RemeGen Co., Ltd. — Capital/Financing Update 2021

Oct 18, 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.

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RemeGen Co., Ltd.* 榮昌生物製藥 ( 煙台 ) 股份有限公司

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

(Stock Code: 9995)

REVISION OF ANNUAL CAPS UNDER THE MATERIALS PURCHASE FRAMEWORK AGREEMENT AND THE GENERAL SERVICES FRAMEWORK AGREEMENT

REVISION OF ANNUAL CAPS UNDER THE MATERIALS PURCHASE FRAMEWORK AGREEMENT

Reference is made to the Prospectus in relation to the Materials Purchase Framework Agreement dated August 22, 2020 entered into by and between the Company and CelluPro.

As the actual transaction amount of the transactions in 2021 contemplated under the Materials Purchase Framework Agreement may exceed the annual caps as set out in the Prospectus, the Company proposes to revise the existing annual caps in respect of the two years ending December 31, 2022.

REVISION OF ANNUAL CAPS UNDER THE GENERAL SERVICES FRAMEWORK AGREEMENT

Reference is made to the Prospectus in relation to the General Services Framework Agreement, defined to include a general services framework agreement dated December 6, 2019 and a supplemental general services framework agreement dated June 24, 2020, entered into by and between the Company and RC Pharma.

As the actual transaction amount of the transactions in 2021 contemplated under the General Services Framework Agreement may exceed the annual caps as set out in the Prospectus, the Company proposes to revise the existing annual caps in respect of the two years ending December 31, 2022.

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LISTING RULES IMPLICATIONS

As at the date of this announcement, the Controlling Shareholders hold approximately 46.22% of the total issued shares of the Company. RC Pharma is owned as to 63.93% by the Controlling Shareholders. CelluPro is owned as to 51% by MabPlex and 49% by RC Pharma, and MabPlex is in turn owned as to 35.1% by Yantai Rongrui Consulting Service Co., Ltd. (煙台榮瑞諮詢服 務有限公司) as its single largest shareholder. The Controlling Shareholders (other than Yantai Rongda Venture Capital Center (Limited Partnership), RongChang Holding Group LTD and I-NOVA Limited) are interested in an aggregate of approximately 45.61% equity interests in MabPlex through Yantai Rongrui Consulting Service Co., Ltd. (煙台榮瑞諮詢服務有限公司), Yantai Zengrui Business Management Center (Limited Partnership) (煙台增瑞企業管理中心 (有限合夥)), Yantai Yirui Business Management Center (Limited Partnership) (煙台頤瑞企業 管理中心(有限合夥)) and Mabplex Holding LTD. As such, each of RC Pharma and CelluPro is an associate of the Controlling Shareholders and hence, a connected person of the Company. Therefore, the transactions under each of the Materials Purchase Framework Agreement and the General Services Framework Agreement constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules.

As each of the applicable percentage ratio(s) calculated in accordance with Rule 14.07 of the Listing Rules in respect of the Revised Materials Purchase Caps and the Revised General Services Caps is above 0.1% but below 5%, the transactions contemplated thereunder are only subject to the reporting, annual review and announcement requirements but are exempt from independent shareholders’ approval requirement under Chapter 14A of the Listing Rules.

BACKGROUND

The Board has resolved to revise the annual caps under the Materials Purchase Framework Agreement and the General Services Framework Agreement on October 18, 2021.

REVISION OF ANNUAL CAPS UNDER THE MATERIALS PURCHASE FRAMEWORK AGREEMENT

The Company received conditional marketing approval for telitacicept (brand name: 泰愛[®] ) for the treatment of SLE in China and for disitamab vedotin (brand name: 愛地希[®] ) for the treatment of HER2 expressing locally advanced or metastatic GC in China in March and June 2021, respectively, and the Company has commenced commercial sales of the two products in March and July 2021, respectively. In light of the increased demand for cell culture medium products which are used in the commercial manufacturing process of these two products, the Board notices that the transaction amount between the Company and CelluPro for the eight months ended August 31, 2021 is approaching the Original Materials Purchase Caps for the year ending December 31, 2021. Therefore, the Company proposes to revise the Original Materials Purchase Caps in respect of the two years ending December 31, 2022.

