- Proceeds to Support Advancing BLU-5937 for Chronic Cough into Clinical Testing -

/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/

LAVAL, QC, Dec. 12, 2017 /CNW/ - BELLUS Health Inc. (TSX: BLU) ("BELLUS Health" or the "Company"), a biopharmaceutical development company advancing novel therapeutics for conditions with high unmet medical need, today closed its previously announced equity offering, issuing a total of 52,631,580 common shares for gross proceeds of $20 million (the "Offering"). The majority of the Offering was subscribed to by healthcare specialized institutional investors and also included the participation by members of the senior management team and board of directors of the Company.

"We are extremely encouraged by the broad interest received from the investment community. This, in addition to the participation of members of the Company's leadership team, is a testament to the potential of BLU-5937 as a best-in-class treatment for chronic cough," said Roberto Bellini, President and CEO of BELLUS Health. "These funds will enable the advancement of BLU-5937 to clinical testing, with filing of a Clinical Trial Application planned for Q2 2018, followed by the commencement of a Phase 1 study expected in Q3 2018, subject in each case to applicable regulatory approval."

Details of the Offering

Under the Offering, led by Bloom Burton Securities Inc., on behalf of a syndicate of agents that included Cormark Securities Inc. and Mackie Research Capital Corporation, subscribers purchased a total of 52,631,580 common shares at a price of $0.38 per share for aggregate gross proceeds of $20 million. The Offering price of $0.38 per share is an 8% discount to the 5-day volume weighted average price before announcement of the financing.

In Canada, the common shares purchased pursuant to the Offering were qualified for sale by way of a prospectus supplement dated December 7, 2017 to BELLUS Health's short form base shelf prospectus dated November 23, 2017 (together, the "Prospectus"), which was filed in each of the Canadian provinces. After the completion of the Offering, BELLUS Health has 119,497,581 common shares issued and outstanding.

Use of Proceeds

Cash, cash equivalents and short-term investments on hand as of December 11, 2017 together with net proceeds of the Offering totals $24.0 million. These funds will be used to fund research and development activities, including but not limited to, activities related to BLU-5937's clinical development, general and administrative expenses, working capital needs and other general corporate purposes.

Insider Participation

Insiders of the Company, Messrs. Roberto Bellini and Franklin Berger and Dr. Youssef Bennani purchased an aggregate of 2,889,477 common shares under the Offering or 5.5% of the shares issued under the Offering. Mr. Roberto Bellini is President and CEO of the Company and a director thereof and each of Mr. Berger and Dr. Bennani is a director. The subscriptions for common shares by Messrs. Roberto Bellini and Franklin Berger and Dr. Youssef Bennani are related party transactions within the meaning of applicable Canadian securities laws due to Messrs. Bellini and Berger and Dr. Bennani being insiders of the Company.

The subscriptions by Messrs. Bellini and Berger and Dr. Bennani are exempt from the formal valuation and minority approval requirements applicable to related party transactions on the basis that the value of the transactions insofar as they involve related parties is less than 25 percent of the Company's market capitalization. The Board of Directors of the Company has approved the Offering and Messrs. Bellini and Berger and Dr. Bennani declared their interest and abstained from voting thereon. A material change report in respect of this related party transaction could not be filed earlier than 21 days prior to the closing of the Offering due to the Offering being launched on December 5, 2017 and the terms of the participation of certain of the non-related parties and the related parties in the Offering confirmed shortly before closing.

Agent Commissions

In connection with the Offering, the agents received a total cash commission of $1,039,600, equal to 6.0% of the gross proceeds of up to $10,000,000 raised in connection with the Offering, 5.0% of the gross proceeds in excess of $10,000,000 raised in connection with the Offering (in each case excluding common shares sold to certain excluded subscribers in respect of which the cash commission was reduced to 3.0%). In addition, the agents were issued 1,806,735 broker warrants exercisable for common shares, equal to (i) 4.0% of the number of common shares issued under the portion of the Offering representing gross proceeds of up to $10,000,000 (excluding any common shares sold to certain excluded subscribers), and (ii) 3.0% of the number of common shares issued under the portion of the Offering representing gross proceeds in excess of $10,000,000 or sold to certain excluded subscribers. Each broker warrant entitles the agents to buy one common share at a price of $0.38 per share for a period of eighteen (18) months from the closing of the Offering.

U.S. Securities Statement

The securities described herein have not been, and will not be, registered under the U.S. Securities Act, or any state securities laws, and accordingly, may not be offered or sold to, or for the account or benefit of, persons in the United States or to U.S. Persons (as such term is defined in Regulation S under the U.S. Securities Act), except in compliance with the registration requirements of the U.S. Securities Act and applicable state securities requirements or pursuant to exemptions therefrom. This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the Company's securities.

About BELLUS Health (www.bellushealth.com)

BELLUS Health is a biopharmaceutical development company advancing novel therapeutics for conditions with high unmet medical need. Its pipeline of projects includes the Company's lead drug candidate BLU-5937 for chronic cough and several other partnered clinical-stage drug development programs. BLU-5937, a selective P2X3 antagonist, has the potential to be a best-in-class therapeutic for chronic cough patients who do not respond to current therapies. Chronic cough is a cough that lasts more than eight weeks and is associated with significant adverse social, psychosocial and physical effects on quality of life. A recent commercial assessment performed by Torreya Insights on behalf of the Company concluded that, in the United States alone, more than 26 million adults have chronic cough and more than 2.6 million of these patients suffer from refractory chronic cough lasting for more than a year.

Forward-Looking Statements

Certain statements contained in this news release, other than statements of fact that are independently verifiable at the date hereof, may constitute "forward-looking statements" within the meaning of Canadian securities legislation and regulations. In particular, this news release includes forward-looking information relating to the offering and the completion and use of net proceeds thereof, our aim to submit a Clinical Trial Application (CTA) in Q2 2018 and our aim to initiate a Phase 1 clinical study on BLU-5937 in Q3 2018. Such statements, based as they are on the current expectations of management, inherently involve numerous important risks, uncertainties and assumptions, known and unknown, many of which are beyond BELLUS Health Inc.'s control. Such risks factors include but are not limited to: the ability to expand and develop its project pipeline, the ability to obtain financing, the impact of general economic conditions, general conditions in the pharmaceutical industry, changes in the regulatory environment in the jurisdictions in which BELLUS Health Inc. does business, stock market volatility, fluctuations in costs, changes to the competitive environment due to consolidation, achievement of forecasted burn rate, potential payments/outcomes in relation to indemnity agreements and contingent value rights, achievement of forecasted pre-clinical and clinical trial milestones and that actual results may vary once the final and quality-controlled verification of data and analyses has been completed. In addition, the length of BELLUS Health Inc.'s drug candidates' development process, their market size and commercial value, as well as the sharing of proceeds between BELLUS Health Inc. and its potential partners from potential future revenues, if any, are dependent upon a number of factors. Consequently, actual future results and events may differ materially from the anticipated results and events expressed in the forward-looking statements. The Company believes that expectations represented by forward-looking statements are reasonable, yet there can be no assurance that such expectations will prove to be correct. The reader should not place undue reliance, if any, on any forward-looking statements included in this news release. These forward-looking statements speak only as of the date made, and BELLUS Health Inc. is under no obligation and disavows any intention to update publicly or revise such statements as a result of any new information, future event, circumstances or otherwise, unless required by applicable legislation or regulation. Please see BELLUS Health Inc.'s public filings with the Canadian securities regulatory authorities, including the Annual Information Form, for further risk factors that might affect BELLUS Health Inc. and its business.

SOURCE BELLUS Health Inc.

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