CStone Pharmaceuticals Reports 2021 Annual Results and Recent Business Highlights

SUZHOU,China,June 1,2022 --CStone Pharmaceuticals ("CStone",HKEX: 2616),a leading biopharmaceutical company focused on research,development,and commercialization of innovative immuno-oncology therapies and precision medicines,today reported 2021 full-year financial results and recent business highlights.

Dr. Frank Jiang,CEO of CStone,commented,

"As a full-fledged biopharmaceutical company,we achieved significant milestones in 2021. As of today,our four innovative drugs --- first-in-class precision medicines GAVRETO,AYVAKIT and TIBSOVO and potential best-in-class immuno-oncology therapy sugemalimab --- have been granted the NDA approvals in the Greater China region.

We accelerated our commercialization agenda that enabled us to post impressive sales performance. With a well-established commercial operation system,we've successfully reached and partnered with a wider range of hospitals across major cities.

We further demonstrated strong R&D capabilities. In 2021,we submitted six new drug applications and had seven oral presentations of our clinical data at global academic conferences. The clinical data from the registrational study of sugemalimab in stage III/IV non-small cell lung cancer were published on The Lancet Oncology,respectively. The registrational study of sugemalimab in the treatment of extranodal natural killer/T-cell lymphoma met the primary endpoint. Multiple phase 3 registrational clinical trials have completed the enrollment of all subjects,including the registrational clinical trial of sugemalimab plus chemotherapy as the first-line treatment of gastric adenocarcinoma/gastro-esophageal junction adenocarcinoma,and esophageal squamous cell carcinoma,and the international multi-center registrational study of nofazinlimab (CS1003) in combination with lenvatinib for the first-line treatment of advanced hepatocellular carcinoma (HCC). With all these efforts,we are now well-positioned to further meet the needs of patients and maximize the commercial value of our products.

Our Pipeline 2.0 strategy was in full swing with breakthroughs made in our early-stage pipeline. We received the IND approvals of CS5001,a potential global best-in-class ROR1-targeting ADC,in the U.S.,Australia,and mainland China,and the first patient was enrolled in the U.S. In addition,we obtained the IND approval of CS2006,a PD-L1/4-1BB/HSA tri-specific antibody,in mainland China. We also initiated and moved forward more than 10 early discovery and technology platform projects.

We leveraged global strategic partnerships to foster commercialization and drug development. CStone Global R&D Headquarters and Manufacturing Base was inaugurated to bolster our in-house R&D capabilities.

In 2022,we will strive to maximize commercial potential with new product and indication launches and continued efforts in market penetration and expansion including further improving diagnostic rate,building scientific leadership and strengthening the accessibility and affordability of our drugs. We have a diverse and balanced pipeline and will continue to focus on cancers with high incidence rates. We will gear up our Pipeline 2.0 strategy,and unleash the global potential of our portfolio. We will make every effort to provide innovative immuno-oncology therapies and precision medicines,and deliver on our commitment to addressing the unmet needs of cancer patients."

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Business Highlights

2021 was a breakout year in CStone's history marked by the launch of two first-in-class precision medicines and multiple additional milestones across our pipeline and business. For the year ended December 31,2021 and as of the date of this announcement,significant progress has been made with respect to our product pipeline and business operations. A shortlist of our achievements over this period includes:

RMB243.7 million in total revenue,including RMB162.8 million of product revenue within eight months

7 NDA approvals obtained for 4 products

3 products launched: avapritinib,pralsetinib,and sugemalimab,and a fourth,ivosidenib,to launch imminently

6 NDAs filed for additional indications or territories

4 IND approvals for Pipeline 2.0 assets with best-in-class potential: CS5001 (ROR1 ADC) in the U.S.,Australia and mainland China,and CS2006 (PD-L1/4-1BB/HSA) in mainland China

Over 10 discovery projects in progress,including multi-specifics,antibody drug conjugates,and a proprietary platform for drugging intractable intracellular targets

2 strategic partnerships formed,one with Jiangsu Hengrui Pharmaceuticals Co.,Ltd. to support product commercialization and the second with an early-stage biotech company to support pre-clinical asset development

Co-development of Pfizer's lorlatinib initiated to further our lung cancer offering

Launched pilot operations of our state-of-the-art manufacturing facility

These achievements represent only a snapshot of what we have accomplished.

We have fully developed our commercial capabilities,making rapid and significant progress in building the team,infrastructure,and industry network over the past year. Our commercial team has executed a clearly defined strategy and achieved successful launches of three products. We have shaped the treatment paradigm for the target diseases of our precision medicines with broad physician education,collaboration with industry associations on diagnostic and treatment standardization,and collaboration with diagnostics companies. As a result,we have seen continuous improvement in diagnostic rates for the approved indications for avapritinib and pralsetinib since their launch. Currently,our precision medicines have been included in over 10 national guidelines,up from 7 at the time we released our 2021 interim results announcement. In addition,they have been listed in over 60 supplemental insurance plans,up from 20,covering an urban population of approximately 60 million people,up from 40 million at the time we released our 2021 interim results.

