Mabpharm Limited — Interim / Quarterly Report 2020

Aug 26, 2020

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, 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 announcement.

This announcement contains forward-looking statements that involve risks and uncertainties. All statements other than statements of historical fact are forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors, some of which are beyond the Company’s control, that may cause the actual results, performance or achievements to be materially different from those expressed or implied by the forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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Mabpharm Limited 邁博葯業有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 2181)

INTERIM RESULTS ANNOUNCEMENT FOR THE SIX MONTHS ENDED JUNE 30, 2020

The Board of Mabpharm Limited is pleased to announce the unaudited consolidated financial results of the Company and its subsidiaries for the six months ended June 30, 2020, together with the comparative figures for the six months ended June 30, 2019.

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FINANCIAL HIGHLIGHTS

	For the six months ended June 30,	For the six months ended June 30,	For the six months ended June 30,
	2020	2019	Change
	RMB’000	RMB’000	(%)
	(unaudited)	(unaudited)	(unaudited)
Other income	20,939	3,726	462.0
Other gains and losses	19,066	(1,322)	1,542.2
Research and development expenses	(60,828)	(58,703)	3.6
Administrative expenses	(30,741)	(27,882)	10.3
Finance costs	(2,624)	(3,973)	(34.0)
Listing expenses	–	(27,527)	(100.0)
Loss before tax	(54,188)	(115,681)	(53.2)
Income tax expense	–	–	–
Loss and total comprehensive expense
for the period	(54,188)	(115,681)	(53.2)
Attributable to:
Owners of the Company	(54,188)	(115,681)	(53.2)
Loss per share attributable to ordinary equity
holders of the Company
– Basic	RMB(0.01)	RMB(0.03)
– Diluted	RMB(0.01)	RMB(0.03)

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	At June 30,	At December 31,
	2020	2019	Change
	RMB’000	RMB’000	(%)
	(unaudited)	(audited)	(unaudited)
Non-current assets	540,715	441,338	22.5
Current assets	776,561	955,139	(18.7)
Current liabilities	273,385	270,334	1.1
Net current assets	503,176	684,805	(26.5)
Non-current liabilities	37,496	72,432	(48.2)
Net assets	1,006,395	1,053,711	(4.5)

CORPORATE PROFILE

We are a leading biopharmaceutical company in China, focusing on the research, development and production of new drugs and biosimilar for cancers and autoimmune diseases. We strive to bring to market high quality and affordable innovative biologics through our efficient research and development (“ R&D ”) system and low-cost pharmaceutical production capability, and develop differentiated therapeutic products by fully utilizing our extensive R&D experience. Our pipeline of drug candidates currently consists of 11 monoclonal antibody drugs and one strong antibody drug, three of which are our Core Products:

• CMAB008 (infliximab) : completed clinical trial and is in the process of new drug marketing application. We have completed the “Phase I comparative study of randomized, double-blind, parallel-controlled, single-dose pharmacokinetics, safety and immunogenicity of CMAB008 and infliximab for injection in healthy male volunteers”, which is expected to be directly admitted to the markets for treating (i) rheumatoid arthritis, (ii) adult and pediatric patients with Crohn’s disease, (iii) patients with fistulizing Crohn’s disease, (iv) ankylosing spondylitis, (v) psoriasis and (vi) adult patients with ulcerative colitis;

• CMAB007 (omalizumab) : currently under phase III clinical trials;

• CMAB009 (cetuximab) : currently under phase III clinical trials (together, the “ Core Products ”).

Among our other drug candidates, CMAB809 (trastuzumab) completed phase I clinical trials and is launching phase III clinical trials; and CMAB819 (nivolumab) has started its clinical trials. The latest research results show that CMAB816 developed by us has a sound prospect in the treatment and prevention of tumors, especially lung cancer, as such we will give priority to the development of CMAB816. The new “strong antibody” drug CMAB017 for treating cancer developed by us has launched pre-clinical animal experiments.

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We have strong in-house capabilities in pharmaceutical research, pre-clinical and clinical development, and manufacturing, and are building our sales and marketing team to prepare for the commercialization of our product candidates. We focus on the R&D of monoclonal antibodies. Our core R&D team members have more than 17 years of experience in this area, and have led three major projects under the “863” Program, among other national-level scientific research projects. In addition, one of our core R&D team members is also a member of the 11th Session of the Chinese Pharmacopoeia Commission. Our production site in Taizhou, currently equipped with one 3×1,500L monoclonal antibody bioreactor system, three 3×1,500L monoclonal antibody bioreactor systems to be put into use in the fourth quarter of 2020 and 18,000L and 7,500L production lines under construction expected to commence production in 2022, is one of the largest antibody drug production facilities in China in terms of production capacity.

We believe that we are well positioned to seize China’s substantial market opportunities, in particular those resulting from China’s recent healthcare regulatory reforms, including new medical insurance measures. The primary focus of our R&D – monoclonal antibody drugs targeting cancers and autoimmune diseases – has substantial untapped clinical demand in China.

With the current pandemic caused by 2019 Novel Coronavirus (“ COVID-19 ”), we have newly developed a recombinant bispecific fusion protein, CMAB020, which is expected to be used for prevention and treatment of SARS-CoV/-2 (SARS-CoV and SARS-CoV-2) infections and SARS/COVID-19 diseases (pneumonia caused by SARS-CoV/-2). We have submitted a patent application for the invention of CMAB020 to China National Intellectual Property Administration on March 23, 2020 (Application No.: 202010208906.8/PCT No.: PCT/CN2020/080859). The drug consists of two functional arms, one of which has an antibody that targets the spike protein of coronavirus and the other consists of a protein which can preserve enzyme activity to reduce vasoconstriction and increase blood flow to the infected lung tissue. It is expected that the drug can effectively treat pneumonia caused by SARS-CoV and SARS-CoV-2, and reduce lung inflammation and cytokine storms. At present, the Company has completed the lab-scale preparation and in vitro function evaluation of CMAB020, and is implementing pharmacodynamic and pharmacological research and developing pilot processes.

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Competitive marketed drugs	Xolair®	Erbitux®	Remicade®, Humira®, Enbrel®, Simponi®, Yisaipu® and Anbainuo®	Remicade®, Humira®, Enbrel®, Simponi®, Yisaipu® and Anbainuo®	Opdivo®, Keytruda®, Tyvyt®, JS001	Herceptin®
Commercial rights	PRC and overseas (excluding Japan, North America and Europe)	PRC and overseas (excluding Japan, North America and Europe)	PRC and overseas (excluding Japan, North America and Europe)		Global	Global
Anticipated completion of regulatory review	Quarter 1, 2022	Quarter 1, 2023	Quarter 1, 2021		Quarter 2, 2026	Quarter 4, 2023
Expected time to reach the next regulatory milestone	Pending new drug application submission (Quarter 2, 2021)	Pending new drug application submission (Quarter 3, 2022)	New drug application submitted in	Quarter 4, 2019	Phase III (Quarter 3, 2021)	Phase III (Quarter 4, 2020)
Phase III
Phase II or Phase II/III
Phase I
Pre-clinical
Classification	New Drug/ Core Product	New Drug/Core Product	New Drug/Core Product		New Drug	Biosimilar
Drug candidate code	CMAB007 (INN name: Omalizumab)	CMAB009 (INN name: Cetuximab)	CMAB008 (INN name: Infliximab)		CMAB819 ((INN name: Nivolumab)	CMAB809 (INN name: Trastuzumab)
Indication	Asthma	Colorectal Cancer	Rheumatoid Arthritis		Non-small cell lung cancer, hepatocellular carcinoma and squamous cell carcinoma of the head and neck	Breast Cancer/Gastric Cancer
Target	IgE	EGFR	TNFα		PD1	HER2
Field	Respiratory Disease	Cancer	Autoimmune Disease		Cancer	Cancer

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Competitive marketed drugs	Perjeta®	Synagis®	ILaris®	Vectibix®	Cosentyx®	Nucala®	New drug candidate developed after December 31, 2019		Cautionary Statement required by Rule 18A.08(3) of the Listing Rules: We may not be able to ultimately develop and market our drug candidates (including Core Products) successfully.
Commercial rights	Global	Global	Global	Global	Global	Global		PRC and overseas (excluding North America and Europe)
Anticipated completion of regulatory review	Quarter 3, 2024	Quarter 4, 2024	Quarter 3, 2024	Quarter 4, 2026	Quarter 4, 2024	Quarter 4, 2026		Quarter 3, 2022
Expected time to reach the next regulatory milestone	Phase III (Quarter 4, 2021)	Phase III (Quarter 1, 2022)	Phase III (Quarter 1, 2022)	Phase III (Quarter 4, 2023)	Phase III (Quarter 2, 2023)	Phase III (Quarter 1, 2024)		Phase III (Quarter 3, 2021)
Phase III
Phase II or Phase II/III
Phase I
Pre-clinical
Classification	Biosimilar	Biosimilar	Biosimilar	Innovative drug	Biosimilar	Biosimilar		Innovative drug
Drug candidate code	CMAB810 (INN name: Pertuzumab)	CMAB813 (INN name: Palivizumab)	CMAB816 (INN name: canakinumab)	CMAB017	CMAB015 (INN name: Secukinumab)	CMAB018 (INN name: Mepolizumab)		CMAB020
Indication	Breast Cancer	Prevention of severe lower respiratory tract disease caused by RSV	Periodic Fever Syndromes/ Systemic Juvenile Idiopathic Arthritis/Lung cancer	KRAS wild-type colorectal cancer/squamous cell carcinoma of the head and neck/skin squamous cell carcinoma	Plaque psoriasis, psoriatic arthritis and ankylosing spondylitis	Asthma and eosinophilic granulomatous polyangitis		Pneumonia infected by novel coronavirus
Target	HER2	RSV	IL-1β	EGFR	IL-17A	IL-5		SARS- CoV SARS- CoV-2
Field	Cancer	Respiratory Disease	Cancer/Autoimmune Disease	Cancer	Autoimmune Disease	Allergy, Inflammatory Disease		Infection

