tm2315761-2_nonfiling - none

May 16, 2023

Dear Shareholders,

The board of directors (the “Board of Directors”) of BELLUS Health Inc. (the “Company”) invites you to attend a special meeting (the “Meeting”) of the holders (the “Shareholders”) of the common shares of the Company (the “Shares”) to be held in person at 275 Armand-Frappier Blvd., Laval, Québec, H7V 4A7, on June 16, 2023, at 11:30 a.m. (Montréal time).

THE TRANSACTION

At the Meeting, Shareholders will be asked to consider and, if deemed advisable, to pass a special resolution (the “Arrangement Resolution”) approving a statutory plan of arrangement (the “Plan of Arrangement”) under section 192 of the Canada Business Corporations Act involving the Company, on the one hand, and GSK plc (the “Parent”), a public limited company formed under the laws of England and Wales, and 14934792 Canada Inc. (the “Purchaser”), a corporation existing under the laws of Canada and a wholly-owned subsidiary of the Parent, on the other hand, pursuant to which the Purchaser will, among other things, acquire all of the issued and outstanding Shares (the “Arrangement”).

Pursuant to the Arrangement, Shareholders will receive US$14.75 per Share in cash (the “Consideration”). The Consideration represents a premium of approximately 103% to the closing price per Share on the Nasdaq Global Select Market (“Nasdaq”) on April 17, 2023, the last trading day prior to the announcement of the Arrangement, and a premium of approximately 101% to the volume-weighted average price per Share on the Nasdaq over the 30 trading days up to and including April 17, 2023, the last trading day prior to the announcement of the Arrangement. The transaction values, as of the date of the announcement, the Company at approximately US$2.0 billion on an equity value basis.

REASONS FOR THE ARRANGEMENT

The recommendation of the transaction committee of the Board of Directors (the “Transaction Committee”) and the Board of Directors that Shareholders vote FOR the Arrangement Resolution is based on various factors, including those presented below. A detailed description of the information and factors considered by the Transaction Committee and the Board of Directors is set out in the accompanying management information circular (the “Circular”).

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Premium Value: The amount of the Consideration payable under the Arrangement to Shareholders represents a premium of approximately 103% to the closing price per Share on the Nasdaq on April 17, 2023, the last trading day prior to the announcement of the Arrangement, and a premium of approximately 101% to the volume-weighted average price of the Shares on the Nasdaq over the 30 trading days up to and including April 17, 2023, the last trading day prior to the announcement of the Arrangement.

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Certainty of Value and Immediate Liquidity: The entirety of the Consideration payable to Shareholders pursuant to the Arrangement will be paid in cash, which provides Shareholders with certainty of value and immediate liquidity.

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Consideration of Other Strategic Alternatives and Arm’s-Length Negotiations: The Company considered a variety of strategic alternatives, with a view to identifying transactions or other alternatives in the best interests of the Company, including continuing to pursue the development and commercialization of camlipixant on a stand-alone basis. The Board of Directors considered the risks inherent in the development of drug products, the risks related to designing, conducting and compiling data from clinical trials, especially a large-scale Phase 3 clinical trial such as the CALM Phase 3 program, the risks related to seeking approval for marketing from the FDA and other regulatory authorities, competition, and other factors affecting the revenues and profitability of biotechnology

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companies generally. The Arrangement Agreement (as defined in the Circular) is a result of arm’s-length negotiations between the Company, on the one hand, and the Parent and the Purchaser, on the other hand.

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Fairness Opinions: The Board of Directors received opinions from each of Centerview Partners LLC (“Centerview”) and Bloom Burton Securities Inc. (“Bloom Burton”) that, as of April 17, 2023, and based upon and subject to the assumptions made, procedures followed, matters considered and qualifications and limitations upon the review undertaken by each of them in preparing their respective opinions, the Consideration to be paid to the Shareholders (other than as specified in such opinions) pursuant to the Arrangement Agreement was fair, from a financial point of view, to such holders, as more fully described below under “Fairness Opinions — Centerview Fairness Opinion” and “Fairness Opinions — Bloom Burton Fairness Opinion”. The written opinions delivered by Centerview and Bloom Burton are attached to the Circular as Appendices D and E, respectively.

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Required Shareholder and Court Approvals: The Arrangement will become effective only if it is approved by (i) at least two-thirds of the votes cast at the Meeting by Shareholders present or represented by proxy and entitled to vote at the Meeting, and (ii) a simple majority of the votes cast at the Meeting by Shareholders present or represented by proxy and entitled to vote at the Meeting, excluding the votes attached to Shares that are required to be excluded pursuant to section 8.1(2) of Multilateral Instrument 61-101 — Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The Arrangement is also subject to a determination of the Québec Superior Court (the “Court”) that the Arrangement is fair and reasonable to the Shareholders.

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Director & Officer and Shareholder Support: Each of the directors of the Company holding Shares and certain executive officers of the Company alongside certain Shareholders related to such directors and executive officers, representing in the aggregate approximately 6.36% of the issued and outstanding Shares, have entered into support and voting agreements pursuant to which each has agreed to vote for the Arrangement Resolution.

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Terms of the Arrangement Agreement: The Board of Directors, after consultation with the Company’s outside legal counsel, is of the view that the terms and conditions of the Arrangement Agreement, including that the Company’s, the Parent’s and the Purchaser’s representations, warranties and covenants and the conditions to completion of the Arrangement, are reasonable in light of the circumstances, including the Consideration offered by the Purchaser and the Parent. In the Board of Directors’ view, the terms of the Arrangement Agreement treat stakeholders of the Company fairly.

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Reasonable Likelihood of Completion: Both the Purchaser’s and the Parent’s obligations to complete the Arrangement are subject to a limited number of conditions, which the Board of Directors, after consultation with the Company’s outside legal counsel, believes are reasonable under the circumstances. The Parent has the capability and the funds to effect the Arrangement, and the Arrangement is not subject to due diligence or financing conditions. The Board of Directors believes that the Arrangement is likely to be completed in accordance with its terms and within a reasonable time, with closing of the Arrangement expected in the third quarter of 2023 or earlier, subject to satisfaction of all closing conditions.

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Termination Fee: The Board of Directors retains the ability, in certain circumstances, to consider, accept and enter into a definitive agreement with respect to a Superior Proposal (as defined in the Circular), provided that the Company pays the Termination Fee (as defined in the Circular). In the Board of Directors’ view, the Termination Fee is appropriate and would not preclude a third party from making a potential unsolicited Superior Proposal in respect of the Company.

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Exercise of Dissent Rights: Registered Shareholders may, upon compliance with certain conditions and in certain circumstances, exercise their Dissent Rights and, if ultimately successful, receive fair value for their Shares as determined by the Court.

THE MEETING

The Meeting will be held in person at 275 Armand-Frappier Blvd., Laval, Québec, H7V 4A7, on June 16, 2023, at 11:30 a.m. (Montréal time).

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The accompanying notice of special meeting (the “Notice of Meeting”) and the Circular contain a detailed description of the Arrangement and set forth the actions to be taken by you at the Meeting. You should carefully consider all of the relevant information in the Notice of Meeting and the Circular and consult with your financial, legal or other professional advisors if you require assistance.

The Board of Directors has set the close of business (Montréal time) on May 15, 2023 (the “Record Date”) as the record date for determining the Shareholders who are entitled to receive notice of, and to vote at, the Meeting. Only persons shown on the register of Shareholders at the close of business on that date, or their duly appointed proxyholders, will be entitled to attend the Meeting and vote on the Arrangement Resolution. Each Share entitled to be voted at the Meeting will entitle the holder thereof as of the Record Date to one vote at the Meeting in respect of the Arrangement Resolution.

VOTING REQUIREMENTS

For the Arrangement to proceed, the Arrangement Resolution must be approved by (i) at least two-thirds of the votes cast at the Meeting by Shareholders present or represented by proxy and entitled to vote at the Meeting, and (ii) a simple majority of the votes cast at the Meeting by Shareholders present or represented by proxy and entitled to vote at the Meeting, excluding for this purpose any person required to be excluded pursuant to section 8.1(2) of MI 61-101.

BOARD RECOMMENDATION

The Board of Directors, based in part on the unanimous recommendation of the Transaction Committee and after receiving legal and financial advice, has unanimously determined that the Arrangement is in the best interests of the Company and fair to the Shareholders. The Board of Directors unanimously recommends that the Shareholders vote FOR the Arrangement Resolution. The determination of the Board of Directors is based on various factors described more fully in the Circular and in particular under the heading “Reasons for the Arrangement”. In making its recommendation, the Board of Directors and the Transaction Committee carefully considered a variety of factors and believe that the Consideration in cash is an attractive option for the Shareholders, taking into account the premium, liquidity, and anticipated future opportunities and risks associated with the business operations, operations, assets, financial performance and condition of the Company on a stand-alone basis.

SUPPORT AND VOTING AGREEMENTS

LETTER OF TRANSMITTAL

If the Arrangement is approved and completed, before the Purchaser can pay you for your Shares, Computershare Investor Services Inc., who acts as depositary under the Arrangement (the “Depositary”), will need to receive the applicable letter of transmittal completed by you if you are a registered Shareholder, or by your broker, investment dealer, bank, trust company or other intermediary (an “Intermediary”) if you are a non-registered Shareholder. Registered Shareholders must complete, sign, date and return the letter of transmittal which is available under the Company’s profile on SEDAR at www.sedar.com. If you are a non-registered Shareholder, you must ensure that your Intermediary completes the necessary transmittal documents to ensure that you receive payment for your Shares if the Arrangement is completed.

CLOSING CONDITIONS

The Arrangement is subject to customary closing conditions for a transaction of this nature, including court approval, approval of Shareholders in the manner described above and applicable regulatory approvals. If the necessary approvals are obtained and the other conditions to closing are satisfied or waived, it is anticipated that the Arrangement will be completed in the third quarter of 2023 or earlier and as a Shareholder,

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you will receive payment for your Shares shortly after closing provided the Depositary receives from you or your Intermediary duly completed transmittal documents.

VOTE USING THE FOLLOWING METHODS PRIOR TO THE MEETING

Your vote is important regardless of how many Shares you own. Whether or not you are able to attend the Meeting, Shareholders are urged to vote as soon as possible electronically, by telephone, email, fax or in writing, by following the instructions set out on the form of proxy or voting instruction form, as applicable, which accompanies the Notice of Meeting. Proxies must be received by the Company’s transfer agent, Computershare Investor Services Inc., at 100 University Avenue, 8th Floor, Toronto, Ontario M5J 2Y1, Attention: Investor Services, Fax: 1-866-249-7775, no later than 11:30 a.m. (Montréal time) on June 14, 2023 (or no later than 48 hours, excluding Saturdays, Sundays and holidays, before any reconvened meeting if the Meeting is adjourned or postponed). If you hold Shares through an Intermediary, you should follow the instructions provided by your Intermediary to ensure your vote is counted at the Meeting.

Voting Method	Registered Shareholders and Non-Objecting Beneficial Owners If your Shares are held in your name and are represented by a physical certificate or DRS Advice Or if you received a voting instruction form from Computershare	Objecting Beneficial Owners If your Shares are held with an Intermediary and you received a voting instruction form from Broadridge or your Intermediary
Internet	www.investorvote.com	www.proxyvote.com
Fax	1-866-249-7775	Complete, date, and sign the voting instruction form and fax it to the number listed therein.
Telephone	1-866-732-8683 (Registered Shareholders) 1-866-734-8683 (Non-Objecting Beneficial Owners) Toll-Free	Call the toll-free listed on your voting instruction form and vote using the control number provided therein.

If you have any questions or need assistance in your consideration of the Arrangement or with the completion and delivery of your proxy, please contact the Company’s proxy solicitation agent, Innisfree M&A Incorporated, who can be reached by Shareholders by toll-free telephone in North America at (877) 750-8332, and by Intermediaries by collect call at (212) 750-5833. If you have any questions about submitting your Shares to the Arrangement including with respect to completing the applicable letter of transmittal, please contact the Depositary at 1-800-564-6253 (for Shareholders in Canada and the United States) or 1-514-982-7555 (for Shareholders outside Canada and the United States).

On behalf of the Company, I would like to thank all of our Shareholders for their continuing support.

Yours very truly,

(signed) “Dr. Francesco Bellini”

Dr. Francesco Bellini
Chairman of the Board of Directors

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BELLUS HEALTH INC.

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
to be held on June 16, 2023

NOTICE IS HEREBY GIVEN that a special meeting (the “Meeting”) of the holders (the “Shareholders”) of the common shares (the “Shares”) of BELLUS Health Inc. (the “Company”) will be held in person at 275 Armand-Frappier Blvd., Laval, Québec, H7V 4A7, on June 16, 2023, at 11:30 a.m. (Montréal time) for the following purposes:

to consider, pursuant to an interim order of the Superior Court of Québec dated May 16, 2023 (as same may be amended, modified or varied, the “Interim Order”) and, if deemed advisable, to pass, with or without variation, a special resolution (the “Arrangement Resolution”) to approve a proposed plan of arrangement (the “Plan of Arrangement”) involving the Company, on the one hand, and GSK plc (the “Parent”), a public limited company formed under the laws of England and Wales, and 14934792 Canada Inc. (the “Purchaser”), a corporation existing under the laws of Canada and a wholly-owned subsidiary of the Parent, on the other hand, pursuant to section 192 of the Canada Business Corporations Act (the “Arrangement”). The full text of the Arrangement Resolution is set forth in Appendix B to the accompanying management information circular (the “Circular”); and

to transact such other business as may properly come before the Meeting or any postponement or adjournment thereof.

Specific details of the matters proposed to be put before the Meeting are set forth in the Circular which accompanies and is deemed to form part of this notice of special meeting of Shareholders (this “Notice of Meeting”).

The Meeting will be held in person at 275 Armand-Frappier Blvd., Laval, Québec, H7V 4A7, on June 16, 2023, at 11:30 a.m. (Montréal time). Doors will open at 11:00 a.m. (Montréal time).

Shareholders are entitled to vote at the Meeting either in person or by proxy with each Share entitling the holder thereof to one vote at the Meeting. The board of directors of the Company has fixed May 15, 2023 as the record date for determining Shareholders who are entitled to receive notice of and vote at the Meeting. Only Shareholders whose names have been entered in the register of the Company as at the close of business (Montreal time) on such date will be entitled to receive notice of and vote at the Meeting.

Your vote is important regardless of how many Shares you own. Whether or not you are able to attend the Meeting, Shareholders are urged to vote as soon as possible electronically, by telephone, email, fax or in writing, by following the instructions set out on the form of proxy or voting instruction form, as applicable, which accompanies this Notice of Meeting. Proxies must be received by the Company’s transfer agent, Computershare Investor Services Inc. (the “Transfer Agent”), at 100 University Avenue, 8th Floor, Toronto, Ontario M5J 2Y1, Attention: Investor Services, Fax: 1-866-249-7775, no later than 11:30 a.m. (Montréal time) on June 14, 2023 (or no later than 48 hours, excluding Saturdays, Sundays and holidays, before any reconvened meeting if the Meeting is adjourned or postponed). The deadline for the deposit of proxies may be waived or extended by the Chair of the Meeting at his discretion, without notice.

If you hold your Shares through a broker, investment dealer, bank, trust company or other intermediary (an “Intermediary”) and received a voting instruction form from your Intermediary, Broadridge Financial Solutions Inc. (“Broadridge”) or the Transfer Agent, you should follow the instructions in the voting instruction form to ensure your vote is counted at the Meeting.

The voting rights attached to the Shares represented by a proxy in the enclosed form of proxy will be voted in accordance with the instructions indicated thereon. If no instructions are given, the voting rights attached to such Shares will be voted FOR the Arrangement Resolution.

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and holidays, before any reconvened meeting if the Meeting is adjourned or postponed), (ii) with the scrutineers of the Meeting, addressed to the attention of the Chair of the Meeting, prior to the commencement of the Meeting on the day of the Meeting, or where the Meeting has been adjourned or postponed, prior to the commencement of the reconvened or postponed Meeting on the day of such reconvened or postponed Meeting, or (iii) in any other manner permitted by law. If you attend the Meeting but do not vote by poll, your previously submitted proxy will remain valid.

A non-registered Shareholder who has given voting instructions in accordance with the voting instruction form may revoke such voting instructions by following the instructions. However, if the non-registered Shareholder is an objecting beneficial owner, the Intermediary or Broadridge from whom such Shareholder received the voting instruction form may be unable to take any action on the revocation if such revocation is not provided sufficiently in advance of the Meeting or any adjournment or postponement thereof.

Registered Shareholders and duly appointed proxyholders, including non-registered Shareholders who have duly appointed themselves as proxyholders , will be able to attend, ask questions and vote at the Meeting.

Pursuant to the Interim Order, registered Shareholders have been granted the right to dissent in respect of the Arrangement and, if the Arrangement becomes effective, to be paid an amount equal to the fair value of their Shares. This dissent right, and the procedures for its exercise, are described in the Circular under “Information Concerning the Meeting — Dissent Rights of Shareholders”. Failure to comply strictly with the dissent procedures described in the Circular will result in the loss or unavailability of any right to dissent. Persons who are beneficial owners of Shares registered in the name of an Intermediary who wish to dissent should be aware that only registered Shareholders are entitled to dissent. Accordingly, a beneficial owner of Shares desiring to exercise this right must make arrangements for the Shares beneficially owned by such Shareholder to be registered in the Shareholder’s name prior to the time the written objection to the Arrangement Resolution is required to be received by the Company or, alternatively, make arrangements for the registered holder of such Shares to exercise such right to dissent on the Shareholder’s behalf. It is strongly suggested that any Shareholder wishing to dissent seek independent legal advice, as the failure to comply strictly with the provisions of the Canada Business Corporations Act, as modified by the Interim Order and the Plan of Arrangement, may result in the forfeiture of such Shareholder’s right to dissent.

If you have any questions or need assistance in your consideration of the Arrangement or with the completion and delivery of your proxy, please contact the Company’s proxy solicitation agent, Innisfree M&A Incorporated, who can be reached by Shareholders by toll-free telephone at (877) 750-8332, and by Intermediaries by collect call at (212) 750-5833. If you have any questions about submitting your Shares to the Arrangement including with respect to completing the applicable letter of transmittal, please contact Computershare Investor Services Inc., who will act as depositary under the Arrangement, at 1-800-564-6253 (for Shareholders in Canada and the United States) or 1-514-982-7555 (for Shareholders outside Canada and the United States).

Dated at Montréal, Québec, this 16th day of May, 2023.

BY ORDER OF THE BOARD OF DIRECTORS OF BELLUS HEALTH INC.

(signed) “Dr. Francesco Bellini”

Dr. Francesco Bellini
Chairman of the Board of Directors

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MANAGEMENT INFORMATION CIRCULAR

Introduction

This Circular is furnished in connection with the solicitation of proxies by and on behalf of management of the Company for use at the Meeting and any adjournment or postponement thereof.

In this Circular, the Company and its Subsidiaries are collectively referred to as the “Company”, as the context requires.

All capitalized terms used in this Circular but not otherwise defined herein have the meanings set forth in the Glossary attached to this Circular as Appendix A or elsewhere in the Circular. Information contained in this Circular is given as of May 16, 2023, except where otherwise noted and except that information in documents incorporated by reference is given as of the dates noted therein. No person has been authorized to give any information or to make any representation in connection with the Arrangement and other matters described herein other than those contained in this Circular and, if given or made, any such information or representation should be considered not to have been authorized by the Company, the Purchaser or the Parent, as applicable.

This Circular does not constitute the solicitation of an offer to purchase, or the making of an offer to sell, any securities or the solicitation of a proxy by any person in any jurisdiction in which such solicitation or offer is not authorized or in which the person making such solicitation or offer is not qualified to do so or to any person to whom it is unlawful to make such solicitation or offer.

Information contained in this Circular is not intended to be and should not be construed as legal, tax or financial advice and Shareholders are urged to consult their own professional advisors in connection therewith.

Descriptions in this Circular of the terms of the Arrangement Agreement, the Plan of Arrangement, the Centerview Fairness Opinion, the Bloom Burton Fairness Opinion and the Interim Order are summaries of the terms of those documents. Shareholders should refer to the full text of each of the Plan of Arrangement, the Centerview Fairness Opinion, the Bloom Burton Fairness Opinion and the Interim Order, which are attached to this Circular as Appendices C, D, E and F, respectively. A copy of the Arrangement Agreement has been filed by the Company under its profile on SEDAR at www.sedar.com. You are urged to carefully read the full text of these documents.

Information Pertaining to the Purchaser Entities

Certain information in this Circular pertaining to the Purchaser and the Parent, including but not limited to, information under “Information Concerning the Purchaser Entities” has been furnished by the Purchaser and the Parent. Although the Company does not have any knowledge that would indicate that such information is untrue or incomplete, neither the Company nor any of its directors or officers assumes any responsibility for the accuracy or completeness of such information, or for the failure by the Purchaser or the Parent to disclose events or information that may affect the completeness or accuracy of such information.

Forward-Looking Statements

Certain statements contained in this Circular may constitute forward-looking information or forward-looking statements (collectively, “forward-looking statements”) under the meaning of applicable Securities Laws, including but not limited to, statements or implications with respect to the rationale of the Transaction Committee and the Board of Directors for entering into the Arrangement Agreement, the expected benefits of the Arrangement, the terms and conditions of the Arrangement Agreement, the timing of various steps to be completed in connection with the Arrangement, and other statements that are not historical facts. Often but not always, forward-looking statements can be identified by the use of forward-looking terminology such

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as “may”, “will”, “expect”, “believe”, “estimate”, “plan”, “could”, “should”, “would”, “outlook”, “forecast”, “anticipate”, “foresee”, “continue” or the negative of these terms or variations of them or similar terminology.

Although the Company believes that the forward-looking statements in this Circular are based on information and assumptions that are reasonable, including assumptions that Parties will receive, in a timely manner and on satisfactory terms, the necessary Court and Shareholder approvals, and that the Parties will otherwise be able to satisfy, in a timely manner, the other conditions to the closing of the Arrangement, including that there be no Material Adverse Effect, these forward-looking statements are by their nature subject to a number of factors that could cause actual results to differ materially from management’s expectations and plans as set forth in such forward-looking statements, including, without limitation, the following factors, many of which are beyond the Company’s control and the effects of which can be difficult to predict: (a) the possibility that the Arrangement will not be completed on the terms and conditions, or on the timing, currently contemplated, and that it may not be completed at all, due to a failure to obtain or satisfy, in a timely manner or otherwise, required Shareholder, regulatory and court approvals and other conditions of closing necessary to complete the Arrangement or for other reasons; (b) risks related to tax matters; (c) the possibility of adverse reactions or changes in business or drug regulatory relationships resulting from the announcement or completion of the Arrangement; (d) risks relating to the Company’s ability to retain and attract key personnel during the interim period; (e) the possibility of litigation relating to the Arrangement, (f) credit, market, currency, operational, liquidity and funding risks generally and relating specifically to the Arrangement, including changes in economic conditions, interest rates, tax legislation or drug regulatory requirements; (g) the potential of a third party making a Superior Proposal to the Arrangement; (h) risks related to diverting management’s attention from the Company’s ongoing business operations; and (i) other risks inherent to the business carried out by the Company and factors beyond its control which could have a Material Adverse Effect on the Company or its ability to complete the Arrangement. Failure to obtain the necessary Shareholder, regulatory and court approvals, or the failure of the Parties to otherwise satisfy the conditions for the completion of the Arrangement or to complete the Arrangement, may result in the Arrangement not being completed on the proposed terms or at all. In addition, if the Arrangement is not completed, and the Company continues as an independent Entity, there are risks that the announcement of the Arrangement and the dedication of substantial resources by the Company to the completion of the Arrangement could have an impact on its business and strategic relationships, including with future and prospective employees, customers, suppliers and partners, operating results and activities in general, and could have a Material Adverse Effect on its current and future operations, financial condition and prospects. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected.

The Company cautions that the foregoing lists of factors and assumptions are not exhaustive and other factors could also adversely affect its results. For more information on the risks, uncertainties and assumptions that could cause the Company’s actual results to differ from current expectations, please refer to the matters discussed under the “Risk Factors” section of this Circular, the “Risk Factors” section of the Annual Information Form, as well as the Company’s other public filings, available on SEDAR at www.sedar.com.

The forward-looking statements contained in this Circular describe the Company’s expectations at the date of this Circular and, accordingly, are subject to change after such date. Except as may be required by applicable Securities Laws, the Company does not undertake any obligation to update or revise any forward-looking statements contained in this Circular, whether as a result of new information, future events or otherwise. Readers are cautioned not to place undue reliance on these forward-looking statements.

Notice to Shareholders Not Resident in Canada

The Company is a corporation organized under the laws of Canada. The solicitation of proxies and the transactions contemplated in this Circular involve securities of a Canadian issuer and is being effected in accordance with Canadian provincial Securities Laws. This Circular has been prepared in accordance with disclosure requirements under Canadian provincial Securities Laws. Shareholders should be aware that disclosure requirements under Canadian provincial Securities Laws may differ from requirements under laws in other jurisdictions.

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The enforcement of civil liabilities under the Securities Laws of jurisdictions outside Canada may be affected adversely by the fact that the Company is organized under the laws of Canada and that most of its directors and executive officers are residents of Canada. You may not be able to sue the Company or its directors or executive officers in a Canadian court for violations of foreign Securities Laws. It may be difficult to compel the Company to subject itself to a judgment of a court outside Canada.

THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY ANY SECURITIES REGULATORY AUTHORITY, NOR HAS ANY SECURITIES REGULATORY AUTHORITY PASSED UPON THE FAIRNESS OR MERITS OF THIS TRANSACTION OR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN THIS CIRCULAR. ANY REPRESENTATION TO THE CONTRARY IS AN OFFENCE.

Shareholders who are foreign taxpayers should be aware that the Arrangement described in this Circular may have tax consequences both in Canada and such foreign jurisdiction. Except as set forth in “Certain Canadian Federal Income Tax Considerations — Holders Not Resident in Canada” and “Certain U.S. Federal Income Tax Considerations” below, such tax consequences for such Shareholders are not described in this Circular. Shareholders are advised to consult their tax advisors to determine the particular tax consequences to them of the transactions contemplated in this Circular.

Currency

All dollar amounts set forth in this Circular are in U.S. dollars, except where otherwise indicated. On May 15, 2023, the rate published by the Bank of Canada for the conversion of U.S. dollars into Canadian dollars was US$1.00 = Cdn$1.3487 and of Canadian dollars into U.S. dollars was Cdn$1.00 = US$0.7415.

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QUESTIONS AND ANSWERS ABOUT THE MEETING AND THE
ARRANGEMENT

The following are some questions that you, as a Shareholder, may have relating to the Meeting and the Arrangement and answers to those questions. These questions and answers do not provide all of the information relating to the Meeting or the Arrangement and are qualified in their entirety by the more detailed information contained elsewhere in this Circular, the attached Appendices, the form of proxy (or voting instruction form) and the Letter of Transmittal, all of which are important and should be reviewed carefully. You are urged to read this Circular in its entirety before making a decision related to your Shares. See the Glossary attached to this Circular as Appendix A for the meanings assigned to capitalized terms used below and elsewhere in this Circular and not otherwise defined herein.

Why did I receive this package of information?

On April 17, 2023, the Company entered into the Arrangement Agreement with the Purchaser and the Parent pursuant to which, among other things, the Purchaser has agreed to acquire all of the issued and outstanding Shares pursuant to the Plan of Arrangement. The Arrangement is subject to, among other things, obtaining the requisite approval of the Shareholders. As a Shareholder as of the close of business on May 15, 2023, you are entitled to receive notice of, and to vote at, the Meeting. Management of the Company is soliciting your proxy, or vote, and providing this Circular in connection with that solicitation.

What is the Arrangement?

A plan of arrangement is a statutory procedure under Canadian corporate law that allows a corporation to carry out transactions with the approval of its securityholders and the Court. The Plan of Arrangement you are being asked to consider will provide for, among other things, the acquisition of all of the issued and outstanding Shares by the Purchaser.

Are there summaries of the material terms of the agreements relating to the Arrangement?

Yes. This Circular includes a summary of the Arrangement Agreement and the terms of the Plan of Arrangement. For more information, see “The Arrangement Agreement”.

Does the Board of Directors support the Arrangement?

Yes. The Board of Directors, acting on the unanimous recommendation of the Transaction Committee and after receiving legal and financial advice, unanimously determined that the Arrangement is in the best interests of the Company and fair to the Shareholders and recommends that the Shareholders vote FOR the Arrangement Resolution.

The Board of Directors established the Transaction Committee to consider and evaluate the Arrangement and matters related thereto. The Transaction Committee is comprised of Dr. Francesco Bellini, Dr. Clarissa Desjardins and Mr. Pierre Larochelle.

In making its recommendation, the Board of Directors and the Transaction Committee carefully considered the terms of the Arrangement and the Arrangement Agreement and believe that the Consideration in cash is an attractive alternative for Shareholders, taking into account the premium, liquidity, and anticipated future opportunities and risks associated with the business operations, operations, assets, financial performance and condition of the Company on a stand-alone basis.

The Board of Directors and the Transaction Committee received from Centerview, acting as financial advisor to the Company, and Bloom Burton, acting as independent fairness opinion provider to the Board of Directors, separate opinions to the effect that, as of the date of such opinions, based upon and subject to the assumptions made, procedures followed, matters considered and qualifications and limitations upon the review undertaken by them in preparing their opinions, the Consideration to be paid to the Shareholders (other than as specified in such opinions) was fair, from a financial point of view to such holders, as more fully described below under “Fairness Opinions”. Copies of these fairness opinions are attached to this Circular as Appendices D and E, respectively.

Following an extensive review, evaluation and negotiation process, the Transaction Committee unanimously determined that the Arrangement is in the best interests of the Company and fair to the

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Shareholders, and unanimously recommended that the Board of Directors approve the Arrangement and recommend that the Shareholders vote FOR the Arrangement Resolution.

