Shanghai Junshi Biosciences : CHANGE IN USE OF PROCEEDS FROM THE GLOBAL OFFERING OF H SHARES AND SUPPLEMENTAL INFORMATION IN RELATION TO THE 2019 ANNUAL REPORT ON USE OF PROCEEDS

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SHANGHAI JUNSHI BIOSCIENCES CO., LTD.*

上海君實生物醫藥科技股份有限公司

(a joint stock company incorporated in the People's Republic of China with limited liability)

(Stock code: 1877)

CHANGE IN USE OF PROCEEDS FROM

THE GLOBAL OFFERING OF H SHARES

AND

SUPPLEMENTAL INFORMATION IN RELATION TO

THE 2019 ANNUAL REPORT ON USE OF PROCEEDS

Shanghai Junshi Biosciences Co., Ltd.* (上海君實生物醫藥科技股份有限公司) (the "Company") proposes to change the use of proceeds from the global offering in relation to the listing of the H shares of the Company on the Main Board of The Stock Exchange of Hong Kong Limited (the "Hong Kong Stock Exchange"). Reference is made to the prospectus of the Company dated 11 December 2018 (the "Prospectus"), the announcement of the Company dated 29 August 2019 in relation to the change in use of proceeds from the Global Offering (the "2019 Announcement"), and the annual report of the Company for the year ended 31 December 2019 published on 20 April 2020 (the "2019 Annual Report"). Unless otherwise defined, capitalized terms used herein shall have the same meanings as those defined in the Prospectus.

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PROCEEDS FROM THE GLOBAL OFFERING OF H SHARES

The net proceeds from the Listing on the Hong Kong Stock Exchange received by the Company, after deducting the underwriting fees and expenses payable by the Company in connection with the Global Offering of H Shares, amounted to approximately HKD3,413 million (the "IPO Proceeds"). As of 31 July 2020, the Company has utilized approximately RMB2,726 million including interests generated from deposit of proceeds (equivalent to approximately HKD3,025 million) of the IPO Proceeds, and approximately RMB310 million (equivalent to approximately HKD424 million) of the IPO Proceeds remain unutilized (the "Unutilized Proceeds").

Summarized in the sub-column (1) "Planned use of proceeds as disclosed in the Prospectus" below is the Group's intended use of the net proceeds from the Global Offering (adjusted on a pro rata basis based on the Offer Price) as disclosed under the section headed "Future Plans and Use of Proceeds" in the Prospectus, and (2) "Planned use of proceeds as disclosed in the 2019 Announcement" below is the Group's revised use of net proceeds as disclosed in the 2019 Announcement.

FURTHER CHANGE IN USE OF PROCEEDS AND EXPECTED TIMELINE FOR THE APPLICATION OF THE UNUTILIZED PROCEEDS

On 28 August 2020, the Board of Directors resolved to further revise the allocation of the remaining Unutilized Proceeds. Set out below is a summary of the utilized proceeds as of 31 July 2020 and the revised allocation of the use of the remaining Unutilized Proceeds.

Also, the Company would like to provide additional information on the expected timeline for the application of the Unutilized Proceeds further to the information as set out in the section headed "Use of Proceeds from Listing" in the Report of Directors in the 2019 Annual Report, as set out below. The expected timeline was based on the Company's estimation of future market conditions and business operations, and remains subject to change based on the actual market conditions and business needs.

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Planned use of

proceeds as disclosed in the

Utilized

Expected

Planned use of

2019 Announcement

IPO

Unutilized

timeline for

proceeds as

(including amount already

Proceeds

Proceeds

Revised

application of

disclosed in

utilized as of the date of the

up to

as of

allocation of

the Unutilized

Planned Usage

the Prospectus

2019 Announcement)

31 July 2020

31 July 2020

the Unutilized Proceeds

Proceeds

% of

% of

HKD

% of

HKD

total

HKD

HKD

HKD

total

million

total IPO

million

IPO

million

million

million

IPO

(approx.)

Proceeds

(approx.)

Proceeds

(approx.)

(approx.)

(approx.)

