On December 31, Glonghui announced that BRII-B (02137.HK) agreed to conduct the following trades by December 31, 2024: (i) the acquisition of BRII-179 and PreHevbri assets with the VBI counterparties and K2 counterparties, pursuant to which K2 agrees to designate the company as the purchaser of the assets from the VBI counterparties, and the VBI counterparties agree to transfer, assign, and convey to the company all rights, ownership, and interests in all assets acquired by BRII-B from the date of delivery; and (ii) a PreHevbri license, where VBI agrees to grant to the company an exclusive, fully paid, royalty-free, perpetual, irrevocable, sublicensable, and transferable license under the reserved PreHevbri expertise for research, development, commercialization, or other use of PreHevbri in the area of hepatitis B prevention and treatment in BRII-B's region.

According to the terms and conditions of the designation agreement, all terminated agreements shall be terminated from the date of delivery. As consideration, the company will pay a total amount equal to 18,000,000 USD to K2 Trust to complete the trades to be conducted under the designation agreement.

The company and VBI agree to enter into a PreHevbri license agreement effective on the date of the designation agreement, whereby VBI agrees to grant to the company an exclusive, fully paid, royalty-free, perpetual, irrevocable, sublicensable, and transferable license under the reserved PreHevbri expertise for research, development, commercialization, or other use of PreHevbri in the area of hepatitis B prevention and treatment in BRII-B's region.

The Board of Directors believes that entering into the BRII-179 and PreHevbri asset acquisition and the PreHevbri license is in the interest of the Group and its Shareholders for the following reasons: the company believes it can ensure a continuous supply of BRII-179 for clinical development and technology transfer, achieving more efficient production for future commercialization of BRII-179, and maximizing the future cash flow attributable to the company. According to the latest clinical data results from the company and its partners, the company believes in the value of BRII-179 in achieving functional cure of the hepatitis B virus (HBV) and the necessity to expedite technology transfer from VBI to selected contract development and manufacturing organizations (CDMO) in China to control future supply.

The company further believes that, given VBI's business operation status, the acquisition of Rehovot assets under the Rehovot asset purchase agreement disclosed in the February announcement can no longer be completed. The BRII-179 and PreHevbri asset acquisition and PreHevbri license allow the company to achieve the objective of ensuring the future supply and production of BRII-179 and PreHevbri, as well as obtaining all intellectual property rights for BRII-179 from VBI, making it another good alternative to the transaction disclosed in the February announcement.