Brii Biosciences Limited - Proxy Solicitation & Information Statement 2022

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult a licensed securities dealer or other registered institution in securities, bank manager, solicitor, professional accountant or other professional advisor for independent advice. If you have sold or transferred all your shares in Brii Biosciences Limited, you should at once hand this circular, together with the enclosed form of proxy to the purchaser or the transferee or to the licensed securities dealer, registered institution in securities or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee.

This circular is for information only and does not constitute an invitation or offer to acquire, purchase or subscribe for the securities mentioned herein

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

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Brii Biosciences Limited 騰盛博藥生物科技有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 2137)

CONNECTED TRANSACTIONS IN RELATION TO PROPOSED GRANTS OF RESTRICTED SHARE UNITS TO EXECUTIVE DIRECTORS AND NOTICE OF EXTRAORDINARY GENERAL MEETING

Independent Financial Advisor to the Independent Board Committee and the Independent Shareholders

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Capitalised terms used in this cover page shall have the same meanings as those defined in the section headed “Definitions” in this circular, unless the context otherwise requires.

A letter from the Board is set out on pages 8 to 24 of this circular. A letter of advice containing the recommendation from the Independent Board Committee to the Independent Shareholders is set out on pages 25 to 26 of this circular. A letter of advice from Grand Moore Capital Limited, the Independent Financial Advisor, to the Independent Board Committee and the Independent Shareholders is set out on pages 27 to 56 of this circular.

A notice convening the EGM to be held physically at One City Center, 110 Corcoran Street, Office 05-130, Durham, North Carolina, the United States of America and virtually via the Tricor e-Meeting System on Wednesday, June 22, 2022 at 9:00 a.m. (Hong Kong time) (or immediately after the conclusion of the annual general meeting of the Company to be held on the same day) is set out on pages 62 to 65 of this circular. A form of proxy for use at the EGM is enclosed with this circular. Whether or not you are able to attend and vote at the EGM, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return it to the Company’s branch share registrar and transfer office in Hong Kong, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible and in any event not later than 48 hours before the time appointed for the holding of the EGM (i.e. not later than Monday, June 20, 2022 at 9:00 a.m. (Hong Kong time)) or any adjournment thereof (as the case may be). Completion and return of the form of proxy will not preclude you from attending and voting in person or via the Tricor e-Meeting System at the EGM or any adjournment thereof (as the case may be) should you so wish and in such event, the form of proxy shall be deemed to be revoked.

PRECAUTIONARY MEASURES FOR PHYSICALLY ATTENDING THE EXTRAORDINARY GENERAL MEETING To safeguard the health and safety of Shareholders and to prevent the spreading of the COVID-19 pandemic, the following precautionary measures will be implemented at the venue of EGM, including but not limited to:

• compulsory body temperature checks • compulsory wearing of surgical face masks • no distribution of corporate gifts and no serving of refreshments Attendees who do not comply with the precautionary measures may be denied entry to the EGM venue. In light of the COVID-19 pandemic and for the health and safety of Shareholders, the Company would like to encourage Shareholders to exercise their right to vote at the EGM by appointing the chairman of the EGM as their proxy and to complete and return the accompanying form of proxy by the time specified above, or attending the EGM virtually via the Tricor e-Meeting System, instead of attending the EGM in person.

March 29, 2022

CONTENT

	Page
SPECIAL ARRANGEMENTS FOR THE EGM . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
LETTER FROM THE INDEPENDENT BOARD COMMITTEE . . . . . . . . . . . . .	25
LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR . . . . . . . . . . . . .	27
APPENDIX GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	57
NOTICE OF EXTRAORDINARY GENERAL MEETING . . . . . . . . . . . . . . . . . .	62

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SPECIAL ARRANGEMENTS FOR THE EGM

HYBRID MEETING

In light of the ongoing COVID-19 pandemic, mass gatherings would potentially impose a significant risk in terms of the spread of the virus. The Board hereby announces that the EGM will be held physically at One City Center, 110 Corcoran Street, Office 05-130, Durham, North Carolina, the United States of America and virtually via the Tricor e-Meeting System.

Although Shareholders are welcome to attend the EGM in person if they so wish, for the safety of the Shareholders, staff and stakeholders, the Company encourages Shareholders, instead of attending the EGM in person, to appoint the chairman of the EGM as their proxy to vote on the relevant resolutions at the EGM by completing and returning the accompanying form of proxy in accordance with the instructions printed thereon, or attend virtually via the Tricor e-Meeting System.

ATTENDING THE EGM PHYSICALLY

To better protect the safety and health of the Shareholders and other persons attending the EGM in person, the Company will implement the following precautionary measures at the venue of the EGM (the “ Venue ”):

compulsory body temperature checks will be conducted on all persons attending the EGM at the waiting area outside the Venue before they are admitted to the Venue;
any person with a body temperature of over 37.4 degree Celsius, or who has any flu-like symptoms, or is otherwise apparently unwell may be denied entry into the Venue and be asked to leave the Venue;
all attendees must wear face masks at all times inside the Venue or at the waiting area outside the Venue. Any person who does not comply with this requirement may be denied entry into the Venue and be asked to leave the Venue. A safe distance between seats are also recommended; and
no refreshments will be served, and there will be no corporate gifts.

To the extent permitted under law, the Company reserves the right to deny entry into the Venue or require any person to leave the Venue in order to ensure the safety of other attendees at the EGM.

In the interest of all stakeholders’ health and safety, the Company reminds all Shareholders that physical attendance in person at the EGM is not necessary for the purpose of exercising voting rights. As an alternative to attending the meeting in person, Shareholders may consider appointing the chairman of the EGM as their proxy to vote on the relevant resolutions at the EGM by submitting forms of proxy with voting instructions inserted, or attending the EGM virtually via the Tricor e-Meeting System, instead of attending the EGM in person.

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SPECIAL ARRANGEMENTS FOR THE EGM

The form of proxy is attached to this circular for Shareholders. Alternatively, the form of proxy can be downloaded from the website of the Company at http://www.briibio.com and the website of the Stock Exchange at http://www.hkexnews.hk. Shareholders can also appoint their proxy via the Tricor e-Meeting System. If you are not a registered Shareholder (if your shares are held via banks, brokers, custodians or the Hong Kong Securities Clearing Company Limited), you should consult directly with your banks or brokers or custodians (as the case may be) to assist you in the appointment of proxy.

ATTENDING THE EGM VIA THE TRICOR E-MEETING SYSTEM

All registered Shareholders will be able to join the EGM either physically in the United States of America or via the Tricor e-Meeting System. The Tricor e-Meeting System can be accessed from any location with access to the internet via smartphone, tablet device or computer.

Through the Tricor e-Meeting System, the registered Shareholders will be able to view the live video broadcast, participate in voting and submit questions online. The live broadcast can broaden the reach of the EGM to Shareholders who do not wish to attend physically due to concerns on attending large scale events under the current COVID-19 situation, or for other overseas Shareholders who are unable to attend the EGM in person.

Shareholders who would like to attend the EGM electronically via the Tricor e-Meeting System can follow the instructions by using the designated URL and the login details provided on the notification letter (the “ Notification Letter ”) (dispatched together with this circular). Shareholders MUST NOT forward the URL and your login details to other persons who are not the Shareholders and who are not entitled to attend the EGM.

HOW TO ATTEND AND VOTE

Shareholders who wish to attend the EGM and exercise their voting rights can be achieved in one of the following ways:

(1) attend the EGM physically in the Unites States of America; or
(2) attend the EGM electronically via the Tricor e-Meeting System which enables live streaming and interactive platform for submitting questions and voting online; or
(3) appoint the chairman of the EGM or other persons as your proxy by form of proxy or providing their email address for receiving the designated log-in username and password to attend and vote on your behalf physically at the EGM or via the Tricor e-Meeting System.

Your proxy’s authority and instruction will be revoked if you attend and vote at the EGM in person or via the Tricor e-Meeting System.

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SPECIAL ARRANGEMENTS FOR THE EGM

Non-registered Shareholders whose Shares are held in the Central Clearing and Settlement System through banks, brokers, custodians or Hong Kong Securities Clearing Company Limited may also be able to attend the EGM, vote and submit questions online. In this regard, they should consult directly with their banks, brokers or custodians (as the case may be) for the necessary arrangements. You will be asked to provide your email address which will be used by the Company’s branch share registrar and transfer office in Hong Kong, Tricor Investor Services Limited, for providing the login details for attending the EGM electronically in the Tricor e-Meeting System.

Completion and return of the form of proxy will not preclude you from attending and voting in person or via the Tricor e-Meeting System at the EGM or any adjournment thereof (as the case may be) should you so wish and in such event, the form of proxy shall be deemed to be revoked.

If you have any questions relating to the arrangement of the EGM, please contact the Company’s branch share registrar and transfer office in Hong Kong, Tricor Investor Services Limited by email to [email protected] or via telephone hotline at +852 2975 0928 during business hours (9:00 a.m. to 5:00 p.m., Monday to Friday, excluding public holidays in Hong Kong) for assistance.

Subject to the development of COVID-19, the Company may implement further changes to the EGM arrangements at a short notice. Shareholders are advised to check the websites of the Stock Exchange (http://www.hkexnews.hk) and the Company (http://www.briibio.com) for the latest announcement and information relating to the EGM.

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DEFINITIONS

In this circular, the following terms and expressions shall have the following meanings unless the context requires otherwise:

“associates”
has the meaning ascribed to it under the Listing Rules
“Board” the board of Directors
“China” or “PRC”
the People’s Republic of China excluding, for the purposes of this circular only, Hong Kong, the Macau Special Administrative Region of the People’s Republic of China and Taiwan
“Company”
Brii Biosciences Limited, a company incorporated in the Cayman Islands with limited liability, the Shares of which are listed on the Main Board of the Stock Exchange
“connected person”

has the meaning ascribed to it under the Listing Rules

“COVID-19”
coronavirus disease 2019, a disease caused by a novel coronavirus and designated as severe acute respiratory syndrome
“Director(s)”

the director(s) of the Company from time to time

“Dr. Hong”
Dr. Zhi Hong, an executive Director, the chairman of the Board and the chief executive officer of the Company
“EGM”

the extraordinary general meeting of the Company to be held physically at One City Center, 110 Corcoran Street, Office 05-130, Durham, North Carolina, the United States of America and virtually via the Tricor e-Meeting System on Wednesday, June 22, 2022 at 9:00 a.m. (Hong Kong time) (or immediately after the conclusion of the annual general meeting of the Company to be held on the same day) or any adjournment thereof (as the case may be) for the Independent Shareholders to consider and, if thought fit, approve the Proposed RSU Grants to EDs and the transactions contemplated thereunder, the notice of which is set out on pages 62 to 65 of this circular

“Grant Date”

January 20, 2022

“Group”

the Company and its subsidiaries from time to time

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DEFINITIONS

“HBV”

hepatitis B virus
“HIV” human immunodeficiency virus
“HK$” Hong Kong dollars, the lawful currency of Hong Kong
“Hong Kong” the Hong Kong Special Administrative Region of the People’s Republic of China
“Independent Board Committee”
an independent committee of the Board comprising all independent non-executive Directors, namely Dr. Martin J Murphy Jr, Ms. Grace Hui Tang, Mr. Yiu Wa Alec Tsui and Mr. Gregg Huber Alton, established to advise the Independent Shareholders in respect of the Proposed RSU Grants to EDs
“Independent Financial Advisor”
Grand Moore Capital Limited, a corporation licensed to conduct Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities under the SFO, being the independent financial advisor appointed by the Company to advise the Independent Board Committee and the Independent Shareholders in respect of the Proposed RSU Grants to EDs and as to voting by the Independent Shareholders
“Independent Shareholders”
the Shareholders who are not required under the Listing Rules to abstain from voting at the EGM to approve the Proposed RSU Grants to EDs
“Latest Practicable Date”
March 24, 2022, being the latest practicable date prior to the printing of this circular for the purpose of ascertaining certain information contained herein
“Listing”
the listing of the Shares on the Main Board of the Stock Exchange
“Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange
“Model Code”
the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix 10 of the Listing Rules
“Mr. Luo”
Mr. Yongqing Luo, an executive Director

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DEFINITIONS

“Post-IPO Share Award Scheme” the post-IPO share award scheme adopted by the Company on June 22, 2021

“Post-IPO Share Option Scheme” the post-IPO share option scheme adopted by the Company on June 22, 2021
“Pre-IPO Share Incentive Plan”
the pre-IPO share incentive plan adopted by the Company on October 30, 2018, as amended from time to time
“Proposed RSU Grant to Dr. Hong”
the proposed grant of 911,000 RSUs to Dr. Hong under the Post-IPO Share Award Scheme
“Proposed RSU Grant to Mr. Luo”
the proposed grant of 607,000 RSUs to Mr. Luo under the Post-IPO Share Award Scheme
“Proposed RSU Grants to EDs”
the Proposed RSU Grant to Dr. Hong and the Proposed RSU Grant to Mr. Luo
“Prospectus” the prospectus of the Company dated June 30, 2021
“Remuneration Committee” the remuneration committee of the Company
“RMB” Renminbi, the lawful currency of the PRC
“RSU(s)” restricted share unit(s) granted pursuant to the Post-IPO Share Award Scheme
“SFO” the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)
“Share Incentive Schemes” the Pre-IPO Share Incentive Plan, the Post-IPO Share Option Scheme and the Post-IPO Share Award Scheme
“Share(s)” the ordinary share(s) of par value US$0.000005 each in the share capital of the Company
“Shareholder(s)” the holder(s) of the Share(s) “Stock Exchange” The Stock Exchange of Hong Kong Limited “subsidiaries” has the meaning ascribed to it under the Companies Ordinance (Chapter 622 of the Laws of Hong Kong)
“substantial shareholders” has the meaning ascribed to it under the Listing Rules

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DEFINITIONS

“US” the United States of America “US$” United States dollars, the lawful currency of the US “%” per cent

– 7 –

LETTER FROM THE BOARD

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Brii Biosciences Limited 騰盛博藥生物科技有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 2137)

Executive Directors:

Dr. Zhi Hong ( Chairman of the Board and Chief Executive Officer ) Mr. Yongqing Luo

Registered office: PO Box 309, Ugland House Grand Cayman, KY1 – 1104 Cayman Islands

Non-executive Directors: Mr. Robert Taylor Nelsen Dr. Axel Bouchon

Principal place of business in Hong Kong: Level 54, Hopewell Centre 183 Queen’s Road East Hong Kong

Independent non-executive Directors: Dr. Martin J Murphy Jr Ms. Grace Hui Tang Mr. Yiu Wa Alec Tsui Mr. Gregg Huber Alton

March 29, 2022

To the Shareholders

Dear Sir/Madam,

CONNECTED TRANSACTIONS IN RELATION TO PROPOSED GRANTS OF RESTRICTED SHARE UNITS TO EXECUTIVE DIRECTORS AND NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

Reference is made to the announcement issued by the Company on January 20, 2022 in relation to the Proposed RSU Grants to EDs (the “ Announcement ”).

The purpose of this circular is to (i) provide you with notice of the EGM at which ordinary resolutions will be proposed to consider and, if thought fit, approve, among others, the Proposed RSU Grants to EDs; (ii) provide you with further information in relation to the Proposed RSU Grants to EDs; (iii) set out the recommendations of the Independent Board Committee in relation to the Proposed RSU Grants to EDs; and (iv) set out the recommendation of the Independent Financial Advisor in relation to the Proposed RSU Grants to EDs.

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LETTER FROM THE BOARD

THE PROPOSED RSU GRANTS TO EDS

As disclosed in the Announcement, subject to acceptance and the Independent Shareholders’ approval at the EGM, the Company proposed to grant on the Grant Date:

(i) up to a total of 911,000 RSUs to Dr. Hong, entitling Dr. Hong to receive a maximum of 911,000 Shares upon full vesting, representing approximately 0.13% of the total number of issued Shares as at the Latest Practicable Date; and
(ii) up to a total of 607,000 RSUs to Mr. Luo, entitling Mr. Luo to receive a maximum of 607,000 Shares upon full vesting, representing approximately 0.08% of the total number of issued Shares as at the Latest Practicable Date.

In accordance with the terms of the Post-IPO Share Award Scheme and the relevant award agreements, the Proposed RSU Grants to EDs are made under the following terms:

(i) each RSU is granted for nil consideration;
(ii) each RSU granted represents the right to receive one Share on the date it vests; and
(iii) the vesting schedule of 1,518,000 RSUs to Dr. Hong and Mr. Luo will be as follows:
(a) in relation to 303,000 RSUs: 25%, 25%, 25% and 25% of the grant will vest on each of the first, second, third and fourth anniversaries of September 17, 2021, respectively; and
(b) in relation to 1,215,000 RSUs: the grant will vest upon the achievements by the Group of certain milestones determined by the Board which are specified in the relevant award agreements entered into between the Company and each of Dr. Hong and Mr. Luo.

In respect of the milestone-based RSUs under the Proposed RSU Grants to EDs, the relevant milestones include market approval and commercialization progress of the Group’s various product pipelines in the pivotal countries, and the clinical trial and development progress of the Group’s various product pipelines as designated by the Board.

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LETTER FROM THE BOARD

Proposed RSU Grants to EDs would be 49,463,500 Shares and 10,375,500 Shares respectively, representing approximately 6.85% and 1.44% of the total number of issued Shares of the Company respectively as at the Latest Practicable Date, and approximately 6.83% and 1.43% of the enlarged total number of issued Shares of the Company respectively (assuming no additional Shares will be issued except for the issue of Shares by the Company to Dr. Hong and Mr. Luo upon full vesting of such RSUs under the Proposed RSU Grants to EDs).

