UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No. 1)

Filed by the Registrant  ☒                             Filed by a Party other than the Registrant  ☐

Check the appropriate box:

CELLULAR BIOMEDICINE GROUP, INC.

(Name of Registrant as Specified In Its Charter)

(Name(s) of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

PRELIMINARY PROXY STATEMENT—SUBJECT TO COMPLETION

DATED NOVEMBER 17, 2020

MERGER PROPOSED—YOUR VOTE IS VERY IMPORTANT

[●], 2020

To the Stockholders of Cellular Biomedicine Group, Inc.:

You are cordially invited to attend a special meeting of the stockholders of Cellular Biomedicine Group, Inc., a Delaware corporation (“CBMG,” the “Company,” “we,” “our” or “us”), which we will hold at [●], on [●], 2020 at [●], Eastern Time. As part of our precautions regarding the coronavirus or COVID-19 pandemic, the special meeting may be held solely by means of remote communication in a virtual format on the above date and time. If we take this step after the dissemination of the accompanying proxy statement, we intend to announce the decision to do so at least 10 days prior to the special meeting in a press release that will be available on our website, https://www.cellbiomedgroup.com. We will also file the press release with the U.S. Securities and Exchange Commission as definitive additional proxy materials. The press release and additional proxy materials will include detailed instructions as to the logistical details of the virtual meeting, including how you can remotely access, participate in and vote at such meeting. If you plan to attend the special meeting, we recommend that you monitor our website for updated information and registration details in the event we determine to hold the special meeting solely by virtual means. We encourage you to vote by proxy—by mail, by telephone or over the Internet—well in advance of the special meeting, to ensure your shares are represented whether or not you decide to attend the special meeting in person.

At the special meeting, holders of shares of our common stock, par value $0.001 per share (“Common Stock”), will be asked to consider and vote on a proposal to adopt the Agreement and Plan of Merger, dated as of August 11, 2020 (as it may be amended from time to time, the “Merger Agreement”), by and among CBMG Holdings, an exempted company with limited liability incorporated under the laws of the Cayman Islands (“Parent”), CBMG Merger Sub Inc., a Delaware corporation and a wholly-owned subsidiary of Parent (“Merger Sub”), and the Company, pursuant to which Merger Sub will be merged with and into the Company (the “Merger”), with the Company surviving the Merger as a wholly-owned subsidiary of Parent. Parent and Merger Sub are entities newly formed on behalf of a consortium consisting of (i) Tony (Bizuo) Liu (Chief Executive Officer of CBMG) and certain other members of CBMG management consisting of Yihong Yao, Li (Helen) Zhang and Chengxiang (Chase) Dai (such other members of CBMG management, together with Mr. Liu, collectively, the “Management Rollover Stockholders”), (ii) Dangdai International Group Co., Limited, Mission Right Limited, Wealth Map Holdings Limited, Earls Mill Limited, OPEA SRL, Maplebrook Limited, Full Moon Resources Limited, Viktor Pan and Zheng Zhou (together with the Management Rollover Stockholders, collectively, the “Consortium Rollover Stockholders”), and (iii) Yunfeng Fund III, L.P., TF Capital Fund III L.P., Velvet Investment Pte. Ltd. and Mr. Liu (in his capacity as an equity investor) (collectively, the “Equity Investors” and, together with Parent, Merger Sub and the Consortium Rollover Stockholders, collectively, the “Buyer Consortium”). In this letter to the stockholders of CBMG, we refer to the Buyer Consortium, together with Novartis AG, Novartis Pharma AG, Yunfeng Capital Limited, TF Capital Ranok Ltd., Winsor Capital Limited and TF I Ltd., collectively, as the “Participants.”

If the Merger is consummated, each share of Common Stock outstanding immediately prior to the effective time of the Merger (other than (i) shares of Common Stock owned by Parent, Merger Sub or any other direct or indirect wholly-owned subsidiary of Parent and shares of Common Stock owned by the Company, (ii) certain shares of Common Stock owned by the Consortium Rollover Stockholders and all of the shares of Common

Stock owned by Novartis Pharma AG (together with the Consortium Rollover Stockholders, collectively, the “Rollover Stockholders”), and (iii) shares of Common Stock owned by stockholders who are entitled to, and who have timely perfected and have not withdrawn a demand for (or lost their right to), appraisal rights pursuant to Section 262 of the General Corporation Law of the State of Delaware) will be converted into the right to receive $19.75 in cash, without interest and subject to any applicable withholding taxes. The Merger is a “going private transaction” under U.S. Securities and Exchange Commission rules. If the Merger is consummated, the Company will be wholly owned by Parent, and Parent will be owned by the Equity Investors and the Rollover Stockholders.

The board of directors of the Company (the “Board”) formed a special committee comprised solely of four independent and disinterested directors of the Company (the “Special Committee”) to evaluate and, if applicable, negotiate the terms of the Merger and alternatives to the Merger. The Special Committee unanimously (i) determined that the terms of the Merger Agreement and the transactions contemplated thereby, including the Merger, are advisable and fair to, and in the best interests of, the Company and its stockholders (other than the Participants and their respective affiliates), (ii) directed that the Merger Agreement be submitted to the Board for its approval and recommendation that the Company’s stockholders adopt the Merger Agreement, and (iii) recommended that the Board (a) approve and declare advisable the Merger Agreement and the transactions contemplated thereby, including the Merger, (b) declare that the Merger Agreement and the transactions contemplated thereby, including the Merger, are fair to, and in the best interests of, the Company and its stockholders (other than the Participants and their respective affiliates), (c) authorize and approve the Company’s entry into the Merger Agreement and consummation of the transactions contemplated thereby, including the Merger, (d) submit the adoption of the Merger Agreement for consideration by the Company’s stockholders at a meeting of the stockholders of the Company, and (e) recommend that the Company’s stockholders vote in favor of the adoption of the Merger Agreement.

The Board (without the participation of Tony (Bizuo) Liu, Darren O’Brien and Hansheng Zhou, who abstained from voting given their relationships with the Buyer Consortium), acting on behalf of the Company and upon the unanimous recommendation of the Special Committee with respect to the Merger Agreement and the transactions contemplated thereby, including the Merger, unanimously (i) determined that the Merger Agreement and other transaction documents and the transactions contemplated thereby, including the Merger, are advisable and fair to, and in the best interests of, the Company and its stockholders (other than the Participants and their respective affiliates), (ii) authorized and approved the execution, delivery and performance by the Company of the Merger Agreement and other transaction documents and consummation of the transactions contemplated thereby, including the Merger, and (iii) directed that the Merger Agreement be submitted for adoption by the Company’s stockholders and recommended that the Company’s stockholders vote in favor of the adoption of the Merger Agreement. Tony (Bizuo) Liu, Darren O’Brien and Hansheng Zhou abstained from the vote of the Board given their relationships with the Buyer Consortium. In evaluating the Merger Agreement and the transactions contemplated thereby, including the Merger, the Special Committee consulted with its independent legal and financial advisors and, in making its recommendation to the Board, considered a number of factors, and, in evaluating the Merger Agreement and the transactions contemplated thereby, the Board consulted with its legal advisors and, in making its determination, including its recommendation to the Company’s stockholders, considered a number of factors, including the recommendation of the Special Committee, as such factors considered by the Special Committee and the Board are described more fully in the enclosed proxy statement. The Board (without the participation of Tony (Bizuo) Liu, Darren O’Brien and Hansheng Zhou, who abstained from voting given their relationships with the Buyer Consortium) unanimously recommends that you vote “FOR” the proposal to adopt the Merger Agreement.

You will also be asked to consider and vote at the special meeting on (i) one or more proposals to approve the adjournment of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to approve the proposal to adopt the Merger Agreement, and (ii) a non-binding, advisory proposal to approve specified compensation that may become payable to the named executive officers of the Company in connection with the Merger. The Board (without the participation of Tony (Bizuo) Liu, Darren O’Brien and Hansheng Zhou, who abstained from voting given their relationships with the Buyer Consortium) unanimously recommends that you vote “FOR” each of these proposals.

The Board is soliciting your proxy to ensure that a quorum exists and that your shares are represented and voted at the special meeting and any adjournments or postponements thereof. The Merger cannot be consummated unless the Merger Agreement is adopted by the affirmative vote of the holders of (i) at least a majority of the shares of Common Stock outstanding at the close of business, Eastern Time, on [●], 2020, the record date for the special meeting, and (ii) at least a majority of the shares of Common Stock outstanding at the close of business, Eastern Time, on the record date excluding the votes of the Participants and their respective affiliates, in each case, in accordance with applicable law and the organizational documents of the Company.

Your vote is important, regardless of the number of shares of Common Stock you own. Whether or not you expect to attend the special meeting in person, please submit a proxy to vote your shares as promptly as possible so that your shares may be represented and voted at the special meeting. If you attend the special meeting and vote in person, your vote by ballot will revoke any proxy previously submitted. If you fail to return your proxy and fail to attend the special meeting in person, your shares will not be counted for purposes of determining whether a quorum exists at the special meeting and will have the same effect as a vote “AGAINST” the adoption of the Merger Agreement. Similarly, if you hold your shares in “street name” and fail to instruct your broker, bank or other nominee as to how to vote your shares, your shares will not be counted for purposes of determining whether a quorum exists and will have the same effect as a vote “AGAINST” the adoption of the Merger Agreement.

In considering the recommendation of the Board, you should be aware that certain of the Company’s directors and executive officers have interests in the Merger that are different from, or in addition to, the interests of our stockholders generally as further described in the accompanying proxy statement. You should also be aware that the Rollover Stockholders have interests in the Merger that are different from, or in addition to, the interests of the Company’s other stockholders, as further described in the accompanying proxy statement. At the close of business, Eastern Time, on the record date for the special meeting, the Rollover Stockholders collectively owned approximately [●]% of the outstanding shares of Common Stock. Pursuant to a Consortium Rollover and Support Agreement and a Novartis Rollover and Support Agreement (collectively, the “Rollover and Support Agreements”), as applicable, each entered into with Parent on August 11, 2020, each of the Rollover Stockholders has agreed, among other things, (i) to vote, or cause to be voted, all of the Common Stock held by such Rollover Stockholder in favor of the proposal to adopt the Merger Agreement and (ii) that certain shares of Common Stock held by the Consortium Rollover Stockholder (or in the case of Novartis Pharma AG, all of the shares of Common Stock held by Novartis Pharma AG) will be canceled at the closing of the Merger for no consideration. In consideration for such cancellation, the Rollover Stockholders will receive newly issued ordinary shares of Parent immediately prior to the consummation of the Merger. The Special Committee and the Board did not assess whether the Rollover and Support Agreements were fair to, and in the best interests of, the Rollover Stockholders.

The accompanying proxy statement provides you with more detailed information about the special meeting, the Merger Agreement and the transactions contemplated thereby, including the Merger. A copy of the Merger Agreement is attached as Annex A to the proxy statement. We encourage you to carefully read the entire proxy statement and its annexes, including the Merger Agreement and the documents referred to or incorporated by reference in the proxy statement. You may also obtain additional information about the Company from other documents that we have filed with the U.S. Securities and Exchange Commission.

Thank you in advance for your cooperation and continued support.

Sincerely,

Alan Au

Director and Chair of the Special Committee

NEITHER THE U.S. SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THE MERGER, PASSED UPON THE MERITS OR FAIRNESS OF THE MERGER OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THE ACCOMPANYING PROXY STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

The accompanying proxy statement is dated [●], 2020, and is first being mailed to stockholders of the Company on or about [●], 2020.

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

TO BE HELD ON [●]

To the Stockholders of Cellular Biomedicine Group, Inc.:

NOTICE IS HEREBY GIVEN that a special meeting of the stockholders of Cellular Biomedicine Group, Inc., a Delaware corporation (“CBMG,” the “Company,” “we,” “our” or “us”), will be held at [●] on [●], 2020 at [●], Eastern Time, for the following purposes:

As part of our precautions regarding the coronavirus or COVID-19 pandemic, the special meeting may be held solely by means of remote communication in a virtual format on the above date and time. If we take this step after the dissemination of the accompanying proxy statement, we intend to announce the decision to do so at least 10 days prior to the special meeting in a press release that will be available on our website, https://www.cellbiomedgroup.com. We will also file the press release with the U.S. Securities and Exchange Commission as definitive additional proxy materials. The press release and additional proxy materials will include detailed instructions as to the logistical details of the virtual meeting, including how you can remotely access, participate in and vote at such meeting. If you plan to attend the special meeting, we recommend that you monitor our website for updated information and registration details in the event we determine to hold the special meeting solely by virtual means. We encourage you to vote by proxy—by mail, by telephone or over the Internet—well in advance of the special meeting, to ensure your shares are represented whether or not you decide to attend the special meeting in person.

All holders of record of shares of our common stock, par value $0.001 per share (“Common Stock”), at the close of business, Eastern Time, on [●], 2020, the record date for the special meeting, are entitled to notice of and to vote at the special meeting or at any adjournments or postponements thereof. All stockholders of record are cordially invited to attend the special meeting in person.

The board of directors of the Company (the “Board”) (without the participation of Tony (Bizuo) Liu, Darren O’Brien and Hansheng Zhou, who abstained from voting given their relationships with the Buyer Consortium) unanimously recommends that the stockholders of the Company vote “FOR” the Merger Agreement Proposal, “FOR” the Adjournment Proposal and “FOR” the Advisory Compensation Proposal.

Parent and Merger Sub are entities newly formed on behalf of a consortium consisting of (i) Tony (Bizuo) Liu (Chief Executive Officer of CBMG) and certain other members of CBMG management consisting of Yihong

Yao, Li (Helen) Zhang and Chengxiang (Chase) Dai (such other members of CBMG management, together with Mr. Liu, collectively, the “Management Rollover Stockholders”), (ii) Dangdai International Group Co., Limited, Mission Right Limited, Wealth Map Holdings Limited, Earls Mill Limited, OPEA SRL, Maplebrook Limited, Full Moon Resources Limited, Viktor Pan and Zheng Zhou (together with the Management Rollover Stockholders, collectively, the “Consortium Rollover Stockholders”), and (iii) Yunfeng Fund III, L.P., TF Capital Fund III L.P., Velvet Investment Pte. Ltd. and Mr. Liu (in his capacity as an equity investor) (collectively, the “Equity Investors” and, together with Parent, Merger Sub and the Consortium Rollover Stockholders, collectively, the “Buyer Consortium”). In this notice, we refer to the Buyer Consortium, together with Novartis AG, Novartis Pharma AG, Yunfeng Capital Limited, TF Capital Ranok Ltd., Winsor Capital Limited and TF I Ltd., collectively, as the “Participants.”

If the Merger is consummated, each share of Common Stock outstanding immediately prior to the effective time of the Merger (other than (i) shares of Common Stock owned by Parent, Merger Sub or any other direct or indirect wholly-owned subsidiary of Parent and shares of Common Stock owned by the Company, (ii) certain shares of Common Stock owned by the Consortium Rollover Stockholders and all of the shares of Common Stock owned by Novartis Pharma AG (together with the Consortium Rollover Stockholders, collectively, the “Rollover Stockholders”), and (iii) shares of Common Stock owned by stockholders who are entitled to, and who have timely perfected and have not withdrawn a demand for (or lost their right to), appraisal rights pursuant to Section 262 of the General Corporation Law of the State of Delaware (the “DGCL”)) will be converted into the right to receive $19.75 in cash, without interest and subject to any applicable withholding taxes. The Merger is a “going private transaction” under U.S. Securities and Exchange Commission rules. If the Merger is consummated, the Company will be wholly owned by Parent, and Parent will be owned by the Equity Investors and the Rollover Stockholders.

Your vote is important, regardless of the number of shares of Common Stock you own. The Board is soliciting your proxy to ensure that a quorum exists and that your shares are represented and voted at the special meeting and any adjournments and postponements thereof. The Merger cannot be consummated unless the Merger Agreement is adopted by the affirmative vote of the holders of (i) at least a majority of the shares of Common Stock outstanding at the close of business, Eastern Time, on the record date, and (ii) at least a majority of the shares of Common Stock outstanding at the close of business, Eastern Time, on the record date excluding the votes of the Participants and their respective affiliates, in each case, in accordance with applicable law and the organizational documents of the Company. If you fail to vote or you abstain from voting on the Merger Agreement Proposal, the effect will be the same as a vote “AGAINST” the Merger Agreement Proposal.

Assuming a quorum exists, approval of the Adjournment Proposal and the Advisory Compensation Proposal requires the affirmative vote of the holders of a majority of the shares of Common Stock outstanding at the close of business, Eastern Time, on the record date that are present in person or represented by proxy at the special meeting. Approval of the Advisory Compensation Proposal and the Adjournment Proposal are not conditions to the consummation of the Merger.

As required by Section 262 of the DGCL, the Company is notifying all stockholders entitled to vote on the Merger that you are or may be entitled to assert appraisal rights in connection with the proposed Merger. The procedures you are required to follow in order to exercise your appraisal rights are summarized in the accompanying proxy statement in the section entitled “Rights of Appraisal” beginning on page 159, and a copy of Section 262 of the DGCL is included with the accompanying proxy statement as Annex C.

Even if you plan to attend the special meeting in person, we request that you complete, sign, date and return the enclosed proxy card to ensure that your shares will be represented at the special meeting if you are unable to attend. You also may submit your proxy card by using a toll-free telephone number or the Internet. We have provided instructions on the proxy card for using these convenient services.

If you are a stockholder who holds your shares of Common Stock in “street name” through a broker, bank or other nominee, please be aware that you will need to follow the directions provided by such broker, bank or nominee regarding how to instruct it to vote your shares of Common Stock at the special meeting. If your shares

are held by a broker, bank or other nominee and you wish to vote in person at the special meeting, you must bring to the special meeting a proxy from the broker, bank or other nominee that holds your shares authorizing you to vote in person at the special meeting. Please also bring to the special meeting your account statement evidencing your beneficial ownership of Common Stock at the close of business, Eastern Time, on the record date. All stockholders should also bring photo identification to the special meeting.

The proxy statement of which this notice forms a part provides a detailed description of the Merger, the Merger Agreement, the Merger Agreement Proposal, the Adjournment Proposal and the Advisory Compensation Proposal, and provides specific information concerning the special meeting. We urge you to read the proxy statement, including any documents incorporated therein by reference, and its annexes carefully and in their entirety. If you have any questions concerning the Merger or the proxy statement, would like additional copies of the proxy statement or need help voting your shares of Common Stock, please contact our Corporate Secretary by mail at 209 Perry Parkway, Suite 13, Gaithersburg, Maryland 20877, or by telephone at +1 (301) 825-5320.

BY ORDER OF THE BOARD OF DIRECTORS

Andrew Chan

Chief Legal Officer (General Counsel), Corporate

Development and Secretary

Dated [●], 2020

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QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER

The following questions and answers address briefly some questions you may have regarding the special meeting, the Merger Agreement and the Merger. These questions and answers may not address all questions that may be important to you as a stockholder of the Company. Please refer to the more detailed information contained elsewhere in this proxy statement, the annexes to this proxy statement and the documents referred to or incorporated by reference in this proxy statement. You may obtain the information incorporated by reference in this proxy statement without charge by following the instructions set forth in the section entitled “Where You Can Find Additional Information” beginning on page 208.

You are receiving this proxy statement in connection with the solicitation of proxies by the Board in favor of the Merger Agreement Proposal and the other matters to be voted on at the special meeting and because you owned shares of Common Stock at the close of business on [●], 2020, the record date for the special meeting. This proxy statement describes matters on which we urge you to vote and is intended to assist you in deciding how to vote your shares of Common Stock with respect to such matters.

Your vote is important, regardless of the number of shares of Common Stock you own. We encourage you to vote by proxy—by mail, by telephone or over the Internet—well in advance of the special meeting, to ensure your shares are represented whether or not you decide to attend the special meeting in person.

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A complete list of stockholders entitled to vote at the special meeting, arranged in alphabetical order, showing the address of and number of shares of Common Stock held by each such stockholder, will be made available at the offices of the Company, 209 Perry Parkway, Suite 13, Gaithersburg, Maryland 20877, for examination by any stockholder, for any purpose germane to the special meeting, during normal business hours, for a period of at least ten days prior to the special meeting.

At the close of business on the record date, the Consortium Rollover Stockholders owned an aggregate of [●] outstanding shares of Common Stock (which represented approximately [●]% of the total number of outstanding shares of Common Stock), and Novartis owned an aggregate of 1,458,257 shares of Common Stock (which represented approximately [●]% of the total number of outstanding shares of Common Stock). Pursuant to the Consortium Support Agreement and the Novartis Support Agreement (each as defined in the section entitled “—Rollover and Support Agreements”), each of the Rollover Stockholders has agreed,

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among other things, (i) to vote, or cause to be voted, all of the shares of Common Stock owned directly or indirectly by him, her or it in favor of the Merger Agreement Proposal, and (ii) until the earlier of the closing of the Merger and the termination of the Merger Agreement, not to, directly or indirectly, transfer any shares of Common Stock owned by him, her or it. Accordingly, assuming the Rollover Stockholders comply with their respective obligations under the applicable Rollover and Support Agreement, the presence of the shares of Common Stock owned by the Rollover Stockholders at the special meeting would ensure a quorum at the special meeting.

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The Buyer Consortium expects to enter into arrangements with certain holders of Vested Company Equity Awards that provide for the rollover of such awards into ordinary shares of Parent.

Except as otherwise agreed to in writing between a holder of an Unvested Company Equity Award and Parent, each Unvested Company Equity Award that is outstanding immediately prior to the effective time of the Merger will be assumed by Parent as an equity award of the same type covering ordinary shares of Parent and will continue to have, and be subject to, the same terms and conditions (including vesting terms) set forth in the Company equity plan under which it was granted and the equity award agreements relating thereto, as in effect immediately prior to the effective time of the Merger, except that (i) the number of ordinary shares of Parent covered by each such assumed equity award will equal the number of shares of Common Stock subject to such equity award, multiplied by the Exchange Ratio, rounded down to the nearest whole share, and (ii) the per share exercise price for the ordinary shares of Parent issuable upon the exercise of an assumed equity award that is a Stock Option will be equal to the quotient obtained by dividing the exercise price per share of Common Stock at which such assumed Unvested Company Equity Award was exercisable immediately prior to the effective time of the Merger by the Exchange Ratio, rounded up to the nearest whole cent. For a further description of the treatment of Stock Options, RSUs and PSUs in the Merger, see “Special Factors—Interests of Certain Persons in the Merger—Treatment of Company Equity Awards” beginning on page 92 and “The Merger Agreement—Treatment of Company Equity Awards” beginning on page 134.

At the close of business on the record date, there were [●] shares of Common Stock outstanding. Given that [●] shares of Common Stock owned by the Company’s stockholders other than the Participants and their respective affiliates were outstanding at the close of business on the record date, [●] shares of Common

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Stock owned by such stockholders other than the Participants and their respective affiliates must be voted in favor of the Merger Agreement Proposal in order for the Merger Agreement Proposal to be approved. At the close of business on the record date, the Consortium Rollover Stockholders owned an aggregate of [●] outstanding shares of Common Stock (which represented approximately [●]% of the total number of outstanding shares of Common Stock), and Novartis owned an aggregate of 1,458,257 shares of Common Stock (which represented approximately [●]% of the total number of outstanding shares of Common Stock). Pursuant to the Consortium Support Agreement and the Novartis Support Agreement, each of the Rollover Stockholders has agreed, among other things, (i) to vote, or cause to be voted, all of the shares of Common Stock owned directly or indirectly by him, her or it in favor of the Merger Agreement Proposal, and (ii) until the earlier of the closing of the Merger and the termination of the Merger Agreement, not to, directly or indirectly, transfer any shares of Common Stock owned by him, her or it. Accordingly, assuming the Rollover Stockholders comply with their respective obligations under the applicable Rollover and Support Agreement, the presence of the shares of Common Stock owned by the Rollover Stockholders at the special meeting would ensure a quorum at the special meeting. However, given that the Rollover Stockholders are Participants, shares of Common Stock held by the Rollover Stockholders and their respective affiliates will not count towards the Company Majority of the Minority Stockholder Approval, but their votes will count towards the affirmative votes to approve the Adjournment Proposal and the Advisory Compensation Proposal.