Save for the revision in the annual caps as described below, the terms of the Materials Purchase Framework Agreement have not been changed or modified in any way and the major terms were set out in the paragraphs headed “Connected Transactions – Our Continuing Connected Transactions – B. Continuing Connected Transactions Subject to the Reporting, Annual Review and Announcement Requirements but Exempt from the Independent Shareholders’ Approval Requirement – 4. Materials Purchase Framework Agreement” in the Prospectus.

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Historical amounts

The table below sets out the historical amounts incurred by the Company under the Materials Purchase Framework Agreement during the periods indicated below:

	For the	For the	For the	For the
	year ended	year ended	year ended	eight months
	December 31,	December 31,	December 31,	ended August 31,
	2018	2019	2020	2021
Transaction amounts	RMB2,619,000	RMB1,577,000	RMB8,361,000	RMB11,857,000
(in approximation)	(inclusive of VAT)	(inclusive of VAT)	(inclusive of VAT)	(inclusive of VAT)

Original and Revised Materials Purchase Caps

The Company proposes that the below Revised Materials Purchase Caps be set for the transactions with CelluPro under the Materials Purchase Framework Agreement in respect of the two years ending December 31, 2022:

	For the	For the
	year ending	year ending
	December 31,	December 31,
	2021	2022
Original Materials Purchase Caps	RMB14,714,000	RMB14,893,000
	(inclusive of VAT)	(inclusive of VAT)
Revised Materials Purchase Caps	RMB15,200,000	RMB25,600,000
	(inclusive of VAT)	(inclusive of VAT)

The Company confirms that as at the date of this announcement, the transaction amounts under the Materials Purchase Framework Agreement has not exceeded the Original Materials Purchase Caps.

Basis of determination of the Revised Materials Purchase Caps

In determining the Revised Materials Purchase Caps, the Directors have considered:

• i. the historical transaction amounts paid by the Group to CelluPro for the medium products, i.e., the basic culture medium and the feed medium;

• ii. the expected demand for medium products used for the commercial manufacturing of telitacicept (brand name: 泰愛[®] ) and disitamab vedotin (brand name: 愛地希[®] ) in accordance with the production schedule of the Company, amounting to approximately 15,300L of basic culture medium and 2,400L of feed medium for the period from September to December in 2021, amounting to approximately RMB1.8 million and RMB1 million in transaction value, respectively; and approximately 110,000L of basic culture medium and 12,000L of feed medium for the year ending December 31, 2022, amounting to approximately RMB10.7 million and RMB4.2 million in transaction value, respectively;

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• iii. the expected demand for medium products used for other research and development activities, amounting to approximately 1,700L of basic culture medium and 100L of feed medium for the period from September to December in 2021, amounting to approximately RMB195,500 and RMB42,500 in transaction value, respectively; and approximately 6,250L of basic culture medium and 200L of feed medium for the year ending December 31, 2022, amounting to approximately RMB625,000 and RMB70,000 in transaction value, respectively; and

• iv. the expected demand for medium products for the manufacturing of other drug candidates, including RC18, RC28 and RC48, amounting to approximately 1,700L of basic culture medium and 260L of feed medium for the period from September to December in 2021, amounting to approximately RMB195,000 and RMB110,000 in transaction value, respectively; and approximately 71,000L of base culture medium and 8,200L feed medium for the year ending December 31, 2022, amounting to approximately RMB7.1 million and 2.9 million in transaction value, respectively.

Reasons for and benefits of the Revised Materials Purchase Caps

The Board has been closely monitoring the Group’s demands for medium products. By the adoption of the Revised Materials Purchase Caps, the Group will be able to continue its commercial manufacturing activities for telitacicept (brand name: 泰愛[®] ) and disitamab vedotin (brand name: 愛地希[®] ) as well as other ongoing research and development activities for other drug candidates without disruption. CelluPro is a medium manufacturing company specializing in the development, production of high-quality serum free medium for mammalian cells culture. After comparing the terms of purchase of medium products from CelluPro and from other third party providers and taking into account of commercial considerations such as cost control and product quality, the Group has purchased the medium products from CelluPro since 2018, and CelluPro is able to provide the medium products required by the Group.

