Aequus Provides Corporate Update on Commercial and Development Programs

VANCOUVER, BC. AUGUST 30, 2016 –

2016 YTD Company Highlights:

• Aequus reported its first commercial revenues in Q1 of 2016 for promotional activities in the Canadian market.
  
• Second-quarter 2016 revenues of $118,100 and year to date revenues of $234,183 were driven by the promotional activities for Tacrolimus IR and the recent launch of Vistitan™. The Company has made significant advances in obtaining public and private coverage for both products, and continues its efforts around market access that is expected to provide a strong foundation for growth in subsequent quarters.
  
• Tacrolimus IR unit volume growth of 62% versus the same quarter last year, and the broad public and private coverage achieved to date demonstrates the early impact of our promotional efforts in this specialty therapeutic area.
  
• Net Loss for the quarter of $1.39M compared to $1.14M in 2015. One time launch related costs for Tacrolimus IR and Vistitan™ was approximately $168,000. Reductions in R&D spend have been offset by the increase in commercial activities cost with a sales force now promoting two commercial products across Canada.
  
• On February 12th, 2016, Aequus in-licensed Canadian commercial rights to two branded epilepsy products: extended-release topiramate tablets and extended-release oxcarbazepine tablets from Supernus Pharmaceuticals Inc. The Company has since had on-going dialogue with Health Canada around the acceptability of the FDA clinical package and foreign market experience, and expects to file a New Drug Submission (“NDS”) in 2017.
  
• In the first half of 2016, the Company announced positive Proof of Concept clinical data for its once-weekly, transdermal aripiprazole program, and has expanded the patent portfolio for this program with a patent issued / allowed in five major countries or regions, including the US, Russia, Mexico, Japan and Australia.
  
• The Company has also advanced its long-acting transdermal clobazam program for the treatment of epilepsy and its long-acting transdermal doxylamine/pyridoxine combination patch program for the treatment of nausea and vomiting in pregnancy (NVP) and has filed international patent applications for each program covering the formulations expected to be advanced into Proof of Concept clinical studies over the following six months.
  
• Aequus expects to continue dialogue with third party partners for potential regional partnerships for at least one of its internal development programs in 2017.
Aequus Pharmaceuticals Inc. (TSX-V:

AQS

, OTCQB:

AQSZF

), a specialty pharmaceutical company, today provided a corporate update and has filed its second quarter financial report, which is available on

www.sedar.com

.“The first half of 2016 has seen significant advances across all levels of the organization - we have begun to recognize revenues associated with our Canadian commercial efforts, in-licensed two branded epilepsy products for Canada, and continued to advance our internal product pipeline including the completion of a Proof of Concept clinical study for our transdermal aripiprazole program. We have also completed formulation work on our transdermal epilepsy and transdermal anti-nausea programs and are encouraged by the drug levels we are achieving in our experiments and animal models. We expect both programs to be transferred to our manufacturing partner this fall and look forward to continued advancements from all three internal programs going forward,” said Doug Janzen, Chairman and CEO of Aequus.“For our commercial arm, the first half of this year has largely been about laying the foundation for growth, both organizationally and for the portfolio” said Ian Ball, Chief Commercial Officer at Aequus. “We have taken significant steps in market access, achieving private reimbursement for our ophthalmology program and progressing as planned for public reimbursement in major provinces. For our transplant program, we have continued to build physician support by communicating the strong clinical package that forms the bedrock of our switch program and ultimately driving cost savings for patients and payors.”

Commercial Business Update:

Second-quarter 2016 revenues of $118,100 was driven by the strong execution of our initial promotional efforts on Tacrolimus IR and launch stock-in of Vistitan™ during the quarter.Aequus’ sales and marketing strategy for its partners is anchored around its in-depth understanding of how to effectively navigate the public and private payor environment. Public listings drive the majority of product utilization in Canada, and requires targeted submissions and negotiations with individual provinces. For specialty products, such as tacrolimus, group purchasing organizations (“GPOs”) drive hospital formulary decisions, and are key in the successful adoption of the product.

Tacrolimus IR:

On December 2nd, 2015, Aequus initiated promotional activities for Tacrolimus IR, a first to market specialty generic used for the prevention of organ rejection in transplant. To date, Aequus has achieved key GPO successes in Ontario and Quebec, driving hospital uptake in those two major provinces. The Company expects to benefit from this hospital uptake in successive quarters as patients transition to community pharmacies, where they are expected to remain on Tacrolimus IR therapy for life. The Company has also achieved 100% coverage with private insurers and public reimbursement in all major provinces for this product.These early listings have resulted in 62% unit growth of Tacrolimus IR compared to the same period in 2015, prior to Aequus initiating its promotional efforts on this product. Over the coming months, Aequus will continue its negotiations with additional GPOs across Canada and will focus its sales efforts on driving physician support to ensure rapid adoption following additional positive listing decisions.

