The Board of Directors of Recipharm resolves on a rights issue of approximately SEK 805 million and announces terms

Not for release, publication or distribution, directly or indirectly, in or into
the United States, Canada, Australia, Japan, Hong Kong, New Zealand, South
Africa or any other jurisdiction where such distribution of this press release
would be subject to legal restrictions
The Board of Directors of Recipharm AB (publ) (“Recipharm” or the “Company”) has
resolved to, based on the authorization from the Extraordinary General Meeting
on 10 May 2016, launch a new share issue with preferential rights for existing
shareholders (the “rights issue”) and has determined the terms of the rights
issue.

Recipharm announced on 18 April 2016, that the Company had signed two separate
agreements to acquire Kemwell’s pharmaceutical CDMO businesses. The first
acquisition comprises Cirrus Pharmaceuticals Inc. with operations in the US,
which services include development of inhalation, liquid, semi-solid, solid and
parenteral products with emphasis on early formulation work as well as
development of analytical methods and testing, and Kemwell AB in Sweden, which
services primarily includes manufacturing of APIs, solids and semi-solid
formulations. The second acquisition refers to Kemwell Biopharma Private Ltd’s
pharmaceutical operations in
India[1] (http://file///G:/Shared/Corporate%20Development/IR/F%C3%B6retr%C3%A4de
s 
emission%202016/Press%20release%20
-%20rights%20issue%20EN%2020160517.docx#_ftn1). The operations comprise both
development services as well as commercial manufacturing of solid, semi-solid,
liquid and topical dose products.

In connection with the announcement of the acquisitions, the Company announced
that the Board of Directors intended to submit a proposal for authorisation from
an Extraordinary General Meeting, to carry out first, a rights issue of
approximately SEK 850 million for the purpose of financing the acquisition of
Kemwell Biopharma Private Ltd’s pharmaceutical operations in India, as described
above, and an issue in kind of Class B shares to the sellers of shares in
Kemwell
AB[2] (http://file///G:/Shared/Corporate%20Development/IR/F%C3%B6retr%C3%A4desem
i 
ssion%202016/Press%20release%20-%20rights%20issue%20EN%2020160517.docx#_ftn2),
that is, the operations in Sweden. The Extraordinary General Meeting on 10 May
2016 authorized the Board of Directors to carry out the rights issue and the
issue in kind. In conjunction with the Extraordinary General Meeting, the Board
of Directors was also authorized, in such case that the shares in the issue in
kind will not be registered before the record date of the rights issue, to carry
out a directed share issue (the “directed share issue”) to the sellers of
Kemwell
AB[2] (http://file///G:/Shared/Corporate%20Development/IR/F%C3%B6retr%C3%A4desem
i 
ssion%202016/Press%20release%20-%20rights%20issue%20EN%2020160517.docx#_ftn2).
Closing of the acquisition of Kemwell AB is expected to take place during the
second quarter 2016 and in connection therewith, the Board will decide on an
issue in kind of Class B shares in Recipharm, corresponding to a value of USD 55
million (SEK 453
million[3] (http://file///G:/Shared/Corporate%20Development/IR/F%C3%B6retr%C3%A4
d 
esemission%202016/Press%20release%20
-%20rights%20issue%20EN%2020160517.docx#_ftn3)), to the sellers of shares in
Kemwell
AB,[2,4] (http://file///G:/Shared/Corporate%20Development/IR/F%C3%B6retr%C3%A4de
s 
emission%202016/Press%20release%20
-%20rights%20issue%20EN%2020160517.docx#_ftn4). Given that closing of the
acquisition will not be finalised in such time that the shares from the issue in
kind can be registered before the record date of the rights issue, the Board of
Directors has decided to reduce the proceeds from the rights issue, from
approximately SEK 850 million to approximately SEK 805 million, if fully
subscribed and before transaction costs, and to instead carry out a directed
share issue of approximately SEK 51 million against cash payment to the sellers
of Kemwell
AB[5] (http://file///G:/Shared/Corporate%20Development/IR/F%C3%B6retr%C3%A4desem
i 
ssion%202016/Press%20release%20-%20rights%20issue%20EN%2020160517.docx#_ftn5).

The entire issue proceeds from the rights issue will be used to partly finance
the purchase price for the above described acquisition of Kemwell Biopharma
Private Ltd’s pharmaceutical operations in India, as announced on 18 April 2016.

The rights issue in brief

  · The rights issue comprises no more than 2,537,143 Class A shares and no more
than 7,273,924 Class B shares, in total no more than 9,811,067 shares.

  · The subscription price is SEK 82 per share. No commission will be charged.

  · The rights issue proceeds will amount to approximately SEK 805 million
before transaction costs, if the rights issue is fully subscribed.

