2016 Interim Results Presentation

Sihuan Pharmaceutical Holdings Group Ltd. 四環醫藥控股集團有限公司

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1 Agenda

I Results Overview

II Business Review Financial Review

III Financial Review

IV Future Strategies

V Appendix

2 Section 1 Results Overview

3 Performance Overview in 2016H1

1 ♦ Revenue decreased by 21.8% y-o-y to approximately 1.39 billion ♦ Profit attributable to was down 49.3% y-o-y to 740 million; excluding the one-off investment income for the same period of last year, decreased by 18.6% y-o-y

2  Maintained market leadership ♦ 1st in CCV prescription market with a market share of 11.93% in terms of hospital purchase ♦ 4th largest pharmaceutical company in Chinese hospital market

3 ♦ Phase I clinical trials of innovative patented drug Pirotinib achieved smooth progress in US ♦ CFDA granted approval of phase II/III clinical trials for Imigliptin Dihydrochloride ♦ 36 generics obtained clinical approval issued by CFDA ♦ Cooperation with Japan’s RaQualia Pharma in novel analgesic gained primary achievement

4 ♦ Adjust marketing strategy, expanding market from high-end to low-end market ♦ Online academic promotion made new progress and became a new way of academic promotion ♦ Marketing system reform of introducing talents, adjusting structure and enhancing marketing capabilities has activated

5 ♦ After new GMP certification, the production management and quality control system was further optimized ♦ Production quality management center strictly implemented systematic production quality management of the production facilities

4 Section 2 Business Review

5 Growth of Pharmaceutical Market Slows

China’s Total Hospital Drug Purchases China’s Total Hospital Purchases of (RMB Bn) CCV Drugs (RMB Bn)

♦ Growth of CCV drugs outpaced industry growth rate

645 614 101.3 551 94.6 485 82.7 71.3 366 343 313 52.3 257 46.3 37.9 203 30.4 23.4

2008 2009 2010 2011 2012 2013 2014 2015 2016H1 2008 2009 2010 2011 2012 2013 2014 2015 2016H1

♦ The pharmaceutical industry continues to grow on the back of the accelerated pace of urbanization, aging population, environment pollution and increasing stress of modern society and expanded national medical insurance coverage

♦ Facing with the increasing pressure brought by stronger control over excessive medical insurance expenditures, “Key Monitored Drug List” announced by various regions’ governments, medical institution’s budget control of drug costs, and the implementation of “Two-Invoice System”, the growth of the industry slows.

6 Leading Market Position

Top 5 Players in China’s CCV Prescription Drug Market in 1H2016

(Market share) 11.93%

5.35% 4.93% 4.69% 3.47%

Sihuan Pfizer SANOFI QILU ASTRAZENECA

Top 10 Corporations in China’s Hospital market in 1H2016 Shares in hospital market Rank Top 10 Corporations In H1 2016 (%)

1 PFIZER GROUP 2.43% 2 YANGZIJIANG FTY 2.34%

3 ASTRAZENECA GROUP 2.21% 4 Sihuan Pharmaceutical 2.02% 5 QILU PHARM GROUP 1.85% 6 SHANGHAI FUSUN PH 1.62% 7 KE LUN 1.61% 8 SANOFI GROUP 1.58% 9 JS.L.Y.G. HENGRUI 1.55%

10 C.T-TIANQING GP 1.45%

Source: IMS 7 Market Leading Position for Main Non-exclusive Products

Sihuan’s Generic Name Sihuan Market Share by Ranking Top 5 Pharmaceutical Companies and Their Market Brand Name （Total revenue） and Percentage in 2016H1 Share in 2016H1 Ranked No.3 Sihuan 1. Qilu (山东齐鲁), 60.45% Ganglioside M1 9.85% 2. Harbin Medical University (黑龙江哈尔滨医大), 10.56% GM1 (RMB 3,422 mil) 3. Sihuan (四环医药), 9.85% 4. BJ Saisheng Pharm (北京赛升), 8.61% 5. SC.Taiji Xinan PH (西南药业), 7.08%

Ranked No.3 Sihuan 1. BJ Taide (北京泰德), 26.81% 19.10% 2. Hayao Biological (哈药生物), 22.58% Alprostadil Yimaining 3. Sihuan (四环制药), 19.10% (RMB 2,869 mil) 4. Xian Libang Pharm (西安力邦), 14.82% 5. Chongqing Yaoyou (重庆药友), 10.32% Ranked No.2 Sihuan Salviae Miltiorrhizae 1. Guizhou Baite (贵州拜特制药),76.36% Danshen and Liguustrazine 23.64% 2. Sihuan (四环制药), 23.64% Chuanxiongqin Injection (RMB 1,636 mil)

Ranked No.1 1. Sihuan (四环医药), 32.54% Sihuan 2. Shanxi Pude Pharm (山西普德), 17.97% Cerebroprotein 32.54% Qu’Ao Hydrolysate 3. GD Longfu Pharm (广东隆赋), 15.92% (RMB 785 mil) 4. Yunnan Mengsheng (云南盟生),15.61% 5. HN.Tongyong Tongming (海南通用), 4.97%

