industry overview...the market size of china’s biosimilar market is expected to reach rmb31.9...

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INDUSTRY OVERVIEW

This section contains information relating to our markets. Certain facts, statistics and data presented in

this section and elsewhere in this Document have been derived, in part, from various publicly available

government and official sources, industry statistics and publications. We also commissioned an independent

industry consultant, Frost & Sullivan, to prepare an industry research report (the “F&S Report”)1 upon

which this Industry Overview section is based. Unless otherwise indicated, all historical and forecast

statistical information, including trends, sales, market share and growth is from the F&S Report.

While we have taken all reasonable care to ensure that the relevant official facts and statistics are

accurately reproduced from these sources, such facts and statistics have not been independently verified by us

the Sole Sponsor, the [REDACTED], the [REDACTED], the [REDACTED], the [REDACTED] or any

other parties involved in the [REDACTED] or their respective directors, officers, employees, advisors, or

agents. Although we have no reason to believe that such information is false or misleading in any material

respect, or that any fact has been omitted that would render such information false or misleading in any

material respect, we make no representation as to the accuracy or completeness of such information, which may

not be consistent with other information available. Accordingly, you should not place undue reliance on such

information or statistics. Our Directors confirm that, after making reasonable enquiries, there is no adverse

change in the market information since the date of the F&S Report that would qualify, contradict or have a

material impact on the information in this section.

OVERVIEW OF BIOLOGICS MARKET

Biologics are a sub-category of pharmaceutical products, which are large molecule substancesderived from a variety of natural sources or produced through biotechnology methods, different fromchemical drugs which are chemically synthesized small molecule substances. Biologics consist of awide range of products such as antibodies (e.g., mAbs, ADCs and BsAbs), recombinant proteins,vaccines and other emerging categories. Due to the superior efficacy in treating a wide range ofdiseases, increasing R&D investment, significant biotechnology development and increasingaffordability of patients, the global biologics market had and is expected to continue to grow,increasing from US$204.8 billion in 2015 to US$286.4 billion in 2019 at a CAGR of 8.7% in terms of salesrevenue, and is expected to reach US$768.0 billion in 2030 at a CAGR of 9.4% from 2019. In China, thebiologics market size increased from RMB145.3 billion in 2015 to RMB312.0 billion in 2019 at aCAGR21.1% in terms of sales revenue, and is expected to reach RMB1,302.9 billion in 2030 at a CAGRof 13.9% from 2019. The following table sets forth the details of the top 10 global blockbuster biologicsby 2019 sales revenue.

1 In connection with the [REDACTED], we have commissioned Frost & Sullivan, an independent market research andconsulting company, to conduct an analysis of, and to prepare a report on, the global biologics market, with a focus onthe PRC market for use in this Document. Founded in 1961, Frost & Sullivan provides market research on variousaspects of the pharmaceutical industry, among other services. The information from Frost & Sullivan disclosed in thisDocument is extracted from the F&S Report, which was commissioned by us for a fee of RMB400,000, and is disclosedwith the consent of Frost & Sullivan. The F&S Report was prepared through analysis of data compiled by Frost &Sullivan from a wide variety of public and proprietary sources. Public sources utilized include news articles, marketingmaterials and filings by other industry participants, as well as information from trade associations. Proprietary sourcesconsist of Frost & Sullivan’s own research database, survey data, industry analyst reports and exclusive interviews withindustry participants, customers and other industry experts. Frost & Sullivan utilized its proprietary forecasting modelsto cross-check and synthesize the data to produce both qualitative and quantitative analysis and projections included inthis Document.

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INDUSTRY OVERVIEW

Ranking

Top 10 Global Blockbuster Biologics

Trade Name2019 Sales

(US$ in billion) Target

1 Humira 19.2 TNF-α2 Keytruda 11.1 PD-13 Opdivo 7.8 PD-14 Eylea 7.5 VEGF5 Avastin 7.1 VEGF6 Enbrel 6.9 TNF-α7 Mabthera/Rituxan 6.5 CD208 Stelara 6.4 IL12/IL239 Herceptin 6.1 Her210 Prevnar 13/Prevenar 13 5.8 N.A

* N.A=Not applicable

Source: F&S Report

THE BIOSIMILAR MARKET IN CHINA

Overview of Global Biosimilar Market

A biosimilar is generally defined as a biological product which is highly similar to an approvedbiologics, known as an originator drug or a reference drug, in terms of quality, safety and efficacybased on requirements of competent authorities, notwithstanding minor differences in clinicallyinactive components. The sales revenue of global biosimilar market is expected to grow fromUS$9.5 billion in 2019 to US$42.4 billion in 2024 at a CAGR of 34.8%, and further grow toUS$112.6 billion in 2030 at a CAGR of 17.7% from 2024, as set out in more details in the chart below.

2.7 4.3 5.6 7.2 9.5 12.417.0

23.832.1

42.4

54.3

66.6

78.6

90.3

101.6

112.6

2015 2016 2017 2018 2019 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E

USD Billion

Period CAGR

2015-2019 37.5%

2019-2024E 34.8%

2024E-2030E 17.7%

Global Biosimilar Market Size and Forecast, 2015-2030E

Source: F&S Report

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Overview of China’s Biosimilar Market

Though the regulatory pathway for biosimilars in China was only recently established after theissuance of the Biosimilar Guidelines, China’s biosimilar market has been in fast lane of growth withsix biosimilars approved since 2019, including our QLETLI. In June 2020, “Measures for theAdministration of Drug Registration (2020)” and “Registration classification of biological products andfiling requirements” further stipulated the biosimilar classification in China, shaping the biosimilardevelopment in China under an increasingly clear regulatory regime. The market size of China’sbiosimilar market is expected to reach RMB31.9 billion in 2024 from RMB2.3 billion in 2019 at a CAGRof 69.4% and further to RMB64.8 billion in 2030 at a CAGR of 12.5% from 2024. The following chart setsforth the historical and forecasted size of China’s biosimilar market for the period indicated.

0.9 1.0 1.2 1.6 2.34.9

9.1

16.5

24.2

31.9

39.5

46.2

52.0

57.0

61.264.8

2015 2016 2017 2018 2019 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E

RMB Billion

Period CAGR

2015-2019(1) 26.4%

2019-2024E 69.4%

2024E-2030E 12.5%

China Biosimilar Market Size and Forecast, 2015-2030E

(1) The first biosimilar approved under the Biosimilar Guidelines received the NMPA approval in 2019. However, theBiosimilar Guidelines define what constitutes a biosimilar, and accordingly three pre-existing generic drugs developedin the PRC (all Enbrel biosimilars) fell within the scope of such definition. These three drugs contributed to the sales ofbiosimilars in China in 2014 through 2018, though are not projected to continue to be major revenue contributors to theoverall PRC biosimilar market given increasing biosimilars are expected to receive approval in China.

Source: F&S Report

In terms of the forecasted revenue from 2023 to 2030, biosimilars under generic names ofadalimumab and bevacizumab are the top two biosimilars in China, for which we have QLETLIapproved to market and BAT1706 pending the NDA review by the NMPA, respectively. In addition,we are developing a biosimilar to Stelara, the eighth global best-selling drug in terms of 2019 salesrevenue. The following graph sets forth the breakdown of China’s biosimilar market by generic namefor the period indicated.

