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TORONTO, APRIL 29, 2022 – Satellos Bioscience Inc. (TSXV: MSCL) (“Satellos” or the “Company”), a regenerative medicine company aimed at developing therapeutics that change the way degenerative muscle diseases are treated, announced today its financial results and operational highlights for the year ending December 31, 2021. All dollar amounts are expressed in Canadian currency unless otherwise noted. 

“2021 was a transformative year for Satellos, as we continue to advance game changing science that can have an immense impact on the lives of those suffering from Duchenne and a host of other muscular dystrophies,” said Satellos Co-Founder and CEO, Frank Gleeson. “Through our reverse takeover of iCo Therapeutics we have been able to reach a broader investor pool by improving our access to capital markets, providing us the funding necessary to advance towards our goal of reaching pre-IND studies before the end of 2022. We’ve made breakthrough proprietary discoveries that are allowing us to progress our lead candidates and have been very active in engaging the scientific and investment communities during the start of the new year. Interest in and excitement for our novel regenerative drug candidates is growing, and we see incredible opportunity on the horizon.” 

Program highlights for the year ended December 31, 2021, along with recent developments include: 

Operational Highlights 

On August 13, 2021, iCo Therapeutics Inc (“iCo”) completed a reverse takeover of Satellos Bioscience Inc., a private corporation incorporated under the laws of Canada, pursuant to a business combination completed by way of a plan of arrangement (the “Arrangement”) under Section 192 of the Canada Business Corporations Act. Upon completion of the Arrangement, the Company changed its name from iCo to Satellos Bioscience Inc, and the common shares of the Company began trading on the TSX Venture Exchange under the ticker symbol “MSCL” on August 18, 2021. 

Coinciding with the Arrangement, Satellos completed a concurrent capital raise of $7.25 million and converted a US$1 million debt instrument by Parent Project Muscular Dystrophy into an equity investment in the Company. During the year, a further $1.9 million was raised through the exercise of outstanding warrants in iCo and Satellos to purchase common shares. On August 25, 2021, Satellos announced receipt of a $50,000 grant to further its research efforts from Jesse’s Journey (since renamed Defeat Duchenne Canada), a Canadian advocacy group focussed on Duchenne muscular dystrophy (“Duchenne”). 

On September 21, 2021 Satellos announced the appointment of J. Robert Hall, CFA as Vice-President, Finance & Administration, and on December 6, 2021 announced the appointment of high-profile biotechnology veterans Dr. Rima Al-awar, PhD and Mr. Adam Mostafa to its board of directors and the 

departure of Dr. John 

Financial Results 

Satellos had cash and cash equivalents of $4,871,263 as at December 31, 2021. 

Net loss / comprehensive loss for the year ended December 31, 2021, was $15,507,096, or $0.64 per share, compared to a loss of $1,578,530, or $0.09 per share, for the year ended December 31, 2020. The increase in net loss for the year ended December 31, 2021 compared with the year ended December 31, 2020 was primarily a result of listing and transaction expenses incurred in the reverse takeover. 

Research and development (“R&D”) expenses of $2,003,613 were incurred during the year ended December 31, 2021, compared to $940,942 incurred in the year ended December 31, 2020. The increase in R&D expenses in the current year is primarily attributable to Satellos’ lead R&D program in Duchenne. 

Satellos’ audited consolidated financial statements for the year ended December 31, 2021 and the related management’s discussion and analysis are available on SEDAR at www.sedar.com. 

Noteworthy Developments 

Duchenne is an incurable genetic disease that affects an estimated 1 in 4,000 live male births per year, worldwide. Satellos has discovered that muscle degeneration and loss of function in Duchenne is driven by perturbations in the way muscle stem cells divide, wherein a process known as cell “polarity” is defective. As announced on March 15, 2022, Satellos has made certain advances in the development of small molecule drugs to correct polarity deficits in muscle stem cells. We believe that correcting such polarity deficits is a novel concept that has the potential to yield a disease modifying therapeutic approach for the treatment of severe muscle disorders including Duchenne, the Company’s lead indication. 

