source: valuation estimates, santhera …

20 October 2021

Please see important research disclosures at the end of this document of 38 VALUATIONLAB | [email protected] | Valuation Report | October 2021

On a mission with a VISION

Funding secured – Vamorolone DMD filings imminent Santhera is focused on the development and commercialization of treatments for rare neuromuscular and lung diseases. Key driver in neuromuscular diseases is vamorolone, a first-in-class dissociative oral steroid in final development for Duchenne muscular dystrophy (DMD). In 2020, Santhera acquired the global rights to vamorolone for all indications from Idorsia (13.7% stakeholder) and ReveraGen with the potential to monetize geographical rights and non-DMD indications. Key driver in lung diseases is lonodelestat in phase I development for cystic fibrosis (CF) acquired from Polyphor in 2018. Vamorolone and lonodelestat target multibillion-dollar markets with high unmet medical need. The positive pivotal “VISION-DMD” 24-week trial results of vamorolone in DMD are transformational for Santhera and signals the start of a new era. Estimated cash of around CHF 17 mn (15 October 2021) strengthened by a recent financing with net proceeds of up to CHF 42 mn, secures a cash runway to mid-2022, past the planned NDA filing of vamorolone in Q1 2022. We derive a sum-of-parts risk-adjusted (r)NPV of CHF 6.5 per share, conservatively based on 84.9 mn shares to raise an additional estimated CHF 40 mn (conservatively includes repayment of 2024 convertible bonds) to build a specialist sales force for vamorolone in the US and EU and to reach profitability expected in 2024. We qualify Santhera as Speculative as it has to timely secure sufficient funding. Key catalysts:

1) Vamorolone pivotal “VISION-DMD” 48-week trial results (Q4 2021): required for

EU filing expected in Q2 2022 and increases our rNPV by another CHF 1.0/share with an 72.5% success rate

2) Vamorolone US DMD filing (Q1 2022): assuming priority review, vamorolone could receive FDA approval in Q4 2022 with US launch around year-end 2022; increases our rNPV by CHF 1.0/share with an 80% success rate

3) Vamorolone EU DMD filing (Q2 2022): assuming a normal review EU approval and launch is expected in 2023

SANTHERA PHARMACEUTICALS VALUATIONLAB FINANCIAL ANALYSIS

FOCUS AREA: NOVEL THERAPIES IN RARE NEUROMUSCULAR AND PULMONARY (LUNG) DISORDERSKEY DATA SIX: SANNMARKET CAPITALIZATION (CHF MN) 72 SHARE PRICE ON 20 OCTOBER 2021 1.3ENTERPRISE VALUE (CHF MN) 79 RISK-ADJUSTED NPV PER SHARE** (CHF) 6.5ESTIMATED CASH * (15 OCTOBER 2021) (CHF MN) 17 UPSIDE/DOWNSIDE (%) 395%MONTHLY OPERATING EXPENSE (CHF MN) 2.9 RISK PROFILE SPECULATIVECASH RUNWAY MID-2022 SUCCESS PROBABILITY LEAD PROJECT 65%BREAK-EVEN (YEAR) 2024 EMPLOYEES 41FOUNDED (YEAR) 2004 LISTED (YEAR) 2006

KEY PRODUCTS: STATUS MAJOR SHAREHOLDERS: (%)- RAXONE (LHON***) LAUNCHED (EU) - IDORSIA 13.7- VAMOROLONE (DMD****) POSITIVE PIVOTAL PHASE IIB - EXECUTIVE MANAGEMENT & BOARD 1.2- LONODELESTAT (CYSTIC FIBROSIS) PHASE I COMPLETED - FREE FLOAT 98.8- LAMA2-MD GENE THERAPY (CMD*****) PRECLINICAL - AVERAGE DAILY VOLUME (30-DAY) 492,253

UPCOMING CATALYSTS: DATE ANALYST(S): BOB POOLER- VAMOROLONE "VISION DMD" 48-WEEK TRIAL RESULTS Q4 2021 [email protected] VAMOROLONE US FILING FOR DMD Q1 2022 +41 79 652 67 68- VAMOROLONE EU FILING FOR DMD Q2 2022* ESTIMATED CASH AND CASH LIFE INCLUDES SEP 2021 NET FINANCING UP TO CHF 42 MN ; ** BASED ON 84.9 MN FULLY DILUTED SHARES FOR ADDITIONAL CHF 40 MN FINANCING AND REPAYMENT CONVERTIBLE BONDS IN 2022/2024

*** LHON - LEBER'S HEREDITARY OPTIC NEUROPATHY; ****DMD = DUCHENNE MUSCULAR DYSTROPHY; *****CMD = CONGENITAL MUSCULAR DYSTROPHY

ESTIMATES AS OF 20 OCTOBER 2021 SOURCE: VALUATIONLAB ESTIMATES, SANTHERA PHARMACEUTICALS

20 October 2021


Strategy & Cash Position Swiss specialty pharma focused on rare neuromuscular & pulmonary diseases Santhera Pharmaceuticals is a Swiss specialty pharmaceutical company focused on the development and commercialization of prescription drugs to treat rare neuromuscular and pulmonary (lung) diseases. With over 200 such diseases, this is an area of high unmet medical need that includes many orphan (rare) and niche indications typically with no effective therapies. These conditions are usually genetic (inherited), are treated by a small number of physicians (implying lower marketing costs), and typically command premium pricing. Development is spurred through special “orphan drug” programs with a more focused development timeframe and prolonged market exclusivity protection. Santhera Pharmaceuticals was founded in September 2004 through a merger between Germany-based Graffinity Pharmaceuticals AG and Swiss-based Myocontract AG, which were both privately held. In November 2006, Santhera was listed on the SIX Swiss Stock Exchange through a successful IPO (initial public offering). The company has its global headquarter based in Pratteln (near Basel), Switzerland with a North American headquarter in Boston, USA. Santhera has 41 employees globally after completing the reorganization following the decision to discontinue the development of its longstanding and most advanced compound Puldysa (idebenone) in Duchenne muscular dystrophy (DMD) after an interim analysis of the pivotal phase III “SIDEROS” concluded it was unlikely to meet its primary endpoint in early October 2020. Strategy to create value by becoming a full-fledged rare disease specialty company Santhera’s strategy is to create value by building a comprehensive portfolio of compounds in rare diseases through in-licensing, subsequently developing these compounds up to market approval through their development capabilities and expertise in rare diseases, and ultimately commercialize these compounds through an own small specialist sales force in key markets to retain and maximize value. Santhera is engaged in the development and commercialization of drugs in rare diseases with a special focus on two therapeutic areas:

1. Neuromuscular diseases: treatments for diseases that impair the functioning of the muscles, including the muscles directly, or indirectly affecting the nerves that control muscles or the communication between muscles and nerves; Santhera’s key neuromuscular drugs include:

• Vamorolone for the treatment of DMD patients with early-to-mid-stage disease; acquired the global rights for all indications from Idorsia and ReveraGen in September 2020; up to USD 130 mn milestone payments to Idorsia and ReveraGen; positive top line results pivotal “VISION-DMD” trial reported in June 2021; US filing Q1 2022 and approval Q4 2022 (assuming Priority Review based on granted FDA Fast-Track designation); EU filing Q2 2022 and approval 2023 (assuming normal review); global peak sales CHF 550+ mn in DMD alone; potential for out licensing in geographies outside the US and Europe or non-DMD indications, including major inflammatory diseases such as inflammatory bowel disease (IBD), asthma or chronic

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obstructive pulmonary disease (COPD), juvenile dermatomyositis, (pediatric) ulcerative colitis, among others

• LAMA2-MD gene therapy for the treatment of LAMA2-deficient congenital muscular dystrophy; preclinical research collaboration with the Biozentrum of the University of Basel started in 2019; Innosuisse and Santhera jointly invest CHF 1.2 mn; additional collaboration agreement signed in May 2020 with Rutgers University, New Jersey, USA, to advance LAMA2-MD gene therapy; Santhera is proactively pursuing collaborations with partners to assess and exploit the potential of LAMA2-MD gene therapy; potential peak sales to be determined

2. Pulmonary (lung) diseases: treatments for diseases that affect the airway, lung

tissue or lung circulation leading to difficulty in breathing, infection, inflammation or heart/lung complications; Santhera’s key pulmonary drug includes:

• Lonodelestat (formerly POL6014) for the treatment of cystic fibrosis (CF)

and other neutrophilic lung diseases; global rights acquired from Polyphor in 2018; positive results phase Ib multiple ascending dose (MAD) trial in cystic fibrosis reported in March 2021; global peak sales of CHF 1 bn in cystic fibrosis alone; potential in other lung disorders associated with high hNE activity, including AAT (alpha-1 antitrypsin deficiency), NCFB (non-cystic fibrosis bronchiectasis) and PCD (primary ciliary dyskinesia) to be collaborated and explored with experts

DMD pipeline still on steroids thanks to the acquisition of vamorolone global rights Following the discontinuation of Santhera’s first DMD compound, Puldysa, in October 2020, the company completed a major restructuring with a focus on maintaining key functions to bring its second DMD compound, vamorolone, a first-in-class dissociative steroid in late-stage development for DMD with similar peak sales potential as Puldysa to market, and execute on its early-stage pipeline projects, including lonodelestat for cystic fibrosis and LAMA2-MD gene therapy for congenital muscular dystrophy (CMD). Vamorolone and lonodelestat target large multibillion dollar markets with additional partnering opportunities in non-DMD indications and geographies outside the US and EU that can add to the company’s cash position. Santhera acquired the global rights of vamorolone in all indications from Idorsia, which now has an 13.7% stake in Santhera, and from ReveraGen, the originator of vamorolone, in September 2020. Two important steps closer to achieving CHF 550+ mn vamorolone DMD peak sales Santhera is two important steps closer to achieving our global peak sales forecasts of CHF 550+ mn for vamorolone in DMD alone, by achieving:

1. Positive pivotal “VISION-DMD” trial results of vamorolone in DMD: On 1 June 2021, Santhera and partner ReveraGen announced positive (24-week) topline results for the pivotal “VISION-DMD” trial of vamorolone in DMD. This is a major value inflection point, which is transformational for Santhera, providing investors substantial equity upside, despite a more than 50% jump of the share price on the news. We forecast peak sales of CHF 550+ mn for vamorolone in DMD alone. We assume a conservative 65% (positive pivotal trial) success rate, which will increase to an 80% (filing) success rate once vamorolone has been filed for US and EU approval in Q1 2022 and Q2 2022, respectively. The positive data from pivotal

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“VISION-DMD” trial is further supported by similar data from the open label long-term extension trial. This showed significant improvement in well-established motor function assessments in vamorolone treated patients compared to steroid naïve patients up to a total treatment duration of 2.5 years. Importantly, vamorolone did not show typical “steroid” side effects such as stunting of growth, mood disturbance, excessive hair growth and Cushingoid appearance (moon face). In Q4 2021, the pivotal “VISION-DMD” trial will report 48-week topline data, required for European filing.

2. CHF 45 mn in funding thereby extending the cash runway to mid-2022: In September 2021, Santhera strengthened its capital structure by securing CHF 45 mn in funding through an oversubscribed CHF 20 mn equity financing, a private placement of CHF 15 mn convertible bonds, and an upsizing of the existing Highbridge Capital financing agreement of up to CHF 10 mn. The mixed equity-debt financing minimizes dilution for existing shareholders and allows sufficient capital for the payment of the bonds due in February 2022. Consequently, Santhera has successfully extended its cash runway to mid-2022, past the NDA filing of vamorolone in Q1 2022, removing another hurdle to invest.

Following the positive topline pivotal “VISION-DMD” 24-week trial results reported in June 2021, we believe Santhera still provides considerable equity upside (a multiple of the current share price) upon filing and US and EU approval of vamorolone in DMD in 2022 and 2023, respectively. Moreover, vamorolone has been largely de-risked thanks to the positive pivotal “VISION-DMD” 24-week trial results with the 48-week data due in Q4 2021. Sales of Raxone in LHON phasing out after transfer of business to Chiesi Santhera has enjoyed commercial success with Raxone (idebenone) in the rare neuro-ophthalmological disease Leber’s Hereditary Optic Neuropathy (LHON), an ultra-rare genetic eye disease that leads to sudden blindness, with an incidence of 1 in a million. Raxone was initially commercialized largely by Santhera’s own specialist sales force in the EU. In May 2019, the company entered into an exclusive license agreement with the Italian private pharmaceutical company Chiesi Group for the global rights (excluding North America) of Raxone in LHON and all other ophthalmological indications for a total consideration of up to CHF 105 mn of which CHF 46.4 mn was recognized as revenue in 2019. This marked Santhera’s exit from neuro-ophthalmological diseases, the company’s first therapeutic area with commercial success. In H1 2021, Santhera reported revenue from contracts with customers (mainly France) of CHF 4.5 mn (H1 2020: CHF 7.8 mn). The decrease in revenues is mainly attributable to a CHF 2.0 mn adjustment to defer revenues recorded in H1 2021 due to uncertainties around pricing and reimbursement in France. Santhera agreed with the regulatory authorities in France to supply Raxone free of charge from August 2021 while reimbursement discussions are ongoing. The EU post-authorization measures (PAMs) for Raxone are nearing completion. In June 2021, the long-term “LEROS” phase IV trial met its primary endpoint, the proportion of eyes with clinically relevant benefit after 12 months Raxone treatment compared to untreated patients from an external natural history control group, with high statistical significance (p=0.002). The strong evidence of efficacy is expected to support market access in countries where this is not the case as well the ongoing reimbursement

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discussions with the French regulatory authorities. Santhera is entitled up to EUR 49 mn additional sales milestone payments upon Chiesi reaching certain sales targets. We conservatively expect a CHF 15 mn sales milestone from Chiesi at earliest in 2022. Santhera’s key priorities for the next 12-18 months include:

• Top line (48-week) results vamorolone “VISION-DMD” pivotal DMD trial & file for approval: The positive “VISION-DMD” 24-week top line results of the pivotal phase IIb “VISION-DMD” of vamorolone in DMD are sufficient to file for US approval. In the EU, 48-week data of the trial, expected in Q4 2021, is required for EU filing. The “VISION-DMD” trial was developed under FDA and EMA scientific advice and is considered a pivotal trial for US approval (Priority Review expected based on granted FDA Fast-Track designation) and EU conditional approval, with approvals expected around year-end 2022 and 2023, respectively.

• Secure additional funding to successfully execute growth plans: Following the

US and EU filings of vamorolone in DMD in H1 2022, Santhera plans to raise additional cash to build up a small specialist sales force to commercialize vamorolone in the US and EU, to secure sufficient funding for operations, and to fund its emerging pipeline. Potential (non-dilutive) funding could come from out licensing agreements for vamorolone in geographies outside the US and Europe or non-DMD indications, including major inflammatory diseases such as inflammatory bowel disease (IBD), asthma or chronic obstructive pulmonary disease (COPD), juvenile dermatomyositis, (pediatric) ulcerative colitis, among others.

• Prepare for a phase II efficacy trial of lonodelestat in cystic fibrosis: Following the positive multiple ascending dose (MAD) trial results reported in March 2021, Santhera is preparing for a phase IIa proof-of-concept (POC) trial of lonodelestat in cystic fibrosis. Sufficient funding must be secured prior to starting the POC trial. We expect the POC trial to start in 2022.

• Discuss clinical pathway of LAMA2-MD gene therapy in CMD: Santhera is proactively pursuing collaborations with partners to assess and exploit the potential of LAMA2-MD gene therapy in the rare disease CMD (congenital muscular dystrophy). Discussions are expected be held with key experts and regulators regarding the clinical pathway of LAMA2-MD gene therapy in CMD, while Santhera is expected to leverage its expertise in the preclinical collaboration with the Biozentrum of the University of Basel and Rutgers University to advance gene therapy research in LAMA2-deficient CMD.

• Broaden product pipeline offering: o In-license new development projects in rare diseases o In-license new products to leverage the current sales force infrastructure

More than CHF 500 mn raised since founded in 2004 Santhera has been very successful in raising money since it was founded in 2004 totaling CHF 522 mn. CHF 85 mn was raised before the public offering with an additional CHF 102 mn during the IPO in November 2006. CHF 230 mn was raised in a series of private placements and share sales that included renowned investors, such as Ares Life Sciences

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(2008), YA Global (2013), IGLU Group (2014), Idorsia (2018), and lately Highbridge Capital and others to fund the vamorolone option from Idorsia. The last fund raise occurred in September 2021, where Santhera successfully raised CHF 20 mn in an oversubscribed equity financing.

