The board of directors Hua Medicine announced that, on August 17, 2020, Hua Medicine (Shanghai) Ltd. (" Hua Shanghai "), a wholly-owned subsidiary of the Company, entered into a strategic collaboration agreement (the "Agreement") with Bayer Healthcare Company Limited ("Bayer") to commercialize and form a strategic partnership for dorzagliatin, a novel diabetes treatment, in China. The commercialization agreement and strategic partnership aims to provide Chinese diabetes patients with access to a new treatment option, building on Bayer 's existing strength and leadership in diabetes management in China and the innovation capabilities of the Company. Under the terms of the agreement, the Company as the market authorization holder shall be responsible for clinical development, registration, product supply and distribution, whilst Bayer as the promotion service provider shall be responsible for marketing, promotion and medical education activities in China. The Company 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. Bayer receives the exclusive rights to commercialize the product in China and will receive tiered service fee based on the net sales. Initially, both parties will share equally in sales derived from China net sales, with adjusting sales percentages based on agreed China net sales thresholds.