Ole Arne Eiksund and Hogne Hallaråker

Arctic Bioscience announces private placement and intention to list on Euronext Growth Oslo

Arctic Bioscience AS is contemplating a private placement raising gross proceeds of NOK 250 million and admission to trading of the Company’s shares on Euronext Growth Oslo.

Ørsta, 16 February 2021: Arctic Bioscience AS (“Arctic Bioscience” or the “Company”), the Norwegian biotechnology company developing a novel treatment for mild-to-moderate psoriasis, has engaged ABG Sundal Collier ASA and DNB Markets, part of DNB Bank ASA (“DNB Markets”), as joint global coordinators and joint bookrunners (together the “Managers”) to advise on and effect a contemplated private placement raising gross proceeds of NOK 250 million (the “Private Placement”) and admission to trading of the Company’s shares on Euronext Growth Oslo (the “Admission”).

About Arctic Bioscience:

Arctic Bioscience is a biotech company founded based on specialised know-how and competence on the unique properties of bioactive marine compounds, and has developed a proprietary platform technology that serves two unique businesses developing products for pharmaceutical and nutraceutical application, respectively. The Company is strategically located in Ørsta on the West Coast of Norway providing direct access to the raw material, and is led by a team with 30+ years of marine extracts experience.

Arctic Bioscience is in the process of developing a novel, oral pharmaceutical treatment for mild-to-moderate psoriasis named HRO350. A clinical Phase IIb study, designed in line with recommendations received from the European Medicines Agency, is scheduled to be initiated in the first quarter of 2022.

Mild-to-moderate psoriasis represents a large target market with a prevalent pool of around 21 million patients across EU5 and the US . Existing treatment alternatives are costly and invasive for large parts of this patient group, and the significant unmet medical need represents an attractive commercial opportunity for Arctic Bioscience. HRO reported encouraging efficacy signals with an attractive safety profile in a completed randomised controlled clinical trial, where sustained and increased effect was shown in patients over time. In a commercial setting, HRO is expected to benefit from its profile as a product based on natural extract and the convenient, oral administration. HRO350 is an unencumbered asset where the Company retains worldwide rights.

The Company’s nutraceutical business develops and commercialises high-value marine products and supplies premium and differentiated nutraceutical ingredients and finished products in the global market for dietary supplements. The Group offers a subscription service for its Romega® branded capsules to consumers in Norway, generating recurring B2C revenues. The Company’s also sells intermediary and finished nutraceutical products to domestic and international business customers and distributors. In 2019 Arctic Bioscience entered a strategic partnership with Kotler Marketing Group, a leading sales and marketing firm with strong foothold in Asia, as the Company’s sales and marketing partner for greater China. The Company expects strong growth within this segment driven by the launch of its B2C subscription business outside of Norway, further development of its strategic partnerships, and a shift in focus towards the sale of finished products to its business customers.

Arctic Bioscience plans to invest in a new state-of-the-art manufacturing facility to support the continued progress of its pharmaceutical and nutraceutical businesses. Moving production in-house will ensure full control of the value chain and contribute to increased margin retention. The future facility will be based on the Company’s proprietary production process, which is protected by a comprehensive portfolio of patents, technological know-how, and confirmed freedom to operate.

The Private Placement and Admission will support Arctic Bioscience’s strategy and ambitions, secure funding beyond the final read out from the upcoming Phase IIb clinical trial with an additional six months buffer, and establish a strong long-term shareholder base that can take part in the Company’s future growth and value creation and allow for a more liquid market for the Company’s shares.

The Private Placement in brief:

The Private Placement will consist of a new share issue of NOK 250 million in the Company. The price per share in the Private Placement has been set to NOK 31.00 (the “Subscription Price”), equivalent to a pre-money equity value of the Company of approximately NOK 450 million based on the 14,622,120 shares currently outstanding in the Company. In addition, the Managers may elect to over-allot additional existing shares equivalent to up to approximately NOK 37.5 million (the "Additional Shares"), representing 15 percent of the offering size in the Private Placement pursuant to an over-allotment option (the "Over-Allotment Option").