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Core Product Candidates

CMAB007 (omalizumab)

CMAB007 (omalizumab), a recombinant humanized anti-IgE monoclonal antibody, is our new drug candidate for treatment of asthma patients who remain inadequately controlled despite med/high dose of ICS plus LABA. As of June 30, 2020, CMAB007 was the only mAb asthma therapy developed in China by a local Chinese company that had reached phase III clinical trial, and we believe that, once approved by the National Medical Products Administration (the “ NMPA ”), it will be the first mAb asthma therapy developed by a local Chinese company marketed in China. CMAB007 combines with free IgE to form an anti-IgE complex that inhibits the high affinity IgE receptor and thereby prevents the allergic response. The safety and efficacy of CMAB007 have been confirmed by the results of two completed clinical trials of a total of 665 subjects, which were the largest clinical trials of mAb treating asthma in China. Based on our clinical trial results, CMAB007 can improve asthma patients’ conditions with lower-dose inhaled corticosteroids and reduce the incidence of acute asthma attacks.

During the Reporting Period, CMAB007 was under phase III clinical trials for allergic asthma. As of June 30, 2020, we had completed case recruitment for the clinic trials. The outbreak of pneumonia caused by SARS-CoV-2, being a respiratory disease, and the recent rebound of pandemic in Beijing and northeastern region of China had certain impact on our research and development. Based on the new regulations and technical guidelines introduced by the NMPA on new biological drugs, we are initiating a head-to-head phase I comparative study versus the currently marketed omalizumab products to confirm the similar pharmacokinetic profile and immunogenicity of CMAB007. It is expected that CMAB007 will expand its indications to chronic idiopathic urticaria and seasonal allergic rhintis in the future. We expect to file the drug marketing application with the NMPA in the second quarter of 2021 upon completion of clinical observation and data analysis of all cases. Currently, we expect that CMAB007 may be approved by the NMPA for marketing in the first quarter of 2022.

CMAB009 (cetuximab)

CMAB009 (cetuximab), a recombinant anti-EGFR chimeric monoclonal antibody, is our new drug candidate based on cetuximab for first-line treatment of metastatic colorectal cancer (“ mCRC ”) in combination with FOLFIRI. CMAB009 is the first NMPA approved chimeric anti-EGFR antibody for clinical trial developed in China by a local Chinese company. CMAB009 uses the Chinese hamster ovary cell (“ CHO ”) expression system, which is different from the mouse myeloma cell SP2/0 expression system used in marketed cetuximab product. The safety and efficacy of CMAB009 have been confirmed from the results of two completed clinical trials of a total of 530 subjects, which were the largest clinical trials of anti-EGFR mAb developed in China by a local Chinese company. Based on our clinical trial results compared to published clinical trial results for the currently marketed cetuximab products, CMAB009 significantly reduces immunogenicity and decreases the incidence of adverse reactions, such as severe hypersensitivity. We believe that CMAB009 is safer than, and as effective as, the currently marketed cetuximab drugs for treatment of mCRC.

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During the Reporting Period, CMAB009 was under phase III clinical trials for colorectal cancer. The outbreak of SARS-CoV-2, being a respiratory disease, and the recent rebound of pandemic in Beijing and northeastern region of China had certain impact on our research and development. We expect to file the drug marketing application with the NMPA in the third quarter of 2022 upon completion of clinical observation and data analysis of all cases. We are also preparing for clinical trials of other indications of CMAB009. Currently, we expect that CMAB009 may be approved by the NMPA for marketing in the first quarter of 2023.

CMAB008 (infliximab)

CMAB008 (infliximab), a recombinant anti-TNF-alpha chimeric monoclonal antibody, is our new drug candidate based on infliximab for moderate to severe active rheumatoid arthritis and is potentially one of the best in class of chimeric anti-TNF-alpha antibody in China. CMAB008 was the first NMPA approved chimeric anti-TNF-alpha antibody for clinical trial developed in China by a local Chinese company. CMAB008 uses the CHO expression system which reduces immunogenicity, according to our clinical results compared to published results of the currently marketed infliximab products. The safety and efficacy of CMAB008 have been confirmed by the results of three completed clinical trials of a total of 588 subjects, which were the largest clinical trials of infliximab in China. Based on our clinical results compared to published clinical results of currently marketed infliximab products, we believe that CMAB008 is safer than, and as effective as, the marketed infliximab products for treatment of moderate to severe active rheumatoid arthritis as of June 30, 2020. The completed tests also show that CMAB008 and marketed infliximab products have similar safety and effectiveness.

In 2019, CMAB008 completed the clinical trial for the treatment of rheumatoid arthritis and an application was made to the NMPA on December 30, 2019 for marketing the drug. We have completed the headto-head study versus the currently marketed infliximab product and confirmed similar pharmacokinetic profile and immunogenicity of CMAB008 (“ phase I comparative study CTR20200314 of CMAB008 and Infliximab for injection in healthy male volunteers featuring randomized, double-blind, parallel control, single-dose pharmacokinetics, safety and immunogenicity ”). We expect that CMAB008 will be granted admission to target six indications, (including (i) rheumatoid arthritis, (ii) adult and pediatric patients with Crohn’s disease, (iii) patients with fistulizing Crohn’s disease, (iv) ankylosing spondylitis, (v) psoriasis and (vi) adult patients with ulcerative colitis) and be included in the medical insurance drug list. Currently, we expect that CMAB008 may be approved by the NMPA for marketing in the first quarter of 2021.

Other Product Candidates

CMAB819 (nivolumab) is our new drug candidate pending phase I clinical trial. CMAB819 was approved by the NMPA for clinical trial in September 2017. As of June 30, 2020, we have completed the preparation of clinical samples and are initiating phase I clinical trial. We expect that CMAB819 may be approved by the NMPA for marketing in the second quarter of 2026. CMAB819 is indicated for the treatment of metastatic non-small cell lung cancer, hepatocellular carcinoma and head and neck squamous cell carcinomas.

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CMAB809 (trastuzumab) is our biosimilar drug candidate which has completed phase I clinical trial and is kicking off phase III clinical trial. CMAB809 was approved by the NMPA for clinical trial in April 2017. As of June 30, 2020, we have completed the phase I clinical trial for CMAB809. As the phase I results confirmed that its pharmacokinetic characteristics are similar to those of the reference drug (Herceptin), we are launching the phase III clinical trial directly without the need to go through phase II clinical trial. We expect that CMAB809 may be approved by the NMPA for marketing in the fourth quarter of 2023. CMAB809 is indicated for the (adjuvant) treatment of HER2 over-expressing breast cancer and metastatic gastric cancer.

CMAB810 (pertuzumab) is our pre-clinical trial biosimilar drug candidate. The related screening processes, the establishment of a cell bank, and the pilot process for CMAB810 have been completed. We are carrying out pre-clinical animal experiments for CMAB810 and expect to apply for clinical trials in the fourth quarter of 2020. We expect that CMAB810 may be approved by the NMPA for marketing in the third quarter of 2024. CMAB810 is indicated for the treatment of breast cancer.

CMAB813 (palivizumab) is our pre-clinical trial biosimilar drug candidate. The related screening processes and the establishment of a cell bank have been completed. We expect to launch phase III clinical trials in the first quarter of 2022 and CMAB813 may be approved by the NMPA for marketing in the fourth quarter of 2024. CMAB813 is indicated for the prevention of severe lower respiratory tract disease caused by RSV in pediatric patients.

CMAB816 (canakinumab) is our pre-clinical trial biosimilar drug candidate. The related screening processes and the establishment of cell bank have been completed. The pilot process has been developed. It is expected to apply for clinical trials in the third quarter of 2021. We expect that CMAB816 may be approved by the NMPA for marketing in the third quarter of 2024. CMAB816 is indicated for the treatment of periodic fever syndrome and systemic juvenile idiopathic arthritis. According to the study results of “Effect of interleukin-1βinhibition with canakinumab on incident lung cancer in patients with atherosclerosis: exploratory results from a randomized, double-blind, placebo-controlled trial (CANTOS, NCT01327846)” published in The Lancet in August 2017, the total cancer mortality was significantly lower in the (including all dosages) canakinumab group than those in the placebo group. The 300 mg dose was statistically significant in its effect on total cancer mortality. Furthermore, both the 150 mg and 300 mg groups had significantly less frequent incidents of lung cancer when compared to the placebo group. Additionally, lung cancer mortality was significantly less frequent in the 300 mg group and the canakinumab group compared to the placebo group. Therefore, it is suggested that CMAB816 therapy could be beneficial in reducing incident lung cancer and lung cancer-associated mortality by targeting the interleukin-1βpathway.

