Last updated on April 17, 2014 at 21:23 EDT

Transition Therapeutics Enters Into a Private Placement with Investors to Receive up to US$21.7 Million in Equity Financing

August 2, 2013

Company to Receive Upfront US$11 Million Upon Closing

TORONTO, Aug. 2, 2013 /PRNewswire/ – Transition Therapeutics Inc. (“Transition” or the “Company”) (NASDAQ: TTHI, TSX: TTH) announced that
Jack W. Schuler, Larry N. Feinberg, Oracle Investment Management,
certain Transition Board members, management and other existing
shareholders will make an investment of up to US$21 million by
purchasing 2,625,298 units of the Company at a price of US$4.19 per
common share.

Each unit consists of (i) one common share, (ii) 0.325 Common Share
purchase warrant with a purchase price of US$4.60 per whole warrant and
(iii) 0.4 Common Share purchase warrant with a purchase price of
US$6.50 per whole warrant.   Each whole warrant will entitle the
holder, within two years from closing, to purchase one additional
common share in the capital of the Company.  If and when all of the
warrants are exercised, the Company will realize an additional US$10.7
million, bringing the total investment to US$21.7 million before
transaction costs.  Closing of the private placement is expected to
occur on or about August 15, 2013 and is subject to approval from the
Toronto Stock Exchange.

“This offering provides sufficient funding for the Company through the
completion of three major Phase 2 studies, each of which could
transform the value of the Company.   In parallel, this offering will
allow the Company to continue its business strategy of in-licensing and
developing a strong pipeline of molecules through partnerships with
pharmaceutical companies. I am very pleased with the on-going
commitment and support of our large investors, Board and management
that contributed to the financing of the offering,” said Dr. Tony Cruz,
Chairman and Chief Executive Officer of Transition.

These securities have not been registered under the U.S. Securities Act
of 1933, as amended (the “Act”), and may not be offered or sold in the
United States unless registered under the Act or unless an exemption
from registration is available. This press release shall not constitute
an offer to sell or the solicitation of an offer to buy nor shall there
be any sale of the securities in any State in which such offer,
solicitation or sale would be unlawful.

About Transition

Transition is a biopharmaceutical company, developing novel therapeutics
for disease indications with large markets. The Company’s lead CNS drug
candidate is ELND005 for the treatment of Alzheimer’s disease and
bipolar disorder.  Transition’s lead metabolic drug candidate is TT-401
for the treatment of type 2 diabetes and accompanying obesity. The
Company’s shares are listed on the NASDAQ under the symbol “TTHI” and
the Toronto Stock Exchange under the symbol “TTH”. For additional
information about the Company, please visit www.transitiontherapeutics.com.

Notice to Readers: Information contained in our press releases should be
considered accurate only as of the date of the release and may be
superseded by more recent information we have disclosed in later press
releases, filings with the Canadian Securities Commissions, the U.S.
Securities and Exchange Commission or otherwise. Except for historical
information, this press release may contain forward-looking statements,
relating to expectations, plans or prospects for Transition, including
the total aggregate investment to be made in the Company, the conduct
of clinical trials and the potential efficacy of its products. These
statements are based upon the current expectations and beliefs of
Transition’s management and are subject to certain risks and
uncertainties that could cause actual results to differ materially from
those described in the forward-looking statements. These risks and
uncertainties include factors beyond Transition’s control and the risk
factors and other cautionary statements discussed in Transition’s
quarterly and annual filings with the Canadian Securities Commissions
and the U.S. Securities and Exchange Commission.

SOURCE Transition Therapeutics Inc.

Source: PR Newswire