Onxeo Reports Third Quarter 2016 Financial Information and Provides Business Update

· Clinical development plan in line with objectives
  · Livatag® on track to deliver its next important milestone with 90% of
patients randomized
  · €12.5m capital increase successfully completed
PARIS & COPENHAGEN--(BUSINESS WIRE (http://www.businesswire.com/))-- Regulatory
News:

Onxeo S.A. (Euronext Paris, Nasdaq Copenhagen: ONXEO), an innovative company
specialized in the development of orphan oncology therapeutics, today published
its consolidated financials for the period ending September 30, 2016 and
provided an update on major milestones achieved during the third quarter of
2016.

“The third quarter of 2016 was particularly eventful and productive for Onxeo.
We made remarkable progress in terms of advancing our three key portfolio
products as well as on the business development front. We announced results from
two important preclinical studies, the first of which reinforces the rationale
for developing Livatag® as a potential new therapeutic option for HCC. Regarding
the Livatag “ReLive” study, we are well on track to finalize the recruitment of
patients in the near term, allowing the release of preliminary results in mid
-2017 as planned. Data from another preclinical study confirmed the potential
benefits of using AsiDNATM in combination with PARP inhibitors such as olaparib.
This summer, we signed an exclusive licensing agreement with Pint Pharma for
Beleodaq® in South America, further expanding our product’s commercial
potential. Lastly, our successful capital increase executed at the end of the
third quarter has enabled us to increase our cash runway and strengthen our
institutional shareholder base, including a number of US-based, specialized
investors. We are well-equipped to address the opportunities expected in the
coming months, as we work to deliver innovative therapeutic options that
patients critically need, while creating value for our shareholders,” commented
Judith Greciet, CEO of Onxeo.

Continued advancement on key assets

  · Comprehensive preclinical and clinical work strengthening the products’
potential

Onxeo has progressed in the development of its key
compound, Livatag® (doxorubicin nanoformulation in Phase III trial for treatment
of hepatocellular carcinoma). With more than 90% of the patients randomized as
of September 30, 2016, the company is on track to deliver the preliminary
results of the ReLive Phase III clinical study in mid-2017, in line with its
development plan.

In an effort to expand the application of Livatag® into other indications, Onxeo
has also announced the first outcomes of its Livatag® preclinical program,
demonstrating enhanced efficacy effect in combination with immunotherapy, which
validates its broader strategy for the product. Data from two in vivo studies
have also confirmed the increased exposure and preferential affinity for the
liver, supporting Onxeo’s current ReLive Phase III study rationale.

Onxeo has also made significant progress on Beleodaq®, its pan-HDAC inhibitor
already approved for PTCL (peripheral T-cell lymphoma). The company has started
an initiative to develop an oral formulation of the compound, which would give a
clear competitive advantage as well as expand the product’s potential
application to indications for which such an oral formulation is appropriate.
This development is on track, with prototypes designed and improved
bioavailibity shown in an animal pharmacokinetic study.

Moreover, the company recently signed a promising new collaboration with the
Royal College of Surgeons in Ireland (RCSI) for a research program on Beleodaq®
conjugate molecules, to improve product lifetime and stability properties,
ultimately aiming to generate new patent opportunities.

  · Active preparation for the clinical development of first-in-class product
AsiDNATM

Since the AsiDNATM acquisition, the Company has undertaken significant efforts
to optimize the manufacturing process in terms of cost and duration, and is on
track to manufacture its first clinical batch by the end of 2016, allowing for
the initiation of a Phase I trial planned for 2017, after appropriate regulatory
toxicologic assay.

The Company’s first objective is to show AsiDNATM activity when administered via
the IV route, which would dramatically expand the potential of this compound. In
parallel, preclinical research demonstrating the synergistic effect of Onxeo’s
signal-interfering DNA product candidate in combination with various PARP
(PolyADP-Ribose Polymerase) inhibitors has been published, confirming the
interest of AsiDNATMcompared to PARP inhibitors alone and the interest of the
combination of these two DNA repair inhibitors.

Solid progress in business development and intellectual property

In the third quarter, Onxeo has strengthened its AsiDNATM intellectual property
portfolio in the US with a new patent valid until 2031, confirming the
innovative nature of the science behind its signal-interfering DNA product.

The company was also actively engaged in key operational and business
development initiatives and achieved an important business development
milestone, signing an exclusive license agreement with Pint Pharma for the
commercialization of Beleodaq® (belinostat) for PTCL in seven major South
American countries.

Q3 revenue growth

Revenues for the third quarter of 2016 amounted to €1.23 million compared to
€1.1 million in the third quarter of 2015 (+8%).

  · €0.8 million of recurring revenues corresponding to product supplies to
commercial partners and royalties on partners’ sales
  · €0.4 million of non-recurring revenues, relating to the recognition under
IFRS of upfront payments on certain licensing agreements

Over the first 9 months of the year, total revenues stood at €3.1 million, out
of which €2.6 million were recurring revenues vs. €2.0 million in 2015 (+30%).

