Dezhan Health (000813): Reply To The Concern Letter Of Shenzhen Stock Exchange

Stock Code: 000813 stock abbreviation: Dezhan health Announcement No.: 2021-005

Announcement of Dezhan dahealth Co., Ltd. on reply to the concern letter of Shenzhen Stock Exchange

The company and all members of the board of directors guarantee that the contents of information disclosure are true, accurate and complete, and there are no false records, misleading statements or major omissions.

Shenzhen stock exchange company management department:

Dezhan dahealth Co., Ltd. (hereinafter referred to as "the company" and "Dezhan health") has seriously organized the verification and implementation of the problems raised in the letter of concern [2021] No. 42 from the company Department of your institute. Now, the reply to the implementation is as follows:

Question 1. In combination with the specific situation and changes of corporate governance and operation management such as your company's shareholding ratio in dongfanglue in 2020, seats on the board of directors, arrangement of management and key technical personnel, decision-making mechanism of major events, etc., explain whether your company can control dongfanglue and the basis for your company to identify it as a "subsidiary"; on this basis, further explain the "progress company" Whether the statement of "Beijing dongfanglue Biomedical Technology Co., Ltd., a subsidiary of the company" mentioned in the notice is accurate and misleading. If it is not accurate, please correct the relevant information in time and fulfill the obligation of disclosure.

reply:

On October 24, 2019, after deliberation and approval at the 18th meeting of the seventh board of directors of the company, the company and dongfanglue signed the cooperation framework agreement, which plans to increase the capital of Dongfang slightly by RMB 300 million and hold no less than 23.2% shares of Dongfang. On December 16, 2019, the 19th meeting of the 7th board of directors of the company deliberated and passed the proposal on increasing capital of Beijing dongfanglue Biomedical Technology Co., Ltd. and related party transactions, which is intended to subscribe for dongfanglue new 3 at RMB 300 million, 6.15 million shares. After the capital increase, the company holds 23.22% shares of dongfanglue, and the board of directors and the board of supervisors of dongfanglue are re elected. It is proposed to recommend two directors and one supervisor. On January 2, 2020, the first extraordinary general meeting of shareholders in 2020 deliberated and passed the above proposal. As of January 25, 2020, the company has paid a capital increase of 20000 as required by the capital increase agreement

According to the agreement, the remaining capital increase will be arranged according to the capital demand of dongfanglue. On January 14, 2020 and February 3, 2020, dongfanglue held the 30th and 40th meetings of the second board of directors and the first extraordinary general meeting of shareholders in 2020, respectively, and completed the proposals on the election of directors and the change of supervisors. On February 20, 2020, dongfanglue completed the industrial and commercial registration procedures for the change of shareholders.

As of December 31, 2020, the company directly held 36.15 million shares of dongfanglue, accounting for 23.22% of the total share capital of dongfanglue. The shareholding situation of all shareholders of Dongfang strategy is as follows:

According to the articles of association of dongfanglue, the board of directors of dongfanglue is composed of 7 directors, 2 of whom are recommended by the company. The company does not directly participate in the management and core technical personnel arrangement of Dongfang strategy.

Therefore, based on the above shareholding ratio, board seats and corporate governance, the company is the largest shareholder of dongfanglue, but the company has not formed control over dongfanglue for the time being, and Dongfang Lue is a shareholding subsidiary. See the notice of correction for details.

Question 2: explain the specific meaning of the joint research and development between inovio and dongfanglue as mentioned in the progress announcement, and explain the specific cooperation mode of the two sides, including but not limited to the R & D, production, research and development of dongfanglue in vgx-3100

The patent ownership, rights in income distribution, obligations to be undertaken, and cooperation period of both parties involved in the commercialization and application; explain whether the above-mentioned cooperation relationship is determined in the form of legally binding contract text or commitment document; and explain that "Oriental slightly owns products in Greater China region (mainland China, Hong Kong, Macao, Taiwan) The specific conditions of the "exclusive rights of development, production and commercialization", such as the authorized party, the period of authorization, and the authorization content, etc., to explain whether the "exclusive rights" mentioned above are determined in the form of legally binding contract text. reply:

