ZSP1225 Peptide Drug Secures $1.4B Licensing Deal with Qilu Pharma for China Commercialization

1. Transaction Overview

Guangdong Zhongsheng Pharmaceutical Co., Ltd. (hereinafter referred to as the "Company") holding subsidiary Guangdong Zhongsheng Ruichuang Biotechnology Co., Ltd. (hereinafter referred to as "Zhongsheng Ruichuang") and Qilu Pharmaceutical Co., Ltd. (hereinafter referred to as "Qilu Pharmaceutical") signed a "License Agreement" on January 16, 2026. Zhongsheng Ruichuang granted Qilu Pharmaceutical the rights for production and commercial sales of RAY1225 Injection (hereinafter referred to as the "Licensed Product") in the China region (including mainland China, Hong Kong, Macao, and Taiwan, collectively referred to as the "Licensed Territory"). Zhongsheng Ruichuang retains all rights, ownership, and interests of the licensed intellectual property. After the Licensed Product receives marketing approval from the drug regulatory authorities, Zhongsheng Ruichuang will be the Marketing Authorization Holder (MAH). Meanwhile, Zhongsheng Ruichuang still holds all rights, ownership, and interests of RAY1225 Injection outside of China, including but not limited to clinical development, manufacturing, new drug registration, sales, and marketing.

Under the terms of the licensing agreement, Zhenchuang Therapeutics will receive an upfront payment and milestone payments totaling RMB 10 billion, including an upfront payment of RMB 2 billion, development and sales milestone payments up to a combined total of RMB 8 billion, and subsequent double-digit royalties on net sales of the licensed product after its market launch.

This transaction has been reviewed and approved at the second meeting of the ninth board of directors held on January 16, 2026, and does not need to be submitted to the company's shareholders' meeting for review. This transaction does not constitute a related party transaction, nor does it constitute a major asset restructuring as defined by the Measures for the Administration of Major Asset Restructuring of Listed Companies.

II. Basic Information of Licensed Products and Counterparties

(1) Basic Information of Licensed Products

The licensed product RAY1225 Injection is an innovative peptide drug with a novel structure independently developed by Zhongsheng Ruichuang, possessing dual agonist activity for both GLP-1 and GIP receptors. Due to its excellent pharmacokinetic properties, it has the potential to be an ultra-long-acting drug administered once every two weeks.

Currently, the Phase III clinical trial (REBUILDING-2 study) for the safety and efficacy of RAY1225 injection in treating obese/overweight patients in China, the Phase III clinical trial (SHINING-3) comparing the safety and efficacy of RAY1225 injection combined with oral hypoglycemic drugs in treating type 2 diabetes patients versus semaglutide injection, and the placebo-controlled Phase III clinical trial (SHINING-2) assessing the safety and efficacy of RAY1225 injection as monotherapy in type 2 diabetes patients have all successfully completed participant enrollment. Zhongsheng RuiChuang will continue to uphold a rigorous attitude, advancing the Phase III clinical trials of RAY1225 injection with high quality, high efficiency, and scientific standards.

(II) Basic Information of the Counterparty

1. Company Name: Qilu Pharmaceutical Co., Ltd.

2. Type: Limited Liability Company

3. Address: No. 317, Xinluo Street, High-tech Zone, Jinan City, Shandong Province, China

4. Legal Representative: Zhang Hanchang

5. Registered Capital: 600,000,000 yuan

6. Date of Establishment: August 21, 1992

7. Unified Social Credit Code: 91370000614073351Q

8. Business Scope: General Projects: Technical services, technical development, technical consultation, technical exchange, technical transfer, technical promotion; Research and development of biochemical products technology; Manufacturing of medical packaging materials; Sales of packaging materials and products; Production of chemical products (excluding licensed chemical products); Sales of chemical products (excluding licensed chemical products); Manufacturing of specialty chemical products (excluding hazardous chemicals); Sales of specialty chemical products (excluding hazardous chemicals); Sales of agricultural products; Sales of metal chains and other metal products (except for projects that require approval according to law, operate independently according to the business license).

Licensed Projects: Pharmaceutical production; Contract pharmaceutical production; Import and export of pharmaceuticals; Wholesale of pharmaceuticals; Import and export of technology; Import and export of goods; Catering services.

