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2016-07-21

Vifor Pharma Ltd.: Galenica to acquire Relypsa to strengthen its Business unit Vifor Pharma

Vifor Pharma Ltd. / Galenica to acquire Relypsa to strengthen its Business
unit Vifor Pharma. Processed and transmitted by NASDAQ OMX Corporate
Solutions. The issuer is solely responsible for the content of this
announcement.
Galenica and Relypsa announce agreement for Galenica to acquire Relypsa.
Acquisition strengthens Galenica's Business unit, Vifor Pharma

-
an important step towards becoming an independent specialty pharma company

- Galenica will commence a tender offer to acquire all issued and outstanding
Relypsa common stock for a cash consideration of USD 32 per share

- Implied fully-diluted equity value of the offer amounts to approximately
USD 1.53 billion

- Acquisition affirms commitment of Galenica Board of Directors to separate
the Galenica Group into two independent listed companies, partly financed by
equity proceeds to be raised in conjunction with the envisaged division of
the Galenica Group in 2017

- Transaction brings Vifor Pharma a dedicated US commercial organisation and
global rights to Veltassa®, a potassium binder for the treatment of
hyperkalaemia

- The Boards of Directors of both Relypsa and Galenica have approved the terms
of the merger agreement, and the Board of Directors of Relypsa has resolved
to recommend that shareholders accept the offer

Galenica Group today announced that it has entered into a definitive agreement
to acquire the US company Relypsa, Inc., (NASDAQ: RLYP), further
strengthening its Business unit Vifor Pharma by gaining full global rights to
the potassium binder Veltassa®(patiromer) for oral suspension and
enhancing its growing position as a global specialty pharmaceutical company
. Under the terms of the merger agreement, Galenica will pay USD 32 per share
in cash, or a total of approximately USD 1.53 billion. Through this
acquisition, Vifor Pharma will gain a fully-integrated commercial
organisation in the US and significantly strengthen its presence in the US
cardio-renal market, a key area of focus.

Transaction in line with the Galenica long-term growth strategy

The transaction is in line with the Galenica strategy of growth through
in-licensing and acquisitions that build on Vifor Pharma's emerging
international leadership in cardio-renal and gastroenterology therapies. It
provides Vifor Pharma with full global rights to Veltassa®, the first new
treatment for hyperkalaemia approved in the US in over 50 years. It will also
significantly enhance the commercial visibility and presence of Vifor Pharma
in the key US cardio-renal market, where Relypsa has already established a
significant and powerful specialist sales force. With the combination of the
assets and products of Vifor Pharma, Vifor Fresenius Medical Care Renal
Pharma (VFMCRP) and Relypsa, Vifor Pharma is positioned to become a major
player in the US in its core therapy areas.

The acquisition of Relypsa is expected to significantly strengthen Vifor
Pharma ahead of the planned division of the Galenica Group into two
independent companies in 2017, with an extensive specialist product portfolio
to include both the intravenous iron deficiency treatment Ferinject®and
Veltassa®, enhanced long-term growth visibility and an experienced global
management team capable of overseeing the successful integration and
development of the two businesses.

Platform for Vifor Pharma to become a major player in US cardio-renal market

Relypsa is a biopharmaceutical company based in Redwood City, California, with
more than 400 employees. The company, founded in 2007, is focused on the
discovery, development and commercialisation of polymeric medicines for
patients with conditions that can be addressed in the gastrointestinal tract.
Its lead product, Veltassa®, was approved by the US Food and Drug
Administration (FDA) for the treatment of hyperkalaemia in October 2015.
Veltassa®is the first medicine for treatment of people with elevated blood
potassium levels to be approved in the US in more than 50 years and the only
hyperkalaemia medicine with long-term data in its label supporting chronic
use. Relypsa has developed an extensive specialist commercial organisation in
the US targeting nephrologists and cardiologists and focused on developing
market access and awareness. Hyperkalaemia is a potentially life-threatening
condition which occurs most frequently in patients with chronic kidney
disease (CKD) and heart failure. It affects approximately 3 million people in
the US with stage 3 or 4 CKD and/or heart failure, giving Veltassa®the
potential to become a blockbuster medicine.

In August 2015, VFMCRP acquired the commercial rights to Patiromer outside the
US and Japan. Through the acquisition, Vifor Pharma will acquire the global
rights to Patiromer (US brand name Veltassa®). The medicine is currently
under regulatory review in Europe.