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INDUSTRY OVERVIEW

2015 2016 2017 2018 2019 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E

Total 0.9 1.0 1.2 1.6 2.3 4.9 9.1 16.5 24.2 31.9 39.5 46.2 52.0 57.0 61.2 64.8

Others - - - - - - 0.2 0.6 1.5 3.0 4.8 6.8 8.6 10.3 12.2 14.1

PD-1&PD-L1 - - - - - - - - - - - - 0.2 0.8 1.4 1.8

Infliximab - - - - - - 0.2 0.5 0.8 1.2 1.6 2.0 2.4 2.6 2.8 2.9

Adalimumab - - - - - 0.3 0.9 2.9 5.5 8.1 10.5 12.3 13.8 14.9 15.6 16.1

Rituximab - - - - 0.2 1.1 1.5 2.0 2.6 3.4 4.2 5.0 5.4 5.6 5.7 5.8

Trastuzumab - - - - - 0.1 0.8 1.6 2.9 4.0 5.2 6.3 7.0 7.5 7.8 8.0

Etanercept 0.9 1.0 1.2 1.6 2.1 2.7 3.4 4.0 4.6 5.0 5.4 5.6 5.9 6.0 6.2 6.2

Bevacizumab - - - - 0.0 0.7 2.0 4.9 6.4 7.2 7.7 8.2 8.7 9.1 9.5 9.9

0.9 1.0 1.2 1.6 2.34.9

9.1

16.5

24.2

31.9

39.5

46.2

52.057.0

61.264.8

Bevacizumab Etanercept Trastuzumab Rituximab Adalimumab Infliximab PD-1&PD-L1 Others

RMB billion

Breakdown of China's Biosimilar Market by Generic Name, 2015-2030E

Source: F&S Report

Key Drivers and Trends for China’s Biosimilar Market

The primary market drivers and trends for China’s biosimilar market include:

• Vast underserved medical needs. Due to the limited affordability of patients, limitedgovernmental reimbursement coverage and underdeveloped commercial insurancesystem, a majority of patient population in China cannot afford the high cost of biologicstreatment which generally have superior efficacy. For example, in 2019, while seven of thetop 10 global blockbuster drugs were biologics, only three of China’s top 10 best-sellingdrugs (excluding traditional Chinese medicines) were biologics. Moreover, although themAbs are a major type of biologics, China’s mAb sales in 2019 represented less than 3.0%of the global total sales. Biosimilars with the price advantage provide patients in Chinawith affordable effective treatment options, which are expected to stimulate the potentialclinical needs deterred by economic concern.

• Blockbuster biologics coming off patent. The top 10 global blockbuster biologics in 2019contributed to 29.5% sales revenue of the overall biologics market, and many of them faceloss of exclusivity over the following years. As of the Latest Practicable Date, five out ofthe top 10 bestselling biologics no longer had patent protection. The expiration of patentsand other intellectual property rights for originator biologics opens up opportunities forbiosimilars to enter the market and continuously drive the market to grow.

• Improved regulatory environment in China. China is striving to establish clear regulatorypathways to assure the market access to qualified biosimilars. The Biosimilar Guidelines

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INDUSTRY OVERVIEW

released in 2015 has set up the biosimilar development and registration regulatoryframework in China, and the NMPA has issued specific guidelines for clinical researchdesign and evaluation for biosimilars under generic names of adalimumab, trastuzumab,bevacizumab and tocilizumab. It is believed that the regulations of R&D and theregistration pathway for biosimilars in China will continue to become increasingly clearand well-defined, which are instrumental for more biosimilars to quickly get into themarket.

• Large R&D investment by Chinese developers. The pipeline of clinical-stage biosimilars hasand is expected to be extensive. For example, as of the Latest Practicable Date, 18, 13 and10 biosimilars to Avastin, Humira and Herceptin, respectively, were in clinical trials orpending NDA approval, supported by significant investment in R&D of domesticdevelopers.

• Increasing pressure on healthcare budget. Due to the growing prevalence of chronic diseasesand aging population, the healthcare budget is under significant pressure in China. Thus,the increasing demand from government agencies, insurers and patients to reduce thesteep cost of blockbuster biological products has created considerable opportunities in thebiosimilar market where affordable copies of the expensive originals provide much-needed affordable quality healthcare.

Entry Barriers

Most Chinese companies have been focused on the research, development and regulatoryaspects of the biosimilar process. However, manufacturing and commercialization capabilities mayturn into major hurdles for many of the biosimilar developers. In addition, the success of a biosimilarfinally depends on the commercialization results, where many domestic R&D-based drug developersonly have limited experiences, if at all.

The Market of Adalimumab in China

Humira is the originator drug of adalimumab. Our in-house developed QLETLI received theNDA approval from the NMPA in November 2019, and it was the first approved biosimilar to Humirain China. Historically, due to the high treatment cost, the market size of Humira in China wasrelatively small and grew slowly in terms of sales revenue. Considering that adalimumab wasincluded into the B List of the NRDL in late 2019 and several Humira biosimilars were and expected tobe approved to market in and after 2019, the market size of Humira biosimilars in China is expected toreach RMB8.1 billion in 2024 at CAGR of 127.9% from 2020 and further to RMB16.1 billion in 2030 atCAGR of 12.2% from 2024, representing a faster-growing market as compared to Humira’s market.The following chart sets forth the historical and forecasted size of China’s adalimumab market byoriginator and biosimilar for the period indicated.

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INDUSTRY OVERVIEW

2.3 3.7 5.2 6.8 7.9 8.7 9.4 9.8 10.1

- 0.3

2.9

5.5

8.1

10.512.3

13.814.9 15.6 16.1

0.1 0.1 0.1 0.4 0.4 0.72.1

5.2

9.2

13.3

17.3

20.222.5

24.325.4 26.2

2015 2016 2017 2018 2019 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E

Originator Biosimilar

0.1 0.1 0.1 0.4 0.4 0.40.91.2

Breakdown of China's Adalimumab Market by Originator and Biosimilar, 2015-2030E

Billion RMB

Period Originator Bilosimilar Total

2015-2019 30.9% N.A 30.9%

2019/2020E-2024E(1) 69.6% 127.9% 104.6%

2024E-2030E 11.6% 12.2% 12.0%

(1) As the first Humira biosimilar was approved in 2019 and commercially launched in China in 2020, the CAGR of China’sHumira biosimilar market is from 2020 to 2024, while the CAGRs of the overall adalimumab market and theadalimumab originator market are from 2019 to 2024.

Source: F&S Report

Competitive Landscape

As of the Latest Practicable Date, in addition to two Humira biosimilars approved to market,there were 13 Humira biosimilar candidates in clinical trials or later development stages in China,including four in or beyond the phase III clinical stage and four pending the NDA review by theNMPA. The table below sets forth a summary of the approved drugs and late-stage drug candidatesthat may compete with QLETLI in China as of the Latest Practicable Date.

Approved Drugs

Trade Name Company

NMPAApproval

Date Indication(s)NRDL

InclusionBidding Price(RMB/Unit)

Humira AbbVie 2010/02/26 RA, AS, psoriasis, Crohn’sdisease, uveitis, pJIA, pPS

B List 1,290/40 mg

QLETLI Our Company 2019/11/06 RA, AS, psoriasis,Crohn’s disease, uveitis

B List 1,150/40 mg(1)

Anjianning Zhejiang HisunPharmaceuticalCo., Ltd.

2019/12/06 RA, AS, psoriasis, Crohn’sdisease

B List 1,150/40 mg

(1) As of the Latest Practicable Date, in a majority of the provincial-level administrative regions where our bidding pricesare listed online, the bidding price of QLETLI was RMB1,150/40 mg, while in a few provincial- or municipal-leveladministrative regions, the bidding prices ranged from RMB1,090/40 mg to RMB1,160/40 mg.