In February 2017, Santhera successfully placed CHF 60 mn senior unsecured convertible bonds with a 5-year maturity due in 2022 and 5% coupon paid annually. In May 2021, the CHF 60 mn 2017/2022 convertible bonds (2017/2022 Bonds) were successfully restructured reducing the amount maturing in February 2022 by ~75% to CHF 15.2 mn, while the company issued new 7.5% Convertible Bonds due August 2024 (2021/2024 Bonds) in the aggregate principal amount of CHF 30.3 mn. In September 2021, Santhera issued senior unsecured private convertible bond with an aggregate principal amount of CHF 15 mn with the same maturity as the 2021/24 Bonds to Highbridge Capital (2021/2024 Private Bonds). The net proceeds of the 2021/2024 Private Bonds will be used to redeem the 2017/2022 Bonds with a principal amount of CHF 15.2 mn, together with accrued interest, due for redemption in February 2022. Highbridge Capital provided several financing arrangements in senior secured exchangeable notes including a CHF 20 mn financing transaction in July 2020 followed by a CHF 15 mn financing transaction in November 2020 and a CHF 18 mn in February 2021. In September 2021, this was upsized by up to CHF 10 mn. The extended financing facility allows for periodic drawdowns (based on meeting certain criteria, an assessment of liquidity and other sources of funds, and sufficient shares for exchanges available at the time) and can be exchanged by Highbridge for shares at a discount to the volume-weighted average price with a minimum exchange price of no less than CHF 2 per share. In May 2019, Santhera signed a licensing agreement for the global rights (excluding North America) of Raxone for treating LHON with Chiesi Group worth up to EUR 93 mn. Santhera received a EUR 44 mn (CHF 50 mn) upfront cash payment in 2019 and is entitled to up to EUR 49 mn additional sales milestones upon Chiesi reaching certain sales targets. Additional funding needed to finance growth plans and to reach breakeven In September 2021, Santhera successfully raised net proceeds up to CHF 42 mn, successfully extending its cash runway to mid-2022, past the NDA filing of vamorolone in Q1 2022. For Santhera to build a specialist sales force for vamorolone in the US and Europe and to fully develop all its key pipeline projects up to commercialization, we calculate an additional CHF 40 mn will be needed before reaching profitability in 2024. This assumes that the company is successful in out licensing vamorolone rights in the ROW and for certain non-DMD indications. In our forecasts, we include CHF 31 mn milestone payments for vamorolone in DMD in ROW, as well as upfront milestone

MONEY RAISED CHF MNPRE-IPO 85IPO (INITIAL PUBLIC OFFERING) INCL. OVER-ALLOTMENT 102PRIVATE PLACEMENTS / SHARE SALES 230CONVERTIBLE BONDS 105

TOTAL RAISED 522SOURCE: VALUATIONLAB, SANTHERA PHARMACEUTICALS

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payments of CHF 30 mn in 2022 and CHF 10 mn in 2023 from out licensing vamorolone in non-DMD indications. Moreover, we expect CHF 15 mn sales milestone payments from Chiesi in both 2022 and 2024. In our forecasts, we conservatively include a repayment of the 2021/2024 convertible bonds in 2024 (CHF 30.3 mn), which may not be necessary if Santhera can convert at higher share prices. To account for our CHF 40 mn funding gap, we conservatively calculate our per share forecasts based on 84.9 mn shares, which includes 54.6 mn shares outstanding plus an estimated 30.3 mn new shares, which amounts to a share dilution of 55% based on the current low share price level. Life Cycle Positioning – Speculative We qualify Santhera’s risk profile as Speculative with a cash runway to mid-2022. The company will need to timely replenish its cash position to finance its growth plans beyond this period. The positive pivotal “VISION-DMD” top line results together with the planned regulatory filings in 2022 and commercial launches in major markets in 2023 targeting vamorolone peak sales of CHF 550+ mn will be transformational for Santhera leading to a substantial re-rating with ample opportunities for the company to replenish its dire cash position, in our view. (see Important Disclosures for our Risk Qualification).

~ 8-14 20 YEARS

RESEARCH & DEVELOPMENT PHASE RETURN PHASE EXPIRY

REG

ISTR

ATIO

N

PHAS

E III

PHAS

E II

PHAS

E I

PRE-

CLIN

ICAL

SAFETY DOSE EFFICACY / APPROVAL

“STAR” “CASH COW” “DOG”~10% 10% -45% 40% - 65% ~80%

BREAKEVEN

GENERICS

ß RISK-ADJUSTED DISCOUNTED CASH FLOW à

SUCCESS <5%

ANIMALS ~10s ~ 100s ~ 100s – 1,000s PTS BIO-SIMILARS

COSTS

SALESp<0.05

P/E >20x P/E ~10-15x P/E > 6-10x

“MATURE”

P/E ~ 15x

0 ADDEX

BASILEA

SANTHERA

NEWRON

COSMO

SOURCE: VALUATIONLAB

LIFE CYCLE POSITIONING – SIX-LISTED BIOTECHNOLOGY COMPANIES

MOLECULAR P.

CASSIOPEA

IDORSIAPOLYPHOR

OBSEVA

KUROS BIO.

RELIEF TH.

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Valuation Overview Sum-of-parts risk-adjusted (r)NPV points to a fair value of CHF 6.5 per share We derive a sum-of-parts rNPV of CHF 6.5 per share for Santhera, conservatively based on a share dilution of 55% (84.9 mn shares) to raise an additional CHF 40 mn to build a specialist sales force for vamorolone in the US and Europe, to fully fund its pipeline up to profitability and to repay its outstanding convertible bonds, with estimated cash of CHF 0.2 per share (15 October 2021) and overhead expenses of CHF 2.5 per share, including convertible bonds repayments in 2022 (CHF 15 mn) and 2024 (CHF 30 mn) assuming a WACC of 7% (reflecting the low Swiss interest environment).

Santhera’s key drivers, include: Raxone in LHON – rNPV of CHF 0.3/share In Europe, we conservatively expect Santhera to receive a total of CHF 30 mn in additional sales milestones (eligible up to a maximum of EUR 49 mn) from Chiesi next to Raxone sales in LHON from France until 2021 when the transition with Chiesi is expected to be completed. This amounts to a NPV of CHF 0.3 per share for the remaining Raxone revenues in LHON. We no longer include any revenues for Raxone in LHON in North America, where Santhera still owns the rights. Vamorolone in DMD (all patients) – rNPV of CHF 8.4/share Vamorolone is targeted at DMD patients with early-to-mid-stage disease to preserve muscle function, effectively replacing mainstay steroid therapy irrespective of the underlying genetic mutation. In September 2020, Santhera acquired the global rights for vamorolone in all indications from Idorsia and ReveraGen with up to USD 130 mn regulatory and sales milestone payments and increasing tiered single to double digit royalty payments on sales. ReveraGen, the originator of vamorolone, reported positive 24-week results of the pivotal phase IIb “VISION-DMD” trial in early June 2021, largely de-risking the compound in DMD. We forecast vamorolone peak sales of CHF 550+ mn in DMD alone, with US launch to occur in around year-end 2022 (assuming Priority Review), followed by EU approval and first EU launches in 2023. We assume Santhera will build up a small specialist sales force in the US and major EU countries to commercialize vamorolone and to maximize the long-term value. We account for these costs as well as COGS of 10%. In the ROW, we expect Santhera to seek commercialization partners in return for milestones of up to CHF 31 mn and 20% sales royalties. We calculate a rNPV of CHF 8.4/share applying a conservative 65% (positive pivotal phase IIb trial) success rate for vamorolone in DMD alone.

SUM OF PARTSPRODUCT INDICATION

PEAK SALES (CHF MN) LAUNCH YEAR (EST)

UNADJUSTED NPV/SHARE * (CHF)

SUCCESS PROBABILITY

RNPV/SHARE * (CHF)

PERCENTAGE OF TOTAL

RAXONE (IDEBENONE) LHON (FRANCE ONLY IN 2021) 53 2015 0.3 100% 0.3 4%VAMOROLONE DMD (STEROID REPLACEMENT) 584 2022 (US) / 2023 (EU) 13 65% 8.4 93%LONODELESTAT (POL6014) CYSTIC FIBROSIS 992 >2025 14 0% 0 0%LAMA2-MD GENE THERAPY CMD TBD >2025 TBDRARE PDPR VOUCHER (ON VAMOROLONE US DMD APPROVAL) 10 2022 0 65% 0.1 1%ESTIMATED NET CASH POSITION (15 OCTOBER 2021) 17 0.2 0.2 2%TOTAL ASSETS 27 9.0 6%OVERHEAD EXPENSES (INCL. REPAYMENT OF CONVERTIBLE BONDS DUE 2022 AND 2024) -2 -2.5

NPV/SHARE (CHF) 25 6.5SHARE PRICE ON OCTOBER 20, 2021 1.3PERCENTAGE UPSIDE / (DOWNSIDE) 395%* NOTE: 84.9 MN SHARES USED FOR CALCULATION RNPV/SHARE, ASSUMING CHF 40 MN ADDITIONAL FINANCING AND REPAYMENT CONVERTIBLE BONDS DUE 2022/2024 (INCLUDED IN OVERHEAD EXPENSES)ESTIMATES AS OF 20 OCTOBER 2021 SOURCE: VALUATIONLAB ESTIMATES

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Rare pediatric disease priority review voucher – rNPV of CHF 0.1/share Santhera is entitled to 10% of the value of a potential rare pediatric disease priority review (RPDPR) voucher upon US approval of vamorolone in DMD around year-end 2022. The average value of these vouchers, which can be sold freely, is approximately USD 100 mn. Applying the same 65% (positive pivotal phase IIb trial) success rate as for vamorolone, the rNPV amounts to CHF 0.1/share. Currently no value attributed to early-stage pipeline projects We have conservatively not accounted for Santhera's early stage pipeline projects due to the lack of sufficient proof-of-concept at the moment. Santhera's unadjusted NPV provides a "sneak preview" on what the value could amount to, if all our assumptions were reached. Lonodelestat in Cystic Fibrosis & other breathing disorders– Phase I, launch >2025 In February 2017, Santhera acquired the exclusive global rights for lonodelestat, a novel, selective human neutrophil elastase (hNE) inhibitor for treating cystic fibrosis and other rare lung disorders from Polyphor for CHF 6.5 mn in Santhera shares in a back-loaded agreement with little impact on Santhera’s cash position. Cystic fibrosis is a rare genetic and progressive disorder that affects mostly the lungs, but also the pancreas, liver, kidneys and intestine, and affects approximately 70,000 patients in Europe and the US. In March 2021, Santhera reported positive topline results of a phase Ib MAD (multiple ascending dose) trial in cystic fibrosis patients, which started in 2018 and was delayed by the COVID-19 pandemic. The trial was already designed by Polyphor and is financially supported by the Cystic Fibrosis Foundation. Upon securing sufficient funding, a phase IIa POC (proof-of-concept) trial would likely start in 2022 with a potential read-out 12 months later. Assuming lonodelestat captures a conservative 15% of the market with a USD 70,000 to USD 100,000 annual treatment price, peak sales could easily amount to approximately CHF 1 bn for cystic fibrosis alone. Additionally, disbalanced neutrophil activity is associated with a large number of inflammatory diseases, which could be additional therapeutic indications for lonodelestat. For instance, lonodelestat could have potential in lung disorders associated with high hNE activity including AAT (alpha-1 antitrypsin deficiency), NCFB (non-cystic fibrosis bronchiectasis) and PCD (primary ciliary dyskinesia). LAMA2-MD gene therapy in CMD - Phase I/preclinical, launch >2025 In May 2019, a preclinical research collaboration was announced with the Biozentrum of the University of Basel to advance gene therapy research for the treatment of LAMA2-deficient CMD (congenital muscular dystrophy). Innosuisse, the public Swiss innovation agency, and Santhera will jointly invest CHF 1.2 mn in the project. In May 2020, Santhera signed an additional collaboration with Rutgers, the State University of New Jersey, USA, to expand gene therapy research in this area. Santhera gains rights to intellectual property developed at Rutgers University on certain gene constructs that will be further studied under a collaboration agreement. The coordinated work of both collaborations will further advance Santhera ́s effort to bring this innovative gene therapy approach to patients with LAMA2-MD. Following the restructuring in 2020, Santhera is now proactively pursuing collaborations with partners to assess and exploit the potential of LAMA2-MD gene therapy in CMD. Due to the early development stage of LAMA2-MD gene therapy, we have not included any forecasts in our valuation.

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Sensitivities that can influence our valuation Funding risk: The recent financing of up to CHF 42 mn in net proceeds extends Santhera’s cash runway to mid-2022, beyond the NDA filing of vamorolone in Q1 2022. We calculate that Santhera will need a total cash injection of around CHF 40 mn to build a specialist sales force for vamorolone in the US and EU and to fully develop its key pipeline projects up to commercialization and profitability expected in 2024, while conservatively repaying its outstanding convertible bonds. We expect the company to raise the required funds upon US/EU filing or US approval of vamorolone in 2022. Santhera can raise funds at far higher share prices to minimize share dilution. The company is currently evaluating several different financing options including equity-based funding, debt financing, royalty financing, standby equity distribution agreement as well as the monetization of pipeline assets such as vamorolone in DMD in certain geographies outside the US and EU and in large non-DMD indications such as asthma, COPD and ulcerative colitis. Development risk: Vamorolone is Santhera’s most advance pipeline compound in pivotal development for DMD. We assume a conservative 65% success rate, which we believe reflects the historical development success rate of an orphan drug with positive single pivotal phase IIb trial results, backed by encouraging long-term POC trial data, which largely de-risks this novel DMD compound. We have conservatively not included forecasts for lonodelestat in phase I development for cystic fibrosis, where historical success rates are typically lower than 10-15% or for the LAMA2-MD gene therapy in preclinical development with success rates typically below 5%. Approval risk: Santhera’s focus is on developing drugs for orphan indications where regulatory requirements are typically less rigorous than for regular indications. For instance, conditional (EU) or accelerated (US) early approval can be granted in the absence of robust clinical trial data e.g., based on a small single clinical trial. However, sometimes the absence of a clear regulatory pathway on how to set up the pivotal clinical trial, including what the right endpoints should be, may add to the risk. Pricing and reimbursement risk: Following approval of vamorolone, Santhera has to negotiate pricing and reimbursement. In the US, pricing is quite straightforward, while in the EU this has to be negotiated in each member state individually. Pricing could be lower, and negotiations could take longer than forecast. Orphan drugs such as vamorolone typically command a high price. Santhera plans to price its drugs “attractively” compared to competitors thanks to lower COGS, thereby enhancing reimbursement and market penetration. Commercialization risk: Santhera has established US operations with initial focus on regulatory and clinical operations and plans to build up a small US specialist sales force to commercialize vamorolone and maximize long-term profitability. The company has similar plans for vamorolone in the EU. In the ROW, the company plans to seek commercialization partners in return for upfront, regulatory and sales milestones and royalties on sales. Delays could occur in the buildup and rollout of vamorolone. Santhera will be dependent on the sales efforts and marketing muscle of its partners in the ROW, where delays can occur, and actual terms could differ from our estimates.