See “The Arrangement — Background to the Arrangement”, “The Arrangement — Recommendation of the Transaction Committee” and “The Arrangement — Recommendation of the Board of Directors”.

How does the Consideration offered for the Shares under the Arrangement compare to the market price of the Shares before the Arrangement was announced?

The Consideration represents a premium of approximately 103% to the closing price per Share on the Nasdaq on April 17, 2023, the last trading day immediately prior to the announcement of the Arrangement, and 101% to the volume-weighted average price per Share on the Nasdaq over the 30 trading days up to and including April 17, 2023, the last trading day prior to the announcement of the Arrangement.

Who has agreed to support the Arrangement?

When will the Arrangement become effective?

If Shareholders approve the Arrangement Resolution, subject to obtaining Court approval as well as the satisfaction or waiver of all other conditions precedent to the Arrangement, it is anticipated that the Arrangement will be completed in the third quarter of 2023 or earlier.

What will I receive for my Shares under the Arrangement?

If the Arrangement is completed, each Shareholder will receive $14.75 per Share in cash.

What will happen to the Company if the Arrangement is completed?

If the Arrangement is completed, the Purchaser will acquire all of the issued and outstanding Shares for $14.75 per Share in cash, except for Shares held by Dissenting Holders. Upon the completion of the Arrangement, the Company will be a wholly-owned Subsidiary of the Purchaser. In addition, all Company Options and Company Deferred Share Units outstanding immediately prior to the Effective Time, in each case whether vested or unvested, will be transferred to the Company in exchange for a cash payment from the Company equal to the amount by which the Consideration per Share exceeds the Exercise Price thereof, subject to applicable withholdings (in the case of Company Options) or a cash payment from the Company equal to the Consideration per Share (in the case of Company Deferred Share Units), subject to applicable withholdings (in the case of Company Deferred Share Units), and each will be subsequently cancelled in accordance with the Plan of Arrangement. See “The Arrangement — Interests of Certain Persons in the Arrangement — Treatment of Company Equity Awards”.

It is expected that the Shares, which are currently listed for trading on the TSX and on the Nasdaq will be de-listed from these exchanges following completion of the Arrangement. The Purchaser also expects to apply to have the Company cease to be a reporting issuer in all jurisdictions in which it is a reporting issuer (or equivalent) in Canada and the United States. See “The Arrangement — Stock Exchange De-Listing and Reporting Issuer Status”.

Who is entitled to vote on the Arrangement Resolution at the Meeting and how will votes be counted?

Only Shareholders shown on the register of Shareholders at the close of business on the Record Date or their duly appointed proxyholders, will be entitled to attend the Meeting and vote on the Arrangement Resolution. Each Share entitled to be voted at the Meeting will entitle the holder thereof as of the Record Date to one vote at the Meeting in respect of the Arrangement Resolution. Computershare Investor

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Services Inc., the Company’s transfer agent and registrar, will count the votes. See “The Arrangement — Required Shareholder Approval”.

What if I acquire my Shares after the Record Date?

Only Shareholders as of the close of business on the Record Date are entitled to receive notice of, attend, be heard and vote at the Meeting.

What approvals are required to be given by Shareholders at the Meeting?

To become effective, the Arrangement Resolution must be approved by: (i) not less than two-thirds of the votes cast at the Meeting by Shareholders present or represented by proxy and entitled to vote at the Meeting; and (ii) a simple majority of the votes cast at the Meeting by Shareholders present or represented by proxy and entitled to vote at the Meeting, excluding for this purpose any person required to be excluded pursuant to section 8.1(2) of MI 61-101. See “The Arrangement — Required Shareholder Approval” and “The Arrangement — Regulatory Matters — Canadian Securities Law Matters”.

When and where is the Meeting?

The Meeting will be held in person at 275 Armand-Frappier Blvd., Laval, Québec, H7V 4A7, on June 16, 2023, at 11:30 a.m. (Montréal time).

What is the quorum for the Meeting?

For all purposes contemplated by this Circular, the quorum for the transaction of business at the Meeting shall be met if at least two persons, each of whom is a Shareholder or a proxyholder representing a Shareholder, holding or representing by proxy together not less than 10% of the total number of outstanding Shares are present or represented by proxy.

Are the Shareholders entitled to Dissent Rights?

Only registered Shareholders are entitled to Dissent Rights on the Arrangement Resolution if they follow the procedures specified in the CBCA, as modified by the Interim Order, the Final Order and the Plan of Arrangement. If you are a registered Shareholder and wish to exercise Dissent Rights, you should carefully review the requirements summarized in this Circular and the Interim Order, section 190 of the CBCA and the Plan of Arrangement, which are attached to this Circular as Appendices F, H and C, respectively, and consult with legal counsel. See “Information Concerning the Meeting — Dissent Rights of Shareholders”.

What other conditions must be satisfied to complete the Arrangement?

In addition to the Shareholder approval at the Meeting in the manner described above, the Arrangement is conditional upon, among other things: (i) the Competition Act Approval; (ii) expiration or termination of the applicable HSR Act waiting period; (iii) such other consents and approvals agreed by the Company and the Parent; and (iv) the receipt of the Final Order from the Court, all in accordance with the terms of the Arrangement Agreement. See “The Arrangement Agreement — Conditions to the Arrangement Becoming Effective”.

What will happen if the Arrangement Resolution is not approved or the Arrangement is not completed for any reason?

If the Arrangement Resolution is not approved or the Arrangement is not completed for any reason, the Arrangement Agreement may be terminated. If this occurs, the Company will continue to carry on as a reporting issuer in the normal and usual course, and will continue to face the risks and limitations that it currently faces with respect to its affairs, business and operations and future prospects. Note that the failure to complete the Arrangement could negatively impact the Share price and the Company, and that the Company may be required, in certain circumstances, to pay the Termination Fee of $75,000,000. See “Risk Factors”. If the Arrangement Resolution is not approved by Shareholders, the Company will reimburse the Parent for reasonable, documented out-of-pocket third party transaction expenses incurred by the Parent in connection with the Arrangement Agreement, in an amount not to exceed $10,000,000.

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What do I need to do now in order to vote at the Meeting?

You should carefully read and consider the information contained in this Circular.

Whether or not you attend the Meeting, you can appoint someone else to vote for you as your proxyholder. You can use the enclosed form of proxy or any other proper form of proxy to appoint your proxyholder. The persons named in the enclosed form of proxy are directors and/or officers of the Company. However, you can choose another person to be your proxyholder, including someone who is not a Shareholder. You may do so by crossing out the names printed on the proxy and inserting another person’s name in the blank space provided. If you choose another person to be your proxyholder, for your vote to count, please make sure the person you appoint is aware that he or she has been appointed and attends the Meeting and registers with the Transfer Agent upon arrival at the Meeting.

If you are a registered Shareholder or non-registered Shareholder designated as a non-objecting beneficial owner (a “Non-Objecting Beneficial Owner”) and voting your Shares by proxy or voting instruction form, the Transfer Agent must receive your signed proxy or voting instruction form in the return envelope provided, to Computershare Investor Services Inc., at 100 University Avenue, 8th Floor, Toronto, Ontario M5J 2Y1, Attention: Investor Services, Fax: 1-866-249-7775, no later than 11:30 a.m. (Montréal time) on June 14, 2023 (or no later than 48 hours, excluding Saturdays, Sundays and holidays, before any reconvened meeting if the Meeting is adjourned or postponed). Failure to properly complete or deposit a proxy may result in its invalidation.

The deadline for deposit of proxies may be waived or extended by the Chair of the Meeting at his discretion, without notice.

If you are a non-registered Shareholder designated as an objecting beneficial owner (an “Objecting Beneficial Owner”) whose Shares are held in the name of an Intermediary such as a broker, investment dealer, bank, trust company, trustee, clearing agency (such as CDS) or other nominee holder, you should follow the instructions provided by your Intermediary or Broadridge, on behalf of your Intermediary who will provide you with a voting instruction form to complete and cast your vote according to the instructions contained therein to ensure that your vote is counted at the Meeting. See “Information Concerning the Meeting — Voting Instructions”.

If my Shares are held by my broker, will my broker vote my Shares for me?

If you are a Non-Objecting Beneficial Owner, you will receive a voting instruction form from the Transfer Agent to vote. If you are an Objecting Beneficial Owner, a broker or other Intermediary will only vote the Shares held by you if you provide instructions to your broker or other Intermediary directly on how to vote. Without instructions, those Shares may not be voted. Most Intermediaries delegate responsibility for obtaining instructions from clients to Broadridge. Broadridge will forward your instruction to the Transfer Agent. Broadridge typically mails a scannable voting instruction form in lieu of a proxy form to Objecting Beneficial Owners and provides appropriate instructions respecting voting of Shares to be represented at the Meeting. Objecting Beneficial Owners should complete the voting instruction form by following the directions provided on the form. Unless your broker or other Intermediary gives you its specific proxy, voting instruction form or other method to provide voting instructions to vote the Shares at the Meeting, you should complete the voting instruction form provided. You cannot vote your Shares in person at the Meeting. See “Information Concerning the Meeting — Voting Instructions — Non-Registered Shareholders”.

If my Shares are held by my broker, can I still vote in person at the Meeting?

Since the Company may not have access to the names of its non-registered Shareholders, if you attend the Meeting, the Company will have no record of your holdings or of your entitlement to vote, unless your Intermediary has appointed you as the proxyholder. Therefore, if you are a non-registered Shareholder and wish to vote in person at the Meeting, please insert your own name in the space provided on the voting instruction form you received. By doing so, you are instructing your Intermediary or Broadridge to appoint you as proxyholder. Then sign and return the form, following the instructions provided on the form. Do not otherwise complete the form, as you will be voting at the Meeting. Please register with the Transfer Agent when you arrive at the Meeting.

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Should I send in my proxy now?

Yes. You should complete and submit the applicable enclosed proxy, voting instruction form or, if applicable, provide your broker or other Intermediary with voting instructions as soon as possible to ensure your vote is counted at the Meeting. See “Information Concerning the Meeting”.

Can I revoke my proxy after I submitted it?

Yes. A registered Shareholder who has submitted a proxy may revoke such proxy by: (a) completing and signing a proxy bearing a later date and depositing it with the Transfer Agent in accordance with the instructions set out above, or (b) depositing an instrument in writing executed by the registered Shareholder or by such Shareholder’s personal representative authorized in writing (i) at the office of the Transfer Agent no later than 11:30 a.m. (Montréal time) on June 14, 2023 (or no later than 48 hours, excluding Saturdays, Sundays and holidays, before any reconvened meeting if the Meeting is adjourned or postponed), (ii) with the scrutineers of the Meeting, addressed to the attention of the Chair of the Meeting, prior to the commencement of the Meeting on the day of the Meeting, or where the Meeting has been adjourned or postponed, prior to the commencement of the reconvened or postponed Meeting on the day of such reconvened or postponed Meeting, or (iii) in any other manner permitted by law.

A non-registered Shareholder who has given voting instructions in accordance with the voting instruction form may revoke such voting instructions by following the instructions. However, the Intermediary or Broadridge from whom an Objecting Beneficial Owner received the voting instruction form may be unable to take any action on the revocation if such revocation is not provided sufficiently in advance of the Meeting or any adjournment or postponement thereof.

What if amendments are made to these matters, or other business is brought before the Meeting?

The accompanying form of proxy and voting instruction form confer discretionary authority on the persons named in it as proxies with respect to any amendments or variations to the matters identified in the Notice of Meeting or other matters that may properly come before the Meeting and the named proxies in your properly-executed proxy or voting instruction form will vote on such matters in accordance with their judgment. At the date of this Circular, management of the Company is not aware of any such amendments, variations or other matters which are to be presented for action at the Meeting.

What are the U.S. and Canadian income tax consequences of the Arrangement to the Shareholders?

For a summary of certain U.S. and Canadian federal income tax consequences of the Arrangement to Shareholders, see “Certain U.S. Federal Income Tax Considerations” and “Certain Canadian Federal Income Tax Considerations” sections, respectively. Such summaries are not intended to be and should not be construed as legal or tax advice to any particular Shareholder. Tax matters are complicated, and the income tax consequences of the Arrangement to you will depend on your particular circumstances. Because individual circumstances may differ, you should consult with your tax advisors as to the specific tax consequences of the Arrangement to you.

Who can help answer my questions?

Shareholders who would like additional copies, without charge, of this Circular or have additional questions about the Arrangement or the Meeting, including the procedures for submitting your Shares or voting your proxy, should contact Innisfree at the contact information provided below:

501 Madison Avenue, 20th floor
New York, New York 10022
Shareholders may call toll free: (877) 750-8332
Banks and Brokers may call collect: (212) 750-5833

Copies of this Circular and the Meeting materials may also be found on the Company’s website at www.bellushealth.com and under the Company’s profile on SEDAR at www.sedar.com.

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SUMMARY

The following is a summary of certain information contained in this Circular, including its Appendices. This summary is not intended to be complete and is qualified in its entirety by the more detailed information contained elsewhere in this Circular, including its Appendices. Certain capitalized terms used in this summary are defined in the Glossary attached to this Circular as Appendix A. Shareholders are urged to read this Circular and its Appendices carefully and in their entirety.

The Meeting

Meeting and Record Dates

The Meeting will be held in person at 275 Armand-Frappier Blvd., Laval, Québec, H7V 4A7, on June 16, 2023, at 11:30 a.m. (Montréal time). Doors will open at 11:00 a.m. (Montréal time). See “Information Concerning the Meeting”. The Board of Directors has fixed May 15, 2023 as the record date for determining Shareholders who are entitled to receive notice of and vote at the Meeting.

The Arrangement Resolution

At the Meeting, Shareholders will be asked to consider and, if deemed advisable, to pass the Arrangement Resolution, a copy of which is attached as Appendix B to this Circular. See “The Arrangement — Required Shareholder Approval” for a discussion of the Shareholder approval requirements to effect the Arrangement.

Voting at the Meeting

This Circular is being sent to all Shareholders. Only registered Shareholders or the persons they appoint as their proxyholders are permitted to vote at the Meeting. Non-registered Shareholders should follow the instructions on the forms they receive so that their Shares can be voted. No other securityholders of the Company are entitled to vote at the Meeting. See “Information Concerning the Meeting”.

Background to the Arrangement

See “The Arrangement — Background to the Arrangement” for a description of the background to the Arrangement.

Recommendation of the Transaction Committee

The Board of Directors established the Transaction Committee for the purposes of, among other things: (i) reviewing and considering the proposed form, structure, terms, conditions and timing of the Arrangement, as well as any alternative transaction proposal received by the Company, (ii) making such recommendations to the Board of Directors as it considers appropriate or desirable in relation to any such transaction (including whether or not to proceed with the Arrangement), and (iii) providing advice and guidance to the Board of Directors as to whether one or more transactions is or are in the best interests of the Company.

The Transaction Committee, having taken into account such matters as it considered relevant and after receiving legal and financial advice, unanimously determined that the Arrangement is in the best interests of the Company and fair to the Shareholders, and unanimously recommended that the Board of Directors approve the Arrangement and recommend that the Shareholders vote FOR the Arrangement Resolution.

In forming its recommendation to the Board of Directors, the Transaction Committee considered a number of factors, including, without limitation, those listed under “The Arrangement — Reasons for the Arrangement”. The Transaction Committee based its recommendation upon the totality of the information presented to and considered by it in light of the members of the Transaction Committee’s knowledge of the business, financial condition and prospects of the Company and after taking into account the advice of the Company’s financial and legal advisors and the advice and input of management of the Company.

Recommendation of the Board of Directors

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determined that the Arrangement is in the best interests of the Company and fair to the Shareholders. Accordingly, the Board of Directors unanimously recommends that the Shareholders vote FOR the Arrangement Resolution.

In forming its recommendation, the Board of Directors considered a number of factors, including, without limitation, the recommendation of the Transaction Committee and the factors listed below under “The Arrangement — Reasons for the Arrangement”. The Board of Directors based its recommendation upon the totality of the information presented to and considered by it in light of the knowledge of the members of the Board of Directors of the business, financial condition and prospects of the Company and after taking into account the advice of the Company’s financial and legal advisors and the advice and input of management of the Company.

Reasons for the Arrangement

The following summary of the information and factors considered by the Transaction Committee and the Board of Directors is not intended to be exhaustive, but includes a summary of the material information and factors considered in approving the Arrangement. In view of the variety of factors and the amount of information considered in connection with the Arrangement, the Transaction Committee and the Board of Directors did not find it practicable to, and did not, quantify or otherwise attempt to assign any relative weight to each of the specific factors considered in reaching its conclusions and recommendations. Individual members of the Transaction Committee and the Board of Directors may have assigned different weights to different factors.

•

the amount of the Consideration payable under the Arrangement to the Shareholders represents a premium of approximately 103% to the closing price per Share on the Nasdaq on April, 17, 2023, the last trading day prior to the announcement of the Arrangement, and a premium of approximately 101% to the volume-weighted average price of the Shares on the Nasdaq over the 30 trading days up to and including April 17, 2023, the last trading day prior to the announcement of the Arrangement.

•

the entirety of the Consideration payable to Shareholders pursuant to the Arrangement will be paid in cash, which provides Shareholders with certainty of value and immediate liquidity;

•

the Board of Directors’ assessment of the current and anticipated future opportunities and risks associated with the business, operations, assets, financial performance and condition of the Company should it continue as a stand-alone Entity, including without limitation that: (i) the Company may be required to raise equity capital to commercialize camlipixant, which could be highly dilutive to Shareholders; (ii) there can be no guarantee that any FDA or other regulatory approval relating to camlipixant will be obtained, nor that the Company will have the ability to develop and commercialize camlipixant; and (iii) the cost at which camlipixant may be commercialized remains uncertain at the current stage of development;

•

the Company’s consideration of a variety of strategic alternatives, with a view to identifying transactions or other alternatives in the best interests of the Company, including continuing to pursue the development and commercialization of camlipixant on a stand-alone basis;

•

the Board of Directors’ consideration of the risks inherent in the development of drug products, the risks related to designing, conducting and compiling data from clinical trials, especially a large-scale Phase 3 clinical trial such as the CALM Phase 3 program, the risks related to seeking approval for marketing from the FDA and other regulatory authorities, competition, and other factors affecting the revenues and profitability of biotechnology companies generally;

•

the oral opinion of Centerview rendered to the Board of Directors on April 17, 2023, which was subsequently confirmed by delivery of a written opinion dated April 17, 2023, that, as of such date and based upon and subject to the assumptions made, procedures followed, matters considered and qualifications and limitations upon the review undertaken by Centerview in preparing its opinion, the Consideration to be paid to the Shareholders (other than as specified in such opinion) pursuant to the Arrangement Agreement was fair, from a financial point of view, to such holders, as more fully described below under “Fairness Opinions — Centerview Fairness Opinion”. The written opinion delivered by Centerview is attached to this Circular as Appendix D;

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•

the oral opinion of Bloom Burton rendered to the Board of Directors on April 17, 2023, which was subsequently confirmed by delivery of a written opinion dated April 17, 2023 that, as of such date and based upon and subject to the various assumptions made, procedures followed, matters considered and qualifications and limitations upon the review undertaken by Bloom Burton in preparing its opinion, the Consideration to be paid to Shareholders (other than as specified in such opinion) pursuant to the Arrangement Agreement is fair, from a financial point of view, to such holders (other than as specified in such opinion). For a detailed discussion of Bloom Burton’s opinion, please see below in “Fairness Opinions — Bloom Burton Fairness Opinion”. The written opinion delivered by Bloom Burton is attached to this Circular as Appendix E;

•

the course and history of the negotiations between the Company and the Parent, including the Board of Directors’ belief that these negotiations yielded the Parent’s best offer, and the enhancements to the offer that the Company was able to obtain as a result of these negotiations, as described under “The Arrangement — Background to the Arrangement”;

•

Shareholders will have an opportunity to vote on the Arrangement, which requires (i) approval by at least two-thirds of the votes cast at the Meeting by Shareholders present or represented by proxy and entitled to vote at the Meeting, and (ii) a simple majority of the votes cast at the Meeting by Shareholders present or represented by proxy and entitled to vote at the Meeting, excluding the votes attached to Shares that are required to be excluded pursuant to section 8.1(2) of MI 61-101;

•

the Transaction Committee has unanimously recommended to the Board of Directors that the Board of Directors approve the Arrangement;

•

the support of the Arrangement by directors and officers (who as of April 17, 2023, beneficially owned or exercised control or direction over, an aggregate of 8,052,338 Shares, representing 6.36% of the issued and outstanding Shares) who have entered into support and voting agreements pursuant to which they have each agreed to vote their respective Shares for the Arrangement Resolution;

•

the Arrangement is subject to a determination of the Court that the Arrangement is fair and reasonable, both procedurally and substantively, to the Shareholders;

•

the terms and conditions of the Arrangement Agreement, including that the Company’s, the Parent’s and the Purchaser’s representations, warranties and covenants and the conditions to completion of the Arrangement are, after consultation with the Company’s outside legal counsel, reasonable in light of the circumstances, including the Consideration offered by the Purchaser and the Parent;

•

both the Purchaser’s and the Parent’s obligations to complete the Arrangement are subject to a limited number of conditions, which the Board of Directors, after consultation with the Company’s outside legal counsel, believes are reasonable under the circumstances;

•

the Parent has the capability and the funds to effect the Arrangement, and the Arrangement is not subject to due diligence or financing conditions;

•

the Board of Directors believes that the Arrangement is likely to be completed in accordance with its terms and within a reasonable time with closing of the Arrangement expected in the third quarter of 2023 or earlier, subject to satisfaction of all closing conditions;

•

the treatment of, and consideration to be received by, holders of Company Equity Awards under the Arrangement;

•

the Board of Directors’ assessment of the Parent’s ability to further develop and commercialize camlipixant;

•

the appropriateness of the Termination Fee and the ability of the Board of Directors, in certain circumstances, to consider, accept and enter into a definitive agreement with respect to a Superior Proposal, provided that the Company pays the Termination Fee. See “The Arrangement Agreement — Termination Fee”;

•

the view of the Board of Directors that the Termination Fee would not preclude a third party from making a potential unsolicited Superior Proposal in respect of the Company;

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•

registered Shareholders may, upon compliance with certain conditions and in certain circumstances, exercise their Dissent Rights and, if ultimately successful, receive fair value for their Shares as determined by the Court;

•

the Arrangement Agreement is a result of arm’s-length negotiations between the Company, on the one hand, and the Parent and the Purchaser, on the other hand; and

•

in the Board of Directors’ view, the terms of the Arrangement Agreement treat stakeholders of the Company fairly.

The Transaction Committee, in making its unanimous recommendation, and the Board of Directors, in reaching its determination, also considered a number of potential risks and potential negative factors relating to the Arrangement, including the following:

•

the risks to the Company if the Arrangement is not completed, including the costs to the Company in pursuing the Arrangement, the diversion of management’s attention away from conducting the Company’s business in the ordinary course and the potential impact on the Company’s current business relationships, including its employees;

•

following the Arrangement, Shareholders will forego any future increase in value that might result from future growth and the potential achievement of the Company’s long-term plans;

•

the conditions to the Parent’s and the Purchaser’s obligation to complete the Arrangement and the right of the Parent and the Purchaser to terminate the Arrangement Agreement under certain limited circumstances;

•

the prohibition contained in the Arrangement Agreement on the Company’s ability to solicit additional interest from third parties, as well as the fact that if the Arrangement Agreement is terminated under certain circumstances, the Company must pay the Termination Fee to the Parent, as described under “The Arrangement Agreement — Termination Fee”; and

•

the Arrangement will generally be a taxable transaction for U.S. federal income tax purposes and Canadian income tax purposes, and, as a result, Shareholders that are U.S. persons or Canadian residents will generally be required to pay taxes on any gains that result from their receipt of the Consideration pursuant to the Arrangement.

The Transaction Committee and the Board of Directors’ reasons for recommending the Arrangement include certain assumptions relating to forward-looking information, and such information and assumptions are subject to various risks. See “Management Information Circular — Forward-Looking Statements” and “Risk Factors”.

Support and Voting Agreements

Each of the directors of the Company holding Shares and certain executive officers of the Company alongside certain shareholders related to such directors and executive officers, representing in the aggregate approximately 6.36% of the issued and outstanding Shares, have entered into support and voting agreements pursuant to which each has agreed to, among other things, support the Arrangement and vote for the Arrangement Resolution all of the Shares he, she or it owns or over which he, she or it exercises voting control, subject to customary exceptions.

The Shares held by these supporting Shareholders will be treated in the same fashion under the Arrangement as Shares held by any other Shareholder. A form of the support and voting agreement is available under the Company’s profile on SEDAR at www.sedar.com.

Fairness Opinions

Centerview and Bloom Burton each provided a fairness opinion as described in greater detail under “The Arrangement — Fairness Opinions”. The fairness opinions were prepared solely for the benefit and use of the Board of Directors in its consideration of the Arrangement and address only the fairness, from a financial point of view, of the Consideration proposed to be paid to Shareholders. The complete text of the Centerview

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Fairness Opinion and the Bloom Burton Fairness Opinion are attached as Appendices D and E to this Circular, respectively. Shareholders are urged to, and should, read each fairness opinion in its entirety.

Centerview Fairness Opinion

The Company retained Centerview as financial advisor to the Board of Directors in connection with the proposed Arrangement and the other transactions contemplated by the Arrangement Agreement, which are collectively referred to as the “Transaction” throughout this section and the summary of Centerview’s opinion below under “Fairness Opinions — Centerview Fairness Opinion”. In connection with this engagement, the Board of Directors requested that Centerview evaluate the fairness, from a financial point of view, to the holders of Shares (other than any Shares (i) held by the Company, (ii) owned by the Parent or any of its Subsidiaries (including the Purchaser) in each case as of immediately prior to the effective time of the Arrangement, or (iii) held by Dissenting Holders; the Shares referred to in clauses (i), (ii) and (iii), together with any Shares held by any affiliate of the Company or the Parent, are collectively referred to as “Excluded Shares” throughout this section and the summary of Centerview’s opinion below under “Fairness Opinions — Centerview Fairness Opinion”) of the Consideration proposed to be paid to such holders pursuant to the Arrangement Agreement.

On April 17, 2023, Centerview rendered to the Board of Directors its oral opinion, which was subsequently confirmed in a written opinion dated April 17, 2023, that, as of such date and based upon and subject to the various assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken by Centerview in preparing its opinion, the Consideration to be paid to the holders of Shares (other than Excluded Shares) pursuant to the Arrangement Agreement is fair, from a financial point of view, to such holders.

Bloom Burton Fairness Opinion

By letter of engagement dated April 7, 2023, Bloom Burton was engaged to provide the Bloom Burton Fairness Opinion. The full text of the Bloom Burton Fairness Opinion, which sets out the assumptions made, matters considered, and limitations and qualifications on the review undertaken by Bloom Burton, is reproduced as Appendix E to this Circular.

Bloom Burton was engaged to provide the Bloom Burton Fairness Opinion based on its experience and reputation as an independent investment banking firm specializing in the life science and healthcare industries, including providing corporate finance and mergers and acquisitions advisory services. The Board of Directors requested that Bloom Burton provide an opinion as to the fairness, from a financial point of view, of the Consideration offered to Shareholders pursuant to the Arrangement. Bloom Burton delivered its opinion orally to the Board of Directors on April 17, 2023 and subsequently confirmed its opinion by delivery of a written opinion to the Board of Directors dated April 17, 2023.

As of that date and based on and subject to various assumptions made, procedures followed, matters considered and limitations and qualifications described in the Bloom Burton Fairness Opinion, Bloom Burton is of the opinion that the Consideration to be received under the Arrangement is fair, from a financial point of view, to the Shareholders.

Arrangement Steps

Pursuant to the terms of the Plan of Arrangement, at the Effective Time, each of the following events shall occur and shall be deemed to occur sequentially as set out below without any further authorization, act or formality, in each case, unless stated otherwise, effective as at five minute intervals starting at the Effective Time (unless otherwise indicated):

(a)

the Company and Subco shall amalgamate to form one corporation with the same effect as if they had amalgamated pursuant to section 181 and section 184 of the CBCA and a certificate of amalgamation had been issued under the CBCA, and shall thereafter continue as one corporation;

(b)

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holder thereof, be deemed to have fully vested and be deemed to be assigned and surrendered by such holder to the Company in exchange for a cash payment equal to the excess, if any, of the Consideration over the Exercise Price of such Company Option, less any applicable withholdings, and such Company Option shall be immediately cancelled. For greater certainty, if the Exercise Price of any Company Option is equal to or greater than the Consideration, such Company Option shall be cancelled at the Effective Time without any cash payment or other consideration being made in respect thereof;

(c)

each Company Deferred Share Unit, whether vested or unvested, outstanding immediately prior to the Effective Time, shall, notwithstanding the terms of the Company Deferred Share Unit Plan and any and all award or similar agreements relating to the Company Deferred Share Unit and without any further action by or on behalf of a holder thereof, be deemed to have fully vested and be deemed to be assigned and surrendered by such holder to the Company in exchange for a cash payment equal to the Consideration, less any withholdings, and such Company Deferred Share Unit shall be immediately cancelled;

(d)

(i) each holder of Company Equity Awards shall cease to be the holder of such Company Equity Awards and to have any rights as holder of Company Equity Awards other than the right to receive the consideration to which they are entitled (as described above), (ii) such holder’s name shall be removed from each applicable register; and (iii) the Company Equity Plans and any and all award or similar agreements relating to the Company Equity Awards shall be terminated and shall be of no further force and effect;

(e)

each of the Shares held by Dissenting Holders in respect of which Dissent Rights have been validly exercised shall be deemed to have been transferred without any further act or formality to the Purchaser, and:

(i)

such Dissenting Holders shall cease to be the holders of such Shares and to have any rights as holder of Shares other than the right to be paid fair value by the Purchaser for such Shares as set out in Section 3.1 of the Plan of Arrangement;

(ii)

such Dissenting Holders’ names shall be removed from the registers of Shareholders maintained by or on behalf of the Company; and

(iii)

the Purchaser shall be deemed to be the transferee of such Shares free and clear of all Encumbrances, and shall be entered in the register of Shares maintained by or on behalf of the Company and shall be deemed to be the legal and beneficial owner thereof; and

(f)

each Share outstanding immediately prior to the Effective Time, other than Shares held by a Dissenting Holder who has validly exercised such holder’s Dissent Rights shall, without any further action by or on behalf of a holder of Shares, be deemed to be assigned and transferred by the holder thereof to the Purchaser in exchange for the Consideration, and:

(i)

the holders of such Shares shall cease to be the holders of such Shares and to have any rights as holders of such Shares other than the right to be paid the Consideration in accordance with this Plan of Arrangement less any withholdings;

(ii)

such holders’ names shall be removed from the register of the Shares maintained by or on behalf of the Company; and

(iii)

the Purchaser shall be deemed to be the transferee of such Shares (free and clear of all Encumbrances) and shall be entered in the register of the Shares maintained by or on behalf of the Company.

