Aequus Provides First Quarter 2018 Financial and Corporate Highlights

May 31, 2018

VANCOUVER, May 31, 2018 – Aequus Pharmaceuticals Inc. (TSX-V: AQS, OTCQB: AQSZF) (“Aequus” or the “Company”), a specialty pharmaceutical company with a focus on developing, advancing and promoting differentiated products, today reported financial results for the first quarter ended March 31, 2018 and associated Company developments. Unless otherwise noted, all figures are in Canadian currency.

Q1 2018 Key Highlights - 4th Consecutive Quarter of Revenue Growth

Revenues remain strong with first quarter 2018 total revenue of $375,000, an increase of 28% over the same quarter in 2017;

Fourth consecutive quarter of revenue growth and second consecutive quarter achieving profitability in commercial division;

Added to commercial portfolio through commercial agreement with Mynosys for promotion of Zepto ® Capsulotomy System in Canada;

First quarter 2018 net loss of $816,485, a decrease of 19% over the same quarter in 2017;

Received positive feedback from FDA on suitability of its long-acting anti-nausea patch, AQS1303, to follow an abbreviated regulatory pathway for approval in the US;

Continued to build medical cannabis partnership framework through collaborations with CannaRoyalty and Ehave.

Commercial Update

The Company recorded revenue of $375,000 in Q1 2018 compared to $293,002 in Q1 2017, which represents growth of 28% when comparing the year over year change. While sales for both products continue to increase with some market volatility, we had expected a modest growth in revenues in the current quarter as the tiered portion of revenues payable to Aequus by our partner declined by 10% for Vistitan as of 2018. Despite this, we were able to demonstrate growth in revenues to Aequus in the current quarter. The terms of the agreement for both tacrolimus and Vistitan extend to 2020.

Sales from the recently announced Zepto Capsulotomy System are expected to contribute to revenues, and will be accretive to the commercial portfolio, as of Q2 2018 with an expected launch date in Canada of June 1, 2018. Zepto is a novel medical device used during cataract surgery to produce a consistent, high quality, round capsulotomy in milliseconds. Zepto has been used in thousands of cataract surgeries in the Asia, Europe, and Central America, and most recently in the US since its launch in the respective territories in February 2017 and August 2017. In Canada, there is an estimated 300,000 cataract procedures annually. Zepto will be marketed by Aequus’ current ophthalmology salesforce and is an attractive complement to its existing product offering.

“For the second consecutive quarter, the commercial division has been profitable and is now contributing in a more meaningful way to the overall business,” said Ian Ball, Chief Commercial Officer at Aequus. “We continue to seek additional value add products that will further strengthen our revenues while reinforcing our commitment to customers in ophthalmology. We are in active discussions for additional revenue products that would complement this strategy.”

Development Program Activities

Aequus’ development efforts in Q1 2018 focused on a pre-Investigational Drug Application (“pre-IND”) meeting with the US Food and Drug Administration (“FDA”) for the Company’s lead development program, AQS1303, a long-acting transdermal anti-nausea program. Upon review of the Company’s pre-IND submission, the FDA agreed that AQS1303 is a suitable candidate for the 505(b)2 abbreviated regulatory pathway for approval in the United States.

Additionally, Aequus continued to build on its partnerships within the medical cannabis field, making significant steps forward for its cannabinoid-based therapeutic program targeting neurological disorders. Aequus announced a collaboration with CannaRoyalty Corp. (“CannaRoyalty”) to advance a suite of cannabis-based therapies targeting neurological disorders into clinical trials in Canada, in collaboration with Canadian doctors and key opinion leaders, and entered into a collaboration with Ehave to access Ehave’s bioinformatics platform, providing cost effective and clinically relevant data collection in Aequus’ anticipated clinical trials in the medical cannabis regulatory regime.

Operating Expenses

Sales and marketing costs for Q1 2018 was $338,447, which is consistent with prior quarters and includes non-cash expenses of $56,628 related to amortization and share based payments expenses. Depreciation and amortization, and share-based payments for Q1 2018 were $45,917 and $10,711, respectively, compared to $45,917 and $25,097, respectively, in Q1 2017. The amortization costs were primarily related to the acquisition costs of TeOra.As the sales and marketing infrastructure is now established, new products, like Zepto, can be marketed to the same customer base with relatively little change to sales related costs.