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Catalysts

CATALYST TIMELINESTIME LINE PRODUCT INDICATION WHAT COMMENT

IMPACT ON RNPV/SHARE

202116 FEB CORPORATE UPDATE CORPORATE UPDATE AND PROPOSAL TO STRENGHTEN CAPITAL STRUCTURE:

PRELIMINARY NET SALES CHF 15 MN, NET LOSS 71.2 MN, CASH CHF 12.4 MN (31 DECEMBER 2020); UPSIZED FUNDING FROM HIGHBRIDGE CAPITAL, PROPOSED CONVERTIBLE BOND RESTRUCTURING, BONDHOLDER MEETING ON 8 MARCH 2021

1 MAR LONODELESTAT CYSTIC FIBROSIS PHASE IB POSITIVE TOP LINE RESULTS OF THE MULTIPLE ASCENDING DOSE (MAD) TRIAL; COMPLETE INHIBITION OF NEUTROPHIL ELASTASE ACHIEVED OVER A PROLONGED PERIOD BY LOCAL DELIVERY THROUGH INHALATION; GOOD TOLERABILITY AND NO SERIOUS SIDE EFFECTS REPORTED

3 MAR VAMOROLONE DMD COMPLETE ENROLLMENT "VISION-DMD" LAST PATIENT HAS COMPLETED LAST VISIT FOR THE FIRST (6-MONTHS) PERIOD OF PIVOTAL "VISION-DMD" TRIAL OF VAMOROLONE IN DMD; 6 MONTHS TOPLINE RESULTS ON TRACK FOR Q2 2021, US FILING Q1 2022

9 MAR RESULTS BONDHOLDERS' MEETING 65% OF BONDHOLDERS WERE REPRESENTED AT THE BONDHOLDERS' MEETING ON 8 MARCH OF WHICH 89% VOTED IN FAVOR OF THE RESOLUTIONS PROPOSED BY SANTHERA, THE REQUIRED THRESHOLD OF 2/3 OF ALL BONDS OUTSTANDING TO PASS SUCH RESOLUTIONS WAS NOT MET

18 MAR EXTRAORDINARY BOARD MEETING ALL BOARD PROPOSALS APPROVED AT THE EGM INCLUDING THE AUTHORIZATION AND ISSUANCE OF SHARES TO IMPLEMENT PLANNED FINANCING ACTIVITIES, THE RESTRUCTURING OF THE CHF 60 MN CONVERTIBLE BOND DUE 2022

25 MAR START CONVERTIBLE BOND EXCHANGE OFFER

LAUNCH OF OFFER TO EXCHANGE OUTSTANDING CHF 60 MN 5% CONVERTIBLE BOND DUE FEBRUARY 2022 WITH A NOMINAL VALUE OF CHF 5,000 FOR 26 SHARES OF SANTHERA AND ONE NEW 7.5% CONVERTIBLE BOND DUE 17 AUGUST 2024; HIGHBRIDGE CAPITAL HOLDING 32% OF ALL 2022 CONVERTIBLE BONDS ACCEPTED THE EXCHANGE OFFER

28 APR VAMOROLONE DMD NEW 2.5 YEAR DATA EXTENSION TRIAL THE PHASE IIA OPEN LABEL LONG-TERM 2.5 YEARS TREATMENT DATA SHOW A MAINTENANCE OF TREATMENT EFFECT EQUIVALENT TO A DELAY OF ABOUT 2 YEARS IN DECLINE FOR TIME TO STAND VELOCITY AND CONFIRM SAFETY AND TOLERABILITY BENEFITS WITH FEWER CORTICOSTEROID-ASSOCIATED SIDE EFFECTS THAN REPORTED IN OTHER CLINICAL TRIALS WITH OTHER STEROIDS WITH NO REPORT OF STUNTED GROWTH

29 APR FY 2020 RESULTS CASH AND CASH EQUIVALENTS OF CHF 11.7 MN (27 APRIL 2021) WITH A LIMITED CASH RUNWAY TO Q3 2021; REVENUE: CHF 15 MN (LARGELY FROM RAXONE LHON IN FRANCE), OPEX DECLINED BY 28% TO CHF 58.3 MN PRIMARILY RELATED TO DISCONTINUATION PULDYSA AND RESTRUCURING; OPERATING LOSS OF CHF -53.1 MN AND NET LOSS OF CHF 67.7 MN IMPACTED BY LOWER RAXONE REVENUE AND ONE-TIME RESTRUCTURING COSTS FOLLOWING THE TERMINATION OF PULDYSA

4 MAY SETTLEMENT BOND EXCHANGE OFFER & ISSUANCE NEW 30.3 MN 2021/2024 BONDS

EXCHANGE OF ~75% OF CHF 60 MN 2017/2022 BONDS TO NEW CHF 30,3 MN 2021/2024 BONDS WITH REDUCING AMOUNT DUE IN FEBRUARY 2022 TO CHF 15.155 MN; CHF 30.3 MN 2021/2024 BONDS PRINCIPAL AMOUNT/DENOMINATION CHF 3,375/BOND WITH A CHF 3.00 CONVERSION PRICE AND A CONVERSION RATIO OF 1,123 SHARES/BOND

7 MAY 2021/2024 CONVERTIBLE BONDS FIRST DAY OF TRADING 2021/2024 CONVERTIBLE BONDS1 JUN VAMOROLONE DMD "VISION-DMD" PIVOTAL PHASE IIB TRIAL

(24 WEEKS DATA)POSITIVE TOP LINE RESULTS PIVOTAL "VISION-DMD" TRIAL (24 WEEKS TREATMENT) - PRIMARY ENDPOINT REACHED: TIME TO STAND (TTSTAND) VELOCITY VAMOROLONE 6 MG/KG/DAY 0.06 RISES/SEC DIFFENCE VS. PLACEBO, P = 0.002; OTHER SECONDARY ENDPOINTS REACHED; NO STUNTED GROWTH, LESS STEROID-LIKE SIDE EFFECTS

22 JUN AGM ANNUAL GENERAL MEETING (VIRTUAL DUE TO COVID-19 PANDEMIC): SHARE CAPITAL INCREASES TO FUND ONGOING DEVELOPMENT ACTIVITIES, INCREASE PRE-COMMERCIALIZATION ACTIVITIES AND EXPAND ORGANIZATION FOR US LAUNCH OF VAMOROLONE FOLLOWING THE POSITIVE PIVOTAL "VISION-DMD" TRIAL RESULTS IN DMD

23 JUN RAXONE LHON "LEROS" PHASE IV TRIAL RESULTS THE PRIMARY ENDPOINT MET OF PROPORTION OF EYES WITH CLINICALLY RELEVANT BENEFIT AFTER 12 MONTHS RAXONE TREATMENT VERSUS UNTREATED PATIENTS FROM AN EXTERNAL CONTROL GROUP WITH HIGH STATISTICAL SIGNIFICANCE (P=0.002) AND CONFIRM PREVIOUS FINDINGS

20 SEP CHF 45 MN IN FINANCING EXTENDING CASH REACH TO MID-2022

CHF 45 MN FUNDING SECURED THROUGH AN OVERSUBSCRIBED CHF 20 MN EQUITY FINANCING, A CHF 15 MN PLACEMENT OF CONVERTIBLE BONDS AND CHF 10 MN UPSIZING OF HIGHBRIDGE FINANCING ARRANGEMENT; PRELIMINARY H1 2021 RESULTS: TOTAL REVENUE CHF 4.4 MN; CASH & CASH EQUIVALENTS CHF 8 MN TOGETHER WITH CHF 42 MN NET PROCEEDS FINANCING EXTENDING CASH REACH TO MID-2022

27 SEP VAMOROLONE BECKER MUSCULAR DYSTROPHY

FDA ORPHAN GRANT FUNDING REVERAGEN RECEIVED USD 1.2 MN FDA GRANT UNDER THE "CLINICAL STUDIES OF ORPHAN PRODUCTS ADDRESSING UNMET NEEDS OF RARE DISEASES" PROGRAM TO START A CLINICAL TRIAL OF VAMOROLONE IN ADULTS AND CHILDREN WITH BECKER MUSCULAR DYSTROPHY UNDERLINING VALUE OF VAMOROLONE

15 OCT H1 2021 RESULTS CASH AND CASH EQUIVALENTS OF CHF 8.0 MN (30 JUNE 2021) TOGETHER WITH RECENT NET FINANCING OF CHF 42 MN EXTENDS CASH RUNWAY TO MID-2022; H1 2021 REVENUE: CHF 4.5MN (H1 2020: CHF 7.8 MN), NET RESULT CHF -20.5 (H1 2020: CHF -31.8 MN)

Q4 VAMOROLONE DMD "VISION-DMD" PIVOTAL PHASE IIB TRIAL (48 WEEKS DATA)

TOP LINE RESULTS OF THE PIVOTAL PHASE IIB "VISION-DMD" TRIAL OF 48 WEEKS TREATMENT WITH VAMOROLONE IN DMD PATIENTS AGED 4 TO <7 YEARS; NEEDED FOR EU FILING

+CHF 1.0

Q4 RAXONE LHON CONCLUSION PAMS CONCLUSION OF RAXONE'S PAMS (POST-AUTHORIZATION MEASURES) SHOULD ALLOW FOR MARKET ACCESS IN EU COUNTRIES WHERE THIS IS NOT YET THE CASE

2022VAMOROLONE NON-DMD* INDICATIONS &

DMD OUTSIDE US/EUROPEPARTNERING PARTNERING VAMOROLONE NON-DMD INDICATIONS OR FOR DMD INDICATIONS

OUTSIDE US AND EUROPE FOR UPFRONT, REGULATORY AND SALES MILESTONES AND ROYALTIES ON SALES

Q1 VAMOROLONE DMD NDA FILING NDA (NEW DRUG APPLICATION) FILING FOR US APPROVAL FOR TREATING DMD BASED ON SINGLE PIVOTAL "VISION-DMD" TRIAL OF 6 MONTHS VAMOROLONE TREATMENT IN DMD PATIENTS AGED 4 TO < 7 YEARS (FAST TRACK SHOULD ALLOW FOR PRIORITY REVIEW)

+CHF 1.0

Q2 VAMOROLONE DMD EU CMA FILING EU CMA (CONDITIONAL MARKETING AUTHORIZATION) FILING FOR APPROVAL FOR TREATING DMD BASED ON "VISION-DMD" TRIAL (24- AND 48-WEEK DATA)

Q4 VAMOROLONE DMD US APPROVAL US APPROVAL FOR TREATING DMD +CHF 1.3Q4 VAMOROLONE DMD PRIORITY VOUCHER UPON US APPROVAL SANTHERA IS ENTITLED TO 10% OF A RARE PEDIATRIC

DISEASE DESIGNATION VOUCHER OF AROUND USD ~100 MN; SALE AND PAYMENT OF VOUCHER LIKELY TO OCCUR IN 2023

+CHF 0.1

TBD LONODELESTAT CYSTIC FIBROSIS START POC TRIAL START PHASE IIA PROOF-OF-CONCEPT TRIAL IN CYSTIC FIBROSIS PATIENTS (ON SUFFICIENT FUNDING)

+CHF 2.1

AROUND YEAR-END

VAMOROLONE DMD US LAUNCH US LAUNCH OF VAMOROLONE TO TREAT DMD THROUGH AN OWN SPECIALIST SALES FORCE TO MAXIMIZE LONG-TERM PROFITABILITY

* DMD = DUCHENNE MUSCULAR DYSTROPHYESTIMATES AS OF 20 OCTOBER 2021 SOURCE: VALUATIONLAB ESTIMATES

20 October 2021


Technology & Pipeline Aim to successfully develop re-profiled compounds in rare diseases Santhera does not have an own discovery or research platform but has vast experience in clinical development in rare diseases. Moreover, the company was one of the first specialty pharmaceutical companies to see substantial value in developing and repositioning existing compounds neglected by “Big Pharma” in rare (orphan) diseases. Consequently, all compounds have been licensed in, acquired, or no longer enjoy patent protection from their originators. Orphan disease programs provides attractive incentives for Santhera: Although individually, orphan diseases may be classified as uncommon, collectively, they affect a large portion of the population and healthcare expenditure. The US and EU orphan disease programs have been developed to provide pharmaceutical companies a strong incentive to pursue and develop orphan prescription drugs for these rare disorders providing additional years of market exclusivity. Vamorolone, lonodelestat, and LAMA2-MD gene therapy all enjoy these market exclusivities. Key advantages to develop drugs in orphan indications include:

• Strong orphan disease market exclusivity of 7 years (US) or 10 years (EU) starting from first day of launch – this provides sufficient time for an attractive return

• Two years additional market exclusivity in pediatric indications • There are often no approved drugs for these indications or only few • Effective treatments can command a relatively high price resulting in high margins • Competition is limited (DMD, BMD, cystic fibrosis, CMD) • Specialists can be addressed by a relatively small field force • Conditional (EU)/Accelerated (US) early approval can be granted in the absence of

robust trial data However, there are also considerable hurdles, including:

• A very low number of patients to conduct clinical trials – lack of robust clinical data, slow enrollment, trial delays

• A lack of widespread expertise in clinical centers • Insufficient understanding of the history or mechanism of the disease • Absence of a clear regulatory pathway on how to set up the pivotal clinical trial,

including what the right endpoints should be • The small number of experts who conduct the trials are often banned from

advisory panels Pipeline expansion in 2018 compensates for Puldysa loss Santhera’s special therapeutic focus is on rare neuromuscular and pulmonary diseases. Idebenone, branded Raxone for LHON and Puldysa for DMD, was Santhera’s cornerstone compound since the company was founded. Raxone was successfully developed and commercialized for treating patients with LHON in Europe. In 2019, Chiesi obtained the global rights (excluding North America) of Raxone in LHON and all other ophthalmological diseases marking Santhera’s exit in rare neuro-ophthalmology diseases. The proceeds from the sale of Raxone were largely reinvested in its DMD franchise then consisting of

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Puldysa and vamorolone. In early October 2020, Puldysa unfortunately suffered a major setback when an interim analysis of the phase III “SIDEROS” trial of Puldysa in DMD concluded the trial would not meet its primary endpoint with Santhera discontinuing further development and announcing a major reorganization. Fortunately, in 2018, Santhera reduced the heavy reliance on cornerstone compound Puldysa considerably with the option to obtain the global rights (excluding Japan and South Korea) of vamorolone from Idorsia and also obtained the global rights of lonodelestat from Polyphor. The pipeline was noticeably expanded by an estimated CHF 1.5+ bn in additional peak sales for both drugs in their lead indications in DMD and cystic fibrosis, respectively. In September 2020, Santhera exercised its option to obtain the global rights to vamorolone in DMD and all other indications including Japan and South Korea, which paves the way for partnering large non-DMD indications such as inflammatory bowel disease (IBD), asthma or chronic obstructive pulmonary disease (COPD), juvenile dermatomyositis, (pediatric) ulcerative colitis, and lung cancers, among others. In early June 2021, positive topline 28-week results were reported for the pivotal phase IIb “VISION-DMD” trial of vamorolone in DMD across multiple endpoints with a compelling safety profile. Vamorolone is targeted at DMD patients with early-to-mid-stage disease to preserve muscle function. Lonodelestat targets cystic fibrosis where current therapies are not adequate. In March 2021, positive results were reported for a phase Ib MAD (multiple ascending dose) trial in cystic fibrosis (already set up by Polyphor and financially supported by the Cystic Fibrosis Foundation). Santhera is preparing a phase II development program for lonodelestat in cystic fibrosis, which upon securing sufficient funding could start in 2022, in our view. Pipeline includes vamorolone and lonodelestat targeting blockbuster markets

Santhera’s key pipeline projects in clinical development include: Vamorolone – First-in-class steroid replacement in DMD without typical side effects Vamorolone is targeted to replace current glucocorticoid treatment used to preserve muscle strength, however, without the typical steroid safety issues in DMD patients irrespective of their underlying genetic mutation. We forecast peak sales to amount to CHF 550+ mn in DMD alone.

Rationale for vamorolone in DMD Vamorolone is a novel first-in-class dissociative steroidal anti-inflammatory compound and is a close analog to prednisone, a conventional glucocorticoid, however, without the typical steroid side effects such as growth stunting, bone

PRODUCT PIPELINEPRODUCT DRUG CLASS INDICATION STATUS

LAUNCH DATE(EXPECTED) PARTNER

GLOBAL PEAK SALES

NEUROMUSCULAR DISEASESVAMOROLONE DISSOCIATIVE STEROID DUCHENNE MUSCULAR DYSTROPHY PHASE IIB

PIVOTALYE 2022 (US) 2023 (EU)

PARTNERS OUTSIDE SANTHERA TERRITORIES

CHF 550+ MN

LAMA2-MD GENE THERAPY

GENE THERAPY CONGENITAL MUSCULAR DYSTROPHY

PRECLINICAL >2025 TBD TBD

PULMONARY DISEASESLONODELESTAT HUMAN NEUTROPHIL

ELASTASE INHIBITORCYSTIC FIBROSIS PHASE I >2025 PARTNERS OUTSIDE

SANTHERA TERRITORIESCHF 1 BN

ESTIMATES AS OF 20 OCTOBER 2021 SOURCE: VALUATIONLAB ESTIMATES

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density loss, weight increase, facial puffiness, and mood disturbances. Vamorolone binds to the glucocorticoid receptor (GR) and like conventional steroids activates the anti-inflammatory (NFkB) response, but unlike conventional steroids does not activate gene transcription pathways, which are responsible for side effects. The differential activation of GR-mediated pathways results in therapeutic (anti-inflammatory) activity but does not activate the pathway associated with glucocorticoid-class side effects. The lipophilic properties of vamorolone allows it to integrate in the cell membrane to provide stability in an environment where stability is crucial due to the lack of dystrophin. Moreover, vamorolone is an antagonist for mineralocorticoid receptor (for instance like spironolactone, which is given routinely to DMD patients to reduce the rate and risk for cardiomyopathy) and hence has cardioprotective properties as opposed to glucocorticoids, which are agonists, adding to its favorable safety profile.

Lonodelestat – Blockbuster potential in cystic fibrosis & rare lung disease We believe lonodelestat nicely complements Santhera’s product pipeline targeting rare diseases such as DMD. Santhera has gained significant knowledge in clinical development of investigational drugs for lung disease with the development program of Puldysa in treating respiratory complications in DMD. Cystic fibrosis is a rare genetic and progressive disorder that affects mostly the lungs with approximately 70,000 patients globally with no cure and poor prognosis. The disease is characterized by persistent lung infection and chronic inflammation. Long-term issues included difficulty breathing and coughing up thick and sticky mucus as a result of frequent lung infections. The average life expectancy is between 42 and 50 years, where lung problems account for death in 80% of cystic fibrosis patients. We forecast peak sales could reach CHF 1 bn in cystic fibrosis alone. Due to the early stage of clinical development, we do not include any forecasts for lonodelestat in cystic fibrosis, yet.

Rationale for lonodelestat in cystic fibrosis Lonodelestat is a novel, highly potent, selective and reversible inhibitor of human neutrophil elastase (hNE), one of the major lung-tissue degrading enzymes under pathological conditions and leading to respiratory decline and exacerbations in cystic fibrosis patients. Chronic inflammation is thought to be caused by neutrophil elastase from neutrophils present in the lung due to the buildup of thick mucus. High levels of hNE have been detected in cystic fibrosis sputa and these high levels of hNE correlate with disease severity and measured by functional lung parameters such as FEV1 reduction and are therefore important surrogate markers of disease.

