【11 January 2017, Hong Kong】On 11 January 2017，Shanghai Fosun Pharmaceutical (Group) Co., Ltd. (hereinafter referred to as “Fosun Pharma”; stock code: 600196.SH, 02196.HK), announced to establish a sino-foreign cooperative enterprise in China (including the Mainland China, Hong Kong and Macao, but excluding Taiwan under the cooperation agreement, same as below) through its wholly-owned subsidiary to introduce KTE-C19, CAR-T products of Kite Pharma (NASDAQ stock code: KITE) to benefit lymphoma patients with world-leading therapy.

T cellular immunotherapy is at the cutting edge for cancer treatment. Kite Pharma is currently the front-runner in the field of R&D for T-cell therapy for cancer. KTE-C19, its key product, is an investigational chimeric antigen receptor (CAR) T-cell therapy for the treatment of B-cell lymphomas and leukemia, which are difficult to be treated when recurrence happens. It is at the development and clinical stage. Such product is also the first product to be introduced under the cooperation.

The cooperative enterprise will be registered in Shanghai and owned equally between Fosun Pharma and Kite Pharma. Under the terms of the agreement, Fosun Pharma intends to contribute US$20 million and Kite Pharma contributes with the right to exclusive use of its products and proprietary technology at the value of US$20 million. Each of them owns 50% equity interests in the cooperative enterprise. Fosun Pharma will pay another US$40 million to the cooperative enterprise for the relevant patent and technology and the cooperative enterprise will make a milestone payment of US$35 million to Kite Pharma according to the R&D progress and market conditions and make a royalty payment for the sale of KTE-C19 products.

“We are committed to bring engineered T-cell therapy to patients in China who are suffering from cancer,” said Arie Belldegrun, Chairman, President, and Chief Executive Officer of Kite Pharma. “This cooperative enterprise accelerates us to access a critically important market like China and meet a major objective of expanding our global reach. Fosun Pharma is China’s leading bio-pharmaceutical innovator and also a market-maker, which makes them an ideal partner to develop and commercialize KTE-C19 in China. Together, we look forward to addressing significant unmet need in China.”

In December 2016, Kite Pharma announced that it has submitted to the U.S. Food and Drug Administration (FDA) of the Biologics License Application (BLA) for KTE-C19 as a treatment for patients with refractory aggressive B-cell NHL Going forward, the cooperative enterprise may continue to introduce product candidates of Kite Pharma later including KITE-439, a TCR therapy directed against the human papillomavirus type 16 E7 oncoprotein and KITE-718, a T cell therapy products engineered to express TCR that target MAGE A3 and MAGE A6, antigens frequently found in solid tumors including bladder, esophageal, head and neck, lung and ovarian cancers.

“There is a huge unmet demand in the treatment for cancer in China. Today’s announcement with Kite Pharma is an important and strategic step to build a long-term foundation for T cell therapy in China, which will help us bring world-leading cancer treatments to patients in need” said Chen Qiyu, Chairman of Fosun Pharma. “In addition, there is significant synergy between cellular immunotherapy products for cancer of Kite Pharma and Fosun Pharma’s existing products.”

Just two days ago on 9 January 2017, Kite Pharma announced a strategic cooperation with Daiichi Sankyo of Japan. Both parties will be committed to the development and commercialization of KTE-C19 product in Japan.

Fosun Pharma will be another important partner of Kite Pharma in Asian region following its strategic cooperation with Daiichi Sankyo of Japan to jointly develop Japanese market.

China is the second largest pharmaceutical market in the world after the US. With increasing incidence and mortality, cancer is the leading disease for death in China with over 4 million new cases and 2.8 million deaths from cancer per year. The five-year survival rate of various cancers commonly occurred in China is significantly lower than that in the US, among which, a difference in survival rate of nearly 40% exists among cervical cancer, lymphoma and leukemia. According to recent estimates, there are approximately 73,000 newly diagnosed cases of non-Hodgkin lymphoma (NHL) in China each year. In particular, diffuse large B-cell lymphoma, representing the largest proportion, is one of extremely aggressive and rapidly developing lymphomas with the largest number of patients. Patients suffering from refractory cancer have relatively limited clinical choice, thus showing a massive but unsatisfied demand. The first introduced KTE-C19 currently achieves a world-leading clinical development. It is very likely to obtain approval from FDA first to provide patients suffering from such type of lymphoma a solution to evidently improve the comprehensive remission rate.

