Pediapharm Sells its US Rights to Naproxen Suspension in a Transaction Valued at up to Approximately US$4.25 Million

MONTREAL, QUEBEC--(Marketwired - Jan. 13, 2016) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Pediapharm Inc. ("Pediapharm" or the "Company") (TSX VENTURE:PDP) is pleased to announce that it has entered into a letter of intent with a third party (the "Acquirer") for the sale of its United States rights to Naproxen Suspension in a transaction valued at approximately US$4.25 million (the "Proposed Transaction"). Financial terms of the Proposed Transaction include: payment of US$2.25 million in cash on closing and payment of US$2.0 million conditional on Pediapharm being granted approval from the Food and Drug Administration of the manufacturing site transfer on or before September 30, 2016. The Prescription Drug User Fee Assessment ("PDUFA") date is expected to be held in February 2016. The Proposed Transaction is subject to a number of terms and conditions including completion of due diligence and the entering into of a formal asset purchase agreement as well as receipt of all necessary regulatory approvals including the approval of the TSX Venture Exchange.

Pediapharm will retain the rights to Naproxen suspension in Canada and will continue to commercialize using its own infrastructure.

"This is a very exciting transaction for Pediapharm, especially coming from the sale of an asset that had yet to generate revenue for us." stated Sylvain Chretien, President and Chief Executive Officer of Pediapharm. He added: "As part of our process to identify potential commercial partners in the United States, we also received offers for the purchase of the rights of Naproxen Suspension. During our evaluation process and for strategic reasons, we felt it was in the best interest of all stakeholders to proceed with the sale of the rights. This solidifies our balance sheet, enables us to fuel the growth of our existing products and puts us in a solid position for the upcoming potential launches of Rupafin and Otixal in 2016."

About Pediapharm Inc.

Pediapharm is the only Canadian specialty pharmaceutical company dedicated to serving the needs of the pediatric community. Its mission is to bring to the Canadian market the latest innovative pediatric products with the objective to improve the health and the well-being of children in Canada. Since its debut in 2008, Pediapharm has entered into numerous commercial agreements with partners from Canada and other countries around the world. The company's innovative product portfolio includes NYDA®; a breakthrough treatment for head lice; EpiCeram® a non-steroid emulsion for eczema; naproxen suspension, indicated to treat pain and inflammation due to various conditions, including Juvenile Idiopathic Arthritis; and a broad pipeline of products under registration.

FORWARD LOOKING STATEMENTS

This news release contains forward-looking statements that involve risks and uncertainties, including without limitation, statements pertaining to the benefits of the Proposed Transaction, the consideration payable thereunder and the receipt of all necessary approvals. Actual results may differ materially. Pediapharm disclaims any intention and assumes no obligation to update or revise any forward looking statements, whether as a result of new information, future events or otherwise. More detailed information about potential factors that could affect the current expectations or beliefs of the Company is included in the documents filed from time to time with the Canadian securities regulatory authorities by Pediapharm.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.