On August 27, 2021, Satellos announced it had successfully determined a high-resolution X-ray crystal structure of its novel drug target for Duchenne muscular dystrophy. The finding represented a significant step forward in the Company’s scientific efforts. On September 13, 2021, the Company announced breakthrough findings from additional preclinical drug development studies in its lead program to treat Duchenne that provided evidence on an entirely new therapeutic approach to repairing the debilitating tissue damage which accumulates in the muscles of Duchenne patients. Satellos believes its technology offers a breakthrough for the therapeutic treatment of the debilitating damage that accumulates in the muscles of Duchenne patients and potentially other degenerative muscle conditions. 

Beyond Duchenne there are more than 30 types of muscular dystrophy that affect humans, each with different causes that manifest into conditions that range across the entire spectrum of severity from benign, small impairments to motor function, through to full loss of ambulation and even death. As part of its plan to explore the potential for its drug candidates in other dystrophic conditions, on December 16, 2021, the Company announced it had entered into a scientific research agreement with Université de Sherbrooke to collaborate on activities to identify additional disease indications for Satellos’ novel muscle regeneration technology in selected preclinical models of rare muscular dystrophies. 

Holyoake and Dr. Michael Rudnicki from the board of directors. Dr. Michael Rudnicki remains Chief Scientific Officer of the Company. 

Satellos has also licensed a large body of intellectual property related to compositions and methods of use of a naturally occurring protein called ‘Wnt7a’, which plays a role in the symmetric stem cell division central to muscle regeneration. It is believed that Wnt7a may be an effective treatment strategy in muscle wasting conditions other than Duchenne, including indications where significant muscle damage and/or atrophy (loss) has occurred due to physical trauma or disuse. Satellos plans to explore the use of Wnt7a as a therapeutic modality in these instances. 

Since the beginning of 2022 Satellos has been highly active in participating in high-profile scientific and investment conferences and events to further awareness of its game changing work. Representatives from Satellos have recently participated in a number of established and respected engagements including Biotech ShowcaseTM 2022, BIO CEO & Investor Conference 2022, Insights in Research Investor Summit and MDA Clinical & Scientific Conference 2022 and most recently as a part of a Drug Discovery News webinar on stem cell research. 

Additionally, on March 15, 2022, Satellos announced that it has invented three unique and proprietary chemical series or classes of small molecule compounds with the potential to modulate muscle stem cell polarity, from which it has designed and screened hundreds of novel drug candidates. The Company announced it is prioritizing several of its most promising compounds to be advanced into adsorption, distribution, metabolism and excretion studies as well as pharmacokinetics profiling. This development represents an important milestone in the Company’s efforts to optimize and select a lead drug candidate and advancing into the requisite pre-investigational new drug studies during the second half of 2022. 

Amp B Technologies Inc. (“Amp B Tech”) 

Following the Arrangement, Satellos formed Amp B Tech as a separate legal entity to focus on advancing the Oral Amp B Delivery System, a patented oral transport technology trade-marked as OralTransTM (described in previous iCo disclosure as iCo-019), which was acquired as part of the transaction. 

On August 18, 2021, Satellos announced that Amp B Tech had entered into a Joint Development Agreement with NW PharmaTech Limited (“NW PharmaTech”) to collaborate on the development of an oral formulation of cannabidiol (“CBD”) to be targeted at the global market. The parties have since announced their intention to create a joint venture corporation that will focus on the invention, development and scientific validation of oral formulations of CBD-based sleep aids targeted at the over-the-counter market for sleep disorders (the “Joint Venture”). Subject to the completion of negotiations, Satellos, through Amp B Tech, will license OralTransTM (described in previous iCo disclosure as iCo-019), to the Joint Venture and NW PharmaTech will provide all funding. 

About Satellos Bioscience Inc. 