You should read “Special Factors—Reasons for the Merger; Recommendation of the Special Committee; Recommendation of the Board; Fairness of the Merger” beginning on page 60 for a discussion of the factors that the Special Committee and the Board (without the participation of Tony (Bizuo) Liu, Darren O’Brien and Hansheng Zhou, who abstained from voting given their relationships with the Buyer Consortium) considered in determining to recommend the approval of the Merger Agreement. See also “Special Factors—Interests of Certain Persons in the Merger” beginning on page 92 for additional information.

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You will have the right to receive the Merger consideration if the Merger Agreement Proposal is approved and the Merger is consummated even if your shares are not voted at the special meeting. However, if your shares are not voted at the special meeting, it will have the same effect as a vote “AGAINST” the Merger Agreement Proposal.

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The affirmative votes by our directors (other than Tony (Bizuo) Liu, Darren O’Brien and Hansheng Zhou) and executive officers (other than the Management Rollover Stockholders) will count towards the Company Majority of the Minority Stockholder Approval. However, shares of Common Stock held by Tony (Bizuo) Liu, Darren O’Brien, Hansheng Zhou and the Management Rollover Stockholders will not count towards the Company Majority of the Minority Stockholder Approval, but their votes will count towards the affirmative votes to approve the Adjournment Proposal and the Advisory Compensation Proposal.

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Even if you plan to attend the special meeting in person, we encourage you to submit a proxy in advance by mail, by telephone or over the Internet so that your shares will be represented and voted at the special meeting if you later decide not to attend the special meeting in person. Telephone and Internet facilities for the submission of a proxy to vote shares will be available 24 hours a day and will close at 11:59 p.m. on [●]. Proxy cards mailed must be received no later than [●] in order to be counted in the vote.

If your shares are held by your broker, bank or other nominee, you are considered the beneficial owner of shares held in “street name” and you will receive a form from your broker, bank or other nominee seeking instruction from you as to how your shares should be voted. If you beneficially own your shares and receive a voting instruction form, you can vote by following the instructions on your voting instruction form. Please refer to information from your broker, bank or other nominee on how to submit voting instructions. Stockholders who hold their shares in “street name” are not able to vote at the special meeting unless they have a “legal proxy,” executed in their favor, from the stockholder of record (i.e., the broker, bank or other nominee) giving them the right to vote the shares at the special meeting.

If you properly sign and return your proxy card or submit your proxy by telephone or over the Internet but do not include instructions on how your shares of Common Stock should be voted on a matter, the shares of Common Stock represented by your unrevoked proxy will be voted “FOR” the Merger Agreement Proposal, “FOR” the Adjournment Proposal and “FOR” the Advisory Compensation Proposal.

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If you hold shares in “street name,” you may submit new voting instructions by contacting your broker, bank or other nominee and you may also change your vote or revoke your proxy in person at the special meeting if you obtain a proxy, executed in your favor, from the stockholder of record (i.e., the broker, bank or other nominee) giving you the right to vote the shares.

If you submit a proxy or provide instructions to vote your shares and do not otherwise revoke such proxy or change such instructions in accordance with one of the methods set forth above, your shares will be represented and voted at the special meeting in accordance with such proxy or instructions.

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SPECIAL FACTORS

Background of the Merger

As part of the Company’s strategic planning process, the Board regularly reviews and discusses with senior management the Company’s performance, business strategy, prospects for growth and competitive position in the industry in which it operates. In addition, the Board and senior management regularly review and evaluate various strategic alternatives, including acquisitions, dispositions, commercial partnerships and other strategic transactions, as part of their ongoing efforts to strengthen the Company’s overall business, including its product development programs, cell therapy initiatives and commercialization efforts, and enhance stockholder value. Since the Company became a publicly-traded company as a result of its merger with EastBridge Investment Group Corporation in 2013, these reviews and evaluations included discussions regarding strategic alternatives to address the liquidity constraints of the Company given that the Company is a clinical-stage biopharmaceutical company that does not presently generate meaningful revenue. Given the existing liquidity pressure on the Company, these strategic alternatives included, among other things, financing ongoing operations by raising capital, which would result in significant dilution to the Company’s existing stockholders, entering into collaboration agreements with third parties, which could require the Company to relinquish certain rights to its technology or product or therapy candidates and share future revenues associated with the partnered product or therapy, or financing operations through debt financing facilities, which would cause the diversion of funds that could otherwise be available to support clinical or commercialization activities towards servicing the interest and principal repayment obligations under such facilities.

On September 25, 2018, the Company entered into a Share Purchase Agreement with Novartis, pursuant to which the Company agreed to sell, and Novartis agreed to purchase from the Company, 1,458,257 shares of Common Stock at a purchase price of $27.43 per share for total gross proceeds of approximately $40 million, and a Registration Rights Agreement with respect to such shares of Common Stock. Also on September 25, 2018, the Company, together with certain of its subsidiaries and certain other entities controlled by the Company, and Novartis entered into a License and Collaboration Agreement (the “Collaboration Agreement”), pursuant to which, among other things, the Company agreed to collaborate with Novartis in connection with the manufacture and supply of a cell therapy. Pursuant to the Collaboration Agreement, during the term of the Collaboration Agreement, the Company (together with such subsidiaries and controlled entities) agreed not to, and agreed to cause its affiliates, licensees, and sublicensees not to, directly or indirectly, (i) license, transfer, sell, or otherwise grant to any third party any right to develop, manufacture, or commercialize certain therapies of the Company (or such subsidiaries or controlled entities) or (ii) enter into a definitive agreement providing for a transaction or series of transactions that would constitute a change of control of the Company, in each case, without first complying with the provisions of the Collaboration Agreement relating to a right of first negotiation granted in favor of Novartis. In addition, the Collaboration Agreement provides that, if the Company were to breach such right of first negotiation, Novartis could have the right to terminate the Collaboration Agreement. On December 21, 2018, the Company, Shanghai Cellular Biopharmaceutical Group Ltd., an entity controlled by the Company, Novartis, and Beijing Novartis Pharma Co., Ltd., an affiliate entity of Novartis, entered into a Toll Manufacturing and Supply Agreement (the “Supply Agreement”) in connection with the manufacture and supply of such cell therapy.

On March 3, 2019, the Board held a telephonic meeting to receive an update regarding the status of the Company’s efforts to evaluate potential capital raising opportunities. At the invitation of the Board, Andrew Chan, Chief Legal Officer, Corporate Development and Secretary of the Company, and representatives of Ellenoff Grossman & Schole, legal counsel to the Company at the time (“EGS”), also attended the meeting. During this meeting, among other things, Tony (Bizuo) Liu, Director, Chief Executive Officer and Chief Financial Officer of the Company, updated the Board regarding recent meetings with investment banks relating to a possible registered public offering of Common Stock. Following discussion, the Board authorized a registered public offering of Common Stock for aggregate proceeds of between $20 million and $30 million at a per share price of at least $18.00 and established a Pricing Committee for the purposes of approving certain terms

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of the offering in the event that the proposed price at which the shares of Common Stock are to be sold is less than $18.00 per share. Subsequently, on March 21, 2019, the Pricing Committee of the Board approved, by unanimous written consent, a registered public offering of Common Stock at a per share price of $17.00, and the Company entered into an underwriting agreement with Cantor Fitzgerald & Co. and Robert W. Baird & Co. Incorporated (“Baird”), as representatives of a syndicate of underwriters, in connection with the offering.

On July 9, 2019, the Board held a telephonic meeting to discuss additional potential sources of financing. At the invitation of the Board, Mr. Chan and representatives of EGS also attended the meeting. During this meeting, among other things, in connection with the Board’s regular review of the Company’s liquidity and cash flow positions, Mr. Liu sought the Board’s authorization to engage an investment bank to aid the Board in identifying additional potential sources of financing. Following discussion, the Board authorized management to identify and engage an investment bank to evaluate certain business opportunities for further consideration by the Board and to explore options to obtain financing of between $20 million and $30 million, with the material terms of such financing to be presented to the Board at a later date.

At various times between July 9, 2019 and early October 2019, Mr. Liu and other members of the Company’s management held various meetings and otherwise worked with representatives of Baird to explore the viability of raising substantial additional capital through a registered public offering of Common Stock, including assessment of market conditions and timing for such offering. Following these efforts, the Company management determined that, at that time and in light of market conditions and various other related factors, in order for a registered public offering of Common Stock to be viable, it would likely need to be priced at a per share price significantly less than the per share price received in the March 2019 registered public offering.

On September 12, 2019, Mr. Liu met with representatives of Hillhouse Bio Holdings, L.P. (“HBH”) to discuss certain publicly available information regarding the Company’s clinical program and liquidity and cash flow positions. Representatives of the Company previously had introductory meetings with representatives of HBH in 2019. Representatives of the Company first met with representatives of HBH in January 2019 at an industry conference in San Francisco and later, at the Company’s offices in Shanghai, met with representatives of HBH in January 2019 and again in August 2019. However, such meetings did not involve any discussions regarding the terms of any potential transaction or any information of the Company that was not publicly available. Additionally, on September 12, 2019, representatives of TF Capital, which had previously invested in the Company, met with representatives of the Company to discuss a potential financing transaction. Between September 12, 2019 and November 11, 2019, Mr. Liu continued to engage in discussions with other third parties to explore a potential financing transaction.

During late September 2019 and early October 2019, Mr. Liu held various telephonic and in-person meetings with representatives of HBH in China to discuss the possibility of a potential transaction involving the Company and HBH, including potential equity or debt financing transactions, based on publicly available information of the Company.

On October 12, 2019, the Board held a meeting to receive an update regarding the status of the Company’s efforts to evaluate potential financing opportunities. At the invitation of the Board, Mr. Chan, Yihong Yao, Chief Scientific Officer of the Company, and representatives of EGS also attended the meeting. During this meeting, among other things, Mr. Liu updated the Board regarding the Company’s liquidity and cash flow positions and potential financing opportunities. Following discussion, the Board instructed Mr. Liu to continue his ongoing efforts to identify potential alternative sources of financing for the Company. Following the October 12, 2019 Board meeting, Mr. Liu discussed with Hansheng Zhou, a member of the Board affiliated with Dangdai International Group Co., Limited (“Dangdai”), the Company’s difficulties raising third party financing in light of the current stock price and Dangdai’s 2016 investment in the Company at a price of $19.00 per share.

On multiple occasions during October 2019, Mr. Liu continued to engage in discussions with representatives of each of HBH and TF Capital to explore a potential transaction that could address the Company’s capital needs and/or allow the Company to improve its competitive position in a business segment

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that was becoming increasingly competitive. The discussions between Mr. Liu, on the one hand, and representatives of HBH and TF Capital, on the other hand, that occurred during this time were based on publicly available information of the Company and were preliminary in nature and did not involve any in-depth discussions regarding the terms of any potential transaction. However, following the October 12, 2019 Board meeting, Mr. Liu and representatives of HBH began discussing the idea of pursuing a “going private transaction” involving the acquisition of all outstanding shares of Common Stock as a potential alternative transaction.

On November 2, 2019, Mr. Liu contacted Messrs. Yao and Dai and Ms. Zhang, each a member of the Company’s management team and a stockholder of the Company, to discuss the feasibility of a “going private transaction” and to ascertain their interest in considering such a potential transaction. These discussions were preliminary in nature and did not result in any in-depth discussions regarding the terms of, or any understanding or agreement with respect to, any potential transaction.

Between November 2, 2019 and November 9, 2019, Mr. Liu engaged in discussions with representatives of HBH and TF Capital to explore structures for a potential “going private transaction” in which HBH and TF Capital would partner with each other and obtain support from other stockholders of the Company, including Messrs. Liu, Yao and Dai and Ms. Zhang, for submitting a buyout proposal to the Company. During that same week, Mr. Liu contacted representatives of Dangdai, an existing stockholder of the Company, to ascertain Dangdai’s interest in considering a potential “going private transaction” involving the Company, including whether it would be interested in rolling over its shares of Common Stock as part of the proposed transaction. These discussions were based on publicly available information of the Company, and, as of such time, none of HBH, TF Capital or Dangdai had entered into a confidentiality agreement with the Company, nor had they received from the Company any due diligence information (including any confidential information) with respect to the Company.

On November 5, 2019, Mr. Liu contacted representatives of Mission Right Limited (“Mission Right”), an existing stockholder of the Company, and discussed the possibility of a “going private transaction” involving the Company and whether Mission Right was interested in potentially being involved in such a proposed transaction, including whether it would be interested in rolling over its shares of Common Stock as part of the proposed transaction. The discussion was preliminary in nature and did not involve any in-depth discussions regarding the terms of such going private transaction. Mission Right had not entered into a confidentiality agreement with the Company, nor had it received from the Company any due diligence information (including any confidential information) with respect to the Company.

On November 6, 2019, HBH sent a draft of a consortium agreement to Mr. Liu and TF Capital. Thereafter, representatives of Kirkland & Ellis LLP (“Kirkland”), which was at the time acting as U.S. legal counsel to HBH, HBH and TF Capital held various calls with Mr. Liu to discuss the draft consortium agreement.

From November 6, 2019 to November 9, 2019, Mr. Liu, HBH and TF Capital and their respective legal counsels negotiated and finalized the terms of the consortium agreement, including the per share merger consideration to be offered in connection with a non-binding proposal to acquire all outstanding shares of Common Stock not already owned by such parties. During this time, Mr. Liu also participated on calls with Messrs. Yao and Dai, Ms. Zhang and representatives of Dangdai and Mission Right to apprise them of the status of discussions with HBH and TF Capital and the terms of the Consortium Agreement.

On November 9, 2019, Messrs. Liu, Yao and Dai, Ms. Zhang, HBH and TF Capital entered into the consortium agreement (the “Consortium Agreement”) pursuant to which each party agreed, among other things, to form a consortium the members of which would work exclusively with one another to undertake a transaction to acquire all of the outstanding shares of Common Stock not already owned by such parties in a “going private transaction,” and that HBH, Mr. Liu and TF Capital would be designated as the lead investors (with authority to negotiate on behalf of the Buyer Consortium) under the Consortium Agreement. For purposes of this section

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entitled “—Background of the Merger,” references to the “Buyer Consortium” mean the Buyer Consortium as it was comprised at the relevant point in time.

On November 9 and 10, 2019, Mr. Liu contacted each of the directors to inform them of a forthcoming indication of interest from the Buyer Consortium.

On November 10, 2019 and November 11, 2019, each of Dangdai and Mission Right, respectively, entered into an adherence agreement pursuant to which they agreed to become a party to the Consortium Agreement and join the Buyer Consortium, which at the time was comprised of Messrs. Liu, Yao and Dai, Ms. Zhang, HBH and TF Capital.

On November 11, 2019, the Buyer Consortium delivered to the Company a non-binding indication of interest in acquiring all outstanding shares of Common Stock (other than those shares held by members of the Buyer Consortium that may be rolled over in the proposed transaction) for $19.50 per share in cash (the “November 11 Proposal”). The November 11 Proposal stated that $19.50 per share represented a 10.4% premium to the closing price for Common Stock on the last trading day prior to the date of such proposal and a premium of 16.1% and 30.3% to the volume-weighted average price for Common Stock during the 30- and 60-trading day periods preceding the last trading day prior to the date of such proposal, respectively. The Buyer Consortium noted that it proposed to finance the transaction with a combination of cash and the rollover of certain equity interests in the Company, it would submit a new proposal that is subject to appropriate procedural protections if a meaningful number of the Company’s stockholders agreed to roll over shares of Common Stock held by such stockholders, and the members of the Buyer Consortium did not intend to sell their equity interests in the Company to any third party. The Buyer Consortium also expressed a willingness to extend to the Company a bridge loan on terms to be mutually agreed by the Buyer Consortium and the Company in order to address any potential short-term liquidity needs of the Company. The November 11 Proposal reported that the members of the Buyer Consortium beneficially owned approximately 23.3% of the Company’s capital stock based on the number of outstanding shares of Common Stock as of November 1, 2019.

Following receipt of the November 11 Proposal, the Board held a telephonic meeting to discuss the proposal. At the invitation of the Board, representatives of EGS also attended the meeting. During this meeting, Mr. Liu explained to the other members of the Board that he and certain other members of management were concerned with the Company’s ability to raise capital on reasonable terms through a secondary public offering, the Company’s liquidity position and the Company’s recent stock price performance, in addition to the Company’s need for significant capital to execute its business plan. Mr. Liu noted that the Management Rollover Stockholders, HBH and TF Capital, together with certain stockholders of the Company, formed the Buyer Consortium and determined to submit the November 11 Proposal to the Board in light of the various challenges facing the Company at that time (particularly those set forth under the section entitled “Special Factors—Purposes and Reasons of the Buyer Filing Persons for the Merger” beginning on page 88).

Following discussion of the November 11 Proposal, at this meeting, the Board unanimously resolved to establish the Special Committee consisting of Chun Kwok Alan Au, Edward Schafer, Terry A. Belmont and Dr. Steve (Wentao) Liu, each having been determined by the Board to be disinterested and independent for all purposes under Delaware law with respect to the November 11 Proposal. The Board delegated to the Special Committee the full power and authority of the Board to take all actions the Special Committee considers necessary, desirable or convenient in connection with the identification, evaluation and negotiation of, and the making of recommendations to the Board regarding, the November 11 Proposal and any alternatives thereto, including the express power and authority to review and to evaluate the terms and conditions, and determine the advisability, of the November 11 Proposal and any alternatives thereto, to negotiate with any party the Special Committee deems appropriate with respect to the terms and conditions of the November 11 Proposal or any alternatives thereto, to determine whether the November 11 Proposal or any alternatives thereto is beneficial to the Company and its stockholders and on arm’s-length terms and conditions, to recommend to the Board what actions, if any, should be taken by the Board with respect to the November 11 Proposal and any alternatives

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thereto, including, without limitation, to approve or elect not to pursue the November 11 Proposal and any alternatives thereto, to act on behalf of the Company in connection with any matters ancillary or related to the November 11 Proposal and any alternatives thereto (including, without limitation, the ability to authorize and enter into contracts of any nature, commence litigation and adopt defensive measures), and to retain such legal counsel, financial advisors and other outside professionals, consultants and agents, each to perform such services and render such advice or opinions, as the Special Committee may deem necessary, desirable or convenient to assist it in connection with the discharge of its duties. The Board also resolved that it would not approve or recommend to the stockholders of the Company the November 11 Proposal or any alternatives thereto without the prior favorable recommendation of the Special Committee. Mr. Au was designated as the Chair of the Special Committee. As Chair, Mr. Au was consulted regularly by the Special Committee’s advisors and would inform the other members of the Special Committee of developments with respect to the proposed transaction when a meeting was not held.

On that same day, following the Board meeting, the Company issued a press release disclosing receipt of the November 11 Proposal, the formation of the Special Committee and that the Special Committee, with the assistance of its advisors, would consider the November 11 Proposal and any response thereto in connection with its ongoing review of strategic alternatives.

Over the following days, the Company filed a current report on Form 8-K, an affiliate of HBH (“HBH Advisor”) and Mr. Liu each filed a Schedule 13D and Dangdai amended its Schedule 13D, in each case, to disclose, among other things, the November 11 Proposal. Following public announcement of the November 11 Proposal, no inbound indications of interest from third parties relating to strategic alternatives were received by the Company. However, following such public announcement, certain stockholders of the Company, consisting of Viktor Pan, Zheng Zhou, Wealth Map Holdings Limited (“Wealth Map”), Earls Mill Limited (“Earls Mill”), OPEA SRL, Maplebrook Limited (“Maplebrook”) and Full Moon Resources Limited (“Full Moon”), each communicated with Mr. Liu to inquire about the proposed transaction.

On November 12, 2019, Mr. Liu contacted representatives of Novartis to discuss the November 11 Proposal and to provide additional information regarding the members of the Buyer Consortium. During these discussions, Mr. Liu informed Novartis of what he believed to be various benefits to the Company in moving forward with a “going private transaction” as contemplated by the November 11 Proposal, including the potential financial and competitive benefits to the Company, and expressed his desire to continue the Company’s business collaboration with Novartis and its affiliates regardless of whether any potential transaction was consummated.

On November 14, 2019, Mr. Au contacted a representative of White & Case LLP (“White & Case”) to discuss potential negotiation strategies, the duties and responsibilities of the Special Committee and the directors’ fiduciary duties in general and in the context of the November 11 Proposal. Mr. Au also requested that representatives of White & Case meet with the Special Committee telephonically to discuss a potential engagement by the Special Committee of White & Case to act as outside legal counsel to the Special Committee.

The Special Committee subsequently engaged White & Case as its outside legal counsel. The Special Committee’s decision was based on, among other factors, White & Case’s qualifications and experience with mergers and acquisitions transactions, including its prior representation of special committees. The Special Committee also determined that the ongoing relationships between White & Case and an affiliate of HBH, as previously disclosed by White & Case to the Special Committee, and between White & Case and Novartis, as later disclosed by White & Case to the Special Committee when discussions began regarding a waiver by Novartis of the right of first negotiation granted in favor of Novartis by the Company under the Collaboration Agreement, were not material to the Special Committee’s evaluation of a transaction involving a consortium that included HBH or a transaction involving Novartis.

On or about November 15, 2019, representatives of Velvet Investment also contacted Mr. Liu and expressed an interest in participating in a potential transaction involving the Company along with the Buyer Consortium.

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These discussions were based on publicly available information of the Company, were preliminary in nature and did not result in any firm offer or proposal for, any in-depth discussions regarding the terms of, or any understanding or agreement with respect to, joining the Buyer Consortium or any potential transaction involving the Company. Following this initial outreach by and discussions with representatives of Velvet Investment, on or about November 17, 2020, Mr. Liu introduced representatives of Velvet Investment to certain members of the Buyer Consortium.

On November 18, 2019, the Board held a telephonic meeting. At the invitation of the Board, Mr. Chan and representatives of EGS also attended the meeting. During this meeting, among other things, Mr. Liu updated the Board regarding the Company’s liquidity position, including Mr. Liu’s expectation that the Company’s existing cash reserves were sufficient to fund ongoing operations for approximately six months.

On November 25, 2019, the Special Committee held a telephonic meeting to discuss the November 11 Proposal and to discuss certain preliminary matters relating to the formation of the Special Committee. At the invitation of the Special Committee, representatives of White & Case also attended the meeting. At the meeting, representatives of White & Case reviewed with the Special Committee the duties and responsibilities of the Special Committee and the directors’ fiduciary duties in general and in the context of the November 11 Proposal and also reviewed with the Special Committee the terms of the November 11 Proposal. Representatives of White & Case then discussed with the Special Committee the importance of retaining an independent financial advisor to assist the Special Committee in its evaluation of the November 11 Proposal and other strategic alternatives and to advise the Special Committee on other potential means to address the Company’s liquidity position.

