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continuing connected transactions
Entered into the 2022 water and electricity framework agreement, the 2022 labor service framework agreement and the 2022 leased assets framework agreement with lizuzumab
On December 30, 2021, in order to meet the needs of the operation and development of lizuzumab, the company convened the board of directors to review and approve the group’s provision of water, electricity, electricity and other services to lizuzumab (1) from January 1, 2022 to December 31, 2022 For steam and sewage treatment, (2) provision of labor services and (3) continuous connected transactions of leased assets, the maximum amounts are RMB 34.30 million, RMB 27.00 million and RMB 36.32 million respectively. On the same day, the company and lizuzumab entered into the 2022 hydropower framework agreement, the 2022 labor service framework agreement and the 2022 leased assets framework agreement respectively for the above continuous connected transactions. The meaning of the Hong Kong Listing Rules on the date of this announcement, Joincare Pharmaceutical Group Industry Co.Ltd(600380) directly and indirectly owns about 44.66% of the equity interest of the company, so it is the controlling shareholder of the company. Joincare Pharmaceutical Group Industry Co.Ltd(600380) indirectly owns 33.07% equity interest in lizuzumab, so lizuzumab is the contact person of Joincare Pharmaceutical Group Industry Co.Ltd(600380) . Therefore, Joincare Pharmaceutical Group Industry Co.Ltd(600380) and its contacts and lizumab are connected persons of the company. According to Chapter 14A of the Hong Kong listing rules, the transactions proposed under the 2022 hydropower framework agreement, the 2022 labor service framework agreement and the 2022 leased assets Framework Agreement constitute the continuous connected transactions of the company respectively. As (I) Mr. Zhu Baoguo, a non-executive director and chairman of the company, is also the chairman of Joincare Pharmaceutical Group Industry Co.Ltd(600380) and indirectly holds 46.95% of the equity of Joincare Pharmaceutical Group Industry Co.Ltd(600380) on the date of this announcement; (II) Mr. Qiu Qingfeng, a non-executive director, is a director and vice president of Joincare Pharmaceutical Group Industry Co.Ltd(600380) ; (III) Mr. Yu Xiong, a non-executive director, is the president of Joincare Pharmaceutical Group Industry Co.Ltd(600380) ; And (IV) Mr. Tang Yanggang, the executive director and Mr. Tao Desheng, the non-executive director of the company, are also directors of lizuzumab. Therefore, Mr. Zhu Baoguo, Mr. Qiu Qingfeng, Mr. Yu Xiong, Mr. Tao Desheng and Mr. Tang Yanggang are deemed to be in the framework agreement on Hydropower in 2002 He has significant interests in the 2022 labor service framework agreement and the 2022 leased assets framework agreement and the transactions to be carried out under them, and has abstained from voting at the board meeting approving the 2022 hydropower framework agreement, the 2022 labor service framework agreement and the 2022 leased assets framework agreement and the transactions to be carried out under them. Except Mr. Zhu Baoguo, Mr. Qiu Qingfeng, Mr. Yu Xiong, Mr. Tao Desheng and Mr. Tang Yanggang, no other directors are required to abstain from voting at the board meeting approving the above matters. Considering that the maximum applicable percentage rates of 2022 hydropower line, 2022 labor service line and 2022 lease line exceed 0.1% but less than 5% respectively, the transactions to be carried out under the 2022 hydropower framework agreement, 2022 labor service framework agreement and 2022 leased assets framework agreement must comply with the reporting and announcement requirements, However, it is exempted from the shareholder approval requirements under Chapter 14A of the Hong Kong listing rules. 1、 2022 hydropower framework agreement
On December 30, 2021, in order to meet the needs of the operation and development of lizumab, the company convened the board of directors to review and approve the continuous connected transactions of the group providing water, electricity, steam and sewage treatment to lizumab from January 1, 2022 to December 31, 2022, with a maximum amount of RMB 34.30 million. On the same day, the company and lizuzumab entered into a hydropower framework agreement for the above continuous connected transactions. Date: December 30, 2021 contracting party buyer: lizuzumab seller: the company’s term of service starts from January 1, 2022 to December 31, 2022 preconditions the 2022 hydropower framework agreement and the transactions to be carried out under it must be approved by the board of directors. Subject matter according to the 2022 hydropower framework agreement, the group will provide water, electricity, steam