Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

Simcere Pharmaceutical Group Limited

先聲藥業集團有限公司

(Incorporated in Hong Kong with limited liability)

(Stock code: 2096)

CHANGE IN USE OF PROCEEDS

Reference is made to (i) the prospectus (the "Prospectus") issued by Simcere Pharmaceutical Group Limited (the "Company" and together with its subsidiaries, the "Group") dated October 13, 2020 relating to the global offering (the "Global Offering") of the Company's shares for the listing (the "Listing") on the Main Board of The Stock Exchange of Hong Kong Limited, (ii) the announcement of offer price and allotment results dated October 23, 2020 (the "Allotment Results Announcement"), (iii) the announcement of partial exercise of the over-allotment option, stabilizing actions and end of stabilization period dated November 18, 2020 (the "Over-allotmentOption Announcement"), (iv) announcement of annual results for the year ended December 31, 2020 (the "Annual Results Announcement") in which the utilization of the net proceeds from the Global Offering and the partial exercise of the over- allotment option as of December 31, 2020 was disclosed, and (v) announcement of connected transaction in relation to disposal of subsidiaries dated April 15, 2021. Unless otherwise defined, the capitalized terms used in this announcement shall have the same meanings as defined in the Prospectus.

As set out in the section headed "Future Plans and Use of Proceeds" in the Prospectus and as disclosed in the Allotment Results Announcement, Over-allotment Option Announcement and Annual Results Announcement, the net proceeds raised from the Listing and the partial exercise of the over-allotment option were approximately HK$3,513.09 million (the "Net Proceeds"). As of March 31, 2021, the Net Proceeds utilized was approximately HK$895.41 million and the remaining Net Proceeds was approximately HK$2,617.68 million. The Board intends to reallocate the Net Proceeds amounted to approximately HK$325.62 million for the selected cell therapy product candidates, including CD19 CAR T-cell therapy (Indication 1), CD19 CAR T-cell therapy (Indication 2), BCMA CAR T-cell therapy and SIM-325 (the "Pipeline Products"), to the selected oncology product candidates that are currently under development, including G1 Trilaciclib (Indication 1, Indication 2 and Indication 3), SIM-

395 (Kazia-Paxalisib) and SIM-364 (Docetaxel Polymeric Micellar for Injection) (the "New Selected Products").

- 1 -

Set out below is the utilization of the Net Proceeds as of March 31, 2021 and the proposed change of use of the unutilized Net Proceeds:

Net

Net Proceeds

Net Proceeds

Percentage of

Proceeds

utilized as of

unutilized as of

Purpose

the total amount

received

March 31, 2021

March 31, 2021

(HK$ in million)

(HK$ in million)

(HK$ in million)

Purpose 1: Continued research

and development of selected

product candidates in the

Company's strategically focused

therapeutic areas(1)

60%

2,107.85

95.32

2,012.53

Purpose 2: Reinforcement of the

Company's sales and marketing

capabilities

10%

351.31

139.68

211.63

Purpose 3: Investment in

companies in the pharmaceutical

or biotechnology sector with

a view to broadening the

Company's product portfolio

10%

351.31

0.00

351.31

Purpose 4: Repayment of certain

outstanding bank loans

10%

351.31

351.31

0.00

Purpose 5: Working capital and

other general corporate purposes

10%

351.31

309.10

42.21

Total

100%

3,513.09

895.41

2,617.68

Notes:

  1. As of March 31, 2021, the Net Proceeds of HK$325.62 million previously allocated to the Pipeline Products were unutilized and will be reallocated to the New Selected Products under Purpose 1. As of March 31, 2021, save as the aforementioned changes, there is no other change in the use of the Net Proceeds. Save as disclosed herein, the Company intends to apply the unutilized Net Proceeds as of March 31, 2021 in the manner and proportion set out in the Prospectus.

