Mabpharm Limited — Interim / Quarterly Report 2021

Aug 27, 2021

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, 2021

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, 2021, together with the comparative figures for the six months ended June 30, 2020.

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FINANCIAL HIGHLIGHTS

	For the six months ended June	For the six months ended June	30,
	2021	2020	Change
	RMB’000	RMB’000	(%)
	(unaudited)	(unaudited)	(unaudited)
Revenue	81,246	–	–
Cost of sales	(16,769)	–	–
Gross profit	64,477	–	–
Other income	3,558	20,939	(83.0)
Other gains and losses	(4,719)	19,066	(124.8)
Research and development expenses	(163,455)	(60,828)	168.7
Administrative expenses	(43,755)	(30,741)	42.3
Finance costs	(1,267)	(2,624)	(51.7)
Loss before tax	(145,161)	(54,188)	167.9
Income tax expense	–	–	–
Loss and total comprehensive expense
for the period	(145,161)	(54,188)	167.9
Attributable to:
Owners of the Company	(145,161)	(54,188)	167.9
Loss per share attributable to ordinary
equity holders of the Company
– Basic	RMB (0.04)	RMB (0.01)
– Diluted	RMB (0.04)	RMB (0.01)

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	At June 30,	At December 31,
	2021	2020	Change
	RMB’000	RMB’000	(%)
	(unaudited)	(audited)	(unaudited)
Non-current assets	580,663	593,911	(2.2)
Current assets	397,962	569,126	(30.1)
Current liabilities	191,830	202,627	(5.3)
Net current assets	206,132	366,499	(43.8)
Non-current liabilities	43,901	78,925	(44.4)
Net assets	742,894	881,485	(15.7)

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 the market high quality and affordable innovative biologics through our efficient research and development (“ R&D ”) system and low-cost pharmaceutical production capabilities, and develop differentiated therapeutic products by fully utilizing our extensive R&D experience. Our drug pipeline currently consists of 10 monoclonal antibody drugs and 1 strong antibody drug:

• CMAB008 類停[®] (infliximab) : was approved for marketing by the National Medical Products Administration of the People’s Republic of China (“ NMPA ”) in July 2021 (Guo Yao Zhun Zi S20210025) for the treatment of 1) ulcerative colitis in adults; 2) ankylosing spondylitis; 3) rheumatoid arthritis; 4) Crohn’s disease in adults and pediatric patients aged above 6 years old; 5) fistula Crohn’s disease; and 6) psoriasis. The antibody drug production base of Taizhou Mabtech Pharmaceutical Limited (泰州邁博太科藥業有限公司) under the Company in China Medical City, Taizhou, Jiangsu Province also successfully passed the GMP compliance inspection for CMAB008 by Jiangsu Provincial Drug Administration. According to the regulations of China’s basic medical insurance program (the “ Medical Insurance ”), CMAB008類停[®] has also been automatically included in the Medical Insurance, and has obtained the Medical Insurance registration code from the National Healthcare Security Administration (the “ Healthcare Security Administration ”). CMAB008 類停[®] is approved for the treatment of six indications which have huge long-term unmet market demand (with more than 10 million patients in the PRC which is still growing). With high quality innovative drugs as the foundation, Mabpharm will provide innovative antibody drugs to patients in the PRC by offering more economical and affordable drug supply solutions and fully participating in China’s national healthcare system reform initiatives. The Company has also initiated cooperation with partners who have accumulated abundant overseas market resources over a long period of time to rapidly expand to overseas markets.

As announced by the World Health Organization (the “ WHO ”) recently, WHO has launched a global clinical trial of drugs including infliximab for the treatment of novel coronavirus pneumonia (“ COVID-19 ”) – the “Solidarity PLUS” according to the previous clinical application with reference to the evaluation conducted by independent expert committee. The Company also proposes to work with its partners to promote the clinical trials of CMAB008 類停[®] (infliximab) in foreign countries that have been seriously affected by the COVID-19 pandemic (the “ Pandemic ”) for the treatment of COVID-19, and will proactively respond to the anti-COVID-19 call of the PRC government.

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• CMAB007 (omalizumab) : completed phase III clinical trials for the indication of asthma and new drug application data collation. The new drug marketing application for CMAB007 is expected to be submitted to the NMPA in September 2021. Given that similar drugs have been approved overseas for urticaria and allergic rhinitis indications and are developing to address food allergy indications, we will expedite the clinical and registration work of CMAB007 for these indications to capture the huge allergic disease market demand in China;

• CMAB009 (cetuximab) : currently under phase III clinical trials for colorectal cancer. CMAB009 uses the Chinese hamster ovary cell (“ CHO ”) expression system, which enjoys significant advantages in safety compared to existing marketed cetuximab products for treating metastatic colorectal cancer. CMAB009 is expected to file the new drug marketing application with the NMPA in the third quarter of 2022;

• CMAB807 (denosumab) : currently under phase III clinical trials for osteoporosis. We are conducting pre-clinical research of the drug for the indication of tumor bone metastasis and will submit the clinical trial application to the Center for Drug Evaluation of NMPA in the fourth quarter of 2021.

Among our other drug candidates, our newly developed “strong antibody” drug CMAB017 has completed the pilot scale up and commenced animal experiments. The completed research results show that CMAB017 has promising efficacy and safety. In addition, we have commenced clinical trials for CMAB819 (nivolumab). We have also developed CMAB022 (usnumab), a biosimilar drug, which has a good market prospect in the fields of psoriasis, ankylosing spondylitis and Crohn’s disease.

We have strong in-house capabilities in pharmaceutical research, manufacturing and pre-clinical and clinical development, and have established a competent and efficient drug marketing team. We focus on the R&D of monoclonal antibodies. Our core R&D team members have more than 18 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.

We have completed the construction of three new production lines in Taizhou, bringing our total cell reactor scale to 18,000 liters. The construction of plants in our new R&D and industrial base in Taizhou has also been completed and it is expected that our total cell reactor scale will be further increased to above 40,000 liters in 2022. The solid equipment, technology and quality foundation we have in the field of antibody drug preparation will enable us to possess an excellent competitive advantage in future medical insurance and centralized procurement negotiations.

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.

Further, during the rapid growth of the pharmaceutical market in China, the central procurement under the medical insurance that may be extended to cover biological drugs in the future and the increased efforts in national negotiations on medical insurance will restructure the pharmaceutical market in China to a large extent. We will actively participate in the national medical reform with our advantages in advanced technology, quality and cost and capture the opportunities presented during the policy reform so as to capture the huge unmet market demand in China. At the same time, we have also initiated our global market expansion and accelerated the registration and launching of our drugs in the international market.

