Novelion Announces Court Approval for Interim Distribution to Registered Shareholders

VANCOUVER, British Columbia, Dec. 23, 2020 (GLOBE NEWSWIRE) — Novelion Therapeutics Inc. (“Novelion” or the “Company”) by Alvarez & Marsal Canada Inc., Novelion’s court appointed liquidator (the “Liquidator”) today announces its intention to make an interim distribution to its registered shareholders in January 2021 (the “Interim Distribution”). The Interim Distribution will be made pursuant to an Order of the Supreme Court of British Columbia (the “Court”) dated December 16, 2020 in accordance with the Company’s Liquidation Plan. The mechanics of the Interim Distribution are in the process of being finalized and the date of the Interim Distribution will be communicated to the Company’s shareholders by way of a subsequent press release once confirmed.

The Interim Distribution will consist of 2,185,238 American depository receipts (“ADRs”) of Amryt Pharma plc (“Amryt”) currently held in Novelion’s name with the depositary for such ADRs, representing approximately 84.5% of the ADRs currently held by Novelion.

The ADRs will be distributed pursuant to the Interim Distribution at a ratio of one (1) ADR for every nine (9) Novelion shares held by a registered Novelion shareholder. Only whole ADRs will be distributed, and any fractional ADR entitlements will be rounded down. An amount equivalent to the market value of the fractional ADRs will be set aside for future distribution to those registered shareholders who would have been entitled to such amounts at the time of the Interim Distribution.

Those shareholders who were registered shareholders as of January 16, 2020, being the effective date of the Liquidation (the “Effective Date”), will be entitled to all distributions made in connection with Novelion’s ongoing statutory liquidation and dissolution.

It is anticipated that a second and final distribution of any remaining Amryt ADRs and any remaining cash in Novelion will be made in the first half of 2021 prior to the court approved statutory dissolution and winding up of the Company, which was previously approved by shareholders. The Court maintains jurisdiction over the ongoing statutory liquidation and dissolution, and an order approving the final distribution to shareholders will also be sought at a later date.

The Company believes that the distribution of the ADRs pursuant to the Interim Distribution will be conducted pursuant to prospectus and registration exemptions available under applicable US and Canadian securities laws. The ADRs are not listed on any stock exchange in Canada, and Amryt is not a reporting issuer in Canada. The Company understands that the ADRs are freely tradable on Nasdaq. The Company is not aware of any securities law restrictions applicable to the ADRs to be distributed, but shareholders are urged to consult their own tax, financial and legal advisors for any questions about the Interim Distribution and to satisfy themselves of any resale restrictions that may apply in their particular circumstances.

Novelion Assets and Amryt ADRs

As announced on September 25, 2019, Amryt acquired 100% of the outstanding equity interests of Novelion’s former operating subsidiary, Aegerion Pharmaceuticals, Inc. (“Aegerion”), as contemplated in Aegerion’s First Amended Joint Chapter 11 Plan (the “Aegerion Transaction”). In the Aegerion Transaction, reorganized Aegerion became a wholly-owned subsidiary of Amryt, and Novelion received ADRs representing approximately 14.0 million ordinary shares of Amryt in full satisfaction of Novelion’s claims as creditor under the secured intercompany loan between Aegerion and Novelion.

The depositary holding the ADRs confirms that Novelion currently holds 2,498,050 ADRs representing approximately 12.49 million ordinary shares of Amryt. After the Interim Distribution, Novelion will hold 312,812 ADRs representing approximately 1.56 million ordinary shares of Amryt.

In addition, Novelion holds certain limited royalty interests and equity interests in subsidiaries that carry on no active business and, aside from cash in an amount not exceeding USD$5,000, are not known to hold any material assets. As of October 31, 2020, the Liquidator, on behalf of the Company, holds cash in its trust accounts of CAD$38,352.77 and USD$289,159.06. On November 6, 2020, a sales process was commenced to market the royalty interests held by the Company with a deadline to submit offers of 5:00 pm PT on December 15, 2020. The Liquidator expects to seek Court approval of any viable offers in early 2021.

