Stock code: 688321 Stock abbreviation: Microchip Bio Announcement No.: 2023-018

Shenzhen Microchip Biotechnology Co., Ltd.

About the signing of an exclusive license between Microchip New Domain and Youhe Pharmaceuticals, a wholly-owned subsidiary of Baiaosetu.

Agreeable Announcement

the company's board of directors and all directors to ensure that the contents of this announcement does not exist any false records, misleading statements or major omissions, and the authenticity, accuracy and completeness of the contents of the legal responsibility.

Important Content Tips:

Chengdu Microchip, a subsidiary of Shenzhen Microchip Biotechnology Co., Ltd. (hereinafter referred to as "the Company")

New Domain Biotechnology Co., Ltd. (hereinafter referred to as "Microcore New Domain") and Baiaosetu (Beijing) Pharmaceuticals

(hereinafter referred to as "Baiosaitu") is a wholly-owned subsidiary of Youhe Pharmaceutical Technology (North

Beijing) Co., Ltd. (hereinafter referred to as "Youhe Pharmaceutical") on the bispecific antibody new drug YH008 (hereinafter briefly

"YH008") signed the Exclusive License Agreement (the "License Agreement"), micro

Core New Domain will receive YH008, a new bispecific antibody drug from Youhe Pharmaceutical, in Greater China (including Hong Kong, China,

Macau, China and Taiwan, China, hereinafter referred to as the "Authorized Area") for research and development, production and commercialization.

accounting for licensing interests. Microchip New Domain will pay Youhe Pharmaceutical a down payment of RMB 40 million and follow-up

R & D milestone payments not exceeding RMB 0.36 billion and subsequent payments not exceeding RMB 0.196 billion

Sales milestone payments and tiered special payments based on annual net sales over the useful life.

The right to use the fee.

This transaction does not constitute a connected transaction, nor does it constitute the provisions of the Measures for the Administration of Major Assets Reorganization of Listed Companies.

major asset restructuring.

This transaction has been considered and approved at the 26th meeting of the second board of directors of the company, and does not need to be submitted to the public.

General meeting of shareholders.

There is uncertainty in the development of innovative drugs, their pharmaceutical research, preclinical studies, selection of indications, and

There is uncertainty as to whether the selected indications will be successful in clinical trials; at the same time, new drugs will be marketed.

The subsequent sales are also affected by many factors, including the market environment and industry development. Therefore,

Whether this cooperation will be able to reach the agreed payment milestones and pay the relevant milestones to Youhe Pharmaceutical.

There is also uncertainty about royalties and tiered royalties.

1. Overview of this transaction

Microchip New Domain has signed a "License Agreement" with Youhe Pharmaceutical, a wholly-owned subsidiary of Baiosetu, through friendly negotiations. Microchip New Domain will obtain the exclusive license rights and interests of the research and development, production and commercialization of Youhe Pharmaceutical's new bispecific antibody drug YH008 in Greater China (including Hong Kong, Macao, China and Taiwan, hereinafter referred to as the "Authorized Area"). Microchip New Domain will pay Youhe Pharmaceutical a down payment of RMB 40 million and a subsequent R & D milestone payment of not more than RMB 0.36 billion, a subsequent sales milestone payment of not more than RMB 0.196 billion and a certain percentage of tiered royalties based on annual net sales during the service life.

this transaction does not constitute a connected transaction, nor does it constitute a major asset restructuring of the listing Corporation's major asset restructuring management approach.

In accordance with the relevant provisions of the Rules Governing the Listing of Shares on the Shanghai Stock Exchange's CRE Board and the Articles of Association, the transaction has been approved at the 26th meeting of the second session of the Board of Directors of the Company and takes effect, and does not need to be submitted to the general meeting of shareholders of the Company for consideration.

Basic information about the parties to the 2. transaction

1. Chengdu Microchip New Domain Biotechnology Co., Ltd.

Nature: Other Limited Liability Company

Legal Representative: Seagull

Registered capital: 17.216667 million yuan

Date of Establishment: 2021-08-17

Domicile and main office: Chengdu Tianfu International Biological City (No. 18, Section 2, Biological City Middle Road, Shuangliu District)

Main business: Microchip New Domain is a holding subsidiary of Microchip Biology. It is an innovative biotechnology company driven by research and development. It is committed to developing macromolecules and other novel therapeutic technologies, and is committed to providing patients with new methods of innovative mechanism treatment, New choice. The research fields include macromolecules represented by antibodies, nucleic acid drugs, cell therapy methods and technologies, and the development of innovative drugs that meet the clinical needs and novel mechanisms of action in many therapeutic fields such as tumors.

As of September 30, 2022, the total assets of Microchip New Domain were 117.7605 million yuan and the net assets were

106.7334 million yuan; January-September 2022, Microchip New Domain operating income of $0, net profit of -851.66

10,000 yuan (the above data is unaudited).