Satellos is a biotechnology company dedicated to developing lifechanging medicines to treat degenerative muscle conditions. Our scientists discovered what we believe to be a previously unrecognized root cause of skeletal muscle degeneration. One which has the potential to transform how muscle disorders are treated. Our scientific founder, Dr. Michael Rudnicki, is a thought leader who discovered and has shown how muscle stem cells regulate muscle repair and growth throughout life. He has shown how defects in a process known as stem cell “polarity”, which controls how muscle stem cells divide to create muscle progenitor cells, lead to a failure of muscle regeneration in Duchenne and potentially other muscle 

disorders. As a result of this ongoing inability to produce sufficient numbers of new muscle cells, the muscles of people living with Duchenne are unable to keep up with and repair the continuous and accumulating damage their muscles experience. Satellos’ lead program is focused on developing an oral therapeutic drug (i.e., a pill) intended to correct muscle stem cell polarity and restore the body’s innate muscle repair and regeneration process. We believe our unique therapeutic approach represents a potential disease modifying treatment for Duchenne and other dystrophies, offering new hope to patients. To expand our programs to other degenerative muscle conditions or disorders, Satellos has created a proprietary discovery platform, MyoReGenX™, which we utilize to identify disease situations where deficits in muscle stem cell polarity and regeneration occur and are amenable to therapeutic treatment. For more information about or to discuss potential collaborations with Satellos concerning our discovery platform and therapeutic candidates or our subsidiary Amphotericin B Technologies Inc., please contact Ryan Mitchell, PhD, Director – Business Development at rmitchell@satellos.com or visit Satellos.com. 

CONTACTS: 

Christina Cameron 

Investor Relations 

Satellos Bioscience Inc. 

ccameron@satellos.com 

647.660.1780 

Notice on forward-looking statements: 

This press release includes forward-looking information or forward-looking statements within the meaning of Canadian and U.S. securities laws regarding Satellos and its business, which may include, but are not limited to, statements with respect to the anticipated benefits of modulating stem cell polarity and its prospective impact on Duchenne patients and muscle regeneration generally; advances in the development of small molecule drug candidates to correct polarity of muscle stem cells; projected benefits of Satellos’ therapeutic approach, including small molecule drug candidates; the potential for Wnt7a to be an effective treatment strategy in muscle wasting conditions other than Duchenne; Satellos’ technologies and drug development plans; the timeline to commence clinical trial testing in humans; the planned advancement of Satellos research and development; Satellos’ plans to create the Joint Venture, license OralTransTM and the anticipated funding by NW PharmaTech;s and the Company’s priorities and anticipated achievement of milestones and evaluation plans for drug molecules. All statements that are, or information which is, not historical facts, including without limitation, statements regarding future estimates, plans, programs, forecasts, projections, objectives, assumptions, expectations or beliefs of future performance, are “forward-looking information or statements”. Often but not always, forward-looking information or statements can be identified by the use of words such as “progress”, “aimed”, “plan”, “expect”, “intend”, “anticipate”, “estimate”, “believe”, “hope”, “objective”, “potentially”, “possibly”, “ongoing efforts”, “develop”, “pioneering”, “groundbreaking”, “milestone”, “further”, “prospect” or any variations (including negative variations) of such words and phrases, or state that certain actions, events or results “may”, “might”, “can”, “could”, “would” or “will” be taken, occur, lead to, result in, or, be achieved. Such statements are based on the current expectations and views of future events of the management of the Company. They are based on assumptions and subject to risks and uncertainties. Although management believes that the assumptions underlying these statements are 

reasonable, they may prove to be incorrect. The forward-looking events and circumstances discussed in this release, may not occur and could differ materially as a result of known and unknown risk factors and uncertainties affecting the Company, including risks relating to the pharmaceutical and bioscience industry, general market conditions and equity markets, economic factors, adverse global events and public-health crises, including the current COVID-19 pandemic, and management’s ability to manage and to operate the business of the Company generally. Although Satellos has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Accordingly, readers should not place undue reliance on any forward-looking statements or information. No forward-looking statement can be guaranteed. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and Satellos does not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. 

No regulatory authority has approved or disapproved the content of this press release. Neither the TSX Venture Exchange nor its Regulatory Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release. 

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