The RSUs to be granted to Dr. Hong and Mr. Luo under the Proposed RSU Grants to EDs would be satisfied by new Shares to be issued by the Company under its specific mandate in compliance with the Post-IPO Share Award Scheme and all applicable laws, rules and regulations, including the Listing Rules. The new Shares to be allotted and issued by the Company under the Proposed RSU Grants to EDs will rank pari passu in all respects among themselves and with all the Shares in issue from time to time. No funds will be raised by the Company as a result of the allotment and issuance of such new Shares. The Listing Committee of the Stock Exchange has previously granted its approval for the listing of, and permission to deal in, the Shares to be issued pursuant to the vesting schedule of any RSUs granted under the Post-IPO Share Award Scheme.

Based on the closing price of HK$22.75 per Share as stated in the daily quotation sheet issued by the Stock Exchange on the Grant Date, the market value of the RSUs under the Proposed RSU Grant to Dr. Hong amounts to approximately HK$20,725,250, and the market value of the RSUs under the Proposed RSU Grant to Mr. Luo amounts to approximately HK$13,809,250.

REASONS FOR AND BENEFITS OF THE PROPOSED RSU GRANTS TO EDS

Purpose of the Post-IPO Share Award Scheme and the Proposed RSU Grants to EDs

The purpose of the Post-IPO Share Award Scheme is to provide participants with the opportunity to acquire proprietary interests in the Company and to encourage participants to work towards enhancing the value of the Company and its Shares for the benefit of the Company and its Shareholders as a whole. For further details of the Post-IPO Share Award Scheme, please refer to the paragraph headed “Appendix IV – Statutory and General Information – D. Share Incentive Schemes – 3. Post-IPO Share Award Scheme” in the Prospectus.

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LETTER FROM THE BOARD

The Proposed RSU Grants to EDs are part of the Company’s remuneration policy. The purpose of such grants is to closely align the interests and benefits of the Company and its employees directly through ownership of Shares in order to maximize the motivation of the executive Directors. The Proposed RSU Grants to EDs aim to provide sufficient incentive to encourage, retain and motivate Dr. Hong and Mr. Luo to achieve performance goals and participate in the formulation of strategy and long-term development of the Company and to recognize their contribution to the growth of the Company.

Furthermore, the dilution effect of the Proposed RSU Grants to EDs to the interests of the existing public Shareholders is insignificant. As the RSUs to be granted under the Proposed RSU Grants to EDs would be satisfied by allotment and issuance of new Shares by the Company, the grant of such RSUs will not result in any cash outflow by the Group, other than a minimal transaction fee associated with administration.

Rationale of the Proposed RSU Grants to EDs

Proposed RSU Grant to Dr. Hong

As disclosed in the Announcement, the Company has a company-wide compensation plan approved and administered by the Remuneration Committee. Basically, the plan contemplates to utilize a mix of time-based and milestone-based equity awards (i.e. share options and RSUs) to create attractive incentive for the Company’s employees, which is consistent with the Company’s goal of attracting and retaining leading talent globally, after taking into account cash and equity-based compensation payable by other companies in the industry (particularly those of comparable size in China).

The Proposed RSU Grant to Dr. Hong was made after taking into consideration a number of factors, including Dr. Hong’s role and responsibilities as the chief executive officer of the Company, his vital role in the leadership of the Company, his extensive biopharmaceutical working experience and his unparalleled role in contributing to the growth of the Group and the continued development of the Group since the founding of the Company.

Dr. Hong has over 25 years of experience in the biopharmaceutical industry. Prior to founding the Group, he was a senior vice president of GlaxoSmithKline, a pharmaceuticals, vaccines and consumer healthcare products company listed on the New York Stock Exchange in the United States (stock code: GSK), and he was the head of the infectious diseases therapy area unit from April 2007 to March 2018. He was also a director of ViiV Healthcare Limited, a subsidiary of GlaxoSmithKline in the United Kingdom engaged in the research and development of HIV medicines, and he was responsible for overseeing the research and development of HIV treatment and prevention therapies from October 2009 to March 2018. He was an executive vice president of research and chief scientific officer of Ardea Biosciences, Inc., a biopharmaceutical company in the United States, and he was responsible for the research and development of infectious diseases and oncology from December 2006 to March 2007. He was a vice president and head of research of Bausch Health Companies Inc., a pharmaceutical company listed on the New York Stock Exchange in the United States (stock

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LETTER FROM THE BOARD

code: BHC), and he was responsible for the research and development of infectious diseases, oncology and neuroscience from June 2000 to March 2007. Dr. Hong obtained his Bachelor of Science in Biochemistry from Fudan University in China in July 1985 and a Ph.D. in Biochemistry from State University of New York in the United States in January 1992.

As the Company’s chief executive officer, Dr. Hong is in charge of overall management, business, and strategy of the Group and the scientific research and development of the Group. After he founded the Company, Dr Hong led the research and development team and leveraged on his previous experience on infectious disease treatment development to establish several product portfolios to form a competitive pipeline, which attracted venture capital to invest the Company at the first place.

Dr. Hong has extensive experience and industry network in innovative research on biopharmaceuticals, focusing on infectious disease drug development, including HIV and HBV. In particular, with Dr. Hong’s effort, the Company built up a close partnership with various outstanding biotechnology companies, including VBI Vaccines, Inc. (a company whose stocks are listed on the NASDAQ Global Market (NASDAQ: VBIV)), Vir Biotechnology, Inc. (a company whose stocks are listed on the Nasdaq Global Market (NASDAQ: VIR)), QPEX Biopharma, Inc. and AN2 Therapeutics, Inc., which further extended the Company’s product portfolio in infectious disease market and expanded the development potentials. After considering the extensive unmet treatment needs in public health area beyond infectious disease, Dr. Hong led the Company to explore the treatments of central nervous system disease and start to discover the postpartum depression and major depressive disorder therapeutic area, which builds up a synergy between the existing pipeline and future development opportunities. All these efforts taken by Dr. Hong eventually brought the Company to the Listing on July 13, 2021, captivated global investment funds with long-term investment focus in healthcare sectors as cornerstone investors. In addition, he has played a crucial role in formulating the Group’s COVID-19 response strategy, identifying the collaboration partners, navigating the clinical development pathway. Leveraging on his industry network, Dr. Hong obtained sponsorship from National Institute of Health of the U.S. Department of Health and Human Services for the pivotal clinical trials, and eventually helped bringing the cocktail of two fully human non-competing neutralizing antibody treating COVID-19 (“ Amubarvimab/Romlusevimab ”) to market approval in China, to tackle the challenges of COVID-19 pandemic. As the Company is committed to advancing therapies for significant infectious diseases and continues to tackle public health challenges, Dr. Hong’s expertise and business insight are essential to the growth of the Company. From the Company’s operational level, Dr. Hong oversees the overall management, business, strategic development and scientific research and development of the Group. Under Dr. Hong’s leadership, the Company has received recognition as a leading biotech research and development company, and he was named the “Industry Leader of the Year 2021” by the China Times.

In view of the above, Dr. Hong is indispensable to the growth of the Group. For further details in relation to Dr. Hong’s background, please refer to the section headed “Directors and Senior Management” in the Prospectus.

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LETTER FROM THE BOARD

Proposed RSU Grant to Mr. Luo

The Proposed RSU Grant to Mr. Luo was made after taking into consideration a number of factors, including Mr. Luo’s fundamental role and responsibilities in the development and commercialization of the Company’s pipeline of products, his industry expertise and extensive knowledge of the Company’s portfolio drug candidates, his background and experience in healthcare industry and his contribution to the business growth of the Group in China and the US.

Mr. Luo is an executive Director, the president and general manager of Greater China of the Company and chief executive officer of TSB Therapeutics (Beijing) Co. Limited (騰盛華創醫藥技術(北京)有限公司). He has more than 25 years of experience in healthcare industry. Prior to joining the Group, Mr. Luo was the global vice president and general manager of China of Gilead Sciences Shanghai Pharmaceutical Technology Co., Ltd. (“ Gilead ”), a biopharmaceutical company, from September 2016 to September 2020, during which he built Gilead Sciences, Inc.’s presence in China from beginning as an early employee in China. He led the development, regulatory review and launch of eight innovative products, gaining rapid access across China. He also led the team and established a unique business model encompassing science, commercialization and patient access. He was the vice president of Shanghai Roche Pharmaceuticals Ltd., a pharmaceuticals company, and he was responsible for pioneering novel strategies for patient access to oncology therapies from August 2012 to August 2016. He was the Head of Great China Pharmaceutical Organization Beijing Headquarters at Novartis Pharma Co., Ltd. (“ Novartis* ”) from June 2009 to August 2012, and the associate brand director of the Novartis global headquarter in Switzerland from September 2007 to June 2009. Mr. Luo received his medical education from Xiangya School of Medicine, Central-South University, in China and graduated in July 1992, and then served for three years as a surgeon at St. Luke’s Hospital, Shanghai, from July 1992 to July 1995. He obtained an Executive Master of Business Administration from China Europe International Business School in China in September 2006.

Mr. Luo has extensive scientific knowledge, proven leadership track record, and commercial expertise in patient access. During his years at Gilead, Mr. Luo and his team introduced nine innovative drug products to China, four of which were listed in the National Drug Reimbursement List, including the launch of Gilead’s blockbuster products Sovaldi, Harvoni, Epclusa and tenofovir alafenamide fumarate in China. Acting as the president and general manager of Greater China of the Company, Mr. Luo has made significant contributions to the cross-border operation and product commercialization after he joined the Company. Usually, a new drug takes several years from research and development to commercial launch to the market, but with Mr. Luo’s extensive experience in commercialization of drug products and collaboration with top experts in the China domestic pharmaceutical industry, the Company successfully completed the biologics license application and got market approval in China of Amubarvimab/Romlusevimab within 20 months. This cocktail therapy has become the first COVID-19 neutralizing antibody combination therapy in China, which is a key milestone to the business development of the Company. As a clinical-stage biopharmaceutical company, the most critical challenges to the Company include successful commercialization of drug

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LETTER FROM THE BOARD

products and maintenance of sustainable revenue and profit after a product has launched to the market. With deep knowledge in pharmaceutical industry and commercialization, Mr. Luo is and will continue to be responsible for leading commercialization of the Company’s pipeline products with related activities including establishing the Company’s China commercialization team and overseeing the Group’s China operations.

In view of the above, Mr. Luo (with his extensive experience and industry expertise) is critical to the Group’s development and success in commercializing the Company’s pipeline of potential products. For further details in relation to Mr. Luo’s background, please refer to the section headed “Directors and Senior Management” in the Prospectus.

Apart from the indispensable roles, responsibilities, working experience and contributions of Dr. Hong and Mr. Luo to the Group as set out above, the Board also took into account the Company’s remuneration policy and compensation framework, and selected Dr. Hong and Mr. Luo, both are executive Directors and eligible participants under the post-IPO Share Award Scheme who have contributed to the growth and the continued development of the Group, to receive the grant of RSUs under the Proposed RSU Grants to EDs, in light of the Company’s goal of attracting, retaining and motivating its talent. In addition, the Proposed RSU Grants to EDs are part of the company-wide RSU grants to all eligible Company’s employees as disclosed in the Announcement, pursuant to and consistent with the said Company’s company-wide compensation plan and the purpose of the Post-IPO Share Award Scheme.

Retention and recognition of Dr. Hong and Mr. Luo

The Board considered that the retention and motivation of Dr. Hong and Mr. Luo as an indispensable part of the senior management of the Group and in light of the Group’s progress since the Listing is highly beneficial for the Group’s development and expansion, and can avoid any potential disruption to the existing operation of the Group resulting from the lack of continuity of leadership. The Proposed RSU Grants to EDs aim to provide sufficient incentive to encourage, retain and motivate Dr. Hong and Mr. Luo to achieve performance goals and participate in the formulation of strategy and long-term development of the Company and to recognize their contribution to the growth of the Company.

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LETTER FROM THE BOARD

The Board proposed to remunerate Dr. Hong and Mr. Luo with the Proposed RSU Grants to EDs after considering the benefits of granting RSUs. The grants of the time-based RSUs to Dr. Hong and Mr. Luo under the Proposed RSU Grants to EDs will provide Dr. Hong and Mr. Luo with monetary benefits that are tied to the share price performance, such grants that can be realized and are readily available at the end of the vesting period are akin to payment of a deferred bonus and hence an effective incentive to Dr. Hong and Mr. Luo. In addition, considering the underlying value of the Shares at the time of vesting of the RSUs, the Proposed RSU Grants to EDs will further serve as motivation for Dr. Hong and Mr. Luo to promote the future development and success of the Company in order to increase the share price of the Company throughout the vesting schedule of the RSUs granted, and hence align the interests of Dr. Hong and Mr. Luo and the long-term interests of the Shareholders, ensuring a better linkage between the Company’s long-term strategic and financial goals and executive compensation. Also, the long vesting schedule of the time-based RSUs granted under the Proposed RSU Grants to EDs will serve as an incentive for Dr. Hong’s and Mr. Luo’s continuing commitment and contribution to the Company’s long-term growth.

Furthermore, as the vesting of the milestone-based RSUs granted to Dr. Hong and Mr. Luo is subject to specific performance-based conditions as summarized in this circular, the Board believes that such performance-based conditions will serve as motivation for Dr. Hong and Mr. Luo to contribute and promote the growth in revenue and profitability of the Group in order to obtain the benefit of the RSUs.

In determining the number of RSUs proposed to be granted to Dr. Hong and Mr. Luo under the Proposed RSU Grants to EDs, the Board and the Remuneration Committee have conducted sufficient qualitative and quantitative assessment based on the afore-mentioned factors and a number of factors, such as the compensation framework of the Company which is in line with the biotech industry benchmark as advised by the Company’s external professional consultant, Aon plc. (“ Aon ”) (one of the leading human resources consultant firms in the world specialized in China’s healthcare sector), engaged to analyse the compensation structure and package of Biotech Companies (as defined in Chapter 18A of the Listing Rules) in the market, Dr. Hong’s and Mr. Luo’s indispensable roles and responsibilities, working experience and contributions to the Group as set out in the sub-sections headed “Proposed RSU Grant to Dr. Hong” and “Proposed RSU Grant to Mr. Luo” in this circular, and the remuneration packages and salaries paid by comparable companies (the “ Comparable Companies ”), as well as the closing price of HK$22.75 per Share on the Grant Date.

The Board and the Remuneration Committee selected nine Comparable Companies that (i) are/were Biotech Companies listed on the Main Board of the Stock Exchange and (ii) had announced the grant of share awards and/or restricted share units to executive directors of such companies during the twelve months prior to the Grant Date, for the purpose of determining the fair market rates of remuneration packages for roles similar to Dr. Hong and Mr. Luo, as executive Directors. These nine Comparable Companies include MicroPort CardioFlow Medtech Corporation (stock code: 2160.HK), Transcenta Holding Limited (stock code: 6628.HK), JW (Cayman) Therapeutics Co. Ltd (stock code: 2126.HK), Ocumension Therapeutics (stock code: 1477.HK), Antengene Corporation Limited (stock code: 6996.HK), Everest Medicines Limited (stock code: 1952.HK), BeiGene, Ltd. (stock code: 6160.HK), Hua Medicine (stock code: 2552.HK) and Innovent Biologics, Inc. (stock code: 1801.HK).

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LETTER FROM THE BOARD

In respect of the proposed grant of 911,000 RSUs to Dr. Hong under the Proposed RSU Grant to Dr. Hong:

In terms of qualitative assessment, apart from considering Dr. Hong’s roles and responsibilities, working experience and contributions to the Group as set out in this circular, the Board and the Remuneration Committee also considered a number of factors, including but not limited to the following:

(i) the competitive market for talents rewarded with the cash and equity-based compensation payable by other companies in the biotech industry (particularly those of comparable size in China, including the Comparable Companies) with a focus on equity-based compensation;
(ii) the reasonable compensation framework of the Company utilizing a mix of time-based equity awards and milestone-based equity awards with vesting conditions tied to timely achievement of milestone or performance goals is expected to promote the future success, on-going development and long-term growth of the Company and increase its share price, and hence aligning the interests of Dr. Hong with the long-term interests of the Company and its Shareholders as a whole;
(iii) Dr. Hong’s professional qualifications, industry stature and the critical nature of his role in managing the Company on a global basis (particularly in China and the US) and in driving the drug discovery, research, development and commercialization of the Company’s current and future drug candidates and the need to retain, motivate and recognize Dr. Hong’s contribution to the growth and development of the Company; and
(iv) the consideration to provide on-going incentive to Dr. Hong in the participation of the continuing operation and long-term development of the Company, in light of the fact that the equity awards granted to Dr. Hong to retain and motivate him when the Company was founded have been fully vested substantially.

