Press Release: Santhera Exercises Option to Obtain Worldwide Rights to Vamorolone in Duchenne Muscular Dystrophy and All Other Indications

-- License gives Santhera worldwide rights to vamorolone, now also including

the major markets Japan and South Korea, and paves the way for partnering

in additional indications

-- Agreements with Idorsia and ReveraGen give Santhera immediate control

over vamorolone and defer milestone-related payments

-- Transaction establishes Santhera as a leading company in rare

neuromuscular diseases with two late-stage assets addressing the medical

need of DMD patients from early to late disease stages

Pratteln, Switzerland, and Rockville, MD, USA, September 2, 2020 --

Santhera Pharmaceuticals (SIX: SANN) announces that it has signed

agreements with Idorsia (SIX: IDIA) and ReveraGen BioPharma Inc., making

Santhera a direct license holder of vamorolone. Under the agreements,

Santhera has obtained an exclusive license from ReveraGen, the

originator of vamorolone, for all indications worldwide. The agreements

create further value for Santhera through the transfer of rights for the

previously excluded markets Japan and South Korea, the right to grant

sublicenses and a share in the expected Priority Review Voucher.

Vamorolone, a first-in-class anti-inflammatory drug candidate with a

novel mode of action, is currently being investigated in the pivotal

Phase 2b VISION-DMD study in patients with Duchenne muscular dystrophy

(DMD) by originator ReveraGen and completion of study enrollment is

expected shortly.

Under the amended terms, Santhera expects a reduction in cash outflow in

the range of USD 18-24 million in the next 12-18 months. In exchange for

the revised license rights, Idorsia will receive 366,667 Santhera shares

and an exchangeable note in the amount of CHF 10 million and ReveraGen

will receive USD 7 million, in monthly instalments of up to USD 500,000,

to fund the ongoing clinical development of vamorolone.

Dario Eklund, Chief Executive Officer of Santhera, said: "We are excited

about the license transfer of vamorolone to Santhera. Our decision to

exercise the option now has been driven by a combination of factors

including the availability of encouraging clinical efficacy and safety

data with vamorolone, enhanced deal terms and the ability to gain full

control over the asset. We look forward to contributing our significant

expertise to advancing vamorolone in DMD and exploring additional

business development opportunities. We believe that having two promising,

complementary, late stage assets for DMD in our pipeline will enable

increased access to potentially transformative treatments for a wider

patient population. We are grateful to Idorsia, our anchor shareholder,

for enabling early access to the license, highlighting its confidence in

Santhera as the best suited company to bring vamorolone to patients."

Eric Hoffman, PhD, Vice President of Research of ReveraGen BioPharma,

said: "We are delighted about the revised contractual arrangement and

being able to work directly with Santhera as the licensee for

vamorolone. Santhera's experience in both development of DMD drug

candidates and the commercialization of a rare disease product positions

it well to bring vamorolone to patients. Our work to date clearly shows

that vamorolone not only holds the potential to become a new standard of

care for patients with DMD but also could benefit patients in a number

of other inflammatory diseases."

The agreements now signed with ReveraGen and Idorsia

Idorsia has assigned its original agreement with ReveraGen to Santhera.

Santhera has thus become a direct contracting party with ReveraGen and

with a signed early option exercise this allows Santhera to gain

exclusive and immediate access to vamorolone and defers some early

milestone-related payments until after study readout. Under the terms of

the agreements now signed with ReveraGen and Idorsia, Santhera has

obtained an exclusive license, including sublicensing rights, for

vamorolone in all indications and all territories worldwide, now also

including Japan and South Korea. Additionally, ReveraGen is the holder

of a Rare Pediatric Disease designation, which may result in receipt of

a Priority Review Voucher upon approval of vamorolone for DMD. Santhera

will have a share in any revenues of a potential sale of such a voucher.

The license agreements [1] were revised and include the following term

amendments:

As consideration for the assignment of its licensing option for

vamorolone to Santhera, Idorsia will receive 366,667 Santhera shares,

increasing Idorsia's equity position in Santhera to close to 12%.