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CMAB017 is an innovative candidate in pre-clinical research stage and an innovative strong antibody drug. At present, the screening of high expression engineering cells and the establishment of engineering cell bank have been completed. The research on production process and formulation selection has been concluded. Animal experiments have been completed and results of the completed experimental study on tissue distribution of tumor-bearing mice show that CMAB017 concentrates locally in tumor 24-72 hours after administration. We expect to apply for clinical trial in the third quarter of 2021. We expect that CMAB017 may be approved by the NMPA for marketing in the fourth quarter of 2026. Regarding CMAB017, the design of blocking peptide is expected to significantly reduce adverse reactions of skin, gastrointestinal mucosa, etc. The selection of IgG1 constant region can enhance the effect mediated by Fc fragment of antibody and thus improve the curative effect. Based on the advantages of safety and curative effect, the cost of case medication is far lower than CMAB009, and it is expected that more new strong antibody drugs will be developed leveraging the research and development experience and platform of CMAB017. CMAB017 is indicated for the treatment of KRAS wild-type colorectal cancer, squamous cell carcinoma of the head and neck and skin squamous cell carcinoma.

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CMAB015 is a biosimilar candidate for secukinumab, which is under pre-clinical study. At present, the screening of high expression engineering cells and the establishment of engineering cell bank have been completed. The research on production process is in progress and it is expected that we will apply for clinical trials in the second quarter of 2022. We expect that CMAB015 may be approved by the NMPA for marketing in the fourth quarter of 2024. CMAB015 targets interleukin 17A (IL-17A) for treating plaque psoriasis, psoriatic arthritis and ankylosing spondylitis.

CMAB018 is a biosimilar candidate for mepolizumab, which is under pre-clinical study. At present, the screening of high expression engineering cells and the establishment of engineering cell bank have been completed, the research on production process is in progress and it is expected that we will apply for clinical trials in the fourth quarter of 2022. We expect that CMAB018 may be approved by the NMPA for marketing in the fourth quarter of 2026. CMAB018 targets interleukin 5 (IL-5) for treating severe asthma and eosinophilic granulomatous polyangiitis.

CMAB020 With the current outbreak of COVID-19, we started to develop a recombinant bispecific fusion protein, CMAB020, which is expected to be used for prevention and treatment of SARS-CoV/-2 (SARS-CoV and SARS-CoV-2) infections and SARS/COVID-19 diseases (pneumonia caused by SARS-CoV/-2) in the first quarter of 2020.

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CMAB020 is designed with two functional arms: (1) one of the arms is a fully human monoclonal antibody (“ Ab ”) targeting the spike protein of SARS-CoV, SARS-CoV-2 and some other SARS-like CoV with high affinity; and (2) the other arm is a truncated angiotensin converting enzyme 2 (“ ACE2 ”) protein. The binding epitopes of the Ab and ACE2 to the spike protein are different. The truncated ACE2 preserves the enzyme activity in converting angiotensin II to angiotensin 1-7, resulting in reduced vasoconstriction and increased blood flow to the infected lung tissue. It could potentially confer organ protection and lessen severe acute respiratory distress syndrome caused by COVID-19. In addition, CMAB020 could potentially antagonize the binding of receptor binding domain with CD147 and mitigate lung inflammation and cytokine storm.

While CMAB020’s primary functionality is to interfere with the viral infection cycle, our current research and development result suggests that the fusion protein with an active ACE2 enzyme may have therapeutic potential for late-stage COVID-19 infections. Such dual functionality of the fusion protein may have a synergistic effect and CMAB020 could help generate passive immunity and shield people, in particular healthcare workers, elderlies and patients with compromised immune systems, from coronavirus such as SARS-CoV/-2. Our current research and development result also shows that the bispecific fusion protein could bind with spike protein with much tighter affinity as compared to that of the individual Ab or ACE2 protein.

We have submitted a patent application for the invention of CMAB020 to China National Intellectual Property Administration on March 23, 2020 (Application No.: 202010208906.8/PCT No.: PCT/CN2020/080859). At present, the Company has completed the lab-scale preparation and in vitro function evaluation of CMAB020, and is implementing further pharmacodynamic and pharmacological research and developing the amplification processes.

Research and development of new drug candidates

We have launched a series of follow-up R&D of new antibody drugs for the treatment of autoimmune diseases and/or tumor diseases. We expect to successfully complete the screening of several new antibody drugs, cell banking and even start pre-clinical animal experiments by the end of 2020, thus further expand our product line and provide sufficient drug candidate pipeline expansion for our long-term development.

Research and development system

We have developed efficient R&D capabilities, broad and advanced preparation technologies, and low-cost drug production capabilities that will allow us to offer high quality and affordable innovative biopharmaceutical products to patients in China and other emerging markets. Within our product pipeline, we currently have three Core Products, one of which has completed clinical trial and applied for marketing and the other two are under phase III clinical development. Two other drug products have been approved for clinical trials, one of which has completed phase I clinical trial. We also own a number of patents for our core technologies, including antibody engineering and humanization technologies, efficient expression vector construction technologies, efficient clone screening technologies, as well as a proprietary R&D animal model. Our R&D activities are carried out by three core teams: basic R&D, clinical trials, and industrialized good manufacturing practices (“ GMP ”). The operations, design, and construction needs of these three core teams are supported by an assisting engineering team. Our R&D teams consist of professionals who have extensive industry experience in biologics R&D and have gained valuable work experience at global pharmaceutical companies. Employees in our R&D teams possess strong academic background from leading institutions in immunology, molecular biology, oncology or monoclonal antibody development.

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DRUG CANDIDATES COMMERCIALIZATION AND PRODUCTION FACILITIES CONSTRUCTION

Existing production facilities

Our production site in Taizhou has two buildings of 15,000 square meters each and houses our mAb production facilities. The first building is equipped with production facilities currently in operation, including (i) a 3×1,500L antibody bioreactor system and related purification lines, (ii) an injection vial filling line capable of manufacturing four million units per annum and (iii) a pre-filled syringes production line capable of manufacturing one million units per annum. We have not commenced commercial manufacturing at our production facilities.

Construction of new production facilities

We are constructing new production facilities in the second building of our Taizhou production site and on the parcel of industrial land of approximately 100,746 square meters in Taizhou Hi-tech Zone. Our expansion plan includes the construction of (i) three cGMP-certified workshops, each with a 3×1,500L stainless steel bioreactor system, and corresponding purification lines, which is expected to be put into trial operation by December 2020; (ii) large-scale monoclonal antibody drug substance production lines with scale of each cell reactor reaching 7,500L and 18,000L, respectively, and (iii) two drug product filling lines which have commenced construction and completed design and purchase of key equipment and is expected to be put into trial operation in the middle of 2022.

Marketing and distribution

We are in the process of building our sales and marketing strategy. We expect our marketing strategies to focus on precision marketing through academic promotion and center around increasing knowledge and awareness of the clinical benefits of our pharmaceuticals among medical professionals. We intend to focus on hospitals with potential clinical demand for our products as our primary customer base. We intend to continue to communicate frequently with major hospitals in China to understand the hospitals and their doctors’ academic views on antibody drugs and patient demands. We also intend to continue to meet industry experts regularly to understand industry trends. We will continue to participate in academic conferences, seminars and symposia, which include large-scale national and provincial conferences organized by the Chinese Medical Association or its local chapters, as well as smaller events tailored to specific cities and hospital departments to promote our brand awareness.

Half of our current core sales team members have over a decade of experience in sales and management of antibody drugs, including the first antibody drug produced by a local Chinese company marketed in China. Our sales team has maintained direct relationships with hospitals through its participation in and support of our clinical trials. In anticipation of the launch of our products, we have been expanding our sales and marketing force. In line with our sales and marketing strategy, we will focus on the recruitment of sales and marketing personnel who has notable academic profile in medicine and pharmacy, and who has over three years’ clinical experience in therapeutic areas of cancers and autoimmune diseases. We expect to implement certain procedures to ensure that our academic promotion and general marketing efforts are in compliance with applicable laws and regulations.

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We expect to sell our products to (i) distributors that sell our products to hospitals and (ii) direct-to-patient pharmacies and others. We plan to build our network of distributors when our products are approved by the NMPA for commercialization. We anticipate that our distribution model will be consistent with customary industry practice and serves to ensure efficient coverage of our sales network while controlling our cost of distribution and account receivables. We intend to select our distributors based on their qualifications, reputation, market coverage and sales experience. To distribute our products in the future, a distributor must maintain its business license and other requisite licenses and permits. A distributor must also maintain extensive hospital coverage in the designated region. A distributor must be capable of delivering our products to covered hospitals in a safe and timely manner. We plan to actively monitor the inventory levels of our distributors to increase the efficiency of our distribution network. To date, we have not entered into any distribution agreement with distributors.

Quality assurance

We believe that an effective quality management system for our raw materials, equipment and finished products is critical to ensure the quality of our services and maintain our reputation and success. To ensure that our products and services consistently meet high industry standards and requirements, we have also established a company-level quality assurance department to inspect the quality of our products and services. It is also responsible for the approval, organization and coordination of quality control and quality assurance procedures within each subsidiary. Facilities and equipment are subject to inspection measures such as united registrar systems, factory acceptance testing, site acceptance testing, installation qualification, operator qualification, performance qualification, and regular maintenance throughout their entire life cycles. Our manufacturing business lines are inspected in accordance with the PRC national laboratory quality control standard and the GMP management requirements; our research and development business lines are also inspected in accordance with the GMP management requirements.

