Sunovion Pharmaceuticals Inc. to Acquire Elevation Pharmaceuticals, Inc.

Sunovion Pharmaceuticals Inc. (Sunovion) today announced that it has signed a definitive agreement (“Agreement”) to acquire Elevation Pharmaceuticals, Inc. (Elevation), a privately held biopharmaceutical company specializing in the development of new aerosol therapies for patients with respiratory diseases. The acquisition includes Elevation Pharmaceuticals’ EP-101 product, an inhalation solution of a long-acting muscarinic antagonist (LAMA) bronchodilator that is in Phase 2b clinical trials for the treatment of patients with moderate to severe chronic obstructive pulmonary disease (COPD).

According to the terms of the agreement, Sunovion will make an upfront payment of US$100 million to the shareholders of Elevation on closing of the acquisition of its shares, and thereafter it will make development milestone payments for EP-101 up to US$90 million. Furthermore, after the regulatory approval, Sunovion will also make commercial milestone payments up to US$210 million. Subsequent milestone payments up to $30 million could occur contingent upon the successive development of additional new programs.

“The acquisition of Elevation Pharmaceuticals will further strengthen and diversify our respiratory pipeline and portfolio, and enable Sunovion to continue to meet the needs of people living with respiratory diseases and the healthcare providers who treat them,” said Hiroshi Nomura, Vice Chair of Sunovion Pharmaceuticals Inc.

“Nebulized medicine is an important treatment option for older and sicker patients — the fastest growing segment within COPD,” observes Bill Gerhart, Founder and CEO of Elevation Pharmaceuticals. “Sunovion is the ideal sponsor to realize our original vision to significantly elevate the standard of care for this underserved patient population.”

The boards of both Sunovion and Elevation have approved the transaction and Agreement; however the acquisition is subject to customary closing conditions.

About EP-101

EP-101 is a proprietary solution formulation of glycopyrrolate, delivered by a customized eFlow® Nebulizer System (originated by and licensed from PARI Pharma GmbH), which was developed to optimize medication delivery and allow ease of use. Daily administration of inhaled bronchodilators (including LABAs and LAMAs) and corticosteroids are the main therapeutic options for managing the symptoms of COPD. EP-101 was designed for patients who are not well controlled on current standard of care or who prefer a nebulizer. The novel delivery system was designed to offer two potential key features for patients: reduced time for administration for patients (<2 min vs. 5-10 min for standard jet nebulizer) and a more portable size with a reduced noise level than most current nebulizer devices. Two Phase 2 studies have been conducted, and an additional Phase 2 study will be conducted this year on EP-101 to evaluate its efficacy and safety in patients with moderate to severe COPD. Phase 3 trials are expected to initiate in the second half of 2013.

“EP-101 is currently the only LAMA in late stage development in nebulized form, providing a significant opportunity to address the needs of patients struggling with the control of their COPD using handheld inhalers,” added Nomura. “With our extensive expertise in successfully launching and commercializing nebulized respiratory treatments, we have the knowledge and infrastructure necessary to complete the development of this important medication.”

About Sunovion Pharmaceuticals Inc. (Sunovion)

Sunovion is a leading pharmaceutical company dedicated to discovering, developing and commercializing therapeutic products that advance the science of medicine in the central nervous system (CNS) and respiratory disease areas and improve the lives of patients and their families. Sunovion’s drug development program, together with its corporate development and licensing efforts, has yielded a portfolio of pharmaceutical products including LATUDA® (lurasidone HCl), LUNESTA® (eszopiclone), XOPENEX® (levalbuterol HCl) Inhalation Solution, XOPENEX HFA® (levalbuterol tartrate) inhalation aerosol, BROVANA® (arformoterol tartrate) inhalation solution, OMNARIS® (ciclesonide) nasal spray, ZETONNA™ (ciclesonide) nasal aerosol and ALVESCO® (ciclesonide) HFA inhalation aerosol.

Sunovion, an indirect, wholly-owned subsidiary of Dainippon Sumitomo Pharma Co., Ltd., is headquartered in Marlborough, Mass. More information about Sunovion Pharmaceuticals Inc. is available at www.sunovion.com.

About Dainippon Sumitomo Pharma Co., Ltd. (DSP)

DSP is a multi-billion dollar, top-ten listed pharmaceutical company in Japan with a diverse portfolio of pharmaceutical, animal health and food and specialty products. DSP aims to produce innovative pharmaceutical products in the CNS field, which has been designated as the key therapeutic area and will also focus in on other specialty disease categories with significant unmet medical needs, which are designated as frontier therapeutic areas. DSP is based on the merger in 2005 between Dainippon Pharmaceutical Co., Ltd., and Sumitomo Pharmaceuticals Co., Ltd. Today, DSP has more than 7,000 employees worldwide. Additional information about DSP is available through its corporate website at www.ds-pharma.com.

About Elevation Pharmaceuticals, Inc.

Elevation Pharmaceuticals, Inc., a private biopharmaceutical company, was founded to develop new aerosol therapies for patients with respiratory diseases. The company focused on developing novel therapies that addressed unmet medical needs for patients with chronic obstructive pulmonary disease (COPD) who were not able to effectively control their disease with dry powder or metered dose inhalers. The Agreement calls for Elevation to become a wholly-owned subsidiary of Sunovion.

Financial Advisors

Barclays is acting as financial advisor to Sunovion Pharmaceuticals Inc. on this transaction. Jefferies and Company, Inc. is acting as financial advisor to Elevation Pharmaceuticals, Inc.

LATUDAis a registered trademark of Dainippon Sumitomo Pharma Co., Ltd. LUNESTA, XOPENEX, XOPENEX HFA and BROVANA are registered trademarks and ZETONNA is a trademark of Sunovion Pharmaceuticals Inc. OMNARIS and ALVESCO are registered trademarks of Nycomed GmbH, used with permission.