Acquisition of 100% Equity of Suzhou Novartis Pharmaceutical Technology Co., Ltd. by Zhejiang Jiuzhou Pharmaceutical Co., Ltd.

Xiaojiang “Lawrence” Shu and Chenyang “Arthur” Cang who are two of the leading partners in Hylands cross-border transaction practice represented Jiuzhou in acquiring 100% of equity interests in SNPT, a Novartis wholly owned facility in Suzhou, China.

In order to accelerate growth by adding new CDMO projects and to develop new products for the market, Zhejiang Jiuzhou Pharmaceutical Co., Ltd. (“Jiuzhou”) entered into a Sale and Purchase Agreement (the SPA) with Novartis International Pharmaceutical Investment Ltd. (“Novartis Investment”) on September 4, 2019, for the acquisition of 100% of the equity interest of Suzhou Novartis Pharmaceutical Technology Co., Ltd. (“SNPT”) owned by Novartis Investment, excluding the spinoff assets of technology and drug development R&D, with its self-raised fund at around 790 million RMB. The transaction was completed on December 20, 2019, upon which SNPT is renamed as Raybow (Suzhou) Pharmaceutical Co., Ltd. and becomes a wholly owned subsidiary of Jiuzhou.

At the same time with the execution of the SPA, the parties have also agreed on a series of ancillary agreements, including (i) Manufacturing and Supply Agreement, in relation to the manufacturing and supply of APIs and intermediates products by the SNPT to Novartis International Pharmaceutical Branch Ireland; (ii) Strategic and Transitional Services Agreement, pursuant to which Novartis Investment supplies certain services for a transitional period to support the SNPT pending its migration to standalone capabilities; (iii) term sheet of the Site Services Agreement which sets forth the fundamental principles of SNPT’s site services provision to the newly established entity that taking over the technology and drug development R&D assets carved-out from SNPT.

The transaction further improves Jiuzhou’s position as a strategic supplier within Novartis’s global supply chain. After the completion of this transaction, SNPT shall become a high-end CDMO R&D and manufacturing site to support business growth in Europe and North America. On the other hand, SNPT shall optimize Jiuzhou’s future business in the areas of one-stop CDMO services for innovative drugs and production of APIs, to serve the demand of the fast-growing CDMO market in China, specifically to meet the demand of Chinese clients that aim to launch their products in developed countries.

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