On November 26, 2019, the Special Committee, with the assistance of White & Case, separately interviewed three financial advisors by telephone, including Jefferies, to discuss their respective interest in serving, and qualifications to serve, as a financial advisor to the Special Committee in connection with a potential transaction involving the Company and to receive their respective fee proposals. During the interview with Jefferies, representatives of Jefferies described Jefferies’ qualifications to serve as financial advisor to the Special Committee, including certain relationships of Jefferies with affiliates of HBH and the absence of any material relationships between Jefferies and the Company during the two-year period prior to the date of the interview, and reviewed with the Special Committee various strategies that the Company could pursue to address its liquidity position. The Special Committee discussed numerous aspects of the information provided by Jefferies. At the conclusion of the Special Committee’s interview of Jefferies, the Special Committee requested additional disclosure from Jefferies regarding its relationships with affiliates of HBH, which relationships Jefferies characterized as immaterial to Jefferies. On the following day, Mr. Au informed a representative of White & Case that the Special Committee had discussed Jefferies’ qualifications and determined to engage Jefferies as the Special Committee’s financial advisor, subject to satisfactory negotiation of the terms of Jefferies’ engagement, including the fees payable to Jefferies and confirmation of Jefferies’ relationships with members of the Buyer Consortium and the absence of any material relationships between Jefferies and the Company.

On or about November 26, 2019, representatives of HBH contacted representatives of Velvet Investment to discuss Velvet Investment’s potential interest in participating in the Buyer Consortium. During the period between November 26, 2019 and March 30, 2020, Velvet Investment had multiple telephonic meetings with representatives of Kirkland with respect to the structure and general timetable of a potential privatization transaction involving the Company and continued to evaluate the possibility of participating in such transaction based on publicly available information.

On December 5, 2019, as previously requested by the Special Committee, representatives of Jefferies provided to representatives of White & Case disclosures regarding Jefferies’ relationships with members of the Buyer Consortium and the absence of any material relationships between Jefferies and the Company during the two-year period prior to December 5, 2019. On the following day, Mr. Au met telephonically with representatives of White & Case to discuss Jefferies’ qualifications and relationships with a company in which

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HBH or its affiliate maintained a material (but less than a majority) equity position, which relationships Jefferies had previously disclosed and characterized as immaterial to Jefferies. Subsequently, on December 11, 2019 and December 13, 2019, representatives of White & Case discussed with representatives of Jefferies the disclosures by Jefferies of its relationships with the company in which HBH or its affiliates maintained an equity position, as well as the terms of a possible engagement by the Special Committee of Jefferies.

On December 9, 2019, White & Case provided to Kirkland, which at that time was serving as outside legal counsel to the Buyer Consortium, an initial draft confidentiality agreement.

Between December 10, 2019 and February 21, 2020, representatives of the Buyer Consortium (which at that time consisted of Messrs. Liu, Yao and Dai, Ms. Zhang, HBH, TF Capital, Dangdai and Mission Right) held various calls with Mr. Pan, Zheng Zhou and representatives of Wealth Map, Earls Mill, OPEA SRL, Maplebrook and Full Moon regarding the possibility of such parties joining the Buyer Consortium. During this time, representatives of Kirkland provided each of Mr. Pan, Zheng Zhou, Wealth Map, Earls Mill, OPEA SRL, Full Moon and Maplebrook with copies of the Consortium Agreement and drafts of an adherence agreement that were in substantially the same form as the adherence agreements that Dangdai and Mission Right entered into on November 10, 2019 and November 11, 2019, respectively.

On December 13, 2019, and again on December 16, 2019, representatives of Velvet Investment visited the Company’s offices in Shanghai and further discussed with Mr. Liu the possibility of Velvet Investment participating in the potential privatization transaction involving the Company contemplated by the November 11 Proposal.

Later on December 13, 2019, the Special Committee held a telephonic meeting to discuss, among other things, the Special Committee’s engagement of Jefferies as its financial advisor. At the invitation of the Special Committee, representatives of White & Case also attended the meeting. After discussion of the information that had been provided previously by Jefferies and the matters previously discussed between White & Case and Jefferies, including the terms of a possible engagement of Jefferies, the consensus of the Special Committee was that Jefferies should be engaged as financial advisor to the Special Committee on the terms discussed with the Special Committee. The Special Committee selected Jefferies as its financial advisor because, among other factors, Jefferies is an internationally recognized investment banking firm with substantial experience in merger and acquisition transactions, including substantial experience advising special committees in transactions similar to the proposed transaction and advising healthcare companies, and its reputation. The Special Committee also determined that any relationships between Jefferies and members of the Buyer Consortium previously disclosed by Jefferies to the Special Committee were not material to the Special Committee’s evaluation of a transaction involving the Buyer Consortium. The Special Committee subsequently engaged Jefferies to act as its financial advisor and the Company issued a press release announcing such engagement and the engagement of White & Case as the Special Committee’s outside legal counsel.

On December 18, 2019, the Special Committee held a telephonic meeting to discuss certain preliminary matters with respect to evaluating the November 11 Proposal. At the invitation of the Special Committee, representatives of White & Case and Jefferies also attended the meeting. Representatives of Jefferies explained to the Special Committee that, in order to commence preparation of financial information with respect to the proposed transaction, Jefferies would require certain financial due diligence from the Company, as well as certain financial forecasts for the Company prepared by Company management, which the Special Committee would also need in order to evaluate the November 11 Proposal. In that regard, the Special Committee directed Jefferies to contact Company management to discuss the status of management’s preparation of financial forecasts for the Company. Representatives of Jefferies also reviewed with the Special Committee certain strategic parties that could have potential interest in a transaction involving the Company, and representatives of White & Case and Jefferies discussed with the Special Committee the process of conducting outreach to potential acquirors. Mr. Au then inquired about potential avenues to address the Company’s short term liquidity position in light of information recently provided to the Board that indicated that the Company would likely run out of

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operating capital sometime during the second quarter of 2020. Representatives of Jefferies explained that, in light of the publicly announced November 11 Proposal, the Company would have difficulty securing third party debt or equity financing on acceptable terms from a party that is not affiliated with the Buyer Consortium. Following further discussion, the Special Committee directed Jefferies to explore potential third party sources of financing, including by discussing with Company management any potential alternative sources of financing that might be available to the Company and with members of the Buyer Consortium as to whether any such members would be willing to provide bridge financing to the Company while the Special Committee continued to evaluate the November 11 Proposal.

From December 20, 2019 through January 6, 2020, in accordance with the Special Committee’s directives, representatives of Jefferies conducted discussions with Company management, including with respect to financing alternatives that might be available to the Company and the right of first negotiation granted in favor of Novartis by the Company under the Collaboration Agreement. Jefferies and Company management discussed how such right of first negotiation could delay the Company from entering into a definitive agreement for at least six months while Novartis evaluated such right of first negotiation pursuant to the terms of the Collaboration Agreement. From December 20, 2019 through July 23, 2020, at the direction of the Special Committee, representatives of Jefferies continued to conduct discussions with Company management regarding certain financial forecasts for the Company that were being prepared by Company management.

On January 6, 2020, Mr. Liu delivered to Jefferies initial drafts of documentation for a bridge loan to the Company in an aggregate principal amount equal to $14 million that were provided to him by Winsor Capital Limited, an affiliate of TF Capital.

On January 10, 2020, the Special Committee held a telephonic meeting to continue discussions regarding process and next steps, including with respect to evaluating the November 11 Proposal, the status of Company management’s preparation of certain financial forecasts for the Company, the status of the outreach process conducted by Jefferies, in accordance with the Special Committee’s directives, to potential alternative third party financing sources, the proposed terms of the bridge loan from Winsor Capital Limited and the right of first negotiation granted in favor of Novartis by the Company under the Collaboration Agreement. At the invitation of the Special Committee, representatives of White & Case and Jefferies also attended this meeting. Representatives of White & Case discussed with the Special Committee the right of first negotiation granted in favor of Novartis and its potentially adverse effect on the Special Committee’s ability to seek and obtain indications of interest from other potential acquirors. In that regard, representatives of White & Case and Jefferies also discussed with the Special Committee the advisability of obtaining a waiver from Novartis of its right of first negotiation. After further discussion, the Special Committee directed White & Case and Jefferies to contact Novartis to seek such a waiver. Also during this meeting, following a discussion of the terms of the proposed bridge loan from Winsor Capital Limited and an update from Jefferies regarding its discussions with Company management regarding potential alternative sources of financing that might be available to the Company, the Special Committee directed White & Case and Jefferies to propose to Mr. Liu that the amount of the proposed bridge loan be increased from $14 million to $22 million and that the terms of the bridge loan be modified to allow for conversion of any outstanding amounts into equity securities of the Company under certain circumstances. The Special Committee also directed Jefferies to continue to explore other alternative sources of financing together with Company management and with oversight from Mr. Belmont. Thereafter, from January 14, 2020 through January 23, 2020, the Special Committee, with the assistance of Jefferies and White & Case, continued to negotiate the terms of the proposed bridge loan from Winsor Capital Limited, and agreed, subject to approval of the Board, to a bridge loan in an aggregate amount of $16 million, with certain outstanding amounts being convertible into equity securities of the Company under certain circumstances.

On January 23, 2020, representatives of White & Case participated on an introductory call with representatives of Kirkland to discuss certain preliminary matters, including the status of the Buyer Consortium’s comments to the draft confidentiality agreement provided by the Company on December 9, 2019. During this discussion, representatives of Kirkland explained that they did not believe a confidentiality agreement among the

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Company and the Buyer Consortium was necessary at such time given that the Buyer Consortium was evaluating the Company based on publicly available information of the Company, and, as of such time, did not require from the Company any due diligence information (including any confidential information) with respect to the Company.

On January 27, 2020, in accordance with the Special Committee’s directives, representatives of White & Case and Jefferies discussed with representatives of Novartis the right of first negotiation granted in favor of Novartis by the Company under the Collaboration Agreement. At that time, the representatives of Novartis would not agree to a waiver of Novartis’ right of first negotiation with respect to a transaction with the Buyer Consortium or a third party acquiror, but expressed a willingness to reconsider its position if and when the Company proposed to enter into a definitive agreement with the Buyer Consortium or a third party.

On January 28, 2020, the Board, by written consent, unanimously approved, and the Company entered into, the TF Bridge Loan Agreement, receipt of funds from which were not conditioned on entry into a transaction with the Buyer Consortium. On January 30, 2020, the Company received funding in an amount equal to $7 million from Winsor Capital Limited for the first tranche of the TF Bridge Loan.

On January 30, 2020, Mr. Liu (and certain other members of the Buyer Consortium that had joined in Mr. Liu’s filing) and HBH Advisor, and on February 3, 2020, Dangdai, each amended their respective Schedule 13Ds to disclose that the members of the Buyer Consortium collectively may be deemed to be the beneficial owner of 24.7% of the outstanding shares of Common Stock. Also on February 3, 2020, Winsor Capital Limited filed a Schedule 13D disclosing, among other things, the TF Bridge Loan Agreement.

On February 3, 2020, the Special Committee held a telephonic meeting to continue discussions regarding process and next steps, including with respect to evaluating the November 11 Proposal, the status of Company management’s preparation of certain financial forecasts for the Company, the status of the outreach process conducted by Jefferies, in accordance with the Special Committee’s directives, to potential alternative third party financing sources, the potential outreach to certain strategic parties to gauge their respective interest in a potential transaction involving the Company, the terms of the TF Bridge Loan, and the right of first negotiation granted in favor of Novartis by the Company under the Collaboration Agreement. At the invitation of the Special Committee, representatives of White & Case and Jefferies also attended this meeting. Representatives of Jefferies reviewed the terms of the TF Bridge Loan Agreement and the unsuccessful efforts to identify potential alternative third party sources of financing. Representatives of Jefferies explained to the Special Committee that Jefferies believed it was unlikely that more favorable terms were reasonably available to the Company at that time than the terms included in the TF Bridge Loan Agreement. Following discussion, the Special Committee unanimously ratified the Board’s approval of the TF Bridge Loan Agreement. Representatives of White & Case then provided an update regarding its January 27, 2020 discussion with representatives of Jefferies and Novartis regarding the right of first negotiation granted in favor of Novartis by the Company under the Collaboration Agreement. Following discussion, the consensus of the Special Committee was that the Special Committee would engage with Novartis about waiving Novartis’ right of first negotiation at a later date. Representatives of Jefferies then reviewed with the Special Committee a list of potential strategic parties that could have a potential interest in a transaction involving the Company, which included selected global pharmaceutical companies that had made recent acquisitions in cell therapy, other well capitalized global pharmaceutical companies (including Novartis), well capitalized oncology companies, Chinese pharmaceutical companies and life sciences manufacturing companies, and reviewed with the Special Committee certain preliminary information that Jefferies proposed to provide to potential acquirors. After further discussion with the Special Committee, Jefferies agreed to consider whether certain growth funds of private equity sponsors would be interested in a potential transaction involving the Company.

On February 10, 2020, Mr. Liu met with representatives of Casdin Partners Master Fund, L.P. (“Casdin”), at Casdin’s request, to discuss Casdin’s potential interest in participating in the Buyer Consortium. Representatives of Casdin had previously met on multiple occasions with representatives of the Company over the preceding

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years at various industry conferences and indicated that Casdin had been following the Company for some time. During the period between February 10, 2020 and March 30, 2020, Casdin continued to evaluate the possibility of participating in a potential “going private transaction” involving the Company based on publicly available information.

On February 12, 2020, Jefferies provided to the Special Committee for its consideration an updated list of potential acquirors that could have a potential interest in a transaction involving the Company, consisting of 13 biopharma and oncology companies, nine other selected Chinese companies, eight manufacturing companies and one financial sponsor, as well as a revised preliminary information that Jefferies proposed to provide to potential acquirors. Following review of such updated information and the proposed list of potential acquirors, the Special Committee directed Jefferies to proceed with the outreach to such potential acquirors.

On February 13, 2020, at the direction of the Special Committee, Jefferies commenced the outreach to the potential acquirors discussed with the Special Committee on the prior day, which continued until March 12, 2020.

On February 21, 2020, Mr. Pan, Zheng Zhou, Wealth Map, Earls Mill, OPEA SRL and Maplebrook, each entered into an adherence agreement to the Consortium Agreement and joined the Buyer Consortium. On or about that time, representatives of Full Moon informed representatives of the Buyer Consortium that, after further internal discussion and consideration, Full Moon, as of such time, had decided not to join the Buyer Consortium.

Also on February 21, 2020, the Company received a revised non-binding indication of interest (the “February 21 Proposal”) from the Buyer Consortium, which at such time also included Mr. Pan, Zheng Zhou, Wealth Map, Earls Mill, OPEA SRL and Maplebrook. According to the February 21 Proposal, the Buyer Consortium collectively was the beneficial owner of 45.2% of the outstanding shares of Common Stock at the time of the February 21 Proposal. The February 21 Proposal reaffirmed the proposed consideration of $19.50 per share in cash and provided that consummation of the transaction contemplated by the February 21 Proposal would be subject to non-waivable conditions requiring approval by a properly functioning special committee and approval by stockholders holding at least a majority of all the issued and outstanding shares of Common Stock not affiliated with any member of the Buyer Consortium. On that same date, Winsor Capital Limited, HBH Advisor, Mr. Liu (and certain other members of the Buyer Consortium that had joined in Mr. Liu’s filing) and Sailing Capital each amended their respective Schedule 13Ds to disclose, among other things, the February 21 Proposal. The Company also filed a current report on Form 8-K confirming receipt of the February 21 Proposal and indicating that the Special Committee, with the assistance of its advisors, would consider the February 21 Proposal and any response thereto in connection with its ongoing review of strategic alternatives.

On March 3, 2020, the Special Committee held a telephonic meeting to continue discussions regarding process and next steps, including with respect to evaluating the February 21 Proposal, the status of the outreach process conducted by Jefferies, in accordance with the Special Committee’s directives, to potential acquirors to gauge their respective interest in a potential transaction involving the Company, the status of Company management’s preparation of certain financial forecasts for the Company, and the right of first negotiation granted in favor of Novartis by the Company under the Collaboration Agreement. At the invitation of the Special Committee, representatives of White & Case and Jefferies also attended this meeting. During this meeting, representatives of Jefferies informed the Special Committee that, in accordance with the Special Committee’s directives, Jefferies had contacted the 31 potential acquirors previously discussed with the Special Committee, of which, in connection with the initial outreach, 10 declined to evaluate a business combination with the Company and 21 had not been responsive despite repeated outreach. The reasons cited by those who declined to proceed included lack of strategic fit and/or a lack of interest in cell therapy or oncology. Following discussion, the Special Committee directed Jefferies to again attempt to initiate contact with such 21 parties that did not respond to the initial outreach, while continuing to follow up with Company management regarding the status of its preparation of certain financial forecasts for the Company to facilitate the Special Committee’s evaluation of the

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February 21 Proposal. Subsequent to the March 3, 2020 meeting and prior to the time the Board and Special Committee approved the Merger Agreement, except for parties that later became Participants, eight of such 21 parties declined to evaluate a business combination with the Company, and the remaining parties had not responded in any meaningful manner notwithstanding such additional outreach.

On or about March 9, 2020, representatives of Maplebrook indicated to the other members of the Buyer Consortium that, after further internal discussion and consideration, Maplebrook would not be able to participate in a potential transaction as a member of the Buyer Consortium due to timing constraints required to obtain internal approvals to roll over its shares of Common Stock in a potential transaction, and therefore desired to withdraw from the Buyer Consortium.

On March 12, 2020, the Company entered into confidentiality agreements with each of the members of the Buyer Consortium. Each of the executed confidentiality agreements contains, in addition to customary limitations regarding the use and disclosure of the Company’s confidential information, standstill provisions that prohibit the counterparty and its affiliates from taking certain actions during the 18-month period after the date of the confidentiality agreement, including prohibitions on acquiring, agreeing to acquire or proposing to acquire securities or any material assets of the Company, or rights to vote or direct the voting of securities of the Company. Although the executed confidentiality agreements provide that such standstill obligations would terminate upon, among other things, entry into the merger agreement or commencement of a tender offer or exchange offer with respect to the Company, none of the executed confidentiality agreements contains a “don’t ask, don’t waive” restriction. Prior to this time, no member of the Buyer Consortium had received from the Company any due diligence information (including any confidential information) with respect to the Company.

Between March 12, 2020 and the signing of the Merger Agreement, representatives of the Buyer Consortium and its financial, legal and accounting advisors had various discussions with the management of the Company regarding the business, operations and financial performance of the Company and conducted preliminary legal, business, financial and accounting due diligence on the Company.

On March 18, 2020, the Special Committee held a telephonic meeting to review certain financial forecasts for the Company prepared by Company management for the fiscal years ending December 31, 2020 through December 31, 2030 (the “March Management Forecasts”). At the invitation of the Special Committee, representatives of White & Case and Jefferies and certain members of senior management of the Company, including Mr. Liu, Angela Jiang, Vice President of Finance of the Company, Charles Zhou, a financial analyst employed by the Company, and Mr. Chan also attended the meeting. Charles Zhou presented the March Management Forecasts to the Special Committee and discussed with the Special Committee certain assumptions underlying the March Management Forecasts, including certain assumptions with respect to the probability of success of certain products under development. After the Special Committee members asked, and Mr. Liu and Charles Zhou answered, questions regarding the March Management Forecasts, all members of Company management in attendance were excused from the meeting, and the Special Committee continued to discuss the March Management Forecasts with representatives of Jefferies and White & Case. At the conclusion of such discussion, the Special Committee instructed Jefferies to prepare preliminary financial information regarding the Company and the February 21 Proposal utilizing the March Management Forecasts.

From March 18, 2020 to March 27, 2020, representatives of Kirkland circulated drafts of an amendment to the Consortium Agreement to HBH, TF Capital, Mr. Liu, Velvet Investment, Casdin and other members of the Buyer Consortium for their consideration and the members of the Buyer Consortium, Velvet Investment and Casdin negotiated and finalized the terms of such amendment.

On March 22, 2020, the Special Committee held a telephonic meeting to discuss preliminary financial information prepared by Jefferies as previously requested by the Special Committee. At the invitation of the Special Committee, representatives of White & Case and Jefferies also attended this meeting. Jefferies reviewed with the Special Committee certain preliminary financial information regarding the Company, including the

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March Management Forecasts (including Company management’s assumptions underlying such forecasts), and certain preliminary financial aspects of the February 21 Proposal. At the conclusion of the meeting and after further discussion, the consensus of the Special Committee was that the proposed consideration of $19.50 per share in cash was not compelling, that the Special Committee would provide a counterproposal to the Buyer Consortium of $22.00 per share in cash, and that Mr. Au would contact Mr. Liu to inquire about timing of a draft merger agreement.

On March 23, 2020, after Mr. Au requested an update about timing of a draft merger agreement as previously discussed with the Special Committee, Mr. Liu informed Mr. Au that a draft merger agreement would be forthcoming in approximately 24 hours. Later on March 23, 2020, Mr. Au discussed with a representative of Jefferies that Mr. Au would deliver the Special Committee’s counterproposal of $22.00 per share in cash upon the Special Committee’s receipt of the draft merger agreement.

On March 24, 2020, Kirkland delivered to White & Case a draft merger agreement. The draft merger agreement provided for, among other things, the rollover of all vested and unvested equity awards into awards settled in stock of Parent, a condition in favor of Parent that the number of dissenting shares not exceed a specified percentage of the total outstanding shares of Common Stock, a termination right in favor of Parent (and payment of a termination fee) if the Company breached the no-shop covenant, reimbursement of Parent’s and the Buyer Consortium’s expenses in the event that the Company was obligated to pay the termination fee, and a cap on Parent’s liability for all breaches under the merger agreement.

Following receipt of the draft merger agreement, on March 25, 2020, Mr. Au communicated to Mr. Liu the Special Committee’s counterproposal of $22.00 per share in cash.

On March 29, 2020, a representative of Jefferies participated on a call with a representative of HBH to discuss the Special Committee’s counterproposal. During this call, the representative of HBH indicated that the Buyer Consortium intended to revise the February 21 Proposal to reflect a reduction in the proposed consideration for Common Stock from $19.50 per share in cash. The representative of HBH cited the impact of the COVID-19 pandemic on the Company’s operations, the recent volatility in trading markets and the regulatory advancement of a drug that would potentially compete with a customer-collaborated product manufactured by the Company as reasons for reducing the proposed per share consideration contemplated by the February 21 Proposal. The representative of HBH advised the representative of Jefferies that a revised proposal would be forthcoming in the coming days and that the Buyer Consortium was seeking additional equity investors to reduce the financial exposure of the existing members of the Buyer Consortium.

On March 30, 2020, the Consortium Agreement was amended to reflect the addition of Velvet Investment and Casdin to the Buyer Consortium and the termination of the Consortium Agreement with respect to Maplebrook.

On March 30, 2020, each of HBH Advisor, Dangdai, Mr. Liu (and certain other members of the Buyer Consortium that had joined in Mr. Liu’s filing), Winsor Capital and Sailing Capital amended its Schedule 13D to disclose that Maplebrook had exited the Buyer Consortium, but that Velvet Investment and Casdin had joined the Buyer Consortium. These amendments disclosed that the Buyer Consortium may be deemed to beneficially own approximately 39.7% of the outstanding shares of Common Stock.

On April 2, 2020, representatives of Jefferies participated on a call with representatives of HBH. During this call, the representatives of HBH communicated that the Buyer Consortium’s revised proposal was for the Buyer Consortium to acquire all outstanding shares of Common Stock (other than those shares held by members of the Buyer Consortium that may be rolled over in the proposed transaction) for $18.00 per share in cash (the “April 2 Proposal”). The representatives of HBH reiterated that the reduced per share consideration was attributable to the impact of the COVID-19 pandemic on the Company’s operations, the recent volatility in trading markets and the regulatory advancement of a drug that would potentially compete with a customer-collaborated product manufactured by the Company.

