DGAP-News

RedHill Biopharma Provides Progress Update on RHB-104 Phase III Crohn's Disease Program and Introduces Option for Early Stop for Success in Q2/2017

DGAP-News: RedHill Biopharma Ltd. / Key word(s): Study
RedHill Biopharma Provides Progress Update on RHB-104 Phase III Crohn's
Disease Program and Introduces Option for Early Stop for Success in Q2/2017

11.10.2016 / 15:30
The issuer is solely responsible for the content of this announcement.

---------------------------------------------------------------------------

RedHill Biopharma Provides Progress Update on RHB-104 Phase III Crohn's
Disease Program and Introduces Option for Early Stop for Success in Q2/2017

- An option for early stop for success for overwhelming efficacy has been
introduced into the ongoing first Phase III study with RHB-104 for
Crohn's disease (the "MAP US" study) and analysis is expected in the
second quarter of 2017 as part of a second independent data safety and
monitoring board (DSMB) interim safety and efficacy review; The
introduction of an early stop for success option may provide an
opportunity to significantly shorten the time for study completion

- An independent safety-focused DSMB meeting for the Phase III MAP US
study is on track for the fourth quarter of 2016

- RHB-104 is a potential paradigm-changing treatment for Crohn's disease,
targeting a suspected underlying bacterial infectious cause of the
disease, Mycobacterium avium subspecies paratuberculosis (MAP)

- Ongoing work on RedHill's companion MAP diagnostic test has led to the
successful identification of MAP DNA in blood samples from Crohn's
disease patients; Further development work on the MAP companion
diagnostic is in progress; RedHill has recently entered into a
collaboration with Baylor College of Medicine - RedHill's third such
MAP diagnostics collaboration with a leading U.S. university

- In order to enhance the overall robustness of the MAP US Phase III
study, provide a more comprehensive assessment of RHB-104's treatment
effect and bolster the likelihood of the study's success even further,
RedHill is implementing several improvements to the study's protocol
and introducing additional enhancements to the overall RHB-104
development program, including:

- The total number of patients to be enrolled in the MAP US study has
been increased from 270 to 410 in order to expand the collection of
clinical data, including mucosal healing, and to compensate for
early terminations; The increase is in line with historical power
assumptions and remission rates of Phase III studies with approved
Crohn's disease drugs

- Overall 90% power has been maintained and sample size calculations
have been modified to reduce the detectable effect from 21% to 15%,
reflecting a more clinically expected treatment effect;
Furthermore, with this modified sample size, more precise estimates
of the treatment effect can be ascertained; No changes are planned
to the primary endpoint of remission, defined as CDAI (Crohn's
Disease Activity Index) of less than 150 at week 26

- With 219 of the targeted 410 patients already enrolled in the MAP US
study, the second independent DSMB meeting is expected in the second
quarter of 2017, when the first 205 patients will have completed 26
weeks of study participation; This independent DSMB review will include
safety and interim efficacy analysis, with evaluation of an early stop
for success under pre-specified efficacy criteria, providing an
opportunity to significantly shorten the time to study completion in
the event of overwhelming efficacy and potentially expediting the data
locking process, once the study is fully completed

- The modifications to the statistical design allow for sequential tests
to be made; If the pre-specified statistical significance threshold is
met at the interim analysis in the second quarter of 2017, the study
could be stopped for efficacy or inefficacy; Should the pre-specified
threshold not be met in the interim analysis, the study is planned to
continue through randomization of all 410 patients and follow-up at 26
weeks, with final efficacy testing performed using a two-sided p-value
of 0.049

- The increase in the number of patients in the MAP US study is also
intended to allow for collection of significantly more colonoscopic
mucosal healing data, supporting future potential marketing
applications and reflecting and adhering to the most recent FDA and EMA
guidance

- A third safety-focused independent DSMB meeting is planned for when 75%
of the 410 patients will have completed 26 weeks of study participation

- In order to improve patient retention and further expedite recruitment,
RedHill is preparing to initiate an open-label extension study,
offering all patients who complete 26 weeks of study drug
administration and remain out of remission (CDAI>150) the opportunity
to receive treatment with RHB-104 for a 52-week period

- To further expedite recruitment and expand data collection in Europe,
RedHill is increasing the number of European sites by adding
approximately 30 new sites in up to four additional European countries,
more than doubling the current number of European sites in the MAP US
study

- In the coming months, RedHill intends to initiate two additional ex-
U.S. small-scale open-label clinical studies with RHB-104, each with up
to 20 Crohn's disease patients, to provide additional supportive
clinical data to potential future marketing applications, as well as
evaluate RHB-104's efficacy in newly diagnosed and treatment-naïve
Crohn's disease patients and as an add-on therapy to current standard
of care

- RedHill will remain blinded to the interim and ongoing results from the
Phase III study; No changes are planned to the MAP US Phase III study's
primary endpoint or 90% power; Assuming enrollment of all 410 planned
subjects, completion of patient recruitment is expected by the end of
2017

