Press Release: Santhera Calls Extraordinary General Meeting to Seek Approval for Proposed Strengthening of Capital Structure

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN THE UNITED STATES OR ANY

OTHER JURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO DO SO.

Pratteln, Switzerland, February 24, 2021 -- Santhera Pharmaceuticals

(SIX: SANN) announces that it is convening an Extraordinary General

Meeting (EGM) where the Board will propose to shareholders the

authorization and issuance of the shares required to implement the

upsized financing from a fund managed by Highbridge Capital Management,

LLC, and the intended restructuring of its CHF 60 million Senior

Unsecured Convertible Bonds.

This press release complements the earlier announcement "Santhera

Announces Corporate Update and Proposal to Strengthen Capital Structure",

which can be viewed

https://www.globenewswire.com/Tracker?data=POw-G1Cwje4KeCNmwWUJ-nzJuj1tF8Vl7rDgcn9fwCkmUOlDRaySPXcmAktzjFywBKrQt-A1dQIElLx5lMVXlVwYCBC917QvduBk1jziJuVkQ_Gwov1d2uMOWZFE1e3MuEOcSWPlk6mjtCDslNmnoowycgWRMP54zWLycAgGkKc=

here.

As announced in the recent corporate update, Santhera's Board of

Directors is calling an Extraordinary General Meeting (EGM), to be held

on March 18, 2021, mainly to propose to the shareholders the

authorization and issuance of the shares required to implement the below

transactions:

Financing arrangement with Highbridge

Santhera's existing investor Highbridge Tactical Credit Master Fund,

L.P. (a fund managed by Highbridge Capital Management, LLC,

"Highbridge") has committed to increasing its existing financing

arrangement with Santhera to provide up to CHF 18 million in senior

secured notes exchangeable by Highbridge (CHF 6 million of which was

previously committed), which will be available in tranches and subject

to certain drawdown conditions. The maturity of such exchangeable notes

has been extended to July 2022 and in consideration for this commitment

and amendment, Highbridge will receive a fee in the form of five-year

warrants (options) for Santhera shares priced at a small premium to a

reference share price determined ahead of the closing of the bond

restructuring.

Bond restructuring

As part of its restructuring activities, Santhera has called a

bondholders' meeting (to be held on March 8, 2021) and proposes to the

holders of the Bonds to (i) convert 32.5% of the principal amount of

each Bond (CHF 19.5 million in aggregate) into shares of Santhera at the

current conversion price of CHF 64.80 per Share and (ii) modify the

terms of the remaining 67.5% of the principal amount of each Bond (CHF

40.5 million in aggregate). The terms of the amendments are set out in

the invitation to the bondholders' meeting. The proposed bondholder

resolution requires a majority of two-thirds of all Bonds outstanding

and Highbridge as the largest bond investor with approx. 32% of the

outstanding principal amount has already agreed to support the

resolution.

The intended strengthening of Santhera's capital structure is dependent,

among others, on the approval of both its bondholders (March 8, 2021)

and shareholders (March 18, 2021). If the EGM does not approve the

required capital increases, the restructuring of the bonds couldn't be

completed and the Company would have insufficient available capital to

fully utilize the recently agreed additional Highbridge finance

facility. As a result, the Company would be significantly limited in its

ability to raise sufficient funding in the short term to continue

operations.

The Board proposes to increase the ordinary share capital by CHF 312,000

for the delivery of shares for the restructuring of part of the

convertible bond, to increase the authorized capital to the statutory

limit of 50% of the issued share capital and to also increase the total

of the two conditional capitals to the same 50% limit (the proposed

increase of the conditional capital for employee participations amounts

to CHF 1,850,000).

The Board of Directors is also requesting shareholder support for a

motion related to a both time and performance based equity instrument

for Executive Management in the form of performance share units (PSU).

The agenda for the EGM, with details on each of the proposed agenda

items and further information, can be viewed

https://www.globenewswire.com/Tracker?data=POw-G1Cwje4KeCNmwWUJ-sr-b572-P_0NA5Yk1CQ2khN0OaJfzhWslYiYqc712_eNCHg7NW4xNOLPi7HTvoml4RmosjQ6UYOunNN3ldjS_kmZ-c7vuz0t17Arn5i2bsL6Ca53ooNt__st9zkM2Rsw8vifpE4MojUZeunWz28UHU=

here. Due to COVID-19 restrictions, shareholders will be able to

exercise their rights at the EGM solely via the independent proxy. All

proposed capital increases require the approval by two thirds of the

votes represented at the EGM.

Related Documents

Invitation to the Extraordinary General Meeting (March 18, 2021),

https://www.globenewswire.com/Tracker?data=CAHLD332zQgKTlJvbxIQaU3Dn5CgScgej5WzjKsyqfNFcBNBykNyMxI1eKIv25FTDXRnweQn8vJsJhQ-RXOVrLBHhw4NyYTDza5yd6NBWKHV3IEObNoRze1qJUVceMDR0g-HRvfEU_adSds_7XjidGzGpw_zrEW5szJa0INcOGc=

Link.