REASONS FOR AND BENEFITS OF THE CHANGE IN USE OF PROCEEDS

The reallocation of the Net Proceeds for the Pipeline Products was primarily due to the disposal of the entire equity interest of Simgene Group Limited. For details, please refer to the announcement of the Company dated April 15, 2021 with regard to connected transaction in relation to disposal of subsidiaries.

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The decision of disposal of the entire equity interest of Simgene Group Limited is made after consideration of the following reasons:

  1. The Latest Clinical Research Progress of the New Candidate Product in Cell Therapy Area Will Decrease the Potential Value of the Pipeline Products. According to the recent clinical research data of CAR-NK(natural killer cell) (the "New Candidate Product"), a new candidate product in cell therapy area, published by a competitor of the Company engaging in cellular immunotherapy for cancer and immune diseases, the New Candidate Product achieved positive clinical data in respect of the evaluation of safety, efficiency, pharmacokinetics and curative effect. As a substitute product to the Pipeline Products, it is anticipated that the New Candidate Product will be massively manufactured with high potential and will have significant lower side effects and costs compared with the Pipeline Products. The Company is of the view that, although there are uncertainties in relation to the successful launch of the New Candidate Product, once launched, the New Candidate Product will have greater advantages and more market potential than the Pipeline Products, which will significantly decrease the potential value of the Pipeline Products and the necessity to continuously research and develop the Pipeline Products;
  2. The Pipeline Products Face Significant Competition from Other Companies with the Same or Similar Products. The number of companies engaging in research and development of same or similar products to the Pipeline Products has significantly increased in recent years, some of which have achieved progress ahead of the Company. For instance, BCMA CAR T-celltherapy of the Company is currently in the early stage of phase I clinical trial while three of the competitors of the Company have already conducted phase II clinical trial and one of the competitors filed biologics license application for the same product to U.S. Food and Drug Administration last year. In consideration of the advanced progress of competitors and the increasing number of the same or similar products in the market, the Company believes that even if the Pipeline Products are launched ultimately, the competitiveness of them will be insufficient in face of fierce market competition;
  3. The Policies Trend Make the Market Prospect of the Pipeline Products Less Promising. According to the results of the fifth medical insurance negotiations (the "Negotiations") conducted by the government of the PRC by the end of 2020, several anti-PD-1/PD-L1therapy pharmaceuticals will be covered by the national medical insurance with the sales price decreased significantly. With years of development, the indications of most anti- PD-1/PD-L1therapy pharmaceuticals available in the market are basically the same with the efficacies and safety quiet similar, and the differences between such pharmaceuticals are relatively small. The policies trend reflected by such Negotiations indicated that the future market opportunities of anti-PD-1/PD-L1therapy pharmaceuticals and pharmaceuticals lack of innovativeness will be substantially reduced. In consideration of the circumstances mentioned in (1) and (2) above, the Company believes that the Pipeline Products is currently confronted with the same market prospect with anti-PD-1/ PD-L1therapy pharmaceuticals. As such, given such policies trend making the future prospect of the Pipeline Products unpromising, the Company is of the view that, once launched, the sales price of the Pipeline Products is likely to be reduced significantly in the foreseeable future.

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Therefore, the Company decided to dispose the cell therapy business by disposal of the entire equity interest of Simgene Group Limited with a view to concentrate the Company's existing resources and manpower to better focus on its business strategies and to ensure the quality and competitiveness of the Company's other pipeline products. As such, the allocation of the Net Proceeds to Pipeline Products is no longer required.

