MedinCell publishes its first-half 2020/2021 financial results (April – September 2020): operating expenses and portfolio development in line with expectations12.09.2020

MedinCell publishes its first-half 2020/2021 financial results (April - September 2020): operating expenses and portfolio development in line with expectations

Euronext: MEDCL ∙ Montpellier - France ∙ December 9, 2020 ∙ 5:45pm CET

Main developments concerning the product portfolio during the first half:

• mdc-IRMprogram (schizophrenia)

1. Phase 3 Pivotal efficacy study: recruitment completed in May and study completed in November (post-closing)

1. Study Readout anticipated in the first quarter of 2021

• 1. Validation of manufacturing and transport procedures for the polymers on an industrial scale
• mdc-CWMprogram (post-operative pain):
• 1. Phase 2 study completed in April

1. Meeting between AIC, MedinCell and the FDA in August 2020 to discuss the results of Phase 2 and the next steps in clinical and regulatory development

• 1. Large-scaleclinical studies expected to start in the first half of 2021
• Other programs
• 1. Progress in the regulatory development of two other antipsychotics: mdc-TJK in Phase 1 and mdc-ANG in preclinical development

1. mdc-TTGprogram (Covid-19): Launch in September of an initial clinical trial to validate the safety of continuous administration of Ivermectin in oral form and selection of a 1-month active injectable formulation to launch preclinical activities in December (post-closing)

1. Final formulations selected or on the verge of being selected for several programs opening the way for preclinical development: mdc-GRT (organ transplantation), mdc-NVA (pain), and mdc-KPT (animal health- pain)

Stronger consolidated financial position at September 30, 2020 compared to the beginning of the semester:

• 27.5 M€ in cash
• 3.8 M€ in risk-free financial assets (0.7 M€ current + 3.1 M€ non-current) including 1.5 M€ provided as collateral for a bank loan
• Post-closing:1.8 M€ in additional non-dilutive financing (PGE) received from BPI (October) and receipt of 5 M€ representing the final tranche of the EIB loan (November)

1/7

Key events of the period

April 2020 - Announcement of the launch of a Covid-19 program (mdc-TTG) aimed to develop a long-acting injectable Ivermectin formulation to protect people who are not infected with Covid-19.

April 2020 - Selection of the candidate formulation for the mdc-WWM program, which can now enter preclinical development. MedinCell has demonstrated in vivo the feasibility of a contraceptive administered by subcutaneous injection, fully bioresorbable and active for six months. This program is being developed with the support of The Bill

• Melinda Gates Foundation through a grant of up to $19 million over four years to fund preclinical activities and initial clinical studies.

May - June 2020 - MedinCell, which took proactive actions to prepare itself for the possible consequences of the serious crisis linked to Covid-19, received 11.9 M€ in non-dilutive financing in the form of PGE (state-guaranteed) loans arranged with Banque Populaire du Sud, BNP Paribas and Caisse d'Épargne.

June 2020 - MedinCell completed a capital increase in the form of a private placement of new shares raising a final gross amount of 15.6 M€. The operation was a great success and benefited from major support among existing shareholders and French and international investors. The proceeds of the capital increase will further strengthen the Company's ability to fund its R&D activities, including the expansion and further development of its portfolio of long- acting injectable treatments.

September 2020 - Launch of the first clinical trial in the mdc-TTG program that aims to protect against Covid-19. This clinical trial aims to validate the safety of continuous administration of Ivermectin in oral form. In parallel, several long-acting injectable formulations based on MedinCell's BEPO® technology are being tested in vivo. A 1-month active injectable prophylactic treatment should be ready to commence development for regulatory purposes by the end of 2020.

November 2020 (post-closing) - Phase 3 pivotal efficacy study completed in the United States for the mdc-IRM program, an experimental long-acting subcutaneous injectable treatment of risperidone for schizophrenia. Teva Pharmaceuticals, which funds and oversees the development of the program, expects to have the trial readout during the first quarter of 2021.