The Company incurred research and development expenses of $192,968 in Q1 2018 as compared to $398,273 in Q1 2017. The decrease was primarily attributable to subcontractor costs, specifically reduced regulatory consulting for AQS1301 and AQS1303 Pre-IND related work and no clinical work projected during Q1 2018 whereas Q1 2017 included work related to the completion of the initial single dose exposure Proof of Concept study for AQS1301, preclinical studies for AQS1302 and AQS1303, and the initiation of clinical trial material development for AQS1303.

General administration expenses were $659,370 during Q1 2018 as compared to $559,639 in Q1 2017, an increase of $99,731 or 18%. The increase of $175,093 was primarily due to an increase in one-time consulting expenses relating to corporate marketing and branding during Q1 2018.

Other

Additionally, the Company issued Camargo Pharmaceutical Services, LLC 31,683 common shares on May 30, 2018 in connection with a service agreement to provide regulatory consulting services for the Company’s product development programs in the United States.

ABOUT AEQUUS PHARMACEUTICALS INC.

Aequus Pharmaceuticals Inc. (TSX-V:AQS, OTCQB:AQSZF) is a growing specialty pharmaceutical company focused on developing and commercializing high quality, differentiated products. Aequus has grown its pipeline to include several commercial products in ophthalmology and transplant, and a development stage pipeline in neurology and psychiatry with a goal of addressing the need for improved medication adherence through enhanced delivery systems. As a complement to its focus in neurology, our most recent addition to the development pipeline was a long-acting form of medical cannabis, where there is a high need for a consistent, predictable and pharmaceutical-grade delivery of products for patients. 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 visitwww.aequuspharma.ca .

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FORWARD-LOOKING STATEMENT DISCLAIMER

This release may contain forward-looking statements or forward-looking information under applicable Canadian securities legislation that may not be based on historical fact, including, without limitation, statements containing the words “believe”, “may”, “plan”, “will”, “estimate”, “continue”, “anticipate”, “intend”, “expect”, “potential” and similar expressions. Forward- looking statements are necessarily based on estimates and assumptions made by us in light of our experience and perception of historical trends, current conditions and expected future developments, as well as the factors we believe are appropriate. Forward-looking statements include but are not limited to statements relating to: the implementation of our business model and strategic plans; revenue growth trends into the future; expected timing for product launches; the Company’s expected revenues; the regulatory approval of its products; the Company’s ability to attract international partners; and ongoing discussions with and the Company’s ability to secure potential partners to further grow our product portfolio. Such statements reflect our current views with respect to future events and are subject to risks and uncertainties and are necessarily based upon a number of estimates and assumptions that, while considered reasonable by Aequus, are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Many factors could cause our actual results, performance or achievements to be materially different from any future results, performance, or achievements that may be expressed or implied by such forward-looking statements. In making the forward looking statements included in this release, the Company has made various material assumptions, including, but not limited to: obtaining regulatory approvals; general business and economic conditions; the Company’s ability to successfully out license or sell its current products and in-license and develop new products; the assumption that the Company’s current good relationships with third parties will be maintained; the availability of financing on reasonable terms; the Company’s ability to attract and retain skilled staff; market competition; the products and technology offered by the Company’s competitors; the impact of the coronavirus (COVID-19) on the Company’s operations; and the Company’s ability to protect patents and proprietary rights. In evaluating forward looking statements, current and prospective shareholders should specifically consider various factors set out herein and under the heading “Risk Factors” in the Company’s Annual Information Form dated April 30, 2021, a copy of which is available on Aequus’ profile on the SEDAR website at www.sedar.com, and as otherwise disclosed from time to time on Aequus’ SEDAR profile. Should one or more of these risks or uncertainties, or a risk that is not currently known to us materialize, or should assumptions underlying those forward-looking statements prove incorrect, actual results may vary materially from those described herein. These forward-looking statements are made as of the date of this release and we do not intend, and do not assume any obligation, to update these forward-looking statements, except as required by applicable securities laws. Investors are cautioned that forward-looking statements are not guarantees of future performance and are inherently uncertain. Accordingly, investors are cautioned not to put undue reliance on forward looking statements.

Aequus Contact Information
‍investors@aequuspharma.ca
604-336-7906