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Competitive marketed drugs	Remicade®, Humira®, Enbrel®, Simponi®, Yisaipu® and Anbainuo®	Remicade®, Humira®, Enbrel®, Simponi®, Yisaipu® and Anbainuo®	Xolair®	Xolair®	Erbitux®	Prolia®	XGEVA®
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	New drug application approved in July 2021		Quarter 4, 2022		Quarter 3, 2023	Quarter 1, 2024	Quarter 1, 2027
Expected time to reach the next regulatory milestone	Not applicable		Pending marketing application submission (Quarter 3, 2021)		Pending marketing application submission (Quarter 3, 2022)	Pending marketing application submission (Quarter 1, 2023)	Phase III (Quarter 1, 2023)
Phase III
Phase II or Phase II/III
Phase I
Pre-clinical
Classification	Biosimilar/Core Product		New Drug/Core Product		New Drug/Core Product	Biosimilar	Biosimilar
Drug candidate code	CMAB008 (INN name: Infliximab)		CMAB007 (INN name: Omalizumab)		CMAB009 (INN name: Cetuximab)	CMAB807 (INN name: Denosumab)	CMAB807X (INN name: Denosumab)
Indication	Ulcerative colitis in adults; Ankylosing spondylitis; Rheumatoid arthritis; Crohn’s disease in adults and pediatric patients aged above 6 years old; Fistula Crohn’s disease; and Psoriasis		Asthma		Colorectal cancer	Osteoporosis	Tumor bone metastasis
Target	TNFα		IgE		EGFR	RANKL
Field	Autoimmune Disease		Respiratory Disease		Cancer	Bone-related diseases

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Competitive marketed drugs	Opdivo®, Keytruda®, Tyvyt®, JS001	Perjeta®	ILaris®	Vectibix®	Cosentyx®	Nucala®	Stelara®	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	Global
Anticipated completion of regulatory review	Quarter 4, 2027	Quarter 1, 2028	Quarter 2, 2026	Quarter 4, 2027	Quarter 2, 2026	Quarter 4, 2026	Quarter 1, 2027
Expected time to reach the next regulatory milestone	Phase III (Quarter 1, 2023)	Phase III (Quarter 1, 2024)	Phase III (Quarter 2, 2024)	Phase III (Quarter 4, 2024)	Phase III (Quarter 1, 2023)	Phase III (Quarter 2, 2023)	Phase III (Quarter 1, 2024)
Phase III
Phase II or Phase II/III
Phase I
Pre-clinical
Classification	Biosimilar	Biosimilar	Biosimilar	Innovative drug	Biosimilar	Biosimilar	Biosimilar
Drug candidate code	CMAB819 (INN name: Nivolumab)	CMAB810 (INN name: Pertuzumab)	CMAB816 (INN name: Canakinumab)	CMAB017	CMAB015 (INN name: Secukinumab)	CMAB018 (INN name: Mepolizumab)	CMAB022 (INN name: Ustekinumab)
Indication	Non-small cell lung cancer, hepatocellular carcinoma and squamous cell carcinoma of the head and neck	Breast cancer	Periodic Fever Syndromes/ Systemic Juvenile Idiopathic Arthritis/Lung cancer	KRAS wild-type colorectal cancer	Plaque psoriasis, psoriatic arthritis and ankylosing spondylitis	Asthma and eosinophilic granulomatous polyangitis	Moderate to severe plaque psoriasis, psoriatic arthritis, active ankylosing spondylitis, active non-radiographic axial spondyloarthritis
Target	PD1	HER2	IL-1β	EGFR	IL-17A	IL-5	IL-12 & IL-23
Field	Cancer	Cancer	Cancer/Autoimmune Disease	Cancer	Autoimmune Disease	Allergy, Inflammatory Disease	Inflammatory Diseases

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Core Products

類停[®] -CMAB008 (infliximab)

CMAB008 (infliximab), trade name: 類停[®] , is a recombinant anti-TNF-alpha chimeric monoclonal antibody that was approved by the NMPA (Guo Yao Zhun Zi S20210025) on July 12, 2021 for the treatment of:

• (i) ulcerative colitis in adults;

• (ii) ankylosing spondylitis;

• (iii) rheumatoid arthritis;

• (iv) Crohn’s disease in adults and pediatric patients aged above 6 years old;

• (v) fistula Crohn’s disease; and

• (vi) psoriasis.

CMAB008 類停[®] is the first China-made infliximab approved for marketing, which is a monoclonal antibody biosimilar independently developed by the Company and one of the core products of the Company. CMAB008類停[®] uses the CHO expression system, and is a monoclonal antibody targeting TNFα (tumor necrosis factor α) that specifically merges with TNFα and blocks the inflammatory cascade response caused by TNFα. The researches we have completed have shown that, compared to other anti-TNFα drugs on the market, CMAB008類停[®] (infliximab for injection) has a stronger affinity for TNFα and a stronger glycosylation character, with rapid onset of effect, long-lasting efficacy, long dosing intervals and no hypersensitivity reactions. The results of our completed researches including, clinical trials, non-clinical comparative studies and pharmacological comparisons of CMAB008類停[®] have also shown that CMAB008 is identical to the original infliximab in terms of efficacy, safety, pharmacological profile and quality.

The only other infliximab currently available for sale in the PRC is “Remicade”, an imported drug sold by Xian Janssen. CMAB008 類停[®] is approved for the treatment of six indications which have huge long-term unmet market demand with more than 10 million patients in the PRC which is still growing. Infliximab is included in the PRC’s national Medical Insurance drug catalogue, and in accordance with relevant regulations on Medical Insurance of the PRC, our CMAB008 類停[®] is applicable to the Medical Insurance coverage of infliximab, thus providing a new and more economical and affordable option for patients. With high quality innovative drugs as the foundation, Mabpharm will provide innovative antibody drugs to patients in the PRC by offering more economical and affordable drug supply solutions and fully participating in China’s national healthcare system reform initiatives. The Company has also reached agreements with partners who have accumulated abundant overseas market resources over a long period of time and is applying for drug registration and marketing of CMAB008 in dozens of countries and regions including Brazil.