Ranked No.1 Sihuan 1. Sihuan (四环医药),48.08% Ligustrazine 48.08% 2. Hefei Pingguang (合肥平光), 45.25% Chuanqing Hydrochloride 3. BJ.Sihuan Kebao PH(北京四环科宝), 2.88% (RMB 215mil) 4. HN. Kelun PH(湖南科伦) , 2.69% [VAL 5. HN.Fureng huanqingtang PH(河南辅仁怀庆堂), 0.49% Ranked No.3 SihuanUE] 1. Simcere Dongyuan (先声东元), 32.05% 11.52% 2. Jilin Boda Pharm (吉林博大),22.64% Edaravone Qingtong 3. Sihuan (四环制药), 11.52% (RMB 2,048 mil) 4. Anhui Guorui Pharm (安徽国瑞), 11.18% 5. YN.Kunming JIDA(昆明积大), 7.77%

8 Diversified Product Portfolio Product Sales Contribution Breakdown in Terms of Hospital Purchase According to IMS Data

For the 6 months ended 30 June 2016

Oudimei 24.41%

Kelinao+Anjieli 15.64%

Yuanzhijiu 15.51%

Yimaining 7.93%

Guhong 7.66%

Yeduojia 6.05%

Danshen Chuanxiongqin 5.60%

GM1 4.88%

Qingtong 3.42%

Qu'ao 3.70%

Chuanqing 1.50%

Others 3.70%

0.00% 5.00% 10.00% 15.00% 20.00% 25.00%

2016H1 2015H1 Source: IMS

9 Sales of Key Products Revenue of CCV Products

For the six months For the six months ended 30 June 2015 ended 30 June 2016 Change in Product Name Year of Launch Other info (RMB ‘000) (RMB ‘000) Sales y-o-y (Restated)

Kelinao/Anjieli 366,872 218,218 -40.5% 2003/2006 Oudimei 454,587 323,834 -28.8% 2010 P Yuanzhijiu 218,387 219,965 0.7% 2011 P Yeduojia 62,150 60,318 -2.9% 2011 P Yimaining 138,772 130,051 -6.3% 2010 P Danshen Chuanxiongqin 110,299 101,328 -8.1% 2011 P injection GM1 102,749 79,907 -22.2% 2008 Qu’Ao 57,950 55,682 -3.9% 2005 Chuanqing 44,570 32,077 -28.0% 2003 Qingtong 37,472 25,505 -31.9% 2008 Guhong 72,515 52,761 -27.2% 2011 P

Scutellarin Glucose injection 1,727 909 -47.4% 2011 P

Exclusive Products P Promising products

♦ Sales of CCV drugs fell 21.7% to 1.3121 billion RMB, accounting for 94.6% of total revenue. ♦ Medical institutions to strictly control the proportion of drug costs, the products of Kelinao, Oudimei be placed in key monitoring drug list by multiples cities; company reduced selling prices of Kelinao etc. to encourage distributors.

10 Sales of Key Products

Revenue of non-CCV Products

For the six months For the six months Product ended 30 June 2015 ended 30 June 2016 Year Other info Change Name (RMB ‘000) (RMB ‘000) of Launch (Restated)

Bi’Ao 29,372 24,125 -17.9% 2005 Respiratory drug Zhuo’Ao 9,836 7,413 -24.6% 2005 Central nervous Ren’Ao 11,081 11,718 5.8% 2005 system drug

Anti-infective drug Clindamycin 23,108 9,006 -61.0% 2014 P

Digestive system drug Roxatidine 4,189 7,414 77% 2013 P

Hepetitis drug Huineng 1,036 3,464 234.5% 2014 P

Exclusive Products P Promising products

♦ Newly-launched products such as Roxatidine and Huineng achieved sound growth but has not reached to sales

scale due to delayed provincial tenders and limited market coverage.

♦ Zhuo’Ao and Bi’ao, etc. did not achieve sales growth due to intensified competition in the market and lowered selling

prices.

11 Innovative Drug R&D

Innovative drug R&D achieve desired progress: Pirotinib: Dose escalating trial of Phase I clinical trials in the United States have been completed, patients demonstrated pharmacodynamic response without serious adverse effects; Phase I clinical trial has also been initiated in China Imigliptin Dihydrochloride: Obtained approval of Phase II/III clinical trials from CFDA, Phase II clinical samples has been completed and Phase II clinical trials will commence shortly. Anaprazole Sodium: Phase I clinical trial has ended, Phase II/III clinical samples and application are being prepared Phase I clinical trial of Tylerdipine Hydrochloride and Benapenem has ended, Phase I clinical trial of Janagliflozin is under preparation The new analgesic patented drugs jointly developed with Japanese company RaQualia were proceeded smoothly, 40 new synthesized compounds are screened, among which monomer compounds were discovered that have further research value.

