The board of directors of Shandong Luoxin Pharmaceutical Group Stock Co. Ltd. announced that on October 22, 2015, the Company entered into an agreement with CJ HealthCare. (the "Agreement").

The Agreement grants the company an exclusive right to develop, manufacture, and commercialize its asset CJ-12420 in the territory of mainland China (the "Territory"). Under the Agreement, the Company will be responsible for development, manufacture and commercial activities in the Territory and associated expenses. Terms of the Agreement include up-front cash payment, and subsequent clinical, regulatory, and performance-based milestone payments.

The Company will also pay CJ HealthCare double-digit percentage royalties on net sales of CJ-12420 in the Territory. The Company and CJ HealthCare have agreed on the initial development plan that will be executed by the Company. It is anticipated that the clinical trial application will be submitted in the first half of 2016.

CJ-12420 is a potassium-competitive acid blocker (P-CAB) in Phase 3 development for the treatment of reflux esophagitis and other acid-related GI diseases. CJ-12420 competitively inhibits the binding of potassium ions to H+, K+-ATPase in the final step of gastric acid secretion in gastric parietal cells, which has the potential to provide a strong and sustained acid secretion inhibitory effect.