Registered shareholders on the Company’s stock transfer books as of the Effective Date will be entitled to a pro-rata share of any distribution to shareholders in the Liquidation. The Liquidator will distribute any remaining ADRs (which are publicly traded and subject to volatility) and any remaining cash assets to registered holders of the Company’s shares in connection with the completion of the Liquidation process. The Liquidator continues to expect that the liquidation distribution will consist almost entirely of the ADRs, net of any sales of ADRs that are necessary to fund the Company’s liabilities and cover the expenses of the Liquidation.

The Liquidator believes that it will be able to complete the final distributions to Novelion shareholders in the first half of 2021, subject to the resolution of ongoing administrative matters including the finalization of tax returns and completion of any sales process undertaken for certain royalty interests. The Liquidator has concluded the claims process on behalf of Novelion and has received a preliminary Clearance Certificate from the Canada Revenue Agency.

Shareholders and other interested parties should visit www.alvarezandmarsal.com/novelion for continuing information about Novelion, the Liquidation and related matters.

Cautionary Information Regarding the Company’s Securities

As of the Effective Date, the Company’s transfer agent closed the Company’s stock transfer books and discontinued recording transfers, and registered shareholders are no longer able to transfer record ownership of their shares. Any distributions made in the Liquidation will be made only to registered shareholders as of the Effective Date, and beneficial holders of common shares will be entitled to receive any distributions only through and from the applicable registered holder of their shares. Shareholders whose shares in Novelion are held in a brokerage firm or with a securities dealer, trust company, bank or another similar organization, are encouraged to reach out to their broker, dealer, trust, bank or other agent with any questions relating to the processes or requirements for receiving any such distributions if and when they are made.

The Company believes, but cannot assure, that trading in the Company’s common shares was suspended or otherwise ceased as of the Effective Date or shortly thereafter. The Company cautions that investors who seek to trade in Novelion common shares or other securities after the Effective Date (to the extent such trading is available), including on any secondary markets, do so at substantial risk to their investment.

The Company continues to caution that trading in the Company’s securities (to the extent such trading is available) remains highly speculative and poses substantial risks. Trading prices for the Company’s securities may bear little or no relationship to the actual value realized, if any, by holders of the Company’s securities. Accordingly, the Company urges extreme caution with respect to existing and future investments in its securities.

Forward-Looking Statements

Certain statements in this press release constitute “forward-looking statements” and “forward-looking information” within the meaning of applicable laws and regulations, including U.S. and Canadian securities laws. Any statements contained herein which do not describe historical facts, including, but not limited to, the Liquidator’s actions with respect to the Liquidation and any orders of the Court related to same, the amount, timing and nature of any distributions as part of the Liquidation, including the Interim Distribution, the distribution and resale of any ADRs in the hands of Novelion’s registered shareholders, the ultimate outcome of the Liquidation process, the undertaking or outcome of any potential sales process for assets held by the Company, and expectations and beliefs related to trading in and the market and record of holders of Novelion common shares after the Effective Date, are forward-looking statements which involve risks and uncertainties that could cause actual results to differ materially from those discussed in such forward-looking statements.

Such risks and uncertainties include, among others, the impact of any determinations of the Court and the actions of the Liquidator undertaken as part of the Liquidation, the possibility that actual expenses and claims that result from the Liquidation will be greater than anticipated, and the potential impact of any volatility in the market price of the ADRs held by the Company, any or all of which could materially reduce the availability of assets available for distribution to shareholders, the possibility of any resale restrictions applicable to the ADRs in the future to either Novelion or Novelion’s registered shareholders, as well as those risks identified in Novelion’s filings with the Securities and Exchange Commission (the “SEC”) and Canadian securities regulators, including the definitive proxy statement filed on October 3, 2019, which are available on the SEC’s website at www.sec.gov and on SEDAR at www.sedar.com. The impact from any such risks and uncertainties could materially reduce or eliminate the availability of assets available for distribution to shareholders.

Novelion cautions investors and others not to place undue reliance on any forward-looking statements, which speak only as of the date they are made. Except as required by law, Novelion undertakes no obligation to update or revise the information contained in this press release, whether as a result of new information, future events or circumstances or otherwise.

Contact:

Nishant Virmani
Alvarez & Marsal Canada Inc.
nvirmani@alvarezandmarsal.com 
www.alvarezandmarsal.com/novelion