12 R&D Breakthroughs Innovative Drug Pipeline

IND Clinical Trials Project Progress Pre-clinical NDA Trails Application Phase I Phase II Phase III L-Phencynonate Hydroloride Cinepazide Mesilate NeuroSTAT Imigliptin Dihydrochloride Anaprazole Sodium Benapenem *Phase I clinical trials of Pirotinib Tylerdipine Hydrochloride are currently conducting in the Pirotinib* U.S U.S smoothly; it has also been Janagliflozin granted full approval of Phase Sirotinib Fadanafil I/II/III clinical trials from CFDA. Project Product Characteristics Medical therapeutic areas Expected time to market L-Phencynonate Hydroloride Category 1.3 innovative drug CCV 2016-2017 (左旋盐酸苯环壬酯) Cinepazide Mesilate Category 4 innovative drug CCV 2017-2018 (甲磺酸桂哌齐特) NeuroSTAT® Category 1.6 New drug CCV 2019-2020 Imigliptin Dihydrochloride Category1.1 innovative drug Anti-diabetic 2018-2019 (盐酸依格列汀) Anaprazole Sodium Category 1.1 innovative drug Digestive 2018-2019 (安纳拉唑钠) Innovative Benapenem Category 1.1 innovative drug Anti-infective 2018-2019 Drugs (百纳培南) Tylerdipine Hydrochloride Category 1.1 innovative drug CCV 2018-2019 (泰乐地平) Pirotinib (哌罗替尼) Category 1.1 innovative drug Oncology 2019

Janagliflozin (加格列净) Category 1.1 innovative drug Anti-diabetic 2020

Sirotinib (赛罗替尼) Category 1.1 innovative drug Oncology 2022

Fadanafil (复达那非) Category 1.1 innovative drug BPH-LUTS，ED 2022 13 R&D Breakthroughs Generic Drug Pipeline As of 30 June 2016, generic drug team received 36 clinical approvals, 27 of which were Category 3 new generic drugs; 26 projects which has submitted application for production approval are expected to be progressively launched to the market within 3 years.

Esomeprazole Oxiracetam Caspofungin Acetate (埃索美拉唑) (奥拉西坦) (醋酸卡泊芬净)

Levetiracetam Injection FlurbiprofenAxetil (左乙拉西坦注射液) Vinpocetine (氟比洛芬酯) (长春西汀) Divalproex sodium Tablets Fasudil Hydrochloride (双丙戊酸钠肠溶片) (盐酸法舒地尔)

Ornithine Aspsrtste Esomeprazole Sodium Octreotide Acetate （门冬氨酸鸟氨酸） (埃索美拉唑钠) (醋酸奥曲肽)

♦ In total, the Group has over 60 generic drug projects under development, including more than 30 Category 3 new generic drugs.

♦ In addition, generic drugs team has started quality consistency evaluation on five oral formulations (including Metformin Hydrochloride, Azithromycin Capsules, Oxcarbazepine Tablets, Simvastatin Tablets and Candesartan Cilexetil Tablets).

14 Sales and Marketing

♦ Fully demonstrate the clinical value of Sihuan’s products and enhance the Sihuan’s professional brand image with the leading force of academic promotion

Conducted practical and effective academic Effectively utilizing Sihuan’s online platform promotion activities and clinical research to and establishing new way of academic enhance physician’s recognition of Sihuan’s promotion products

Organized over 3,335 academic promotion activities, including 3,287 Through Sihuan Pharm Online School, there increased 6,902 new departmental seminars at hospital, 48 provincial/municipal medium- registered members. Over 52,976 physicians became registered sized academic conferences in 2016H1. members and there were over 10 million visitors.

Conducted several clinical applications studies of its key Further optimization, enriched the contents of network platform, “ the products, reflecting the sound efficacy and safety of the products and salon of Neurological Department of Peking Hospital” formally recognition by medical experts and specialists. launched and updated multiple columns content , including consultation and surgical imaging, academic activities and medical development etc.

15 Sales and Marketing

♦ From first and second-tier cities to primary market, improve market output

Mature products Growth products New varieties

Blank market first and second-tier first and second-tier Seize tendering cities cities opportunities

three or four lines of urban three or four lines of urban Enter into regional drug reimbursement lists and essential drug lists

Improve the efficiency of market output

♦ Strengthen sales and marketing system, strive to enhance the marketing capabilities ♦ In response to changes in the market, then strengthen marketing system, strive to enhance the professional level of team and marketing capabilities. Introduction of excellent marketing manager who had multinational enterprise experience, the newly established Medical Affairs Department is responsible for the medical market research and market strategy, as well as the introduction of SMART data system which based on marketing, to determine the market development and set goals, to lead the efficient allocation of resource and to realize the effective development of market.

16 Production Management and Quality Control

♦ After the new GMP certification, the Group established production quality control center, then the management and quality will continue to optimize.

♦ The internal one-time qualification rate was maintained 100%, there was no external institutions have failed to test sample and no quality and safety-related incident have occurred.

♦ Labor costs continue to increase and the amortization of pre GMP investment which bring pressure on the cost of production system. Due to main production declined ,. manufacturing cost of the product increased significantly compared with the same period in 2015.

