Financial Results for First Fiscal Quarter Ended November 30, 2012

Research and development expenses in the first quarter of fiscal 2013 were approximately $6.8 million, an increase of approximately $1.8 million or 35%, over expenses of approximately $5.0 million in the same period of the prior fiscal year. The increase was primarily due to an increase in RP103 manufacturing expenses to support the ramp-up for the commercial launch of RP103 for the treatment of nephropathic cystinosis, if approved. The increase was also due to: Raptor's share of the costs to conduct the NIDDK-sponsored NASH Phase 2b clinical trial of RP103; the addition of staff to support Medical Affairs, Regulatory and Clinical Operations; and the increased costs for preclinical development programs.

General and administrative expenses in the first quarter of fiscal 2013 were approximately $6.4 million, an increase of approximately $4.1 million or 172%, over approximately $2.3 million in the same period of the prior fiscal year. The increase was primarily due to pre-commercial expenses related to preparation for the launch of RP103 for the treatment of nephropathic cystinosis, if approved, and for the addition of staff for Commercial Operations (to support pre-commercial and future commercial activities), Finance and Human Resources. General and administrative expenses also increased for non-cash stock option compensation expense and legal expenses, and due to a decrease in general and administrative expenses allocated to research and development due to a change in allocation methodology.

Cash as of November 30, 2012, included approximately $5.9 million received under an At-The-Market financing agreement along with approximately $1.0 million received from warrant exercises during the first fiscal quarter of 2013.

Recent Events

On December 20, 2012, the Company signed a $50 million loan agreement with HealthCare Royalty Partners. The Company received approximately $23.4 million, net of fees and commissions, in the first tranche. The Company will receive an additional $25 million before expenses upon receiving FDA approval of RP103 as a therapy for nephropathic cystinosis. The loan bears interest at an annual fixed rate of 10.75% and a variable royalty rate, tiered down, based on a percentage of future product net sales. The loan is interest-only for the first two years.

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