  · Those who on the record date, 23 May 2016, are registered as shareholders of
Recipharm will receive one (1) Class A subscription right for each Class A
Recipharm share held and one (1) Class B subscription right for each Class B
Recipharm share held. The subscription rights entitle the holder to subscribe
for new shares with first priority preferential right, in which case five (5)
subscription rights of Class A and Class B, respectively, entitle the holders to
subscribe for one (1) new Recipharm Class A and Class B share, respectively.
Shares that are not subscribed for by shareholders entitled to subscribe
pursuant to first priority preferential right shall, regardless of share class,
be offered to all shareholders for subscription (second priority preferential
right). In addition, investors will be invited to submit their interest in
subscribing for new shares without first or second priority preferential right.

  · The record date is 23 May 2016. The last day of trading in Recipharm’s Class
B shares including the right to receive subscription rights is 19 May 2016, and
the first day of trading in Recipharm’s Class B shares excluding the right to
receive subscription rights is 20 May 2016.

  · The subscription period will run from and including 25 May 2016 up to and
including 7 June 2016.

  · Existing shareholders in Recipharm, controlling 58.7 per cent of the share
capital and 87.5 per cent of the votes, have committed or indicated their
intentions to subscribe for their respective pro rata shares in the rights
issue.

Background and reasons for the rights issue

On 18 April 2016, Recipharm announced that the Company had signed two separate
agreements to acquire Kemwell’s pharmaceutical contract development and
manufacturing (CDMO) businesses. The first acquisition, which comprises
US[6] (http://file///G:/Shared/Corporate%20Development/IR/F%C3%B6retr%C3%A4desem
i 
ssion%202016/Press%20release%20-%20rights%20issue%20EN%2020160517.docx#_ftn6)
and
Swedish[7] (http://file///G:/Shared/Corporate%20Development/IR/F%C3%B6retr%C3%A4
d 
esemission%202016/Press%20release%20
-%20rights%20issue%20EN%2020160517.docx#_ftn7) operations, is expected to close
during the second quarter 2016. The acquisition is subject to review by the
Swedish Competition Authority and confirmation from a third party regarding
certain commitments. The condition regarding review by the Swedish Competition
Authority has been met. The second acquisition, comprising operations in
India[8] (http://file///G:/Shared/Corporate%20Development/IR/F%C3%B6retr%C3%A4de
s 
emission%202016/Press%20release%20
-%20rights%20issue%20EN%2020160517.docx#_ftn8), is conditional upon governmental
approvals and expected to close before year end.

The entire issue proceeds from the rights issue together with available funds,
existing credit facilities, and the issue proceeds from the directed share
issue, will finance the above described acquisition of Kemwell Biopharma Private
Ltd’s pharmaceutical operations in India. The acquisition of Cirrus
Pharmaceuticals Inc. and Kemwell AB is financed with available funds, existing
credit facilities, as well as the issue in kind of Class B shares in Recipharm
to the sellers of Kemwell AB, corresponding to a value of approximately USD 55
million. For additional information on the acquisitions, please refer to the
press release published on 18 April 2016.

Terms and conditions for the rights issue

Those who on the record date, 23 May 2016, are registered by Euroclear Sweden AB
as a shareholder in Recipharm, will receive one (1) Class A subscription right
for each Class A Recipharm share held and one (1) Class B subscription right for
each Class B Recipharm share held. The subscription rights entitle the holder to
subscribe for new shares with first priority preferential right, in which case
five (5) subscription rights of Class A and Class B respectively, entitle the
holder to subscribe for one (1) new share of Class A and Class B, respectively.
Shares that are not subscribed for by shareholders entitled to subscribe
pursuant to first priority preferential right shall, regardless of share class,
be offered to all shareholders for subscription (second priority preferential
right). In connection with transfer of a subscription right (first priority
preferential right), the second priority preferential right is also transferred
to the new holder of the subscription right. In addition, investors will be
invited to submit their interest in subscribing for new shares without first or
second priority preferential right (without preferential right).

The Company’s share capital will be increased by not more than SEK 4,905,534
through the issuance of no more than 2,537,143 Class A shares and no more than
7,273,924 Class B shares. The subscription price is SEK 82 per share,
corresponding to total rights issue proceeds of approximately SEK 805 million
before transaction costs, provided that the rights issue is fully subscribed.

The existing Recipharm Class B shares are traded including the right to receive
subscription rights up to and including 19 May 2016 and the first day of trading
in Recipharm’s Class B shares excluding the right to receive subscription rights
is 20 May 2016. The subscription period runs from 25 May 2016 up to and
including 7 June 2016. Recipharm’s Board of Directors has the right to extend
the subscription period which, when applicable, will be announced through a
press release.

