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2015-04-23

Biotie Therapies Oyj: Biotie proposes to strengthen its capital structure by approximately EUR 95 million through a directed issue of convertible notes and war

BIOTIE THERAPIES CORP. STOCK EXCHANGE RELEASE 23
April 2015 at 10.16 am

Not for release, publication or distribution, directly or indirectly, in whole
or in part, in or into the United States, Australia, Canada, Japan or South
Africa.

Biotie proposes to strengthen its capital structure by approximately EUR 95
million through a directed issue of convertible notes and warrants and a US
Public Offering to finance a Phase 3 trial of tozadenant in Parkinson's
disease

Biotie Therapies Corp. ("Biotie" or the "Company") announces plans to
strengthen its capital structure to finance a Phase 3 double-blinded clinical
trial, including the open label extension, of its lead product candidate
tozadenant (the "Tozadenant Phase 3 Trial") by in aggregate approximately EUR
95 million through a directed issue of up to EUR 42.5 million convertible
promissory notes (the "Convertible Notes") and other equity-based instruments
(the "Warrants") to certain US investors and certain existing shareholders,
as well as a US public offering (the "US IPO") and potential other offerings
in connection with the US IPO. The issue of the Convertible Notes and
Warrants, as well as the US IPO, is conditional on the granting of necessary
authorizations and election of new Board members by an Annual General Meeting
of Biotie expected to be held in May 2015 (the "AGM").

Investment by US investors and existing shareholders

Biotie has on 23 April 2015 entered into an agreement (the "Agreement") with
certain US based investors, including Vivo Capital, OrbiMed, Versant Ventures
and investment funds managed by the Baupost Group (the "Investors") whereby
the Investors will make an initial investment as a convertible loan in the
Company by means of subscribing for Convertible Notes in an aggregate
principal amount of approximately EUR 27.5 million. Each Convertible Note
would entitle the holder to convert such Convertible Note into one new share
in the Company. The subscribers of the Convertible Notes will for each
Convertible Note also receive one Warrant entitling the holder to subscribe
for one new or treasury share in the Company.

Further, certain existing shareholders of the Company have indicated that they
will subscribe for a minimum of EUR 0.5 million each and in aggregate up to
EUR 15 million of the Convertible Notes, and will also receive Warrants, on
the same terms as the Investors.

The convertible loan, represented by the Convertible Notes, will be subscribed
for and the proceeds thereof will be paid to the Company shortly after the
AGM and each Convertible Note will have a conversion price of EUR 0.15 per
share. The Convertible Notes can be converted by their holders at any time
prior to the repayment of the Convertible Notes. The Convertible Notes
automatically convert into new shares in the Company upon completion of the
US IPO and, should the US IPO not take place, the Company can force the
conversion of the Convertible Notes at any time after 1 May 2016. The
Convertible Notes can be repaid by the Company after 1 May 2035 if, and to
the extent, they have not been converted. The Investors may also declare the
Convertible Notes to be repaid in the event of certain defaults by the
Company, including but not limited to the event that the aggregate gross
proceeds of the Convertible Notes, the US IPO and potential other offerings
prior to the completion of the US IPO would exceed USD 95 million.

Each Warrant entitles the holder to subscribe for one new or treasury share in
the Company at a subscription price of EUR 0.17. The Warrants, irrespective
of the contemplated US IPO, may be exercised for a period of five (5) years
from a date falling five (5) months after issuance of the Warrants.

The conversion price of the Convertible Notes and exercise price of the
Warrants have been determined by considering the share price of the Company's
shares in public trading on NASDAQ OMX Helsinki Ltd, the non-secured and
interest free nature of the Convertible Notes as well as availability and
terms of possible other financing alternatives.

The maximum number of shares in the Company to be issued under the Convertible
Notes and Warrants amounts to 562,000,000 shares representing approximately
123 per cent of the existing shares and votes in the Company, half of which
will be used for the short-term Convertible Notes and the other half for the
long-term Warrants.

As part of the Agreement, the election of two (2) new members of the Board of
Directors will be proposed to the AGM, the election of whom is a condition to
the obligations of the Investors to subscribe for the Convertible Notes.

The obligations of the Investors under the Agreement are subject to certain
additional conditions, including no material adverse change related to Biotie
and the validity of certain representations and warranties. In relation to
the issuance of Convertible Notes, the Agreement includes certain
indemnification undertakings in the event of a qualified breach of the
Company's representations and warranties, in which case Biotie would have an
obligation to indemnify the Investors against damages resulting from such
breach in certain situations, however, not to exceed a maximum amount
corresponding to the Investors' total investment in the issuance of
Convertible Notes. In connection with the issue of Convertible Notes and
Warrants, the Company will undertake to enable certain sales of the Company's
shares under the U.S. Securities Act of 1933.