Certain existing shareholders in the Company have pre-committed to subscribe for New Shares for a total subscription amount of approximately NOK 94 million, including the following members of the board of directors of Arctic Bioscience: (i) Ronja Capital II for NOK 20.0 million, represented in the board of directors by Tore Tønseth; (ii) Ajea Invest AS for NOK 8.0 million, represented in the board of directors by Asbjørn Solevågseide; and (iii) Vartdal Holding AS and Nye Brødrene Vartdal AS for a combined NOK 5.5 million, represented in the board of directors by Jan Endre Vartdal.

In addition, Arctic Bioscience has received commitments from strong Nordic investors for a significant share of the Private Placement, and has agreed to provide the following investors a total minimum allocation of approximately NOK 55 million: Fjärde AP-Fonden (AP4) (approximately NOK 35 million) and Altitude Capital AS (NOK 20m).

The net proceeds to the Company from the Private Placement will be invested in (i) the development of the Company’s novel treatment against mild-to-moderate psoriasis, (i) state-of-the-art production and process technology and (iii) general corporate purposes.

The Private Placement will be directed towards Norwegian and international investors (a) outside the United States, subject to applicable exemptions from any prospectus and registration requirements and in reliance on Regulation S under the U.S, Securities Act, and (b) to investors in the United States who are QIBs as defined in, and in reliance on, Rule 144A under the U.S. Securities Act, in each case subject to an exemption being available from offer prospectus requirements and any other filing or registration requirements in the applicable jurisdictions and subject to other selling restrictions. The minimum application and allocation amount has been set to the NOK equivalent of EUR 100,000 per investor. The Company may, however, at its sole discretion, allocate an amount below EUR 100,000 to the extent applicable exemptions from the prospectus requirement pursuant to the Norwegian Securities Trading Act and ancillary regulations are available. Further selling restrictions and transaction terms will apply.

Application for Admission on Euronext Growth Oslo:

The Company has applied, and expects, subject to successful completion of the Private Placement and the necessary approvals from the Oslo Stock Exchange, to have its shares admitted to trading on Euronext Growth Oslo. The first day of trading on Euronext Growth Oslo is expected to be shortly after completion of the Private Placement and is currently anticipated to be on or about 24 February 2021.

Conditions for the Private Placement:

Issuance and delivery of the new shares and payment for the new shares in the Private Placement is subject to i) the necessary corporate resolutions, including the resolution by the Annual General Meeting of the Company (to be held on or about 22 February 2021, the “AGM”) to issue the new shares and to authorise the Company’s board of directors’ (the “Board”) to issue the additional new shares pursuant to the Greenshoe Option (the "AGM Resolutions"), and the Board's resolution to consummate the Private Placement and to allocate the Offer Shares, and (ii) the registration of the AGM Resolutions in the Norwegian Register of Business Enterprises having taken place.

The Company may, in its sole discretion, in consultation with the Managers, cancel and/or modify the terms of the Private Placement, at any time and for any reason, without any compensation to the applicants. Neither the Company nor the Managers will be liable for any losses incurred by applicants if the Private Placement is cancelled and/or modified, irrespective of the reason for such cancellation or modification.

Stabilisation:

Certain existing shareholders are expected to grant DNB Markets, on behalf of the Managers (the "Stabilisation Manager"), an option to borrow a number of shares equivalent to the Additional Shares in order to enable the Managers to settle any over -allotments made in the Private Placement. Pursuant to the Over-Allotment Option, the Company is also expected to grant the Stabilisation Manager an option (the "Greenshoe Option") to subscribe and have issued, at the Offer Price, a number of new shares up to the number of Additional Shares allocated in the Private Placement to cover short positions resulting from any over -allotments made in the Private Placement not covered through share purchases made as part of any stabilization activities. The Greenshoe Option is exercisable, in whole or in part, by the Stabilisation Manager within a 30-day period commencing at the time trading in the shares commences on Euronext Growth Oslo. The Company will receive the proceeds from any shares issued, if any, following exercise of the Greenshoe Option.