In terms of quantitative assessment, the Board and the Remuneration Committee aims at ensuring that Dr. Hong’s total remuneration package will be competitive and in line with market rates, taking into account his contribution to the Group and other qualitative factors as discussed above, and considered the following:

(i) the monetary value range of the equity awards under the Proposed RSU Grant to Dr. Hong is determined based on the principles of the corporate compensation framework, which is consistent with the role and position of Dr. Hong;
(ii) the number of RSUs awarded under the Proposed RSU Grant to Dr. Hong is determined based on the monetary value range of such award and the closing price per Share on the Grant Date;

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LETTER FROM THE BOARD

(iii) the market value of the awarded shares or restricted share units granted to the executive directors of the Comparable Companies as disclosed in the relevant announcements ranged from approximately HK$1,005,000 to HK$90,041,000, with an average of approximately HK$18,107,000. Based on the closing price of HK$22.75 per Share on the Grant Date, the final market value of the RSUs under the Proposed RSU Grant to Dr. Hong amounts to approximately HK$20,725,250, which falls within the above-mentioned market value range; and
(iv) the percentage of the awarded shares or restricted share units granted to the executive directors of the Comparable Companies to the total issued share capital of the Comparable Companies as disclosed in the relevant announcements ranged from approximately 0.01% to 1.50%, with an average of approximately 0.16%. Given the diverse range of market capitalization of the Comparable Companies, for fair consideration, based on the closing price of HK$22.75 per Share on the Grant Date, the final number of RSUs determined to be awarded under the Proposed RSU Grant to Dr. Hong is accounted to 0.13% of the total issued share capital of the Company as at the Grant Date, which falls within the above-mentioned percentage range.

In respect of the proposed grant of 607,000 RSUs to Mr. Luo under the Proposed RSU Grant to Mr. Luo:

In terms of qualitative assessment, apart from considering Mr. Luo’s roles and responsibilities, working experience and contributions to the Group as set out in this circular, the Board and the Remuneration Committee also considered a number of factors, including but not limited to the following:

(i) the competitive market for talents rewarded with the cash and equity-based compensation payable by other companies in the biotech industry (particularly those of comparable size in China, including the Comparable Companies) with a focus on equity-based compensation;
(ii) Mr. Luo’s professional qualifications, industry stature and the critical nature of his role in managing the Company and in driving the cross-border operation and commercialization of the Company’s current and future drug candidates and the need to retain and motivate Mr. Luo’s contribution to the growth and development of the Company; and
(iii) the reasonable compensation framework of the Company utilizing a mix of time-based equity awards and milestone-based equity awards with vesting conditions tied to timely achievement of milestone or performance goals is expected to promote the future success, on-going development and long-term growth of the Company and increase its share price, and hence aligning the interests of Mr. Luo with the long-term interests of the Company and its shareholders as a whole.

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LETTER FROM THE BOARD

In terms of quantitative assessment, the Board and the Remuneration Committee aims at ensuring that Mr. Luo’s total remuneration package will be competitive and in line with market rates, taking into account his contribution to the Group and other qualitative factors as discussed above, and considered the following:

(i) the monetary value range of the equity awards under the Proposed RSU Grant to Mr. Luo is determined based on the principles of the corporate compensation framework, which is consistent with the role and position of Mr. Luo;
(ii) the number of RSUs awarded under the Proposed RSU Grant to Mr. Luo is determined based on the monetary value range of such award and the closing price per Share on the Grant Date;
(iii) the market value of the awarded shares or restricted share units granted to the executive directors of the Comparable Companies as disclosed in the relevant announcements ranged from approximately HK$1,005,000 to HK$90,041,000, with an average of approximately HK$18,107,000. Based on the closing price of HK$22.75 per Share on the Grant Date, the final market value of the RSUs under the Proposed RSU Grant to Mr. Luo amounts to approximately HK$13,809,250, which falls within the above-mentioned market value range; and
(iv) the percentage of the awarded shares or restricted share units granted to the executive directors of the Comparable Companies to the total issued share capital of the Comparable Companies as disclosed in the relevant announcements ranged from approximately 0.01% to 1.50%, with an average of approximately 0.16%. Given the diverse range of market capitalization of the Comparable Companies, for fair consideration, based on the closing price of HK$22.75 per Share on the Grant Date, the final number of RSUs determined to be awarded under the Proposed RSU Grant to Mr. Luo is accounted to 0.08% of the total issued share capital of the Company as at the Grant Date, which falls within the above-mentioned percentage range.

– 18 –

LETTER FROM THE BOARD

Based on the afore-mentioned factors and reasons, in particular, those set out below, the Directors (including independent non-executive Directors but excluding the relevant interested Directors) and the Remuneration Committee consider that the terms of each of the Proposed RSU Grant to Dr. Hong and the Proposed RSU Grant to Mr. Luo are on normal commercial terms, fair and reasonable and in the interests of the Company and its Shareholders as a whole:

(i) Dr. Hong’s and Mr. Luo’s professional qualifications, industry stature and the critical nature of their roles in managing the Company on a global basis (particularly in China and the US) and in driving the drug discovery, research, development and commercialization of the Company’s current and future drug candidates and the need to retain, motivate and recognize their contribution to the growth and development of the Company;
(ii) the Proposed RSU Grants to EDs are made as part of the company-wide RSU grants as disclosed in the Announcement, and were consistent with the design and purpose of the Company’s compensation plan and its goal of attracting, retaining and motivating leading talent globally while aligning the interests of the Company and its Shareholders and its employees through ownership of Shares;
(iii) with the analysis provided by the external professional consultant engaged by the Company, Aon, to analyse the compensation structure and package of other Biotech Companies, the proposed size and structure of the Company’s equity awards (including the grant of RSUs) are consistent or generally comparable to those awarded by other Biotech Companies (particularly China-based Biotech Companies);
(iv) the Proposed RSU Grants to EDs, which are comprised of equity awards with 4-year time-based RSUs and milestone-based RSUs with vesting conditions based on timely achievement of relevant milestone or performance goals, are expected to align the interests of Dr. Hong and Mr. Luo with the long-term interests of the Company and its Shareholders as a whole; and
(v) the Proposed RSU Grants to EDs will result in no cash outflow by the Company other than a minimal transaction fee associated with administration, and minimal dilution effect to the Company’s public Shareholders.

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LETTER FROM THE BOARD

EFFECTS ON THE SHAREHOLDING STRUCTURE OF THE COMPANY

As at the Latest Practicable Date, the total number of issued Shares is 722,274,722 Shares. For illustrative purpose only, the shareholding structure of the Company as at the Latest Practicable Date and immediately after the allotment and issuance of new Shares assuming full vesting of RSUs under the Proposed RSU Grants to EDs (assuming no additional Shares will be issued except for the issue of Shares by the Company to Dr. Hong and Mr. Luo upon full vesting of such RSUs under the Proposed RSU Grants to EDs) is set out below.

				Immediately after the	Immediately after the
				allotment and issuance of
				new Shares assuming full
				vesting of RSUs under the
	As at	the		Proposed RSU	Grants to
	Latest Practicable		Date	EDs
	No. of	Approximate		No. of	Approximate
	Shares		%	Shares	%
Dr. Hong	32,400,000(1)		4.49%	33,311,000(2)	4.60%
Mr. Luo	0		0%	607,000(3)	0.08%
Other Shareholders	689,874,722		95.51%	689,874,722	95.31%
Total	722,274,722		100%	723,792,722	100%

Notes:

Includes (i) the 16,400,000 Shares held by the Jingfan Huang 2020 Revocable Trust and the Zhi Hong 2020 Revocable Trust, of which Dr. Hong is the trustee; and (ii) the 16,000,000 Shares held by the Hong Family 2020 Irrevocable Trust, of which Dr. Hong is the grantor. For the avoidance of doubt, this does not include Dr. Hong’s entitlements to receive up to 16,152,500 Shares pursuant to the exercise of options granted to him under the Pre-IPO Share Incentive Plan and the Post-IPO Share Option Scheme, subject to the vesting conditions.
Includes (i) the 16,400,000 Shares held by the Jingfan Huang 2020 Revocable Trust and the Zhi Hong 2020 Revocable Trust, of which Dr. Hong is the trustee; (ii) the 16,000,000 Shares held by the Hong Family 2020 Irrevocable Trust, of which Dr. Hong is the grantor; and (iii) the 911,000 new Shares to be issued to Dr. Hong upon full vesting of the RSUs granted to him under the Proposed RSU Grant to Dr. Hong, subject to the vesting conditions. For the avoidance of doubt, this does not include Dr. Hong’s entitlements to receive up to 16,152,500 Shares pursuant to the exercise of options granted to him under the Pre-IPO Share Incentive Plan and the Post-IPO Share Option Scheme, subject to the vesting conditions.
Includes the 607,000 new Shares to be issued to Mr. Luo upon full vesting of the RSUs granted to him under the Proposed RSU Grant to Mr. Luo, subject to the vesting conditions. For the avoidance of doubt, this does not include Mr. Luo’s entitlements to receive up to 9,768,500 Shares pursuant to the exercise of options granted to him under the Pre-IPO Share Incentive Plan and the Post-IPO Share Option Scheme, subject to the vesting conditions.

– 20 –

LETTER FROM THE BOARD

FUND RAISING ACTIVITIES OF THE COMPANY DURING THE PAST 12 MONTHS

The Company was listed on the Main Board of the Stock Exchange on July 13, 2021. Save for the initial public offering of the Company which was completed on July 13, 2021, the Company has not conducted any fund raising activity in the past 12 months immediately before the Latest Practicable Date. The total net proceeds raised from the issue of new Shares by the Company in its Listing and the partial exercise of the over-allotment option (after deducting underwriting fee and relevant expenses) amounted to approximately HK$2,613.8 million. The intended use of the net proceeds was set out in the Prospectus.

LISTING RULES IMPLICATIONS

As each of Dr. Hong and Mr. Luo is an executive Director, each of Dr. Hong and Mr. Luo is a connected person of the Company under Rule 14A.07 of the Listing Rules. The Proposed RSU Grants to EDs and the transactions contemplated thereunder constitute connected transactions of the Company under Chapter 14A of the Listing Rules and are subject to reporting, announcement, and the Independent Shareholders’ approval requirements.

The Proposed RSU Grant to Dr. Hong and the transactions contemplated thereunder have been unanimously approved by all members of the Remuneration Committee. Save for Dr. Hong, no other Director has a material interest in the Proposed RSU Grant to Dr. Hong and therefore none of them other than Dr. Hong abstained from voting on the relevant Board resolution.

The Proposed RSU Grant to Mr. Luo and the transactions contemplated thereunder have been unanimously approved by all members of the Remuneration Committee. Save for Mr. Luo, no other Director has a material interest in the Proposed RSU Grant to Mr. Luo and therefore none of them other than Mr. Luo abstained from voting on the relevant Board resolution.

The Company has established the Independent Board Committee, comprising all independent non-executive Directors, namely Dr. Martin J Murphy Jr, Ms. Grace Hui Tang, Mr. Yiu Wa Alec Tsui and Mr. Gregg Huber Alton, to advise the Independent Shareholders in respect of the Proposed RSU Grants to EDs and the transactions contemplated thereunder.

The Company has appointed Grand Moore Capital Limited as the Independent Financial Advisor to advise the Independent Board Committee and the Independent Shareholders in respect of the Proposed RSU Grants to EDs and the transactions contemplated thereunder.

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LETTER FROM THE BOARD

INFORMATION ON THE COMPANY

The Company is a biotechnology company based in China and the US committed to advancing therapies for significant infectious diseases, such as HBV, HIV, COVID-19, multi-drug resistant or extensive drug resistant gram-negative infections, and other illnesses, such as the central nervous system diseases, which have significant public health burdens in China and worldwide. The Shares of the Company was listed on the Main Board of the Stock Exchange on July 13, 2021.

EGM

Ordinary resolutions will be proposed at the EGM for the Independent Shareholders to consider and, if thought fit, approve the Proposed RSU Grants to EDs and the transactions contemplated thereunder. The notice convening the EGM to be held physically at One City Center, 110 Corcoran Street, Office 05-130, Durham, North Carolina, the United States of America and virtually via the Tricor e-Meeting System on Wednesday, June 22, 2022 at 9:00 a.m. (Hong Kong time) (or immediately after the conclusion of the annual general meeting of the Company to be held on the same day) is set out on pages 62 to 65 of this circular. The voting at the EGM will be conducted by poll.

Pursuant to Chapter 14A of the Listing Rules, Shareholders with a material interest in the Proposed RSU Grants to EDs and the transactions contemplated thereunder are required to abstain from voting on the relevant resolutions at the EGM. To the best of the Directors’ knowledge, information and belief after having made all reasonable enquiries, as at the Latest Practicable Date, (i)(a) Dr. Hong and his associates are interested in a total of 48,552,500 Shares or underlying Shares, representing approximately 6.72% of the total number of issued Shares of the Company; and (b) there are no other Shareholders having any material interest in the Proposed RSU Grant to Dr. Hong and the transactions contemplated thereunder, accordingly, save for Dr. Hong, no Shareholders are required under the Listing Rules to abstain from voting at the EGM on the resolutions approving the Proposed RSU Grant to Dr. Hong and the transactions contemplated thereunder; and (ii)(a) Mr. Luo and his associates are interested in a total of 9,768,500 Shares or underlying Shares, representing approximately 1.35% of the total number of issued Shares of the Company; and (b) there are no other Shareholders having any material interest in the Proposed RSU Grant to Mr. Luo and the transactions contemplated thereunder, accordingly, save for Mr. Luo, no Shareholders are required under the Listing Rules to abstain from voting at the EGM on the resolutions approving the Proposed RSU Grant to Mr. Luo and the transactions contemplated thereunder.

A form of proxy for use at the EGM is enclosed with this circular. As set out in the section headed “SPECIAL ARRANGEMENTS FOR THE EGM” of this circular, the EGM will be a hybrid meeting. Although Shareholders are welcome to attend the EGM in person if they so wish, for the safety of the Shareholders, staff and stakeholders, the Company encourages Shareholders, instead of attending the EGM in person, to appoint the chairman of the EGM as their proxy to vote on the relevant resolutions at the EGM by completing and returning the accompanying form of proxy in accordance with the instructions printed thereon, or attend virtually via the Tricor e-Meeting System. Whether or not you are able to attend the EGM, you

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LETTER FROM THE BOARD

are requested to complete and return the form of proxy in accordance with the instructions printed thereon to the Company’s branch share registrar and transfer office in Hong Kong, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible and in any event not later than 48 hours before the time appointed for the holding of the EGM (i.e. not later than Monday, June 20, 2022 at 9:00 a.m. (Hong Kong time)) or any adjournment thereof (as the case may be). Completion and return of the form of proxy will not preclude you from attending and voting in person or via the Tricor e-Meeting System at the EGM or any adjournment thereof (as the case may be).

In light of the current COVID-19 situation, your attention is drawn to the section headed “SPECIAL ARRANGEMENTS FOR THE EGM” set out on pages 1 to 3 of this circular for further information.

VOTING BY POLL

Pursuant to Rule 13.39(4) of the Listing Rules, any resolution put to the vote of the Shareholders at a general meeting must be taken by poll except where the chairman of the general meeting, in good faith, decides to allow a resolution which relates purely to a procedural or administrative matter to be voted on by a show of hands. Accordingly, all resolutions to be considered and, if thought fit, passed at the EGM will be voted by way of poll by the Shareholders.

After the conclusion of the EGM, an announcement on the poll results will be published on the respective websites of the Stock Exchange and the Company under Rule 13.39(5) of the Listing Rules.

SUBMISSION OF QUESTIONS PRIOR TO AND AT THE EGM

Shareholders can submit their questions to the Board in advance of the EGM by sending email to [email protected] before 9:00 a.m. (Hong Kong time) on Monday, June 20, 2022 (being not less than 48 hours before the time appointed for the EGM). Shareholders attending the EGM using the Tricor e-Meeting System can also submit their questions online during the EGM. The Company will endeavour to answer as many relevant questions as possible at the EGM and, for questions which have not been dealt with at the EGM, the Company will respond to such questions as soon as practicable after the EGM.

CLOSURE OF REGISTER OF MEMBERS

The register of members of the Company will be closed from Friday, June 17, 2022 to Wednesday, June 22, 2022, both dates inclusive, for the purpose of ascertaining the Shareholders’ entitlement to attend and vote at the EGM. In order to be eligible to attend and vote at the EGM, all transfer documents accompanied by the relevant share certificates must be lodged for registration with the Company’s branch share registrar and transfer office in Hong Kong, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong, not later than 4:30 p.m. on Thursday, June 16, 2022.

– 23 –

LETTER FROM THE BOARD

RECOMMENDATION

Your attention is drawn to the Independent Board Committee and the letter from the Independent Financial Advisor, respectively, which sets out their recommendations in respect of the Proposed RSU Grants to EDs and the principal factors considered by them in arriving at their recommendation.

The Directors are of the view that the Proposed RSU Grants to EDs are on normal commercial terms, fair and reasonable and in the interests of the Company and the Shareholders as a whole, accordingly, recommend that all Shareholders should vote in favor of the resolutions to be proposed at the EGM in relation to the Proposed RSU Grants to EDs.

ADDITIONAL INFORMATION

Your attention is also drawn to:

(i) the letter from the Independent Board Committee containing its recommendation in respect of the Proposed RSU Grants to EDs and the transactions contemplated thereunder, the text of which is set out on pages 25 to 26 of this circular;
(ii) the letter from the Independent Financial Advisor containing its recommendation in respect of the Proposed RSU Grants to EDs and the transactions contemplated thereunder, the text of which is set out on pages 27 to 56 of this circular; and
(iii) the general information set out in the appendix to this circular.

The Independent Shareholders are advised to read the aforesaid letters and the appendix to this circular before deciding as to how to vote on the resolutions in relation to Proposed RSU Grants to EDs.

