Anthera Pharmaceuticals Inc (ANTH): Biotechnology Value Fund Reports 9.99% Stake

Page 10 of 14 – SEC Filing

The conversion price for the Series X-1 Preferred Stock will be equal to the lower of: (a) 75% of the five-day VWAP of the Issuer’s Common Stock over the five full trading days following the Issuer’s initial public announcement of top-line clinical efficacy and safety data from the Issuer’s ongoing “SOLUTION” clinical study or (b) 175% of the then-applicable conversion price for the Series X Preferred Stock, provided that the conversion price will in no event be lower than $2.95, the closing price for the Common Stock as reported on NASDAQ on September 6, 2016. Without the Beneficial Ownership Limitation (defined below), the 25,000 shares of Series X-1 Preferred Stock is convertible into approximately 4,842,613 shares of Common Stock.

The Series X-1 Option may not be exercised if, after such exercise, the Reporting Persons would beneficially own, as determined in accordance with the Exchange Act, more than 9.99% of the number of shares of Common Stock then issued and outstanding (the “Series X-1 Beneficial Ownership Limitation”, together with the “Warrant Beneficial Ownership Limitation” and the “Series X Preferred Stock Beneficial Ownership Limitation” the “Beneficial Ownership Limitation”).

Due to the Series X-1 Beneficial Ownership Limitation, the Reporting Persons have assumed that the Series X-1 Preferred Option would not be converted.

The Reporting Persons may choose to convert or exercise, as applicable, the Series X Preferred Stock, Series X-1 Preferred Option, Series X-1 Preferred Stock, or Warrants in other amounts among the Reporting Persons, while continuing to comply with the Beneficial Ownership Limitation.

As of the date hereof, (i) BVF beneficially owned approximately 2,355,593 shares of Common Stock issuable upon the conversion of 6,949 shares of Series X Preferred Stock held by it; (ii) BVF2 beneficially owned approximately 1,539,661 shares of Common Stock issuable upon the conversion of 4,542 shares of Series X Preferred Stock held by it, and (iii) Trading Fund OS beneficially owned 0 shares of Common Stock, excluding approximately 458,305 shares of Common Stock issuable upon the conversion of 1,352 shares of Series X Preferred Stock held by it due to the Beneficial Ownership Limitation. In each case, assuming a Series X Conversion Price of $2.95.

Partners OS as the general partner of Trading Fund OS may be deemed to beneficially own 0 shares of Common Stock beneficially owned by Trading Fund OS.

Partners, as the general partner of BVF, BVF2, the investment manager of Trading Fund OS, and the sole member of Partners OS, may be deemed to beneficially own the approximately 4,582,033 shares of Common Stock beneficially owned in the aggregate by BVF, BVF2, Trading Fund OS, and a certain Partners Managed Account (the “Partners Managed Account”), including approximately 686,779 shares of Common Stock held in the Partners Managed Account issuable upon the conversion of 2,026 shares of Series X Preferred Stock, and excluding approximately 44,407 shares of Common Stock held in the Partners Managed Account due to the Beneficial Ownership Limitation. In total, the Partners Managed Account holds approximately 731,186 shares of Common Stock issuable upon the conversion of 2,157 shares of Series X Preferred Stock.