3SBio : 2021Annual Report

(Incorporated in the Cayman Islands with limited liability)

Stock Code : 1530Convertible Bonds Code : 40285

"OOVBM 3FQPSU

Contents

• 2 Company Profile

• 3 Corporate Information

• 5 Financial Highlights

• 6 Chairman's Statement

• 9 Management Discussion and Analysis

• 34 Directors and Senior Management

• 40 Report of Directors

• 62 Corporate Governance Report

• 79 Independent Auditor's Report

  Consolidated Financial Statements

• 87 Consolidated Statement of Profit or Loss

• 88 Consolidated Statement of Comprehensive Income

• 89 Consolidated Statement of Financial Position

• 91 Consolidated Statement of Changes in Equity

• 93 Consolidated Statement of Cash Flows

• 95 Notes to Financial Statements

Company Profile

3SBio Inc. (the "Company" or "3SBio", and with its subsidiaries collectively, the "Group") is a leading biotechnology company in the People's Republic of China (the "PRC"). As a pioneer in the Chinese biotechnology industry, the Group has extensive expertise in researching and developing, manufacturing and marketing biopharmaceuticals. The core products of the Group include TPIAO ( 特比澳 ), recombinant human erythropoietin ("rhEPO") products EPIAO ( 益比奥 ) and SEPO ( 賽博爾 ), Yisaipu ( 益賽普 ), and Mandi ( 蔓迪 ). TPIAO is the only commercialized recombinant human thrombopoietin ("rhTPO") product in the world. According to IQVIA1, the market share in the treatment of thrombocytopenia, in terms of sales value, of TPIAO in Mainland China2 was 72.1% in 2021. With its two rhEPO products, the Group has been the premier market leader in the Mainland China rhEPO market for two decades, holding a total share of 42.4% in 2021. Yisaipu is a Tumour Necrosis Factor ("TNF") α inhibitor product with a share of 29.5% in the Mainland China TNF α market in 2021. According to the data of Chinese Pharmaceutical Association ( 中國藥學會 ,"CPA"), Mandi has a dominant market share of 71.2% in the Mainland China minoxidil tincture market in terms of sales value in 2021. The Group has been expanding its therapeutic coverage by adding products through internal research and development ("R&D") and various external strategic partnerships. Meanwhile, the Group boosts its revenue scale through strategic positioning in contract development and manufacturing operation ("CDMO") business. Its operation officially commenced since December 2021, witnessing strong growth in Mainland China.

As at 31 December 2021, amongst the 33 product candidates within the Group's active pipeline, 26 were being developed as innovative drugs in Mainland China. Out of these 33 product candidates, 18 are monoclonal antibody ("mAb") or bi-specific antibodies, seven are other biologic products, and eight are small molecule entities. The Group has ten product candidates in oncology; 16 product candidates that target auto-immune diseases including rheumatoid arthritis ("RA"), and other diseases including refractory gout and ophthalmological diseases such as age-related macular degeneration ("AMD"); six product candidates in nephrology; and one product candidate in dermatology.

The Group operates in a highly attractive industry. Biotechnology has revolutionized the pharmaceutical industry by addressing unmet medical needs and offering innovative treatments for a wide array of human diseases. In Mainland China, the biotechnology industry enjoys strong government support and has been selected by the State Council of the PRC as a key strategic emerging industry. Strong government support along with increasing physician adoption of biopharmaceuticals has driven strong industry growth in Mainland China.

The Group is positioned for global expansion. Outside of Mainland China, TPIAO has been approved in nine countries; EPIAO has been approved in 23 countries; and Yisaipu has been approved in 15 countries. In the long term, the Group aims to market its products in developed countries. Furthermore, the Group is collaborating with international partners to develop and market the Group's product candidates, such as pegsiticase and anti-programmed cell death protein 1 ("PD-1") mAb. The Group aims to focus its R&D to provide innovative therapeutics for patients in Mainland China and globally.

As at 31 December 2021, the Group had operation facilities in Shenyang, Shanghai, Hangzhou and Shenzhen, all in Mainland China, as well as in Como, Italy, with 5,292 employees. The Group's pharmaceutical products are marketed and sold in all provinces, autonomous regions and special municipalities in Mainland China, as well as a number of foreign countries and regions. For the year ended 31 December 2021 (the "Reporting Period"), the Group's nationwide sales and distribution network enabled it to sell its products to nearly 9,000 hospitals and medical institutions in Mainland China.

• 1 All market share information throughout this report cites the IQVIA data, unless otherwise noted.

• 2 Hereinafter referred to as the mainland area of the PRC.

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3SBIO INC.

Corporate Information

BOARD OF DIRECTORS

Executive Directors

Dr. LOU Jing (Chairman & Chief Executive Officer) Ms. SU Dongmei

Non-executive Directors

Mr. HUANG Bin

Mr. TANG Ke

REMUNERATION COMMITTEE

Ms. YANG, Hoi Ti Heidi (Chair) (appointed on

21 January 2022)

Mr. PU Tianruo

Mr. TANG Ke

Dr. WONG Da Silva Lap Yan Leo De Rothschild

(formerly known as Wong Lap Yan) (Chairman) (resigned on 21 January 2022)

Independent Non-executive Directors

Mr. PU Tianruo

Ms. YANG, Hoi Ti Heidi (appointed on 29 June 2021)

Mr. NG, Joo Yeow Gerry (appointed on 21 January 2022) Mr. David Ross PARKINSON (resigned on 29 June 2021) Dr. WONG Da Silva Lap Yan Leo De Rothschild

(formerly known as Wong Lap Yan)

(resigned on 21 January 2022)

COMPANY SECRETARY

Ms. LAI Siu Kuen (appointed on 10 February 2022) Ms. LEUNG Suet Wing (resigned on 17 July 2021)

Mr. LEE Kwok Fai Kenneth (appointed on 17 July 2021 and resigned on 10 February 2022)

AUTHORIZED

REPRESENTATIVES

Ms. SU Dongmei

Ms. LAI Siu Kuen (appointed on 10 February 2022)

Ms. LEUNG Suet Wing (resigned on 17 July 2021)

Mr. LEE Kwok Fai Kenneth (appointed on 17 July 2021

and resigned on 10 February 2022)

AUDIT COMMITTEE

Mr. PU Tianruo (Chairman)

Ms. YANG, Hoi Ti Heidi (appointed on 29 June 2021)

Mr. NG, Joo Yeow Gerry (appointed on 21 January 2022) Mr. HUANG Bin (resigned on 29 June 2021)

Dr. WONG Da Silva Lap Yan Leo De Rothschild

(formerly known as Wong Lap Yan)

(resigned on 21 January 2022)

NOMINATION COMMITTEE

Dr. LOU Jing (Chairman)

Mr. PU Tianruo

Mr. NG, Joo Yeow Gerry (appointed on 21 January 2022) Dr. WONG Da Silva Lap Yan Leo De Rothschild

(formerly known as Wong Lap Yan)

(resigned on 21 January 2022)

REGISTERED OFFICE

(IN THE CAYMAN ISLANDS)

Cricket Square, Hutchins Drive PO Box 2681

Grand Cayman, KY1-1111 Cayman Islands

PRINCIPAL PLACE OF

BUSINESS IN HONG KONG

5/F, Manulife Place

348 Kwun Tong Road Kowloon

Hong Kong

HEADQUARTER

No. 3 A1, Road 10

Shenyang Economy and Technology Development Zone Shenyang

People's Republic of China

Annual Report 2021

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