Livzon Pharmaceutical : VOLUNTARY ANNOUNCEMENT PROGRESS OF REREARCH AND DEVELOPMENT OF PRODUCTS BY A CONTROLLING SUBSIDIARY LIVZON DIAGNOSTICS

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VOLUNTARY ANNOUNCEMENT

PROGRESS OF REREARCH AND DEVELOPMENT OF PRODUCTS BY A CONTROLLING SUBSIDIARY LIVZON DIAGNOSTICS

This announcement is made voluntarily by 麗珠醫藥集團股份有限公司 Livzon Pharmaceutical Group Inc.* (the "Company", together with its subsidiaries, collectively referred to as the "Group").

At the end of 2019, a novel coronavirus (2019-nCoV) pneumonia outbreak occurred in Wuhan, Hubei Province. 珠海麗珠試劑股份有限公司 Zhuhai Livzon Diagnostics Inc.* ("Livzon Diagnostics"), a controlling subsidiary of the Company, actively responds to the needs of prevention and control of the epidemic of novel coronavirus. For the purpose of diagnosis of novel coronavirus, Livzon Diagnostics actively establishes a team to conduct the research and development ("R&D"), launch approval application, and promotion of clinical applications of the diagnostic products and matched equipment related to the detection of viral nucleic acids and antibodies. Details of the R&D and launch approval application related to the relevant products are announced as follows:

1. The main products and their R&D progress

1. Novel coronavirus (2019-nCoV) nucleic acid diagnostic kit (PCR-fluorescence method)

This product is self-developed by Livzon Diagnostics based on the magnetic beads separation and purification technology of viral nucleic acid and the principle of fluorescent Taqman RT-PCR technology. It is used to detect the ORF1ab and N genes of new coronavirus (2019-nCoV) in throat swabs, sputum and alveolar lavage fluid for the diagnosis of suspected cases of pneumonia due to novel coronavirus infection, patients with suspected clustering cases, and other patients who need to be diagnosed or differentiated. Currently, Livzon Diagnostics has completed the R&D and trial production of the product, and is working with several CDC and medical institutions to expand the sample number of clinical trial so as to further evaluate the effectiveness of the product and to verify its diagnostic sensitivity and specificity. Meanwhile, in order to obtain the launch approval as soon as possible, an emergency approval

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application was submitted to China National Medical Products Administration (國家藥品監督管理局) on 27 January 2020.

Compared with the existing products on the market, the novel coronavirus nucleic acid reagent independently developed by Livzon Diagnostics has unique technical advantages. It is produced with the all-components freeze-dryingtechnology, packed for a single test, and can be transported and stored at a temperature of 2-8 ℃. It is easy to operate and the test results can be obtained more quickly, which better matches the needs of transportation and use. Moreover, equipped with the self-developedautomatic and high-throughputnucleic acid detection equipment, the positive results can be obtained within 30 minutes at the soonest, and the manual preparation steps before the test can be avoided to the greatest extent, which improves the labour efficiency and greatly reduces the waiting time. Meanwhile, the reagent is sealed with mineral oil during the whole test process to minimize the probability of generating aerosol, which can effectively solve the problem of safety and cross contamination. Up to now, five similar domestic products were granted the launch approval in January 2020.

This product will reach a production capacity of 200,000 tests/ month after it is granted the launch approval, expecting to timely provide enough diagnostic kits for the prevention and control of the novel coronavirus infections.

2. Diagnostics kit for IgM antibody to novel coronavirus (ELISA)/ diagnostics kit for IgG antibody to novel coronavirus (ELISA)

This product is jointly developed with Wuhan Institute of Virology, Chinese Academy of Science. The diagnostics kit for IgM antibody to novel coronavirus (ELISA) is based on the principle of capture method for ELISA, which is used for the in vitro qualitative detection of IgM antibodies to novel coronavirus in human serum or plasma. The diagnostics kit for IgG antibody to novel coronavirus (ELISA) is based on the principle of indirect method for ELISA, which is used for the in vitro qualitative detection of IgG antibodies to novel coronavirus in human serum or plasma. There are a large number of mild or even asymptomatic patients infected with novel pneumonia, which makes the prevention and control of the epidemic more complicated. Serological testing plays an important role in screening these patients, which could serve as an important auxiliary screening method in addition to the throat swab pathogen-based nucleic acid detection, providing serological evidence for clinical use and for screening the suspected cases and mild cases on a large scale.

Currently, Livzon Diagnostics has completed the R&D and trial production of the product, and is working with several CDC and medical institutions to expand the sample number of clinical trial so as to further evaluate the effectiveness of the product and to verify its diagnostic sensitivity and specificity. Meanwhile, in order to obtain the launch approval as soon as possible, an emergency approval application was submitted to China National Medical Products Administration (國家藥品監督管理局) on 28 January 2020. At present, no similar products have been approved in the PRC.

This product will reach a production capacity of 2,000,000 tests/ month after it is granted the launch approval, expecting to timely provide enough diagnostic kits for the prevention and control, as well as epidemiological investigations of novel coronavirus infections.

