VOLUNTARY ANNOUNCEMENT: FIRST PATIENT DOSED IN THE PHASE 1B CLINICAL TRIAL FOR SEPSIS OF THE GROUP FIRST-IN-CLASS DRUG STC3141

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China Grand Pharmaceutical and Healthcare Holdings Limited 遠大醫藥健康控股有限公司*

(Incorporated in Bermuda with limited liability)

(Stock Code: 00512)

VOLUNTARY ANNOUNCEMENT

FIRST PATIENT DOSED IN THE PHASE 1B CLINICAL TRIAL FOR SEPSIS OF

FIRST-IN-CLASS DRUG STC3141

This announcement is made by the board of directors (the "Board") of China Grand Pharmaceutical and Healthcare Holdings Limited (the "Company", together with its subsidiaries, the "Group") on a voluntary basis.

The Board is pleased to announce that STC3141, a first-in-class drug (first-in-class) for the treatment of sepsis, is being developed by Grand Medical Pty Ltd, a wholly-owned subsidiary of the Group and an Australia based antiviral and anti-infection innovative drug research center. Since it submitted an application for clinical trial (IND) to the National Medical Products Administration of the People's Republic of China ("NMPA") in December 2020, it has been granted a"Notice of Approval for Clinical Trial of Drugs" issued by the NMPA and approved to carry out Phase Ib clinical trial in another indication for acute respiratory distress syndrome ("ARDS"). This will focus on assessing the safety, tolerability, and metabolic characteristics of the drug in patients with ARDS and accumulating more data to comprehensively assess the risks and benefits of later-stage clinical trials so as to accelerate the global product development process.

STC3141 has now completed a Phase Ia clinical trial of healthy volunteers in Australia, which has preliminarily determined the safety and metabolic characteristics of the drug in human. In May 2020, Phase II clinical trial for the treatment of ARDS in patients with 2019 coronavirus disease ("COVID-19") and Phase Ib clinical trial for the treatment of sepsis were approved.

ARDS is a non-cardiogenic clinical syndrome characterized by progressive dyspnea and refractory hypoxemia. Its pathologic basis is the extensive damage of capillary endothelial cells in lung tissue caused by inflammation, which leads to severe ventilation/blood imbalance and leads to hypoxia and respiratory distress. According to a survey of nearly 30,000 patients in 459 intensive care units (ICUs) in 50 countries, the prevalence of ARDS is 10.4% among critically ill patients. Currently there are limited access to treatment for ARDS, with an overall mortality rate of 34% in hospital and 60% in severe cases.

Sepsis, commonly known as blood poisoning, is an immune system disorder caused by infection, which can lead to life-threatening organ dysfunction. It is a common fatal complication of patients with tumors and severe infections such as burns, trauma and major surgery. Sepsis affects more than 31.5 million people worldwide each year, of which over 19.4 million patients are with severe sepsis. Despite that anti-infective therapy and organ support technology have made great progress, severe sepsis, with a fatality rate higher than a quarter, becomes the leading cause of mortality following heart disease in intensive care units.

In the COVID-19 pandemic, ARDS and sepsis are also important causes of death. There is a clear relevance between the two pathogenic mechanisms. However, there is a lack of drugs targeted for sepsis in the market, indicating an urgent clinical demand and tremendous market prospect.

With clear therapeutic mechanism, STC3141 is used to treat sepsis by reversing organ damage which is caused by the body's excessive immune response through neutralizing extracellular histones and neutrophil trapping nets. The results of STC3141 were published in the top academic journal "Nature Communications" in February 2020, with profound academic influence. The Phase Ib clinical study of ARDS in China is also an important milestone in the global development of the project.

The Group always puts focus on the R&D of innovative products and advanced technologies. Sticking to patients-centered and innovation-driven, the Group will continue to increase its investment in the world-class innovative products and advanced technologies to meet unmet clinical needs, and enrich product pipeline and improve supply chain. The Group adopts the strategy of "global expansion and dual-cycle operation", forming a new pattern of domestic and international cycles that synergize with each other. In this way, the Group can make full use of its industrial advantages and research and development capabilities, to accelerate commercialization process for innovative products and provide patients with more advanced and diverse treatment options in the world.

Warning

The aforementioned product is still in the R&D stage. The approval of commercialization and manufacturing of such products is subject to various factors with uncertainty. Shareholders and prospective investors of the Company are advised to exercise caution when dealing in the securities of the Company.

By order of the Board

China Grand Pharmaceutical and

Healthcare Holdings Limited

Liu Chengwei

Chairman

Hong Kong, 03 March 2021

As at the date of this announcement, the Board comprises four executive directors, namely, Mr. Liu Chengwei, Mr. Hu Bo, Dr. Shao Yan and Dr. Niu Zhanqi and three independent non-executive directors, namely, Ms. So Tosi Wan, Winnie, Dr. Pei Geng and Mr. Hu Yebi.

* For identification purpose only