Proceeds

The R&D and

2,218

65%

2,457

72%

2,323

134

373

79%

Expected to

commercialization of the

be fully

Group's drug candidates

utilized by

31 December

2021

The R&D and

1,365

40%

1,365

40%

1,319

46

148

43%

Expected to

commercialization of

be fully

the Group's Core

utilized by

Product, JS001

31 December

The R&D of the Group's

2021

546

16%

546

16%

524

22

159

20%

Expected to

other drug candidates

be fully

to fund clinical trials

utilized by

worldwide, including

31 December

JS004, etc. (Note 1a)

2021

The construction of,

307

9%

546

16%

480

66

66

16%

Expected to

acquisition of facilities

be fully

for and settlement of

utilized by

start- up costs on the

31 December

Lingang Site and the

2021

Wujiang Site (Note 1b)

The Group's investment

853

25%

614

18%

337

277

38

11%

Expected to

in the health care and/or

be fully

life science sector(s),

utilized by

including acquisition of

31 December

companies, licensing-in

2022

and collaboration (Note 1c)

The Group's working capital

342

10%

342

10%

365(Note3)

13

13

10%

Expected to

and other general

be fully

corporate purposes

utilized by

31 December

2021

Total

3,413

100%

3,413

100%

3,025 (Note3)

424 (Note3)

424

100%

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Notes:

1. As disclosed in the 2019 Announcement, in August 2019, adjustments were made on these items from the following original planned usage disclosed in the Prospectus:
2. 1. Adjusted from "The R&D of the Group's other drug candidates to fund clinical trials".
   2. Adjusted from "The construction of the Lingang Production Base and the Wujiang Production Base"
   3. Adjusted from "The Group's investment in and acquisition of companies in the pharmaceutical sector".
3. Any discrepancies in this table between the total amount and sums of amounts listed herein are due to rounding.
4. The sum of proceeds includes interests of HKD36 million generated from bank savings account in which the IPO proceeds have been deposited.

REASONS FOR THE CHANGE IN USE OF PROCEEDS

The reallocation of the Unutilized Proceeds (the "Reallocation") is principally to reallocate from usage in the Group's investment in the health care and/or life science sector(s), including acquisition of companies, licensing-in and collaboration, (i) approximately RMB90 million (equivalent to approximately HKD102 million), or 3% of the total IPO Proceeds, to usage in the R&D of the Group's Core Product, JS001, and (ii) approximately RMB120 million (equivalent to approximately HKD137 million), or 4% of the total IPO Proceeds, to usage in the R&D of the Group's other drug candidates to fund clinical trials worldwide, including JS004, etc.

In order to strengthen the use efficiency of proceeds, reduce finance cost and protect the interest of investors, the Company constantly monitors and reviews the use of IPO Proceeds. Since the Listing on the Hong Kong Stock Exchange, the Group has used approximately HKD1,319 million and HKD524 million from the IPO Proceeds on the R&D of the Group's Core Product, JS001 and other drug candidates, respectively. Since the Listing, the R&D of JS001 has achieved significant progress, including obtaining marketing approval in China, receiving support from the National Science and Technology Major Project, and having conducted more than 30 clinical studies covering more than ten indications in the PRC, the United States and other countries so far. In respect of other drug candidates, there are currently 11 pipeline candidates entering clinical trial phase including, among others, TAB004/JS004, the world's first anti-BTLA monoclonal antibody for injection which is approved for clinical trial and has commenced Phase I clinical trials in China and the United States. Having reviewed the Group's development and progress in the R&D of its other drug candidates and external investments since August 2019 and considered the Group's business strategy and potential investment opportunities in the near future, it is expected that the R&D of drug candidates would require more capital investment in the short run than external investment. The Board considers that the Reallocation is important to support such development plans, and would be a more effective use of the IPO Proceeds.

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The Board confirms that there is no material change in the business of the Company as set out in the Prospectus. The Board considers that the changes in use of IPO Proceeds are in line with the Group's business strategy and will not adversely affect the operation and business of the Group, and are in the best interests of the Company and its shareholders as a whole.

By order of the Board

Shanghai Junshi Biosciences Co., Ltd.*

Mr. Xiong Jun

Chairman

Shanghai, the PRC, 28 August 2020

As at the date of this announcement, the board of directors of the Company comprises Mr. Xiong Jun, Dr. Li Ning, Dr. Feng Hui, Mr. Zhang Zhuobing, Dr. Wu Hai and Dr. Yao Sheng as executive Directors; Mr. Tang Yi, Mr. Li Cong, Mr. Yi Qingqing and Mr. Lin Lijun as non-executive Directors; and Dr. Chen Lieping, Mr. Chen Xinjun, Mr. Qian Zhi, Mr. Zhang Chun and Dr. Roy Steven Herbst as independent non-executive Directors.

For the purpose of this announcement and for illustrative purpose only, conversions of RMB to HK$ are based on the exchange rate published by the State Administration of Foreign Exchange on 31 July 2020, i.e. RMB0.90125 = HK$1. No representation is made that any amounts in HKD or RMB can be or could have been converted at the relevant dates at the above rate or at any other rates or at all.

• For identification purpose only

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