DearShareholders,

It’s remarkable the difference one year can make. I’d like to tell you how we felt upon learning of the negative KIACTATM Phase 3 AA amyloidosis results in mid 2016, how we decided to rebuild from this bitter disappointment and why we are more excited than ever about the future-particularly because of our new project, BLU-5937.

Shocked and disappointed. From our partners at Auven Therapeutics to our Board of Directors to all of our employees, it was a major blow to learn that the Phase 3 AA amyloidosis study had not reached its primary endpoint. We had all felt the study had a very good chance of being successful and had planned all the next steps, including the regulatory process and lining up potential commercial partners. None of those plans were to be set in motion.

We nevertheless had contingency plansin the event of a negative study outcome, including continuing or selling the business. The arguments in favor of the former were strong:

• Leverage the team and its expertise: the team had coalesced well and its ability to identify and develop promising drug candidates to value inflection points had not changed;
• Core business plan was still relevant: ecosystem continued to provide strong value to companies that are able to develop drug candidates through proof of concept studies; and
• Residual projects and rights in Sarcoidosis, Fragile X and Alzheimer’s disease were undervalued in our market capitalization: we knew there was value in some of our partnered programs that would take time to materialize.

After much consideration and discussion with the Board of Directors as well as our shareholders, we decided to continue and rebuild the Company, on one important condition: identify a new project to serve as BELLUS’ core focus

On February 28^th, 2017, we announced this new core project, a drug candidate for chronic cough called BLU-5937. It met the stringent criteria the Board of Directors had set for undertaking a new program:

• Exceptional science: work done by the teams at Astra Zeneca (chemistry, optimization and characterization) and at the NEOMED Institute (chronic cough proof of concept);
• Unmet need: there have been no new drugs approved for chronic cough for more than 40 years and current drugs have limited benefit and/or problematic side effect profiles;
• Mitigated risk: the P2X3 receptorthat BLU-5937 targets has been clinically validated in chronic cough;
• Right-sized transaction: the transaction terms are reasonable and we are confident in our ability to properly execute the development plan; and
• Significant potential upside: we believe that demonstrating BLU-5937’s safety and efficacy in clinical trials will generate significant commercial drug company interest.

We are excited as we begin development of BLU-5937, a potentially best-in-class drug addressing a high unmet need, and look forward to providing updates on our progress

We would like to, once again, thank our shareholders for their continued support. We understand that 2016 did not bring the results that many of us were expecting. As a management team, we’re motivated to make up for that loss and we believe we’ll be able to do that with our new plan.

Sincerely,

Roberto Bellini

President and Chief Executive Officer