Our clinical team has demonstrated the ability to translate our advantages in innovation,speed,and quality into tangible results for patients and our business. We successfully obtained approval of four products within 12 months,including three first-in-class precision medicines as well as our flagship immuno-oncology backbone drug. We have also advanced a number of trials through significant clinical milestones. For one,sugemalimab met the primary endpoint in a study of patients with stage III NSCLC without disease progression after concurrent or sequential chemoradiotherapy in our one-of-a-kind GEMSTONE-301 trial,making it the world's only anti-PD-1/PD-L1 monoclonal antibody to achieve this outcome. The broader spectrum of our clinical development success is reflected in the fact that CStone was invited to present data via seven (7) oral presentations at global academic conferences,a rare accomplishment among Chinese biotech companies. These presentations covered study results of sugemalimab in stage III NSCLC and stage IV NSCLC patients,pralsetinib in first-line NSCLC and MTC patients in China and ivosedinib in R/R AML patients in China as well as first-line AML patients in a global trial. In the latter,the global phase III AGILE trial was halted for further enrolment due to overwhelmingly compelling efficacy and the results were published in The New England Journal of Medicine . Moreover,the results of the unique sugemalimab trials for both stage III NSCLC and stage IV NSCLC have been published in the oncology journal The Lancet Oncology .

Our research team has made transformational changes to its capacity for early-stage innovation and efficiency. In 2021,we refined our research strategy to harness the modular nature of biologics to accelerate internal drug discovery around new modalities. Additionally,we established a new global R&D center,expanding our capacities in critical areas such as antibody discovery and development,systems pharmacology,and bioinformatics. These initiatives bolster our immuno-oncology and precision medicine franchises and enhance our capacity to meet our long-term target of filing 1-2 INDs per year.

Our latest business development partnerships will maximize the commercial value of our CTLA-4 antibody and bring access to proprietary technology to generate new pre-clinical assets with BIC/FIC potential.

Lastly,we launched pilot operations of our manufacturing facility as expected. We are steadily advancing our readiness for full-scale operations to produce our products for clinical trials as well as commercial sales. We are also in the process of technology transfer for multiple products which will reduce costs and improve long-term profitability of our products.

These achievements give us the potential to finish 2022 with the launch of ivosidenib,additional launches for in-market products across a range of indications and geographies,new IND filings,new preclinical development programs,and further the maturation of our business into a full-fledged biopharmaceutical company with end-to-end capabilities.

For the year ended December 31,significant progress has been made with respect to our product pipeline and business operations:

I. Multiple Product Launches and Continued Robust Commercial Efforts

We have maintained a significantly accelerated level of commercial activity with the launch of two first-in-class precision medicines,AYVAKIT® (avapritinib) and GAVRETO® (pralsetinib),which we brought to market over the course of May and June 2021. We continued our success into the beginning of 2022 with the commercial launch of CEJEMLY® (sugemalimab),in partnership with Pfizer. Most recently,we have received NDA approval for another first-in-class product,TIBSOVO® (ivosidenib),and expect to launch soon in mainland China.

Our growing commercial team continued its rapid execution of pre-launch and post-launch efforts to set the stage for market adoption of our products. They have kept up robust efforts to engage the healthcare community,including healthcare providers,academic societies,patient groups,hospitals,pharmacies,payors,and other stakeholders,to provide education on our products and demonstrate our scientific leadership. In addition,they have expanded access and affordability of our products through various patient identification programs and by working with payors to promote coverage of them in insurance programs.

Lastly,they are supporting the broader pipeline of late-stage assets by mapping out commercialization plans for those coming to market in the near-term,including in close collaboration with our commercial partners.

Highlights and details on our 2021 commercial activity follow below.

Achieved Significant Sales Ramp Up of Our First Products to Market

We achieved a rapid sales ramp up of AYVAKIT® (avapritinib) and GAVRETO® (pralsetinib),our first two drugs to market,generating combined net sales of RMB162.8 million within the first eight months following their launch.

Achieved Successful Launches

Our comprehensive commercial efforts resulted in successful launches of our approved products.

- AYVAKIT® (avapritinib): Launched in mainland China and Taiwan,China. Prescribed in approximately 50 hospitals and available in 50 direct-to-patient pharmacies ("DTPs") within one month of launch.

- GAVRETO® (pralsetinib): Launched in mainland China. Available in 80 DTPs in approximately 70 cities within one month of launch.