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Later that day, the Special Committee held a telephonic meeting to discuss the April 2 Proposal. At the invitation of the Special Committee, representatives of White & Case and Jefferies also attended this meeting. At this meeting, representatives of Jefferies updated the Special Committee with respect to their discussions with representatives of HBH on March 29 and April 2. Following discussion of the Jefferies representatives’ March 29, 2020 and April 2, 2020 discussions with representatives of HBH and the April 2 Proposal, the consensus of the Special Committee was that the COVID-19 pandemic did have an impact on the Company’s operations, and, given the liquidity position of the Company and lack of reasonable financing alternatives, the Company should continue to explore a transaction with the Buyer Consortium. However, the consensus of the Special Committee was that the reduction in per share consideration proposed by the Buyer Consortium was not acceptable. The Special Committee then directed Jefferies to communicate to HBH a counterproposal of $19.50 per share in cash, the per share consideration contemplated by the November 11 Proposal and the February 21 Proposal.

On April 4, 2020, representatives of Jefferies participated on a call with representatives of HBH. During this call, in accordance with the Special Committee’s directives, the representatives of Jefferies communicated to the representatives of HBH the Special Committee’s counterproposal of $19.50 per share in cash. The representatives of HBH reiterated that the per share consideration should reflect a reduced valuation of the Company as result of the impact of the COVID-19 pandemic on the Company’s operations, the recent volatility in trading markets and the regulatory advancement of a drug that would potentially compete with a customer-collaborated product manufactured by the Company. Representatives of Jefferies provided an update regarding this discussion by email to the Special Committee on April 6, 2020.

On April 7, 2020, representatives of White & Case delivered to Kirkland a revised draft merger agreement. The revised draft merger agreement provided for, among other things, the cash out of equity awards based on the per share merger consideration, a 45-day “go-shop” period, and payment by Parent of a reverse termination fee in the event that Parent failed to close when required to do so pursuant to the terms of the merger agreement or in the event of certain material breaches by Parent and payment by the Company of a termination fee equal to the termination fee proposed in the draft delivered by Kirkland to White & Case on March 24, 2020 (and a lesser amount if in connection with the “go-shop” provisions) and removed, among other things, the closing condition based on the number of dissenting shares, the termination right based on a breach of the no-shop covenant, reimbursement of Parent’s and the Buyer Consortium’s expenses in the event that the Company is obligated to pay the termination fee, and the cap on Parent’s liability for all breaches under the merger agreement as proposed in such draft delivered by Kirkland to White & Case.

On April 14, 2020 and April 20, 2020, the Special Committee and the Company entered into a confidentiality agreement with Casdin and Velvet Investment, respectively. These confidentiality agreements contain, in addition to customary limitations regarding the use and disclosure of the Company’s confidential information, standstill provisions that prohibit the counterparty and its affiliates from taking certain actions during the 18-month period after the date of the confidentiality agreement, including prohibitions on acquiring, agreeing to acquire or proposing to acquire securities or any material assets of the Company, or rights to vote or direct the voting of securities of the Company. Although each confidentiality agreement provides that such standstill obligations would terminate upon, among other things, entry into the merger agreement or commencement of a tender offer or exchange offer with respect to the Company, such agreements do not contain “don’t ask, don’t waive” restrictions.

Also on April 14, 2020, representatives of Jefferies participated on a call with a representative of HBH. During this call, the representative of HBH communicated a revised proposal for the Buyer Consortium to acquire all outstanding shares of Common Stock (other than those shares held by members of the Buyer Consortium that may be rolled over in the proposed transaction) for $18.50 per share in cash (the “April 14 Proposal”). Representatives of Jefferies provided an update regarding this discussion to the Special Committee later that day.

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On April 15, 2020, the Special Committee held a telephonic meeting to discuss the April 14 Proposal. At the invitation of the Special Committee, representatives of White & Case and Jefferies also attended this meeting. Representatives of Jefferies provided an update regarding the April 14, 2020 call among representatives of Jefferies and representatives of HBH regarding the April 14 Proposal. Following discussion of such matters, as well as the liquidity position of the Company and the Company’s limited access to capital on acceptable terms, the Special Committee directed Jefferies to communicate to the Buyer Consortium that the April 14 Proposal was not compelling and that the Special Committee would consider a revised proposal of $19.00 per share in cash assuming resolution of the issues in the merger agreement in a manner acceptable to the Special Committee.

On April 17, 2020, representatives of Jefferies participated on a call with representatives of HBH. During this call, in accordance with the Special Committee’s directives, a representative of Jefferies communicated to the representatives of HBH that the April 14 Proposal was not compelling to the Special Committee and that the Special Committee would consider a revised proposal of $19.00 per share in cash. During that call, representatives of HBH agreed to the per share consideration of $19.00 in cash. Representatives of Jefferies reported to the Special Committee the Buyer Consortium’s agreement to per share consideration of $19.00 in cash.

On April 18, 2020, a representative of HBH called a representative of Jefferies to convey that, notwithstanding the acceptance communicated during the April 17, 2020 call, the Buyer Consortium was reverting to its April 14 Proposal of $18.50 per share in cash.

On April 20, 2020, Kirkland delivered to White & Case a revised draft merger agreement. The revised draft merger agreement provided for, among other things, the rollover of all vested and unvested equity awards into awards settled in stock of Parent, a condition in favor of Parent that the number of dissenting shares not exceed a specified percentage of the total outstanding shares of Common Stock, a termination right in favor of Parent (and payment of a termination fee equal to the termination fee proposed in the draft delivered by White & Case to Kirkland on April 7, 2020) if the Company breached the no-shop covenant, reimbursement of Parent’s and the Buyer Consortium’s expenses in the event that the Company was obligated to pay a termination fee, and a cap on Parent’s liability for all breaches under the merger agreement and removed, among other things, the “go-shop” provisions and the reverse termination fee.

From April 20, 2020 to April 28, 2020, Kirkland, White & Case and Novartis exchanged drafts of a confidentiality agreement contemplated to be entered into among the Special Committee, the Company and Novartis. However, Novartis’ continuing position was that it would not agree to enter into a confidentiality agreement that contained a standstill provision. On April 28, 2020, after consultation with Mr. Au, it was determined that Novartis would not be required to enter into the proposed confidentiality agreement, given the existing confidentiality restrictions contained in the Collaboration Agreement and certain other agreements to which the Company and Novartis were parties.

On April 21, 2020, representatives of HBH and Jefferies continued discussions regarding the April 14 Proposal. During this discussion, a representative of HBH explained that certain other members of the Buyer Consortium were lacking sufficient capital to proceed with a revised proposal of $19.00 per share in cash and would not be able to participate in the proposed transaction at that price.

Later on April 21, 2020, the Special Committee held a telephonic meeting to continue discussions regarding the April 14 Proposal in light of the recent discussions among representatives of Jefferies and HBH. At the invitation of the Special Committee, representatives of White & Case and Jefferies also attended this meeting. Representatives of Jefferies updated the Special Committee regarding the explanation provided by HBH for the acceptance (and later rejection) of a revised proposal of $19.00 per share in cash. Following discussion of the Special Committee’s concerns that certain of the Buyer Consortium members might withdraw from their consideration of a proposed transaction due to the lack of sufficient capital if the Special Committee insisted at such time on per share consideration of $19.00 in cash, the current operations of the Company and the effects of

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the COVID-19 pandemic, the ongoing liquidity position of the Company, the Company’s limited access to capital on acceptable terms and the proposed terms of the merger agreement, the Special Committee directed Jefferies to communicate to representatives of HBH that the Special Committee would accept the April 14 Proposal if the Buyer Consortium substantially agreed to the terms of a transaction reflected in the revised draft merger agreement provided by White & Case on April 7, 2020.

On April 22, 2020, representatives of Jefferies participated on a call with representatives of HBH. During this call, in accordance with the Special Committee’s directives, representatives of Jefferies communicated to the representatives of HBH the Special Committee’s conditional acceptance of the April 14 Proposal subject to the Buyer Consortium agreeing to the terms of a transaction reflected in the revised draft merger agreement provided by White & Case on April 7, 2020.

On April 24, 2020, Kirkland and White & Case participated on a call to discuss process and next steps with respect to the proposed transaction.

On April 25, 2020, White & Case delivered to Kirkland a revised draft merger agreement. The revised draft merger agreement provided for, among other things, the cash out of equity awards based on the per share merger consideration, a 30-day “go-shop” period and payment of a reverse termination fee by Parent equal to the reverse termination fee proposed in the draft delivered by White & Case to Kirkland on April 7, 2020 in the event that Parent failed to close when required to do so pursuant to the terms of the merger agreement or in the event of certain material breaches by Parent and payment by the Company of a termination fee equal to the termination fee proposed in such draft delivered by White & Case to Kirkland under certain circumstances and removed, among other things, the closing condition based on the number of dissenting shares, the termination right based on a breach of the no-shop covenant, the reimbursement of Parent’s and the Buyer Consortium’s expenses in the event that the Company was obligated to pay the termination fee, and the cap on Parent’s liability for all breaches under the merger agreement.

On April 28, 2020, representatives of White & Case and Kirkland participated on a call to discuss certain proposed terms of the merger agreement, including, among other things, the “go-shop” period, the circumstances in which the Company would be liable to Parent for a termination fee or Parent would be liable to the Company for a reverse termination fee, the amounts of the termination fees and the reverse termination fee, the conduct of the Company’s operations during the period between signing of the merger agreement and closing of the merger, and the treatment of equity awards in the merger.

On April 29, 2020, the Board held a telephonic regular meeting. At the invitation of the Board, Mr. Chan also attending this meeting. During this meeting, Mr. Liu updated the Board regarding various matters relating to the Company’s business, including the Company’s intention to provide notice to Novartis pursuant to the right of first negotiation granted in favor of Novartis by the Company under the Collaboration Agreement of the development of one of the Company’s products, recent clinical results relating to such product, and the Company’s liquidity position and potential means to address the Company’s working capital needs.

On April 30, 2020, the Special Committee held a telephonic meeting to discuss certain proposed terms of the merger agreement and the positions communicated by Kirkland with respect to those terms. At the invitation of the Special Committee, representatives of White & Case and Jefferies also attended this meeting. At this meeting, representatives of White & Case reviewed with the Special Committee the status of negotiations with Kirkland and the open points in the merger agreement. Following discussion, the Special Committee directed White & Case to communicate the Special Committee’s positions with respect to those issues to Kirkland. Later that day, White & Case and Kirkland participated on a call to discuss those issues.

On May 1, 2020, Kirkland delivered to White & Case a revised draft merger agreement. The revised draft merger agreement provided for, among other things, the rollover of all vested and unvested options and performance stock units and all unvested restricted stock units into awards settled in stock of Parent, the cash out

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of all vested RSUs based on the per share merger consideration, a termination right in favor of Parent (and payment of a termination fee by the Company in an amount greater than the termination fee proposed in the draft delivered by White & Case to Kirkland on April 25, 2020 if the Company breached the no-shop covenant, and payment of a reverse termination fee by Parent in an amount less than the reverse termination fee proposed in such draft delivered by White & Case to Kirkland if the merger agreement was terminated because Parent failed to close when required to do so pursuant to the terms of the merger agreement.

On May 5, 2020, White & Case delivered to Kirkland a revised draft merger agreement. The revised draft merger agreement provided for, among other things, the cash out of all equity awards based on the per share merger consideration, payment of a termination fee by the Company in an amount less than the termination fee proposed in the draft delivered by Kirkland to White & Case on May 1, 2020 (and a lesser amount if in connection with the “go-shop” provisions) under certain circumstances and payment of a reverse termination fee by Parent in an amount greater than the reverse termination fee proposed in such draft delivered by Kirkland to White & Case in the event that Parent failed to close when required to do so pursuant to the terms of the merger agreement or in the event of certain material breaches by Parent and removed, among other things, the termination right based on a breach of the no-shop covenant.

On May 6, 2020, representatives of White & Case and Kirkland participated on a call to discuss certain proposed terms of the merger agreement. During this discussion, the parties agreed, among other things, that the termination fee payable by the Company under certain circumstances would be equal to the termination fee proposed in the draft delivered by White & Case to Kirkland on May 5, 2020 (including a lesser amount if in connection with the “go-shop” provisions), a reverse termination fee equal to the reverse termination fee proposed in such draft delivered by White & Case to Kirkland would be payable by Parent in the event that Parent failed to close when required to do so pursuant to the terms of the merger agreement or in the event of certain material breaches by Parent, and Parent would not be permitted to terminate the merger agreement solely on the basis that the Company breached the no-shop covenant.

Later that day, representatives of Kirkland delivered to White & Case a revised draft merger agreement. The revised draft merger agreement provided for, among other things, the rollover of all vested and unvested options and performance stock units and all unvested restricted stock units into awards settled in stock of Parent, and the cash out of all vested RSUs based on the per share merger consideration, as well as certain terms agreed between White & Case and Kirkland earlier that day. From that date through May 21, 2020, Kirkland and White & Case, after regular consultation with and guidance from the Special Committee, continued to negotiate the terms of the merger agreement, including the treatment of equity awards thereunder, as well as the forms of equity commitment letter and limited guarantee to be delivered by certain members of the Buyer Consortium.

On May 9, 2020, the Special Committee held a telephonic meeting to discuss certain proposed terms of the merger agreement, including the treatment of equity awards. At the invitation of the Special Committee, representatives of White & Case and Jefferies also attended this meeting. At this meeting, representatives of White & Case reviewed with the Special Committee the status of negotiations with Kirkland and the open terms of the merger agreement. Following discussion, the consensus of the Special Committee was that Mr. Au would contact Mr. Liu to discuss certain matters relating to the Company’s employees and treatment of equity awards. On May 11, 2020, Mr. Au discussed with Mr. Liu certain modifications to the merger agreement relating to the treatment of equity awards.

On May 15, 2020, representatives of Gibson, Dunn & Crutcher LLP, outside legal counsel to the Company (“Gibson Dunn”), participated on a telephone conference with representatives of CFIUS to discuss the proposed transaction.

On May 16, 2020, White & Case delivered to Kirkland an initial draft of the Company’s confidential disclosure letter.

On June 1, 2020, representatives of TF Capital introduced Mr. Liu to representatives of Yunfeng Capital.

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On or about June 5, 2020, Mr. Liu met with representatives of Yunfeng Capital in Shanghai to discuss Yunfeng Capital’s potential interest in participating in the Buyer Consortium.

Between June 6, 2020 and June 8, 2020, Mr. Liu participated on various calls with representatives of HBH to discuss the status of the proposed transaction. During these calls, representatives of HBH informed Mr. Liu that, in light of various recent developments, including the impact of the COVID-19 pandemic on the Company’s operations, the recent volatility in trading markets and the regulatory advancement of a drug that would potentially compete with a customer-collaborated product manufactured by the Company, HBH was reconsidering its participation in the Buyer Consortium and required further internal deliberation regarding whether it was prepared to move forward with the proposed transaction on the terms contemplated at that time.

On June 8, 2020, June 10, 2020 and June 11, 2020, Mr. Liu and representatives of Yunfeng Capital held several meetings (with representatives of TF Capital also in attendance at some of those meetings) to explore the possibility and feasibility of Yunfeng Capital replacing HBH as a member of the Buyer Consortium and one of the designated lead investors under the Consortium Agreement in the event that HBH determined to withdraw from the Buyer Consortium and not proceed with the proposed transaction. On or about June 11, 2020, representatives of Yunfeng Capital informed Mr. Liu and TF Capital that Yunfeng Capital was interested in potentially joining the Buyer Consortium, subject to further internal deliberation as well as further evaluation of the Company and its business based on publicly available information of the Company. On or about June 11, 2020, Yunfeng Capital engaged O’Melveny & Myers LLP (“O’Melveny”) to assist it in its evaluation of the proposed transaction and potentially joining the Buyer Consortium and Mr. Liu engaged Wilson Sonsini Goodrich & Rosati, P.C. to serve as his U.S. legal counsel in connection with the proposed transaction.

On June 11, 2020, the Special Committee held a telephonic meeting to discuss certain updates relating to the proposed transaction and the operations of the Company. At the invitation of the Special Committee, representatives of White & Case and Jefferies also attended this meeting. During this meeting, the Special Committee discussed the possibility that HBH could withdraw from the Buyer Consortium. The Special Committee also discussed recent clinical results relating to one of the Company’s products and the potential impact of such results on the Company.

From June 12, 2020 to June 16, 2020, representatives of Yunfeng Capital and O’Melveny conducted due diligence on the Company based solely on publicly available information and evaluated various considerations relating to Yunfeng Capital’s potential involvement in the proposed transaction and membership in the Buyer Consortium, including legal and regulatory matters that might be implicated by a “going private transaction” involving the Company. Yunfeng Capital had not entered into any confidentiality agreement with the Company at that time, nor had Yunfeng Capital received from the Company any due diligence information (including any confidential information) with respect to the Company.

On June 13, 2020, the Board held a telephonic special meeting. At the invitation of the Board, Mr. Chan and representatives of Gibson Dunn also attended the meeting. During this meeting, among other things, Mr. Liu informed the Board that, while there had not been any formal change to the Buyer Consortium’s composition as of such time, the composition might change in the near future. Mr. Liu also provided an overview of certain recent clinical results and informed the Board that notice was provided to Novartis pursuant to the right of first negotiation granted in favor of Novartis by the Company under the Collaboration Agreement of the development of one of the Company’s products as previously discussed during the April 29, 2020 meeting of the Board. Mr. Liu also updated the Board regarding the Company’s liquidity position and his intention to seek third party debt financing.

On June 18, 2020, representatives of O’Melveny provided a draft termination agreement to HBH relating to HBH’s withdrawal from the Buyer Consortium. During this time, representatives of O’Melveny also provided updates to other members of the Buyer Consortium and provided for their consideration drafts of the termination agreement as well as a draft of an amended and restated consortium agreement (which was in substantially the

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same form as the Consortium Agreement, except that Yunfeng Capital would replace HBH as a member of the Buyer Consortium and one of the lead investors thereunder).

Between June 18, 2020 and June 24, 2020, representatives of O’Melveny negotiated the terms of the termination agreement with representatives of HBH and its outside legal counsel.

On June 24, 2020, HBH and each of the other members of the Buyer Consortium at that time (consisting of Messrs. Liu, Yao and Dai, Ms. Zhang, TF Capital, Velvet Investment, Casdin, Dangdai, Mission Right, Mr. Pan, Zheng Zhou, Wealth Map, Earls Mill and OPEA SRL) entered into the termination agreement (the “Termination Agreement”) pursuant to which HBH terminated its involvement and participation in the transactions contemplated under the Consortium Agreement and withdrew from the Buyer Consortium as of that date. Later on that same day, Yunfeng Capital and the members of the Buyer Consortium at that time (other than HBH, which had terminated its involvement in the Buyer Consortium earlier that day under the Termination Agreement) entered into an amended and restated consortium agreement (the “A&R Consortium Agreement”), which superseded the Consortium Agreement in its entirety on substantially the same terms as the Consortium Agreement, to provide for, among other things, the inclusion of Yunfeng Capital as a new member of the Buyer Consortium and as one of the lead investors (together with Mr. Liu and TF Capital) that was authorized and empowered to negotiate the terms of the potential transaction involving the Company on behalf of the Buyer Consortium with the Special Committee and its advisors.

Also on June 24, 2020, HBH Advisor amended its Schedule 13D to disclose HBH’s withdrawal from the Buyer Consortium. Mr. Liu (and certain other members of the Buyer Consortium that had joined in Mr. Liu’s filing) and Dangdai each amended their respective Schedule 13Ds to disclose that Yunfeng Capital would be added as a member of the Buyer Consortium. These amendments also disclosed that the reconstituted Buyer Consortium may be deemed to beneficially own approximately 38.5% of the outstanding shares of Common Stock.

On June 25, 2020, representatives of Kirkland sent to O’Melveny, which at that time had been appointed as outside legal counsel to the Buyer Consortium pursuant to the terms of the A&R Consortium Agreement, the latest drafts of the transaction documents that Kirkland had been negotiating with White & Case prior to HBH’s decision to enter into the Termination Agreement and withdraw from the Buyer Consortium. That same day, O’Melveny participated on an introductory call with White & Case. During this call, representatives of White & Case updated O’Melveny with respect to the negotiations to date and the status of the merger agreement and other transaction documents.

On June 26, 2020, and again on July 1, 2020, representatives of White & Case, O’Melveny and Gibson Dunn participated on calls to review Gibson Dunn’s interactions with CFIUS regarding the proposed transaction, and to discuss potential future interactions with CFIUS, with respect to the proposed transaction.

Also on June 26, 2020, the Board held a telephonic meeting. At the invitation of the Board, Mr. Chan and representatives of Gibson Dunn also attended the meeting. During this meeting, among other things, Mr. Liu reminded the Board that notice was provided to Novartis pursuant to the right of first negotiation granted in favor of Novartis by the Company under the Collaboration Agreement of the development of one of the Company’s products and provided an overview of the competitive landscape with respect to such product.

Between June 28, 2020 and July 3, 2020, representatives of O’Melveny evaluated the latest drafts of the transaction documents, including the merger agreement, with the lead members of the Buyer Consortium (consisting of Yunfeng Capital, Mr. Liu and TF Capital), during which time such parties discussed, among other matters, the open points in the merger agreement and other transaction documents, regulatory matters, and next steps and timeline with respect to the signing of definitive agreements. During these discussions, the lead members agreed to attempt to maintain consistency in approach on the merger agreement and the terms of the other transaction documents as previously negotiated with the Special Committee (to the extent feasible and

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supported by legal and commercial considerations of the Buyer Consortium as reconstituted by the A&R Consortium Agreement). Following these discussions, representatives of O’Melveny and the lead members of the Buyer Consortium determined that the key open points with respect to the proposed transaction were the Special Committee’s request that the Equity Investors be jointly and severally liable under their respective limited guarantees for the entire reverse termination fee that would be payable to the Company under certain circumstances and the desire by the Buyer Consortium to formally submit the proposed transaction to CFIUS for review.

On July 3, 2020, the Special Committee and the Company entered into a confidentiality agreement with Yunfeng Capital that provided for substantially similar confidentiality and standstill provisions as the confidentiality agreements previously executed by the other members of the Buyer Consortium. Following the execution of the confidentiality agreement, Yunfeng Capital and its advisors were granted access to due diligence materials provided by the Company and began their commercial, financial, regulatory and legal due diligence review of the Company (which was completed on or about August 1, 2020).

On July 7, 2020, the Special Committee held a telephonic meeting to discuss recent updates with respect to the proposed transaction. At the invitation of the Special Committee, representatives of White & Case and Jefferies also attended this meeting. Representatives of White & Case reviewed with the Special Committee the recent discussions among White & Case, O’Melveny and Gibson Dunn regarding CFIUS matters, including Yunfeng Capital’s intention (as communicated by representatives of O’Melveny on July 1, 2020) to formally clear the transaction with CFIUS prior to consummation of the merger. The Special Committee discussed the timing of a proposed transaction, including potential SEC and CFIUS review, and the impact of such timing on the Company’s liquidity position, which could result in the Company not having sufficient capital to fund its ongoing operations given that the first tranche of the TF Bridge Loan would mature on October 30, 2020 (or upon the occurrence of an earlier event of default). The Special Committee also continued discussions regarding recent clinical results relating to one of the Company’s products and the potential impact of such results on the Company. Following discussion of potential means to address the Company’s liquidity position prior to consummation of the proposed transaction, the consensus of the Special Committee was that the Special Committee would discuss with Mr. Liu the impact of the recent clinical results relating to such product on the March Management Forecasts and the need to secure short-term liquidity support. Following this meeting, Mr. Belmont contacted Mr. Liu to arrange a discussion with Mr. Liu and other members of Company management to review all ongoing projects relating to the Company’s products.