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3. Diagnostics kit for IgM antibody to novel coronavirus (colloidal gold)/ diagnostics kit for IgG antibody to novel coronavirus (colloidal gold)

This product is jointly developed with Wuhan Institute of Virology, Chinese Academy of Science. Diagnostics kit for IgM antibody to novel coronavirus (colloidal gold) is based on the principle of colloidal gold immunochromatography, which is used for the in vitro qualitative detection of IgM antibodies to novel coronavirus in human serum or plasma and is applicable to auxiliary diagnosis of early infection of novel coronavirus. Diagnostics kit for IgG antibody to novel coronavirus (colloidal gold) is based on the principle of colloidal gold immunochromatography, which is used for the in vitro qualitative detection of IgG antibodies to novel coronavirus in human serum or plasma and is applicable to auxiliary diagnosis of early infection and epidemiological investigations of novel coronavirus. This product can produce the test result within 15 minutes as a single test and can either be operated manually or run on an automated instrument. It can assist the primary medical institutions in early screening and diagnosis, and adapt to the primary medical institutions' requirements for small-size, portability and fast speed of producing results.

Currently, Livzon Diagnostics has completed the R&D and trial production of the product, and is working with several CDC and medical institutions to expand the sample number of clinical trial to further evaluate the effectiveness of the product and to verify its diagnostic sensitivity and specificity. Meanwhile, in order to obtain the launch approval as soon as possible, an emergency approval application was submitted to China National Medical Products Administration (國家藥品監督管理局) on 2 February 2020. At present, no similar products have been approved in the PRC.

This product will reach a production capacity of 2,000,000 tests/ month after it is granted the launch approval, expecting to timely provide enough diagnostic kits for the prevention and control, as well as epidemiological investigations of novel coronavirus infections.

4. Diagnostic equipment used with the above products

(1) Nucleic acid extractor (核酸提取儀)

The nucleic acid extractor, with the specification model of Auto NA96, is used in combination with the novel coronavirus (2019-nCoV) nucleic acid diagnostic kit (PCR-fluorescence method (PCR-螢光法)). It functions by adding proteinase K, magnetic beads and lysis buffer to the sample through loading module to cleave DNA/RNA from protein by incubation and shaking, and then combines the sample loading module with magnetic plates for completion of the washing and the elution process between the DNA/RNA and the magnetic beads to obtain the required nucleic acid solution. Such equipment applies advanced technologies such as TADM (吸放液全程即時監控技術), ADC (抗懸滴技術), and CO-RE (壓縮 O 形圈擴張技術) to achieve precise and accurate monitoring and traceability of the entire nucleic acid extraction process as well as samples loading, ensuring biological safety at the same time. The nucleic acid extractor was launched on 30 October 2019, and its case number is Yue Zhu Xie Bei No. 20190079 (粵珠械備 20190079 號).

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(2) Colloidal gold rapid test analyzer (膠體金試劑分析儀)

The colloidal gold rapid test analyzer, with the specification model of GS1201, is used in combination with the diagnostics kit for IgM antibody to novel coronavirus (colloidal gold)/ diagnostics kit for IgG antibody to novel coronavirus (colloidal gold). It functions as an in vitro diagnostic device by applying the principle of single reflection of light with optoelectronic technology. Such device has 12 channels and is able to run multiple testing projects at the same time and to obtain 90 test results in an hour. It is also equipped with a touch screen for easy operation, and can be connected to the LIS system in a hospital to experience advantages such as data sharing. Such device was approved for launch on 12 March 2018 and its registration certificate number is Yue Xie Zhu Zhun 20182400353 (粵械注准 20182400353).

II. Basic Information about the partners

Established in 1956, Wuhan Institute of Virology, Chinese Academy of Science (中國科學院武漢病毒 研究所) ("Wuhan Institute of Virology") is a comprehensive research institution specializing in virology basic research and related technological innovation. Wuhan Institute of Virology aims to address the strategic needs of national biosafety, population health and sustainable agricultural development. Relying on the cluster platform of the High-level Biosafety Laboratory of the Chinese Academy of Sciences (中國科學院), Wuhan Institute of Virology focuses on fundamental research and application of virology, emerging biotechnology and biosafety. Efforts will be made to break through cutting-edge scientific issues in research of emerging and severe infectious disease pathogens, significantly improve technological innovation, system integration and technological transformation capabilities, so as to enhance the scientific and technological supporting capabilities to emergently respond to the emerging and outbreak of infectious disease. Wuhan Institute of Virology also aims to become a comprehensive institution for virology and biosafety researches with international standards.