- CEJEMLY® (sugemalimab): Launched in mainland China within 18 days of receiving NDA approval,thanks to close collaboration with our commercial partner Pfizer.

Expansion of sales force coverage in key markets for prescriptions of precision drugs

- We have established a full-fledged commercial organization with the capabilities and executional sophistication of multinational company. The leadership team is composed of seasoned industry executives whose track record include over 30 successful drug launches in oncology and hematology. The team is currently focused on market development for CStone's approved precision medicines and the broader pipeline of late-stage assets to support CStone's oncology franchise.

- We have specifically focused our efforts on ensuring dedicated sales coverage and expanded to approximately 600 hospitals in the second half of 2021,up from 400 at midyear,accounting for approximately 70-80% of the relevant market for precision medicines where we believe we can maximize the return on our sales efforts.

Established broad industry and academic awareness of our brand and scientific leadership

- We established GAVRETO® (pralsetinib),AYVAKIT® (avapritinib) and TIBSOVO®(ivosidenib) in over 10 of China's national guidelines,including CSCO NSCLC/GIST Guidelines,Chinese Medical Association Guidelines,and Guidelines on Clinical Practice of Molecular Tests in NSCLC,for treatment paradigms for multiple therapeutic areas (NSCLC,thyroid cancer,gastrointestinal stromal tumors and acute myeloid leukemia).

- We collaborated with several industry associations – Chinese Society of Clinical Oncology,China Anti-Cancer Association,and Chinese Medical Doctor Association – on diagnostic and treatment standardization projects for gastrointestinal stromal tumors,NSCLC and hematological malignancies,further strengthening our industry connections and demonstrating our expertise.

- We enhanced awareness of our products among physicians and key opinion leaders ("KOLs") via proactive engagement and constant education. In 2021,we participated in over 1,500 activities and events reaching over 10,000 leading KOLs and healthcare professionals ("HCPs"),resulting in an enhanced awareness within the healthcare community of our treatments.

- We sponsored leading KOLs in post-approval clinical projects such as investigator-initiated trials and real-world studies to generate additional data in multiple cancer indications which may support the adoption of our drugs,and funded research in collaboration with non-profit academic institutions.

Launched anchor projects to facilitate patient identification and support prescription and retention ratios

- We are collaborating with gene sequencing companies to strengthen the diagnostic capabilities of hospitals and improve testing rates.

- We have launched disease management programs for patients and physicians,including an online platform,to provide education and process inquiries on our drugs,encourage follow up visits and manage adverse events that may arise during the course of treatment,among other topics. This patient-centric approach is intended to increase prescription and retention ratios.

Developing a range of approaches to promote access to and affordability of our drugs

- We established a patient assistance program (PAP) for AYVAKIT® (avapritinib) and GAVRETO® (pralsetinib) with a charitable foundation.

- We secured inclusion of AYVAKIT®(avapritinib) and GAVRETO® (pralsetinib) in over 60 of the major commercial and government insurance programs,up from 20 as disclosed in our 2021 interim results announcement. Our efforts have expanded the availability of reimbursement for our drugs for approximately 60 million people.

- We established a strategic collaboration agreement with Sinopharm Group Co.,Ltd ("Sinopharm") to broaden hospital and pharmacy distribution coverage for both GAVRETO® (pralsetinib) and AYVAKIT® (avapritinib). By the end of 2021,AYVAKIT® (avapritinib) and GAVRETO® (pralsetinib) have been listed in approximately 100 hospitals and DTPs.

- We formed strategic collaboration agreements with three of the largest integrated innovative healthcare service platforms in mainland China – Shanghai Meditrust Health Co.,Ltd.,Beijing Yuanxin Technology Group Co.,and Medbanks Health Technology Co.,Ltd. – to improve distribution and affordability of GAVRETO®(pralsetinib) and AYVAKIT® (avapritinib) by facilitating enrolment in city insurance programs.

Establishing commercial plans for new indications to expand the addressable market for precision medicines

- We are actively preparing for the launch readiness of several new indications for late-stage drugs,which can greatly expand their market potential. For three of our precision medicines,GAVRETO® (pralsetinib),AYVAKIT® (avapritinib) and TIBSOVO® (ivosidenib),we estimate the potential addressable patient population to expand from approximately 10,000 for second-line NSCLC and GIST launched in 2021 to approximately 90,000 for these and other indications,including first-line NSCLC,acute myeloid leukemia,cholangiocarcinoma,and myelodysplastic syndromes,among others.