On July 8, 2020, the Special Committee held a telephonic meeting to receive an update from Company management regarding each of the Company’s products then under development. At the invitation of the Special Committee, Messrs. Liu, Yao and Chan, and Dr. Michael Humphries, Head of Development & Strategy of the Company, as well as representatives of White & Case and Jefferies, also attended this meeting. Messrs. Yao and Liu led a discussion with the Special Committee regarding the Company’s ongoing clinical programs and recent clinical results, including discussion of delays in certain clinical programs resulting from the impact of the COVID-19 pandemic, and a discussion of recent clinical results relating to one of the Company’s products. Company management was then excused from the meeting, and the Special Committee continued to discuss with its advisors the clinical results provided by Company management and its potential impact on the Company. Following further discussion, the consensus of the Special Committee was that Company management should revise the March Management Forecasts to reflect more recent clinical data and that the Board should discuss with Company management financing alternatives that might be available to address the Company’s liquidity position, including additional financing from Winsor Capital Limited or equity financing from another third party.

From July 10, 2020 until July 13, 2020, representatives of O’Melveny negotiated the terms of the merger agreement, form of equity commitment letter, form of limited guarantee and certain other transaction documents with certain members of the Buyer Consortium and their respective outside legal counsels. From time to time during this process, representatives of O’Melveny discussed the issues arising under the merger agreement (in

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particular, with respect to the CFIUS process and consequences of any failure to obtain CFIUS clearance) and under the interim investors agreement (in particular, with respect to draft proposed post-closing governance terms that were to be later negotiated), and positions to be taken in negotiations with the Special Committee and its advisors.

On July 13, 2020, O’Melveny delivered to White & Case revised drafts of the merger agreement, form of equity commitment letter, form of limited guarantee and certain other transaction documents. The revised draft merger agreement provided for, among other things, the rollover of all unvested equity awards into awards settled in stock of Parent, and the cash out of all vested equity awards based on the per share merger consideration, a condition that the transaction is cleared by CFIUS (as well as a termination right if the transaction is not cleared by CFIUS under certain circumstances), and a condition that Novartis waives the right of first negotiation with respect to the proposed transaction granted in favor of Novartis by the Company under the Collaboration Agreement.

On July 14, 2020, the Board held a telephonic special meeting. At the invitation of the Board, Mr. Chan and representatives of Gibson Dunn were also present. During this meeting, Mr. Liu provided to the Board an overview of the Company’s projected cash flows for the remainder of calendar year 2020. Mr. Liu also informed the Board that TF Capital would agree to extend the maturity of the TF Bridge Loan by six months, that Yunfeng Capital would be willing to provide an additional $25 million of bridge financing on terms substantially similar to those contained in the TF Bridge Loan Agreement and that he was participating in discussions with potential third party lenders for additional financing to satisfy the Company’s working capital needs.

On July 16, 2020, the Special Committee held a telephonic meeting to discuss certain terms of the draft merger agreement, form of equity commitment letter and form of limited guarantee provided by O’Melveny, the proposed bridge financing arrangements, the status of Company management’s preparation of revised financial forecasts for the Company, and the possible public disclosure of certain clinical data. At the invitation of the Special Committee, representatives of White & Case and Jefferies also attended this meeting. The Special Committee agreed that White & Case should continue to negotiate the transaction documents with O’Melveny so that definitive agreements could be executed without delay if the Buyer Consortium proposed per share consideration that was acceptable to the Special Committee.

Later that day, Mr. Au contacted Dr. Albert Huang, Executive Director of Yunfeng Capital, to request a draft of the bridge loan agreement with Yunfeng Capital, which O’Melveny then delivered to White & Case on July 17, 2020. The draft agreement contained terms that were substantially similar to those contained in the TF Bridge Loan Agreement, except that the outstanding amounts under the loan to be provided by Yunfeng Capital would not be convertible into equity securities of the Company. From July 17, 2020, through August 11, 2020, the Special Committee and its advisors continued to negotiate the terms of the amendment to the TF Bridge Loan Agreement and the terms of the Yunfeng Capital bridge loan agreement.

On July 14, 2020, Mr. Belmont and Dr. Liu contacted Mr. Liu to discuss the proposed consideration to be paid to holders of Common Stock in the proposed transaction.

On July 20, 2020, representatives of White & Case and O’Melveny participated on a call to discuss, among other things, certain terms of the merger agreement, form of equity commitment letter and form of limited guarantee, and the status of any revised proposal which might be forthcoming from the Buyer Consortium, given that the composition of the Buyer Consortium had recently changed. During these discussions, representatives of O’Melveny informed White & Case that Yunfeng Capital proposed that the Yunfeng Capital bridge loan agreement would be signed concurrently with a merger agreement (and not earlier) because Yunfeng Capital was unwilling to provide an unsecured loan to the Company on the terms contemplated under the Yunfeng Capital bridge loan agreement unless it had some reasonable level of assurance that the Company would be able to repay the loan. Following this discussion, White & Case delivered to O’Melveny revised drafts of the merger agreement, form of equity commitment letter and form of limited guarantee. The revised draft merger agreement

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provided for, among other things, payment of a reverse termination fee by Parent equal to 6% of the equity value of the Company in the event that the merger agreement is terminated due to a failure to obtain CFIUS clearance. The revised draft form of limited guarantee provided, among other things, that each of the guarantors would be jointly and severally liable for the entire reverse termination fee.

Also on July 20, 2020, representatives of O’Melveny contacted Novartis to discuss the status of the transaction and to inquire whether Novartis would be interested in rolling over its shares of Common Stock as part of the proposed transaction. In connection with this outreach, O’Melveny provided representatives of Novartis with the latest drafts of the transaction documents, including a rollover and support agreement to be entered into by certain stockholders of the Company, as well as draft waivers to be provided by Novartis with respect to certain obligations of the Company under the Collaboration Agreement, including a waiver by Novartis of the right of first negotiation granted in favor of Novartis by the Company under the Collaboration Agreement with respect to the proposed transaction, and certain obligations of the Company under the Supply Agreement. On that same day, representatives of Novartis informed representatives of the Buyer Consortium that Novartis had not decided whether to roll over its shares of Common Stock in connection with the proposed transaction, but would consider providing the requested waivers.

On July 23, 2020, the Special Committee held a telephonic meeting to discuss certain updates to the March Management Forecasts (the “July Management Forecasts”), which updates reflected certain developments with respect to the Company’s individual products, including certain assumptions as to probability of success and certain product development delays resulting from the COVID-19 pandemic. At the invitation of the Special Committee, Mr. Liu, Ms. Jiang and Charles Zhou of the Company, as well as representatives of White & Case and Jefferies, also attended this meeting. Charles Zhou reviewed the July Management Forecasts with the Special Committee and addressed certain questions posed by the Special Committee regarding the July Management Forecasts and certain assumptions with respect to the Company’s products under development. Following discussion, Company management was excused from the meeting, and the Special Committee discussed with its advisors the status of, among other things, the draft merger agreement and the Yunfeng Capital bridge loan agreement, including Yunfeng Capital’s proposal that the Yunfeng Capital bridge loan agreement would be signed concurrently with a merger agreement (and not earlier) and the circumstances under which the Yunfeng Capital bridge loan would be required to be repaid prior to its maturity. At the conclusion of the meeting, the Special Committee directed Jefferies to update its preliminary financial information regarding the Company using the July Management Forecasts.

On July 24, 2020, the Special Committee held a telephonic meeting to discuss updated preliminary financial information prepared by Jefferies as previously requested by the Special Committee. At the invitation of the Special Committee, representatives of White & Case and Jefferies also attended this meeting. Jefferies reviewed with the Special Committee certain updated preliminary financial information regarding the Company. Following discussion, and in view of the potential future financial performance of the Company indicated by the July Management Forecasts and recent clinical data relating to one of the Company’s products, the Special Committee directed Jefferies to inform the Buyer Consortium that if the Buyer Consortium reconfirmed its proposal of $18.50 per share, as communicated by the Buyer Consortium in the April 14 Proposal, that per share consideration was now deemed insufficient by the Special Committee.

Also on July 24, 2020, Hogan Lovells, outside legal counsel to Novartis, provided, on behalf of Novartis, comments to the draft waivers to be provided by Novartis with respect to certain obligations of the Company under the Collaboration Agreement, including a waiver by Novartis of the right of first negotiation granted in favor of Novartis by the Company under the Collaboration Agreement with respect to the proposed transaction, and certain obligations of the Company under the Supply Agreement.

On July 26, 2020, O’Melveny delivered to White & Case revised drafts of the merger agreement, form of equity commitment letter, form of limited guarantee and certain other transaction documents. The revised draft merger agreement provided for, among other things, the removal of Parent’s obligation to pay the reverse

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termination fee in the event that the merger agreement was terminated due to a failure to obtain CFIUS clearance and the inclusion of certain limitations on the guarantor’s obligations to provide to CFIUS certain non-public information. The revised draft limited guarantee provided, among other things, that the guarantors would not be jointly and severally liable for the entire reverse termination fee.

Later that day, representatives of Jefferies contacted Dr. Huang of Yunfeng Capital to communicate the Special Committee’s position that the April 14 Proposal was insufficient. In response, Dr. Huang communicated to Jefferies a revised proposal for the Buyer Consortium to acquire all outstanding shares of Common Stock (other than those shares held by members of the Buyer Consortium that may be rolled over in the proposed transaction) for $19.00 per share in cash, contingent on the Special Committee’s acceptance of the terms set forth in the draft transaction documents delivered by O’Melveny to White & Case earlier that day. Representatives of Jefferies provided an update regarding this discussion to the Special Committee.

On July 28, 2020, O’Melveny delivered to White & Case its comments to the draft of the Company’s confidential disclosure letter. White & Case and O’Melveny continued to exchange drafts of the Company’s confidential disclosure letter through August 11, 2020.

On July 29, 2020, the Special Committee held a telephonic meeting to discuss certain terms of the merger agreement and the other transaction documents and whether to submit a counterproposal to the Buyer Consortium’s latest proposal of $19.00 per share in cash. At the invitation of the Special Committee, representatives of White & Case and Jefferies also attended this meeting. Following discussion, the Special Committee directed Jefferies to communicate a counterproposal to Dr. Huang of $20.75 per share in cash.

Later that day, O’Melveny delivered to White & Case a revised draft of the Yunfeng Capital bridge loan agreement, which provided that the amounts outstanding could be convertible into equity securities of the Company under certain circumstances. White & Case then delivered to O’Melveny revised drafts of the merger agreement, form of equity commitment letter, form of limited guarantee and certain other transaction documents. The revised draft merger agreement provided for, among other things, removal of the limitations on the guarantor’s obligations to provide to CFIUS certain non-public information and an obligation on the part of Parent to pay a reverse termination fee equal to 3% of the equity value of the Company in the event that the merger agreement was terminated due to a failure to obtain CFIUS clearance.

On July 31, 2020, representatives of Jefferies discussed with Dr. Huang the Special Committee’s counterproposal of $20.75 per share in cash. In response, Dr. Huang communicated a revised proposal for the Buyer Consortium to acquire all outstanding shares of Common Stock (other than those shares held by members of the Buyer Consortium that may be rolled over in the proposed transaction) for per share consideration of $19.25 in cash (the “July 31 Proposal”).

Later that day, O’Melveny delivered to White & Case revised drafts of the merger agreement, form of equity commitment letter, form of limited guarantee and certain other transaction documents. The draft merger agreement provided for, among other things, the removal of Parent’s obligation to pay the reverse termination fee in the event that the merger agreement was terminated due to a failure to obtain CFIUS clearance and the inclusion of certain limitations on the guarantor’s obligations to provide to CFIUS certain non-public information.

On August 3, 2020, representatives of White & Case and O’Melveny participated on a call to discuss certain unresolved terms of the merger agreement relating to CFIUS clearance. Representatives of O’Melveny also conveyed that the July 31 Proposal was premised on acceptance of the terms relating to CFIUS clearance contained in O’Melveny’s most recent draft of the merger agreement, and that the Buyer Consortium might consider a proposal of $19.50 per share in cash, although no formal revised proposal was made by the Buyer Consortium at such time. White & Case provided to the Special Committee a summary of certain unresolved terms of the merger agreement and related transaction documents, including those with respect to CFIUS clearance.

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Also on August 3, 2020, representatives of Novartis indicated that, while Novartis had not decided whether to roll over its shares of Common Stock in connection with the proposed transaction, it had decided not to join the Buyer Consortium or enter into the A&R Consortium Agreement or an interim investors agreement being negotiated by the members of the Buyer Consortium. Representatives of Novartis then provided a markup of a separate rollover and support agreement that reflected certain points for consideration in the event Novartis did ultimately decide to roll over its shares of Common Stock in connection with the proposed transaction.

On August 4, 2020, representatives of Maplebrook informed Mr. Liu that, after further internal deliberation, Maplebrook was interested in participating in the proposed transaction and joining the Buyer Consortium, but needed to first review and assess the relevant transaction documents. On that same day, representatives of O’Melveny sent to representatives of Maplebrook the latest drafts of the transaction documents (including the merger agreement, the rollover and support agreement and the interim investors agreement) and thereafter provided additional support to inform Maplebrook of the terms of the proposed transaction and the transaction documents to which Maplebrook would be a party should it decide to participate in the proposed transaction and join the Buyer Consortium.

Also on August 4, 2020, the Special Committee held a telephonic meeting to discuss whether to submit a counterproposal to the July 31 Proposal and to discuss certain terms of the merger agreement relating to CFIUS clearance. At the invitation of the Special Committee, representatives of White & Case and Jefferies also attended this meeting. Representatives of White & Case updated the Special Committee about their August 3, 2020 discussion with representatives of O’Melveny, including that O’Melveny explained that the July 31 Proposal was premised on acceptance of the terms relating to CFIUS clearance contained in O’Melveny’s most recent draft of the merger agreement, and that the Buyer Consortium might consider a proposal of $19.50 per share in cash. Following discussion of certain terms of the merger agreement relating to CFIUS clearance, the July 31 Proposal and the directors’ fiduciary duties in general and in the context of the July 31 Proposal, the Special Committee directed Jefferies to communicate a counterproposal to Dr. Huang of $19.95 per share in cash and an obligation on the part of Parent to reimburse the Company’s expenses (subject to a cap of 3% of the equity value of the Company) in the event that the merger agreement was terminated due to a failure to obtain CFIUS clearance. The consensus of the Special Committee was also that the members of the Special Committee would discuss with Mr. Liu this counterproposal following the regularly scheduled Board meeting later that day.

Following the meeting, White & Case delivered to O’Melveny revised drafts of the merger agreement, form of equity commitment letter and form of limited guarantee. The draft merger agreement provided for, among other things, an obligation on the part of Parent to reimburse the Company’s expenses (subject to a cap of 3% of the equity value of the Company) in the event that the merger agreement is terminated due to a failure to obtain CFIUS clearance.

Also following the meeting, in accordance with the Special Committee’s directives, representatives of Jefferies communicated to Dr. Huang the Special Committee’s counterproposal of $19.95 per share in cash. In response, Dr. Huang explained that he was not authorized to propose per share consideration greater than $19.50 in cash, but that he would advise the other members of the Buyer Consortium of the proposal. Dr. Huang also explained that Yunfeng Capital would not accept an obligation to reimburse the Company’s expenses or to pay a reverse termination fee if CFIUS clearance is not obtained, and if the Company insisted on such a provision, Yunfeng Capital likely would not proceed with the proposed transaction.

Later that day, the Special Committee met with Mr. Liu following a regularly-scheduled meeting of the Board to discuss the proposed per share consideration and certain terms of the merger agreement relating to CFIUS clearance. During that discussion, the Special Committee proposed to Mr. Liu that, if the per share consideration were increased, the Special Committee would not insist on an obligation on the part of Parent to reimburse the Company’s expenses or to pay a reverse termination fee if CFIUS clearance is not obtained.

On August 4, 2020, the Board approved the Company’s entry into the Amendment Letter and the Yunfeng Bridge Loan Agreement.

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On August 5, 2020 and August 6, 2020, O’Melveny delivered to White & Case drafts of the proposed waivers to be provided by Novartis with respect to certain obligations of the Company under the Collaboration Agreement, including a waiver by Novartis of the right of first negotiation granted in favor of Novartis by the Company under the Collaboration Agreement with respect to the proposed transaction, and certain obligations of the Company under the Supply Agreement.

Also on August 5, 2020, representatives of Full Moon informed Mr. Liu that, after further internal discussion and consideration, Full Moon was interested in participating in the proposed transaction and joining the Buyer Consortium, but needed to continue to review and assess the relevant transaction documents.

On August 6, 2020, O’Melveny delivered to White & Case revised drafts of the merger agreement, form of equity commitment letter, and form of limited guarantee. O’Melveny and White & Case continued to exchange drafts of these and other transaction documents through August 11, 2020

On August 7, 2020, White & Case delivered to O’Melveny a revised draft of the waiver relating to the right of first negotiation granted in favor of Novartis by the Company under the Collaboration Agreement, which provided, among other things, that Novartis’ waiver of its right of first negotiation extended to acquisition proposals that are superior proposals under the merger agreement. Later that day, a representative of O’Melveny explained to White & Case that Novartis was unwilling to expand the scope of the waiver in the manner proposed by White & Case.

Also on August 7, 2020, at the direction of the Special Committee, representatives of Jefferies contacted representatives of Yunfeng Capital to request a status update regarding any revised proposals that might be forthcoming.

At various times on August 7, 2020 and August 8, 2020, Mr. Liu and representatives of Yunfeng Capital, TF Capital and Velvet Investment discussed the open points in the merger agreement and the proposed per share consideration and resolved to make a best and final offer to the Special Committee of $19.75 per share in cash, contingent on the Special Committee’s agreement to remove any termination fee associated with termination of the merger agreement due to failure to obtain CFIUS clearance, as reflected in the revised draft merger agreement that O’Melveny proposed to circulate to White & Case.

On August 8, 2020, representatives of O’Melveny sent to representatives of Full Moon various background materials as well as the latest drafts of the transaction documents (including the drafts of the merger agreement, the rollover and support agreement and the interim investors agreement) and thereafter provided additional support to inform Full Moon of the terms of the proposed transaction and the transaction documents to which Full Moon would be party should it decide to participate in the proposed transaction and join the Buyer Consortium.

Also on August 8, 2020, O’Melveny circulated final drafts of the transaction documents, including the merger agreement, to the members of the Buyer Consortium, Novartis, Maplebrook and Full Moon. On or about that same day, representatives of Novartis informed representatives of O’Melveny that, subject to the resolution of the remaining open points with respect to the scope of the proposed Novartis waiver of its right of first negotiation, Novartis had decided to roll over its shares of Common Stock in the proposed transaction and would execute the Novartis Rollover and Support Agreement, but as previously communicated to O’Melveny, it had decided not to join the Buyer Consortium or sign the interim investors agreement. Representatives of Maplebrook and Full Moon each informed Mr. Liu and representatives of O’Melveny that they were satisfied with the terms of the transaction documents, including the merger agreement, rollover and support agreement, and the interim investors agreement, and were prepared to execute the rollover and support agreement and interim investors agreement and thereby join the Buyer Consortium. During that same day, representatives of O’Melveny discussed with representatives of Hogan Lovells the request from the Special Committee and its advisors that Novartis’ waiver of its right of first negotiation extend to acquisition proposals that are superior

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proposals under the merger agreement, to which the response was that Novartis was unwilling to provide an advanced and irrevocable waiver in respect of an indistinct transaction with respect to which Novartis did not know, among other things, the counterparties or the terms of the proposed transaction that would constitute a superior proposal.

Further on August 8, 2020, representatives of Jefferies participated on a call with representatives of Yunfeng Capital. During this call, the representatives of Yunfeng Capital communicated a revised proposal for the Buyer Consortium to acquire all outstanding shares of Common Stock (other than those shares held by members of the Buyer Consortium that may be rolled over in the proposed transaction) for $19.75 per share in cash, contingent on acceptance of the terms reflected in the revised draft merger agreement that would be forthcoming from O’Melveny. Jefferies then provided an update to the Special Committee regarding the revised proposal just received from the Buyer Consortium.

Shortly thereafter, the revised proposal of $19.75 per share in cash was also communicated by email from O’Melveny to White & Case. Later that day, O’Melveny delivered to White & Case revised drafts of the merger agreement, form of equity commitment letter, form of limited guarantee and certain other transaction documents, and stated that Hogan Lovells (on behalf of Novartis) reiterated that Novartis would not agree to an advance waiver of its right of first negotiation without knowing the counterparties or terms of the transaction, and this included an advance waiver of any acquisition proposal which would constitute a superior proposal under the merger agreement.

During the evening of August 8, 2020, representatives of White & Case and O’Melveny participated on a call to discuss, among other things, the methodology used to calculate the termination fees and the reverse termination fee reflected in the revised draft merger agreement.

On August 9, 2020, Jefferies provided to White & Case updated disclosure regarding Jefferies’ relationships with the members of the Buyer Consortium and the absence of any material relationships between Jefferies and the Company during the two-year period prior to August 9, 2020, which White & Case delivered to the Special Committee on August 10, 2020. Other than its engagement as a financial advisor to the Special Committee in connection with the Merger, Jefferies’ updated disclosure revealed that no material relationships existed in the past two years between Jefferies’ financial advisory business and the Company, Parent or any of the Participants, including any material relationship pursuant to which any compensation was received from the Company, Parent or any of the Participants for financial advisory or financing services.

The following day, on August 10, 2020, representatives of White & Case discussed the scope of the waiver of the right of first negotiation granted in favor of Novartis by the Company under the Collaboration Agreement with representatives of Hogan Lovells. During that discussion, the representatives of Hogan Lovells reiterated that Novartis would not agree to expand the scope of the waiver to include a waiver of its right of first negotiation with respect to acquisition proposals that are superior proposals under the merger agreement.

On August 10, 2020, Mr. Liu received a message from representatives of Casdin that, in light of the newly-revised proposal of $19.75 per share in cash, Casdin may need additional time to evaluate its involvement in the Buyer Consortium and its participation in the proposed transaction.

During the evening of August 10, 2020, the Special Committee held a telephonic meeting. At the invitation of the Special Committee, representatives of White & Case and Jefferies also attended this meeting. Representatives of White & Case reviewed with the Special Committee the directors’ fiduciary duties in general and in the context of the proposed Merger Agreement. White & Case then reviewed the Merger Agreement and other transaction documents, including the limited scope of the waiver of the right of first negotiation granted in favor of Novartis by the Company under the Collaboration Agreement. Also at this meeting, at the Special Committee’s request, Jefferies reviewed its financial analysis of the Per Share Merger Consideration with the Special Committee. After discussion of the financial analysis among members of the Special Committee and

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representatives of Jefferies, Jefferies rendered its opinion to the Special Committee to the effect that, as of that date and based on and subject to various assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken as described in its opinion, the Per Share Merger Consideration to be received by holders of shares of Common Stock (other than Parent, Merger Sub, the Rollover Stockholders and their respective affiliates) pursuant to the Merger Agreement was fair, from a financial point of view, to such holders. After careful consideration of various reasons to approve the Merger Agreement and the risks associated therewith, the Special Committee unanimously (i) determined that the terms of the Merger Agreement and the transactions contemplated thereby, including the Merger, are advisable and fair to, and in the best interests of, the Company and its stockholders (other than the Participants and their respective affiliates), (ii) directed that the Merger Agreement be submitted to the Board for its approval and recommendation that the Company’s stockholders adopt the Merger Agreement, and (iii) recommended that the Board (a) approve and declare advisable the Merger Agreement and the transactions contemplated thereby, including the Merger, (b) declare that the Merger Agreement and the transactions contemplated thereby, including the Merger, are fair to, and in the best interests of, the Company and its stockholders (other than the Participants and their respective affiliates), (c) authorize and approve the Company’s entry into the Merger Agreement and consummation of the transactions contemplated thereby, including the Merger, (d) submit the adoption of the Merger Agreement for consideration by the Company’s stockholders at a meeting of the stockholders of the Company, and (e) recommend that the Company’s stockholders vote in favor of the adoption of the Merger Agreement. The Special Committee also approved, and ratified all actions previously taken by the Board with respect to, the Amendment Letter and the Yunfeng Bridge Loan Agreement.