The Directors (including the independent non-executive Directors) considered the Revised Materials Purchase Caps is on normal commercial terms and in the ordinary and usual course of business of the Group, fair and reasonable and in the interests of the Company and the Shareholders as a whole.

REVISION OF ANNUAL CAPS UNDER THE GENERAL SERVICES FRAMEWORK AGREEMENT

Due to the increased demand for steam used in our daily business operations in connection with the commercial manufacturing of telitacicept (brand name: 泰愛[®] ) and disitamab vedotin (brand name: 愛地希[®] ), the Board notices that the transactions between the Company and RC Pharma under the General Services Framework Agreement for the eight months ended August 31, 2021 is approaching the Original General Services Caps for the year ending December 31, 2021. Therefore, the Company proposes to revise the Original General Services Caps in respect of the two years ending December 31, 2022.

Save for the revision in the annual caps as described below, the terms of the General Services Framework Agreement have not been changed or modified in any way and the major terms were set out in the paragraphs headed “Connected Transactions – Our Continuing Connected Transactions – B. Continuing Connected Transactions Subject to the Reporting, Annual Review and Announcement Requirements but Exempt from the Independent Shareholders’ Approval Requirement – 2. General Services Framework Agreement” in the Prospectus.

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Historical amounts

The table below sets out the historical amounts incurred by the Company under the General Services Framework Agreement during the periods indicated below:

	For the	For the	For the	For the eight
	year ended	year ended	year ended	months ended
	December 31,	December 31,	December 31,	August 31,
	2018	2019	2020	2021
Transaction amounts	RMB7,146,126	RMB9,541,997	RMB7,615,653	RMB7,550,484
	(inclusive of VAT)	(inclusive of VAT)	(inclusive of VAT)	(inclusive of VAT)

Original and Revised General Services Caps

The Company proposes that the below Revised General Services Caps be set for the transactions with RC Pharma under the General Services Framework Agreement in respect of the two years ending December 31, 2022:

	For the	For the
	year ending	year ending
	December 31,	December 31,
	2021	2022
Original General Services Caps	RMB9,011,000	RMB9,111,000
	(inclusive of VAT)	(inclusive of VAT)
Revised General Services Caps	RMB14,920,000	RMB19,690,000
	(inclusive of VAT)	(inclusive of VAT)

The Company confirms that as at the date of this announcement, the transaction amounts under the General Services Framework Agreement has not exceeded the Original General Services Caps.

Basis of determination of the Revised General Services Caps

In determining the Revised General Services Caps, the Directors have considered:

• i. the historical transaction amounts under the General Services Framework Agreement and in particular, the historical transaction amounts paid by the Group to RC Pharma for the provision of steam; and

• ii. the expected increased usage of steam in connection with the commercial manufacturing of telitacicept (brand name: 泰愛[®] ) and disitamab vedotin (brand name: 愛地希[®] ).

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Reasons for and benefits of the Revised General Services Caps

The Board has been closely monitoring the Group’s usage of steam. By the adoption of the Revised General Services Caps, the Group will be able to continue its commercial manufacturing activities for telitacicept (brand name: 泰愛[®] ) and disitamab vedotin (brand name: 愛地希[®] ) without disruption. RC Pharma constructed and maintained the facilities and equipment for producing steam and provides the same to all corporations located in the Rongchang Biopharmaceutical Park where the Company is located. The provision of steam is charged at the procurement costs paid by RC Pharma, for the natural gas required for producing steam plus service charge for the maintenance of facilities and equipment for converting the same into steam.

The Directors (including the independent non-executive Directors) considered the Revised General Services Caps is on normal commercial terms and in the ordinary and usual course of business of the Group, fair and reasonable and in the interests of the Company and the Shareholders as a whole.