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On August 11, 2021, the WHO announced that the “Solidarity PLUS” campaign led by it would recruit hospitalized COVID-19 patients to evaluate the efficacy of three drugs, being artesunate, imatinib and infliximab, in treating diseases caused by the novel coronavirus (the “ Novel Coronavirus ”) from more than 600 hospitals across 52 countries and regions. These three drugs were selected by an independent expert group and considered to have the potential to reduce the mortality rate of hospitalized COVID-19 cases. “Cytokine storm” is an important cause of severe pneumonia and failure of multiple organs resulting from the Novel Coronavirus, and TNFα (tumor necrosis factor α) and other inflammation-related cytokines are significantly increased in severe COVID-19 cases. For severe COVID-19 cases, it may take too long for antiviral drugs to take effect, and they are more likely to benefit from drugs targeting the immune system. Infliximab can block the inflammatory signaling pathway of TNFα and reduce the level of inflammatory cytokines such as TNFα. The data collected from patients with inflammatory bowel disease who received anti-TNF treatment such as infliximab in Germany showed that the mortality of such patients after being infected with the Novel Coronavirus was far below the average level. The results of infliximab treatment for severe COVID-19 patients without inflammatory bowel disease also proved that the mortality rate was significantly lower than that of the control group. In this regard, the Company proposes to work with its partners to promote the clinical trials of CMAB008類停[®] (infliximab) in foreign countries that have been affected seriously by the COVID-19 pandemic, and will proactively respond to the anti-COVID-19 call of the PRC government.

Recently, CMAB008 has been approved by the NMPA. Please refer to the section headed “SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD” below for further details.

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. We believe that, once approved by the NMPA for marketing, 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 four clinical trials of a total of 824 subjects who have been administered CMAB007, 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 has completed phase III clinical trials for allergic asthma. Based on new regulations and technical guidelines introduced by the NMPA on new biological drugs, we have also completed a head-to-head phase I comparative study against 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 urticarial, seasonal allergic rhinitis and food allergies in the future. We plan to file the drug marketing application with the NMPA in the third quarter of 2021. Currently, we expect that CMAB007 may be approved by the NMPA for marketing in the fourth quarter of 2022.

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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 CHO expression system, which is different from the mouse myeloma cell SP2/0 expression system used in marketed cetuximab products. The safety and efficacy of CMAB009 have been confirmed from the results of two completed clinical trials on 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 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, currently marketed cetuximab drugs for the treatment of mCRC.

During the Reporting Period, CMAB009 was under phase III clinical trials for colorectal cancer. The outbreak of the Pandemic, and the recent rebound of the Pandemic had certain impacts on our research and development in 2021. We expect to file the new 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 third quarter of 2023.

Other Product Candidates

CMAB807 (Denosumab) is a human IgG2 monoclonal antibody with affinity and specificity for human RANKL (receptor activator of nuclear factor kappa-B ligand), which is a transmembrane or soluble protein essential for the formation, function, and survival of osteoclasts, the cells responsible for bone resorption. CMAB807 prevents RANKL from activating its receptor, RANK, on the surface of osteoclasts and their precursors. Prevention of the RANKL/RANK interaction inhibits osteoclast formation, function, and survival, thereby decreasing bone resorption and increasing bone mass and strength in both cortical and trabecular bones. CMAB807 is currently under phase III clinical trials for osteoporosis and we expect that CMAB807 will be approved by NMPA for marketing in the first quarter of 2024 for the indication of osteoporosis.

We have also developed a dosage form of CMAB807 for the treatment of tumor bone metastasis and conducted pre-clinical research, i.e. CMAB807X (denosumab). We expect that phase III clinical trials for tumor bone metastasis will be launched in the first quarter of 2023. It is currently expected that CMAB807X will be approved by NMPA for marketing in the first quarter of 2027 for the indication of tumor bone metastasis.

CMAB819 (nivolumab) is our biosimilar drug candidate currently undergoing phase I clinical trial. CMAB819 was approved by the NMPA for clinical trial in September 2017. As of June 30, 2021, we have commenced the phase I clinical trial. We expect that CMAB819 may be approved by the NMPA for marketing in the fourth quarter of 2027. CMAB819 is indicated for the treatment of metastatic non-small cell lung cancer, hepatocellular carcinoma and head and neck squamous cell carcinomas (HNSCC).

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CMAB810 (pertuzumab) is our pre-clinical trial biosimilar drug candidate. The related screening processes, the establishment of a cell bank, and a lab-scale process for CMAB810 have been completed. We are carrying out preclinical animal experiments for CMAB810 and expect to apply for clinical trials in the fourth quarter of 2022. We expect that CMAB810 may be approved by the NMPA for marketing in the first quarter of 2028. CMAB810 is indicated for the treatment of breast cancer.

CMAB816 (canakinumab) is our pre-clinical trial biosimilar drug candidate. The related screening processes and the establishment of cell bank have been completed. It is expected to apply for clinical trials in the third quarter of 2022. We expect that CMAB816 may be approved by the NMPA for marketing in the second quarter of 2026. CMAB816 is indicated for the treatment of periodic fever syndrome and systemic juvenile idiopathic arthritis. Further, according to the latest research results, canakinumab can potentially reduce the incidence of lung cancer and lung cancer-related mortality rates.

CMAB017 is an innovative candidate in preclinical 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 the production process and formulation selection has been concluded. 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 commence phase III clinical trial in the fourth quarter of 2024. We expect that CMAB017 may be approved by the NMPA for marketing in the fourth quarter of 2027. Regarding CMAB017, the design of blocking peptide is expected to significantly reduce adverse skin reactions, 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 by leveraging the research and development platform of CMAB017. CMAB017 is indicated for the treatment of KRAS wild-type colorectal cancer.

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CMAB015 is a biosimilar candidate for secukinumab, which is under preclinical 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 trial in the first quarter of 2022. We expect that CMAB015 may be approved by the NMPA for marketing in the second quarter of 2026. CMAB015 targets interleukin 17A (IL-17A) for treating plaque psoriasis, psoriatic arthritis and ankylosing spondylitis.

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CMAB018 is a biosimilar candidate for mepolizumab, which is under preclinical 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 trial in the second 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) in treating severe asthma and eosinophilic granulomatous polyangiitis.

CMAB022 is a candidate biosimilar product of stelara[®] (ustekinumab). Ustekinumab is a monoclonal antibody targeting interleukin-12 (IL-12) and interleukin-23 (IL-23). It inhibits these two proinflammatory cytokines by binding to the P40 subunit shared by IL-12 and IL-23 and preventing them from binding to the cell surface IL-12 receptor β1. IL-12 and IL-23 are two natural proteins, which play a key role in immune-mediated inflammatory diseases, including plaque psoriasis, psoriatic arthritis and Crohn’s disease, indications include: moderate to severe plaque psoriasis in adult patients who are candidates for systemic therapy or phototherapy; adults with active psoriatic arthritis (PsA); adults with active ankylosing spondylitis (AS); adults with active non-radiographic axial spondyloarthritis (nr-axSpA) with objective signs of inflammation. The pilot processes are currently in development. We expect to apply for clinical trials in the fourth quarter of 2022 and CMAB022 may be approved by the NMPA for marketing in the first quarter of 2027.

