Acerus Announces Buyout of All Obligations under the Mattern License Agreement

TORONTO–(BUSINESS WIRE)–Acerus Pharmaceuticals Corporation (TSX:ASP) (“Acerus” or the “Company”)
today reported that it has entered into an agreement with Mattern Pharma
AG (“Mattern”) to buy out all of its obligations (the “Buyout”) under
the Amended and Restated Intellectual Property Rights and Product
Development Agreement, dated December 21, 2013 (as amended) (“License
Agreement”), including all of its future royalty payment obligations.

Under the License Agreement, Acerus owed royalties on upfronts,
milestones and revenues from products, including NATESTO®,
covered by the License Agreement, including minimum annual royalties of
U.S.$5.0 million if gross product sales are U.S.$75 million or greater
or U.S.$2.5 million if gross product sales are below U.S.$75 million,
starting in fiscal 2018 and ending in 2024. Pursuant to the Buyout, with
the payment of U.S.$7.5 million, all of Acerus’ material obligations
owed to Mattern are suspended, but Mattern’s obligations to Acerus
remain in force. Under the Buyout, among other rights, Acerus receives a
perpetual, fully-paid, irrevocable license to all of Mattern’s patents
and know-how for the products covered by the License Agreement. Acerus
will pay the U.S.$7.5 million in the following instalments: U.S.$0.75M
within 10 days from execution, U.S.$1.75M by September 20, 2018,
U.S.$2.50M by January 20, 2019, and U.S.$2.50M by January 20, 2020.

“The Buyout will result in higher gross margins and bring greater
clarity to reporting of the cost of goods for Natesto going forward,”
said Ken Yoon, Chief Financial Officer of Acerus.

“The Buyout represents a mutually beneficial outcome for both parties,”
said Ed Gudaitis, President and Chief Executive Officer of Acerus.

The Buyout also includes a covenant not to sue and a waiver from
Mattern, which will become irrevocable upon payment of the last
instalment to Mattern. The Buyout will remain in full force and effect
as long as the License Agreement is in force. In the event of a payment
default, following a grace period, the Buyout automatically terminates
and the License Agreement’s obligations become binding on Acerus again.
In such an eventuality, all monies paid by Acerus pursuant to the
Buyout, with the exception of the first instalment, can be offset
against monies that would otherwise be owed to Mattern under the License
Agreement.

About Acerus
Acerus Pharmaceuticals Corporation is a
Canadian-based specialty pharmaceutical company focused on the
development, manufacture, marketing and distribution of innovative,
branded products that improve patient experience, with a primary focus
in the field of men’s and women’s health. The Company commercializes its
products via its own salesforce in Canada, and through a global network
of licensed distributors in the U.S. and other territories.

Acerus currently has three marketed products: ESTRACE®, a
product for the symptomatic relief of menopausal symptoms, is
commercialized in Canada; NATESTO®, the first and only
testosterone nasal gel for testosterone replacement therapy in adult
males diagnosed with hypogonadism, is commercialized in Canada and the
U.S.; and URIVARX®, a Natural Health Product that helps
reduce symptoms of hyperactive bladder such as daytime urinary
frequency, urgency and nocturia. URIVARX® was recently
approved by Health Canada and is being offered over-the-counter to
Canadians dealing with such symptoms. Also, NATESTO® has been
licensed for distribution in 48 additional countries worldwide.
Marketing approvals in jurisdictions outside of North America are
expected to take place over the course of the coming years. Acerus’
pipeline includes five innovative products: STENDRA®, a new
chemical entity PDE5 inhibitor for the treatment of erectile
dysfunction, which has been approved by the US FDA and the EU EMA and is
commercialized in the US under the trade name STENDRA® and in
the EU under the trade name SPEDRA®; ELEGANt™ Vaginal
Moisturizer, which provides comfort to women suffering from vaginal
dryness, and ELEGANT™ pH, which is a pH balanced vaginal product;
GYNOFLOR™, an ultra-low dose vaginal estrogen combined with a probiotic,
for which a NDS has been filed in Canada for the treatment of vaginal
atrophy, restoration of vaginal flora and treatment of certain vaginal
infections; and TEFINA™, a clinical stage product aimed at addressing a
significant unmet need for women with female sexual dysfunction.
Finally, Acerus is working on expanding its product portfolio by
leveraging its proprietary delivery systems, patents and formulation
expertise. As such, Acerus has a number of products in various stage of
development. One of these projects relates to cannabinoids (whether
synthetic or naturally derived cannabinoids) to be delivered
intranasally to patients, which may have multiple possible therapeutic
applications (the “Cannabinoids Initiative”). Acerus has filed patent
applications on the Cannabinoids Initiative, is currently working on
setting up a series of pharmacokinetic clinical trials and is actively
looking at potential partnering transactions for these initiatives.

Acerus’ shares trade on TSX under the symbol ASP. For more information,
visit www.aceruspharma.com
and follow us on Twitter
and LinkedIn.

Notice Regarding Forward-Looking Statements
Information in
this press release that is not current or historical factual information
may constitute forward looking information within the meaning of
securities laws. Implicit in this information are assumptions regarding
our future operational results. These assumptions, although considered
reasonable by the company at the time of preparation, may prove to be
incorrect. Readers are cautioned that actual performance of the company
is subject to a number of risks and uncertainties and could differ
materially from what is currently expected as set out above. For more
exhaustive information on these risks and uncertainties you should refer
to our annual information form dated March 20, 2018 which is available
at www.sedar.com.
Forward-looking information contained in this press release is based on
our current estimates, expectations and projections, which we believe
are reasonable as of the current date. You should not place undue
importance on forward-looking information and should not rely upon this
information as of any other date. While we may elect to, we are under no
obligation and do not undertake to update this information at any
particular time, whether as a result of new information, future events
or otherwise, except as required by applicable securities law.

Contacts

Acerus Pharmaceuticals Corporation
Ken Yoon, (905) 817-8288
Chief
Financial Officer
kyoon@aceruspharma.com