Source: F&S Report

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INDUSTRY OVERVIEW

Phase III or Later Development Stage Humira Biosimilar Candidates

Drug CandidateName Company Indication(s) Development Stage First Posted Date(1)

IBI303 Innovent Biologics, Inc. AS NDA 2018/11/15

HLX03 Henlius Biotech Co., Ltd. Psoriasis NDA 2019/01/28

UBP 1211 TopAlliance Biosciences Inc. RA NDA 2019/11/13

TQZ2301 Chia Tai TianqingPharmaceutical Group Co.,Ltd.

AS NDA 2020/06/16

DB101 Tonghua DongbaoPharmaceutical Co., Ltd.

Psoriasis Phase III 2019/02/26

SCT630 Sinocelltech Group Ltd. Psoriasis Phase III 2019/06/06

HL01 Hualan BiologicalEngineering Inc.

RA, AS, psoriasis Phase III 2020/02/07

BC002 Shangdong DanhongPharmaceutical Co., Ltd

AS Phase III 2020/08/10

(1) Except for otherwise indicated, for a clinical-stage drug candidate, the first posted date refers to the date when theinformation about relevant clinical trials is published for the first time; and for a product with NDA submitted and theNDA result pending, it refers to the acceptance date of such NDA submission by the NMPA and other competentauthorities.

Source: F&S Report

For competitive landscape analysis, please refer to “Business—Our Product Portfolio—Approved Product – QLETLI (Humira Biosimilar)—Competition and Competitive Advantages.”

The Market of Bevacizumab in China

Avastin is the originator drug of bevacizumab. Due to the launch of more Avastin biosimilars,the global market size of the originator drug Avastin is expected to decrease from US$7.1 billion in2019 to US$3.0 billion in 2030, while the global market size of Avastin biosimilars is expected toincrease from US$0.2 billion in 2019 to US$2.5 billion in 2024 at a CAGR of 62.4% and further toUS$3.9 billion in 2030 at a CAGR of 7.8% from 2024. The following chart sets forth the historical andforecasted global bevacizumab market size by originator and biosimilar for the period indicated.

Breakdown of Global Bevacizumab Market by Originator and Biosimilar, 2015-2030E

2015 2016 2017 2018 2019 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E


6.9 6.9 6.8 7.0 7.1 6.4 5.8 5.4 4.9 4.6 4.2 3.9 3.7 3.4 3.2 3.0

0.1 0.20.8 1.4 1.8 2.1 2.5 2.8 3.0 3.3 3.5 3.7 3.9

6.9 6.9 6.8 7.1 7.3 7.2 7.2 7.2 7.1 7.0 7.0 7.0 6.9 6.9 6.8 6.8

Billion USD


2015-2019 0.6% N.A 1.4%

2019-2024E -8.5% 62.4% -0.9%

2024E-2030E -7.0% 7.8% -0.5%

Source: F&S Report

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INDUSTRY OVERVIEW

In China, the first Avastin biosimilar was approved in December 2019 and commencedcommercial sales in 2020, and the sales revenue of Avastin biosimilars is expected to increase fromRMB0.7 billion in 2020 to RMB9.9 billion in 2030, gradually accounting for the majority portion of theoverall bevacizumab market. The following chart sets forth the historical and forecasted bevacizumabmarket size in China by originator and biosimilar for the period indicated.

1.3 1.5 1.7 3.2 4.0 4.6 5.4 6.2 6.8 7.2 7.5 7.7 7.8 7.9 7.9 8.00.00.7

2.04.9

6.4 7.2 7.7 8.2 8.7 9.1 9.5 9.9

1.3 1.5 1.73.2 4.0

5.37.5

11.113.2

14.4 15.2 15.9 16.5 17.0 17.4 17.9

2015 2016 2017 2018 2019 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E


Breakdown of China's Bevacizumab Market by Originator and Biosimilar, 2015-2030E

Billion RMB


2015-2019 32.5% N.A 32.6%

2019-2024E 12.7% 237.1% 29.2%

2024E-2030E 1.7% 5.5% 3.7%

Source: F&S Report


China

In China, as of the Latest Practicable Date, two Avastin biosimilars were approved. BAT1706 isthe first domestically-developed Avastin biosimilar undergoing a global multi-center phase III clinicaltrial. In addition to BAT1706, there were 17 Avastin biosimilar candidates in clinical trials or laterdevelopment stages in China, of which four were pending the NDA review by the NMPA and tenwere in phase III clinical trials. The tables below set forth a summary of the approved drugs and drugcandidates in or beyond the phase III clinical trial that may compete with BAT1706 in China as of theLatest Practicable Date.

Approved Drugs

Trade Name CompanyNMPA

Approval Date Indication(s)NRDL

InclusionBidding Price

(RMB/Injection)

Avastin Roche 2010/02/26 1L metastatic CRC1L nsNSCLC

B List 1,500/100 mg

An Ke Da(安可達)

Qilu pharmaceutical Co., Ltd. 2019/12/06 1L metastatic CRC1L nsNSCLC

B List 1,198/100 mg

BYVASDA(達攸同)

Innovent Biologics, Inc. 2020/06/17 1L metastatic CRC1L nsNSCLC

B List 1,188/100 mg

Source: F&S Report

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INDUSTRY OVERVIEW

Phase III or Later Development Stage Avastin Biosimilar Candidates

Drug CandidateName Company Indication(s)

DevelopmentStage

First PostedDate

BP102(1) Suzhou SuncadiaBiopharmaceuticals Co., Ltd.

nsNSCLC NDA 2020/04/15

LY01008(1) Luye Pharma Group Ltd/Shandong BoAn BiotechnologyCo. Ltd.


MIL60(1) Zhejiang Hisun PharmaceuticalCo., Ltd./Betta Pharmaceuticals Co., Ltd.


BAT1706 Our Company nsNSCLC NDA 2020/06/24TAB008 TOT Biopharm Co., Ltd. A/R nsNSCLC Phase III 2017/05/17GB222 Genor Biopharma Co., Ltd. NSCLC Phase III 2017/12/15

HLX04 Henlius Biotech Co., Ltd.mCRC Phase III 2018/03/18

NSCLC Phase III 2019/06/26

TQ-B2302 Chia Tai-TianqingPharmaceutical Co., Ltd.

nsNSCLC Phase III 2018/07/02

WBP264/ HLX04 Hualan Genetic EngineeringCo., Ltd.


SCT510 Sinocelltech Group Ltd. nsNSCLC Phase III 2018/12/18

AK-3008 Anhui Anke Biotechnology(Group) Co., Ltd.


PF-06439535 Pfizer nsNSCLC Phase III 2019/11/05

SIBP04 Shanghai Institute Of BiologicalProducts Co., Ltd.


ABP 215 Amgen Inc. nsNSCLC Phase III 2020/04/14

(1) The NDA application entities are different from the clinical registration entities of such candidates because of the mergerand acquisition or collaboration between companies, or the requirement of the marketing authorization holder system inChina.

Source: F&S Report

U.S. and EU

As of the Latest Practicable Date, two Avastin’s biosimilars, namely, Pfizer’s Zirabev andAmgen Inc.’s Mvasi, were approved in both the United States and EU. In addition, four and sixAvastin biosimilar candidates were in the phase III clinical trial or later development stages in theUnited States and EU, respectively. The following tables set forth details of drugs and drug candidatesthat may compete with BAT1706 in the United States and EU as of the Latest Practicable Date.

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INDUSTRY OVERVIEW

Approved Drugs

Trade Name Company Approval Date Indication(s)Retail Price

(Unit)Authority and

Jurisdiction

Avastin Roche

2004/02/26 1L or 2L mCRC, 1L nsNSCLC,RCC, glioblastoma, cervicalcancer, ovarian cancer, HCC

US$841.51/4 ml FDA/US

2006/01/24 mCRC, 1L mBC, 1L nsNSCLC, 1LmRCC, 1L advanced epithelialovarian, fallopian tube, or primaryperitoneal cancer and cervix

EUR391.43/4 ml EMA/EU

Zirabev Pfizer

2019/06/27 CRC, NSCLC, glioblastoma, RCC,cervical cancer


2019/02/14 mCRC, 1L mBC, 1L nsNSCLC, 1LmRCC, 1L advanced epithelialovarian, fallopian tube, or primaryperitoneal cancer and cervix


Mvasi Amgen Inc.

