SCIENCE : Annual financial results as of 31 December 2015

AB SCIENCE press release - Resultats 2015 -Eng VF

Paris, April 29, 2016 - 6pm

2015 revenues of 2,284 K€ Three non futile phase 3 studies, in Amyotrophic Lateral Sclerosis, severe asthma and Alzheimer's disease Positive results from Phase 3 study for masitinib in Adults with Severe Systemic Mastocytosis Positive Interim Results from Phase 3 Trial for Masitinib in Amyotrophic Lateral Sclerosis AB Science SA (NYSE Euronext - FR0010557264 - AB), a pharmaceutical company specialized in research, development and marketing of protein kinase inhibitors (PKIs), reports today its annual financials as of 31 December 2015 and provides an update on its activities. The Board who met on April 28th, 2015, reviewed and approved the consolidated financial statement for the year closing on

31 December 2015. Audit procedures on consolidated financial statements were performed. The audited financial report is available on the Company's website.

I. Key events of year 2015

In human medicine

Clinical study results

AB Science announced that the phase 3 study evaluating masitinib in the treatment of adult patient with severe systemic mastocytosis has met its primary objective well as its secondary objectives.

The results showed that masitinib 6 mg/kg/day was superior to optimal symptomatic treatment on the primary efficacy analysis as well as secondary efficacy analyses. No new safety signals for masitinib were observed in this phase 3 study.

The phase 3 randomized study compared masitinib plus optimal symptomatic treatment versus placebo plus optimal symptomatic treatment in adult patients with severe systemic mastocytosis, with or without D816V mutation of c-Kit. Study results showed that masitinib administered at 6 mg/kg/day was superior to the comparator, as measured by the cumulative 75% response rate until week 24 on the handicaps of pruritus or flushes or depression or fatigue (4H75% response). The 4H75% response was 18.7% for the masitinib treatment-arm versus 7.4% for the placebo treatment-arm (p=0.0076, Odd ratio=3.63) in the mITT population (modified intention to treat, primary analysis).

Update on the status of the clinical development program

- In non oncology :

Futility tests planned in the protocols have been performed in 2015 by the Independent Data Safety Monitoring Committee (IDMC) in order to streamline the studies portfolio in non-oncology.

The phase 3 trial with masitinib for the treatment of patients with multiple sclerosis passed the futility test successfully and is ongoing. This phase 3 trial (AB07002) is a double-blind, randomized, placebo- controlled study designed to assess the efficacy and safety of masitinib in patients with primary progressive or relapse-free secondary progressive multiple sclerosis. The treatment period is 96 weeks.

The phase 3 trial with masitinib for the treatment of patients with Alzheimer's disease passed the futility test successfully and is ongoing. This phase 3 trial (AB09004) is a double-blind, randomized, placebo-controlled study designed to assess the efficacy and safety of masitinib in patients with confirmed mild to moderate Alzheimer's disease. The treatment period is 24 weeks.

The phase 2/3 trial with masitinib for the treatment of patients with amyotrophic lateral sclerosis passed the futility test successfully and is ongoing. This phase 2/3 trial (AB10015) is a double-blind, randomized study comparing the efficacy and safety of masitinib with that of placebo in the treatment of patients with amyotrophic lateral sclerosis. Study treatment is given as add-on therapy to patients who have been treated with a stable dose of riluzole. The treatment period is 48 weeks.

AB Science made the decision to stop the phase 3 study of masitinib in rheumatoid arthritis. This decision has been made following a futility test, conducted by the external Data and Safety Monitoring Board (DSMB), showing that the probability of success on the primary endpoint was below 50% for this study, including the resampling option.

- In oncology :

The phase 3 trial with masitinib for the treatment of patients with metastatic melanoma passed the futility test successfully and is ongoing. This phase 3 trial (AB08026) is an open-label, controlled study comparing masitinib to dacarbazine and designed to assess the efficacy and safety of masitinib in patients with non-resectable or metastatic stage 3 or stage 4 melanoma carrying a mutation in the juxta- membrane (JM) domain of c-Kit. Primary endpoint is the tumor response.