III. Introduction of Livzon Diagnostics

Livzon Diagnostics is a 39.425% owned controlling subsidiary of the Company, which engages in the R&D, manufacturing and sales of in vitro diagnostic reagents and instruments. Livzon Diagnostics has a comprehensive production quality control system, which has passed the national GMP certification, GSP certification and ISO13485/ISO9001 certification. Livzon Diagnostics has an R&D area of 6,000 square meters, with five R&D teams and three R&D centers locating in Zhuhai, Shanghai and Suzhou. The R&D personnel account for nearly 20% of all employees of Livzon Diagnostics and the annual investment for R&D exceeds 10% of its sales revenue. Livzon Diagnostics has been awarded the "National High-tech Enterprises ( 國家高新技術企業)", "Livzon In Vitro Diagnostic Engineering Research Centre in Guangdong Province (廣東省麗珠體外診斷工程技術研究中心)", "Guangdong Provincial Enterprise Technology Centre (廣東省省級企業技術中心)", "Guangdong Province Innovative Enterprise (廣東省 創新型企業)" and "National Post-Doctoral Scientific Research Workstation (全國博士後科研工作站)". Its products cover the fields of hepatitis, AIDS, sexually transmitted diseases, eugenics, respiratory infections, tumor marker detection, drug concentration monitoring, autoimmunity, allergen detection and blood safety.

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IV. Main contents of the Cooperation Agreement

Livzon Diagnostics and Wuhan Institute of Virology will sign the Cooperation Framework Agreement on Novel Coronavirus Antibody Diagnostic Kit between Wuhan Institute of Virology, Chinese Academy of Science and Zhuhai Livzon Diagnostic Reagents Inc.* (the "Agreement") in relation to the cooperative development of novel coronavirus antibody diagnostic kit between Wuhan Institute of Virology and Livzon Diagnostics. The principal terms of the Agreement to be signed are as follows:

1. The main products of the cooperation are: (the "Agreed Products")

1. diagnostic kit for IgM antibody to novel coronavirus (ELISA);
2. diagnostic kit for IgG antibody to novel coronavirus (ELISA);
3. diagnostic kit for IgM antibody to novel coronavirus (colloidal gold);
4. diagnostic kit for IgG antibody to novel coronavirus (colloidal gold);
5. co-diagnostickit for IgM/IgG antibody to novel coronavirus (colloidal gold).

1. Term: 10 years
2. Cooperation methods

Wuhan Institute of Virology and Livzon Diagnostics will jointly develop the Agreed Products. After completion of the R&D, Livzon Diagnostics will submit the application for registration of the Agreed Products to China National Medical Products Administration (國家藥品監督管理局) with Livzon Diagnostics being the registrant. Wuhan Institute of Virology will assist Livzon Diagnostics to provide research data until the production license of the Agreed Products is obtained. After completing the product registration and obtaining the production license, Wuhan Institute of Virology shall assist Livzon Diagnostics in technical transformation and mass production, and ensure that the mass-produced products meet the technical requirements for entering the market.

Within the validity period of the cooperation (10 years), Wuhan Institute of Virology shall supply the agreed raw materials according to the requirements of Livzon Diagnostics; during which Wuhan Institute of Virology or its related raw material manufacturers shall only supply raw materials of the products under the agreement for Livzon Diagnostics, and shall not provide them to other enterprises.

4. Intellectual property rights

The intellectual property rights arising from the use of the technology platform, related patents and know-how, and subsequent improvements in patents and know-how by Wuhan Institute of Virology under the Agreement belong to Wuhan Institute of Virology. Wuhan Institute of Virology must ensure that the Agreed Products do not infringe on other patents. Any problems and losses arising from patent disputes shall be borne entirely by Wuhan Institute of Virology. The intellectual property rights arising from the use of the technology platform, related patents and know-how, and subsequent improvements in patents and know-how by Livzon Diagnostics under the Agreement belong to Livzon Diagnostics.

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5. Default liabilities

Both parties to the Agreement shall perform their obligations in good faith in strict accordance with the terms thereof. In the event of default, the default party shall be liable for the breach of the Agreement and shall compensate the performing party for the damage caused by the breaching party.

6. Conditions precedent

The Agreement will be effective on the date of signing by the authorized representatives of both parties.

V. Risk Warning

As there is still uncertainty as to the approval of the above products, the Company will continue to pay attention to the progress of approval and timely perform its obligations of information disclosure as required. Investors are reminded that China Securities Journal, Securities Times, Securities Daily, Shanghai Securities News, and the websites of CNINFO (www.cninfo.com.cn), HKEx (www.hkexnews.hk) and the Company (www.livzon.com.cn) are the designated media for information disclosure of the Company. All information of the Company are subject to the announcements published in the above medias. Investors are advised to read those announcements carefully and be aware of the risks on investment.

By order of the Board

麗珠醫藥集團股份有限公司

Livzon Pharmaceutical Group Inc. *

Yang Liang

Company Secretary

Zhuhai, China

4 February 2020

As at the date of this announcement, the Executive Directors of the Company are Mr. Tang Yanggang (President) and Mr. Xu Guoxiang (Vice Chairman and Vice President); the Non-Executive Directors of the Company are Mr. Zhu Baoguo (Chairman), Mr. Tao Desheng (Vice Chairman) and Mr. Qiu Qingfeng; and the Independent Non-Executive Directors of the Company are Mr. Xu Yanjun, Mr. Zheng Zhihua, Mr. Xie Yun, Mr. Tian Qiusheng and Mr. Wong Kam Wa.

* For identification purpose only

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