2017/09/14 CRC, NSCLC, glioblastoma, RCC,cervical cancer


2018/01/15 mCRC, 1L mBC, 1L nsNSCLC,1L mRCC, 1L advancedepithelial ovarian, fallopiantube, or primary peritonealcancer and cervix


Source: F&S Report

Phase III or Later Development Stage Avastin Biosimilar Candidates


DevelopmentStage

First PostedDate

Authorityand

Jurisdiction

SB8Samsung BioepisCo., Ltd.

nsNSCLC NDA 2019/11/19 FDA/US

nsNSCLC NDA 2019/07/19 EMA/EU

MYL-1402OMylanPharmaceuticalsInc./ Biocon Ltd.

nsNSCLC NDA 2020/03/09 FDA/US

nsNSCLC Phase III 2016/07/11 EMA/EU

BAT1706 Our Company nsNSCLC Phase III 2017/10/31(1) FDA/US

EMA/EU

BI 695502

BoehringerIngelheimPharmaceuticals,Inc.

NSCLC Phase III 2014/10/23 FDA/US

mCRC Phase III 2016/05/18 FDA/US

nsNSCLC, Phase III 2015/09/07 EMA/EU

mCRC Phase III 2016/04/26 EMA/EU

HD204 PrestigeBiopharma Co.,Ltd.

NSCLC Phase III 2018/01/18 EMA/EU

MB02 mAbxience S.A Stage IIIB/IV nsNSCLC Phase III 2018/09/20 EMA/EU

(1) Refers to the date when the information about the phase III clinical trial was published on China Registration andInformation Disclosure Platform for Drug Clinical Studies (藥物臨床試驗登記與信息公示平台). This is a global phase III trialdesigned in compliance with GCP and cGMP requirements of various authorities, including the FDA and EMA.

Source: F&S Report

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INDUSTRY OVERVIEW

For competitive landscape analysis, please refer to “Business—Our Product Portfolio—Near-commercial Assets – Drug Candidates in or Beyond Phase III Clinical Trials—BAT1706 – NDA-stageAvastin Biosimilar Candidate—Competition and Competitive Advantages.”

The Market of Tocilizumab in China

Actemra/RoActemra is the originator drug of tocilizumab. BAT1806 is the first domestically-developed Actemra biosimilar candidate undergoing a global phase III clinical trial. Actemra/RoActemra is the global first-in-class anti-IL-6R immunosuppressive drug indicated for RA and otherfour indications, if other drugs like DMARDs have proven to be ineffective or were not tolerated.Actemra/RoActemra is available for both intravenous and subcutaneous formulations. The overallglobal market size of tocilizumab (including the originator and biosimilar drugs) in terms of salesrevenue increased from US$1.5 billion in 2015 to US$2.3 billion in 2019 at a CAGR of 11.8% and furtherto US$3.2 billion in 2024 at a CAGR of 6.2%. The first Actemra/RoActemra biosimilar worldwide isexpected to be launched in 2022 at a more affordable price, therefore the global market size ofActemra/RoActemra market is expected to decrease from US$3.2 billion in 2023 to US$1.8 billion in2030. The size of Actemra/RoActemra biosimilar market is expected to increase from US$5.7 million in2022 to US$678.6 million in 2030 at a CAGR of 81.9%. The following chart sets forth the historical andforecasted global tocilizumab market size by originator and biosimilar for the period indicated.

1,490.5 1,722.9 1,956.52,207.3 2,326.1

2,681.23,002.9 3,174.1 3,237.5 3,140.4 2,952.0 2,715.8 2,498.6

2,248.7 2,023.8 1,781.0

5.7 31.2 62.4118.5

207.4331.9

464.6590.1

678.6

1,490.51,722.9

1,956.52,207.3 2,326.1

2,681.2

3,002.93,179.7 3,268.7 3,202.8

3,070.52,923.3 2,830.4 2,713.3 2,613.9

2,459.6

2015 2016 2017 2018 2019 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E


Breakdown of Global Tocilizumab Market by Originator and Biosimilar, 2015-2030E

Million USD


2015-2019 11.8% N.A 11.8%

2019/2022E -2024E(1) 6.2% 231.7% 6.6%

2024E-2030E -9.0% 48.9% -4.3%

(1) As the first Actemra/RoActemra biosimilar worldwide is expected to be launched in 2022, the CAGR of the globaltocilizumab biosimilar market is from 2022 to 2024, while the CAGRs of the global overall tocilizumab market and thetocilizumab originator market are from 2019 to 2024.

Source: F&S Report

The market size of tocilizumab in China increased to RMB130.6 million in 2019 fromRMB22.7 million in 2015 at CAGR of 54.8%. As the first Actemra biosimilar in China is expected to belaunched in 2022, the Actemra biosimilar market is expected to increase from RMB39.2 million in 2022to RMB1.9 billion in 2030, and the overall tocilizumab market in China is expected to reach RMB1.2 billion and RMB3.1 billion in 2024 and 2030, respectively. The following chart sets forth thehistorical and forecasted tocilizumab market size in China by originator and biosimilar for the periodindicated.

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Breakdown of China's Tocilizumab Market by Originator and Biosimilar, 2015-2030E

22.7 39.6 94.9 122.2 130.6 241.5 386.5 560.4 728.5 852.3 954.6 1,050.0 1,134.0 1,190.7 1,214.6 1,226.739.2176.3

326.2587.2

927.81,298.9

1,623.6 1,786.0 1,911.0

22.7 39.6 94.9 122.2 130.6 241.5386.5

599.5904.8

1,178.5

1,541.8

1,977.8

2,433.0

2,814.43,000.6

3,137.7

2015 2016 2017 2018 2019 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E


Million RMB

Period Originator Biosimilar Total

2015-2019 54.8% N.A 54.8%

45.5% 188.5% 55.36%

2024E-2030E 6.3% 34.3% 17.7%

2019/2022E -2024E (1)

(1) As the first Actemra biosimilar in China is expected to be launched in 2022, the CAGR of China’s tocilizumab biosimilarmarket is from 2022 to 2024, while the CAGRs of China’s overall tocilizumab market and tocilizumab originator marketare from 2019 to 2024.

Source: F&S Report


As of the Latest Practicable Date, Actemra/RoActemra has been approved in China, the U.S.and EU. Besides BAT1806, there were eight other Actemra biosimilars under clinical development inChina, including three in the phase III clinical trials and five in the phase I clinical trials. In the U.S. andEU, except for BAT1806, there was no Actemra/RoActemra biosimilar candidates under clinicaldevelopment based on available public information as of the Latest Practicable Date. The tables belowset forth a summary of the approved drugs and drug candidates in or beyond the phase III clinicaltrials that may compete with BAT1806 in the indicated jurisdictions as of the Latest Practicable Date.

China

Approved Drug

Trade Name Company

NMPAApproval

Date IndicationNRDL

Inclusion

Bidding Price(RMB/

Injection)

Actemra Roche 2013/03/26 sJIA, RA B List 830/80 mg

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Clinical-stage Actemra Biosimilar Candidates

Drug Candidate Name Company Indication(s)Development

StageFirst Posted

Date

BAT1806 Our Company RA Phase III 2019/02/11

HS628 Zhejiang HisunPharmaceutical Co., Ltd.