The phase 2 study with masitinib for the treatment of patients with T-cell lymphoma was accelerated into a phase 3 randomized controlled trial. This phase 2/3 trial (AB10004) is open-label, three-parallel groups, randomized trial to evaluate the efficacy and safety of masitinib plus dexamethasone with or without gemcitabine, as compared against the active control of dexamethasone plus gemcitabine, in patients with relapsed or refractory peripheral T-cell lymphoma. The primary endpoint of this study is overall survival.

A seamless adaptive design phase 2/3 study with masitinib for the treatment of patients with ovarian cancer has been launched. This is an open-label, randomized, active-controlled, phase 2/3 study to evaluate the efficacy and safety of masitinib in combination with gemcitabine as compared with single- agent gemcitabine in advanced or metastatic epithelial ovarian cancer patients who are refractory to first-line platinum treatment or are in third-line. The study's primary efficacy measure will be overall survival.

AB Science has developed an extensive phase 1/2 program in solid tumors with masitinib to ascertain which indications should be pursued in phase 3. This program is close to completion with the status of each study summarized below:

For the phase 2 studies that have been launched:

• Four studies passed their predefined statistical test instigating launch of randomized controlled phase 3 studies in each indication. Those indications include the digestive cancers of GIST, gastric cancer and colorectal cancer, as well as prostate cancer.

• One study passed its predefined statistical test in triple negative breast cancer. A decision to move to phase 3 is pending results from an on-going phase 2 study in breast metastatic cancer.

• Three studies did not meet their pre-specified statistical test and a decision has been made not to launch phase 3. Those studies were non small cell lung (NSCL) cancer, metastatic melanoma not bearing the juxtamenbrane mutation of c-Kit, and glioblastoma.

• Three studies are still on-going, in breast cancer, liver cancer, and head & neck cancer.

Orphan drug designation :

The U.S. Food and Drug Administration (FDA) has granted the company Orphan Drug designation for masitinib in the treatment of amyotrophic lateral sclerosis.

The U.S. Food and Drug Administration (FDA) has granted the company Orphan Drug designation for masitinib in the treatment of esophagogastric adenocarcinoma.

Other events

- Equity financing facility

AB Science has two equity financing facilities set up with Société Générale and Crédit Agricole.

 With Société Générale :

This equity line facility (PACEO) set up with Société Générale on the 30 of July 2014 enables the Company to carry out successive capital increases representing a maximum of 3,200,000 shares (being 9.14% of currently outstanding shares as of 31 December 2015).

For each tranche, the price to be paid equals the volume weighted average share price of the three trading days preceding the effective date of purchase with a discount capped at 5% depending on the size of the drawdown. This discount allows Société Générale, who is not positioned as a long term shareholder in the Company, to purchase the shares independently of market volatility.

In 2015, AB Science used three times this equity line facility (PACEO):

• On February 13 2015, AB Science proceeded with the issue of 463,500 new shares for the price of €17.26 per share

• On June 2 2015, AB Science proceeded with the issue of 485,000 new shares for the price of

  €16.52 per share

• On December 14 2015, AB Science proceeded with the issue of 510,000 new shares for the price of €12.90 per share

Therefore, as of December 31, 2015, 1,458,500 new ordinary shares with a nominal amount of 0.01 euro have been issued through this PACEO, resulting in a capital increase of 22,021,894 euros (including 14,585 for share capital). The number of new shares to be potentially issued though a new use of the PACEO before 30th of July 2017 is 1,741,500.

 With Crédit Agricole :

AB Science concluded an equity line with Crédit Agricole Corporate and Investment Bank ("Crédit Agricole CIB"), as authorised by the Shareholders' Meeting held on 22 June 2015.

Under the terms of the agreement, Crédit Agricole CIB has committed to purchase new shares during a 36-month commitment period, within the global limit of 3,340,000 shares, representing 9.54% of the shares currently outstanding.