In addition, given oncology is one of the Company's strategically focused therapeutic areas, the Company targets to constantly devote sufficient resources into this area. In consideration that the New Selected Products have entered or will enter into certain critical development stages which will further expand the breadth of the Company's oncology product pipeline, the Company believes that the New Selected Products have promising prospects and will allocate the Net Proceeds to accelerate their future research and development. Details of the New Selected Products and their respective stages were set out as below:

Stage of the Research

Products Name

Introduction of the Products

and Development

G1 Trilaciclib

Indication 1

The Company obtained a clinical trial

approval on January 18, 2021 for the

This is a First-in-Class product for

development of this product in China

the treatment of chemotherapy -

for small cell lung cancer.

induced myelosuppression (transient

CDK4/6 inhibitor for injection),

and is the first product to be used

for bone marrow (red blood cells,

neutrophils, platelets) protection

p r i o r c h e m o t h e r a p y f o r a n t i -

tumor treatment . This product

was granted breakthrough therapy

d e s i g n a t i o n b y t h e U . S . F o o d

and Drug Administration (FDA)

and was approved on February

12, 2021 (U.S. time) to decrease

the incidence of chemotherapy-

induced myelosuppression in adult

patients when administered prior

to a platinum/etoposide-containing

regimen or topotecan-containing

regimen for extensive-stage small

cell lung cancer.

- 4 -

Stage of the Research

Products Name

Introduction of the Products

and Development

Indication 2

The Company plans to join the

global multi-center phase III study

This is a product indicated for bone

sponsored by G1 therapeutics,

marrow protection in patients with

Inc. and obtained the clinical trial

colorectal cancer. There is currently

approval on April 14, 2021. The

no similar competitive product

patient recruitment has been initiated

developed for this indication.

outside of China while the enrolment

in China is expected to start in third

quarter of this year.

Indication 3

The Company plans to join the

global multi-center phase III study

This is a product indicated for

sponsored by G1 therapeutics, Inc.

patients with triple negative breast

The clinical trial application of this

cancer (TNBC). The results of a phase

product has been accepted in April

II study of this product indicated

2021. The first patient enrollment

that Trilaciclib administrated prior

worldwide will be initiated in April

to chemotherapy (gemcitabine

2021 and the enrollment completion

combined with carboplatin) has

is expected in the first half of 2022.

clinical significant improvements in

progression-free survival and overall

survival.

SIM-395

Paxalisib is an effective inhibitor of

The Company plans to join its phase

(Kazia-Paxalisib)

the PI3K pathway and can penetrate

II/III global clinical registration

the blood-brain barrier. It has not yet

study and is currently preparing for

been approved for commercialization

the investigational new drug (IND)

i n a n y c o u n t r i e s . T h e r e s u l t s

application. The IND approval is

of the phase IIa study targeted

expected to be obtained this year to

glioblastoma multiforme show that

carry out registered clinical trials.

this product largely improve patients'

progression-free survival and overall

survival.

SIM-364

Compared with traditional docetaxel,

This product is currently being

(Docetaxel Polymeric

D o c e t a x e l - P o l y m e r i c M i c e l l a r

investigated in a phase I clinical trial.

Micellar for Injection)

replaced the toxic cosolvents with

polymeric micelles. This will simplify

pre-treatment process, reduce adverse

events like allergic reactions, alcohol

toxicity, skin toxicity, and improve

the tolerance.

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In view of the above, the Board considers that the aforesaid change in the use of the Net Proceeds will facilitate an effective use of the financial resources of the Group, strengthen the future development of the Group and is in the best interest of the Company and its shareholders as a whole. The Directors confirm that there is no material effect on the Group's business strategies or material change in the nature of business of the Group as set out in the Prospectus. Save for the aforesaid changes, there is no other change in the use of the Net Proceeds.

By order of the Board of

Simcere Pharmaceutical Group Limited

Mr. Ren Jinsheng

Chairman and executive Director

Hong Kong, April 15, 2021

As at the date of this announcement, the Board comprises Mr. REN Jinsheng as the Chairman and executive Director, Mr. WAN Yushan and Mr. TANG Renhong as the executive Directors; Mr. ZHAO John Huan as the non-executive Director; and Mr. SONG Ruilin, Mr. WANG Jianguo and Mr. WANG Xinhua as the independent non-executive Directors.

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Simcere Pharmaceutical Group published this content on 15 April 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 April 2021 15:01:08 UTC.