Sihuan Pharmaceutical (0460.HK): Establishment of Joint Venture with Bluepha Co., Ltd.

HONG KONG,Jan. 21,2022 --Sihuan Pharmaceutical Holdings Group Co.,Ltd.(the "Company" or "Sihuan Pharmaceutical",together with its subsidiaries,collectively referred to as the "Group:" Hong Kong Stock Exchange Stock Code: 0460) is pleased to announce that Beijing MeiYan KongJian Technology Co.,Ltd. ("MeiYan KongJian") under the Group and Bluepha Co.,Ltd. ("Bluepha") entered into an agreement on 19 January 2022 for the establishment of joint venture to jointly develop PHA microspheres and biomanufacturing based regenerative medical materials. They will jointly complete the research and development,compliance declaration and subsequent commercial promotion of the products.

PHA is a natural polyester existing in microbial cells,and is a linear polymer connected by the ester bonds formed by the carboxyl group of a hydroxy fatty acid monomer and the hydroxyl groups in the same or different types of hydroxy fatty acid monomers. PHA has good biocompatibility with cells in vivo,the ultimate degradation products of which are carbon dioxide and water,which have no poisonous effect on cells. The cells can grow well on the scaffold comprised of PHA. Therefore,PHA is widely applied in medical field. Due to the special biodegradability,gas isolation,biological histocompatibility,anticoagulant activity,hydrophobicity,optical isomerism and other characteristics of PHA,as an upscale biomedical material,it has distinctive advantages when applied in the medical equipment,histological engineering,drug carrier as well as other fields. The surgical suture,absorbable surgical membrane and other medical equipment comprised of PHA have been approved for launching in the United States by the FDA.

As light medical aesthetics enters the era of regeneration,and given that there are currently only three regenerative injection products in China that meets compliance standards,the market is in urgent need of new materials to offer diversified choices to the customers. Among the existing products,both PLA and PCL require chemical interaction to achieve molecular aggregation and are subject to the risk of chemical interaction agent residue. PHA,a type of intracellular polyester synthesized by microorganisms,is a natural high-molecular polymer,which will be a good choice for light medical aesthetics whether as a new material to enter light medical aesthetics market with large scarcity or for its own safety.

Founded in 2016,Bluepha is a company engaging in molecular and material innovation based on synthetic biology technologies. It is dedicated to designing,developing,manufacturing and selling new types of biomolecule and material and had completed the Series B financing in January 2022,with an aggregate amount of RMB1.5 billion. Bluepha is one of the pioneers on the synthetic biology industrialization in China. Its synthetic biology research and development platform enables the design of a variety of high-performance PHA materials according to users' demands,which is applied to a wide range of industries such as consumer goods,food,medical,agriculture and industry. Bluepha is equipped with abundant technical reserves and intellectual property layout in all links of the PHA-related technology chain (including the preparation process of PHA microsphere lyophilized powder),such as strain research and development,bio-transformation,separation and purification,material modification and others.

As early as in 2004,synthetic biology has long been recognized by MIT Technology Review as one of the top 10 new technologies that will change the world. In respect of its latent and significant development prospects,synthetic biology is regarded as the world-leading "Third Biotechnology Revolution" after the two biotechnology revolutions of the discovery of the DNA double helix structure and the human genome sequencing. For commercial application,the synthetic biology market is expected to grow rapidly at a compound annual growth rate of nearly 30% by 2025.

Dr. Che Fengsheng,chairman and executive director of Sihuan Pharmaceutical Holding Group,said: "Sihuan Pharmaceutical has a forward-looking layout in the medical aesthetics field,and entered into an exclusive distribution agreement in China with Hugel Inc.,a leading biomedical company in the South Korea,in relation to botulinum toxin Letybo® and hyaluronic acid in 2014. The strategic cooperation reached between the Group and Bluepha in respect of technology development and commercialized application of PHA microsphere related products for medical aesthetics,and the joint establishment of joint venture provide the Group with a chance to enter the huge blue ocean of synthetic biology in advance,which is a significant step forward in vertical extension from the medical aesthetics industry to the upstream raw materials supply. This will not only help the Group to further improve its product matrix in medical aesthetics field,but also significantly enhance its comprehensive capability in non-surgical medical aesthetics field and strengthen its core competitiveness."

MeiYan KongJian

MeiYan KongJian is a medical aesthetics subsidiary of Sihuan Pharmaceutical,a large pharmaceutical and medical aesthetics group company in China. Focusing on the high-growth and low penetration PRC medical aesthetics market experiencing explosive growth,MeiYan KongJian has successfully established a "one-stop" new medical aesthetics platform in China and is dedicated to building a leading company featuring full medical aesthetics product matrix in China by leveraging the rigour and innovation of pharmaceutical companies through globalized layout and localized production,comprehensive and professional medical aesthetics product matrix,strong product R&D and registration capabilities as well as diversified marketing channel ability.

After years of development,MeiYan KongJian has built complete product matrix across medical aesthetics value chain with "self-development + BD" dual engine drivers. Taking the coverage of the whole life cycle of beauty enthusiasts as the starting point,its product layout covers a variety of high-quality medical aesthetics products,including the filling,shaping,supporting,supplementing,optoelectronic device,body sculpturing,skin care and others. MeiYan KongJian is equipped with strong in-house R&D and technology transformation capabilities,and its current R&D pipelines has more than ten self-developed class III medical aesthetics products and tens of class II medical aesthetics products. Besides,MeiYan KongJian has established the Meiyen Laboratory in Los Angeles,the United States,to conduct innovative technology introduction,independent research and development of new generation medical aesthetics products and biomaterial,and the technology transformation and manufacture in China. Leveraging the global resources of Sihuan Pharmaceutical,the parent company,MeiYan KongJian has strong product registration,manufacture and sales capabilities and is able to quickly accelerate the launch of new products. At present,MeiYan KongJian has completed the construction of three domestic manufacture bases with a gross floor area of 16,000 square meters. It has currently planned for 9 production lines equipped with optimized quality management system and is able to implement effective risk management in the whole life cycle of products. Most members in the sales team of MeiYan KongJian come from multinational medical aesthetics and pharmaceutical enterprises with rich sales experience for medical aesthetics products. They work closely with tens of agents with the sales network covering more than 200 cities and 2,200 medical aesthetics institutions nationwide.

Sihuan Pharmaceutical Holdings Group Ltd.

Founded in 2001 and listed on the Main Board of the Hong Kong Stock Exchange Limited in 2010,Sihuan Pharmaceutical Holdings Group Ltd. ("Sihuan Pharmaceutical" or the "Company",together with its subsidiaries the "Group") (HKSE: 00460.HK) is an international pharmaceutical company led and driven by both innovation and generic,with an independent and leading independent research and development ("R&D") technology platform,a rich global product pipeline and a mature and excellent sales system. Focusing on high-growth therapeutic areas such as oncology,metabolic diseases,medical aesthetics,anti-infectives,digestive system,cardiovascular and cerebrovascular,Sihuan Pharmaceutical is building a leading medical aesthetic and biopharmaceutical leader in China with a two-wheel drive strategy of independent innovation and research and incubation to cultivate high growth new businesses.

For more information on Sihuan Pharmaceutical,please visit the company website https://www.sihuanpharm.com/

This press release is issued by Porda Havas International Financial Communications Groupfor and on behalf ofSihuan Pharmaceutical Holdings Group Ltd.