RA Phase III 2020/07/10

sJIA Phase I 2019/04/09

CMAB806 Jinyu Bio-Technology Co.,Ltd.

RA Phase III 2019/04/19

sJIA Phase I 2018/08/29

LZM008 Livzon Mabpharm Inc. RA Phase III 2019/06/27

WBP216 Wuxi Yaoming LikangBiomedical

RA Phase I 2017/04/25

QX003S Jiangsu Quanxin BiologicalMedicine Co., Ltd.

RA Phase I 2019/01/15

GB224 Genor Biopharma RA Phase I 2018/08/09

Recombinanthumanized anti-IL-6R mAb

Beijing VDJBio Co., Ltd. RA Phase I 2019/06/19

IA001 Destiny Bioscience GlobalCorp.

RA, sJIA Phase I 2020/01/14

Source: F&S Report

U.S. and EU

Brand Name Company First Posted Date IndicationsDevelopment

StageRetail Price

(per injection)Authority/

Jurisdiction

Actemra/RoActemra

Roche

2010/01/11 RA, sJIA, pJIA,GCA and CRS

Approved US$490.95/4 ml FDA/US

2009/01/15 RA, sJIA, pJIA,GCA and CRS

Approved EUR167.16/4ml

EMA/EU

BAT1806 Our Company 2019/02/11(1) RA Phase III N/A EMA/EU

(1) Refers to the date when the information about the phase III clinical trial is published on China Registration andInformation Disclosure Platform for Drug Clinical Studies. This is a global phase III trial designed in compliance withGCP and cGMP requirements of various authorities, including the FDA and EMA.

Source: F&S Report

For competitive landscape analysis, please refer to “Business—Our Product Portfolio—Near-commercial Assets – Drug Candidates in or Beyond Phase III Clinical Trials—BAT1806 – PhaseIII Actemra Biosimilar Candidate—Competition and Competitive Advantages.”

The Market of Golimumab in China

Simponi is the originator drug of golimumab, it is the globally first approved once-monthly self-injectable TNF-α inhibitor for treatment of moderately to severely active RS and active AS. In China,Simponi was approved in December 2017, requiring only 12 injections (once every month) from the

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first dosing, which offers better patient injection experience and convenience, and may lead to bettertreatment adherence and patient outcomes. Golimumab was included into the B List of the NRDL inAugust 2019. In 2019, the global sales revenue of Simponi reached US$2.2 billion.


As of the Latest Practicable Date, BAT2506 was the global first and only biosimilar candidate toSimponi based on public available information. The following tables set forth the details of Simponiand BAT2506.

Approved Drug—Simponi

Trade Name CompanyApproval

Date Indication(s)Bidding Price/Retail

Price (Unit)Authority and

Jurisdiction

SimponiJanssenBiotech, Inc.

2017/12/28 RA, AS RMB4,900/50 mg NMPA/China(included in the BList of the NRDL)

2009/04/24 RA, PsA, AS,UC

US$5,256.05/50 mg FDA/US

2009/01/10 RA, AS, PsA,UC

EUR1,531.4/50 mg EMA/EU

Source: F&S Report

Simponi Biosimilar Candidate

Drug Candidate Name Company Indication(s) Development Stage First Posted Date

BAT2506 Our Company RA, AS, PsA Phase III (initiated) 2020/04/20(1)

(1) Refers to the date on which EudraCT issued EudraCT Number for the global phase III trial of BAT2506 registered by us.

Source: F&S Report

For competitive landscape analysis, please refer to “Business—Our Product Portfolio—Near-commercial Assets – Drug Candidates in or Beyond Phase III Clinical Trials—BAT2506 – Phase IIISimponi Biosimilar Candidate—Competition.”

OVERVIEW OF THE ADC DRUG MARKET IN CHINA

Overview of the ADCs

ADCs are complex molecules comprising of monoclonal antibodies attached to biologicallyactive drugs by chemical linkers. Since the breakthrough discovery of the first FDA-approved ADC in2010, the ADC drugs have gone through constant evolvement and gradually enhanced homogeneity,stability, PK properties and efficacy. By combining the specific targeting ability of antibodies withcytotoxic drugs, ADCs tend to demonstrate higher efficacy than mAbs alone, and achieve selective

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delivery of chemotherapeutic agents in a tumor micro-environment, making them a promisingtreatment option for cancer patients.

Key Drivers and Trends for China’s ADC Drug Market

The primary market drivers and trends for China’s ADC drug market include:

• Large and growing cancer patient pool. ADC drugs are an emerging class of targetedoncology drugs. China has the world’s largest annual cancer incidence, which hasincreased steadily in the past five years, climbing from 4.0 million in 2015 to 4.4 million in2019, and the incidence is projected to reach 5.7 million in 2030.

• Growing pipeline. As of the Latest Practicable Date, in addition to two approved ADCproducts, namely, anti-HER2 Kadcyla and anti-CD30 Adcetris, there were over 20 ADCsin clinical development including seven in or beyond the phase III clinical trials in China.The current major targets of ADC drugs include HER2, hepatocyte growth factor receptor(HGFR), EGFR, Trop2 and CD20. Such a wide application in different cancer types,combined with an improved patient affordability and public disease awareness, willsustain the further growth of the ADC market.

• R&D investment and advancement. Development of ADC drugs have to pass throughcertain major technical hurdles, including, among others, linker stability in bloodcirculation, nature of the linker and delivery mechanism, antigen binding, payload releaseand potency, conjugation sites, which all affect the efficacy and off-target cytotoxicityADC drugs. Extensive efforts have been made to improve all these components of ADCsto enhance their targetability, safety profile and therapeutic efficacy against solid tumorsand hematological cancers. In anticipation of continuous R&D investment in variousaspects of ADC therapies, such as combination therapies, innovative targets and dosingregimen optimization, ADC therapeutics are expected to be an more and more importantpart of the cancer treatment paradigm.

• Broad therapeutic areas. Current therapeutic indications of available ADCs encompass awide range of solid tumors and hematological cancers. Meanwhile, opportunities forimproved therapeutics made through ADC drugs exist in other areas like infectiousdiseases, autoimmune diseases including multiple sclerosis and systemic sclerosis, andcardiovascular diseases.

Entry Barriers of China’s ADC Drug Market

Despite the tremendous market potential of ADCs, drug makers still face great challenges inselecting (i) specific antibodies capable of targeting cell-surface proteins with tumor-specific membraneexpression; (ii) stable linker that keeps the cytotoxic payload attached during circulation but permits

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release of the cytotoxins after cellular internalization; and (iii) effective cytotoxic chemotherapypayload with strong potency in killing tumor cells. In addition, quality assurance and consistencyduring large-scale manufacturing is a major focus of developers. It is important to generatehomogeneous ADCs during the whole manufacturing process, which requires advanced and accurateanalytical methods to minimize the variability caused by conjugation chemistries and assay methods.In addition, the conjugation technology makes the manufacturer not only face challenges associatedwith the biologics, but also brings the high containment to handle highly potent chemical molecules.Once the production is scaled up, the challenges would be magnified, coupled with quality consistencyconcerns caused by process variation.

The Market of Anti-HER2 ADC Drugs for HER2-positive Breast Cancer

HER2 is a validated molecular target for oncology treatment. Over-expression of HER2 proteinshas been shown to play a critical role in the progression of malignancies, especially breast cancer, andis also associated with a number of other cancer types, including GC/GEJ, urothelial carcinoma,ovarian cancer and colorectal cancer. HER2 levels in tumor biopsies can be determined by fluorescencein situ hybridization, or FISH, and scored as either negative or positive (overexpression). Breast canceris one of the most prevalent cancer types in China, of which 20% to 30% are diagnosed as HER2-positive. The incidence of HER2-positive breast cancer in China had reached 85.8 thousand in 2019,and is estimated to reach 98.1 thousand in 2030.