Upon issuance of the Certificate of Arrangement by the Director under the CBCA, the transactions comprising the Arrangement shall occur and shall be deemed to have occurred in the order set out in the Plan of Arrangement without any further act or formality.

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Arrangement Agreement

On April 17, 2023, the Company, the Purchaser and the Parent entered into the Arrangement Agreement under which the Parties agreed, subject to certain terms and conditions, to complete the Arrangement.

This Circular contains a summary of certain provisions of the Arrangement Agreement, which summary is qualified in its entirety by the full text of the Arrangement Agreement, a copy of which is available under the Company’s profile on SEDAR at www.sedar.com. See “The Arrangement Agreement”.

Parties to the Arrangement

The Company

The Company is a clinical-stage biopharmaceutical company working to better the lives of patients suffering from persistent cough, starting with the development of camlipixant (BLU-5937) for the treatment of refractory chronic cough (“RCC”). Camlipixant, the Company’s lead asset, is an investigational P2X3 receptor antagonist for the treatment of RCC, which is currently being evaluated in the CALM Phase 3 clinical program. With no approved treatments in the U.S., camlipixant has the potential to be a breakthrough in the RCC treatment landscape.

Chronic cough is defined as a cough lasting longer than eight weeks. When the cause of chronic cough cannot be identified or the cough persists despite treatment of any associated condition, the condition is referred to as RCC. RCC is a frequent, yet often under-recognized, medical condition that has significant physical, social, and psychological consequences on one’s quality of life. There are currently no approved treatments for this condition in the United States, European Union or the United Kingdom.

The Parent

The Parent is a global biopharmaceutical company headquartered in Brentford, United Kingdom focused on innovation in vaccines and specialty medicines. The Parent has approximately 69,400 employees in more than 80 countries worldwide. The Parent’s shares are listed in London (LSE: GSK) and also listed in New York (NYSE: GSK) in the form of American Depositary Shares.

The Purchaser

The Purchaser is a corporation existing under the laws of Canada and is a wholly-owned Subsidiary of the Parent. The Purchaser has no Subsidiaries and was incorporated solely for the purpose of entering into the Arrangement Agreement and completing the Arrangement. The Purchaser has not carried on any activities to date other than activities in connection with the Arrangement.

Termination Fee

The Arrangement Agreement requires that the Company pay the Termination Fee in certain circumstances. See “The Arrangement Agreement — Termination Fee”.

Expense Reimbursement

The Arrangement Agreement requires that the Company reimburse the Parent for reasonable documented out-of-pocket third party transaction expenses incurred by the Parent in connection with the Arrangement Agreement in certain circumstances. See “The Arrangement Agreement — Expense Reimbursement”.

Shareholder Approval

To be effective, the Arrangement Resolution must be approved by (i) not less than two-thirds of the votes cast at the Meeting by Shareholders present or represented by proxy and entitled to vote at the Meeting, and (ii) a simple majority of the votes cast at the Meeting by Shareholders present or represented by proxy and entitled to vote at the Meeting, excluding for this purpose any person required to be excluded pursuant to section 8.1(2) of MI 61-101.

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The Arrangement Resolution must be passed in order for the Company to seek the Final Order and implement the Arrangement on the Effective Date. See “The Arrangement — Required Shareholder Approval”.

Letter of Transmittal

Registered Shareholders can find a copy of the Letter of Transmittal under the Company’s profile on SEDAR at www.sedar.com. In order for a registered Shareholder to receive the Consideration for each Share held by such Shareholder, following the Effective Time, such registered Shareholder must deposit the certificate(s) and/or DRS Advice(s) representing his, her or its Shares with the Depositary. The Letter of Transmittal, properly completed and duly executed, together with all other documents and instruments referred to in the Letter of Transmittal or reasonably requested by the Depositary, must accompany all certificates and DRS Advices for Shares deposited for payment pursuant to the Arrangement.

Any non-registered Shareholder whose Shares are registered in the name of an Intermediary such as a broker, investment dealer, bank, trust company, trustee, clearing agency (such as CDS) or other nominee should contact that Intermediary and should follow the instructions of that Intermediary in order to receive the Consideration following the Effective Time. See “Arrangement Mechanics — Letter of Transmittal”.

Court Approval of the Arrangement

The Arrangement requires approval by the Court under section 192 of the CBCA. A copy of the Notice of Presentation applying for the Final Order approving the Arrangement is attached to this Circular as Appendix G. Subject to the approval of the Arrangement Resolution by Shareholders at the Meeting, the hearing in respect of the Final Order is expected to take place on or about June 22, 2023 at 2:00 p.m. (Montréal time) in the Court located at 1 Notre-Dame Street East, Montréal, Québec, H2Y 1B6, or as soon thereafter as is reasonably practicable. At the hearing, the Court will consider, among other things, the fairness and reasonableness of the terms and conditions of the Arrangement and the rights and interests of every person affected. The Court may approve the Arrangement in any manner the Court may direct, subject to compliance with such terms and conditions, if any, as the Court deems fit. See “The Arrangement Regulatory Matters — Court Approvals”.

MI 61-101 Requirements

The Company is subject to MI 61-101. MI 61-101 regulates transactions which raise the potential for conflicts of interest and is intended to ensure that all securityholders are treated in a manner that is fair and that is perceived to be fair with respect to these types of transactions. The Arrangement is a “business combination” (as defined in MI 61-101) and, accordingly, certain requirements of MI 61-101 apply, including the requirements to obtain “majority of the minority” approval of the Arrangement. See “The Arrangement — Regulatory Matters — Canadian Securities Law Matters”.

Stock Exchange Delisting and Ceasing Reporting Issuer Status

It is expected that, shortly following the completion of the Arrangement, the Shares will be delisted from the TSX and Nasdaq and that the Company will apply to cease to be a reporting issuer in all jurisdictions in which it is a reporting issuer (or equivalent) in Canada and the United States. See “The Arrangement — Stock Exchange De-listing and Reporting Issuer Status”.

Dissent Rights

Pursuant to the Plan of Arrangement and the Interim Order, only registered Shareholders may exercise, pursuant to and in the manner set forth in section 190 of the CBCA, their Dissent Rights in connection with the Arrangement Resolution, as modified by the Interim Order and the Plan of Arrangement. There can be no assurance that a Shareholder that dissents will receive consideration for his, her or its Shares of equal or greater value to the Consideration such Shareholder would have received on completion of the Arrangement if such Shareholder did not exercise its Dissent Rights.

Only registered Shareholders are entitled to dissent. Shareholders should carefully read the section in this Circular titled “Information Concerning the Meeting — Dissent Rights of Shareholders” if they wish to exercise

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Dissent Rights and seek their own legal advice as failure to strictly comply with the dissent procedures in section 190 of the CBCA, as modified and supplemented by the Interim Order and the Plan of Arrangement, will result in the loss or unavailability of the right to dissent. See Appendix F to this Circular for a copy of the Interim Order and certain information relating to the Dissent Rights.

Depositary and Proxy Solicitation Agent

Prior to the Effective Date, the Company will retain Computershare Investor Services Inc. to act as depositary for the receipt of certificates in respect of Shares and related Letters of Transmittal.

The Company has retained Innisfree, among other things, assist in the solicitation of proxies. The solicitation of proxies is on behalf of management of the Company. Innisfree can be reached by Shareholders by toll-free telephone at (877) 750-8332, and by Intermediaries by collect call at (212) 750-5833.

Risk Factors

Shareholders should consider a number of risk factors relating to the Arrangement and the Company in evaluating whether to approve the Arrangement Resolution. These risk factors are discussed herein and/or in certain sections of documents publicly filed, which sections are incorporated herein by reference. See “Risk Factors”.

* * *

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INFORMATION CONCERNING THE MEETING

Purpose of the Meeting

At the Meeting, Shareholders will be asked to consider and, if deemed advisable, to pass the Arrangement Resolution (a copy of which is attached as Appendix B to this Circular) and such other business as may properly come before the Meeting. At the time of printing of this Circular, the Board of Directors and management of the Company know of no other matter expected to come before the Meeting, other than the vote on the Arrangement Resolution.

Meeting Information

The Meeting will be held in person at 275 Armand-Frappier Blvd., Laval, Québec, H7V 4A7, on June 16, 2023, at 11:30 a.m. (Montréal time). Doors will open at 11:00 a.m. (Montréal time).

Only Shareholders of record on the Record Date of May 15, 2023 will be entitled to receive notice of, attend, be heard and vote at the Meeting. No Shareholder who becomes a Shareholder after the Record Date shall be entitled to vote at the Meeting.

Attending the Meeting

The Meeting will be held in person at 275 Armand-Frappier Blvd., Laval, Québec, H7V 4A7, on June 16, 2023, at 11:30 a.m. (Montréal time).

Registered Shareholders and duly appointed and registered proxyholders will be able to attend, participate and vote at the Meeting. . Non-registered Shareholders who have not duly appointed themselves as proxyholders will not be able to vote at the Meeting.

Voting Instructions

You can vote your Shares by proxy or at the Meeting. Please follow the instructions below based on whether you are a registered Shareholder or a non-registered Shareholder.

If you have any questions about the information contained in this Circular or require assistance in completing the form of proxy or voting instruction form, please contact the Company’s proxy solicitation agent, Innisfree, who can be reached by Shareholders by toll-free telephone at (877) 750-8332, and by Intermediaries by collect call at (212) 750-5833.

Registered Shareholders

You are a registered Shareholder if you have a share certificate or DRS Advice for Shares and they are registered in your name or if you hold Shares through direct registration. You will find a form of proxy enclosed.

How to Vote

In order for your vote to be counted, your voting instructions must be received by no later than 11:30 a.m. (Montréal time) on June 14, 2023 (or no later than 48 hours, excluding Saturdays, Sundays and holidays, before any reconvened meeting if the Meeting is adjourned or postponed).

You may vote by proxy using one of the following methods:

•

by Internet at www.investorvote.com;

•

by fax to 1-866-249-7775;

•

by telephone by calling 1-866-732-8683 (toll-free within Canada or the U.S.); or

•

by mail, using the envelope accompanying your proxy.

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Voting by Proxy

Voting by proxy means you are giving the person or persons named in your form of proxy the authority to attend the Meeting, or any adjournment or postponement thereof, and vote your Shares for you. Please mark your vote, sign, date and follow the return instructions provided in the enclosed form of proxy. By doing this, you are giving the directors or executive officers of the Company who are named in the form of proxy the authority to vote your Shares at the Meeting, or any adjournment or postponement thereof.

You can choose another person to be your proxyholder, including someone who is not a Shareholder. You can do so by following the instructions set out below under “Appointment of Proxies”.

The Shares represented by any proxy received by management of the Company will be voted for or against the Arrangement Resolution, as the case may be, by the persons named in the enclosed form of proxy in accordance with the direction of the Shareholder appointing them. In the absence of any direction to the contrary, the Shares represented by proxies received by management of the Company will be voted on any ballot FOR the Arrangement Resolution.

Voting at the Meeting

You do not need to complete or return your form of proxy if you plan to vote at the Meeting. Simply attend the Meeting and vote during the Meeting.

Changing your Vote

A registered Shareholder who has submitted a proxy may revoke such proxy by: (a) completing and signing a proxy bearing a later date and depositing it with the Transfer Agent in accordance with the instructions set out above, or (b) depositing an instrument in writing executed by the registered Shareholder or by such Shareholder’s personal representative authorized in writing (i) at the office of the Transfer Agent no later than 11:30 a.m. (Montréal time) on June 14, 2023 (or no later than 48 hours, excluding Saturdays, Sundays and holidays, before any reconvened meeting if the Meeting is adjourned or postponed), (ii) with the scrutineers of the Meeting, addressed to the attention of the Chair of the Meeting, prior to the commencement of the Meeting on the day of the Meeting, or where the Meeting has been adjourned or postponed, prior to the commencement of the reconvened or postponed Meeting on the day of such reconvened or postponed Meeting, or (iii) in any other manner permitted by law. If a registered Shareholder attends the Meeting but does not vote by poll, his, her or its previously submitted proxy will remain valid.

The revocation of a proxy does not, however, affect any matter on which a vote has been taken prior to the revocation.

Non-Registered Shareholders

You are a non-registered Shareholder if your Shares are held in the name of an Intermediary (such as a bank, trust company or securities broker) or in the name of a clearing agency (such as CDS). Your voting instruction form contains a 16-digit control number provided to you by Broadridge or your Intermediary.

Unless you instruct your Intermediary or Broadridge to vote in accordance with their request for voting instructions, they are generally prohibited from voting your Shares, as such Shares should only be voted upon instructions of the beneficial owner of the Shares. You may vote your Shares at the Meeting in person or through your Intermediary or the Transfer Agent by following the instructions provided to you by them if you are an Objecting Beneficial Owner or Non-Objecting Beneficial Owner, respectively. Please contact your Intermediary should you wish to vote at the Meeting.

Voting at the Meeting

Non-registered Shareholders who have not duly appointed themselves as proxyholder will not be able to vote at the Meeting. This is because the Company does not have unrestricted access to the names of its non-registered Shareholders. If you attend the Meeting, the Company may have no record of your shareholdings or entitlement to vote, unless your Intermediary has appointed you as proxyholder.

Should a non-registered Shareholder wish to attend and vote at the Meeting (or have another person attend and vote on behalf of the non-registered Shareholder), the non-registered Shareholder should follow

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the instructions for voting at the Meeting that are provided on the relevant voting instruction form and refer to the instructions set out below under “Appointment of Proxies”.

How to Vote by Voting Instruction Form

If you are a Non-Objecting Beneficial Owner, and were mailed a voting instruction form by the Transfer Agent, in order for your vote to be counted, your voting instructions must be received by no later than 11:30 a.m. (Montréal time) on June 14, 2023 (or no later than 48 hours, excluding Saturdays, Sundays and holidays, before any reconvened meeting if the Meeting is adjourned or postponed).

You may vote using one of the following methods:

•

by Internet at www.investorvote.com;

•

by fax to 1-866-249-7775;

•

by telephone by calling 1-866-734-8683 (toll-free within Canada or the U.S.); or

•

by mail, using the envelope accompanying your voting instruction form.

If you are a Non-Objecting Beneficial Owner, the Company or the Transfer Agent has sent this Circular and accompanying materials directly to you, and your name and address and information about your holdings of Shares, have been obtained in accordance with applicable securities regulatory requirements from the Intermediary holding Shares on your behalf. By choosing to send these materials to you directly, the Company (and not the Intermediary holding on your behalf) has assumed responsibility for (i) delivering these materials to you, and (ii) executing your proper voting instructions. Please return your voting instructions as specified in the request for voting instructions.

In the case of Objecting Beneficial Owners, applicable regulations in Canada require Intermediaries to seek voting instructions from such Shareholders in advance of the Meeting. Every Intermediary has its own mailing procedures and provides its own return instructions, which should be carefully followed by Objecting Beneficial Owners in order to ensure that their Shares are voted at the Meeting. The form of proxy or voting instruction supplied to you by your Intermediary will be similar to the proxy provided to registered Shareholders. However, its purpose is limited to instructing the Intermediary on how to vote your Shares on your behalf. In order for such proxy to be valid, it must be properly executed by the Intermediary holding the Shares and returned to the Transfer Agent by the Intermediary prior to the proxy deposit deadline of 11:30 a.m. (Montréal time) on June 14, 2023 (or no later than 48 hours, excluding Saturdays, Sundays and holidays, before any reconvened meeting if the Meeting is adjourned or postponed).

Most Intermediaries delegate responsibility for obtaining instructions from clients to Broadridge. Broadridge typically mails a scannable voting instruction form in lieu of a proxy form to Objecting Beneficial Owners and provides appropriate instructions respecting voting of Shares to be represented at the Meeting. For your Shares to be voted, you must follow the instructions on the voting instruction form that is provided to you. You can complete the voting instruction form by: (i) calling the phone number listed thereon; (ii) mailing the completed voting instruction form in the envelope provided; or (iii) using the Internet at www.proxyvote.com. Objecting Beneficial Owners who have questions about deciding how to vote or who have additional questions about this Circular or the matters described in this Circular, please contact your professional advisors. Additionally, the Company may utilize Broadridge’s QuickVoteTM service to assist Objecting Beneficial Owners with voting their Shares.

Non-registered Shareholders who receive voting instructions from their Intermediary other than those contained in the voting instruction form sent by Broadridge should carefully follow the instructions provided by their Intermediary to ensure their vote is counted.

Subject to the terms of your voting instruction form, if you do not specify how you want your Shares voted, they will be voted FOR the Arrangement Resolution.

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Changing your Vote

If you have already sent your completed voting instruction form to your Intermediary and you change your mind about your voting instructions, or want to vote at the Meeting, contact your Intermediary to find out whether this is possible and what procedure to follow.

Exercise of Discretion by Proxies

If you do not specify on your proxy form how you want a proxyholder appointed by you (other than the management nominees) to vote your Shares, then your proxyholder can vote your Shares as he or she sees fit. Shares represented by properly executed proxies appointing the management nominees of the Company as designated in the proxy will be voted for or against the Arrangement Resolution in accordance with the instructions contained in the proxy. If a proxy appointing management nominees does not contain voting instructions, the Shares represented by such proxies will be voted FOR the Arrangement Resolution.

Appointment of Proxies

Shareholders have the right to appoint a person (a “third-party proxyholder”) other than the management nominees identified in the form of proxy or voting instruction form, as applicable, as proxyholder. The following applies to such Shareholders who wish to appoint a third-party proxyholder, including non-registered Shareholders who wish to appoint themselves as proxyholder to attend and vote at the Meeting.

Shareholders who wish to appoint a third-party proxyholder to attend at the Meeting as their proxyholder and vote their Shares must submit their form of proxy or voting instruction form, as applicable, appointing that person as proxyholder. To appoint a third-party proxyholder, insert that person’s name in the blank space provided in the form of proxy or voting instruction form and follow the instructions for submitting such form of proxy or voting instruction form. If you are a non-registered Shareholder and wish to vote at the Meeting, you must insert your own name in the space provided on the voting instruction form sent to you by your Intermediary or the Transfer Agent, follow all of the applicable instructions provided by your Intermediary. By doing so, you are instructing your Intermediary or the Transfer Agent to appoint you as proxyholder. It is important that you comply with the signature and return instructions provided by your Intermediary or the Transfer Agent.

How the Votes are Counted

The Transfer Agent counts and tabulates the votes. It does this independent of the Company to make sure that the votes of individual Shareholders are confidential. The Transfer Agent refers proxy forms to the Company only when:

•

it is clear that a Shareholder wants to communicate with management;

•

the validity of the form is in question; or

•

the law requires it.

Questions and Assistance in Voting

Solicitation of Proxies

Whether or not you plan to attend the Meeting, management of the Company, with the support of the Board of Directors, requests that you fill out your proxy or voting instruction form to ensure your votes are cast at the Meeting. This solicitation of your proxy is made on behalf of management of the Company.

It is expected that the solicitation of proxies will be made primarily by mail, but proxies may also be solicited personally or by telephone, fax or other electronic means by employees of the Company. The

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Company has also retained Innisfree as proxy solicitation agent to, among other things, assist in the solicitation of proxies and may also retain other persons as it deems necessary to aid in the solicitation of proxies with respect to the Meeting. The costs of soliciting proxies and printing and mailing this Circular in connection with the Meeting will be borne by the Company. The Company and Innisfree entered into an engagement agreement with customary terms and conditions, which provides that Innisfree will be paid a proxy solicitation management fee of $40,000 plus certain success fees and per call fees.

Shareholders Entitled to Vote

Shareholders are entitled to vote at the Meeting either in person or by proxy. The Board of Directors has fixed the close of business on May 15, 2023 as the Record Date for determining Shareholders who are entitled to receive notice of and vote at the Meeting. Quorum for the Meeting shall be met if at least two persons, each of whom is a Shareholder or a proxyholder representing a Shareholder, holding or representing by proxy together not less than 10% of the total number of outstanding Shares are present or represented by proxy. Shareholders whose names have been entered in the register of the Company as at the close of business (Montreal time) on the Record Date will be entitled to receive notice of and vote at the Meeting. Shares held through a broker, investment dealer, bank, trust company or other Intermediary, will be voted by the registered holder thereof, in accordance with the instructions given by the non-registered Shareholder to such Intermediary. No other securityholders are entitled to vote at the Meeting other than Shareholders.

To the knowledge of the Company, as at the date hereof, no person beneficially owns, or exercises control or direction, directly or indirectly, over more than 10% of the outstanding Shares of the Company.

Dissent Rights of Shareholders

Pursuant to the Plan of Arrangement and the Interim Order, only registered Shareholders may exercise, pursuant to and in the manner set forth in section 190 of the CBCA, their Dissent Rights in connection with the Arrangement Resolution, as modified by the Interim Order and the Plan of Arrangement. As such, the following description of the Dissent Rights is not a comprehensive statement of the procedures to be followed by a Dissenting Holder who seeks payment of the fair value of his, her or its Shares, and is qualified in its entirety by reference to the full text of section 190 of the CBCA, which is attached as Appendix H to this Circular, as modified by the Interim Order, which is attached to this Circular as Appendix F, and the Plan of Arrangement, which is attached to this Circular as Appendix C.

The dissent procedures require that a registered Shareholder who wishes to dissent ensure that a written notice of objection to the Arrangement Resolution is sent to the Company (Attention: Ramzi Benamar, Chief Financial Officer) by e-mail (rbenamar@bellushealth.com) no later than 5:00 p.m. (Montréal time) on June 14, 2023, or 5:00 p.m. (Montréal time) on the day which is two Business Days immediately preceding the date that any adjourned or postponed Meeting is reconvened or held, as the case may be, and must otherwise strictly comply with the dissent procedures described.

There can be no assurance that a Shareholder that dissents will receive consideration for his, her or its Shares of equal or greater value to the Consideration such Shareholder would have received on completion of the Arrangement if such Shareholder did not exercise its Dissent Rights. Only registered Shareholders are entitled to dissent. Shareholders should carefully read this section in this Circular if they wish to exercise Dissent Rights and seek their own legal advice as failure to strictly comply with the dissent procedures in section 190 of the CBCA, as modified and supplemented by the Interim Order and the Plan of Arrangement, will result in the loss or unavailability of the right to dissent. See Appendices F and H to this Circular for a copy of the Interim Order and certain information relating to the Dissent Rights.

Dissenting Holders who are ultimately determined to be entitled to be paid the fair value of the Shares in respect of which they have exercised Dissent Rights will have their Shares transferred to the Purchaser in exchange for the right to be paid by the Purchaser the fair value of their Shares. Each such Dissenting Holder will cease to be a holder of Shares, and their name will be deemed to be removed from the securities register for the Shares, as of the Effective Date.

Dissenting Holders who validly withdraw their Dissent Rights or who are ultimately determined not to be entitled, for any reason, to be paid fair value for their Shares will be deemed to have participated in the

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Arrangement on the same basis as a non-Dissenting Holder and shall be entitled to receive the Consideration from the Purchaser for each Share formerly held by them in accordance with the Plan of Arrangement.

In addition to any other restrictions under section 190 of the CBCA, holders of Shares who vote for the Arrangement Resolution, or have instructed a proxyholder to vote such Shares for the Arrangement Resolution shall not be entitled to exercise Dissent Rights and shall be deemed to have not exercised Dissent Rights in respect of such Shares.

No Dissent Rights shall be available to holders of Company Options and Company Deferred Share Units in connection with the Arrangement.

In no circumstances shall the Purchaser, the Company or any of their respective successors or any other person be required to recognize a person exercising Dissent Rights unless such person is the registered holder of those Shares in respect of which such rights are sought to be exercised. In no case shall the Company, the Purchaser, the Transfer Agent or any other person be required to recognize a Dissenting Holder as a holder of Shares after the Effective Time and the name of each Dissenting Holder shall be deleted from the register of holders of Shares as at the time those Shares are so transferred and such Shares will be cancelled.

Section 190 of the CBCA

A brief summary of the provisions of section 190 of the CBCA as modified by the Interim Order and Plan of Arrangement is set out below. This summary is qualified in its entirety by the provisions of section 190 of the CBCA, the Interim Order and the Plan of Arrangement, the full text of which are set forth in Appendices H, F and C to this Circular, respectively.

Shareholders may exercise a Dissent Right in respect of the Arrangement and require the Purchaser to purchase the Shares held by such Shareholders at the fair value of such Shares.

The exercise of Dissent Rights does not deprive a registered Shareholder of the right to vote at the Meeting. However, a Shareholder is not entitled to exercise Dissent Rights in respect of the Arrangement Resolution if such holder votes any of the Shares beneficially held by such holder for the Arrangement Resolution.

A Dissenting Holder is required to send a written objection to the Arrangement Resolution to the Company prior to the Meeting, in accordance with the dissent procedure set forth above. The execution or exercise of a proxy against the Arrangement Resolution, a vote against the Arrangement Resolution or not voting on the Arrangement Resolution does not constitute a written objection for purposes of the right to dissent under section 190 of the CBCA. Within ten days after the Arrangement Resolution is approved by Shareholders, the Company must send to each Dissenting Holder a notice that the Arrangement Resolution has been adopted, setting out the rights of the Dissenting Holder and the procedures to be followed on exercise of those rights. The Dissenting Holder is then required, within 20 days after receipt of such notice (or if such Shareholder does not receive such notice, within 20 days after learning of the adoption of the Arrangement Resolution), to send to the Company a written notice containing the Dissenting Holder’s name and address, the number of Shares in respect of which the Dissenting Holder dissents and a demand for payment of the fair value of such Shares and, within 30 days after sending such written notice, to send to the Company or the Transfer Agent the appropriate certificate(s) or DRS Advice(s) representing the Shares in respect of which the Dissenting Holder has exercised Dissent Rights. A Dissenting Holder who fails to send to the Company within the required periods of time the required notices or the certificate(s) or DRS Advice(s) representing the Shares in respect of which the Dissenting Holder has dissented may forfeit its Dissent Rights.

If the matters provided for in the Arrangement Resolution become effective, then the Company will be required to send, no later than the seventh day after the later of: (i) the Effective Date; or (ii) the day the demand for payment is received by the Company, to each Dissenting Holder whose demand for payment has been received, a written offer from the Purchaser to pay for the Shares of such Dissenting Holder in such amount as the directors of the Company consider to be the fair value thereof accompanied by a statement showing how the fair value was determined. Under the Plan of Arrangement, the Purchaser will be required to pay the fair value of such Shares held by a Dissenting Holder and to offer and pay the amount to which such holder is entitled. Such payment is to be made, pursuant to section 190 of the CBCA as modified by the Interim Order and the Plan of Arrangement, within ten days after an offer made as described above has been

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THE ARRANGEMENT

Background to the Arrangement

The execution of the Arrangement Agreement among the Company, the Parent and the Purchaser is the result of extensive arm’s length negotiations among the Company, the Parent and their respective financial advisors and outside legal counsel. The following is a summary of the principal events leading up to the execution of the Arrangement Agreement and its public announcement on April 18, 2023.

In the ordinary course of business, the Company and its Board of Directors regularly review and evaluate the Company’s performance and prospects in light of its business and developments in the biotechnology and pharmaceutical industries. From time to time, these review processes have included consideration of potential partnerships, collaborations, licensing arrangements and other strategic transactions, including a sale of the Company or its assets, to enhance Shareholder value.

Starting in the first half of 2019, the Company contacted several global pharmaceutical companies with respect to a potential transaction involving the Company and camlipixant. In early 2019, the Company entered into confidentiality agreements with two such potential counterparties, including Company A. Neither of these confidentiality agreements, or any other confidentiality agreement entered into with third parties mentioned below, contained standstill provisions. Both of these potential counterparties conducted due diligence of the Company and camlipixant. From 2019 through 2023, the Board of Directors received regular status updates from management regarding developments with respect to discussions of a potential transaction.

Following the reporting by the Company of the topline results for its Phase 2 RELIEF trial of camlipixant in June 2020, both counterparties paused discussions with the Company and neither of them submitted any proposal with respect to a potential transaction involving the Company or camlipixant.

In November 2020 and September 2021, two additional potential counterparties entered into confidentiality agreements, including Company B.

In December 2021, the Company reported topline results for its Phase 2b SOOTHE trial of camlipixant. Following such report, in December 2021, Company A entered into a new confidentiality agreement with the Company. In February and August 2022, two additional potential counterparties entered into confidentiality agreements with the Company, including Company C. All three parties conducted due diligence of the Company and camlipixant.

In September 2022, Company B verbally expressed an intent to submit an acquisition proposal for the Company. However, in December 2022, Company B instead submitted a proposal to license the ex-U.S. rights of camlipixant, which was rejected by the Company.

By December 2022, other than Company B that had made a transaction proposal, the other potential counterparties in due diligence had paused discussions with the Company.

