Santhera Pharmaceuticals Holding AG: Santhera Reports 2010 Interim Financial Results with Significant Reduction in Net Loss and Strong Increase in Product Sales

Santhera Pharmaceuticals Holding AG / Santhera Reports 2010 Interim Financial Results
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Liestal, Switzerland, September 3, 2010 - Santhera Pharmaceuticals (SIX: SANN) announced
today the results for the first half year ended June 30, 2010. During the reporting
period, Catena achieved net sales of CHF 1.7 million (plus 270%; first half year 2009:
CHF 0.5 million). Net cash burn (CHF 13.8 million) and net loss (CHF 14.2 million) were
both significantly lower in the first six months of 2010 compared to the same period in
2009 (CHF 21.6 million and CHF 23.4 million respectively) and in line with expectations.
As of June 30, 2010, Santhera had cash and cash equivalents of CHF 39.5 million. The
Company expects to be profitable in the second half year 2010 considering the upfront
payment of EUR 13.0 million (CHF 16.9 million) from Ipsen for the rights to fipamezole
announced earlier today. Based on its current financial planning, Santhera is funded
well into 2013.

Major events of 2010 to date include

· Revenues from sales of Catena in Canada and through the Named Patient Program
(NPP) have already reached level of prior full year after six months in 2010

· Positive results from RHODOS study with Catena in Leber's Hereditary Optic
Neuropathy (LHON) open regulatory path for potential filings in 2011 for marketing
approval

· Pivotal MICONOS study with Catena/Sovrima in Friedreich's Ataxia was
disappointing

· Fipamezole in Dyskinesia in Parkinson's Disease partnered to Ipsen for
development and commercialization outside North America and Japan

Key financial figures (unaudited)

(IFRS, consolidated, for half year ended June 30, in CHF thousands) 2010 2009 Changes
Total equity 67,148 83,5121 -20%
Cash and cash equivalents 39,477 53,3201 -26%
Net change in cash and cash equivalents -13,843 -21,564 36%
Net sales 1,711 463 270%
Operating expenses -15,703 -24,893 37%
Operating result -13,669 -24,528 44%
Net loss -14,163 -23,407 40%

1 As of December 31, 2009

Commenting on the operational results, Klaus Schollmeier, Chief Executive Officer of
Santhera, said: "The data generated with Catena in LHON are very encouraging. The
instant and strong interest among LHON patients and their physicians reflects the high
unmet medical need for a treatment for this devastating eye disease. We are now
considering regulatory filings options together with health authorities. The second
regional partnering of fipamezole outside North America and Japan is another highlight.
Fipamezole is the most advanced drug candidate for levodopa-induced Dyskinesia in
Parkinson's Disease. Together with Ipsen and Biovail, we are committed to bring this
important product to the market as expeditiously as possible."

Commenting on the financial results, Barbara Heller, Chief Financial Officer of
Santhera, said: "The financial results for the first half of 2010 are well within our
expectations. In the first six months, we saw an impressive growth in product sales and
significantly reduced the operating expenses primarily in research and development. The
revenues from Catena sales and the upfront payment from the licensing agreement with
Ipsen as announced earlier today will result in a highly profitable second half year
2010. Our current cash position as well as future product sales and milestone payments
ensure that Santhera is financed well into 2013."

Solid cash position and financed well into 2013

As of June 30, 2010, Santhera had cash and cash equivalents of CHF 39.5. Net change in
and cash equivalents in the first half year of 2010 was CHF 13.8 million compared to CHF
21.6 million in the same reporting period 2009. The significant reduction in cash burn
reflects the Company's clear focus of activities and strict cost controls. Total equity
at mid-year amounted to CHF 67.1 million compared to CHF 83.5 million as of December 31,
2009. Santhera continues to allocate funds primarily to the development programs with
Catena/Sovrima as well as marketing and business development activities.

The value of Santhera's intangible assets fell by CHF 3.1 million to CHF 30.7 million
compared to CHF 33.8 million at year-end 2009, primarily due to currency
exchange-related valuation losses of the Euro-denominated Catena/Sovrima asset.

Santhera's share capital was increased by the exercise of 6,023 employee stock options.
As of June 30, 2010, the share capital of Santhera Pharmaceuticals Holding AG consisted
of 3,660,242 registered shares with a nominal value of CHF 1 each. Santhera remains
fully equity financed.

Significantly increased sales, focused spending and reduced operating expenses

In the first six months of 2010, Catena generated net sales of CHF 1.7 million compared
to CHF 0.5 million in the corresponding period in 2009. The bulk of the revenues (CHF
1.6 million) originate from product sales in Canada while the remainder comes from NPP
sales in Europe and elsewhere. Gross profit amounted to CHF 1.5 million (first half of
2009: CHF 0.4 million).