- RedHill maintained a debt-free balance sheet with $47.7 million in cash
and cash equivalents at the end of the second quarter of 2016; The cash
burn resulting from the changes outlined above in the third quarter of
2016 was insignificant; The expected total impact of cash burn
resulting from the expanded recruitment and the initiation of the open-
label extension study up until the second independent DSMB meeting and
the option for early stop for success in the second quarter of 2017, is
approximately $6 million

- Two recent non-clinical studies by researchers from the University of
Central Florida (UCF) College of Medicine suggest that RHB-104 capsule
proprietary formulation should be more effective in eradicating MAP
infection than regimens with multi-individualized antibiotics and that
RHB-104 active components at minimum inhibitory concentrations provide
synergistic anti-MAP growth activity compared to individual or dual
combinations

- RedHill will host a conference call and webcast to discuss the updates
on the RHB-104 Phase III development program today, Thursday, October
6th, 2016, at 8:30 am EDT; Please visit the Company's website for dial-
in information and webcast access: http://ir.redhillbio.com/events.cfm

TEL-AVIV, Israel, October 11, 2016 RedHill Biopharma Ltd. (NASDAQ: RDHL)
(TASE: RDHL) ("RedHill" or the "Company"), a biopharmaceutical company
primarily focused on development and commercialization of late clinical-
stage, proprietary, orally-administered, small molecule drugs for
gastrointestinal and inflammatory diseases and cancer, provided an update
on the RHB-104 Phase III Crohn's disease development program, planned
enhancements to the MAP US first Phase III study and expected milestones,
including an option for early stop for success for overwhelming efficacy.

Ira Kalfus, MD, Medical Director at RedHill Biopharma, noted: "The
increased number of patients and new open-label program reflect the strong
and growing interest we have had from our current investigators who see the
potential benefit of RHB-104 and the value of participating in this
important study." Dr. Kalfus further stated: "We do not expect these
changes to significantly impact timelines and the addition of an interim
analysis for early stop for success, expected in the second quarter of
2017, may in fact substantially shorten time to study completion."

Professor David Graham, MD, M.A.C.G., internationally-renowned researcher
and physician at the Baylor College of Medicine and the lead investigator
of the RHB-104 MAP US Phase III study, said: "Crohn's disease is a chronic
inflammatory condition with a devastating impact on patient's overall
health and quality of life. With the cause of the disease remaining
unknown, current standard of care therapies offer only to control the
disease symptoms by suppressing the immune system. RHB-104 targets a
specific pathogen believed to be the cause of the disease and thus presents
a new approach to treating Crohn's disease. If the RHB-104 MAP US Phase III
study is successful, it could completely change the treatment paradigm with
therapy being based on the etiology of this disease."

"We are introducing an option for early stop for success, expected in the
second quarter of 2017, providing a new near-term catalyst and an
opportunity to considerably speed up the study's timelines, without
compromising its integrity," said Dror Ben-Asher, RedHill's CEO. "RHB-104
is one of RedHill's three ongoing gastrointestinal Phase III flagship
programs in the U.S., along with RHB-105 for H. pylori infection and
BEKINDA(R) for gastroenteritis and gastritis. RHB-104 is a potential
ground-breaking therapy for the treatment of Crohn's disease and a
potential blockbuster, if approved. Given the important unmet medical need
in Crohn's disease, the large commercial opportunity it presents and the
clinical data already accumulated, we are determined to optimally position
this study for success. The purpose of this update is to provide a detailed
and transparent report of RedHill's RHB-104 Crohn's disease program and the
important actions we are taking to further enhance the program and the
ongoing Phase III study protocol, while maintaining the same endpoints and
powering and keeping cash burn in check." Mr. Ben-Asher added: "We are very
pleased with the current recruitment pace of the MAP US Phase III study and
we are taking additional steps to accelerate recruitment even further. The
changes introduced to the study's protocol are intended to expand the
analyzable data to support future potential marketing applications and
further bolster the study's likelihood of success. We are excited about the
significant progress achieved with RHB-104, including the successful
identification of MAP DNA in blood samples from Crohn's disease patients as
part of our diagnostic development program. Our hope is to address the
strong unmet medical need in Crohn's disease by potentially changing the
treatment paradigm for patients suffering from this debilitating and
painful disease."

Professor Thomas Borody, MD, a leading innovator of therapeutic approaches
for gastrointestinal diseases, inventor of the original anti-MAP
combination, which included the RHB-104 actives (Myoconda), as well as the
first patented triple antibiotic therapy for H. pylori peptic ulcer
disease, and a member of RedHill's Advisory Board, said: "I have been
treating patients in my clinic with the anti-MAP combination of antibiotics
for over 20 years and have seen remarkable results, with many patients
achieving complete and lasting remission over time. It is very exciting to
see RedHill continue to progress
RHB-104 through advanced clinical development. The similarities between
Crohn's disease in humans and Johne's disease in cattle, the strong science
pointing to MAP as the infective suspected cause of Crohn's disease and my
extensive experience in treating patients with these antibiotics, all lead
me to believe that RHB-104 has the potential to become a ground-breaking
treatment for Crohn's disease. I am therefore hopeful that RedHill's
RHB-104 Phase III program will succeed in demonstrating the relationship
between MAP and Crohn's disease and, if successful, help provide Crohn's
patients with a new, safe and effective treatment option."