On October 25, 2022, the Company’s then Senior Vice President of Business Development had an initial meeting with representatives of the Parent’s business development team about a potential transaction. Subsequent meetings and discussions occurred between representatives of the Company and the Parent in November 2022 and then in January through March 2023, during which the Company and the Parent continued to explore the possibility of a potential transaction.

In January 2023, an additional potential counterparty, Company D, entered into a confidentiality agreement with the Company and conducted due diligence of the Company and camlipixant. Due diligence and discussions with Company D continued until the Company entered into the Exclusivity Agreement with the Parent as described below.

On March 2, 2023, the Company entered into the Confidentiality Agreement with the Parent.

On March 13, 2023, the Parent and its representatives received access to the Company’s virtual data room containing non-public due diligence materials of the Company and camlipixant.

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On March 30, 2023, Mr. Roberto Bellini, the Company’s Chief Executive Officer, and Mr. Luke Miels, the Parent’s Chief Commercial Officer, had a phone conversation, during which Mr. Miels indicated that the Parent intended to make a proposal to acquire the Company.

On March 31, 2023, the Parent submitted a non-binding proposal to the Company to acquire all of the issued and outstanding Shares at a price of $12.50 per Share, payable in cash (the “Initial Proposal”).

In connection with the receipt of the Initial Proposal, the Company engaged Centerview to act as financial advisor to the Company in connection with a potential transaction. The Company selected Centerview based on, among other considerations, Centerview’s reputation, experience and knowledge of the biopharmaceutical industry and experience with merger and acquisition transactions in that industry. The Company formally executed an engagement letter with Centerview on April 10, 2023.

On April 2, 2023, the Board of Directors held a meeting, also attended by management, representatives of Centerview and representatives of the Company’s outside legal counsel from Davies Ward Phillips & Vineberg LLP (“Davies”) and Goodwin Procter LLP (“Goodwin”). Members of management and representatives of Centerview provided an overview of the Initial Proposal. Representatives of Davies and Goodwin reviewed with the Board of Directors the role and responsibilities of the Board of Directors with respect to a potential sale of the Company. The Board of Directors reviewed and discussed the Initial Proposal, with the assistance of management and representatives of Centerview, Davies and Goodwin. After careful review and discussion, the Board of Directors determined that the Initial Proposal was insufficient. The Board of Directors instructed management and representatives of Centerview to communicate to the Parent that the Initial Proposal was insufficient. The Board of Directors also instructed representatives of Centerview to contact Company A, Company C and Company D in order to assess their willingness to present acquisition proposals to the Company. The Board of Directors, after discussion with management and representatives of the Company’s outside advisors, viewed these three companies as the potential counterparties, other than the Parent, most likely to be interested in a transaction with the Company.

On April 3 and 4, 2023, representatives of Centerview contacted representatives of the three other potential counterparties as directed by the Board of Directors, informed them that the Company had received an acquisition proposal from a global pharmaceutical company, and asked whether they would be interested in a potential acquisition of the Company. Company D, which was actively conducting due diligence of the Company and camlipixant, indicated that it was not able to submit a proposal in the timeframe specified by the Company in light of the proposal from the Parent. By the time the Company entered into the Exclusivity Agreement, neither Company A nor Company C expressed interest in submitting an acquisition proposal for the Company.

Between April 2 and April 6, 2023, Mr. Roberto Bellini held several conversations with representatives of the Parent. Consistent with the Board of Directors’ instructions, on April 3, 2023, Mr. Roberto Bellini advised Parent that its proposal was insufficient and needed to be improved. During this period and through the signing of the definitive agreement, consistent with the Board of Directors’ instructions, Centerview had a number of conversations with PJT Partners, Inc. (“PJT”), the Parent’s financial advisor.

On April 4, 2023, Mr. Miels contacted Mr. Roberto Bellini to communicate an intent to submit a revised proposal.

On the morning of April 5, 2023, the Parent submitted a non-binding proposal to acquire all of the issued and outstanding Shares at a price of $13.85 per Share, payable in cash. On the same day, Mr. Roberto Bellini communicated to Mr. Miels that management of the Company would present the improved proposal to the Board of Directors, but Mr. Roberto Bellini expected that the Board of Directors would still consider this proposal insufficient.

On April 6, 2023, after continued discussions between representatives of the Company and representatives of the Parent, the Parent submitted a non-binding proposal to acquire all of the issued and outstanding Shares at a price of $14.50 per Share, payable in cash (the “April 6 Proposal”). The April 6 Proposal was conditioned on the Parent and the Company entering into an exclusivity agreement, which would require the Company to terminate any existing discussions with other parties and prevent the Company from soliciting or engaging in discussions with any other parties, until April 17, 2023, with respect to any acquisition proposal for the Company. The Parent submitted a proposed exclusivity agreement together with its April 6 Proposal.

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The Parent also requested the execution of a definitive agreement and announcement with respect to the transaction no later than April 17, 2023.

After the receipt of the April 6 Proposal, the Board of Directors held a meeting on the same day, also attended by management and representatives of Centerview, Davies and Skadden, Arps, Slate, Meagher & Flom LLP (“Skadden”), which had been engaged as special outside legal counsel to the Company in connection with the proposed transaction. The Board of Directors discussed with Centerview, Davies and Skadden the recent developments of the negotiations with the Parent, the April 6 Proposal, the Parent’s request for exclusivity and for the execution of a definitive agreement and announcement with respect to the transaction no later than April 17, 2023. Davies and Skadden discussed the Board of Directors’ role and responsibilities with respect to a potential sale of the Company. Representatives of Centerview informed the Board of Directors that neither Company A nor Company C expressed interest in submitting an acquisition proposal for the Company, and Company D was not able to submit a proposal in the timeframe specified by the Company. Representatives of Centerview also presented a preliminary financial analysis, which was based on a set of preliminary, risk-adjusted, non-public, prospective financial information for fiscal years 2023 through 2042 that had been prepared by management (the “Preliminary Projections”). The Preliminary Projections were identical to the Management Projections that Centerview relied on in rendering its fairness opinion to the Board of Directors, except that the Management Projections contained updated assumptions with respect to net cash and utilization of net operating losses. For more information regarding the Management Projections, please see below under the caption “The Arrangement — Certain Financial Projections”; for more information regarding Centerview’s opinion, please see below under the caption “Fairness Opinions — Centerview Fairness Opinion”.

After careful review and discussion, the Board of Directors determined that the April 6 Proposal was insufficient. The Board of Directors instructed management and representatives of Centerview to communicate to the Parent that the April 6 Proposal was insufficient and to counter-offer with a price of $16.00 per Share, in exchange for exclusivity and an agreement to proceed on the accelerated timeline proposed by the Parent.

At its April 6, 2023 meeting, the Board of Directors also approved the formation of a transaction committee comprised of Dr. Francesco Bellini, Dr. Clarissa Desjardins and Mr. Pierre Larochelle (the “Transaction Committee”), for the purposes of, among other things, receiving more frequent updates from management and outside advisors with respect to the negotiation with the Parent and providing guidance to management in such negotiation.

After the April 6, 2023 Board of Directors meeting, on April 6 and 7, 2023, Mr. Roberto Bellini had several conversations with Mr. Miels, during the first of which Mr. Roberto Bellini delivered the messages and the counter-offer as directed by the Board of Directors. A representative of Centerview also communicated the same messages to PJT as directed by the Board of Directors.

During such conversations, Mr. Miels indicated to Mr. Roberto Bellini that the $16.00 counter-offer was unacceptable and the Parent would terminate discussions if the Company was not willing to accept the April 6 Proposal. Mr. Roberto Bellini, consistent with the Board of Directors’ instructions, communicated to Mr. Miels that the Company would not accept the April 6 Proposal but invited the Parent to submit an improved proposal prior to terminating discussions.

On April 7, 2023, following the discussions mentioned above, the Parent submitted a non-binding proposal to acquire all of the issued and outstanding shares of the Company at $14.75 per Share, payable in cash (the “April 7 Proposal”), conditioned on the parties entering into an exclusivity agreement providing for exclusive discussions until April 17, 2023. The April 7 Proposal also stated that the Parent expected that the parties would work towards a public announcement of the transaction by April 17, 2023.

After the receipt of the April 7 Proposal, the Transaction Committee held a meeting on the same day, also attended by management and representatives of Centerview, Davies and Skadden. The Transaction Committee discussed with Centerview, Davies and Skadden the recent developments in the negotiations with the Parent, the improved April 7 Proposal, and the Parent’s request for exclusivity and for the execution of a definitive agreement no later than April 17, 2023. The Transaction Committee also discussed the Company’s long-term plan and prospects on a stand-alone basis, including the risks involved in and substantial resources required

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for the development and commercialization of camlipixant. The Transaction Committee also considered the fact that neither Company A nor Company C expressed interest in submitting an acquisition proposal for the Company, and Company D was not able to submit a proposal in the timeframe specified by the Company. After careful review and discussion, the Transaction Committee determined that the Company should proceed on the basis of the April 7 Proposal and enter into exclusive discussions with the Parent.

In accordance with the Board of Directors’ instruction, the Company entered into an exclusivity agreement with the Parent on the same date.

Also on April 7, 2023, Bloom Burton was retained by the Board of Directors for purposes of conducting financial analyses and opining on the fairness of the proposed transaction to the shareholders of the Company from a financial point of view. The Company selected Bloom Burton based on, among other considerations, Bloom Burton’s reputation, experience and knowledge of the biopharmaceutical industry, and experience and familiarity in delivering “long-form” fairness opinions in Canadian merger and acquisition transactions.

On April 9, 2023, Centerview delivered to Skadden Centerview’s relationship disclosures with respect to the Parent and its affiliates, which representatives of Skadden subsequently reviewed with the Board of Directors.

On April 10, 2023, outside legal counsel for the Parent delivered a draft arrangement agreement for the review of the Company and its representatives. The draft arrangement agreement contemplated the delivery of support and voting agreements by the Company’s directors and officers.

Also on April 10, 2023, the Transaction Committee held a meeting to review certain matters in connection with the Arrangement, including discussing the proposed establishment of a transaction bonus pool and proposed severance arrangements for the employees of the Company in the event of a change of control. After discussion, the Transaction Committee authorized management to convey to the Parent the proposals with respect to the transaction bonus pool and the severance arrangements as presented to the Transaction Committee, which ultimately resulted in the transaction bonus pool and severance arrangements described under the heading “The Arrangement — Interests of Certain Persons in the Arrangement — Transaction Related Payments”.

From April 10, 2023 until April 17, 2023, the Company and the Parent, and their respective outside legal counsel negotiated the terms, and exchanged drafts, of the Arrangement Agreement and the other transaction documents, including the form of Support and Voting Agreement to be entered into by directors and officers of the Company and certain other Shareholders. In the same time period, the Parent completed its confirmatory due diligence with the assistance of the Company and its representatives.

On April 17, 2023, the Transaction Committee held a meeting, also attended by management and representatives of Centerview, Davies and Skadden. Representatives of Davies and Skadden discussed with the Transaction Committee the status of parties’ negotiations and various transaction documents.

Later on April 17, 2023, the Board of Directors and the Transaction Committee held a joint meeting, also attended by management and representatives of Centerview, Davies and Skadden. Representatives of Davies and Skadden reviewed the key provisions of the Arrangement Agreement, including the nature of the non-solicitation obligations and “fiduciary-out” clauses of the Arrangement Agreement, closing conditions, scope of covenants, including interim operating covenants and covenants in respect of regulatory approvals, the circumstances in which each party would be permitted to terminate the Arrangement Agreement and the instances in which the Termination Fee or expense reimbursement would be payable by the Company.

Representatives of each of Centerview and Bloom Burton reviewed with the Board of Directors, including all members of the Transaction Committee, their respective financial analysis and each rendered to the Board of Directors, including all members of the Transaction Committee, an oral opinion, which was subsequently confirmed by delivery of a written opinion of Centerview dated April 17, 2023 and a written opinion of Bloom Burton dated April 17, 2023 that, as of such date and based upon and subject to the various assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken in preparing such opinions, the Consideration to be paid to the Shareholders (other than as set specified in such opinions) pursuant to the Arrangement Agreement was fair, from a financial point of

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view, to such Shareholders. For a detailed discussion of the opinions of Centerview and Bloom Burton, please see below under the caption “The Arrangement — Fairness Opinions”.

The Transaction Committee, after having taken into consideration the discussions with Davies and Skadden, the respective opinions of Centerview and Bloom Burton, and such other matters it considered relevant, including those set forth under the heading “Reasons for the Arrangement”, unanimously recommended that the Board of Directors approve the Arrangement. Thereafter, the Board of Directors, having taken into consideration the discussions with Davies and Skadden, the respective opinions of Centerview and Bloom Burton, the recommendation of the Transaction Committee and such other matters it considered relevant, including those set forth under the heading “Reasons for the Arrangement”, unanimously determined that the Arrangement was in the best interests of the Company and unanimously resolved to approve the Arrangement and the execution of the Arrangement Agreement by the Company and to recommend that the Shareholders vote in favour of the Arrangement Resolution.

The parties finalized the terms of the Arrangement Agreement prior to the joint Transaction Committee and Board of Directors meeting. In the evening of April 17, 2023, the parties finalized all transaction documents and executed the Arrangement Agreement. The Company and the Parent issued a joint press release announcing the transaction on April 18, 2023, prior to the opening of trading in the United Kingdom.

On May 12, 2023, the Board of Directors approved the contents and mailing of this Circular.

Recommendation of the Transaction Committee

As described above under “Background to the Arrangement”, the Transaction Committee established by the Board of Directors ultimately had responsibility to oversee, review and consider the Arrangement and make a recommendation to the Board of Directors with respect to the Arrangement. The Transaction Committee was comprised Dr. Francesco Bellini, Dr. Clarissa Desjardins and Mr. Pierre Larochelle, and it met on numerous occasions both as a committee and with management and the full Board of Directors present, where appropriate.

The Transaction Committee, after careful consideration, having taken into account such matters as it considered relevant, unanimously determined that the Arrangement is in the best interests of the Company and fair to the Shareholders and unanimously recommended that the Board of Directors approve the Arrangement and recommend that the Shareholders vote FOR the Arrangement Resolution.

In forming its recommendation to the Board of Directors, the Transaction Committee considered a number of factors, including, without limitation, those listed below under “The Arrangement — Reasons for the Arrangement”. The Transaction Committee based its recommendation upon the totality of the information presented to and considered by it in light of the members of the Transaction Committee’s knowledge of the business, financial condition and prospects of the Company and after taking into account the advice of the Company’s financial and legal advisors and the advice and input of management of the Company.

Recommendation of the Board of Directors

After careful consideration and taking into account, among other things, the recommendation of the Transaction Committee, the Board of Directors, after receiving legal and financial advice, has unanimously determined that the Arrangement is in the best interests of the Company and fair to the Shareholders. Accordingly, the Board of Directors unanimously recommends that the Shareholders vote FOR the Arrangement Resolution (the “Board Recommendation”).

In forming its recommendation, the Board of Directors considered a number of factors, including, without limitation, the recommendation of the Transaction Committee and the factors listed below under “The Arrangement — Reasons for the Arrangement”. The Board of Directors based its recommendation upon the totality of the information presented to and considered by it in light of the knowledge of members of the Board of Directors’ of the business, financial condition and prospects of the Company and after taking into account the advice of the Company’s financial and legal advisors and the advice and input of management of the Company.

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Reasons for the Arrangement

The Transaction Committee, in unanimously recommending that the Board of Directors approve the Arrangement, and the Board of Directors, in unanimously determining that the Arrangement is in the best interests of the Company and is fair to the Shareholders, considered and relied upon a number of factors, including, among others, the following (which are not listed in any relative order of importance):

•

the entirety of the Consideration payable to Shareholders pursuant to the Arrangement will be paid in cash, which provides Shareholders with certainty of value and immediate liquidity;

•

the oral opinion of Centerview rendered to the Board of Directors on April 17, 2023, which was subsequently confirmed by delivery of a written opinion dated April 17, 2023, that, as of such date and based upon and subject to the assumptions made, procedures followed, matters considered and qualifications and limitations upon the review undertaken by Centerview in preparing its opinion, the Consideration to be paid to the Shareholders (other than as specified in such opinion) pursuant to the Arrangement Agreement was fair, from a financial point of view, to such holders (other than as specified in such opinion), as more fully described below under “Fairness Opinions — Centerview Fairness Opinion”. The written opinion delivered by Centerview is attached to this Circular as Appendix D;

•

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•

the Transaction Committee has unanimously recommended to the Board of Directors that the Board of Directors approve the Arrangement;

•

the Arrangement is subject to a determination of the Court that the Arrangement is fair and reasonable, both procedurally and substantively, to the Shareholders;

•

the Parent has the capability and the funds to effect the Arrangement, and the Arrangement is not subject to due diligence or financing conditions;

•

that the Board of Directors believes that the Arrangement is likely to be completed in accordance with its terms and within a reasonable time with closing of the Arrangement expected in the third quarter of 2023 or earlier, subject to satisfaction of all closing conditions;

•

the treatment of, and consideration to be received by, holders of Company Equity Awards under the Arrangement;

•

the Board of Directors’ assessment of the Parent’s ability to further develop and commercialize camlipixant;

•

the view of the Board of Directors that the Termination Fee would not preclude a third party from making a potential unsolicited Superior Proposal in respect of the Company;

•

the Arrangement Agreement is a result of arm’s-length negotiations between the Company, on the one hand, and the Parent and the Purchaser, on the other hand; and

•

in the Board of Directors’ view, the terms of the Arrangement Agreement treat stakeholders of the Company fairly.

•

the risks to the Company if the Arrangement is not completed, including the costs to the Company in pursuing the Arrangement, the diversion of management’s attention away from conducting the

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Company’s business in the ordinary course and the potential impact on the Company’s current business relationships, including its employees;

•

following the Arrangement, Shareholders will forego any future increase in value that might result from future growth and the potential achievement of the Company’s long-term plans;

•

The foregoing discussion of the information and factors considered and given weight by the Transaction Committee and the Board of Directors is not intended to be exhaustive. The Transaction Committee, in unanimously recommending that the Board of Directors approve the Arrangement, and the Board of Directors, in unanimously determining that the Arrangement is in the best interests of the Company and is fair to the Shareholders, did not assign any relative or specific weights to the foregoing factors, and individual directors may have given different weights to different factors. The Board of Directors resolved unanimously that the Arrangement was in the best interests of the Company and is fair to the Shareholders.

The explanation of the reasons and reasoning set forth above contain forward-looking statements that should be read in conjunction with the section of this Circular entitled “Forward-Looking Statements” and “Risk Factors.”

Certain Financial Projections

The Company’s management does not, as a matter of course, publicly disclose forecasts or internal projections as to future performance, results of operations, earnings or other results, due to, among other things, the inherent difficulty of predicting financial performance for future periods and the likelihood that the underlying assumptions and estimates may not be realized. However, in connection with the evaluation of the proposed transaction with the Parent and other strategic alternatives, the Company’s management prepared certain risk-adjusted, non-public, unaudited prospective financial information for fiscal years 2023 through 2042 (the “Management Projections”). The Management Projections were provided to the Board of Directors in considering, analyzing and evaluating the Arrangement, as well as potential strategic alternatives for the Company. In addition, the Management Projections were provided to Centerview and Bloom Burton, and were approved by the Company for use and reliance by Centerview and Bloom Burton in connection with the rendering of their respective fairness opinions to the Board of Directors and in performing the related financial analyses as described in “The Arrangement — Fairness Opinions” and were the only financial projections with respect to the Company used by Centerview and Bloom Burton in performing such financial analyses. The Management Projections were not provided to the Parent.

The Company is summarizing the Management Projections in this Circular to provide holders of Shares access to certain non-public, unaudited prospective financial information that was prepared for the Board of Directors for purposes of considering and evaluating the Parent’s proposal. The Company makes and has made no representation to the Parent or the Purchaser, in the Arrangement Agreement or otherwise, concerning any projected financial information.

The Management Projections were based upon certain financial, operating and commercial assumptions developed solely using the information available to the Company management at the time the Management Projections were created.

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Cautionary Note About the Management Projections

The Management Projections, while necessarily presented with numerical specificity, were based on numerous variables and assumptions that are inherently uncertain and many of which are beyond the Company’s control. The Management Projections reflect numerous estimates and assumptions made by the Company’s management, based on information available at the time the Management Projections were developed, with respect to industry performance and competition, regulatory conditions, general business, economic, market and financial conditions, and matters specific to the Company’s product candidate, all of which are difficult to predict and many of which are beyond the Company’s control. As a result, there can be no assurance that the Management Projections accurately reflect future trends or accurately estimate the future market for the Company’s product candidate. There can be no assurance of the approvals, or timing of such approvals, of the Company’s product candidate, and it is possible that other therapeutic options will be preferable. The Management Projections also reflect assumptions as to certain business decisions that are subject to change. Important factors that may affect actual results and result in the Management Projections not being achieved include, but are not limited to, the timing of regulatory approvals and introduction of new products, market acceptance of new products, success of clinical testing, availability of third-party reimbursement, impact of competitive products and pricing, the effect of regulatory actions, the effect of global economic conditions, fluctuations in foreign currency exchange rates, the cost and effect of changes in tax and other legislation, and other risk factors described in the “Risk Factors” section of this Circular, the Company’s latest Annual Information Form as well as the Company’s other public filings, available on SEDAR at www.sedar.com. In addition, the Management Projections may be affected by the Company’s ability to achieve strategic goals, objectives and targets over the applicable periods. Further, the Management Projections cover multiple years and, by their nature, become subject to greater uncertainty with each successive year. Accordingly, there can be no assurance that the Management Projections will be realized, and actual results may vary materially from those shown.

Modeling and forecasting the future commercialization of a clinical stage drug candidate is a highly speculative endeavor. In addition to the various limitations described above, there can also be no assurance that the Company will obtain and maintain any of the regulatory approvals necessary for the commercialization of its product candidate, or that the Company’s competitors will not commercialize products that are safer, more effective, or more successfully marketed and sold than any product that the Company may commercialize. Since the Management Projections cover a long period of time, the Management Projections by their nature are unlikely to anticipate each circumstance that will have an effect on the commercial value of the Company’s product candidate.

In light of the foregoing factors and the uncertainties inherent in the Management Projections, holders of Shares are cautioned not to place undue, if any, reliance on the Management Projections. The Management Projections were not prepared with a view toward public disclosure. The inclusion of the Management Projections in this Circular should not be regarded as an indication that the Company or any of its affiliates, advisors or representatives considered or consider the Management Projections to be predictive of actual future events, and the Management Projections should not be relied upon as such or construed as financial guidance. Neither the Company nor any of its affiliates assumes any responsibility for the accuracy of this information. Neither the Company nor any of its affiliates, advisors, officers, directors or representatives can give any assurance that actual results will not differ from the Management Projections, and none of them undertakes any obligation to update or otherwise revise or reconcile the Management Projections to reflect circumstances existing after the date the Management Projections were generated or to reflect the occurrence of future events even if any or all of the assumptions underlying the Management Projections are shown to be in error. The Company does not intend to make publicly available any update or other revision to the Management Projections, except as may otherwise be required by law. Neither the Company nor any of its affiliates, advisors, officers, directors or representatives has made or makes any representation or warranty to any holders of Shares or other person regarding the ultimate performance of the Company compared to the information contained in the Management Projections, the likelihood that the Management Projections will be achieved, the results of the Company’s clinical trials, the effectiveness or marketability of the Company’s product candidate or the overall future performance of the Company. The Management Projections were prepared based on the Company’s continued operation as a stand-alone company and do not take into account the proposed Arrangement, including the effect of any business or strategic decision or action that has been or will be taken as a result of the execution of the Arrangement Agreement. The Management Projections are

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subjective in many respects and are thus subject to interpretation. Please refer to “Management Information Circular — Forward-Looking Statements” above.

The Management Projections were prepared in accordance with the IFRS, which differ from U.S. generally accepted accounting principles in certain material respects. In addition, the Management Projections were not prepared with the assistance of, or reviewed, compiled or examined by, independent accountants. The Management Projections are not being included in this Circular to influence any Shareholder’s decision whether to vote in favor of the Arrangement, but instead because the Management Projections were provided to the Board of Directors and to Centerview and Bloom Burton as described above. The Management Projections may differ from publicly available analyst estimates, and the Management Projections do not take into account any events or circumstances after the date they were prepared, including the announcement of the Arrangement.

THE COMPANY DOES NOT INTEND TO UPDATE OR OTHERWISE REVISE THE MANAGEMENT PROJECTIONS TO REFLECT CIRCUMSTANCES EXISTING AFTER THE DATE WHEN MADE OR TO REFLECT THE OCCURRENCE OF FUTURE EVENTS, EVEN IF ANY OR ALL OF THE ASSUMPTIONS UNDERLYING THE MANAGEMENT PROJECTIONS ARE NO LONGER APPROPRIATE.

These financial projections were prepared in April 2023 by management based on assumptions about the Company’s continued operation as a stand-alone, publicly traded company, with respect to its product candidate and platform, and for royalties and milestones expected from the Company’s camlipixant ex-U.S. partnership and the Company’s collaboration with Alzheon, Inc. Other than the camlipixant ex-U.S. partnership and the collaboration with Alzheon, Inc., these financial projections did not include any other assumptions regarding any potential collaborations with any other third parties. The projections reflected a risk-adjusted outlook, based on certain internal assumptions prepared by the Company management about the probability of success and the probability of regulatory approvals, launch timing, pricing, sales ramp, market share, market exclusivity, research and development expenses, sales and marketing expenses, general and administrative expenses, effective tax rate and utilization of federal net operating losses, federal research and development expenses and other relevant factors related to the Company’s long-range operating plan. The foregoing is a summary of certain key assumptions and does not purport to be a comprehensive overview of all assumptions reflected in the Management Projections.

Management Projections (Risk-Adjusted)
(Amounts in Millions)

	2023			2024			2025			2026			2027			2028			2029			2030			2031			2032
Net Revenue			—			—			—		$	186		$	365		$	623		$	829		$	915		$	1,225		$	1,521
EBIT		$	(105)		$	(88)		$	(146)		$	(185)		$	4		$	247		$	442		$	515		$	906		$	1,172

	2033			2034			2035			2036			2037			2038			2039			2040			2041			2042
Net Revenue		$	1,393		$	1,324		$	1,308		$	1,241		$	610		$	286		$	143		$	72		$	36		$	18
EBIT		$	1,040		$	966		$	940		$	864		$	503		$	247		$	123		$	62		$	31		$	15

In addition, at the direction of the Company management, Centerview calculated, solely based on the Management Projections and other projected financial information provided by the Company management, unlevered free cash flows for the second through fourth quarters of fiscal year 2023 and fiscal years 2024 through 2042 for use in its final financial analyses relating to the Management Projections. The unlevered free cash flow based on the Management Projections were approved by the Company for use and reliance by Centerview in connection with the rendering of its fairness opinion to the Board of Directors and in performing the related financial analyses as described in “The Arrangement — Fairness Opinions” and were the only unlevered free cash flow used by Centerview as the basis for the rendering of its fairness opinion described in “The Arrangement — Fairness Opinions”. The following is a summary of the unlevered free cash flows, which were calculated as earnings before interest expenses and taxes (“EBIT”), less tax expense, plus depreciation, less capital expenditures, less changes in net working capital, in each case based on the Management Projections. For purposes of calculating the discounted cash flow, Centerview assumed, at the direction of Company management, (i) tax savings resulting from the usage of the Company’s federal net

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operating losses as of December 31, 2022, federal research and development expenses as of December 31, 2022, estimated net losses from January 1, 2023 to March 31, 2023, and future losses as of March 31, 2023, (ii) impact of the cost of future equity raises in each of 2024 and 2025, assuming equity raises in each of those years, and (iii) $313 million of the Company’s net cash as of March 31, 2023. The values in the table below do not take into account the cost of future capital raises or the net cash mentioned above.

($ in millions)	2023			2024			2025			2026			2027			2028			2029			2030			2031			2032
EBIT		$	(105)		$	(88)		$	(146)		$	(185)		$	4		$	247		$	442		$	515		$	906		$	1,172
Less: Tax Expenses			—			—			—			—			—			—			—			(117)			(240)			(311)
Plus: Depreciation			—			—			—			1			3			6			7			8			11			13
Less: Capital Expenditures			—			—			—			(1)			(3)			(6)			(7)			(8)			(11)			(13)
Less: Change in Net Working Capital			—			—			—			(28)			(27)			(39)			(31)			(13)			(46)			(44)
Unlevered Free Cash Flow		$	(105)		$	(88)		$	(146)		$	(213)		$	(23)		$	208		$	411		$	384		$	620		$	817

($ in millions)	2033			2034			2035			2036			2037			2038			2039			2040			2041			2042
EBIT		$	1,040		$	966		$	940		$	864		$	503		$	247		$	123		$	62		$	31		$	15
Less: Tax Expenses			(275)			(256)			(249)			(229)			(133)			(65)			(33)			(16)			(8)			(4)
Plus: Depreciation			13			12			12			12			6			—			—			—			—			—
Less: Capital Expenditures			(13)			(12)			(12)			(12)			(6)			—			—			—			—			—
Less: Change in Net Working Capital			19			10			2			10			95			49			21			11			5			3
Unlevered Free Cash Flow		$	783		$	720		$	693		$	645		$	464		$	230		$	112		$	56		$	28		$	14

Fairness Opinions

Centerview Fairness Opinion

The full text of Centerview’s written opinion, dated April 17, 2023, which describes the assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken by Centerview in preparing its opinion, is attached as Appendix D to this Circular and is incorporated herein by reference. The summary of the written opinion of Centerview set forth below is qualified in its entirety by the full text of Centerview’s written opinion attached as Appendix D to this Circular. Centerview’s financial advisory services and opinion were provided solely for the information and assistance of the Board of Directors (in their capacity as directors and not in any other capacity) in connection with and for purposes of its consideration of Transaction and Centerview’s opinion only addressed the fairness, from a financial point of view, as of the date thereof, to the holders of Shares (other than Excluded Shares) of the Consideration to be paid to such holders pursuant to the Arrangement Agreement. Centerview’s opinion did not address any other term or aspect of the Arrangement Agreement or the Transaction and does not constitute a recommendation to any Shareholder or any other person as to how such Shareholder or other person should vote with respect to the Arrangement or otherwise act with respect to the Transaction or any other matter.