FUTURE AND OUTLOOK

Continue to advance the clinical research and commercialization of our drug candidates

Over the short-term, we intend to focus on completing clinical trials and the eventual commercialization of our current pipeline of drug candidates, particularly our Core Products, CMAB007, CMAB009 and CMAB008. To bring our Core Products to market, we aim to reinforce our R&D teams, particularly the clinical medicine team, through the provision of regular professional training and pushing ahead with the clinical trials for CMAB007, CMAB009 and CMAB008. We are also in the process of establishing a sales team consisting of staff with strong academic promotion experience and capabilities. Our goal is to generate stable revenue and profits in the future by creating our own sales team in China and strengthening our commercialization capabilities by further building our sales team.

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Continue to maintain investments in advanced technologies and product development

We believe R&D is the key element to support our future growth and our ability to maintain our competitiveness in a global biopharmaceutical market. We plan to upgrade the development of our integrated technological platforms from molecular design to commercialized production, and focus on the R&D of biologics with huge clinical demand and the potential for sustained and rapid growth in China. In order to capture new opportunities in the biopharmaceutical market, we plan to continue increasing our investment into innovative technologies for the development of drugs with improved curative effects and less toxic side effects in order to maintain our industry leading position. We also expect to invest in talent to expand and enhance our R&D team.

Continue to attract and nurture high quality talents to support our rapid growth

Recruiting and retaining high quality scientific and technological talent as well as other leaders in R&D technology will be key to our success. We plan to leverage our close cooperation with elite universities in China and internationally to recruit and develop outstanding R&D personnel. We also plan to provide systematic and sophisticated training and development programs to our research teams in order to enhance and optimize their scientific and technical abilities to benefit our Company. Part of this strategy involves the creation of an incentive scheme to retain and motivate high-performing team members.

Establish global brand awareness and foster deeper and more extensive cooperative relationship with domestic and overseas renowned pharmaceutical companies

To build our brand internationally and to support our sustainable growth, we plan to in-license products from global pharmaceutical companies for sales in China and/or to transfer or out-license overseas product rights of certain of our drug candidates to other pharmaceutical companies. We may also consider developing collaborative partnerships with global pharmaceutical companies in order to enter and expand our market share in markets outside of China and to further broaden the geographic coverage of our business. As part of this strategy, we may take advantage of strategic opportunities for merger and acquisition internationally to expand our pipeline of products for R&D development and sales in overseas markets.

FINANCIAL INFORMATION

The financial information set out below in this announcement represents an extract from the interim condensed consolidated financial information, which is unaudited but has been reviewed by the Audit Committee.

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FINANCIAL REVIEW

The following table summarizes our results of operations for the six months ended June 30, 2020 and 2019:

		For the six months	ended June 30,
	2020	2019	Change	Change
	RMB’000	RMB’000	RMB’000	(%)
	(unaudited)	(unaudited)	(unaudited)	(unaudited)
Other income	20,939	3,726	17,213	462.0
Other gains and losses	19,066	(1,322)	20,388	1,542.2
Research and development
expenses	(60,828)	(58,703)	(2,125)	3.6
Administrative expenses	(30,741)	(27,882)	(2,859)	10.3
Finance costs	(2,624)	(3,973)	1,349	(34.0)
Listing expenses	–	(27,527)	27,527	(100.0)
Loss before tax	(54,188)	(115,681)	61,493	(53.2)
Income tax expense	–	–	–	–
Loss and total
comprehensive expense
for the period	(54,188)	(115,681)	61,493	(53.2)
Attributable to:
Owners of the Company	(54,188)	(115,681)	61,493	(53.2)
Loss per share attributable
to ordinary equity holders
of the Company
– Basic	RMB(0.01)	RMB(0.03)
– Diluted	RMB(0.01)	RMB(0.03)

OTHER INCOME

Other income of the Group increased by 462.0% from RMB3.7 million for the six months ended June 30, 2019 to RMB20.9 million for the six months ended June 30, 2020, which was primarily due to a significant increase in government grants during the Reporting Period from the corresponding period of last year and a sharp rise in interest income obtained from the unutilized proceeds which were deposited at a higher interest rate.

– 15 –

Set out below are the components of other income for the periods indicated:

Bank interest income Government grants and subsidies related to income	For the six months ended June 30, 2020 2019 RMB’000 RMB’000 (unaudited) (unaudited) 8,173 187 12,766 3,539 20,939 3,726	For the six months ended June 30, 2020 2019 RMB’000 RMB’000 (unaudited) (unaudited) 8,173 187 12,766 3,539 20,939 3,726
		3,726

OTHER GAINS AND LOSSES

Other gains and losses of the Group increased by 1,542.2% from RMB1.3 million losses for the six months ended June 30, 2019 to RMB19.1 million gains for the six months ended June 30, 2020, which was primarily due to increase in exchange rate of foreign currencies held by the Group.

Set out below are the components of other gains and losses for the periods indicated:

Net foreign exchange gains (losses) Others	For the six months ended June 30, 2020 2019 RMB’000 RMB’000 (unaudited) (unaudited) 13,677 (1,322) 5,389 – 19,066 (1,322)	For the six months ended June 30, 2020 2019 RMB’000 RMB’000 (unaudited) (unaudited) 13,677 (1,322) 5,389 – 19,066 (1,322)
		(1,322)

RESEARCH AND DEVELOPMENT EXPENSES

Research and development expenses of pipelines of the Group increased by 3.6% from RMB58.7 million for the six months ended June 30, 2019 to RMB60.8 million for the six months ended June 30, 2020. Research and development expenses remained stable without significant fluctuations.

The Group’s research and development expenses mainly include contract costs, raw materials and consumables, staff cost, depreciation and amortization, and others.

– 16 –

Set out below are the components of research and development expenses for the periods indicated:

Contract costs Raw materials and consumables Staff cost Depreciation and amortization Others Total	For the six months ended June 30, 2020 2019 RMB’000 RMB’000 (unaudited) (unaudited) 25,609 21,935 11,193 11,833 17,174 15,619 3,770 4,028 3,082 5,288 60,828 58,703	For the six months ended June 30, 2020 2019 RMB’000 RMB’000 (unaudited) (unaudited) 25,609 21,935 11,193 11,833 17,174 15,619 3,770 4,028 3,082 5,288 60,828 58,703
		58,703

ADMINISTRATIVE EXPENSES

Administrative expenses of the Group increased by 10.3% from RMB27.9 million for the six months ended June 30, 2019 to RMB30.7 million for the six months ended June 30, 2020. There was no significant fluctuation in administrative expenses.

Administrative expenses of the Group primarily comprise of staff salary and benefit costs of our non-R&D personnel, depreciation and others.

Set out below are the components of administrative expenses for the periods indicated:

	For the six months	ended June 30,
	2020	2019
	RMB’000	RMB’000
	(unaudited)	(unaudited)
Staff cost	16,065	16,000
Building rental fees	–	17
Depreciation	7,366	7,022
Others	7,310	4,843
Total	30,741	27,882

– 17 –

FINANCE COSTS

Finance costs of the Group decreased by 34.0% from RMB4.0 million for the six months ended June 30, 2019 to RMB2.6 million for the six months ended June 30, 2020, which was primarily due to the repayments of loans from related parties.

The Group’s finance costs mainly include interests on related party loans, bank loans and lease liabilities.

LISTING EXPENSES

Listing expenses of the Group decreased by 100.0% from RMB27.5 million for the six months ended June 30, 2019 to nil for the six months ended June 30, 2020. Listing expenses were incurred in line with the progress of Listing. As the Company has been listed on May 31, 2019, no Listing expenses were incurred during the Reporting Period.

LIQUIDITY AND CAPITAL RESOURCES

Our current pledged bank deposits, time deposit and cash and bank decreased by RMB208.8 million from RMB897.8 million at December 31, 2019 to RMB689.0 million at June 30, 2020, which was primarily due to the utilization of such resources for manufacturing and operation as scheduled.

Set out below is an analysis of the liquidity and capital resources at the dates indicated:

	At June 30,	At December 31,
	2020	2019	Change
	RMB’000	RMB’000	(%)
	(unaudited)	(audited)	(unaudited)
Prepayments and other receivables	44,629	21,904	103.7
Inventories	26,749	22,224	20.4
Contract costs	16,168	13,240	22.1
Pledged bank deposits	–	129,891	(100.0)
Time deposit	45,670	179,160	(74.5)
Cash and bank	643,345	588,720	9.3
Total	776,561	955,139	(18.7)

INDEBTEDNESS

As of June 30, 2020, we had non-trade amount due to a related party of RMB0.5 million and lease liabilities of RMB40.5 million. As of the same date, none of our existing indebtedness included any material covenants or covenants that could potentially limit our ability to incur new indebtedness.

– 18 –

Set out below is a breakdown of our outstanding borrowings, non-trade amount due to a related party and lease liabilities at the dates indicated:

	At June 30,	At December 31,
	2020	2019
	RMB’000	RMB’000
	(unaudited)	(audited)
Unsecured and unguaranteed amount due to Biomabs	530	2,431
Lease liabilities	40,506	42,418
Secured borrowings from the bank	–	63,205

As at June 30, 2020, we have repaid all principals and interests thereon to Nanyang Commercial Bank Shenzhen Branch.

As at June 30, 2020, we, as a lessee, had outstanding lease liabilities for the remaining terms of relevant lease agreements in an aggregate amount of RMB40.5 million.