Shortly after the Special Committee meeting during the evening of August 10, 2020, Mr. Liu informed the other members of the Board that the meeting of the Board that was to occur immediately following the Special Committee meeting would be postponed for 24 hours, and representatives of O’Melveny contacted representatives of White & Case to convey that they received indications that suggested that Casdin might not be prepared to participate in the proposed transaction.

During the evening of August 10, 2020 through the morning of August 11, 2020, after discussions among certain members of the Buyer Consortium, Mr. Liu agreed to increase his capital contribution under his equity commitment letter by $5 million to a total of $10 million, Dangdai agreed to increase the number of its rollover shares from 1,513,333 shares of Common Stock to 1,766,498 shares of Common Stock, Yunfeng Capital agreed to increase its equity commitment under its equity commitment letter by $5 million to a total of $105 million and TF Capital agreed to increase its equity commitment under its equity commitment letter by $5 million to a total of $65 million, in each case, to cover any shortfall resulting from Casdin’s withdrawal from the Buyer Consortium.

During the morning of August 11, 2020, representatives of O’Melveny confirmed to White & Case that Casdin would not be participating in the proposed transaction and confirmed that the Buyer Consortium had agreed to reallocate Casdin’s portion of the equity commitment and guaranteed obligations among the participating members of the Buyer Consortium.

During the evening of August 11, 2020, the Special Committee held a telephonic meeting. At the invitation of the Special Committee, representatives of White & Case and Jefferies also attended this meeting. Representatives of White & Case reviewed with the Special Committee the changes to the composition of the Buyer Consortium and the changes that were made to the transaction documents to reflect such changes. During this meeting, the Special Committee confirmed its prior recommendation to the Board.

Later that evening, the Board held a telephonic meeting. At the invitation of the Board, certain members of Company senior management, as well as representatives of White & Case and Gibson Dunn, also attended this meeting. Dr. Liu, in his capacity as Chairman of the Compensation Committee of the Board, reported on the recent meeting of the Compensation Committee at which the Compensation Committee reviewed the terms of certain incentive plans sponsored by the Company. The Compensation Committee then recommended to the

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Board that the Board adopt the treatment of equity awards as contemplated by the Merger Agreement, and the Board thereafter adopted such treatment (without the participation of Tony (Bizuo) Liu, Darren O’Brien and Hansheng Zhou, who abstained from voting given their relationships with the Buyer Consortium). Mr. Au, on behalf of the Special Committee, then reviewed with the Board the Special Committee’s process, and conveyed the Special Committee’s recommendation to the Board. In reviewing with the Board the Special Committee’s process, Mr. Au reported that the Special Committee, among other things, had carefully reviewed and considered (i) the advice of its legal advisors regarding the terms and conditions of the Merger Agreement and the Merger and (ii) the opinion rendered to the Special Committee by its financial advisor, Jefferies, as to the fairness, from a financial point of view, of the Per Share Merger Consideration to be received by holders of shares of Common Stock (other than Parent, Merger Sub, the Rollover Stockholders and their respective affiliates) pursuant to the Merger Agreement, and, in conveying the Special Committee’s recommendation to the Board, stated that the Special Committee recommended that the Board (a) approve and declare advisable the Merger Agreement and the transactions contemplated thereby, including the Merger, (b) declare that the Merger Agreement and the transactions contemplated thereby, including the Merger, are fair to, and in the best interests of, the Company and its stockholders (other than the Participants and their respective affiliates), (c) authorize and approve the Company’s entry into the Merger Agreement and consummation of the transactions contemplated thereby, including the Merger, (d) submit the adoption of the Merger Agreement for consideration by the Company’s stockholders at a meeting of the stockholders of the Company, and (e) recommend that the Company’s stockholders vote in favor of the adoption of the Merger Agreement. After careful consideration, the Board (without the participation of Tony (Bizuo) Liu, Darren O’Brien and Hansheng Zhou, who abstained from voting given their relationships with the Buyer Consortium), acting on behalf of the Company and upon the unanimous recommendation of the Special Committee with respect to the Merger Agreement and the transactions contemplated thereby, including the Merger, unanimously (i) determined that the Merger Agreement and other transaction documents and the transactions contemplated thereby, including the Merger, are advisable and fair to, and in the best interests of, the Company and its stockholders (other than the Participants and their respective affiliates), (ii) authorized and approved the execution, delivery and performance by the Company of the Merger Agreement and other transaction documents and consummation of the transactions contemplated thereby, including the Merger, and (iii) directed that the Merger Agreement be submitted for adoption by the Company’s stockholders and recommended that the Company’s stockholders vote in favor of the adoption of the Merger Agreement.

Following the adjournment of such meeting, the Company, Parent and Merger Sub entered into the Merger Agreement, and the related transaction documents, including the Novartis Waivers (as defined in “—Position of the Participants as to the Fairness of the Merger—Novartis’ Position”), the Amendment Letter and the Yunfeng Bridge Loan Agreement were also executed. Prior to the opening of the financial markets in the United States on August 12, 2020, the Company issued a press release announcing the execution of the Merger Agreement and other transaction documents and filed a Current Report on Form 8-K, including copies of the Merger Agreement and the press release as exhibits.

On August 12, 2020, Mr. Liu (and certain other members of the Buyer Consortium that had joined in Mr. Liu’s filing) and Dangdai each amended their respective Schedule 13Ds to disclose the execution of the Merger Agreement and other transaction documents.

On August 14, 2020, Novartis filed its Schedule 13D to disclose that Novartis executed the Novartis Rollover and Support Agreement and the Novartis Waivers to the Collaboration Agreement and the Supply Agreement on August 11, 2020 in connection with the execution of the Merger Agreement between the Company and the Buyer Consortium.

The Merger Agreement permits the Company (at the direction of the Special Committee) to actively solicit and negotiate Acquisition Proposals from third parties during the Go-Shop Period (as described in the section entitled “The Merger Agreement—Go-Shop Period; Solicitation of Acquisition Proposals” beginning on page 142). During the Go-Shop Period, Jefferies, under the direction of the Special Committee, contacted again the

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potential acquirors that were part of the initial outreach from February 13, 2020 through March 12, 2020 (other than parties that later became Participants). As of the No-Shop Period Start Date, nine of such parties declined to evaluate a business combination with the Company, and the remaining parties had not responded in any meaningful manner. As a result, as of the No-Shop Period Start Date, there were no Excluded Parties.

On October 7, 2020, upon the request of Mr. Au on behalf of the Special Committee, Mr. Liu participated in discussions with TF Capital and Yunfeng Capital regarding the provision of additional bridge financing to the Company to address the Company’s liquidity position through the closing of the Merger. Following these discussions, on October 7, 2020, Mr. Liu notified the Special Committee that each of TF Capital and Yunfeng Capital agreed to provide a bridge loan of $10 million dollars to the Company on the terms substantially similar to the terms of the Yunfeng Bridge Loan Agreement. On October 11, 2020, White & Case delivered to O’Melveny initial drafts of the bridge loan agreements. From October 11, 2020 through October 17, 2020, White & Case and O’Melveny continued to negotiate the terms of the bridge loan agreements. The Board approved the Company’s entry into the Second TF Bridge Loan and the Second Yunfeng Bridge Loan on October 16, 2020, and the parties executed the Second TF Bridge Loan Agreement, the Second Yunfeng Bridge Loan Agreement and the Consent Letter on October 23, 2020.

Reasons for the Merger; Recommendation of the Special Committee; Recommendation of the Board; Fairness of the Merger

Both the Special Committee and the Board believe, based on their consideration of the factors described below, that the Merger Agreement and the transactions contemplated thereby, including the Merger, are substantively and procedurally fair, to the Company’s stockholders (including the Company’s unaffiliated security holders).

Recommendation of the Special Committee

The Special Committee, with the advice and assistance of its independent legal and financial advisors, evaluated and directed the negotiation of the Merger Agreement and the transactions contemplated thereby, including the Merger. At a telephonic meeting held on August 10, 2020 (described above in the section entitled “—Background of the Merger”), the Special Committee unanimously (i) determined that the terms of the Merger Agreement and the transactions contemplated thereby, including the Merger, are advisable and fair to, and in the best interests of, the Company and its stockholders (other than the Participants and their respective affiliates), (ii) directed that the Merger Agreement be submitted to the Board for its approval and recommendation that the Company’s stockholders adopt the Merger Agreement, and (iii) recommended that the Board (a) approve and declare advisable the Merger Agreement and the transactions contemplated thereby, including the Merger, (b) declare that the Merger Agreement and the transactions contemplated thereby, including the Merger, are fair to, and in the best interests of, the Company and its stockholders (other than the Participants and their respective affiliates), (c) authorize and approve the Company’s entry into the Merger Agreement and consummation of the transactions contemplated thereby, including the Merger, (d) submit the adoption of the Merger Agreement for consideration by the Company’s stockholders at a meeting of the stockholders of the Company, and (e) recommend that the Company’s stockholders vote in favor of the adoption of the Merger Agreement. In this section entitled “—Reasons for the Merger; Recommendation of the Special Committee; Recommendation of the Board; Fairness of the Merger,” references to the Board refer to the Board without the participation of Tony (Bizuo) Liu, Darren O’Brien and Hansheng Zhou, who abstained from voting given their relationships with the Buyer Consortium. The Special Committee further believes that the Merger is substantively and procedurally fair to the Company’s unaffiliated security holders.

In evaluating the Merger Agreement and the transactions contemplated thereby, including the Merger, the Special Committee consulted with the Special Committee’s independent legal counsel and financial advisor and with Company management and, in the course of making the determinations described above, the Special

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Committee considered the following factors relating to the Company, its business and prospects, and the risks and challenges facing it, and to the Merger Agreement and the transactions contemplated thereby, including the Merger (which are not necessarily presented in any relative order of importance):

Merger Consideration

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Stockholder Approval and Availability of Appraisal Rights

Available Alternatives

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Negotiations with the Buyer Consortium

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Likelihood of Consummation

Terms of the Merger Agreement and Certain Other Agreements

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In the course of reaching the determinations and making the recommendation described above, the Special Committee also considered the following factors relating to the procedural safeguards that it believed would ensure the fairness of the Merger and permit the Special Committee to represent effectively the interests of the Company’s unaffiliated security holders:

Process of the Special Committee

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Terms of the Merger Agreement

In the course of reaching the determinations and decisions and making the recommendation described above, the Special Committee considered the following risks and potentially negative factors relating to the Merger Agreement and the transactions contemplated thereby, including the Merger (which are not necessarily presented in any relative order of importance):

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The Special Committee concluded that the potential benefits that it expected the Company’s stockholders (other than the Participants and their respective affiliates) would achieve as a result of the Merger outweighed the risks and the potentially negative factors relevant to the Merger. The foregoing discussion of the information and factors considered by the Special Committee is not intended to be exhaustive but includes the material factors considered by the Special Committee. In view of the variety of factors considered in connection with its evaluation of the Merger, the Special Committee did not find it practicable to, and did not, quantify or otherwise assign relative weights to the specific factors considered in reaching its determination and recommendation. In addition, individual members of the Special Committee may have given different weights to different factors. The Special Committee did not undertake to make any specific determination as to whether any factor or any particular aspect of any factor supported or did not support its ultimate determination. Accordingly, the Special Committee recommended to the Board that the Merger Agreement and the Merger be approved based upon the totality of the information it considered.

In addition, the Special Committee was aware of and considered the fact that certain of the Company’s directors and executive officers have financial interests in the transactions contemplated by the Merger Agreement that may be different from, or in addition to, those of the Company’s stockholders generally, including those interests that are a result of employment and compensation arrangements with the Company, as more fully described in the section entitled “—Interests of Certain Persons in the Merger” beginning on page 92.

In its analysis of the fairness of the Merger, the Special Committee did not consider the liquidation value of the Company, and did not believe it to be a relevant methodology, because it considered the Company to be a viable going concern and it considered determining a liquidation value to be impracticable given the significant execution risk involved in any breakup of the Company and that the Company will continue to operate its business following the Merger. For the foregoing reasons, the Special Committee did not consider liquidation value to be a relevant methodology. Further, the Special Committee did not consider net book value as a factor because they believed that net book value is not a material indicator of the value of the Company as a going concern but rather is indicative of historical costs and because net book value does not take into account the prospects of the Company, market conditions, trends in the industry in which the Company operates or the business risks inherent in that industry.

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The Special Committee did not seek to establish a pre-Merger going concern value for the Company, and therefore no such value was considered by the Board in making its fairness determination on behalf of the Company. Rather, the Special Committee believed that the financial analyses of Jefferies, as more fully summarized in the section entitled “—Opinion of Jefferies LLC,” which financial analyses the Special Committee expressly adopted as its own, were indicative of going concern values for the Company as it continues to operate its business.

Recommendation of the Board of Directors

On August 11, 2020, the Board (without the participation of Tony (Bizuo) Liu, Darren O’Brien and Hansheng Zhou, who abstained from voting given their relationships with the Buyer Consortium), acting on behalf of the Company and upon the unanimous recommendation of the Special Committee with respect to the Merger Agreement and the transactions contemplated thereby, including the Merger, unanimously (i) determined that the Merger Agreement and other transaction documents and the transactions contemplated thereby, including the Merger, are advisable and fair to, and in the best interests of, the Company and its stockholders (other than the Participants and their respective affiliates), (ii) authorized and approved the execution, delivery and performance by the Company of the Merger Agreement and other transaction documents and consummation of the transactions contemplated thereby, including the Merger, and (iii) directed that the Merger Agreement be submitted for adoption by the Company’s stockholders and recommended that the Company’s stockholders vote in favor of the adoption of the Merger Agreement. The Board further believes that the Merger is substantively and procedurally fair to the Company’s unaffiliated security holders. The Board produced the foregoing fairness determinations on behalf of the Company and, in so doing, expressly adopted the Special Committee’s determinations, analyses and conclusions in their entirety. In adopting the Special Committee’s recommendations and concluding that the Merger Agreement and the transactions contemplated thereby, including the Merger, are in the best interests of the Company and its stockholders, the Board consulted with outside legal counsel, considered and relied upon the same factors and considerations that the Special Committee relied upon, as described above.

In the course of making such determinations, the Board considered the following additional factors (which factors are not in any relative order of importance):

The Board concluded that the potential benefits that it expected the Company’s stockholders (other than the Participants and their respective affiliates) would achieve as a result of the Merger outweighed the risks and the potentially negative factors relevant to the Merger. The foregoing discussion of the information and factors considered by the Board is not intended to be exhaustive but includes the material factors considered by the Board. In view of the variety of factors considered in connection with its evaluation of the Merger, the Board did not find it practicable to, and did not, quantify or otherwise assign relative weights to the specific factors considered in reaching its determination and recommendation. In addition, individual directors may have given different weights to different factors. The Board did not undertake to make any specific determination as to whether any factor or any particular aspect of any factor supported or did not support its ultimate determination. Accordingly, the Board approved the Merger Agreement and the Merger based upon the totality of the information it considered.

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During the two years prior to the Board’s approval of the Merger and the Company’s entry into the Merger Agreement, the Company did not repurchase any shares of Common Stock other than as disclosed in the section entitled “Important Information Regarding Cellular Biomedicine Group, Inc.—Transactions in Common Stock” and the Company did not receive any offers (firm or otherwise) in respect of a merger, consolidation, sale of all or a substantial part of the Company’s assets or purchase of a controlling equity interest in the Company other than as disclosed in the section entitled “—Background of the Merger.” Accordingly, the Board could not consider any such purchase or offer in its fairness determination (other than to the extent the Board considered the absence of any such offers (in particular, in response to the pre-signing market check) in making its determinations, as discussed above).

The Board (without the participation of Tony (Bizuo) Liu, Darren O’Brien and Hansheng Zhou, who abstained from voting given their relationships with the Buyer Consortium) unanimously recommends that you vote “FOR” the proposal to adopt the Merger Agreement.

The Board believes, based on its consideration of the factors described above, that the Merger Agreement and the transactions contemplated thereby, including the Merger, are substantively and procedurally fair, to the Company’s unaffiliated security holders. The Board produced the foregoing fairness determinations on behalf of the Company and, in so doing, expressly adopted the Special Committee’s determinations, analyses and conclusions in their entirety. In adopting the Special Committee’s recommendations and concluding that the Merger Agreement and the transactions contemplated thereby, including the Merger, are in the best interests of the Company and its stockholders, the Board consulted with outside legal counsel, considered and relied upon the same factors and considerations that the Special Committee relied upon, as described above, including the financial analyses of Jefferies, as more fully summarized in the section entitled “ —Opinion of Jefferies LLC” beginning on page 69, which financial analysis and conclusion the Board, acting on behalf of the Company, expressly adopted as its own.

The Company entered into the Merger Agreement at this time because it believes that, in light of the Company’s near-term liquidity position and the risk that the Company would not be able to continue as a long-term going concern absent a capital raise or other significant liquidity event, as well as other information with respect to the Company’s business, operations, financial condition, earnings and prospects, the Company’s long-range plans, and the risk in achieving those prospects and plans, it will be challenging for the Company to compete as a public company. The Company believes that, as a private company it will have greater operating flexibility, and management will be able to more effectively concentrate on long-term growth and reduce its focus on the quarter-to-quarter performance often emphasized by the public markets. Additionally, the per share consideration offered under the Merger Agreement represents a significant premium to the historical trading prices for Common Stock and is payable in cash, providing the Company’s stockholders (other than the Rollover Stockholders) an opportunity to receive a defined value for their shares of Common Stock. The Company believes that providing such liquidity to its stockholders at such a premium at this time is also in the best interests of the unaffiliated security holders.

Opinion of Jefferies LLC

The Company has retained Jefferies as the financial advisor to the Special Committee in connection with a possible financing or refinancing for the Company or a sale, disposition or other business transaction or series of transactions involving all or substantially all of the consolidated assets or a majority of the outstanding equity of the Company, whether directly or indirectly and through any form of transaction, including the Merger. In connection with this engagement, the Special Committee requested that Jefferies evaluate the fairness, from a financial point of view, of the Per Share Merger Consideration to be received by holders of shares of Common Stock (other than Parent, Merger Sub, the Rollover Stockholders and their respective affiliates) pursuant to the Merger Agreement. At a meeting of the Special Committee held on August 10, 2020 to evaluate the Merger, Jefferies rendered its opinion to the Special Committee to the effect that, as of that date and based on and subject to various assumptions made, procedures followed, matters considered and limitations and qualifications on the

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review undertaken as described in its opinion, the Per Share Merger Consideration to be received by holders of shares of Common Stock (other than Parent, Merger Sub, the Rollover Stockholders and their respective affiliates) pursuant to the Merger Agreement was fair, from a financial point of view, to such holders.

The full text of Jefferies’ opinion, which describes various assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken by Jefferies, is attached as Annex B to this proxy statement and is incorporated herein by reference. Jefferies’ opinion was provided for the use and benefit of the Special Committee (in its capacity as such) in its consideration of the Merger and did not address the relative merits of the transactions contemplated by the Merger Agreement as compared to any alternative transaction or opportunity that might be available to the Company, nor did it address the underlying business decision by the Company to engage in the Merger or the terms of the Merger Agreement (other than the Per Share Merger Consideration to the extent expressly specified therein) or the documents referred to therein. Jefferies’ opinion did not constitute a recommendation as to how any holder of shares of Common Stock should vote on the Merger or any matter related thereto. The following summary is qualified in its entirety by reference to the full text of Jefferies’ opinion.

In arriving at its opinion, Jefferies, among other things:

In its review and analysis and in rendering its opinion, Jefferies assumed and relied upon, but did not assume any responsibility to independently investigate or verify, the accuracy and completeness of all financial and other information that was supplied or otherwise made available by the Company or that was publicly available to Jefferies (including, without limitation, the information described above) or otherwise reviewed by Jefferies. Jefferies relied on assurances of the management of the Company that it was not aware of any facts or circumstances that would make such information inaccurate or misleading. In its review, Jefferies did not obtain any independent evaluation or appraisal of any of the assets or liabilities of, nor did Jefferies conduct a physical inspection of any of the properties or facilities of, the Company, and Jefferies was not furnished with any such evaluations or appraisals, and assumed no responsibility to obtain any such evaluations, appraisals or physical inspections.

With respect to the financial forecasts provided to and examined by Jefferies, Jefferies noted that projecting future results of any company is inherently subject to uncertainty. However, the Company informed Jefferies, and Jefferies assumed, that such financial forecasts were reasonably prepared on bases reflecting the best currently available estimates and good faith judgments of the management of the Company as to the future financial performance of the Company. Jefferies expressed no opinion as to the Company’s financial forecasts or the assumptions on which they were based.

Jefferies relied upon the assessments of the management of the Company as to, among other things, (i) the potential impact on the Company of market, competitive and other conditions, trends and developments in and prospects for, and governmental, regulatory and legislative matters relating to or affecting, the biopharmaceutical

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industry, including with respect to the pricing of and/or reimbursement for pharmaceutical products, (ii) matters relating to the Company’s products and product candidates, including the potential use and indications for such products and product candidates, related technology and intellectual property (including the validity and duration of licenses and patents) and regulatory approval processes and risks, the probability and timing for achieving the Company’s expected use and indications for such products and product candidates, the research and development, clinical testing, manufacturing and commercialization of such products and product candidates and the potential for generic competition, and (iii) the Company’s existing and future agreements and arrangements with, and ability to attract, retain and/or replace, key employees and consultants, customers, suppliers and manufacturers, and other commercial and collaboration relationships, including financial and other terms and ongoing obligations associated with the Company’s collaboration, licensing, royalty and other agreements and arrangements. Jefferies assumed that there would not be any developments with respect to any such matters that would be meaningful in any respect to Jefferies’ analyses or opinion.

Jefferies’ opinion was based on economic, monetary, regulatory, market and other conditions existing, and which could be evaluated, as of the date of Jefferies’ opinion. Jefferies expressly disclaimed any undertaking or obligation to advise any person of any change in any fact or matter affecting its opinion of which Jefferies becomes aware after the date of its opinion. As the Special Committee was aware, the credit, financial and stock markets, the industry in which the Company operates and the securities of the Company have experienced and may continue to experience volatility, and Jefferies expressed no view or opinion as to any potential effects of such volatility on the Company or the Merger.

Jefferies made no independent investigation of any legal or accounting matters affecting the Company, and Jefferies assumed the correctness in all respects material to its analyses of all legal and accounting advice given to the Company and the Special Committee, including, without limitation, advice as to the legal, accounting and tax consequences of the terms of, and transactions contemplated by, the Merger Agreement to the Company and its stockholders. In addition, in preparing its opinion, Jefferies did not take into account any tax consequences of the transaction to any holder of Common Stock. Jefferies assumed that the Merger would be consummated in accordance with the terms of the Merger Agreement without waiver, modification or amendment of any term, condition or agreement and in compliance with applicable laws, documents and other requirements and that the final form of the Merger Agreement would be substantially similar to the last draft of the Merger Agreement reviewed by Jefferies. Jefferies also assumed that, in the course of obtaining the necessary regulatory or third-party approvals, consents and releases for the Merger, no delay, limitation, restriction or condition would be imposed that would have an adverse effect on the Company or the Merger in any respect meaningful to Jefferies’ analysis or opinion.