Existing shareholders who choose not to participate in the rights issue will
have their ownership diluted by approximately 17 per
cent[9] (http://file///G:/Shared/Corporate%20Development/IR/F%C3%B6retr%C3%A4des
e 
mission%202016/Press%20release%20-%20rights%20issue%20EN%2020160517.docx#_ftn9),
but are able to financially compensate for this dilution by selling their
subscription rights. Unexercised subscription rights must be sold in order not
to lapse without value.

Commitments and indications of intent

Recipharm’s two main shareholders, Flerie Participation AB, which is controlled
by Recipharm’s CEO Thomas Eldered, and Cajelo Invest AB, which is controlled by
Recipharm’s Chairman Lars Backsell, who control 20.6 and 12.9 per cent of the
share capital, respectively, and 41.1 and 38.7 per cent of the votes,
respectively, have committed to subscribe for their respective pro rata shares
in the rights issue.

In addition, Lannebo Fonder, Första AP-fonden and Fjärde AP-fonden, who together
control 25.3 per cent of the share capital and 7.7 per cent of the votes, have
indicated their intention to subscribe for their respective pro rata shares in
the rights issue.

Thus, existing shareholders in Recipharm, controlling 58.7 per cent of the share
capital and 87.5 per cent of the votes, have committed or indicated their
intentions to subscribe for their respective pro rata shares in the rights
issue.

Indicative timetable for the rights issue

19 May 2016 – Estimated date for publication of the prospectus

19 May 2016 - Last day of trading in Recipharm’s Class B shares including the
right to receive subscription rights

20 May 2016 - First day of trading in Recipharm’s Class B shares excluding the
right to receive subscription rights

23 May 2016 – Record date for determining who is entitled to receive
subscription rights to subscribe for new shares in the rights issue

25 May – 2 June 2016 – Trading in subscription rights (only Class B subscription
rights will be traded on Nasdaq Stockholm)

25 May – 7 June 2016 – Subscription period

13 June 2016 – Announcement of the preliminary outcome of the rights issue

For further information please visit www.recipharm.com or contact:

Thomas Eldered, CEO, +46 8 602 52 10
Björn Westberg, CFO, ir@recipharm.com, +46 8 602 46 20

This information is published in accordance with the Swedish Securities Market
Act, the Swedish Financial Instruments Trading Act and/or the regulations of
Nasdaq Stockholm. This information was submitted for publication on 17 May 2016,
at 07:15 am CET.

About Recipharm
Recipharm is a leading CDMO (Contract Development and Manufacturing
Organisation) in the pharmaceutical industry employing some 3,200 employees.
Recipharm offers manufacturing services of pharmaceuticals in various dosage
forms, production of clinical trial material and APIs, and pharmaceutical
product development. Recipharm manufactures several hundred different products
to customers ranging from Big Pharma to smaller research- and development
companies. Recipharm’s turnover is approximately SEK 4.6 billion and the Company
operates development and manufacturing facilities in France, Germany, India,
Israel, Italy, Portugal, Spain, Sweden and the UK and is headquartered in
Jordbro, Sweden. The Recipharm B-share (RECI B) is listed on Nasdaq Stockholm.

For more information on Recipharm and our services, please visit
www.recipharm.com

Financial and legal advisers

DNB Markets, Handelsbanken Capital Markets and Swedbank Corporate Finance are
acting as financial advisors and Setterwalls Advokatbyrå AB is acting as legal
advisor to Recipharm in relation to the rights issue.

Important information

The information in this press release does not constitute an offer to acquire,
subscribe for or otherwise trade in shares, subscription rights or other
securities in Recipharm. Any invitation to the persons concerned to subscribe
for shares in Recipharm will only be made through the prospectus that Recipharm
estimates to publish on or around 19 May 2016.

This press release may not be released, published or distributed, directly or
indirectly, in or into the United States, Australia, Canada, Hong Kong, Japan,
New Zealand, South Africa or any other jurisdiction where such action is wholly
or partially subject to legal restrictions or where such action would require
additional prospectuses, registrations or other actions in addition to what
follows from Swedish law. Nor may the information in this press release be
forwarded, reproduced or disclosed in a manner that contravenes such
restrictions or would entail such requirements. Failure to comply with this
instruction may result in a violation of applicable securities laws.

No subscription rights, BTAs (interim shares) or new shares have or will be
registered under the U.S. Securities Act of 1933, as amended, (“Securities
Act”), or securities legislation in any state or other jurisdiction in the
United States and may not be offered or sold, directly or indirectly, in or into
the United States, except pursuant to an available exemption from the
registration requirements of the Securities Act and in compliance with the
securities laws of any state or other jurisdiction of the United States.