Beijing Apollo Saturn biomedical Co., Ltd. (hereinafter referred to as "Apollo Saturn"), a wholly-owned subsidiary of dongfanglue, signed a license and cooperation agreement with inovio pharmaceuticals (Chinese Name: sinovision) on December 29, 2017, It is clearly agreed in the agreement that novio shall grant exclusive license to Apollo Saturn in the development, use, production, sales, import and marketing of vgx-3100 and its target products in the Greater China region (mainland China, Hong Kong, Macao and Taiwan), as well as the patent, proprietary technology and cooperative intellectual property rights of the products. The term of the contract is 18 years, which is calculated from the effective date of the contract, that is, December 29, 2017. With regard to vgx-3100 products, based on the requirements of Apollo and Saturn, novio will transfer its production technology to Apollo Saturn (or the third-party production enterprise designated by Apollo Saturn), so that Apollo Saturn (or the third-party production enterprise) can use the production technology of novio to complete the production of vgx-3100, conveying device and target products, and copy novio The technological process adopted by (or its manufacturer). If applicable, based on Apollo Saturn's requirements, novio shall (and shall use its reasonable commercial efforts to cause its third-party producers) cooperate with and assist Apollo Saturn in the transfer of Technology (including on-site assistance), provide technical advice related to the transfer and implementation of production technology at the reasonable request of Apollo Saturn, and assist Apollo Saturn or its third-party production The manufacturer uses the following production technology of novo. As for the ownership of intellectual property rights, inventions and other intellectual property rights independently made by Apollo and Saturn personnel in connection with the agreement belong to Apollo and Saturn. The ownership of inventions and other intellectual property rights independently made by uniovio personnel in connection with the agreement belongs to novio. The ownership of inventions and other intellectual property rights jointly made by both parties shall belong to both parties. The terms of the deal include the first $23 million license fee paid by Apollo Saturn to inovio, as well as milestone payments, royalties (10 years from the launch date) and other payments. The agreement clearly stipulates that Apollo Saturn has the exclusive right to manufacture vgx-3100, conveyor and the subject products for distribution in the contract area.

The agreement is signed and effective by both parties and is legally binding. The agreement and all issues related to its validity, interpretation, violation or performance shall be interpreted and implemented in accordance with the laws of the state of New York.

Question 3. Does your company have cooperation arrangements with dongfanglue? If so, please explain the specific cooperation mode and scope. In combination with the specific contents of the strategic cooperation agreement signed between Jincheng pharmaceutical and dongfanglue, please state whether the cooperation arrangement between your company and dongfanglue is in conflict with the strategic cooperation agreement signed by Jincheng medical and dongfanglue, and whether the relevant disclosure is true and accurate Accurate and complete.

reply:

The 19th meeting of the seventh board of directors and the first extraordinary general meeting of shareholders in 2020 deliberated and passed the proposal on increasing capital of Beijing dongfanglue Biomedical Technology Co., Ltd. and related party transactions, and signed the capital increase agreement. According to the terms and conditions of the capital increase agreement, the company has contributed 300 million yuan in cash legally owned by it to subscribe for the new 36.15 million shares of the target company, and the amount exceeding the newly added registered capital of 263.85 million yuan is included in the capital reserve of the target company. The original shareholders of dongfanglue agreed to increase the registered capital of dongfanglue from RMB 119.53 million to RMB 155.68 million. After the completion of capital increase, the company holds 23.22% shares of Dongfang, which is the largest shareholder of Dongfang company. In addition to the above agreement, the company has not signed any other cooperation agreement with dongfanglue, so there is no contradiction between the company and Jincheng pharmaceutical and dongfanglue, and the relevant disclosure is true, accurate and complete.

Question 4. Please further disclose the main time and process of vgx-3100 R & D, the current specific R & D or trial stage, and the subsequent required R & D and approval process. In addition, combined with the average R & D cycle of domestic and overseas original drugs, further prompt the relevant risks.

reply:

The phase I clinical trial of vgx-3100 project started in May 2008 and ended in March 2011. The phase II clinical trial started in April 2011 and ended in April 2015. The relevant results have been published in the lancet, a top international medical journal. The phase III real 1 clinical trial started on June 13, 2017, and the 36 week validity data was published on March 1, 2021. Based on the mitt population analysis, the trial reached the main end point, that is, the proportion of subjects who achieved the histological outcome of HSIL lesions and HPV16 / 18 virus clearance at the 36th week. The patients in the treatment group were significantly higher than those in the control group, with statistical significance. Secondary end points were also achieved, including: a) cervical HSIL lesions turned to normal tissues and HPV16 / 18 virus clearance; b) only cervical HSIL lesions turned to normal tissues; c) cervical HSIL lesions turned to normal tissues; d) only HPV 16 / 18 virus was eliminated.