In the following sections we will provide an in-depth analysis and forecasts for Santhera's key drivers, including:

• Vamorolone in DMD (see page 15) • Early-stage pipeline projects including lonodelestat, LAMA2-MD gene therapy;

not included in our forecasts, yet (see page 31)

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Forecasts & Sensitivity Analysis Vamorolone (Duchenne Muscular Dystrophy) Product Analysis DMD peak sales of CHF 550+ mn - rNPV of CHF 8.4 per share We forecast peak sales of CHF 584 mn for vamorolone in DMD assuming first launches in the US in around year-end 2022 and in the EU in 2023, method of use patent protection until at least 2029, and orphan drug market exclusivity until end 2029 (US) and 2035 (EU including 2-year pediatric exclusivity), respectively. We conservatively assume an annual weight-based treatment cost in the US at a ~15% premium to PTC Therapeutics’ Emflaza (deflazacort) of USD 58,625 for patients weighing ~34 kg (aged 4-11 years) and up to USD 109,375 for patients weighing ~63 kg (aged 11-22 years). In the EU and ROW, we apply an ~40% discount to the US pricing. In patients aged 4-11 years we assume peak penetration rates of up to 45% (US) and half the amount (23%) in patients aged 11-22 as disease progresses. In the US and EU, we account for 10% COGS, the buildup of a small specialist sales force in both regions, regulatory and commercialization milestones payments of CHF 125 mn and increasing tiered single to low double-digit percentage sales royalty payments to Idorsia and ReveraGen. In the ROW, we assume Santhera to partner vamorolone in return for CHF 31 mn milestones and 20% sales royalties from its partner(s). Our rNPV amounts to CHF 713 mn or CHF 8.4 per share applying a 65% (positive single pivotal phase IIb) success rate and a WACC of 7% (for detailed forecasts see page 27) Santhera’s DMD pipeline is still on steroids with vamorolone Vamorolone is a first-in-class dissociative steroid in the final stage of development for DMD, with the promise to provide an effective and in particular safe alternative to mainstay steroid treatment. In early June 2021, positive topline 24-week results were reported for the pivotal phase IIb “VISION-DMD” trial of vamorolone in DMD across a broad range of efficacy endpoints with a competitive safety and tolerability profile, largely de-risking the compound in DMD. Vamorolone is being developed by its originator, the privately held US-based ReveraGen Biopharma Inc., with participation in funding and design of trials by several international non-profit foundations, the US National Institutes of Health (NIH), the US Department of Defense and the European Commission’s “Horizon 2020” program. In November 2020, ReveraGen received a USD 3.3 mn NIH Commercialization Readiness Pilot (CRP) grant for NDA preparations for vamorolone in DMD, enabling timely US filing after the positive readout of the pivotal “VISION-DMD” trial. In September 2021, ReveraGen received a USD 1.2 mn orphan grant to start a clinical trial of vamorolone in Becker muscular dystrophy (BMD), a progressive muscle wasting disease like DMD but typically milder. The CRP and FDA orphan grants underline vamorolone’s promising potential in addressing muscular dystrophies such as DMD and BMD, in our view. Santhera obtained the option to in-license the global rights (excluding Japan/South Korea) of vamorolone in all indications, in particular DMD, from Idorsia, in 2018, which in turn had acquired the option for the exclusive global rights from ReveraGen in 2016. Idorsia became an anchor shareholder with the largest stake (now approximately 13.7% or 7.5 mn

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shares) in Santhera. In September 2020, Santhera secured the global rights for vamorolone in all indications via direct license from ReveraGen. Positive readout of the pivotal “VISION-DMD” trial will be transformational Although generically available steroids such as prednisone and deflazacort (branded Emflaza in the US by PTC Therapeutics) are effective, off-label prescribed, treatments for DMD, side effects such as stunted growth, metabolic disorders, fractures, unwanted hair growth, moon face, are particularly unwanted for chronic treatment resulting in high levels of discontinuation. Vamorolone is designed to retain the anti-inflammatory efficacy of steroids with reduced steroid-associated side effects that can be used as a foundational chronic treatment across all disease stages irrespective of underlying genetic mutation with the potential of combination therapy with recently approved DMD drugs. The positive readout of the pivotal phase IIb “VISION-DMD” 28-week trial results of vamorolone in DMD, announced in June 2021, will be transformational for Santhera with peak sales of vamorolone expected to reach CHF 550+ mn in DMD alone. US filing is scheduled for Q1 2022 followed by EU filing in Q2 2022. With Fast Track Designation granted in the US, we assume Priority Review (6 months instead of 10), and therefore the US launch could occur already around year-end 2022, while the EU launch is expected in 2023. Vamorolone has huge promise outside DMD targeting multibillion dollar markets Additional formulations of vamorolone are planned to allow for differential dosing and pricing for indications outside DMD and neuromuscular disorders. Conventional steroids such as prednisone, deflazacort or budesonide are widely prescribed to treat inflammatory diseases such as asthma, chronic obstructive pulmonary disease (COPD), ulcerative colitis and inflammatory bowel disease (IBD), among others. These indications are too large for Santhera to target alone and require substantial financial resources and know-how to develop these indications and sufficient marketing muscle to commercialize them successfully. Peak sales in these indications could be a multiple of vamorolone in DMD and other rare neuromuscular diseases. Santhera plans to monetize the rights of these indications to large pharmaceutical companies in return for upfront, regulatory and sales milestones and royalties on sales to add to its cash position. USD 1.2 mn FDA Orphan Grant for BMD further underlines vamorolone potential In September 2021, ReveraGen received a USD 1.2 mn grant from the FDA under their “Clinical Studies of Orphan Products Addressing Unmet Need of Rare Disease (R01)” grants program to start a clinical trial of vamorolone in adults and children with Becker muscular dystrophy (BMD). We believe this grant further underlines the potential of vamorolone in other (rare) muscular disorders. There are currently no approved drugs for BMD with very few clinical development programs underway. Corticosteroids are often not accepted by BMD patients due to their side effects. Vamorolone with its more favorable side effect burden may provide a valuable new treatment option. BMD is a progressive muscle wasting disease like DMD but typically milder. Both Duchenne and Becker muscular dystrophy are caused by mutations in the dystrophin protein. In DMD, functioning dystrophin is completely absent in muscle, while in BMD, there is some dystrophin present, although not enough for completely normal muscle function, leading to variable onset (from 5 to 60 years of age) and progression of muscle weakness. The incidence of BMD is estimated to range between 1 in 18,000 and 1 in 30,000 male births. The mechanisms of actions, providing basis for vamorolone efficacy as demonstrated in the pivotal “VISION-DMD” trial in the more severe DMD, are felt to be

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highly relevant to BMD. In addition, vamorolone is hypothesized to increase dystrophin protein levels in BMD via inhibition of microRNAs that deleteriously target dystrophin, and this may further complement the mechanism of action specifically in BMD. Vamorolone will now be tested in a 24-week clinical exploratory trial in BMD. The double-blind trial will test efficacy and safety of daily vamorolone on motor outcomes and established biomarker outcomes, with participants randomized 2:1 vamorolone or placebo. The clinical trial plans to enroll at sites in Padova (Italy) and Pittsburgh (US). Given the early development stage, we currently exclude BMD in our vamorolone forecasts. Santhera obtains global rights to vamorolone at amended terms in September 2020 In September 2020, Santhera exercised its option to obtain the global rights to vamorolone in DMD and all other indications, which it acquired from Idorsia in 2018. Idorsia assigned its original exclusive agreement with ReveraGen to Santhera with Santhera now becoming a direct contacting party with ReveraGen, which allows for exclusive and immediate access to vamorolone. The license gives Santhera global rights to vamorolone, also including Japan and South Korea, while some early milestone-related payments are now due after the positive pivotal “VISION-DMD” trial readout. Additionally, Santhera will have a 10% share in any revenues of a potential sale of a Rare Pediatric Disease Priority Review (RPDPR) Voucher, which ReveraGen is entitled to receive upon US approval of vamorolone in DMD. Under the amended terms, milestone payments by Santhera up to and including potential FDA approval will amount to USD 72 mn (previously USD 90 mn). In exchange for the revised license rights, Idorsia received 366,667 Santhera shares and an exchangeable note in the amount of CHF 10 mn. ReveraGen will receive up to USD 7 mn, in monthly instalments of up to USD 0.5 mn to fund the ongoing clinical development of vamorolone. The revised global vamorolone license agreement from September 2020 in a nutshell:

• Strategic shareholding: Idorsia received 366,667 Santhera shares bringing the total to approximately 1.7 mn shares (5.6% stake in Santhera), locked up until US approval of vamorolone in DMD (Idorsia received 1 mn Santhera shares when it sold the exclusive option to vamorolone in 2018)

• Payments to ReveraGen: A payment of up to USD 7 mn in monthly instalments of up to USD 0.5 mn to ReveraGen to fund development including the pivotal phase IIb “VISION-DMD” trial; USD 5 mn to ReveraGen at the time when FDA supports an NDA filing with phase IIb 24-week data

• Payments to Idorsia: a non-interest-bearing exchangeable note to Idorsia in the amount of CHF 10 mn (is payable up to 65% in Santhera shares at Santhera’s discretion, which could reduce cash outlay by an additional USD 6.5 mn); upon the first USD 100 mn vamorolone revenue, an additional USD 5 mn milestone payment is due to Idorsia.

• RPDPR Voucher: Santhera will receive 10% of any potential proceeds that could arise from the monetization of the expected Rare Pediatric Disease Priority Review Voucher upon US approval of vamorolone.

• Regulatory milestones: USD 50 mn (previously USD 60 mn) in total for FDA approval

• Sales milestones: four one-time payments of up to USD 130 mn in aggregate • Royalties on net sales: tiered single digit to low double-digit percentage of sales

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• Regulatory milestones: for three additional indications up to USD 205 mn in aggregate

Unique anti-inflammatory activity of a steroid without the typical steroid side effects Vamorolone was developed by ReveraGen as a “dissociative” steroid – chemically separating the aspects of efficacy (clinical benefit) from safety concerns (side effects) and is first-in-class. Vamorolone is a close analog to prednisone, a conventional glucocorticoid (steroid), however, without the typical steroid side effects. Toxicity, pharmacokinetics, pharmacodynamics, and ADME (absorption, distribution, metabolism and excretion) studies have been conducted. Results demonstrated that most short-term (acute) properties of vamorolone were similar to traditional steroids. In animal models for DMD (mdx mouse model of DMD), vamorolone consistently showed improvements in muscle function that were similar or superior to prednisone and showed a dose-dependent reduction in muscle inflammation and improved muscle strength. Vamorolone showed loss of side effects typically seen with prednisone, including loss of growth stunting, heart fibrosis and immunosuppressive side effects. Foundational chronic treatment for all DMD patients irrespective of genetic mutation Vamorolone is targeted at replacing glucocorticoids (steroids) such as prednisone or deflazacort (branded Emflaza in the US by PTC Therapeutics), the current standard of care in DMD patients with early- and mid-stage disease to prevent muscle deterioration. Chronic use of glucosteroids is often hampered by side effects such as growth stunting, facial puffiness, weight increase and obesity, upper respiratory infection and cough, or unwanted hair growth. In the clinical data seen so far, vamorolone appears to have a superior safety and tolerability profile largely lacking these typical steroid side effects. Vamorolone can be given to DMD patients irrespective of the underlying genetic mutation with the potential of combination therapy, including PTC Therapeutics’ Translarna (only available in the EU) and Sarepta’s EXONDYS 51, VYONDYS 53 or AMONDYS 45 (only available in the US). Vamorolone has been developed as a foundational chronic treatment for patients with DMD irrespective of genetic mutation with an excellent safety and tolerability profile. USD 139 mn sales for Emflaza in 2020 despite no differentiation to generic steroids Marathon Pharmaceutical’s Emflaza (deflazacort) became the first steroid that the FDA approved to treat all forms of DMD in patients of 5 years and older in February 2017. In the US, physicians typically prescribe the steroid prednisone off-label for treating young DMD patients to prevent muscle deterioration. Deflazacort was never approved in the US despite being widely generically available in the EU and large parts of the world. Emflaza has the typical steroid side effects, including facial puffiness (30% of patients), weight increase (20%), increased appetite (14%), upper respiratory tract infections (12%), cough (12%), frequent daytime urination (12%), and unwanted hair growth (10%), among others. Emflaza’s US launch was far from smooth. PTC Therapeutics bought the rights from Marathon in April 2017 in the midst of controversy over its price, for an upfront of USD 140 mn and low- to mid-20’s percentage of net sales, with the option to receive a single USD 50 mn sales-based milestone. PTC Therapeutics cut Marathon’s initial USD 89,000 annual treatment cost per patient to around USD 35,000. However, the USD 35,000 annual estimate applies to boys who weigh up to 25 kg and increases significantly for older boys that weigh far more. Emflaza pricing continues to cause controversy, because its active ingredient is generically available as deflazacort outside the US at a considerably lower

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annual treatment cost per patient of around USD 1,200. Nevertheless, sales for Emflaza amounted to USD 139 mn (+38%) in 2020. Catabasis edasalonexent phase III DMD failure offers pricing power for vamorolone The recent failure of Catabasis’ anti-inflammatory NF-kB inhibitor edasalonexent in DMD, announced at the end of October 2020, can be seen as a positive for vamorolone. In the pivotal “PolarisDMD” phase III trial in 131 patients with DMD, edasalonexent did not meet its primary endpoint, the change in baseline over one-year treatment in the North Star Ambulatory Assessment compared to placebo, nor its secondary endpoints of timed muscle function tests. Catabasis decided to discontinue further development of edasalonexent. Not only is there now one competitor less, edasalonexent would have been at least 6 months ahead of vamorolone in the US market. Catabasis would have set pricing for novel anti-inflammatory DMD drugs, which could have impacted vamorolone pricing. As a result, we have slightly increased our pricing for vamorolone to a ~15% premium pricing over Emflaza from previously a similar pricing. This also reflects the positive topline 28-week results of the pivotal “VISION-DMD” trial and the encouraging 2 ½ year long-term VBP15-LTE open label trial results where vamorolone appears to have a superior safety and tolerability profile compared to conventional steroids such as Emflaza. Clinical development program in DMD to seek parallel approval in the US and EU ReveraGen is seeking parallel regulatory approval in the US and EU. Vamorolone was granted Orphan Drug Designation in the EU and US (including Fast-Track Designation) with the potential of Priority Review (6 months instead of 10) in the US and conditional approval in the EU, based on the positive single pivotal “VISION-DMD” trial. In the US, pre-IND (investigational new drug) meetings were held with the FDA in October 2013, and the IND was filed in December 2014. Phase I clinical trials were completed in late 2015 in adult volunteers with SAD (single ascending dose) and MAD (multiple ascending dose) trials, which have been funded through venture philanthropy contracts by the Muscular Dystrophy Association (US), Joining Jack (UK), Duchenne Research Fund (UK) and Duchenne Children’s Trust (UK). The DMD clinical program is being developed and run by a collaboration between the CINRG (Cooperative International Neuromuscular Research Group) and Newcastle University. Phase IIa POC program provides encouraging data and the basis for the pivotal trial The phase IIa POC development program consisted of two trials: 1) Study VBP15-002: a 2-week open label, 4-dose trial in 48 steroid-naïve (not have taken prednisone or deflazacort) DMD patients aged 4 to 7 years; and 2) Study VBP15-003: a 6-months, open label, multiple dose extension trial where all 48 patients from Study ‘002 were enrolled, with 46 completed. 1) Study VBP-15-002 showed that vamorolone was safe and well tolerated up to 6 mg/kg/day (approximately ten times the conventional steroid dose), with improved safety compared to steroids by reduction of insulin resistance, beneficial changes in bone turnover, and reduction in adrenal suppression. 2) Study VBP15-003 extension trial used timed function tests in comparison to conventional steroids and natural history data. Vamorolone showed dose-dependent efficacy in timed function tests comparable to conventional steroids with improved safety signals in biomarkers of insulin resistance, bone formation, and adrenal suppression.