Kadcyla is the first and only marketed anti-HER2 ADC drug in China and is currently approvedfor adjuvant treatment of early-stage HER2-positive breast cancer. The domestically-developed ADCdrugs are expected to be launched from 2021. As a result, the total market size of anti-HER2 ADCdrugs for HER2-positive breast cancer is expected to have an exponential growth from 2020 to 2024 ata CAGR of 207.4% in terms of sales revenue. The following chart sets forth the forecasted market sizeof anti-HER2 ADC drugs for HER2-positive breast cancer in China for the period indicated.

16.7 43.9230.8

742.0

1,487.7

2,020.1

2,333.32,498.4

2,616.4 2,680.1 2,696.9

2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E

Market Size of ADC Drugs for HER2-positive Breast Cancer in China, 2020E-2030E

Million RMB

Period CAGR

2020E-2024E 207.4%

2024E-2030E 10.4%

Source: F&S Report

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As of the Latest Practicable Date, Roche’s Kadcyla is the only approved anti-HER2 ADC inChina. Out of a total of 15 anti-HER2 ADC drug candidates under clinical development, fivecandidates were in phase III clinical trials. The following table sets out details of the approved anti-HER2 ADC and phase II/III anti-HER2 ADC candidates that may compete with BAT8001 in China asof the Latest Practicable Date.

Approved Drugs

Trade Name CompanyDevelopment

StageFirst Posted



Kadcyla (TrastuzumabEmtansine)

Roche Approved 2020/01/21 Adjuvanttherapy forHER2-positiveearly stage BC

— 19,282/100 mg

Source: F&S Report

Phase II/III Anti-HER2 ADC Candidates


DevelopmentStage

First PostedDate

BAT8001 Our Company

mBC Phase III 2018/02/22

HER2-positive advancedsolid tumor (in combinationwith BAT1306)

Phase Ib/IIa 2019/04/08

RC48-ADC RemeGen Ltd.


GC Phase II 2019/07/02

Urothelial carcinoma Phase II 2019/12/26

Biliary tract cancer Phase II 2019/10/17

DS-8201a Daiichi Sankyo Holdings Co.,Ltd.


TAA013 TOT Biopharm Co., Ltd. mBC Phase III 2020/06/03

ARX788 Zhejiang Medicine HER2-positive breast cancer Phase II/III 2020/06/30

Source: F&S Report

For competitive landscape analysis, please refer to “Business—Our Product Portfolio—Near-commercial Assets – Drug Candidates in or Beyond Phase III Clinical Trials—BAT8001 – Phase IIIAnti-HER2 ADC Drug Candidate—Competition and Competitive Advantages.”

The Market of Anti-Trop2 ADC Drugs in China

Trop2 is a transmembrane glycoprotein that has high expression in various epithelial cancers. Inparticular, approximately 80% to 90% of TNBC, approximately 50% of GC, over 50% of NSCLC

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patients and approximately 60% of SCLC patients show high expression of Trop2, while healthytissues only have low or no expression. The correlation of specific high expression with poor prognosisin several solid tumors make Trop2 an ideal target for cancer drug development.

The anti-Trop2 ADC drug market is primarily driven by the increasing number of addressablepatients with Trop2-positive cancer. BAT8003 is primarily planned to be indicated for TNBC, whichhas high expression of Trop2 and a large number of addressable patients, indicating the great potentialfor anti-Trop2 ADC drugs. The addressable patients of Trop2-positive TNBC in China have been andare expected to grow in the foreseeable future as shown in the chart below.

Incidence of Trop2-positive TNBC in China, 2015-2030E

2015-2019 1.8%

38.8

2015 2016 2017 2018 2019 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E

39.5 40.2 40.9 41.6 42.3 42.9 43.6 44.2 44.8 45.4 45.9 46.4 46.8 47.2 47.6

1.5%

1.0%

2019-2024E

2024E-2030E

Thousand

Period CAGR

Source: F&S Report

As of the Latest Practicable Date, there were three anti-Trop2 ADC candidates in the clinicalstage in China, including BAT8003, with details sets forth in the following table.


StageFirst Posted

Date

Sacituzumab Govitecan Everest PharmaceuticalsLtd.

TNBC Phase IIb(1) 2020/05/21

BAT8003 Our Company Trop2-positiveadvanced epithelialcarcinoma

Phase I 2019/04/01

SKB264 Sichuan Kelun BotaiBiomedical Co., Ltd.

Late stage solidtumor

Phase I 2020/06/09

(1) A single-arm bridging study setting and the company didn’t begin with the phase I clinical trial in China.

Source: F&S Report

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OVERVIEW OF CERTAIN OTHER BIOLOGICS

In addition to biosimilars and ADC candidates, we are developing a number of other biologicscandidates, including (i) BAT4306F and BAT4406F, two anti-CD20 mAb candidates; (ii) BAT5906, ananti-VEGF mAb candidate currently indicated for wet AMD and DME; and (iii) BAT1306 andBAT1308, two clinical-stage PD-1 inhibitor candidates.

The Market of Anti-CD20 MAbs in China

MAbs that target the CD20 antigen on B cells are able to deplete mature B cells through ADCCand are successfully used in the clinic treatment for various types of cancers and autoimmune diseases,such as NHL and NMOSD. The following chart sets forth the historical and forecasted market size ofanti-CD20 mAbs in China for the period indicated.

1.5 1.8 2.12.5

3.4

4.55.4

6.27.0

7.98.8

9.610.1 10.3 10.5 10.6

2015 2016 2017 2018 2019 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E

Market Size of Anti-CD20 MAbs in China, 2015-2030E

Million RMB

Period CAGR

2015-2019 22.9%

2019-2024E 18.7%

2024E-2030E 5.0%

Source: F&S Report


As of the Latest Practicable Date, two anti-CD20 mAbs were approved for NHL and 17candidates were under clinical development for this indication in China. The table below sets forth asummary of the major competitors of BAT4306F in China as of the Latest Practicable Date.

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Approved Drugs

Trade Name Company

NMPAApproval


InclusionBidding Price

(RMB/Injection)MabThera/Rituxan

Roche 2000/03/15 R/R follicular central lymphoma,CD20-positive DLBCL, relapsed/refractory CD20-positive B-cell NHL,relapsed/refractory chroniclymphocytic l eukemia

B List 2,294/100 mg

Hanlikang(漢利康)

Henlius BiotechCo., Ltd.

2019/02/22 R/R follicular central lymphoma,CD20-positive DLBCL, relapsed/refractory CD20-positive B-cell NHL,relapsed/refractory chroniclymphocytic leukemia

B List 1,398/100 mg

Source: F&S Report

Clinical-stage Anti-CD20 MAb Candidates Indicated for Lymphoma


StageFirst Posted

DateIBI301 Innovent Biologics, Inc. DLBCL NDA 2019/07/01

Obinutuzumab Roche CD20-positiveFL

NDA 2019/09/28

SCT400 Sinocelltech Group Ltd. CD20-positiveDLBCL

NDA 2019/12/16

Chimeric Anti-CD20mAb

Zhejiang Hisun Pharmaceutical Co., Ltd.Beijing Mabworks Biotech Co., Ltd.

CD20-positiveDLBCL

Phase III 2018/07/03

JHL1101 JHL Biotech, Inc. DLBCL Phase III 2018/09/30

GB241 Genor Biopharma Co., Ltd. CD20-positiveNHL


TQB2303 Chia Tai Tianqing Pharmaceutical GroupCo., Ltd.

