Luye Pharma Group Limited — Capital/Financing Update 2021

Mar 16, 2021

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LUYE PHARMA GROUP LTD.

綠 葉 製 藥 集 團 有 限 公 司

(Incorporated in Bermuda with limited liability) (Stock Code: 02186)

VOLUNTARY ANNOUNCEMENT

LUYE PHARMA GRANTED EXCLUSIVE RIGHTS TO COMMERCIALIZE THE NEW DRUG RIVASTIGMINE MD IN FOUR EUROPEAN COUNTRIES TO ITALFARMACO

The board of directors (the ‘‘Board’’) of Luye Pharma Group Ltd. (the ‘‘Company’’, together with its subsidiaries, the ‘‘Group’’) is pleased to announce that Luye Pharma Switzerland AG (‘‘Luye Switzerland’’), a wholly-owned subsidiary of the Group, and Italfarmaco Group (‘‘Italfarmaco’’) have entered into an agreement (the ‘‘Agreement’’) under which Italfarmaco was granted exclusive rights to commercialize the new drug, Rivastigmine Multi-Day Transdermal Patch (‘‘Rivastigmine MD’’ or ‘‘LY30410’’), in four European countries.

Under the terms of the Agreement, Italfarmaco was granted the exclusive rights to commercialize Rivastigmine MD in Germany, Italy, Portugal and Greece (the ‘‘Region’’). Italfarmaco will also have a preferential right to market Rivastigmine MD in Chile and Vietnam. Italfarmaco is required to make an upfront payment to the Group upon the signing of the Agreement as well as additional payments when certain sales milestones are achieved. The Group is also eligible to receive royalties from Italfarmaco.

Alzheimer’s disease remains a major global health issue, and the number of patients is constantly growing. According to the ‘‘World Alzheimer Report 2018’’, there is a new case of dementia every three seconds around the world. 50 million people worldwide were living with dementia in 2018, and this number is expected to reach 82 million by 2030. While the development of new drugs in this therapeutic area is still a challenge, Rivastigmine is a first-line drug in the treatment of dementia associated with Alzheimer’s disease and is currently marketed worldwide.

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The Board believes that, Italfarmaco, as a well-known pharmaceutical company with extensive central nervous system (CNS) experience and strong business operation system, will expand the accessibility of Rivastigmine MD to meet the unmet needs for patients in the Region.

ABOUT RIVASTIGMINE MD

Rivastigmine MD is a twice-weekly innovative patch formulation of Rivastigmine for the treatment of mild to moderate dementia associated with Alzheimer’s disease. The product was developed by the Group on its proprietary transdermal patch platform and is one of the Company’s core products in the central nervous system therapeutic field.

Rivastigmine is in a class of medicines called cholinesterase inhibitors. These medicines can improve cognitive functions, such as memory and thinking, by increasing the amount of a certain natural substance in the brain and amplifying the communication channels between nerve cells, which are less active in individuals with mild to moderate Alzheimer’s disease. The drug is currently available in the form of tablets and patches.

Rivastigmine MD requires lower frequency of application than the Rivastigmine once-daily patches generally available in the market, enabling it to improve patients’ medication adherence. Due to its transdermal route of administration, Rivastigmine MD is convenient for patients who have difficulty in swallowing, and it might have the potential to lower the incidence of gastrointestinal adverse reactions such as nausea and vomiting compared with the oral form. The Group has filed, and been issued a portfolio of international patents protecting Rivastigmine MD.

It is expected that Rivastigmine MD will be registered in major global markets, including Europe, Japan and China. In May 2020, the Marketing Authorization Application of Rivastigmine MD in countries within the European Union was accepted for review by competent authorities of the European Union. In September 2020, the product was approved by the Centre for Drug Evaluation of China’s National Medical Products Administration to initiate clinical trials in the country. In February 2021, the exclusive development and commercialization rights of Rivastigmine MD in Japan were granted to Towa Pharmaceutical Co., Ltd. (‘‘Towa’’). Rivastigmine MD is soon to start phase III clinical trials in Japan. The Group also plans to register this product in the U.S. and other countries.

In addition, the Rivastigmine once-daily transdermal patch developed by the Group, which has a proven track record of product R&D and sales, has been marketed in the U.S., European countries and China, as well as other countries in Asia.

ABOUT ITALFARMACO

Italfarmaco is a specialty pharmaceutical company engaged in the discovery, development, manufacturing and marketing of branded prescription and nonprescription products in more than 60 countries on 5 continents. Italfarmaco’s research and development expertise is well demonstrated through its HDAC inhibitor development programs, addressing new therapeutic treatments of specialty and rare diseases.

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Through both marketed drugs and compounds in development, Italfarmaco is dedicated to serving patients whose needs remain largely unmet. Italfarmaco employs over 3000 people. Italfarmaco’s products mainly address women’s health, the central nervous system, cardiovascular, immuno-oncology, and musculoskeletal conditions.

Italfarmaco is currently active in neurology-focused indications, especially with the treatment of Amyotrophic Lateral Sclerosis (ALS) patients, which originates from Italfarmaco’s own research pipeline.

By Order of the Board LUYE PHARMA GROUP LTD. Liu Dian Bo Chairman

Hong Kong, 16th March 2021

As at the date of this announcement, the executive directors of the Company are Mr. LIU Dian Bo, Mr. YANG Rong Bing, Mr. YUAN Hui Xian and Ms. ZHU Yuan Yuan; the non-executive directors of the Company are Mr. SONG Rui Lin and Mr. SUN Xin; and the independent non-executive directors of the Company are Mr. ZHANG Hua Qiao, Professor LO Yuk Lam, Mr. LEUNG Man Kit and Mr. CHOY Sze Chung Jojo.

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