Mr. Roberto Bellini reports

BELLUS HEALTH REPORTS RESULTS FOR YEAR ENDED DECEMBER 31, 2011, AND PROVIDES UPDATE ON KIACTAA PHASE 3 CONFIRMATORY STUDY

Bellus Health Inc. has released its financial results for the year ended Dec. 31, 2011, and provided an update on its pipeline of products.

Highlights:

• Japanese Pharmaceutical and Medical Device Agency (PMDA-Japan) has accepted sponsor's proposal to expand the Kiactaa phase 3 confirmatory trial to Japan;

• Continued enrolment of patients in the Kiactaa phase 3 registration trial;

• Turned Viviminda business cash-flow positive in 2011;

• Further expanded Viviminda's marketing and sales network through licence agreements in new markets;

• Completed phase 1 trial of NRM8499: the compound was found to be safe and well tolerated at the intended therapeutic dose;

• Completed several strategic initiatives that reduced use of cash and extended the company's financial resources to mid-2013.

"During 2011, Bellus Health continued to execute on its business plan, making significant progress on several fronts," said Roberto Bellini, president and chief executive officer of Bellus Health. "In particular, the expansion of the Kiactaa phase 3 registration trial to Japan is an important milestone for the company and now positions Kiactaa for marketing approval in the three major global pharma markets, the United States, Europe and Japan, on completion of the phase 3 study," Mr. Bellini added.

Kiactaa (eprodisate) for the treatment of AA amyloidosis

During 2011, Bellus Health and its strategic partner Celtic Therapeutics continued the patient recruitment for the global phase 3 confirmatory clinical trial for Kiactaa (eprodisate). The trial is designed to confirm the safety and efficacy of Kiactaa in preventing renal function decline in patients diagnosed with AA amyloidosis. The international, randomized, double-blind, placebo-controlled, event-driven study will involve approximately 230 patients diagnosed with AA amyloidosis recruited from 83 sites in 28 countries worldwide, including those in Japan. Thus far, a total of 72 clinical centres in 26 countries are actively recruiting patients. The Japanese portion of the study is scheduled to enroll 10 to 20 patients in up to seven clinical centres. These sites are expected to be activated in the second half of 2012 and will recruit patients for at least one year. Recruitment is continuing and is expected to be completed in the second half of 2013.

The phase 3 confirmatory study is an event-driven trial which will conclude when 120 patients have reached worsening events linked to deterioration of kidney function. Further to the expansion of the study to Japan and the extension of the recruitment period, the completion of the study is now expected in the second half of 2015.

There will be periodic data safety monitoring review boards that will independently assess the safety of Kiactaa (eprodisate) throughout the study. The first such monitoring review board is scheduled to convene in April, 2012. No efficacy interim analysis will be performed.

Kiactaa (eprodisate) has been granted orphan drug designation in the United States and received orphan medicinal product designation in Europe, which normally provide for market exclusivity of seven years and 10 years, respectively, once the drug is approved. Kiactaa (eprodisate) has also received orphan drug designation in Switzerland.

Viviminda, a natural health product designed to protect memory function

Following the agreements entered into in 2010 relating to the distribution of Viviminda in Italy with FB Health LLC, and the exclusive licence and supply agreement for the distribution of Viviminda in Canada with Advanced Orthomolecular Research Inc. (AOR), the company entered into an exclusive licence and distribution agreement with Agahan Ayandeye Pars Inc. in 2011 for the rights to Viviminda in Egypt, United Arab Emirates, Pakistan, Iran and certain other Gulf states. The Agahan Group expects to launch Viviminda in the first half of 2012. The company also entered into an exclusive licence and distribution agreement with Integris Pharma Ltd. in 2011, which has secured the exclusive right to market and sell Viviminda in Greece and Cyprus. Integris expects to launch Viviminda in Greece and Cyprus in the middle of 2012.

The company is actively pursuing additional partnerships in order to further expand Viviminda's commercial footprint throughout the world. NRM8499, a pro-drug of tramiprosate for the treatment of Alzheimer's disease

In January, 2011, Bellus Health announced the results of the phase I clinical trial for NRM8499, which investigated the safety, tolerability and pharmacokinetic profile of NRM8499 as compared with tramiprosate in a group of 67 young and elderly healthy subjects. The phase I clinical trial data demonstrated that NRM8499 were safe and well tolerated at the intended therapeutic dose. Moreover, the gastrointestinal tolerability and pharmacokinetic profile of tramiprosate was meaningfully improved with NRM8499. The company is currently exploring strategic partnership opportunities with the aim of further pursuing the development process of NRM8499.