Professor Colm O'Morain, MD, internationally-renowned researcher and
physician, former Dean of Healthcare Sciences at Trinity College Dublin,
past president of the United European Gastroenterology Federation (UEG) and
advisor to RedHill, said: "Crohn's disease incidence in Europe is one of
the highest in the world and has increased in several European countries
over the past few decades. Patients suffering from Crohn's disease are
limited in their therapeutic options, with existing therapies targeting
only symptomatic relief and accompanied by major potential side effects.
The expansion of the European leg of the MAP US Phase III study is very
encouraging, as this drug is targeting the suspected cause of the disease,
rather than only disease symptoms. I hope that the expansion of the MAP US
study in Europe will help advance the development of RHB-104 and provide
additional European patients, who are in need of a new therapeutic
alternative, the opportunity to receive treatment with this potential
paradigm-changing new therapy."

RHB-104 Crohn's Disease Program and the Microbiome Revolution

RHB-104 is a proprietary and potentially groundbreaking antibiotic
combination therapy in oral capsule formulation, with potent intracellular,
anti-mycobacterial and anti-inflammatory properties. The development of
RHB-104 is based on increasing evidence supporting the hypothesis that
Crohn's disease and potentially other autoimmune diseases are related to
Mycobacterium avium subspecies paratuberculosis (MAP) infection in
susceptible patients. The development of RHB-104 is consistent with the
growing awareness of the possibility that a bacterially-induced
dysregulated immune system may contribute to the pathogenesis of various
autoimmune diseases of unknown etiology.

RHB-104 and the Ongoing RHB-104 MAP US First Phase III Study for Crohn's
Disease

RedHill is developing RHB-104 for the treatment of Crohn's disease, with an
ongoing first Phase III study (the MAP US study). RHB-104 is also being
developed for multiple sclerosis, with a Phase IIa proof of concept study
recently completed in Israel (the CEASE-MS study). Final results from the
Phase IIa study for multiple sclerosis are currently under analysis,
following encouraging top-line interim results.

The ongoing RHB-104 MAP US Phase III study for Crohn's disease is enrolling
in up to 150 clinical sites in the U.S, Canada, Europe, Israel, Australia
and New Zealand. Additional studies will likely be required to support a
U.S. New Drug Application (NDA) for RHB-104.

The MAP US study is a randomized, double-blind, placebo-controlled first
Phase III study intended to evaluate the safety and efficacy of RHB-104 in
patients with moderately to severely-active Crohn's disease, defined as
Crohn's Disease Activity Index (CDAI) between 220 and 450. Subjects
enrolled in the study are randomized in a 1:1 fashion to receive RHB-104 or
a placebo, with a primary endpoint of disease remission, defined as
reduction in CDAI to less than 150 at week 26. Secondary and exploratory
endpoints include, among others, state of response at week 26, maintenance
of remission through week 52 and efficacy outcome measures in relation to
the presence of MAP bacterial infection. Exploratory endpoints include
endoscopic evaluation of mucosal healing.

219 subjects have already been randomized in the MAP US study, with a data
and safety monitoring board (DSMB) meeting on track to take place in the
fourth quarter of 2016. This independent DSMB meeting will focus on safety.
RedHill will remain blinded to the interim and ongoing results from the
Phase III study.

In order to further enhance the overall robustness of the MAP US Phase III
study, provide a more comprehensive assessment of RHB-104's treatment
effect, better evaluate the Crohn's disease population enrolled in the
study, further improve recruitment pace, address retention and early
terminations and bolster the likelihood of study success even further,
RedHill is implementing several changes to the study's protocol and
introducing additional enhancements to the overall RHB-104 development
program, including:

- RedHill has increased the number of subjects planned to be enrolled in
the study from 270 to 410, in order to enhance the study's overall
robustness, account for early terminations and increase precision of
estimates of efficacy.

Overall, 90% power has been maintained and sample size calculations have
been modified to reduce the detectable effect from 21% to 15%, reflecting a
more clinically expected treatment effect. Furthermore, with this modified
sample size, more precise estimates of the treatment effect can be
ascertained. No changes are planned to the primary endpoint of remission at
week 26.

219 patients have already been enrolled in the MAP US study and an
independent DSMB review, focused on safety, is on track for the fourth
quarter of 2016. Two additional DSMB meetings are expected to take place in
the MAP US study after 50% and after 75% of the 410 patients planned to be
enrolled in the study will complete 26 weeks of study participation. The
second independent DSMB meeting is expected in the second quarter of 2017,
after the first 205 patients complete 26 weeks of study participation.
Patient 205 was randomized in August 2016.

The second DSMB meeting will include safety and interim efficacy analysis
and could potentially provide the opportunity to expedite the data locking
process for the final analysis, once the study is complete.