INFORMATION ABOUT THE GROUP

The Group is a commercial-ready biopharmaceutical company committed to the discovery, development and commercialization of innovative and differentiated biologics for the treatment of autoimmune, oncology and ophthalmic diseases with unmet medical needs in China and globally.

INFORMATION ABOUT CELLUPRO AND RC PHARMA

CelluPro is a medium manufacturing company specializing in the development, production of highquality serum free medium for mammalian cells culture. RC Pharma is a leading platform based in the PRC with subsidiaries engaging in the pharmaceutical industry focusing on the research and development of small molecule drugs and Chinese medicines.

As of the date of this announcement, CelluPro is owned as to 51% by MabPlex and 49% by RC Pharma.

MabPlex is in turn owned as to 35.1% by Yantai Rongrui Consulting Service Co., Ltd. (煙台榮 瑞諮詢服務有限公司) as its single largest shareholder. The Controlling Shareholders (other than Yantai Rongda Venture Capital Center (Limited Partnership), RongChang Holding Group LTD and I-NOVA Limited) are interested in an aggregate of approximately 45.61% equity interests in MabPlex through Yantai Rongrui Consulting Service Co., Ltd. (煙台榮瑞諮詢服務有限公司), Yantai Zengrui Business Management Center (Limited Partnership) (煙台增瑞企業管理中心(有限 合夥)), Yantai Yirui Business Management Center (Limited Partnership) (煙台頤瑞企業管理中心 (有限合夥)) and Mabplex Holding LTD.

RC Pharma is owned as to 63.93% by the Controlling Shareholders.

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LISTING RULES IMPLICATIONS

As at the date of this announcement, the Controlling Shareholders hold approximately 46.22% of the total issued shares of the Company. RC Pharma is owned as to 63.93% by the Controlling Shareholders. CelluPro is owned as to 51% by MabPlex and 49% by RC Pharma, and MabPlex is in turn owned as to 35.1% by Yantai Rongrui Consulting Service Co., Ltd. (煙台榮瑞諮詢服 務有限公司) as its single largest shareholder. The Controlling Shareholders (other than Yantai Rongda Venture Capital Center (Limited Partnership), RongChang Holding Group LTD and I-NOVA Limited) are interested in an aggregate of approximately 45.61% equity interests in MabPlex through Yantai Rongrui Consulting Service Co., Ltd. (煙台榮瑞諮詢服務有限公司), Yantai Zengrui Business Management Center (Limited Partnership) (煙台增瑞企業管理中心(有限 合夥)), Yantai Yirui Business Management Center (Limited Partnership) (煙台頤瑞企業管理中心 (有限合夥)) and Mabplex Holding LTD. As such, each of RC Pharma and CelluPro is an associate of the Controlling Shareholders and hence, a connected person of the Company. Therefore, the transactions under each of the Materials Purchase Framework Agreement and the General Services Framework Agreement constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules.

As each of the applicable percentage ratio(s) calculated in accordance with Rule 14.07 of the Listing Rules in respect of the Revised Materials Purchase Caps and the Revised General Services Caps is above 0.1% but below 5%, the transactions contemplated thereunder are only subject to the reporting, annual review and announcement requirements but are exempt from independent shareholders’ approval requirement under Chapter 14A of the Listing Rules.

As Mr. Wang Weidong, Dr. Fang Jianmin, Mr. Lin Jian and Dr. Wang Liqiang are our Controlling Shareholders and have a material interest in the Revised Materials Purchase Caps and the Revised General Services Caps, they have abstained from voting on the board resolutions of the Company in relation to the revision of annual caps.

