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BELLUS Health Amends Terms of CVRs in Connection With Its Acquisition of Thallion

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LAVAL, QUEBEC -- (Marketwired) -- 07/10/13 -- BELLUS Health Inc. (TSX: BLU) ("BELLUS Health") and Thallion Pharmaceuticals Inc. ("Thallion") (TSX VENTURE: TLN) announced today that they have entered into an amendment (the "Amendment") to the acquisition agreement dated June 17, 2013 pertaining to the proposed plan of arrangement (the "Arrangement") involving the acquisition of Thallion by BELLUS Health.

The Amendment provides for the potential of increased consideration for Thallion shareholders under the contingent value rights ("CVR") by:

-- increasing from 80% to 100% the pro rata share entitlement of a CVR holder for any additional purchase price consideration that may be received by Thallion, whether in cash, securities or property of any kind, from Premium Brands Holding Corp. expected in 2016 and representing up to a possible $0.0404 per CVR;-- removing the $10 million tranche threshold requirement thereby allowing a CVR holder to receive its pro rata share of 5% of any Shigamabs® revenue generated or received by BELLUS Health, including from any sale or other use of the Shigamabs® technology, capped at $6.5 million or $0.1812 per CVR;-- entitling a CVR holder to receive its pro rata share of 100% of any net proceeds generated from the licensing, selling or otherwise commercializing of (i) diagnostic products or services using certain Caprion Proteomics Inc. products, and (ii) all issued patents or pending patents pertaining to such Caprion Proteomics Inc. products, in respect of which Thallion has an ownership interest or monetary entitlement.-- providing that the CVRs may be transferred upon compliance with certain conditions and applicable securities legislation and requirements of regulatory authorities; and-- providing that BELLUS Health will apply to list the CVRs on the TSX. Listing will be subject to BELLUS Health fulfilling all the listing requirements of the TSX. There is no certainty that the CVRs will be listed.



The estimated combined $6.332 million cash and CVR consideration under the Arrangement (assuming that the maximum amount payable under the CVRs is achieved) now represents a premium of 206.2% to Thallion's closing trading price of $0.13 on the TSX Venture Exchange on June 17, 2013, being the last day prior to the announcement of the Arrangement, a premium of 214.5%, based on the volume weighted average trading price for the 20 prior trading days and a premium of 243.8%, based on the volume weighted average trading price for the 90 prior trading days.

Pursuant to the Amendment, the parties also agreed, for clarification purposes, to modify the definition of "Net Cash", to provide that in calculating the Net Cash, the amounts under (i) of the definition (i.e. the assets) shall include the deemed proceeds for the exercise or cancellation and treatment as per the Arrangement of "in-the-money" options of approximately $500,000, while the amounts under (ii) of the definition (i.e. the liabilities) shall exclude amounts paid or payable by Thallion for the cancellation of options or warrants and redemption of securities of Thallion as contemplated by the Arrangement (pursuant to Section 8.10 of the acquisition agreement). The parties further agreed that the Net Cash shall be calculated in a manner consistent with the calculations provided in Schedule F to the acquisition agreement which describe Thallion's estimate of Net Cash as at May 31, 2013, being approximately $8,200,000 to $8,400,000, including the deemed proceeds for the exercise or cancellation and treatment as per the plan of Arrangement of "in-the-money" options of approximately $500,000, and is provided for illustrative purposes only. As per the table set out on page 47 of Thallion's proxy circular dated July 4, 2013 relating to the annual and special meeting of shareholders (the "Circular") available on SEDAR at www.sedar.com, if the effective Net Cash on the effective date of the Arrangement is $8,000,000, the cash consideration per share payable on the effective date will be $0.1904 per share, representing, together with the consideration payable to optionholders under the plan of Arrangement, an aggregate consideration of approximately $6.332 million in addition to the CVRs.