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The VBP15-003 phase IIa POC extension trial was a 6 months extension to the preceding VBP-002 phase IIa POC trial assessing the efficacy and safety of oral vamorolone in 48 patients with DMD aged 4 to <7 years. Vamorolone at all doses (0.25, 0.75, 2 and 6 mg/kg/day in 12 patients per treatment group) was safe and well tolerated. Mean changes from baseline to weeks 12 and 24 for the primary efficacy outcome, TTSTAND (time to stand) from supine measured as velocity, showed dose- and time-related improvements. The mean difference in change from baseline to week 24 was significant for the comparison of the 2 and 6 mg/kg/day groups to the lowest 0.25 mg/kg/day group (p=0.02 and p=0.04, respectively). The mean difference in change from baseline to week 24 was also significant for comparison of the 2 mg/kg/day vamorolone group to an untreated comparator cohort (p=0.04). Motor function outcomes for secondary endpoints time to run/walk 10 meters (TTRW), time to climb stairs (TTCLIMB), 6-minute walk test (6MWT) and North Star Ambulatory Test showed a consistent pattern of vamorolone dose proportional improvement. Specifically, the 6 mg/kg/day dose showed significant improvements in TTRW (p=0.006) and 6MWT (p=0.002) compared to the lowest 0.25 mg/kg/day dose group. Vamorolone treatment led to increased serum levels of osteocalcin, a biomarker of bone formation, suggesting possible reduction of bone morbidities typically associated with corticosteroids. Biomarker outcomes for adrenal suppression and insulin resistance also indicated better tolerability of vamorolone treatment, relative to published studies of steroid therapy. Extension Study VBP15-LTE shows long-term treatment effect and superior safety 46 patients who completed the Study VBP15-003 trial enrolled in Study VBP15-LTE, a long-term, open label extension trial up to 24 months of vamorolone treatment, with all doses increased to 2, 4 or 6 mg/kg/day. The Study VBP15-LTE completed in June 2020 with most boys opting for the high dose with no serious side effects attributable to vamorolone. In September 2020, Reveragen published encouraging detailed 18-month vamorolone treatment data, which was announced earlier at the World Muscle Society meeting in 2019. The trial demonstrated significant continued clinical improvement of all outcomes measured over the 18-month treatment period, similar to an external control group with corticosteroid-treated patients. Importantly, vamorolone did not show stunting of growth seen with deflazacort or prednisone with fewer steroid side effects such as mood disturbance, excessive hair growth and Cushingoid appearance (e.g., moon face), which we believe bodes well for the pivotal “VISION-DMD” trial.

Favorable 18-months Study VBP15-LTE data published in PLOS Medicine In September 2020, the renowned PLOS Medicine journal published peer-reviewed and detailed open label data of the long-term Study VBP15-LTE of vamorolone in DMD patients treated for 18 months, demonstrating similar efficacy as conventional steroid treatment, however, without the hampering steroid-specific side effects. Motor function and tolerability data from 23 DMD patients treated with oral vamorolone 2 or 6 mg/kg/day for at least 18 months in the ongoing VBP15-LTE trial were presented. The VBP15-LTE trial is an extension trial of the VBP15-003 phase IIa proof-of-concept (POC) trial in which 48 DMD patients were treated for 6 months over a broad dose range, from 0.25 up to 6 mg/kg/day, showing dose-related improvements in multiple gross motor outcomes. 46 patients who participated in the VBP-003 trial moved over to the 2 years open label long-term extension VBP15-LTE trial with all doses increased to 2 or 6 mg/kg/day of vamorolone.

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Vamorolone treatment consistently and significantly improved motor function as measured by time to stand from supine (TTSTAND, p=0.012), time to run/walk 10 meters velocity (TTRW, p<0.001) and time to climb 4-stairs (TTCLIMB, p=0.001) from baseline to month 18. Motor function for vamorolone patients was also consistently better than outcomes for steroid naïve patients (n=19) from an external natural history trial with TTSTAND, p=0.088, TTRW, p=0.003, and TTCLIMB, p=0.027, all in favor of vamorolone-treated patients. When vamorolone-treated DMD patients were compared to age-matched prednisone-treated DMD patients from an external control group, vamorolone showed similar efficacy results as conventional steroids where both groups showed similar improvements in the gross motor outcomes noted above. Importantly, vamorolone-treated DMD patients showed normal growth rates, less physician-reported weight gain and Cushingoid features (e.g. moon face) compared to published trials of prednisone or deflazacort. This is a key differentiator for vamorolone, where conventional steroids are widely prescribed to DMD patients in the early stage of disease and therefore at an early age, despite the steroid-specific side effects. VBP15-LTE completed in 2020 – Most boys opt for high dose after 2 years In June 2020, ReveraGen announced that it completed the long-term open label VBP15-LTE trial with 24 months treatment with vamorolone in patients with DMD. ReveraGen is still analyzing the efficacy data and plans to report the detailed results in upcoming scientific conferences and publications. Including 6 months treatment in the preceding VBP15-003 trial, the company now has safety and efficacy data with vamorolone over a period of 2 ½ years in 41 boys with DMD with 106 patient-years of vamorolone exposure with no serious side effects attributable to vamorolone to date. All 46 patients who completed the VBP15-003 trial requested to continue vamorolone treatment in the long-term extension, rather than transition to conventional corticosteroids. The VBP15-LTE trial enabled dose escalation and de-escalation at the preference of the physician and family (suggested range 2.0 to 6.0 mg/kg/day). Of the 41 participants completing end-of-study visit after 24 months, 27 ended at 6.0 mg/kg/day (66%), 11 at 2.0 mg/kg/day (27%), and 3 at 4.0 mg/kg/day (7%). Thus, the majority of physicians/families chose treatment at the highest tested dose of vamorolone by the end of the VBP15-LTE trial. Positively, the large majority of the boys completing the 2-year VBP15-LTE trial have transitioned to Expanded Access Programs (USA, Canada, Israel) or compassionate use programs (UK, Sweden, Australia) to receive continued vamorolone treatment. Positive long-term vamorolone treatment up to 2 ½ years reported In April 2021, promising new 2.5-year treatment data was reported with vamorolone in DMD. These phase IIa long-term treatment data demonstrate a maintenance of treatment effect, equivalent to a delay of approximately two years in decline for TTSTAND (time to stand) velocity and confirm safety and tolerability benefits over the 2.5-year follow up period with significantly fewer corticosteroid-associated side effects than reported in other clinical trials with other steroids. Importantly, there were no reports of stunted growth, commonly reported in connection with corticosteroid treatment, over the entire follow up period.

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Phase IIb “VISION-DMD” trial considered a pivotal trial for US and EU approval The phase IIb trial “VISION-DMD” (VBP15-004) was developed under FDA and EMA guidance and is considered a pivotal trial for both US and EU approval. The 24-week placebo-controlled period is relevant for the primary analysis for both agencies, with only the EMA in addition requesting 48-week data to assess maintenance of treatment effect and additional longer term safety data.

“VISION-DMD” is a phase IIb randomized, double-blind, parallel group, placebo- and active-controlled trial with a double-blind extension. The trial is being conducted in 30 sites in the US (recruiting), EU, Canada, Australia and Israel and has enrolled 121 ambulant boys from 4 to <7 years of age, who have not taken steroids (prednisone or deflazacort) who were randomized in 4 treatment groups: 1) low dose vamorolone (2 mg/kg/day), 2) high vamorolone (6 mg/kg/day), 3) prednisone 0.75 mg/kg/day, or 4) placebo. Treatment consists of a 24-week 1st Treatment Period (weeks 1-24), a 4-week transition period (weeks 25-28) where the prednisone and placebo groups will cross-over to low or high dose vamorolone, a 20-week 2nd Treatment Period (weeks 28-48) and a 4-week dose-tapering period (weeks 49-52); with one visit per month. The primary endpoint is efficacy measured by time to stand test (TTSTAND) of vamorolone at 6.0 mm/kg/day vs. placebo group in change from baseline to week 24 assessment. Secondary endpoints include secondary outcomes such as safety, cardiac function and additional efficacy measures (e.g., 6-minute walk test, time to run/walk test).

The EMA’s CHMP (Committee for Medicinal Products for Human Use) does not require a formal comparison between vamorolone and prednisone, but rather requests a global assessment of comparative efficacy and safety between vamorolone and prednisone without formal statistical hypothesis testing. First patient enrolment started in August 2018, positive 24-week results (1st treatment period) were reported in June 2021 (see below) and 48-week week treatment data (2nd treatment period) are expected to report in Q4 2021. Positive & statistically significant topline results “VISION-DMD” signal a new era On 1 June 2021, Santhera and partner ReveraGen reported positive topline results of the 1st treatment period (24 weeks) of the pivotal phase IIb “VISION-DMD” trial where vamorolone demonstrated efficacy across primary and secondary and over a broad dose range, including the high dose (6 mg/kg/day) and low dose (2 mg/kg/day) as can be seen in the table below.

OVERVIEW EFFICACY DATA VAMOROLONE "VISION-DMD" TRIAL (AT 24 WEEKS)RANK ENDPOINT COMPARISON DIFFERENCE VS. PLACEBO P-VALUEPRIMARY ENDPOINT:

1 TTSTAND VELOCITY VAMOROLONE 6 MG VS. PLACEBO 0.06 RISES/SECOND 0.002SECONDARY ENDPOINTS:

2 TTSTAND VELOCITY VAMOROLONE 2 MG VS. PLACEBO 0.04 RISES/SECOND 0.0173 6MWT DISTANCE VAMOROLONE 6 MG VS. PLACEBO 42 METER 0.0034 6MWT DISTANCE VAMOROLONE 2 MG VS. PLACEBO 37 METER 0.0095 TTRW 10 METERS VELOCITY VAMOROLONE 6 MG VS. PLACEBO 0.24 METER/SECOND 0.0026 TTRW 10 METERS VELOCITY VAMOROLONE 2 MG VS. PLACEBO 0.13 METER/SECOND 0.103 NS

* TTSTAND = TIME TO STAND; ** 6MWT = 6 MINUTE WALK TEST; *** TTRW = TIME TO RUN/WALK; NS = NON-SIGNIFICANTSOURCE: VALUATIONLAB, SANTHERA PHARMACEUTICALS

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Primary endpoint in change to TTSTAND show clinically relevant improvement The trial met its primary endpoint of superiority in change of TTSTAND (time to stand from supine positioning to standing) velocity with the high dose (6 mg/kg/day) of vamorolone versus placebo (p=0.002) with a treatment difference of 0.06 [95% CI: 0.02–0.10] rises/second from baseline (see graph below). This corresponds to a clinically relevant improvement in TTSTAND in the vamorolone high dose group from 6.0 to 4.6 seconds and a corresponding deterioration in the placebo group from 5.4 to 5.5 seconds.

The trial also demonstrated superiority of vamorolone versus placebo across multiple secondary endpoints which include (in the order of pre-defined hierarchy): • TTSTAND velocity low dose vamorolone: p=0.02 • 6MWT (6-minute walk test) high dose vamorolone: p=0.003 • 6MWT low dose vamorolone: p=0.009 • TTRW (time to run/walk) 10 minutes velocity high dose vamorolone: p=0.002 • TTRW low dose vamorolone (not significant): p=0.103 (N.S.) Consequently, the clinical results establish the efficacy of vamorolone over a wide,

SOURCE: SANTHERA PHARMACEUTICALS

CHANGE IN TTSTAND (IN SECONDS)

CHANGE IN TTSTAND VELOCITY (RISES/SECOND)

SOURCE: SANTHERA PHARMACEUTICALS

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threefold dose range from 2 to 6 mg/kg/day. No statistically significant differences were observed between high dose vamorolone and mainstay corticosteroid prednisone across the above endpoints. The graph below shows the primary endpoint in mean difference at week 24 in TTSTAND in seconds (instead of rises per second) between high dose vamorolone compared to prednisone and placebo. Favorable safety and tolerability profile compared to prednisone… The trial completion rate at 24 weeks was 94% (or 114 of 121 participants). Vamorolone at both low and high doses showed a favorable safety and tolerability profile. In the vamorolone groups, no grade 3 or higher TEAEs (treatment emergent adverse events) or adverse events leading to trial discontinuation were observed. The total number of TEAEs was lower for low dose (events n=96) and higher dose vamorolone (n=91) groups compared to prednisone (n=120). In a prespecified analysis of clinically relevant adverse events (moderate, severe, serious or leading to discontinuation due to safety), defined for the EMA and conducted by Santhera, high dose vamorolone was significantly superior to prednisone (n=6 vs n=19, p=0.02). …without the feared stunted growth seen in chronic steroid use Stunting of growth is a major concern of families and patients treated with corticosteroids and a major reason for not starting or for discontinuing efficacious steroid treatment. As previously published, in open-label trials of 2.5 years duration (113 patient years), vamorolone did not show stunting of growth as reported with conventional corticosteroids. This has now been validated in the 24-week double-blind “VISION-DMD” pivotal phase IIb trial where high dose vamorolone compared to prednisone (0.75 mg/kg/day) showed a statistically significant difference in growth velocity (p=0.02). The strength of evidence for both efficacy and safety of vamorolone over such a wide dose range from 2 to 6 mg/kg/day allows clinicians to individually tailor treatment of Duchenne patients by starting at the high dose of vamorolone with equivalent efficacy to daily prednisone and titrate the dose according to how well the treatment is tolerated whilst maintaining optimal efficacy. This approach may allow patients to avoid side effects that currently lead to discontinuing steroid treatment and staying on treatment for longer. US filing on track for Q1 2022 with a potential US launch around year-end 2022 Based on these positive topline results, Santhera expects to submit an NDA (New Drug Application) for US approval of vamorolone in DMD in Q1 2022, requesting a Priority Review based on the Fast-Track Designation granted earlier by the FDA. Vamorolone has been granted Orphan Drug Designation in the US (7-years market exclusivity) and in the EU (10-years market exclusivity) and has also received Rare Pediatric Disease designation by the FDA and Promising Innovative Medicine (PIM) status from the UK MHRA. Santhera is eligible to 10% of the value of the Rare Pediatric Disease Priority Review (RPDPR) Voucher on US approval. The average value of a RPDPR Voucher, which can be sold freely, amounts to around USD 100 mn. EU filing scheduled for Q2 2022 with EU approval and launch expected in 2023 Subject to positive 48-week “VISION-DMD” trial results, the company will submit an MAA (Marketing Authorization Application) for EU approval of vamorolone in DMD in Q2 2022. Approval of vamorolone in DMD will be transformational for Santhera with the company planning to commercialize vamorolone by an own small specialist sales force in the lucrative US and major EU markets to maximize value creation and out license in other geographies and non-DMD indications.

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Peak sales of approximately CHF 550+ mn for vamorolone in DMD alone We have based our vamorolone forecasts on detailed bottom-up analysis based on the number of DMD patients in three distinct regions, including the US and the Europe (excluding the CEE), where Santhera plans to market vamorolone by an own small specialist sales force, and ROW where we expect partners to commercialize vamorolone in return for milestone payments and royalties on sales. We provide a breakdown of DMD patients in three groups from: 1) age 4-11 years (~32% of patients); 2) age 12-22 years (~44% of patients), and 3) age 23+ years (~24% of patients). As vamorolone is expected to be given in early stages of disease, we exclude the latter patient group. We expect the annual cost of treatment per patient will be weight dependent. We assume an average weight of ~34 kg for patients of age 4-11 years and ~63 kg for patients of age 12-22 years. In the US, we conservatively assume a ~15% premium pricing for vamorolone compared to PTC Therapeutics’ branded conventional corticosteroid Emflaza (deflazacort), which was specifically developed for DMD in the US and approved in 2017. Deflazacort is generically available outside the US and prescribed off-label for use in DMD. Consequently, our vamorolone US treatment price amounts to an annual treatment cost per patient of age 4-11 years (average weight of ~ 34 kg) of USD 58,625 and USD 109,375 for patients of age 12-22 years (average weight of ~63 kg). Note that Emflaza still has the typical steroid side effects, including facial puffiness (33% of patients), weight increase (20%), increased appetite (14%), cough (12%), frequent daytime urination (12%), upper respiratory tract infection (12%), central obesity (10%) and unwanted hair growth (10%), which hampers chronic use in young boys. Vamorolone’s superior safety and tolerability profile should justify premium pricing over Emflaza, in our view. In the EU and ROW, we conservatively assume a ~40% price discount to the US pricing, to reflect the generic availability of prednisone and deflazacort in these regions. We assume that steroids are used in ~60% of DMD patients in these age groups. Vamorolone is targeted at replacing current steroids in DMD with an efficacious but safer and more tolerable dissociative steroid. In the US, we assume vamorolone will penetrate 80% of DMD patients of age 4-11 years treated with steroids leading to a ~45% peak market penetration. In the higher age 12-22 years patient group, we assume a lower peak penetration of 23% (roughly half the penetration rate as in the younger 4-11 years patient group). In the EU, we conservatively assume a lower peak penetration rate of ~40% in the younger patient group and ~20% in the older patient group, and in ROW we assume peak penetration rates of ~30% and ~15% in the respective age groups. Note that we do not account for a higher steroid use in DMD patients, which could be the case with vamorolone due to its superior safety and tolerability profile compared to mainstay steroid (prednisone or deflazacort) therapy. This could provide additional upside to our forecasts. Our conservative bottom-up approach (pricing, penetration, steroid use) results in vamorolone peak of CHF 584 mn in DMD alone. Vamorolone could potentially be developed in other diseases where steroids are involved such as asthma, inflammatory bowel disease, rheumatoid arthritis, multiple sclerosis, cystic fibrosis, among others. In the US and Europe, we account for 10% COGS and cost for the buildup of an own small specialist sales force to commercialize vamorolone and maximize long-term profitability. Santhera estimates in the US there are approximately 160 centers and 450 physicians that

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treat DMD patients and in the EU-5 ~180 centers and ~750 physicians, which can be targeted by an own small specialist sales force. In ROW, we assume partnering upon US approval in 2022 in return for upfront, regulatory and commercial milestones totaling CHF 31 mn with 20% royalties on sales. We account for global regulatory and sales milestone payments of up to USD 130 mn payable to ReveraGen and Idorsia and sales royalty payments in tiered single to low double-digits (if product sales USD >1 bn). Based on the positive “VISION-DMD” topline results and encouraging long-term VBP15-LTE open label extension trial results, we now assume a 65% (positive single pivotal phase IIb trial) success rate from previously 50%. Applying a WACC of 7%, we calculate a rNPV of CHF 713 mn or CHF 8.4 per share for vamorolone in DMD alone (for details see the following page).

