SATELLOS BIOSCIENCE ANNOUNCES Q3 2022 FINANCIAL RESULTS 

AND OPERATIONAL HIGHLIGHTS

TORONTO, November 23, 2022 – Satellos Bioscience Inc. (TSXV: MSCL) (“Satellos” or the “Corporation”), a drug discovery company developing therapeutics to regenerate muscle as a new approach to treating disease conditions from muscular dystrophy to aging, announced today its financial results and operational highlights for the quarter ending September 30, 2022. The Company’s interim condensed consolidated financial statements for the quarter ended September 30, 2022, and the related management’s discussion and analysis (MD&A) are available on SEDAR at www.sedar.com. 

“The Satellos team made considerable progress during the third quarter towards our key milestones. Our ongoing scientific and drug development advancements have provided further evidence that muscle stem cell divisions can be modulated by small molecule drug treatment to regenerate muscle. We believe our approach is unique and has the potential to become a disease-modifying treatment for Duchenne,” said Frank Gleeson, President and CEO of Satellos. “We recently advanced several drug candidates to the next stage of pre-IND development, added additional strength to our senior leadership and expanded our reach to the investment community in the United States through our OTCQB listing. We are excited by these achievements and believe they position us well for continuing progress and advances in developing a drug to restore muscle regeneration as a treatment for Duchenne.”  

Program highlights for the quarter ended September 30, 2022, along with recent developments include:

Duchenne muscular dystrophy (“Duchenne”)

Duchenne is a fatal genetic disease that affects an estimated 1 in 4,000 live male births per year, worldwide. There is no known cure for Duchenne and the need of patients for next generation treatment approaches is high. Satellos is working to be an important contributor to meeting this patient need.

On November 3, 2022, Satellos announced it had prioritized and advanced several small molecule drug candidates which it had created into further preclinical studies. These compounds have been designed by Satellos scientists to be potent and selective inhibitors of a specific kinase protein — which the company is calling ‘K9’ for reasons of competitive secrecy.  Inhibiting this protein target with a small molecule drug has the potential to modulate muscle stem cell division and regeneration and, Satellos believes, offers the possibility of a disease altering therapeutic approach for the treatment of Duchenne. 

The Corporation intends to evaluate the drug candidates it has prioritized in order to characterize and assess their absorption, distribution, metabolism and excretion (ADME), and pharmacokinetics (PK) properties. Results from these studies will inform our next development steps and, we believe, move us closer to undertaking IND-enabling studies with a lead drug candidate. 

Disease Expansion Indication: Congenital Muscular Dystrophy Type 1A

On October 12, 2022, Satellos reported new data generated under its Sponsored Research Agreement with the Université de Sherbrooke showing preliminary proof of concept in a second rare disease, Congenital muscular dystrophy type 1. In this study, our collaborators showed the potential for treatment with a Satellos drug candidate to modulate the muscle stem cell division process and restore  regeneration. Satellos presented this preclinical proof of concept data at the World Muscle Society Congress in Halifax, Canada on October 14th, 2022.  

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

On October 6, 2022, Amp B Tech (a wholly-owned subsidiary of Satellos) and NW PharmaTech, established NW Micelle Therapeutics Inc. (NWMT) for the purpose of developing an oral formulation of cannabidiol for the treatment of insomnia and other indications in the mental health sphere (“Oral CBD“). Additionally, NW PharmaTech Ltd. obtained a conditional call option for a period of 24-months to acquire Amp B Tech from Satellos for US$3,000,000 while Satellos received a put option to trigger a sale of Amp B Tech to NWPT for the same amount at the end of the 24-month period.

Bertilimumab

On October 07, 2022, Alexion notified Satellos that it was terminating the Product Sublicense Agreement for Bertilimumab as of November 07, 2022. The agreement, which was signed originally in 2010 between Immune Pharma and iCo Therapeutics, has now been terminated. Satellos is exploring monetization options for this antibody product. 

Operational Updates

On October 6, 2022, Satellos announced that its common shares commenced trading on the OTCQB Venture Market (“OTCQB”) under the symbol “MSCLF”. OTCQB is the premiere marketplace for early stage and developing companies that are committed to providing a high-quality trading and information experience for their U.S. investors. Shares in Satellos continue to trade on the TSXV under the symbol MSCL.

On September 28, 2022, Satellos announced the appointment of Dr. Phil Lambert, an experienced pharmaceutical drug development professional, to the role of Chief Technology Officer. Dr. Lambert has assumed overall responsibility for planning, oversight and execution of the Company’s R&D plans, including identification of a DC and advancing into IND-enabling studies.

On July 11, 2022, Satellos announced that it had filed a preliminary short form prospectus with securities regulatory authorities in British Columbia, Alberta and Ontario in connection with a best-efforts offering of units of the Company comprised of common shares and common share purchase warrants. The prospectus was amended and restated on August 29th and a final prospectus was filed on September 7, 2022. On September 13, 2022, Satellos announced that a total of 8,750,000 Units were issued at a price of $0.40 per Unit, raising gross proceeds of $3,500,000. Net proceeds from the Offering are being deployed to advance Satellos’ lead program and identify a development candidate by the end of 2022.

Financial Results

Satellos had cash and cash equivalents of $3,130,639 as at September 30, 2022.

Comprehensive loss for the quarter ended September 30, 2022, was $1,899,192 or $0.05 per share, compared to a loss of $11,255,843 or $0.43 per share, for the quarter ended September 30, 2021. The significant decrease in net loss for the quarter ended September 30, 2022, compared with the quarter ended September 30, 2021 was primarily a result of Satellos closing its Arrangement with iCo and recognizing the related Listing Expense of $9,725,129 during the quarter ended September 30, 2021.

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Research and development (“R&D”) expenses of $620,688 were incurred during the quarter ended September 30, 2022, compared to $479,170 incurred in the quarter ended September 30, 2021. The increase in R&D expenses in the current quarter is primarily attributable to increased R&D contractor spending.

Satellos’ condensed consolidated interim financial statements for the quarter ended September 30, 2022 and the related management’s discussion and analysis (MD&A) are available on SEDAR at www.sedar.com.

About Satellos Bioscience Inc.

Satellos is a biotechnology company dedicated to developing life-changing 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, therapeutic drug candidates or Bertilimumab, please contact Ryan Mitchell, Ph.D., Director – Business Development at rmitchell@satellos.com or visit Satellos.com.

CONTACT:

Christina Cameron, Communications

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 applicable securities laws regarding Satellos and its business, which may include, but are not limited to, statements regarding the potential novelty of its drug candidates; timelines for completing and analyzing studies of potential drug candidates; its ability or intentions to prioritize and advance drug candidates; the general benefits of developing small molecules as therapeutic drugs to modulate stem cell polarity; its/their prospective impact on Duchenne patients and muscle regeneration generally; the utility of regenerating muscle; and Satellos’ technologies and drug development plans. 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 “shall”, , “anticipate”, “believe”, “plan”, “expect”, “intend”, “estimate”, “project”, “anticipate”, “aims”, “offers”, “promises” 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 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.