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2015-08-19

Interim report January 1-June 30, 2015: Financially stable - new investments in regenerative medicine: CDNF and Lymfactin

Interim report January 1-June 30, 2015 (unaudited)

Highlights in January-June 2015:

* Tekes, the Finnish Funding Agency for Innovation, granted a 2,903 million
euro R&D loan to the company to support its clinical study of CDNF for the
treatment of Parkinson's disease. Clinical trial applications will be
submitted in 2015.
* Initial results of the Phase 2 study of cis-UCA Eye Drops did not meet
expectations. Cis-UCA Eye Drop was statistically significantly better than
placebo in only certain secondary endpoints. The company writes off the
remaining activated development expenses related to cis-UCA while it
continues its evaluation of the results.
* Scientific publication suggests that CDNF improves long-term memory in a
mouse model of Alzheimer's disease.
* Herantis had no essential revenue during the review period. The Group's
financial result for the period was €-13.6 million (H1/2014: €-2.4 million)

* Herantis cash flow from operations was €-5.3 million (H1/2014: €-2.4
million)
* Herantis' cash and cash equivalents amounted to €6.6 (14.2) million on June
30, 2015

Key figures

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| € thousands 1-6/2015 1-6/2014 1-6/2013 1-12/2014 |
| ¹ ¹ 2 ¹ |
| Consolidated Consolidated Parent Consolidated |
| Revenue 1.2 0.0 0.0 0.8 |
| Personnel expenses -766.0 -355.0 -183.2 -1,115.0 |
| Depreciation and amortization -8,593.2 -455.7 -151.3 -1,884.9 |
| Other expenses for business operations -4,372.5 -831.0 -161.1 -4,662.6 |
| Profit for the period -13,585.2 -2,445.2 -514.5 -8,356.4 |
| Cash flow from operations -5,335.8 -2,409.0 -407.0 -5,438.4 |
----------------------------------------------------------------------------------------------

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| € thousands Jun 30, 2015 Jun 30, 2014 Dec 31, 20132 Dec 31, 20141 |
| ¹ ¹ |
| Consolidated Consolidated Parent Consolidated |
| Cash and cash equivalents 6,635.8 14,241.7 17.7 11,416.4 |
| Equity 8,135.8 26,861.3 120.0 21,328.9 |
| Balance sheet total 15,899.9 33,658.4 2,640.9 29,102.9 |
---------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------
| 1-6/2015 1-6/2014 1-6/20132 1-12/2014 |
| ¹ ¹ ¹ |
| Consolidated Consolidated Parent Consolidated |
| Equity ratio % 51.2 79.8 4.5 73.3 |
| Earnings per share € -3.34 -2.21 n/a -3.21 |
| Number of shares at end of period3 4,067,794 4,058,214 n/a 4,062,214 |
| Average number of shares 4,063,201 1,107,739 n/a 2,606,773 |
-------------------------------------------------------------------------------------------
1Herantis Pharma Group was formed on April 29, 2014 through merger of Herantis
Pharma Plc and Laurantis Pharma

2Comparison period figures from parent company of Herantis Pharma Plc

Pro Forma information

The pro forma information on the merger of business operations illustrates the
financial effects of the merger. The information is prepared based on the
assumption that the merger took place on January 1, 2013. The combination of
business operations was completed on April 29, 2014. The pro forma
information is given for the periods 1-6/2014 and 1-6/2013. The accounting
principles for the pro forma information are detailed in Herantis' IPO and
listing prospectus of May 12, 2014.

------------------------------------------------------------------------------------
| € thousands 1-6/2015 1-6/2014 1-6/2013 1-12/2014 |
| Consolidated Pro forma Pro forma Consolidated |
| Personnel expenses -766.0 -508.2 -357.1 -1,115.0 |
| Depreciation and amortization -8,593.2 -1,064.7 -1,064.7 -1,884.9 |
| Other operational expenses -4,372.5 -1,361.8 -736.3 -4,662.6 |
| Profit (-loss) from operations -13,730.6 -2,934.8 -2,158.1 -7,656.6 |
------------------------------------------------------------------------------------
Formulae used in calculating key figures

Equity ratio = Equity / balance sheet total
Earnings per share = Profit for period / average number of shares
Average number of shares = Weighted average number of shares. The number of
shares is weighted by the number of days each share has been outstanding
during the review period

Guidance for 2015

In pharmaceutical development, the speed of research defines the expenses
incurred. The faster the research, the more quickly expenses are created. The
company does not expect any revenues in 2015. The financial position is
expected to be positive at the end of the period.