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Forecasts & Sensitivity Analysis

VAMOROLONE - FINANCIAL FORECASTS FOR DUCHENNE MUSCULAR DYSTROPHYINDICATION PRESERVATION OF MUSCLE FUNCTION IN DMD WITH IMPROVED SAFETY AND TOLERABILITY PROFILE THAN EXISTING STEROIDSDOSAGE TO BE DETERMINED (2 MG UP TO 6 MG/KG/DAY)PRICE ANNUAL COST PER KG WEIGHT: US: USD 1,750 (~15% PREMIUM TO EMFLAZA); EU: EUR 900; ROW: USD 1,000; CONSERVATIVE PRICING TO FACILITATE REIMBURSEMENTSTANDARD OF CARE STEROIDS (OFF-LABEL) & BRANDED EMFLAZA (US ONLY); EXONDYS 51/VYONDYS 53 ACCELERATED APPROVAL (US ONLY); TRANSLARNA CONDITIONAL APPROVAL (EU ONLY)UNIQUE SELLING POINT REPLACEMENT OF EXISTING STANDARD OF CARE STEROIDS, WHICH REDUCES THE DECLINE IN MUSCLE FUNCTION WITHOUT THE TYPICAL STEROID SIDE EFFECTS

7Ps ANALYSISPATENT METHOD OF USE PATENT EXPIRY 2028-2030 (EXTENSION UP TO 5 YEARS); ORPHAN DRUG EXCLUSIVITY POST-APPROVAL: US 7 YEARS; EU: 10 YEARS + 2 YEARS PEDIATRICPHASE PHASE IIA COMPLETED (INCL. POSITIVE DATA LONG-TERM "VBP15-003" EXTENSION TRIAL); POSITIVE PHASE IIB "VISION-DMD" PIVOTAL TRIAL RESULTS REPORTED JUNE 2021PATHWAY ORPHAN DRUG DESIGNATION IN EU & US (FAST TRACK) - US: FILING Q1 2022, APPROVAL Q4 2022, LAUNCH ~YE 2022; EU: FILING Q2 2022, APPROVAL & LAUNCH: H2 2023PATIENT REDUCTION IN PROGRESSIVE DECLINE IN MUSCLE FUNCTION MEANS IMPROVED QUALITY OF LIFE FOR PATIENT WITH LESS COMPLICATIONSPHYSICIAN EFFECTIVE TREATMENT WITH GOOD TOLERABILITY THAT REDUCES THE DECLINE IN MUSCLE FUNCTION, WHICH LEADS TO LOSS OF MOBILITY AND PREMATURE DEATHPAYER SUBSTANTIAL SAVINGS DUE TO LESS HOSPITALIZATIONS, LESS COMPLICATIONS AND LOWER SUPPORTIVE CARE COSTSPARTNER RIGHTS ACQUIRED FROM IDORSIA/REVERAGEN SEP 2020; UP TO USD 130 MN REGULATORY/SALES MILESTONE PAYMENTS; RISING TIERED SINGLE- TO DOUBLE-DIGIT ROYALTIES

REVENUE MODELEUROPE EXCLUDING CEE (SANTHERA SALES FORCE) 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030ENUMBER OF PATIENTS 18,071 18,252 18,434 18,619 18,805 18,993 19,183 19,375 19,568 19,764 19,962GROWTH (%) 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1%PATIENTS AGE 4-11 YEARS (~32%) 5,783 5,841 5,899 5,958 6,018 6,078 6,138 6,200 6,262 6,324 6,388PENETRATION (%) 0% 0% 0% 2% 16% 24% 30% 34% 36% 38% 39%TREATED PATIENTS (AGE 4-11 YEARS) 0 0 0 119 963 1,459 1,842 2,108 2,254 2,403 2,491ANNUAL COST OF THERAPY (AVE. ~34 KG) (CHF) 33,277 33,277 33,277 33,277 33,277 33,277 33,277 33,277 33,277SALES PATIENTS AGE 4-11 YEARS (CHF MN) 0 4 32 49 61 70 75 80 83PATIENTS AGE 12-22 YEARS (~44%) 7,951 8,031 8,111 8,192 8,274 8,357 8,440 8,525 8,610 8,696 8,783PENETRATION (%) 0% 0% 0% 0% 1% 8% 12% 15% 17% 18% 19%TREATED PATIENTS (AGE 12-22 YEARS) 0 0 0 0 83 669 1,013 1,279 1,464 1,565 1,669ANNUAL COST OF THERAPY (AVE. 63 KG) (CHF) 62,083 62,083 62,083 62,083 62,083 62,083 62,083 62,083 62,083SALES PATIENTS AGE 12-22 YEARS (CHF MN) 0 0 5 42 63 79 91 97 104SALES (CHF MN) 0 0 0 4 37 90 124 150 166 177 187CHANGE (%) 838% 142% 38% 20% 11% 7% 5%COGS (10%) (CHF MN) 0 0 0 0 -4 -9 -12 -15 -17 -18 -19TIERED ROYALTY PAYMENTS TO REVERAGEN (%) 0% 0% 5% 5% 5% 5% 5% 5% 7% 7% 7%TIERED ROYALTY PAYMENTS TO REVERAGEN (CHF MN) 0 0 0 0 -2 -5 -6 -7 -11 -12 -12R&D COSTS (INCL. IDORSIA/REVERAGEN PAYMENTS) (CHF MN) -6 -13 -51 -18 0 0 0 0 0 0 0M&S COSTS (CHF MN) 0 0 -2 -11 -25 -27 -31 -30 -25 -27 -28PROFIT BEFORE TAX (CHF MN) -6 -13 -53 -26 7 50 74 97 114 121 128TAXES (CHF MN) 0 0 0 0 0 -2 -11 -19 -23 -24 -26PROFIT (CHF MN) -6 -13 -53 -26 7 47 63 78 91 97 102LNCH: H2 ODD: Q3UNITED STATES / CANADA (SANTHERA SALES FORCE) 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030ENUMBER OF PATIENTS 16,239 16,564 16,895 17,233 17,577 17,929 18,287 18,653 19,026 19,407 19,795PATIENTS AGE 4-11 YEARS (~32%) 5,196 5,300 5,406 5,514 5,625 5,737 5,852 5,969 6,088 6,210 6,334PENETRATION (%) 0% 0% 0% 15% 25% 33% 39% 43% 45% 45% 45%TREATED PATIENTS (AGE 4-11 YEARS) 0 0 0 827 1,406 1,893 2,282 2,567 2,740 2,795 2,850ANNUAL COST OF THERAPY (AVE. ~34 KG) (CHF) 53,373 53,373 53,373 53,373 53,373 53,373 53,373 53,373 53,373 53,373SALES PATIENTS AGE 4-11 YEARS (CHF MN) 0 0 44 75 101 122 137 146 149 152PATIENTS AGE 12-22 YEARS (~44%) 7,632 7,785 7,941 8,099 8,261 8,427 8,595 8,767 8,942 9,121 9,304PENETRATION (%) 0% 0% 0% 0% 0% 8% 13% 17% 20% 22% 23%TREATED PATIENTS (AGE 12-22 YEARS) 0 0 0 0 0 632 1,074 1,447 1,744 1,961 2,093ANNUAL COST OF THERAPY (AVE. ~63 KG) (CHF) 99,577 99,577 99,577 99,577 99,577 99,577 99,577 99,577 99,577SALES PATIENTS AGE 12-22 YEARS (CHF MN) 0 0 0 63 107 144 174 195 208SALES (CHF MN) 0 0 0 44 75 164 229 281 320 344 361CHANGE (%) 70% 118% 40% 23% 14% 8% 5%UPFRONT AND MILESTONE INCOME (CHF MN) 0 0 9 0 0 0 0 0 0 0 0TIERED ROYALTY PAYMENTS TO REVERAGEN (%) 0% 0% 5% 5% 5% 5% 5% 5% 7% 7% 7%TIERED ROYALTY PAYMENTS TO REVERAGEN (CHF MN) 0 0 0 -2 -4 -8 -11 -14 -21 -22 -23MILESTONE PAYMENTS TO IDORSIA/REVERAGEN (CHF MN) 0 0 0 0 -5 -9 0 0 0 0 0COGS (10%) (CHF MN) 0 0 0 -4 -8 -16 -23 -28 -32 -34 -36M&S COSTS (CHF MN) 0 -3 -9 -15 -19 -33 -34 -42 -48 -52 -54PROFIT BEFORE TAX (CHF MN) 0 -3 0 22 40 97 160 197 219 236 247TAXES (CHF MN) 0 0 0 0 0 -5 -24 -39 -44 -47 -49PROFIT (CHF MN) 0 -3 0 22 40 93 136 157 175 189 198LAUNCH MID ODD EXPIRY H2

REST OF WORLD (JAPAN & AUSTRALIA) (PARTNERS) 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030ENUMBER OF PATIENTS 5,019 5,070 5,120 5,171 5,223 5,275 5,328 5,381 5,435 5,490 5,544TREATED PATIENTS (AGE 4-11 YEARS) 0 0 0 0 33 169 273 379 452 492 532ANNUAL COST OF THERAPY (AVE. ~34 KG) (CHF) 30,499 30,499 30,499 30,499 30,499 30,499 30,499SALES PATIENTS AGE 4-11 YEARS (CHF MN) 0 1 5 8 12 14 15 16TREATED PATIENTS (AGE 12-22 YEARS) 0 0 0 0 0 25 125 202 281 335 365ANNUAL COST OF THERAPY (AVE. ~63 KG) (CHF) 56,901 56,901 56,901 56,901 56,901 56,901 56,901SALES PATIENTS AGE 12-22 YEARS (CHF MN) 0 0 1 7 12 16 19 21SALES (CHF MN) 0 0 0 0 1 7 15 23 30 34 37CHANGE (%) 520% 125% 62% 29% 15% 18% 6%ROYALTIES (%) 20% 20% 20% 20% 20% 20% 20% 20% 20% 20% 20%ROYALTY INCOME (CHF MN) 0 0 0 0 0 1 3 5 6 7 7UPFRONT AND MILESTONE INCOME (CHF MN) 0 0 14 0 9 0 0 2 3 0 0TIERED ROYALTY PAYMENTS TO REVERAGEN (%) 0% 0% 5% 5% 5% 5% 5% 5% 7% 7% 7%TIERED ROYALTY PAYMENTS TO REVERAGEN (CHF MN) 0 0 0 0 0 0 -1 -1 -2 -2 -2PROFIT BEFORE TAX (CHF MN) 0 0 14 0 9 1 2 5 7 5 5TAXES (CHF MN) 0 0 0 0 0 0 0 -1 -1 -1 -1PROFIT (CHF MN) 0 0 14 0 9 1 2 4 5 4 4LAUNCH MID ODD EXPIRY H2

2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030EGLOBAL PRODUCT SALES (CHF MN) 0 0 0 48 113 261 368 454 516 556 584CHANGE (%) 135% 130% 41% 23% 14% 8% 5%

GLOBAL PROFIT (CHF MN) -6 -15 -40 -4 56 141 201 239 272 290 304CHANGE (%) 29% 139% 157% -91% -1597% 150% 43% 19% 13% 7% 5%WACC (%) 7%NPV TOTAL PROFIT (CHF MN) 1,098NUMBER OF SHARES (MN) 84.9NPV PER SHARE (CHF) 13SUCCESS PROBABILITY 65% = POSITIVE PHASE IIB PIVOTAL TRIAL (US ACCELERATED/EU CONDITIONAL APPROVAL)

RISK ADJUSTED NPV PER SHARE (CHF) 8.4SENSITIVITY ANALYSIS

WACC (%)CHF/SHARE 5.5 6.0 6.5 7.0 7.5 8.0 8.5

100% 14.5 13.9 13.4 12.9 12.5 12.0 11.690% 13.0 12.5 12.1 11.6 11.2 10.8 10.480% 11.6 11.1 10.7 10.3 10.0 9.6 9.3

SUCCESS PROBABILITY 70% 10.1 9.7 9.4 9.0 8.7 8.4 8.165% 9.4 9.0 8.7 8.4 8.1 7.8 7.550% 7.2 7.0 6.7 6.5 6.2 6.0 5.8


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Unique Selling Point First-in-class dissociative steroid with the potential to replace current DMD standard of care steroid therapy (prednisone, deflazacort) due a superior safety and tolerability profile with similar efficacy. Vamorolone can be given to DMD patients irrespective of the underlying genetic mutation and potentially in combination with other DMD treatments 7P's Analysis Patent: Method of use patents expire in 2029 with potential extension to 2033. Orphan drug exclusivity should provide protection in the US until late 2029 (7 years) from the date of approval and in the EU until 2035 (including 10 years orphan drug and 2 years pediatric exclusivity). Phase: Phase I safety and phase IIa proof-of-concept established successfully. The single pivotal phase IIb “VISION-DMD” trial in 121 ambulant steroid naïve DMD boys of age 4 to <7 years reported positive topline results of the 1st readout (24-week) in June 2021 with a second readout (48-week) expected in Q4 2021. This trial was developed under FDA and EMA scientific advice and is considered a pivotal trial for US accelerated approval and EU conditional approval with the 24-week period being the primary analysis of the trial. Pathway: Vamorolone enjoys in both the EU and US orphan drug designation; an incentive to develop drugs for rare disease. Vamorolone has also received FDA “Fast-Track Designation”, potentially speeding up the US review time to only 6 months. Patient: Slowing down of progressive muscle function leads to longer patient mobility. The superior safety and tolerability profile lead to better patient compliance with less complications for the patient, improved quality of life, and potentially prolonged life expectancy. Physician: Vamorolone has the potential to replace standard of care steroid therapy (prednisone or deflazacort) with an effective steroid with a superior safety and tolerability profile, enhancing patient compliance and hence long-term outcomes. Vamorolone slows the progressive loss in muscle function and the of loss of mobility. Vamorolone has the potential to be combined with other DMD drugs such as PTC Therapeutics’ Translarna (approved in the EU only) or Sarepta’s EXONDYS 51, VYONDYS 53 and AMONDYS 45 (approved in the US only). Payer: A treatment that slows down progressive muscle function loss in DMD patients may save costs related to loss of mobility (e.g. wheelchair, special bed), rescue medication, supportive care and hospitalization. The superior safety and tolerability profile compared to mainstay steroids should lead to less secondary complications and increased patient compliance and long-term treatment outcomes. Partner: Santhera plans to sell vamorolone in DMD through an own small specialist sales force in the US and EU that it will build up shortly after approval and seek commercialization partners in ROW. The company will seek develop and commercialization partners for vamorolone in other indications outside DMD, such as asthma, chronic obstructive pulmonary disease (COPD), ulcerative colitis and inflammatory bowel disease (IBD), among others. Peak sales in these indications could be a multiple of vamorolone in DMD and other rare neuromuscular diseases.

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Duchenne Muscular Dystrophy Market The Duchenne muscular dystrophy market has started to take off since the launch of specific treatments for DMD. PTC Therapeutics’ Translarna (2020 sales: USD 187 mn) was granted conditional approval in the EU in 2014, while its branded steroid Emflaza (2020 sales: USD 139 mn) was approved in the US in February 2017. Sarepta Therapeutics’ EXONDYS 51 (2020 sales: USD 415 mn) was granted accelerated approval in the US in 2016, followed by VYONDYS 53 (2020 sales: USD 41 mn) in December 2019 and AMONDYS 45 in February 2021. In June 2021, Santhera reported positive pivotal trial results for its dissociative steroid vamorolone with a potential US launch around year-end 2022 and EU launch in 2023 with estimated DMD peak sales of CHF 550+ mn. At present systemic steroids are used off-label and have become the mainstay treatment for DMD. Due to their severe side effects the use of steroids is generally limited to certain disease stages with high discontinuation rates. Excessive weight gain is particularly problematic in older non-ambulatory patients. The DMD market has increased substantially with the introduction of new treatments potentially delaying the progression of this fatal muscle wasting disease that starts in early childhood. We expect widespread combination therapy and possibly reduction in the use of mainstay steroids once vamorolone is approved. With annual treatment costs ranging from USD 35,000 up to USD 500,000 per patient, the DMD market could rapidly grow to USD 4 bn.

Duchenne muscular dystrophy is an inherited and fatal muscle wasting disease that worsens quickly. The disease is caused by a defective dystrophin gene, the largest gene located on the human X chromosome, which codes for the protein dystrophin. This protein is an important component within muscle tissue that provides structural stability during cycles of muscle contraction and relaxation. Lack of dystrophin protein leads to muscle cell damage and ultimately loss. DMD often occurs in people without a known family history of the condition. Because of the way DMD is inherited, only boys are affected, not girls.

