Current report No. 27/2022 – Signing of an agreement on implementing and co-funding Celon Pharma S.A.’s project on improving drug safety by implementing innovative forms of orally administered medicinal products to Celon Pharma S.A.’s in-house production

Date prepared: December 1, 2022, 08:35 PM

Legal basis: Article 17 section 1 of the Market Abuse Regulation (MAR) – inside information.

Content of the report:

The Management Board of Celon Pharma S.A. (“Company”, “Beneficiary”) hereby informs that on December 1, 2022 an agreement was signed between the Company and the Medical Research Agency (“Agency”) on implementing and co-funding a project entitled “CardioCAPS – Improving Drug Safety by Implementing Innovative Forms of Three Orally Administered –Medicinal Products Used in Pharmacotherapy in Cardiovascular Diseases to Celon Pharma S.A.’s In-house Production” (“Agreement” and “Project”, respectively). Information about selecting the Project for co-funding was announced by the Company in current report No. 24/2022 on November 8, 2022.

The total eligible cost of the Project amounts to PLN 19.6 million. Pursuant to the conditions set out in the Agreement, the Agency has granted the Beneficiary with co-funding for conducting industrial research, development works and primary research (within the meaning of the Commission Regulation (EU) No. 651/2014 of 17 June 2014 declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 of the Treaty, Official Journal of the EU - L 187/1 of 26 June 2014, as amended) in the amount not exceeding PLN 12.1 million, which constitutes 61.7% of total eligible costs of the Project. Co-funding will be transferred in the form of an advance payment or a refund, made in tranches.

The project implementation is expected by the end of June 2025.

The aim of the project is to develop new generic products in the field of cardiovascular diseases, in particular to conduct bioequivalence clinical trials and to implement a comprehensive portfolio of three new generation anticoagulants containing three various active substances, each in a wide range of doses, for the Company’s in-house production. The project will ultimately enable the expansion of the Company’s portfolio of drugs used in treatment of cardiovascular diseases. In particular, the Agreement states that the Beneficiary must hold the entirety of economic copyrights, derivative and related rights to the works used under the Project, as well as the rights to deliverables of development works achieved as part of the Project. Pursuant to the provisions of the Agreement, in the case of commercialization, i.e. the Beneficiary implementing serial production as part of its own economic activity, the Beneficiary undertakes to manufacture and market at least two batches of the medicinal product within 3 years from the end of the Project implementation. In the case no commercialization is achieved within 3 years from the end of the Project implementation, the Beneficiary is obliged to return the entirety of co-funding, together with interest. Based on the current knowledge and the conducted patent clearance study, the Company has not identified any obstacles to commercialization of products developed in its projects. The product portfolio implementation, as a deliverable of the project, will allow for a significant increase of Celon Pharma’s revenue in the generics segment as early as in 2024.