Yours faithfully, By order of the Board Brii Biosciences Limited Dr. Zhi Hong

Chairman

– 24 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

==> picture [197 x 49] intentionally omitted <==

Brii Biosciences Limited 騰盛博藥生物科技有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 2137)

March 29, 2022

To the Independent Shareholders

Dear Sir/Madam,

CONNECTED TRANSACTIONS IN RELATION TO PROPOSED GRANTS OF RESTRICTED SHARE UNITS TO EXECUTIVE DIRECTORS AND NOTICE OF EXTRAORDINARY GENERAL MEETING

We refer to the circular of the Company to the Shareholders dated March 29, 2022 (the “ Circular ”), of which this letter forms a part. Unless the context otherwise requires, capitalised terms used in this letter shall have the same meanings as those defined in the Circular.

We have been appointed as members of the Independent Board Committee to advise the Independent Shareholders in relation to the Proposed RSU Grants to EDs, details of which are set out in the “Letter from the Board” in the Circular. Grand Moore Capital Limited has been appointed as the Independent Financial Advisor to advise the Independent Board Committee and the Independent Shareholders in this regard.

We wish to draw your attention to the “Letter from the Board” set out on pages 8 to 24 of the Circular and the “Letter from the Independent Financial Advisor” set out on pages 27 to 56 of the Circular.

Having taken into account, among other things, the principal factors and reasons considered by, and the advice of, the Independent Financial Advisor, regarding the Proposed RSU Grants to EDs as set out in the “Letter from the Independent Financial Advisor” in the Circular, we concur with the view of the Independent Financial Advisor and are of the view that (i) the Proposed RSU Grants are, although not in the ordinary and usual course of business of the Group, on normal commercial terms; and (ii) the terms of the Proposed RSU Grants to EDs and the transactions contemplated thereunder are fair and reasonable so far as the Independent Shareholders are concerned and in the interests of the Company and the Shareholders as a whole.

– 25 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

Accordingly, we recommend the Independent Shareholders to vote in favour of the resolutions to be proposed at the EGM in relation to the Proposed RSU Grants to EDs.

Yours faithfully,

Dr. Martin J Ms. Grace Hui Tang Mr. Yiu Wa Mr. Gregg Murphy Jr Independent Alec Tsui Huber Alton Independent non-executive Independent Independent non-executive Director non-executive non-executive Director Director Director

– 26 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

The following is the full text of the letter of advice from the Independent Financial Advisor to the Independent Board Committee and the Independent Shareholders in respect of the Proposed RSU Grants to EDs and the transactions contemplated thereunder, and prepared for the purpose of incorporation into the circular.

==> picture [46 x 28] intentionally omitted <==

Unit 1607, 16/F, Silvercord Tower 1 30 Canton Road, Tsim Sha Tsui Kowloon, Hong Kong

29 March 2022

To the Independent Board Committee and the Independent Shareholders of Brii Biosciences Limited

Dear Sirs,

CONNECTED TRANSACTIONS IN RELATION TO PROPOSED GRANTS OF RESTRICTED SHARE UNITS TO EXECUTIVE DIRECTORS

INTRODUCTION

We refer to our engagement by the Company to advise the Independent Board Committee and the Independent Shareholders in respect of the Proposed RSU Grants to EDs and the transactions contemplated thereunder, the particulars of which have been set out in the circular to the Shareholders dated 29 March 2022 (the “ Circular ”) and in which this letter forms part. Unless the context requires otherwise, capitalized terms used in this letter shall have the same meanings as defined in the Circular.

Grand Moore Capital Limited has been appointed as the Independent Financial Advisor to advise (i) the Independent Board Committee and the Independent Shareholders as to whether the Proposed RSU Grants to EDs and the transactions contemplated thereunder are on normal commercial terms and in the ordinary and usual course of business of the Group, the terms of the Proposed RSU Grants to EDs and the transactions contemplated thereunder are fair and reasonable so far as the Independent Shareholders are concerned and in the interests of the Company and the Shareholders as a whole; and (ii) the Independent Shareholders as to the voting in respect of the ordinary resolution(s) to be proposed at the EGM to approve the Proposed RSU Grants to EDs and the transactions contemplated thereunder. Details of the reasons for and benefits of the Proposed RSU Grants to EDs are set out in the “Letter from the Board” in the Circular (the “ Board Letter ”).

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

Reference is made to the Announcement in relation to, among others, the connected transactions in relation to the Proposed RSU Grants to EDs and the transactions contemplated thereunder and announcements of the Company dated 15 February 2022 and 8 March 2022 in relation to the delay in dispatch of Circular. As per the Announcement, the Company had proposed on 20 January 2022 the Proposed RSU Grants to EDs pursuant to which 911,000 RSUs are to be granted to Dr. Hong and 607,000 RSUs are to be granted to Mr. Luo under the Post-IPO Share Award Scheme on the Grant Date, subject to acceptance and the Independent Shareholders’ approval at the EGM. As part of the company-wide compensation plan approved and administered by the Remuneration Committee, the Company may grant RSUs to its employees (including Directors, senior management and other employees) under the Post-IPO Share Award Scheme from time to time to align the interests and benefits of the Company with its employees in order to maximize their motivation. The Proposed RSU Grants to EDs are part of the Company’s remuneration policy.

The Company has established the Independent Board Committee comprising all independent non-executive Directors, namely Dr. Martin J Murphy Jr, Ms. Grace Hui Tang, Mr. Yiu Wa Alec Tsui and Mr. Gregg Huber Alton, to advise the Independent Shareholders in respect of the Proposed RSU Grants to EDs and the transactions contemplated thereunder. The Company has appointed us as the Independent Financial Advisor to advise the Independent Board Committee and the Independent Shareholders in respect of the Proposed RSU Grants to EDs and the transactions contemplated thereunder.

OUR INDEPENDENCE

As at the Latest Practicable Date, we were not connected with the Company or any of its respective substantial Shareholders, Directors or chief executives, or any of their respective associates and accordingly, are considered suitable to give independent advice to the Independent Board Committee and the Independent Shareholders in respect of the Proposed RSU Grants to EDs and the transactions contemplated thereunder.

In the past two years, we have not acted as any financial advisor role to the Company. Save for the appointment as the Independent Financial Advisor, there was no other relationship and/or engagement between the Company and us in the past two years.

With regards to our independence from the Company, it is noted that (i) apart from normal professional fees paid or payable to us in connection with the appointment as the Independent Financial Advisor, no other arrangements exist whereby we had received or will receive any fees or benefits from the Company, its subsidiaries or their respective controlling Shareholders that could reasonably be regarded as relevant to our independence; and (ii) the aggregate

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professional fees paid/to be paid to us do not make up a significant portion of our revenue during the relevant period which would affect our independence. Accordingly, we consider that we are independent to act as the Independent Financial Advisor in respect of the Proposed RSU Grants to EDs and the transactions contemplated thereunder pursuant to Rule 13.84 of the Listing Rules.

BASIS OF ADVICE

In formulating our opinion to the Independent Board Committee and the Independent Shareholders, we have relied on (i) the information and facts contained or referred to in the Circular; (ii) the Prospectus and the annual results announcement of the Company for the year ended 31 December 2021 (the “ 2021 Results Announcement ”); (iii) other information provided by the Directors and the management of the Company (the “ Management ”); and (iv) the opinions expressed by and the representations of the Management. We have assumed that all information and representations that have been provided by the Management, for which they are solely and wholly responsible, are true and accurate at the time when they were made and continue to be so as at the Latest Practicable Date, and should there be any material changes to our opinion after the Latest Practicable Date, Shareholders would be notified as soon as possible. We have also assumed that all statements of belief, opinion, expectation and intention made by the Directors in the Circular were reasonably made after due enquiry and careful consideration. We have no reason to suspect that any material facts or information have been withheld or to doubt the truth, accuracy and completeness of the information and facts contained in the Circular, or the reasonableness of the opinions expressed by the Company, its advisors and/or the Directors, the Management (where applicable), which have been provided to us.

The Circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in the Circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or the Circular misleading.

We consider that we have taken sufficient and necessary steps on which to form a reasonable basis and an informed view for our opinion in compliance with Chapters 13 and 14A of the Listing Rules.

We, as the Independent Financial Advisor, take no responsibility for the contents of any part of the Circular, save and except for this letter of advice. We consider that we have been provided with sufficient information to reach an informed view and to provide a reasonable basis for our opinion. We have not, however, carried out any independent verification of the information, opinions or representations given or made by or on behalf of the Company, nor conducted any independent in-depth investigation into the business affairs, assets and liabilities or future prospects of the Company and its respective subsidiaries or associates (if

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

applicable) or any of the other parties involved in the Proposed RSU Grants to EDs, nor have we considered the taxation implication on the Group or the Shareholders as a result of the Proposed RSU Grants to EDs. The Company has been separately advised by its own professional advisors with respect to the Proposed RSU Grants to EDs and the preparation of the Circular (other than this letter).

We have assumed that the Proposed RSU Grants to EDs will be consummated in accordance with the terms and conditions set forth in the Circular without any waiver, amendment, addition or delay of any terms or conditions. We have assumed that in connection with the receipt of all necessary consents, authorizations and approvals in respect of the Proposed RSU Grants to EDs, no delay, limitation, condition or restriction will be imposed that would have a material adverse effect on the contemplated benefits expected to be derived from the Proposed RSU Grants to EDs. In addition, our opinion is necessarily based on the financial, market, economic, industry-specific and other conditions as they existed on, and the information made available to us as at the Latest Practicable Date.

In the event of inconsistency, the English text of this letter shall prevail over the Chinese translation of this letter.

PRINCIPAL FACTORS CONSIDERED

In arriving at our opinion and recommendation, we have taken into consideration the following factors:

1 Background information on the parties

1.1 Principal activities of the Group

The Company is a biotechnology company based in China and the US committed to advancing therapies for significant infectious diseases, such as HBV, HIV, COVID-19, multi-drug resistant or extensive drug resistant gram-negative infections, and other illnesses, such as the central nervous system diseases, which have significant public health burdens in China and worldwide. The Shares of the Company were listed on the Main Board of the Stock Exchange on 13 July 2021.

The Group is based in the PRC and the US and primarily focused on developing therapies for infectious diseases.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

1.2 Financial information on the Group

Set out below is the key consolidated financial information of the Company for the years ended 31 December 2020 and 2021 as extracted from the consolidated income statement set out in the 2021 Results Announcement:

Loss attributable to owners of the Company Adjusted net loss (excluding the effect of certain non-cash items and one-off events)	For the year ended 31 December 2021 2020 RMB’000 RMB’000 (4,163,849) (1,189,600) (480,730) (888,744)

The Company is a pre-revenue company primarily engaged in pharmaceutical research and development activities. As per the 2021 Results Announcement, most of the Company’s candidates are engaged in ongoing clinical trials and it does not anticipate sales or commercialization of drug candidates outside of the Company’s COVID-19 therapy in the immediate future. Accordingly, the Company generated no revenue from product sales during the years ended 31 December 2020 and 2021.

The Company recorded an increase in loss attributable to owners of the Company from approximately RMB1,189.6 million during the year ended 31 December 2020 to approximately RMB4,163.8 million during the year ended 31 December 2021, representing an increase of approximately RMB2,974.2 million, or approximately 250.0%. The increase in loss attributable to owners of the Company is primarily due to (i) the increase in fair value loss on financial liabilities at fair value through profit or loss (“ FVTPL ”) of approximately RMB3,248.5 million as a result of change in fair value of the Company’s preferred shares during the year ended 31 December 2021; and (ii) the increase in administrative expenses of approximately RMB105.0 million during the year ended 31 December 2021, which were partially offset by the decrease in research and development expenses of approximately RMB381.2 million during the year ended 31 December 2021.

According to the 2021 Results Announcement, the Group also exhibited adjusted net loss for the period excluding the effect of certain non-cash items and one-time events, namely the loss on fair value changes of the conversion feature of preferred shares (financial liabilities measured at FVTPL), share-based compensation expenses and listing expenses, in order to supplement the Group’s consolidated financial statements which are presented in accordance with the International Financial Reporting Standard (IFRS). The Group is of the view that such adjusted net loss can provide useful information to Shareholders and potential investors in understanding and evaluating the consolidated results of operations. Furthermore, the Group believes that such non-IFRS measures are reflections of its normal operating results by eliminating potential impacts of items that

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the Management do not consider to be indicate of the Group’s operating performance. The aforesaid adjusted net loss decreased from approximately RMB888.7 million during the year ended 31 December 2020 to approximately RMB480.7 million during the year ended 31 December 2021, indicating a decrease of approximately RMB408.0 million, or approximately 45.9%.

Set out below are certain key consolidated financial information of the Company as at 31 December 2020 and 2021 as extracted from the consolidated balance sheet set out in the 2021 Results Announcement:

Total assets Total liabilities Net assets/(liabilities) attributable to owners of the Company	As at 31 December 2021 2020 RMB’000 RMB’000 3,611,699 1,267,944 300,443 3,010,646 3,342,904 (1,738,289)

The consolidated total assets of the Company amounted to approximately RMB3,611.7 million as at 31 December 2021, representing an increase of approximately RMB2,343.8 million, or approximately 184.8%, as compared to approximately RMB1,267.9 million as at 31 December 2020. The increase in total assets was mainly due to (i) the increase in bank balances and cash of approximately RMB1,820.1 million; and (ii) the increase in time deposits with original maturity over three months of approximately RMB479.6 million.

The consolidated total liabilities of the Company amounted to approximately RMB300.4 million as at 31 December 2021, representing a decrease of approximately RMB2,710.2 million, or approximately 90.0%, as compared to approximately RMB3,010.6 million as at 31 December 2020. The decrease in total liabilities was mainly due to the absence of financial liabilities at FVTPL as at 31 December 2021, as compared to the financial liabilities at FVTPL of approximately RMB2,403.0 million as at 31 December 2020.

Due to combined effects of the aforementioned factors, the consolidated net assets attributable to owners of the Company amounted to approximately RMB3,342.9 million, representing a turnaround from a consolidated net liabilities attributable to owners of the Company of approximately RMB1,738.3 million as at 31 December 2020.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

1.3 Information on the connected grantees

Details of the two connected grantees, namely Dr. Hong and Mr. Luo (collectively, the “ Connected Grantees ”), including their relationship with the Group, professional expertise and experience as extracted from the Company’s website and Board Letter are set out as follows:

Name

Relationship with the Group

Dr. Hong an executive Director, chairman of the Board and the chief executive officer of the Company
Mr. Luo an executive Director, president and general manager of Greater China of the Company and chief executive officer of TSB Therapeutics Ltd (Beijing) Co. Limited* (騰盛華創醫藥技術(北京)有限公司), an indirect non-wholly owned subsidiary of the Company

1.3.1 Dr. Hong

For identification purposes only

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

As the Company’s chief executive officer, Dr. Hong is in charge of overall management, business, and strategy of the Group and the scientific research and development of the Group. After he founded the Company, Dr. Hong led the research and development team and leveraged on his previous experience on infectious disease treatment development to establish several product portfolios to form a competitive pipeline, which attracted venture capital to invest the Company in the first place.

1.3.2 Mr. Luo

Mr. Luo is an executive Director, the president and general manager of Greater China of the Company and chief executive officer of TSB Therapeutics Ltd (Beijing) Co. Limited* (騰盛華創醫藥技術(北京)有限公司). He has more than 25 years of experience in healthcare industry. Prior to joining the Group, Mr. Luo was the global vice president and general manager of China of Gilead, a biopharmaceutical company, from September 2016 to September 2020, during which he built Gilead Sciences, Inc.’s presence in China from beginning as an early employee in China. He led the development, regulatory review and launch of eight innovative products, gaining rapid access across China. He also led the team and established a unique business model encompassing science, commercialization and patient access. He was the vice president of Shanghai Roche Pharmaceuticals Ltd., a pharmaceuticals company, and he was responsible for pioneering novel strategies for patient access to oncology therapies from August 2012 to August 2016. He was the Head of Great China Pharmaceutical Organization Beijing Headquarters at Novartis from June 2009 to August 2012, and the associate brand director of the Novartis global headquarter in Switzerland from September 2007 to June 2009. Mr. Luo received his medical education from Xiangya School of Medicine, Central-South University, in China and graduated in July 1992, and then served for three years as a surgeon at St. Luke’s Hospital, Shanghai, from July 1992 to July 1995. He obtained an Executive Master of Business Administration from China Europe International Business School in China in September 2006.

2 The Proposed RSU Grants to EDs

As stated in the Board Letter, subject to acceptance and the Independent Shareholders’ approval at the EGM, the Company proposed to grant on the Grant Date:

(i) up to a total of 911,000 RSUs to Dr. Hong, entitling Dr. Hong to receive a maximum of 911,000 Shares upon full vesting, representing approximately 0.13% of the total number of issued Shares as at the Latest Practicable Date; and
(ii) up to a total of 607,000 RSUs to Mr. Luo, entitling Mr. Luo to receive a maximum of 607,000 Shares upon full vesting, representing approximately 0.08% of the total number of issued Shares as at the Latest Practicable Date.
For identification purposes only

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

2.1 Reasons for and benefits of the Proposed RSU Grants to EDs

2.1.1 Purpose of the Post-IPO Share Award Scheme and the Proposed RSU Grants to EDs

As stated in the Board Letter, the purpose of the Post-IPO Share Award Scheme is to provide participants with the opportunity to acquire proprietary interests in the Company and to encourage participants to work towards enhancing the value of the Company and its Shares for the benefit of the Company and its Shareholders as a whole. For further details of the Post-IPO Share Award Scheme, please refer to the paragraph headed “Appendix IV – Statutory and General Information – D. Share Incentive Schemes – 3. Post-IPO Share Award Scheme” in the Prospectus.