As at June 30, 2020, we did not have any outstanding debt securities, charges, mortgages, or other similar indebtedness, hire purchase commitments, liabilities under acceptances (other than normal trade bills), acceptance credits, which are guaranteed, unguaranteed, secured or unsecured, any guarantees or other material contingent liabilities.

CAPITAL STRUCTURE

On April 8, 2019, in preparing for the Global Offering, the then existing shareholders of the Company passed resolutions to conditionally approve, among other things, (i) to increase in the authorized share capital of the Company from 500,000,000 ordinary shares of US$0.0001 par value each to 50,000,000,000 ordinary shares of US$0.0001 par value each; (ii) to allot and issue at par 3,265,500,000 shares as fully paid, which shall rank pari passu in all respects with the then existing shares for allotment and issue, to the persons whose names appear on the register of members of the Company on the day preceding the Listing Date in proportion to their respective shareholdings (as nearly as possible without involving fractions) in the Company by way of capitalization of an amount of US$326,550 standing to the credit of the share premium account of the Company. On May 30, 2019, 3,265,500,000 shares of the Company were issued under the Capitalization Issue.

– 19 –

Subsequently, 783,580,000 Shares were issued under the Global Offering and the Shares were listed on the Main Board of the Stock Exchange on May 31, 2019. There were no changes in the capital structure of the Group since then. The share capital of the Group only comprises ordinary Shares. As at June 30, 2020, the total issued share capital of the Company was US$412,408 divided into 4,124,080,000 Shares.

The capital structure of the Group was 23.6% debt and 76.4% equity as at June 30, 2020, compared with 24.5% debt and 75.5% equity as at December 31, 2019.

FOREIGN EXCHANGE

Foreign currency risk refers to the risk of loss resulting from changes in foreign currency exchange rates. Fluctuations in exchange rates between RMB and other currencies in which our Group conducts business may affect our financial condition and results of operation. The Group mainly operates in the PRC and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to Hong Kong dollars and the U.S. dollars. The conversion of foreign currencies into RMB, including Hong Kong dollars and the U.S. dollars, has been based on rates set by the People’s Bank of China. The Group primarily limits our exposure to foreign currency risk by closely monitoring the foreign exchange market. During the Reporting Period, the Group did not enter into any currency hedging transactions.

GEARING RATIO

Gearing ratio is calculated using total liabilities divided by total assets and multiplied by 100%. As at June 30, 2020, the gearing ratio of the Group was 23.6% (unaudited) (as at December 31, 2019: 24.5% (audited)).

The following table sets forth our other key financial ratios as of the dates indicated.

	At June 30,	At December 31,
	2020	2019
	(unaudited)	(audited)
	%	%
Current ratio(1)	284.1	353.3
Quick ratio(2)	274.3	345.1

Notes:

(1) Current ratio represents current assets divided by current liabilities as of the same date.

• (2) Quick ratio represents current assets less inventories and divided by current liabilities as of the same date.

Our current ratio decreased from 353.3% as of December 31, 2019 to 284.1% as of June 30, 2020, and our quick ratio decreased from 345.1% as of December 31, 2019 to 274.3% as of June 30, 2020, primarily due to utilization of monetary funds for operation as scheduled.

– 20 –

INTERIM CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

For the six months ended 30 June 2020

Notes Other income 6 Other gains and losses 7 Research and development expenses Administrative expenses Finance costs 8 Listing expenses Loss before tax 9 Income tax expense 10 Loss and total comprehensive expense for the period Attributable to: Owners of the Company Loss per share attributable to ordinary equity holders of the Company 12 – Basic – Diluted	2020 (Unaudited) RMB’000 20,939 19,066 (60,828) (30,741) (2,624) – (54,188) – (54,188) (54,188) RMB(0.01) RMB(0.01)	2019 (Unaudited) RMB’000 3,726 (1,322) (58,703) (27,882) (3,973) (27,527) (115,681) – (115,681) (115,681) RMB(0.03) RMB(0.03)

– 21 –

INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

30 June 2020

Notes Non-current assets Plant and equipment 13 Right-of-use assets Other non-current assets 14 Rental deposit to a related party 21 Pledged bank deposits 16 Total non-current assets Current assets Prepayments and other receivables 15 Inventories Contract costs Pledged bank deposits 16 Time deposit 16 Cash and bank 16 Total current assets	30 June 2020 (Unaudited) RMB’000 417,504 74,894 47,906 411 – 540,715 44,629 26,749 16,168 – 45,670 643,345 776,561	31 December 2019 (Audited) RMB’000 255,049 77,346 85,415 411 23,117 441,338 21,904 22,224 13,240 129,891 179,160 588,720 955,139

– 22 –

Notes Current liabilities Trade and other payables 17 Amount due to a related party 21 Lease liabilities Lease liabilities to a related party 21 Contract liabilities Bank borrowings 18 Deferred income Total current liabilities Net Current Assets Total Assets Less Current Liabilities Non-current liabilities Deferred income Lease liabilities Lease liabilities to a related party 21 Total non-current liabilities Net Assets Capital and reserves Share capital Reserves Total Equity	30 June 2020 (Unaudited) RMB’000 151,703 640 3,122 4,238 70,058 – 43,624 273,385 503,176 1,043,891 4,350 30,915 2,231 37,496 1,006,395 2,804 1,003,591 1,006,395	31 December 2019 (Audited) RMB’000 128,119 2,538 2,823 4,472 58,662 63,205 10,515 270,334 684,805 1,126,143 37,309 30,737 4,386 72,432 1,053,711 2,804 1,050,907 1,053,711

– 23 –

INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the six months ended 30 June 2020

	Share	Share	Other	Share-option	Accumulated	Total
	capital	premium	reserve	reserve	losses	equity
	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000
	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)
At 1 January 2020	2,804	1,400,504	(32,763)	19,289	(336,123)	1,053,711
Loss and total comprehensive expense
for the period	–	–	–	–	(54,188)	(54,188)
Recognition of equity-settled
share-based compensation	–	–	–	6,872	–	6,872
At 30 June 2020	2,804	1,400,504	(32,763)	26,161	(390,311)	1,006,395
At 1 January 2019	51	410,433	(32,763)	5,445	(133,594)	249,572
Loss and total comprehensive expense
for the period	–	–	–	–	(115,681)	(115,681)
Shares issued upon initial public
offerings	541	1,032,727	–	–	–	1,033,268
Transaction costs attributable to issue of
new shares	–	(40,444)	–	–	–	(40,444)
Capitalization issue	2,212	(2,212)	–	–	–	–
Recognition of equity-settled
share-based compensation	–	–	–	7,032	–	7,032
At 30 June 2019	2,804	1,400,504	(32,763)	12,477	(249,275)	1,133,747

– 24 –

INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

For the six months ended 30 June 2020

Notes CASH FLOWS FROM OPERATING ACTIVITIES Loss before tax Adjustments for: Bank interest income Finance costs 8 Depreciation of plant and equipment 9 Depreciation of right-of-use assets 9 Write-down of inventories 9 Share-based payment expenses 9 (Increase)/decrease in inventories Increase in contract costs Increase in prepayments and other receivables Increase in other non-current assets Increase/(decrease) in amount due to a related party (Decrease)/increase in trade and other payables Increase in contract liabilities Increase in deferred income Net cash flows used in operating activities CASH FLOWS FROM INVESTING ACTIVITIES Interest received from bank Purchase of plant and equipment Advance to a related party Repayment from a related party Placement of a time deposit Withdraw of a time deposit Withdraw of pledged bank deposits Placement of pledged bank deposits Net cash flows from/(used in) investing activities	2020 (Unaudited) RMB’000 (54,188) (8,173) 2,624 7,746 3,937 – 6,872 (41,182) (4,525) (2,928) (19,090) (3,472) 1,231 (12,991) 11,396 150 (71,411) 6,038 (92,865) – – (45,012) 179,220 153,008 – 200,389	2019 (Unaudited) RMB’000 (115,681) (187) 3,973 7,143 3,888 119 7,032 (93,713) 5,003 – (1,451) (7,265) (1,635) 22,235 – 1,275 (75,551) 187 (17,958) (9) 42 – – 522 (70,799) (88,015)

– 25 –

CASH FLOWS FROM FINANCING ACTIVITIES Interest paid Issue costs paid Repayment of bank loans Loans obtained from a bank Repayments of loans from related parties Repayments to a related party Repayments of principal portion of lease liabilities Proceeds from the issue of the Company’s ordinary shares Net cash flows (used in)/from financing activities NET INCREASE IN CASH AND CASH EQUIVALENTS Cash and cash equivalents at beginning of period Effects of foreign exchange rate changes, net CASH AND CASH EQUIVALENTS AT END OF PERIOD	2020 (Unaudited) RMB’000 (2,832) (1,280) (63,086) – – (3,129) (3,331) – (73,658) 55,320 588,720 (695) 643,345	2019 (Unaudited) RMB’000 (5,437) (28,200) – 95,071 (105,000) (12,221) (2,732) 1,033,268 974,749 811,183 198,195 – 1,009,378

– 26 –

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION

30 June 2020

1. GENERAL INFORMATION

Mabpharm Limited (the “ Company ”) was incorporated in the Cayman Islands as an exempted company with limited liability on 1 June 2018, and its shares are listed on The Stock Exchange of Hong Kong Limited on 31 May 2019. The address of the registered office and the principal place of business of the Company are set out in the section headed “Corporate Information” to the interim report.