Importantly, this independent DSMB meeting will evaluate the option of an
early stop for success, according to a pre-specified statistical
significance threshold for analysis requiring overwhelming efficacy of
RHB-104 versus placebo in the primary endpoint (two sided p-value< 0.003).
Potentially, this could shorten the time to study completion considerably
without compromising its integrity. The modifications to the statistical
design allow for sequential tests to be made using the O'Brien-Fleming
spending function to determine the test boundaries. If the pre-specified
threshold is met at the second DSMB meeting, the study could be stopped for
efficacy or inefficacy. If the pre-specified threshold is not met during
the interim analysis, the study is planned to continue through
randomization of all 410 patients and follow-up at week 26, with final
efficacy testing performed using two sided p-value of 0.049. Given the high
thresholds for determining interim efficacy (or inefficacy) set by the pre-
specified test boundaries using the O'Brien-Fleming method, RedHill expects
to continue the MAP US Phase III study through completion of enrolment of
all 410 patients and that the DSMB will not recommend an early stop.

Taking into account the increase in the total number of patients in the
study, and assuming the study is not stopped for success or inefficacy
following the DSMB meeting in the second quarter of 2017, completion of
recruitment is expected by the end of 2017.

The expansion of the MAP US study is also expected to improve the ability
to capture more data related to mucosal healing with endoscopic testing, an
exploratory endpoint in the MAP US study. Both the U.S. Food and Drug
Administration (FDA) and the European Medicines Agency (EMA) have stressed
the increasing importance of mucosal healing data in Crohn's disease
studies. Mucosal healing is a voluntary exploratory endpoint in the MAP US
Phase III study and the additional imaging data from this study, as well as
from two planned ex-U.S. small-scale clinical studies with RHB-104, will
potentially add to the understanding of RHB-104's therapeutic effect and
may support future potential marketing applications.

- In order to improve patient retention, further expedite recruitment and
expand the safety and efficacy data set of RHB-104, RedHill plans to
initiate an open-label extension study for all patients who have
completed 26 weeks of treatment in the MAP US study and failed to
achieve remission at week 26, the study's primary endpoint. Patients
with a Crohn's Disease Active Index (CDAI) score of greater than 150 at
week 26 will be offered the opportunity to receive treatment with
active drug (RHB-104) for a 52-week period. This study is considered
separate from the MAP US study results and data collected will be
supplemental to the MAP US study data.

- To further expedite recruitment and expand data collection in Europe,
RedHill is increasing the number of European sites in the MAP US study
by adding approximately 30 new sites in up to four additional European
countries, more than doubling the current number of sites in Europe.

- In support of future potential marketing applications, RedHill also
plans to initiate two additional open-label, ex-U.S. clinical studies
of up to 20 Crohn's disease patients each to further evaluate the
safety and efficacy of RHB-104, including generation of additional
efficacy data in newly diagnosed and treatment-naïve Crohn's disease
patients and as an add-on therapy to current standard-of-care. In
addition, an extensive pharmacokinetic (PK) program is ongoing,
including a population PK (pop PK) study which is being conducted as
part of the MAP US study along with previously completed food effect
and drug-drug interaction studies.

- RedHill maintained debt-free balance sheet with $47.7 million in cash
and cash equivalents at the end of the second quarter of 2016. The
expected cash burn resulting from the changes outlined above in the
third quarter of 2016 was insignificant. The expected total cash burn
impact resulting from the expanded recruitment and the initiation of
the open-label extension study, up until the second independent DSMB
meeting and the option for early stop for success in the second quarter
of 2017, is approximately $6 million.

Mycobacterium avium subspecies paratuberculosis (MAP) - Johne's and Crohn's
diseases

MAP is a slow-growing, Gram-positive bacterium which is the causative agent
of Johne's disease, a severe enteritis that afflicts cattle and other
ruminant animals. Heinrich Albert Johne first characterized the condition
in 1895 when he demonstrated the presence of acid fast microorganisms in
intestinal mucosa of cattle with enteritis[1]. Nearly two decades later,
T. K. Dalziel identified a human enteritis similar to Johne's disease yet
distinctly different from tuberculosis, another acid fast organism[2]. At
the same time, F. W. Twort succeeded in cultivating a new mycobacterium
which produced experimental enteritis formally designated mycobacterium
avium paratuberculosis[2]and the veterinary disease was renamed
paratuberculosis. In 1932, Burril Crohn reported on the disease that bore
his name similarly describing a non-tuberculous granulomatous regional
ileitis[4].

Johne's disease is a chronic granulomatous disease that primarily affects
the ileum. It is characterized by progressive weight loss and chronic
diarrhea, resulting in wasting and eventual death. Initial clinical signs
typically arise after maturity and the birth of first calf following a
healthy appearing prolonged incubation period of two to ten years[5].
Infected animals may shed up to one million infectious doses of MAP in
their feces per day[6] and it is estimated that over 90% of U.S. dairy
herds[7] and roughly 5-10% of U.S. dairy cattle are infected[8].

