Uni-Bio Science is a leading Chinese biopharmaceutical healthcare company engaged in the research, development, production and commercialisation of biopharmaceuticals for the Chinese healthcare market. We are committed to the research and development, commercialisation and manufacturing of innovative drugs to address the unmet medical needs in China. We currently manufacture and commercialise four marketed drugs:

1. GeneTime® (recombinant human epidermal growth factor liquid for external use), a dermatology drug, mainly used for burns and wound healing, and is one of the leading products in the China. The drug is on the national reimbursement drug list (NRDL).

2. GeneSoft® (recombinant human epidermal growth factor derivative eye drops), an ophthalmology drug, mainly used for ophthalmic surgeries and ophthalmic wound healing. We are in the process of applying for NRDL listing.

3. Pinup® (Voriconazole), an anti-infective drug, mainly used for treating fungal infection, which is also a national reimbursement drug.

4. Mitiglinide, a best-in-class prescription oral drug for the treatment of type 2 diabetes, by lowering blood glucose content. The drug was recently included into the 2017 NRDL.

GeneTime® and GeneSoft® are both biologics manufactured by Shenzhen Watsin, while Pinup® is a chemical drug manufactured by Beijing Genetech.

Additionally, Uni-Bio Science has a growing pipeline of drug candidates that, with “blockbuster” potential, are complementary to, and have strong synergy with its existing portfolio of marketed therapies.

One of the Company’s lead programmes in currently in development includes Uni-PTH (Recombinant Human Parathyroid Hormone 1-34: for the treatment of osteoporosis and Uni-E4 - a next-generation drug for the treatment of Type 2 diabetes. Uni-PTH is the only drug class which has been shown to increase bone mass density, reduce bone fracture, and effectively manage ostealgia (bone pain). It has completed phase III clinical trials, and its New Drug Application was accepted by the China Food and Drug Administration (CFDA) in Nov 2017.

In clinical studies, Uni-E4, another one of Uni-Bio's leading programmes has been shown to be an effective treatment for Type-2 diabetes, with the added benefit of relieving obesity in overweight patients, lowering the risk of hypoglycemia and promoting β-cell regeneration. It has completed phase III clinical trials and Uni-Bio Science continued to develop the next-genercation of the product- liquid formulation.

Given the large number of patients suffering from osteoporosis and diabetes in China, the Company has full confidence in the potential of these two new drugs.

According to the Stock Exchange Industry Classification System, the Company belongs to pharmaceutical sector under Health & Personal Care. Under Wind’s classification, the Company belongs to the biotechnology sector.

As of the 30^th of June 2018, approximately 24.8% of Uni-Bio Science’s shares are held by Mr. Kingsley LEUNG, Chairman of the board; 14.8% of which is registered in the name of Lord Profit Limited, a company that is wholly owned by him, while the remaining around 10% is registered under the name of Automatic Result Limited, which is wholly owned my MJKPC Holdings Limited, a family trust of which Mr. Kingsley LEUNG is one of the discretionary objects. Mr. David CHEN, Vice Chairman, holds approximately 6.4% of shares. Meanwhile, Heungkong Great Health GP Limited and Overseas Capital Assets Limited own approximately 17.67% and 10.63% of shares respectively as strategic investors. The remaining shares of the Company, are held by institutional and retail investors.

Overseas Capital Assets Limited is an investment company. Its stake in Uni-Bio Science is categorized as financial investment and is not involved in the daily operations of our business.

As of 31 December 2018, the Group employed 366 staff, including 90 staff in the PRC R&D department, 97 staff in the PRC production department, 125 staff in the PRC commercial office and 12 staff in the Hong Kong headquarters. In addition to the full-time employees in the PRC sales offices, the Group has 167 regional distributors.

The Board of directors of the Company (the “Board”) is comprised of a Chairman, a vice-chairman and 4 Non-executive Directors.