Operating expenses in the first half of 2010 were reduced by 37% to CHF 15.7 million
(first half of 2009: CHF 24.9 million). This substantial decrease resulted primarily
from cost reductions in Research and Development (R&D) in connection with the
restructuring of the early drug discovery activities announced in July 2009 and the
phase out of two large clinical studies. Total R&D amounted to CHF 7.9 million,
representing 51% (first half of 2009: CHF 16.9 million and 68%) of total operating
expenses. Marketing and Sales (M&S) slightly increased to CHF 2.2 million or 14% of
total operating expenses (first half of 2009: CHF 2.0 million or 8%) in line with
expanded activities for Catena in Canada and in Europe. General and administrative
expenses (G&A) decreased to CHF 5.6 million, representing 35% of total operating
expenses (first half of 2009: CHF 6.0 million or 24%). G&A includes expenses for
corporate finance, business development activities as well as infrastructure and all
management expenses which are not reallocated in general. Other operating
income/expenses amounted to CHF 0.5 million (first half of 2009: CHF -0.03 million)
mainly from a research grant. For the first half of 2010, Santhera reports a net loss of
CHF 14.2 million, which is significantly lower than the net loss of CHF 23.4 million
reported for the first half of 2009.

Focus continues on core activities, cash runway secured well beyond 2013
After the close of books for the 2010 Interim Report, Santhera signed a license
agreement with Ipsen for the development and commercialization of fipamezole outside the
US, Canada and Japan for an upfront payment of EUR 13.0 million. For the second half of
2010, Santhera anticipates to be profitable. Net cash burn for the full year is expected
to be well below the 2009 level. According to its current financial planning, Santhera
is funded well into 2013.

Preparation for regulatory filings of Catena in LHON will continue over the next months
and expects to file for marketing approvals in the first half of 2011. In parallel to
the regulatory work, Santhera will present the positive results from the RHODOS study at
upcoming scientific and medical conferences. Enrollment of the first group of 40
patients into the pivotal DELOS study in Duchenne Muscular Dystrophy is expected to be
completed in a few weeks' time. The proof-of-concept Phase IIa MELTIMI study in MELAS
syndrome is expected to be completed with top-line data available before the end of the
year.

Update on Products and Pipeline

Product sales - Catena
Product sales of Catena in Canada and under the NPP continued to grow with revenues for
the first half of 2010 equal to the annual sales in 2009. In Canada, the drug has been
prescribed to 153 Friedreich's Ataxia patients (of an expected population of
approximately 300 individuals); 99 of them have secured reimbursement from their
insurance carriers. Sales on named-patient basis continued to meet considerable interest
in Europe and elsewhere.

Catena in Leber's Hereditary Optic Neuropathy (LHON) - RHODOS Phase II/III study

The RHODOS data reported in June 2010 showed that in LHON vision could be preserved or
even improved in patients receiving Catena compared to those receiving placebo. For
example, a higher proportion of patients receiving Catena who were almost completely
blind recovered sufficiently to read at least 5 letters on a standard eye chart versus
placebo. The data also indicated that the drug has the potential to protect patients at
highest risk for vision loss from further deterioration in their visual acuity. The
positive visual acuity outcomes were supported by improvements in color contrast
sensitivity with Catena treatment compared to placebo. In the absence of any available
treatment for this rare and devastating disease, Santhera is discussing strategies to
make Catena available to LHON patients as soon as possible. Filings for marketing
approval are anticipated for the first half of 2011.

Catena/Sovrima in Duchenne Muscular Dystrophy - DELOS Phase III study

Six centers in Europe and one in the United States are open for recruitment of patients
into this 12-month placebo-controlled study. DELOS employs a group-sequential design and
currently only patients not comedicated with glucocorticoid are being enrolled. It is
anticipated that recruitment of this first group of patients will be completed within
the next few weeks. A first interim analysis will be conducted when patients in this
group have been treated for six months and is expected in the first half of 2011. An
interim analysis of DELOS was encouraged by both the European Medicines Agency (EMA) and
the US Food and Drug Administration (FDA). Both regulatory authorities indicated that a
single pivotal study providing robust efficacy data could suffice for approval.
Recently, Santhera was granted patent protection in Europe until 2026.

Catena/Sovrima in Friedreich's Ataxia - MICONOS Phase III study
The MICONOS results announced in May 2010 represent a major setback for this development
program. Santhera is awaiting further data from two ongoing extension studies which will
provide long-term follow-up data on the use of the drug in Friedreich's Ataxia patients.
The Company believes that the results of the completed studies conducted to date and the
experience of treating physicians and patients underscore the benefit individual
patients receive from Catena/Sovrima. Still under investigation are the reasons for the
failure of MICONOS to demonstrate conclusively the efficacy of the drug. It is already
clear that the unexpected variability in disease progression as measured by the
available neurological rating scales and the limited size and duration of the trial
played an important role. In Canada, Santhera and Health Canada are exploring
possibilities to allow patients continued access to Catena under the existing NOC/c.

Catena in MELAS syndrome - MELTIMI Phase IIa study

Santhera is collaborating with the Columbia University of New York City in this Phase II
proof-of-concept study. The trial investigates the efficacy of two doses of Catena
versus placebo in reducing the levels of a disease-relevant biomarker over a treatment
period of 28 days. Recruitment is almost completed and Santhera expects to report
top-line results in the second half of 2010.