Other Production Bases in Beijing Sihuan pharm Langfang Gaobo Jingbang pharm Jilin and Liaoning

♦ Core chemical preparation production ♦ For active pharmaceutical ingredient (“API”) ♦ Production bases included Jilin base and pharmaceutical intermediates Sihuan, Changchun Xiangtong and manufacturing Benxi Hengkang plants, etc. ♦ National High and New Technology ♦ Passed the certification by the U.S. FDA Enterprise ♦ Jilin Sihuan granted “High and New ♦ Cooperation with Canada-based Apotex Inc. Technology Enterprise” ♦ Granted Beijing “G20” leading and India’s Dr. Reddy’s Laboratories Ltd., enterprises etc. continue to proceed smoothly ♦ All received new GMP certification

17 Sound Progress in Domestic and International Collaborations • Cooperation for the • Cooperation for the development development of novel of five insulin products analgesic patented drugs and ion channel technology development. RaQualia Pharma • Collaborative project for innovative CCV Inc. product NeuroSTAT® Chongqing Peg-Bio (Japan) • Sihuan has exclusive license to develop, Biotechnology Co., market and sell the product in China Ltd.

NeuroVive Pharmaceutical AB Apotex (Sweden based and (Largest listed Canadian-owned company) pharmaceutical Text company)

• Cooperation with our APIs Dr. Reddy’s production facility Laboratories Ltd. Covance Inc. (U.S.-based company)

• Cooperation with our APIs production facility

• Long-term partnership to support the preclinical and clinical global development of the Group’s innovative drug pipeline 18 Section 3 Financial Review

19 Financial Highlights

For the six months ended 30 June Key Income Statement Items 2016 2015 (RMB’000) (RMB’000) Change

Revenue 1,387,672 1,773,521 -21.8% Gross Profit 927,421 1,278,850 -27.5% Operating Profit 828,941 1,598,783 -48.2% Profit attributable to owners of the Company 735,968 1,451,550 -49.3%

For the six months ended 30 June Key Financial Ratios 2016 2015

Gross Profit Margin 66.8% 72.1% Net Profit Margin 53.0% 81.9% Basic EPS (RMB cents) 7.10 14.01 Receivable Turnover (days) 62 63 Inventory Turnover (days) 98 73 Proposed final cash dividend per share (RMB cents) 1.4 1.4

20 Statistics in Overall Sales Revenue

Revenue 5.4% (RMB million) CCV 2,500.0 2,000.0 1,773.5 Non-CCV 1,387.7 1,500.0 1,000.0 94.6% 500.0 0.0 20151H 20161H Revenue by Segment CCV: RMB 1,312.1 million For the six months ended 30 June Non-CCV: RMB 75.6 million

♦ Revenue decreased by 21.8% to RMB 1,387.77 million. The decrease was mainly due to the fact that the Group reduced its supply price for Kelinao/Anjieli, one of its core products. Meanwhile, control on medical insurance expenditure also greatly affected sales of the Group. ♦ The sales of CCV drugs decreased 21.7% to approximately RMB 1,312.1 million.

21 Profit Margin

Gross profit Gross profit margin Net profit Net profit margin (RMB2,500.00 million) 100% (RMB million) 100% 1,451.55 2,000.00 80% 1,500.00 72.1% 80% 66.8% 1,500.00 60% 1,278.90 1,000.00 60% 735.97 1,000.00 927.42 40% 40% 81.8% 500.00 500.00 20% 53.0% 20%

0.00 0% 0.00 0% 20151H 20161H 20151H 20161H For the six months ended 30 June For the six months ended 30 June

♦ Gross profit decreased by 27.5% to RMB927.4 million ♦ Gross profit margin decreased from 72.1% to 66.8% mainly due to a decrease in selling price of some products as a result of keen market competition as well as an increase in the amortised cost per production unit. ♦ Net profit decreased by 50.2% to RMB736 million

22 Distribution Costs

Distribution Costs % of Revenue (RMB million) 100.0 8%

3.5% 4% 4.0% 61.9 10.0 55.9

1.0 1% 20151H 20161H Distribution Costs % of Revenue

For the six months ended 30 June

♦ Distribution cost decreased by RMB6.1 million to RMB55.9 million over the same period last year due to due to lower transportation expenses and marketing expenditure.

23 Capital Expenditure

(RMB million) 300 272.3 20.4 250

55.9

200

150 134.4 Land use rights

32.7 Intangible Assets

100 196.0 Property, Plant & Equipment

50 101.7

0 20151H 20161H

For the six months ended 30 June

24 Section 4 Future Strategies

25 Future Strategies & Outlook

Entering primary pharmaceutical market, exploring potential market of existing products  Using mature varieties in first and second-tier cities to develop primary market Strategies  Using the varieties in growth stage, to develop blank market and primary market together  New products in past two years, need to seize opportunity to enter bidding and gain access to local healthcare insurance and essential drug list Extend the life cycle of core product market  The research on the mechanism and effect of the core products  Introduced SMART market data analysis system , analyzing the market scientifically and objectively  Through the analysis of market data, determine the market development space and setting 8000-10000 hospital as goals Further rich product resources  After the released products of Roxatidine, Huineng, Nilestriol etc., company will launch a series of product from reserve products. Combined with the approval of new drugs to further enrich product portfolio  With the development of provincial tender and goes into local medical insurance directory, the contribution of new production will gradually appear Adjusting market strategy and maintaining marketing capabilities  Make prompt adjustments to the marketing strategies according to changes in the market  Further step up academic promotions and realize the scientific, systematic and digital management of the marketing system  Strengthen the construction of marketing system, maintain strong marketing ability

