Bionor Pharma ASA : contemplates private placement of new shares

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART DIRECTLY OR INDIRECTLY, IN AUSTRALIA, CANADA, JAPAN OR THE UNITED STATES

(Oslo, Norway, 21 January 2016) Bionor Pharma ASA ('Bionor' or the 'Company', ticker 'BIONOR') has retained DNB Markets (the 'Manager') to advise on and effect a private placement of new shares (the 'Offer Shares') directed towards Norwegian and international investors(the 'Private Placement').

The gross proceeds from the contemplated Private Placement are expected to amount to approximately NOK 45 million. The subscription price in the Private Placement will be determined through a bookbuilding process. The Private Placement comprises:

• an offering towards the 100 largest shareholders of the Company as registered in the VPS on 20 January 2016, the Company's management and the members of the Board of Directors, in addition to selected external investors, who may lawfully participate in the Private Placement, where the total number of investors is limited to 149 and the minimum application and allocation amount is set to NOK 50,000, and
• an offering towards other investors, who may lawfully participate in the Private Placement, where the minimum application and allocation amount is set to the NOK equivalent of EUR 100,000, however so that the Company and the Manager reserve the right to allocate below the NOK equivalent of EUR 100,000 pursuant to and in compliance with applicable exemptions from the obligation to publish an offering prospectus pursuant to the Norwegian Securities Trading Act.

The Board of Directors of the Company has considered various transaction structures to raise equity. Taking into account the need for funding, execution risk, cost, cash position of the Company and timing implications in a rights issue, the Board of Directors has on the basis of careful considerations decided that an announced private placement combined with a subsequent repair offering for existing shareholders not being allocated shares in the Private Placement (the 'Repair Issue'), will be the structure that best protects the Company's and the shareholders' interests.

Use of proceeds and long term capital need
The proceeds from the Private Placement are expected to provide financial resources to prepare the Company for the BIOSKILL clinical trial. More specifically, the Company intends to use the proceeds from the Private Placement to:

• Complete the preparation of the BIOSKILL clinical trial with Vacc-4x administered with an adjuvant and given prior to a latency reversing agent (romidepsin) to demonstrate in a blinded and placebo controlled clinical trial that Vacc-4x improves control of virus in the blood after the virus has been 'shocked' out of its latent reservoir by a latency reversing agent
• Working capital and other general corporate purposes, including for fulfilling the Company's outstanding contractual obligations and existing payment obligations.

Net proceeds from the private placement are estimated to amount to approximately NOK 34 million (the deducted costs are related to the preparations and resources used for the planning of a more significant equity raise that have already been incurred as well as expenses related to this transaction).

Following completion of the Private Placement, which is expected to fund the Company through the first half of 2016, and the subsequent Repair Issue, the Company is planning to conduct an additional equity offering during the first half of 2016, before initiation of the BIOSKILL clinical trial.

In total, Bionor's capital need to complete the BIOSKILL clinical trial is estimated by the Company to approximately NOK 375-425 million, from third quarter 2016 to first quarter 2019, equivalent to the period from initiation of the BIOSKILL clinical trial until 6-9 months after the expected announcement of final results of the BIOSKILL clinical trial, which is projected to be the next major value inflection point for the Company.

Participation from primary insiders and shareholders
Certain primary insiders within the executive management team and the Board of Directors of the Company have pre-subscribed for shares corresponding to approx. NOK 9.4 million. In addition, certain existing shareholders have indicated that they intend to subscribe for shares corresponding to approx. NOK 10.4 million. Total amount pre-subscribed or indicated is hence NOK 19.8 million. The company's largest shareholder has committed to vote in favor of the transaction at the EGM.

Bookbuilding period
The bookbuilding period opens today at 09:00 CET (21 January 2016) and closes on 29 January 2016 at 16:30 CET. The Company, in consultation with the Manager may, however, at any time resolve to shorten or extend the bookbuilding period at its sole discretion and on short notice.

The Company will announce the number of shares placed and the final subscription price in the Private Placement through a stock exchange announcement expected to be sent before opening of Oslo Børs on 1 February 2016 (subject to extension of the bookbuilding period).

Warrants
Investors will be granted one (one) warrant (the 'Warrant') per 1 (one) Offer Share allocated in the Private Placement. Each Warrant will give the right to subscribe for one new share in the Company and the exercise price of each warrant will be equal to the subscription price per Offer Share in the Private Placement. The Warrants will be exercisable in an exercise period (the 'Exercise Period') determined as follows: (a) if a new equity offering with cash proceeds in the Company (other than the Repair Issue or any equity issued in relation to employee incentive programs) (an 'Equity Offering') is launched prior to 1 July 2016, and the allocation in such Equity Offering becomes unconditional prior to 31 July 2016, in the period from the date the allocation becomes unconditional until and including 30 November 2016 and (b) if no Equity Offering is launched prior to 1 July 2016 or an Equity Offering is launched prior to 1 July 2016, but the allocation in such Equity Offering does not become unconditional prior to 31 July 2016, in the period from 31 July 2016 until and including 30 November 2016. Following expiry of the relevant Exercise Period, all Warrants not exercised will lapse without compensation to the Warrant holder. The Warrants will be registered in the VPS but will not be transferable or tradable. Shareholders participating in the Repair Issue will be offered the same warrant structure terms as investors in the Private Placement.

