Mr. Roberto Bellini reports

BELLUS HEALTH ANNOUNCES A $17 MILLION STRATEGIC PARTNERSHIP AND FINANCING WITH PHARMASCIENCE INC.; REORGANIZATION TO RESULT IN A SIMPLIFIED CAPITAL STRUCTURE

Bellus Health Inc. has entered into a strategic partnership and financing with Pharmascience Inc., whereby Pharmascience will pay a total of $17.25-million to Bellus Health, including $8.15-million in non-dilutive capital and a $9.1-million investment, for a 10.4-per-cent ownership stake in a new public company. The partnership will be put in place through a plan of arrangement, under which 89.6 per cent of new Bellus will be owned by securityholders of Bellus Health.

"This transaction fully funds the company until the completion of the ongoing phase 3 registration trial of Kiacta as a treatment for AA amyloidosis," said Roberto Bellini, president and chief executive officer of Bellus Health. "It also introduces a strong, new strategic partner to the company and results in a cleaner capital structure. This simpler capital structure supports our plan to attract a wider range of investors and increase our trading liquidity as we near completion of the Kiacta phase 3 trial and evaluate opportunities to add to our pipeline."

"As the largest generic pharmaceutical company in Quebec, we are actively looking for opportunities to strategically build our exposure to innovative development pipelines," added David Goodman, chief executive officer of Pharmascience. "Under this plan of arrangement, the company that emerges will be a well-funded, late-stage company, and we look forward to collaborating with Bellus on drug development programs of mutual interest."

As part of the arrangement, all outstanding convertible securities of Bellus Health will be converted to common equity of new Bellus or amended to rank equally with the common shares of new Bellus, at the same price as the Pharmascience investment. Common shares of Bellus Health will be exchanged on a one-for-one basis for common shares of new Bellus. New Bellus will carry on its business operations under the name "Bellus Health Inc." and apply to have its common shares listed with the same BLU symbol on the Toronto Stock Exchange. The current senior management of Bellus Health will continue with new Bellus.

A summary of the reorganization to be completed under a court-supervised arrangement pursuant to the Canada Business Corporations Act follows:

• Bellus Health will transfer all its assets to a newly constituted limited partnership, to be owned 10.4 per cent by Pharmascience and 89.6 per cent by new Bellus.
• The LP will continue Bellus Health's business operations.
• Bellus Health's convertible debt holders will convert the majority of their debt into common shares of the company at a conversion rate of five cents, and preferred shareholders will automatically be converted into common shares in accordance with their terms.
• Holders of convertible notes of Bellus Health will have the option to either immediately convert their notes at a conversion price of five cents or having the terms of their notes amended to rank pari passu with the common shares of new Bellus and to be convertible into common shares of new Bellus in 2016 at a fixed conversion price of five cents.
• New Bellus will apply to have its common shares listed on the Toronto Stock Exchange under the symbol BLU.
• Upon completion of the transaction, Pharmascience will own 100 per cent of the common shares of the original Bellus Health and a 10.4-per-cent interest in the LP, which interest will be exchangeable for 10.4 per cent of the common shares of new Bellus that are outstanding (after giving effect to the conversion of convertible notes and exchange of shares of Bellus Health) at the effective time of the arrangement.

Completion of the transaction is subject to receipt of court and regulatory approvals and other third party consents. The arrangement must also be approved by holders of 66-2/3 per cent of the common shares and preferred shares of Bellus Health, and 66-2/3 per cent of the convertible notes of Bellus Health voted at a special meeting and, if applicable, a majority of minority holders in each such class. The special meeting of the company's securityholders that will be held on May 15, 2012, in conjunction with the company's annual general shareholders' meeting. Additional details regarding the transaction and the votes to be taken at the special meeting will be provided to Bellus Health securityholders in an information circular that will be mailed before the end of April, 2012. The information circular will also be available on Bellus Health's website and on SEDAR.

Based on a number of factors, including a fairness opinion rendered by the company's financial adviser for the transaction and the recommendation of an independent committee of Bellus Health's board of directors that was constituted to supervise the company's negotiation of the transaction, Bellus Health's board of directors unanimously recommends that the company's securityholders approve the transaction.

Pharmascience has concurrently entered into voting and support agreements with securityholders holding approximately 35.9 per cent of the company's common shares, 52.9 per cent of company's preferred shares and 61-per-cent principal amount of the company's convertible notes, which securityholders have agreed to vote in favour of the transaction.

We seek Safe Harbor.