Author : adminDate : 2020-02-27 17:36

Acquisition of Riovceranib’s global rights

Acquisition of Riovceranib’s global rights

 Advenchen and Rivoceranib

· G. Paul Chen, the owner of Advenchen Laboratories in USA, developed and patented the substance “YN968D1”

- Advenchen Laboratories transferred the Chinese publication rights of “YN968D1” to Hengrui Medicine in 2004, and

- in 2007, the company transferred its rights to global regions outside of China to Elevar Therapeutics (formerly LSKB), which is a wholly owned subsidiary of HLB.

- "YN968D1" is named "Apatinib" in Hengrui Medicine of China and "Rivoceranib" in Elevar. Since 2014, it has been marketed under the brand name "Aitan" in China for gastric cancer treatment.

· Paul Chen, the original developer of Rivoceranib, studied pharmacy in China, earned a master's degree in organic chemistry from Tulane University of Los Angeles, and after worked as a researcher in global pharmaceutical companies such as Neurogen, Cytel, and Amgen, he founded the Advenchen Laboratories in California in 2003 and still actively conducting research and development with holding patents for more than 30 new drug candidates.

· Joining Elevar as Director of 2019 and a major shareholder of HLB, Paul Chen has 36 years of experience in the pharmaceutical industry, with experience ranging from discovery of new drug candidates to nonclinical and clinical development. He is currently collaborating with HLB on various pipelines.

 Achievements of Jiangsu Hengrui Medicine

· According to the Goldman Sachs Report on July 16, 2019, Hengrui Medicine's Apatinib (Chinese brand name: Aitan) sales are estimated at 470 billion won in 2019 and 550 billion won in 2020, expecting 17% of sales growth this year.

· As shown in the following report, Apatinib is growing rapidly every year. In fact, Apatinib formed 57% of Hengrui Medicine’s total percentage of sales in Innovative drug business and is proving to be the future growth engine more than as Hengrui’s Cash Cow.

 Acquisition of Riovceranib’s global rights 

· On February 26, we signed a binding term sheet to Rivoceranib to acquire global rights, (including China) from Advenchen Laboratories (Rivoceranib's original developer). The total acquisition amount is 50 Million USD and a significant portion of it will be paid with our stock.

· Advenchen Laboratories signed a licensing agreement with Hengrui Medicine in 2004 and has been receiving royalty on Rivoceranib (Apatinib) sales in China since 2014 and under a license agreement with Elevar in 2007, we will receive royalty for future global sales outside of China.

· Under the agreement to transfer rights of Rivoceranib with Advenchen Laboratories, we will secure the global rights (including China) of Rivoceranib held by Advenchen and will receive royalty from Hengrui Medicine this year, starting with the sales in Hengrui Medicine in 2019.

· Also, we are expecting stable and long-term operating profit since we will receive royalty for Elevar's global sales on Rivoceranib starting from next year.

· In other words, with the following contract, we secured both current and future cash flows, all of which will be added up as an operating income.

· Paul Chen, director of Elevar and a major shareholder of HLB, was convinced that Rivoceranib approved by the FDA and subsequently expand in value, thereby increasing HLB's enterprise value and receiving a significant portion of HLB's stock.

The table below shows the journey of the last 10 years after HLB began investing in anticancer drug business and Elevar and eventually securing China and global rights.

We will show our shareholders better results and at the end, we will reward you with good results.

<Table> Development and Acquisition process of Rivoceranib