Other information and conditions in the Private Placement
Notification of conditional allocation and payment instructions will be sent to the investors on or about 1 February 2016 through a notification to be issued by the Manager, subject to extension of the bookbuilding period. Payment details and instructions will be included in the notification. The payment date for the Offer Shares is expected to be on or about 12 February 2016. The allocated Offer Shares will be delivered to the applicants as soon as practicable after full payment has been received and the conditions for the Private Placement (as described below) have been met.

The Private Placement is conditional upon (i) the corporate resolutions of the Company required to implement the issue of the Offer Shares and Warrants, including approval of the Private Placement and Warrants by the shareholders in the extraordinary general meeting (the 'EGM') expected to held on or about 11 February 2016, (ii) registration of the increased share capital of the Company pertaining to the Private Placement and the Warrants in the Norwegian Register of Business Enterprises. Further, the listing of the Offer Shares is subject to a listing prospectus being approved by the Norwegian Financial Supervisory Authority and published by the Company.

The Repair Issue
Subject to a successful placement in the Private Placement, the Board of Directors will propose to the EGM to carry out a subsequent Repair Issue to existing shareholders who were not allocated shares in the Private Placement. The subscription price in the Repair Issue will be the same as in the Private Placement. The Company's shareholders as of the last trading day of the bookbuilding period, expected to be 29 January 2016 (as registered in the Norwegian Central Securities Depository (VPS) on the second trading day thereafter, expected to be on 2 February 2016) who were not allocated shares in the Private Placement, will be granted subscription rights giving right to subscribe for shares in the Repair Issue, subject to applicable restrictions in the relevant jurisdictions of the eligible shareholders. Shareholders being allocated shares in the Private Placement will not receive any subscription rights. Shareholders participating in the Repair Issue will be offered the same warrant structure terms as investors in the Private Placement. Subject to completion of the Private Placement, the Bionor share will trade ex-right to participate in the Repair Issue from 1 February 2016 unless the bookbuilding period is shortened or extended.

This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.

The announcement as PDF.

Further information
David Horn Solomon, President and CEO, [phone], [e-mail]
Jens Krøis, CFO, [phone], [e-mail]
Jørgen Fischer Ravn, VP Investor Relations & Communications, [phone], [e-mail]

About Bionor
Bionor Pharma is a Norwegian biopharmaceutical company focused on advancing its proprietary therapeutic vaccine Vacc-4x in combination with other medicines toward a functional HIV cure. The company believes it has first mover potential based on clinical results to date and early adoption of now recognized clinical strategy. In December 2015, Bionor announced that the HIV 'Shock & Kill' trial REDUC with Vacc-4x and romidepsin successfully met its primary endpoint by significantly reducing latent HIV reservoir and further demonstrated control of viral load. Bionor is currently planning BIOSKILL, a proof-of-concept Phase II trial, which may lead to a major value inflection point and partnering opportunities. Bionor currently retains full ownership rights to Vacc-4x, i.e., the upside potential from partnering or licensing remains with the company. Bionor is based in Oslo, Norway, and also has offices in Copenhagen, Denmark and New York, USA. Bionor is listed on Oslo Børs (OSE:BIONOR). More information about Bionor is available at www.bionorpharma.com.

Important information
The release is not for publication or distribution, in whole or in part directly or indirectly, in or into Australia, Canada, Japan or the United States (including its territories and possessions, any state of the United States and the District of Columbia).

This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act. It is issued for information purposes only, and does not constitute or form part of any offer or solicitation to purchase or subscribe for securities, in the United States or in any other jurisdiction. The securities mentioned herein have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the 'Securities Act'). The securities may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of the Securities Act. The Company does not intend to register any portion of the offering of the securities in the United States or to conduct a public offering of the securities in the United States. Copies of this announcement are not being made and may not be distributed or sent into Australia, Canada, Japan or the United States. The issue, exercise, purchase or sale of subscription rights and the subscription or purchase of shares in the Company are subject to specific legal or regulatory restrictions in certain jurisdictions. Neither the Company nor the Manager assumes any responsibility in the event there is a violation by any person of such restrictions.

The distribution of this release may in certain jurisdictions be restricted by law. Persons into whose possession this release comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. The Manager is acting for the Company and no one else in connection with the Private Placement and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients or for providing advice in relation to the Private Placement and/or any other matter referred to in this release