Transaction Highlights

• Acasti and Grace are a strong strategic fit:
  • Acasti gains a new pipeline of high potential clinical and preclinical programs
  • Acasti expands its expertise with Grace’s competencies in novel drug delivery technology and rare diseases
  • Combined company has significant drug development, regulatory and commercialization experience
• First three clinical-stage assets from Grace have total US market potential of $850 million:
  • Each program addresses unmet medical needs with a highly differentiated value proposition for patients and providers
  • All assets granted Orphan Designation status, with potential for 7-year US and 10-year EU market exclusivity
  • Pursuing lower cost, lower risk 505(b)(2) regulatory pathway
  • Orphan drugs generally command premium pricing
  • Potential near-term, value-enhancing milestones for each product candidate
• Approximately $64 million cash on hand expected to fund two lead assets through approval and pipeline advancement
  • Multiple additional preclinical drug candidates in pipeline for potential future development or partnering
  • Strong and growing intellectual property portfolio of >40 granted and pending patents in various global jurisdictions

Management and Operations

Upon shareholder approval of the Proposed Transaction, the combined companies will be led by Jan D’Alvise as president and chief executive officer, and the corporation will continue to maintain its corporate headquarters in Laval, Quebec, Canada. All Grace employees will transition to Acasti and they will continue to maintain an R&D laboratory and commercial presence in North Brunswick, New Jersey. The new Board of Directors will be composed of 4 representatives from Acasti and 3 from Grace, with more details to be provided in the proxy statement.

About the Proposed Transaction

Pending approval by Acasti shareholders as well as applicable stock exchange approvals, Grace will merge with a new wholly owned subsidiary of Acasti. Grace stockholders will receive newly issued Acasti common shares pursuant to an exchange ratio formula set forth in the definitive agreement. Under the terms of the definitive agreement, immediately following the consummation of the Proposed Transaction, Acasti’s securityholders on a pro forma basis would own approximately 55% of the combined company’s common shares, and Grace’s securityholders would own approximately 45% of the combined company’s common shares, in each case calculated on a fully-diluted basis, subject to upward adjustments in favor of Acasti based on each company’s capitalization and net cash balance as set forth in the definitive agreement, with more details to be provided in the proxy statement.

In connection with the entering into the definitive agreement, Grace stockholders representing substantially all of the outstanding shares of Grace have entered into voting and lock-up agreements with the Company pursuant to which they have agreed, amongst other things to (i) vote their shares of Grace in favor of the Proposed Transaction, (ii) be subject to lock-up provisions for a period of 12 months (subject to certain exceptions), and (iii) support the election of board nominees through to the 2023 annual general meeting of shareholders.

The Proposed Transaction is expected to close in calendar Q3 of 2021, immediately following approval by Acasti shareholders, subject to any applicable SEC review and stock exchange approvals, as well as satisfaction of other closing conditions by each company specified in the definitive agreement.

Grace’s Leading Drug Assets:

• GTX-104: Subarachnoid Hemorrhage (SAH) – Intravenous Infusion
  • Clinical stage: PK Bridging study results expected Q1‘22; Phase 3 Safety Study expected to start enrollment Q3’22.
  • Product Description: Novel aqueous nanoparticle formulation of water insoluble nimodipine, that enables a continuous peripheral IV infusion for rapid and enhanced bioavailability. Acasti and Grace believe GTX-104 can potentially improve the management of hypotension and vasospasm in SAH patients, thereby improving patient outcomes and potentially preventing death and/or reduce long-term disability.
  • Disease Target: SAH is a rare and life-threatening medical emergency in which bleeding occurs over the surface of the brain in the subarachnoid space between the brain and skull. A primary cause of such hemorrhage is rupture of an aneurysm or ballooning of a weakened blood vessel wall. Notably, 10-15% of SAH patients currently die before reaching hospital and 20% of admitted patients die in hospital².
  • Target Market: SAH affects approximately 50,000 patients per year in the U.S.³ with an estimated addressable market of over $300 million⁴. Nimodipine, the current standard of care for SAH, is only available as an oral capsule and liquid solution in the U.S., making drug delivery very difficult particularly when a patient is unconscious. Oral nimodipine also has suboptimal absorption when administered through the gut⁵.
• GTX-102: Ataxia-telangiectasia (A-T) - Oral Mucosal Spray
  • Clinical stage: PK Study results expected 2H’22; start of Phase 3 expected 1H’23.
  • Product Description: A novel and convenient oral mucosal spray formulation of betamethasone intended to significantly improve neurological symptoms of A-T, including improving clinical assessments of posture and gait disturbance, and kinetic speech and oculomotor functions. Currently, there are no FDA approved pharmacotherapies for A-T. Acasti and Grace also believe that GTX-102 could ease drug administration for patients experiencing A-T given its application as a more convenient, concentrated and metered betamethasone liquid spray onto the tongue, as these A-T patients typically have difficulty swallowing⁶.
  • Disease Target: A-T is a progressive, neurodegenerative genetic disease that primarily impacts children causing severe disability, for which no treatment currently exists. A-T affects many parts of the body, including areas of the brain, causing difficulty with motor function and motion. The disease is also associated with weakening of the immune system predisposing patients to infection, and with faulty repair of damaged DNA that may increase the risk of cancer⁷.
  • Target market: A-T affects approximately 4,300 patients per year in the U.S.⁸ with an estimated addressable market of approximately $150 million⁴.
• GTX-101: Post Herpetic Neuralgia (PHN) - Topical Spray
  • Clinical Stage: Phase 1 results expected 2H’22; start of Phase 2 expected 2H’22.
  • Product Description: A novel, topical bio-adhesive film-forming spray of bupivacaine for the treatment of PHN, which could provide significant benefits over the standard of care, including greater convenience, and faster onset and longer action. GTX-101’s metered-dose of bupivacaine spray forms a thin bio-adhesive topical film on the surface of the patient’s skin, which enables a touch-free, non-greasy application. No skin sensitivity was reported in its Phase 1 study.
  • Disease Target: PHN is a persistent and often debilitating neuropathic pain caused by nerve damage from the varicella zoster virus (shingles). PHN pain varies from mild to excruciating in severity, and may persist for months and even years, adversely impacting quality of life and leading to social withdrawal and depression. As a result, PHN is often cited as the leading cause of suicide in chronic pain patients over the age of 70⁹.
  • Target market: PHN affects approximately 150,000 patients per year in the U.S.¹⁰ with an estimated addressable market of approximately $400 million⁴. Current treatment of PHN most often consists of oral gabapentin and lidocaine patches, and refractory cases may be prescribed opioids to address persistent pain. Current lidocaine patches used for PHN are suboptimal, as these patches are difficult to use; 40% of patients experience insufficient pain relief, the analgesic effect could take up to 2 weeks, and many patients suffer from skin sensitivity and irritation⁴. Unlike oral gabapentin and lidocaine patches, Acasti and Grace believe that the biphasic delivery mechanism of GTX-101 has the potential for rapid onset and continuous pain relief for up to eight hours¹¹.