The full text of Centerview’s written opinion should be read carefully in its entirety for a description of the assumptions made, procedures followed, matters considered, and qualifications and limitations upon the review undertaken by Centerview in preparing its opinion.

In connection with rendering the opinion described above and performing its related financial analyses, Centerview reviewed, among other things:

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•

a draft of the Arrangement Agreement dated April 17, 2023, referred to in this summary of Centerview’s opinion as the “Draft Arrangement Agreement”;

•

Annual Reports on Form 40-F of the Company for the years ended December 31, 2022, December 31, 2021 and December 31, 2020;

•

certain interim reports to Shareholders on Form 6-K of the Company;

•

certain publicly available research analyst reports for the Company;

•

certain other communications from the Company to its Shareholders; and

•

certain internal information relating to the business, operations, earnings, cash flow, assets, liabilities and prospects of the Company, including certain financial forecasts, analyses and projections relating to the Company prepared by management of the Company and furnished to Centerview by the Company for purposes of Centerview’s analysis, which are referred to in this summary of Centerview’s opinion as the “Forecasts,” and which are collectively referred to in this summary of Centerview’s opinion as the “Internal Data.”

Centerview also participated in discussions with members of the senior management and representatives of the Company regarding their assessment of the Internal Data. In addition, Centerview reviewed publicly available financial and stock market data for the Company and compared that data with similar data for certain other companies, the securities of which are publicly traded, in lines of business that Centerview deemed relevant. Centerview also compared certain of the proposed financial terms of the Transaction with the financial terms, to the extent publicly available, of certain other transactions that Centerview deemed relevant, and conducted such other financial studies and analyses and took into account such other information as Centerview deemed appropriate.

Centerview assumed, without independent verification or any responsibility therefor, the accuracy and completeness of the financial, legal, regulatory, tax, accounting and other information supplied to, discussed with, or reviewed by Centerview for purposes of its opinion and, with the Company’s consent, Centerview relied upon such information as being complete and accurate. In that regard, Centerview assumed, at the Company’s direction, that the Internal Data (including, without limitation, the Forecasts) were reasonably prepared on bases reflecting the best currently available estimates and judgments of the management of the Company as to the matters covered thereby and Centerview relied, at the Company’s direction, on the Internal Data for purposes of Centerview’s analysis and opinion. Centerview expressed no view or opinion as to the Internal Data or the assumptions on which it was based. In addition, at the Company’s direction, Centerview did not make any independent evaluation or appraisal of any of the assets or liabilities (contingent, derivative, off-balance-sheet or otherwise) of the Company, nor was Centerview furnished with any such evaluation or appraisal, and was not asked to conduct, and did not conduct, a physical inspection of the properties or assets of the Company. Centerview assumed, at the Company’s direction, that the final executed Arrangement Agreement would not differ in any respect material to Centerview’s analysis or opinion from the Draft Arrangement Agreement reviewed by Centerview. Centerview also assumed, at the Company’s direction, that the Transaction will be consummated on the terms set forth in the Arrangement Agreement and in accordance with all applicable Laws and other relevant documents or requirements, without delay or the waiver, modification or amendment of any term, condition or agreement, the effect of which would be material to Centerview’s analysis or Centerview’s opinion and that, in the course of obtaining the necessary governmental, regulatory and other approvals, consents, releases and waivers for the Transaction, no delay, limitation, restriction, condition or other change will be imposed, the effect of which would be material to Centerview’s analysis or Centerview’s opinion. Centerview did not evaluate and did not express any opinion as to the solvency or fair value of the Company, or the ability of the Company to pay its obligations when they come due, or as to the impact of the Transaction on such matters, under any state, federal or other laws relating to bankruptcy, insolvency or similar matters. Centerview is not a legal, regulatory, tax or accounting advisor, and Centerview expressed no opinion as to any legal, regulatory, tax or accounting matters.

Centerview’s opinion expressed no view as to, and did not address, the Company’s underlying business decision to proceed with or effect the Transaction, or the relative merits of the Transaction as compared to any alternative business strategies or transactions that might be available to the Company or in which the Company might engage. Centerview’s opinion was limited to and addressed only the fairness, from a financial point of

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view, as of the date of Centerview’s written opinion, to the holders of Shares (other than Excluded Shares) of the Consideration to be paid to such holders pursuant to the Arrangement Agreement. For purposes of its opinion, Centerview was not asked to, and Centerview did not, express any view on, and its opinion did not address, any other term or aspect of the Arrangement Agreement or the Transaction, including, without limitation, the structure or form of the Transaction, or any other agreements or arrangements contemplated by the Arrangement Agreement or entered into in connection with or otherwise contemplated by the Transaction, including, without limitation, the fairness of the Transaction or any other term or aspect of the Transaction to, or any consideration to be received in connection therewith by, or the impact of the Transaction on, the holders of any other class of securities, creditors or other constituencies of the Company or any other party. In addition, Centerview expressed no view or opinion as to the fairness (financial or otherwise) of the amount, nature or any other aspect of any compensation to be paid or payable to any of the officers, directors or employees of the Company or any party, or class of such persons in connection with the Transaction, whether relative to the Consideration to be paid to the holders of Shares pursuant to the Arrangement Agreement or otherwise. Centerview’s opinion was necessarily based on financial, economic, monetary, currency, market and other conditions and circumstances as in effect on, and the information made available to Centerview as of, the date of Centerview’s written opinion, and Centerview does not have any obligation or responsibility to update, revise or reaffirm its opinion based on circumstances, developments or events occurring after the date of Centerview’s written opinion. Centerview’s opinion does not constitute a recommendation to any Shareholder or any other person as to how such Shareholder or other person should vote with respect to the Arrangement or otherwise act with respect to the Transaction or any other matter. Centerview’s financial advisory services and its written opinion were provided solely for the information and assistance of the Board of Directors (in their capacity as directors and not in any other capacity) in connection with and for purposes of its consideration of the Transaction. The issuance of Centerview’s opinion was approved by the Centerview Partners LLC Fairness Opinion Committee.

Summary of Centerview Financial Analysis

The following is a summary of the material financial analyses prepared and reviewed with the Board of Directors in connection with Centerview’s opinion, dated April 17, 2023. The summary set forth below does not purport to be a complete description of the financial analyses performed or factors considered by, and underlying the opinion of, Centerview, nor does the order of the financial analyses described represent the relative importance or weight given to those financial analyses by Centerview. Centerview may have deemed various assumptions more or less probable than other assumptions, so the reference ranges resulting from any particular portion of the analyses summarized below should not be taken to be Centerview’s view of the actual value of the Company. Some of the summaries of the financial analyses set forth below include information presented in tabular format. In order to fully understand the financial analyses, the tables must be read together with the text of each summary, as the tables alone do not constitute a complete description of the financial analyses performed by Centerview. Considering the data in the tables below without considering all financial analyses or factors or the full narrative description of such analyses or factors, including the methodologies and assumptions underlying such analyses or factors, could create a misleading or incomplete view of the processes underlying Centerview’s financial analyses and its opinion. In performing its analyses, Centerview made numerous assumptions with respect to industry performance, general business and economic conditions and other matters, many of which are beyond the control of the Company or any other parties to the Transaction. None of the Company, the Parent, the Purchaser or Centerview or any other person assumes responsibility if future results are materially different from those discussed. Any estimates contained in these analyses are not necessarily indicative of actual values or predictive of future results or values, which may be significantly more or less favorable than as set forth below. In addition, analyses relating to the value of the Company do not purport to be appraisals or reflect the prices at which the Company may actually be sold. Accordingly, the assumptions and estimates used in, and the results derived from, the financial analyses are inherently subject to substantial uncertainty. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on or before April 17, 2023 (the last trading day before the public announcement of the Transaction) and is not necessarily indicative of current market conditions.

Discounted Cash Flow Analysis

Centerview performed a discounted cash flow analysis of the Company based on the Forecasts, which reflects certain assumptions and future financing needs of the Company. A discounted cash flow analysis is a

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traditional valuation methodology used to derive a valuation of an asset or set of assets by calculating the “present value” of estimated future cash flows of the asset or set of assets. “Present value” refers to the current value of future cash flows or amounts and is obtained by discounting those future cash flows or amounts by a discount rate that takes into account macroeconomic assumptions and estimates of risk, the opportunity cost of capital, expected returns and other appropriate factors.

In performing this analysis, Centerview calculated a range of equity values for the Shares by (a) discounting to present value as of March 31, 2023 using discount rates ranging from 12.0% to 14.0% (reflecting Centerview’s analysis of the Company’s weighted average cost of capital) and using a mid-year convention: (i) the forecasted risk-adjusted, after-tax unlevered free cash flows of the Company over the period beginning on April 1, 2023 and ending on December 31, 2042, utilized by Centerview as set forth in the Forecasts, (ii) an implied terminal value of the Company, calculated by Centerview by assuming that unlevered free cash flows would decline in perpetuity after December 31, 2042 at a rate of free cash flow decline of 50% year over year, as directed by the Company’s management, and (iii) tax savings from usage of the Company’s federal net operating losses as of December 31, 2022, federal research and development expenses as of December 31, 2022, estimated net losses from January 1, 2023 to March 31, 2023, and future losses as of March 31, 2023, in each case, as set forth in the Forecasts and (b) adding to the foregoing results (i) the Company’s net cash as of March 31, 2023, as reflected in the Internal Data, and (ii) subtracting from the foregoing results, and using the same discount rates, the net present value of the estimated costs associated with assumed equity raises in 2024 and in 2025, as set forth in the Forecasts and as directed by the Company’s management. Centerview divided the result of the foregoing calculations by the number of fully-diluted outstanding Shares (using the treasury stock method based on the number of Shares outstanding and taking into account the dilutive impact of outstanding in-the-money options and Company Deferred Share Units) as of April 14, 2023, as set forth in the Internal Data, resulting in a range of implied equity values per Share of $11.00 to $13.05, rounded to the nearest $0.05. Centerview then compared the results of the above analysis to the offer price of $14.75 per Share in cash to be paid to the holders of Shares (other than Excluded Shares) pursuant to the Arrangement Agreement.

Other Factors

Centerview noted for the Board of Directors certain additional factors solely for informational purposes, including, among other things, the following:

•

Historical Share Price Trading Analysis: Centerview reviewed historical closing trading prices of the Shares during the 52-week period ended on April 17, 2023 (the last trading day before the public announcement of the Arrangement), which reflected low and high closing prices for the Shares during such period of $6.45 to $12.00 per Share, rounded to the nearest $0.05;

•

Analyst Price Target Analysis: Centerview reviewed share price targets for the Shares in selected publicly available Wall Street research analyst reports as of April 17, 2023 (the last trading day before the public announcement of the Arrangement), which indicated low and high price targets for the Shares ranging from $8.10 to $24.00 per Share, rounded to the nearest $0.05; and

•

Premiums Paid Analysis: Centerview performed an analysis of premiums paid in twenty selected transactions between $1 billion and $10 billion from January 2021 through April 2023 involving publicly traded biopharmaceutical companies for which premium data was available. The premiums in this analysis were calculated by comparing the per share acquisition price in each selected transaction to the closing price of the target company’s common shares for the date one day prior to the date on which the trading price of the target’s common shares was perceived by Centerview to be affected by a potential transaction. Based on the analysis above and other considerations that Centerview deemed relevant in its professional judgment, Centerview applied a range of 65% to 120% to the Company’s closing share price on April 17, 2023 (the last trading day before the public announcement of the Arrangement) of $7.26, which resulted in an implied price range of approximately $12.00 to $15.95 per Share, rounded to the nearest $0.05.

General

The preparation of a financial opinion is a complex analytical process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to

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the particular circumstances and, therefore, a financial opinion is not readily susceptible to summary description. In arriving at its opinion, Centerview did not draw, in isolation, conclusions from or with regard to any factor or analysis that it considered. Rather, Centerview made its determination as to fairness on the basis of its experience and professional judgment after considering the results of all of the analyses.

Centerview’s financial analyses and opinion were only one of many factors taken into consideration by the Board of Directors in its evaluation of the Transaction. Consequently, the analyses described above should not be viewed as determinative of the views of the Board of Directors or management of the Company with respect to the Consideration or as to whether the Board of Directors would have been willing to determine that a different consideration was fair. The Consideration was determined through arm’s-length negotiations between the Company and the Parent and was approved by the Board of Directors. Centerview provided advice to the Company during these negotiations. Centerview did not, however, recommend any specific amount of consideration to the Company or the Board of Directors or that any specific amount of consideration constituted the only appropriate consideration for the transaction.

Centerview is a securities firm engaged directly and through affiliates and related persons in a number of investment banking, financial advisory and merchant banking activities. In the two years prior to the date of its written opinion, except for its current engagement, Centerview had not been engaged to provide financial advisory or other services to the Company, and Centerview did not receive any compensation from the Company during such period. In the two years prior to the date of its written opinion, Centerview had not been engaged to provide financial advisory or other services to the Parent or the Purchaser, and Centerview did not receive any compensation from the Parent during such period. Centerview may provide financial advisory and other services to or with respect to the Company or the Parent or their respective affiliates in the future, for which Centerview may receive compensation. Certain (i) of Centerview’s and Centerview’s affiliates’ directors, officers, members and employees, or family members of such persons, (ii) of Centerview’s affiliates or related investment funds and (iii) investment funds or other persons in which any of the foregoing may have financial interests or with which they may co-invest, may at any time acquire, hold, sell or trade, in debt, equity and other securities or financial instruments (including derivatives, bank loans or other obligations) of, or investments in, the Company, the Parent, or any of their respective affiliates, or any other party that may be involved in the Transaction.

The Board of Directors selected Centerview as its financial advisor in connection with the Arrangement based on Centerview’s reputation and experience. Centerview is an internationally recognized investment banking firm that has substantial experience in transactions similar to the Arrangement.

In connection with Centerview’s services as the financial advisor to the Board of Directors, the Company has agreed to pay Centerview an aggregate fee of approximately $46 million, $1 million of which was payable upon the rendering of Centerview’s opinion and approximately $45 million of which is payable contingent upon consummation of the Transaction. In addition, the Company has agreed to reimburse certain of Centerview’s expenses arising, and to indemnify Centerview against certain liabilities that may arise, out of Centerview’s engagement.

Bloom Burton Fairness Opinion

Bloom Burton delivered its opinion orally to the Board of Directors on April 17, 2023 and subsequently confirmed its opinion by delivery of a written opinion to the Board of Directors dated April 17, 2023. As of that date and based on and subject to various assumptions made, procedures followed, matters considered and limitations and qualifications described in the Bloom Burton Fairness Opinion, Bloom Burton is of the opinion that the Consideration to be received under the Arrangement is fair, from a financial point of view, to the Shareholders.

In connection with the Company retaining Bloom Burton, the Company has agreed to pay Bloom Burton a fixed fee for its services, the payment of which was not contingent upon Bloom Burton reaching any conclusion as to fairness. In addition, the Company has agreed to reimburse certain of Bloom Burton’s expenses arising, and to indemnify Bloom Burton against certain liabilities that may arise, out of Bloom Burton’s engagement.

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Assumptions and Limitations of the Bloom Burton Fairness Opinion

In connection with the Bloom Burton Fairness Opinion, Bloom Burton reviewed, considered and, where appropriate, relied upon certain documents listed in the Bloom Burton Fairness Opinion, including, among other things:

(a)

a draft of the Arrangement Agreement, together with a draft plan of arrangement in respect of the Arrangement;

(b)

certain publicly available business and financial information relating to the Company and other companies deemed relevant;

(c)

certain internally prepared information relating to the Company, the Arrangement, its operations, business plans and prospects of the Company (the “Internal Information”), including Management Projections;

(d)

discussions with the Company regarding the Internal Information;

(e)

publicly available information relating to other selected transactions and companies that were deemed relevant, including recent and historical trading statistics, select financial information and metrics on comparable transactions;

(f)

the state of the broader capital markets and selected industry groupings; and

(g)

other information, including but not limited to such other financial studies and analyses or qualitative matters, as we deemed appropriate in rendering the Bloom Burton Fairness Opinion.

In providing its opinion, Bloom Burton relied upon the completeness, accuracy and fair presentation of all financial information, agreements and contracts, forecasts and other information, data, advice, opinions and representations obtained by Bloom Burton from public sources, or provided by the Company, its directors, officers, associates, affiliates, consultants, advisors or representatives and otherwise obtained pursuant to Bloom Burton’s engagement and relating to the Company and its associates and affiliates (collectively, the “Information”). Senior officers of the Company represented to Bloom Burton, in a certificate, dated April 13, 2023, that all the Information provided by or on behalf of the Company were true and correct in all material aspects and contained no untrue statement of a material fact concerning the Company or the Arrangement, and did not omit to state a material fact that is required to be stated or that is necessary to make a statement not misleading in light of the circumstances in which it was made. The Bloom Burton Fairness Opinion is wholly conditional upon such completeness, accuracy and fair presentation of such Information. Bloom Burton was not provided with, and did not attempt, any independent verification of the completeness, accuracy or fair presentation of any of the Internal Information or Information. In addition, Bloom Burton did not assume any obligation to conduct any, and was not provided with reports regarding, any independent physical inspection of any properties, facilities or other physical assets of the Company or to verify the good standing of any intellectual property or other intangible assets of the Company. Bloom Burton also did not make and was not provided with any independent evaluation or appraisal of the assets or liabilities of the Company or any other Entity. In rendering its opinion, Bloom Burton assumed that the representations and warranties of the Parties in the Arrangement Agreement were true and correct and that the Arrangement would be consummated pursuant to definitive agreements that will be in accordance with the terms and conditions of, and substantially within the timeframes specified within, the draft agreements and documents provided to Bloom Burton, without any waiver or amendment of any material term or condition thereof, and that any governmental, regulatory or other consents and approvals necessary for the consummation of the Arrangement will be obtained without any adverse effect.

In addition to the foregoing, the Bloom Burton Fairness Opinion was rendered on the basis of securities markets, economic, financial and general business conditions prevailing as at that date and the conditions and prospects, financial and otherwise, of the Company as they were reflected in the Information and as they were represented to Bloom Burton. In its analyses and in connection with the preparation of the Bloom Burton Fairness Opinion, Bloom Burton made a number of assumptions with respect to general business, market and economic conditions and other matters, many or all of which are beyond the control of Bloom Burton or the

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Company. Subsequent developments may affect the Bloom Burton Fairness Opinion and that Bloom Burton does not have any obligation to update, revise, or reaffirm the Bloom Burton Fairness Opinion.

Bloom Burton expressed no opinion or view as to any terms or other aspects or implications of the Arrangement, other than the fairness of the Consideration from a financial point of view, including, without limitation, the form or structure of the Arrangement or any legal, regulatory, accounting, tax or similar matters terms, aspects or implications of the Arrangement. Bloom Burton also provided no opinion or view as to the relative merits of the Arrangement in comparison to other strategies or transactions that might be available to the Company or as to the underlying business decision of the Board of Directors to proceed with the Arrangement. In addition, Bloom Burton expressed no opinion or recommendation as to how any securityholder of the Company, including the Shareholders, should vote or act in connection with the Arrangement or any other matter. The Bloom Burton Fairness Opinion is not to be construed as a recommendation as to how any securityholder of the Company, including the Shareholders, should vote or act in connection with the Arrangement or any other matter.

Bloom Burton, as an investment dealer may, in the future, in the ordinary course of its business, perform financial advisory or investment banking services for any of the Interested Parties (as such term is defined in the Bloom Burton Fairness Opinion). Bloom Burton has a current ongoing consulting arrangement, with a fixed monthly retainer fee, wherein Bloom Burton acts as an advisor to the Company in connection with the review, from time to time, of pre-clinical development programs and potential therapeutic indications. No other agreements or commitments exist between Bloom Burton and the Company with respect to any future business dealings other than those that may arise from its engagement. Bloom Burton does not own any securities of the Company. Additionally, in the ordinary course of its business, Bloom Burton may have other normal course financial dealings with one or more of the Interested Parties or actively trade shares and other securities of one or more of the Interested Parties for its own account and for its client accounts, and, accordingly, may at any time hold a long or short position in such securities. Bloom Burton also produces research on public equity securities and may, in the ordinary course of its business, provide research reports and investment advice to its clients on investment matters, including with respect to any of the Interested Parties or the Arrangement.

Summary of Bloom Burton Fairness Analysis

Bloom Burton performed a variety of financial and comparative analyses, as summarized below. The below does not constitute a complete description of the financial analyses performed and considered by Bloom Burton and the order in which the financial analyses summarized below appear does not necessarily reflect the relative importance or weight given to such analyses. The summary of the analyses below and certain factors considered is not a comprehensive description of all analyses undertaken or factors considered by Bloom Burton. The preparation of a fairness opinion is a complex process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances and, therefore, a fairness opinion and analyses are not readily susceptible to partial analysis or summary description. The analyses and factors summarized below in connection to the Bloom Burton Fairness Opinion must be considered as a whole and in context. Selecting portions of the Bloom Burton analyses and factors, without considering all analyses and factors or the narrative description of the analyses and factors, could create a misleading or incomplete view of the processes underlying Bloom Burton’s analyses and opinion.

No Comparable Company or Precedent Transaction (each as defined below) is identical or perfectly comparable to the Company or the Arrangement. Bloom Burton reviewed and considered certain financial and non-financial information and exercised its professional judgement in making qualitative and quantitative assessments based on individual traits and characteristics, and other information, for each of the Comparable Companies and the Precedent Transaction.

Discounted Cash Flow Analysis

Bloom Burton employed a discounted cash flow (“DCF”) analysis in estimating a valuation range for the Shares. DCF is a core valuation approach in the financial markets used to value a company or asset based on an estimated present value of the projected future cash flows to be generated by the company or asset by discounting the projected future cash flows at a discount rate that is selected to appropriately reflect the risks

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of receiving such cash flows, the cost of capital, expected return on capital or other applicable factors. Bloom Burton performed DCF analysis using the Management Projections to derive a range of implied equity values for the Shares. In conducting the DCF analysis, Bloom Burton used the capital asset pricing model in combination with its professional judgement, experience to estimate an appropriate discount rate (or estimated weighted average cost of capital) range for the Company of 11.5% to 14.0%. The Management Projections were used to calculate the after-tax, projected free cash flows generated by the Company for annual periods 2023 through 2042. No terminal value was assumed based on the length of the forecast extending through the anticipated loss of patent exclusivity for camlipixant (BLU-5937) and the immaterial impact of the present value contribution of an assumed terminal value based on the terminal value estimation methods considered. The range of DCF-implied enterprise values was also adjusted for the estimated present value of the impact of assumed future equity issuances in 2024 and 2025 as projected by the Management Projections. The net cash position of Company of approximately $313 million (“Net Cash”), based on the Information as of April 17, 2023, was used to arrive at a range of implied equity values based on the DCF analysis. These DCF-implied equity values were then applied by Bloom Burton to the number of fully diluted Shares outstanding, including the dilutive impact from outstanding and in the money options using the treasury stock method, to provide a range of implied values per Share of: $9.85 to $13.05 (rounded to the nearest $0.05). This range was then compared by Bloom Burton to the Consideration of $14.75 per Share.

Selected Comparable Companies

Bloom Burton considered a public comparables analysis in support of rendering the Bloom Burton Fairness Opinion. While no public company is directly or perfectly comparable to the Company or the Arrangement, Bloom Burton identified seven selected public companies (the “Comparable Companies”) that were, in the opinion of Bloom Burton, deemed as relevant comparators. The Comparable Companies ranged in enterprise value from between $588 million to $1.4 billion, with an average and mean of $969 million and $905 million, respectively. Among other things, the Comparable Companies were identified and selected by Bloom Burton based on company-specific characteristics including, being publicly-traded, clinical stage biopharmaceutical companies with a lead development program that was judged to be comparable to camlipixant (BLU-5937) based on the stage of development and lead indication characteristics, including the type of disease and the characteristics of the estimated patient population. Bloom Burton used publicly available financial information to calculate an observed enterprise value of each of the Comparable Companies, based on, among other things: (i) their respective closing share price as of April 14, 2023; (ii) their fully diluted equity value using the treasury stock method; and (iii) adding the book value of any debt or other relevant liabilities less the reported cash and cash equivalents.

Bloom Burton, exercising its professional judgement, arrived at an estimated range of implied enterprise values for the Company based on the observed enterprise value range of the Comparable Companies. Based on this approach, Bloom Burton assigned an estimated enterprise value range of $600 million to $1.4 billion for the Company based on the public comparables analysis. This estimated enterprise value range was then used in combination with the Net Cash and the fully diluted Shares outstanding, adjusting for the impact of outstanding dilutive securities using the treasury stock method, to arrive at an estimated implied range of $7.05 to $12.80 per Share. Bloom Burton compared this estimated range to the Consideration of $14.75 per Share.

Selected Precedent Transactions

Bloom Burton also considered and reviewed selected precedent transactions in rendering the Bloom Burton Fairness Opinion. While no other transaction is directly or perfectly comparable to the Company or the Arrangement, Bloom Burton identified certain prior completed all-cash transactions, including eight public and nine private company acquisitions and asset-based transactions (the “Precedent Transactions”), that were deemed relevant in the professional opinion of Bloom Burton. The Precedent Transactions were chosen by Bloom Burton based on qualitative and quantitative factors or characteristics that included, among other potential things, the clinical development stage of the company or asset, and other selected attributes relating to the targeted therapeutic indication or market segment.

Bloom Burton utilized publicly available financial information pertaining to the Precedent Transactions to calculate the observed total and (or) “up front” value of each transaction, excluding any contingent or

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other deferred consideration, where applicable (the “Transaction Value”). The public company acquisition Precedent Transactions had mean and median Transaction Values of $2.1 billion and $1.2 billion, respectively, and the private Precedent Transactions had mean and median Transaction Values of $1.7 billion and $725 million, respectively.

Bloom Burton, exercising its professional judgement, arrived at an estimated range of implied transaction (or enterprise) values for the Company based on the range of Transaction Values for the Precedent Transactions. The estimated enterprise value range was $600 million to $1.8 billion based on the Precedent Transactions. This estimated enterprise value range was then used in combination with the Net Cash of the Company and the fully diluted Shares outstanding, adjusting for the impact of outstanding dilutive securities to arrive at an implied equity value range of $7.05 to $15.70 per Share. Bloom Burton compared this range to the Consideration of $14.75 per Share.

Bloom Burton also assessed and considered the observed acquisition premiums paid by the acquirors in the public company acquisitions contained in the Precedent Transaction group. These premiums were calculated by Bloom Burton based on comparing the per share acquisition price (excluding any contingent or deferred consideration) to the unaffected closing share price of the target company, prior to the announcement or other knowledge of the transaction impacting the target’s share price. Based on this analysis, Bloom Burton estimated a comparable premium range of approximately 30% to 115%. Bloom Burton then applied the estimated acquisition premiums range to the Company’s most recent closing share price (as of April 14, 2023) to determine an implied share price range representative of the acquisition premium for the public Precedent Transactions of $9.15 to $15.10. Bloom Burton compared this range to the Consideration of $14.75 per Share.

Bloom Burton also analyzed, observed and considered certain additional information that was not directly considered part of its financial analyses but noted for the Board of Directors for informational purposes, including: (i) the historical trading performance of the Shares, using the Nasdaq listing, during the 52 weeks ended April 14, 2023, which indicated low and high closing prices during such period of $6.46 per Share and $12.00 per Share, respectively; and (ii) 12 month share price targets as reflected in selected publicly available equity research analysts’ reports.

Support and Voting Agreements

The following description is qualified in its entirety by reference to the full text of the form of support and voting agreement. A copy of the form of support and voting agreement is accessible through the Company’s profile on SEDAR at www.sedar.com. The Shares held by the Supporting Shareholders will be treated in the same fashion under the Arrangement as Shares held by any other Shareholder.

Each of the directors of the Company holding Shares and certain executive officers of the Company alongside certain Shareholders related to such directors and executive officers (the “Supporting Shareholders”), representing in the aggregate approximately 6.36% of the issued and outstanding Shares, have entered into support and voting agreements pursuant to which each has agreed to, among other things, support the Arrangement and vote for the Arrangement Resolution all of the Shares he, she or it owns or over which he, she or it exercises voting control, subject to customary exceptions. Under each support and voting agreement, the Supporting Shareholder has agreed, among other things:

(a)

to vote or to cause to be voted all of the Shares, other securities convertible into or exchangeable or exercisable for Shares, or any other rights to acquire Shares (the “Subject Securities”) entitled to vote, including any other such securities of the Company directly or indirectly acquired by or issued after April 17, 2023, for the approval of the Arrangement Resolution and any other matter necessary for the consummation of the transactions contemplated by the Arrangement Agreement;

(b)

no later than ten days prior to the Meeting, to deliver or to cause to be delivered to the Company duly executed proxies or voting instruction forms voting for the approval of the Arrangement Resolution, such proxy or voting instruction forms not to be revoked or withdrawn without the prior written consent of the Parent;

(c)

not to, directly or indirectly (including through any of its representatives):

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(i)

solicit, assist, initiate, knowingly encourage or otherwise knowingly facilitate any inquiry, proposal, discussion, negotiation or offer that constitutes or may reasonably be expected to constitute or lead to, an Acquisition Proposal;

(ii)

enter into, continue or otherwise initiate, solicit, knowingly encourage, engage or participate in or knowingly facilitate any discussions or negotiations with any person (other than with the Parent, the Purchaser, the Parent’s Representatives or any person acting jointly or in concert with the Parent or the Purchaser) regarding any inquiry, proposal or offer that constitutes or may reasonably be expected to constitute or lead to, an Acquisition Proposal;

(iii)

accept, approve, endorse or recommend, or publicly propose to accept, approve, endorse or recommend, any Acquisition Proposal;

(iv)

withdraw support, or propose publicly to withdraw support, from the transactions contemplated by the Arrangement Agreement;

(v)

enter, or propose publicly to enter, into any agreement related to any Acquisition Proposal;

(vi)

act jointly or in concert with others with respect to voting securities of the Company for the purpose of opposing or competing with the Purchaser and the Parent in connection with the Arrangement Agreement; or

(vii)

join in the requisition of any meeting of the securityholders of the Company for the purpose of considering any resolution related to any Acquisition Proposal;

(d)

except as contemplated by the Arrangement Agreement and support and voting agreement, not to, directly or indirectly:

(i)

sell, transfer, gift, assign, grant a participation interest in, option, pledge, hypothecate, grant a security or voting interest in or otherwise convey or encumber (each, a “Transfer”), or enter into any agreement, option or other arrangement with respect to the Transfer of any of its Subject Securities to any person;

(ii)

grant or agree to grant any proxy, power of attorney or other right to vote the Subject Securities, or enter into any voting trust or pooling agreement or arrangement in respect of the Subject Securities; or

(iii)

agree to take any of the actions described in the foregoing sections (i) and (ii); provided that the Supporting Shareholder may (x) exercise and/or settle Company Equity Awards to acquire additional Shares, and (y) Transfer Subject Securities to a corporation, family trust, registered retirement savings plan or other Entity directly or indirectly owned or controlled by the Supporting Shareholder or under common control with or controlling the relevant director or officer and subject certain conditions specified in the support and voting agreement; and

(e)

not to exercise any rights of appraisal or rights of dissent provided under any applicable Laws or otherwise in connection with the Arrangement or the transactions contemplated by the Arrangement Agreement.