Collaborating with global strategic partners to support launches of IO backbone drugs

- We are closely collaborating with our partners Pfizer and EQRx on the development and commercialization of sugemalimab in mainland China and outside of Greater China,respectively. On December 21,2021,we received the approval of sugemalimab in mainland China for stage IV NSCLC and the drug has been launched successfully in early January 2022. We worked with Pfizer to set up all commercial agreements,ordering process and commercial/PAP goods supply. In addition,we have opened distributor accounts and supported bidding progress to ensure patient accessibility upon the NDA approval.

- With EQRx,we are working closely on global development and regulatory strategies for sugemalimab,including the U.S.,the U.K. and the European Union ("EU"),as well as territories beyond these such as the Middle East,Turkey and Africa. The global market size of PD-(L)1 for the treatment of NSCLC,gastric and esophageal cancers is forecasted to be approximately US$30 billion in 2026.

II. Innovation,High Quality and Rapid Execution Lead to Advances across a Maturing Pipeline

CStone followed through on an aggressive clinical agenda with further developments across its pipeline. In total,we secured seven NDA approvals and submitted six NDA filings as we rounded out our diverse and maturing pipeline of in-market and near-commercial ready drugs. In doing so,our clinical engine once again distinguished itself in terms of four key dimensions:

- Innovation in drug development to broaden addressable patient populations and target unmet medical needs:

Our sugemalimab trials simultaneously covered different pathologies and treatment modalities to establish efficacy for stage III and stage IV NSCLC.

We achieved breakthrough therapy designation from China National Medical Products Administration ("NMPA") and the U.S. Food and Drug Administration ("U.S. FDA") for the treatment of relapsed or refractory extranodal natural killer/T-cell lymphoma (R/R ENKTL),demonstrating our ability to target patient populations with significant unmet needs.

We made seven oral presentations at prestigious global conferences in 2021,including the American Society for Clinical Oncology (ASCO),the European Society for Medical Oncology (ESMO),and the World Conference on Lung Cancer (WCLC). And two manuscripts were published in the Lancet Oncology on our trials with sugemalimab in stage III and stage IV NSCLC,with commentary from the journal recognizing the high degree of similarity between progression-free-survival and overall-survival and those of previously approved trials by global regulatory bodies such as the U.S. FDA.

- Exceptional speed leading to consecutive launches:We secured approval of four products within 12 months,reaching the commercial stage of our development within just over five years since the company's inception; and we achieved approval of our sugemalimab in its first large indication,NSCLC,within four years from the first patient dosed.

- World class quality to support our global partnerships:Our global quality has been validated by our global strategic partners such as Pfizer,Bayer,Blueprint,Servier,and EQRx. Our clinical trials have generated data that is highly consistent with that achieved by our global partners.

- Efficiency and cost effectiveness:Our abilities across all of these dimensions will ultimately shorten the route to commercialization for our products and allow us to do so with fewer costs and resources. We believe this capability gives us a significant competitive advantage.

Details follow below.

Sugemalimab (CS1001,PD-L1 antibody),in 2021 became the first PD-(L)1 in the world to demonstrate efficacy for both stage III and stage IV NSCLC in randomized,double-blind phase III trials.

- In September 2021,the NMPA accepted the NDA for sugemalimab as a consolidation therapy in patients with unresectable stage III NSCLC without disease progression after concurrent or sequential chemoradiotherapy,addressing a significant unmet need in the patient population. The final PFS analysis of the registrational study further demonstrates sugemalimab's robust efficacy and significant clinical benefits shown in interim analysis. We expect to receive the NDA approval in the first half of 2022. This would cement sugemalimab's global first-in-class stature for treatment of the sequential population,which accounts for approximately 70% of the clinical practice in China.

- In December 2021,we received the NDA approval of sugemalimab from the NMPA for the first-line treatment of both squamous and non-squamous stage IV NSCLC. This is the first trial to show a benefit when combining a PD-L1 inhibitor with chemotherapy for patients with metastatic squamous and non-squamous NSCLC. In January 2022,the drug was launched in mainland China by our partner,Pfizer.

- In January 2022,the registrational trial for relapsed or refractory extranodal natural killer/T-cell lymphoma (R/R ENKTL) met the primary endpoint and demonstrated a complete response (CR) rate significantly exceeding that of the currently available targeted monotherapy for these patients. This gives it the potential to set a new standard of care in this indication. We plan to submit an NDA to the NMPA for this indication in the near term.

- In January 2022,two key phase III registrational clinical trials completed patient enrollment,one for the first-line treatment of metastatic gastric adenocarcinoma (GC)/gastro-esophageal junction (GEJ) adenocarcinoma,and the other for the first-line treatment of metastatic esophageal squamous cell carcinoma (ESCC).