The Company is an investment holding company. The Company and its subsidiaries (the “ Group ”) is principally engaged in research, development and production of monoclonal antibody drugs for cancers and autoimmune diseases.

The immediate holding company of the Company is Asia Mabtech Limited, a limited liability company incorporated in the British Virgin Islands, which is ultimately controlled by Mr. Guo Jianjun.

2.

BASIS OF PREPARATION

The interim condensed consolidated financial information for the six months ended 30 June 2020 has been prepared in accordance with IAS 34 Interim Financial Reporting. The interim condensed consolidated financial information does not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group’s annual consolidated financial statements for the year ended 31 December 2019.

This interim condensed consolidated financial information is presented in Renminbi (“ RMB ”) and all values are rounded to the nearest thousand except when otherwise indicated.

3. CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES

The accounting policies adopted in the preparation of the interim condensed consolidated financial information are consistent with those applied in the preparation of the Group’s annual consolidated financial statements for the year ended 31 December 2019, except for the adoption of the following revised International Financial Reporting Standards (“ IFRSs ”) for the first time for the current period’s financial information.

Amendments to IFRS 3 Definition of a Business Amendments to IFRS 9, IAS 39 and IFRS 7 Interest Rate Benchmark Reform Amendments to IAS 1 and IAS 8 Definition of Material

The adoption of these revised standards has had no significant financial effect on the Group’s interim condensed consolidated financial information.

4. SEGMENT INFORMATION

For the purpose of resources allocation and performance assessment, the key management of the entities and business comprising the Group, being the chief operating decision maker, reviews the consolidated results when making decisions about allocating resources and assessing performance of the Group as a whole and hence, the Group has only one reportable segment and no further analysis of this single segment is presented.

The Group did not record any revenue during the six months ended 30 June 2020 and the Group’s non-current assets are substantially located in the People’s Republic of China (the “ PRC ”), accordingly, no analysis of geographical segment is presented.

– 27 –

5. REVENUE

Intellectual property transfer agreement with a customer

In January 2017, the Group entered into an agreement with a third-party customer for transferring of an intellectual property in relation to CMAB806, at a consideration of RMB65,180,000 and further increased to RMB82,180,000 pursuant to two supplementary agreements signed in September 2019 and February 2020 (collectively named “ Intellectual Property Transfer Agreement ”). The Group did not recognize revenue from this contract during the reporting period since the control of rights of the intellectual property had not been transferred to the customer. The research and development cost incurred on this intellectual property before the Group entered into the Intellectual Property Transfer Agreement with the customer were all charged to profit or loss. While, after the inception of the Intellectual Property Transfer Agreement, the cost incurred to fulfil this contract, amounting to RMB16,168,000 and RMB13,240,000 at 30 June 2020 and 31 December 2019, respectively, were capitalized as cost to fulfil the contract and were included in contract costs in the condensed consolidated statement of financial position.

6. OTHER INCOME

Bank interest income Government grants and subsidies related to income	For the six months ended 30 June 2020 2019 RMB’000 RMB’000 (Unaudited) (Unaudited) 8,173 187 12,766 3,539 20,939 3,726	For the six months ended 30 June 2020 2019 RMB’000 RMB’000 (Unaudited) (Unaudited) 8,173 187 12,766 3,539 20,939 3,726
		3,726

7. OTHER GAINS AND LOSSES

Net foreign exchange gains/(losses) Others FINANCE COSTS Interest on related party loans (Note 21) Interest on bank loans Interest on lease liabilities	For the six months ended 30 June 2020 2019 RMB’000 RMB’000 (Unaudited) (Unaudited) 13,677 (1,322) 5,389 – 19,066 (1,322) For the six months ended 30 June 2020 2019 RMB’000 RMB’000 (Unaudited) (Unaudited) – 1,639 1,235 900 1,389 1,434 2,624 3,973	For the six months ended 30 June 2020 2019 RMB’000 RMB’000 (Unaudited) (Unaudited) 13,677 (1,322) 5,389 – 19,066 (1,322) For the six months ended 30 June 2020 2019 RMB’000 RMB’000 (Unaudited) (Unaudited) – 1,639 1,235 900 1,389 1,434 2,624 3,973
		3,973

8. FINANCE COSTS

– 28 –

9. LOSS BEFORE TAX

Loss before tax for the period has been arrived at after charging:

Depreciation for plant and equipment Depreciation for right-of-use assets Write-down of inventories to net realisable value Staff cost (including directors’ emoluments): – Salaries and other benefits – Retirement benefit scheme contributions – Share-based payment expenses – Consultation fee Auditors’ remuneration Short-term lease payment Cost of inventories recognized as expense (included in research and development expense)	For the six months ended 30 June 2020 2019 RMB’000 RMB’000 (Unaudited) (Unaudited) 7,746 7,143 3,937 3,888 – 119 26,356 20,395 1,120 2,229 6,872 7,032 335 244 34,683 29,900 600 600 – 17 11,193 11,833	For the six months ended 30 June 2020 2019 RMB’000 RMB’000 (Unaudited) (Unaudited) 7,746 7,143 3,937 3,888 – 119 26,356 20,395 1,120 2,229 6,872 7,032 335 244 34,683 29,900 600 600 – 17 11,193 11,833
		29,900 600 17 11,833

10. INCOME TAX EXPENSE

The Company was incorporated in the Cayman Islands and is exempted from income tax.

No Hong Kong profits tax was provided for as there was no estimated assessable profit of the Group’s Hong Kong subsidiary that was subject to Hong Kong profits tax during the periods presented in the interim condensed consolidated financial information.

No PRC Enterprise Income tax was provided for as there was no estimated assessable profit of the Group’s PRC subsidiaries during the periods presented in the interim condensed consolidated financial information.

Deferred taxation had not been recognized on the unused tax losses and deductible temporary differences since it is not probable that the taxable profits will be available against which the tax losses and deductible temporary differences can be utilized in the foreseeable future.

11. DIVIDENDS

No dividend was paid or proposed for ordinary shareholders of the Company during the six months ended 30 June 2020, nor has any dividend been proposed since the end of the reporting period (during the six months ended 30 June 2019: Nil).

– 29 –

12. LOSS PER SHARE ATTRIBUTABLE TO ORDINARY EQUITY HOLDERS OF THE COMPANY

The calculation of the basic and diluted loss per share is based on the following data:

Loss attributable to owners of the Company for the purpose of calculating basic and diluted loss per share Weighted average number of ordinary shares for the purpose of calculating basic and diluted loss per share	For the six months ended 30 June 2020 2019 RMB’000 RMB’000 (Unaudited) (Unaudited) (54,188) (115,681) For the six months ended 30 June 2020 2019 RMB’000 RMB’000 (Unaudited) (Unaudited) 4,124,080 3,474,704

The calculation of the basic and diluted loss per share for the six months ended 30 June 2019 was based on the weighted average number of ordinary shares assumed to be in issue after taking into account the retrospective adjustments on the assumption that the capitalization issue had been in effect on 1 January 2019.

The calculation of diluted loss per share for the six months ended 30 June 2020 did not assume the exercise of the pre-IPO share options since its inclusion would be anti-dilutive. The calculation of diluted loss per share for the six months ended 30 June 2019 did not assume the exercise of the pre-IPO share options or the over-allotment option since their inclusion would be anti-dilutive.

13. PLANT AND EQUIPMENT

During the six months ended 30 June 2020, the Group acquired assets with a cost of RMB170,201,000 (unaudited) including RMB165,279,000 (unaudited) of construction in process (for the six months ended 30 June 2019: RMB16,946,000 (unaudited) including RMB13,933,000 (unaudited) of construction in process).

14. OTHER NON-CURRENT ASSETS

	30 June	31 December
	2020	2019
	RMB’000	RMB’000
	(Unaudited)	(Audited)
Prepayment for acquisition of plant and equipment	15,014	54,495
Deposit for construction of production facilities	1,500	3,000
VAT recoverable	31,392	27,920
	47,906	85,415

– 30 –

15. PREPAYMENTS AND OTHER RECEIVABLES

Other receivables Prepayments for research and development services Interest receivables Other deposits and prepayments VAT recoverable	30 June 2020 RMB’000 (Unaudited) 1,625 9,747 5,572 8,392 19,293 44,629	31 December 2019 RMB’000 (Audited) 1,616 11,780 3,437 3,239 1,832
		21,904

16. PLEDGED BANK DEPOSITS/TIME DEPOSIT/CASH AND BANK

Pledged bank deposits

There are no current pledged bank deposits at 30 June 2020 (current pledged bank deposits at 31 December 2019 represented deposits pledged to the bank to secure banking facilities granted to the Group, which were interest-bearing at a fixed rate of 2.25% per annum).

There are no non-current pledged bank deposits at 30 June 2020 (non-current pledged bank deposits at 31 December 2019 were pledged to a bank as collateral for the issue of Euro letter of credit by the bank in connection with the purchase of plant and equipment by the Group, which were interest-bearing at a fixed rate of 0.05% per annum).

Time deposit

The time deposit is placed with bank in Hong Kong with a term of four months upon placement, which earns interest at a fixed rate of 1.75% per annum at 30 June 2020 (31 December 2019: the time deposit was placed with bank in Hong Kong with a term of six months upon placement, which was interest-bearing at a fixed rate of 2.50% per annum).

