BRII-B(02137): Tengsheng Pharmaceutical and Vir have not reached a settlement regarding the claim.

BRII-B(02137) Announcement, on May 23, 2018, our company, Tengshangbo Drug Cayman Subsidiary Company (a subsidiary of our company, collectively referred to as Tengshangbo Drug), and Vir Biotechnology, Inc. (Vir, a company registered in Delaware, USA, and operating in San Francisco, California) signed a cooperation, option, and license agreement (cooperation agreement). According to the agreement, each party may exercise the option to obtain exclusive licenses to advance the development and commercialization of certain products initially developed by the other party. On June 12, 2020, Tengshangbo Drug exercised the option for the elebsiran project (a small interfering RNA (siRNA) candidate drug for hepatitis B virus). On December 19, 2024, Tengshangbo Drug and Vir signed the sixth agreement letter to transfer drug formulation production from Vir to Tengshangbo Drug. On April 16, 2026, regarding contract disputes arising from the cooperation agreement and agreement letter, Tengshangbo Drug submitted an arbitration application (arbitration) against Vir to the Judicial Arbitration and Mediation Services, Inc. based in the US, accusing Vir of violating the cooperation agreement and agreement letter. Our company announced the arbitration on April 16, 2026. As of the date of this announcement, the arbitration is still in the early stages, and Tengshangbo Drug and Vir have not reached a settlement on the claims. Due to the ongoing delays in the elebsiran project caused by disputes related to Vir's actions, and with uncertainty regarding the outcome or timing of the arbitration or reaching a settlement on the claims, our company believes there is uncertainty in the future prospects of the elebsiran project. In particular, unless and until the claims in the arbitration are satisfactorily resolved, Tengshangbo Drug will not be able to invest in any Phase 3 clinical trials for hepatitis B combination therapy involving elebsiran. Our company will continue to evaluate the progress, assess the impact on the prospects of advancing the elebsiran project, and provide updates to our shareholders and the public in a timely manner based on relevant regulations.