- For the markets outside of Greater China,we are working closely with EQRx on regulatory discussions for regulatory submissions for indications in stage III NSCLC,stage IV NSCLC,and ENKTL in multiple countries and regions,the U.K.,and the EU. For stage IV NSCLC,we expect the first NDA filing outside of the U.S. in the second half of 2022. Meanwhile,constructive conversations with the U.S. FDA are ongoing to gain greater clarity on the regulatory path. For ENKTL,sugemalimab has received Breakthrough Therapy Designation ("BTD") from the U.S. FDA and we expect the Biologics License Application ("BLA") filing in 2023.

Pralsetinib (CS3009,RET inhibitor) – We have secured two (2) NDA approvals and have two (2) NDA filings currently under review.

- On March 24,we received the NDA approval from the NMPA for the treatment of patients with locally advanced or metastatic RET fusion-positive NSCLC previously treated with platinum-based chemotherapy.

- In April 2021,the NMPA accepted the NDA with priority review designation for the treatment of patients with advanced or metastatic RET-mutant medullary thyroid cancer (MTC) and RET fusion-positive thyroid cancer (TC).

- On March 11,2022,we received the NDA approval from the NMPA for the treatment of patients with advanced or metastatic RET-mutant MTC and RET fusion-positive TC.

- In February 2022,the Taiwan Food and Drug Administration ("TFDA") accepted the NDA for the treatment of patients with RET fusion-positive locally advanced or metastatic NSCLC,RET-mutant MTC and RET fusion-positive TC.

- In March 2022,the Hong Kong Department of Health ("HK DoH") accepted the NDA for the treatment of patients with RET fusion-positive locally advanced or metastatic NSCLC.

Avapritinib (CS3007,KIT/PDGFRA inhibitor) – We have secured three (3) NDA approvals for this product.

- On March 31,we received an NDA approval from the NMPA for the treatment of adults with unresectable or metastatic gastrointestinal stromal tumor (GIST) harboring a PDGFRA exon 18 mutation,including PDGFRA D842V mutation.

- On April 29,we received the NDA approval license from the TFDA through an accelerated approval pathway for adults with unresectable or metastatic GIST harboring a PDGFRA D842V mutation.

- On December 28,we received the NDA approval from the HK DoH for adults with unresectable or metastatic GIST harboring a PDGFRA D842V mutation.

- In June 2021,our partner Blueprint Medicines announced that the U.S. FDA approved avapritinib for the treatment of adult patients with advanced systemic mastocytosis ("Advanced SM"),including aggressive SM,SM with an associated hematologic neoplasm and mast cell leukemia. We reached agreement with the NMPA about the registrational pathway for this indication in mainland China.

Ivosidenib (CS3010,IDH1 inhibitor) – We have secured our first NDA approval for this product and achieved a positive topline readout.

- On January 31,we received an NDA approval from the NMPA for the treatment of adults with relapsed or refractory acute myeloid leukemia ("R/R AML") with an isocitrate dehydrogenase 1 ("IDH1") mutation.

- In August 2021,our partner,released positive topline data from the global phase III AGILE trial of ivosidenib for previously untreated IDH1 mutant acute myeloid leukemia ("AML"). The trial halted further enrolment due to compelling efficacy data. Servier announced the U.S. FDA approval for this indication in May 2022. We plan to submit an NDA for this indication to the NMPA in 2022.

Lorlatinib (ROS-1 inhibitor)

- We are working with Pfizer to jointly develop lorlatinib for c-ros oncogene 1 ("ROS1")-positive advanced NSCLC in Greater China. In December 2021,we received the IND approval from the NMPA. In May 2022,the first patient was enrolled in the pivotal study of lorlatinib for the treatment of ROS1-positive advanced NSCLC.

Nofazinlimab (CS1003,PD-1 antibody)

- In March 2022,we completed the enrolment for the global phase III trial of nofazinlimab in combination with LENVIMA® (lenvatinib) as a first-line treatment for patients with advanced HCC.

III. Research Efforts Harness Biologics Modular Potential and Reinforce Core IO Franchise

In 2021,we made significant progress developing two high-potential pre-clinical assets and advancing them toward clinical development. We received IND approval for our ROR1 antibody drug conjugate ("ADC") (CS5001) in the U.S.,and announced the commencement of the first-in-human ("FIH") clinical trial in the U.S.. Our PD-L1/4-1BB/HSA tri-specific molecule,CS2006,also received approval of its IND application and is proceeding toward first-in-human study in China in the near-term.

Beside these two molecules,we are developing additional Pipeline 2.0 assets. Precision medicine and immuno-oncology combinations remainour strategic focus. In the near-term,we will pursue developments in these areas using two emerging therapeutic modalities: ADCs which deliver cytotoxic agents to tumor with precision,and multi-specific biologics which are combinations of themselves. Additionally,we have systemically revised our research strategy to take advantage of the modular nature of biologics that allows "plug-and-play" of various modules into an antibody backbone to provide different specificity and functionality. This research strategy offers an efficient and streamlined approach to create a suite of FIC/BIC/FW molecules via collective efforts of in-house research and platform partner collaborations. In support of this effort,we recently recruited new talent with expertise in protein engineering,structural biology,and quantitative systems pharmacology.