Vistitan™:

On April 28th, 2016 the Company initiated commercial activities for Vistitan™ (bimatoprost 0.03% w/v, ophthalmic solution) used for the reduction of elevated intraocular pressure (IOP) in patients with open angle glaucoma or ocular hypertension. Since the launch of Vistitan™, Aequus has submitted for both private and public reimbursement across all provinces. To date, Aequus has achieved listings with 90% of private insurers. Public reimbursement decisions are expected in major provinces as early as September, 2016 and sales force resources have been strategically allocated in key areas to maximize these anticipated near term listings.“We are seeing our model working, with units sold growing materially from our efforts. In these early days pricing and product stock-in will have both positive and negative impacts on our reported service revenue numbers on a quarter over quarter basis due to the “lumpiness” of stock-in orders from one month to the next. But as overall revenues grow beyond $1M and the products are made more broadly available in every province, the revenue fluctuations will begin to smooth out,” said Ian Ball, Chief Commercial Officer. “Our targeted approach to promoting differentiated established products is yielding a solid base and has led to discussions with additional parties regarding other products that we can add to our commercial portfolio.”

Topiramate XR and Oxcarbazepine XR:

On February 12, 2016, Aequus in-licensed Canadian commercial rights for two branded, once-daily, extended-release products for the treatment of epilepsy: topiramate extended-release (“Topiramate XR”) tablets and oxcarbazepine extended-release (“Oxcarbazepine XR”) tablets from Supernus Pharmaceuticals, Inc. With an estimated 288,000 patients with epilepsy in Canada, the Company believes both products could represent a sizeable opportunity. Topiramate XR has the potential to additionally have a labelled indication for the prevention of migraines, which currently affect approximately 421,000 patients in Canada.Both of these products have been successfully marketed in the US under the tradenames Trokendi XR and Oxtellar XR since 2013. This foreign market experience will be used to further strengthen the Health Canada regulatory submission alongside the data package used for approval by the FDA in the United States. Since in-licensing these products, Aequus has had on-going dialogue with Health Canada around the acceptability of the FDA clinical package and foreign market experience, and expects to file an New Drug Submission (“NDS”) in 2017.

Development Product Updates:

In the first half of 2016, Aequus has made significant advances in all three development programs around formulation optimization, patent position and, in the case of its once-weekly transdermal aripiprazole program, completion of its initial Proof of Concept clinical study.

• Positive Proof of Concept Clinical Data for Once-Weekly Transdermal Aripiprazole Patch: Aequus’ once-weekly transdermal aripiprazole program is being developed for the treatment of certain psychiatric disorders. In the first half of 2016, Aequus announced positive results from an initial Proof of Concept clinical study, which suggested the current formulation may provide sustained, seven-day delivery of therapeutic doses of aripiprazole. Aequus is preparing for the follow-on, multi-dose bioavailability study expected to be initiated in the second half of 2016. Aequus has also expanded the patent portfolio for this program, with a patent issued / allowed in five major countries or regions, including the US, Russia, Mexico, Japan and Australia, and pending in multiple additional territories. Aequus owns worldwide rights to the formulation described in the issued patent, and will look to partner commercial rights in markets outside of Canada as the program continues to advance.
  
• Advancement of IP and Formulation Optimization for Long-Acting Transdermal Clobazam Patch: Aequus is also developing a once-daily and up to a once-weekly transdermal patch for clobazam, intended for the treatment of certain epilepsies, including a rare and severe form called Lennox Gastaut Syndrome. During the first half of 2016, the Company completed preclinical studies, including a skin irritation study in animals and has a formulation that has shown sustained transdermal delivery of clobazam up to once-weekly in-vitro. Aequus has filed an international patent that covers the current formulation, for which it owns worldwide rights, and expects to tech transfer this program to its development partner in the second half of 2016 to further prepare the formulation for Proof of Concept clinical studies.
  
• Advancement of IP and Formulation Optimization for Long-Acting Transdermal Anti-Nausea Patch: Aequus is advancing a once-daily and up to a once-weekly transdermal doxylamine and pyridoxine combination patch for the treatment of nausea and vomiting in pregnancy (NVP). During the first half of 2016, the Company completed preclinical studies and expects to advance the current formulation into Proof of Concept clinical studies in the second half of 2016. Aequus has filed an international patent that covers the current formulation and has ownership of worldwide rights.

Aequus has been engaging with third parties around partnering discussions for each of its internal programs, with a goal of ensuring the maximum benefit is realized by shareholders.

ABOUT AEQUUS PHARMACEUTICALS

Aequus Pharmaceuticals Inc. (TSX-V: AQS, OTCQB: AQSZF) is a growing specialty pharmaceutical company focused on developing and commercializing high quality, differentiated products. Aequus’ development stage pipeline includes several products in neurology and psychiatry with a goal of addressing the need for improved medication adherence through enhanced delivery systems. Aequus intends to commercialize its internal programs in Canada alongside its current portfolio of marketed established medicines and will look to form strategic partnerships that would maximize the reach of its product candidates worldwide. Aequus plans to build on its Canadian commercial platform through the launch of additional products that are either created internally or brought in through an acquisition or license; remaining focused on highly specialized therapeutic areas. For further information, please visit www.aequuspharma.ca.

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