CD20-positiveNHL


WBP263 Hualan Biological Engineering Inc. DLBCL Phase III 2019/04/17

SIBP02 Shanghai Institute Of Biological ProductsCo., Ltd.

CD20-positiveDLBCL


H02 Lunan Pharmaceutical Group Co., Ltd. CD20-positiveNHL


MIL62 Beijing Mabworks Biotech Co., Ltd. Relapsed/refractory FL

Phase I/IIa 2020/04/09

LZM002C Livzon Mabpharm Inc. CD20-positiveNHL

Phase I 2017/09/12

B001 Shanghai Pharmaceuticals Holding Co.,Ltd.

CD20-positiveNHL

Phase I 2018/03/30

BAT4306F Our Company CD20-positiveNHL

Phase I 2018/09/12

TRS005 Zhejiang Teruisi Pharmaceutical Co., Ltd. NHL Phase I 2018/11/29

MRG001 Shanghai Miracogen Inc. NHL Phase I 2019/05/05

IMM0306 ImmuneOnco Biopharmaceuticals(Shanghai) Co., Ltd.

CD20-positiveNHL

Phase I 2020/03/23

Source: F&S Report

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As of the Latest Practicable Date, three biologics candidates indicated for NMOSD were underclinical development. The table below sets forth a summary of the major competitors of BAT4406F inChina as of the Latest Practicable Date.

Clinical-stage Biologics Candidates Indicated for NMOSD

Drug Candidate Name Company Target(s) IndicationDevelopment

StageFirst Posted

Date

RC18/Telitacicept RemeGen Ltd. BLyS/APRIL NMOSD Phase III 2017/10/19

BAT4406F Our Company CD20 NMOSD Phase I 2019/10/18

HBM9161/Batoclimab Harbour BioMedShanghai Co., Ltd.

hFcRn NMOSD Phase I 2019/11/06

Source: F&S Report

The Indications of Our Anti-CD20 MAb Candidates

CD20-positive Non-Hodgkin Lymphomas

NHL, as a subcategory of lymphomas, accounts for approximately 90% of total lymphomapatient. Among NHL patients in China, about 94.5% are CD20 positive. The following chart sets forththe historical and forecasted incidence of CD20-positive NHL in China for the period indicated.

Incidence of CD20-positive NHL in China, 2015-2030E

Thousand

Period CAGR

2015-2019 2.6%

2019-2024E 2.4%

2024E-2030E 2.2%

77.0 79.1 81.2 83.2 85.3 87.4 89.6 91.7 93.9 96.2 98.5 100.8 103.1 105.3 107.4 109.5

2015 2016 2017 2018 2019 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E

Source: F&S Report

NMOSD

Neuromyelitis optica (NMO) is an autoimmune disease of the central nervous system (CNS) thatis characterized by inflammatory demyelinating lesions in the spinal cord and optic nerve, potentiallyleading to paralysis and blindness. In 2015, the International Panel for NMO Diagnosis (IPND)announced the new nomenclature that defines the unifying term NMOSD, which is stratified furtherby serologic testing (NMOSD with or without AQP4-IgG). The following chart sets forth the historicaland forecasted incidence of NMOSD in China for the period indicated.

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46.0 46.6

47.2 47.8 48.3 48.9 49.4 49.9 50.4 50.8 51.2 51.6 51.9 52.2 52.4 52.6

2015 2016 2017 2018 2019 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E

Incidence of NMOSD in China, 2015-2030E

Thousand

Period

2015-2019

2019-2024E

2024E-2030E

CAGR

1.3%

1.0%

0.6%

Source: F&S Report

The Market Size of Anti-VEGF Biologics for Retinal Diseases in China

VEGF has been shown to cause neovascularization and leakage in models of ocular angiogenesisand vascular occlusion, and is thought to contribute to pathophysiology of wet AMD and other retinaldiseases such as DME. The market of anti-VEGF biologics for retinal diseases in China consists of threedrugs, namely Lucentis, Langmu and Eylea, with a market size of RMB2.6 billion in aggregate in terms of2019 sales revenue. In the foreseeable future, due to the launch of new drugs and the increase inphysicians’ recognition on using biologics for retinal diseases, the market is estimated to reachRMB13.5 billion in 2024 and further to RMB44.5 billion in 2030. The following chart sets forth the historicaland forecasted market size of anti-VEGF biologics for retinal diseases in China for the period indicated.

0.8 1.1 1.4 2.0 2.64.2

5.77.3

9.9

13.5

17.5

22.1

27.0

32.3

38.2

44.5

2015 2016 2017 2018 2019 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E

Market Size of Anti-VEGF Biologics for Retinal Diseases in China, 2015-2030E

Billion RMB

Period CAGR

2015-2019E 39.8%

2019E-2024E 35.4%

2024E-2030E 22.0%

Source: F&S Report


As of the Latest Practicable Date, for retinal disease treatment, there were three approved anti-VEGF drugs and 14 anti-VEGF drug candidates in the clinical stage in China. The following table setsforth details of the approved drugs and clinical-stage anti-VEGF drug candidates that may competewith BAT5906 in China.

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Approved Anti-VEGF MAbs for Retinal Diseases

Trade Name (Generic Name) CompanyNMPA

Approval DateNRDL


Lucentis (Ranibizumab) Norvartis AG 2011/12/31 B List 3,950/2 mg

Eylea (Aflibercept biosimilar) Bayer 2018/02/02 B List 4,100/2 mg

Langmu (Conbercept) Chengdu KanghongBiotechnologies Co., Ltd.

2013/11/27 B List 4,160/4 mg

Source: F&S Report

Clinical-stage of Anti-VEGF Biologics Candidates for wAMD/DME Treatment

DrugCandidate Name Company Drug Format Indication(s)

DevelopmentStage

First PostedDate

QL1207Qilu pharmaceuticalCo., Ltd.

Fusion ProteinwAMD Phase III 2019/05/20

DME Phase I 2018/12/07

QL1205 Qilu pharmaceuticalCo., Ltd.

mAb wAMD Phase III 2019/07/17

Faricimab Roche BsAb DME Phase III 2019/07/26

BAT5906 Our Company mAbwAMD Phase II 2020/05/09

DME PhaseIb/IIa

2020/05/11

HB002.1M Huabo Biopharm Co.,Ltd.

Fusion Protein wAMD Phase II 2020/06/09

TK001 Jiangsu T-mabBioPharma Co., Ltd.

mAb wAMD Phase I 2016/01/04

TAB014 TOT Biopharm Co.,Ltd.


JY028 Beijing EasternBiotech Co., Ltd.


601A Sunshine GuojianPharmaceuticals(Shanghai) Co., Ltd.

mAb wAMD,DME

Phase I 2018/08/13

RC28-E RemeGen Ltd. BsAb wAMD Phase I 2018/11/09

SOLOT-Eye Stainwei Biotech Inc. mAb wAMD Phase I 2018/11/01

IBI302 Innovent Biologics,Inc.

BsAb wAMD Phase I 2019/01/23

LY09004 Luye Pharma GroupLtd.

Fusion Protein wAMD Phase I 2019/06/20

MG021 North ChinaPharmaceuticalCompany. Ltd


Source: F&S Report

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INDUSTRY OVERVIEW

The Market Size of PD-1/PD-L1 Inhibitors in China

In China, the first PD-1 inhibitor was approved in 2018, representing the opening of thePD-1/PD-L1 inhibitor market. Currently, there are eight PD-1/PD-L1 inhibitors approved to themarket in China. The PD-1/PD-L1 inhibitor market in China is expected to grow rapidly in theforeseeable future as more of such drugs get approved and commercialized. The sales revenue ofPD-1/PD-L1 inhibitors in China is expected to grow at a CAGR of 67.2% from RMB6.3 billion in 2019to RMB81.9 billion in 2024, and further grow at a CAGR of 3.4% to reach RMB100.0 billion in 2030. Thefollowing chart sets forth the historical and forecasted market size of PD-1/PD-L1 inhibitors in Chinafor the period indicated.