and sewage treatment to lizuzumab from January 1, 2022 to December 31, 2022. The group may enter into specific implementation contracts (including but not limited to payment terms and payment arrangements) with lizumab for the provision of water supply, electricity, steam and sewage treatment, provided that the detailed terms of such implementation contracts shall not conflict with the terms of the 2022 hydropower framework agreement. The annual upper limit and determination basis during the period from January 1, 2022 to December 31, 2022, the group will provide water, electricity, steam and sewage treatment to lizuzumab, with a maximum amount of RMB 34.30 million. The annual upper limit is determined by the group after fair consultation with lizuzumab based on factors such as the past transaction amount, the expected progress of vaccine R & D and production, and the production plan demand of lizuzumab for other drugs in 2022. The amount of 2022 hydropower line is higher than the transaction amount in previous years, which is mainly due to the increase of water, electricity, steam and sewage treatment capacity estimated by lizumab for commercial production of covid-19 vaccine. The covid-19 vaccine of lizumab is undergoing a global multicenter phase III clinical trial. The group has been informed by lizuzumab that if the clinical trial and production approval are carried out smoothly, lizuzumab plans to expand production capacity in 2022, and start new stock solution and preparation production lines, quality control and other supporting facilities to meet the global demand for covid-19 vaccine. Therefore, the expected water, electricity, steam and sewage treatment capacity of lizumab in the production process will also increase significantly to meet its business needs. Past transaction amount
Unit: RMB million as of December 31, 2018 as of December 31, 2019 as of December 31, 2020 as of November 30, 2021 (audited) (audited) (Unaudited) 7.878.818.2512.50 pricing principle the group provides water, electricity The price of steam will be determined after fair negotiation with reference to the current market price, and the sewage treatment fee will be calculated comprehensively with reference to the sewage treatment capacity and corresponding material consumption. Reasons and benefits of entering into the 2022 hydropower framework agreement the production and operation of lizumab requires the use of water, electricity, steam and sewage treatment. If lizumab is purchased from an independent third party, various procedures and processes need to be handled in time, which may affect the recent continuous growth of production and operation of lizumab, and lizumab needs to pay the corresponding opening expenses and bear the additional administrative costs. Therefore, the provision of water, electricity, steam and sewage treatment by the group to lizumab can reduce the potential impact on the production and operation of lizumab and save costs. As lizuzumab is a holding subsidiary of the company, it can improve the overall operating performance of the group.
After considering all relevant factors, the directors (including independent non-executive directors) believe that the 2022 hydropower framework agreement (including the proposed annual cap) was entered into by the group in the general and daily business process on general commercial terms, and its terms are fair and reasonable and in line with the overall interests of the company and shareholders. 2、 2022 framework agreement on labor services
On December 30, 2021, in order to meet the needs of the operation and development of lizumab, the company convened the board of directors to review and approve the continuous connected transactions of the group providing labor services to lizumab from January 1, 2022 to December 31, 2022, with a maximum amount of RMB 270000. On the same day, the company and lizumab entered into the 2022 labor service framework agreement on the above continuous connected transactions. Date: December 30, 2021 contracting party buyer: lizuzumab seller: the company’s term is from January 1, 2022 to December 31, 2022. The 2022 labor service framework agreement and the transactions to be carried out under it must be approved by the board of directors. Subject matter according to the 2022 labor service framework agreement, the group will provide clinical R & D and trial management services and drug entrusted production to lizuzumab from January 1, 2022 to December 31, 2022. The group may enter into specific implementation contracts (including but not limited to payment terms and payment arrangements) with lizumab for the provision of labor services, provided that the detailed terms of such implementation contracts shall not conflict with the terms of the 2022 labor services framework agreement.