Cash and bank

Cash and bank comprise of cash at banks and short-term bank deposits with an original maturity of three months or less. Cash and bank earns interest at floating rates based on daily bank deposit rates. Short-term time deposits are made for varying periods of between one day and three months depending on the immediate cash requirements of the Group and earn interest at the respective short-term time deposit rates. The bank balances are deposited with creditworthy banks with no recent history of default. The carrying amounts of the cash and bank approximate to their fair values.

17. TRADE AND OTHER PAYABLES

Trade payables Accrued expenses for research and development services Other payables Salary and bonus payables Other taxes payable Accrued listing expenses and issue costs	30 June 2020 RMB’000 (Unaudited) 2,936 28,173 101,509 7,165 375 11,545 151,703	31 December 2019 RMB’000 (Audited) 4,401 23,902 66,369 9,645 514 23,288
		128,119

– 31 –

Payment terms with suppliers are mainly on credit with 60 days from the time when the goods and/or services are received from the suppliers. The aging analysis of the trade payables presented based on the receipt of goods/services by the Group at the end of the reporting period is as follows:

Within 60 days Over 60 days but within 1 year Over 1 year	30 June 2020 RMB’000 (Unaudited) 1,853 911 172 2,936	31 December 2019 RMB’000 (Audited) 2,459 1,942 –
		4,401

18. BANK BORROWINGS

During the six months ended 30 June 2020, the Group has repaid the bank borrowings and the mortgage of the land use right was released on 5 August 2020.

19. SHARE-BASED PAYMENT TRANSACTIONS

Equity-settled share option scheme of the Company

The Company’s Pre-IPO Share Option Scheme (the “ Scheme ”) were adopted pursuant to a resolution passed on 10 August 2018 for the primary purpose of providing incentives to directors of the Company and eligible employees of the Group. Under the Scheme, 1,875,000 options were granted on 18 August 2018 to directors of the Company and eligible employees of the Group to subscribe for shares in the Company, which will expire on 17 August 2028.

The Scheme has a service condition that shall vest over an 8-year period, with 20%, 20%, 20%, 20% and 20% of the total number of the options granted to be vested on the fourth, fifth, sixth, seventh and eighth anniversary of the listing date, respectively.

The exercise price in relation to each option granted shall be the final offer price per share at which the shares are to be acquired by the investors pursuant to the Hong Kong Public Offering and the International Offering, which shall not be less than the par value of the shares, provided that the exercise price shall be adjusted in the event of any capitalization issue, rights issue, open offer, sub-division, consolidation of shares, or reduction of capital of the Company.

On 8 April 2019, a shareholders’ resolution about capitalization issue was passed and after taking into account of the capitalization issue the number of share options were increased to 83,512,500.

Particulars and movements in the Scheme are as follows:

	Outstanding at				Outstanding at
Date of grant	1 January 2020	Granted	Exercised	Forfeited	30 June 2020
	(Audited)				(Unaudited)
18 August 2018	81,416,506	–	–	(344,297)	81,072,209

The Group recognized the total expense of RMB6,872,000 (unaudited) for the six months ended 30 June 2020 in relation to share options granted by the Company (for the six months ended 30 June 2019: RMB7,032,000 (unaudited)).

The fair value of the options granted was determined using the Binomial pricing model at the grant date.

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20. CAPITAL COMMITMENTS

The Group had capital commitments for equipment purchase and building construction under contracts as follows:

	30 June	31 December
	2020	2019
	RMB’000	RMB’000
	(Unaudited)	(Audited)
Contracted but not provided for	76,333	182,332

21. RELATED PARTY TRANSACTIONS

(a) Transactions with related parties:

i. Purchase of raw materials, research and development services from related parties

Shanghai Sinomab Biotechnology Co., Ltd. (“MTJA”) (note a) Shanghai Biomabs Pharmaceuticals Co., Ltd (“Biomabs”) (note b)	For the six months ended 30 June 2020 2019 RMB’000 RMB’000 (Unaudited) (Unaudited) – 414 333 375 333 789	For the six months ended 30 June 2020 2019 RMB’000 RMB’000 (Unaudited) (Unaudited) – 414 333 375 333 789
		789

ii. Expenses incurred in clinical business paid by a related party on behalf of the Group

Biomabs iii. Interest expense on related party loans Ms. Guo Xiaoxin (note c) Biomabs	For the six months ended 30 June 2020 2019 RMB’000 RMB’000 (Unaudited) (Unaudited) 1,228 5,370 For the six months ended 30 June 2020 2019 RMB’000 RMB’000 (Unaudited) (Unaudited) – 1,066 – 573 – 1,639	For the six months ended 30 June 2020 2019 RMB’000 RMB’000 (Unaudited) (Unaudited) 1,228 5,370 For the six months ended 30 June 2020 2019 RMB’000 RMB’000 (Unaudited) (Unaudited) – 1,066 – 573 – 1,639
		1,639

– 33 –

iv. Interest on lease liabilities to a related party

	For the six months ended 30 June	For the six months ended 30 June
	2020	2019
	RMB’000	RMB’000
	(Unaudited)	(Unaudited)
Biomabs	251	250

Notes:

• a. MTJA was previously ultimately controlled by Mr. Guo Jianjun and was disposed to a third party on 1 July 2019. As such, it is no longer a related party of the Group since July 2019.

• b. Biomabs is ultimately controlled by a close family member of the controlling shareholder.

• c. Ms. Guo Xiaoxin is a close family member of the controlling shareholder.

(b) Outstanding balances with related parties:

At 30 June 2020, the Group had balances with related parties as follows:

i. Rental deposit to a related party

Biomabs ii. Amount due to a related party Trade Payables Biomabs Non-trade payables Biomabs	30 June 2020 RMB’000 (Unaudited) 411 30 June 2020 RMB’000 (Unaudited) 110 530 640	31 December 2019 RMB’000 (Audited) 411
		31 December 2019 RMB’000 (Audited) 107
		2,431
		2,538

– 34 –

The trading terms with a related party is similar to other suppliers of the Group. The aging analysis of the trade payables to a related party presented based on the receipt of goods/services by the Group at the end of the reporting period is as follows:

Within 60 days Over 60 days but within 1 year Lease liabilities to a related party Lease liabilities payable to Biomabs: Within one year Within a period of more than one year but not more than two years Less: Amount due for settlement with 12 months presented in current liabilities Amount due for settlement after 12 months presented in non-current liabilities	30 June 2020 RMB’000 (Unaudited) 110 – 110 30 June 2020 RMB’000 (Unaudited) 4,238 2,231 6,469 (4,238) 2,231	31 December 2019 RMB’000 (Audited) 106 1
		107
		31 December 2019 RMB’000 (Audited) 4,472 4,386
		8,858 (4,472)
		4,386

iii. Lease liabilities to a related party

The amounts represent capitalization of a forty-month secured building lease entered with Biomabs, which commenced from 1 September 2018. For the six months ended 30 June 2020, the Group paid Biomabs in an amount of RMB2,640,000 in connection with this lease arrangement (for the six months ended 30 June 2019: RMB747,000).

(c) Compensation of key management personnel of the Group

Salaries and other benefits Retirement benefit scheme contributions Directors’ fee Share-based compensation Consultation fee	For the six months ended 30 June 2020 2019 RMB’000 RMB’000 (Unaudited) (Unaudited) 2,558 2,290 24 172 163 – 5,621 5,628 335 244 8,701 8,334	For the six months ended 30 June 2020 2019 RMB’000 RMB’000 (Unaudited) (Unaudited) 2,558 2,290 24 172 163 – 5,621 5,628 335 244 8,701 8,334
		8,334

– 35 –

OTHER INFORMATION

Interim Dividend

The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2020.

Use of Net Proceeds from Listing

With the Shares of the Company listed on the Stock Exchange on May 31, 2019, the net proceeds from the Global Offering (after deducting the underwriting fees and related expenses) were approximately HK$1,144.5 million (equivalent to approximately RMB1,005.1 million), which included approximately RMB37.7 million which forms part of the Listing expenses payable settled after receipt of the proceeds from the Listing. By excluding this portion, the net proceeds planned for applications amount to approximately RMB967.4 million. As of June 30, 2020, the Company used a total of approximately RMB293.7 million of the proceeds, including approximately RMB101.6 million for research and development of our Core Products, approximately RMB132.7 million for production scale-up and construction of new production facilities in Taizhou, PRC, approximately RMB24.8 million for research and development of our other candidate products and approximately RMB34.6 million for working capital and general purpose. The Company intends to apply such net proceeds in accordance with the plan as set out in the Prospectus. The table below sets out the planned applications of the net proceeds of the Global Offering and actual usage up to June 30, 2020[(1) (2)] :

Use of proceeds Allocation of net proceeds of the Global Offering (RMB million) For R&D of our Core Products 180.9 For production scale-up and construction of new production facilities in Taizhou, PRC 497.2 For R&D of our other product candidates 194.5 For working capital and other general corporate purposes 94.8 Total 967.4	Percentage of total net proceeds 18.7% 51.4% 20.1% 9.8% 100%	Utilized amount (as of June 30, 2020) Unutilized amount (as of June 30, 2020) Timetable for full utilization of the unutilized amount (RMB million) (RMB million) 101.6 79.3(3) By June 30, 2022 132.7 364.5(4) By December 31, 2022 24.8 169.7(5) By June 30, 2022 34.6(6) 60.2 By December 31, 2021 293.7 673.7

– 36 –

Note:

• (1) Net IPO proceeds were received in Hong Kong dollar and translated to Renminbi for application planning.

