Press Release: Santhera Launches Exchange Offer for its CHF 60 Million Convertible Bonds

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN ANY JURISDICTION IN

WHICH IT WOULD BE UNLAWFUL TO DO SO.

Pratteln, Switzerland, March 25, 2021 -- Santhera Pharmaceuticals (SIX:

SANN) announces an offer to exchange its outstanding CHF 60 million 5%

Convertible Bonds due 2022 on the same economic terms as previously

proposed to the bondholders' meeting of March 8, 2021.

Santhera announces the publication of an offer (the Exchange Offer) to

the holders of its outstanding CHF 60 million 5% Convertible Bonds due

2022 (ISIN: CH0353955195, the 2017/22 Bonds) to exchange all 2017/22

Bonds in circulation. Santhera launches the Exchange Offer following the

recent bondholders' meeting held on March 8, 2021. At that meeting, a

large majority of 89% of bonds represented voted in favor of the

amendments to the terms of the 2017/22 Bonds proposed by the Company,

however, the required threshold of 2/3 of all bonds outstanding to pass

the amendments was not met. With the Exchange Offer, Santhera wishes to

enable the holders of the 2017/22 Bonds to exchange their 2017/22 Bonds

on a voluntary basis on the same economic terms, mutatis mutandis, as

had been proposed to the bondholders' meeting.

In exchange for each 2017/22 Bond with a nominal value of CHF 5,000,

Santhera offers

-- 26 shares of Santhera and

-- one new 7.5% Convertible Bond due on August 17, 2024 with a nominal value

of CHF 3,375 and a significantly reduced conversion price, to be issued

by the Company and to be listed on the SIX Swiss Exchange (each a New

Bond, see details in table).

Highbridge Tactical Credit Master Fund, L.P., the largest holder of the

2017/22 Bonds holding 32% of all 2017/22 Bonds in circulation, has

informed the Company that it will accept the Exchange Offer.

The Company believes that a restructuring of the 2017/22 Bonds is needed

to enable it to raise additional financing, if the pivotal VISION-DMD

readout expected for the second quarter of 2021 is positive. Such

restructuring is therefore also crucial to preserve the Company as a

going concern until after such subsequent financing.

Key differences between the 2017/22 Bonds and the New Bonds:*

Bond Term 2017/22 Bonds New Bonds

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

Conversion price CHF 64.80 115% of the lower of (a) CHF

per share 4.80 (closing share price on

SIX Swiss Exchange on February

15, 2021) and (b) the average

(mean) of the daily VWAP of

one share for the five trading

days immediately preceding (but

excluding) the settlement of

the Exchange Offer, but in the

case of (a) or (b) not less

CHF 2.50.

Maturity February 17, 2022 August 17, 2024

Nominal value per CHF 5,000 CHF 3,375

bond

Interest p.a. 5% 7.5%

(CHF 250 per bond) (CHF 253.13 per bond)

Interest payment In cash In cash or, at the option of

Santhera, in shares at a 10%

discount to the then-prevailing

market price of the shares.

Interest None If a bondholder converts a bond,

make-whole Santhera will pay the interest

for the three years following

the conversion date (or up to

the maturity date, if shorter)

in addition to the accrued interest

up to the conversion date. The

possibility of Santhera to pay

interest in shares also applies

to the interest make-whole.

Santhera's right 160% of the conversion 150% of the conversion price

to redeem Bonds price

Events of default Increase of bondholders' rights

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

*) This overview is qualified in its entirety by the terms of the New

Bonds set forth in the preliminary issuance and listing prospectus

regarding the New Bonds, which is available to eligible recipients as

indicated below.

The terms of the Exchange Offer are set forth in the Notice of a

Repurchase Offer published by the Company today in accordance with the

Swiss rules on public tender offers. The Exchange Offer is subject to

certain offer restrictions and certain conditions, including minimum

acceptance of 50%. In parallel to launching the Exchange Offer, the

Company is seeking additional consents to its proposals to the

bondholders' meeting in order to achieve the requisite two-thirds

majority. If the Company obtains the necessary number of additional

consents in time, the Exchange Offer will not be completed and the

original bond restructuring would be pursued.

The exchange offer period is expected to start on April 6, 2021, and end

at 5:00 p.m. (CEST) on April 19, 2021. If the Exchange Offer is declared

successful after the expiry of the offer period, an additional

acceptance period is expected to start on April 21, 2021, and end at

5:00 p.m. (CEST) on April 27, 2021. The Exchange Offer is planned to be

settled on or around May 4, 2021.

Stifel Nicolaus Europe Limited is serving as sole financial advisor to

the Company.