Press release "Santhera Announces Corporate Update and Proposal to

Strengthen Capital Structure":

https://www.globenewswire.com/Tracker?data=CAHLD332zQgKTlJvbxIQaSd9tQIty1LonxeS9uhqQ2UhHhuTtb8jVAHCFrdv7-fyQRFBXk1CC91IonMOkmp15b1gwabs2htRR5g6yURtgkDgNVh0quxgKwe0UTdEGrqFV0ehAOx1rmwlpDd0e3yYFDmi6zrJi4K1eTKwBWwarFE=

Link.

Invitation to the Bondholders' Meeting (March 8, 2021), the EGM (March

18, 2021) and accompanying documents:

https://www.globenewswire.com/Tracker?data=c0Ta4bB58ke3wvo3e74iNoO_zDYKfWKEVCXKynp4oVxSXOhEjzASK5BSofUiZt7EP7Gf2zs4twWZ7IAhYfi7c8bs1AsiZN0jR2Yhhm9nV886h8YdZ0_45V9Zh3SCTzjkWy_4vj8WsF_4dTj23CN4e4D9xhH8tlvIi9HSerG8_SdBXpJPCH4i5ozKzG8YhlWD-trsXSJnjQe9eybZH-hBu2UneOULIyHHCl3Eecjt8hAGp6FRYplLPPXIJqEMMOhfVzuKqxYfjM-U7aF4w9hURg==

http://www.santhera.com/investors-and-media/investor-toolbox/share-bondholder-meetings

Corporate calendar

March 8, 2021 Bondholder Meeting

March 18, 2021 Extraordinary General Meeting

April 27, 2021 Publication of annual

results and Annual Report 2020

June 22, 2021 Annual General Meeting

About Santhera

Santhera Pharmaceuticals (SIX: SANN) is a Swiss specialty pharmaceutical

company focused on the development and commercialization of innovative

medicines for rare neuromuscular and pulmonary diseases with high unmet

medical need. Santhera has an exclusive license for all indications

worldwide to vamorolone, a first-in-class dissociative steroid with

novel mode of action, currently investigated in a pivotal study in

patients with DMD as an alternative to standard corticosteroids. The

clinical stage pipeline also includes lonodelestat (POL6014) to treat

cystic fibros.is (CF) and other neutrophilic pulmonary diseases as well

as an exploratory gene therapy approach targeting congenital muscular

dystrophies. Santhera out-licensed ex-North American rights to its first

approved product, Raxone(R) (idebenone), for the treatment of Leber's

hereditary optic neuropathy (LHON) to Chiesi Group. For further

information, please visit

https://www.globenewswire.com/Tracker?data=9WlCock9CcSY8edtyYIKHmIu7xgvuvM33FMDr6gqMkc5CEN24zOdk4ERWNBj2MSOqiT-iNAgY4mSFydoU_qvjw==

www.santhera.com.

Raxone(R) is a trademark of Santhera Pharmaceuticals.

For further information please contact:

https://www.globenewswire.com/Tracker?data=gLHjOIlMIWDFSpGa_PI824_HsxmVOhJXsMdnOo_bkdU7mLk8IgUrcZ25kVlHy3yYJ53O_s4dxiRWcn_t_Hp5Pw19N6Gr3zyBBrocOsGRCTw4kuD1GJuscfuiiAlk9EZe

public-relations@santhera.com or

Eva Kalias, Head External Communications

Phone: +41 79 875 27 80

eva.kalias@santhera.com

Disclaimer / Forward-looking statements

This publication is not intended to constitute an offer or solicitation

to purchase or invest in securities of Santhera Pharmaceuticals Holding

AG in any jurisdiction.

The securities referred to in this publication, including in connection

with the contemplated transaction described in this publication, may not

be publicly offered, directly or indirectly, in Switzerland within the

meaning of the Swiss Financial Services Act ("FinSA"). Neither this

communication nor any other information material relating to the

securities referred to in this publication constitutes advertisement

within the meaning of the FinSA or a prospectus pursuant to the FinSA,

and no such prospectus has been or will be prepared for or in connection

with the transaction described in this publication.

This publication does not constitute an offer to sell, or a solicitation

of an offer to purchase, any securities in the United States. The

securities of Santhera Pharmaceuticals Holding AG to which these

materials relate have not been and will not be registered under the

United States Securities Act of 1933, as amended (the "Securities Act"),

and may not be offered or sold in the United States absent registration

or an applicable exemption from, or in a transaction not subject to, the

registration requirements of the Securities Act. There will not be a

public offering of securities in the United States.

This publication may contain certain forward-looking statements

concerning Santhera Pharmaceuticals Holding AG and its business. Such

statements involve certain risks, uncertainties and other factors which

could cause the actual results, financial condition, performance or

achievements of Santhera Pharmaceuticals Holding AG to be materially

different from those expressed or implied by such statements. Readers

should therefore not place undue reliance on these statements,

particularly not in connection with any contract or investment decision.

Santhera Pharmaceuticals Holding AG disclaims any obligation to update

these forward-looking statements.

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Attachment

-- 2021 02 24_SantheraEGM_e_final

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February 24, 2021 01:00 ET (06:00 GMT)