October - November 2020 (post-closing) - Strengthening of the Company's financial resources with an additional

1.8 M€ non-dilutive financing (PGE) received from BPI (October) and receipt of 5 M€ representing the final tranche of the European Investment Bank loan. The terms under which this tranche of the EIB loan may be drawn down had been renegotiated in June 2020. The EIB had provided MedinCell in March 2018 with 20 M€ in support that could be cashed in three tranches. The first two were paid to MedinCell in June 2018 and July 2019. This loan is repayable after June 1, 2023.

Changes in the Executive Board - Franck Pouzache, who joined MedinCell in April as Chief Human Resources Officer, was appointed by the Supervisory Board to the Company's Executive Board in September. Franck Pouzache has over 25 years' experience as a human resources executive to his name and has worked in the technology, nuclear and medical industry in France and the United States. Nicolas Heuzé, Chief Corporate Development Officer, left the Company at the end of October to pursue new business ventures after devoting close to 7 years to MedinCell's operational and financial development.

Details of the product portfolio's development at the end of the first half

At September 30, 2020, the portfolio consisted of:

• 3 products in regulatory clinical development, with the most advanced set to complete its Phase 3 trials in the United States
• 3 drug candidates in regulatory preclinical development phases
• 6 products at the formulation stage (this preliminary phase aims to deliver a product prototype meeting the target specifications, including the duration of action and the dose of active ingredient to be regularly released)

Of these products in regulatory development or at the formulation stage:

• 6 are being developed with industry partners such as Teva Pharmaceuticals, which is leading and funding the clinical development of 3 antipsychotics using BEPO® technology, or with the financial support of foundations and health agencies, such as the Bill & Melinda Gates Foundation and Unitaid.
• 6 are directly funded by MedinCell.

11 products at the formulation or the regulatory development stage are for human health, and 1 product at the formulation stage is for animal health applications.

2/7

PROGRAMS AT CLINICAL STAGE

Subcutaneous injection

mdc-IRM	The Phase 3 pivotal efficacy study has been completed (post-closing). Analysis
Treatment of schizophrenia	of the results is expected in the first quarter of 2021.
Partner: Teva Pharmaceuticals
mdc-TJK	The first-in-human study for the investigational long-acting injectable
Antipsychotic	antipsychotic mdc-TJK has started in Q4 2019. The results of this study,
Partner: Teva Pharmaceuticals	expected during 2021, will inform future development.
Intraarticular injection
mdc-CWM	AIC and MedinCell met with the FDA in August 2020 to discuss the results of
Post-operative pain and inflammation	Phase 2 and the next steps in clinical and regulatory development. Final
Partner: AIC	preparation is underway for large-scale clinical studies, which are scheduled
	for the first half of 2021.

NEXT POTENTIAL CANDIDATES FOR CLINICAL DEVELOPMENT

Subcutaneous injection

mdc-ANG	Status at September 30, 2020: preclinical
Antipsychotic	Preclinical work continues to progress and will inform a decision on further
Partner: Teva Pharmaceuticals	development expected in the second half of 2020.
mdc-TTG	A clinical trial was launched in September 2020 to demonstrate the safety of
Covid-19	Ivermectin when taken regularly in oral form over 4 weeks to simulate the
MedinCell program	continuous release of the active ingredient by a long-acting injectable.
	An initial formulation is due to be selected by the end of the year so clinical
	development can commence immediately.
mdc-GRT	A candidate formulation is about to be selected after in vivo studies
Organ transplant	(post-closing).The program is all set for regulatory preclinical development to
MedinCell program	begin in 2021.
mdc-WWM	Status at September 30, 2020: preclinical
Contraception	The CMC activities are underway ahead of the GLP-tox studies in 2021. The
Partner: Bill & Melinda Gates Foundation	clinical trials are scheduled to begin in 2022.
mdc-STM	Status at September 30, 2020: formulation
Malaria
Partner: Unitaid
mdc-STG	Status at September 30, 2020: formulation
Indication: confidential
MedinCell program
mdc-KPT (animal health)	A candidate formulation has been selected based on in vivo studies, and
Pain	regulatory development will start in 2021.
MedinCell program

N.B. Plans to set up a joint venture with Cornerstone Animal Health have been abandoned definitively. That has had no impact on the progress made by the animal health programs, which remain in MedinCell's ownership.