Jefferies’ opinion did not address the relative merits of the transactions contemplated by the Merger Agreement as compared to any alternative transaction or opportunity that might be available to the Company, nor did it address the underlying business decision by the Company to engage in the Merger or the terms of the Merger Agreement (other than the Per Share Merger Consideration to the extent expressly specified therein) or the documents referred to therein. Jefferies was not asked to address, and its opinion did not address, the fairness to, or any other consideration of, the holders of any class of securities, creditors or other constituencies of the Company, other than the holders of shares of Common Stock. Jefferies expressed no view or opinion as to the price at which shares of Common Stock will trade at any time. Furthermore, Jefferies did not express any view or opinion as to the fairness, financial or otherwise, of the amount or nature of any compensation payable to or to be received by any of the Company’s officers, directors or employees, or any class of such persons, in connection with the Merger relative to the Per Share Merger Consideration or otherwise. Jefferies’ opinion was authorized by Jefferies’ fairness committee.

In connection with rendering its opinion to the Special Committee, Jefferies performed certain financial and comparative analyses, including those described below. The following summary is not a complete description of all analyses performed and factors considered by Jefferies in connection with its opinion. The preparation of a financial opinion is a complex process involving subjective judgments and is not necessarily susceptible to partial analysis or summary description.

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Jefferies believes that its analyses and the summary below must be considered as a whole and in context and that selecting portions of its analyses and factors or focusing on information presented in tabular format, without considering all analyses and factors or the narrative description of the analyses, could create a misleading or incomplete view of the processes underlying Jefferies’ analyses and opinion. Jefferies did not draw, in isolation, conclusions from or with regard to any one factor or method of analysis for purposes of its opinion, but rather arrived at its ultimate opinion based on the results of all analyses undertaken by it and assessed as a whole.

The estimates of the future performance of the Company in or underlying Jefferies’ analyses are not necessarily indicative of future results or values, which may be significantly more or less favorable than those estimates. In performing its analyses, Jefferies considered industry performance, general business and economic conditions and other matters, many of which are beyond the control of the Company. Estimates of the financial value of companies or businesses do not purport to be appraisals or necessarily reflect the prices at which companies, businesses or securities actually may be sold or acquired. Accordingly, the estimates used in, and the implied reference ranges resulting from, any particular analysis described below are inherently subject to substantial uncertainty and should not be taken as Jefferies’ view of the actual value of the Company or its businesses or securities.

The terms of the Merger were determined through negotiations between the Special Committee and the Buyer Consortium, and the decision by the Special Committee to recommend to the Board that the Company enter into the Merger Agreement was solely that of the Special Committee. Jefferies’ opinion and financial analyses were only one of many factors considered by the Special Committee and should not be viewed as determinative of the views of the Special Committee with respect to the Merger or the consideration payable in the Merger.

Jefferies Materials

Jefferies delivered to the Special Committee preliminary discussion materials on March 22, 2020 and July 24, 2020 and a presentation on August 10, 2020 (together, the “Jefferies Materials”). The summaries of the Jefferies Materials in this proxy statement are qualified in their entirety by reference to the full text of the Jefferies Materials, copies of which have been attached as exhibits to the transaction statement on Schedule 13E-3.

August 10, 2020 Presentation

Financial Analyses

The summary of the financial analyses described in this section entitled “—Financial Analyses” is a summary of the material financial analyses reviewed with the Special Committee and performed by Jefferies in connection with its opinion. Considering the data below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of Jefferies’ financial analyses. The order in which the financial analyses summarized below appear does not necessarily reflect the relative importance or weight given to such analyses.

Discounted Cash Flow Analysis. Jefferies performed a discounted cash flow analysis of the Company by calculating the estimated present value of the standalone unlevered, after-tax free cash flows that the Company was forecasted to generate during the second half of the calendar year ending December 31, 2020 through the calendar year ending December 31, 2030 using the July Management Forecasts, which were based on probability-weighted and tax-affected estimates of the Company’s management and adjusted in the terminal year to set depreciation and amortization equal to capital expenditures and to normalize the change in working capital to reflect the perpetuity growth rate. For purposes of this analysis, stock-based compensation was treated as a cash expense. The implied terminal value of the Company was derived by applying a selected range of perpetuity

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growth rates of 2.5% to 3.5% to the Company’s normalized unlevered after-tax free cash flow in the terminal year. The present values (as of June 30, 2020) of the cash flows and terminal values were then calculated using a selected discount rate range of 12.5% to 14.5%, which was based on the Company’s estimated weighted average cost of capital. Jefferies determined implied enterprise values for the Company, then added the Company’s net cash as of June 30, 2020 (after reducing the Company’s balance sheet indebtedness by $7 million to reflect the equity repayment terms of the Company’s first tranche of the TF Bridge Loan, which was treated as equity), and divided by the number of fully diluted shares of Common Stock as of August 10, 2020 (calculated using the treasury stock method), each as provided or based upon information furnished to Jefferies by Company management. This analysis indicated a range of implied equity values per share of Common Stock of approximately $16.91 to $29.69, as compared to the Per Share Merger Consideration of $19.75.

Certain Additional Information

Premiums Paid Analysis. Jefferies observed certain additional information that was not considered part of Jefferies’ financial analysis with respect to its opinion but was noted for informational purposes, including the implied premiums paid or proposed to be paid in 49 selected merger and acquisition transactions involving U.S. listed Chinese acquisition transactions announced since January 1, 2015. Applying a selected range of implied premiums of 14.2% to 28.2% (reflecting the overall 25th and 75th percentile implied premiums derived from such transactions based on the closing stock prices of the target companies involved in such transactions one trading day prior to public announcement of such transactions) to the closing price of shares of Common Stock on November 8, 2019 and August 10, 2020, indicated a range of implied equity values per share of Common Stock of approximately $20.18 to $22.65 and $17.10 to $19.19, respectively.

Other Jefferies Materials

July 24, 2020 Discussion Materials

The July 24, 2020 discussion materials included preliminary financial analyses that were substantially similar to those contained in the August 10, 2020 presentation based on the July Management Forecasts and the then-current market information and share capitalization for the Company provided by Company management. The preliminary discounted cash flow analysis, utilizing the selected ranges of perpetuity growth rates and discount rates described above under “—August 10, 2020 Presentation,” indicated a range of implied equity values per share of Common Stock of approximately $16.77 to $29.45. The preliminary premiums paid analysis, which was provided for informational purposes and was based on the implied premiums paid or proposed to be paid in 48 selected merger and acquisition transactions involving U.S. listed Chinese acquisition transactions announced since January 1, 2015, applied a selected range of implied premiums of 15% to 28% (reflecting the overall 25th and 75th percentile implied premiums derived from such transactions based on the closing stock prices of the target companies involved in such transactions one trading day prior to public announcement of such transactions) to the closing price of shares of Common Stock on November 8, 2019 and July 23, 2020, which indicated a range of implied equity values per share of Common Stock of approximately $20.32 to $22.62 and $16.09 to $17.91, respectively.

March 22, 2020 Discussion Materials

The March 22, 2020 discussion materials included preliminary financial analyses that were substantially similar to those contained in the July 24, 2020 discussion materials based on the March Management Forecasts, the then-current market information, and publicly available information as to the Company’s share capitalization and balance sheet information, in each case publicly available at the time of the March 22, 2020 discussion materials. The discounted cash flow analysis, utilizing the selected range of perpetuity growth rates described above under “—August 10, 2020 Presentation” and selected ranges of discount rates of 12.8% to 14.8% based on market data as of March 20, 2020 and 13.5% to 15.5% based on market data as of February 21, 2020, which was the last trading day prior to the receipt of the February 21 Proposal, in each case based on the Company’s

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estimated weighted average cost of capital as of such dates, indicated a range of implied equity values per share of Common Stock of approximately $14.90 to $26.41 based on market data as of March 20, 2020 and approximately $12.58 to $22.42 based on market data as of February 21, 2020. The preliminary premiums paid analysis, which was provided for informational purposes and was based on the implied premiums paid or proposed to be paid in 37 selected merger and acquisition transactions involving U.S. listed Chinese acquisition transactions announced since January 1, 2015, applied a selected range of implied premiums of 13% to 26% (reflecting the overall 25th and 75th percentile implied premiums derived from such transactions based on the closing stock prices of the target companies involved in such transactions one trading day prior to public announcement of such transactions) to the closing price of shares of Common Stock on November 8, 2019 and March 20, 2020, which indicated a range of implied equity values per share of Common Stock of approximately $19.97 to $22.26 and $15.99 to $17.83, respectively. The March 22, 2020 discussion materials also included a preliminary discounted cash flow analysis, which was provided for informational purposes, utilizing the selected range of perpetuity growth rates described above under “—August 10, 2020 Presentation” and a selected range of discount rates of 12.8% to 18% to display a discount rate range calculated during the trading week ending on March 20, 2020 and the resulting volatility in the observed implied equity values per share. The low end of such range (12.8%) was calculated based on market data as of March 20, 2020 (based on the low end of the discount rate range calculated as of that day), and the high end of such range (18%) was calculated based on market data as of March 18, 2020 (based on the high end of the discount rate range calculated as of that day), in each case based on the Company’s estimated weighted average cost of capital as of such dates. This preliminary discounted cash flow analysis indicated a range of implied equity values per share of Common Stock of approximately $6.25 to $26.41.

Miscellaneous

The Company has agreed to pay Jefferies for its financial advisory services to the Special Committee in connection with the Merger an aggregate fee of $1.5 million, which was payable upon delivery of Jefferies’ opinion (regardless of the conclusion set forth therein) to the Special Committee. In addition, the Company agreed to reimburse Jefferies for expenses, including fees and expenses of counsel, incurred in connection with Jefferies’ engagement and to indemnify Jefferies and related parties against liabilities, including liabilities under federal securities laws, arising out of or in connection with the services rendered and to be rendered by Jefferies under its engagement.

During the two years prior to the date of its opinion, Jefferies did not receive any fees from the Company, Parent or any of the Participants for financial advisory or financing services. In the ordinary course of business, Jefferies and its affiliates may trade or hold securities or financial instruments (including loans and other obligations) of the Company and/or its affiliates for Jefferies’ own account and for the accounts of Jefferies’ customers and, accordingly, may at any time hold long or short positions or otherwise effect transactions in those securities or financial instruments.

Jefferies was selected as the financial advisor to the Company in connection with the Merger because, among other things, Jefferies is an internationally recognized investment banking firm with substantial experience in merger and acquisition transactions. Jefferies is regularly engaged in the valuation of businesses and their securities in connection with mergers and acquisitions, leveraged buyouts, negotiated underwritings, competitive bids, secondary distributions of listed and unlisted securities and private placements.

Certain Company Forecasts

The Company does not as a matter of course make public forecasts as to future performance, earnings or other results due to the unpredictability of the underlying assumptions and estimates. However, in connection with the Special Committee’s evaluation of a potential transaction involving the Buyer Consortium, in March 2020, Company management presented to and discussed with the Special Committee certain unaudited prospective financial information prepared by Company management for fiscal years 2020 through 2030

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comprising the March Management Forecasts and certain assumptions underlying the March Management Forecasts, including assumptions with respect to the probability of success of certain products under development. The March Management Forecasts also were provided to Jefferies. In July 2020, Company management presented to and discussed with the Special Committee the July Management Forecasts, which reflected certain updates to the March Management Forecasts prepared by Company management with respect to the Company’s individual products. In particular, the July Management Forecasts reflected an improved probability of success with respect to the Company’s Anti-19/20 BiCar product from 5% to 20% as a result of continuing patient enrollment in the ongoing clinical trial, the initial clinical safety readout, and early efficacy signals in evaluable participants in the ongoing clinical trial. In addition, as a result of the COVID-19 pandemic, the Company experienced delays in the recruitment of patients for its Phase II clinical trial for its Rejoin^® product, and the assumptions underlying the July Management Forecasts reflect a resulting delayed launch of that product by one year. The assumptions underlying the July Management Forecasts also reflect that the Company’s potential revenue would be delayed by one year as a result of clinical development delays caused by the COVID-19 pandemic. As a result, earnings before interest, taxes, depreciation and amortization (“EBITDA”) reflected in the July Management Forecasts were lower than EBITDA reflected in the March Management Forecasts for fiscal years 2021 through 2025, but higher for fiscal years 2026 through 2030. The July Management Forecasts were otherwise substantially similar to the March Management Forecasts. The July Management Forecasts superseded the March Management Forecasts in all respects. The July Management Forecasts also were provided to Jefferies for its use and reliance in connection with its opinion and related financial analyses, as described in the section entitled “—Opinion of Jefferies LLC” beginning on page 69. The summary below of the July Management Forecasts is not being included in this proxy statement to influence a stockholder’s decision whether to adopt the Merger Agreement and thereby approve the Merger, but is being included to provide the Company’s stockholders with certain unaudited prospective financial information that was made available to the Special Committee, the Board and Jefferies.

Cautionary Note About the July Management Forecasts

The July Management Forecasts, while necessarily presented with numerical specificity, were based on numerous variables and assumptions that are inherently uncertain and many of which are beyond the Company’s control. The July Management Forecasts reflected numerous estimates and assumptions made by Company management, based on information available at the time the July Management Forecasts were developed, with respect to industry performance and competition, regulatory conditions, general business, economic, market and financial conditions and matters specific to the Company’s product candidates, including probability of success of such product candidates, all of which are difficult to predict and many of which are beyond the Company’s control. As a result, there can be no assurance that the July Management Forecasts accurately reflect future trends or accurately estimate the future market for the Company’s product candidates. There also can be no assurance of the approval, or timing of such approval, of any of the Company’s clinical-stage product candidates, and it is possible that other therapeutic scenarios will be preferable. The July Management Forecasts further reflect assumptions as to certain business decisions that are subject to change and, in many respects, subjective judgement and, thus, are susceptible to multiple interpretations and periodic revisions based on actual experience and further or future business developments. Important factors that may affect actual results and result in the July Management Forecasts not being achieved include, but are not limited to, the timing of regulatory approvals and introduction of new products, market acceptance of new products, success of clinical testing, availability of third-party reimbursement, impact of competitive products and pricing, the effect of regulatory actions, the effect of global economic conditions, fluctuations in foreign currency exchange rates, the cost and effect of changes in tax and other legislation and other risk factors described in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2019, subsequent quarterly reports on Form 10-Q and current reports on Form 8-K. In addition, the July Management Forecasts may be affected by the Company’s ability to achieve strategic goals, objectives and targets over the applicable periods. The July Management Forecasts cover multiple years and, by their nature, become less predictive with each successive year. Accordingly, there can be no assurance that the July Management Forecasts will be realized, and actual results may vary materially from those shown. The July Management Forecasts should be evaluated, if at all, in light of the assumptions made by Company management

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and in conjunction with other information regarding the Company contained elsewhere in this proxy statement and the Company’s public filings with the SEC. See the section entitled “Cautionary Statement Concerning Forward-Looking Information” beginning on page 116 and the section entitled “Where You Can Find Additional Information” beginning on page 208 for additional information. The Company can give no assurance that the July Management Forecasts and the underlying estimates and assumptions will be realized.

Modeling and forecasting the future commercialization of clinical stage drug candidates is a highly speculative endeavor. In addition to the various estimates, assumptions and factors described above, there can also be no assurance that the Company will obtain and maintain any of the regulatory approvals necessary for the commercialization of its product candidates, or that the Company’s competitors will not commercialize products that are safer, more effective, or more successfully marketed and sold than any product that the Company may commercialize. Since the July Management Forecasts cover a long period of time, the July Management Forecasts by their nature are unlikely to anticipate each circumstance that will have an effect on the commercial value of the Company’s product candidates.

In light of the foregoing estimates, assumptions and factors and the uncertainties inherent in the July Management Forecasts, holders of Common Stock are cautioned not to place undue reliance on the July Management Forecasts. The July Management Forecasts were not prepared with a view toward public disclosure. The inclusion of the July Management Forecasts in this proxy statement should not be regarded as an indication that the Company, any Participant or any of their respective affiliates, advisors, officers, directors or other representatives or any other recipient of this information considered or now considers the July Management Forecasts to be necessarily predictive of actual future events or events which have occurred since the date of such forecasts, and the July Management Forecasts should not be relied upon as such or construed as financial guidance. Neither the Company nor any of its affiliates, advisors, officers, directors or other representatives can give any assurance that actual results will not differ from the July Management Forecasts, and none of them undertakes any obligation to update or otherwise revise or reconcile the July Management Forecasts to reflect circumstances existing after the date the July Management Forecasts were generated or to reflect the occurrence of future events even in the event that any or all of the assumptions underlying the July Management Forecasts are shown to be in error. The Company does not intend to make publicly available any update or other revision to the July Management Forecasts, except as otherwise required by law. Neither the Company nor any of its affiliates, advisors, officers, directors or other representatives has made or makes any representation or warranty to any holders of Common Stock regarding the ultimate performance of the Company compared to the information contained in the July Management Forecasts, the likelihood that the July Management Forecasts will be achieved or otherwise. The July Management Forecasts were prepared based on the Company’s continued operation as a stand-alone company and do not take into account the Merger, including the effect of any business or strategic decision or action that has been or will be taken as a result of the execution of the Merger Agreement. The Company can give no assurance that, had the July Management Forecasts been prepared either as of the date of the Merger Agreement or as of the date of this proxy statement, similar estimates and assumptions would be used.

The July Management Forecasts were not prepared with a view toward compliance with published guidelines of the SEC, the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of financial forecasts (“GAAP”). Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and non-GAAP financial measures as used by the Company may not be comparable to similarly titled amounts used by other companies. In addition, the July Management Forecasts were not prepared with the assistance of, or reviewed, compiled or examined by, independent accountants. The July Management Forecasts may differ from publicly available analyst estimates, and the July Management Forecasts do not take into account any events or circumstances after the date they were prepared, including the announcement of the Merger.

In light of the foregoing estimates, assumptions and factors and the uncertainties inherent in the July Management Forecasts, and considering that the special meeting will be held several months after the July

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Management Forecasts were prepared, stockholders are cautioned not to place undue reliance on the July Management Forecasts. Since the date the July Management Forecasts were prepared, the Company has made publicly available its actual results of operations for the quarter ended June 30, 2020. You should review the Company’s Current Report on Form 8-K filed on August 12, 2020 and Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, filed on August 12, 2020, to obtain this information. See the section entitled “Where You Can Find More Information” beginning on page 208 of this proxy statement.

July Management Forecasts

The following is a summary of the July Management Forecasts (figures are rounded to the nearest million dollars):

Note:    The July Management Forecasts are adjusted for probability of success assumptions per Company management.

The July Management Forecasts are based on various assumptions, including the following:

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Certain of the financial projections above were not prepared in accordance with GAAP, including EBITDA and free cash flow. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. The Company’s calculation of non-GAAP financial measures may differ from others in the industry and EBITDA and free cash flow are not necessarily comparable with similar titles used by other companies. The non-GAAP financial measures were relied upon by Jefferies for purposes of its financial analyses and opinion and by the Special Committee in connection with its consideration of the Merger. Financial measures provided to a financial advisor in connection with a business combination transaction are excluded from the definition of non-GAAP financial measures and therefore are not subject to SEC rules regarding disclosures of non-GAAP financial measures, which would otherwise require a reconciliation of a non-GAAP financial measure to a GAAP financial measure. Reconciliations of non-GAAP financial measures were not relied upon by Jefferies for purposes of its financial analyses and opinion or by the Special Committee in connection with its consideration of the Merger. Accordingly, we have not provided a reconciliation of the financial measures.

Purposes and Reasons of the Company for the Merger

The Company’s purpose for engaging in the Merger is to enable its stockholders to realize the value of their investment in the Company through their receipt of $19.75 per share of Common Stock in cash, subject to any applicable withholding taxes, which Per Share Merger Consideration represents:

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The Company believes its long-term objectives can best be pursued as a private company. The Company has determined to undertake the Merger at this time based on the factors, determinations and conclusions of the Special Committee and the Board described in detail above under “—Reasons for the Merger; Recommendation of the Special Committee; Recommendation of the Board; Fairness of the Merger” beginning on page 60.

Provisions for Unaffiliated Security Holders

No provision has been made (i) to grant the unaffiliated security holders access to the corporate files of the Company, any other party to the Merger or any of their respective affiliates, or (ii) to obtain counsel or appraisal services at the expense of the Company, any other party to the Merger or any of their respective affiliates. The Special Committee did not retain an unaffiliated representative to act solely on behalf of unaffiliated security holders for purposes of negotiating the terms of the Merger or preparing a report concerning the fairness of the Merger.

Position of the Buyer Filing Persons as to the Fairness of the Merger

Under SEC rules governing “going private transactions,” each of the Buyer Filing Persons is required to express his, her or its belief as to the fairness of the transactions contemplated by the Merger Agreement, including the Merger, to the unaffiliated security holders.

Each of the Buyer Filing Persons is making the statements included in this section solely for the purpose of complying with the requirements of Rule 13e-3 and related rules under the Exchange Act. The views of the Buyer Filing Persons as to the fairness of the transactions contemplated by the Merger Agreement, including the Merger, are not intended to be and should not be construed as a recommendation to any stockholder of the Company as to how that stockholder should vote on the Merger Agreement Proposal. The Buyer Filing Persons have interests in the transactions contemplated by the Merger Agreement, including the Merger, that are different from, and/or in addition to, those of the other stockholders of the Company by virtue of the Buyer Filing Persons’ continuing interests in the Company after the consummation of the transactions contemplated by the Merger Agreement, including the Merger. These interests are described under the section entitled “—Interests of Certain Persons in the Merger—Interests of the Participants” beginning on page 93.

The Consortium Filing Persons’ Position

Each of the Consortium Filing Persons believes that the interests of the unaffiliated security holders were represented by the Special Committee, which negotiated the terms and conditions of the Merger Agreement with the assistance of its independent legal and financial advisors. The Consortium Filing Persons attempted to negotiate a transaction that would be most favorable to them, and not to the unaffiliated security holders and, accordingly, did not negotiate the Merger Agreement with a goal of obtaining terms that were substantively or procedurally fair to the unaffiliated security holders. None of the Consortium Filing Persons or their respective

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affiliates participated in the deliberations of the Special Committee regarding, nor received any advice from the Special Committee’s independent legal or financial advisors as to, the fairness of the transactions contemplated by the Merger Agreement, including the Merger, to the unaffiliated security holders.

Furthermore, the Consortium Filing Persons did not themselves undertake a formal evaluation of the fairness of the transactions contemplated by the Merger Agreement, including the Merger. No financial advisor provided any of the Consortium Filing Persons or their affiliates with any analysis or opinion with respect to the fairness of the Per Share Merger Consideration to the unaffiliated security holders.

Based on their knowledge and assessment of available information regarding the Company, discussions with the Company’s senior management regarding the Company and its business and the factors considered by, and findings of, the Special Committee and the Board discussed under “—Reasons for the Merger; Recommendation of the Special Committee; Recommendation of the Board; Fairness of the Merger” beginning on page 60, each of the Consortium Filing Persons believes that the transactions contemplated by the Merger Agreement, including the Merger, are substantively fair to unaffiliated security holders based on the following factors, which are not listed in any relative order of importance:

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The Consortium Filing Persons’ consideration of the factors described above reflects their assessment of the fairness of the Per Share Merger Consideration payable in the Merger to the unaffiliated security holders in relation to the going-concern value of the Company on a stand-alone basis. The Consortium Filing Persons implicitly considered the value of the Company in a sale as a going concern by taking into account the Company’s current and anticipated business, financial condition, results and operations, prospects and other forward-looking matters. The Consortium Filing Persons did not, however, explicitly calculate a stand-alone pre-Merger going-concern value of the Company as a public company because the Company will have a significantly different capital structure following the Merger. Therefore, the Consortium Filing Persons do not believe that the going-concern value of the Company is an appropriate indicator to determine the fairness of Per Share Merger Consideration payable in the Merger to the unaffiliated security holders. However, to the extent the pre-Merger going concern value was reflected in the pre-announcement price of the shares of Common Stock, the Per Share Merger Consideration represented a premium to the going concern value of the Company.