Further announcements relating to the Private Placement and Admission will be made in due course.

Advisers

ABG Sundal Collier ASA and DNB Markets, part of DNB Bank ASA are acting as Joint Global Coordinators and Joint Bookrunners in respect to the Private Placement and the Admission.

Adviso advokatfirma AS and Advokatfirmaet Wiersholm AS are acting as legal counsels in connection with the Private Placement and the Admission.

NOT FOR DISTRIBUTION, RELEASE OR REPUBLICATION, DIRECTLY OR INDIRECTLY, TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN, OR ANY OTHER JURISDICTION IN WHICH THE DISTRIBUTION, RELEASE OR REPUBLICATION WOULD BE UNLAWFUL.

Ole Arne Eiksund

For further information, please contact:

Ole Arne Eiksund
CEO

Mobile: +47 908 43 944
Mail: olearne@arctic-bioscience.com

Important Notice:

This announcement is not and does not form a part of any offer to sell, or a solicitation of an offer to purchase, any securities of the Company. The distribution of this announcement and other information may be restricted by law in certain jurisdictions. Copies of this announcement are not being made and may not be distributed or sent into any jurisdiction in which such distribution would be unlawful or would require registration or other measures. Persons into whose possession this announcement or such other information should come are required to inform themselves about and to observe any such restrictions.

The securities referred to in this announcement have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and accordingly may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and in accordance with applicable U.S. state securities laws.

The Company does not intend to register any part of the offering or its securities in the United States or to conduct a public offering of securities in the United States. Any sale in the United States of the securities mentioned in this announcement will be made solely to "qualified institutional buyers" as defined in Rule 144A under the Securities Act.

In any EEA Member State, this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Regulation, i.e., only to investors who can receive the offer without an approved prospectus in such EEA Member State. The expression "Prospectus Regulation" means Regulation 2017/1129 as amended together with any applicable implementing measures in any Member State.

This communication is only being distributed to and is only directed at persons in the United Kingdom that are (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order") or (ii) high net worth entities, and other persons to whom this announcement may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as "relevant persons"). This communication must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this communication relates is available only for relevant persons and will be engaged in only with relevant persons. Persons distributing this communication must satisfy themselves that it is lawful to do so.

Matters discussed in this announcement may constitute forward-looking statements. Forward-looking statements are statements that are not historical facts and may be identified by words such as "believe", "expect", "anticipate", "strategy", "intends", "estimate", "will", "may", "continue", "should" and similar expressions. The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the Company believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict and are beyond its control.

Actual events may differ significantly from any anticipated development due to a number of factors, including without limitation, changes in investment levels and need for the Company's services, changes in the general economic, political and market conditions in the markets in which the Company operates, the Company's ability to attract, retain and motivate qualified personnel, changes in the Company's ability to engage in commercially acceptable acquisitions and strategic investments, and changes in laws and regulation and the potential impact of legal proceedings and actions. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements. The Company does not provide any guarantees that the assumptions underlying the forward-looking statements in this announcement are free from errors nor does it accept any responsibility for the future accuracy of the opinions expressed in this announcement or any obligation to update or revise the statements in this announcement to reflect subsequent events. You should not place undue reliance on the forward-looking statements in this document.

The information, opinions and forward-looking statements contained in this announcement speak only as at its date, and are subject to change without notice. The Company does not undertake any obligation to review, update, confirm, or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise in relation to the content of this announcement.

Neither of the Managers nor any of their respective affiliates makes any representation as to the accuracy or completeness of this announcement and none of them accepts any responsibility for the contents of this announcement or any matters referred to herein.

This announcement is for information purposes only and is not to be relied upon in substitution for the exercise of independent judgment. It is not intended as investment advice and under no circumstances is it to be used or considered as an offer to sell, or a solicitation of an offer to buy any securities or a recommendation to buy or sell any securities in the Company. Neither the Managers nor any of their respective affiliates accepts any liability arising from the use of this announcement.