DGAP-Adhoc: PAION GRANTS PENDOPHARM EXCLUSIVE OPTION TO

PAION AG / Key word(s): Contract 13.06.2014 01:02 Dissemination of an Ad hoc announcement according to § 15 WpHG, transmitted by DGAP - a company of EQS Group AG. The issuer is solely responsible for the content of this announcement. --------------------------------------------------------------------------- NOT FOR DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, JAPAN, AUSTRALIA OR ANY OTHER JURISDICTION IN WHICH THE DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL. AD-HOC ANNOUNCEMENT ACCORDING TO §15 WPHG PAION GRANTS PENDOPHARM EXCLUSIVE OPTION TO REMIMAZOLAM IN CANADA - Pendopharm's European affiliate, Pharmascience International Limited, has committed to invest up to EUR 4 million in connection with the upcoming planned rights offering of PAION - PAION and Pendopharm agreed on the principal terms of an exclusive license for Remimazolam in Canada and have executed an exclusivity agreement - PAION to receive up to CAD 5.7 million (approx. EUR 3.8 million) in milestone payments, plus significant double digit tiered royalties starting at 15% under the exclusive license agreement Aachen (Germany), 13 June 2014 - PAION AG, a Specialty Pharma Company (ISIN DE000A0B65S3; Frankfurt Stock Exchange Prime Standard: PA8) and Pendopharm, a division of Pharmascience Inc., headquartered in Montreal, Canada, have entered into an exclusivity agreement concerning a license agreement for Remimazolam. The license agreement is not yet executed but all principal terms have been agreed. The agreement grants Pendopharm an exclusive licence for the development and commercialization in the territory of Canada. Under the licence agreement, PAION will be eligible to receive future milestone payments of CAD 5.7 million (approx. EUR 3.8 million) and significant double digit tiered royalties on net sales in Canada starting at 15%. Pursuant to the exclusivity agreement, Pendopharm's European affiliate, Pharmascience International Limited, has committed to invest up to EUR 4 million in shares not subscribed by PAION's shareholders at the end of the upcoming planned rights offering at a 10% premium to the theoretical ex-rights price of PAION's share price. The investment is subject to PAION's planned rights offering generating the necessary funds to conduct the US phase III program in procedural sedation. If, at the end of the rights offering, insufficient new shares are available to permit the full investment of the EUR 4 million, PAION has the right to require Pendopharm or Pharmascience International Limited, within an agreed time period after the rights offering, to invest the remaining portion of the EUR 4 million in shares of PAION in a separate private placement at a 10% premium to the then current market price. In certain cases, Pendopharm and Pharmascience International Limited, instead of investing the remainder of the EUR 4 million in a separate private placement, will make a cash payment to PAION in an amount equal to 10% of the remaining investment amount. ### About Remimazolam Remimazolam is an innovative short-acting general anaesthetic/sedative. Due to its short duration of action and good controllability, it has a preferable efficacy and safety profile relative to other currently marketed anaesthesia compounds. The rapid offset of Remimazolam's effect is due to its metabolism by tissue esterase enzymes that are widely distributed throughout the body. Remimazolam has potential in three indications: - Procedural sedation - General anaesthesia - ICU sedation Remimazolam is available for licensing outside Japan, China, Russia (CIS) Turkey, South Korea and Canada, where the compound is partnered with, Ono Pharmaceutical, Yichang Humanwell, R-Pharm, Hana Pharm and Pendopharm. About PAION PAION AG is a publicly-listed Specialty Pharma Company headquartered in Aachen, Germany with a second site in Cambridge, UK. The company has a track record in developing hospital-based treatments for which there is substantial unmet medical need. PAION AG is transforming its business model from a pure development company to a specialty pharmaceutical company with a focus on anaesthesia products to take advantage of the unique profile of its main compound, Remimazolam. About Pendopharm, a Division of Pharmascience Inc. Pendopharm is a division of Pharmascience Inc., a Canadian privately-owned company. Established in 1983, Pharmascience Inc. is Canada's 10th largest pharmaceutical company, with a highly-skilled workforce of 1,400 people. Pharmascience commercializes over 400 products, including branded prescription, OTC and BTC products as well as generic products in Canada and with its affiliates and distributors in to over 60 countries worldwide. Strategically committed to growth, Pendopharm is actively engaged in licensing, partnering, developing and marketing late-stage specialty prescription medicines as well as consumer brands. http://www.pendopharm.com PAION Contact Ralf Penner Director Investor Relations / Public Relations PAION AG Martinstrasse 10-12 52062 Aachen - Germany Phone: +49 241 4453-152 E-mail: r.penner@paion.com www.paion.com Pendopharm Contact Isabelle Vezina Senior Director, Marketing Pendopharm, a division of Pharmascience Inc. 6111, Royalmount Avenue, Suite 100 Montreal, Quebec H4P 2T4, Canada Phone: +1 514 340 9800 Email: ivezina@pendopharm.com www.pendopharm.com Disclaimer: This release contains certain forward-looking statements concerning the future business of PAION AG. These forward-looking statements contained herein are based on the current expectations, estimates and projections of PAION AG's management as of the date of this release. They are subject to a number of assumptions and involve known and unknown risks, uncertainties and other factors. Should actual conditions differ from the Company's assumptions, actual results and actions may differ materially from any future results and developments expressed or implied by such forward-looking statements. Considering the risks, uncertainties and other factors involved, recipients should not rely unreasonably upon these forward-looking statements. PAION AG has no obligation to periodically update any such forward-looking statements to reflect future events or developments. This release does not constitute an offer of securities for sale or a solicitation of an offer to purchase securities of PAION AG in the United States, Germany or any other jurisdiction. Neither this announcement nor anything contained herein shall form the basis of, or be relied upon in connection with, any offer or commitment whatsoever in any jurisdiction. The offer will be made exclusively by and on the basis of a securities prospectus that will be published following approval by the German Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht). It is anticipated that this prospectus will be published on PAION AG's website and that free-of-charge copies will, inter alia, be made available at the premises of PAION AG (Martinstrasse 10-12, 52062 Aachen, tel.: +49 241 4453-0). The securities of PAION AG may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended (the "Securities Act"). The securities of PAION AG have not been, and will not be, registered under the Securities Act. In the United Kingdom, this document is only being distributed to and is only directed at persons who (i) are investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (the "Order") or (ii) are persons falling within Article 49(2)(a) to (d) of the Order (high net worth companies, unincorporated associations, etc.) (all such persons together being referred to as "Relevant Persons"). This document is directed only at Relevant Persons and must not be acted on or relied on by persons who are not Relevant Persons. Any investment or investment activity to which this document relates is available only to Relevant Persons and will be engaged in only with Relevant Persons. 13.06.2014 DGAP's Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------------- Language: English Company: PAION AG Martinstr. 10-12 52062 Aachen Germany Phone: +49 (0)241-4453-0 Fax: +49 (0)241-4453-100 E-mail: info@paion.com Internet: www.paion.com ISIN: DE000A0B65S3 WKN: A0B65S Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin, Düsseldorf, Hamburg, München, Stuttgart End of Announcement DGAP News-Service ---------------------------------------------------------------------------