Research and development of new drug candidates

We have launched a series of follow-up R&D on 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, 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, CMAB008 has been marketed and commercialized, CMAB007 has completed clinical trials and will apply to be marketed soon while CMAB009 and CMAB807 are under phase III clinical trials. 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 backgrounds 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 30,000 square meters in total and houses our mAb production facilities. The two buildings are equipped with production facilities currently in operation, including (i) four 3×1,500L antibody bioreactor systems 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. Our production facilities have successfully passed the GMP compliance inspection for CMAB008 by the Jiangsu Provincial Drug Administration and have commenced commercial production.

Construction of new production facilities

We constructed new production facilities on a parcel of industrial land of approximately 100,746 square meters in the Taizhou Hi-tech Zone. Our expansion plan includes the construction of (i) large-scale monoclonal antibody drug substance production lines with scale of each cell reactor reaching 7,500L and 18,000L, respectively, and (ii) two drug product filling lines which have commenced construction and already completed the construction of the plant, design and purchase of key equipment and is expected to be put into trial operation in the middle of 2022.

Marketing and distribution

Further, during the rapid growth of the pharmaceutical market in China, the central procurement under the medical insurance that may be extended to cover biological drugs in the future and the increased effort in national negotiations on medical insurance will restructure the pharmaceutical market in China to a large extent. We will actively participate in the national medical reform with our advantages in advanced technology, quality and cost and capture the opportunities presented during the policy reform so as to capture the huge unmet market demand in China. At the same time, we have also initiated our global market expansion and accelerated the registration and launching of our drugs in the international market.

We are in the process of building our sales and marketing strategy. 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 these 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.

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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 their 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 have notable academic profiles in medicine and pharmacy, and have 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.

We expect to sell our products to (i) distributors that sell our products to hospitals and (ii) direct-to-patient pharmacies and others. We are establishing our network of distributors for CMAB008 in accordance with the national drug sales regulations. Our distribution model is 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, 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.

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.

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FUTURE AND OUTLOOK

We leverage our efficient sales system with a focus on niche markets to capture the opportunities presented in the pharmaceutical reform in China.

Under the implementation of the new medical insurance policy in recent years, the pharmaceutical market in China is undergoing significant market restructuring. Companies with more competitive advantages in quality and pricing have benefited greatly from the negotiations on medical insurance price between the National Healthcare Security Administration and regional healthcare security administrative bodies at all levels and negotiations in relation to central procurement for drugs covered under the medical insurance. As a result, the overall market penetration has increased significantly during the reformation. This trend will drive the development of the pharmaceutical market in China for a long time into the future. Riding on the trend of the overall pharmaceutical policy reform, we will build a sales team in China with high efficiency and academic promotion as its core strategy, focusing on niche markets, such as gastroenterology, respiratory, rheumatology and oncology, with an aim to promote our products and cultivate the practice of antibody drugs application. We will actively monitor, and participate in, the negotiations of medical insurance, especially focusing on capturing the huge potentials brought by the negotiations of central procurement for biological products under the medical insurance. Relying on the significant advantages of our drugs in terms of quality and cost, we will capture opportunities presented in the significant increase in market penetration caused by the policy reform, effectively satisfying the unmet market demand in China in respect of biological agents with high quality products and ultimately benefiting patients.

The antibody drugs development in overseas markets has shown a rapid increase resulting in a huge unmet global market demand for antibody drugs, especially for those with PIC/s as the core. In light of the policy reform in China, the economies of scale of antibody drugs will greatly enhance the global competitiveness of Chinese antibody drugs. In view of this, we will work closely with our overseas market expansion partners to initiate new drug registration and launching new drugs in different countries and regions in a comprehensive and flexible manner with multiple products, with an aim to promote our products’ global presence and accelerate their growth in the global market.

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 CMAB008, CMAB007, CMAB009 and CMAB807. To bring our 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 product candidates. 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.

– 14 –

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 in 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 talent 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 have established collaborative partnerships with domestic and foreign pharmaceutical companies with overseas channel resources, and constantly seek more opportunities to cooperate with potential partners with sales resources, 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 mergers and acquisitions internationally to expand our pipeline of products for R&D development and sales in overseas markets.

– 15 –

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.

FINANCIAL REVIEW

The following table summarizes our results of operations for the six months ended June 30, 2021 and 2020:

		For the six months	ended June 30,
	2021	2020	Change	Change
	RMB’000	RMB’000	RMB’000	(%)
	(unaudited)	(unaudited)	(unaudited)	(unaudited)
Revenue	81,246	–	81,246	–
Cost of sales	(16,769)	–	(16,769)	–
Gross profit	64,477	–	64,477	–
Other income	3,558	20,939	(17,381)	(83.0)
Other gains and losses	(4,719)	19,066	(23,785)	(124.8)
Research and development expenses	(163,455)	(60,828)	(102,627)	168.7
Administrative expenses	(43,755)	(30,741)	(13,014)	42.3
Finance costs	(1,267)	(2,624)	1,357	(51.7)
Loss before tax	(145,161)	(54,188)	(90,973)	167.9
Income tax expense	–	–	–	–
Loss and total comprehensive
expense for the period	(145,161)	(54,188)	(90,973)	167.9
Attributable to:
Owners of the Company	(145,161)	(54,188)	(90,973)	167.9
Loss per share attributable to ordinary
equity holders of the Company
– Basic	RMB(0.04)	RMB(0.01)
– Diluted	RMB(0.04)	RMB(0.01)

– 16 –

Revenue

The Group’s revenue increased from RMB0.0 million for the six months ended June 30, 2020 to RMB81.2 million for the six months ended June 30, 2021, primarily attributable to the intellectual property transfer agreement on CMAB806 during the Reporting Period. Set out below are the components of revenue for the periods indicated:

	For the six months	ended June 30,
	2021	2020
	RMB’000	RMB’000
	(unaudited)	(unaudited)
Revenue from intellectual property transfer agreement
on CMAB806 – at a point in time	81,246	–

Cost of sales

The Group’s cost of sales increased from RMB0.0 million for the six months ended June 30, 2020 to RMB16.8 million for the six months ended June 30, 2021, primarily attributable to the cost corresponding to the revenue from intellectual property transfer agreement on CMAB806 recognized during the Reporting Period. Set out below are the components of cost of sales for the periods indicated:

	For the six months	ended June 30,
	2021	2020
	RMB’000	RMB’000
	(unaudited)	(unaudited)
Cost of sales corresponding to revenue from intellectual
property transfer agreement on CMAB806	16,769	–

– 17 –

OTHER INCOME

Other income of the Group decreased by 83.0% from RMB20.9 million for the six months ended June 30, 2020 to RMB3.6 million for the six months ended June 30, 2021, which was primarily due to a decline in interest income due to decreased monetary funds, which is caused by the increase of R&D investment and a drop in government subsidies from the corresponding period of last year during the Reporting Period. Set out below are the components of other income for the periods indicated:

