Clarus Lifesciences III, L.P. Acquires Securities of ESSA Pharma Inc.

CAMBRIDGE, MA, Jan. 14, 2016 /CNW/ - Clarus Lifesciences III, L.P. ("Clarus") is pleased to announce that it has acquired 2,121,212 units (the "Units") of ESSA Pharma Inc. ("ESSA"), a Vancouver, British Columbia based clinical development-stage pharmaceutical company.

Each Unit was purchased pursuant to a subscription agreement at a price of $4.74 per Unit (US$3.30 converted into Canadian dollars using an exchange rate of $1.00 = US$0.70, being the noon exchange rate reported by the Bank of Canada on January 14, 2016). Each Unit consists of one common share of ESSA ("Common Share"), one seven-year cash and cashless exercise warrant (the "7-Year Warrants") and one-half of one two-year cash exercise warrants (the "2-Year Warrants" and, together with the 7-Year Warrants, the "Warrants"). Each whole Warrant entitles the holder thereof to acquire one Common Share at an exercise price of US$3.30.

After giving effect to the acquisition of the 2,121,212 Units, Clarus has acquired ownership of 2,121,212 Common Shares, representing approximately 7.8% of the presently issued and outstanding Common Shares. In addition, Clarus has acquired ownership of 2,121,212 7-Year Warrants and 1,060,606 2-Year Warrants, for an aggregate of 3,181,818 Warrants. Assuming the exercise in full of the 3,181,818 Warrants, Clarus will own 5,303,030 Common Shares, representing approximately 17.5% of the issued and outstanding Common Shares, on a partially-diluted basis.

The securities were acquired through a private placement with ESSA. Clarus has acquired the Common Shares and Warrants for investment purposes, and may acquire further Common Shares and Warrants, or dispose of its holdings of Common Shares and Warrants, both as investment conditions warrant. ESSA is listed on the Toronto Stock Exchange under the symbol "EPI" and on the NASDAQ under the symbol "EPIX".

Pursuant to the terms of the subscription agreement between ESSA and Clarus, Clarus will be entitled to nominate two directors to the board of directors of ESSA, one of which must be an independent director and pre-approved by ESSA. These nomination rights will continue for so long as Clarus holds greater than or equal to 1,060,606 Common Shares, subject to adjustment in certain circumstances.

Richard Glickman, Marianne Sadar, Raymond Andersen and Bob Rieder, who in the aggregate control approximately 9,482,800 Common Shares, have entered into a voting agreement (the "Voting Agreement") with Clarus providing that such shareholders will vote against certain change of control transactions, unless Clarus consents otherwise, and support Clarus' nominees to the board of directors of ESSA. Under the Voting Agreement, the applicable shareholders will be prohibited from transferring 50% of the Common Shares held by them on the effective date, with limited exceptions. The provisions of the Voting Agreement relating to change of control transactions and non-transferability of Common Shares will expire, at the latest, upon the six month anniversary of the public release of the results of the completed Phase 2 portion of the Phase 1/ 2 clinical trial of EPI-506 by ESSA or the public release of the results of the completed Phase 2 portion of an alternative program that is approved by the board of directors, and the provisions relating to the Clarus nominees will continue for so long as Clarus is entitled to nominate directors to ESSA's board of directors.

In addition, Clarus, the other subscribers under the private placement and ESSA entered into a registration rights agreement pursuant to which ESSA will, within 30 days of closing, file a prospectus supplement under its Registration Statement on Form F-10 with respect to resales in the United States, from time to time, of the Common Shares issued under the private placement and the Common Shares issuable upon the exercise of Warrants (the "Warrant Shares"). Upon filing of the prospectus supplement, the Common Shares and Warrant Shares will be freely tradeable in the United States. 

SOURCE Clarus Lifesciences III, L.P.

For further information: Clarus is located at 101 Main Street, Suite 1210, Cambridge, Massachusetts 02142. For further information, please contact Sarah Parker at (617) 949-2200.

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Clarus Lifesciences III, L.P.

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