With reference to the Board Letter, the Proposed RSU Grants to EDs are part of the Company’s remuneration policy. The purpose of such grants is to closely align the interests and benefits of the Company and its employees directly through ownership of Shares in order to maximize the motivation of the executive Directors. The Proposed RSU Grants to EDs aim to provide sufficient incentive to encourage, retain and motivate Dr. Hong and Mr. Luo to achieve performance goals and participate in the formulation of strategy and long-term development of the Company and to recognize their contribution to the growth of the Company.

As further stated in the Board Letter, the dilution effect of the Proposed RSU Grants to EDs to the interests of the existing public Shareholders is insignificant. As the RSUs to be granted under the Proposed RSU Grants to EDs would be satisfied by allotment and issuance of new Shares by the Company, the grant of such RSUs will not result in any cash outflow by the Group, other than a minimal transaction fee associated with administration.

2.1.2 Rationale of the Proposed RSU Grant to Dr. Hong

With reference to the Board Letter, the Company has a company-wide compensation plan approved and administered by the Remuneration Committee. Basically, the plan contemplates to utilize a mix of time-based and milestone-based equity awards (i.e. share options and RSUs) to create attractive incentive for the Company’s employees, which is consistent with the Company’s goal of attracting and retaining leading talent globally, after taking into account cash and equity-based compensation payable by other companies in the industry (particularly those of comparable size in China).

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

Dr. Hong has extensive experience and industry network in innovative research on biopharmaceuticals, focusing on infectious disease drug development, including HIV and HBV. In particular, with Dr. Hong’s effort, the Company built up a close partnership with various outstanding biotechnology companies, including VBI Vaccines, Inc. (a company whose stocks are listed on the NASDAQ Global Market (NASDAQ: VBIV)), Vir Biotechnology, Inc. (a company whose stocks are listed on the Nasdaq Global Market (NASDAQ: VIR)), QPEX Biopharma, Inc. and AN2 Therapeutics, Inc., which further extended the Company’s product portfolio in infectious disease market and expanded the development potentials. After considering the extensive unmet treatment needs in public health area beyond infectious disease, Dr. Hong led the Company to explore the treatments of central nervous system disease and start to discover the postpartum depression and major depressive disorder therapeutic area, which builds up a synergy between the existing pipeline and future development opportunities. All these efforts taken by Dr. Hong eventually brought the Company to the Listing on July 13, 2021, captivated global investment funds with long-term investment focus in healthcare sectors as cornerstone investors. In addition, he has played a crucial role in formulating the Group’s COVID-19 response strategy, identifying the collaboration partners, navigating the clinical development pathway. Leveraging on his industry network, Dr. Hong obtained sponsorship from National Institute of Health of the U.S. Department of Health and Human Services for the pivotal clinical trials, and eventually helped bringing Amubarvimab/Romlusevimab to market approval in China to tackle the challenges of COVID-19 pandemic. As the Company is committed to advancing therapies for significant infectious diseases and continues to tackle public health challenges, Dr. Hong’s expertise and business insight are essential to the growth of the Company. From the Company’s operational level, Dr. Hong oversees the overall management, business, strategic development and scientific research and development of the Group. Under Dr. Hong’s leadership, the Company has received recognition as a leading biotech research and development company, and he was named the “Industry Leader of the Year 2021” by The China Times.

In view of the above and Dr. Hong’s extensive experience in the biopharmaceutical industry as discussed in section 1.3.1 of this letter, the Board considered that Dr. Hong is indispensable to the growth of the Group.

2.1.3 Rationale of the Proposed RSU Grant to Mr. Luo

With reference to the Board Letter, the Proposed RSU Grant to Mr. Luo was made after taking into consideration a number of factors, including Mr. Luo’s fundamental role and responsibilities in the development and commercialization of the Company’s pipeline of products, his industry expertise and extensive knowledge of the Company’s portfolio drug candidates, his background and experience in healthcare industry and his contribution to the business growth of the Group in China and the US.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

Mr. Luo has extensive scientific knowledge, proven leadership track record, and commercial expertise in patient access. During his years at Gilead, Mr. Luo and his team introduced nine innovative drug products to China, four of which were listed in the National Drug Reimbursement list, including the launch of Gilead’s blockbuster products Sovaldi, Harvoni, Epclusa and tenofovir alafenamide fumarate in China. Acting as the president and general manager of Greater China of the Company, Mr. Luo has made significant contributions to the cross-border operation and product commercialization after he joined the Company. Usually, a new drug takes several years from research and development to commercial launch to the market, but with Mr. Luo’s extensive experience in commercialization of drug products and collaboration with top experts in the China domestic pharmaceutical industry, the Company successfully completed the biologics license application and got market approval in China of Amubarvimab/Romlusevimab within 20 months. This cocktail therapy has become the first COVID-19 neutralizing antibody combination therapy in China, which is a key milestone to the business development of the Company. As a clinical-stage biopharmaceutical company, the most critical challenges to the Company include successful commercialization of drug products and maintenance of sustainable revenue and profit after a product has launched to the market. With deep knowledge in pharmaceutical industry and commercialization, Mr. Luo is and will continue to be responsible for leading commercialization of the Company’s pipeline products with related activities including establishing the Company’s China commercialization team and overseeing the Group’s China operations.

In view of the above and Mr. Luo’s extensive experience in the healthcare industry as discussed in section 1.3.2 of this letter, the Board considered that Mr. Luo is critical to the Group’s development and success in the commercialization of the Company’s pipeline of potential products.

2.1.4 The Board’s further views

As stated in the Board Letter, apart from the indispensable roles, responsibilities, working experience and contributions of Dr. Hong and Mr. Luo to the Group as discussed in sections 1.3.1, 1.3.2, 2.1.2 and 2.1.3 of this letter, the Board also took into account the Company’s remuneration policy and compensation framework, and selected Dr. Hong and Mr. Luo, both are executive Directors and eligible participants under the post-IPO Share Award Scheme who have contributed to the growth and the continued development of the Group, to receive the grant of RSUs under the Proposed RSU Grants to EDs, in light of the Company’s goal of attracting, retaining and motivating its talent. In addition, the Proposed RSU Grants to EDs are part of the company-wide RSU grants to all eligible Company’s employees as disclosed in the Announcement, pursuant to and consistent with the said Company’s company-wide compensation plan and the purpose of the Post-IPO Share Award Scheme.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

The Board Letter carries on to state that the Board proposed to remunerate Dr. Hong and Mr. Luo with the Proposed RSU Grants to EDs after considering the benefits of granting RSUs. The grants of the time-based RSUs to Dr. Hong and Mr. Luo under the Proposed RSU Grants to EDs will provide Dr. Hong and Mr. Luo with monetary benefits that are tied to the share price performance, such grants that can be realized and are readily available at the end of the vesting period are akin to payment of a deferred bonus and hence an effective incentive to Dr. Hong and Mr. Luo. In addition, considering the underlying value of the Shares at the time of vesting of the RSUs, the Proposed RSU Grants to EDs will further serve as motivation for Dr. Hong and Mr. Luo to promote the future development and success of the Company in order to increase the share price of the Company throughout the vesting schedule of the RSUs granted, and hence align the interests of Dr. Hong and Mr. Luo and the long-term interests of the Shareholders, ensuring a better linkage between the Company’s long-term strategic and financial goals and executive compensation. Also, the long vesting schedule of the time-based RSUs granted under the Proposed RSU Grants to EDs will serve as an incentive for Dr. Hong’s and Mr. Luo’s continuing commitment and contribution to the Company’s long-term growth.

As further stated in the Board Letter, the vesting of the milestone-based RSUs granted to Dr. Hong and Mr. Luo is subject to specific performance-based conditions as summarized in the Board Letter, the Board believes that such performance-based conditions will serve as motivation for Dr. Hong and Mr. Luo to contribute and promote the growth in revenue and profitability of the Group in order to obtain the benefit of the RSUs.

As stated in the Board Letter, in determining the number of RSUs proposed to be granted to Dr. Hong and Mr. Luo under the Proposed RSU Grants to EDs, the Board and the Remuneration Committee have conducted sufficient qualitative and quantitative assessment based on the afore-mentioned factors and a number of factors, such as the compensation framework of the Company which is in line with the biotech industry benchmark as advised by the Company’s external professional consultant, Aon (one of the leading human resources consultant firms in the world specialized in China’s healthcare sector), engaged to analyse the compensation structure and package of Biotech Companies (as defined in Chapter 18A of the Listing Rules) in the market, Dr. Hong’s and Mr. Luo’s indispensable roles and responsibilities, working experience and contributions to the Group as set out in the

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sub-sections headed “Proposed RSU Grant to Dr. Hong” and “Proposed RSU Grant to Mr. Luo” in the Board Letter, and the remuneration packages and salaries paid by the Comparable Companies, as well as the closing price of HK$22.75 per Share on the Grant Date.

In respect of the proposed grant of 911,000 RSUs to Dr. Hong under the Proposed RSU Grant to Dr. Hong:

In terms of qualitative assessment, apart from considering Dr. Hong’s roles and responsibilities, working experience and contributions to the Group as set out in the Circular, the Board and the Remuneration Committee also considered a number of factors, including but not limited to the following:

(i) the competitive market for talents rewarded with the cash and equitybased compensation payable by other companies in the biotech industry (particularly those of comparable size in China, including the Comparable Companies) with a focus on equity-based compensation;
(ii) the reasonable compensation framework of the Company utilizing a mix of time-based equity awards and milestone-based equity awards with vesting conditions tied to timely achievement of milestone or performance goals is expected to promote the future success, on-going development and long-term growth of the Company and increase its share price, and hence aligning the interests of Dr. Hong with the long-term interests of the Company and its Shareholders as a whole;
(iii) Dr. Hong’s professional qualifications, industry stature and the critical nature of his role in managing the Company on a global basis (particularly in China and the US) and in driving the drug discovery,

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research, development and commercialization of the Company’s current and future drug candidates and the need to retain, motivate and recognize Dr. Hong’s contribution to the growth and development of the Company; and

(iv) the consideration to provide on-going incentive to Dr. Hong in the participation of the continuing operation and long-term development of the Company, in light of the fact that the equity awards granted to Dr. Hong to retain and motivate him when the Company was founded have been fully vested substantially.

(i) the monetary value range of the equity awards under the Proposed RSU Grant to Dr. Hong is determined based on the principles of the corporate compensation framework, which is consistent with the role and position of Dr. Hong;
(ii) the number of RSUs awarded under the Proposed RSU Grant to Dr. Hong is determined based on the monetary value range of such award and the closing price per Share on the Grant Date;
(iii) the market value of the awarded shares or restricted share units granted to the executive directors of the Comparable Companies as disclosed in the relevant announcements ranged from approximately HK$1,005,000 to HK$90,041,000, with an average of approximately HK$18,107,000. Based on the closing price of HK$22.75 per Share on the Grant Date, the final market value of the RSUs under the Proposed RSU Grant to Dr. Hong amounts to approximately HK$20,725,250, which falls within the above-mentioned market value range; and
(iv) the percentage of the awarded shares or restricted share units granted to the executive directors of the Comparable Companies to the total issued share capital of the Comparable Companies as disclosed in the relevant announcements ranged from approximately 0.01% to 1.50%, with an average of approximately 0.16%. Given the diverse range of market capitalization of the Comparable Companies, for fair consideration, based on the closing price of HK$22.75 per Share on the Grant Date, the final number of RSUs determined to be awarded under the Proposed RSU Grant to Dr. Hong is accounted to 0.13% of the total issued share capital of the Company as at the Grant Date, which falls within the abovementioned percentage range.

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In respect of the proposed grant of 607,000 RSUs to Mr. Luo under the Proposed RSU Grant to Mr. Luo:

In terms of qualitative assessment, apart from considering Mr. Luo’s roles and responsibilities, working experience and contributions to the Group as set out in the Circular, the Board and the Remuneration Committee also considered a number of factors, including but not limited to the following:

(i) the competitive market for talents rewarded with the cash and equitybased compensation payable by other companies in the biotech industry (particularly those of comparable size in China, including the Comparable Companies) with a focus on equity-based compensation;
(ii) Mr. Luo’s professional qualifications, industry stature and the critical nature of his role in managing the Company and in driving the cross-border operation and commercialization of the Company’s current and future drug candidates and the need to retain and motivate Mr. Luo’s contribution to the growth and development of the Company; and
(iii) the reasonable compensation framework of the Company utilizing a mix of time-based equity awards and milestone-based equity awards with vesting conditions tied to timely achievement of milestone or performance goals is expected to promote the future success, on-going development and long-term growth of the Company and increase its share price, and hence aligning the interests of Mr. Luo with the long-term interests of the Company and its shareholders as a whole.

(i) the monetary value range of the equity awards under the Proposed RSU Grant to Mr. Luo is determined based on the principles of the corporate compensation framework, which is consistent with the role and position of Mr. Luo;
(ii) the number of RSUs awarded under the Proposed RSU Grant to Mr. Luo is determined based on the monetary value range of such award and the closing price per Share on the Grant Date;
(iii) the market value of the awarded shares or restricted share units granted to the executive directors of the Comparable Companies as disclosed in the relevant announcements ranged from approximately HK$1,005,000 to

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HK$90,041,000, with an average of approximately HK$18,107,000. Based on the closing price of HK$22.75 per Share on the Grant Date, the final market value of the RSUs under the Proposed RSU Grant to Mr. Luo amounts to approximately HK$13,809,250, which falls within the abovementioned market value range; and

(iv) the percentage of the awarded shares or restricted share units granted to the executive directors of the Comparable Companies to the total issued share capital of the Comparable Companies as disclosed in the relevant announcements ranged from approximately 0.01% to 1.50%, with an average of approximately 0.16%. Given the diverse range of market capitalization of the Comparable Companies, for fair consideration, based on the closing price of HK$22.75 per Share on the Grant Date, the final number of RSUs determined to be awarded under the Proposed RSU Grant to Mr. Luo is accounted to 0.08% of the total issued share capital of the Company as at the Grant Date, which falls within the abovementioned percentage range.

(i) Dr. Hong’s and Mr. Luo’s professional qualifications, industry stature and the critical nature of their roles in managing the Company on a global basis (particularly in China and the US) and in driving the drug discovery, research, development and commercialization of the Company’s current and future drug candidates and the need to retain, motivate and recognize their contribution to the growth and development of the Company;
(ii) the Proposed RSU Grants to EDs are made as part of the company-wide RSU grants as disclosed in the Announcement, and were consistent with the design and purpose of the Company’s compensation plan and its goal of attracting, retaining and motivating leading talent globally while aligning the interests of the Company and its Shareholders and its employees through ownership of Shares;
(iii) with the analysis provided by the external professional consultant engaged by the Company, Aon, to analyse the compensation structure and package of other Biotech Companies, the proposed size and structure of the Company’s equity awards (including the grant of RSUs) are consistent or generally comparable to those awarded by other Biotech Companies (particularly China-based Biotech Companies);

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(iv) the Proposed RSU Grants to EDs, which are comprised of equity awards with 4-year time-based RSUs and milestone-based RSUs with vesting conditions based on timely achievement of relevant milestone or performance goals, are expected to align the interests of Dr. Hong and Mr. Luo with the long-term interests of the Company and its Shareholders as a whole; and
(v) the Proposed RSU Grants to EDs will result in no cash outflow by the Company other than a minimal transaction fee associated with administration, and minimal dilution effect to the Company’s public Shareholders.

2.1.5 Our view on the reasons and rationale for the Proposed RSU Grants to EDs

We are of the view that the Connected Grantees’ extensive experience in the biopharmaceutical and healthcare industries, as evidenced by their working profile, academic background and other experience discussed in section 1.3 of this letter and their contributions to the Group discussed in sections 2.1.2 and 2.1.3 above, is vital to the management, operation and development of the Group. In particular, Dr. Hong is the founder of the Group, has participated and contributed in the business development of the Group over the past years, is an iconic figure of the Group as perceived by the employees, senior management, regulators and business partners, and has over 25 years of experience in the pharmaceutical industry with expertise in scientific research and development, while Mr. Luo, who has over 25 years of experience in the healthcare industry with product development, regulatory review and launch experience, is the key person responsible for the Group’s business in China as well as the Group’s growth in the US. Their proven track records in management, scientific research and development, regulatory review and launch of products form the foundation of the Group’s sustained growth.

2.2 Terms of the Proposed RSU Grants to EDs

In accordance with the terms of the Post-IPO Share Award Scheme and the relevant award agreements, the Proposed RSU Grants to EDs are made under the following terms:

(i) each RSU is granted for nil consideration;
(ii) each RSU granted represents the right to receive one Share on the date it vests; and
(iii) the vesting schedule of 1,518,000 RSUs to Dr. Hong and Mr. Luo will be as follows:
(a) in relation to 303,000 RSUs: 25%, 25%, 25% and 25% of the grant will vest on each of the first, second, third and fourth anniversaries of September 17, 2021, respectively; and

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

(b) in relation to 1,215,000 RSUs: the grant will vest upon the achievements by the Group of certain milestones determined by the Board which are specified in the relevant award agreements entered into between the Company and each of Dr. Hong and Mr. Luo.

