6.11.2008

Santhera raises CHF 15.9 million in private placement with strategic investor Ares Life Sciences

Santhera Pharmaceuticals, a Swiss specialty pharmaceutical company focused on neuromuscular diseases, announced today that it has raised gross proceeds of CHF 15.9 million in a private placement with Ares Life Sciences.

Liestal and Geneva, Switzerland - Santhera Pharmaceuticals (SIX: SANN), a Swiss specialty pharmaceutical company focused on neuromuscular diseases, announced today that it has raised gross proceeds of CHF 15.9 million in a private placement with Ares Life Sciences, an investment vehicle established by the Bertarelli family. Santhera sold 370,082 new registered common shares at a price of CHF 43.00 per share representing a premium of 3.7% over the volume-weighted average share price of the last five trading days. The transaction strengthens Santhera’s financial flexibility and represents a positive strategic endorsement by a major global biotech investor.

The transaction was executed on November 5, 2008 after the close of trading on the SIX Swiss Exchange. The capital increase will be effected today. The new shares with a par value of CHF 1.00 each will be issued from the Company’s authorized share capital and will represent 10.6% of the outstanding share capital after the transaction. The subscription rights of existing shareholders have been excluded in accordance with Santhera's articles of incorporation. The new shares will be listed on SIX Swiss Exchange with the first day of trading on November 7, 2008. Ares has agreed to a lock-up with regard to the new shares for a period of 12 months following the share issuance.

“We are delighted to have Ares invest in Santhera as a new, long term and strategic shareholder”, said Klaus Schollmeier, Chief Executive Officer of Santhera. “Ares represents long-standing and successful first-hand experience in the biotechnology sector. Their investment is a significant validation of our business model in orphan diseases, our product portfolio and our growth prospects.” Commenting on the funding, Barbara Heller, Chief Financial Officer of Santhera said: “The new funds we raise provide the Company with additional financial flexibility to ensure the timely progress of our next product candidates and to support the development of our specialist marketing organization for the North American markets. This capital increase further secures Santhera's cash position well beyond the planned launch of our lead product, CATENA®, for the treatment of Friedreich’s Ataxia in the United States.”

“Santhera is our first investment in the biotech sector since the initiation of the fund earlier this year. In our view, Santhera is one of the best-positioned young biopharmaceutical companies in Europe”, said Jacques Theurillat, Chief Executive Officer of Ares Life Sciences. “We are extremely pleased to have been given the opportunity to invest in Santhera and strongly believe in the high quality nature of its product pipeline and the excellence of its management team.”

The financial advisors for this transaction were Merrill Lynch International, London, and Bank Vontobel, Zurich, for Santhera and Piper Jaffray, London, for Ares Life Sciences.

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