Pulmatrix Enters Into Binding Term Sheet with Cipla Technologies LLC for the Development and Commercialization of Pulmazole

Pulmatrix, Inc., a clinical stage biopharmaceutical company focused on developing novel inhaled therapeutics to serve unmet needs in respiratory disease, announced today its entry into a Binding Term Sheet with Cipla Technologies LLC ("Cip Tec"), a subsidiary of Cipla Limited (BSE: 500087; NSE: CIPLA EQ; and hereafter referred to as "Cipla") for the co-development and commercialization of Pulmazole (PUR1900) – an inhaled iSPERSE™ formulation of the anti-fungal drug itraconazole for the treatment of allergic bronchopulmonary aspergillosis (ABPA) in patients with asthma.

The Binding Term Sheet lays the groundwork for entry into a definitive agreement with Cip Tec during the second quarter of 2019. Per the Binding Term Sheet, subject to entry into the definitive agreement, Cip Tec will make an upfront payment of $22 million to Pulmatrix in exchange for an assignment of all rights to Pulmazole to Cip Tec. However, following this assigning, Pulmatrix will retain the right to receive 50% of the free cash flow from future sales of Pulmazole. In addition, Pulmatrix will remain primarily responsible for the implementation of the clinical development of Pulmazole and Cip Tec will be responsible for implementation of the commercialization of the product. Entry into a definitive agreement is contingent upon, Pulmatrix having at least $15 million in unencumbered funds.

Following the execution of a definitive agreement, coupled with the funds to be provided by Cip Tec, Pulmatrix believes it will be in a position to complete the Phase 2 study entitled: "A Randomized, Double- Blind, Multicenter, Placebo-Controlled, Phase 2 Study to Evaluate the Safety, Tolerability, and Pharmacokinetics of Itraconazole Administered as a Dry Powder for Inhalation (PUR1900) in Adult Asthmatic Patients With Allergic Bronchopulmonary Aspergillosis", which is planned to begin in the second quarter 2019. Post Phase 2, all future development and commercialization costs will be equally shared by Pulmatrix and Cip Tec.

"With the FDA review of the IND complete, allowing us to proceed into ABPA patients, we are excited to take this important step forward in financing the Pulmazole program. In addition to securing a 50% commitment from Cip Tec for future Pulmazole development and commercialization costs, Cipla's deep experience in respiratory drug development, device, manufacturing, and commercialization of Respiratory products should further strengthen the program. This important milestone brings us one step closer towards providing an improved novel therapeutic option to patients suffering from ABPA.", said Robert W. Clarke, Ph.D, chief executive officer of Pulmatrix.

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