As at the Latest Practicable Date, the total number of issued Shares is 722,274,722 Shares. The maximum number of Shares that may be issued to Dr. Hong and Mr. Luo under the Proposed RSU Grants to EDs would be 911,000 and 607,000 respectively, representing approximately 0.13% and 0.08% of the total number of issued Shares respectively and approximately 0.13% and 0.08% of the enlarged total number of issued Shares respectively (assuming no additional Shares will be issued except for the issue of Shares by the Company to Dr. Hong and Mr. Luo upon full vesting of such RSUs under the Proposed RSU Grants to EDs). Each of Dr. Hong’s and Mr. Luo’s total interests in the Shares or underlying Shares of the Company after the Proposed RSU Grants to EDs would be 49,463,500 Shares and 10,375,500 Shares respectively, representing approximately 6.85% and 1.44% of the total number of issued Shares of the Company respectively as at the Latest Practicable Date, and approximately 6.83% and 1.43% of the enlarged total number of issued Shares of the Company respectively (assuming no additional Shares will be issued except for the issue of Shares by the Company to Dr. Hong and Mr. Luo upon full vesting of such RSUs under the Proposed RSU Grants to EDs).

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

2.2.1 Comparable analysis on the Proposed RSU Grants to EDs

In order to assess the fairness and reasonableness of the terms of the Proposed RSU Grants to EDs, we have identified 28 comparable grants of award shares (the “ Comparable Grants ”) which are Hong Kong listed companies that have announced a grant of award shares (including restricted shares) during the three months period ended on the date which the Board announced the Proposed RSU Grants to EDs (i.e., 20 January 2022) (the “ Review Period ”). We consider the length of the Review Period is fair and representative because (i) it has generated a reasonable number of samples for our analysis and having a shorter period would result in an inadequate number of samples which might not able to reflect the recent market trends/conditions; and (ii) it would capture the recent market trends while having a longer period may have been too distant in time, and making the samples less relevant in relation to the dynamic financial markets.

In our selection of the Comparable Grants, we have excluded the grant of awarded shares conducted by Bosideng International Holdings Limited (3998.hk) announced on 20 December 2021 (“ Bosideng ”), SinoMab BioScience Limited (3681.hk) announced on 23 December 2021 (“ SinoMab ”) and Shi Shi Services Limited (8181.hk) announced on 11 January 2022 (“ Shi Shi ”, together with Bosideng and SinoMab, the “ Outliers ”). Bosideng and SinoMab have been excluded in our analysis due to their average market value of the awarded shares per grantee are approximately HK$37.52 million and HK$75.72 million respectively, representing more than four and eight times of the next highest Comparable Grant of approximately HK$9.20 million and approximately 20.97 times and 42.32 times of the average of the Comparable Grants of approximately HK$1.79 million. Shi Shi has been excluded in our analysis for the reason that its percentage of total number of awarded shares to total number of shares in issued on the date of announcement is approximately 10.00%, which is more than three times of the next highest percentage of approximately 3.00% amongst the Comparable Grants and approximately 20.0 times of the average of the Comparable Grants of approximately 0.50%. We consider that the exclusion of the Outliers would provide a more meaningful representation of the recent market norm so as to assess the fairness and reasonableness of the terms of the Proposed RSU Grants to EDs.

The Comparable Grants comprise of 20 grants of award shares to solely independent third parties (the “ Comparable Independent Grants ”), 2 grants of award shares to solely connected person (the “ Comparable Connected Grants ”) and 6 grants of award shares to both connected parties and independent third parties.

Based on our best information, knowledge and belief, the Comparable Grants represent an exhaustive list of all suitable comparable companies meeting the aforementioned criteria as identified by us. We consider an analysis of merely the Comparable Connected Grants may not be fair and representative given that there were insufficient sample size of only 2 Comparable Connected Grants during the Review Period. However, given that the terms of Comparable Independent Grants

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

should be arrived at after arm’s length negotiations between the respective listed companies and their independent third parties, we consider that the inclusion of the Comparable Independent Grants would allow us to evaluate whether the terms of Proposed RSU Grants to EDs are more favourable than terms of grants of award shares to independent third parties in market, and hence providing a relevant and alternative perspective for us to assess the fairness and reasonableness of the terms of the Proposed RSU Grants to EDs.

In view of the above, we consider that the Comparable Grants form a fair and representative list of samples.

Shareholders should note that the business, operations and financial performance of the companies offering the Comparable Grants may not be the same as the Group and we have not conducted any in-depth investigation into the businesses and operations of the companies offering the Comparable Grants. However, we consider that the Comparable Grants are fair and representative samples that could provide the Independent Shareholders with a general reference of transactions of similar nature conducted by companies listed on the Stock Exchange granting award shares and the length of the vesting period.

Set out below are the summaries of the Comparable Grants:

			Percentage of total	Percentage of total
			number of	award
			shares to total		Market value	of the	Average market
			number of shares in		awarded shares on		value of the awarded
Date of initial			issue on the date of		the date of	grant/	shares per grantee
announcement (DD/MM/YY)	Company name (stock code)	Number of grantee(s)	announcement (Approx. %) (Note 1)		announcement (HK$ million) (Note 2)		(Approx. HK$ million)	Vesting date/period
20/01/22	eBroker Group	45 grantees,		0.75%		0.84	0.02	980,000 award shares shall
	Limited	including						be vested to a connected
	(8036.hk)	3 connected						person on the 20 January
		persons						2022; 4,640,000 award
								shares shall be vested to
								the respective selected
								persons on 31 December
								2022; and the remaining
								3,660,000 award shares
								shall be vested to the
								respective selected persons
								on 31 December 2023

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

			Percentage of total	Percentage of total
			number of	award
			shares to total		Market value	of the	Average market
			number of shares in		awarded shares on		value of the awarded
Date of initial			issue on the date of		the date of	grant/	shares per grantee
announcement (DD/MM/YY)	Company name (stock code)	Number of grantee(s)	announcement (Approx. %) (Note 1)		announcement (HK$ million) (Note 2)		(Approx. HK$ million)		Vesting date/period
17/01/22	Tongda Group	14 grantees		0.66%		15.74		1.12	30% commencing from the
	Holdings								first trading day after the
	Limited								12 months from date of
	(698.hk)								acceptance to 24 months
									from date of acceptance;
									30% commencing from the
									first trading day after the
									24 months from date of
									acceptance to 36 months
									from date of acceptance;
									and 40% commencing
									from the first trading day
									after the 36 months from
									date of acceptance to
									48 months from date of
									acceptance
14/01/22	IDG Energy	15 grantees		0.25%		19.12		1.27	30% on 14 January 2023;
	Investment								30% on 14 January 2024;
	Limited								and 40% on 14 January
									2025
13/01/22	SITC	170 grantees		0.08%		60.36		0.36	Not disclosed
	International
	Holdings
	Company
	Limited
	(1308.hk)
11/01/22	Ming Yuan	18 grantees		0.33%	118.55			6.59	30% on 11 January 2024;
	Cloud Group								30% on 11 January 2025;
	Holdings								20% on 11 January 2026;
	Limited								and 20% on 11 January
	(909.hk)								2027
10/01/22	Genscript	1 grantee who		0.01%		5.28		5.28	Last batch of the restricted
	Biotech	is a							shares will be vested on
	Corporation	connected							10 January 2027
04/01/22	(1548.hk) Smoore	person Number not		0.02%		32.90	N/A	(Note 3)	Not disclosed
	International	disclosed,
	Holdings	none of the
	Limited	grantees is a
	(6969.hk)	connected
		person
03/01/22	Transcenta	1 grantee who		0.22%		9.20		9.20	The restricted share units
	Holding	is a							will vest between
	Limited	connected							January 1, 2023 and
	(6628.hk)	person							January 1, 2026

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

			Percentage of total	Percentage of total
			number of	award
			shares to total		Market value	of the	Average market
			number of shares in		awarded shares on		value of the awarded
Date of initial			issue on the date of		the date of	grant/	shares per grantee
announcement (DD/MM/YY)	Company name (stock code)	Number of grantee(s)	announcement (Approx. %) (Note 1)		announcement (HK$ million) (Note 2)		(Approx. HK$ million)		Vesting date/period
30/12/21	Ourgame	8 grantees,		3.00%		13.45		1.68	For connected persons: 50%
	International	including							of the total number of the
	Holdings	2 connected							award shares granted shall
	Limited	persons							be vested on 30 December
	(6899.hk)								2021; 25% of the total
									number of the award
									shares granted shall be
									vested on 30 December
									2022; and 25% of the total
									number of the award
									shares granted shall be
									vested on 30 December
									2023. For independent
									third parties: Not disclosed
30/12/21	TradeGo	13 grantees		1.25%		5.63		0.43	Commencing from
	FinTech								30 December 2021 and
	Limited								ending on the two-year
	(8017.hk)								period from 30 December
									2021
28/12/21	Suoxinda	420 grantees,		1.49%		37.81		0.09	For connected persons:
	Holdings	including							Three tranches with
	Limited	6 connected							different vesting schedules
	(3680.hk)	persons							For independent third
									parties: Seven tranches
									with different vesting
									schedules
24/12/21	Smoore	Number not		0.08%	188.77		N/A	(Note 3)	Not disclosed
	International	disclosed,
	Holdings	none of the
	Limited	grantees is a
	(6969.hk)	connected
		person
23/12/21	TOT	28 grantees		2.28%		54.12		1.93	Three tranches with different
	BIOPHARM								vesting schedules
	International
	Company
	Limited
17/12/21	(1875.hk) JW (Cayman)	Number not		0.12%		5.42	N/A	(Note 3)	30% on the 2nd anniversary
	Therapeutics	disclosed,							of the vesting
	Co. Ltd	none of the							commencement date; 30%
	(2126.hk)	grantees is a							on the 3rd anniversary of
		connected							the vesting commencement
		person							date; and 40% on the 4th
									anniversary of the vesting
									commencement date
17/12/21	AGTech	18 grantees		0.07%		2.17		0.12	Within 4 years from
	Holdings								17 December 2021
	Limited
	(8279.hk)
15/12/21	Alibaba Health	42 grantees		0.02%		17.91		0.43	Within 4 years from
	Information								15 December 2021
	Technology
	Limited
	(241.hk)

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

			Percentage of total	Percentage of total
			number of	award
			shares to total		Market value	of the	Average market
			number of shares in		awarded shares on		value of the awarded
Date of initial			issue on the date of		the date of	grant/	shares per grantee
announcement (DD/MM/YY)	Company name (stock code)	Number of grantee(s)	announcement (Approx. %) (Note 1)		announcement (HK$ million) (Note 2)		(Approx. HK$ million)		Vesting date/period
10/12/21	Genscript	Number not		0.08%		67.28	N/A	(Note 3)	Last batch of the restricted
	Biotech	disclosed,							shares will be vested on
	Corporation	none of the							10 December 2024
	(1548.hk)	grantees is a
		connected
		person
09/12/21	China Modern	48 grantees,		0.11%		11.48		0.24	25 March 2022
	Dairy	including
	Holdings Ltd.	1 connected
	(1117.hk)	person
06/12/21	Innovent	53 grantees		0.10%		93.81		1.77	36,800 restricted shares
	Biologics, Inc.								granted 6 December 2021;
	(1801.hk)								1,481,110 of the restricted
									shares granted to
									53 grantees shall vest in
									the grantees as follows:
									75% on 6 December 2024;
									and 25% on 6 December
									2025
02/12/21	Sisram Medical	68 grantees,		0.80%		41.55		0.61	The restricted share units
	Ltd (1696.hk)	including							will be vested in four
		2 connected							equal instalments in a
		persons							period of four years after
									2 December 2021
26/11/21	Maoyan	Number not		0.13%		13.64	N/A	(Note 3)	Not disclosed
	Entertainment	disclosed,
	(1896.hk)	none of the
		grantees is a
		connected
		person
25/11/21	Alphamab	12 grantees		0.12%		22.25		1.85	20% on 23 April 2022; 20%
	Oncology								on 23 April 2023; 20% on
	(9966.hk)								23 April 2024; and 40%
									on 23 April 2025
23/11/21	Wuxi Biologics	486 grantees		0.15%	675.52			1.39	Not disclosed
	(Cayman) Inc.
	(2269.hk)
22/11/21	China Railway	732 grantees,		0.88%	669.60			0.93	Not disclosed
	Group Limited	including
	(390.hk)	13 connected
		persons
08/11/21	Shangri-La Asia	6 grantees		0.32%		2.21		0.37	80,000 shares on 15 October
	Limited								2021 Remaining 268,000
	(69.hk)								shares as follows: 32.84%

0.37 80,000 shares on 15 October 2021 Remaining 268,000 shares as follows: 32.84% on 15 October 2022; 32.84% on 15 October 2023; and 34.32% on 15 October 2024

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

			Percentage of total	Percentage of total	Percentage of total
			number of	award
			shares to total			Market value	of the	Average market
			number of shares in			awarded shares on		value of the awarded
Date of initial			issue on the date of			the date of	grant/	shares per grantee
announcement (DD/MM/YY)	Company name (stock code)	Number of grantee(s)	announcement (Approx. %) (Note 1)			announcement (HK$ million) (Note 2)		(Approx. HK$ million)		Vesting date/period
05/11/21	IGG Inc	25 grantees			0.09%		7.92		0.32	330,000 shares shall
	(799.hk)									subject to a vestin
										as follows: 50% o
										5 November 2022;
										50% on 5 Novemb
										The remaining 77
										shares shall be su
										vesting period as
										25% on 5 Novemb
										25% on 5 Novemb
										25% on 5 Novemb
										and 25% on 5 No
										2025
29/10/21	Ming Yuan	20 grantees			0.13%		67.40		3.37	30% on 29 October
	Cloud Group									30% on 29 Octobe
	Holdings									20% on 29 Octobe
	Limited									and 20% on 29 O
21/10/21	(909.hk) Tongcheng-	Number not			0.48%	195.94		N/A	(Note 3)	2026 Not disclosed
	Elong	disclosed,
	Holdings	none of the
	Limited	grantees is a
	(780.hk)	connected
		person
20/12/21	The Company	85 grantees,	0.75%		(Note 4)	123.04			1.45	The vesting schedul
		including 2								proposed grants
		connected								1,518,000 RSUs t
		persons								Dr. Hong and Mr

0.32 330,000 shares shall be subject to a vesting period as follows: 50% on 5 November 2022; and 50% on 5 November 2023. The remaining 770,000 shares shall be subject to a vesting period as follows: 25% on 5 November 2022; 25% on 5 November 2023; 25% on 5 November 2024; and 25% on 5 November 2025
3.37 30% on 29 October 2023; 30% on 29 October 2024; 20% on 29 October 2025; and 20% on 29 October 2026
N/A(Note 3) Not disclosed

1.45 The vesting schedule of the proposed grants of 1,518,000 RSUs to Dr. Hong and Mr. Luo will be as follows:(Note 5) (i) in relation to 303,000 RSUs: 25%, 25%, 25% and 25% of the grant will vest on each of the first, second, third and fourth anniversaries of September 17, 2021, respectively; and (ii) in relation to 1,215,000 RSUs: the grant will vest upon the achievements by the Group of certain milestones determined by the Board which are specified in the relevant award agreements entered into between the Company and each of Dr. Hong and Mr. Luo

Max. 3.00% 675.52 9.20 Min. 0.01% 0.84 0.02 Average 0.50% 87.71 1.79

Sources: the announcement of relevant companies on the website of the Stock Exchange

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

Notes:

The percentage of total number of award shares to total number of shares in issue on the date of announcement of the Comparable Grants is extracted from the relevant announcement, where such information is not available from the relevant announcement, the percentage is calculated by dividing the number of award shares granted by the total issued share capital as extracted from the monthly return of equity issuer on movement in securities prior to the publication of the relevant announcement.
Market value of the awarded shares on the date of announcement is adopted if the date of grant of the awarded shares is not disclosed in the announcement of the relevant Comparable Grant.
Number of grantee(s) is not disclosed in the announcement of this Comparable Grant.
The percentage of total number of RSUs to total number of issued Shares included the grants of RSUs to non-executive Director, independent non-executive Directors and employees and senior management of the Company. The percentage of total number of RSUs proposed to be granted to the Connected Grantees to total number of issued Shares is approximately 0.21%.
The vesting schedule differs from the grants of RSUs to non-executive Director, independent non-executive Directors and employees and senior management of the Company. Please refer to the Announcement regarding the relevant vesting schedules.

We consider that the amount of 28 Comparable Grants over the Review Period of three months demonstrates that the alignment of interests of selected employees by way of grant and ownership of award shares is not uncommon and is in line with the market practice.

We note that the percentage of total number of award shares to total number of shares in issue on the date of announcement of the Comparable Grants range from a low of approximately 0.01% to a high of approximately 3.00%, with the average thereof being approximately 0.50%. The total number of Shares under the grants of RSUs to non-executive Director, independent non-executive Directors and employees and senior management of the Company and the Proposed RSU Grants to EDs altogether represent approximately 0.75% of the issued share capital of the Company as at the date of the Announcement, which falls within the range as represented by the Comparable Grants. The number of new Shares under the Proposed RSU Grants to EDs represent approximately 0.21% of the issued share capital of the Company as at the date of the Proposed RSU Grants to EDs therefore falls within the range as represented by the Comparable Grants and way below the average of the Comparable Grants of approximately 0.50%, illustrating comparatively less dilutive effect to existing Shareholders.