During the period from January 1, 2022 to December 31, 2022, the group will provide clinical R & D and trial management services and drug entrusted production to lizuzumab, with a maximum amount of 27.00 million yuan. The annual upper limit is determined by the group and lizuzumab after fair consultation according to the R & D stage, estimated input hours, entrusted production capacity and estimated production cost. The amount of 2022 labor service quota is higher than the transaction amount in previous years, which mainly comes from the business progress of lizuzumab listed products and pipelines in several clinical R & D stages. The sales volume of recombinant human chorionic gonadotropin for injection of lizumab is expected to increase in 2022. The group is the authorized manufacturer of lizumab MAH. Therefore, the output of lizumab entrusted to the group to produce this product will increase accordingly. In addition, the recombinant human follicle stimulating hormone injection of lizumab is expected to enter the phase III clinical trial in 2022. Therefore, the cost of entrusting the group to produce clinical samples and process validation is expected to increase accordingly. In addition, lizhizumab entrusts the group to provide several projects of clinical R & D and trial management services (such as recombinant tumor enzyme specific interferon for injection) α- 2bfc fusion protein, recombinant humanized anti-PD-1 monoclonal antibody for injection, recombinant anti-human IL-17A / F humanized monoclonal antibody injection, etc.) are still in progress. Past transaction amount
Unit: RMB million as of December 31, 2018 as of December 31, 2019 as of December 31, 2020 as of November 30, 2021 (audited) (audited) (Unaudited) 0.564.119.0716.16 pricing principle the price of clinical R & D and trial management services and entrusted drug production provided by the group to lizuzumab will be determined after fair negotiation with reference to operating costs, comprehensive potential income, comparable clinical R & D and trial management services and the current market price of entrusted drug production. Reasons and benefits of entering into the 2022 labor service framework agreement for clinical R & D trial management services, lizumab can make use of the group’s long-term experience and resources in drug R & D management, so as to improve the quality and progress of its clinical trial management; For the entrusted production of drugs, lizuzumab can make full use of the group’s rich production experience and excellent production performance in the field of hormone drugs, make full use of the group’s existing production workshops that meet the rhCG process and dosage form requirements, mobilize part of the group’s excess capacity and optimize the capacity utilization of the group’s production workshops. At the same time, avoid repeated construction of production equipment for lizumab, so that they can focus their resources on R & D. As lizuzumab is a holding subsidiary of the company, it can improve the overall operating performance of the group.
After considering all relevant factors, the directors (including independent non-executive directors) believe that the 2022 labor service framework agreement (including the proposed annual cap) was entered into by the group in the general and daily business process on general commercial terms, and its terms are fair and reasonable and in line with the overall interests of the company and shareholders. 3、 2022 framework agreement on leased assets
On December 30, 2021, in order to meet the business development needs of lizuzumab, the company convened the board of directors to review and approve the continuous connected transactions of the group’s leased assets from lizuzumab from January 1, 2022 to December 31, 2022, with a maximum amount of 36.32 million yuan. On the same day, the company and lizumab entered into a 2022 leased out assets framework agreement on the above continuous connected transactions. Date: December 30, 2021 contracting party buyer: lizuzumab seller: the company’s term of service is from January 1, 2022 to December 31, 2022. Preconditions the 2022 leased out assets framework agreement and the transactions to be carried out under it must be approved by the board of directors. Subject matter according to the asset lease out framework agreement in 2022, the group will lease out plant and equipment from lizuzumab from January 1, 2022 to December 31, 2022. The group may enter into specific implementation contracts (including but not limited to payment terms and payment arrangements) with lizumab for leased assets, provided that the detailed terms of such implementation contracts shall not conflict with the terms of the 2022 leased assets framework agreement.
During the period from January 1, 2022 to December 31, 2022, the group will lease plant and equipment from lizuzumab, with a maximum amount of 36.32 million yuan. The annual upper limit is determined by the group after fair consultation with lizuzumab according to the current variety R & D and production progress of lizuzumab, the required plant space and equipment, business demand and other factors. The amount of 2022 lease limit is higher than the transaction amount of previous years, which