Uni-Bio Science currently commercialises its products in Mainland China, with presence in all 22 provinces, four municipalities and five autonomous regions. Domestic sales currently account for 100% of our revenue from pharmaceutical products and the Company aim to expand into the international market in the future.

The Company focuses on the research and development of innovative treatments in diabetes (including other metabolic diseases), ophthalmology and dermatology , with priority in developing Class I & VII prescription drugs. Uni-Bio Science’s Class I prescription new drugs in development include Uni-E4(2nd Generation Injection) for treating of Type 2 diabetes, and the Class VII prescription new drug includes Uni-PTH used for treating osteoporosis.

GeneTime® (recombinant human epidermal growth factor, an external-use spray) can be applied for burn wounds (including superficial or deep second-degree burns), small residual wounds, different kinds of chronic ulcer wounds (including vascular, radiation, diabetes ulcers), surgical wounds and new skin donor site wounds etc. At present, it is the only epidermal growth factor spray in China. Its aseptic packaging allows easy and convenient usage, reducing the possible repercussions from misuse.

GeneSoft® (recombinant human epidermal growth factor derivative eye drop) is used to treat corneal epithelial defect, which can be caused in a variety of ways, including corneal mechanical injury, various corneal surgery treatments, mild dry eye with superficial punctate keratopathy, and minor chemical burns etc. Our patented formula with three additional amino acids at the amino terminal in the epidermal growth factor derivative substantially enhances its molecular stability, allowing the drug to be stored in room temperature.

Pinup® (Voriconazole), a broad-spectrum triazole anti-fungus drug used for treating invasive aspergillosis, severe invasive infections caused by fluconazole-resistant yeasts (including candida krusei), and severe infections caused by scedosporium species and fusarium species. The drug can be used to treat ongoing and possibly life-threating infections among immunosuppressive patients.

Mitiglinide is an insulintropic, glinide class drug used for treating type 2 diabetes. It has a fast onset of action, as well as a reduced risk of post-prandial hypoglycemia and dyslipidemia compared to other glinides in the market. These makes it suitable for elderlies, which account for 63% of the type 2 diabetic patients. The drug is currently sold under brand name Bokangtai® in China.

Uni-PTH is a Class VII prescription new drug used to treat osteoporosis, stimulate bone growth, improve bone density and lower fracture risk. According to IMS, the China osteoporosis drug market is about RMB1.6 billion in 2016, far lower than the market in US, EU as well as Japan, which are approximately USD 25 billion every year.

Uni-E4 is for treating Type 2 diabetes. Apart from effectively controlling the blood glucose level, it is also effective for diabetes affiliated obesity to ease the patients’ overweight condition. According to IMS, it is estimated that 30% of the diabetes patients are overweight, and the domestic diabetes drug market reached RMB22 billion in 2016. Currently, 11.6% of the Chinese adults suffer from diabetes, costing the government RMB173 billion per year, creating a tremendous strain on the country’s public health system and a pressing need for effective treatment solutions.

The Company has its own sales team and engages more than 80 sales representatives. Our sales network covers 1,000 hospitals. We plan to expand our own sales team and seek opportunities to collaborate with major pharmaceutical companies to market our products, with the aim to expand our coverage to 3,000 hospitals.

Yes. Currently, Uni-Bio Science is working with two partners to commercialize their drug products. In 2015, Uni-Bio Science signed a partnership to acquire a new oral anti-diabetes drug called Mitiglinide from Jiangsu Hansoh. Mitiglinide has been approved by the CFDA to treat type 2 diabetes in a first- and second- line setting. Uni-Bio Science owns all rights to the product, and Jiangsu Hansoh will continue supplying drug to Uni-Bio Science till technology transfer is complete.