Following this modular research framework,which we have fully implemented,we initiated and have in progress a total of over 10 discovery projects in 2021 that are currently in progress,ADCs,antibody-cytokine fusion molecules,and a proprietary platform for targeting otherwise undruggable intracellular proteins. Additionally,we are working with our new strategic partner,Singapore-based DotBio,to harness the company's proprietary technology platform to co-develop preclinical multi-specific assets. CStone will lead the design of the target combination based on the intended mechanism of action while DotBio will be responsible for engineering the molecules.

To further strengthen our in-house discovery research capability,we are establishing the CStone Global R&D Center,a brand-new research facility located adjacent to the manufacturing plant in Suzhou. The Center will be a cutting-edge discovery and translational research institute where state-of-the-art technical and functional platforms such as antibody discovery and development,and bioinformatics drive CStone's Pipeline 2.0 forward.

This new R&D facility will occupy approximately 16,000 square-meters of research and office space,an approximately six-fold increase from our current facilities. We have completed the design,begun construction and expect to commence operations by the fourth quarter of 2022.

In a further effort to spur innovation,we will dedicate space within this facility to house an incubator to foster the growth of biotech startups developing promising molecules and technological platforms to which we can have early access. We will broadly select candidates for the incubator based on their potential to contribute molecules for discovery platforms that would be highly complementary to our Pipeline 2.0 efforts. We are currently in active discussions with several incubator candidates,with DotBio slated to be the first among them,and expect to announce additional candidates soon.

Details of our progress are below.

CS2006 (NM21-1480,PD-L1/4-1BB/HSA tri-specific molecule): The FIH study is ongoing and includes sites in the U.S. and Taiwan,China. We anticipate the completion of monotherapy dose-escalation in the first half of 2022. We received the IND approval from the NMPA in September 2021.The enrolment for FIH studies of CS2006 in China is expected to commence in the second half of 2022.

CS5001 (LCB71,ROR1 ADC): We submitted an IND application to the U.S. FDA and received the SAFE TO PROCEED ("STP") letter in December 2021,and commenced the FIH study in March 2022. In addition,the Australia Ethics Committee ("EC") submission has also been achieved in December 2021. Additionally,we submitted IND application to the NMPA in March 2022 and received the approval in May 2022.

IV. Strategic Relationships Advance Commercialization Activities and Pipeline Development

We continue to grow and deepen relationships with key global strategic partners and to forge new partnerships to expand commercialization of our in-market and late-stage drugs,bolster our early-stage pipeline of potential First-in-Class (FIC)/Best-in-Class (BIC) molecules,and access technologies that complement our research and development efforts.

In November 2021,we formed a strategic collaboration agreement with Singapore-based DotBio to pursue joint design and engineering of up to three pre-clinical assets with BIC/ FIC potential,harnessing DotBio's proprietary technology platform for prefabricating antibody modules. This collaboration,which includes CStone making an equity investment in DotBio,represents the first project to be settled at CStone Global R&D Headquarters and Industrialization Base in Suzhou. CStone will lead the design of target combination based on the intended mechanism of action and DotBio will lead the molecular design and engineering. It will become a source of innovative preclinical candidates to support CStone's Pipeline 2.0 strategy,further accelerating drug discovery with de novo design.

In November 2021,we established a new strategic partnership with Jiangsu Hengrui Pharmaceuticals Co.,Ltd. ("Hengrui"). This strategic partnership marks another milestone in CStone's mission to introduce innovative oncology therapies in China after the commercial launch of two first-in-class drugs this year. CStone granted the exclusive rights to Hengrui for research,registration,manufacturing and commercialization of anti-CTLA-4 mAb (CS1002),a backbone immuno-oncology asset,in Greater China. CStone will retain the rights to develop and commercialize CS1002 outside of Greater China. CStone and Hengrui will partner respective R&D and commercial expertise to accelerate the development and commercialization of CS1002 to fully unleash its commercial value.

In addition,we broadened our relationship with Pfizer in 2021 with the agreement to co-develop Pfizer's late-stage oncology asset lorlatinib in second line ROS1-positive NSCLC in Greater China. This type of collaboration was envisioned in the original partnership that we announced in 2020. It is a significant advancement which not only expands our partnership with Pfizer,but also provides validation of our clinical and research strength. The plan for lorlatinib is to assess if this agent can provide benefits to the patients with relapsed ROS1-positive advanced NSCLC,which if positive would add a new therapeutic approach to our lung cancer pipeline. This program also bolsters the foundation of our relationship with a global biopharmaceutical leader and sets us up for future collaboration with them.