Fipamezole in Dyskinesia in Parkinson's Disease - Phase III development

On September 2, 2010, Santhera and Ipsen signed a license agreement under which Ipsen
acquired the rights to develop and commercialize fipamezole outside North America and
Japan. Santhera receives an upfront payment of EUR 13.0 million and is entitled to up to
EUR 128.0 million in development and sales milestones plus royalties on Ipsen's future
product sales. Santhera retains full rights in Japan.

Meanwhile, preparation for the Phase III development at Biovail, Santhera's partner in
the United States and Canada, is progressing. Initiation of the first pivotal study with
fipamezole is currently planned for 2011. Biovail has entered a definitive merger
agreement with Valeant and a pipeline review is intended to be undertaken.

Omigapil in Congenital Muscular Dystrophy - Phase II/III development

With a grant from the patient organization Association française contre les myopathies,
Santhera completed the nonclinical development required for omigapil in support of a
clinical study. In collaboration with international experts, in the forthcoming months
Santhera will develop a clinical trial protocol which will be discussed with the EMA and
FDA during protocol assistance meetings early next year.

Half-year 2010 Financial Information

The 2010 Interim Report of Santhera Pharmaceuticals including the unaudited consolidated
financial statements is available on the Company's Web site under www.santhera.com
http://www.santhera.com/ /reports.

Condensed consolidated income statement (unaudited)
(IFRS, for half year ended June 30, in CHF thousands) 2010 2009
Net sales 1,711 463
Gross profit 1,482 365

Other operating income 552 0

Research and Development -7,947 -16,876
Marketing and Sales -2,151 -1,971
General and Administration -5,553 -6,016
Other operating expenses -52 -30
Operating expenses -15,703 -24,893
Operating result -13,669 -24,528
Financial result -412 1,155
Income taxes -82 -34
Net loss -14,163 -23,407
Basic and diluted loss per share (in CHF) -3.87 -6.65

Condensed consolidated balance sheet (unaudited)
(IFRS, in CHF thousands) June 30, 2010 December 31, 2009
Cash and cash equivalents 39,477 53,320
Noncurrent assets 33,585 36,824
Other current assets 4,351 4,557
Total assets 77,413 94,701

Equity 67,148 83,512
Noncurrent liabilities 2,665 2,654
Current liabilities 7,600 8,535
Total equity and liabilities 77,413 94,701

Condensed consolidated cash flow statement (unaudited)
(IFRS, for half year ended June 30, in CHF thousands) 2010 2009
Gross operating/investing cash flow -15,762 -22,013

Cash and cash equivalents at January 1 53,320 75,006
Cash and cash equivalents at June 30 39,477 53,442
Net change in cash and cash equivalents -13,843 -21,564

Share capital
June 30, 2010 December 31, 2009
Number of shares issued with par value of CHF 1 3,660,242 3,654,219
Conditional capital for stock options 644,492 650,515
Conditional capital for convertible rights 600,000 490,182
Authorized capital 1,800,000 323,945

* * *

About Santhera

Santhera Pharmaceuticals (SIX: SANN) is a Swiss specialty pharmaceutical company focused
on the development and commercialization of innovative pharmaceutical products for the
treatment of severe neuromuscular diseases, an area of high unmet medical need which
includes many orphan indications with no current therapy. Santhera's first product,
Catena, to treat Friedreich's Ataxia is marketed in Canada. For further information,
please visit www.santhera.com.

Catena is a trademark of Santhera Pharmaceuticals.

Webcast/Teleconference

At 15:00 CET / 14:00 UKT / 09:00 EST on September 3, 2010, Santhera's management will
host a teleconference/webcast. You can either join the webcast on
www.santhera.com/webcast or the teleconference using the conference ID 96144870 and one
of the following dial-ins:

Switzerland 056 580 00 12 (local call)
Germany 0692 222 4956 (local call)
UK 0844 338 74 (local call)
Europe +44 (0) 1452 561 488 (standard international)
USA 1877 328 4999
The webcast will be available for playback one hour after the analyst presentation
ends.

For further information, contact
Klaus Schollmeier, Chief Executive Officer
Phone: +41 (0)61 906 89 52
klaus.schollmeier@santhera.com

Barbara Heller, Chief Financial Officer
Phone: +41 (0)61 906 89 54
barbara.heller@santhera.com

Thomas Staffelbach, Head Public & Investor Relations
Phone: +41 (0)61 906 89 47
thomas.staffelbach@santhera.com

Disclaimer/Forward-looking statements

This communication does not constitute an offer or invitation to subscribe for or
purchase any secu­rities of Santhera Pharmaceuticals Holding AG. This publication may
contain certain forward-looking statements concerning the Company and its business. Such
statements involve certain risks, un­certainties and other factors which could cause the
actual results, financial condition, performance or achievements of the Company to be
materially different from those expressed or implied by such statements. Readers should
therefore not place undue reliance on these statements, particularly not in connection
with any contract or investment decision. The Company disclaims any obligation to update
these forward-looking statements.

HUG#1442473

News release 1H2010 http://hugin.info/137261/R/1442473/386704.pdf

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Santhera Pharmaceuticals Holding AG
Hammerstrasse 49 Liestal Switzerland

ISIN: CH0027148649;