Luye Pharma : VOLUNTARY ANNOUNCEMENT - CLINICAL TRIAL APPLICATION OF THE GROUP'S NEW DRUG LY09606 WAS FORMALLY ACCEPTED BY CDE

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LUYE PHARMA GROUP LTD.

綠 葉 製 藥 集 團 有 限 公 司

(Incorporated in Bermuda with limited liability)

(Stock Code: 02186)

VOLUNTARY ANNOUNCEMENT

CLINICAL TRIAL APPLICATION OF THE GROUP'S NEW DRUG LY09606 WAS FORMALLY ACCEPTED BY CDE

The board of directors (the ''Board'') of Luye Pharma Group Ltd. (the ''Company'', together with its subsidiaries, the ''Group'') announces that the clinical trial application of the Group's Class 2 new drug, Ropivacaine Hydrochloride Liposome Suspension Injection (''LY09606''), has received formal acceptance from the Centre for Drug Evaluation (''CDE'') of the National Medical Products Administration (''NMPA'') in the People's Republic of China (''China'').

Ropivacaine is the first pure levorotatory long-acting amide local anaesthetic with dual effects of anesthesia and analgesia. High dose of Ropivacaine can produce surgical anesthesia, while low dose can produce sensory block (analgesia) with limited nonprogressive motor nerve block.

LY09606 is a multivesicular liposome formulation containing Ropivacaine. Its unique multivesicular structure facilitates the sustained release of the encapsulated drug. LY09606, which can be indicated for postoperative analgesia, is the first Ropivacaine multivesicular liposome injection product which has applied for clinical trial approval in China. The high technical barriers and complex processes of multivesicular liposome manufacturing attest to the Group's strengths in key technologies for liposome research, development and manufacturing.

Compared with traditional Ropivacaine Injection and other local liposome anaesthetics, LY09606 has the following advantages:

(1) Long-period sustained analgesia from single administration, meeting the clinical need for postoperative analgesia;

(2) Avoid sustained use of analgesia devices and related complications, and reduce the use of systemically administered drugs like opioids and nonsteroidal anti-inflammatory drugs (''NSAIDs'') and related side effects, significantly increasing patient compliance;

(3) Less central nervous system and cardiac toxicities and better safety profile compared with Bupivacaine liposome products in the market.

There are 300 million surgical patients worldwide each year, Ropivacaine is the most common medication for local anaesthetic. According to the data from IQVIA, the size of the local anaesthetic market in China in 2019 reached RMB2.36 billion, with a compound annual growth rate (CAGR) of 23.3% from 2017 to 2019.

The Group attaches great importance to the research and development as well as production of liposome formulation. It has built a variety of new technology platforms such as new liposome platforms, advanced carrier material platforms, and industrialized research platforms. The Group's liposome research and development platform was included in the State Key Laboratory of Long-acting and Targeting Drug Delivery System. The Group has built an intelligent liposome production line with continuous improvement in production capacity.

The Group's liposome platform has made a number of significant achievements. The Group's Paclitaxel Liposome for Injection is currently the first and only paclitaxel liposome product in the world which is approved for marketing, indicating for non-small cell lung cancer, ovarian cancer and breast cancer. Irinotecan Hydrochloride Liposome Injection (''LY01610'') is under Phase II clinical trials in China, and Hydrochloride Irinotecan FloxurudineLiposome Injection (''LY01616'') was approved to initiate clinical trials in China. In addition, the Group has many other liposome products under preclinical research stages.

The Board believes that LY09606 will further enrich the Group's product portfolio in the field of Central Nervous System and will accordingly continue to promote the Group's development in such field.

By Order of the Board LUYE PHARMA GROUP LTD.

Liu Dian Bo

Chairman

Hong Kong, 7 March 2021

As at the date of this announcement, the executive directors of the Company are Mr. LIU Dian Bo, Mr. YANG Rong Bing, Mr. YUAN Hui Xian and Ms. ZHU Yuan Yuan; the non-executive directors of the Company are Mr. SONG Rui Lin and Mr. Sun Xin; and the independent non-executive directors of the Company are Mr. ZHANG Hua Qiao, Professor LO Yuk Lam, Mr. LEUNG Man Kit and Mr. CHOY Sze Chung Jojo.