	For the six months	ended June 30,
	2021	2020
	RMB’000	RMB’000
	(unaudited)	(unaudited)
Bank interest income	1,043	8,173
Government grants and subsidies related to income	2,515	12,766
	3,558	20,939

OTHER GAINS AND LOSSES

Other gains and losses of the Group decreased by 124.8% from gains of RMB19.1 million for the six months ended June 30, 2020 to losses of RMB4.7 million for the six months ended June 30, 2021, which was primarily due to a significant decrease 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:

	For the six months	ended June 30,
	2021	2020
	RMB’000	RMB’000
	(unaudited)	(unaudited)
Net foreign exchange (losses)/gains	(4,646)	13,677
Others	(73)	5,389
	(4,719)	19,066

– 18 –

RESEARCH AND DEVELOPMENT EXPENSES

Research and development expenses of pipelines of the Group increased by 168.7% from RMB60.8 million for the six months ended June 30, 2020 to RMB163.5 million for the six months ended June 30, 2021, primarily due to intellectual property license-in expenses of RMB66.0 million incurred for the acquisition of CMAB807 during the Reporting Period.

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

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

	For the six months	ended June 30,
	2021	2020
	RMB’000	RMB’000
	(unaudited)	(unaudited)
Contract costs	51,999	25,609
Raw materials and consumables	13,090	11,193
Staff cost	24,235	17,174
Depreciation and amortization	3,895	3,770
Intellectual property license-in expenses	66,038	–
Others	4,198	3,082
Total	163,455	60,828

– 19 –

ADMINISTRATIVE EXPENSES

Administrative expenses of the Group increased by 42.3% from RMB30.7 million for the six months ended June 30, 2020 to RMB43.8 million for the six months ended June 30, 2021, primarily due to an increase in depreciation from new production plants that have been constructed.

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,
	2021	2020
	RMB’000	RMB’000
	(unaudited)	(unaudited)
Staff cost	19,414	16,065
Depreciation	14,190	7,366
Others	10,151	7,310
Total	43,755	30,741

FINANCE COSTS

Finance costs of the Group decreased by 51.7% from RMB2.6 million for the six months ended June 30, 2020 to RMB1.3 million for the six months ended June 30, 2021, which was primarily due to no outstanding loans during the Reporting Period.

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

– 20 –

LIQUIDITY AND CAPITAL RESOURCES

Our trade receivables increased from RMB0.0 million as at December 31, 2020 to RMB11.5 million as at June 30, 2021, which was primarily due to the outstanding balance of the intellectual property transfer agreement on CMAB806 during the Reporting Period.

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

	At June 30,	At December 31,
	2021	2020	Change
	RMB’000	RMB’000	(%)
	(unaudited)	(audited)	(unaudited)
Trade receivables	11,468	–	–
Prepayments and other receivables	38,391	31,673	21.2
Inventories	37,664	33,427	12.7
Contract costs	850	16,769	(94.9)
Pledged bank deposits	2,000	2,000	0.0
Rental deposit to a related party	411	411	0.0
Cash and bank balances	307,178	484,846	(36.6)
Total	397,962	569,126	(30.1)

INDEBTEDNESS

As of June 30, 2021, we had non-trade amount due to a related party of RMB2.8 million and lease liabilities of RMB37.5 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.

– 21 –

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

	At June 30,	At December 31,
	2021	2020
	RMB’000	RMB’000
	(unaudited)	(audited)
Unsecured and unguaranteed amount due to Biomabs	2,762	21
Lease liabilities	37,498	40,348

As at June 30, 2021, we, as a lessee, had outstanding lease liabilities for the remaining terms of relevant lease agreements in an aggregate amount of RMB37.5 million.

As at June 30, 2021, 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 May 31, 2019, 783,580,000 Shares were issued under the Global Offering and the Shares were listed on the Main Board of the Stock Exchange. 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, 2021, 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 24.1% debt and 75.9% equity as at June 30, 2021, compared with 24.2% debt and 75.8% equity as at December 31, 2020.

– 22 –

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, 2021 the gearing ratio of the Group was 24.1% (unaudited) (as at December 31, 2020: 24.2% (audited)).

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

	At June 30,	At December 31,
	2021	2020
	(unaudited)	(audited)
Current ratio(1)	2.1	2.8
Quick ratio(2)	1.9	2.6

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 2.8 as of December 31, 2020 to 2.1 as of June 30, 2021, and our quick ratio decreased from 2.6 as of December 31, 2020 to 1.9 as of June 30, 2021, primarily due to utilization of monetary funds for operation as scheduled.

– 23 –

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

For the six months ended 30 June 2021

Notes Revenue 5 Cost of sales 5 Gross profit Other income 6 Other gains and losses 7 Research and development expenses Administrative expenses Finance costs 8 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	2021 (Unaudited) RMB’000 81,246 (16,769) 64,477 3,558 (4,719) (163,455) (43,755) (1,267) (145,161) – (145,161) (145,161) RMB(0.04) RMB(0.04)	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)

– 24 –

INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

30 June 2021

Notes Non-current assets Plant and equipment 13 Right-of-use assets Other non-current assets 14 Total non-current assets Current assets Trade receivables 15 Prepayments and other receivables 16 Inventories Contract costs 5 Pledged bank deposits 17 Rental deposit to a related party 21 Cash and bank balances 17 Total current assets	30 June 2021 (Unaudited) RMB’000 406,386 69,640 104,637 580,663 11,468 38,391 37,664 850 2,000 411 307,178 397,962	31 December 2020 (Audited) RMB’000 438,408 74,209 81,294
		593,911
		– 31,673 33,427 16,769 2,000 411 484,846
		569,126

– 25 –

Notes Current liabilities Trade and other payables 18 Amount due to a related party 21 Lease liabilities to third parties Lease liabilities to a related party 21 Contract liabilities Deferred income Total current liabilities Net Current Assets Total Assets Less Current Liabilities Non-current liabilities Deferred income Lease liabilities to third parties Total non-current liabilities Net Assets Capital and reserves Share capital Reserves Total Equity	30 June 2021 (Unaudited) RMB’000 105,985 50,039 4,612 2,985 16,144 12,065 191,830 206,132 786,795 14,000 29,901 43,901 742,894 2,804 740,090 742,894	31 December 2020 (Audited) RMB’000 113,297 75 4,146 4,386 70,058 10,665
		202,627
		366,499
		960,410
		47,109 31,816
		78,925
		881,485
		2,804 878,681
		881,485

– 26 –

INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the six months ended 30 June 2021