For each drawdown, the subscription price is computed as the volume weighted average share price during the three trading days preceding the effective date of subscription, with a discount capped at 5% and depending on the size of the drawdown. The new shares issued will be subsequently sold on- or off-market by Crédit Agricole CIB.

AB Science has no minimum drawdown obligation, and will use the facility at its sole discretion if market conditions are favourable and in the best interests of both the Company and its shareholders.

This equity line facility has not been used in 2015.

• Convertible bonds

  In 2012, a bond loan agreement, convertible or reimbursable in ordinary shares, for a total nominal value of 10,000,500 € (100 bonds with nominal value of 100,005 euros each), authorized by the Board of Directors on 2 March 2012, making use of the delegation given by the General Shareholder's

  Meeting of 23 May 2011, has been fully subscribed and paid on the 17 April 2012. In case of conversion, price per share is 15 euros.

  On the 5 September 2015, 15 bonds with nominal amount of 100,050 euros were converted into shares. 100,050 new shares have been issued. Following this conversion, the number of bonds with nominal value of 100,005 euros to be potentially converted is 85.

  In 2013, bonds for a total nominal value of 12,508,232 € before conversion, authorized by the Board of Directors on 24 May 2013, making use of the delegation given by the General Shareholder's Meeting of 30 March 2012, had been fully subscribed and paid beginning June 2013.

  The bonds had been categorized according to their main characteristics:

  • A first group of bonds for a total nominal value of 10,658,148.80 € bears a 0.21% average annual interest rate, a 2.5% accrued interest rate (payable only in case of repayment at maturity) and a price per share of 23.53 € in case of conversion.

  • A second group of bonds for a total nominal value of 1,850,119.20 € bears a 0.00% average annual interest rate, a 2.5% accrued interest rate (payable only in case of repayment at maturity) and a price per share of 29.30 € in case of conversion.

  On the 29 October 2015, a convertible bond at 23,53 euros and with a nominal value of 145,462,46 was converted into shares. 6,182 new ordinary shares have been issued.

• Grants

  The Company received from Bpifrance in January 2015 the balance of the conditional advance (665 K€) and of the grant (276 K€) related to the APAS-IPK project (Amélioration de la Prédictivité de l'Activité et de la Sélectivité des Inhibiteurs de Protéine Kinase) in oncology. The total amount of the conditional advance amounts to 4,432 K€, payable in 4 phases. In case of success of the project, the Company will pay to Bpifrance, from the third year after the commercialization, a 1% interest fee on the turnover generated by the sale of the products, for amounts up to 3.1 million euros per year and on the turnover made on two accounting years.

  The company received in May 2015 an advance payment amounting to 2,435 K€ corresponding to the first installment of repayable advances granted by Bpifrance on the strategic industrial innovation project "Romane" for the development of a new targeted therapy in Alzheimer's disease. The total amount of advance payments received so far amounts to 4,899 K€. As a reminder, the maximum funding awarded to the project by Bpifrance through repayable advances and grants amounts to 8.6 million euros, including 5.8 million euros for AB Science.

• Other events :

During 2015 :

• 95,940 stocks options were granted

• 28,000 unattached share subscription warrants were allocated and signed

• 1,647,024 redeemable share subscription warrants were allocated in 2014 and unsubscribed as of 31 December 2015. The main features of these warrants are as follows:

  • The subscription of the warrants is subject to an agreement signing at general meetings of the company with the current majority shareholder (AMY SAS and Alain Moussy) and the signing of a commitment to retain the shares resulting from the warrants until 30 August 2034.

  • The subscription price is equal to the average of the last thirty trading days on Euronext Paris preceding the date of 31 October 2014, which is 8.92 euros, including an issuance premium of

    8.91 euros.

  • The warrants cannot be exercised until the average share price of the Company over the last sixty trading days preceding the exercise date is less than 30 euros.

  • The warrants must be exercised if the average share price of the Company over the last sixty days before the said date is above 50 euros.