"The combination of Vifor Pharma and Relypsa is an important step towards
achieving our goal of building a world-leading specialty pharmaceutical
company focused on nephrology, cardiology and gastroenterology medicines,"
said Etienne Jornod, Executive Chairman of Galenica. "This acquisition will
give Vifor Pharma direct access to the key US market, enabling us to maximise
the potential of our compelling product portfolio and enhancing our growing
attraction as an international partner of choice. This transaction
demonstrates the commitment of the Galenica Board of Directors to achieve the
separation of Vifor Pharma and Galenica Santé, with both businesses in the
strongest possible position. We look forward to welcoming Relypsa to Vifor
Pharma."

"We are very proud of the team that built Relypsa into the company it is today
and brought Veltassa®to patients in need. Vifor Pharma is a recognised
international leader in the cardio-renal space that shares a strong
commitment to patients and closely aligned values with Relypsa," said John A.
Orwin, President and Chief Executive Officer of Relypsa. "We are excited to
announce this transaction today, which we believe offers significant and
immediate value to our shareholders. We look forward to continuing our
mission of improving patients' lives as part of the Vifor Pharma organisation
and are confident that our combined expertise, resources and commercial
strength will help us build on the significant progress we have made since
launching Veltassa®in the United States."

Offer recommended by Relypsa Board of Directors

Under the terms of the merger agreement, Galenica will commence a tender offer
to acquire all of the issued and outstanding common stock of Relypsa for USD
32 per share. The implied fully-diluted equity value of the offer amounts to
approximately USD 1.53 billion.

The Boards of Directors of both Relypsa and Galenica have approved the terms
of the merger agreement, and the Board of Directors of Relypsa has resolved
to recommend that shareholders accept the offer, once it is commenced.

The acquisition is structured as an all-cash tender offer for all outstanding
issued common stock of Relypsa followed by a merger in which remaining shares
of Relypsa would be converted into the same USD per share consideration as in
the tender offer. The transaction is not subject to a financing condition.

Completion anticipated during the third quarter 2016

Subject to customary conditions, including the tender of the majority of the
outstanding Relypsa shares and the expiration or earlier termination of the
waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, the transaction is expected to close during the third quarter of 2016.
Relypsa is expected to be delisted from the NASDAQ and integrated into Vifor
Pharma thereafter.

Vifor Pharma intends to retain the Relypsa leadership team in order to support
the integration of Relypsa into Vifor Pharma, as well as the ongoing business
and future development of Veltassa®.

Credit Suisse acted as the sole financial adviser to Galenica for this
transaction. Centerview and BofA Merrill Lynch acted as financial advisers to
Relypsa.

Jones Day acted as the legal adviser to Galenica for this transaction.
Latham&Watkins LLP acted as legal adviser to Relypsa.

Financing and proposed division of Galenica Group

As stated in May 2016, preparations continue for the division of the Galenica
Group into two independent listed companies. The acquisition of Relypsa
affirms the commitment of the Galenica Board of Directors to this strategy,
adding further breadth and scale to the Vifor Pharma specialty portfolio.

Galenica has secured committed bridge loan financing from Credit Suisse which,
in addition to the Galenica existing cash and cash equivalents, is available
to finance the transaction.

Galenica plans to refinance a portion of the bridge loan through equity
proceeds to be raised in conjunction with the envisaged division of the Group
in the course of 2017, either through an IPO of Galenica Santé or through
another option such as an equity increase. Galenica intends to raise
sufficient equity to maintain implied investment grade ratings at both Vifor
Pharma and Galenica Santé in the medium term after the separation of the
Group.

Update on Vifor Pharma guidance

Due to the excellent momentum, the former guidance on 2016 EBIT of Vifor
Pharma is raised on a like-for-like basis and is now expected to increase by
approximately 10% compared to the previous year.

However, due to the significant but planned investment required to ramp-up
sales of Veltassa®in the US in the newly acquired business of Relypsa, the
combined 2016 EBIT of Vifor Pharma is expected to reduce by approximately CHF
80 million on the assumption that Relypsa is consolidated as of October 2016.
Looking ahead to 2017 a low triple digit investment is planned in order to
drive the continued ramp-up of Veltassa®. This investment will continue into
2018, but at a decreasing rate. The newly acquired business is expected to
generate a positive EBIT from 2019 onwards that is expected to accelerate
rapidly up to mid to high three digit numbers in the subsequent years.

A comprehensive guidance update for the whole Galenica Group will be given
with the publication of the half year results on 9 August 2016.

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| Conference call and webcast access |
| |
|Galenica will host an analyst, investor and media conference call and webcast |
|today, Thursday, July 21, 2016 at 2:00 p.m. CEST. |
|To access the conference call (the call will be held in English), please dial |
| |
| * Switzerland: +41 (0)22 567 54 31 |

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