With EQRx,we are advancing discussions with regulatory bodies in multiple countries and jurisdictions all around the world – the U.S.,and the EU – regarding the registration of sugemalimab for NSCLC and ENKTL indications. We are collaborating with EQRx to explore the feasibility of extending indications for this drug in the global market including gastric cancer and esophageal cancer. In addition,we are working with EQRx on a global phase III study of nofazinlimab in hepatocellular carcinoma ("HCC") in the U.S. and major EU markets.

V. Other Business Updates

Capital Markets Access.Due to the strong performance in our shares during the 12 months by the end of 2021,our stock has been included in the Hang Seng Composite Index and the Hong Kong Stock Connect. This development is significant as it makes our shares accessible to investors in mainland China,and can foster greater trading in our shares,more efficient price discovery and additional liquidity for investors.

Manufacturing.Additionally,we have completed construction of our state-of-the-art manufacturing facility and began running pilot operations at the end of 2021 as projected. The manufacturing facility has a capacity of 26,000 liters for biologics and 1 billion tablets/capsules for small molecule drugs. We are also in the process of technology transfer for multiple products which will reduce costs and improve long-term profitability of our products.

Future and outlook

We are working to bring a number of significant clinical and commercial developments to fruition that will be catalysts for our growth in the rest of 2022. Additionally,to further strengthen CStone's in-house research capability,we anticipate the grand opening of the new global R&D center in the second half of 2022.

A detailed breakdown of expected developments for the remainder of 2022 is below.

Commercial Developments

Our commercial team is working rapidly to expand the addressable market for our products and maximize their commercial potential with a focus on the following:

Improving market coverage organically by maximizing deployment effectiveness and leveraging digital platform.

Improving diagnosis rate and accuracy via collaboration with next generation sequencing companies and National Pathology Quality Control Center.

Strengthening physician education with focus on differentiation in clinical and safety profile.

Strengthening accessibility with continued efforts in hospitals and DTPs listing.

Improving affordability through pricing strategy optimization,commercial insurance/ innovative payment plans and strategically considering National Reimbursement Drug List potential.

Research & Development

NDA approvals expected:

Sugemalimab: NDA approval in mainland China for stage III NSCLC.

NDA filings expected:

Sugemalimab: NDA submission in mainland China for R/R ENKTL.

Pralsetinib: NDA submission in mainland China for 1L RET fusion-positive NSCLC.

Ivosidenib: NDA submission in mainland China for IDH1-mutant 1L AML.

Sugemalimab: first NDA filing outside of China.

Topline readouts expected:

Sugemalimab: first-line GC/GEJ.

First-in-human study initiation:

CS2006: Commencement of first-in-human study in China.

Research catalysts:

Advancing several of the compounds in our discovery projects into preclinical development.

Completing the transfer of all laboratory work to the new CStone Global R&D Center.

Launching our biotech incubator and selecting our first slate of candidate startups

Manufacturing

Having launched pilot operations,in the current year we are progressing with the preparations for commercial-scale operations that will give us the ability to control the supply of our own products,whether for use in clinical trials or for commercial sales. The facility will have a production capacity of 26,000 litres for biologics and 1 billion tablets for small molecules. For 2022,we will continue the technology transfer for multiple products which will reduce costs and improve long-term profitability of our products.

Looking Beyond 2022

Our commercial,clinical,research and business development capabilities provide a solid basis for CStone to maximize shareholder value as we pursue ground-breaking science with a portfolio of in-market products,some of which secure approval and commercial distribution in global markets. To begin,we are further strengthening our commercial team and presence in the healthcare community that will facilitate the launch and uptake of our drugs in mainland China. We are continuing to expand and deepen our coverage of markets where prescriptions of precision medicines are concentrated.

Our clinical team is working with demonstrable efficiency to expand our portfolio of commercially available drugs and their total addressable market through a combination of indication expansions and geographic coverage. As a result,we are poised to establish a competitive presence in some of the most prevalent cancers.

At the research stage,we are carving out a competitive position in emerging modalities with potential FIC/BIC candidates that will reinforce our core IO and precision medicine franchise. Our improved pre-clinical innovation and development capabilities are on track to generate a greater and more sustainable volume of discovery programs and IND candidates that reach the post proof-of-concept stage.