US IPO

Biotie also announces that it intends to conduct a US IPO and listing on the
Nasdaq Global Market of American Depositary Receipts representing the
Company's shares. The Company will remain a Finnish company, and its ordinary
shares will continue to be listed on NASDAQ OMX Helsinki Ltd.

The maximum number of new shares in the Company to be issued in the US IPO and
potential other offerings in connection with the US IPO amounts to
530,000,000 shares representing approximately 42 per cent of the shares and
votes in the Company after such US IPO and potential other offerings in
connection with the US IPO (including the dilution resulting from the
automatic conversion of the Convertible Notes at the US IPO, but excluding
the dilution resulting from the potential exercise of the Warrants).

Use of Proceeds

The Company intends to use the proceeds of the Convertible Notes and the US
IPO and potential other offerings in connection with the US IPO, together
with its current liquid assets and future revenue from Lundbeck in respect of
Selincro to finance the Tozadenant Phase 3 Trial at least through to the next
major milestone, namely top-line data on the primary endpoint at 24 weeks,
which is currently expected by the end of 2017. Further information on the
contemplated Tozadenant Phase 3 Trial may be found from the Company's release
of 23 April 2015.

Rationale for the transaction and shareholder support

The Board of Directors, having considered various strategies for financing the
Tozadenant Phase 3 Trial, has concluded that the issuance of the Convertible
Notes and Warrants, and the carrying out of the US IPO and potential other
offerings in connection with the US IPO, is the most favorable option for the
Company to raise the large amount of capital required to conduct such a
study. This strategy will enable the product to move quickly into clinical
trials for the benefit of patients, and consequently, to maximize the value
of tozadenant to the Company and its shareholders. There are, therefore,
weighty financial reasons from the Company's perspective for deviating from
shareholders' pre-emptive subscription rights in the issuance of Convertible
Notes and Warrants, and shares in the US IPO.

The Board of Directors will convene the AGM to decide on the necessary
authorizations and election of new Board members relating to the transaction
announced herein. Existing Biotie shareholders representing in aggregate more
than 50 per cent of the Company's total number of shares and votes have
indicated that they will support the granting of such authorizations and the
election of new Board members at the AGM.

The Board will decide on the detailed terms and conditions of the issuance of
Convertible Notes and Warrants pursuant to the Agreement as well as the
detailed terms and conditions of the US IPO and potential other offerings in
connection with the US IPO provided that the AGM grants the necessary
authorizations.

The issuance of the Convertible Notes and Warrants is expected to take place
shortly after the AGM, and the US IPO is expected to complete by the middle
of 2015, which would allow the recruitment into the Tozadenant Phase 3 Trial
to commence as planned.

Timo Veromaa, President and Chief Executive Officer of Biotie commented: "We
are delighted to have these leading investors contributing to the finance
of the clinical development of our lead product candidate tozadenant, for
which we have worldwide rights. Parkinson's disease remains an area of high
unmet medical need and these funds, together with the proposed US IPO, will
allow us to commence a pivotal Phase 3 clinical trial that we believe could
form the basis for approval of tozadenant by the FDA as an adjunctive
treatment to levodopa in Parkinson's
".

Biotie Therapies Corp.
Timo Veromaa
President and CEO

For further information, please contact:
Virve Nurmi, Investor Relations Manager, Biotie Therapies Corp.

tel. +358 2 274 8900, e-mail: virve.nurmi@biotie.com

www.biotie.com

DISTRIBUTION:
NASDAQ OMX Helsinki Ltd
Main Media

About Biotie

Biotie is a specialized drug development company focused on products for
neurodegenerative and psychiatric disorders. The current development products
include tozadenant for Parkinson's disease, which is transitioning into Phase
3 development, and two additional compounds which are in Phase 2 development
for cognitive disorders including Parkinson's disease dementia, and primary
sclerosing cholangitis (PSC), a rare fibrotic disease of the liver. Biotie's
development has already delivered Selincro (nalmefene) for alcohol
dependence, which received European marketing authorization in 2013 and is
currently being rolled out across Europe by partner Lundbeck.

About Tozadenant

Tozadenant is an oral, selective adenosine A2a receptor antagonist which has
previously reported positive data from a 420-patient Phase 2b study
evaluating tozadenant in Parkinson's patients experiencing levodopa related
end-of-dose 'wearing-off'. Full data from this trial was published in Lancet
Neurology in 2014. The trial met its primary endpoint of a highly significant
decrease in "off" time vs. placebo, as well as demonstrating efficacy across
multiple secondary endpoints. The Phase 3 protocol will largely replicate
that of the Ph...

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