The Consortium Filing Persons did not consider the liquidation value of the Company because they consider the Company to be a viable going concern and views the trading history of the shares of Common Stock as an indication of the Company’s going concern value and, accordingly, did not believe liquidation value to be relevant to a determination as to the fairness of the transactions contemplated by the Merger Agreement, including the Merger.

The Consortium Filing Persons did not consider net book value, which is an accounting concept, as a factor, because they believed that net book value is not a material indicator of the value of the Company as a going concern but rather is indicative of historical costs and therefore not a relevant measure in the determination as to the fairness of the transactions contemplated by the Merger Agreement, including the Merger. The Consortium Filing Persons note, however, that Per Share Merger Consideration of $19.75 receivable by the unaffiliated security holders in connection with the Merger is substantially higher than the net book value of the shares of Common Stock as of September 30, 2020 of $0.89 (based on 19,450,353 outstanding shares of Common Stock as of that date). See “Where You Can Find Additional Information” beginning on page 208 for a description of how to obtain a copy of the Company’s Quarterly Report on Form 10-Q for the Quarter Ended September 30, 2020.

Except as set forth under “—Background of the Merger” beginning on page 33, the Consortium Filing Persons are not aware of, and thus did not consider, any offers or proposals made by any unaffiliated person,

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other than the Buyer Consortium, during the past two years for (a) the merger or consolidation of the Company with or into another company, or vice versa, (b) an acquisition of the Company, (c) a tender offer or other acquisition of any class of the Company’s securities, (d) the sale or other transfer of a material amount of the assets of the Company, or (e) a purchase of the Company’s securities that would enable the purchaser to exercise control over the Company.

The Consortium Filing Persons did not perform or (prior to the execution of the Merger Agreement) receive any independent reports, opinions or appraisals from any third party related to the transactions contemplated by the Merger Agreement, including the Merger, and thus did not consider any such reports, opinions or appraisals in determining the substantive and procedural fairness of the transactions contemplated by the Merger Agreement, including the Merger, to unaffiliated security holders.

The Consortium Filing Persons believe that the transactions contemplated by the Merger Agreement, including the Merger, are procedurally fair to the unaffiliated security holders based on the following factors, which are not listed in any relative order of importance:

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The foregoing is a summary of the information and factors considered and given weight by the Consortium Filing Persons in connection with its evaluation of the fairness of the transactions contemplated by the Merger Agreement, including the Merger, to the unaffiliated security holders, which is not intended to be exhaustive, but is believed by the Consortium Filing Persons to include all material factors considered by them. The Consortium Filing Persons did not find it practicable to assign, and did not assign, relative weights to the individual factors considered in reaching their conclusion as to the fairness of the transactions contemplated by the Merger Agreement, including the Merger, to the unaffiliated security holders. Rather, their fairness determination was made after consideration of all of the foregoing factors as a whole.

The Consortium Filing Persons believe these factors provide a reasonable basis for their belief that the transactions contemplated by the Merger Agreement, including the Merger, are both substantively and procedurally fair to the unaffiliated security holders. This belief, however, is not intended to be and should not be construed as a recommendation by the Consortium Filing Persons to any stockholder of the Company as to how such stockholder should vote with respect to the Merger Agreement Proposal.

Novartis Filing Persons’ Position

The Novartis Filing Persons believe that the interests of the unaffiliated security holders were represented by the Special Committee, which it understood had negotiated the terms and conditions of the Merger Agreement with the assistance of its independent legal and financial advisors. The Novartis Filing Persons did not participate in the deliberations of the Special Committee regarding, and did not receive any advice from the Special Committee’s independent legal or financial advisors as to, the fairness of the Merger to the unaffiliated security holders. Additionally, the Novartis Filing Persons did not participate in the negotiation of the Merger other than entering into the Novartis Support Agreement and executing the Novartis Waivers (as defined below in this section) in respect of the transactions contemplated by the Merger Agreement, including the Merger. No financial advisor provided the Novartis Filing Persons with any analysis or opinion with respect to the fairness of the Per Share Merger Consideration to the unaffiliated security holders. Furthermore, the Novartis Filing Persons did not themselves undertake a formal evaluation of the fairness of the transactions contemplated by the Merger Agreement, including the Merger. The Novartis Filing Persons, however, have reviewed and evaluated the reasons due to which the Consortium Filing Persons believe that the transactions contemplated by the Merger Agreement, including the Merger, are fair to the unaffiliated security holders and the Novartis Filing Persons have adopted the reasoning and analysis of the Consortium Filing Persons set forth above under the section entitled “—The Consortium Filing Persons’ Position” beginning on page 79. Based on their knowledge and assessment of available information regarding the Company (which did not include confidential information regarding the Company received by the Buyer Consortium as the Novartis Filing Persons did not participate in the negotiations of the Merger other than entering into the Novartis Support Agreement and the Novartis Waivers), as well as the factors considered by, and findings of, the Special Committee and the Board discussed under the section entitled “—Reasons for the Merger; Recommendation of the Special Committee; Recommendation of the Board; Fairness of the Merger” beginning on page 60, the Novartis Filing Persons believe that the transactions contemplated by the Merger Agreement, including the Merger, are substantively fair to unaffiliated security holders based on the following factors, which are not listed in any relative order of importance:

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The Novartis Filing Persons’ consideration of the factors described above reflects their assessment of the fairness of the Per Share Merger Consideration payable in the Merger to the unaffiliated security holders in relation to the going-concern value of the Company on a stand-alone basis. The Novartis Filing Persons implicitly considered the value of the Company in a sale as a going concern by taking into account the Company’s current and anticipated business, financial condition, results and operations, prospects and other forward-looking matters. The Novartis Filing Persons did not, however, explicitly calculate a stand-alone pre-Merger going-concern value of the Company as a public company because the Company will have a significantly different capital structure following the Merger. Therefore, the Novartis Filing Persons do not believe that the going-concern value of the Company is an appropriate indicator to determine the fairness of the Per Share Merger Consideration payable in the Merger to the unaffiliated security holders. However, to the extent the pre-Merger going concern value was reflected in the pre-announcement price of the shares of Common Stock, the Per Share Merger Consideration represented a premium to the going concern value of the Company.

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The Novartis Filing Persons did not consider the liquidation value of the Company because they consider the Company to be a viable going concern and view the trading history of the shares of Common Stock as an indication of the Company’s going concern value and, accordingly, did not believe liquidation value to be relevant to a determination as to the fairness of the transactions contemplated by the Merger Agreement, including the Merger.

The Novartis Filing Persons did not consider net book value, which is an accounting concept, as a factor, because they believed that net book value is not a material indicator of the value of the Company as a going concern but rather is indicative of historical costs and therefore not a relevant measure in the determination as to the fairness of the transactions contemplated by the Merger Agreement, including the Merger. The Novartis Filing Persons note, however, that the Per Share Merger Consideration of $19.75 receivable by the unaffiliated security holders in connection with the Merger is substantially higher than the net book value of the shares of Common Stock as of September 30, 2020 of $0.89 per share (based on 19,450,353 outstanding shares of Common Stock as of that date). See “Where You Can Find Additional Information” beginning on page 208 for a description of how to obtain a copy of the Company’s Quarterly Report on Form 10-Q for the Quarter Ended September 30, 2020.

Except as set forth under “—Background of the Merger” beginning on page 33, the Novartis Filing Persons are not aware of, and thus did not consider, any offers or proposals made by any unaffiliated person, other than the Buyer Consortium, during the past two years for (a) the merger or consolidation of the Company with or into another company, or vice versa, (b) an acquisition of the Company, (c) a tender offer or other acquisition of any class of the Company’s securities, (d) the sale or other transfer of a material amount of the assets of the Company, or (e) a purchase of the Company’s securities that would enable the purchaser to exercise control over the Company.

The Novartis Filing Persons did not perform or receive any independent reports, opinions or appraisals from any third party related to the transactions contemplated by the Merger Agreement, including the Merger, and thus did not consider any such reports, opinions or appraisals in determining the substantive and procedural fairness of the transactions contemplated by the Merger Agreement, including the Merger, to unaffiliated security holders.

The Novartis Filing Persons believe that the transactions contemplated by the Merger Agreement, including the Merger, are procedurally fair to the unaffiliated security holders based on the following factors, which are not listed in any relative order of importance:

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The Novartis Filing Persons are not members of the Buyer Consortium. However, pursuant to the Novartis Support Agreement, Novartis has agreed, among other things, that the Novartis Rollover Shares will be canceled for no consideration in the Merger and that it will subscribe for newly issued ordinary shares of Parent immediately prior to the closing of the Merger and, until the earlier of the effective time of the Merger and the termination of the Merger Agreement, that it will vote all of its shares of Common Stock (i) in favor of the adoption of the Merger Agreement and any related action reasonably required in furtherance thereof, (ii) against any other acquisition proposal, (iii) against any action, agreement or proposal which could reasonably be expected to impede, interfere with, delay or adversely affect the Merger Agreement, the Merger or the Novartis Support Agreement, and (iv) against any action, proposal, transaction or agreement that could reasonably be expected to result in a breach of any covenant, representation or warranty or any other obligation or agreement of Parent and Merger Sub under the Merger Agreement, or of Novartis under the Novartis Support Agreement.

In addition, concurrently with the execution and delivery of the Merger Agreement, Novartis also executed certain waivers (the “Novartis Waivers”) pursuant to which Novartis agreed, with respect to the Merger, to waive (i) certain early termination rights set forth in the Supply Agreement, and (ii) certain rights of first negotiation and early termination rights set forth in the Collaboration Agreement. Novartis agreed to execute and deliver the Novartis Waivers in light of its familiarity with certain members of the Buyer Consortium and the fact that, following the Merger, Mr. Liu would continue to operate the Company. See “—Novartis Waivers” beginning on page 106 for additional information.

The foregoing is a summary of the information and factors considered and given weight by the Novartis Filing Persons in connection with their evaluation of the fairness of the transactions contemplated by the Merger Agreement, including the Merger to the unaffiliated security holders, which is not intended to be exhaustive, but is believed by the Novartis Filing Persons to include all material factors considered by them. The Novartis Filing Persons did not find it practicable to assign, and did not assign, relative weights to the individual factors considered in reaching its conclusion as to the fairness of the transactions contemplated by the Merger Agreement, including the Merger, to the unaffiliated security holders. Rather, their fairness determination was made after consideration of all of the foregoing factors as a whole.

The Novartis Filing Persons believe these factors provide a reasonable basis for their belief that the transactions contemplated by the Merger Agreement, including the Merger, are both substantively and procedurally fair to the unaffiliated security holders. This belief, however, is not intended to be and should not be construed as a recommendation by the Novartis Filing Persons to any stockholder of the Company as to how such stockholder should vote with respect to the authorization and approval of the Merger Agreement and the transactions contemplated thereby, including the Merger.

Purposes and Reasons of the Buyer Filing Persons for the Merger

Under SEC rules governing “going private transactions,” each of the Buyer Filing Persons is required to express his, her or its reasons for the Merger to the unaffiliated security holders.

For the Buyer Filing Persons, the purpose of the Merger is to enable Parent to acquire 100% ownership and control of the Company in a transaction in which the Company’s stockholders (other than the holders of

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Excluded Shares) will be cashed out in exchange for Per Share Merger Consideration of $19.75, so that Parent will bear the rewards and risks of the sole ownership of the Company after the Merger, including any increase in value of the Company as a result of improvements to the Company’s operations or acquisitions of other businesses. In addition, the consummation of the transactions contemplated by the Merger Agreement, including the Merger, will enable Mr. Liu to increase his ownership percentage in the Company through his indirect ownership in Parent and maintain a leadership role with the Surviving Corporation, and for the Consortium Rollover Stockholders to maintain a significant portion of their investment through their respective direct or indirect ownership in Parent, each as described under “—Interests of Certain Persons in the Merger—Interests of the Participants.”

The Consortium Filing Persons believe the operating environment has changed in a significant manner since the Company’s initial public offering. In particular:

These changes have increased the uncertainty and volatility inherent in the business models of companies similar to the Company. Furthermore, to stay competitive, to devote efforts to developing the Company’s product candidates and to support clinical development, the Company may need to continue investing in research and development. Responding to current market challenges will require tolerance for volatility in the performance of the Company’s business, commitment, ability to make capital expenditures and a willingness to make business decisions focused on improving the Company’s long-term performance. The Consortium Filing Persons believe that these strategies would be most effectively implemented in the context of a private company structure. As a privately held company, the Company’s management will have greater flexibility to focus on raising additional capital, seeking and forming strategic alliances, and improving long-term performance without the pressures exerted by the public market’s valuation of the Company and its emphasis on short-term period-to-period performance. Each of the Consortium Filing Persons also believes that the Merger will provide the Company with flexibility to pursue transactions with a risk profile that may be unacceptable to many unaffiliated security holders, and that these transactions can be more effectively executed as a private company.

As a privately held company, the Company will be relieved of many of the expenses, burdens and constraints imposed on companies that are subject to the public reporting requirements under the U.S. federal securities laws, including the Exchange Act and the United States Sarbanes-Oxley Act of 2002. The need for the management of the Company to be responsive to the concerns of the unaffiliated security holders and to engage in an ongoing dialogue with unaffiliated security holders can at times distract management’s time and attention from the effective operation and improvement of the business. It is estimated that the Company will save approximately $2 million per year as a result of no longer being a public company separately subject to the reporting requirements of U.S. federal securities laws.

The Consortium Filing Persons decided to undertake the transactions contemplated by the Merger Agreement at this time because it wants to take advantage of the benefits of the Company being a privately held company as described above. In the course of considering the transactions contemplated by the Merger Agreement, the Consortium Filing Persons did not consider alternative transaction structures, because the

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Consortium Filing Persons believed the Merger was the most direct and effective way to enable the Buyer Consortium to acquire ownership and control of the Company.

The Novartis Filing Persons decided to participate in the Merger by rolling over the Novartis Rollover Shares because they wished to retain their investment in the Surviving Corporation after the closing of the Merger and participate in the future prospects of the Surviving Corporation through such investment. The Novartis Filing Persons did not consider alternative transaction structures other than the Merger, which was initiated by the Buyer Consortium and negotiated between the Company and the Buyer Consortium. The Novartis Filing Persons did not participate in the negotiations of the transactions contemplated by the Merger Agreement other than entering into the Novartis Support Agreement and the Novartis Waivers.

Certain Effects of the Merger

If the conditions to the parties’ obligations to consummate the Merger are satisfied or, if permitted, waived, (i) Merger Sub will be merged with and into the Company, with the Company surviving the Merger as a wholly-owned subsidiary of Parent and (ii) each share of Common Stock outstanding immediately prior to the effective time of the Merger (other than the Excluded Shares) will be converted into the right to receive $19.75 in cash, without interest and subject to any applicable withholding taxes. As a result of the Merger, the Company will cease to be a publicly traded company and will instead be a wholly-owned subsidiary of Parent and, through Parent, beneficially owned by the Equity Investors and the Rollover Stockholders.

Benefits of the Merger for the Unaffiliated Security Holders

The primary benefit of the Merger to the unaffiliated security holders will be their right to receive the Per Share Merger Consideration, which represents:

Additionally, such stockholders will avoid the risk of any possible decrease in the Company’s future earnings, growth or value.

Detriments of the Merger for the Unaffiliated Security Holders

The primary detriments of the Merger to such stockholders include, without limitation, the following:

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Plans for the Company After the Merger

Following the consummation of the Merger, Parent will own 100% of the equity interests in the Surviving Corporation. The Buyer Consortium anticipates that the Surviving Corporation will continue to conduct its operations substantially as they are currently being conducted, except that it will cease to be a publicly-traded company and will instead be a wholly-owned subsidiary of Parent and, through Parent, beneficially owned by the Equity Investors and the Rollover Stockholders. In addition, the Surviving Corporation will no longer be subject to the Exchange Act and Nasdaq compliance and reporting requirements and the related direct and indirect costs and expenses, and may experience positive effects on profitability as a result of the elimination of such costs and expenses.

The Buyer Consortium has advised the Company that, except as set forth in this proxy statement and except for the transactions already under consideration by the Company, the Buyer Consortium does not have any current plans, proposals or negotiations that relate to or would result in an extraordinary corporate transaction involving the Company’s corporate structure, business, or management, such as a merger, reorganization, liquidation, relocation of any material operations, or sale or transfer of a material amount of the Company’s assets. However, subsequent to the consummation of the Merger, the Surviving Corporation’s management and board of directors will continuously evaluate and review the Surviving Corporation’s entire business and operations from time to time, and may propose or develop plans and proposals, including (i) any of the foregoing actions and any actions to address the challenges referred to in “—Reasons for the Merger; Recommendation of the Special Committee; Recommendation of the Board; Fairness of the Merger” above, and (ii) the disposition or acquisition of material assets or other extraordinary transactions, including the possibility of relisting the Surviving Corporation or a substantial part of its business on another internationally recognized stock exchange, in each case, which they consider to be in the best interests of the Surviving Corporation and its stockholders. The Buyer Consortium expressly reserves the right to make any changes they deem appropriate to the operation of the Surviving Corporation in light of such evaluation and review as well as any future developments.

Effects on the Company if the Merger is Not Completed

If our stockholders do not approve the Merger Agreement or if the Merger is not consummated for any other reason, our stockholders will not receive any payment for shares of Common Stock held by such stockholders provided by the Merger Agreement. Instead, unless the Company is sold to another third party, the Company will remain a publicly-traded company, and Company management would expect to operate the business in a manner similar to that in which it is being operated today. Our shares of Common Stock will continue to be listed and traded on Nasdaq, provided that the Company continues to meet Nasdaq listing requirements. In addition, the Company will remain subject to SEC reporting obligations. Therefore, if the Merger is not consummated, our stockholders will continue to be subject to similar risks and opportunities as they currently are with respect to their ownership of shares of Common Stock. If the Merger is not consummated, there is no assurance as to the effect of these risks and opportunities on the future value of shares of Common Stock, including the risk that the market price of shares of Common Stock may decline to the extent that the current market price of our stock reflects a market assumption that the Merger will be consummated.

From time to time, the Board will evaluate and review the business operations, properties and capitalization of the Company and, among other things, make such changes as are deemed appropriate and continue to seek to

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maximize stockholder value. If our stockholders do not approve the Merger Agreement Proposal or the Merger is not consummated for any other reason, there is no assurance that any other transaction acceptable to the Company will be offered or that the business, prospects or results of operations of the Company will not be adversely impacted. If the Merger is not consummated for any reason, we will be subject to a number of material risks, including the disruption to our business resulting from the announcement of the signing of the Merger Agreement, the diversion of management’s attention from our day-to-day business, and the substantial restrictions imposed by the Merger Agreement on the operation of our business during the period before the consummation of the Merger, which may make it difficult for us to achieve our business goals if the Merger does not occur. In addition, the Rollover Stockholders would continue to hold a substantial portion of the outstanding shares of Common Stock.

Also, under specified circumstances in which the Merger Agreement is terminated, the Company may be required to pay Parent a termination fee, or Parent may be required to pay the Company a termination fee, in each case, as described in the section entitled “The Merger Agreement—Termination Fees” beginning on page 154.

Intent of the Company’s Directors and Executive Officers to Vote in Favor of the Merger

Our directors and executive officers have informed us that, as of the date of this proxy statement, they intend to vote all of the shares of Common Stock owned directly by them in favor of the Merger Agreement Proposal and each of the other proposals listed in this proxy statement. At the close of business on the record date, (i) our directors and executive officers directly owned, in the aggregate, [●] shares of Common Stock, or approximately [●]% of the outstanding shares of Common Stock, and (ii) our directors (other than Tony (Bizuo) Liu, Darren O’Brien and Hansheng Zhou) and executive officers (other than the Management Rollover Stockholders) directly owned, in the aggregate, [●] shares of Common Stock, or approximately [●]% of the outstanding shares of Common Stock.

The affirmative votes by our directors (other than Tony (Bizuo) Liu, Darren O’Brien and Hansheng Zhou) and executive officers (other than the Management Rollover Stockholders) will count towards the Company Majority of the Minority Stockholder Approval. However, shares of Common Stock held by Tony (Bizuo) Liu, Darren O’Brien, Hansheng Zhou and the Management Rollover Stockholders will not count towards the Company Majority of the Minority Stockholder Approval, but their votes will count towards the affirmative votes to approve the Adjournment Proposal and the Advisory Compensation Proposal.

Interests of Certain Persons in the Merger

In considering the recommendations of the Special Committee and the Board (without the participation of Tony (Bizuo) Liu, Darren O’Brien and Hansheng Zhou, who abstained from voting given their relationships with the Buyer Consortium) that you vote to approve the Merger Agreement Proposal, you should be aware that, aside from their interests as stockholders of the Company, certain directors and executive officers of the Company (including Messrs. Liu and Yao, who are also Rollover Stockholders) and members of the Buyer Consortium have agreements or arrangements that provide them with interests in the Merger, including financial interests, that may be different from, or in addition to, the interests of the other stockholders of the Company. Interests of executive officers and directors that may be different from or in addition to the interests of the Company’s stockholders are described in more detail below, and include:

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The Board and the Special Committee were aware of these interests during their respective deliberations of the merits of the Merger and in determining to recommend that the Company’s stockholders vote in favor of the Merger Agreement Proposal.

Interests of the Participants

If the Merger is consummated, the Surviving Corporation will be wholly owned by Parent. Mr. Liu, Yunfeng Capital, TF Capital, Velvet Investment, the other Consortium Rollover Stockholders and Novartis will beneficially own approximately 7.19%, 25.48%, 15.77%, 7.28%, 36.83% and 6.99%, respectively, of the equity interests in Parent immediately following the consummation of the Merger, subject to adjustments set forth in the Interim Investors Agreement. Because of Parent’s equity interest in the Surviving Corporation, each Participant will directly or indirectly enjoy the benefits from any future earnings and growth of the Surviving Corporation after the Merger which, if the Surviving Corporation is successfully managed, could exceed the value of their original investments in the Company. Parent will also directly bear the corresponding risks of any possible decreases in the future earnings, growth or value of the Surviving Corporation. Parent’s investment in the Surviving Corporation will be illiquid, with no public trading market for the Surviving Corporation’s shares and no certainty that an opportunity to sell its shares in the Surviving Corporation at an attractive price, or that dividends paid by the Surviving Corporation, will be sufficient to recover its investment.

The Merger may also provide additional means to enhance stockholder value for the Participants, including improved profitability due to the elimination of the expenses associated with public company reporting and compliance, increased flexibility and responsiveness in management of the business to achieve growth and respond to competition without the restrictions of short-term earnings comparisons and additional means for making liquidity available to the Participants, such as through dividends or other distributions.

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The Company’s Net Book Value and Net Earnings (Losses)

The table below summarizes the indirect interest in the Company’s net book value and net earnings for each of the Participants before and after the Merger, based on the historical net book value and net earnings of the Company as of September 30, 2020. The Company’s net losses for the nine-month period ended September 30, 2020 were approximately $(42,117,590), and its net book value as of September 30, 2020 was approximately $17,323,600.