Insilico Medicine (03696) has announced that on August 27, 2026, following the close of trading, the company entered into a subscription agreement with the managers. Subject to the satisfaction of certain conditions outlined therein, the company has agreed to issue, and the managers have agreed to subscribe for and pay for, or procure subscribers to subscribe for and pay for, convertible bonds with an aggregate principal amount of US$305 million.

The initial conversion price is set at HK$58.07 per share, representing a premium of approximately 23.5% over the closing price of HK$47.02 per share as quoted on the Stock Exchange of Hong Kong on August 27, 2026, which is also the date of the subscription agreement.

Assuming full conversion of the bonds at the initial conversion price of HK$58.07 per share, the bonds would be convertible into approximately 41.1747 million shares. This figure represents roughly 7.07% of the company's issued share capital as of August 27, 2026, being the latest practicable date prior to the publication of this announcement, and approximately 6.60% of the company's issued share capital as enlarged by the full conversion of the bonds.

Upon completion of the bond issuance, the total gross proceeds from the subscription of the bonds are expected to be approximately US$305 million. After deducting manager commissions and other estimated payable expenses related to this offering, the net proceeds from the subscription are expected to amount to approximately US$302 million.

The company intends to allocate these proceeds as follows: (a) approximately 40% of the net proceeds will be used to fund clinical trials for self-developed drug candidates; (b) approximately 30% of the net proceeds will be allocated to expanding the group's research and development team; (c) approximately 15% of the net proceeds will support the development and training of frontier scientific SOTA foundational models; and (d) the remaining approximately 15% of the net proceeds will be utilized to supplement working capital and for other corporate purposes.