SSA.L Regulatory News (SSA)

Sistema, CapitalBio Technology and RCIF to create the largest innovative biotechnology laboratory in Russia

Vladivostok, September 11, 2018 - Sistema PJSFC ("Sistema" or "the Corporation") (LSE: SSA, MOEX: AFKS), a publicly traded diversified Russian holding company, CapitalBio Technology, an industry-leading Chinese life science company that develops and commercializes total health-care solutions, the Russia-China Investment Fund (RCIF), have agreed to create the largest innovative biotechnology laboratory in Russia. A corresponding agreement was signed today on the sidelines of the meeting between Russian President Vladimir Putin and Chinese President Xi Jinping at the Eastern Economic Forum.

The first in Russia private innovative biotechnology laboratory will focus on genetic and molecular research in order to diagnose and treat socially significant diseases, including cancer treatment. The biotechnological center will consist of a genetic laboratory, a preclinical studies laboratory, a cell technologies laboratory, and a biobank. The activities of the laboratory will be based on international best practice, the experience of scientists in the biomedicine field, and the knowledge of international partners from global companies.

Vladimir Evtushenkov, Chairman of Sistema's Board of Directors, said:

"The global market for medical services is on the threshold of significant discoveries, above all in genetic research. Establishing the first private biotech laboratory in Russia in partnership with CapitalBio, one of the leading Chinese R&D Institute, will make it possible to leverage the accumulated knowledge of Russian and Chinese geneticists, and to introduce innovative diagnostic techniques and personalised treatments of diseases that have significant social impact into real clinical practice. We hope that the opening of a biotech laboratory will help many Russians to fight cancer ".

Junquan Xu, CEO of CapitalBio Technology, said:

"Precision medicine has turned into an inevitable trend in the development of modern medicine. People now are pursuing precise medication and individualized treatment. Molecular diagnostic technology based on genetic research, which meets the urgent needs of precision medicine, is being applied more and more in the field of clinical medicine. We are honored to have this opportunity to cooperate with the Russia-China Investment Fund and Sistema to establish the joint laboratory in Russia. We do believe that the establishment of joint laboratory will further achieve resource sharing, complementary advantages and improve the medical standards".

Kirill Dmitriev, CEO of RDIF and Co-CEO of RCIF, noted:

"Investments in the development of national medicine are one of the priorities of RDIF. We strive to improve the quality of life of the population by investing in socially significant projects. Financing of the first Russian biotechnology laboratory specializing in oncogenetics will provide substantial support to scientific research in this field and will allow for the future development of the newest effective medical drugs to combat oncological diseases. This is the first transaction by RDIF in the field of genetics, and we intend to continue actively searching for attractive investment opportunities in this area".

Bing Hu, Co-CEO and President of RCIF, said:

"Attracting a strong Chinese Biotechnology partner such as CapitalBio in this transaction will not only creating a world-class laboratory, but also make a breakthrough in the field of oncogenetic, genetic and molecular technologies in Russia. We are pleased to welcome CapitalBio and Sistema as a partner of RCIF and are confident that today's agreement is a notable milestone of productive long-term cooperation in the field of medicine and biotechnology".

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Sistema PJSFC is a publicly-traded diversified Russian holding company serving over 150 million customers in the sectors of telecommunications, children's goods retail, paper and packaging, healthcare services, agriculture, high technology, banking, real estate, pharmaceuticals and hospitality. The company was founded in 1993. Its revenue in 2017 was RUB 704.6 bn; its total assets equalled RUB 1.1 trn as of 31 December 2017. Sistema's global depositary receipts are listed under the "SSA" ticker on the London Stock Exchange. Sistema's ordinary shares are listed under the "AFKS" ticker on the Moscow Exchange. Website: www.sistema.com.

CapitalBio Technology is a leading Chinese biotechnology company specializing in the development of products for genetic, cellular and protein research. It was founded in 2000 with the support of the National Development and Reform Commission, and the Tsinghua Holdings is the primary shareholder. As a high-tech innovative company, it provides instruments, reagents and services in the fields of scientific research, clinical diagnosis, drug development, health management and forensic test. It combines modern medicine with conventional Chinese medicine to improve the health management and rehabilitation. Its products and services have been exported to more than 30 countries and regions. There are about 300 patents have been received (the implementation of patents is about 60%). CapitalBio Technology will endeavor to create a comprehensive health service system to benefit the human being. Further information can be found at www.capitalbiotech.com.

Russia-China Investment Fund (RCIF) is a joint fund, established by the Russian Direct Investment Fund and China Investment Corporation (CIC). The activity of RCIF is aimed at development of bilateral economic, trade and investment relations between Russia and China. Further information can be found at http://www.rcif.com.

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