DUCHENNE MUSCULAR DYSTROPHY - KEY FACTSMARKET SIZE USD 1+ BN (EXCL. OFF-LABEL STEROIDS) - POTENTIAL UP TO USD 4 BN (vL ESTIMATE)PREVALENCE 4-5 PER 100,000; APPR. 14,500 IN THE US/CAN; APPR. 22,000 IN THE EU; APPR. 5,000 IN JAPANINCIDENCE 1 OUT OF 3,500 MALE INFANTSUNDERLYING CAUSE DUCHENNE MUSCULAR DYSTROPHY (DMD) IS CAUSED BY A DEFECTIVE GENE ENCODING FOR

DYSTROPHIN (A PROTEIN RESPONSIBLE FOR THE MECHANICAL STABILITY OF MUSCLE CELLS). BECAUSE OF THE WAY IT IS INHERITED ONLY BOYS ARE AFFECTED. WOMEN CAN BE CARRIERS OF THE DEFECTIVE GENE BUT DEVELOP NO SYMPTOMS. SONS OF THESE WOMEN HAVE A 50% CHANCE OF HAVING THE DISEASE. UNFORTUNATELY, THE FAMILY HISTORY IS OFTEN UNKNOWN UNTIL THE DISEASE APPEARS.

SYMPTOMS SYMPTOMS USUALLY APPEAR BEFORE AGE 6 AND AS EARLY AS INFANCY, INCLUDING:- MUSCLE WEAKNESS (STARTS IN LEGS AND PELVIS FOLLOWED BY WEAKNESS IN ARMS, NECK)- DELAYED MOTOR SKILLS (RUNNING, HOPPING, JUMPING, FREQUENT FALLS)- PROGRESSIVE DIFFICULTY WITH WALKING (ABILITY TYPICALLY LOST DURING EARLY TEENAGE YEARS THEN CONFINED TO WHEELCHAIR)- PROGRESSIVE RESPIRATORY INSUFFICIENCY REQUIRING ASSISTED VENTILATION- CARDIAC COMPLICATIONS- FATIGUE- LEARNING DIFFICULTIES (IQ CAN BE BELOW 75)DMD LEADS TO QUICKLY WORSENING DISABILITY. DEATH USUALLY OCCURS AROUND AGE 30 PREDOMINANTLY FROM RESPIRATORY FAILURE

DRUG CLASS (KEY BRANDS) CURRENT STANDARD OF CARE:- STEROIDS - NOTE: OFF-LABEL USE, EMFLAZA (DEFLAZACORT) APPROVED IN US ONLYEMERGING THERAPIES:- DYSTROPHIN READ-THROUGH THERAPY (TRANSLARNA)- EXON-SKIPPING THERAPIES (EXONDYS 51, VYONDYS 53, AMONDYS 45)- DISSOCIATIVE STEROIDS (VAMOROLONE, EDASALONEXENT)

MAJOR PLAYERS (KEY BRANDS) - PTC THERAPEUTICS (TRANSLARNA, EMFLAZA)- SAREPTA THERAPEUTICS (EXONDYS 51, VYONDYS 53, AMONDYS 45)- SANTHERA (VAMOROLONE)

SOURCE: VALUATIONLAB, NIH, WHO, ORPHA.NET, COMPANY DATA

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Genetic tests performed can detect DMD with approximately 95% accuracy. DMD occurs in 1 out of ~3,500 male infants. There are roughly 40,000 DMD patients in the EU, North America and Japan. Symptoms appear at early age, as early as infancy, and worsen rapidly. Generally, muscle weakness starts in the legs and pelvis, but also occurs less severely in the arms, neck and other areas of the body. These boys fall frequently and have difficulties running, hopping, jumping, climbing stairs or getting up from a lying position. Furthermore, the ability to walk deteriorates quickly and may be lost during early teenage years, with the child confined to a wheelchair. Slowly the lungs and heart are affected resulting in breathing difficulties and heart disease. Death occurs around the age of 30, typically from respiratory failure. Mainstay treatment limited to steroids, unproven remedies and supportive care To date, no cure has been found for DMD. Systemic steroids use, such as prednisone or deflazacort (branded Emflaza in the US), is given as first line treatment. Such steroids can slow the loss of muscle strength and prolong the patient’s ambulatory status and delay loss of respiratory function. However, chronic use of steroids impacts normal growth and weakens bones, which is particularly problematic in young patients. In older patients, excessive weight gain and the risk of diabetes are additional complications typically limiting the use of steroids to a window stating around 5-7 years of age and ending by the time patients become non-ambulatory. Supplements with no proven efficacy include amino acids, creatine or nutritional supplements such as fish oil, carnitine, coenzyme Q10, vitamin E, or green tea extracts. Further treatment is focused on encouraging activity to maintain muscle strength and function, such as physiotherapy. Orthopedic appliances such as braces, and wheelchairs are used to improve mobility. Assisted ventilation is used during day or night to help breathing. DMD market experiencing rapid growth by the introduction of new treatments The introduction of new therapies is driving growth in the DMD market. PTC Therapeutics’ Translarna (ataluren), a dystrophin nonsense mutation read-through therapy aiming at ~13% of a DMD cases, received conditional approval in the EU in May 2014 becoming the first specific DMD therapy to reach the market, albeit on a failed phase IIb trial. The drug was turned down in the US. In September 2016, Sarepta’s EXONDYS 51 (eteplirsen) received accelerated approval to treat nonsense mutation DMD that occurs in ~13% of DMD cases. Despite a high annual price tag of USD ~300,000, reimbursement issues due to the questionable efficacy. In 2019, the FDA approved VYONDYS 53 (golodirsen) followed by AMONDYS 45 (casimersen) in 2020, two other nonsense mutation DMD drugs from Sarepta. PTC Therapeutics acquired Marathon’s steroid Emflaza (deflazacort), which was approved in the US in February 2017. The net price of USD ~35,000 per year per patient fails to ease the concerns of some federal lawmakers who had criticized Marathon’s initial USD 89,000 list price (~70 times higher than the drug’s UK price). Deflazacort is a decades-old generic steroid available outside the US. Novel steroids without the dreadful side effects are also being developed, including Santhera/ReveraGen’s dissociative steroid vamorolone (positive pivotal phase IIb). Recent late stage DMD treatment setbacks include, Santhera’s short-chain benzoquinone Puldsya (idebenone – futile phase III interim analysis) and Catabasis’ NF-kB inhibitor edasalonexent (phase III did not meet primary endpoint). Early-stage projects that are still years away from market introduction, include Tivorsan Pharma’s biglycan/TVN-102 (pre-clinical), and stem cell and gene therapies. For instance, Asklepios BioPharmaceutical is conducting the first biostrophin gene therapy trial for DMD in the US.

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Pipeline – Another blockbuster in the early stages We have conservatively not accounted for Santhera’s early stage pipeline projects due to the lack of sufficient clinical proof-of-concept at this moment. These projects could provide substantial upside when developed successfully. Santhera’s early stage clinical projects include:

1. Lonodelestat for treating cystic fibrosis and other rare lung disorders 2. LAMA2-MD gene therapy for treating congenital muscular dystrophy (CMD)

1) Lonodelestat (cystic fibrosis) – Peak sales potential of CHF 1 bn In February 2018, Santhera expanded its product pipeline in lung diseases. The company acquired exclusive global rights to lonodelestat (formerly POL6014) from the Swiss biopharmaceutical company Polyphor (ticker: POLN). Lonodelestat is a clinical stage selective human neutrophil elastase (hNE) inhibitor for treating cystic fibrosis and other neutrophilic lung diseases such as non-cystic fibrosis bronchiectasis (NCFB), alpha-1 antitrypsin deficiency (AATD) and primary ciliary dyskinesia (PCD). These are all rare lung diseases, which allow for 10 years orphan drug market exclusivity in the EU and 7 years in the US from the date of approval. In 2018, lonodelestat received Orphan Drug Designation in the EU for cystic fibrosis. Lonodelestat enjoys composition of matter patent protection until 2025 with potential market protection (patent extensions) until 2030. In addition, method of use and formulation patents have been filed or are in preparation. We believe lonodelestat nicely complements Santhera’s product pipeline targeting rare diseases such as DMD. Santhera has gained significant knowledge in clinical development of investigational drugs for lung disease with the development program of Puldysa in treating respiratory complications in DMD. In October 2020, Puldysa was discontinued after an interim analysis of phase III “SIDEROS” trial concluded the trial was unlikely to meet it primary endpoint. Agreement paid in shares with back-loaded cash milestone payments Polyphor received an initial payment of CHF 6.5 mn, paid in Santhera shares at an agreed valuation of CHF 27.2053 and is eligible to additional cash milestone payments of up to CHF 121 mn in development, regulatory and particularly sales milestones (indicating back-loaded cash milestone payments) and tiered royalty payments on net sales. Santhera issued 238,924 shares (3.8% of issued shares in February 2018) required for the initial payment to Polyphor out of its existing authorized share capital. Consequently, the transaction provided Santhera with a promising new product candidate for rare lung disorders with little upfront development costs to reach proof-of-concept in cystic fibrosis. Cystic fibrosis affects 70,000 patients globally with no cure and poor prognosis Cystic fibrosis is a rare genetic and progressive disorder that affects mostly the lungs, but also the pancreas, liver, kidneys and intestine, and affects approximately 70,000 patients in Europe and the US. It is caused by the presence of mutations in both copies of the gene for cystic fibrosis transmembrame conductance regulator (CFTR) protein. The disease is characterized by persistent lung infection and chronic inflammation. Long-term issues include difficulty breathing and coughing up thick and sticky mucus as a result of frequent lung infections. The average life expectancy is between 42 and 50 years, where lung problems account for death in ~80% of cystic fibrosis patients. Cystic fibrosis is most common among people of Northern European ancestry and affects about one of every

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3,000 newborns. The disease is considered an orphan drug disease, which allows for 10 years market exclusivity in the EU and 7 years in the US. There is no known cure for cystic fibrosis. Lonodelestat could become a blockbuster in a USD 10 bn cystic fibrosis market… The global cystic fibrosis market is expected to exceed USD 10 bn over the next ten years. Treatment typically consists of combination therapies, including mucolytics (e.g. Pulmozyme), inhaled antibiotics such as Novartis’ Tobi (tobramycin), pancreatic enzyme products such as AbbVie’s Creon (pancrelipase) and CFTR modulators such as Vertex’ Kalydeco (ivacaftor) or Orkambi (ivacaftor/lumacaftor combo). However, these treatments do not significantly reduce the chronic lung inflammation. Lonodelestat is a first-in-class hNE inhibitor that targets chronic inflammation, caused by neutrophil elastase from neutrophils present in the lung due to the buildup of thick mucus. High levels of hNE have been detected in cystic fibrosis sputa and these high levels of hNE correlate with disease severity as measured by lung parameters such as FEV1 reduction and are therefore an important surrogate marker of disease. Lonodelestat could be potentially used in combination with existing treatments. …administered by the Pari eFlow nebulizer and by capturing 15% market share Previous hNE inhibitors have mostly been given as an oral tablet, which did not deliver adequate concentrations of drug to the lung and safety issues due to systemic exposure leading to their discontinuation. Lonodelestat will be administered by inhalation using Pari eFlow, a well-accepted rapid nebulizer system used in cystic fibrosis, leading to high concentrations in the lung (1,000 times greater in the lung sputum versus plasma) and favoring local activity in the lung with low systemic exposure, thereby reducing the risk of systemic side effects. Chiesi Farmaceutici is developing CHF6333, a dry-powder inhaler formulation of hNE, which has successfully completed a phase I trial in 72 patients with cystic fibrosis and non-cystic fibrosis bronchiectasis (NCFB). Assuming lonodelestat captures a conservative 15% of the market with a USD 70,000 to USD 100,000 annual treatment price, peak sales could easily reach CHF 1 bn for cystic fibrosis alone. Next development steps with lonodelestat in cystic fibrosis Lonodelestat has been shown to be effective in various non-clinical and biomarker trials, including human sputum and bronchiolar lavage (BAL) samples for patients with cystic fibrosis and findings from two completed phase I trials: one in a first-in-man trial in 48 healthy volunteers and one in a single ascending dose (SAD) safety and tolerability trial in cystic fibrosis patients. The data showed that single dose inhalation of lonodelestat can lead to high concentrations within the lung, resulting in inhibition of hNE in sputum of patients, an enzyme associated with lung tissue inflammation, with very limited systemic drug exposure. In cystic fibrosis, excessive release of enzymes such as hNE accelerates lung tissue inflammation and damage leading to a debilitating and progressive decline in lung function. No serious adverse events were observed, and the single dose was well-tolerated. The two double-blind placebo-controlled trials evaluated the safety, tolerability and pharmacokinetics of single ascending doses of inhaled lonodelestat in 48 healthy volunteers and 24 cystic fibrosis patients. Healthy volunteers received lonodelestat at doses ranging from 20 mg to 960 mg, while cystic fibrosis patients were dosed at 80 mg, 160 mg or 320 mg. Shortly after inhalation of lonodelestat, a clear reduction of active hNE was observed at all doses tested in cystic fibrosis patients. Levels of lonodelestat in

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sputum of these patients appeared to be up to 1,000-fold higher compared to plasma levels 3 and 24 hours after inhalation, indicating high lung exposure to lonodelestat with very limited systemic drug exposure. Lonodelestat was considered safe and well tolerated in doses of up to 480 mg. Positive phase Ib MAD results reported in March 2021 justify phase II development In March 2020, positive results were announced from the phase Ib MAD (multiple ascending dose) with lonodelestat in patients with cystic fibrosis. The trial, supported by the Cystic Fibrosis Foundation, showed good tolerability and transient, near complete inhibition of elastase activity with daily inhalation of 40/80/160 mg QD (1x daily) and 80 mg BID (2x daily) over a period of up to 28 days. High levels of NE play a central role in the deterioration of lung function associated with cystic fibrosis. Neutrophils produce NE, normally absent in the lung, which causes damage to structural, cellular and soluble components the lung tissues. Inhibition with lonodelestat is expected to stop or slow down the progression of lung function loss, preserve pulmonary independence for longer and help cystic fibrosis patients to live longer with an improved quality of life. Proof-of-concept trial in cystic fibrosis could be started in 2022 After completion of the analyses of the positive MAD trial, the company will prepare for a phase II efficacy trial of lonodelestat in cystic fibrosis and potentially also for other inflammatory lung diseases. Upon securing sufficient funding, we believe the phase II proof-of-concept trial could be started in 2022 with a potential read-out 12 months later. Santhera will seek further EU and US regulatory guidance before starting phase II development. The company will also advance partnering opportunities for additional indications in a range of other neutrophilic lung diseases associated with excessive lung NE levels. Potential in other diseases associated with disbalanced neutrophil activity In parallel, Santhera will also collaborate with experts to explore not only cystic fibrosis, but potentially other rare lung disorders for which lonodelestat offers a treatment option. Disbalanced neutrophil activity is associated with a large number of inflammatory diseases, which could be additional therapeutic indications for the compound. For instance, lonodelestat could have potential in lung disorders associated with high hNE activity including AAT (alpha-1 antitrypsin deficiency), NCFB (non-cystic fibrosis bronchiectasis) and PCD (primary ciliary dyskinesia). 2) LAMA2-MD gene therapy (CMD) – Peak sales to be determined Congenital muscular dystrophies (CMD) in 2007. These are a variety of inherited neuromuscular disorders with different forms of progressive loss of muscle tissue characterized by early-onset weakness and hypotonia (low muscle tone or strength) alongside associated dystrophic findings in muscle biopsy. Progressive muscle weakness, joint contractures and respiratory insufficiency characterize most CMDs. Pre-clinical studies in a disease-relevant model showed that omigapil inhibits cell death and reduces body weight loss and skeletal deformation, while increasing locomotive activity and protecting from early mortality. Research collaborations with Biozentrum Basel and Rutgers in CMD gene therapy In May 2019, a preclinical research collaboration was announced with the Biozentrum of the University of Basel, Switzerland, to advance gene therapy research for the treatment of

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LAMA2-deficient (LAMA2-MD or MDC1A) congenital muscular dystrophy (CMD). Innosuisse, the public Swiss innovation agency, and Santhera will jointly invest CHF 1.2 mn in the project. In May 2020, Santhera extended its collaborative network for this therapeutic approach with the signing of two agreements with Rutgers, the State University of New Jersey, USA, as part of its program to advance gene therapy research for the treatment of LAMA2-deficient CMD. Under the agreements, Santhera gains rights to intellectual property developed at Rutgers on certain gene constructs that will be further studied under a collaboration agreement. Santhera is proactively pursuing collaborations with partners to assess and exploit the potential of LAMA2-MD gene therapy in the rare disease CMD (congenital muscular dystrophy). Laminins are proteins of the extracellular matrix that help maintain muscle fiber stability by binding to other proteins. LAMA2-related muscular dystrophy (LAMA2 MD, also called MDC1A), is one of the most common forms of CMD. It is caused by mutations in the LAMA2 gene encoding the alpha2 subunit of laminin-211. Most LAMA2 MD patients show complete absence of laminin-alpha 2, are hypotonic (floppy) at birth, fail to walk, and die to respiratory complications. It has been demonstrated that two linker proteins, engineered with domains derived of the extracellular matrix proteins agrin, laminin and nidogen, could compensate for the lack of laminin-alpha2 and restore the muscle basement membrane. Through simultaneous expression of artificial linkers (“SEAL”), this gene therapy approach aims to overcome the genetic defect by substituting laminin-alpha2 deficiency with small linker proteins containing necessary binding domains to re-establish muscle fiber integrity. In a transgenic mouse model, the linker expression increased the lifespan of LAMA2-deficient mice fivefold to a median of 81 weeks compared to 15.5 weeks in the disease model without the therapeutic linker expression. Recently, it was demonstrated that such linker constructs could be applied by standard adeno-associated virus (AAV) vectors. Due to the early development stage of this novel gene therapy approach to treat LAMA2-deficient CMD, we have not included any forecasts in our valuation.