Chen Qiyu said that we have entered the era of precise medicine with innovative R&D. Fosun Pharma has continued to increase its R&D investments. The focus of our innovative R&D is also placed on precise medicine, especially on solving of cancer problems. Fosun Pharma actively keeps abreast of cutting-edge technology around the world and is committed to offering patients the most comprehensive and the best technology and solution for diagnosis and treatment.

Fosun Pharma has made a layout for the R&D of monoclonal antibody drugs as early as 2009 and now is leading the industry in China. For various fields of cancer including lymphoma and breast cancer, Shanghai Henlius, the R&D platform for monoclonal antibody of Fosun Pharma, has made significant progress in R&D. Its first type of non-Hodgkin lymphoma indication and the second type of breast cancer indication under development are at the phase III clinical stage. The first introduced KTE-C19 has a solid complementary effect with monoclonal antibody drugs targeted at CD20 to cover the entire treatment stage of B-cell lymphoma, presenting a comprehensive solution to patients in China.

Fosun has continued to explore new collaboration models in the process of establishing a closed loop of tumor precision medicine industry. It further participates in the research and development process of the world’s leading technology, shifting from conventional product introduction model to collaboration model in research and development, production and sales. At the end of 2016, Fosun Pharma announced the official initiation of strategic cooperation with Intuitive Surgical, Inc. of the U.S., a global leader in the field of robotic-assisted minimally invasive surgery to establish a joint venture in Shanghai mainly for the R&D, production and sale of innovative products in respect of early diagnosis and treatment of lung cancer based on robotic-assisted conduit technology. This will provide doctors with innovative precise instruments for diagnosis and treatment, thereby raising medical level and benefitting lung cancer patients.

Guo Guangchang, Chairman of Fosun Group, the controlling shareholder of Fosun Pharma, said, “The profound integration of products and technology and the technology-driven evolution of Fosun are its key growth drivers at present and in the future. Fosun emphasizes and endeavors to raise its investment in innovation, research and development. In the meantime, we require all segments to integrate technology into their development, including Fosun Foundation Art Center with dozens of patents and the establishment of One Fosun, a consolidated middle-back office support system, with big data. Among which, the most important factor is Fosun’s research, development and innovation in healthcare. We have seen a sign of breakthrough in the global research and development platform connecting China and the US we initiated seven years ago. Meanwhile, Fosun has collaborated with the world’s leading and well-established research and development teams and corporates to together propel the technological advancement in the industry. Examples of which are the acquisition of Gland Pharma in India, the establishment of joint venture in Shanghai with Intuitive Surgical, Inc. and this collaboration with Kite Pharma. Through these collaborations, I believe these corporates and Fosun could definitely have a stronger chemical reaction in scientific research, thus promoting a great progress in the human health industry with our endeavor and wisdom.”

About Kite Pharma

Kite Pharma, Inc., is a clinical-stage biopharmaceutical company engaged in the development of novel cancer immunotherapy products, with a primary focus on engineered autologous cell therapy (eACT™) designed to restore the immune system's ability to recognize and eradicate tumors. Kite Pharma is based in Santa Monica, CA. For more information on Kite Pharma, please visit www.kitepharma.com.

About KTE-C19

Kite Pharma's lead product candidate, KTE-C19 is an investigational therapy in which a patient's T cells are engineered to express a chimeric antigen receptor (CAR) to target the antigen CD19, a protein expressed on the cell surface of B-cell lymphomas and leukemias, and redirect the T cells to kill cancer cells. KTE-C19 has been granted Breakthrough Therapy Designation status for diffuse large B-cell lymphoma (DLBCL), transformed follicular lymphoma (TFL), and primary mediastinal B-cell lymphoma (PMBCL) by the U.S. Food and Drug Administration (FDA) and brought into the examination and approval plan of DLBCL Priority Medicines (PRIME) in the EU.