Outlook In 2016, the Group will strengthen its foundation in terms of operations, internal management and cost control, in order to advance through steady growth and pursue opportunities through reforms and innovation. Sihuan Pharmaceutical, with leading market position, a strong business foundation, economies of scale, a wide marketing network and strong capabilities in R&D and resources integration will be able to capture new development opportunities in the next round of industry restructuring.

26 Section 5 Appendix

27 Our History . Phase I clinical trials of innovative patented drug Pirotinib are currently conducting smoothly in the U.S.; it has also been granted full approval of Phase I/II/III clinical trials from CFDA . Phase I clinical trials of Category 1.1 innovative drug Imigliptin Dihydrochloride have completed and it will apply for Phase II 2015 and Phase III clinical trials in the near future . The IND applications of category 1.1 innovative drugs Sirotinib and Fadanafil have been filed and accepted by CFDA . Entered into a research collaboration agreement with Japan’s RaQualia Pharma Inc. in novel analgesic drugs and ion channel technology development

. The IND application of Janagliflozin has been filed and accepted by CFDA 2013-2014 . Established cooperation with Chongqing Peg-Bio Biotechnology Co., Ltd for the development of five insulin products . Entered into a share acquisition and capital injection agreement with Beijing Ruiye and will enjoy sales priority of all its products . Made indirect investments in the medical service sector by injecting capital into Renfang Medical Holdings Ltd. . Tylerdipine Hydrochloride, Anaprazole Sodium and Benapenem, three Category 1.1 innovative drugs received Clinical Trial Approval

. First-to-market exclusive drug Roxatidine was launched . Collaborated with Swedish company NeuroVive AB to develop two innovative CCV drugs 2011-2012 . Acquired remaining 40% equity interest in Xuanzhu Pharma to consolidate R&D resources . Acquired Jilin Sihuan which owns three exclusive CCV drugs and Jilin Sichang which owns 4 TCM CCV products . Acquired 80% interest in Changchun Xiangtong which owns GM1 injection and API manufacturing facility . Acquired Acquisition of Benxi Leilong, from which the company gained the ownership of Yimaining

. Listed on the Hong Kong Stock Exchange 2010 . Ranked No. 4 in the Forbes 2010 list of the most promising enterprises in the PRC and No. 1 among pharmaceutical companies . Obtained a 30-year exclusive distribution rights of Yimaining

. Qingtong and GM1 was launched . 2008-2009 MSPEA invested and privatized the Company with major shareholders, which then was delisted from the SGXST . Acquired 60% interest in Xuanzhu Pharma to enhance R&D capabilities of innovative drugs . Received a 20-year patent protection in the PRC for the invention and production method of non-solvated cinepazide maleate crystal for producing Kelinao and Anjieli 2007 . Listed on the main board of the SGX-ST on 23 March 2007 . Commanded the largest share of the CCV market in China . Hainan Sihuan CVD Research became a wholly-owned subsidiary of the Group . Received a 20-year patent protection in the PRC for the improved production method of Kelinao and Anjieli in 2006； 2001-2006 Kelinao was granted “State Torch Programme” status by the Science and Technology Ministry of the PRC in 2006 . Acquired the remaining interest in Beijing Sihuan which then became a wholly-owned subsidiary of the Group in 2006 . Received a 20-year patent protection in the PRC for the synthesis process of Kelinao and Anjieli in 2004 . Kelinao and Chuanqing were launched in 2003 . Hainan Sihuan was founded in 2001 28 Business Architecture

Sihuan Pharmaceutical Group

R&D System Production System Marketing System

XuanZhu AoHe Pharma Pharmaceutical BeiJing Siuan JiLin Sihuan HaiNan Sihuan ShenZhen Research Pharm Pharm Pharm Sihuan Pharm (Innovative Institute Medicine) (Generic Drug) BenXi LangFang HengKang Gaobo Pharm Pharm BeiJing Clinical & JiLin SiChang ChangChun XiangTong TongHua JiDa Registration Pharm Center Pharm Pharm

JiLin JiLin JinSheng Zhen’Ao Pharm Pharm

29 Core Management Team Our core management are very professional and highly experienced in Chinese pharmaceutical industry with average of twenty-years experience

 Proven entrepreneurial success  Deep understanding of China's pharmaceutical industry  Expertise in operating high growth companies  Proven R&D and drug acquisition track record  High standard of corporate governance  Extensive clinical experience