Crohn's disease shares many similarities with Johne's disease. They both
were first described as occurring in the ileum, and like Johne's disease,
Crohn's disease presents as a disease of the young. Typical onset of
Crohn's disease is between the ages of 15-25 and it is characterized by
chronic, recurrent abdominal pain, diarrhea, weight loss and failure to
thrive. Pathologically, granulomatous inflammation of the intestinal wall
is seen in both Crohn's disease and Johne's disease as is a cobblestone
appearance of the intestinal mucosa, which is pathognomonic of Crohn's
disease in humans. The principal pathological changes found in the
intestine, such as thickening of the ileum and ulcerations of the mucosa,
usually with underlying nodules of lymphoid tissue, have been observed in
both Johne's disease and Crohn's disease.

In humans, MAP is an intracellular pathogen that resides in monocytes and
macrophages and may persist for months in a dormant spheroplast form
without a cell wall. This makes detection by standard staining methods
difficult. MAP takes up to six months to grow and requires a highly
specialized media, further confounding its identification. Mycobacterium
paratuberculosis is a Gram-positive, acid-fast, non-spore forming and non-
motile bacteria with a straight or curved rod shape. Within macrophages,
MAP drops its cell wall, the component of the bacterium that takes up the
characteristic acid stain and enhances the ability of the mycobacterium to
resist host defenses. The lipid-rich cell wall is believed to determine
many of the properties of the organism, such as virulence and resistance to
extracellular degradation. In addition, without the cell wall, the
bacterium is no longer 'acid fast' and cannot be detected microscopically.
Recent studies have demonstrated the capacity of MAP to undergo a
morphologic change to become spore-like. The spore morphotype survives heat
and may lead to increased persistence in hosts and the environment[9][10].

There is currently no FDA-approved commercial diagnostic test for MAP.
However, recent advances in diagnostic technology have led to increasingly
higher identification of MAP, with studies demonstrating high prevalence of
MAP in Crohn's disease patients[11].

Clinical Study History - MAP and Crohn's disease

In the summer of 1998, the Paratuberculosis Awareness and Research
Association issued a plea to the United States Government to investigate
the relationship between the cattle pathogen, MAP, and the devastating
human condition known as Crohn's disease. In 1999, the U.S. National
Institute of Allergy and Infectious Disease (NIAID), part of the National
Institutes of Health (NIH), published a research agenda which targeted
research into the relationship between infection and Crohn's disease, with
particular reference to infection with MAP.

Since the 1998 NIH / NIAID-sponsored conference on MAP in Crohn's disease,
there have been numerous studies published in peer-reviewed journals
regarding MAP detection in human blood, tissues and stool samples taken
from Crohn's disease patients demonstrating a strong relationship between
Crohn's disease and MAP.

The resemblance of intestinal pathology in Johne's disease to Crohn's
disease was more recently identified and studied by Professor Thomas
Borody[12], an innovator of therapeutic approaches to treating
gastrointestinal tract diseases. Professor Borody pioneered anti-MAP
therapy approximately 20 years ago and has since treated over 300 Crohn's
disease patients with the same antibiotics as are used in RHB-104.
Professor Borody has published results from several of his studies,
including a retrospective analysis of 12 Crohn's disease patients
demonstrating complete remission in half of those treated with anti-MAP
therapy[13]. Pharmacia Corporation ("Pharmacia"), which was later acquired
by Pfizer Inc., licensed the product from Professor Borody and conducted a
large 213 patient study which, until RedHill's current study, had been the
largest study ever done with anti-MAP therapy in Crohn's disease.
Unfortunately, the Pharmacia study design left it significantly
underpowered and led to its missing its primary endpoints, although the
active arm was better than placebo throughout study drug administration (16
weeks, 52 weeks and 104 weeks)[14]. A reanalysis of the study conducted by
McGill University researchers Drs. Marcel A. Behr, MD, and Professor James
A. Hanley, PhD, and published in the Lancet Infectious Diseases[15] found
that flaws in the study design led not only to an analysis of incremental
benefit instead of maintenance of benefit, but also to the introduction of
bias in the treatment groups as well. Correcting for these concerns, Drs.
Behr and Hanley demonstrated that anti-MAP therapy was significantly more
efficacious than placebo with a persistent treatment effect of
approximately 16% from week 16 through week 104. According to the Behr and
Hanley reanalysis, the Pharmacia study demonstrated a 66% vs. 50% treatment
effect favoring anti-MAP therapy at 16 weeks (p=0.02). This was maintained
through 52 weeks, with results of 40% vs. 22% (p=0.003) and through 104
weeks with 30% vs. 14% (p=0.005), favoring anti-MAP therapy.

In 2010, following publication of the Lancet article, RedHill acquired the
worldwide exclusive rights to RHB-104 from the Sydney, Australia-based
company, Giaconda. RedHill has since initiated an extensive R&D program and
significantly advanced the development of RHB-104, which included an
improved reformulation of the active ingredients in higher doses in an
all-in-one single oral capsule, clinical PK studies, a development program
for a companion diagnostic for MAP and discussions with the FDA and
additional regulatory agencies to clarify the potential regulatory path for
approval.

