Luye Pharma : COMPLETION OF DISCLOSEABLE AND CONNECTED TRANSACTION IN RELATION TO THE ACQUISITION OF EQUITY INTEREST IN SHANDONG BOAN

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LUYE PHARMA GROUP LTD.

綠 葉 製 藥 集 團 有 限 公 司

(Incorporated in the Bermuda with limited liability)

(Stock Code: 02186)

COMPLETION OF DISCLOSEABLE AND CONNECTED TRANSACTION IN RELATION

TO THE ACQUISITION OF EQUITY INTEREST IN SHANDONG BOAN

Reference is made to the announcement of Luye Pharma Group Ltd. (the ''Company'') dated 1 December 2019 and the circular of the Company (the ''Circular'') dated 6 January 2020 in relation to the acquisition of equity interest in Shandong Boan. Terms defined in the Circular have the same meanings when used in this announcement unless otherwise specified.

The Board is pleased to announce that all conditions to Completion have been fulfilled and Completion took place on 17 February 2020.

As the Group looks towards its next stage of development and evolve into a global innovative pharmaceutical company, the Group believes that continued investment in innovative and advanced technologies is imperative to the Group's long-term success. Through the strategic acquisition of Shandong Boan, a company with a proven track record in the R&D of biosimilars and innovative drugs, the Group hopes to not only further expand and diversify its pipeline portfolio, but also further accelerate its growth and penetration in the fast-growing biopharmaceutical sub-segment.

The Board views the Acquisition as consistent with the Group's stated strategy of accelerating the growth of the Group's business and product portfolio through acquisitions, with the ultimate objective to become a leading pharmaceutical company globally. In recent years, a number of Chinese pharmaceutical companies have announced their development or investment in antibody products, including applications for marketing authorisation and commencement of relevant clinical trials. As such, in order to maintain the Group's leading position in this sub-segment and ensure long-term sustainable growth, the Group previously acquired 4 Boan Biosimilars in order to continue building up its pipeline of biological antibodies, and is now pursuing the acquisition of 98.0% of the equity interest in Shandong Boan to both further broaden its portfolio of innovative biological antibody candidates and enhance its existing R&D and manufacturing capabilities within the sub-segment. Given the complementary nature of Shandong Boan's products and technologies with the Group, the Board also

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believes that there are a number of areas in which the two companies are able to collaborate and achieve a substantial level of synergies, including but not limited to sales and marketing of drugs with similar or common indications and R&D. As a whole, the Board is excited by the opportunities presented by the Acquisition, and the Board believes that the Acquisition will provide value to the Company and its Shareholders.

By Order of the Board

LUYE PHARMA GROUP LTD.

Liu Dian Bo

Chairman

Hong Kong, 17 February 2020

As at the date of this announcement, the executive directors of the Company are Mr. LIU Dian Bo, Mr. YANG Rong Bing, Mr. YUAN Hui Xian and Ms. ZHU Yuan Yuan; the non-executive director of the Company is Mr. SONG Rui Lin; and the independent non-executive directors of the Company are Mr. ZHANG Hua Qiao, Professor LO Yuk Lam, Mr. LEUNG Man Kit and Mr. CHOY Sze Chung Jojo.

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