DEFINITIONS

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

“Board” or	the board of Directors of the Company
“Board of Directors”
“CelluPro”	Yantai CelluPro Biotechnology Co., Ltd.* (煙台賽普生物技術有限
	公司), a limited liability company incorporated in the PRC on June
	27, 2018
“Company”	RemeGen Co., Ltd.*榮昌生物製藥(煙台)股份有限公司, a joint
	stock company incorporated in the People’s Republic of China with
	limited liability
“Controlling Shareholders”	Mr. Wang Weidong, Dr. Fang Jianmin, Mr. Lin Jian, Dr. Wang
	Liqiang, Mr. Wang Xudong, Mr. Deng Yong, Mr. Xiong Xiaobin,
	Mr. Wen Qingkai, Ms. Yang Minhua, Mr. Wei Jianliang, Yantai
	Rongda Venture Capital Center (Limited Partnership) (煙台榮達
	創業投資中心(有限合夥)), RongChang Holding Group LTD and
	I-NOVA Limited

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“Director(s)”	the director(s) of the Company
“GC”	gastric cancer
“General Services	the general services framework agreement dated December 6, 2019
Framework Agreement”	and a supplemental general services framework agreement dated
	June 24, 2020, entered into by and between the Company and RC
	Pharma
“Group”	the Company and its subsidiaries
“HER2 expressing”	HER2 status of tumor cells identified with a test score of IHC 1+ or
	above
“Hong Kong”	the Hong Kong Special Administrative Region of the PRC
“IHC”	immunohistochemistry, a test that uses a chemical dye to stain and
	measure specific proteins. IHC staining for HER2 status is the most
	widely used initial approach for evaluating HER2 as a predictor of
	response to anti-HER2 therapy. The HER2 IHC test gives a score of
	0 to 3+ that measures the amount of HER2 proteins on the surface of
	cells in a tissue sample
“L”	litres
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock Exchange
“MabPlex”	Yantai MabPlex International Biomedical Co., Ltd.* (煙台邁百瑞國
	際生物醫藥有限公司), a limited liability company incorporated in
	the PRC on June 25, 2013
“Materials Purchase	the Materials Purchase Framework Agreement dated August 22,
Framework Agreement”	2020 entered into by and between the Company and CelluPro
“Original General	the original total amounts under the General Services Framework
Services Caps”	Agreement for the years ending December 31, 2021 and 2022 of
	RMB9,011,000 and RMB9,111,000, respectively
“Original Materials	the original total amounts under the Materials Purchase Framework
Purchase Caps”	Agreement for the years ending December 31, 2021 and 2022 of
	RMB14,714,000 and RMB14,893,000, respectively
“Prospectus”	the prospectus of the Company dated October 28, 2020
“PRC”	the People’s Republic of China, which for the sole purpose of this
	announcement excludes Hong Kong, Macau Special Administrative
	Region and Taiwan
“RC Pharma”	Yantai Rongchang Pharmaceutical Co., Ltd.* (煙台榮昌製藥股份有
	限公司), a joint stock company incorporated in the PRC on March
	18, 1993

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“Revised General the revised total amounts under the General Services Framework Services Caps” Agreement for the years ending December 31, 2021 and 2022 of RMB14,920,000 and RMB19,690,000, respectively “Revised Materials the revised total amounts under the Materials Purchase Framework Purchase Caps” Agreement for the years ending December 31, 2021 and 2022 of RMB15,200,000 and RMB25,600,000, respectively “RMB” Renminbi, the lawful currency of the PRC “Share(s)” the shares of the Company “Shareholder(s)” holders of the Shares “SLE” systemic lupus erythematosus, a systemic autoimmune disease in which the body’s immune system attacks normal, healthy tissue and can result in symptoms such as inflammation and swelling “Stock Exchange” The Stock Exchange of Hong Kong Limited “U.S.” the United States of America “VAT” value-added tax “%” per cent. By order of the Board RemeGen Co., Ltd.* Mr. Wang Weidong Chairman and executive director

Yantai, The People’s Republic of China October 18, 2021

As at the date of this announcement, the Board of the Company comprises Mr. Wang Weidong, Dr. Fang Jianmin, Dr. He Ruyi and Mr. Lin Jian as the executive directors, Dr. Wang Liqiang and Dr. Su Xiaodi as the non-executive directors, and Ms. Yu Shanshan, Mr. Hao Xianjing and Dr. Ma Lan as the independent non-executive directors.

• For identification purposes only

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