China Grand Pharmaceutical and Healthcare Holdings Limited announced that the Group recently reached an exclusive product licensing agreement with Formosa Pharmaceuticals, Inc. The Group will obtain the exclusive development and commercialization rights of an improved new drug hormone nanosuspension eye drops (APP13007) for anti- inflammatory and pain relief after ophthalmology surgery developed by Formosa in Mainland China, Hong Kong and Macau (the Licensed Region), with a milestone payment of not more than USD 9.5 million and a certain percentage of sales commissions. Hormone ophthalmic preparations are one of the most commonly used and effective drugs for the treatment of ocular inflammatory reactions. For the inflammatory diseases of cornea, ocular surface and after ophthalmic surgery, rational application of hormone ophthalmic preparations can quickly and effectively control the inflammatory response and condition.

The Expert Consensus on the Application of Glucocorticoid Ophthalmic Preparations in the Treatment of Corneal and Ocular Surface Diseases in China (2016) pointed out that both corneal transplant surgery and laser corneal refractive surgery require the use of hormonal ophthalmic preparations to prevent inflammatory reactions. The Expert Consensus on Prevention and Treatment of Non-Infectious Inflammatory Response During Perioperative Period of Cataract in China (2015) also recommended the combined use of hormonal ophthalmic preparations and non-steroidal anti-inflammatory drugs after surgery to prevent the occurrence of inflammatory reactions. According to Frost&Sullivan's statistics, there were approximately 4.3 million cataract surgeries in China in 2019, with a 5-year CAGR of 15.5% from 2015 to 2019.

According to the Report on National Vision Case in China, the population of myopia reached 600 million in 2018, and for 2020 isabout 700 million. The penetration rate of refractive surgery is only about 0.3%, equivalent to 1/3 of that of the United States. There is still great potential for future development.

With the further increase in the volume of ophthalmic surgery, the market space for hormone ophthalmic preparations is bound to expand further. According to the data of Menet, the sales of domestic urban hospitals for hormone ophthalmic preparations reached RMB 700 million in 2019. However, due to the limitation of domestic ophthalmic preparation technology, the current hormone ophthalmic preparations are dominated by imported products.

There are no new products on the market in this market segment in the past decade. There is an urgent need for strong hormonal eye drops with high safety in clinic, and APP13007 product is expected to fill the gap in clinical demand.