Mr. Roberto Bellini reports

BELLUS HEALTH PRESENTS 2018 HIGHLIGHTS AND 2019 CORPORATE PLAN

Bellus Health Inc. has presented its 2018 achievements and corporate priorities for 2019. The company also reported its financial and operating results for the year ended Dec. 31, 2018. All currency figures reported in this press release are in Canadian dollars, unless otherwise specified.

"The positive phase 1 data reinforces our position that our lead drug candidate BLU-5937 has the potential to be a best-in-class therapeutic for the treatment of chronic cough," said Roberto Bellini, president and chief executive officer of Bellus Health. "The $35-million financing completed in December also positions us for another year of important milestones, including the start of our phase 2 study in mid-2019."

2019 corporate plan

Bellus Health priorities for 2019 will be focused on achieving the following:

• Initiate a clinical phase 2 study for BLU-5937 in chronic cough patients in mid-2019, with top-line results anticipated in mid-2020;
• The clinical phase 2 study will be a dose-escalation crossover design study to assess the efficacy, safety and tolerability of BLU-5937 in chronic cough patients, in addition to helping confirm the optimal dose regimen. A total of 50 patients with refractory chronic cough are expected to be enrolled in approximately 10 clinical sites located in the United Kingdom and the United States;
• Pursue BLU-5937 enabling activities to prepare the program for later-stage clinical development;
• Present BLU-5937 phase 1 data at medical conferences;
• Develop BLU-5937 program for potential expansion in other P2X3 indications.

2018 highlights:

• Announced positive top-line results from the clinical phase 1 study for BLU-5937, the company's lead drug candidate for chronic cough;
  • BLU-5937 was shown to be safe and well tolerated, and did not cause any taste loss at the anticipated therapeutic doses. This confirms the company's expectation that at the anticipated therapeutic doses there is no or very limited effect on taste perception. The benign side effect profile, in combination with the anti-tussive effect demonstrated in several preclinical studies, further reinforces the company's position that BLU-5937 has the potential to be a best-in-class therapeutic for chronic cough patients.
• Closed a $35-million equity offering, led by OrbiMed;
  • On Dec. 18, 2018, the company issued 36,842,105 common shares from treasury at a price of 95 cents per share for aggregate gross proceeds of $35-million. The offering was led by OrbiMed and also included New Leaf Venture Partners, First Manhattan Co., Samsara BioCapital, Fonds de solidarite FTQ, AppleTree Partners and Amzak Health.
• Secured patent protection for BLU-5937 in all major pharmaceutical markets;
  • Patents were granted by the European Patent Office and the Japan Patent Office in 2018, in addition to patents granted in the United States and China in 2017, with claims covering the composition of matter of BLU-5937 until 2034. In addition, the company further expanded BLU-5937's patent protection to 2038 by securing a new United States patent claiming P2X3 selectivity as a means of minimizing taste effects.
• Appointed an international clinical advisory board to provide strategic guidance and support to the BLU-5937 development program;
  • The CAB comprises highly respected clinical leaders whose work has influenced the treatment and management of chronic cough. The chair of the CAB is Dr. Jaclyn Smith, MB, ChB, FRCP, PhD, professor of respiratory medicine at the University of Manchester in the United Kingdom and an honorary consultant at the University Hospital of South Manchester NHS Foundation Trust.
• Concluded the year with cash, cash equivalents and short-term investments totalling $48.9-million;
  • The liquidity position should enable the company to finance its operations for more than two years.

                                    SUMMARY OF FINANCIAL RESULTS
                           (in thousands of dollars, except per-share data) 

                                                              Year ended Dec. 31, 2018   Year ended Dec. 31, 2017

Revenues                                                                           $35                       $165
Research and development expenses, net                                          (6,532)                    (3,321)
General and administrative expenses                                             (3,409)                    (2,529)
Net finance income                                                                 741                         19
Change in fair value of contingent consideration receivable                         81                          -
Realized gain on sale of investment in FB Health                                     -                      1,909
Gain on sale of subsidiary                                                           -                      1,944
Deferred tax expense                                                                 -                        (61)
Net (loss) for the year                                                        $(9,084)                   $(1,874)
Basic and diluted (loss) per share                                              $(0.08)                    $(0.03)

Research and development expenses, net of research tax credits, amounted to $6,532,000 for the year ended Dec. 31, 2018, compared with $3,321,000 for the previous year. The increase is primarily attributable to higher expenses incurred in relation to the development of BLU-5937, the company's lead drug candidate for chronic cough, including the clinical phase 1 study completed by the company in 2018.

General and administrative expenses amounted to $3,409,000 for the year ended Dec. 31, 2018, compared with $2,529,000 for the previous year. The increase is mainly due to higher stock-based compensation expense in relation to the company's stock option plan and deferred share unit plans.

Net finance income amounted to $741,000 for the year ended Dec. 31, 2018, compared with $19,000 for the previous year. The increase is primarily attributable to higher interest income due to the company's increased cash, cash equivalents and short-term investments position following the equity offering in December, 2017, as well as to the foreign exchange gain that arose from the translation of the company's net monetary assets denominated in United States dollars.

Realized gain on sale of investment in FB Health amounted to $1,909,000 for the year ended Dec. 31, 2017, and is related to the sale of the company's equity interest in FB Health SpA.

Gain on sale of subsidiary amounted to $1,944,000 for the year ended Dec. 31, 2017, and is related to the sale of the company's wholly owned subsidiary, Thallion Pharmaceuticals Inc.

As at Dec. 31, 2018, the company had available cash, cash equivalents and short-term investments totalling $48,906,000, compared with $23,888,000 as at Dec. 31, 2017.

The company's full audited consolidated financial statements and accompanying management's discussion and analysis for the year ended Dec. 31, 2018, will be available shortly on SEDAR.

About Bellus Health Inc.

Bellus Health is a clinical-stage biopharmaceutical company developing novel therapeutics for conditions with high unmet medical need. Its pipeline of projects includes the company's lead drug candidate BLU-5937 for chronic cough and several other partnered clinical-stage drug development programs. BLU-5937, a highly selective P2X3 antagonist, has the potential to be a best-in-class therapeutic for chronic cough patients who do not respond to current therapies.

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