Pharmaron Beijing Co., Ltd — Capital/Financing Update 2020

Dec 3, 2020

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Pharmaron Beijing Co., Ltd. 康龍化成（北京）新藥技術股份有限公司*

(A joint stock company incorporated in the People’s Republic of China with limited liability)

(Stock Code: 3759)

SUPPLEMENTAL ANNOUNCEMENT IN RELATION TO DISCLOSEABLE TRANSACTION

Reference is made to the announcement of Pharmaron Beijing Co., Ltd. (the “ Company ”) dated November 9, 2020 (the “ Announcement ”) in relation to a discloseable transaction relating to the Membership Interest Purchase Agreement. Terms used herein shall have the same meanings as defined in the Announcement unless otherwise stated.

This announcement is made to provide supplemental information on the details of the agreed targets relating to the financial performance of the Target Companies which should be met before the earn-out payment of up to US$22,500,000 is paid and the payment terms for the earn-out payment.

The earn-out payment of up to US$22,500,000 should be paid if the Target Companies achieve an agreed average gross margin over the financial years ended December 31, 2020 and 2021 (the “ Target Gross Margin ”) and achieve an agreed consolidated net revenues (the “ Target Revenue ”) in connection with the provision of services related to the research, development and/or commercialization of specified products for the financial years ended December 31, 2020 and 2021. The Target Gross Margin shall be calculated as of the end of December 31, 2021 and for the purposes of the calculation, cost of revenue in determining the gross margin shall exclude (i) depreciation and amortization included in the cost of revenue; (ii) compensation payable to the founders of the Target Companies to the extent included within cost of revenue; and (iii) any compensation payable in respect of transaction costs incurred by the Company for this transaction or otherwise payable to any employee of the Target Companies outside of the ordinary course of business, to the extent included within cost of revenue. The Target Gross Margin and Target Revenue have been arrived at after arm’s length negotiations between the parties with reference to historical performance of the Target Companies, market research information and the expected performance of the Target Companies.

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The Company shall deliver to Absorption Holdings a statement (the “ Earn-out Statement ”) setting forth in reasonable detail the Company’s calculations of the Target Gross Margin and Target Revenue of the Target Companies over the financial years ended December 31, 2020 and 2021. Assuming no disagreement between the Company and Absorption Holdings on the Earn-out Statement, the Company shall make the earn-out payment to Absorption Holdings within ten days after the Earn-Out Statement has become final and binding on the Parties in accordance with the Membership Interest Purchase Agreement by wire transfer of immediately available funds.

By order of the Board Pharmaron Beijing Co., Ltd. 康龍化成（北京）新藥技術股份有限公司 Dr. Lou Boliang* Chairman

Beijing, the PRC December 3, 2020

As at the date of this announcement, the Board of Directors comprises Dr. Lou Boliang, Mr. Lou Xiaoqiang and Ms. Zheng Bei as executive Directors; Mr. Chen Pingjin, Mr. Hu Baifeng, Mr. Li Jiaqing and Mr. Zhou Hongbin as non-executive Directors; Mr. Dai Lixin, Ms. Chen Guoqin, Mr. Tsang Kwan Hung Benson and Mr. Yu Jian as independent non-executive Directors.

• For identification purposes only

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