Today, Hebei Changshan Biochemical Pharmaceutical Co., Ltd. signs a cooperation agreement with Israel's Kitov Pharma Ltd. (hereinafter referred to as “Kitov”). After signing this agreement, Changshan Pharmaceutical will have the exclusive right to introduce, produce, and sell Consensi^TM in China (including Hong Kong, Macao, and Taiwan). Consensi^TM is a type of drug developed by Kitov for the treatment of osteoarthritis with hypertension. As a NASDAQ-listed company (NASDAQ/TASE: KTOV), Kitov is incorporated under the laws of Israel. It is an innovative bio-pharmaceutical company dedicated to the treatment of osteoarthritis with hypertension. It has developed and possessed thepatent and expertise for a new compound formulation called ConsensiTM (hereafter referred to as “this product”). This product is designed to treat both osteoarthritic pain and high blood pressure at the same time. So it is applicable to patients with high blood pressure, who are now using non-steroidal anti-inflammatory drugs for the treatment of osteoarthritis. Currently, the tablets for this product have completed all clinical trials necessary for applying for marketing approval in the US, and its safety and efficacy are verified through clinical trials. It is expected that Kitov will receive a reply from the FDA of the US to the marketing application of this product by the end of May 2018.

According to the epidemiological data published by CHC (China Heart Congress) in 2017, the prevalence of hypertension in adults aged 18 and above in China has reached 23.0%, with the number of patients being 243.5 million. The prevalence of hypertension increases with age. As the pace of social life becomes faster and faster, while the diet structure continues to consist of food high in heat and fat, the trend for a significant increase in the number of patients with hypertensionwill last for a long time. According to statistics recorded by the end of 2015, there were 120 million patients with arthritis in China, with an incidence of about 13%. It is estimated that there are about 41 million people experiencing arthritis with hypertension in China.

Currently, there is no compound formulation for the simultaneous treatment ofosteoarthritic pain with hypertension in the global market. According to the data from Menet, the sales amount of amlodipine drugs used for the treatment of hypertension in China reached about 7.3 billion yuan in 2016. According to the Institute of Mathematical Statistics (IMS), the total market sales amount for non-steroidal anti-inflammatory drugs in China in 2016 was estimated to be about $1.3 billion. This product will obtain a large market space after marketing in China.

Through this cooperation, the company will be granted with the authorization and license of Kitov on the patented product of Consensi^TM, and will perform the domestic drug registration process in order to exclusively import, produce and sell this product.

The company is one of the few leading enterprises in China that has a complete heparin product industry chain and is capable of simultaneously developing, producing, and selling heparin APIs and heparin formulations. While being dedicated to the generic drugs, such as the main product of heparin formulations, sildenafil citrate tablets, and hyaluronic acid, the company has also worked in the research and development of new drugs, such as the Class-1.1 innovative drug of albenatide, in order to actively promote the development of the company into an innovative pharmaceutical company.

The cooperation with Kitov acts as a new step for the company in international cooperation in the field of innovative drug research and development. By introducing innovative drugs, we can effectively shorten the research and development cycle of new drugs, and reduce the risks in research and development, which will help the company with international intellectual property cooperation in the future. This cooperation will help the company cultivate new products other than heparin-related products, and enrich the company's research and development product line, improving the company's profit structure and enhancing the company's profitability.