Pharmaron Beijing Co., Ltd — Capital/Financing Update 2021

Aug 29, 2021

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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)

UPDATE ANNOUNCEMENT IN RELATION TO DISCLOSEABLE TRANSACTION

Reference is made to the announcements of Pharmaron Beijing Co., Ltd. (the “ Company ”) dated November 9, 2020 and December 3, 2020 (the “ Announcements ”) 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 Announcements unless otherwise stated.

As disclosed in the Announcements, an earn-out payment of up to US$22,500,000 shall be paid to Absorption Holdings 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.

According to the financial statements of the Target Companies for the year ended December 31, 2020 and the six months ended June 30, 2021, the consolidated net revenues of the Target Companies have already exceeded the Target Revenue and the average gross margin of the Target Companies for the period ended June 30, 2021 have also exceeded the Target Gross Margin. Pursuant to the Membership Interest Purchase Agreement, Pharmaron Lab Testing may, in its sole discretion, elect to pay Absorption Holdings the earn-out payment of US$22,500,000 (the “ Maximum Earn-out Amount ”) at any time after closing. In order to further incentivize the shareholders of Absorption Holdings who remain as management of the Target Companies, Pharmaron Lab Testing, Absorption Holdings and the shareholders of Absorption Holdings, namely Mr. Patrick M. Dentinger, Dr. Ismael J. Hidalgo and Dr. Sid Bhoopathy, entered into a supplemental agreement on August 27, 2021 (U.S. time), pursuant to which Pharmaron Lab Testing agreed to pay Absorption Holdings the Maximum Earn-out Amount without waiting for the remainder of the year ending December 31, 2021 to be completed given that both the Target Gross Margin and the Target Revenue have been met by June 30, 2021 (“ Earn Out Acceleration ”). In light of the fact that the Target Revenue and Target Gross Margin have already been met as set out above, the Board considers that the entry into the supplemental agreement and the Earn Out Acceleration is fair and reasonable and in the interests of the Shareholders as a whole.

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The Company believes that the fact that Target Gross Margin and Target Revenue are met by June 30, 2021 reflects the strong market demand for research and development (“ R&D ”) service of cell and gene therapy products (“ CGT ”) as well as the high-quality services provided by the Target Companies. As disclosed in the annual results announcement of the Company for the year ended December 31, 2020, it is the Company’s strategy to accelerate the establishment of an integrated R&D services platform for CGT (the “ CGT Services ”) through the continuous development of the Target Companies and the acquisition of Allergan Biologics Limited (together with the Target Companies, the “ Acquired Companies ”), which was completed in the second quarter of 2021. In view of the long term growth strategy and strong market demand of CGT services, the Board believes that it is in the best interests of the Company and its Shareholders to opt for the Earn Out Acceleration to 1) facilitate deeper integration among different CGT service capabilities and geographic locations of the Group; and 2) accelerate the capabilities and capacities expansion of the Acquired Companies to meet the strong market demand in the CGT laboratory services area.

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 August 29, 2021

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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