limit for the Executive and Supervisory Board members of Medigene AG, and there is no intention to introduce such age limits in the future.

Both the Executive and Supervisory Boards consider such age limits to be an inappropriate restriction not only on the shareholders’ right to elect the Supervisory Board members, but also on the Supervisory Board’ selection of qualified Executive Board members. The Supervisory and Executive Boards are well-balanced in their age structures, even without a mandatory age limit.

4. Constitution of a nomination committee

The German Corporate Governance Code recommends in point 5.3.3 that the Supervisory Board constitute a nomination committee made up exclusively of shareholder representatives. Such a nomination committee has not hitherto been constituted by Medigene AG's Supervisory Board and is not under consideration for the future.

The members of the Executive and Supervisory Boards believe that in view of the overall size of the Supervisory Board, it is neither necessary nor advisable to constitute such a committee, and that the Supervisory Board is able to perform this task on its own without sacrificing its efficiency.

5. Consideration of committee work in the compensation of Supervisory Board members

The German Corporate Governance Code recommends in point 5.4.6 (I) that membership in Supervisory Board committees be taken into consideration in the remuneration of Supervisory Board members. Any membership in committees of the Supervisory Board is not taken into account when fixing the remuneration of Medigene’s Supervisory Board members, nor is this planned for the future.

Both the Executive and Supervisory Boards believe that the Supervisory Board members show a high degree of commitment in their committee work without any such arrangement.

6. Performance-based compensation of the Supervisory Board members

The German Corporate Governance Code recommends in point 5.4.6 (II) that the members of the Supervisory Board receive performance-based remuneration in addition to their fixed remuneration. Medigene AG's Supervisory Board members have up to now received no performance-based remuneration, and this is also not planned for the future.

The Executive and Supervisory Boards believe that the Supervisory Board's activities are efficient and geared toward maximum corporate success at all times, regardless of whether or not remuneration is performance-related.

Martinsried, December 9, 2011

For the Executive Board                    For the Supervisory Board

Dr. Frank Mathias                        Prof. Dr. Ernst-Ludwig Winnacker