Pekka Simula, CEO:

"The initial results of our cis-UCA Eye Drop study did not meet our
expectations. Dry Eye Syndrome is a very challenging indication for both
patients and drug development. We will continue to evaluate collaboration
opportunities with potential partners.

I am very satisfied with the professional conduct of this clinical study in
its planned schedule and budget. Our strong expertise in clinical development
remains a cornerstone of the company when proceeding with the development of
our other drug candidates.

Indeed the most important activities of the review period concern one of our
other drug candidates, CDNF. Tekes, the Finnish Funding Agency for
Innovation, granted a significant R&D loan to support our clinical study in
Parkinson's disease. This enables an optimal scope for the study both in
terms of the number of patients and length of the study. Also during the
review period, a scientific article was published suggesting that CDNF
improves long-term memory in a model of Alzheimer's disease. Both Parkinson's
disease and Alzheimer's disease have a major need for new, improved
treatments and cause a significant societal burden. If CDNF is shown as safe
and efficacious it may help improve the lives of a countless number of
people.

From the patient's viewpoint it is of course meaningless whether millions of
people share the same disease. Therefore the development of our drug
candidate Lymfactin for secondary lymphedema caused by breast cancer
treatments is also very important for us though only some dozens of thousands
of new cases are diagnosed annually. I am really pleased that after excellent
discussions with regulatory authorities we are ready to submit our clinical
trial application on Lymfactin already within weeks and we hope to treat the
first patients in Finland by the end of the year.

Both CDNF and Lymfactin represent a novel and promicing branch of medicine,
regenerative medicine, which aims at restoring the normal function of human
tissues or organs. Our goal is to show the initial safety and efficacy of our
drug candidates in early clinical studies in the next two years. We also
target signing at least one commercial partnering agreement by the end of
2017. In practice this could mean collaboration with a larger pharmaceutical
company to cover the costs of late stage clinical development and market
roll-out, with milestone payments for our company."

Outlook for 2015

After listing on the First North marketplace, Herantis has focused on the
clinical development of its three most important drug candidates. Based on
the initial results from the clinical study of cis-UCA Eye Drops the company
is looking for a commercial partner for the possible further development of
the asset.

Herantis' long-term goal is to significantly increase its business through
commercialization agreements for its drugs and investing the received income
in the development of new drug candidates.

Thus far, no commercialization agreements exist. Instead, Herantis' operations
focus on the clinical development of its drugs. The objective has been set to
enter a commercialization agreement for at least one of the top priority
drugs with a Finnish or international pharmaceutical company by the end of
2017.

The main objective for 2015 was to conclude the Phase 2 cis-UCA clinical trial
started in the United States toward the end of 2014. While the results of the
study did not meet expectations the well-executed study proved that Herantis
can conduct high-quality clinical development in budget and schedule. This
provides a strong basis for the planned clinical development of our other
drug candidates.

The main objectives for the second half of 2015 are launching clinical
development with CDNF in Parkinson's disease and with Lymfactin in secondary
lymphedema by submitting clinical trial applications to regulatory
authorities.

Herantis' drug development

Drug development is a long-term endeavor divided into a preclinical phase and
clinical studies on humans. The clinical studies are normally conducted in
three phases. Phase 1 studies the safety of the drug candidate. Phase 2
studies investigate the optimal dosage and efficacy of the drug for treating
a particular disease. Finally, Phase 3 aims at proving the efficacy of the
drug candidate typically in hundreds or thousands of patients as a
prerequisite for applying for the drug to be licensed. Completing all the
stages of a drug development project typically takes 10 to 15 years from the
start of the research to the granting of the license.

Dry eye / Cis-UCA eye drops

Dry eye (Keratoconjunctivitis sicca) is the most common cause for eye
irritation. Its typical symptoms include dryness of the eye, a burning
feeling, pain, redness and a sensation of a foreign object in the eye. Severe
or prolonged dry eye may damage the surface of the eye and deteriorate
eyesight. Dry eye is believed to become more common as the population is
aging and the use of computers and mobile devices is increasing.

Herantis' cis-UCA Eye Drop is a drug candidate being developed for the
treatment of dry eye. Based on a Phase ...

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