SihuanPharmaceutical Holdings Group Ltd., a leading pharmaceutical company with the largestcardio-cerebral vascular (CCV) drug franchise in China’s prescription market, has entered into a collaboration agreement with NeuroVivePharmaceutical AB, a leading international mitochondrial pharmaceuticaldevelopment company, to develop two innovative products, CicloMulsion and NeuroSTAT, which are used for the treatment of heart reperfusion injuries andtraumatic brain injuries respectively.

Pursuant to the collaboration agreement, NeuroVive will grant Sihuan Pharmaceutical an exclusive license to develop,market and sell CicloMulsion and NeuroSTAT in China, as well as theintellectual property rights and knowhow in connection with the products to passclinical trials. Both CicloMulsion and NeuroSTAT reach international standards,and they are currently undergoing the third and second phases of clinicaltrials respectively. Both medical products contain cyclosporine A, which is mainlyused for the treatment of heart reperfusion injuries and traumatic brain injuries.By protecting the mitochondria of cells, CicloMulsion and NeuroSTAT ensurethat energy production is preserved and the normal regenerative mechanisms ofdamaged cells can act to repair and maintain the cells. Therefore, the twoproducts act to prevent the destruction of the mitochondria in damaged cellsand the cascade of intracellular biochemical events that lead to secondarytissue damage following a traumatic injury. As there are currently no approvedpharmaceutical treatment options for these types of injuries, the two products haveenormous market potential. The current market size of exclusive drug productswith similar efficacy is over RMB1 billion. According to MENET, the CCV marketamounts to approximately RMB100 billion with an annual compound growth rate ofmore than 20% and is the largest segment in China’s pharmaceutical market.

Sihuan Pharmaceutical shall make upfront and milestone paymentstotalling RMB35 million and RMB12 million to NeuroVive in respect ofCicloMulsion and NeuroSTAT respectively. In addition, the Company shall pay aroyalty representing 10 per cent of the net revenue from the two products for a period of 10 years from the time they are launched.

Dr Che Fengsheng, chairman and CEO of SihuanPharmaceutical, said, “The importantcollaborative agreement with a renowned international pharmaceutical developmentcompany marks a breakthrough for our business development. The collaborationwill bring together Sihuan Pharmaceutical’s competitive advantages in productdevelopment, marketing promotion and distribution network and NeuroVive’sadvanced drug development technology. This will enrich our product portfolio, raisethe level of our product resources and widen our revenue stream. We believethat CicloMulsion and NeuroSTAT will become new drivers of our sales, sustainour growth in the long run, and consolidate Sihuan Pharmaceutical’s leadershipin the CCV drug market. ”

Mikael Brönnegård, CEO of NeuroVive, said, “Our agreement with Sihuan is a transformationalevent for NeuroVive and provides strong validation of the huge potential ofmitochondrial medicine and specifically the work we have done to develop thecyclophilin D inhibitors CicloMulsion and NeuroSTAT. Sihuan is one of theleading pharmaceutical companies in China and through this agreement will addsignificant resources, product development and marketing expertise that willgreatly accelerate the development and commercialization of our products inChina. I look forward to a long and productive partnership with Sihuan that Iam confident will lead to the launch of NeuroVive’s products for the treatmentof acute cardiovascular and neurological conditions in the Chinese market.”