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Oneness and Microbio (Shanghai) have entered into an exclusive agreement of Fespixon commercialization with China Resources Double Crane Pharmaceutical Co., Ltd. |
- Date of occurrence of the event: 2024/07/19
- Counterparty to the contract or commitment: China Resources Double Crane Pharmaceutical Company Limited
- Relationship with the Company: NA
- Starting and ending dates (or rescission date) of the contract or commitment: 2024/07/19
- Major content (not applicable where rescinded):
- (1)Oneness and Microbio (Shanghai) (hereinafter referred to as MBS, Oneness has direct and indirect ownership of 31.5% shares) have jointly entered into an exclusive agreement of commercial license in China (hereinafter referred to as the Agreement) of Fespixon with China Resources Double Crane Pharmaceutical Company Limited (hereinafter referred to as CR Double-Crane). CR Double-Crane will have the exclusive right of sales and marketing of Fespixon in the licensed territory. The business transaction will be made between CR Double-Crane and MBS according to the pre-agreed supply cost and MBS will place the order request to Oneness.
- (2)According to the Agreement, CR Double-Crane will make an upfront payment of up to US$34 million to MBS and sales milestones of US$13.6 million based on every RMB 1 billion integer (the calculation each time minus the paid sales milestones). The agreement term is 20 years and expires in 2043. Three-fifth of the upfront payment shall be made by CR Double-Crane to MBS in 30 working days after the first custom clearance of Fespixon, and one-fifth of the upfront payment shall be made in 6 months after the first portion of upfront payment was made. The remaining one-fifth upfront payment will be made if Fespixon is included in the National Reimbursement Drug List (NRDL) in the pre-agreed timeline. In case the first NRDL price meets the mutual expectation, the remaining upfront payment will be exempted.
- (3)Fespixon will be manufactured and supplied by Oneness Nanchou Plant
- Restrictive covenants (not applicable where rescinded): Per the agreement
- Commitment (not applicable where rescinded): Per the agreement
- Any other important agreement (not applicable where rescinded): NA
- Effect on company finances and business: Positive to finances and business
- Concrete purpose/objective:
- (1)The exclusive agreement of Fespixon commercial license in China will bring substantial benefit resulted from the successful research and development of the new drug and product launch to the shareholders’ equity.
- (2)The commercialization of Fespixon is anticipated to significantly decrease the amputation of diabetic patients and bring important health benefits to the patients.
- Any other matters that need to be specified(the information disclosure also meets the requirements of Article 7, subparagraph 8 of the Securities and Exchange Act Enforcement Rules, which brings forth a significant impact on shareholders rights or the price of the securities on public companies.):
- (1)Oneness will supply Fespixon in accordance with the Agreement and obtains reasonable margin. In addition, according to the license agreement signed with MBS, Oneness can obtain a certain proportion of royalties based on MBS’s net sales; Oneness can share the operating results and recognize MBS’s profits and losses using equity method through the direct and indirect ownership of 31.5% shares of MBS.
- (2)Current Market: Diabetes is a prevalent disease in China. According to the international epidemiology literatures, the number of adult diabetic patients in China has reached 148 million. The DFU incidence is up to 8.1% among diabetic patients aged above 50 years so the DFU patient number has increased accordingly. It is estimated that there are over 8.3 million DFU patients in China. Due to the complexity of DFU etiology, dressings, growth factors, hospital pharmacy compounding, and Chinese OTC topicals for burns are not effective. This imposes a huge unmet medical need in the treatment and an estimation of 1.6 million amputations. According to Chinese guideline on prevention and management of diabetic foot (2019 edition), the diabetic foot, the serious chronic complication, is the leading cause of amputation and death among diabetic patients. The patients often ended up with amputation. The amputation rate is 19% among DFU patients, and the mortality rate is up to 50% in 5 years after amputation. It is estimated that a diabetic amputation occurs every 20 seconds globally, which is life-threatening. The significant costs of diabetic foot treatment is contributing to one third of the diabetes medical expenses, causing huge burden to individuals, families, hospitals, and societies.
- (3)Oneness has out-licensed the exclusive right of development and commercialization of ON101 (Fespixon’s research code), the DFU new drug in the territory of China, Hong Kong and Macau to MBS in 2018. This Agreement is a joint sublicense with MBS of the exclusive right of commercialization in the territory to CR Double-Crane.
- (4)CR Double-Crane is a public-listed company on Shanghai Stock Exchange (ticker: 600062) with business in new drug development, pharmaceutical finished products manufacturing, sales and marketing, API manufacturing, etc. Please visit https://www.sse.com.cn/home/search/index.shtml?webswd=600062 for its related finances and business information.
- (5)According to the technology transfer and license agreement entered into by Oneness and Development Center for Biotechnology (DCB), Oneness shall pay royalties based on a certain percentage of the net sales to the upstream licensor, DCB during the validity of the license agreement (till December 31, 2027).
- (6)It takes considerable time and expenses to develop a new drug of which success can't be guaranteed. Investors shall bear such investment risk that warrants careful assessment before making investment decisions.
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