Long-term visibility reinforced with a successful €12.5 million capital increase

In early October, Onxeo successfully completed a capital increase of 5,434,783
new ordinary shares, raising gross proceeds of €12.5 million in a Private
Placement. This capital increase strengthens and diversifies Onxeo’s shareholder
base with the addition of prominent US-based healthcare institutional investors.

Proceeds from the capital increase, received on October 5, add to the €22.4
million consolidated cash balance at the end of September 2016, which extends
Onxeo’s cash runway until Q2 2018. This capital will allow the company to pursue
and accelerate the ongoing development of its pipeline assets, including the
AsiDNATM and Livatag® programs, as well as advance key preclinical programs,
such as the combination therapy studies for AsiDNATM, Livatag®, and Beleodaq®.

Key near- and mid-term milestones

  · Livatag®:
    · Preclinical combination plan
    · Next DSMB for Phase III trial: Q4 2016
    · Preliminary Phase III trial results: expected mid-2017

  · AsiDNATM:
    · Phase I initiation (monotherapy systemic) now expected in 2017, based on
current CMC progress

  · Beleodaq®:
    · New oral formulation validated, ready to enter clinic: Q3 2017
    · Preclinical combination study results: end of 2016 and onwards
    · 1st-line PTCL Phase III initiation: end of 2016

About Onxeo

Onxeo is a leading developer of orphan oncology drugs. The Company is focused on
developing innovative therapeutics for rare cancers, one of the fastest growing
markets in the healthcare industry with high, unmet medical needs. Onxeo’s
vision is to become a global leader and pioneer in oncology, with a focus on
orphan or rare cancers, by developing advanced, effective, and safe therapeutics
designed to improve the lives of patients. Onxeo’s comprehensive portfolio
features a broad orphan oncology pipeline, with four independent programs in
various stages of clinical development, including Onxeo’s first approved orphan
oncology drug, Beleodaq®. The Company is headquartered in Paris, France and has
approximately 50 employees. Onxeo is listed on Euronext in Paris, France
(Ticker: ONXEO, ISIN Code: FR0010095596) and Nasdaq Copenhagen, Denmark (Ticker:
ONXEO).

Onxeo’s orphan oncology products are:

  · Livatag® (Doxorubicin Transdrug™): Currently being evaluated in a Phase III
trial (ReLive) in patients with hepatocellular carcinoma (primary liver cancer);
and in combination with other cancer agents in first-line HCC
  · Beleodaq® (belinostat): FDA-approved in the US in 2014 under the agency’s
accelerated approval program as a second-line treatment for patients with
peripheral T-cell lymphoma (PTCL) and currently marketed by Onxeo’s partner in
the US, Spectrum Pharmaceuticals; belinostat in combination with other cancer
agents is currently in development in first-line treatment for patients with
PTCL (BelCHOP) and in other solid tumors
  · AsiDNA: The first-in-class siDNA (signal-interfering DNA) which has
successfully undergone a proof-of-concept Phase I trial in metastatic melanoma
  · Validive® (Clonidine Lauriad®): Positive final results from a Phase II trial
in head and neck cancer patients with severe oral mucositis

In addition, Onxeo has successfully developed and registered two non-cancer
products which are currently being commercialized in the U.S. and Europe.

Learn more by
visiting www.onxeo.com (http://cts.businesswire.com/ct/CT?id=smartlink&url=http%
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Disclaimer

This communication expressly or implicitly contains certain forward-looking
statements concerning Onxeo and its business. Such statements involve certain
known and unknown risks, uncertainties and other factors, which could cause the
actual results, financial condition, performance or achievements of Onxeo to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Onxeo is providing this
communication as of this date and does not undertake to update any forward
-looking statements contained herein as a result of new information, future
events or otherwise. For a discussion of risks and uncertainties which could
cause actual results, financial condition, performance or achievements of Onxeo
to differ from those contained in the forward-looking statements, please refer
to the Risk Factors ("Facteurs de Risque") section of the 2015 Reference
Document filed with the AMF on April 29, 2016, which is available on the AMF
website (http://www.amf
-france.org (http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fwww
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amf-france.org&esheet=51446347&newsitemid=0&lan=en
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-france.org&index=3&md5=c73a30b7dec703543a08b81126e62d9c)) or on the company’s
website
(www.onxeo.com (http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2F
w 
ww.onxeo.com&esheet=51446347&newsitemid=0&lan=en
-US&anchor=www.onxeo.com&index=4&md5=82dcfbf6d2aba960dbc9a7ebef2652dd)).
Onxeo S.A.
Judith Greciet, CEO
Nicolas Fellmann, CFO
investors@onxeo.com
+33 1 45 58 76 00
or
Alize RP (France)
Caroline Carmagnol / Florence Portejoie
onxeo@alizerp.com
+33 6 64 18 99 59 / +33 6 47 38 90 04
or
The Ruth Group (U.S.)
Kirsten Thomas / Lee Roth
kthomas@theruthgroup.com / lroth@theruthgroup.com
+1 508 280 6592 / +1 646 536 7012