Sihuan Pharmaceutical : Voluntary Announcement - Innovative Digestive System Drug Anaprazole Sodium Commenced Phase II Clinical Trial in China

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Sihuan Pharmaceutical Holdings Group Ltd.

̬ᐑᔼᖹછٰණྠϞࠢʮ̡

(incorporated in Bermuda with limited liability)

(Stock Code: 0460)

Voluntary Announcement

Innovative Digestive System Drug Anaprazole Sodium

Commenced Phase II Clinical Trial in China

The board of directors ("the "Board") of Sihuan Pharmaceutical Holdings Group Ltd. (the "Company "or" Sihuan Pharmaceutical" together with its subsidiaries, the "Group") is pleased to announce that Anaprazole Sodium ("Anaprazole "orthe" new drug") has commenced Phase II clinical trial in China (the "Study"). Anaprazole is an innovative digestive system drug developed by Shandong Xuanzhu Pharma Co., Ltd., a wholly-owned subsidiary of the Group.

Anaprazole is a novel drug in the proton pump inhibitors ("PPIs") family that inhibits gastric acid secretion and eliminates Helicobacter pylori rapidly and with high efficiency. In the previously completed Phase I clinical study, the new drug has demonstrated good safety profile and therapeutic potency. The study protocol involves recruitment of approximately 150 participants. It is a multi-centered, double-blinded, randomized controlled Phase II clinical trial to assess the efficacy and safety profile of the new drug in patients with duodenal ulcer.

Preclinical studies have demonstrated distinctive features of Anaprazole including rapid onset and longer duration of acid suppression. Composed of single isomers, the new drug is metabolized through multiple enzymes, which mitigates the risk of drug-drug interactions and hence is potentially the best-in-class attributable to its good safety properties and efficiency.

According to Pharmaceutical Data Base (PDB) data, the market volume of peptic ulcer medications in China reached RMB7.43 billion in 2016 and has been increasing over the years, among which PPIs account for 91.8% of all peptic ulcer medications in China, indicating that the new drug is in extensive demand and with promising market potential.

This announcement is being made by the Company on a voluntary basis to let the investing public understand the Group's latest business development, and does not constitute, and is not intended to be, an advertisement regarding the use of any medicine, surgical appliance, treatment or orally consumed product.

By order of the Board

Sihuan Pharmaceutical Holdings Group Ltd.

Che Fengsheng

Chairman and Executive Director

Hong Kong, 20 August, 2018

As at the date of this announcement, the executive directors of the Company are Dr. Che Fengsheng (Chairman), Dr. Guo Weicheng (Deputy Chairman and Chief Executive Officer), Mr. Choi Yiau Chong, Dr. Zhang Jionglong and Ms. Chen Yanling; the non-executive directors of the Company is Mr. Kim Jin Ha; and the independent non-executive directors of the Company are Mr. Patrick Sun, Mr. Tsang Wah Kwong and Mr. Zhu Xun.