Our business development efforts will seek to unlock the full value of CStone's business through strategic partnership and deal making. With its leadership and search and evaluation team situated in the U.S.,they have a clear line of sight into the most promising innovations in oncology as well as more direct access to assets and partners for strategic collaboration. Our strategy will remain centered on pipeline building transactions with a focus on FIC or BIC assets with global rights. Equally significant,they will prioritize multi-dimensional collaborations and portfolio deals over single asset in-licensing,while remaining flexible for assets of high clinical and commercial value. In addition,business development will also play a critical role and maximizing asset value through global development and commercial partnerships for CStone assets.

We believe that focusing on these aspects of our business will give us significant and powerful levers for unlocking the full potential of our portfolio and realizing sustainable,long-term value creation. We are moving closer to producing a steady volume of commercially viable and clinically differentiated candidate molecules that can generate diverse and recurring revenue streams. As a result,we are actively shortening the pathway to achieving our ultimate vision of clinical success--to provide breakthrough therapies for cancer patients to help them live longer and healthier lives--while realizing the full commercial value of our innovative capacity and distinctive operating model.

Financial Highlights

International Financial Reporting Standards ("IFRS") Measures:

Revenue was RMB243.7 million for the year ended December 31,composed of RMB162.8 million in sales of pharmaceutical products,representing sales of the Company's newly launched pharmaceutical products (avapritinib and pralsetinib),and RMB80.95 million in license fee income,representing a decrease of RMB957.9 million from RMB1,038.8 million in the previous year as a result of decrease in the one-off license fee income.

Research and development expenses were RMB1,304.9 million for the year ended December 31,representing a decrease of RMB99.74 million from RMB1,404.7 million for the year ended December 31,2020,primarily due to lower spending on approved products,and offset by continued investment in key clinical trials and pre-clinical studies during the Reporting Period. In particular,we received the approval of sugemalimab in mainland China for stage IV non-small cell lung cancer ("NSCLC") and met the primary endpoint of progression-free survival ("PFS") in patients with stage III NSCLC during the Reporting Period.

Administrative expenses were RMB297.6 million for the year ended December 31,representing a decrease of RMB44.91 million from RMB342.5 million for the year ended December 31,primarily due to the decrease in share-based payment expenses.

Selling and marketing expenses were RMB363.8 million for the year ended December 31,representing an increase of RMB221.6 million from RMB142.2 million for the year ended December 31,primarily attributable to sales force build-up and marketing activities for product launches.

Loss for the year was RMB1,920.1 million for the year ended December 31,representing an increase of RMB699.1 million from RMB1,221.0 million for the year ended December 31,primarily attributable to the decrease in the license fee income,increase in selling and marketing expenses for commercial launch,and offset by the increase in sales income of avapritinib and pralsetinib.

Non-International Financial Reporting Standards ("Non-IFRS") Measures:

Research and development expenses excluding the share-based payment expenses were RMB1,182.1 million for the year ended December 31,representing a decrease of RMB63.6 million from RMB1,245.7 million for the year ended December 31,we received the approval of sugemalimab in mainland China for stage IV NSCLC and met the primary endpoint of PFS in patients with stage III NSCLC during the Reporting Period.

Administrative and selling and marketing expenses excluding the share-based payment expenses were RMB561.5 million for the year ended December 31,representing an increase of RMB273.9 million from RMB287.6 million for the year ended December 31,primarily attributable to sales force build-up and marketing activities for product launches.

Loss for the year excluding the share-based payment expenses was RMB1,697.4 million,representing an increase of RMB832.4 million from RMB865.0 million for the year ended December 31,primarily attributable to the decrease in the one-off license fee income,increase in selling and marketing expenses for commercial launch and offset by the increase in revenue of avapritinib and pralsetinib.

About CStone

CStone (HKEX: 2616) is a biopharmaceutical company focused on researching,developing,and commercializing innovative immuno-oncology and precision medicines to address the unmet medical needs of cancer patients in China and worldwide. Established in 2015,CStone has assembled a world-class management team with extensive experience in innovative drug development,clinical research,and commercialization. The company has built an oncology-focused pipeline of 15 drug candidates with a strategic emphasis on immuno-oncology combination therapies. Currently,CStone has received seven NDA approvals for four drugs. Multiple late-stage drug candidates are now under pivotal clinical trials or registration. CStone's vision is to become globally recognized as a world-renowned biopharmaceutical company by bringing innovative oncology therapies to cancer patients worldwide.

For more information about CStone,please visit www.cstonepharma.com.

Forward-looking statement

The forward-looking statements made in this article only relate to events or information as of the date when the statements are made in this article. Except as required by law,we undertake no obligation to update or publicly revise any forward-looking statements,whether as a result of new information,future events or otherwise,after the date on which the statements are made or to reflect the occurrence of unanticipated events. You should read this article completely and with the understanding that our actual future results or performance may be materially different from what we expect. All statements in this article are made on the date of publication of this article and may change due to future developments.