DGAP-Ad hoc: PAION AG

DGAP-Adhoc: PAION GRANTS COSMO PHARMACEUTICALS REMIMAZOLAM LICENSE IN THE U.S. AND COSMO BECOMES LARGEST SHAREHOLDER OF PAION AG

PAION AG / Key word(s): Contract

24.06.2016 19:26

Dissemination of an Ad hoc announcement according to § 15 WpHG, transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement.

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PAION GRANTS COSMO PHARMACEUTICALS REMIMAZOLAM LICENSE IN THE U.S. AND COSMO BECOMES LARGEST SHAREHOLDER OF PAION AG

- Cosmo to make EUR 10 million upfront license fee payment to PAION

- PAION entitled to receive up to EUR 42.5 million in milestone payments and significant double-digit tiered royalties

- PAION resolves issuance of 5,064,194 new shares to a subsidiary of Cosmo by way of a private placement and receives EUR 9.6 million

Aachen (Germany), 24 June 2016 - Today, PAION AG, a specialty pharma company (ISIN DE000A0B65S3; Frankfurt Stock Exchange Prime Standard: PA8), and Cosmo Technologies Ltd., a subsidiary of Cosmo Pharmaceuticals N.V., ("Cosmo") entered into a license agreement for remimazolam. The agreement grants Cosmo Technologies Ltd. an exclusive license for the development and commercialization of PAION's lead drug candidate, remimazolam, in the territory of the United States.

Under the license agreement, PAION will receive a EUR 10 million upfront licence fee payment. In addition, PAION is entitled to receive additional payments of up to EUR 42.5 million contingent upon certain milestones related to the U.S. regulatory approval process and, upon commercialization of remimazolam in the U.S., following regulatory approval, tiered royalties on net sales in the U.S. ranging from 20% to 25%, which may be adjusted under certain conditions but not to below 15% of net sales.

Under the terms of the license agreement, Cosmo has the right to further develop and commercialize remimazolam in the U.S., while bearing all future associated costs for market authorization and distribution. However, PAION will be responsible for and bear the cost associated with the completion of the ongoing U.S. trials in procedural sedation.

At the same time, Granell Strategic Investment Fund Limited ("Granell"), another subsidiary of Cosmo, entered into an investment agreement with PAION AG, pursuant to which it has committed to invest EUR 10 million in shares of PAION AG. In this context, PAION AG today resolved to issue 5,064,194 new shares of PAION AG at a price of EUR 1.90 per share (5-day VWAP) for a total of EUR 9.6 million to Granell under exclusion of shareholders' subscription rights. The remaining amount of EUR 0.4 million will be invested at a later date. The shares issued to Granell will be subject to a 12-month lock-up period. Upon completion of the private placement, which is expected to occur on 29 June 2016, Granell will hold approximately 9% in PAION AG's issued share capital. Under the Investment Agreement, PAION has undertaken, subject to approval by the Company's shareholders' meeting, to cause the appointment of one supervisory board member proposed by Cosmo to the Company's supervisory board.

Due to the significant impact of the license agreement and the investment agreement on PAION's net assets, financial position and results of operations, PAION will adapt the financial outlook for 2016 given on 22 March 2016 in connection with the publication of PAION's annual financial results 2015. A new outlook will be published later in the course of 2016.

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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

COSMO Contact Dr. Chris Tanner Cosmo Pharmaceuticals NV Riverside II Sir John Rogerson's Quay Dublin 2, Ireland investor.relations@cosmopharma.com +353 1 817 03 70

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.

24.06.2016 The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at 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: Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Munich, Stuttgart End of Announcement DGAP News-Service ---------------------------------------------------------------------------