	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
At 1 January 2021 (Audited)	2,804	1,400,504	(32,763)	31,695	(520,755)	881,485
Loss and total comprehensive expense
for the period (Unaudited)	–	–	–	–	(145,161)	(145,161)
Recognition of equity-settled
share-based compensation
(Unaudited)	–	–	–	6,570	–	6,570
At 30 June 2021 (Unaudited)	2,804	1,400,504	(32,763)	38,265	(665,916)	742,894
At 1 January 2020 (Audited)	2,804	1,400,504	(32,763)	19,289	(336,123)	1,053,711
Loss and total comprehensive expense
for the period (Unaudited)	–	–	–	–	(54,188)	(54,188)
Recognition of equity-settled
share-based compensation
(Unaudited)	–	–	–	6,872	–	6,872
At 30 June 2020 (Unaudited)	2,804	1,400,504	(32,763)	26,161	(390,311)	1,006,395

– 27 –

INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

For the six months ended 30 June 2021

Notes CASH FLOWS FROM OPERATING ACTIVITIES Loss before tax Adjustments for: Bank interest income 6 Finance costs 8 Depreciation of plant and equipment 9 Depreciation of right-of-use assets 9 Loss on disposal of plant and equipment 9 Net foreign exchange losses/(gains) 7 Share-based payment expenses 9 Increase in inventories Decrease/(Increase) in contract costs Increase in trade receivables Increase in prepayments and other receivables Decrease/(Increase) in other non-current assets Increase in amount due to a related party Increase/(Decrease) in trade and other payables (Decrease)/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 Disposal of plant and equipment Placement of a time deposit Withdraw of a time deposit Withdraw of pledged bank deposits Net cash flows (used in)/from investing activities	2021 (Unaudited) RMB’000 (145,161) (1,043) 1,267 14,085 4,569 73 4,646 6,570 (114,994) (4,237) 15,919 (11,468) (6,718) 2,794 50,347 12,494 (53,914) 1,400 (108,377) 1,043 (61,230) 42 – – – (60,145)	2020 (Unaudited) RMB’000 (54,188) (8,173) 2,624 7,746 3,937 – (13,677) 6,872 (54,859) (4,525) (2,928) – (19,090) (3,472) 1,231 (12,991) 11,396 150 (85,088) 6,038 (92,865) – (45,012) 179,220 153,008 200,389

– 28 –

CASH FLOWS FROM FINANCING ACTIVITIES Interest paid Issue costs paid Repayment of bank loans Repayments to a related party Repayments of principal portion of lease liabilities Net cash flows used in financing activities NET (DECREASE)/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	2021 (Unaudited) RMB’000 (1,294) – – (383) (2,809) (4,486) (173,008) 484,846 (4,660) 307,178	2020 (Unaudited) RMB’000 (2,832) (1,280) (63,086) (3,129) (3,331) (73,658) 41,643 588,720 12,982 643,345

– 29 –

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION

30 June 2021

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 is 190 Elgin Avenue, George Town, Grand Cayman KY1-9008, Cayman Islands and the principal place of business is located at Block G79, Lujia Road East, Koutai Road West, China Medical City, Taizhou, the People’s Republic of China (the “ PRC ”).

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 and transfer of intellectual property.

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 2021 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 2020.

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 2020, 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 9, IAS 39 Interest Rate Benchmark Reform – Phase 2 IFRS 7, IFRS 4 and IFRS 16 Amendment to IFRS 16 Covid-19-Related Rent Concessions Amendment to IFRS 16 Covid-19-Related Rent Concessions beyond 30 June 2021

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

– 30 –

4. SEGMENT INFORMATION

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.

Geographical information

The Group’s revenue during the reporting period is derived from one external customer which is located in the PRC and the Group’s non-current assets are substantially located in the PRC, accordingly, no geographical information in accordance with IFRS 8 Operating Segments is presented.

Information about a major customer

Revenue of approximately RMB81,246,000 (unaudited) (during the six months ended 30 June 2020: Nil (unaudited)) was derived from an intellectual property transfer agreement to a single customer.

5. REVENUE

An analysis of revenue is as follows:

	For the six months ended 30 June	For the six months ended 30 June
	2021	2020
	RMB’000	RMB’000
	(Unaudited)	(Unaudited)
Revenue from contracts with a customer
Revenue from intellectual property transfer agreement on CMAB806
– at a point in time	81,246	–

In January 2017, the Group entered into an agreement with an independent third-party customer to transfer 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. The Group recognized revenue from this contract during the reporting period since the control of rights of the intellectual property had been transferred to the customer. The cost incurred to fulfil this contract, amounting to RMB16,769,000 (unaudited) was charged to cost of sales during the six months ended 30 June 2021 and was included in contract costs as at 31 December 2020, respectively.

The following table shows the amounts of revenue recognized in the current reporting period that were included in the contract liabilities at the beginning of the reporting period:

	For the six months ended 30 June	For the six months ended 30 June
	2021	2020
	RMB’000	RMB’000
	(Unaudited)	(Unaudited)
Revenue from intellectual property transfer agreement on CMAB806	70,058	–

– 31 –

Intellectual property transfer agreement with a customer

In December 2020, the Group entered into an agreement with an independent third-party customer to transfer an intellectual property in relation to CMAB809 at a consideration of RMB50,000,000. 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 and no cost incurred to fulfil this contract as at 30 June 2021.

Contract development and manufacturing agreement with a customer

In May 2021, the Group entered into an agreement with an independent third-party customer for contract development and manufacturing in relation to CMAB806, at a consideration of RMB43,860,000, while RMB16,144,000 has been received as at 30 June 2021. The Group did not recognize revenue from this contract during the reporting period since the control of rights of the deliverables had not been transferred to the customer. The cost incurred to fulfil this contract, amounting to RMB850,000 (unaudited) at 30 June 2021, was capitalized as cost to fulfil the contract and was included in contract costs in the interim condensed consolidated statement of financial position.

