Xbiome and Aurealis Therapeutics Announce Exclusive License-in Agreement for Genetically Engineered Bacterial Drug AUP-16 in Greater China

Xbiome Co. Ltd.—an industry-leading AI pharmaceutical company focused on microbiome therapeutics, and Aurealis Therapeutics—a synthetic biology company dedicated to developing breakthrough drugs based on genetically engineered bacteria, today announced an exclusive collaboration and licensing agreement for Greater China to develop and commercialize AUP-16, a clinical-stage novel drug for the treatment of diabetic foot ulcers, other chronic wounds, and inflammatory diseases.

According to the terms of the agreement, Xbiome will obtain exclusive rights to develop and commercialize AUP-16 for all potential indications in Greater China (including mainland China, Hong Kong, Macao, and Taiwan). Xbiome will be responsible for all activities related to the clinical development, regulatory submission, and commercialization of AUP-16 in Greater China. Aurealis retains all rights to AUP-16 in other regions globally and will continue to advance the global development process of AUP-16. Aurealis will closely collaborate with Xbiome to jointly explore the therapeutic potential of AUP-16 for diabetic foot ulcers (DFU) and other indications. As part of the agreement, Aurealis is eligible to receive up to $139 million in payments, including an upfront cash payment, development and sales milestone payments, as well as tiered royalties ranging from single-digit to double-digit percentages of net sales of AUP-16 in Greater China.

Xbiome stated that this collaboration marks the first licensing introduction project in Asia based on synthetic biology and genetically engineered microbial drug pipelines. It will enhance Xbiome's comprehensive layout across the major drug modalities of microbiome therapeutics. Additionally, partnering with a globally leading biotechnology company to introduce synthetic biology drugs, which have entered clinical stages, for industrialization in China reflects the partners' recognition and confidence in Xbiome’s international team and its capability for implementation and transformation. This collaboration also represents a significant milestone for Xbiome as it fully launches its "AI×BT" strategy, expanding its R&D pipeline through active international cooperation and empowering the global microbiome pharmaceuticals industry with an AI-driven drug discovery platform.

Dr. Tan Yan, co-founder and CEO of Xbiome, stated: "We are very pleased to have reached this collaboration with Aurealis. Xbiome is an AI-driven pharmaceutical company specializing in the research and development of microbiome-based drugs, with extensive experience in drug R&D and clinical translation. Currently, Xbiome is actively exploring the deep integration of AI and BT in terms of platforms, technology, and talent. We hope that through Xbiome's AI-powered drug discovery platform and our drug development platform based on microbial biotechnology, we can accelerate the industrialization of microbiome-based drugs."

Xbiome is building an innovative and diversified product pipeline based on its microbiome drug discovery platform. The introduction of AUP-16 and related genetically modified organism (GMO) technology aligns perfectly with Xbiome's platform technology and long-term strategy. Aurealis is one of the most innovative biotech companies we have encountered globally, and more importantly, we share the same vision and passion. Therefore, we are thrilled to collaborate with Aurealis to bring AUP-16 to a vast number of patients in China suffering from diabetic foot ulcers and other chronic wounds. Our joint efforts will significantly accelerate the development of AUP-16 in China and globally. This marks the beginning of a long-term partnership between Xbiome and Aurealis, and we are excited to embark on this journey to explore more possibilities in the near future."

Dr. Juha Yrjänheikki, CEO of Aurealis, stated: "We are very pleased to have reached a strategic cooperation with Xbiome. The professionalism and execution capabilities of the Xbiome team, particularly their determination to advance treatments for diabetic complications including AUP-16, as well as globally leading microbiome AI therapies and drugs into the Chinese and global markets, have left a deep impression on us. We believe that our collaboration with Xbiome will accelerate the development process of AUP-16, providing more valuable treatment options for a large number of patients in China and around the world suffering from diabetic foot ulcers and other chronic wounds."

Aurealis Chairman Roger Meier added, "Aurealis is committed to developing innovative therapies based on GMOs with the hope of improving the quality of life for millions of patients worldwide. Chronic wounds, represented by diabetic foot ulcers, not only cause immense suffering to patients but also impose a heavy social burden. We are very pleased to partner with Xbiome, our ideal collaborator in China, to bring hope of healing to the growing number of chronic wound patients in China and around the world. We look forward to embarking on this journey together with Xbiome."

AUP-16 is a genetically engineered *Lactococcus lactis*, a non-pathogenic probiotic, carrying coding genes for multiple regenerative factors within its system. It can express human basic fibroblast growth factor (FGF2, bFGF), interleukin 4 (IL-4), and macrophage colony-stimulating factor (CSF1, mCSF). AUP-16 is locally administered at the wound site and covered with a dressing to treat chronic wounds such as diabetic foot ulcers, lower limb venous ulcers, and pressure ulcers. Once in the wound microenvironment, AUP-16 acts as millions of "immune-activating bioreactors," immediately initiating the expression of regenerative factors, continuously modulating the immune system, and reversing chronic inflammation by inducing M2 macrophage polarization. On this basis, it ultimately achieves rapid and complete wound healing by promoting angiogenesis, granulation tissue formation, and re-epithelialization.

Aurealis Therapeutics AG is a clinical-stage biopharmaceutical company based in Switzerland and Finland, dedicated to developing innovative therapies based on genetically modified organisms (GMOs). AUP-16 is Aurealis' first-in-class, four-in-one synthetic biology drug that has entered the clinical stage, applicable for treating chronic wounds and other chronic inflammatory tissue injury diseases. Based on Aurealis’ proprietary engineered bacterial technology using genetically modified organisms, AUP-16 can continuously express multiple regenerative protein factors in local tissues, safely and effectively accelerating tissue regeneration by precisely modulating the local immune microenvironment.

Xbiome Co. Ltd. is a leading AI-based microbiome drug development company in China. The company is committed to addressing unmet clinical needs through various forms of microbiome therapeutics, including Fecal Microbiota Transplantation (FMT), Live Biotherapeutic Products (LBP), and Small Molecule Microbiome Modulators (SMMM). In June 2021, Xbiome received formal approval from the U.S. FDA for its Investigational New Drug (IND) application to conduct clinical trials of its oral FMT drug, XBI-302, for the treatment of Graft-versus-Host Disease (GvHD).