Press Release: Santhera Announces Half-Year 2022 -3-

In February 2022, Santhera fully repaid its senior unsecured convertible bonds (2017/22 Bonds) with a remainder amount of CHF 13.9 million. Of the senior unsecured convertible bonds (2021/24 Bonds) maturing in August 2024, an aggregate amount of CHF 19.6 million was still outstanding on June 30, 2022, unchanged from December 31, 2021 as no repayment or conversion into shares took place during the period. Of the private convertible bonds (2021/24 Private Bonds) in the amount of CHF 15 million issued to Highbridge, CHF 3 million were converted into shares during the period, leaving a remainder of CHF 12 million at June 30, 2022. In summary, this significantly reduced total and short-term convertible debt from an original amount of CHF 60 million maturing in February 2022 to approximately CHF 31.5 million maturing in August 2024.

During the six months ending June 30, 2022, in order to provide additional fundraising flexibility, Santhera issued new shares to be held as treasury shares totaling 19,107,892 with a nominal value of CHF 1 each. As a result, Santhera's issued share capital amounts to CHF 73,725,702 as of June 30, 2022. Santhera expects to hold its treasury shares until market conditions allow for a favorable financing transaction.

Concurrently with the ordinary capital increase, and as approved by the Extraordinary General Meeting (EGM) on December 15, 2021 and the Annual General Meeting (AGM) on June 30, 2022, Santhera's authorized capital has increased during the six months ending June 30, 2022, from CHF 27,303,905 to CHF 36,860,687 and its conditional capital for financing has increased from CHF 21,878,228 to CHF 31,370,336. Together with the 19,485,946 treasury shares held as of June 30, 2022, the Company plans to use these shares for financing activities if required.

With the shareholders' approval at the AGM held on June 30, 2022, Santhera reduced the nominal value of the shares from CHF 1.00 to CHF 0.01 per share with effective date September 6, 2022.

On June 2, 2022, the Company entered into an amendment to the timing of an upcoming milestone payment to partner ReveraGen, resulting in a reduction of the milestone payment (expected in the second half of 2023) due upon FDA approval in exchange for an increase of the sales milestone in the same amount. Thereby near-term financial obligations of the Company were reduced by CHF 20 million.

In addition, on June 2, 2022, the Company upsized its existing financing arrangement with certain funds managed by Highbridge Capital Management, LLC (Highbridge) by up to an additional CHF 40 million. An initial unconditional drawdown of CHF 20 million was received on June 3, 2022. The remaining balance of CHF 20 million is divided into two tranches of CHF 10 million each, available for drawdown subject to Highbridge Capital Management's consent.

Amendment of Highbridge facility to satisfy immediate cash requirements

On September 28, 2022, Santhera and Highbridge agreed to amend the existing financing arrangement that has been announced on June 2, 2022, and again mentioned above, to provide for the immediate drawdown of a CHF 10 million tranche in senior secured Exchangeable Notes and amend certain provisions. Of this amount, approximately CHF 5 million was used to repurchase part of the outstanding convertible bonds issued to Highbridge in 2021 and due in 2024 at a 25 percent discount to its nominal value plus interest. The Exchangeable Notes can be exchanged by Highbridge for shares at a discount to VWAP, subject to a reduced floor price. As part of this new money financing and further commitments, Santhera has agreed on a new conversion price of CHF 1.20 for the remaining outstanding private convertible bond and a new exercise price of CHF 0.80 per share for the existing warrants held by Highbridge. A further tranche of CHF 10 million available for drawdown is conditional on management achieving certain milestones and other conditions.

Funding outlook

Santhera still has treasury shares, conditional and authorized capital from past EGM and AGM authorizations which are available for future placement, subject to market conditions. This, in combination with cash balances of CHF 12.7 million (at June 30, 2022), the recent drawdown from the Highbridge facility and remaining facilities, is expected to provide a liquidity runway into Q1-2023.

In order to ensure the execution of the Company's operating plans to mid-2023, when approval of vamorolone for DMD in the U.S. is expected at the earliest, Santhera will need to secure additional funds. Santhera is pursuing strategic options including but not limited to non-dilutive funding in the form of out-licensing agreements and/or the monetization of assets and, in parallel, is also evaluating debt financing, royalty financing, standby equity distribution agreement or, depending on market conditions, equity-based funding.