Qilu Pharmaceutical, headquartered in Jinan, Shandong Province, is a large-scale comprehensive modern pharmaceutical enterprise in China, specializing in the research, production, and sales of formulations and active pharmaceutical ingredients for the treatment of cancer, cardiovascular and cerebrovascular diseases, anti-infectives, psychiatric and neurological disorders, and ophthalmic conditions. Qilu Pharmaceutical has a scientific and complete product structure with over 300 products on the market, characterized by a broad therapeutic scope and a full range of product series. With its reliable product quality and customer-centric service philosophy, Qilu Pharmaceutical has established the Qilu brand in the pharmaceutical industry. The company boasts an extensive sales network across major provinces and cities in China, as well as international markets including North America, the European Union, Japan, and Australia. Qilu Pharmaceutical is not listed as a dishonest entity and maintains good credit standing and contract performance capabilities.

The controlling shareholder, shareholders holding more than 5%, directors, senior management personnel, and their related parties of the company do not directly or indirectly control Qilu Pharmaceutical, nor do they hold any positions in Qilu Pharmaceutical. There are no other relationships that may or have already caused the company to be inclined towards their interests. The company, Zhongsheng Ruichuang, and Qilu Pharmaceutical do not have any related party relationships.

3. Main Contents of the Licensing Agreement

Licensor: Guangdong Zhongsheng Ruichuang Biotechnology Co., Ltd.

Licensee: Qilu Pharmaceutical Co., Ltd.

WHEREAS, Zhenchuang Therapeutics owns all rights and authority to develop, manufacture, promote, distribute, or otherwise commercialize the licensed product (RAY1225 Injection), and the licensee possesses leading production, promotion, distribution, and commercialization capabilities and resources in the pharmaceutical industry; pursuant to the terms and conditions of this Agreement, Zhenchuang Therapeutics grants the licensee rights under the licensed intellectual property related to the licensed product within the licensed territory.

(1) License

1. License Authorization

Based on the terms and conditions of the agreement, Zhenchuang grants the licensee and its affiliates an exclusive, royalty-bearing, sublicensable, non-transferable license within the licensed territory based on the licensed intellectual property, for the manufacturing and commercialization of the licensed products within the licensed field (overweight/obesity and Type 2 diabetes, collectively referred to as the "initial indications") in the licensed territory.

2. Reserved Rights

Zhongsheng Ruichuang reserves all rights, ownership, and interests in the licensed intellectual property. Upon the licensed product obtaining drug approval

After the regulatory authority's approval for market registration, Zhirong Rui Chuang will be the Marketing Authorization Holder (MAH). During the term of this agreement, the licensee shall cooperate and provide assistance to Zhirong Rui Chuang in fulfilling its responsibilities as the MAH.

3. Development and Registration

Notwithstanding any contrary provisions of this Agreement, for each initial indication of the Licensed Product, Zhenchen Ruichuang shall continue to lead and be responsible for the clinical trials of the Licensed Product in the Licensed Territory that have been initiated and are ongoing for such initial indication, and shall bear the costs thereof until it obtains the marketing authorization for the Licensed Product for such initial indication within the Licensed Territory.

(II) Licensing Fees

After the effective date of this agreement, Zhenchuang Rui Chuang will receive an upfront payment of RMB 200 million. In the later stages, the licensee will make milestone payments to Zhenchuang Rui Chuang based on the development phases and commercialization progress of RAY1225. Zhenchuang Rui Chuang is eligible to receive development and sales milestone payments totaling up to RMB 800 million.

In addition to paying the upfront payment, development and sales milestone payments, after the first commercial sale of the licensed product in the licensed territory, Zhongsheng Rui Chuang is entitled to receive sales royalties based on a double-digit percentage of the net sales of the licensed product within the licensed field in the licensed territory.

(III) Term and Effectiveness of the Agreement

This Agreement shall become effective as of the date hereof, unless terminated earlier by mutual written consent of both parties or by either party in accordance with the terms of this Agreement. This Agreement shall remain in full force and effect until the expiration of a fifteen-year term commencing on the date of the first commercial sale of the last indication for which marketing approval is obtained within the Licensed Territory for the Licensed Product. However, either party shall have the right to issue a renewal notice prior to the expiration of this Agreement, and upon reaching a mutual agreement through friendly consultations, the parties may enter into a supplementary agreement to extend the term of this Agreement.