BIOMED-LUBLIN WYTWÓRNIA SUROWIC I SZCZEPIONEK SA (5/2018) Commencement of cooperation with Bioton SA in the distribution and promotion of the medicinal product of the "Distreptaza" company on the domestic market

The Management Board of BIOMED - LUBLIN Wytwórnia Surowic i Szczepionek S.A. ("Company", "Issuer", "Biomed"), hereby informs that on February 12, 2018, Resolution No. 2/2018 was adopted by the Management Board of the Company regarding the consent to conclude an agreement with BIOTON Spółka Akcyjna with its registered office in Warsaw ( hereinafter: "BIOTON") regarding cooperation in the distribution and promotion of the medicinal product of the company with the Distreptaza® trade name. In implementing the resolution of the management board, on 12 February 2018 the Issuer concluded a contract with BIOTON, as a result of which the Issuer agreed to sell on the exclusivity principle in the territory of the Republic of Poland to BIOTON Distreptaza® medicinal product ("Product"). BIOTON undertook to purchase Products from the Issuer and then sell them exclusively on the territory of the Republic of Poland. BIOTON also undertook to actively promote and advertise the Product. In exchange for services provided by BIOTON, the Issuer undertook to pay a remuneration that depends on the volume of the Product's sales. The parties have contractually estimated the Forecasted Annual Order Level (PRPZ) and Forecasted Monthly Order Level (PMPZ) of the Product, which increase in every year of the contract. The parties have also established the Minimum Annual Order Limit (MRPZ) and the Minimum Monthly Order Limit (MMLZ) of the Product. In the case of sales below the Minimum Annual Order Level, BIOTON will return to the Issuer lost benefits in the form of margin on the Product less the remuneration that would be due BIOTON, if the MRPZ would have been executed. The parties also specified in the Agreement a cumulative order limit in a calendar year, the overrunning entitles BIOTON to charge additional remuneration for Products sold over a set limit. The contract was concluded for a definite period of time December 31, 2022. The Agreement may be terminated at any time by mutual consent of both Parties, expressed in writing. The contract may be terminated if the other party breaches essential contractual terms, and in particular if Biomed loses the ability to deliver the product, or orders placed by BIOTON will be lower than the minimum order levels described above. Termination or expiration of the Agreement does not affect any outstanding liabilities due under this Agreement that arose from itstermination or expiration, including in particular payment of liabilities for the price of Products delivered and remuneration liabilities for the Products distribution services provided, nor does it affect the legal measures specified in the contract that may be enjoyed by the Parties under this Agreement. The parties have contractually reduced BIOTON's total liability for partial or total non-performance or improper performance of the Agreement up to PLN 2,500,000. Other terms of the contract do not differ from those commonly used in this type of contracts. The total projected value of the Agreement is approximately PLN 45 million over the entire term of its validity. In the opinion of the Issuer's Management Board, signing the Agreement will allow for a faster increase in the sales volume of the Product on the domestic market. The sales limits agreed in the Agreement are higher than those assumed by the Issuer, which can be realized with own sales forces. This will translate into improvement of the Issuer's margins and financial results in subsequent years, starting from 2019. It also means a change in the basket structure: fixed sales costs will be reduced (variable remuneration), will be replaced with variable costs, remuneration for BIOTON dependent on sales volumes. The implementation of the sales plans contained in the Agreement for 2019 and subsequent years will be possible thanks to the launch of the new Distreptazy department and the doubling of the Company's production capacity.

Source: company website, investor relations, current and periodic reports.

Company information
Company name:Bioton SA
Adress: ul. Starościńska 5 02-516 Warszawa
Phone:+48 22 7214000

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