Shanghai Junshi Biosciences : FORMATION OF A JV COMPANY TO JOINTLY DEVELOP CD39 DRUG

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SHANGHAI JUNSHI BIOSCIENCES CO., LTD.*

上海君實生物醫藥科技股份有限公司

(a joint stock company incorporated in the People's Republic of China with limited liability)

(Stock code: 1877)

FORMATION OF A JV COMPANY

TO JOINTLY DEVELOP CD39 DRUG

The board (the "Board") of directors (the "Directors") of the Company is pleased to announce that, recently, the Company entered into a shareholders cooperation agreement (the "Shareholders Cooperation Agreement") with Beijing Eirene Biotech Co., Ltd.* (北京恩瑞尼生物科技股份 有限公司) ("Beijing Eirene") in relation to the formation of a joint venture company (the "JV Company"). The JV Company will be mainly engaged in the research and development ("R&D"), clinical application and market development of the CD39 drug. The JV Company will be owned as to 50% by the Company and 50% by Beijing Eirene upon its formation.

KEY TERMS OF THE SHAREHOLDERS COOPERATION AGREEMENT

Beijing Eirene will make non-cash contributions to the JV Company by way of transfer of all intellectual property rights and development and sales rights in the CD39 drug in the China territory (including the Hong Kong Special Administrative Region of the PRC, the Macau Special Administrative Region of the PRC and the Taiwan region) to the JV Company. The Company will make its contributions to the JV Company in cash. The JV Company will be held as to 50% and 50% by the Company and Beijing Eirene, respectively.

The JV Company will mainly be engaged in the R&D, clinical application and market development of the CD39 drug. The benefits generated directly or indirectly from the CD39 project (in any form, including share acquisition or disposal, drug authorization, drug sales, technology transfer, etc., and after deducting costs, including manufacturing and sales costs) will be distributed between the parties in proportion to their respective shareholding in the JV Company.

ABOUT CD39 PROJECT

CD39 is the enzyme responsible for the initial steps in the conversion of immune stimulatory extracellular ATP to immune suppressive adenosine in the tumor microenvironment, and plays an important role in the immune suppressive response in the tumor microenvironment. Studies have shown that CD39 has demonstrated high expression in various types of human tumors, including lymphoma, sarcoma, lung cancer, pancreatic cancer, ovarian cancer, renal cell cancer, thyroid cancer and testicular cancer. According to publicly available information, there are currently at least three CD39 targeted drugs entering the clinical trial on a global scale. The project's CD39 product has a unique and innovative design concept to achieve high efficacy and reduce potential systemic side effects by selectively targeting at the immune suppressive cells of the high expression CD39 in the tumor microenvironment.

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ABOUT BEIJING EIRENE

Beijing Eirene is a pre-clinical stage biotech company with a mission to develop biologicals to target purinergic signaling and key ectonucleotidases for treatment of cancer, autoimmunity, inflammatory disease and metabolic syndrome.

To the best of the Directors' knowledge, information and belief having made all reasonable enquiry, Beijing Eirene is not a connected person of the Company (as defined in the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited).

BENEFITS OF AND REASONS FOR ENTERING INTO THE SHAREHOLDERS COOPERATION AGREEMENT

The Company is a joint stock limited liability company established in the PRC, whose H Shares are listed on The Stock Exchange of Hong Kong Limited (stock code: 1877) and A Shares are listed on the STAR Market of the Shanghai Stock Exchange (stock code: 688180). The Group is an innovation-driven biopharmaceutical company dedicated to the discovery and development of innovative drugs and their clinical research and commercialization on a global scale. The Company is of the view that by entering into the Shareholders Cooperation Agreement and forming the JV Company, the Company can enjoy the long term benefits from the CD39 project. The cooperation is conducive to expanding the Company's R&D pipeline in the field of cancer treatment, improving the Company's market layout, and providing alternative treatment options for the unmet clinical needs in the market, which will have a positive impact on the sustained operations of the Company.

RISK WARNING

As pharmaceutical product is characterized by high technology, high risk and high added value with a long-life cycle constituted of R&D, clinical development, drug approval and commercial production, and is prone to be affected by uncertainties, thus the successful approval and release of CD39 project is subject to certain risks. Investors are reminded to exercise caution in making decisions and be cautious of investment risks. The CD39 drug may not ultimately be successfully development and marketed. The Company will fulfill its information disclosure obligations in a timely manner in relation to the subsequent progress of the project in accordance with relevant regulations.

By order of the Board

Shanghai Junshi Biosciences Co., Ltd.*

Mr. Xiong Jun

Chairman

Shanghai, the PRC, 9 September 2020

As at the date of this announcement, the board of directors of the Company comprises Mr. Xiong Jun, Dr. Li Ning, Dr. Feng Hui, Mr. Zhang Zhuobing, Dr. Wu Hai and Dr. Yao Sheng as executive Directors; Mr. Tang Yi, Mr. Li Cong, Mr. Yi Qingqing and Mr. Lin Lijun as non-executive Directors; and Dr. Chen Lieping, Mr. Chen Xinjun, Mr. Qian Zhi, Mr. Zhang Chun and Dr. Roy Steven Herbst as independent non-executive Directors.

• For identification purpose only

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