Dr. Che Fengsheng Dr. Guo Weicheng Ms. Jia Zhongxin Mr. Choi Yiau Chong Dr. Qinhua Cindy Ru Dr. CK Shih Ms. Yuan Tingjun Co-founder, Co-founder, Deputy Chief Operating Chief Financial Chief Scientific Head of XUANZHU Vice President Chairman & Chairman & Chief Officer Officer Officer Executive Director Executive Officer 8 years of clinical 6 years of clinical Over 25 years of Extensive finance and Near 20 years of in- Seasoned harmacologist in In many experience as a experience as a experience in accounting experience depth international the Pharma industry with pharmaceutical neurologist general surgeon operational gained from a publicly- working experience in extensive experiences in the companies engaged management of listed company and Oncology preclinical areas of cardiovascular in operation and Over 20 years of Over 20 years of pharmaceutical Deloitte & Touche research, clinical diseases, immunological management experience in sales experience in sales companies in the PRC research and diseases, anti-viral diseases. and marketing of and marketing of Member of the Over 20 years of development, global pharmaceutical pharmaceutical Previously CEO of a Chartered Institute of More than 20 years experiences in regulatory products and products publicly listed Chinese Management experiences in Boehringer pharmaceutical registration, global managing pharmaceutical Accountants (UK) and Ingelheim Pharmaceutical production and product launch and pharmaceutical company the Institute of Certified Inc.，made seminal quality control asset life cycle companies Public Accountants of contribution to the discovery management at Merck Singapore and development of &Co., Novartis, Pfizer, Viramune and other items. etc. 30 R&D Breakthroughs Optimized Template for Microsoft PowerPoint 2003 ♦ We have two leading R&D teams composed over 400 personnel who focus on developing innovative patent drugs and first-to-market generic drugs, including 25 PhDs and over 160 master degree holders. ♦ Our investment in R&D has been well above domestic average and accounted for about 6% to 10% of sales since 2007. ♦ Currently, we have over 80 new drugs under various development stages, including 14 innovative patented drugs. To date, we have submitted a total of IND applications for 9 Category 1.1 innovative drugs , 7 of them obtained approval for clinical trials and entered into different stage of clinical trials. One innovative patented drug Pirotinib, its phase I clinical trials are conducting in the U.S. ♦ We have applied for 600 patents including 34 PCTs and already more than 300 granted patent rights. ♦ 3 Category 1.1 innovative drugs have been classified as the National Major Innovative Drug Projects (国家“重大新药创制”科技重大专项)

Innovative Drug Generic Drug R&D Team R&D Team ♦ Focuses on discovery and development of new chemical ♦ Focuses on first-to-market generic drugs entities as novel therapeutic agents ♦ Potential to result in intellectual property rights in ♦ Key research scientists have on average over 10 years of relation to formulation, production process, improved drug R&D experience from their tenures at multinational chemical attributes or drug delivery system pharmaceutical companies

31 Unique and Proven Sales and Marketing Model Managed and supported by our professional in-house sales and product managers, to ensure the efficiency, productivity and stability of our distribution network

Rapidly develop and penetrate hospital market through the close collaboration of 600-plus in-house product and Our Group sales managers with over 3,000 distributors

Product managers Sales managers ♦ Sihuan’s in-house sales and marketing team: Over 100 product managers Academic marketing & promotion Selecting and managing distributors – devising marketing strategies – organizing national, provincial and municipal conferences; holding Distributor Distributor Distributor • • • Distributor seminars in hospital departments, etc. – providing product knowledge training for distributors  • • •  Over 500 sales managers – responsible to drug biddings, provincial RDL, EDL or NRCMSL Hospitals and physicians – screening/selecting distributors, and setting sales targets for them – closely monitoring distributors' performance – providing support and services to distributors, as necessary ♦ Over 3,000 distributors and their sales forces:

Patients – have deep understanding of the local markets, established sales channels , and excellent working relationship to local hospitals

Product, marketing and promotional support; – responsible for hospital market development and sales to hospitals distributor screening/selection and management – responsible for the daily maintenance of the relationship with hospitals Organizing and supporting various types of pharmaceutical academic conferences, visiting senior experts and opinion leaders in collaboration

Our unique sales model has proven to be very successful, highly productive and cost- efficient, enable us to quickly develop and penetrate the market

32 Rich and Diversified Product Resources

Therapeutic areas CCV CNS Metabolism Oncology Anti-infective

Total Products 39 9 6 7 15

Main products Kelinao, Oudimei, Ren’ao Roxatidine Kaqiping Clindamyein Yuanzhijiu, Yeduojia

2003 2004 2005 2006 2007 2008 2009 2010 2011 2013 2014 2015

Salivae Roxatidine Ren’Ao Anjieli Anjiejian GM1 Pojia Oudimei Kelinao Kanglixin Miltiorrhizae Acetate Liguspyragine Huineng Hydrochloride and Hydrochloride Glucose Injection (Monoammonium Glycyrrhizinate and Cysteine and Sodium Qingtong Yuanzhijiu Chuanqing Zhuo’Ao / Chloride Injection) Bi’Ao Nalmefene Danshen Hydrochloride Yeduojia Chuanxiongqin Injection Injection Clindamyein Qu’Ao