A recent non-clinical study conducted at the University of Central Florida
(UCF) College of Medicine's Burnett School of Biomedical Sciences compared
the minimum inhibitory concentrations of RHB-104 proprietary all-in-one
oral capsule with an RHB-104 analog of the three antibiotics dissolved
individually for eradication of MAP infection, as well as other organisms.
The study was designed to evaluate the synergistic properties of the
RHB-104 all-in-one formulation of three antibiotics and was described by
the researchers in an article titled "A single capsule formulation of
RHB-104 demonstrates higher anti-microbial growth potency for effective
treatment of Crohn's disease associated with Mycobacterium avium subspecies
paratuberculosis" which has been accepted for publication in the peer-
reviewed journal Gut Pathogens[16]. The article concludes that the RHB-104
proprietary formulation of three antibiotics in a single oral capsule
results in potent synergistic anti-microbial activity far exceeding the
treatment efficacy of multi-individually dissolved drugs. The study
strongly suggests that the proprietary RHB-104 capsule formulation should
be more effective in eradication of MAP infection than regimens with multi-
individualized antibiotics.

This study follows a previous publication by researchers from the
University of Central Florida (UCF) College of Medicine's Burnett School of
Biomedical Sciences, which was also published in Gut Pathogens under the
title "RHB-104 triple antibiotics combination in culture is bactericidal
and should be effective for treatment of Crohn's disease associated with
Mycobacterium paratuberculosis"[17]. The results described in this article
demonstrated that the RHB-104 active components, in their individual
concentrations or in dual combinations, were not as effective compared to
the triple combination of RHB-104, at minimum inhibitory concentration
levels, against all microorganisms. The authors concluded that the triple
combination of RHB-104 active components at minimum inhibitory
concentration (MIC) provided synergistic anti-MAP growth activity compared
to individual or dual combinations of the drugs and, consequently,
administration of RHB-104 is considered favorable and should lead to
tolerable dosage that is desirable for long-term treatment of Crohn's
disease.

RedHill's MAP Diagnostics Development Program

RedHill continues to advance the development program for a commercial
companion diagnostic for the detection of MAP bacteria in Crohn's disease
patients.

Results to date include initial validation of RedHill's platform PCR
(polymerase chain reaction) detection methodology licensed from UCF and
developed by Professor Saleh A. Naser, a leading investigator in the field
of Mycobacterium avium subspecies paratuberculosis (MAP) and its
association with Crohn's disease. Further testing of the methodology at
three different U.S. laboratories has successfully identified MAP DNA in
blood samples drawn from patients with Crohn's disease outside of the MAP
US study. Further optimization of the processes for rapid detection of MAP
is currently in progress.

The development of the commercial companion diagnostic is an extension of
RedHill's RHB-104 Phase III development program. RedHill has also recently
initiated a third U.S. university collaboration with Baylor College of
Medicine intended to further advance the efforts to develop a companion
diagnostic for MAP. RedHill had previously acquired the rights to two
separate patented technologies from the laboratory of Professor Saleh A.
Naser at the UCF College of Medicine's Burnett School of Biomedical
Sciences and from the University of Minnesota.

Critical to the successful development of a companion diagnostic will be
ensuring that any future commercial test is accurate and reproducible.
RedHill believes that PCR (polymerase chain reaction) technology is the
most promising approach currently available and is focusing its efforts in
that direction.

There is currently no validated, FDA-approved, commercially available
method of detecting the presence or absence of MAP in patients suffering
from Crohn's disease and other diseases. The development of a companion
diagnostic is expected to contribute to the understanding of the role of
MAP infection in Crohn's disease and potentially other inflammatory
diseases.

RedHill's RHB-104 Phase IIa Multiple Sclerosis Program

RHB-104 is also under development for relapsing-remitting multiple
sclerosis (RRMS). Top-line final results from the Phase IIa CEASE-MS study
with RHB-104 for RRMS are expected in the fourth quarter of 2016, following
the recently announced last patient follow-up visit in the study. In the
first 24 weeks, patients enrolled in the CEASE-MS study received treatment
with RHB-104 as an add-on therapy to interferon beta-1a and were then
evaluated for an additional 24-week follow-up period during which they were
treated with interferon beta-1a alone. Top-line interim results announced
in March 2016, after completion of the 24-week treatment period,
demonstrated positive safety and efficacy signals, including an encouraging
relapse-free rate, Expanded Disability Status Scale (EDSS) scores and MRI
results, which support further clinical development.

RHB-104 - Strong Patent Protection

RedHill has built a robust patent portfolio, including protection of the
RHB-104 formulation and method-of-use through 2032. RedHill's formidable
patent portfolio covering its oral antibiotic combination therapy includes
more than 25 patents in various countries including the U.S., Australia,
Canada, Japan and multiple European countries with additional patent claims
being pursued worldwide.

RHB-104 is composed of three active pharmaceutical ingredients (APIs) and
RedHill has been working with various manufacturers to obtain secure and
reliable sourcing of these active components. In some cases, this has
required the development of proprietary manufacturing processes, which
RedHill believes may be an added source of protection for RHB-104.