Inovio will continue to evaluate the safety of live 1 subjects for 18 months after the last administration

The results of real 1 data are expected to be presented at the 2021 scientific research conference. The real 2 clinical trial was launched in the second half of 2019, with 198 cases planned to be enrolled. The experimental group and the control group were randomly divided into two groups according to the ratio of 2:1. The regimen was administered at 0, 4 and 12 weeks, the efficacy endpoint was evaluated at the 36th week, and the safety was evaluated at the 40th week. At present, dongfanglue is independently carrying out phase III clinical trials of the project in China, and plans to carry out trials in 24 research centers. Dongfanglue has entrusted a third-party company to assist in the relevant work in the early stage of clinical research. According to the actual situation of the original research drugs at home and abroad, according to the different difficulties of the original research drugs and the different R & D cycles required, 20-100 healthy subjects were included in the general phase I clinical trial, mainly to study the safety of drugs for human body. Clinical phase II takes several months to 2 years. Hundreds of patients are involved in the study of drug efficacy and safety. Clinical phase III trials take about 1-4 years, with hundreds to thousands of diseased subjects to study the efficacy of drugs and the safety of continuing studies on patients.

After phase III clinical trials, drug applicants can submit a new drug application for approval of the drug for sale in the United States. According to the therapeutic characteristics of drugs, FDA divides the review procedures into "standard review" and "priority review", and the approval time is within 10 months and 6 months respectively. In addition, fast track can also be applied. Once a drug meets the fast track requirements, FDA must make a decision within 60 days. Due to the characteristics of large investment, long cycle and high risk in the research and development of original drugs, vgx-3100 may be a long time for the follow-up clinical trials, and there are risks and uncertainties in the test results, the approval results of the competent departments and the smooth listing of the listed companies, which has no impact on the recent performance of the listed companies. Please make prudent decisions and pay attention to the investment risks!

Question 5. According to the relevant provisions of the guidelines for the standardized operation of listed companies of this stock exchange, we will give a detailed description of the recent survey conducted by reception institutions and individual investors, and whether there are any violations of the principle of fair disclosure.

reply:

There is no investigation by reception agencies and individual investors recently. The company maintains communication with investors through telephone communication, interactive platform of Shenzhen Stock Exchange, etc. the communication content is public information, and there is no violation of the principle of fair disclosure.

The company will follow the principles of openness, fairness and impartiality, truthfulness, accuracy and integrity in strict accordance with the guidelines for the standardized operation of Listed Companies in Shenzhen Stock Exchange and the information disclosure management system

To do a good job in information disclosure.

Question 6. Check whether the directors, supervisors, senior managers and their immediate relatives of your company have bought or sold the shares of your company and whether there are any cases of insider trading, and provide the stock exchange with the list of insiders.

reply:

According to the company's self inspection and the inquiry certificate of information disclosure obligor's shareholding and share change and detailed list of shareholder's share change issued by zhongdeng Shenzhen Branch on March 9, 2021, the company's directors were three months (from December 4, 2020 to March 4, 2021) before the company disclosed the announcement on the progress of phase III clinical trial of cooperative R & D projects of subsidiaries (Announcement No.: 2021-003) , supervisors, senior managers and their immediate relatives do not buy or sell the company's stocks.

On March 1, 2021, inovio announced the positive results of the first phase III clinical trial of vgx-3100, a DNA therapy drug, on its official website

https://www.inovio.com/）。 From March 2, 2021 to March 3, 2021, some domestic media, such as Beijing News (news: inovio company's DNA innovative drug phase III clinical trial has obtained positive results), Tencent (news: inovio announced positive results of live 1) and other domestic media paid attention to and reported the above information. On March 3, 2021, the company paid attention to the above information and received a letter of notification from Dongfang Lue on the same day. Subsequently, the company disclosed the information according to the letter.

If there is no case of insider trading, the company will provide the list of insiders to Shenzhen Stock Exchange in time according to relevant regulations.

It is hereby announced.

Board of directors of Dezhan dahealth Co., Ltd

March 11, 2021