Perineural injection

The two products below are the first in MedinCell's portfolio with perineural administration

mdc-CMVPain

MedinCell program

Status at September 30, 2020: preclinical

The results of the first preclinical studies do not make it possible to envisage going into the clinic now Further investigations are still in progress. Activities are on stand-by at the moment

mdc-NVA	Status at September 30, 2020
Pain	A candidate formulation is likely to be selected in early 2021 on the basis of
MedinCell program	the full results of ongoing studies.

3/7

Covid-19 crisis and MedinCell's financial visibility

From the start of the the Covid-19 pandemic and related economic crisis, the health and well-being of its employees have been MedinCell's top priorities. As part of its preventative approach, in line with the health authorities' directives, MedinCell introduced a travel ban and a homeworking policy from March 2020. The Jacou facility, close to Montpelier, was set up under the business continuity plan to ensure that the laboratory operations could continue during the lockdown without any threat to the health and safety of employees.

Given the uncertainties as to the scale, length and effects of the crisis, MedinCell rapidly introduced measures to unlock savings during the first quarter. Strategic research and development programs were not affected, while other activities were postponed, leading to some of the teams working part-time between April and June 2020. MedinCell's objective was to maintain a high level of financial visibility.

Several financing operations have been completed during the period to increase its cash position and to keep its programs moving forward.

• 11.9 M€ of non-dilutive financing in the form of a State-Guaranteed Loan - May and June 2020
• Renegotiation of the drawdown conditions for the final tranche of the EIB loan - June 2020.
• 15.6 M€ capital increase - Private placement - June 2020

At September 30, 2020, due to reactivity and adapted management, MedinCell held sufficient cash to achieve its strategic objectives and cover its working capital requirement through to the second half of 2022, excluding the mdc-TTG program.

Selected first-half 2020 financial information

Financial visibility strengthened

At September 30, 2020, MedinCell held 27.5 M€ in cash, plus 3.8 M€ in risk-free financial assets. Six months earlier at the beginning of the financial year, it held 12.4 M€ in cash and 3.6 M€ in financial assets. During the first six months of the financial year, 11.9 M€ in non-dilutive financing in the form of PGE loans (state-guaranteed) were negotiated and received. In addition, a capital increase of a gross amount of 15.6 M€ and subscribed for by French and international qualified investors was completed successfully through a private placement of new shares. In addition to its available cash, MedinCell can count on the final 5 M€ tranche of the total 20 M€ loan awarded by the European Investment Bank, the drawdown terms for which were renegotiated in June 2020. This final tranche was in the end drawn down by MedinCell in November 2020 (post-closing).

Cash flow statement

	(€ thousands)		09/30/2020		09/30/2019
		6 months		6 months
A	Net cash generated/(used) by operating activities		(6,658)		(9,081)
B	Net cash generated/(used) by investing activities		(432)		(441)
C	Net cash generated/(used) by financing activities		22,165		4,361
	Change in net cash position		15,074		(5,161)
	Cash and cash equivalents at start of period		12,377		21,284
	Cash and cash equivalents at end of period		27,451		16,123

A - Net cash generated/(used) by operating activities

During the first six months of the financial year, MedinCell's operations consumed 6.7 M€ in cash, in line with expectations, compared to 9.1 M€ in the previous period. Note that the 3.2 M€ CIR (Research Tax Credit) corresponding to 2019 was received during the period. In contrast, the 2.5 M€ credit for 2018 before was not received during first half of the previous year. MedinCell recorded a first-half net loss of 10.8 M€, compared to 9.0 M€ one year earlier. The difference was attributable to the revenue contraction (see section A below) and the reevaluation of the EIB debt cost, triggered by the June supplemental agreement concerning variable payments.

4/7