2. Youhe Pharmaceutical Technology (Beijing) Co., Ltd.

Nature: limited liability company (wholly owned by foreign-invested enterprise legal person)

Legal Representative: Shen Yuelei

Registered capital: 52.631579 million yuan

Date of Establishment: 11/11/2016

Domicile: No.12, Baoshen South Street, Daxing Biomedical Industry Base, Zhongguancun Science Park, Daxing District, Beijing

Room 406, Floor 4, Building 1, Yard

Main office: Floor 23, Tower 3, Hualao, No.77 Jianguo Road, Chaoyang District, Beijing

Main business: Youhe Pharmaceutical is a wholly-owned subsidiary of Baiosetto, Youhe Pharmaceutical focuses on tumor and non-tumor antibody drug treatment, relying on Baiosetto's all-human antibody RenMice platform and large-scale new drug research and development system, has built a strong research and development pipeline for more than ten targets. At this stage, two products have started the international multi-center (MRCT) phase II clinical study, and two products are in clinical phase I.

As of June 30, 2022, the total assets of BAIOSETU Group were 2174.52 million yuan and the net assets were

997.86 million yuan; From January to June 2022, the operating income of BAIOSETU Group was 229.13 million yuan and the loss was

272.59 million yuan (the above data are unaudited).

There is no relationship between Youhe Pharmaceutical and the Company in terms of property rights, business, assets, debts and personnel.

Basic information about the subject matter of the 3. transaction

1. Basic information of licensed products

YH008 is a self-developed, first of its kind, proprietary double for tumor immunotherapy.

specific antibodies. The product is currently approved by the US FDA IND and has been released to China in December 2022.

NMPA submitted the project's domestic clinical trial application and was accepted.

2. Ownership

Youhe Pharmaceutical has the patent and proprietary technology of YH008. As of the effective date of the Agreement, YH008 does not

There are mortgages, pledges or other third-party rights, and there are no material disputes, litigation or

In arbitration matters, there are no judicial measures such as seizure or freezing.

Main Contents of 4. License Agreement

1. Main contents of the agreement

Microchip New Domain will obtain the exclusive license rights and interests of the research and development, production and commercialization of the new bispecific antibody YH008 in Greater China (including Hong Kong, Macao and Taiwan, hereinafter referred to as the "Authorized Area").

2. Agreement amount

(1) First payment

Microchip New Domain shall pay a one-time, irrevocable, non-refundable and non-creditable down payment of RMB 40 million to Youhe Pharmaceutical within thirty (30) working days after the effective date of this Agreement.

(2) Milestone payment

Microchip New Domain will pay Youhe Pharmaceutical a subsequent R & D milestone payment with a total amount not exceeding RMB 0.36 billion and a sales milestone payment with a total amount not exceeding RMB 0.196 billion after reaching the corresponding milestone event.

(3) Graded royalties

Microchip New Domain will pay a percentage of tiered royalties to Youhe Pharma during the sales share period based on the annual net sales of the agreed products in Greater China.

3. Entry into force of the agreement

The License Agreement shall enter into force after being signed by both parties and approved by the Board of Directors of the Company.

4. Applicable Law and Dispute Resolution

The License Agreement shall be construed and governed in accordance with the laws of Mainland China. All disputes, claims or disputes relating to or arising out of the License Agreement shall be brought to the Shanghai Arbitration Court.

Impact of the performance of the 5. agreement on the company

At present, the company has built a number of intellectual property protection and technical barriers in the five fields of oncology, metabolic diseases, autoimmune diseases, central nervous system diseases and antiviral, and the research and development pipeline has laid out a number of original new drugs with global rights and interests. This cooperation with Youhe Pharmaceutical will enable Microchip New Domain to obtain YH008 innovative products.

The exclusive licensing rights and interests of the Greater China region are conducive to promoting the progress of new drug research and development in the micro-core new domain, accelerating the transformation of research and development innovation achievements into company benefits, promoting the long-term development of the company, and in line with the company's overall development strategy. The signing of this agreement will not lead to changes in the company's main business and business scope, has no impact on the company's independence, and does not harm the interests of the company and its shareholders.

6. Risk Alert

YH008 product of Youhe Pharma has been submitted to the National Medical Products Administration (NMPA) for new drug clinical studies.

The application was accepted on December 26, 2022 and has not yet been officially approved for clinical trials. innovative medicine

There are uncertainties in the research and development of new drugs, and there are uncertainties in pharmaceutical research, preclinical research, selection of indications and whether the selected indications can be successful in clinical trials; at the same time, the sales of new drugs after marketing are also affected by many factors, including market environment and industry development. Therefore, there is also uncertainty as to whether the cooperation will be able to reach the agreed payment milestones and pay the relevant milestone payments and royalties to Youhe Pharma.

This cooperation will not have a significant impact on the company's recent normal production and operation, financial situation and operating results. The company will actively promote this cooperation, and timely follow-up progress to fulfill the obligation of information disclosure, so that the majority of investors cautious decision-making, pay attention to prevent investment risks.

It is hereby announced.

Board of Directors of Shenzhen Microchip Biotechnology Co., Ltd.

28 February 2023