Palleon Pharmaceuticals and Henlius Enter into Strategic Collaboration to Develop Bifunctional Sialidase Therapies

Palleon and Henlius to co-develop Bifunctional HER2-Sialidase and a second bifunctional sialidase to be jointly designed -

Henlius received exclusive license for two products in China (including Hong Kong,Macau,and Taiwan); Palleon retains all other global rights -

Palleon receives upfront payment and is eligible for up to $196.5 million in milestone payments -

SHANGHAI,June 28,2022 --Palleon Pharmaceuticals Inc.,a companypioneering the field of glyco-immunology to treat cancer and inflammatory diseases,todayannounced a strategic collaboration with Shanghai Henlius Biotech,Inc. (2696.HK) to develop andcommercialize two bifunctional sialidase programs from Palleon's EAGLE (Enzyme-AntibodyGlyco-Ligand Editing) immuno-oncology platform,including Palleon's Bifunctional HER2-Sialidasenow in preclinical development and a second bifunctional sialidase to be developed with aproprietary target provided by Henlius.

Palleon's EAGLE platform potentiates antitumor immunity by enzymatically removing immunosuppressive sialic acids from tumor and immune cell surfaces. The EAGLE platform is created by genetic fusion of an engineered human sialidase with antibody domains,and includes clinical stage Bi-Sialidase,as well as various bifunctional sialidases comprising a sialidase together with a targeting arm. As one of Palleon's most advanced bifunctional sialidases,the Bifunctional HER2-Sialidase has shown the potential to treat both HER2-low and HER2-high expressing tumors with modest to high levels of tumor surface sialoglycans,and the candidate is on the verge of entering IND-enabling studies.

Henlius has built a vertically integrated biopharmaceutical platform with core capabilities of highefficiency and innovation embedded throughout the entire product life cycle of R&D,manufacturing,and commercialization,expediting a diversified and robust pipeline coveringtumor-associated-antigen (TAA) targets with high market potential. Fully leveraging itsexperience in biologics development and harnessing the power of innovation,Henliusimplements its proprietary antibody and novel conjugating technologies to explore various formsof antibody conjugates to continue building a more diverse innovative pipeline by synergizing itsinnovation centers in China and the US,as well as its global clinical development teams. Henlius has process development capabilities that span the product lifecycle,starting with cell linedevelopment and continuing through commercial manufacturing,effectively supporting thecommercialization of its products around the world.

"We're very pleased to partner with Henlius to develop and expand Palleon's pipeline to realizethe potential of bifunctional sialidases as a treatment option for a wide range of cancer types,"said Jim Broderick,M.D.,Chief Executive Officer and Founder of Palleon. "Henlius has a strong track record of providing groundbreaking and cost-effective medicines for patients in China,and the development of these two therapeutic candidates will benefit from their expertise and capabilities."

Under the terms of the agreement,Palleon will perform research and the parties will then sharepreclinical and global clinical development responsibilities and costs for the Bifunctional HER2-Sialidase and a second bifunctional sialidase. Henlius has an exclusive license to the twoinvestigational therapies in China (including Hong Kong,and Taiwan),while Palleonretains all other global rights and,for the second product,receives a royalty-bearing exclusivelicense to Henlius' antibody technology outside China. Palleon received an upfront payment andis further eligible to receive up to $196.5 million in certain predetermined R&D and commercialmilestones,in addition to royalties upon Henlius commercialization in China.

"We strive to offer innovative and affordable biologics to all patients," said Wenjie Zhang,Chairman,Executive Director,and CEO of Henlius. "Henlius is currently exploring various formsof antibody conjugates utilizing our proprietary antibody expertise and novel conjugatingtechnologies. Together with Palleon's cutting-edge EAGLE immuno-oncology platform,webelieve that this collaboration will complement Henlius' innovative early-stage pipeline andaccelerate our progress of providing breakthrough treatments for patients with unmet medicalneeds."

About Palleon Pharmaceuticals

Palleon Pharmaceuticals is the leading biotechnology company developing drugs that harnessglyco-immunology to treat cancer and inflammatory diseases. The company's proprietaryplatforms enable new target discovery,patient selection,and the development of noveltherapeutics for devastating diseases characterized by immune system dysfunction. Palleon'slead program in oncology,E-602,is a first-in-class enzymatic degrader of immunosuppressivesialoglycans on tumors and immune cells which is now being evaluated in a Phase 1/2 study(NCT05259696).

www.palleonpharma.com

AboutHenlius

Henlius (2696.HK) is a global biopharmaceutical company with a vision to provide high-quality,affordable,and innovative biologic medicines to patients worldwide,with a specific focus ononcology,autoimmune diseases,and ophthalmic diseases. To date,Henlius has launched fiveproducts in China and one in Europe,and has had thirteen indications approved worldwide. Inaddition,Henlius has had two New Drug Applications (NDA) accepted for review in China.

Since its inception in 2010,Henlius has built an integrated biopharmaceutical platform with corecapabilities of high efficiency and innovation embedded throughout the whole product life cycle,including R&D,manufacturing and commercialization. Henlius has established global innovationcenters and Shanghai-based manufacturing facilities aligned with global Good ManufacturingPractice (GMP) standards. These facilities include the Xuhui Plant,which has received ChineseGMP and EU GMP certification,and the Songjiang First Plant,which has received Chinese GMPcertification.

Henlius has actively built a diversified and high-quality product pipeline covering over twentyinnovative monoclonal antibodies (mAbs). In addition,Henlius has continued to explore immunooncologycombination therapies with its proprietary HANSIZHUANG (anti-PD-1 mAb) asthe backbone of this pipeline. Henlius has also launched HANLIKANG (rituximab),the first-everChina-developed biosimilar,HANQUYOU (trastuzumab,trade name in Europe: Zercepac®),thefirst China-developed mAb biosimilar approved in both China and Europe,HANDAYUAN(adalimumab),and HANBEITAI (bevacizumab). In addition,Henlius' innovative product HANSIZHUANG has been approved by the NMPA for the treatment of MSI-H solid tumors,and its NDAsfor the treatment of squamous non-small cell lung cancer and extensive small cell lung cancer(ES-SCLC) are under review. Henlius has conducted over twenty clinical studies for twelveproducts and ten combination therapies.