News Release

New policy applied for procurement of drug products in China

In a recent development in the China pharmaceutical market, 11 major cities collaborated together for purchasing 25 selected pharmaceutical drug products at significantly discounted prices (a decrease of 52% in aggregate). It is reported that certain pharmaceutical companies in China have been negatively impacted by this new development. The targeted 25 drugs are used for the treatments of various diseases as cancer, asthma, hypertension and pain relief. Etuary, as the only approved pirfenidone for the treatment of IPF in China, has not been subjected to this new procurement policy, nor does the Company expect it to be so in the foreseeable future. Accordingly, and as a significant portion of the Company’s revenue and profit is derived from our medical devices business in the U.S., we do not intend to revise our financial projections for the fiscal years.