October 14, 2020, Shanghai, China

Hua Medicine (the"Company", Stock Code: 2552.HK) announces that, after review and on-site verification under the Marketing Authorization Holder ("MAH") system, the Company has obtained the drug manufacturing permit for dorzagliatin, its investigational first-in-class drug, issued by the Shanghai Municipal Drug Administrative Bureau.

Since the beginning of this year, Hua Medicine has successfully completed two critical milestones for marketing registration, SEED (HMM0301), the Phase III clinical trial of dorzagliatin monotherapy in drug naïve patients with Type 2 diabetes (T2D) and DAWN (HMM0302), the metformin combination clinical trial in T2D patients inadequately glycemic controlled with metformin. The results of the studies showed that, during the relevant treatment period, dorzagliatin has demonstrated its long-lasting efficacy and favorable safety profiles, and can improve the pancreatic β-cell functions, promote early-phase insulin secretion and reduce insulin resistance, which is expected to fundamentally treat diabetes. On August 17, Hua Medicine and Bayer announced the establishment of their strategic partnership and concluded a cooperative agreement on the commercialization of dorzagliatin in China. Hua Medicine will be responsible for the clinical development, registration, product supply and distribution, whilst Bayer, as the exclusive promotion service provider for the product in China, will be responsible for its marketing, promotion and medical education activities in China. Hua Medicine will receive an upfront payment of RMB 300 million and additional payments could reach up to RMB 4.18 billion if certain milestones are met. The grant of the drug manufacturing permit will further accelerate the dorzagliatin New Drug Application (NDA) process of Hua Medicine, facilitate the commercial production and supply of the drug upon the product launch and lay a solid foundation for the expected increase of production capacity in the future.

According to the newly revised Drug Administration Law and Administrative Measures for the Supervision and Administration of Drug Manufacturing, the MAH, as the main party engaged in drug manufacturing, must obtain the drug manufacturing permit, whether it manufactures drugs by itself or entrusts the manufacturing to a third party. Hua Medicine is among the first group of biotechnology companies that have obtained the drug manufacturing permit since the implementation of the new Drug Administration Law on December 1, 2019. The grant of the drug manufacturing permit indicates that Hua Medicine and its CMOs have completed the core work related to commercialization of the drug. After dorzagliatin is approved for commercialization, Hua Medicine may entrust the manufacturing of dorzagliatin to the current CMOs to prepare for product launch. At the same time, the drug manufacturing permit is a requisite for submitting the NDA, which will help speed up the approval process for new drugs.

As one of the first batch of MAH enterprises in China, Hua Medicine has established management systems for drug safety/pharmacovigilance and pharmaceutical quality that are in line with its responsibilities as a MAH and also comply with international and domestic standards. The drug manufacturing permit granted for dorzagliatin is a recognition of Hua Medicine's management capabilities and management practices. It also means that Hua Medicine, who will become a drug marketing and registration applicant and a drug marketing license holder, fully possesses the compliant, high-quality and efficient management systems and management capabilities necessary for drug life-cycle quality management, entrusted production management, drug safety and pharmacovigilance management, risk management, post-market traceability system and liability compensation.

"The drug manufacturing permit granted for dorzagliatin marks an important milestone of Hua Medicine. It is also a full recognition of the principle of 'high standards and high quality to create high value' that Hua Medicine has always adhered to. Hua Medicine will continue to work with partners in the fields of clinical trial, drug production and commercialization to bring dorzagliatin, the first-in-class drug for diabetes, to patients in the world as soon as possible," said Dr. Li CHEN, CEO of Hua Medicine.

About Dorzagliatin
Dorzagliatin is an investigational first-in-class, dual-acting glucokinase activator, designed to control the progressive, degenerative nature of diabetes by restoring glucose homeostasis in patients with Type 2 diabetes. By addressing the defect of the glucose sensor function of glucokinase, dorzagliatin has the potential to restore the impaired glucose homeostasis state of patients with Type 2 diabetes and serve as a first-line standard-of-care therapy for the treatment of the disease, or as a cornerstone therapy when taken in combination with currently approved anti-diabetes drugs.

About Hua Medicine
Hua Medicine is a leading, clinical-stage innovative drug development company in China focused on developing novel therapies for the treatment of diabetes. Founded by an experienced group of entrepreneurs and international investment firms, Hua Medicine advanced a first-in-class oral drug for the treatment of T2DM into NDA-enabling stage and is currently evalsuating the therapy in adults with diabetes in two Phase III trials in China and various earlier stage clinical trials in China and the United States. Dorzagliatin has achieved its primary endpoint in both of its Phase III monotherapy and combination trials in China over the 24-week trial period, and completed its 52-week Phase III monotherapy trial. The Company has initiated product life-cycle management studies of this novel diabetes therapy and advanced its use in personalized diabetes care. Hua Medicine is working closely with disease experts and regulatory agencies in China and across the world to advance diabetes care solutions for patients worldwide.

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