Voting Support Agreement with Jaguar Financial Corporation

Jaguar Financial Corporation ("Jaguar Financial") has entered into a voting support agreement supporting the Arrangement (the "Voting Support Agreement"), as amended, representing 13.9% of the shares outstanding of Thallion. In addition to the previously obtained 10.2% in support from other Thallion shareholders, this now represents total shareholder support of approximately 24.1%.

Vic Alboini elected Director

Thallion also announces that concurrently with the entering into of the Voting Support Agreement, it has entered into an agreement with Jaguar Financial and Vic Alboini pursuant to which the Board of Directors of Thallion has filled the vacancy created by the recent departure of a Board member by electing Vic Alboini as a director of Thallion to hold office until the next annual meeting of shareholders or until his successor is elected or appointed, subject to the terms and conditions of such agreement.

Supplement to Circular

Thallion's Circular together with a supplement containing further details regarding the Amendment are expected to be mailed to Thallion shareholders on or about July 11, 2013.

Copies of the amendment to the acquisition agreement, Jaguar Financial voting support agreement, supplement to the Circular and certain related documents will be filed with Canadian securities regulators and will be available on SEDAR at www.sedar.com as part of Thallion's public filings.

About BELLUS Health (www.bellushealth.com)

BELLUS Health is a development-focused healthcare company concentrating on products that provide innovative health solutions and address critical unmet medical needs. The Company's lead program is KIACTA™, a novel drug candidate currently in a Phase III Confirmatory Study for the treatment of AA amyloidosis, an orphan indication resulting in renal dysfunction that often rapidly leads to dialysis and death. KIACTA™ is partnered with global private equity firm Auven Therapeutics. AA amyloidosis affects approximately 35,000 to 50,000 individuals in the United States, Europe and Japan.

About Thallion (www.thallion.com)

Thallion is a biotechnology company developing pharmaceutical products in the areas of infectious disease and oncology. Thallion's lead clinical program Shigamabs® is a dual antibody product for the treatment of Shiga toxin-producing E. coli bacterial infections and has recently completed a Phase II clinical trial. Additional information about Thallion can be obtained at www.thallion.com.

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. Such statements, based as they are on the current expectations of management, inherently involve numerous risks and uncertainties, known and unknown, many of which are beyond the control of BELLUS Health Inc. or Thallion Pharmaceuticals Inc. Such risks include but are not limited to: the ability to obtain Court and regulatory approvals, third party consents and to satisfy other closing conditions, adjustments may be made to the cash consideration depending on the Net Cash, risks relating to the satisfaction of payment conditions under the CVRs, estimated Net Cash, the ability to obtain financing, the impact of general economic conditions, general conditions in the pharmaceutical and/or nutraceutical industry, changes in the regulatory environment in the jurisdictions in which the BELLUS Health Inc. and Thallion Pharmaceuticals Inc. do business, stock market volatility, fluctuations in costs, changes to the competitive environment due to consolidation, achievement of forecasted burn rate, achievement of forecasted clinical trial milestones, and that actual results may vary once the final and quality-controlled verification of data and analyses has been completed. Consequently, actual future results may differ materially from the anticipated results expressed in the forward-looking statements, and there can be no assurance that any amounts will become payable under the CVRs. The reader should not place undue reliance, if any, on any forward-looking statements included in this news release. These statements speak only as of the date made and neither BELLUS Health Inc. nor Thallion Pharmaceuticals Inc. is under any obligation to update or revise such statements as a result of any event, circumstances or otherwise, and BELLUS Health Inc. and Thallion Pharmaceuticals Inc. disavow any intention to do so, unless required by applicable legislation or regulation. Please see the public fillings of BELLUS Health Inc. and Thallion Pharmaceuticals Inc., including the Annual Information Form of BELLUS Health Inc. for further risk factors that might affect both companies and their respective businesses.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.



Contacts:
BELLUS Health Contact:
Adam Peeler
TMX Equicom
416-815-0700 ext. 225
apeeler@tmxequicom.com

Thallion Contact:
Michael Singer
Chief Financial Officer
(514) 940-3600
(514) 336-2343 (FAX)
info@thallion.com
www.thallion.com



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