Important Milestone Achieved to Expand into the Intravenous Solution Market

HONG KONG, May 27, 2019 /PRNewswire/ -- Sihuan Pharmaceutical Holdings Group Ltd. (HKEx: 0460) ("Sihuan Pharmaceutical" or the "Group"), the largest cardio-cerebral vascular ("CCV") drug manufacturer in China's prescription drug market, announced the "non-PVC solid-liquid double chamber bag for ceftazidime/sodium chloride injection" (the "Product") jointly developed by the Group and its associated company Beijing Ruiye Drugs Manufacture Co. Ltd. ("Beijing Ruiye") has been granted drug registration approval by the National Medical Products Administration (the "NMPA") of the People's Republic of China ("China"). All the ceftazidime currently approved for production in China are powder injection. The Group is the first company that has been granted drug registration approval for "non-PVC solid-liquid double chamber bag for ceftazidime/sodium chloride injection" in China.

Non-PVC solid-liquid double chamber infusion soft bag (the "Formulation") has high technology barriers and long development cycle. This Formulation is currently one of the technologically advanced new formulations of intravenous solution. Currently, products of this Formulation have only been manufactured by pharmaceutical companies in the United States and Japan. Non-PVC soft bag infusion products are the mainstream in the intravenous solution market of countries such as the United States and Japan.

The Formulation avoids secondary contamination in the dispensing process caused by microorganisms and particles. It also solved potential drug allergies of medical staff that occur during the infusion preparation. It has significant strengths in the application of emergencies and extreme situations. It has been recognized as the safest and most convenient infusion product and is considered as one of the new formulations with great development potential in the pharmaceutical industry.

The annual number of intravenous solution consumed in the United States is approximately 1 billion bags/bottles, with non-PVC soft bag infusion products accounting for 90% of the market share. In Japan, market share of this Formulation also exceeds 40%. Compared with overseas market, utilization rate of non-PVC soft bag infusion products in China only accounts for approximately 20%, and this Formulation is still untapped in China. It can be foreseen that this Formulation has broad market prospect and huge market potential.

The Product is an exclusive formulation of ceftazidime/sodium chloride injection. Ceftazidime is a semi-synthetic third-generation cephalosporins antibiotics. Ceftazidime is primarily used for treating sepsis, lower respiratory tract infection, abdominal and biliary tract infection, complicated urinary tract infection and severe skin and soft tissue infection caused by sensitive gram-negative bacilli. In particular, it is applicable with explicit efficacy to the infection of immunodeficiency patients caused by multiple resistant gram negative bacilli, nosocomial infection and central nervous system infection caused by gram negative bacilli or pseudomonas aeruginosa.

According to MENET database, the sales of antibacterial drugs for full application in 2017 was RMB128.73 billion. Among which, the sales of cephalosporins was RMB67.02 billion, accounting for 52.3% of the market share of antibacterial drugs for full application. Currently, all the ceftazidime currently approved for production in China are powder injection which achieved annual sales of RMB4.52 billion, accounting for 6.7% of the market share of cephalosporins. The launch of the Group's solid-liquid double chamber bag product is expected to replace some of the existing products and have promising market prospect.

Beijing Ruiye has been dedicated to the research and development of the Formulation since 2005 by introducing Japan's cutting-edge technology, and was the first and only in China that has been granted drug registration approval by the NMPA. This Formulation utilises specific processes and uses non-PVC multi-layer co-extrusion film as packaging materials and encloses the drug and solvent injection into the two chambers of the same packaging, which are separated by empty solder. Before infusion, the user only needs to squeeze the bottom of the chambers making them connected, allowing the drug powder and the solvent injection to be mixed with each other.

Dr. Che Fengsheng, Chairman and CEO of Sihuan Pharmaceutical, said, "The approval of the Product will further enrich the Group's product line in the area of anti-infective drugs, as well as firmly establish the Group's leading position in the area of non-PVC solid-liquid double chamber infusion soft bag, thus contributing the Group's development in the antibiotic intravenous solution market."

Regarding future product launches, Dr. Che stated, "Beijing Ruiye has other subsequent products of this Formulation, which includes four varieties and six specifications of cefuroxime and cefodizime that are under review and are expected to be launched to market after obtaining the approval for drug registration. The subsequent products portfolio includes a majority of first-line antibiotics in China's current market. In addition, a number of products under research and development in 2019 will be filed for assessment and review."

In regard to expanding production capacity, Dr. Che added, "Sihuan and Beijing Ruiye are expanding their existing production capacity and constructing a new manufacturing base for therapeutic-use solid-liquid double chamber infusion soft bag. The Group expects its future production capacity will meet the demand from the patients in China. The manufacturing cost is expected to further decrease as a result of economies of scale, giving the Group competitive advantages in tender and procurement. The Group is expected to gradually become a leading company in the therapeutic solid-liquid double chamber infusion industry in China, while satisfying patients' demand for drugs will reward the Group with good returns."

About Sihuan Pharmaceutical Holdings Group Ltd.

Founded in 2001, Sihuan Pharmaceutical Holdings Group Ltd. has become the largest cardio-cerebral vascular drug manufacturer in China's prescription drug market by market share since 2007. The Group was the 11^th largest pharmaceutical company in terms of hospital purchase in the Chinese prescription drug market in 2018. Sihuan Pharmaceutical is an integrated corporate with its own production, R&D and marketing capacities. The success of the Group can be attributed to its differentiated and proven sales and marketing model, extensive nationwide distribution network, diversified product portfolio, and strong R&D capabilities. The Group's current products encompass the top five medical therapeutic areas in China: cardio-cerebral vascular system, central nervous system, metabolism, oncology and diabetes. The Group has begun its innovative drug R&D since 2008 and now possesses a well-established innovative drug R&D platform, which is supported by over 600 R&D experts and focuses in therapeutic areas with considerable unmet clinical demand, including diabetes, oncology, anti-infectives and non-alcoholic liver diseases.

SOURCE Sihuan Pharmaceutical