Huadong Medicine (000963.SZ) has obtained the exclusive commercialization rights to the recombinant type A botulinum toxin product YY001 owned by Chongqing Yuyan.

Huadong Medicine (000963.SZ) announced on November 14, 2023, that its wholly-owned subsidiary, Xinkelimei Xue (Hangzhou) Medical Technology Co., Ltd. (hereafter referred to as "Xinkelimei Xue"), Hangzhou Industrial Investment Co., Ltd. (hereafter referred to as "Hangzhou Industrial Investment"), Hangzhou Gongshu Guotou Industrial Development Co., Ltd. (hereafter referred to as "Gongshu Guotou"), and Chongqing Yuyan Pharmaceutical Co., Ltd. (hereafter referred to as "Chongqing Yuyan") and its shareholders' representative jointly signed the "Shareholders Agreement" and "Series B Investment Agreement". The total investment of RMB 300 million was made by all investors to subscribe for the newly increased registered capital of RMB 2.10226 million of Chongqing Yuyan, corresponding to a total of 8.5714% equity after the transaction. Among them, Xinkelimei Xue invested RMB 150 million and holds 4.2857% equity of Chongqing Yuyan after the transaction. On the same day, the company signed an "Exclusive Distribution Agreement" with Chongqing Yuyan, obtaining exclusive commercialization rights in the fields of medical aesthetics in mainland China, the Hong Kong Special Administrative Region, and the Macau Special Administrative Region for the Type A botulinum toxin YY001 product owned by Chongqing Yuyan. The company will pay an initial payment of RMB 50 million and a registration milestone payment of up to RMB 100 million to Chongqing Yuyan. At the same time, the company has the right of first refusal for the following matters: the development and commercialization rights of the target product outside the authorized area; and the right of first negotiation for the following matters: (1) any form of cooperation involving products using Type A recombinant botulinum toxin YY001 as the active ingredient, including but not limited to development, registration, and commercialization rights; and (2) promotion and sales cooperation of the target product beyond the medical aesthetic indications. The target product of this transaction is YY001, the world's first and only clinical stage recombinant Type A botulinum toxin under development by Chongqing Yuyan. YY001 is a botulinum toxin produced through a new recombinant protein production pathway, aiming to solve the biosafety issues of extracting natural botulinum toxin from host bacteria. YY001 is a highly differentiated product with advantages such as high purity, good safety, and production scalability. Its high purity reduces the immunogenicity risks associated with introducing exogenous proteins into the human body and improves the overall safety of YY001 administration. As a therapeutic biologic, YY001 obtained approval from the Chinese National Medical Products Administration to conduct clinical research in March 2022. It has successfully completed Phase I/II clinical trials for the indication of improving moderate to severe glabellar lines and is actively advancing Phase III clinical trials. Chongqing Yuyan has built a production facility that meets Good Manufacturing Practice (GMP) standards, with a current design annual capacity of 2 million bottles of YY001 lyophilized formulation, which has been put into use since the first quarter of 2023.