6. OTHER INCOME

	For the six months ended 30 June	For the six months ended 30 June
	2021	2020
	RMB’000	RMB’000
	(Unaudited)	(Unaudited)
Bank interest income	1,043	8,173
Government grants and subsidies related to income	2,515	12,766
	3,558	20,939

7. OTHER GAINS AND LOSSES

Net foreign exchange (losses)/gains Others	For the six months ended 30 June 2021 2020 RMB’000 RMB’000 (Unaudited) (Unaudited) (4,646) 13,677 (73) 5,389 (4,719) 19,066	For the six months ended 30 June 2021 2020 RMB’000 RMB’000 (Unaudited) (Unaudited) (4,646) 13,677 (73) 5,389 (4,719) 19,066
		19,066

8. FINANCE COSTS

Interest on bank loans Interest on lease liabilities	For the six months ended 30 June 2021 2020 RMB’000 RMB’000 (Unaudited) (Unaudited) – 1,235 1,267 1,389 1,267 2,624	For the six months ended 30 June 2021 2020 RMB’000 RMB’000 (Unaudited) (Unaudited) – 1,235 1,267 1,389 1,267 2,624
		2,624

– 32 –

9. LOSS BEFORE TAX

Loss before tax for the period has been arrived at after charging/(crediting):

Depreciation for plant and equipment Depreciation for right-of-use assets Loss on disposal of plant and equipment Government grants and subsidies related to income Staff cost (including directors’ emoluments): – Independent non-executive directors’ fee – Salaries and other benefits – Retirement benefit scheme contributions – Share-based payment expenses – Consultation fee Auditors’ remuneration Short-term lease payment Expense incurred in intellectual property transfer agreement on CMAB807 Cost of intellectual property transfer agreement on CMAB806 Cost of inventories recognized as expense (included in research and development expense)

For the six months ended 30 June 2021 2020 RMB’000 RMB’000 (Unaudited) (Unaudited) 14,085 7,746 4,569 3,937 73 – (2,515) (12,766) 151 163 33,505 26,356 3,065 1,120 6,570 6,872 336 335 43,627 34,846 700 600 83 – 66,038 – 16,769 – 12,432 11,193

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 2021, nor has any dividend been proposed since the end of the reporting period (during the six months ended 30 June 2020: Nil).

– 33 –

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 ordinary equity holders 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 2021 2020 RMB’000 RMB’000 (Unaudited) (Unaudited) (145,161) (54,188) For the six months ended 30 June 2021 2020 ’000 ’000 (Unaudited) (Unaudited) 4,124,080 4,124,080

The calculation of diluted loss per share for the six months ended 30 June 2021 and 2020 did not assume the exercise of the pre-IPO share options since its inclusion would be anti-dilutive.

13. PLANT AND EQUIPMENT

During the six months ended 30 June 2021, the Group acquired assets with a cost of RMB15,287,000 (unaudited) including RMB13,696,000 (unaudited) of construction in process (for the six months ended 30 June 2020: RMB170,201,000 (unaudited) including RMB165,279,000 (unaudited) of construction in process).

During the six months ended 30 June 2021, the grants related to construction of plant in Taizhou of RMB33,109,000 (unaudited) received in 2019 were deducted from the carrying amount of the assets upon the compliance of the Group with the conditions attached to the grants and the government acknowledged acceptance (for the six months ended 30 June 2020: Nil (unaudited)).

14. OTHER NON-CURRENT ASSETS

Prepayment for acquisition of plant and equipment (note a) Deposit for construction of production facilities VAT recoverable (note b)	30 June 2021 RMB’000 (Unaudited) 70,207 3,000 31,430 104,637	31 December 2020 RMB’000 (Audited) 44,070 3,000 34,224
		81,294

Notes:

• a. Prepayment for acquisition of plant and equipment is mainly related to the new production facilities on the parcel of industrial land of approximately 100,746 square meters in Taizhou Hi-tech Zone.

• b. VAT recoverable is presented in prepayments and other receivables and other non-current assets based on the management’s estimation of the amount of VAT recoverable to be utilized within one year.

– 34 –

15. TRADE RECEIVABLES

	30 June 2021	31 December 2020
	RMB’000	RMB’000
	(Unaudited)	(Audited)
Trade receivables from a third party	11,468	–

The Group’s trade receivables are generated from the intellectual property transfer agreement on CMAB806 and were received in July 2021.

The ageing of the trade receivables as at the end of each of the reporting period, based on the date of the service rendered, is less than three months and the expected credit loss is minimal.

The Group does not hold any collateral or other credit enhancements over its trade receivables. Trade receivables are non-interest-bearing.

16. PREPAYMENTS AND OTHER RECEIVABLES

	30 June 2021	31 December 2020
	RMB’000	RMB’000
	(Unaudited)	(Audited)
Other receivables	1,110	1,224
Prepayments for research and development services	13,813	11,177
Other deposits and prepayments	8,943	4,185
VAT recoverable (note)	14,525	15,087
	38,391	31,673

Note: VAT recoverable is presented in prepayments and other receivables and other non-current assets based on the management’s estimation of the amount of VAT recoverable to be utilized within one year.

17. PLEDGED BANK DEPOSITS/CASH AND BANK BALANCES

Pledged bank deposits

The current pledged bank deposits at 30 June 2021 and 31 December 2020 were pledged to a bank as collateral for the issue of a payment guarantee for a construction contract, which were interest-bearing at a fixed rate of 0.3% per annum. The pledge will be expired in September 2021.

Cash and bank balances

Cash and bank balances comprise of cash at banks and short-term bank deposits with an original maturity of three months or less. Cash and bank balances 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 balances approximate to their fair values.

– 35 –

18. TRADE AND OTHER PAYABLES

Trade payables Accrued expenses for research and development services Other payables for purchases of plant and equipment Salary and bonus payables Other taxes payable Accrued listing expenses and issue costs Other payables	30 June 2021 RMB’000 (Unaudited) 6,472 43,558 34,282 8,361 437 10,545 2,330 105,985	31 December 2020 RMB’000 (Audited) 4,466 25,334 54,088 11,185 594 10,646 6,984
		113,297

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:

	30 June 2021	31 December 2020
	RMB’000	RMB’000
	(Unaudited)	(Audited)
Within 60 days	4,691	2,997
Over 60 days but within 1 year	1,538	1,469
Over 1 year	243	–
	6,472	4,466

– 36 –

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 2021	Granted	Exercised	Forfeited	30 June 2021
					(Unaudited)
18 August 2018	80,046,901	–	–	100,256	79,946,645

The Group recognized the total expense of RMB6,570,000 (unaudited) for the six months ended 30 June 2021 in relation to share options granted by the Company (for the six months ended 30 June 2020: RMB6,872,000 (unaudited)).

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

20. CAPITAL COMMITMENTS

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

	30 June 2021	31 December 2020
	RMB’000	RMB’000
	(Unaudited)	(Audited)
Contracted but not provided (note)	172,571	138,014

Note: The capital commitments are mainly related to the new production facilities on the parcel of industrial land of approximately 100,746 square meters in Taizhou Hi-tech Zone.