Yimaining

33 Key Products

Kelinao Oudimei Yuanzhijiu

 Established key product  Established exclusive product  Promising exclusive products at earlier  Therapeutic area: CCV  Therapeutic area: CCV stage of development   Entered NRDL  Entered 24 provincial RDLs Therapeutic area: CCV   Provincial EDL and NRCMSL  Provincial EDL and NRCMSL Entered 23 provincial RDLs   Entered Guangdong 、XinjiangEDL  Entered Hubei EDL Provincial EDL and NRCMSL   Entered Anhui、Shandong EDL  Entered Xingjiang EDL Entered Guangdong EDL tender   Entered Hebei、Henan EDL  Entered Henan EDL Entered Chongqing EDL   Entered Jiangsu EDL  Entered NRCMC list of 11 provinces Entered Xingjiang EDL  Entered NRCMSL of 12provinces  Entered NRCMC list of 6 provinces

Yeduojia Danshen Chuanxiongqin Roxatidine Huineng

 Promising exclusive product  Promising product  New first-to-market generic  New exclusive product launched at earlier stage of development  Therapeutic area: CCV product launched to the to the market  Therapeutic area: nervous system  Entered 23 provincial RDLs market  Therapeutic area: hepatitis and metabolism  Therapeutic area: digestive system   Provincial EDL and NRCMSL Entered 4 provincial RDLs: Anhui, Jilin  Entered DRL of 18 provinces  Entered 1 provincial RDL , Xinjiang Autonomous Region and  Entered Shanxi 、AnhuiEDL Jiangxi  Provincial EDL and NRCMSL  Provincial EDL tender   Entered Xinjiang EDL tender  Provincial EDL  Entered Xingjiang 、Guizhou Entered Hebei EDL tender  Entered Hebei EDL tender  Entered NRCMC list of EDL tender 6provinces  Entered Henan EDL tender  Entered NRCMC list of 15 provinces 34 Main Products

Product Product Characteristics Cinepazide maleate is a calcium channel blocker with endogenous adenosine synergistic effect. Through calcium ion antagonism, it Kelinao dilates blood vessels, restore lesions blood circulation, and can change the hemorheology parameters to effectively improve the (Cinepazide Maleate microcirculation; through endogenous adenosine (adenosine is an endogenous protective factor in the hypoxic ischemic brain Injection) (80 mg) damage) synergy, it blocks multiple links of stroke cerebral apoplexy in multiple ways and levels, thereby achieving the effect of protecting the nerve cells. Anjieli (Cinepazide Clinically, cinepazide maleate is widely used in the treatment of cerebral arteriosclerosis, cerebral insufficiency supply of blood, TIA, maleate injection) cerebral infarction, subarachnoid hemorrhage, cerebral hemorrhage sequelae, traumatic brain injury, cardiovascular diseases and (320mg) microcirculation disturbance caused by diabetes, as well as other peripheral vascular diseases.

A multipleganglioside, polypeptide and amino compound preparation used to repair, protect, nurture and energize nerves. Cattle encephalon glycoside and ignotinparticipatesin the growth, split and regeneration process of neurons, and effectively increase the expression of Heat Shock Protein (HSP70 is an indicator of nerve protection) and Nestin (Nestin is an indicator of nerve reparation), thus achieve repairing, protecting, neutralizing and supplying energy to nerves; cattle encephalon glycoside and ignotin can inhibit

Oudimei calcium overload, protect the integrity of nerve cell membrane structure, refrain pathologic lipid from peroxidation, reduce free radical generation and alleviate cerebral edema and neurons injury; through blood brain barrier, the components in the cattle encephalon (Cattle encephalon glycoside and ignotin such as polypeptide and free amino acid can provide and supplement specific nutrients required by nerve glycoside and ignotin metabolism, and provide energy and nutrition support for tissue repair. injection) Cattle encephalon glycoside and ignotin injection is widely used in the treatment of cerebral apoplexy, Alzheimerdisease, hypoxic ischemic encephalopathy, craniocerebral injury, spinal cord injury and central nerve damage caused by other factors. It is also used to treat peripheral nerve injuries such as traumatic peripheral nerve injury, diabetic peripheral neuropathy and oppressive nerve lesions.

35 Main Products

Product Product Characteristics

Also referred to as Tetramethylpyrazine, it is a single chemical entity derived from total artificial synthesis. Ligustrazine hydrochloride Chuanqing is a typical calcium channel blocker that, through its pharmacological characteristics of inhibiting generation of free radical, enhancing (Ligustrazine endogenous SOD activity, removing oxygen free radical, improving hemorheology, inhibiting platelet aggregation and fibrosis, can achieve important biological effects such as expanding blood vessel, improving microcirculation, inhibiting thrombosis and dissolving hydrochloride for formed thrombosis, blocking ischemia-reperfusion injury and protecting brain tissue and the myocardial tissue. injection) Clinically, it is widely used to treat ischemic cerebrovascular disease, coronary heart disease, cerebral embolism, vasculitis, vascular dementia and hypercoagulabale state.