Arrangement Steps

The following description is qualified in its entirety by reference to the full text of the Plan of Arrangement, attached as Appendix C to this Circular.

(a)

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(b)

each Company Option, whether vested or unvested, outstanding immediately prior to the Effective Time, shall, notwithstanding the terms of the Company Option Plan and any and all award or similar agreements relating to the Company Option and without any further action by or on behalf of the holder thereof, be deemed to have fully vested and be deemed to be assigned and surrendered by such holder to the Company in exchange for a cash payment equal to the excess, if any, of the Consideration over the Exercise Price of such Company Option, less any applicable withholdings, and such Company Option shall be immediately cancelled. For greater certainty, if the Exercise Price of any Company Option is equal to or greater than the Consideration, such Company Option shall be cancelled at the Effective Time without any cash payment or other consideration being made in respect thereof;

(c)

(d)

(e)

(i)

(ii)

such Dissenting Holders’ names shall be removed from the registers of Shareholders maintained by or on behalf of the Company; and

(iii)

(f)

(i)

(ii)

such holders’ names shall be removed from the register of the Shares maintained by or on behalf of the Company; and

(iii)

the Purchaser shall be deemed to be the transferee of such Shares (free and clear of all Encumbrances) and shall be entered in the register of the Shares maintained by or on behalf of the Company.

Upon issuance of the Final Order and the satisfaction or waiver of the conditions precedent to the proposed Arrangement set forth in the Arrangement Agreement, the Company will file the Articles of

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Arrangement and such other documents as may be required to give effect to the Arrangement with the Director pursuant to section 192 of the CBCA.

Upon issuance of the Certificate of Arrangement by the Director, the transactions comprising the Arrangement shall occur and shall be deemed to have occurred in the order set out in the Plan of Arrangement without any further act or formality.

Effective Date

The Arrangement will become effective on the date shown on the Certificate of Arrangement to be endorsed by the Director under the CBCA on the Articles of Arrangement giving effect to the Arrangement in accordance with the CBCA.

Sources of Funds for the Arrangement

The Purchaser and the Parent will finance the Arrangement from internally available funds and do not need to obtain any new external debt financing in order to consummate the Arrangement. The Parent and the Purchaser have represented in the Arrangement Agreement that the Parent will have sufficient funds at Closing to satisfy the Aggregate Arrangement Consideration payable pursuant to the Arrangement in accordance with the terms of the Arrangement Agreement and the Plan of Arrangement. The Arrangement Agreement is not subject to a financing condition.

Interests of Certain Persons in the Arrangement

In considering the determinations and recommendations of the Transaction Committee and the Board of Directors with respect to the Arrangement, Shareholders should be aware that certain directors and executive officers of the Company may have certain interests in connection with the Arrangement or may receive certain collateral benefits (as such term is defined in MI 61-101) that differ from, or are in addition to, the interests of Shareholders generally in connection with the Arrangement and that may present them with actual or potential conflicts of interest in connection with the Arrangement. The Transaction Committee and the Board of Directors are aware of these interests and considered them along with other matters described herein.

Other than the interests and benefits described below, none of the directors or executive officers of the Company or, to the knowledge of the directors and executive officers of the Company, any of their respective associates or affiliates, has any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any matter to be acted upon in connection with the Arrangement or that would materially affect the Arrangement.

All of the benefits received, or to be received, by directors, officers or employees of the Company as a result of the Arrangement are, and will be, solely in connection with their services as directors, officers or employees of the Company. No benefit has been, or will be, conferred for the purpose of increasing the value of consideration payable to any such person for the Shares held by such persons and no consideration is, or will be, conditional on the person supporting the Arrangement.

Transaction Related Payments

There are no transaction related payments payable in connection with the completion of the Arrangement other than pursuant to broad-based programs maintained by the Company or as described below:

•

Bonus Pool: The Company is permitted under the Arrangement Agreement to establish an employee bonus pool in the aggregate amount of $4,000,000. The determination of participants, individual allocations, and payment terms (including applicable milestones) will be as mutually determined via consultation between the Parent and the Company after the date of the Arrangement Agreement, which process shall be recommended by the Company’s Chief Executive Officer, with all terms of the individual awards subject to the mutual agreement of both parties. Any recipient of a bonus award must, as a condition to payment of the bonus, sign an agreement with the Company that his or her employment may, in connection with the transaction, be transferred to any affiliate of the Parent.

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•

Severance Program: The Company is permitted under the Arrangement Agreement to adopt a severance program providing the coverage summarized below to all Company employees who were employed as of the date of the Arrangement Agreement, for any terminations of employment without cause, to be effective for at least the one-year period immediately following the date of the Closing. Such severance shall be paid in a lump sum, subject to a customary release of claims (subject to applicable Laws) and shall be offset by the amount of any statutory or contractual severance and notice entitlements. Benefit continuation will be provided for the applicable severance period set forth below for U.S. employees. Severance for Canadian employees will be subject to applicable Law, which may require additional payments. The severance program shall be set forth in a plan document, the final form of which shall be subject to the Parent’s review and ultimate consent (which shall not be unreasonably withheld, conditioned or delayed).

Title			Severance
Executive Team			18 months base salary plus 1.5x target annual bonus
Vice President and above			12 months base salary
Senior or Executive Director			8 months base salary
Director			5 months base salary
Remainder			3 months base salary

Change of Control Benefits

Except as set out elsewhere in this Circular, including under “The Arrangement — Interests of Certain Persons in the Arrangement — Treatment of Company Equity Awards”, “The Arrangement — Interests of Certain Persons in the Arrangement — Consideration”, and “Regulatory Matters — Canadian Securities Law Matters”, there are no change of control benefits payable upon the closing of the Arrangement under any employment, consulting or other agreements between the Company and any of its directors or executive officers.

Intentions of Directors and Executive Officers

As of the Record Date, the Supporting Shareholders beneficially owned, directly or indirectly, or exercised control or direction over, in the aggregate 8,052,338 Shares, which represented approximately 6.36% of the issued and outstanding Shares on an undiluted basis.

Pursuant to the support and voting agreements, the Supporting Shareholders have agreed, among other things, to vote their Shares FOR the Arrangement Resolution. See “The Arrangement — Support and Voting Agreements”.

Treatment of Company Equity Awards

As of the Record Date, a total of 11,829,204 Company Options and 340,677 Company Deferred Share Units were outstanding.

Pursuant to the Plan of Arrangement, each Company Option, whether vested or unvested, outstanding immediately prior to the Effective Time, shall, notwithstanding the terms of the Company Option Plan and any and all award or similar agreements relating to the Company Option and without any further action by or on behalf of the holder thereof, be deemed to have fully vested and be deemed to be assigned and surrendered by such holder to the Company in exchange for a cash payment equal to the amount by which the Consideration exceeds the Exercise Price of such Company Option, less applicable withholdings, and each such Company Option shall immediately be cancelled and, for greater certainty, where such amount is zero or a negative, the holder of such Company Option will not be entitled to receive any amount in respect of such Company Option, and all obligations in respect of all such Company Options shall be deemed to be fully satisfied. The Company Option Plan, each Company Option issued and outstanding immediately prior to the Effective Time and any agreements related thereto shall thereafter be immediately cancelled and terminated.

In addition, the Plan of Arrangement provides that each Company Deferred Share Unit, whether vested or unvested, outstanding immediately prior to the Effective Time, shall, notwithstanding the terms of the

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Company Deferred Share Unit Plan and any and all award or similar agreements relating to the Company Deferred Share Unit and without any further action by or on behalf of a holder thereof, be deemed to have fully vested and be deemed to be assigned and surrendered by such holder to the Company in exchange for a cash payment equal to the Consideration, less any withholdings, and each such Company Deferred Share Unit shall immediately be cancelled and all obligations in respect of the Company Deferred Share Units shall be deemed to be fully satisfied. The Company Deferred Share Unit Plan, each Company Deferred Share Unit issued and outstanding immediately prior to the Effective Time and any agreements related thereto shall thereafter be immediately cancelled and terminated.

On or as soon as practicable after the Effective Date (and in any event, no later than ten days thereafter), the Company shall process the cash payments through the Company’s payroll systems or payroll providers (or issue a check for any such payment if such payment cannot be made through such payroll system or payroll provider), to each holder of a Company Option or a Company Deferred Share Unit as reflected on the register maintained by or on behalf of the Company in respect of Company Options and of Company Deferred Share Units, representing the amount, if any, which such holder of Company Options, or Company Deferred Share Units, as applicable, has the right to receive under the Plan of Arrangement for such Company Options and Company Deferred Share Units, as applicable, less applicable withholdings. Notwithstanding that amounts under the Plan of Arrangement are payable in U.S. dollars, the Company is entitled to make the payments in the applicable currency in respect of which the Company customarily makes payment to such holder by using the applicable Bank of Canada daily exchange rate in effect on the Effective Date.

Consideration

The following table sets out the names and positions of the directors and executive officers of the Company as of May 15, 2023, the number of Shares, Company Options and Company Deferred Share Units owned or over which control or direction was exercised by such director or executive officer of the Company and, where known after reasonable inquiry, by their respective associates or affiliates and the consideration to be received for such Shares, Company Options and Company Deferred Share Units pursuant to the Arrangement.

Name and Position with the Company	Shares		Estimated amount of Consideration to be received in respect of Shares			“In-the- Money” Company Options		Company Deferred Share Units		Estimated amount of cash to be received in respect of Company Options and Company Deferred Share Units(1)			Total estimated amount of consideration to be received (subject to applicable withholdings)
Executive Officers
Roberto Bellini, President and Chief Executive Officer(2)		5,329,871		$	44,950,124		3,348,056		24,931		$	31,847,046		$	76,797,170
Ramzi Benamar, Chief Financial Officer		—			—		702,500		—		$	6,924,683		$	6,924,683
Catherine M. Bonuccelli		—			—		939,722		—		$	8,001,569		$	8,001,569
Denis Garceau		676		$	9,971		777,944		458		$	7,289,334		$	7,299,305
Andreas Orfanos		—			—		474,375		—		$	3,876,019		$	3,876,019
Tony Matzouranis		—			—		675,722		—		$	6,363,835		$	6,363,835
Sébastien Roy, Corporate Secretary		1,613		$	23,792		—		—			—		$	23,792
Directors
Francesco Bellini(3)		1,761,621		$	25,983,910		447,667		28,370		$	4,781,782		$	30,765,692
Youssef L. Bennani		109,649		$	1,617,323		244,111		—		$	2,496,435		$	4,113,758
Franklin M. Berger		698,918		$	10,309,041		224,889		65,256		$	3,048,301		$	13,357,342

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Name and Position with the Company	Shares		Estimated amount of Consideration to be received in respect of Shares			“In-the- Money” Company Options		Company Deferred Share Units		Estimated amount of cash to be received in respect of Company Options and Company Deferred Share Units(1)			Total estimated amount of consideration to be received (subject to applicable withholdings)
Clarissa Desjardins		18,420		$	271,695		238,111		60,959		$	3,338,733		$	3,610,428
Pierre Larochelle		131,540		$	1,940,215		313,222		131,311		$	4,857,169		$	6,797,384
William Mezzanotte		—			—		117,000		17,770		$	1,313,458		$	1,313,458
Joseph Rus		—			—		260,222		11,622		$	2,690,356		$	2,690,356

Notes:

(1)

In 2021, the Company started to grant options having an exercise price in US dollars. Prior to 2021, options granted by the Company had an exercise price in Canadian dollars; those options are converted into US dollars in the above table using the closing rate of CDN$1.00 = US$0.7415 at May 15, 2023.

(2)

Mr. Roberto Bellini is the registered holder of 765,061 Shares and has an interest in 4,564,810 Shares through his 50% interest in Rocabe Investments Inc.

(3)

Dr. Francesco Bellini is the registered holder of 280,894 Shares. The FMRC Family Trust, a trust of which Dr. Francesco Bellini, Chairman of the Board of the Company, and Mr. Roberto Bellini, President and Chief Executive Officer of the Company, are beneficiaries and 1324286 Alberta Limited, a wholly-owned Subsidiary of The FMRC Family Trust, own 657,239 Shares and Picchio International Inc. owns 823,488 Shares, which shares are shown in Dr. Bellini’s share ownership.

Continuing Insurance Coverage for Directors and Executive Officers of the Company

The Arrangement Agreement provides that at or prior to the Effective Time, the Company shall, unless otherwise directed by the Parent in writing, through a nationally recognized insurance broker approved by the Parent (such approval not to be unreasonably withheld, delayed, or conditioned) purchase six-year “tail” policies for the existing policies effective as of the Effective Time and if an applicable “tail policy” has been obtained, it shall be deemed to satisfy all obligations to obtain and/or maintain insurance pursuant to the Arrangement Agreement in respect of the applicable policy; provided that in no event shall the Company be required to expend in any one year an amount in excess of 300% of the annual premiums currently payable by the Company with respect to such current policies, it being understood that if the annual premiums payable for such insurance coverage exceeds such amount, the Parent shall be obligated to cause the Company to obtain policies with the greatest coverage available for a cost equal to such amount.

If a “tail policy” is not obtained prior to the Effective Time, from the Effective Time until the six-anniversary of the Closing Date, the Company shall, and the Parent shall cause the Company to, maintain, in effect, the existing directors’ and officers’, employment practices and fiduciary liability insurance policies maintained by the Company as of the date of the Arrangement Agreement for the benefit of the Company, its Subsidiaries and the Indemnified Persons who are currently covered by such existing policies with respect to their acts and omissions occurring prior to the Effective Time in their capacities as directors and officers of the Company (as applicable), on terms with respect to coverage, deductibles and amounts no less favorable than the existing policy.

Required Shareholder Approval

In order for the Arrangement to be effected, Shareholders will be asked to consider and, if deemed advisable, approve the Arrangement Resolution and any other related matters at the Meeting. The Arrangement Resolution must be approved by: (i) not less than two-thirds of the votes cast at the Meeting by Shareholders present or represented by proxy and entitled to vote at the Meeting; and (ii) a simple majority of the votes cast at the Meeting by Shareholders present or represented by proxy and entitled to vote at the Meeting, excluding for this purpose any person required to be excluded pursuant to section 8.1(2) of MI 61-101 (the “Required Shareholder Approval”).

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The full text of the Arrangement Resolution and Plan of Arrangement are attached to this Circular as Appendices B and C, respectively.

Regulatory Matters

Required Key Regulatory Approvals

Competition Act Approval

Part IX of the Competition Act requires that each of the parties to a transaction that exceeds the thresholds set out in sections 109 and 110 of the Competition Act and is not otherwise exempt (a “Notifiable Transaction”) provide the Commissioner with pre-closing notification filings (“Notifications”) in respect of their Notifiable Transaction. The parties to a Notifiable Transaction cannot complete the transaction until the applicable statutory waiting period under section 123 of the Competition Act has expired or been terminated, an advance ruling certificate (“ARC”) has been issued by the Commissioner pursuant to section 102 of the Competition Act, or a waiver of the requirement to submit Notifications under subsection 113(c) of the Competition Act has been provided by the Commissioner.

The statutory waiting period is 30 calendar days after the day on which the parties to the Notifiable Transaction submit their Notifications, provided that, before the expiry of this period, the Commissioner has not notified the parties pursuant to subsection 114(2) of the Competition Act that the Commissioner requires additional information that is relevant to the Commissioner’s assessment of the transaction (a “Supplementary Information Request”). If the Commissioner provides the parties with a Supplementary Information Request, the parties cannot complete the transaction until 30 calendar days after compliance with the Supplementary Information Request (unless an advance ruling certificate or a No-Action Letter is issued before the expiry of such extended period) and cannot complete the transaction after that 30 day period if there is any Competition Tribunal order in effect prohibiting completion of the transaction at that time.

In lieu of or in addition to filing Notifications, the parties to a Notifiable Transaction may apply to the Commissioner under subsection 102(1) of the Competition Act for an ARC confirming that the Commissioner is satisfied that he does not have sufficient grounds on which to apply to the Competition Tribunal for an order under section 92 of the Competition Act to prohibit the completion of the transaction or, as an alternative to an ARC, for a waiver under paragraph 113(c) of the Competition Act and a letter from the Commissioner that he does not, at that time, intend to make an application under section 92 of the Competition Act in respect of the Notifiable Transaction (a “No-Action Letter”).

Whether or not a merger is subject to notification under Part IX of the Competition Act, the Commissioner can apply to the Competition Tribunal for a remedial order under section 92 of the Competition Act at any time before the merger has been completed or, if completed, within one year after it was substantially completed, provided that, subject to certain exceptions, the Commissioner did not issue an ARC in respect of the merger. On application by the Commissioner under section 92 of the Competition Act, the Competition Tribunal may, where it finds that the merger prevents or lessens, or is likely to prevent or lessen, competition substantially, order that the merger not proceed or, if completed, order its dissolution or the disposition of the assets or shares acquired; in addition to, or in lieu thereof, with the consent of the person against whom the order is directed and the Commissioner, the Competition Tribunal may order a person to take any other action. There can be no assurance that a challenge to the Arrangement under the Competition Act will not be made or, if such challenge is made, what the result of such challenge will be.

The Arrangement constitutes a Notifiable Transaction under the Competition Act. On May 2, 2023, the Purchaser filed with the Commissioner a request for an ARC or, in the alternative, a No-Action Letter. It is a condition to closing of the Arrangement that the Competition Act Approval be obtained (which requires that an ARC or a No-Action Letter be issued by the Commissioner). In addition, on May 2, 2023 the Purchaser and the Company filed their respective Notifications with the Commissioner. On May 15, 2023, the Commissioner issued the requested ARC, which satisfies the Competition Act Approval condition to closing set out in the Arrangement Agreement.

HSR Act Approval

Under the HSR Act and the rules promulgated thereunder, certain acquisitions may not be completed until information has been furnished to the Antitrust Division of the U.S. Department of Justice (the “DOJ”)

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and the U.S. Federal Trade Commission (the “FTC”), and the applicable HSR Act waiting period requirements have been satisfied. The waiting period under the HSR Act applicable to the Arrangement is 30 calendar days.

The Arrangement is subject to the provisions of the HSR Act and therefore cannot be completed until each of the Company and the Parent file a notification and report form with the DOJ and the FTC under the HSR Act and the applicable waiting period has expired or been terminated.

The Company and the Parent filed a notification and report form with the DOJ and the FTC under the HSR Act on May 2, 2023. Accordingly, the applicable waiting period under the HSR Act will expire at 11:59 p.m. Eastern Time on June 1, 2023.

At any time before or after Closing, notwithstanding the termination or expiration of the waiting period under the HSR Act, the DOJ or the FTC could take such action under the Antitrust Laws as it deems necessary or desirable in the public interest, including seeking to enjoin the consummation of the Arrangement, seeking divestiture of substantial assets of one or both of the parties, requiring the parties to license or hold separate assets or terminate existing relationships and contractual rights, or requiring the parties to agree to other remedies.

The Arrangement is also subject to such other consents and approvals agreed by the Company and the Parent.

At any time before or after the Effective Time, and notwithstanding receipt of Competition Act Approval, the termination or expiration of the waiting period under the HSR Act, and such other consents and approvals agreed by the Company and the Parent, any state or foreign jurisdiction could take such action under the Antitrust Laws or Foreign Direct Investment Laws as it deems necessary or desirable in the public interest. Such action could include seeking to enjoin the consummation of the Arrangement, seeking divestiture of substantial assets of one or both of the parties, requiring the parties to license or hold separate assets or terminate existing relationships and contractual rights, or requiring the parties to agree to other remedies. Private parties may also seek to take legal action under the Antitrust Laws under certain circumstances, including by seeking to intervene in the regulatory process or litigate to enjoin or overturn regulatory approvals, any of which actions could significantly impede or even preclude obtaining required regulatory approvals. There is no certainty that a challenge to the Arrangement will not be made or that, if a challenge is made, what the result of such challenge will be.

Although the Company expects that all required regulatory clearances and approvals will be obtained, it cannot assure Shareholders that these regulatory clearances and approvals will be timely obtained, obtained at all, or that the granting of these regulatory clearances and approvals will not involve the imposition of additional conditions, restrictions, qualifications, requirements, or limitations on the transactions contemplated by the Arrangement Agreement, including the requirement to divest assets, license, or hold separate assets or terminate existing relationships and contractual rights, or agree to other remedies, or require changes to the terms of the Arrangement Agreement. These conditions or changes could result in the conditions to the Arrangement not being satisfied.

Each of the parties has agreed to use reasonable best efforts to obtain all regulatory approvals required to consummate the Arrangement and the other transactions contemplated by the Arrangement Agreement, subject to certain limitations as set forth in the Arrangement Agreement.

Court Approvals

An arrangement of a corporation under the CBCA requires sanction by the Court. On May 16, 2023, the Company obtained the Interim Order providing for the calling and holding of the Meeting and other procedural matters. A copy of the Interim Order and the Notice of Presentation of the Final Order are attached to this Circular as Appendices F and G, respectively.

If the Arrangement Resolution is approved by Shareholders at the Meeting in the manner required by the Interim Order, the Company will apply to the Court to obtain the Final Order. The hearing in respect of the Final Order is scheduled to take place at the Court located at 1 Notre-Dame Street East, Montréal, Québec, H2Y 1B6 on June 22, 2023, at 2:00 p.m. (Montréal time), or as soon after such time as counsel may be heard. Any Shareholders wishing to appear in person or to be represented by counsel at the hearing of the application

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for the Final Order may do so but must comply with certain procedural requirements described in the Notice of Presentation of the Final Order, including filing an appearance (and if such appearance is with a view to contesting the application for a Final Order, a written contestation supported by affidavit(s), and exhibit(s), if any) with the Court and serving same upon the Company and the Purchaser via their respective counsel as soon as reasonably practicable and, in any event, no later than 4:30 p.m. (Montréal time) at least five Business Days immediately preceding the date of the Meeting (as it may be adjourned or postponed from time to time).

The Court has broad discretion under the CBCA when making orders with respect to arrangements. The Court, when hearing the application for the Final Order, will consider, among other things, the fairness of the Arrangement to Shareholders. The Court may approve the Arrangement in any manner it may direct and determine appropriate.

Once the Final Order is granted and the other conditions contained in the Arrangement Agreement are satisfied or waived to the extent legally permissible, the Articles of Arrangement will be filed with the Director under the CBCA for issuance of the Certificate of Arrangement giving effect to the Arrangement.

Canadian Securities Law Matters

The Company is a reporting issuer in each of the provinces of Canada and, accordingly, is subject to applicable Securities Laws of such provinces, including MI 61-101.

MI 61-101 is intended to regulate certain transactions to ensure equality of treatment among securityholders, generally requiring (i) enhanced disclosure, (ii) approval by a majority of securityholders excluding certain interested or related parties and their joint actors — so-called “majority of the minority” approval, and (iii) in certain instances, independent valuations and approval and oversight of the transaction by a special committee of independent directors. The protections of MI 61-101 apply to, among other transactions, “business combinations” (as defined in MI 61-101) that terminate the interests of equity securityholders without their consent (regardless of whether the equity security is replaced with another security). MI 61-101 provides that, in certain circumstances, where a “related party” of an issuer (as defined in MI 61-101) is entitled to receive a “collateral benefit” (as defined in MI 61-101), in connection with an arrangement, such transaction may be considered a “business combination” for the purposes of MI 61-101 and as a result such related party will be an “interested party” (as defined in MI 61-101). A “related party” includes a director, senior officer and a securityholder holding over 10% of the voting rights attached to all of the issuer’s outstanding voting securities, or affiliates of the foregoing.

A “collateral benefit” (as defined in MI 61-101) includes any benefit that a related party of the Company is entitled to receive as a consequence of the Arrangement, including without limitation, an increase in salary, a lump sum payment, a payment for surrendering securities or other enhancements in benefits related to services as an employee, director or consultant of the Company. MI 61-101 excludes from the meaning of collateral benefit a payment per security that is identical in amount and form to the entitlement of the general body of holders in Canada of securities of the same class, as well as certain benefits to a related party received solely in connection with the related party’s services as an employee or director of an issuer, of an affiliated Entity of such issuer or of a successor to the business of such issuer where (a) the benefit is not conferred for the purpose, in whole or in part, of increasing the value of the consideration paid to the related party for securities relinquished under the transaction; (b) the conferring of the benefit is not, by its terms, conditional on the related party supporting the transaction in any manner; (c) full particulars of the benefit are disclosed in the disclosure document for the transaction; and (d) either (i) at the time the transaction is agreed to, the related party and his or her associated entities beneficially own, or exercise control or direction over, less than 1% of the outstanding securities of each class of equity securities of the issuer (the “1% Exemption”), or (ii) the related party discloses to an independent committee of the issuer the amount of consideration that the related party expects to be beneficially entitled to receive, under the terms of the transaction, in exchange for the equity securities the related party beneficially owns and the independent committee acting in good faith determines that the value of the benefit, net of any offsetting costs to the related party, is less than 5% of the value of the consideration the related party will receive pursuant to the terms of the transaction for the equity securities beneficially owned by the related party, and the independent committee’s determination is disclosed in the disclosure document for the transaction (the “5% Exemption”).

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If the Arrangement is completed, each Company Option and Company Deferred Share Unit outstanding immediately prior to the Effective Time, in each case whether vested or unvested, will be transferred to the Company in exchange for a cash payment from the Company equal to the amount by which the Consideration exceeds the Exercise Price thereof, subject to applicable withholdings (in the case of the Company Options) or a cash payment from the Company equal to the Consideration, subject to applicable withholdings (in the case of the Company Deferred Share Units). By virtue of such acceleration of Company Options and Company Deferred Share Units, certain executive directors of the Company may be considered to be receiving a “collateral benefit”. Given such benefits do not fall within either the 1% Exemption or the 5% Exemption to the definition of “collateral benefit” under MI 61-101, the Shares held by such directors and their related entities will be excluded in determining whether minority approval for the Arrangement is obtained. See “The Arrangement — Interests of Certain Persons in the Arrangement”.

In summary, for purposes of the “majority of the minority” approval requirements of MI 61-101, all of the 7,091,492 Shares beneficially owned, directly or indirectly, or over which control or direction is exercised by Dr. Francesco Bellini and Roberto Bellini, or their related parties or joint actors, representing in the aggregate approximately 5.59% of the issued and outstanding Shares, will be excluded in determining whether “majority of the minority” approval for the Arrangement is obtained. The Shares to be excluded for purposes of the “majority of the minority” approval requirement are set out below:

Shareholder(1)	Shares(2)(3)
Shareholder(1)	#		%
Francesco Bellini(4)		1,761,621		1.39%
Roberto Bellini(5)		5,329,871		4.20%

Notes:

(1)

References to each Shareholder in this column refer to the Shareholder and the Shareholder’s related parties and joint actors and certain affiliates.

(2)

Information sourced from the System for Electronic Disclosure by Insiders (SEDI).

(3)

Based on 126,798,993 Shares outstanding as of the Record Date.

(4)

Of which 823,488 Shares are held by Picchio International Inc., a corporation wholly-owned by Dr. Francesco Bellini, Chairman of the Board of Directors, and 657,239 Shares are held by The FMRC Family Trust and 1324286 Alberta Limited.

(5)

Of which 4,564,810 Shares are held by Rocabe Investments Inc., a corporation in which Roberto Bellini, President and Chief Executive Officer of the Company, owns more than 10% of the voting securities.

Pursuant to section 4.3(1) of MI 61-101, the Company is not required to obtain a formal valuation under MI 61-101 in connection with the Arrangement.

To the knowledge of the Company and its directors and executive officers, after reasonable inquiry, there have been no prior valuations in respect of the Company (as contemplated in MI 61-101) in the 24 months prior to the date of the Arrangement Agreement and, except as disclosed in this Circular under the heading “The Arrangement — Background to the Arrangement”, no bona fide prior offer (as contemplated in MI 61-101) that relates to the transactions contemplated by the Arrangement has been received by the Company during the 24 months before the execution of the Arrangement Agreement.

Stock Exchange De-Listing and Reporting Issuer Status

The Shares of the Company are currently listed for trading on the TSX and on the Nasdaq under the symbol “BLU”. The Company expects that the Shares will be de-listed from these exchanges on or following the Effective Date.

