Press Release: Santhera Announces Half-Year 2024 -2-

AGAMREE has been developed to provide an anti-inflammatory and muscle preserving treatment with a favorable safety and tolerability profile as an alternative to the current standard of care with glucocorticoids. In addition to long-term efficacy and safety data with AGAMREE, recent publications and presentations further characterized AGAMREE's differentiated profile mainly with regard to bone health.

Clinical studies with AGAMREE in Duchenne muscular dystrophy (DMD) were initiated to investigate its effects in a broader patient age group and additional clinical work was started to differentiate the safety profile over the next couple of years. The clinical development program for AGAMREE until now included patients 4 to <7 years old and, as part of the pediatric investigational plan (PIP) requested by EMA, a new Phase 2 study aims at collecting information on AGAMREE outside this age range through inclusion of patients starting at an age of 2 years and up to 18 years. In addition, a Phase 1 study in healthy volunteers aims to confirm AGAMREE's mineralocorticoid antagonistic properties, a key mechanism in current standard therapies to slow cardiomyopathy progression, further distinguishing AGAMREE as the only corticosteroid that may offer early cardioprotective benefits alongside its proven efficacy in DMD.

Separately, a Phase 2 pilot study in Becker muscular dystrophy (BMD) is evaluating the safety, tolerability and exploratory clinical efficacy on motor function outcome.

Santhera is committed to fully realizing AGAMREE's potential in the treatment of DMD by investing in its market potential and refining its clinical development priorities for potential new indications. While the Company initially planned to provide more details on the development of a second indication in Q4 this year, Catalyst Pharmaceuticals, the partner in North America, will begin further clinical exploratory and development studies in 2025 to inform the strategy for future indications thereafter.

FINANCIAL PERFORMANCE

Half-year results

-- Revenue from contracts with customers of CHF 14.1 million (H1-2023:

CHF 3.9 million)

-- Operating result of CHF -17.7 million (H1-2023: CHF -20.3 million)

-- Net result of CHF -15.3 million (H1-2023: CHF -23.3 million)

-- Cash flow from operating activities of CHF-15.3 million (H1-2023:

CHF -15.4 million)

-- Cash and cash equivalents of CHF 16.5 million (Dec 31, 2023: CHF 30.4

million)

Subsequent events and financing outlook

-- Close of financings with Highbridge and R-Bridge (August 12, 2024)

provided initial receipt of CHF 58 million net of transaction costs with

future sales milestones of up to USD 8 million

-- Repayment of maturing listed convertible bonds (CHF 14 million including

interest)

-- Extension of CHF 7 million private convertible bond until August 2025

-- Cash reach into 2026 when cash flow break-even is expected

Net Revenue

In the first half-year 2024, Santhera reported revenue from contracts with customers of CHF 14.1 million (H1-2023: CHF 3.9 million). Net sales amounted to CHF 6.5 million following the launch of AGAMREE in Germany and Austria (H1-2023: CHF 1.0 million arising from RAXONE which ceased following the disposal during H2-2023). Additionally, Santhera recognized CHF 7.7 million (H1-2023: CHF 3.0 million) from partners in China and North America reflecting milestones and product supply.

Cost of goods sold

Cost of goods sold amounted to CHF 5.2 million and increased on the prior year level (H1-2023: CHF 1.9 million), reflecting initiation of commercial supply and the amortization of intangible assets. Cost of goods for the six months includes non-cash intangible amortization of CHF 2.5 million (H1-2023: CHF 1.5 million), royalties payable of CHF 1.0 million (H1-2023: nil) as well as early-stage logistics and CMC set up expenses.

Operating expenses and result

Operating expenses of CHF 26.7 million (H1-2023: CHF 22.5 million) were 20% higher year-on-year, primarily due to an increase in activities to support the commercialization of AGAMREE.

Development expenses amounted to CHF 13.8 million (H1-2023: CHF 9.7 million). The increase of 40% arises from additional longer-term studies and CMC (chemistry, manufacturing, and controls) development activities to further enhance the commercial success of AGAMREE.

Marketing and sales expenses were CHF 4.7 million (H1-2023: CHF 4.3 million). This represents a slight increase due to higher activities for AGAMREE in Europe to support launches offset by reduction in expenses incurred in H1-2023 to support pre partnering US activities.