• (2) Timetable for utilizing the unutilized proceeds as disclosed above was prepared based on the best estimates of the Board and the latest information as of the date of this announcement.

• (3) CMAB008 has completed clinical trials and is in the process of application for new drug marketing, while CMAB007 and CMAB009 are currently under phase III clinical trials.

• (4) We are constructing new production facilities in the second building of our Taizhou production site and on the parcel of industrial land of approximately 100,746 square meters in Taizhou Hi-tech Zone.

• (5) Of our other drug candidates, CMAB809 has completed phase I clinical trials and CMAB819 is pending to initiate clinical trials.

• (6) RMB20.6 million has been used for repayment of principal and interests of bank loans.

Significant Investments, Material Acquisitions and Disposals

Save as disclosed in this announcement, as at the date of this announcement, there were no significant investments held by the Group or future plans regarding significant investment or capital assets. For the six months ended June 30, 2020, we did not have material acquisitions or disposals of subsidiaries, associates and joint ventures.

Employee and Remuneration Policy

As of June 30, 2020, we had a total of 314 employees, of which 101 are located in Shanghai and 213 are located in Taizhou. The table below sets forth a breakdown of our employees by function:

Function Business units R&D personnel(1) Sales and marketing(2) Administration Management Total	Number of Employees 61 177 15 23 38 314

Notes:

• (1) The number of R&D personnel here excludes 19 R&D team members who have been included in our management.

• (2) The number of sales and marketing personnel here excludes our four core sales and marketing team members, who have been included in our management.

– 37 –

Our success depends on our ability to attract, recruit and retain qualified employees. We provide our employees with opportunities to work on cutting-edge biologics projects with world-class scientists. We aim to attract qualified employees with overseas educational backgrounds and relevant experience gained from global pharmaceutical or biotechnology companies. As of the date of this announcement, we had 104, 12 and 7 scientists holding a bachelor’s degree or equivalent, a master’s degree or equivalent, and a Ph.D. degree or equivalent in fields that are highly relevant to our business. In addition, as of the same date, 123 out of our 196 R&D personnel (including those who are our management) held a bachelor’s degree or above.

Our employment agreements typically cover matters such as wages, benefits and grounds for termination. The remuneration package of our employees generally includes salary and bonus elements. In general, we determine the remuneration package based on the qualifications, position and performance of our employees. We also make contributions to the social insurance fund, including basic pension insurance, medical insurance, unemployment insurance, childbirth insurance, work-related injury insurance funds, and housing reserve fund. In addition, we have adopted an employee share option plan to provide an additional means to attract, motivate, retain and reward our employees.

We have established a labor union at Taizhou that represents employees with respect to the promulgation of bylaws and internal protocols. As of June 30, 2020, all of our employees at Taizhou were members of the labor union. We believe that we maintain a good working relationship with our employees. We had not experienced any material labor disputes or any material difficulty in recruiting employees for our operations during the Reporting Period and up to the date of this announcement.

COMPLIANCE WITH THE CORPORATE GOVERNANCE CODE

The Group is committed to maintaining high standard of corporate governance to safeguard the interests of the Shareholders, enhance corporate value, formulate its business strategies and policies, and enhance its transparency and accountability.

The Company’s corporate governance practices are based on the principles and code provisions as set out in the CG Code contained in Appendix 14 to the Listing Rules and the Company has adopted the CG code as its own code of corporate governance. The CG Code has been effective and applicable to the Company with effect from the Listing Date. The Board is of the view that the Company has complied with the applicable code provisions as set out in the CG Code since the Listing Date up to the date of this announcement. The Board will periodically review and enhance its corporate governance practices to ensure that the Company continues to meet the requirements of the CG Code.

– 38 –

COMPLIANCE WITH THE MODEL CODE FOR SECURITIES TRANSACTIONS

With consent from the Directors, the Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 to the Listing Rules (the “ Model Code ”) as the guidelines for the Directors’ dealings in the securities of the Company since the Listing Date. Specific enquiry has been made to each Director and all Directors have confirmed that they have complied with the applicable standards set out in the Model Code since the Listing Date and up to the date of this announcement.

PURCHASE, SALE OR REDEMPTION OF THE COMPANY’S LISTED SECURITIES

Neither the Company nor any of its subsidiaries purchased, sold or redeemed any of the Company’s listed securities during the Reporting Period.

AUDIT COMMITTEE AND REVIEW OF FINANCIAL REPORT

The independent auditors of the Company, namely Ernst & Young, have carried out a review of the interim financial information in accordance with the Hong Kong Standard on Review Engagement 2410 “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” issued by the Hong Kong Institute of Certified Public Accountants.

The Audit Committee has examined the efficiency of our risk management and internal control system and is convinced that our internal control system is sufficient to identify, manage and reduce various risks arising from our business activities. The Audit Committee consists of two independent non-executive Directors, being Dr. Liu Linqing and Mr. Guo Liangzhong, and one non-executive Director, being Mr. Jiao Shuge. Dr. Liu Linqing serves as chairman of the Audit Committee.

The Audit Committee has reviewed the interim consolidated financial statements of the Group for the six months ended June 30, 2020. The Audit Committee has also discussed matters with respect to the accounting principles and policies adopted by the Company and internal control with members of senior management and the external auditors of the Company, Ernst & Young.

PUBLICATION OF INTERIM REPORT

This announcement is published on the websites of the Stock Exchange (www.hkexnews.hk) and the Company (www.mabpharm.cn).

The interim report for the six months ended June 30, 2020, containing all the information as required under Appendix 16 of the Listing Rules, will be despatched to the Shareholders and published on the websites of the Stock Exchange and the Company in due course.

SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD

Save as disclosed in this announcement, there was no significant event subject to disclosure from June 30, 2020 to the date of this announcement.

APPRECIATION

On behalf of the Board, I wish to express my sincere gratitude to our Shareholders and business partners for their continued support, and to our employees for their dedication and hard work.

– 39 –

DEFINITIONS

In this announcement, the following expressions have the meanings set out below unless the context requires otherwise:

“Audit Committee”	the audit committee of the Board
“Biomabs”	Shanghai Biomabs Pharmaceuticals Co., Ltd. (上海百邁博製藥有限
	公司), a limited liability company incorporated in the PRC on October
	16, 2009 and a direct wholly-owned subsidiary of Sinomab as of the date
	of this announcement
“Board” or “Board of	the board of Directors of the Company
Directors”
“CG Code”	the Corporate Governance Code as set out in Appendix 14 to the Listing
	Rules
“cGMP”	current Good Manufacturing Practice
“Company”	Mabpharm Limited (邁博藥業有限公司), an exempted company
	incorporated in the Cayman Islands with limited liability on June 1, 2018
	and whose Shares are listed on the Stock Exchange
“connected person(s)”	has the meaning ascribed to it under the Listing Rules
“Core Product(s)”	has the meaning ascribed to it in Chapter 18A of the Listing Rules; for
	the purpose of this announcement, our Core Products include CMAB007,
	CMAB009 and CMAB008
“Director(s)”	the director(s) of our Company
“Global Offering”	has the meaning ascribed to it under the Prospectus
“Group”, “our Group”, “the	the Company and its subsidiaries from time to time
Group”, “we”, “us”, or
“our”
“Hong Kong”	the Hong Kong Special Administrative Region of the PRC
“Hong Kong dollars” or “HK	Hong Kong dollars, the lawful currency of Hong Kong
dollar” or “HK$”
“IPO”	initial public offering
“Listing”	the listing of Shares on the Main Board of the Stock Exchange on May
	31, 2019

– 40 –

“Listing Date” May 31, 2019, being the date on which the Shares were listed on the Main Board of the Stock Exchange

“Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange “Main Board” the Main Board of the Stock Exchange “Model Code” the Model Code for Securities Transactions by Directors of Listed Issuers contained in Appendix 10 to the Listing Rules “PRC” the People’s Republic of China, excluding, for the purposes of this announcement, Hong Kong Special Administrative Region, the Macau Special Administrative Region and Taiwan “Prospectus” the prospectus issued by the Company on May 20, 2019 in connection with the Hong Kong public offering of the Shares

“Reporting Period” six months from January 1, 2020 to June 30, 2020 “RMB” Renminbi, the lawful currency of the PRC “Shares” ordinary share(s) in the capital of the Company with nominal value of US$0.0001 each “Shareholder(s)” holder(s) of Share(s) “Sinomab” Sinomab Limited (formerly known as Mabtech Limited), a limited liability company incorporated in the Cayman Islands on September 4, 2014, and a company which an associate of the controlling shareholder of the Company indirectly controls 66.67% voting rights as of the date of this announcement

“Stock Exchange” The Stock Exchange of Hong Kong Limited

By Order of the Board Mabpharm Limited Jiao Shuge Chairman

Hong Kong, August 26, 2020

As at the date of this announcement, the Board of Directors comprises Dr. Qian Weizhu, Dr. Wang Hao, Mr. Li Yunfeng and Dr. Li Jing as executive Directors; Mr. Guo Jianjun and Mr. Jiao Shuge as non-executive Directors; and Mr. Guo Liangzhong, Dr. Zhang Yanyun and Dr. Liu Linqing as independent non-executive Directors.

– 41 –