Bellus Health announces scheduled settlement of convertible notes

- Issuance of 7,286,828 common shares in settlement of convertible notes -

LAVAL, QC, Jan. 1, 2016 /CNW/ - BELLUS Health Inc. (TSX: BLU) (BELLUS Health or the Company), a drug development company focused on rare diseases, today announced the scheduled issuance of 7,286,828 common shares from treasury to Victoria Square Ventures Inc. (VSVI) in settlement of convertible notes. The settlement further simplifies the Company's capital structure.

The convertible notes' notional amount was approximately $10.9 million and terms of the conversion were determined as part of BELLUS Health's capital reorganization in 2012. Subsequent to the settlement, VSVI now holds 32.5% of the Company's issued and outstanding common shares and 27.0% on a fully diluted basis.

"The settlement of these convertible notes is the penultimate step to the completion of our capital structure's simplification that started in 2012", said Roberto Bellini, President and Chief Executive Officer of BELLUS Health. "We expect that the conversion of the second and final equity-like instrument, being the Pharmascience Exchange Right, will occur by the fourth quarter of 2016."

The Company now has approximately 54.7 million common shares outstanding and 65.7 million common shares on a fully diluted basis. Dilution items include approximately 4.7 million common shares issuable under the stock option plan and 6.4 million common shares issuable upon the exercise by Pharmascience of its right to exchange its 10.4% interest in the limited partnership carrying out BELLUS Health's activities (the Exchange Right). On or after September 30, 2016, BELLUS Health has the right, which the Company expects to exercise, to force the conversion of the Pharmascience Exchange Right.

For further information, please see a recent blog post by the Company's Vice President, Finance, François Desjardins on the BELLUS Health website at www.bellushealth.com.

About BELLUS Health (www.bellushealth.com)

BELLUS Health is a drug development company focused on rare diseases. Its pipeline of rare disease projects includes KIACTA™ in Phase III for AA amyloidosis, KIACTA™ for sarcoidosis, clinical stage Shigamab™ for sHUS and a research-stage project for AL amyloidosis. The lead program KIACTA™ is currently in a Phase III Confirmatory Study for the treatment of AA amyloidosis, an orphan indication resulting in renal dysfunction that often leads to dialysis and death. BELLUS Health is partnered with global private equity firm Auven Therapeutics for the development of KIACTA™.

Forward-Looking Statements

Certain statements contained in this news release, other than statements of fact that are independently verifiable at the date hereof, may constitute "forward-looking statements" within the meaning of Canadian securities legislation and regulations.  Such statements, based as they are on the current expectations of management, inherently involve numerous important risks, uncertainties and assumptions, known and unknown, many of which are beyond BELLUS Health Inc.'s control. Such risks factors include but are not limited to: the ability to obtain financing, the impact of general economic conditions, general conditions in the pharmaceutical industry, changes in the regulatory environment in the jurisdictions in which the BELLUS Health Inc. does business, stock market volatility, fluctuations in costs, changes to the competitive environment due to consolidation, achievement of forecasted burn rate, potential payments/outcomes in relation to indemnity agreements and contingent value rights, achievement of forecasted pre-clinical and clinical trial milestones, dependence on Auven Therapeutics for the completion of the KIACTA™ Phase III Confirmatory Study and that actual results may vary once the final and quality-controlled verification of data and analyses has been completed. In addition, the length of the KIACTA^TM Phase III Confirmatory Study and the sharing of proceeds between Auven Therapeutics and BELLUS Health Inc. from potential future revenue of KIACTA™ is dependent upon a number of factors, including the quantum of proceeds. Consequently, actual future results and events may differ materially from the anticipated results and events expressed in the forward-looking statements. The Company believes that expectations represented by forward-looking statements are reasonable, yet there can be no assurance that such expectations will prove to be correct. The reader should not place undue reliance, if any, on any forward-looking statements included in this news release. These forward-looking statements speak only as of the date made, and BELLUS Health Inc. is under no obligation and disavows any intention to update publicly or revise such statements as a result of any new information, future event, circumstances or otherwise, unless required by applicable legislation or regulation. Please see BELLUS Health Inc.'s public filings with the Canadian securities regulatory authorities, including the Annual Information Form, for further risk factors that might affect BELLUS Health Inc. and its business.

SOURCE BELLUS Health Inc.

For further information:

Francois Desjardins
Vice President, Finance
BELLUS Health Inc.
450-680-4525
[email protected]