RedHill hosted a conference call and webcast call today, October 6th,
2016 at 8:30 a.m. EDT, to review the RHB-104 development program and the
planned changes to the MAP US Phase III study. Please visit the Company's
website for dial-in information and webcast access: http://
ir.redhillbio.com/events.cfm

About RHB-104:
Currently in a first Phase III study for the treatment of Crohn's disease
(the MAP US study), RHB-104 is a proprietary and potentially groundbreaking
oral antibiotic combination therapy, with potent intracellular, anti-
mycobacterial and anti-inflammatory properties. RHB-104 is based on
increasing evidence supporting the hypothesis that Crohn's disease is
caused by Mycobacterium avium subspecies paratuberculosis (MAP) infection
in susceptible patients. Clinical trials conducted with earlier
formulations of RHB-104 include an Australian Phase III study conducted by
Pharmacia/Pfizer. RedHill has conducted several supportive studies with the
current formulation of RHB-104 and a long-term population pharmacokinetic
(pop-PK) study is ongoing as part of the Phase III MAP US study. RHB-104 is
covered by several issued and pending patents. RedHill is also conducting
the CEASE-MS Phase IIa, proof-of-concept clinical study, evaluating RHB-104
as an add-on therapy to interferon beta-1a in patients treated for
relapsing-remitting multiple sclerosis (RRMS), with top-line interim
results announced and top-line final results expected in the fourth quarter
of 2016.

About RedHill Biopharma Ltd.:
RedHill Biopharma Ltd. (NASDAQ/TASE: RDHL) is a biopharmaceutical company
headquartered in Israel, primarily focused on the development and
commercialization of late clinical-stage, proprietary, orally-administered,
small molecule drugs for the treatment of gastrointestinal and inflammatory
diseases and cancer. RedHill's current pipeline of proprietary products
includes: (i) RHB-105 - an oral combination therapy for the treatment of
Helicobacter pylori infection with successful results from a first Phase
III study; (ii) RHB-104 - an oral combination therapy for the treatment of
Crohn's disease with an ongoing first Phase III study and an ongoing proof-
of-concept Phase IIa study for multiple sclerosis; (iii) BEKINDA(R)
(RHB-102) - a once-daily oral pill formulation of ondansetron with an
ongoing Phase III study for acute gastroenteritis and gastritis and an
ongoing Phase II study for IBS-D; (iv) RHB-106 - an encapsulated bowel
preparation licensed to Salix Pharmaceuticals, Ltd.; (v) YELIVA(TM)
(ABC294640) - a Phase II-stage, orally-administered, first-in-class SK2
selective inhibitor targeting multiple oncology, inflammatory and
gastrointestinal indications; (vi) MESUPRON - a Phase II-stage first-in-
class, orally-administered uPA inhibitor, targeting gastrointestinal and
other solid tumors; (vii) RP101 - currently subject to an option-to-acquire
by RedHill, RP101 is a Phase II-stage first-in-class, orally-administered
Hsp27 inhibitor, , targeting pancreatic and other gastrointestinal cancers;
(viii) RIZAPORT(R) (RHB-103) - an oral thin film formulation of rizatriptan
for acute migraines, with a U.S. NDA currently under discussion with the
FDA and marketing authorization received in Germany in October 2015; and
(ix) RHB-101 - a once-daily oral pill formulation of the cardio drug
carvedilol.

This press release contains "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995. Such statements
may be preceded by the words "intends," "may," "will," "plans," "expects,"
"anticipates," "projects," "predicts," "estimates," "aims," "believes,"
"hopes," "potential" or similar words. Forward-looking statements are based
on certain assumptions and are subject to various known and unknown risks
and uncertainties, many of which are beyond the Company's control, and
cannot be predicted or quantified and consequently, actual results may
differ materially from those expressed or implied by such forward-looking
statements. Such risks and uncertainties include, without limitation, risks
and uncertainties associated with (i) the initiation, timing, progress and
results of the Company's research, manufacturing, preclinical studies,
clinical trials, and other therapeutic candidate development efforts; (ii)
the Company's ability to advance its therapeutic candidates into clinical
trials or to successfully complete its preclinical studies or clinical
trials; (iii) the extent and number of additional studies that the Company
may be required to conduct and the Company's receipt of regulatory
approvals for its therapeutic candidates, and the timing of other
regulatory filings, approvals and feedback; (iv) the manufacturing,
clinical development, commercialization, and market acceptance of the
Company's therapeutic candidates; (v) the Company's ability to establish
and maintain corporate collaborations; (vi) the Company's ability to
acquire products approved for marketing in the U.S. that achieve commercial
success and build its own marketing and commercialization capabilities;
(vii) the interpretation of the properties and characteristics of the
Company's therapeutic candidates and of the results obtained with its
therapeutic candidates in research, preclinical studies or clinical trials;
(viii) the implementation of the Company's business model, strategic plans
for its business and therapeutic candidates; (ix) the scope of protection
the Company is able to establish and maintain for intellectual property
rights covering its therapeutic candidates and its ability to operate its
business without infringing the intellectual property rights of others; (x)
parties from whom the Company licenses its intellectual property defaulting
in their obligations to the Company; (xi) estimates of the Company's
expenses, future revenues capital requirements and the Company's needs for
additional financing; (xii) competitive companies and technologies within
the Company's industry; and (xiii) the impact of the political and security
situation in Israel on the Company's business. More detailed information
about the Company and the risk factors that may affect the realization of
forward-looking statements is set forth in the Company's filings with the
Securities and Exchange Commission (SEC), including the Company's Annual
Report on Form 20-F filed with the SEC on February 25, 2016. All forward-
looking statements included in this Press Release are made only as of the
date of this Press Release. We assume no obligation to update any written
or oral forward-looking statement unless required by law.

