Hong Kong Exchanges and Clearing : INTERIM RESULTS ANNOUNCEMENT FOR THE SIX MONTHS ENDED JUNE 30, 2019

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.

HUA MEDICINE

華 領 醫 藥

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 2552)

INTERIM RESULTS ANNOUNCEMENT FOR

THE SIX MONTHS ENDED JUNE 30, 2019

BUSINESS HIGHLIGHTS

• Our strategic goal is to become a global diabetes care company
• • We will continue to advance the development of dorzagliatin as a global first-in- class medicine, launched first in China
  • We plan to expand our market access globally through the strength of our drug development platform
  • Our scientific platform focuses on the remodeling of glucose homeostasis by employing dorzagliatin as a cornerstone therapy for diabetes - either as monotherapy or in combination with other currently approved antidiabetic medicines, as well as other popular medicines commonly taken by diabetes patients
• We advanced our two Phase III trials for dorzagliatin in China, with total randomized enrollment of 1,181 patients as of July 31, 2019
• • Our monotherapy Phase III trial (HMM0301) completed enrollment on February 28, 2019
  • As of July 31, 2019, enrollment for our combination with metformin Phase III trial (HMM0302) was 718 patients
• In order to implement the Company's strategy, we announced our updated pipeline in June 2019, which significantly expands our dorzagliatin-driven portfolio in the diabetes care market

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• To support the expansion of dorzagliatin into additional diabetes indications, we have initiated two combination studies with dorzagliatin in clinical trials in the United States
• • Our DPP-4 combination trial (HMM0111) is a pharmacokinetic (PK) and pharmacodynamic (PD) study of dorzagliatin in combination with sitagliptin to investigate the PK/PD of each drug alone or in combination. We dosed our first patient in January 2019
  • Our SGLT-2 combination trial (HMM0112) is a PK/PD study of dorzagliatin in combination with empagliflozin to investigate the PK/PD of each drug alone or in combination. We dosed our first patient in April 2019
• In addition, we continue to advance our development of fixed-dose combination drug candidates with dorzagliatin, with six programs in development, and for which we filed a a series of patents in May 2019
• In January 2019, the China National Intellectual Property Administration (CNIPA) issued to our Company a patent on a controlled release formulation of dorzagliatin. This new patent would extend the exclusivity of dorzagliatin to 2037 in China
• In February 2019, we announced the appointment of Dr. Ralph DeFronzo as our Global Consultant - Distinguished Scientific Consultant. Dr. DeFronzo is currently a Professor and Division Chief of Diabetes Division at the University of Texas Health Science Center and the Deputy Director of the Texas Diabetes Institute. He has contributed to several significant milestones in diabetes medicine, including leading the U.S. development of metformin, and its FDA approval in 1995. Since then, he has discovered a new approach to diabetes treatment that targets glucose reabsorption in the kidneys, which led to the development and approval of the SGLT-2 class of drugs.
• Cash position was approximately RMB1,246.4 million as of June 30, 2019.
• Total expenditures incurred by the Company for the six months ended June 30, 2019 was approximately RMB240.9 million, of which approximately RMB166.5 million was attributable to research and development expenses.

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FINANCIAL HIGHLIGHTS

• Research and development expenses increased by approximately RMB70.8 million or approximately 74% to approximately RMB166.5 million for the six months ended June 30, 2019.
• Loss before tax decreased by approximately RMB1,271.4 million or approximately 84.4% to approximately RMB235.5 million for the six months ended June 30, 2019.
• Loss and total comprehensive expense for the period decreased by approximately RMB1,271.4 million or approximately 84.4% to approximately RMB235.5 million for the six months ended June 30, 2019.
• Adjusted loss* increased by approximately RMB78.2 million or approximately 67.9% to approximately RMB193.5 million for the six months ended June 30, 2019.
• • Adjusted loss is not a financial measure defined under International Financial Reporting Standards ("IFRS"). It is calculated by taking loss before tax for the period and adding back (a) share-based payment; and (b) loss on changes in fair value of financial liabilities at FVTPL.

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MANAGEMENT DISCUSSION AND ANALYSIS

Business overview

We are a pre-revenue drug development company currently focused on developing dorzagliatin,

1. first-in-classoral drug for the treatment of Type 2 diabetes (T2D). In the first half of 2019, we defined our strategic goal to become a global diabetes care company. We intend to establish dorzagliatin as a cornerstone therapy for diabetes, either as a monotherapy or in combination with other currently approved medicines.

We filed an Investigational New Drug (IND) application with the National Medical Products Administration (NMPA) for dorzagliatin under Category 1.1 (New Drug) in 2012 and initiated a Phase Ia clinical study of our novel glucokinase activator dorzagliatin in September 2013. We also filed an IND application with the U.S. Food and Drug Administration (FDA) for dorzagliatin in March 2015. Since then, we have completed five Phase I trials in China, two Phase I trials in the United States, and one Phase II trial in China. We are currently conducting two Phase III trials in China and two Phase I trials in the United States. Our Phase III registration trials began in July 2017, with dorzagliatin both as a monotherapy (HMM0301) and in combination with metformin (HMM0302).