Following the Effective Date, it is expected that the Purchaser will cause the Company to apply to cease to be a reporting issuer under the securities legislation of all provinces of Canada and the U.S., or take or cause to be taken such other measures as may be appropriate to ensure that the Company is not required to prepare and file continuous disclosure documents.

Effects on the Company if the Arrangement is Not Completed

If the Arrangement Resolution is not approved by Shareholders or if the Arrangement is not completed for any other reason, Shareholders will not receive any payment for any of their Shares in connection with the

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Arrangement, and the Arrangement Agreement may be terminated. If this occurs, the Company will continue to carry on as a reporting issuer in the normal and usual course, and will continue to face the risks and limitations that it currently faces with respect to its affairs, business and operations and future prospects. Note that the failure to complete the Arrangement could negatively impact the Share price and the Company, and that the Company may be required, in certain circumstances, to pay the Termination Fee of $75,000,000. See “Risk Factors”. If the Arrangement Resolution is not approved by Shareholders, the Company will reimburse the Parent for reasonable, documented out-of-pocket third party transaction expenses incurred by the Parent in connection with the Arrangement Agreement, in an amount not to exceed $10,000,000.

Expense Reimbursement

The estimated fees, costs and expenses of the Company in connection with the Arrangement contemplated herein including, without limitation, financial advisors’ fees, filing fees, legal and accounting fees, proxy solicitation fees and printing and mailing costs, but excluding payments made by the Company pursuant to holders of Company Equity Awards and pursuant to the bonus pool disclosed elsewhere in this Circular, are anticipated to be approximately $55.1 million.

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RISK FACTORS

Shareholders should carefully consider the following risks related to the Arrangement. These risk factors should be considered in conjunction with the other information included in this Circular, including certain sections of documents publicly filed, which sections are incorporated by reference herein. Additional risks and uncertainties, including those currently unknown to or considered immaterial by the Company, may also adversely affect the Arrangement. The following risk factors are not a definitive or exhaustive list of all risk factors associated with the Arrangement.

Risk Factors Relating to the Arrangement

There can be no certainty that all conditions to the Arrangement will be satisfied or waived prior to the End Date, if at all. Failure to complete the Arrangement could negatively impact the share price of the Shares or otherwise adversely affect the business of the Company.

The completion of the Arrangement is subject to a number of conditions, certain of which are outside the control of the Company, including Shareholder approval in the manner described herein, receipt of the Competition Act Approval, expiration or termination of the applicable HSR Act waiting period, such other consents and approvals agreed by the Company and the Parent, and receipt of the Final Order and no Governmental Body issuing any laws that prohibit or make illegal the Arrangement. The Arrangement Agreement also contains a number of additional conditions for the benefit of the Purchaser including compliance with covenants by the Company, the truth and correctness of certain representations and warranties made by the Company as of the Closing Date, and the absence of a Material Adverse Effect since the date of the Arrangement Agreement and that is continuing as of the Effective Time. There can be no certainty, nor can the Company provide any assurance, that these conditions will be satisfied or waived or, if satisfied or waived, when they will be satisfied or waived.

If the Arrangement is not completed, the market price of the Shares may be adversely affected (to the extent that the market price reflects a market assumption that the Arrangement will be completed) by many factors, including (i) the reason the Arrangement is not completed and whether such incompletion results from factors adversely affecting the Company; (ii) the possibility that the market would consider the Company to be an unattractive acquisition candidate; and (iii) the possible sale of Shares by investors following the announcement that the Arrangement is not completed. If the Arrangement is not completed and the Board of Directors decides to seek another arrangement, merger or business combination, there can be no assurance that it will be able to find a party willing to pay an equivalent or more attractive price than the Consideration to be paid pursuant to the Arrangement.

Certain costs related to the Arrangement, such as legal, and certain financial advisor fees, must be paid by the Company even if the Arrangement is not completed. The Arrangement could cause the attention of management to be diverted from the day-to-day operations of the Company. These disruptions could be exacerbated by a delay in the completion of the Arrangement and could have an adverse effect on the business, operating results or prospects of the Company.

In addition, since the completion of the Arrangement is subject to uncertainty, officers and employees of the Company may experience uncertainty about their future roles with the Company. This may adversely affect the Company’s ability to attract or to retain key management and personnel in the period until the Arrangement is completed or terminated.

The Arrangement Agreement may be terminated by the parties in certain circumstances, including in the event of a Material Adverse Effect.

Each of the Parent and the Company has the right, in certain circumstances, to terminate the Arrangement Agreement, in which case the Arrangement would not be completed. Accordingly, there can be no certainty, nor can the Company provide any assurance, that the Arrangement Agreement will not be terminated by either of the Company or the Parent prior to the completion of the Arrangement. For example, the Parent has the right, in certain circumstances, to terminate the Arrangement Agreement if changes occur that have a Material Adverse Effect on the Company. Although a Material Adverse Effect excludes certain events that are beyond the control of the Company (including but not limited to general changes or

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developments in the clinical-stage biopharmaceutical industry or changes in the economy generally or changes in other general business, financial, or market conditions (including interest rates, exchange rates, tariffs, trade wars and credit markets)), there is no assurance that a Material Adverse Effect on the Company will not occur before the Effective Date, in which case the Parent could elect to terminate the Arrangement Agreement and the Arrangement would not proceed. Failure to complete the Arrangement could negatively impact the trading price of the Shares or otherwise adversely affect the business of the Company. See “The Arrangement Agreement — Termination of the Arrangement Agreement”.

The Company may have to pay a Termination Fee or reimburse the Parent for transaction expenses. The Termination Fee provided under the Arrangement Agreement if the Arrangement Agreement is terminated in certain circumstances may discourage other parties from attempting to acquire the Company.

Under the Arrangement Agreement, in the event the Arrangement Agreement is terminated in certain circumstances, the Company may be required to pay a Termination Fee of $75,000,000 to the Parent or reimburse the Parent up to $10,000,000 for reasonable, documented, out-of-pocket third party transaction expenses incurred by the Parent in connection with the Arrangement Agreement. The Termination Fee may discourage other parties from attempting to acquire the Company, even if those parties would otherwise be willing to offer greater value than that offered under the Arrangement. See “The Arrangement Agreement — Termination Fee” and “The Arrangement Agreement — Expense Reimbursement”.

If the Company is unable to complete the Arrangement or if completion of the Arrangement is delayed, there could be a Material Adverse Effect on the Company’s business, financial condition, operating results or the price of its Shares.

The completion of the Arrangement is subject to the satisfaction of numerous closing conditions, including the approval by Shareholders, receipt of the Competition Act Approval, expiration or termination of the applicable HSR Act waiting period, such other consents and approvals agreed by the Company and the Parent, and receipt of the Final Order. A substantial delay in obtaining satisfactory approvals and/or the imposition of unfavourable terms or conditions in the approvals to be obtained could have an adverse effect on the business, financial condition or results of operations of the Company or could result in the termination of the Arrangement Agreement.

Even if the Arrangement Agreement is terminated without payment of the Termination Fee, the Company may, in the future, be required to pay the Termination Fee in certain circumstances.

Under the Arrangement Agreement, the Company may be required to pay the Termination Fee to the Parent at a date subsequent to the termination of the Arrangement Agreement if the Arrangement Agreement is terminated in certain circumstances and (i) prior to such termination an Acquisition Proposal (for these purposes, the term “Acquisition Proposal” has the meaning assigned to it in the Glossary attached to this Circular as Exhibit A, except that references to “20%” shall be deemed to be references to “50% or more”) is made known to the Company or publicly disclosed and (ii) within 12 months following such termination, the Company shall have entered into a definitive agreement providing for, or completed the implementation of, an Acquisition Proposal. See “The Arrangement Agreement — Termination Fee”.

The Company has dedicated significant resources to pursuing the Arrangement and while the Arrangement is pending, the Company is restricted from taking certain actions.

Under the Arrangement Agreement, the Company is subject to customary non-solicitation provisions and must generally conduct its business in the ordinary course. Before the completion of the Arrangement or termination of the Arrangement Agreement, the Company is restricted from taking certain specified actions without the consent of the Parent (such consent not to be unreasonably withheld, conditioned or delayed). These restrictions may prevent the Company from pursuing attractive business opportunities that may arise prior to the completion of the Arrangement. See “The Arrangement Agreement — Covenants”. If the Arrangement is not completed for any reason, the announcement of the Arrangement, the dedication of the Company’s resources to the completion thereof and the restrictions that were imposed on the Company under the Arrangement Agreement may have an adverse effect on the current and future operations, financial condition and prospects of the Company.

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Uncertainty surrounding the Arrangement could adversely affect the Company’s retention of suppliers.

The Arrangement is dependent upon satisfaction of various conditions, and as a result, its completion is subject to uncertainty. In response to this uncertainty, the Company’s suppliers may delay or defer decisions concerning the Company. Any change, delay or deferral of those decisions by suppliers could negatively impact the Company’s business, operations and prospects, regardless of whether the Arrangement is ultimately completed.

The Company’s directors and officers may have interests in the Arrangement that are different from those of Shareholders.

In considering the recommendation of the Transaction Committee and the Board of Directors to vote in favour of the Arrangement Resolution, Shareholders should be aware that certain members of the Board of Directors and officers of the Company may have agreements or arrangements that provide them with interests in the Arrangement that differ from, or are in addition to, those of Shareholders, generally. See “The Arrangement — Interests of Certain Persons in the Arrangement”.

Shareholders will no longer hold an interest in the Company following the Arrangement.

Following the Arrangement, Shareholders will no longer hold any of the Shares and Shareholders will forego any future increase in value that might result from future growth and the potential achievement of the Company’s long-term plans. In the event that the value of the Company’s assets or business, prior, at or after the Effective Date, exceeds the implied value of the Company under the Arrangement, Shareholders will not be entitled to additional consideration for their Shares.

The Arrangement is generally a taxable transaction.

The Arrangement will generally be a taxable transaction for Canadian income tax purposes and U.S. federal income tax purposes and, as a result, Shareholders that are Canadian residents or U.S. persons will generally be required to pay Canadian income tax or U.S. federal income tax, respectively, on any gains that result from their receipt of Consideration pursuant to the Arrangement, subject to the discussion below in “Certain U.S. Federal Income Tax Considerations” and “Certain Canadian Federal Income Tax Considerations” below.

The Company, the Parent and the Purchaser may be the targets of legal claims, securities class actions, derivative lawsuits and other claims. Any such claims may delay or prevent the Arrangement from being completed.

The Company, the Parent and the Purchaser may be the target of securities class actions and derivative lawsuits which could result in substantial costs and may delay or prevent the Arrangement from being completed. Securities class action lawsuits and derivative lawsuits may be brought against companies that have entered into an agreement to acquire a public company or to be acquired. Third parties may also attempt to bring claims against the Company, the Parent or the Purchaser seeking to restrain the Arrangement or seeking monetary compensation or other remedies. Even if the lawsuits are without merit, defending against these claims can result in substantial costs and divert management time and resources. Additionally, if a plaintiff is successful in obtaining an injunction prohibiting consummation of the Arrangement, then that injunction may delay or prevent the Arrangement from being completed.

In addition, political and public attitudes towards the Arrangement could result in negative press coverage and other adverse public statements affecting the Company. Adverse press coverage and other adverse statements could lead to investigations by regulators, legislators and law enforcement officials or in legal claims or otherwise negatively impact the ability of the Company to conduct its business.

The pending Arrangement may divert the attention of the Company’s management.

The pendency of the Arrangement could cause the attention of the Company’s management to be diverted from the day-to-day operations and suppliers may seek to modify or terminate their business relationships with the Company. These disruptions could be exacerbated by a delay in the completion of the Arrangement and could have an adverse effect on the business, operating results or prospects of the Company.

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ARRANGEMENT MECHANICS

Depositary Agreement

Prior to the Effective Date, the Company, the Parent, the Purchaser and the Depositary, in its capacity as depositary under the Arrangement Agreement, will enter into a depositary agreement.

Pursuant to the Arrangement Agreement, the Purchaser shall deposit, or arrange to be deposited for the benefit of Shareholders (other than Dissenting Holders) sufficient funds to satisfy the Aggregate Arrangement Consideration payable to Shareholders pursuant to the Plan of Arrangement, which funds shall be held by the Depositary in escrow as agent and nominee for such Shareholders.

Certificates and Payment

Upon surrender to the Depositary for cancellation of a certificate or DRS Advice which immediately prior to the Effective Time represented outstanding Shares that were transferred pursuant to the Plan of Arrangement, together with a duly completed and executed Letter of Transmittal and such additional documents and instruments as the Depositary may reasonably require, the registered holder of the Shares represented by such surrendered certificate or DRS Advice shall be entitled to receive in exchange therefor, and the Depositary shall deliver to such holder following the Effective Time, the Consideration which such holder has the right to receive under the Plan of Arrangement for such Shares, without interest, less any amounts withheld in respect of taxes pursuant to the Plan of Arrangement, and any certificate or DRS Advice so surrendered shall forthwith be cancelled.

On or as soon as practicable after the Effective Time (and in any event, no later than ten days thereafter), the Company shall deliver to each holder of Company Options and Company Deferred Share Units as reflected on the register maintained by or on behalf of the Company in respect of such Company Options and Company Deferred Share Units, the cash payments (or process the payment through the Company’s payroll systems or such other means as the Company may elect or as otherwise directed by the Purchaser including with respect to the timing and manner of such delivery), if any, which such holder of such Company Options and Company Deferred Share Units has the right to receive under the Plan of Arrangement for such Company Options and Company Deferred Share Units, less any amount withheld in respect of taxes pursuant to the Plan of Arrangement.

Until surrendered as contemplated above, each certificate or DRS Advice that immediately prior to the Effective Time represented Shares, shall be deemed after the Effective Time to represent only the right to receive upon such surrender the Consideration which the holder is entitled to receive in lieu of such certificate or DRS Advice contemplated above. Any such certificate or DRS Advice formerly representing Shares not duly surrendered on or before the sixth anniversary of the Effective Date shall cease to represent a claim by or interest of any former holder of Shares of any kind or nature against or in the Company, the Parent or the Purchaser. On such date, all Consideration to which such former holder was entitled shall be deemed to have been surrendered to the Purchaser, and shall be paid over by the Depositary to the Purchaser or as directed by the Purchaser.

Any payment made by the Depositary pursuant to the Plan of Arrangement that has not been deposited or has been returned to the Depositary or that otherwise remains unclaimed, in each case, on or before the sixth anniversary of the Effective Date, and any right or claim to payment under the Arrangement Agreement that remains outstanding on the sixth anniversary of the Effective Date shall cease to represent a right or claim of any kind or nature and the right of the holder to receive the applicable consideration for the Affected Securities pursuant to the Plan of Arrangement shall terminate and be deemed to be surrendered and forfeited to the Purchaser or the Company, as applicable, for no consideration.

No holder of Affected Securities shall be entitled to receive any consideration with respect to such Affected Securities other than the Consideration or the cash payment, if any, which such holder is entitled to receive in accordance with Section 2.3 and Section 4.1 of the Plan of Arrangement and, for greater certainty, no such holder will be entitled to receive any interest, dividends, premium or other payment in connection therewith other than, in respect of Shares, any declared but unpaid dividends with a record date prior to the Effective Date.

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In the event any certificate which immediately prior to the Effective Time represented one (1) or more Shares that were transferred pursuant to the Plan of Arrangement shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Shareholder claiming such certificate to be lost, stolen or destroyed and who was listed immediately prior to the Effective Time as the registered holder thereof on the register of Shareholders maintained by or on behalf of the Company, the Depositary will issue in exchange for such lost, stolen or destroyed certificate, the cash payment to which such holder is entitled to receive for such Shares under the Plan of Arrangement. When authorizing such payment in exchange for any lost, stolen or destroyed certificate, the Shareholder to whom such cash is to be delivered shall as a condition precedent to the delivery of such cash, give a bond satisfactory to the Parent and the Depositary, if requested (each acting reasonably) in such sum as the Parent may direct (acting reasonably), or otherwise indemnify the Parent, the Purchaser and the Company in a manner satisfactory to the Parent and the Company, each acting reasonably, against any claim that may be made against the Parent, the Purchaser or the Company with respect to the certificate alleged to have been lost, stolen or destroyed.

The Parent, the Purchaser, the Company, Subco and the Depositary, as applicable, shall be entitled to deduct and withhold from any amount otherwise payable or deliverable to any person under the Plan of Arrangement, such amounts as the Parent, the Purchaser, the Company, Subco or the Depositary, as applicable, are required to deduct and withhold, or reasonably believe to be required to deduct and withhold, from such amount otherwise payable or deliverable under any provision of any applicable Laws in respect of taxes (including, but not limited to, the Tax Act and the Code). Any such amounts will be deducted, withheld and remitted from the amount otherwise payable or deliverable pursuant to the Plan of Arrangement and shall be treated for all purposes under the Plan of Arrangement as having been paid to the person in respect of which such deduction, withholding and remittance was made; provided that such deducted and withheld amounts are actually remitted to the appropriate Governmental Body.

Letter of Transmittal

In order to receive the Consideration, the registered Shareholders must complete and sign the Letter of Transmittal that can be found on the Company’s SEDAR profile at www.sedar.com, and deliver such letter and the other documents required by it, including the certificate(s) and/or DRS Advice(s) representing the Shares, to the Depositary in accordance with the instructions contained in the Letter of Transmittal.

The Letter of Transmittal contains procedural information relating to the Arrangement and should be reviewed carefully.

Non-registered Shareholders holding Shares that are registered in the name of an Intermediary on their behalf must contact their Intermediary for instructions and assistance in receiving the Consideration.

The Consideration will be denominated in U.S. dollars. A Shareholder may prior to the Effective Date elect instead to receive payment in Canadian dollars by checking the applicable box on the Letter of Transmittal. The Depositary’s currency exchange services will be used to convert payment of the Consideration that each Shareholder is entitled to receive.

The exchange rate that will be used to convert payments from U.S. dollars into Canadian dollars will be the rate established by Computershare, in its capacity as foreign exchange service provider to the Company, on the date the funds are converted; which rates will be based on the daily exchange rate posted by the Bank of Canada on such date. The risk of any fluctuations in exchange rates, including risks relating to the particular date and time at which funds are converted, will be borne solely by the registered participating Shareholder. The Depositary, in its capacity as the foreign exchange service provider, will act as principal in such currency conversion transactions.

The Purchaser reserves the right, if it so elects, in its absolute discretion, to instruct the Depositary to waive or not to waive any and all errors or other deficiencies in any Letter of Transmittal or other document and any such waiver or non-waiver will be binding upon the affected Shareholders. The granting of a waiver to one or more Shareholders does not constitute a waiver for any other Shareholders. The Company and the Purchaser reserve the right to demand strict compliance with the terms of the Letters of Transmittal and the Arrangement. The method used to deliver the Letter of Transmittal and any accompanying certificate(s) and/or DRS Advice(s) representing the Shares is at the option and risk of the holder surrendering them, and

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THE ARRANGEMENT AGREEMENT

The Arrangement will be carried out pursuant to the Arrangement Agreement and the Plan of Arrangement. The following is a summary only of the principal terms of the Arrangement Agreement. This summary does not purport to be complete and is qualified in its entirety by reference to the Arrangement Agreement (which has been filed by the Company under its SEDAR profile at www.sedar.com) and to the Plan of Arrangement (attached to this Circular as Appendix C). Shareholders are encouraged to read the Arrangement Agreement and the Plan of Arrangement in their entirety. The Arrangement Agreement establishes and governs the legal relationship between the Company, the Parent and the Purchaser with respect to the transactions described in this Circular. It is not intended to be a source of factual, business, or operational information about the Company, the Parent or the Purchaser.

Conditions to the Arrangement Becoming Effective

Mutual Conditions Precedent

Under the Arrangement Agreement, the respective obligations of each Party to consummate the Arrangement is subject to the satisfaction or waiver by the Parent and the Purchaser, or by the Company (in each case, to the extent permitted by applicable Law) at or prior to the Effective Time of the following conditions:

(a)

the Arrangement Resolution shall have been approved and adopted by the Shareholders at the Meeting in accordance with the Interim Order;

(b)

the Interim Order and the Final Order shall have each been obtained on terms consistent with the Arrangement Agreement and have not been set aside or modified in a manner unacceptable to either the Company or the Parent, each acting reasonably, on appeal or otherwise;

(c)

no (i) injunction or similar order by any Governmental Body having competent jurisdiction over Parent, Purchaser, the Company, or any of their respective Subsidiaries that prohibits the consummation of the Arrangement and the other Transactions shall have been entered and shall continue to be in effect or (ii) Law shall have been enacted, entered, promulgated, enforced, or deemed applicable by any Governmental Body having competent jurisdiction over Parent, Purchaser, the Company, or any of their respective Subsidiaries, that, in any case, prohibits or makes illegal the Transactions (any such order, injunction, or Law in clause (i) or (ii), a “Legal Restraint”); and

(d)

(i) any waiting period under the HSR Act and such other filings agreed by the Company and the Parent (and any extension thereof) shall have expired or been earlier terminated; (ii) the Competition Act Approval shall have been received; (iii) all other authorizations, consents, orders, approvals, filings, and declarations, and all expirations of waiting periods, required under the applicable Antitrust Laws and Foreign Direct Investment Laws with respect to the Arrangement agreed by the Company and the Parent shall have been made, expired, terminated, or obtained, as the case may be (all authorizations, consents, orders, approvals, filings, and declarations and the lapse of all such waiting periods, including under the HSR Act, of such jurisdictions being the “Requisite Regulatory Approvals”); and (iv) all Requisite Regulatory Approvals shall be in full force and effect.

Additional Conditions Precedent to the Obligations of the Company

The obligation of the Company to consummate the Arrangement is further subject to the satisfaction or waiver by the Company (to the extent permitted by applicable Law) of the following conditions:

(a)

the representations and warranties of the Parent and the Purchaser set forth in Schedule D of the Arrangement Agreement (without regard to any qualification as to materiality or Parent Material Adverse Effect in such representations and warranties) shall be true and correct both when made and at and as of the Closing Date, as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such date), except where the failures of such representations and warranties to be so true and correct would not, individually or in the aggregate, reasonably be expect to have a Parent Material Adverse Effect;

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(b)

the Parent and the Purchaser shall have performed in all material respects all obligations required to be performed by them under the Arrangement Agreement at or prior to the Effective Time;

(c)

the Parent shall have delivered to the Company a certificate, dated as of the Closing Date and signed by a duly authorized officer thereof, certifying to the effect that the conditions relating to the accuracy of their representations and warranties, and confirming that both the Parent and the Purchaser have performed all obligations required by them at or prior to the Effective Time; and

(d)

the Purchaser has deposited or caused to be deposited with the Depositary the Aggregate Arrangement Consideration to be received by Shareholders under the Arrangement Agreement and the Plan of Arrangement.

Additional Conditions Precedent to the Obligations of the Parent and Purchaser

The obligations of the Parent and the Purchaser to consummate the Arrangement are further subject to the satisfaction or waiver by the Parent and the Purchaser (to the extent permitted by applicable Law) of the following conditions:

(a)

(i)

the representations and warranties of the Company as relating to authorized share capital (except for de minimis inaccuracies) shall be true and correct in all respects, both when made and at and as of the Closing Date, as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such date);

(ii)

the representations and warranties of the Company relating to an absence of any Material Adverse Effect since December 31, 2022, the Centerview Fairness Opinion, the Bloom Burton Opinion, and the Company’s engagement with its financial advisors, shall be true and correct in all respects both when made and at and as of the Closing Date, as if made at and as of such time;

(iii)

representations and warranties of the Company relating to due organization, Subsidiaries, Constating Documents, rights associated with outstanding Shares, the Company’s power and authority to perform its obligations under the Arrangement Agreement, no conflicts/non-contravention and consents, and the shareholder vote requirement (in each case, disregarding all materiality and Material Adverse Effect qualifications contained therein) shall be true and correct in all material respects, both when made and at and as of the Closing Date, as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such date); and

(iv)

the other representations and warranties of the Company set forth in Schedule C of the Arrangement Agreement (disregarding all materiality and Material Adverse Effect qualifications contained therein) shall be true and correct both when made and at and as of the Closing Date, as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case as of such date), except with respect to this clause (iv) where the failure of such representations and warranties to be so true and correct would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(b)

The Company shall have performed in all material respects all obligations required to be performed by it under the Arrangement Agreement at or prior to the Effective Time.

(c)

Since the date of the Arrangement Agreement there shall not have occurred a Material Adverse Effect that is continuing.

(d)

The Company shall have delivered to the Parent a certificate, dated as of the Closing Date, and signed by its Chief Executive Officer or another senior officer, certifying to the effect that the conditions relating to accuracy of certain representations and warranties, the Company’s performance of its obligations in all material respects, and absence of a Material Adverse Effect have been satisfied.

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(e)

The aggregate number of Shares held by Shareholders that have validly exercised Dissent Rights in connection with the Arrangement shall not have exceed 10% of the number of Shares then outstanding.

Frustration of Closing Conditions

If any Party fails to perform their obligations under the Arrangement Agreement, and that Party’s failure is the principle cause of a failure of satisfaction of any closing condition (mutual or otherwise), that same Party may not rely on their own failure to consummate the Arrangement, terminate the Arrangement Agreement or abandon the Arrangement.

Deemed Satisfaction of Conditions

The conditions precedent, mutual or otherwise, as set forth in the Arrangement Agreement will be conclusively deemed to have been satisfied, waived or released when the Certificate of Arrangement is issued by the CBCA Director. For greater certainty, and notwithstanding the terms of any escrow arrangement entered into between the Purchaser and the Depositary, all funds held in escrow by the Depositary pursuant to the Arrangement Agreement shall be deemed to be released from escrow when the Certificate of Arrangement is issued.

Representations and Warranties

The Arrangement Agreement contains representations and warranties of Company, the Parent and the Purchaser.

Some of the representations and warranties in the Arrangement Agreement made by the Company are qualified as to “materiality” or “Material Adverse Effect.” For purposes of the Arrangement Agreement, a “Material Adverse Effect” means an event, effect, change, occurrence, condition, circumstance, state of facts or development or combination of the foregoing (an “Effect”) that, individually or taken together, has had or would reasonably be expected to have a material adverse effect on the Product or the business, assets, liabilities, properties, operations, condition (financial or otherwise), or results of operations of the Company and its Subsidiaries, taken as a whole; provided that no Effect arising out of or resulting from any of the following shall be deemed either alone or in combination to constitute a Material Adverse Effect, and none of the following shall be taken into account in determining whether there is, or would reasonably likely to be, a Material Adverse Effect:

(a)

any change in the market price or trading volume of the Shares;

(b)

any event, effect, change, occurrence or development resulting from the execution or announcement of the Arrangement Agreement (including the identity of the Parent) (other than (i) for purposes of any representation or warranty in Section 5 of Schedule C of the Arrangement Agreement but subject to disclosures in Section 5 of the Company Disclosure Schedule or (ii) any other representation or warranty that addresses the consequences resulting from the execution or announcement of the Arrangement Agreement);

(c)

general changes or developments in the clinical-stage biopharmaceutical industry or changes in the economy generally or changes in other general business, financial, or market conditions (including interest rates, exchange rates, tariffs, trade wars, and credit markets);

(d)

fluctuations in the value of any currency;

(e)

(i) changes to any domestic, foreign or global political condition, (ii) any act of terrorism, war (whether or not declared), civil unrest, civil disobedience, protests, public demonstrations, insurrection, national or international calamity, sabotage or terrorism, (iii) any pandemic or epidemic (including COVID-19) or other outbreak of contagious diseases (or the escalation or worsening of any of the foregoing) or (iv) any volcano, tsunami, earthquake, hurricane, tornado, other natural or man-made disaster, or act of God, or any similar force majeure event;

(f)

the failure of the Company to meet internal or analyst’s expectation, forecast, estimate, or prediction in respect of revenues, earnings, or other financial or operating metrics for any period;

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(g)

any action taken (or failure to act) by the Company at the written direction of the Parent and any action specifically required to be taken by the Company under the Arrangement Agreement (excluding the requirement that the Company use reasonable best efforts to conduct its business in all material respects in the ordinary course); or

(h)

any change in, or any compliance with or action taken for the purpose of complying with, any applicable law or IFRS (or authoritative interpretations of any applicable law or IFRS), after the date hereof;

For the purpose of clauses (a) and (f) above, it is understood that the underlying cause of any such change, decline or failure referred to therein (if not falling under any other exception above) is or would be reasonably likely to be a Material Adverse Effect or has otherwise resulted in or contributed to a Material Adverse Effect, provided further that with respect to subclauses (c), (d), (e) and (h), if such Effect disproportionately affects the Product or the Company and its Subsidiaries, taken as a whole, compared to other similar biopharmaceutical companies or biopharmaceutical companies generally, then such Effect shall be taken into account in determining whether there has been, or would reasonably expected to be, a Material Adverse Effect.

In the Arrangement Agreement, the Company has made customary representations and warranties to the Parent and the Purchaser that are subject, in some cases, to specified exceptions and qualifications contained in the Arrangement Agreement and the Company Disclosure Schedule. These representations and warranties relate to, among other things, (a) the Company and its Subsidiaries’ due organization, valid existence, good standing, and authority and qualification to conduct business, (b) Constating Documents of the Company and its Subsidiaries, (c) ownership and capital structure of the Company, (d) the Company’s corporate power and authority to execute, deliver, and perform its obligations under the Arrangement Agreement and the enforceability of the Arrangement Agreement against the Company, (e) no conflicts/ non-contravention and consents, (f) the required vote of the shareholders of the Company to consummate the Arrangement, (g) Shareholders’ and similar agreements, (h) the corporate minute books of the Company and its Subsidiaries, (i) the Board of Directors and Transaction Committee approval, (j) the auditors of the Company, (k) the absence of transactions with directors, officers, employees or any of their respective associates or Affiliates, except in the ordinary course of business, (l) Canadian Securities Laws matters and U.S. Securities Laws matters, (m) the Company’s financial statements, (n) disclosure controls and internal controls over financial reporting, (o) the absence of any Material Adverse Effects since December 31, 2022 and the Company’s operation in all material respects in the ordinary course of business consistent with past practice since December 31, 2022, (p) title to assets of the Company and its Subsidiaries, (q) ownership and leases of real property, (r) intellectual property matters, (s) data privacy and information security matters, (t) the existence, validity, and enforceability of specified categories of the Company’s Material Contracts, (u) the absence of undisclosed liabilities, (v) the Company’s compliance with applicable Laws, (w) regulatory matters, (x) Anti-Corruption Laws, Sanctions, and similar rules and regulations, (y) valid government authorizations, (z) tax matters, (aa) employee and labor matters, (bb) environmental matters, (cc) insurance held by the Company, (dd) Legal Proceedings against the Company, (ee) the Centerview Fairness Opinion and the Bloom Burton Fairness Opinion, (ff) Centerview’s and Bloom Burton’s respective engagements with the Company, (gg) the absence of related party transactions, except as disclosed or in the ordinary course of business, and (hh) the Company’s Major Suppliers.