General and administrative expenses amounted to CHF 8.3 million (H1-2023: CHF 8.4 million), with activities focused in 2024 on supporting commercial growth.

The operating result amounted to a loss of CHF 17.7 million (H1-2023: loss of CHF 20.3 million).

Financial income and expenses

The financial income amounted to CHF 8.6 million (H1-2023: CHF 5.7 million). The increase was predominantly related to net positive changes in fair value of financial instruments, interest receivable and in (un)realized foreign exchange gains.

Financial expenses were CHF 6.0 million (H1-2023: CHF 8.8 million), primarily driven by interest payable and in (un)realized foreign exchange losses.

In summary, this resulted in a net financial income of CHF 2.7 million, compared with a net expense of CHF 3.1 million for H1-2023.

Net result

The net result in 2024 was a loss of CHF 15.3 million, compared to a net loss of CHF 23.3 million for H1-2023.

Cash balance and cash flows

As of June 30, 2024, the Company had cash and cash equivalents of CHF 16.5 million compared to CHF 30.4 million as of December 31, 2023, a decrease of CHF 13.9 million (H1-2023 an increase of CHF 0.3 million)

Net cash flow used in operating activities amounted to CHF 15.3 million (H1-2023: net cash outflow of CHF 15.4 million).

There was negligible cash flow from investing activities (H1-2023 income of CHF 5.7 million from proceeds of sale of shares).

Net cash flow used in/from financing activities was CHF -0.4 million (H1-2023: CHF 10.0 million). There were no financing inflows during the period due to the available cash balances, while additional finance was raised following the period end.

Assets and liabilities

Intangible assets decreased by CHF 2.5 million to CHF 71.5 million reflecting amortization in the period.

Total assets decreased by CHF 1.4 million to CHF 108.2 million as a result of a reduction in cash of CHF 13.9 million, offset by an increase in inventory and trade receivables following initial commercialization and milestones receivable.

Total liabilities increased by CHF 10.5 million to CHF 60.2 million mainly due to increase in trade payables relating to inventory purchases.

Shareholders' equity

Total consolidated equity as of June 30, 2024, amounted to CHF 48.1 million compared to CHF 59.9 million as of December 31, 2023.

Financing activities

As previously announced, additional funding was required to support ongoing activities and service debt obligations. In August, Santhera closed two financing agreements that provided the Company with gross funding totaling approximately CHF 69 million.

CHF 35 million received from Highbridge under a new term loan agreement

Santhera received CHF 35 million from a term loan financing from certain funds managed by Highbridge Capital Management, LLC (Highbridge). The loan has a four-year maturity with amortization in the amount of 15% per year, commencing after 24 months, and will pay a cash interest of 3-month SARON (floor of 2%) plus 9.75% per year. The transaction includes changes to the existing Highbridge private convertible bonds, extending CHF 7 million with a strike price of CHF 10 by 12 months to August 2025, and converting CHF 4 million, with a strike price of CHF 5 as well as issuing the new warrants to Highbridge.

USD 30 million received from R-Bridge for partial and capped royalty monetization

Upon closing of the royalty monetization financing agreement, R-Bridge paid an upfront of USD 30 million to Santhera and will make staged sales-related milestone payments that, if achieved, would result in total payments to Santhera of a further USD 8 million.

The royalty agreement with R-Bridge is partial and capped. Santhera is monetizing 75% of the future royalty income streams (net of any agreed payment obligations of Santhera to ReveraGen and Idorsia) from its licensing agreements for AGAMREE with Catalyst Pharmaceuticals, Inc. and with Sperogenix Therapeutics Ltd., in respect of net product sales occurring from July 1, 2024. Once the agreed threshold or duration of royalty payments is met, the North America and China royalty payments will revert back to Santhera. In addition, Santhera retained certain rights to buy back the royalty income stream.

Following closing of the financings, the proforma cash balance was CHF 72 million (August 13, 2024) after receipt of CHF 58 million net of transaction fees. After repayment of the maturing listed convertible bonds and interest in the amount of CHF 14 million, the remaining cash balance is expected to provide for a cash runway into 2026 and to expected cash flow break-even.

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