We note that the market value of the award shares on the date of grant of the Comparable Grants range from a low of approximately HK$840,000 to a high of approximately HK$675.52 million with the average thereof being approximately HK$87.71 million. The market value of the entire grant of RSUs (inclusive of the Proposed RSU Grant to EDs) of approximately HK$123.04 million falls within the range as represented by the Comparable Grants. Although the market value of the total number of Shares under the grants of RSUs to non-executive Director, independent non-executive Directors and employees and senior management of the

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

Company together with the Proposed RSU Grants to EDs of approximately HK$123.04 million is approximately 40.28% above the average market value of the award shares on the date of grant of the of the Comparable Grants, the average market value of the RSU per grantee under the grants of RSUs to non-executive Director, independent non-executive Directors and employees and senior management of the Company together with the Proposed RSU Grants to EDs of approximately HK$1.45 million is within the range of the Comparable Grants from approximately HK$20,000 to approximately HK$9.20 million, and below the average of the Comparable Grants of approximately HK$1.79 million by a significant margin. We note that the companies conducting the Comparable Grants are companies from different industries and as their respective grantees all have different academic background, professional qualifications and working experience, their remuneration level can vary. Accordingly, the above analysis on market value of the grants is only for the Independent Shareholders’ general reference purpose.

Moreover, the vesting period of the Comparable Grants range from immediate vesting up to approximately 5 years. With reference to the Board Letter and information provided by the Management, the Proposed RSU Grants to EDs shall be vested on various dates, but no later than 17 September 2025, majority of which are linked to achievements by the Group of certain milestones as determined by the Board. The vesting period of the Proposed RSU Grants to EDs is generally in line with those of the Comparable Grants. It is noted that in respect of 303,000 RSUs under the Proposed RSU Grants to EDs, there is a vesting period by phases over 3.5 years which should serve as an incentive for Dr. Hong’s and Mr. Luo’s continuing commitment and contribution to the long-term growth of the Group as envisaged by the Board. Meanwhile, the remaining 1,215,000 RSUs under the Proposed RSU Grants to EDs (i.e. the majority of the grants) will vest upon the achievements by the Group of certain milestones as determined by the Board which will serve as motivation for Dr. Hong and Mr. Luo to contribute and promote the growth in revenue and profitability of the Group also as envisaged by the Board.

We are of the view that given the Company is at pre-revenue stage and primarily engaged in pharmaceutical research and development activities, the Proposed RSU Grants to EDs shall motivate the Connected Grantees to achieve the performance targets relating to the research and development progress of certain drug candidates of the Group and the subsequent launch of products. The future success of the Group is highly dependent of the insight and keen business acumen from Dr. Hong, and Mr. Luo‘s extensive experience in Chinese pharmaceutical market with international vision. They lead the product development and business operations with their extraordinary leadership and great efforts which is expected by the Board to bring great success to the Company. Therefore, we consider the terms of the Proposed RSU Grants to EDs are fair and reasonable, and are in interest of the Group and the Shareholders as a whole.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

2.3 Comparable analysis on the overall remuneration package of the executive Directors

In order to assess the fairness and reasonableness of the overall remuneration package of the executive Directors, we have identified 15 comparable biotechnology companies at pre-revenue stage (the “ Comparable Biotechnology Companies ”) which are Hong Kong listed companies with market capitalization range from 50% below to 50% above the market capitalization of the Company based on the closing share price on the Grant Date. We consider the range of market capitalization adopted is fair and representative because (i) it has generated a reasonable number of samples which able to provide meaningful market information for our analysis; and (ii) it would capture companies in the same industry with similar size in terms of market capitalization.

Set out below are the summaries of the Comparable Biotechnology Companies:

		Average amount of
	Aggregate	the annual
	amount of the	remuneration
	annual	package per
	remuneration	executive director
	package of the	receiving the
	executive directors	remuneration
	(Approx.	package (Approx.
Company name (stock code)	RMB million)	RMB million)
Jacobio Pharmaceuticals Group Co
Ltd (1167.hk)	11.07	2.77
Ocumension Therapeutics
(1477.hk)	6.70	3.35
Everest Medicines Ltd (1952.hk)	85.27	21.32
MicroPort CardioFlow Medtech
Corp (2160.hk)	9.99	2.50
CARsgen Therapeutics Holdings
Ltd (2171.hk)	2.29	1.14
Clover Biopharmaceuticals Ltd
(2197.hk)	7.31	3.65
Venus MedTech HangZhou Inc
(2500.hk)	2.83	0.94
CStone Pharmaceuticals (2616.hk)	6.06	6.06
Cansino Biologics Inc (6185.hk)	25.81	6.45
New Horizon Health Ltd (6606.hk)	16.46	8.23
Akeso Inc (9926.hk)	17.99	4.50
Alphamab Oncology (9966.hk)	7.88	3.94
InnoCare Pharma Ltd (9969.hk)	135.28	67.64
RemeGen Co Ltd (9995.hk)	17.75	4.44
Peijia Medical Ltd (9996.hk)	11.13	3.71
The Company	22.30(Note 1)	22.30(Note 1)
Maximum	135.28	67.64
Minimum	2.29	0.94
Average	24.25	9.38

Sources: the latest annual report or prospectus of relevant companies on the website of the Stock Exchange

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

Note:

Information extracted from the Prospectus, showing the amount of the remuneration package received by Dr. Hong, the sole executive Director for the year ended 31 December 2020. Mr. Luo was appointed as executive Director on 30 March 2021 and therefore his remuneration package is not disclosed in the Prospectus which has included the Company’s financial information for the year ended 31 December 2020, while (i) the 2021 Results Announcement does not included the information on the remuneration package of the executive Directors; and (ii) the Company’s annual report for the year ended 31 December 2021 has not been published as at the Latest Practicable Date.

Based on the above analysis, we consider that the amount of 15 Comparable Biotechnology Companies demonstrates that biotechnology companies at pre-revenue stage offering attractive remuneration package to their executive directors is not uncommon and is in line with the market practice.

We note that the aggregate amount of annual remuneration package offered to the executive directors by the Comparable Biotechnology Companies ranged from a low of approximately RMB2.29 million to a high of approximately RMB135.28 million, with an average of approximately RMB24.25 million. The aggregate amount of annual remuneration package offered by the Company to its executive Director of approximately RMB22.30 million therefore falls within the range as represented by the Comparable Biotechnology Companies and below the average of the Comparable Biotechnology Companies of approximately RMB24.25 million. In terms of the average amount of annual remuneration package received by each executive director, the amount of annual remuneration package offered by the Company of approximately RMB22.30 million falls within the range from approximately RMB0.94 million to approximately RMB67.64 million and above the average of the Comparable Biotechnology Companies of approximately RMB9.38 million. Despite Dr. Hong’s annual remuneration package being much higher than the average figure of the Comparable Biotechnology Companies, we consider that it is not out of the ordinary given that it is still within the range as represented by the Comparable Biotechnology Companies. Furthermore, given the contribution and importance of Dr. Hong to the Company’s development as discussed in sections 1.3.1 and 2.1.2 of this letter, it is in the Company’s interest to offer attractive package to Dr. Hong that is in line with Company’s remuneration policy to retain such talent.

We note that (i) Dr. Hong will receive a bonus of US$5.00 million payable from the Group’s June 30, 2021 cash balances with reference to the interim report of the Company for the six months ended 30 June 2021; and (ii) the market value of the RSUs under the Proposed RSU Grant to Dr. Hong and Mr. Luo amount to approximately HK$20.73 million and HK$13.81 million, respectively, based on the closing price of HK$22.75 per Share on the Grant Date. Taking the above into account, the overall remuneration package for Dr. Hong for the year ended 31 December 2021 is estimated to be higher than the remuneration package Dr. Hong received for the year ended 31 December 2020; and the market value of the RSUs under the Proposed RSU Grant to Dr. Hong and Mr. Luo is higher than the average remuneration package received by the executive directors of the

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

Comparable Biotechnology Companies based on the information for the year ended 31 December 2020. We consider the higher overall remuneration package received Dr. Hong and Mr. Luo for the year ended 31 December 2021 and the year ending 31 December 2022 are fair and reasonable due to (i) Dr. Hong’s contribution in the Listing, an important milestone of the Company; (ii) as mentioned in section 2.2.1 of this letter, there is a vesting period by phases of over 3.5 years in respect of 303,000 RSUs under the Proposed RSU Grants to EDs and the majority of the grants, i.e. the remaining 1,215,000 RSUs, will vest upon the achievements by the Group of certain milestones as determined by the Board, the actual monetary amount received by Dr. Hong and Mr. Luo under the Proposed RSU Grants to EDs in each financial year during the vesting period is lower and a significant portion of the grants will be rewarded upon achieving certain milestones which are in line with the Company’s aim to provide sufficient incentive to motivate Dr. Hong and Mr. Luo and in the interest of the Company and the Shareholders as a whole; and (iii) the remuneration package of the executive directors vary based on their academic background, professional qualifications, working experience, importance and contribution to the company as determined by the board of directors of the company and the difficulties in hiring another suitable candidate for the position.

2.4 Our conclusion on the Proposed RSU Grants to EDs

Taking into account (i) the extensive experience of the Connected Grantees as evidenced by their biographical information discussed in section 1.3 of this letter; (ii) the Connected Grantees’ contributions to the Group discussed in sections 2.1.2 and 2.1.3 of this letter (iii) the principal terms of the Proposed RSU Grants to EDs are fair and reasonable as discussed in section 2.2.1 of this letter; (iv) the alignment of interests of selected employees by way of grant and ownership of award shares is not uncommon and is in line with the market practice as discussed in section 2.2.1 of this letter; (v) the reasons for and benefits of the Proposed RSU Grants to EDs of providing sufficient incentive to retain and motivate the Connected Grantees as discussed in sections 2.1 and 2.2.1 of this letter; and (vi) the overall remuneration package of the executive Directors discussed in section 2.3 of this letter, we are of the view that the Proposed RSU Grants to EDs is fair and reasonable and in the interest of the Company and Shareholders as a whole.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISOR

CONCLUSION

Having considered the above principal factors, we are of the opinion that (i) the Proposed RSU Grants to EDs is, although not in the ordinary and usual course of business of the Group, on normal commercial terms; and (ii) the terms of the Proposed RSU Grants to EDs and the transactions contemplated thereunder are fair and reasonable and in the interest of the Company and the Shareholders as a whole. Therefore, we would recommend (i) the Independent Board Committee to advise the Independent Shareholders; and (ii) the Independent Shareholders, to vote in favor of the ordinary resolution(s) to approve the Proposed RSU Grants to EDs and the transactions contemplated thereunder at the EGM.

Yours faithfully, For and on behalf of Grand Moore Capital Limited

Kevin So

Director – Investment Banking Department

Note: Mr. Kevin So is a licensed person under the SFO to undertake type 6 regulated activity (advising on corporate finance) and is a responsible officer in respect of Grand Moore Capital Limited’s type 6 regulated activity (advising on corporate finance). Mr. So has over 16 years of experience in the corporate finance industry in Hong Kong.

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GENERAL INFORMATION

APPENDIX

1. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

2. DIRECTORS’ AND CHIEF EXECUTIVE’S INTERESTS AND SHORT POSITIONS IN SHARES, UNDERLYING SHARES AND DEBENTURES

As at the Latest Practicable Date, the interests and short positions of the Directors or chief executives of the Company in the shares, underlying shares and debentures of the Company or its associated corporations (within the meaning of Part XV of the SFO) which (i) were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which they were taken or deemed to have under such provisions of the SFO); or (ii) were required pursuant to section 352 of the SFO to be entered in the register referred to therein; or (iii) were required pursuant to the Model Code to be notified to the Company and the Stock Exchange were as follows:

			Approximate
		Number of	percentage of
		Shares or	the issued share
Name of Director	Capacity and	underlying	capital of the
or chief executive	nature of interest	Shares held(1)	Company(2)
Mr. Robert Taylor Nelsen	Interest of controlled	90,410,418(3)	12.52%
	corporation
Dr. Zhi Hong	Beneficial owner	17,063,500(4)	2.36%
	Trustee	16,400,000(5)	2.27%
	Founder of	16,000,000(6)	2.22%
	discretionary trust
Mr. Yongqing	Beneficial owner	10,375,500(7)	1.44%
Dr. Axel Bouchon	Beneficial owner	84,000(8)	0.01%
Dr. Martin J Murphy Jr	Beneficial owner	42,000(9)	0.01%
Ms. Grace Hui Tang	Beneficial owner	42,000(10)	0.01%
Mr. Yiu Wa Alec Tsui	Beneficial owner	42,000(11)	0.01%
Mr. Gregg Huber Alton	Beneficial owner	42,000(12)	0.01%

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GENERAL INFORMATION

APPENDIX

Notes:

All interests stated are long position.
The calculation is based on the total number of 722,274,722 Shares in issue as at the Latest Practicable Date.
The general partner of ARCH Venture Fund IX, L.P. is ARCH Venture Partners IX, L.P., the general partner of which is ARCH Venture Partners IX, LLC. ARCH Venture Partners IX, LLC is owned by several individuals, but its voting power is controlled as to one-third by each of Mr. Robert Taylor Nelsen (a non-executive Director), Mr. Clinton Bybee and Mr. Keith Crandell. In addition, the general partner ARCH Venture Fund IX Overage, L.P. is ARCH Venture Partners IX Overage, L.P., the general partner of which is ARCH Venture Partners IX, LLC. As such, Mr. Robert Taylor Nelsen is deemed to be interested in the 90,410,418 Shares held by ARCH Venture Fund IX, L.P. and ARCH Venture Fund IX Overage, L.P. in aggregate.
Includes (i) Dr. Hong’s entitlements to receive up to 16,152,500 Shares pursuant to the exercise of options granted to him under the Pre-IPO Share Incentive Plan and the Post-IPO Share Option Scheme, subject to the vesting conditions; and (ii) the 911,000 Shares underlying the Proposed RSU Grant to Dr. Hong under the Post-IPO Share Award Scheme, subject to the vesting conditions.
These Shares are held by the Jingfan Huang 2020 Revocable Trust and the Zhi Hong 2020 Revocable Trust, of which Dr. Hong is the trustee. Under the SFO, Dr. Hong is deemed to be interested in these Shares.
These Shares are held by the Hong Family 2020 Irrevocable Trust, of which Dr. Hong is the grantor. Under the SFO, Dr. Hong is deemed to be interested in these Shares.
Includes (i) Mr. Luo’s entitlements to receive up to 9,768,500 Shares pursuant to the exercise of options granted to him under the Pre-IPO Share Incentive Plan and the Post-IPO Share Option Scheme, subject to the vesting conditions; and (ii) the 607,000 Shares underlying the Proposed RSU Grant to Mr. Luo under the Post-IPO Share Award Scheme, subject to the vesting conditions.
Includes Dr. Axel Bouchon’s entitlement to 84,000 Shares underlying RSUs granted to him under the Post-IPO Share Award Scheme, subject to the vesting conditions.
Includes Dr. Martin J Murphy Jr’s entitlement to 42,000 Shares underlying RSUs granted to him under the Post-IPO Share Award Scheme, subject to the vesting conditions.
Includes Ms. Grace Hui Tang’s entitlement to 42,000 Shares underlying RSUs granted to her under the Post-IPO Share Award Scheme, subject to the vesting conditions.
Includes Mr. Yiu Wa Alec Tsui’s entitlement to 42,000 Shares underlying RSUs granted to him under the Post-IPO Share Award Scheme, subject to the vesting conditions.
Includes Mr. Gregg Huber Alton’s entitlement to 42,000 Shares underlying RSUs granted to him under the Post-IPO Share Award Scheme, subject to the vesting conditions.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors and chief executives of the Company had or was deemed to have any interests or short positions in the shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which (i) were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which they were taken or deemed to have under such provisions of the SFO); or (ii) were required pursuant to section 352 of the SFO to be entered in the register referred to therein; or (iii) were required pursuant to the Model Code to be notified to the Company and the Stock Exchange.

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GENERAL INFORMATION

APPENDIX

3. DIRECTORS’ INTERESTS IN ASSETS

As at the Latest Practicable Date, none of the Directors had any interest, direct or indirect, in any assets which have been, since December 31, 2021 (being the date to which the latest published audited consolidated financial statements of the Company were made up), acquired or disposed of by or leased to any member of the Group, or were proposed to be acquired or disposed of by or leased to any member of the Group.

4. DIRECTORS’ INTERESTS IN CONTRACTS

As at Latest Practicable Date, there was no contract or arrangement subsisting in which any Director was materially interested, directly or indirectly, and which was significant in relation to the business of the Group.

5. DIRECTORS’ INTERESTS IN COMPETING BUSINESS

As at the Latest Practicable Date, save as disclosed below, none of the Directors or their respective close associates (as defined in the Listing Rules) was interested in any business which competes or is likely to compete, either directly or indirectly, with the business of the Group, which interest would be required to be disclosed under Rule 8.10 of the Listing Rules as if each of them was a controlling shareholder of the Company.

Mr. Robert Taylor Nelsen (“ Mr. Nelsen ”), a non-executive Director, currently serves as a director of Vir Biotechnology, Inc. (“ Vir ”), a company listed on the NASDAQ stock exchange (stock code: VIR). Vir is a clinical-stage immunology company focused on the development of products to treat and prevent serious infectious diseases. In addition to the research and development activities of HBV, Vir is engaged in research and development activities for drug candidates targeting COVID-19, and hence might directly or indirectly compete with the Company in terms of HBV, COVID-19 or other drug candidates that it may pursue. As of the Latest Practicable Date, Mr. Nelsen may be deemed to be interested in (i) approximately 12.52% of the total number of issued Shares and (ii) approximately 20.8% of Vir’s outstanding shares, through shares held by entities affiliated with ARCH Venture Partners. For further details in relation to Mr. Nelsen’s interests in Vir, please refer to the section headed “Directors and Senior Management” in the Prospectus.

