EQS-News: PAION AG to issue approximately 4.8 million shares at EUR 1.90 per share in capital increase with subscription rights

NOT FOR DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OR ANY OTHER JURISDICTION IN WHICH THE DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL.

CORPORATE NEWS

PAION AG to issue approximately 4.8 million shares at EUR 1.90 per share in capital increase with subscription rights

Aachen, 20 October 2023 - The Management Board of the specialty pharmaceutical company PAION AG (ISIN DE000A3E5EG5; Frankfurt Stock Exchange, Prime Standard: PA8) has, following PAION AG’s announcement of 13 October 2023, resolved with the approval of the Supervisory Board, to increase the Company's registered share capital against contributions in cash by partial utilization of the authorized capital with subscription rights for existing shareholders.

For further details on the capital increase with subscription rights, please see the subscription offer provisionally planned to be published in the electronic Federal Gazette on 23 October 2023 and on the website of PAION AG (www.paion.com).

PAION will receive gross proceeds of about EUR 9 million for the capital increase with subscription rights. PAION will use the net proceeds from the capital increase for investments in its commercial infrastructure, the launch of Byfavo^® in general anesthesia in Europe, for product life cycle management and fulfillment of development obligations as well as for repayments and interest under the loan agreement with the European Investment Bank and for general corporate purposes.

The Humanwell Healthcare Group from China has committed itself in an investment agreement – subject to certain conditions – to purchase new shares not subscribed for by existing shareholders or other investors at the subscription price for a total amount of up to EUR 6 million. In addition, Nice & Green S.A., a Swiss small/midcap investor, has committed itself in a backstop agreement – subject to certain conditions – to purchase new shares not subscribed for by existing shareholders, or other investors (including Humanwell) at the subscription price for an additional total amount of up to EUR 5 million.

The commitment of Humanwell is capped at a number of new shares not exceeding a holding of 19.9% of the voting rights in the company following the settlement. Humanwell also committed itself to a potential follow-on investment in the company through a capital increase under exclusion of subscription rights in case Humanwell’s holding following the rights issue has not reached at least 9%. The company also agreed in the investment agreement to reasonably support Humanwell in assuming up to two seats in the company’s supervisory board depending on Humanwell’s participation in the company crossing certain thresholds.

An exclusive Remimazolam license agreement for the Chinese market has existed between Yichang Humanwell, a subsidiary of Humanwell, and PAION since 2012. At the beginning of 2022, a patent rights assignment agreement was concluded with Humanwell. Under the agreement, PAION had assigned all of its Chinese Remimazolam patents and sold the associated future royalties on sales in China from the license agreement with Yichang Humanwell to Humanwell. Remimazolam, which is marketed in China under the trade name Ruima^®, has seen an impressive increase in sales. The long-standing partnership has been successful for both parties so far and the current participation in the capital increase opens up new opportunities. Humanwell and PAION are currently evaluating further promising areas of cooperation.

Tilmann Bur, CEO of PAION AG, commented: "This capital increase is an important step towards achieving our growth targets. It supports our vision to provide innovative products for anesthesia and intensive care. We would like to thank our long-time shareholders for your continued commitment and confidence in our mission and products. We appreciate your continued interest in our company and look forward to having you continue to stand with us as we shape the future together. At the same time, we are pleased to have Humanwell on our side as a strategic investor and industry partner that recognized Remimazolam's potential early on and is actively working to ensure its success."

Sebastian Werner, CFO of PAION AG, added: ”This capital increase marks a first important milestone in our overarching financing strategy. In tandem with the anticipated revenue growth in the years ahead, stemming from licensing agreements and the commercialization activities within the European market and stringent cost-cutting measures, it plays a pivotal role in our journey towards profitability. Likewise, our drive for even leaner and more efficient structures remains a key concern. We have already made considerable progress in this, but want to continue to optimize costs both internally and within our network."

About Humanwell

Humanwell Healthcare (Group) Co. Ltd., is a leading Chinese publicly listed pharmaceutical company, which principally engages in the development, manufacturing and distribution of drugs in the fields of anesthetics & analgesics, men’s and women’s health, Chinese traditional medicine, CNS, and dermatology. Humanwell owns more than 400 drug products globally, with 220 drug candidates in pipeline. With annual sales exceeding USD 3.3 billion and more than 15,000 staff, Humanwell distributes its products mainly in the Chinese and U.S. markets and exports its products to more than 80 countries.

About PAION

PAION AG is a publicly listed specialty pharmaceutical company with innovative drugs to be used in hospital-based sedation, anesthesia and critical care services. PAION’s lead compound is Byfavo^® (remimazolam), an intravenous, ultra-short-acting and controllable benzodiazepine sedative/anesthetic. PAION is rolling out Byfavo^® in selected European markets. Byfavo^® is partnered in multiple territories outside of Europe. Byfavo^® is approved in the U.S., the EU/EEA/UK, China, South Korea and Taiwan for procedural sedation and in the EU/EEA/UK, Japan, the Philippines and South Korea for general anesthesia.

In addition, PAION markets two intensive care products in selected European countries: Angiotensin II (GIAPREZA^®), a vasoconstrictor indicated for the treatment of refractory hypotension in adults with septic or other distributive shock, and eravacycline (XERAVA^®), a novel fluorocycline type of antibiotic indicated for the treatment of complicated intra-abdominal infections in adults.

PAION’s mission is to be a leading specialty pharmaceutical company in the fields of anesthesia and critical care by bringing novel products to market to benefit patients, doctors and other stakeholders in healthcare.

PAION is headquartered in Aachen (Germany).

IR contact:

Ralf Penner

SVP Investor Relations & Corporate Communications

PAION AG

Heussstrasse 25

52078 Aachen – Germany

Phone +49 241 4453-152

E-mail r.penner@paion.com

www.paion.com

Important notes:

This release contains certain forward-looking statements concerning PAION AG. These reflect the best estimates and assumptions made by the management of PAION AG as of the date of this release and involve certain risks, uncertainties and other factors. If the circumstances underlying the Company's assumptions change, actual results and actions may differ materially from those implied or expressly anticipated. In light of these risks, uncertainties as well as other factors, recipients of this publication should not place undue reliance on these forward-looking statements. PAION AG does not undertake any obligation to update or revise any such forward-looking statements to reflect future events or developments.

This publication constitutes neither an offer nor a solicitation of an offer to purchase securities in the United States of America or any other country. Neither this publication nor its contents may be relied upon in connection with any offer in any jurisdiction. The securities of PAION AG may not be offered or sold in the United States absent registration or an exemption from the registration requirements of the United States Securities Act of 1933, as amended (the "Securities Act"). The securities of PAION AG have not been and will not be registered under the Securities Act.