Related Documents

Notice of a Repurchase Offer (Exchange of CHF 60,000,000 Senior

Unsecured Convertible Bonds due 2022):

https://www.globenewswire.com/Tracker?data=f_X2JsUnK9_ypfXlKu_uwROE5p9QxBHulIRu88h0Wsmkh45UMTnzQDxH-bW_N4iSiZVk0fZhE3UX7upfm9HCMKZ2M8xDEoKlt24DKi0sgKcbTGk0710duzA1xWPclmB68HNy209jfWeqI5x8zSmcGJ5pu-x7DvOOyD0ksm09g5CN5bKixEqpaOEofECuYne8HVg04uUElUtT_j1A4SdFKkOUV0txEYtc4Q0WJwHPRGmwC63SCeepdddNl_1fHLdgH9AmlUX97Tin_WeCgr7uUg==

https://www.santhera.com/investors-and-media/investor-toolbox/bond-exchange-offering

Preliminary Issuance and Listing Prospectus Regarding the New Bonds:

https://www.globenewswire.com/Tracker?data=f_X2JsUnK9_ypfXlKu_uwROE5p9QxBHulIRu88h0Wsmkh45UMTnzQDxH-bW_N4iSiZVk0fZhE3UX7upfm9HCMKZ2M8xDEoKlt24DKi0sgKcbTGk0710duzA1xWPclmB6NGYPM1NW8vSlPiuiuMtcGtQxuaWq_ALKTDO12biDzn4jMGVp2rOdk6nNXDetBTXASn8wKkeJqCLZx3PBJS0Frod_E77OjLAsTTBctYg_ucmyyOWOTahM0go-Wl157PR3HNmOOWOBUVoby5GPXNwmgQ==

https://www.santhera.com/investors-and-media/investor-toolbox/bond-exchange-offering

Forms to cast bondholder votes are available

https://www.globenewswire.com/Tracker?data=0_TmeeuXLtboT2nl2T7pZfkY9OKq-hQ6RPNUOHh4hm--cYh8AwFj8CIxJAUbbOhS03_R_OGMV9bv-85n8SrSpwDjalK-vYt23_Qwo88AmG3-TDmLLmqSe-Q4nxZ5Ntz3YHNuSRG90ZQXsfAIlS1V1iSqQokwEz1pYpnWnRKxvw4=

here.

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

18, 2021) and accompanying documents:

https://www.globenewswire.com/Tracker?data=f_X2JsUnK9_ypfXlKu_uwTI_KggyZcvniQmlfpyTlIH-MSsxqqjkkTEip8jfeC04Y3PTri1sPDnmPl0KeKTvm3GD8ZTg_0YCzaOQlL8ySD6_MSWNG-Si00JcHQqmSWP8fAeJbttQM3qjs8Kubax-D81Sfjim1CIhpgnndOQX4FqXn8VuBS9G3OCbYfnEdsGBObVCs4URkj22TQrtaKbNsV3oRGwD6zrPjN90xMC845Zb3M3y4z-_qglwjmOoKdNDHXs-gnc16FVM2Oh57pCnQA==

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

Press release "Santhera Announces Corporate Update and Proposal to

Strengthen Capital Structure":

https://www.globenewswire.com/Tracker?data=Ltc5MTF7pduqG7sDedhqn_GItKsWJ8NXxDceSWQYH6GOgpB5AEAeWx4PHu-79inS7ySo1RmYVez-rtX_fJQTzXeBIi7IRiRKx9XfxgSA85tNqC0t9pGjtqHcblZQiUtlfHR9KvQYA_MHG11KXbWzoKQSOjV_nApg8x62DKeXBtg=

Link.

Corporate calendar

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 fibrosis (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=dzhxNCYg81MErlAzHricjDfT-Iq2TCjPHMnOOIezR56VsemK0Y7DRk4_kwWdRsCArC6ClPzT2SMGHyxfMCOkiA==

www.santhera.com.

Raxone(R) is a trademark of Santhera Pharmaceuticals.

For further information please contact:

https://www.globenewswire.com/Tracker?data=NqjPUvnoEDSpS7Vdl2bNkqLPdAxpTgyAgU19n1f_kpmvUHJ3n4_074MsznuMGprtnpjRgoJ-iV3JLtM-v2pvGDU_s9PMXUBNezgILBtc9J8eH1Cp_ZXp-MYazZH0Kcut

public-relations@santhera.com or

Eva Kalias, Head External Communications

Phone: +41 79 875 27 80

eva.kalias@santhera.com

Forward-looking Statements

This publication may contain certain forward-looking statements

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