– 37 –

21. RELATED PARTY TRANSACTIONS

(a) The Group had the following transactions with related parties during the period:

Expense incurred in intellectual property transfer agreement: Shanghai Biomabs Pharmaceuticals Co., Ltd. (“Biomabs”) (note a) Expenses incurred in clinical business paid by a related party on behalf of the Group: Biomabs Repayments to a related party regarding to the expenses incurred in clinical business paid by a related party on behalf of the Group: Biomabs Interest on lease liabilities to a related party: Biomabs Note:	For the six months ended 30 June 2021 2020 RMB’000 RMB’000 (Unaudited) (Unaudited) 66,038 – 3,124 1,561 383 3,129 108 251	For the six months ended 30 June 2021 2020 RMB’000 RMB’000 (Unaudited) (Unaudited) 66,038 – 3,124 1,561 383 3,129 108 251
		1,561
		3,129
		251

• a. Biomabs is ultimately controlled by a close family member of the controlling shareholder. In March 2021, the Group entered into an agreement with Biomabs in relation to acquire the intellectual property in connection with CMAB807 from Biomabs at a consideration of RMB66,038,000 (excluding value added tax). Till 30 June 2021, the outstanding payable balance was accrued to RMB47,170,000 (unaudited). For further details regarding the acquisition of CMAB807, please refer to the announcement of the Company dated 1 March 2021, and the circular dated 13 April 2021 published on the websites of the Stock Exchange and the Company.

(b) Outstanding balances with related parties:

Rental deposit to a related party: Biomabs Amount due to a related party: Trade payables Biomabs Non-trade payables Biomabs Lease liabilities payable to Biomabs: Within one year	30 June 2021 RMB’000 (Unaudited) 411 47,277 2,762 50,039 2,985	31 December 2020 RMB’000 (Audited) 411
		54
		21
		75
		4,386

Non-trade payables to Biomabs are unsecured, non-interest-bearing and repayable on demand.

– 38 –

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 ageing 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	30 June 2021 RMB’000 (Unaudited) 47,277 – 47,277	31 December 2020 RMB’000 (Audited) 39 15
		54

The lease liabilities payable to Biomabs 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 2021, the Group paid Biomabs in an amount of RMB1,509,000 (unaudited) in connection with this lease arrangement (for the six months ended 30 June 2020: RMB2,640,000 (unaudited)).

(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 2021 2020 RMB’000 RMB’000 (Unaudited) (Unaudited) 2,538 2,558 134 24 151 163 2,948 5,621 336 335 6,107 8,701	For the six months ended 30 June 2021 2020 RMB’000 RMB’000 (Unaudited) (Unaudited) 2,538 2,558 134 24 151 163 2,948 5,621 336 335 6,107 8,701
		8,701

– 39 –

OTHER INFORMATION

Interim Dividend

The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2021.

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, 2021, the Company used a total of approximately RMB658.2 million of the proceeds, including approximately RMB163.0 million for research and development of our Core Products, approximately RMB307.3 million for production scale-up and construction of new production facilities in Taizhou, PRC, approximately RMB116.9 million for research and development of our other candidate products, approximately RMB51.0 million for working capital and other general corporate purposes and approximately RMB20.0 million for acquisition of CMAB807 license. The Company intends to apply such net proceeds in accordance with the plan as set out in the Prospectus and the announcement published by the Company on March 1, 2021. The table below sets out the planned applications of the net proceeds of the Global Offering and actual usage up to June 30, 2021:[(1) ] (2)

Use of proceeds Original Allocation of the proceeds Revised allocation of the proceeds(3) (RMB million) (RMB million) For R&D of our Core Products 180.9 180.9 For production scale-up and construction of new production facilities in Taizhou, PRC 497.2 497.2 For R&D of our other product candidates 194.5 194.5 For working capital and other general corporate purposes 94.8 74.8 For acquisition of CMAB807 License 0.0 20.0 Total 967.4 967.4

Utilized amount (as of June 30, 2021) Unutilized amount (as of June 30, 2021) Expected timeline for fully utilizing the unutilized amount (RMB million) (RMB million) 163.0 17.9(4) By June 30, 2022 307.3 189.9(5) By December 31, 2022 116.9 77.6(6) By June 30, 2022 51.0 23.8 By December 31, 2021 20.0 – 658.2 309.2

– 40 –

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) On March 1, 2021, the Board resolved to allocate approximately RMB20 million of the proceeds raised from the global offering of the Company originally allocated for working capital and other general corporate purposes to finance part of the consideration for acquisition of CMAB807 License.

• (4) The application for new drug marketing of CMAB008 has been approved in July 2021, CMAB007 has completed phase III clinical trials and CMAB009 are currently under phase III clinical trials.

• (5) 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.

• (6) Of our other drug candidates, CMAB807 is currently undergoing phase III clinical trials and CMAB819 is currently undergoing phase I clinical trials.

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, 2021, we did not have material acquisitions or disposals of subsidiaries, associates and joint ventures.

Employee and Remuneration Policy

As of June 30, 2021, we had a total of 405 employees, of which 91 are located in Shanghai and 314 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 58 233 40 27 47 405

Notes:

• (1) The number of R&D personnel here excludes 22 R&D team members who have been included in our management.

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

– 41 –

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 June 30, 2021, we had 127, 17 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, 151 out of our 255 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, 2021, 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 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 for the six months ended June 30, 2021 and 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.

– 42 –

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 for the six months ended June 30, 2021 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, 2021. 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, 2021, 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.

– 43 –

SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD

In July 2021, the new drug application (NDA) of CMAB008 類停[®] (infliximab for injection), a core product of the Company and a recombinant anti-tumor necrosis factor-α human-mouse chimeric monoclonal antibody independently developed by the Company, was approved by the National Medical Products Administration of the People’s Republic of China for the treatment of (i) ulcerative colitis in adults; (ii) ankylosing spondylitis; (iii) rheumatoid arthritis; (iv) Crohn’s disease in adults and pediatric patients aged above 6 years old; (v) fistula Crohn’s disease; and (vi) psoriasis. Please refer to the announcement of the Company published on July 14, 2021 for details of the aforementioned approval.

Save as disclosed in this announcement and above, there was no significant event subject to disclosure from June 30, 2021 to the date of this announcement.

APPRECIATION

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

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

– 44 –

“Director(s)”	the director(s) of our Company
“Global Offering”	has the meaning ascribed to it under the Prospectus
“Group”, “our Group”,	the Company and its subsidiaries from time to time
“the Group”, “we”,
“us”, or “our”
“Hong Kong”	the Hong Kong Special Administrative Region of the PRC
“Hong Kong dollars” or	Hong Kong dollars, the lawful currency of Hong Kong
“HK dollar” or “HK$”
“IPO”	initial public offering
“Listing”	the listing of Shares on the Main Board of the Stock Exchange on May
	31, 2019
“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, 2021 to June 30, 2021
“RMB”	Renminbi, the lawful currency of the PRC

– 45 –

“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 27, 2021

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

– 46 –