6. DIRECTORS’ SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had entered into, or proposed to enter into, a service contract with the Company or its subsidiaries which will not expire or be determinable by the Company or its subsidiaries within one year without payment of compensation (other than statutory compensation).

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GENERAL INFORMATION

APPENDIX

7. EXPERT’S QUALIFICATION AND CONSENT

The following is the qualification of the expert who has given opinion or advice contained in this circular:

Name Qualification Grand Moore Capital Limited a corporation licensed to conduct Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities under the SFO.

The expert has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter and references to its name in the form and context in which it appears.

As at the Latest Practicable Date, the expert was not interested in any shares in the Company or any member of the Group, nor did it have any right or option (whether legally enforceable or not) to subscribe for or nominate persons to subscribe for any shares in the Company or any member of the Group.

As at the Latest Practicable Date, the expert had not had any interest, direct or indirect, in any assets which have been, since December 31, 2021 (being the date to which the latest published audited consolidated financial statements of the Company were made up), acquired or disposed of by or leased to any member of the Group, or were proposed to be acquired or disposed of by or leased to any member of the Group.

8. NO MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors were not aware of any material adverse change in the financial or trading position of the Group since December 31, 2021, being the date to which the latest published audited consolidated financial statements of the Company were made up.

9. GENERAL

(i) The registered office of the Company is located at PO Box 309, Ugland House, Grand Cayman, KY1 – 1104, Cayman Islands.
(ii) The principal place of business of the Company in Hong Kong is located at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong.
(iii) The joint company secretaries of the Company are Dr. Ankang Li, who is a Chartered Financial Analyst of the CFA Institute, and Ms. Wing Tsz Wendy Ho, who is a fellow of The Chartered Governance Institute and The Hong Kong Chartered Governance Institute.

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GENERAL INFORMATION

APPENDIX

(iv) The Company’s branch share registrar and transfer office in Hong Kong is Tricor Investor Services Limited, whose address is at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong.
(v) The registered office of the Independent Financial Advisor, Grand Moore Capital Limited, is at Unit 1607, 16/F, Silvercord Tower 1, 30 Canton Road, Tsim Sha Tsui, Kowloon, Hong Kong.
(vi) The English text of this circular prevails over the Chinese text.

10. DOCUMENTS ON DISPLAY

Copies of the following documents will be published on the website of the Company (http://www.briibio.com) and on the website of the Stock Exchange at (http://www.hkexnews.hk) for a period of 14 days from the date of this circular:

(i) the Post-IPO Share Award Scheme;
(ii) the letter from the Independent Board Committee, the text of which is set out on pages 25 to 26 of this circular;
(iii) the letter from the Independent Financial Advisor, the text of which is set out on pages 27 to 56 of this circular;
(iv) the written consent of the expert referred to in the paragraph headed “EXPERT’S QUALIFICATION AND CONSENT” in this appendix; and
(v) this circular.

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NOTICE OF EXTRAORDINARY GENERAL MEETING

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Brii Biosciences Limited 騰盛博藥生物科技有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 2137)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT an extraordinary general meeting (the “ EGM ”) of Brii Biosciences Limited (the “ Company ”) will be held physically at One City Center, 110 Corcoran Street, Office 05-130, Durham, North Carolina, the United States of America and virtually via the Tricor e-Meeting System on Wednesday, June 22, 2022 at 9:00 a.m. (Hong Kong time) (or immediately after the conclusion of the annual general meeting of the Company to be held on the same day) for the purpose of considering and, if thought fit, passing the following resolutions (with or without amendments) as ordinary resolutions of the Company.

Unless the context otherwise requires, capitalised terms used in this notice shall have the same meanings as those defined in the circular of the Company dated March 29, 2022 (the “ Circular ”).

ORDINARY RESOLUTIONS

“ THAT
(a) the conditional grant of 911,000 RSUs to Dr. Hong in accordance with the terms of the Post-IPO Share Award Scheme, subject to all applicable laws, rules, regulations and the relevant award agreement (the “ Proposed RSU Grant to Dr. Hong ”) be hereby approved, confirmed and ratified; and
(b) any one or more of the directors of the Company, with the exception of Dr. Hong, be authorized to exercise the powers of the Company to allot, issue and deal with the Shares pursuant to the Proposed RSU Grant to Dr. Hong under the specific mandate granted to the Directors by the shareholders of the Company at the extraordinary general meeting of the Company held on June 22, 2021, such that the new Shares to be allotted and issued by the Company under the Proposed RSU Grant to Dr. Hong will rank pari passu in all respects among themselves and with all the Shares of the Company in issue from time to time, and be and is hereby authorized to, on behalf of the Company, take all such actions, do all such things, and sign, seal, execute and deliver all such documents, which in his opinion may be necessary, appropriate, desirable or expedient for the purpose of, in connection with, giving effect to and/or to implement the transactions contemplated in 1(a) above.”

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NOTICE OF EXTRAORDINARY GENERAL MEETING

2. “ THAT

(a) the conditional grant of 607,000 RSUs to Mr. Luo in accordance with the terms of the Post-IPO Share Award Scheme, subject to all applicable laws, rules, regulations and the relevant award agreement (the “ Proposed RSU Grant to Mr. Luo ”) be hereby approved, confirmed and ratified; and
(b) any one or more of the directors of the Company, with the exception of Mr. Luo, be authorized to exercise the powers of the Company to allot, issue and deal with the Shares pursuant to the Proposed RSU Grant to Mr. Luo under the specific mandate granted to the Directors by the shareholders of the Company at the extraordinary general meeting of the Company held on June 22, 2021, such that the new Shares to be allotted and issued by the Company under the Proposed RSU Grant to Mr. Luo will rank pari passu in all respects among themselves and with all the Shares of the Company in issue from time to time, and be and is hereby authorized to, on behalf of the Company, take all such actions, do all such things, and sign, seal, execute and deliver all such documents, which in his opinion may be necessary, appropriate, desirable or expedient for the purpose of, in connection with, giving effect to and/or to implement the transactions contemplated in 2(a) above.”

By order of the Board Brii Biosciences Limited Dr. Zhi Hong Chairman

Hong Kong, March 29, 2022

Registered office:

PO Box 309, Ugland House Grand Cayman, KY1 – 1104 Cayman Islands

Principal place of business in Hong Kong: Level 54, Hopewell Centre 183 Queen’s Road East Hong Kong

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NOTICE OF EXTRAORDINARY GENERAL MEETING

Notes :

(1) The register of members of the Company will be closed from Friday, June 17, 2022 to Wednesday, June 22, 2022, both dates inclusive, for the purpose of ascertaining the entitlement of the shareholders of the Company to attend and vote at the EGM. In order to be eligible to attend and vote at the EGM, all transfer documents accompanied by the relevant share certificates must be lodged for registration with the Company’s branch share registrar and transfer office in Hong Kong, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong, not later than 4:30 p.m. on Thursday, June 16, 2022.
(2) A shareholder of the Company entitled to attend and vote at the EGM convened by this notice is entitled to appoint one or more proxy to attend and vote in his stead. A proxy need not be a shareholder of the Company. If more than one proxy is so appointed, the appointment shall specify the number and class of shares of the Company in respect of which each such proxy is so appointed.
(3) A form of proxy for use at the EGM is enclosed. Whether or not you are able to attend the EGM, you are urged to complete and return the form of proxy in accordance with the instructions printed thereon as soon as possible. Completion and return of the form of proxy will not preclude you from attending and voting in person or via the Tricor e-Meeting System at the EGM or any adjournment thereof (as the case may be) should you so wish and in such event, the form of proxy shall be deemed to be revoked.
(4) In order to be valid, the form of proxy must be deposited together with a power of attorney or other authority, if any, under which it is signed or a notarially certified copy of that power of attorney or authority, at the Company’s branch share registrar and transfer office in Hong Kong, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible and in any event not less than 48 hours before the time for the holding of the EGM (i.e. not later than Monday, June 20, 2022 at 9:00 a.m. (Hong Kong time)) or adjournment thereof (as the case may be).
(5) In the case of joint registered holders of any shares of the Company, one of such joint registered holders may vote at the EGM, either in person or by proxy (whether physically or via Tricor e-Meeting System), in respect of such shares as if he/she/it were solely entitled thereto; but if more than one of such joint registered holders are present at the EGM, the vote of the senior who tenders a vote, whether in person or by proxy (whether physically or via Tricor e-Meeting System), shall be accepted to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand in the register of members of the Company in respect of the joint holding.
(6) All resolutions at the EGM will be taken by poll (except where the chairman decides to allow a resolution relating to a procedural or administrative matter to be voted on by a show of hands) pursuant to the Listing Rules. The results of the poll will be published on the website of the Company at http://www.briibio.com and on the website of the Stock Exchange at http://www.hkexnews.hk in accordance with the Listing Rules.
(7) In light of the ongoing COVID-19 pandemic, mass gatherings would potentially impose a significant risk in terms of the spread of the virus. The EGM will be held physically at One City Center, 110 Corcoran Street, Office 05-130, Durham, North Carolina, the United States of America and virtually via the Tricor e-Meeting System. Although Shareholders are welcome to attend the EGM in person if they so wish, for the safety of the shareholders, staff and stakeholders of the Company, the Company encourages shareholders of the Company, instead of attending the EGM in person, to appoint the chairman of the EGM as their proxy to vote on the relevant resolutions at the EGM by completing and returning the accompanying form of proxy in accordance with the instructions printed thereon, or attend virtually via the Tricor e-Meeting System.

To better protect the safety and health of the shareholders of the Company and other persons attending the EGM in person, the Company will implement certain precautionary measures at the venue of the EGM, details of which are set out in the section headed “SPECIAL ARRANGEMENTS FOR THE EGM” of the Circular. To the extent permitted under law, the Company reserves the right to deny entry into the EGM venue or require any person to leave the EGM venue in order to ensure the safety of other attendees at the EGM.

All registered shareholders of the Company will be able to join the EGM or any adjourned meeting thereof either physically in the United States of America or via the Tricor e-Meeting System. The Tricor e-Meeting System can be accessed from any location with access to the internet via smartphone, tablet device or computer. Non-registered shareholders of the Company whose Shares are held in the Central Clearing and Settlement System through banks, brokers, custodians or Hong Kong Securities Clearing Company Limited may also be able to attend the EGM, vote and submit questions online. In this regard, they should consult directly with their banks, brokers or custodians (as the case may be) for the necessary arrangements.

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NOTICE OF EXTRAORDINARY GENERAL MEETING

(8) Shareholders who would like to attend the EGM electronically via the Tricor e-Meeting System can follow the instructions by using the designated URL and the login details provided on the Notification Letter (dispatched together with the Circular). Shareholders of the Company MUST NOT forward the URL and your login details to other persons who are not the shareholders of the Company and who are not entitled to attend the EGM.
(9) Shareholders who wish to attend the EGM and exercise their voting rights can be achieved in one of the following ways:
(1) attend the EGM physically in the Unites States of America; or
(2) attend the EGM electronically via the Tricor e-Meeting System which enables live streaming and interactive platform for submitting questions and voting online; or
(3) appoint the chairman of the EGM or other persons as your proxy by form of proxy or providing their email address for receiving the designated log-in username and password to attend and vote on your behalf physically at the EGM or via the Tricor e-Meeting System.

Your proxy’s authority and instruction will be revoked if you attend and vote at the EGM in person or via the Tricor e-Meeting System.

(10) Shareholders can submit their questions to the board of directors of the Company in advance of the EGM by sending email to [email protected] before 9:00 a.m. (Hong Kong time) on Monday, June 20, 2022 (being not less than 48 hours before the time appointed for the EGM). Shareholders attending the EGM using the Tricor e-Meeting System can also submit their questions online during the EGM. The Company will endeavour to answer as many relevant questions as possible at the EGM and, for questions which have not been dealt with at the EGM, the Company will respond to such questions as soon as practicable after the EGM.
(11) Subject to the development of COVID-19, the Company may implement further changes to the EGM arrangements at a short notice. Shareholders are advised to check the websites of the Stock Exchange (http://www.hkexnews.hk) and the Company (http://www.briibio.com) for the latest announcement and information relating to the EGM.

As at the date of this notice, the Board comprises Dr. Zhi Hong and Mr. Yongqing Luo as executive Directors; Mr. Robert Taylor Nelsen and Dr. Axel Bouchon as non-executive Directors; and Dr. Martin J Murphy Jr, Ms. Grace Hui Tang, Mr. Yiu Wa Alec Tsui and Mr. Gregg Huber Alton as independent non-executive Directors.

– 65 –

AI assistant

Brii Biosciences Limited — Proxy Solicitation & Information Statement 2022

50394_rns_2022-03-28_1b71ed2b-3cb9-4f40-9d08-4560e7f8f8f0.pdf

Brii Biosciences Limited 騰盛博藥生物科技有限公司

CONNECTED TRANSACTIONS IN RELATION TO PROPOSED GRANTS OF RESTRICTED SHARE UNITS TO EXECUTIVE DIRECTORS AND NOTICE OF EXTRAORDINARY GENERAL MEETING

Independent Financial Advisor to the Independent Board Committee and the Independent Shareholders

HYBRID MEETING

ATTENDING THE EGM PHYSICALLY

ATTENDING THE EGM VIA THE TRICOR E-MEETING SYSTEM

HOW TO ATTEND AND VOTE

DEFINITIONS

Brii Biosciences Limited 騰盛博藥生物科技有限公司

CONNECTED TRANSACTIONS IN RELATION TO PROPOSED GRANTS OF RESTRICTED SHARE UNITS TO EXECUTIVE DIRECTORS AND NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

THE PROPOSED RSU GRANTS TO EDS

LETTER FROM THE BOARD

REASONS FOR AND BENEFITS OF THE PROPOSED RSU GRANTS TO EDS

Purpose of the Post-IPO Share Award Scheme and the Proposed RSU Grants to EDs

LETTER FROM THE BOARD

Rationale of the Proposed RSU Grants to EDs

Proposed RSU Grant to Dr. Hong

LETTER FROM THE BOARD

Proposed RSU Grant to Mr. Luo

LETTER FROM THE BOARD

Retention and recognition of Dr. Hong and Mr. Luo

LETTER FROM THE BOARD

EFFECTS ON THE SHAREHOLDING STRUCTURE OF THE COMPANY

FUND RAISING ACTIVITIES OF THE COMPANY DURING THE PAST 12 MONTHS

LISTING RULES IMPLICATIONS

INFORMATION ON THE COMPANY

EGM

LETTER FROM THE BOARD

VOTING BY POLL

SUBMISSION OF QUESTIONS PRIOR TO AND AT THE EGM

CLOSURE OF REGISTER OF MEMBERS

RECOMMENDATION

ADDITIONAL INFORMATION

Brii Biosciences Limited 騰盛博藥生物科技有限公司

CONNECTED TRANSACTIONS IN RELATION TO PROPOSED GRANTS OF RESTRICTED SHARE UNITS TO EXECUTIVE DIRECTORS AND NOTICE OF EXTRAORDINARY GENERAL MEETING

CONNECTED TRANSACTIONS IN RELATION TO PROPOSED GRANTS OF RESTRICTED SHARE UNITS TO EXECUTIVE DIRECTORS

INTRODUCTION

OUR INDEPENDENCE

BASIS OF ADVICE

PRINCIPAL FACTORS CONSIDERED

1 Background information on the parties

1.1 Principal activities of the Group

1.2 Financial information on the Group

1.3 Information on the connected grantees

Name

Relationship with the Group

1.3.1 Dr. Hong

1.3.2 Mr. Luo

2 The Proposed RSU Grants to EDs

2.1 Reasons for and benefits of the Proposed RSU Grants to EDs

2.1.2 Rationale of the Proposed RSU Grant to Dr. Hong

2.1.3 Rationale of the Proposed RSU Grant to Mr. Luo

2.1.4 The Board’s further views

2.1.5 Our view on the reasons and rationale for the Proposed RSU Grants to EDs

2.2 Terms of the Proposed RSU Grants to EDs

2.2.1 Comparable analysis on the Proposed RSU Grants to EDs

2.3 Comparable analysis on the overall remuneration package of the executive Directors

2.4 Our conclusion on the Proposed RSU Grants to EDs

CONCLUSION

Yours faithfully, For and on behalf of Grand Moore Capital Limited

Kevin So

1. RESPONSIBILITY STATEMENT

2. DIRECTORS’ AND CHIEF EXECUTIVE’S INTERESTS AND SHORT POSITIONS IN SHARES, UNDERLYING SHARES AND DEBENTURES

3. DIRECTORS’ INTERESTS IN ASSETS

4. DIRECTORS’ INTERESTS IN CONTRACTS

5. DIRECTORS’ INTERESTS IN COMPETING BUSINESS

6. DIRECTORS’ SERVICE CONTRACTS

7. EXPERT’S QUALIFICATION AND CONSENT

8. NO MATERIAL ADVERSE CHANGE

9. GENERAL

10. DOCUMENTS ON DISPLAY

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NOTICE OF EXTRAORDINARY GENERAL MEETING

ORDINARY RESOLUTIONS

2. “ THAT

NOTICE OF EXTRAORDINARY GENERAL MEETING

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