It is a peptidergic nerve nutritious drug composed by a variety of amino acids and polypeptide which are vital to human body. It can Qu’Ao act on central nervous through a multiple ways, adjust and improve the metabolism of neuron, promote the generation of synapse, (Cerebroprotein induce the differentiation of neuron, and further protect nerve cells from various ischemia and neuro toxins. Through blood brain barrier, it facilitates the synthesis of brain proteins, affects respiratory chain and enhances the brain's capability of resisting hypoxia hydrolysate) and brain energy metabolism.

Clinically, it is widely used to treat cerebrovascular disease and sequelae of cerebrovascular disease with symptoms of hypomnesia and attention deficit disorder.

Edaravone can directly remove hydroxy and oxygen free radicals, effectively inhibit the generation of lipid free radicals, chain Qingtong reaction caused by the cell membrane lipid peroxidation, and bring down the irreversible damage of proteins and nucleic acids mediated by oxygen free radicals. While effectively prevent ischemia-reperfusion injury, it can also reduce the generation of (Edaravone inflammatory mediators. injection) Clinically, it is widely used to treat cerebrovascular diseases such as ischemiccerebral infarction, acute intracerebral hemorrhage, acute severe brain injury and neurologic symptoms caused by acute severe head injury, as well as activity of daily living and function improvement.

36 Main Products

Product Product Characteristics

It is a kind of alprostadil preparation using lipid microspheres as drug carrier. By wrapping with lipid microspheres that prevent Yimaining alprostadil from deactivation and promote the target distribution to damaged blood vessels, it can promote the targeted (Alprostadil lipid microcirculation and protect the organs and tissue cells. Clinically, it is widely used to treat limb ulcer caused by chronic arteriosclerosis obliterans, resting pain, cardio-cerebral vascular emulsion injection) microcirculation disturbance and antithrombotic therapy after organ transplantation.

Yuanzhijiu It is a combo formulation of troxerutin, active peptide and a variety of amino acids and nucleic acids. It can act simultaneously on the nerves and blood vessel system to improve brain energy metabolism while increase the cAMP in blood platelet, which inhibit platelet (Troxerutin and aggregation and prevent thrombosis, as well as lower down the capillary permeability and ease cerebral edema. cerebropropeinhydr Clinically, it is used to treat acute and chronic cardio-cerebral vascular diseases such as cerebral thrombosis, cerebral hemorrhage olysate injection) and cerebral vasospasm; cerebral dysfunctions caused by occlusive peripheral vascular diseases such as insufficient blood supply, cerebral infarction and cerebral hemorrhage; occlusive vascular diseases, thrombophlebitis, capillary bleeding and edema caused by vascular permeable increase.

Currently the only intravenous administration of a vitamin B compound formulation, which consists of B1, B2 and B12.Through synergistic action on peripheral nerves, the three components promote sugar aerobic metabolism and provide energy the damaged Yeduojia nerve need, enhanceγ-aminobutyric acid generation and homocysteine metabolism, improve peripheral nerve blood vessels (Compound microcirculation, participate in methyl transfer, and maintain a complete myelin sheath, thus achieving the effect of promoting the damaged nerve recovery. trivitamin B for Clinically, it is used for the treatment of nerve injury, polyneuritis, trigeminal neuralgia and sciatica; prevention of isoniazid poisoning, injection (II)) gestation, radiation sickness, antineoplastic-induced vomiting, pernicious anemia and nutritional anemia. It also can used as nutrition supplement for patients with B vitamins intake disorders.

37 Main Products

Product Product Characteristics

Danshen The compound preparation of ligustrazine hydrochloride and dihydroxyphenyl. Through against platelet aggregation, lowering blood Chuanxiongqin viscosity, speeding up the red blood cell velocity and expanding the blood vessel, it aims to achieve microcirculation promotion and (Salviaemiltiorrhizae blood vessel expansion. Clinically, it can be used to treat occlusive cerebral vascular diseases such as coronary heart disease, angina pectoris and myocardial infarction, as well as ischemic cardio-vascular diseases such as chest distress caused by coronary and ligustrazine heart disease, angina, myocardial infarction and thromboangiitis obliterans. hydrochloride injection)

Jie’ao (Roxatidine acetate The latest Histamine H2 receptor antagonists, which is use to inhibit of gastric acid secretion, prevent and treat of upper digestive tract ulcer bleeding and protect the gastric mucosa. It is the most effective first-tier drug to prevent stress gastric ulcer. hydrochloride injection)

Huineng The compound preparation of monoammonium glycyrrhizinate and cysteine. Working against the patotoxicity, lowering glutamic- (Monoammonium pyruvic transaminase and restoring liver cell function, it is mainly used for the treatment of chronic persistent hepatitis, chronic aggressive hepatitis, acute hepatitis, hepatotoxicity and initial cirrhosis. It can also be used to treat allergic diseases. Glycyrrhizinate and Cysteine and Sodium Chloride Injection)