References:

[1] Guglieri M et al (2022). JAMA Neurol. Published online August 29, 2022. doi:10.1001/jamaneurol.2022.2480. Link https://www.globenewswire.com/Tracker?data=Y75QPe4jQMlMsfFQLLGMYlrwjmB8UsoBHQrbOdqTvjdUH7umlzK540otoX4bDZZ9NwQN4URXw4Xj0pSWBlpNGdxAAhhcrf4l4vSSf0CK2jPjcUKlQlaEKN7QfThswMvEt1hJ79w_PmQpHgI4d9foaagIDcSmCZ4meEnq3H3HwmP36-SaGZBIng9ZA2XyIXXSv5FPRt2jQg6aU5N4J-QADjaUOJuawKe3fBFvEr-jKEP2KypsBcZJYPJtmm0vnEkXFMuZNOGrqZ1xhZdzac3ByA==.

[2] Mah JK et al (2022). JAMA Netw Open. 2022;5(1):e2144178. doi:10.1001/jamanetworkopen.2021.44178. Link https://www.globenewswire.com/Tracker?data=Y75QPe4jQMlMsfFQLLGMYp7N8Pwh9YLAHqsnsqgKBA_sm96nVC3W9rMu85Q72gbN8s8NLTs51f6Uav4r8VgBHragKnd7vwzWKugNPjYDTxXb2ItiW3i9mrUpZiriJu8ZiD3xBbxsniSu-Ac9VjDcog==.

[3] Guglieri, et al (2022) JAMA. doi:10.1001/jama.2022.4315

[4] Heier CR at al (2019). Life Science Alliance DOI: 10.26508

[5] Liu X, et al (2020). Proc Natl Acad Sci USA 117:24285-24293

Half-year Report

The Santhera Half-year Report 2022 is available for download on the Company's website at www.santhera.com/financial-reports.

Conference Call

Santhera will host a conference call on November 7, 2022, at 14:30 CET / 13:30 GMT / 08:30 EST. CEO Dario Eklund, CFO Andrew Smith and CMO Shabir Hasham, MD, will discuss the 2022 half-year financial results and comment on ongoing corporate developments. Participants are invited to call one of the following numbers (no dial-in code is required):

Switzerland/Europe: +41 58 310 50 00

United Kingdom: +44 207 107 06 13

USA: +1 631 570 56 13

A replay will be accessible at https://www.santhera.com/ad-hoc-news from about two hours after the call has ended.

2022 Half-year Financial Information

Santhera's 2022 Half-year Report see www.santhera.com/investors-and-media/investor-toolbox/financial-reports.

Interim condensed consolidated income

statement

(for the six months ended June 30, in H1-2022 H1-2021

CHF thousands, except per share data) (unaudited) (unaudited)

------------ ------------

Net sales (5,873) 2,853

Revenue from out-licensing transactions 11,190 -

Net sales to licensing partner 933 1,639

Revenue from contracts with customers 6,250 4,492

------------ ------------

Cost of goods sold (1,875) (2,031)

of which amortization intangible assets (1,519) (1,519)

Development (16,870) (13,592)

Marketing and sales (5,917) (2,008)

General and administrative, other (7,203) (6,338)

Operating expenses (29,990) (21,938)

------------ ------------

Operating result (25,536) (19,477)

------------------------------------------ ------------ ------------

Financial result, net (3,596) (389)

Income taxes (592) (653)

Net result (29,724) (20,519)

------------ ------------

Basic and diluted loss per share (in CHF) (0.52) (0.92)

------------------------------------------ ------------ ------------

Interim condensed consolidated balance

sheet Jun 30, 2022 Dec 31, 2021

(in CHF thousands) (unaudited) (audited)

------------ ------------

Cash and cash equivalents 12,697 21,208

Other current assets 1,866 3,433

Noncurrent assets 65,219 66,476

Total assets 79,782 91,117

------------ ------------

Equity (13,845) 1,328

Noncurrent liabilities 55,051 57,007

Current liabilities 38,576 32,782

Total equity and liabilities 79,782 91,117

------------ ------------

Interim condensed consolidated cash flow

statement

(for six months ended June 30, in CHF H1-2022 H1-2021

thousands) (unaudited) (unaudited)

------------ ------------

Net cash flow from/(used in) operating

activities (11,957) (18,607)

Net cash flow from/(used in) investing

activities -- (75)

Net cash flow from/(used in) financing

activities 3,488 14,276

Cash and cash equivalents at January 1 21,208 12,411

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October 31, 2022 02:00 ET (06:00 GMT)