GP (HK) Enters into a Capital Subscription and Acquisition Agreement, Acquires the Third-Generation Stent Retriever Contributing to Achieve the Strategic Plan of “Treating the Heart and Brain with the Same Therapeutic Method”, Enhancing Global “Precision Diagnostics + Treatment” Planning

GP (HK) Enters into a Capital Subscription and Acquisition Agreement, Acquires the Third-Generation Stent Retriever Contributing to Achieve the Strategic Plan of “Treating the Heart and Brain with the Same Therapeutic Method”, Enhancing Global “Precision Diagnostics + Treatment” Planning

(July 27, 2020, Hong Kong) China Grand Pharmaceutical and Healthcare Holdings Limited (“GP (HK)” or the “Company”, together with its subsidiaries, the “Group”, stock code: 00512) is pleased to announce that on July 27, 2020, Grand Pharmaceutical (China) Company Limited (“Grand Pharmaceutical”), an indirect non-wholly owned subsidiary of the Group, Nanjing Chuangyi Dongyin Equity Investment Partnership (Limited Partnership) (“Nanjing Fund”), Shanghai Hongsheng Enterprise Management Partnership (Limited Partnership) (“Shanghai Hongsheng”), the Original Equity Interest Holders, Nanjing Kainite Medical Technology Company Limited (“Target Company”) and Changzhou Kainite Medical Technology Company Limited (“Target Subsidiary”) entered into an agreement in respect of the capital subscription and the acquisition (the “Capital Subscription and Acquisition Agreement”); and on July 27, 2020, Nanjing Fuhan Enterprise Management Partnership (Limited Partnership) (“Nanjing Fuhan”), a non-wholly owned subsidiary of Grand Pharmaceutical, and Nanjing Fuguang Investment Management Company Limited (“Nanjing Fuguang”) entered into an agreement in respect of the capital contribution (the “Capital Contribution Agreement”).

According to the Capital Subscription and Acquisition Agreement, subject to the fulfillment of the conditions precedent set out in the agreement, Grand Pharmaceutical will conduct two stages of capital subscription (the “Capital Subscription”). Following the completion of the second stage of the capital subscription, and subject to the fulfillment of the conditions precedent set out in the agreement, Grand Pharmaceutical has the right to acquire all of the equity interest in the Target Company held by Nanjing Fund, Shanghai Hongsheng and the Original Equity Interest Holders (the “Acquisition”). And following the completion of the Acquisition, Grand Pharmaceutical will hold 100% of the equity interest in the Target Company.

According to the Capital Contribution Agreement, Nanjing Fuhan shall contribute RMB100,000,000 to the Nanjing Fund, as part of the capital subscription. Nanjing Fuhan is owned 51% by Grand Pharmaceutical as a general partner and owned 49% by Xudong Haipu as a limited partner. The remaining capital is intended to be used by Nanjing Fund to invest in future projects relating to healthcare, pharmaceutical and medical devices, etc.

The core product of the Target Company is the third-generation stent retriever which is used to treat cerebral stroke. The target Company is expected to get five registration certificates for its products including the third-generation stent retriever and its ancillary products in 2024.

Cerebral stroke (or cerebralvascular accident, CVA) is an acute cerebrovascular disease, and is a series of symptoms related to brain damage due to insufficient blood supply to brain resulted by rupture or thrombosis of intracranial blood vessels, including cerebral hemorrhage, ischemic stroke, etc. Cerebral stroke has become the leading cause of adults’ death and disability in China. As the aging population increasing, and young people suffering high pressure and living an unhealthy life, it is very common to live with the risk factors that may lead to cerebro-cardiovascular diseases, thus the huge threat of cerebral stroke in China cannot be underestimated. According to the information shown in the report titled “Mortality, morbidity, and risk factors in China and its provinces, 1990–2017” published by “The Lancet” and “Global Burden of Disease Study 2017”, and “Report On Stroke Prevention And Treatment in China: 2018”, in 2017 there were 4.25 million new cerebral stroke patients in China, the morbidity rate was 301 out of 100,000 people, and 1.96 million deaths was recorded. Currently the average annual growth rate of cerebral stroke morbidity for the age group between 40 to 74 in China is approximately 8.3%. This may result in great burden to economy and society, and thus there is a relatively large clinical need.

The common treatment for ischemic stroke is using thrombolytic drugs, but there is only 6 hours window for thrombolytic therapy and many patients already missed the “golden hour” when hospitalised, and it is difficult to be effectively treated by thrombolytic drug. Intervention therapy, especially the stent intervention, can extend the treatment window to 24 hours, thus stent retriever thrombectomy becomes a new clinical method for treating acute ischemic stroke. In recent years there are different clinical studies in the world showing that the use of stent retriever thrombectomy in combination with intravenous thrombolytic therapy can increase the ischemic stroke patients’ recanalization rate. For those patients who have passed the window for applying intravenous thrombolytic therapy, solely using stent retriever thrombectomy can still enhance the prognosis. The core product of the Target Company is the third-generation stent retriever, which is easier to be positioned by the operator. It is more convenient for doctor to operate, and may save up time and cost for surgery and enhance the effectiveness and safety, and thus represent a new development direction for cerebrovascular intervention.

The Board of China Grand Pharmaceutical and Healthcare Holdings Limited, commented: “The Group establishes its global ‘Precision Diagnostics + Treatment’ strategic platform in the precise intervention treatment area, consisting of Canadian-based Conavi Medical Inc that specialises in vascular imaging diagnostics, Germany-based Cardionovum GmbH that specialises in vascular intervention, Australian-based Sirtex Medical Pty Ltd. and United States-based OncoSec Medical Incorporated that specialise in tumour intervention. The Group is striving to build a leading ‘Pan Intervention Treatment Platform’ in China as well as the world. The Capital Subscription and Acquisition will expand the Group’s product pipeline in the precise intervention treatment area. During the development of the pipelines of intracranial stent retriever and ancillary products, it may also facilitate further development and localization of coronary intervention products of the Group, complete the integrated platform for development/manufacturing/sales and achieve the strategic planning of ‘Treating the heart and brain with the same therapeutic method’. Furthermore, it will facilitate the development of innovative, high entry barrier as well as sustainable development of precision treatment area, and build-up its integrated strategic plan for development/manufacturing/sales of advanced medical devices, and thus enhance the Group’s comprehensive competitiveness and earn higher returns for shareholders.”