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Income Statement

NOTE: From 2020 onwards, Chiesi books all Raxone LHON revenues, excluding France where Santhera is expected to continue to book sales up to 2021. On 31 December 2020, Santhera had a total of CHF 180.3 mn unrecorded tax loss carryforwards, which we anticipate the company will be able to use on future profits. H1 2021 results in a nutshell (in CHF mn): H1 2021 H1 2020 Revenue from contracts with customers: 4.5 7.8 Operating expenses: -21.9 -31.9 Operating result: -19.5 -25.9 Net result: -20.5 -31.8 Cash and cash equivalents (30 June): 8.0 19.4

SANTHERA PHARMACEUTICALS SHARE PRICE (CHF) 1.32IFRS

INCOME STATEMENT (CHF MN) 2020 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030EPRODUCT SALES (INCL. PARTNER SALES) 41 40 49 99 166 312 480 683 870 1,041 1,201CHANGE (%) 11% -3% 23% 101% 67% 88% 54% 42% 27% 20% 15%

REPORTED SALES (SANTHERA TERRITORIES) 11 6 0 48 112 254 432 651 839 1,007 1,164CHANGE (%) -60% -47% -100% 133% 126% 70% 51% 29% 20% 16%

ROYALTIES (FROM PARTNER SALES) 2 2 0 0 0 1 3 5 6 7 7

UPFRONT & MILESTONES 2 0 53 25 24 0 0 2 3 0 0

OTHER REVENUES 0 0 0 0 0 0 0 0 0 0 0CHANGE (%) 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%

REVENUES (EXCL. PARTNER SALES) 15 8 53 73 137 255 435 658 848 1,013 1,171CHANGE (%) -80% -44% 524% 39% 87% 87% 70% 51% 29% 20% 16%

COGS (INCL. PAYMENTS TO POLYPHOR / IDORSIA) -10 -4 -2 -10 -13 -31 -50 -102 -99 -116 -138

GROSS PROFIT 5 4 51 63 123 224 385 556 748 898 1,033CHANGE (%) -93% -3% 1039% 25% 95% 82% 72% 45% 35% 20% 15%MARGIN (%) 30.5% 52.7% 96.2% 86.6% 90.3% 87.7% 88.4% 84.5% 88.3% 88.6% 88.2%

R&D (INCL. IDORSIA OPTION PAYMENTS) -34 -19 -60 -40 -28 -23 -13 -14 -14 -15 -16CHANGE (%) -17% -45% 222% -33% -31% -15% -45% 11% -2% 9% 8%

GENERAL & ADMINISTRATIVE -12 -13 -13 -13 -13 -14 -14 -14 -14 -15 -15CHANGE (%) -35% 1% 2% 2% 2% 2% 2% 2% 2% 2% 2%

MARKETING & SALES -11 -4 -12 -27 -45 -66 -113 -147 -170 -204 -242CHANGE (%) -43% -67% 224% 127% 63% 47% 72% 30% 16% 20% 19%

OTHER OPERATING INCOME/(EXPENSE) 0 0 0 0 0 0 0 0 0 0 0

EBIT -53 -30 -34 -17 38 122 245 381 550 664 760CHANGE (%) 408% -43% 13% -50% -324% 220% 102% 55% 44% 21% 15%MARGIN (%) -353.7% -356.4% -64.7% -23.2% 27.9% 47.6% 56.4% 57.9% 64.9% 65.5% 64.9%

EBITDA -46 -26 -30 -13 42 126 250 385 554 669 765CHANGE (%) 710% -43% 15% -57% -430% 198% 98% 54% 44% 21% 14%MARGIN (%) -306.1% -309.1% -57.0% -17.5% 31.0% 49.3% 57.4% 58.6% 65.4% 66.0% 65.3%

D&A 7 4 4 4 4 4 4 5 5 5 5

NET FINANCIAL INCOME/(EXPENSES) -14 -10 -2 -2 -1 1 1 1 1 1 1

PROFIT/(LOSS) BEFORE TAXES -67 -40 -36 -19 37 122 246 382 551 665 761CHANGE (%) 267% -40% -11% -48% -298% 235% 101% 55% 44% 21% 14%MARGIN (%) -449% -475% -68% -25% 27% 48% 57% 58% 65% 66% 65%

TAXES (EXCL. TAX LOSS CARRYFORWARDS) 0 0 0 0 0 -7 -36 -60 -68 -72 -76TAX RATE (%) 0% 0% 0% 0% 0% 6% 14% 16% 12% 11% 10%

NET PROFIT/LOSS -68 -40 -36 -19 37 115 211 322 483 593 685CHANGE (%) 257% -41% -11% -48% -298% 214% 83% 53% 50% 23% 16%MARGIN (%) -451% -475% -68% -25% 27% 45% 48% 49% 57% 58% 59%

NET PROFIT/LOSS (EXCL. MILESTONES) -69 -40 -89 -44 12 115 211 320 480 593 685CHANGE (%) 6% -42% 121% -51% -129% 822% 83% 52% 50% 23% 16%

EPS (CHF) -5.08 -0.74 -0.66 -0.34 0.67 2.11 3.86 5.90 8.85 10.85 12.55


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Ratios | Balance Sheet | Cash Flow Statement

NOTE: In September 2021, Santhera successfully secured sufficient funding with net proceeds up to CHF 42 mn extending its cash runway to mid-2022, past the NDA filing of vamorolone in Q1 2022. For Santhera to build a specialist sales force for vamorolone in the US and Europe and to fully develop all its key pipeline projects up to commercialization, we calculate an additional CHF 40 mn will be needed before reaching profitability in 2024. This assumes that the company is successful in out licensing vamorolone rights in the ROW and for certain non-DMD indications. In our forecasts, we include CHF 31 mn milestone payments for vamorolone in DMD in ROW as well as upfront milestone payments of CHF 30 mn in 2022 and CHF 10 mn in 2023 from out licensing vamorolone in non-DMD indications. Moreover, we expect CHF 15 mn sales milestone payments from Chiesi in 2022 and 2024, respectively. In our forecasts, we conservatively include a repayment of the 2021/2024 convertible bonds in 2024 (CHF 30.3 mn), which may not be necessary if Santhera can convert at higher share prices. To account for our CHF 40 mn funding gap, we conservatively calculate our per share forecasts based on 84.9 mn shares, which includes 54.6 mn shares outstanding plus an estimated 20.3 mn new shares, which amounts to a share dilution of 55% based on the current low share price level.

SANTHERA PHARMACEUTICALS SHARE PRICE (CHF) 1.32IFRS

RATIOS 2020 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030EP/E -1.8x -2.0x -3.9x 2.0x 0.6x 0.3x 0.2x 0.1x 0.1x 0.1xP/S 8.5x 1.4x 1.0x 0.5x 0.3x 0.2x 0.1x 0.1x 0.1x 0.1xP/NAV -16.0x -4.6x -2.1x -2.6x 0.8x 0.2x 0.1x 0.1x 0.0x 0.0xEV/EBITDA -3.0x -2.6x -6.2x 1.9x 0.6x 0.3x 0.2x 0.1x 0.1x 0.1x

PER SHARE DATA (CHF) 2020 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030EEARNINGS -5.08 -0.74 -0.66 -0.34 0.67 2.11 3.86 5.90 8.85 10.85 12.55CHANGE (%) 194% -86% -11% -48% -298% 214% 83% 53% 50% 23% 16%CASH 0.93 0.33 0.21 -0.06 0.14 2.46 7.05 14.12 24.30 36.56 50.59CHANGE (%) -67% -64% -38% -127% -347% 1687% 187% 100% 72% 50% 38%DIVIDENDS 0 0 0 0 0 0 0 0 0 0 0PAYOUT RATIO (%) 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%NET ASSET VALUE -0.48 -0.08 -0.28 -0.62 -0.51 1.60 5.45 11.35 20.20 31.05 43.60CHANGE (%) -125% -83% 244% 119% -19% -415% 241% 108% 78% 54% 40%

BALANCE SHEET (CHF MN) 2020 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030ENET LIQUID FUNDS 12 18 11 -3 8 134 385 771 1,327 1,996 2,762

TOTAL ASSETS 89 95 88 73 84 211 461 847 1,403 2,073 2,839

TOTAL SHAREHOLDERS' EQUITY -6 -5 -16 -34 -28 87 298 620 1,103 1,696 2,381CHANGE (%)RETURN ON EQUITY (%) 1065% 889% 231% 54% -132% 132% 71% 52% 44% 35% 29%

FINANCIAL DEBT 58 60 45 45 45 0 0 0 0 0 0

EMPLOYEES 91 47 47 47 47 47 47 47 47 47 47 - CHANGE IN % -22% -48% 0% 0% 0% 0% 0% 0% 0% 0% 0%

CASH FLOW STATEMENT (CHF MN) 2020 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030EPROFIT / (LOSS) BEFORE TAXES -67 -40 -36 -19 37 122 246 382 551 665 761DEPRECIATION & AMORTIZATION 7 4 4 4 4 4 4 5 5 5 5OTHER NON-CASH ITEMS 17CASH FLOW FROM OPERATING ACTIVITIES -44 -36 -32 -14 41 127 251 386 556 670 766CASH FLOW FROM INVESTING ACTIVITIES 2FREE CASH FLOW -42 -36 -32 -14 41 127 251 386 556 670 766CASH FROM FINANCING ACTIVITIES 23 42 25 0 -30 0 0 0 0 0 0EFFECTS OF EXCHANGE RATE CHANGES ON CASH 0CHANGE IN LIQUID FUNDS -19 6 -7 -14 11 127 251 386 556 670 766


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APPENDIX Pharmaceutical life cycle To determine the value of a prescription (bio)pharmaceutical compound, it is critical to understand its life cycle. Fortunately, all compounds follow the same life cycle. The clock starts ticking after the compound is patented, providing 20 years of protection from generic competition. Market exclusivities can extend this protection period. Additional protection is provided by orphan drug status (10 years in EU, 7 years in US). The average Research & Development Phase takes 8-14 years, leading to an effective Return Phase of 6-12 years. The Development Phase has 3 distinct Phases, focused on safety (Phase I), dose (Phase II) and efficacy/clinical benefit (Phase III). The compound is filed for registration/approval at the FDA (US) or EMA (EU). The Return Phase is characterized by a star, cash cow, and mature phase. After patent expiry (or loss of market exclusivity) generic manufacturers may copycat the branded prescription drug, at significantly lower costs, leading to a sales and earnings implosion of the branded drug.

Success Probabilities & Royalties In our risk-adjusted NPV calculations, we use standardized success probabilities based on historical clinical success rates. The success rate increases as the project progresses through development. Sales and earnings forecasts are based on the clinical and competitive profile of the compound. The more advanced the compound is, the more accurate the forecasts become as the target market can be defined. We conservatively exclude projects that lack Phase IIa proof-of-concept data in our valuations.

SUCCESS PROBABILITIES & ROYALTIESDEVELOPMENT STAGE AIM WHAT / WHO

SUCCESS PROBABILITY (%)

COSTS(USD MN)

ROYALTIES (%)

PRE-CLINICAL SAFETY & PHARMACOLOGY DATA LAB TESTS / ANIMALS - NO HUMANS! < 5 3PHASE I SCREENING FOR SAFETY HEALTHY VOLUNTEERS (10'S) 5-15 3 < 5PHASE IIA PROOF-OF-CONCEPT PATIENTS WITH DISEASE (10'S) 10-20PHASE II ESTABLISH THE TESTING PROTOCOL PATIENTS WITH DISEASE (100'S) 15-35 5 5-15PHASE IIB OPTIMAL DOSAGE PATIENTS WITH DISEASE (100'S) 20-45 5-10PHASE III EVALUATE OVERALL BENEFIT/RISK PATIENTS WITH DISEASE (1,000'S) 40-65 > 20-1,000 10-25REGULATORY FILING DETERMINE PHYSICIAN LABELING CLINICAL BENEFIT ASSESSMENT 80-90APPROVAL MARKETING AUTHORIZATION PHYSICIANS FREE TO PRESCRIBE 100 15-30

SOURCE: VALUATIONLAB, TUFTS, FDA, EMA, CLINICALTRIALS.GOV

~ 10-14! 20! YEARS!

RESEARCH & DEVELOPMENT PHASE! RETURN PHASE! EXPIRY!

REG

ISTR

ATIO

N!

PHAS

E III!

PHAS

E II!

PHAS

E I!

PRE-

CLIN

ICAL!

SAFETY! DOSE! EFFICACY / APPROVAL!

“STAR”! “CASH COW”! “DOG”!~10%! 10% -45%! 40% - 65%! ~80%!

BREAKEVEN!

GENERICS!

! RISK-ADJUSTED DISCOUNTED CASH FLOW " !

SUCCESS <5%!

ANIMALS! ~10s! ~ 100s! ~ 100s – 1,000s PTS!

BIO-SIMILARS !

COSTS!

SALES!p<0.05!

P/E >20x! P/E ~10-15x! P/E > 6-10x!

“MATURE”!

P/E ~ 15x!

0!

SOURCE: VALUATIONLAB!

PHARMACEUTICAL LIFE CYCLE!

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Important Research Disclosures valuationLAB AG is an independent life science research boutique with no securities or banking services. The company does not hold any positions in the securities mentioned in this report. Our financial analyses are based on the "Directives on the Independence of Financial Research" issued by the Swiss Bankers Association in January 2008. Purpose of the Research This research report has been commissioned by Santhera Pharmaceuticals Holding AG and prepared and issued by valuationLAB AG for general circulation and is circulated for general information only. This document has been furnished to you solely for your information and may not be reproduced or redistributed to any other person. Information has been obtained from publicly available sources believed to be reliable but no representation or warranty, either expressed or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein. Views and estimates constitute our judgment as of the date of this report and are subject to change without notice. Past performance is not indicative of future results. This research report is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors. The views and recommendations herein do not consider individual client circumstances, objectives, or needs and are not intended as recommendations of particular securities, financial instruments or strategies to particular clients. The recipient of this research report must make his or her own independent decisions regarding any securities or financial instruments mentioned herein. The information contained herein is directed exclusively at market professionals and institutional investors and does not apply to, and should not be relied upon by, private clients. valuationLAB AG accepts no liability for any loss or damage of any kind arising out of the use of this research report or its contents. This research report is not directed to or intended for distribution to or use by any person or entity in any jurisdiction where such distribution, publication or use would be unlawful. By accepting this document, you agree to be bound by the foregoing limitations. Achievement of the (risk-adjusted) Fair Value Recipients of this research report should seek financial advice regarding the appropriateness of investing in any security; financial instrument or strategy discussed in this report and should understand that future (risk-adjusted) fair values may not be realized. The (risk-adjusted) fair value estimate is based on a number of factors and assumptions. It should be noted that if any of these are inaccurate or are not achieved, it might be necessary to adjust the fair value. Investors should note that income from such securities or financial instruments or strategies, if any, may fluctuate and that each security’s price or value may rise or fall. Accordingly, investors may receive back less than originally invested. Foreign currency rates of exchange may adversely affect the value, price or income of any security or related investment mentioned in this research report. In addition, investors in securities such as ADRs, whose values are influenced by the currency of the underlying security, effectively assume currency risk. Fair values for stocks under coverage are calculated by submitting the analyst(s)’ financial projections to one or more of a variety of valuation approaches. These include “absolute” methodologies such as DCF and NPV modeling, as well as relative methodologies such as peer group and market valuation multiple comparisons. Risk Qualification Speculative less than 1 year cash and breakeven beyond 1 year High Risk profitable within 2 years and 1 approved product/key indication (patent expiry > 5 years) Medium Risk profitable and/or sales from at least 2 marketed products/key indications (patent expiry > 5 years) Low Risk profitable and sales from >2 marketed products/key indications (patent expiry > 5 years) Analyst Certification The research analyst(s) identified on the first page of this research report hereby attest that all of the views expressed in this report accurately reflect their personal views about any and all of the subject securities or issuers. In order to ensure the independence of our research analysts, and their immediate household, are expressly prohibited from owning any securities in the valuationLAB AG research universe, which belong to their sector(s). Neither the research analyst nor his/her immediate household serves as an Officer, Director or Advisory Board Member of Santhera Pharmaceuticals Holding AG. Copyright 2021 VALUATIONLAB AG All rights reserved. FELSENRAINSTRASSE 17 | 8832 WOLLERAU | SWITZERLAND | WWW.VALUATIONLAB.COM | P: +41 79 652 67 68

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