The board of directors of Sichuan Kelun-Biotech Biopharmaceutical Co., Ltd. updated its shareholders and potential investors on the Group's collaboration with Merck Sharp & Dohme LLC. The Group has entered into three license and collaboration agreements with MSD to develop up to nine ADC assets for cancer treatment (the "MSD Collaboration Agreements") including three ADC assets which have proceeded to clinical stage (including the Group's Core Product SKB264 and key products SKB315 and SKB410) and up to six preclinical ADC assets. On October 21, 2023, the Company received formal written notice from MSD that MSD made a decision (1) to terminate an exclusive license the Company granted to MSD to develop, manufacture and commercialize a preclinical ADC asset, and (2) not to exercise an exclusive option the company granted to MSD to obtain an exclusive license to another preclinical ADC asset (collectively, the "Excluded Preclinical ADC Assets").

None of the Excluded Preclinical ADC Assets is a Core Product or key product of the Company. The Group is not obliged to return any payments received or make any payments to MSD in respect of the aforementioned termination of the collaboration on the Ex included Preclinical ADC Assets. MSD is not obliged to pay any termination fee or required to pay any future milestone or royalty payments to the Group in respect of the Excluded Preclinical AD Assets under the MSD Collaboration Agreements.

The Group will continue with its research, development, manufacturing and commercialization of the Excluded PreclinicalAD Assets and explore collaboration opportunities with other partner(s) in respect of the Excluded preclinical ADC Assets. Except as disclosed above, there is no change to the MSD Collaboration Ag agreements. The collaboration between the Group and MSD with respect to three clinical-stage ADC assets and four preclinical ADC assets (the "Continuing ADC Assets") remains unaffected.

The Group's progress on the research, development, manufacturing and commercialization of the Continuing ADC Assets continues to be on schedule. In addition, there is a possibility for the Group and MSD to explore other collaboration opportunities on new target ADC assets.