Company contact:                               IR & PR contact (Europe)
Adi Frish                                      Anne Hennecke
Senior VP Business Development &               Managing Partner
Licensing                                      MC Services AG
RedHill Biopharma                              [phone]
[phone]                               [e-mail]
[e-mail]

[1] Cocito C. et al., Paratuberculosis, Clin Microbiol Rev, Jul 1994;
328-345.

[2] Dalziel TK, Chronic interstitial enteritis, British Medical Journal.
1913;2:1068-1070.

[3] Twort F. W. et al., A Method for Isolating and Cultivating the
Mycobacterium enteritidis chronicae pseudotuberculosae bovis, Johne, and
some Experiments on the Preparation of a Diagnostic Vaccine for
Pseudo-tuberculous Enteritis of Bovines, The Royal Society, Mar 1912, Vet.
J. 68, 353-365.

[4] Crohn BB et al., Regional Ileitis - A Pathological and Clinical Entity,
JAMA. 1932;99(16):1323-1329.

[5] Tiwari A. et al., Johne's disease in Canada: Part I: Clinical symptoms,
pathophysiology, diagnosis, and prevalence in dairy herds, 2006, Can Vet J,
Sep; 47(9): 874-882.

[6] Marce C, Predicting fadeout versus persistence of paratuberculosis in a
dairy cattle herd for management and control purposes: a modelling study,
2011, Vet Res, 42:36; Wu C et al. Defining the Stressome of Mycobacterium
avium subsp. paratuberculosis In Vitro and in Naturally Infected Cows,
2007, J. Bacteriol. Nov. 7877-7886.

[7] Lombard JE et al. Herd-level prevalence of Mycobacterium avium subsp.
paratuberculosis infection in the United States dairy herd in 2007, Prev
Vet Med, 2013; 108, 234-238.

[8] Lombard JE, Epidemiology and Economics of Paratuberculosis, Vet Clin
North Am Food Anim Pract. 2011 Nov;27(3):525-35.

[9] Tessema MZ et al., Bacteriology: Review paratuberculosis: How does
mycobacterium avium subsp. Paratuberculosis resist intracellular
degradation?, Vet Quart, 2011 23:4, 153-162.

[10] Dow CT, Mycobacterium avium Subspecies Paratuberculosis and Human
Disease: Bridging Infection and Autoimmunity, Infection and Autoimmunity,
2015 Elsevier B.V.

[11] Bull TJ et al. Detection and verification of Mycobacterium avium
subsp. paratuberculosis in fresh ileocolonic mucosal biopsy specimens from
individuals with and without Crohn's disease, J Clin Microbiol, 2003,
Jul;41(7):2915-23.; Shafran I et al. Seroreactivities against Saccharomyces
cerevisiae and Mycobacterium avium subsp. paratuberculosis p35 and p36
antigens in Crohn's disease patients, Dig Dis Sci, 2002, Sep;47(9):2079-81.

[12] Prof. Borody is a member of RedHill's Advisory Board.

[13] Borody TJ et al., Treatment of severe Crohn's disease using
antimycobacterial triple therapy - approaching a cure? Digest Liver Dis
2002;34:29-38.

[14] Selby W, Pavli P, Crotty B, Florin T, et al. Antibiotics in Crohn's
Disease Study Group.Two year combination antibiotic therapy with
clarithromycin, rifabutin, and clofazimine for Crohn's disease.
Gastroenterology. 2007; 132(7):2313-9.

[15] Behr MA, Hanley J, Antimycobacterial therapy for Crohn's disease: a
reanalysis, Lancet Infectious Diseases, 2008; 8:344.

[16] Qasem A, Safavikhasraghi M, Naser SA. A single capsule formulation of
RHB-104 demonstrates higher anti-microbial growth potency for effective
treatment of Crohn's disease associated with Mycobacterium avium subspecies
paratuberculosis, Gut Pathogens, 2016, 8:45.

[17] Alcedo KP, Thanigachalam S, Naser SA. RHB-104 triple antibiotics
combination in culture is bactericidal and should be effective for
treatment of Crohn's disease associated with Mycobacterium
paratuberculosis, Gut Pathogens, 2016, 8:32.


---------------------------------------------------------------------------

11.10.2016 Dissemination of a Corporate News, transmitted by DGAP - a
service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

The DGAP Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Archive at www.dgap.de

---------------------------------------------------------------------------

510743 11.10.2016