Strategic cost reduction initiatives

Since the second quarter of 2010, the company has been implementing cost reduction initiatives to reduce its fixed-cost base and extend its financial resources. These included the reduction of the company's head count by more than 75 per cent; the early termination of the lease agreement for the company's Laval, Que., premises; and the reorganization of its international structure. As a result, the company has significantly reduced its required cash outflows.

In early 2011, the company exercised its right to terminate the lease of its Laval, Que., premises as of April 7, 2011, as provided in the amended lease agreement dated March 31, 2009, with A.R.E. Quebec No. 2, Inc., the landlord of such premises. The early termination of the lease resulted in annual savings of approximately $4.5-million for the company, representing a total of approximately $43-million in total savings over the remainder of the original lease term. The company has signed a new lease that began on April 8, 2011, at the same premises, for less space.

In 2011, Bellus Health completed a corporate reorganization whereby the company streamlined its international structure by liquidating its subsidiaries in Europe and the United States. The reorganization resulted in the repatriation of Bellus Health's intellectual property to Canada and the reduction of the company's operating expenses by approximately $1.4-million per year.

Financial results

All currency figures reported in this press release, including comparative figures, are in Canadian dollars, unless otherwise specified.

For the year ended Dec. 31, 2011, net income amounted to $3,424,000 (one cent per share), compared with a net loss of $24,553,000 (12 cents per share) for the same period last year. For the fourth quarter ended Dec. 31, 2011, the company recorded a net loss of $2,223,000 (one cent per share), compared with $12,739,000 (six cents per share) for the corresponding quarter the previous year.

The increase in net income/decrease in net loss in the current periods, compared with the corresponding periods the previous year, is partly due to cost reduction initiatives implemented by the company during the past years, such as reducing its work force, amending and early terminating its lease agreement, and streamlining its international structure. In addition, net income for the year ended Dec. 31, 2011, includes finance income of $13,105,000 recorded in relation to the decrease in the fair value of the embedded conversion option liability on the 2009 notes, compared with finance costs of $5,904,000 for the corresponding period in 2010. Net loss for the fourth quarter ended Dec. 31, 2011, includes finance costs of $243,000 in relation to the increase in the fair value of the embedded conversion option liability on the 2009 notes, compared with finance costs of $9,405,000 for the corresponding period in 2010.

As at Dec. 31, 2011, the company had available cash and cash equivalents of $5,105,000, compared with $10,257,000 as at Dec. 31, 2010. For the year ended Dec. 31, 2011, net decrease in cash and cash equivalents amounted to $5,152,000, compared with $3.76-million for the corresponding period the previous year. The net decrease in 2010 is net of proceeds of $10.2-million received in relation to the Kiactaa asset sale and licence agreement entered into with Celtic in 2010. Excluding this cash inflow, net decrease in cash used compared with last year is attributable to cost reduction initiatives implemented by the company, as discussed previously.

The company's consolidated financial statements and accompanying management's discussion and analysis for the year ended Dec. 31, 2011, will be available shortly on SEDAR and on the company's website.

Going concern

As at Dec. 31, 2011, based on current estimates, the company's cash and cash equivalents on hand, and expected sources of finances are considered, in management's view, to be sufficient to meet its committed cash obligations and expected level of expenditures into the third quarter of 2013. Beyond that, the ability of the company to continue as a going concern is dependent upon raising additional financing through borrowings, share issuances, receiving finances through sale of assets, supply agreements or product licensing agreements, and from obtaining regulatory approval in various jurisdictions to market and sell its product candidates and ultimately achieving future profitable operations. The outcome of these matters is dependent on a number of factors outside of the company's control. This material uncertainty may cast significant doubt about the company's ability to continue as a going concern beyond that period.

Management continues to pursue additional sources of financees including through further arrangements relating to the distribution of Viviminda and a potential partnership for NRM8499. While the discussions could lead to the signing of binding agreements in the future, there can be no assurance whatsoever that any such transaction will be put in place.

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