Milestone payments by Santhera up to and including potential FDA

approval will be reduced by USD 18 million to USD 72 million (previously

USD 90 million). Santhera's obligations are a payment of up to USD 7

million, payable in monthly instalments of up to USD 500,000 to

ReveraGen, to fund development including the Phase 2b VISION-DMD study;

USD 5 million to ReveraGen at the time when FDA supports an NDA filing

with Phase 2b 6-month data; a non-interest bearing exchangeable note to

Idorsia in the amount of CHF 10 million; and USD 50 million (previously

USD 60 million) in total for FDA approval. Since the exchangeable note

is payable up to 65% in Santhera shares, at Santhera's discretion, this

could potentially reduce cash outlay by an additional USD 6.5 million.

Furthermore, Santhera will receive 10% of any potential proceeds that

could arise from the monetization of the expected Priority Review

Voucher. Upon achievement of the first USD 100 million revenue, an

additional USD 5 million milestone payment is due to Idorsia.

Santhera estimates the peak sales potential for vamorolone for the DMD

indication alone to be in excess of USD 500 million in the US and the

largest five EU countries.

With Puldysa(R) and vamorolone, Santhera is building a complementary DMD

product portfolio

Vamorolone is in development for young DMD patients requiring an

anti-inflammatory, muscle strengthening treatment before onset of

respiratory function decline. Based on the cumulative knowledge obtained

from extensive non-clinical studies and Phase 1 and Phase 2a clinical

studies with vamorolone, ReveraGen is currently conducting the pivotal

Phase 2b VISION-DMD trial and anticipates full study enrollment shortly.

Subject to positive results of the first 6-month treatment period, now

expected in the second quarter of 2021 due to delays caused by the

Covid-19 pandemic, this would pave the way for a regulatory submission

to the US FDA in the fourth quarter of 2021.

Puldysa (idebenone) for patients with DMD in respiratory function

decline who are not taking glucocorticoids is currently under regulatory

review in Europe for which Santhera anticipates a CHMP opinion in the

fourth quarter of 2020. The Company expects the combination of

vamorolone and Puldysa to address the medical needs of DMD patients,

from early to late disease stages, irrespective of age, underlying

dystrophin mutation or ambulatory status.

Vamorolone and Puldysa have been granted Orphan Drug status in the US

and in Europe, Fast Track and Rare Pediatric Disease designations by the

US FDA and Promising Innovative Medicine (PIM) status by the UK MHRA. In

the UK, Puldysa is available to patients through the Early Access to

Medicines Scheme (EAMS).

Santhera will further discuss the option exercise in the conference call

on the occasion of the publication of the First Half-year Results on

September 8, 2020.

Reference:

[1] Press release "Santhera Enters into Agreement to Acquire Option from

Idorsia for Exclusive Sub-License of First-in-class Dissociative Steroid

Vamorolone", November 20, 2018, accessible

https://www.globenewswire.com/Tracker?data=158a6dkVFzx5yghLvnI2gxuOmAyS8WD9_coMMZvcidfBY1BfOchVNL0F2ienPUjlu8-H6vxRz-BHKsNUSaM3W1uoeHcpHQLjB-P9CsvFDk9jnsEnCneXgcRFnHMai1gZNOPItcj8-G9F8x9ptSvDeGIXQZPPf1c0CllDRQElwH-6wKVmEP0RkfwqO5VZLC_9

here.

About Vamorolone -- a first-in-class anti-inflammatory drug candidate

with a novel mode of action

Vamorolone is a first-in-class drug candidate that binds to the same

receptors as corticosteroids but modifies the downstream activity of the

receptors. This has the potential to 'dissociate' efficacy from typical

steroid safety concerns and therefore could emerge as a valuable

alternative to corticosteroids, the current standard of care in children

and adolescent patients with DMD. There is a clear unmet medical need in

this patient group as high dose corticosteroids have significant

systemic side effects that detract from patient quality of life.

Vamorolone is being developed by US-based ReveraGen BioPharma Inc. with

participation in funding and design of studies by several international

non-profit foundations, the US National Institutes of Health, the US

Department of Defense and the European Commission's Horizon 2020

program.

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 is building a Duchenne muscular dystrophy (DMD)

product portfolio to treat patients from early to late disease stages,

irrespective of causative mutations, ambulatory status or age. A

marketing authorization application for Puldysa(R) (idebenone) is

currently under review by the European Medicines Agency. Santhera has an

exclusive license for all indications worldwide to vamorolone, a

first-in-class anti-inflammatory drug candidate 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 fibrosis

(CF) and other neutrophilic pulmonary diseases, as well as omigapil and

an exploratory gene therapy approach targeting congenital muscular

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September 02, 2020 01:00 ET (05:00 GMT)