ZSPH Biotech's Subsidiary Secures $1.4B Licensing Deal with Qilu Pharma for Novel Peptide Drug RAY1225

1. Transaction Overview

Guangdong Zhongsheng Pharmaceutical Co., Ltd. (hereinafter referred to as the "Company") and its controlling subsidiary, raynovent (Guangdong Zhongsheng Ruichuang Biotechnology Co., Ltd., hereinafter referred to as "raynovent"), signed a "License Agreement" with Qilu Pharmaceutical Co., Ltd. (hereinafter referred to as "Qilu Pharmaceutical") on January 16, 2026. raynovent granted Qilu Pharmaceutical the rights to manufacture and commercially sell 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"). raynovent retains all rights, ownership, and interests in the licensed intellectual property. After the Licensed Product receives marketing approval from the pharmaceutical regulatory authorities, raynovent will be the Marketing Authorization Holder (MAH). Meanwhile, raynovent still holds all rights, ownership, and interests for RAY1225 Injection outside of China, including but not limited to clinical development, manufacturing, new drug registration, sales, and marketing promotion.

Under the terms of the licensing agreement, Raynovent 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 an offering under the listing rules.

Significant asset restructuring as defined in the Measures for the Administration of Significant Asset Restructuring.

II. Basic Information of Licensed Products and Counterparties

(1) Basic Information of Licensed Products

The licensed product RAY1225 Injection, developed by raynovent, is an innovative peptide drug with global independent intellectual property rights. It exhibits dual agonist activity on GLP-1 and GIP receptors and, thanks to its excellent pharmacokinetic properties, has the potential to be an ultra-long-acting drug administered once every two weeks.

Currently, the Phase III clinical trial (REBUILDING-2 study) evaluating the safety and efficacy of RAY1225 injection for the treatment of obese/overweight patients in China, the Phase III clinical trial (SHINING-3) assessing the safety and efficacy of RAY1225 injection in combination with oral hypoglycemic drugs for type 2 diabetes patients compared with semaglutide injection, and the placebo-controlled Phase III clinical trial (SHINING-2) examining the safety and efficacy of RAY1225 injection as monotherapy for type 2 diabetes patients have all successfully completed participant enrollment. Raynovent will continue to uphold a rigorous approach, advancing the Phase III clinical trials of RAY1225 injection in a high-quality, efficient, and scientifically standardized manner.

(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 million 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 in accordance with the business license).

Licensed Projects: Pharmaceutical Production; Contract Pharmaceutical Production; Pharmaceutical Import and Export; Pharmaceutical Wholesale; Technology Import and Export; Goods Import and Export; Catering Services.

Qilu Pharmaceutical, headquartered in Jinan, Shandong Province, is a large comprehensive modern pharmaceutical enterprise in China. It specializes in the research, production, and sales of formulations and active pharmaceutical ingredients for treating cancer, cardiovascular and cerebrovascular diseases, anti-infectives, psychiatric and neurological disorders, and ophthalmic conditions. Qilu Pharmaceutical boasts a scientific and complete product structure with over 300 products on the market, characterized by broad therapeutic areas and systematic product series. Relying on solid product quality and a customer-centric service philosophy, Qilu Pharmaceutical has established its brand in the pharmaceutical industry. The company has a nationwide sales network across all major provinces and cities in China, and its products are exported to North America, the European Union, Japan, Australia, and other regions. Qilu Pharmaceutical is not a dishonest executor and maintains good credit standing and contract performance capabilities.

The controlling shareholder, shareholders holding more than 5%, directors, senior management, 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, Raynovent, and Qilu Pharmaceutical do not have any related party relationships.

3. Main Content of the Licensing Agreement

Licensor: raynovent

Licensee: Qilu Pharmaceutical Co., Ltd.

WHEREAS, Raynovent 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, Raynovent grants the licensee a license related to the licensed intellectual property rights concerning the licensed product within the licensed territory.

(1) License

1. License Authorization

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

2. Reserved Rights

Raynovent reserves all rights, titles, and interests in the licensed intellectual property. Upon the licensed product obtaining drug approval

After the regulatory authority's approval for marketing registration, Raynovent will be the Marketing Authorization Holder (MAH). During the term of this agreement, the licensee shall cooperate and provide assistance for Raynovent to fulfill its duties as the MAH.

3. Development and Registration

Notwithstanding any contrary provisions in this Agreement, with respect to each initial indication of the Licensed Product, Raynovent will continue to lead and be responsible for the ongoing clinical trials of such initial indication within the Licensed Territory, and bear the costs themselves until the Licensed Product receives marketing approval for that initial indication within the Licensed Territory.

(II) Licensing Fees

After the effective date of this agreement, Raynovent will receive an upfront payment of RMB 200 million. In the later stages, the licensee will make milestone payments to Raynovent based on the development phases and commercialization progress of RAY1225. Raynovent 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, Raynovent is entitled to receive sales royalties at a double-digit percentage rate based on 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 take effect as of the date hereof, unless terminated earlier by mutual written consent of both parties or by either party in accordance with the provisions herein. The 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. However, should either party issue a renewal notice prior to the expiration of this Agreement, both parties may, through friendly consultations and upon reaching an agreement, enter into a supplementary agreement to extend the term of this Agreement.