To expand our market globally, we recently announced an updated pipeline to investigate the combination of dorzagliatin with several other medicines. Two Phase I trials began in the first half of 2019 in the United States, and are studying the pharmacokinetic (PK) and pharmacodynamic (PD) characteristics of dorzagliatin in combination with sitagliptin (DPP-4 inhibitor) and empagliflozin (SGLT-2 inhibitor), respectively. We plan to initiate trials with several other available medicines to expand our dorzagliatin-driven portfolio.

In preparation for our eventual new drug application (NDA) submission for dorzagliatin with the NMPA, we completed the required active pharmaceutical ingredient commercial manufacturing process validation. We established the leadership team for our China Commercialization Strategy and Marketing (CSM) team for dorzagliatin in 2018, and have continued to grow our CSM team in 2019.

We are also developing mGLUR5, a potential novel drug candidate for the treatment of neurodegenerative diseases, including Parkinson's disease levodopa-induced dyskinesia, or PD-LID.

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Product pipeline

Set out below are the key stages of our product candidates under development:

Trial #	Drugs	Disease indication	Study type Pre-clinical Phase I Phase II Phase III NDA
HMM0301	Dorzagliatin	Drug naïve T2D	Registration trial
HMM0302	Dorzagliatin & metformin	Metformin tolerated T2D	Registration trial
HMM0311	Dorzagliatin vs. DPP-4	T2D	Head to head
HMM0312	Dorzagliatin vs. acarbose	T2D	Head to head
HMM0109	Dorzagliatin	Hepatic impaired T2D	Label expansion
HMM0110	Dorzagliatin	Renal impaired T2D	Label expansion
HMM0111	Dorzagliatin + DPP-4	Obese T2D	PK/PD & DDI
HMM0112	Dorzagliatin + SGLT-2	Metabolic syndrome	PK/PD & DDI
HMM0113	Dorzagliatin + atorvastatin	Label expansion	PK/PD & DDI
HMM0114	Dorzagliatin + valsartan	Label expansion	PK/PD & DDI
HMM0115	Dorzagliatin + sulfonylurea	SU-tolerated T2D	PK/PD & DDI
HMM0116	Dorzagliatin + acarbose	Acarbose tolerated T2D	PK/PD & DDI
HMM0117	Dorzagliatin + liraglutide	GLP-1 tolerated T2D	PK/PD & DDI
HMM0119	Dorzagliatin + pioglitazone	NASH T2D	PK/PD & DDI
HMM1201	Dorzagliatin + insulin	Basal insulin tolerated T2D	Insulin sparing
HMM1202	Dorzagliatin + insulin	Drug naïve severe T2D	Pre-clinical
	mGLUR5	PD-LID	Pre-clinical

HMM0301 is a dorzagliatin monotherapy Phase III trial in drug-naive T2D patients in China. We completed enrollment with over 450 patients as of February 28, 2019, and we expect to announce top-line24-week results by the fourth quarter of 2019.

HMM0302 is a dorzagliatin combination with metformin Phase III trial in metformin tolerant T2D patients in China. We expect to complete patient enrollment in the third quarter of 2019, and we expect to announce top-line24-week result by the second quarter of 2020.

As part of our strategy to establish dorzagliatin as a cornerstone therapy for the treatment of T2D globally, we are also investigating the combination of dorzagliatin with various approved classes of orally available anti-diabetic medicines as well as other popular medicines commonly taken by diabetes patients to address patients' personal needs.

HMM0111 is a dorzagliatin combination with sitagliptin (DPP-4 inhibitor) Phase I trial in T2D patients in the United States. We announced that the first patient was dosed in January 2019 and expect to complete and announce results by year end 2019.

HMM0112 is a dorzagliatin combination with empagliflozin (SGLT-2 inhibitor) Phase I trial in T2D patients in the United States. We announced the first patient was dosed in April 2019 and expect to complete and announce results by first half 2020.

We expect to initiate a head to head comparison trial (HMM0311) with a DPP-4 inhibitor (sitagliptin, aka Januvia®) in the second half of 2019. As Januvia® and Janumet® combined generated over US$5.9 billion in global sales in 2018, this trial has the potential to expand and accelerate the Company's commercialization plans for dorzagliatin. Shanghai Municipal Science

• Technology Commission has provided a government grant subsidy in support of this important trial. For similar reasons, the Company is also beginning preparatory work for initiation of its head to head comparison trial (HMM0312) between dorzagliatin and α-glucosidase inhibitor, the leading China oral anti-diabetic drug class with RMB8.7 billion annual sales in 2017 in China (according to Frost & Sullivan). We are also planning to conduct additional dorzagliatin combination trials with several other T2D drugs on the market as well.

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