For the Year under Review, the Group recorded a turnover of HK$135.3 million, representing a decrease of 13.6% year-on-year. The decrease was mainly attributable to a weaker sales situation for one of the Group’s marketed drugs, namely Pinup®. The product faced keener price competitions across the marketplace where other market players lowered the product price, hence the sales was temporarily affected. However, sales of Pinup® had begun to pick up towards the end of the Year, thanks to its increased coverage to Guizhou, Xinjiang, Shaanxi and Hainan provinces and making the total provincial coverage to 26. The Group believes that Pinup® will enjoy a much better leverage after obtaining the BE approval, which was anticipated in 2020. Given that the Group’s major competitors who are engaged with price war in the market have not conducted BE study, obtaining the approval will allow the Group to enjoy numerous policy benefits during tendering and purchasing, thus it will further enhance the brand image and market advantage of the product. Also, the cooperation with Loymed Pharma will open up new sales channels and give rise to the revenue growth generated from Pinup®.

Cost of sales for the Year also decreased by 22.7% from HK$22.8 million in 2017 to HK$17.7 million in 2018. During the Year, gross profit was at HK$117.6 million, representing a decrease of approximately 12.0% from HK$133.6 million in 2017, mainly driven by the reduction in revenue. On the contrary, gross profit margin improved slightly from 85.4% in 2017 to 86.9% in 2018, led mainly by the increase of overall unit sales price of GeneTime®. Alongside our efforts for restructuring and re-organizing our sales team in order to achieve greater efficiency, the Group also expanded the number of sales team members. Hence the sales and distribution cost recorded an increase over the Year.

In 2018, the Group recorded a loss of HK$138.6 million with a basic loss per share of HK$2.24 cents for the Year.

Research and development costs for 2018 was approximately HK$44.2 million, representing a small uptick of 3.9% from HK$42.5 million for 2017. R&D costs proportionate to revenue increase from 27.2% for 2017 to 32.7% for the Year. We have initiated and carried on with multiple R&D projects during the Year, including the NDA of Uni-E4 and Uni-PTH, and the BE study of Acarbose and Pinup®. This year the Group maintained a healthy level of R&D expenses, partly because Beijing Baiao Pharmaceutical shared the increased R&D input with the Group on Acarbose. Riding on last year’s development of liquid formulations in an effort to increase the competitive advantages of our products, we continued to invest resources into these areas this year. R&D expenses may experience fluctuations if calculated on a year-onyear basis as drugs development, research and development enter different phases at different time, but the Group always exercise stringent cost control to make sure resources are invested appropriately and adequately. The Group will stick to build on its strategy to focus on endocrinology in the future.

Total loss (exclude impairment losses on intangible assets and property, plant and equipment) widen by 55.3% from approximately HK$77.6 million last year to approximately HK$120.6 million for the Year. The increase in loss was mainly caused by two reasons. Firstly, we have seen mounting pressure on the pricing of Pinup®, hence the Group has been optimizing its salesforce since last year in an effort to achieve maximum sales efficiency. The sales team has been expanding rapidly, and the distribution channels have also expanded significantly leading to a higher cost in the short term. By the time the Group secure the threshold of drug consistency evaluation, which should be by 2020, more resources will be deployed on marketing and distributing Pinup®. This should bring promising revenue in the near future. Furthermore, given that the Group has been restructuring the salesforce, enlarging direct sales channels, expanding and increasing sales and marketing expenses on the promotion and advertising of Bokangtai, therefore, selling and distribution expenses saw substantial increment. The Group is confident that the investment into building a sales platform should begin to payoff with more hospitals are secured. We have also seen repercussions resulting from an isolated incident.

As of 31 December 2018, the Company’s bank balance and cash amounted to approximately HK$38.8 million. The Company’s financing need depends on the cooperation forms and progress of our projects. Specifically, we may cooperate with our partners in different ways. For example, we may consider acquiring the patents for self-operation, or otherwise adopting a profit-sharing model for certain products, the need for cash flow of which may vary from case to case. Overall, the Company enjoys sound operations at present and our financing need depends on future funding requirement. We will closely monitor the market conditions and explore the best alternative when needs arise.