This press release may contain forward-looking statements which reflect
Recipharm’s current view on future events and financial and operational
development. The words “intend”, “estimate”, “expect”, “may”, “plan”,
“anticipate” or similar expressions regarding indications or prognoses of future
developments or trends and which are not statements based on historical facts
constitute forward-looking information. Although Recipharm believes that these
statements are based on reasonable assumptions and expectations, Recipharm
cannot give any assurances that such statements will materialize. Forward
-looking statements are in its nature involved with both known and unknown risks
and uncertainties, since it is depending on future events and circumstances.
Forward-looking statements do not constitute any representations and warranties
and the outcome could differ materially from the information set out in the
forward-looking statements.

----------------------------------------------------------------------

[1] (http://file///G:/Shared/Corporate%20Development/IR/F%C3%B6retr%C3%A4desemis
s 
ion%202016/Press%20release%20-%20rights%20issue%20EN%2020160517.docx#_ftnref1)
Kemwell Biopharma Private Ltd´s India Pharma Division, which prior to completion
of the transaction will be transferred to Dagny Pharma Private Ltd.

[2] (http://file///G:/Shared/Corporate%20Development/IR/F%C3%B6retr%C3%A4desemis
s 
ion%202016/Press%20release%20-%20rights%20issue%20EN%2020160517.docx#_ftnref2)
Kemfin Holdings Private Ltd and a minority seller.

[3] (http://file///G:/Shared/Corporate%20Development/IR/F%C3%B6retr%C3%A4desemis
s 
ion%202016/Press%20release%20-%20rights%20issue%20EN%2020160517.docx#_ftnref3)
Exchange rate of USD/SEK of 8.2325.

[4] (http://file///G:/Shared/Corporate%20Development/IR/F%C3%B6retr%C3%A4desemis
s 
ion%202016/Press%20release%20-%20rights%20issue%20EN%2020160517.docx#_ftnref4)
The number of shares in the issue in kind is expected to amount to approximately
3.1 million based on an exchange rate of USD/SEK of 8.2325 as of 16 May 2016 and
an agreed subscription price of SEK 145.06, calculated as the average of the
volume weighted average share price for (i) 20 trading days prior to the day for
signing of the acquisition agreement and (ii) 20 trading days prior to the date
for the Extra General Meeting, adjusted for non-occurring dividend for the
financial year 2015. Specified numbers are based on an exchange rate of USD/SEK
of 8.2325 as of 16 May 2016 and will be subject to adjustment in connection to
the closing of the acquisition.

[5] (http://file///G:/Shared/Corporate%20Development/IR/F%C3%B6retr%C3%A4desemis
s 
ion%202016/Press%20release%20-%20rights%20issue%20EN%2020160517.docx#_ftnref5)
The sellers of Kemwell AB, Kemfin Holdings Private Ltd and a minority seller,
have committed to subscribe for Class B shares in Recipharm within the framework
of the directed share issue of Class B shares of approximately SEK 51 million,
with the same subscription price per share as in the rights issue and as if they
had subscribed for their pro rata shares in a rights issue of approximately SEK
856 million.

[6] (http://file///G:/Shared/Corporate%20Development/IR/F%C3%B6retr%C3%A4desemis
s 
ion%202016/Press%20release%20-%20rights%20issue%20EN%2020160517.docx#_ftnref6)
Cirrus Pharmaceutical Inc. through the acquisition of all the shares in its
parent company Kemwell Biopharma Inc.

[7] (http://file///G:/Shared/Corporate%20Development/IR/F%C3%B6retr%C3%A4desemis
s 
ion%202016/Press%20release%20-%20rights%20issue%20EN%2020160517.docx#_ftnref7)
Kemwell AB.

[8] (http://file///G:/Shared/Corporate%20Development/IR/F%C3%B6retr%C3%A4desemis
s 
ion%202016/Press%20release%20-%20rights%20issue%20EN%2020160517.docx#_ftnref8)
Kemwell Biopharma Private Ltd´s India Pharma Division, which prior to completion
of the transaction will be transferred to Dagny Pharma Private Ltd.

[9] (http://file///G:/Shared/Corporate%20Development/IR/F%C3%B6retr%C3%A4desemis
s 
ion%202016/Press%20release%20-%20rights%20issue%20EN%2020160517.docx#_ftnref9)
Including the directed share issue.
Recipharm AB (publ)
Corporate identity number 556498-8425
Address Lagervägen 7, SE-136 50 Jordbro, Sweden, Telephone 46 8 602 52
00, Fax 46 8 81 87 03
www.recipharm.com