In the Arrangement Agreement, the Parent and the Purchaser have made customary representations and warranties to the Company that are subject, in some cases, to specified exceptions and qualifications contained in the Arrangement Agreement. These representations and warranties relate to, among other things, (a) the Parent and the Purchaser’s due organization, valid existence, and good standing with respect to their respective jurisdictions of organization, (b) the Parent’s and the Purchaser’s corporate power and authority to execute and deliver the Arrangement Agreement and perform their respective obligations thereunder, and the enforceability of the Arrangement Agreement against the Parent and the Purchaser, (c) no conflicts/ non-contravention and consents, (d) no Legal Proceedings against the Parent or the Purchaser reasonably be expected to have a Parent Material Adverse Effect, (e) availability of funds, (f) the Parent and the Purchaser’s absence of ownership of shares of the Company and its affiliates, (g) information relating to brokers and other advisors, and (h) each of the Parent and the Purchaser being a trade agreement investor that is not a state-owned enterprise, and not a Russian investor, all within the meaning and for the purposes of the Investment Canada Act (Canada).

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The representations and warranties of each of the Parties contained in the Arrangement Agreement do not survive the completion of the Arrangement and expire and terminate on the earlier of the Effective Time and the date on which the Arrangement Agreement is terminated in accordance with its terms.

Covenants

The Arrangement Agreement also contains customary negative and affirmative covenants of each of the Company, the Parent and the Purchaser.

Conduct of Business of the Company

(a)

Subject to certain exceptions set forth in the Arrangement Agreement or as required by applicable Laws, during the period from the date of the Arrangement Agreement until the earlier of the Effective Time and the termination of the Arrangement Agreement in accordance with Section 7.1 of the Arrangement Agreement (the “Pre-Closing Period”), the Company shall, and shall cause its Subsidiaries to (x) conduct its business in the ordinary course in a manner consistent with the past practice of the Company prior to the date of the Arrangement Agreement and (y) use reasonable best efforts to preserve intact the value of the Company’s business, its business organizations and relationships with employees, customers, suppliers, licensors, licensees, Governmental Body and other persons.

(b)

During the Pre-Closing Period, except (A) as expressly required by the Arrangement Agreement or by applicable Laws, (B) with the prior written consent of the Parent, which consent shall not be unreasonably withheld, conditioned, or delayed or (C) as set forth in the Company Disclosure Schedule, neither Company nor any of its Subsidiaries shall:

(i)

(A) establish a record date for, declare, accrue, set aside, or pay any dividend or make any other distribution in respect of any securities (including the Shares) (other than with respect to any dividend or distribution by a direct or indirect wholly owned Subsidiary to its direct or indirect parent consistent with past practice) or (B) other than with respect to transactions among the Company and its wholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries, repurchase, redeem, or otherwise reacquire any securities (including any Share), or any right, warrant, or option to acquire any securities, other than in connection with the forfeiture, vesting, exercise, or settlement of Company Options or in connection with withholding to satisfy the Exercise Price and/or Tax obligations with respect to Company Options;

(ii)

split, combine, subdivide, or reclassify any of its securities (including the Shares) or other equity interests;

(iii)

sell, issue, grant, deliver, pledge, transfer, encumber, or authorize the issuance, sale, delivery, pledge, transfer, Encumbrance, or grant by the Company of (A) any Share, equity interest, or other security of the Company, (B) any option, call, warrant, restricted securities, or right to acquire any Share, equity interest, or other security of the Company, or (C) any instrument convertible into, exchangeable for or with respect to any Share, equity interest, or other security of the Company (except on the exercise of Company Options in accordance with their present terms);

(iv)

adopt a plan or agreement of complete or partial liquidation or dissolution, merger, consolidation, restructuring, recapitalization, or other reorganization of the Company or any of its Subsidiaries;

(v)

except as required by the express terms of the Arrangement Agreement or as may be required under applicable Law or the terms of any Employee Plan as in effect on the date of the Arrangement Agreement: (A) establish, adopt, terminate, amend, renew, announce or waive any rights with respect to (or commit to do any of the preceding in respect of) any Employee Plan or other compensation or benefit, plan, program, policy, practice, agreement or arrangement that would constitute an Employee Plan if in effect on the date of the

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Arrangement Agreement; (B) take any action to accelerate the vesting or payment, or fund or in any other way secure the payment, of any compensation or benefits under any Employee Plan; (C) increase the compensation or benefits payable to any Company Associate; (D) grant, provide or amend the terms of any change-of-control, retention, severance or termination compensation or benefits to any Company Associate; or (E) hire (other than as set forth in the Company Disclosure Schedule), terminate (other than for cause), or lay off (or give notice of any such action to) any Company Associate;

(vi)

amend or permit the adoption of any amendment to any of its Constating Documents;

(vii)

form any Subsidiary, acquire any equity interest or equity-linked interest in any other Entity (other than securities in a publicly traded company held for investment by the Company and consisting of less than 1% of the outstanding capital stock of such Entity) or enter into any joint venture, partnership, limited liability corporation, or similar arrangement;

(viii)

make or authorize aggregate capital expenditures other than as set forth in the Company’s capital expense budget made available to the Parent or the Parent’s Representatives;

(ix)

acquire, lease, license, sublicense, pledge, sell, or otherwise dispose of, abandon, waive, relinquish or fail to renew, permit to lapse (other than in the Company’s reasonable judgment), transfer, assign, encumber, or subject to any material Encumbrance (other than Permitted Encumbrances) any material right or other material asset or property, excluding any Intellectual Property Right or other right in or to any Company Product (except, in the case of any of the foregoing, (A) in the ordinary course of business, (B) pursuant to dispositions of obsolete, surplus, or worn-out assets that are no longer useful for the conduct of the business of the Company or any of its Subsidiaries and (C) as permitted by Section 4.2(b)(viii) of the Arrangement Agreement);

(x)

(A) acquire, lease, license, sublicense, pledge, sell, or otherwise dispose of, abandon, waive, relinquish or fail to renew, permit to lapse, transfer, assign, encumber, or subject to any material Encumbrance (other than Permitted Encumbrances), fail to diligently prosecute, renew or maintain, waive, allow to lapse, grant a third party any right to receive payments with respect to, or grant a covenant-not-to-assert to a third party with respect to (x) any Company Product or any Intellectual Property Rights relating to any Company Product or (y) any other material Company IP (in the case of clause (x) or (y), except for non-exclusive licenses or sublicenses in the ordinary course of business to contract manufacturers, contract research organizations or distributors, in each case, subject to written confidentiality obligations with respect to any Trade Secrets); or (B) enter into, terminate, or exercise or waive any option under any collaboration, development, research, commercialization or royalty agreement or any other similar agreement in connection with or relating to any Company Product, any Company IP relating to any Company Product or any other material Company IP;

(xi)

disclose any Trade Secrets relating to any Company Product or that are otherwise material to the Company or any of its Subsidiaries to any third party, other than in the ordinary course of business pursuant to written confidentiality obligations binding on such third party;

(xii)

(A) acquire, or agree to acquire, fee ownership (or its jurisdictional equivalent) of any real property or (B) enter into, amend, renew (or fail to exercise a renewal option under), or modify a Company Lease if such Company Lease, amendment, renewal, or modification would increase the aggregate amount of payments under such Company Lease (as amended, renewed, or modified, as the case may be) by in excess of $250,000 or terminate any Company Lease (except any termination that shall occur at the end of the maximum term of such Company Lease, other than by extending such term through the payment of any extension fee in excess of $250,000);

(xiii)

make any material capital contribution or advance to, or material investment in, any person (other than between the Company and any of its wholly owned Subsidiaries), or incur, assume, prepay, repurchase, redeem, modify in any material respect or guarantee any

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indebtedness for borrowed money (except for (A) advances to employees and consultants for travel and other business-related expenses in the ordinary course of business and (B) any drawdown of any existing credit facility of the Company or any of its Subsidiaries as of the date of the Arrangement Agreement);

(xiv)

amend or modify, accelerate or waive any material right under, terminate, replace, or release, settle, or compromise any material claim, liability, or obligation under any Material Contract or enter into any Contract that, if entered into prior to the date of the Arrangement Agreement, would have been a Material Contract (except for any non-exclusive licenses or sublicenses in the ordinary course of business to contract manufacturers, contract research organizations or distributors, in each case, subject to written confidentiality obligations with respect to any Trade Secrets and provided no such Contract purports, after the Effective Time, to grant any third party any license, covenant not-to-assert or other right with respect to any Intellectual Property Rights owned by or licensed to the Parent or its Subsidiaries or to otherwise subject the Parent or its Subsidiaries to any non-compete or other restrictions on the operation or scope of its business);

(xv)

amend or modify in any material respect any privacy policies, or any administrative, technical, or physical safeguards related to privacy or cybersecurity except to remediate any security issue, to enhance data security or integrity, to comply with or improve compliance with applicable Law, as otherwise directed or required by a Governmental Body, or in relation to any new or updated software, products or technologies of the Company and its Subsidiaries;

(xvi)

commence any Legal Proceeding, except: (A) with respect to routine matters in the ordinary course of business; (B) in such cases where the Company reasonably determines in good faith that the failure to commence suit would result in a material impairment of a valuable aspect of its business (provided that the Company consults with the Parent and considers in good faith the views and comments of the Parent with respect to any such Legal Proceeding prior to commencement thereof); or (C) in connection with a breach of the Arrangement Agreement or any other agreement contemplated thereby;

(xvii)

settle, release, waive, or compromise any Legal Proceeding or other claim (or threatened Legal Proceeding or other claim), other than as agreed by the Parties in the Arrangement Agreement.

(xviii)

negotiate, adopt, enter into, amend, or terminate any Collective Bargaining Agreement or other similar arrangement relating to unions, work council, similar entities or other organized employees, or voluntarily recognize any new union, works council or similar entities or other organized employees;

(xix)

enter into any Contract that materially limits the freedom or right of the Company or any of its Subsidiaries (or following the Closing, the Parent, the Purchaser, or the Company or their respective Affiliates or investors or Affiliates of such investors) to sell, distribute or manufacture any product or service either (A) by materially limiting any freedom or right to engage in any line of business or to compete with any other person in any location or line of business or (B) by providing “most favored nation” rights (including with respect to pricing) or exclusivity obligations or restrictions, in each case, in favor of a party other than the Company or any of its Subsidiaries;

(xx)

change in any material respect their material financial accounting principles, practices or methods, except as required by IFRS or applicable Law;

(xxi)

in each case, except in the ordinary course of business: (A) make, change, or rescind any material Tax election; (B) settle or compromise any material Tax claim; (C) change (or request to change) any material method of accounting for Tax purposes; (D) file any material amended Tax Return or file any Tax Return in a manner materially inconsistent with past practice; (E) waive or extend any statute of limitations or consent to any waiver or extension in respect of a period within which an assessment or reassessment of material Taxes may be issued; (F) request any extension in respect of a period within which material Taxes must be

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paid; (G) apply for any material Tax ruling; (H) enter into any Tax sharing, allocation or similar agreement (other than such agreements or arrangements that form part of a commercial agreement or arrangement, the primary subject of which is not Tax, and agreements or arrangements wholly between the Company and/or its Subsidiaries) or (I) enter into any material “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar provision of state, local, or non-U.S. Tax Laws) or material voluntary disclosure agreement or material Tax amnesty filing with any Governmental Body;

(xxii)

abandon or fail to maintain or perform any material obligations with respect to, any material Regulatory Authorizations;

(xxiii)

with regard to any Company Product in development, (A) initiate or commence any new clinical trials, (B) materially amend or modify any existing clinical trial protocols, study recruitment efforts, study enrollment activities or clinical trial timelines, or (C) terminate any ongoing clinical trials or activities for planned clinical trials, unless in the case of any of (A) through (C), mandated or required by a Governmental Body;

(xxiv)

with regard to any Company Product in development or in commercial distribution, modify any specification for such Company Product unless such modification is mandated or required by a Governmental Body;

(xxv)

enter into any new material line of business;

(xxvi)

terminate, cancel or make any material changes to the structure, limits or terms and conditions of any material insurance policies, including allowing such insurance policies to expire without renewal or comparable replacement coverage or otherwise maintain insurance at less than current levels or otherwise in a manner inconsistent with past practice; or

(xxvii)

enter into or authorize, agree, or commit to take any action described in clauses (i) through (xxvi) above.

Nothing in the Arrangement Agreement gives to the Parent or the Purchaser, directly or indirectly, any right to control or direct the operations of the Company prior to the Effective Time. Prior to the Effective Time, each of the Parent and the Company exercise, consistent with the terms and conditions of the Arrangement Agreement, complete control and supervision of its respective operations and those of its Subsidiaries.

Covenants of the Company Relating to the Arrangement

Access to Information

Subject to applicable Law and other terms of the Arrangement Agreement, during the Pre-Closing Period, on reasonable advance notice to the Company, the Company shall, and shall cause its Subsidiaries to, promptly provide the Parent and the Parent’s Representatives with reasonable access during the Company’s normal business hours to the Company and its Subsidiaries and its personnel, and books and records reasonably in connection with strategic and integration planning, confirmatory due diligence or for other purposes reasonably related to the transactions contemplated by the Arrangement Agreement. Such information, as disclosed, will be subject to the obligations of the Parties under the Confidential Disclosure Agreement, dated March 2, 2023, between the Company and GlaxoSmithKline Services Unlimited (the “Confidentiality Agreement”). However, the Company may elect to withhold information that (i) is protected by attorney-client or other legal privilege or (ii) if disclosed, would contravene any applicable Law, fiduciary duty or agreement binding on the Company. In either case, the Company is still obligated to both inform the Parent and the Parent’s Representatives about the general nature of what is being withheld and reasonably cooperate to make appropriate substitute arrangements.

Filings, Consents and Approvals

Subject to the terms and conditions of the Arrangement Agreement, each of the Parties shall, and shall cause their respective Affiliates to, use their respective reasonable best efforts to take, or cause to be taken, all

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actions, to file, or cause to be filed, all documents, and to do, or cause to be done, and to assist and cooperate with the other Parties in doing, all things necessary, proper, or advisable under applicable Antitrust Laws or Foreign Direct Investment Laws to consummate and make effective the Transactions as soon as reasonably practicable. This includes actions or filings required by both the HSR Act and the Competition Act as well as applicable filings or consents listed in the Company Disclosure Schedule. Furthermore, the Arrangement Agreement includes specific terms that govern the cooperative efforts required by the Parent, the Purchaser and the Company.

Termination of 401(k) Plan

Effective as of no later than the day immediately preceding the Closing Date, if requested by the Parent in writing at least ten Business Days prior to the Closing Date, the Company shall cause the BELLUS Health 401(k) Retirement Savings Plan (the “401(k) Plan”) to be terminated. If the Parent provides such written notice to the Company, the Company shall provide Parent with evidence that the 401(k) Plan has been terminated (effective as of no later than the day immediately preceding the Closing Date), and the Company shall have taken all steps necessary to terminate the 401(k) Plan as Parent may reasonably require.

Securityholder Litigation

During the Pre-Closing Period, the Company shall, as promptly as possible after obtaining knowledge thereof, notify the Parent of any Legal Proceeding brought by security holders of the Company (including Shareholders) against the Company or its directors arising out of or relating to the Transactions. The Company shall control any such Legal Proceeding brought by securityholders of the Company (including Shareholders) against the Company or its directors arising out of or relating to the Transactions; provided that the Company shall give the Parent the right to participate in and timely consult with the Parent with respect to such Legal Proceeding and any settlement, release waiver or compromise of such litigation and the Company shall in good faith take any comments into account; provided that the disclosure of information in connection therewith shall be subject to the provisions of Section 4.1 of the Arrangement Agreement, including with respect to attorney-client privilege or any other applicable legal privilege. No such settlement shall be agreed without the Parent’s prior written consent (such consent not to be unreasonably withheld, conditioned, or delayed) (a) with respect to the exercise of any Dissent Rights and (b) except to the extent the settlement is fully covered by the Company’s insurance policies (other than any applicable deductible), but only if such settlement would not result in the imposition of any restriction on the business or operations of the Company, with respect to any other matters.

Stock Exchange Delisting; Deregistration

Prior to the Closing Date, the Company shall cooperate with the Parent and use its reasonable best efforts to take or cause to be taken all actions, and do or cause to be done all things, reasonably necessary, proper, or advisable on its part under applicable Law to cause the delisting by the Company of the Shares from the Nasdaq and TSX, the deregistration of the Shares under the Exchange Act and under any applicable Securities Laws as promptly as practicable after the Effective Time and to cause the Company to cease being a reporting issuer under any applicable Securities Laws as promptly as practicable after the Closing Date.

Regulatory Matters

Prior to the Closing Date, to the extent permissible under applicable Law, the Company must inform and provide the Parent with a reasonable opportunity to review and comment on, in advance, any material filing proposed to be made by or on behalf of the Company or any of its Subsidiaries with respect to any Company Product, and any material correspondence or other material communication proposed to be submitted or otherwise transmitted to the FDA, Health Canada, or any other Regulatory Authority by or on behalf of the Company or any of its Subsidiaries.

Prior to the Closing Date, to the extent permissible under applicable Law, the Company shall reasonably promptly (and in any event within three Business Days upon discovery by the Company) notify the Parent in writing of:

(a)

any material FDA Form 483, warning letter, untitled letter, or other similar material correspondence or notice from the FDA, Health Canada, or any other applicable Regulatory Authority alleging or

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asserting material noncompliance with any applicable Laws or Regulatory Authorizations received by the Company, its Subsidiaries, or to the knowledge of the Company, any of their respective contract manufacturers with respect to the Company Products;

(b)

any written notices, correspondence, or other communication from any institutional review board, the FDA, Health Canada, or any applicable Regulatory Authority, recommending or requiring the termination, suspension, or material modification of any ongoing or planned clinical trials conducted by, or on behalf of, the Company or any of its Subsidiaries;

(c)

any Legal Proceedings (whether complete or pending) or request from a Regulatory Authority seeking the recall, withdrawal, suspension or seizure of any Company Product; or

(d)

any written notice or other communication from any applicable Regulatory Authority (A) withdrawing or placing any of the Company Products on “clinical hold” or requiring the termination or suspension of any pre-clinical studies or clinical trials of the Company Products or (B) alleging any material violation of any applicable Law.

Covenants of the Parent and Purchaser Relating to the Arrangement

Section 338 Elections; Entity Classification Elections

The Parent and the Purchaser shall not make (and shall cause each of their respective Affiliates to not make) any election under Section 338 of the Code or any similar provision of any U.S. state or local or foreign law with respect to the Company or any of its Subsidiaries.

The Parent and the Purchaser shall not make (and shall cause each of their respective Affiliates to not make) any Entity classification election pursuant to U.S. Treasury Regulations Section 301.7701-3 with respect to the Company or any of its Subsidiaries, which election would be effective on or prior to the Closing Date.

Mutual Covenants of the Parties to the Arrangement

Additional Agreements Without limitation or contravention of the provisions of Section 4.3 of the Arrangement Agreement, and subject to the terms and conditions of the Arrangement Agreement, the Parent and the Company shall use reasonable best efforts to take, or cause to be taken, all actions necessary to consummate the Transactions. Without limiting the generality of the foregoing, subject to the terms and conditions of the Arrangement Agreement, each Party to the Arrangement Agreement shall:

(a)

make all filings (if any), obtain all consents (if any) and give all notices (if any) required to be made and given by such Party in connection with the Transactions pursuant to any applicable Law or Material Contract set forth in the Company Disclosure Schedule;

(b)

use reasonable best efforts to lift any restraint, injunction or other legal bar (other than with respect to Antitrust Laws and Foreign Direct Investment Laws) to the Arrangement Agreement or the Arrangement brought by any third person against such Party;

(c)

use reasonable best efforts to satisfy all conditions precedent in the Arrangement Agreement and take all steps set forth in the Interim Order and Final Order applicable to it and comply promptly with all requirements imposed by applicable Law on it or its Subsidiaries with respect to the Arrangement Agreement or the Arrangement; and

(d)

not take any action, or refrain from taking any commercially reasonable action, or permitting any action to be taken or not taken, in each case, which is inconsistent with the Arrangement Agreement or would reasonably be expected to prevent, materially delay or otherwise impede the consummation of the Arrangement or the transactions contemplated by the Arrangement Agreement.

The afore described provisions shall not apply to approval under Antitrust Laws or Foreign Direct Investment Laws. The Company shall give notice to the Parent as promptly as reasonably practicable after (and shall subsequently keep the Parent informed on a reasonably current basis of any developments related to such notice) it becomes aware (i) of the receipt of any notice from any person alleging that the consent of such person is or may be required in connection with any of the Transactions or (ii) that any Legal Proceeding

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has been commenced or threatened in writing relating to or involving the Company or any of its Subsidiaries that relates to the consummation of the Transactions. The Company is not required to pay for any such consent, nor shall obtaining any such filing, notice or consent be a condition precedent to the Closing. During the Pre-Closing Period, the Company and its Subsidiaries must keep the Parent promptly informed in writing of any material communication (written or oral) with or from the FDA, Health Canada, or any other Governmental Body or Regulatory Authority performing functions similar to those performed by the FDA related to a Company Product. The Company and its Subsidiaries must consult with, and consider any comment from, the Parent in good faith prior to making any material submissions to or having material discussions with the FDA, Health Canada, or any other Governmental Body or Regulatory Authority performing functions similar to those performed by the FDA.

The Company shall ensure that it has available (on hand or through capacity under a credit facility) funds to pay the Termination Fee, if payable.

Disclosure

Following the first public disclosure of the Transactions, none of the Parties or any of their Representatives acting on their behalf, shall, without the prior written consent of the other Parties (which consent shall not be unreasonably withheld, conditioned, or delayed) issue or cause the publication of any press release or otherwise make any public statement, disclosure, or communication with respect to the Transactions, subject to certain exceptions.

Notice and Cure Provisions

During the period commencing on the date of the Arrangement Agreement and continuing until the earlier of the Effective Time and the termination of the Arrangement Agreement in accordance with its terms, each Party shall promptly notify the other Party of the occurrence, or failure to occur, of any event or state of facts which occurrence or failure would, or would be reasonably likely to:

(a)

cause any of the representations or warranties of such Party contained in the Arrangement Agreement to be untrue or inaccurate in any material respect at any time from the date of the Arrangement Agreement to the Effective Time; or

(b)

result in the failure to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by such Party under the Arrangement Agreement.

Such notification will not affect the representations, warranties, covenants, agreements or obligations of the Parties (or remedies with respect thereto) or the conditions to the obligations of the Parties under the Arrangement Agreement.

The Parties may not elect to exercise their right of termination under the Arrangement Agreement, unless the Party seeking to terminate the Agreement (the “Terminating Party”) has delivered a written notice (“Termination Notice”) to the other Party (the “Breaching Party”) specifying in reasonable detail all breaches of covenants, representations and warranties or other matters which the Terminating Party asserts as the basis for termination. After delivering a Termination Notice, provided the Breaching Party is proceeding diligently to cure such matter and such matter is capable of being cured prior to the End Date, the Terminating Party may not exercise such termination right until the earlier of (i) the End Date, and (ii) the date that is 15 Business Days following receipt of such Termination Notice by the Breaching Party, if such matter has not been cured by such date, provided that, for greater certainty, if any matter is not capable of being cured by the End Date, the Terminating Party may immediately exercise the applicable termination right, and provided further that a breach caused by fraud or Willful Breach shall be deemed to be incapable of being cured.

If the Terminating Party delivers a Termination Notice prior to the date of the Meeting, unless the Parties agree otherwise, the Company shall postpone or adjourn the Meeting to the earlier of (i) five Business Days prior to the End Date and (ii) the date that is 15 Business Days following receipt of such Termination Notice.

TABLE OF CONTENTS

Other Actions

The Company shall and shall cause its Subsidiaries to take certain actions set forth in the Company Disclosure Schedule.

At least two Business Days prior to the Effective Time, the Company shall incorporate a new wholly-owned Subsidiary (“Canadian IP Transfer Co”) of Subco that will be incorporated in a jurisdiction designated by the Purchaser, the Constating Documents of which shall be reviewed and agreed upon by the Purchaser, acting reasonably.

Immediately following the amalgamation contemplated in Section 2.3(1) of the Plan of Arrangement and prior to the occurrence of the transactions contemplated in Section 2.3(2) of the Plan of Arrangement, Amalco (as defined below and in the Plan of Arrangement) shall, to the extent legally permissible, effectively transfer and assign, in writing, to Canadian IP Transfer Co all right, title and ownership in and to all Selected IP (as defined in the Company Disclosure Schedule) (including, without limitation, all rights to sue for past, current or future infringement thereof, all rights to register, prosecute, maintain and defend such Selected IP, and all income, royalties, profits and damages related thereto).

U.S. Tax Treatment of Amalgamation

The Parties intend that, for United States federal income tax purposes, the Amalgamation will qualify as a “reorganization” within the meaning of section 368(a) of the Code and the Treasury Regulations thereunder, to which each of Subco and the Company are to be parties under section 368(b) of the Code and the Treasury Regulations thereunder. The Plan of Arrangement, taken together with the Arrangement Agreement, is intended to be, and is adopted as, a plan of reorganization for purposes of sections 354, 361 and 368 of the Code and within the meaning of Treasury Regulations section 1.368-2(g). None of the Parties knows of any fact or circumstance (without conducting independent inquiry or diligence of the other relevant Parties), or has taken or will take any action, if such fact, circumstance or action would be reasonably expected to cause the Amalgamation to fail to qualify as a reorganization within the meaning of section 368(a) of the Code and the Treasury Regulations thereunder. The Amalgamation shall be reported by the Parties for all Tax purposes in accordance with the foregoing, unless otherwise required by a Governmental Body as a result of a “determination” within the meaning of section 1313(a) of the Code. The Parties shall cooperate with each other and their respective counsel to document and support the Tax treatment of the Amalgamation as a “reorganization” within the meaning of section 368(a) of the Code, including providing factual support letters.

Non-Solicitation

Except as expressly provided in the Arrangement Agreement, the Company shall not, and shall cause its Subsidiaries not to, directly or indirectly, through any of its or their Representatives or otherwise, and shall not permit or authorize any such person to:

(a)

solicit, assist, initiate, knowingly encourage, or otherwise knowingly facilitate (including by way of furnishing or providing copies of, access to, or disclosure of, any confidential or non-public information, properties, facilities, books or records of the Company or any of its Subsidiaries or entering into any form of agreement, arrangement or understanding) any inquiry, proposal, discussion, negotiation, or offer that constitutes or may reasonably be expected to constitute or lead to, an Acquisition Proposal;

(b)

subject to certain exceptions, enter into, continue, or otherwise initiate, solicit, knowingly encourage, engage, assist, or participate in or knowingly facilitate (including by the furnishing any confidential or non-public information regarding the Company or any of its Subsidiaries) any discussions or negotiations with any person (other than with the Parent, the Purchaser, the Parent’s Representatives or any person acting jointly or in concert with the Parent or the Purchaser) regarding any inquiry, proposal or offer that constitutes or may reasonably be expected to constitute or lead to, an Acquisition Proposal;

(c)

make a Change in Recommendation;

(d)

enter into, or publicly propose to enter into, any agreement, letter of intent, agreement in principle,

		RECOMMENDATION TO SHAREHOLDERS:
		THE BOARD OF DIRECTORS OF BELLUS HEALTH INC. UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
		FOR
		THE ARRANGEMENT RESOLUTION

	APPENDIX A GLOSSARY					A-1
	APPENDIX B ARRANGEMENT RESOLUTION					B-1
	APPENDIX C PLAN OF ARRANGEMENT					C-1
	APPENDIX D CENTERVIEW FAIRNESS OPINION					D-1
	APPENDIX E BLOOM BURTON FAIRNESS OPINION					E-1
	APPENDIX F INTERIM ORDER					F-1
	APPENDIX G NOTICE OF APPLICATION FOR FINAL ORDER					G-1
	APPENDIX H SECTION 190 OF THE CBCA					H-1

	Amendments					81
	Governing Law and Jurisdiction					81
	INFORMATION CONCERNING THE COMPANY					82
	General					82
	Description of Share Capital					82
	Trading in Shares					82
	Material Changes in the Affairs of the Company					83
	Previous Purchases and Sales of Securities					83
	Previous Distributions of Shares					84
	Dividend Policy					84
	INFORMATION CONCERNING THE PURCHASER AND THE PARENT					85
	CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS					86
	Holders Resident in Canada					86
	Holders Not Resident in Canada					88
	CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS					90
	Passive Foreign Investment Company Status					91
	U.S. Federal Income Tax Consequences of the Arrangement to U.S. Holders					92
	INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS					95
	AUDITOR					95
	OTHER INFORMATION AND MATTERS					95
	LEGAL MATTERS					95
	ADDITIONAL INFORMATION					95
	DIRECTORS’ APPROVAL					95
	CONSENT OF CENTERVIEW PARTNERS LLC					96
	CONSENT OF BLOOM BURTON SECURITIES INC.					97