1.06.3

13.8

26.9

46.3

67.1

81.990.1

95.5 98.4 99.3 99.8 100.0

2018 2019 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E

Period CAGR

2019-2024E 67.2%

2024E-2030E 3.4%

PD-1/PD-L1 Inhibitor Market in China, 2018-2030E

Billion RMB

Source: F&S Report

The Indication of PD-1/PD-L1 Inhibitors

EBVaGC

EBVaGC accounts for approximately 10% of gastric cancers. Multiple factors contribute totumorigenesis EBVaGC, including EBV driven hypermethylation of tumor suppressor genes,inflammatory changes in gastric mucosa, host immune evasion by EBV and changes in cell cyclepathways. The following chart sets forth the historical and forecasted prevalence of EBVaGC in Chinafor the period indicated.

33.0 34.1 35.2 36.3 37.4 38.5 39.6 40.8 41.9 43.1 44.3 45.5 46.7 47.9 49.1 50.3

2015 2016 2017 2018 2019 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E

Incidence of EBVaGC in China, 2015-2030E

Thousand

Period CAGR2015-2019 3.1%

2019-2024E 2.9%2024E-2030E 2.6%

Source: F&S Report

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As of the the Latest Practicable Date, there were six and eighteen PD-1 inhibitors approved tomarket and in the phase II clinical trial or later development stages in China, respectively. As of theLatest Practicable Date, Opdivo was the only PD-1 inhibitor approved by the NMPA for treatment ofgastric cancer. As of the same date, BAT1306 was the only clinical-stage PD-1 inhibitor candidatespecifically indicated for EBVaGC in China. The following tables set forth details of approved PD-1inhibitors and PD-1 inhibitor candidates in the clinical development that may compete with BAT1306on gastric cancer as of the Latest Practicable Date.

Approved Drug

Trade Name Company

NMPAApproval Date

for GCNRDL


Opdivo(1) Bristol Myers Squibb 2018/06/15 — 9,250/100 mg

Note:

(1) Opdivo is the first PD-1 inhibitor approved by the NMPA on June 15, 2018, and is the first and only PD-1 inhibitorapproved for treatment of gastric cancers in China.

Clinical-stage PD-1 Inhibitor Candidates


StageFirst Posted

Date

BAT1306 Our Company EBVaGC Phase II 2019/01/08

HX008 Hangzhou HansiBiomedicalCo., Ltd

GC Phase III 2020/06/15

HLX10 Henlius BiotechCo., Ltd.

GC, TNBC, NSCLC,SCLC, ESCC


QL1604 QiluPharmaceuticalCo., Ltd.

Locally advanced ormetastatic GC/GEJ

Phase I/II 2020/06/16

Source: F&S Report

OVERVIEW OF GPIIB/IIIA INHIBITOR MARKET IN CHINA

GPIIb/IIIa inhibitors bind to GPIIb/IIIa receptors on platelet surface, and prevent the binding ofadhesive of glycoproteins (particular fibrinogen) to the activated platelets and inhibit the plateletaggregation. GPIIb/IIIa inhibitors are primarily used in preventing platelet aggregation-inducedthrombus (blood clot) formation in patients with ACS who undergo PCI procedures. Due to factorssuch as aging population, increasing number of patients with coronary disease, improving accessibilityto qualified healthcare institutions, the volume of PCI procedures rose rapidly at a CAGR of 17.0%

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INDUSTRY OVERVIEW

from 2015 to 2019. The volume is expected to grow exponentially and reach 3,407.0 thousand in theyear of 2030. The following chart sets forth the historical and forecasted volume of PCI procedures inChina for the period indicated.

567.6 666.5 753.1

915.3 1,064.4

1,224.1 1,394.3

1,574.1 1,764.6

1,967.5 2,183.9

2,415.4

2,659.4

2,917.4

3,143.0

3,407.0

2015 2016 2017 2018 2019 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E

Period CAGR

2015-2019 17.0%

2019-2024E 13.1%

2024E-2030E 9.6%

Historical and Forecasted Volume of PCI Procedures in China, 2014-2030E

Thousand

Source: F&S Report


We expect BAT2094 to primarily compete with tirofiban and eptifibatide, the two widely-usedsmall-molecule GPIIb/IIIa antagonists in the PCI setting in China. The following tables set forth theapproved drugs and drug candidates that may compete with BAT2094 as of the Latest PracticableDate.

Approved Drugs

Representative Drug Representative Company(2) Indications Approval DateBidding Price(RMB/Unit)

NRDLinclusion

TirofibanHydrochloride(Aggrastat)(1)

Correvio PharmaCorp.

Preventpostoperativecardiac ischemia

2014/06/04 1,500/50 ml650/50 ml

B List

TirofibanHydrochlorideSodiumChloride(1) (欣維寧)

Grand Pharmaceutical(China) Co., Ltd.

Preventpostoperativecardiac ischemia

2004/08/25 300/100 ml B List

Eptifibatide Jiangsu HansohPharmaceuticalGroup Co., Ltd.

For the treatmentof ACS

2012/10/30 335/10 ml B List

(1) Tirofiban Hydrochloride and Triofiban Hydrochloride Sodium Chloride contain the same active pharmaceuticalingredient (i.e., tirofiban), but the latter one contains sodium chloride.

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INDUSTRY OVERVIEW

(2) In addition to the listed companies, as of the Latest Practicable Date, four drugs approved under the generic name ofTirofiban Hydrochloride, 10 drugs approved under the generic name of Tirofiban Hydrochloride Sodium Chloride andone drug approved under the generic name of eptifibatide, were sold by other domestic companies.

Source: F&S Report

Clinical-stage Small-molecule GPIIb/IIIa Antagonist Candidates in PCI Setting

DrugCandidate Name Company Indications

DevelopmentStage

First PostedDate

TiroficanHydrochloride

Yangtze RiverPharmaceutical GroupCo., Ltd.

Prevent postoperativecardiac ischemia

NDA 2020/02/18

BAT2094(Batifiban)

Our Company Preventing plateletaggregation-inducedthrombus in ACSpatients undergoingPCI

Phase IIIcompleted

2018/05/02

Eptifibatide Chengdu ShengnuoBiopharma Co., Ltd

For PCI in patients withhigh-risk ACS

NDA 2017/09/30

Eptifibatide Nuotai Ao NuoBiopharmaceutical


NDA 2019/01/26

Eptifibatide Hainan ShuangchengPharmaceuticals Co., Ltd.


NDA 2019/01/26

Eptifibatide Hainan Poly Pharm. Co.,Ltd.


NDA 2020/01/08

Eptifibatide Nanjing KingfriendBiochemical PharmaceuticalCo., Ltd.


NDA 2020/07/04

Anfibatide Zhaoke PharmaceuticalHefei Co., Ltd.

PCI for STEMI,NSTEMI

Phase II 2015/09/18

Puruibatai Shaanxi Micot TechnologyCo., Ltd.

ACS and PCI Phase I 2017/07/26

Source: F&S Report

For competitive landscape analysis, please refer to “Business—Our Product Portfolio—Near-commercial Assets – Drug Candidates in or Beyond Phase III Clinical Trials—BAT2094 (Batifiban) –NDA-stage GPIIb/IIIa Antagonist Candidate—Competition and Competitive Advantages.”

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industry overview...the market size of china’s biosimilar market is expected to reach rmb31.9...

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