PLYMOUTH MEETING, Pa.--(BUSINESS WIRE)-- Beijing Med-Pharm Corporation (Nasdaq: BJGP - News) today announced that it has signed definitive agreements to purchase a majority interest in the Shanghai Rongheng Pharmaceutical Co., Ltd. ("Rongheng") from Shanghai CAS Shenglongda Biotech (Group) Co., Ltd. ("Shanghai CAS") and Shanghai Rongheng International Trade Co. Ltd. of Orient International (Holding) Co. ("Orient International"). The transaction is subject to a number of conditions including receipt of Chinese central government approval, and is expected to close by the end of the second quarter of 2007.
Rongheng is a pharmaceutical distribution enterprise with operations in Shanghai, China's largest city with 17 million residents. Rongheng distributes over 400 pharmaceutical products to more than 250 hospitals in Shanghai, including almost all of the top tier hospitals in the city, generating annual revenues of $12 million in 2006. In January 2007, Beijing Med-Pharm announced that it had emerged as the winning bidder for shares of Rongheng, posted on the Shanghai United Assets and Equity Exchange in accordance with Chinese law.
"We are pleased to have reached final agreements with the current owners of Rongheng and look forward to supporting the company's continued success," says David Gao, CEO of Beijing Med-Pharm. "When we complete this transaction, our second significant acquisition in China, Rongheng will become a key component of our unique proprietary distribution network, complementing our current operations in Beijing and anticipated expansion to Guangdong province through the Alliance Boots joint venture. This is another important step toward our objective to have truly national distribution capabilities in China for our partners and our own products."
Under the terms of the agreements, Beijing Med-Pharm will acquire a 63.3 percent stake in Rongheng and will begin immediate participation in the management of the company, in anticipation of Chinese government approval of the transaction. A transition team, led by David Gao, has been formed. The current General Manager of Rongheng, Zhou Jianwei, will remain in that position. Mr. Zhou has 25 years of experience in the pharmaceuticals business and served as Executive Vice President of Shanghai Pharmaceuticals before joining Rongheng.
Beijing Med-Pharm expects to file an application with the central government by the end of March, 2007. No assurance can be provided that the application will be approved or that the acquisition will be completed.
About Beijing Med-Pharm Corporation
Beijing Med-Pharm is a pharmaceutical marketing and distribution company that offers the following services in China: pre-market entry analysis; clinical trial management; product registration; market research; pharmaceutical distribution to hospitals; and pharmaceutical marketing to physicians, hospitals and other healthcare providers.
Forward Looking Statements
In addition to historical facts or statements of current condition, this press release contains forward-looking statements within the meaning of the "Safe Harbor" provisions of The Private Securities Litigation Reform Act of 1995, including statements regarding the expected closing time of the Rongheng acquisition, the expected timing of our filing of an application with the central government, the expected timing of our filing of an application with the central government, the significance of the Rongheng acquisition to us and our anticipated expansion to Guangdong province through the Alliance Boots joint venture. Forward-looking statements provide Beijing Med-Pharm's current expectations or forecasts of future events. Actual results could differ materially from those reflected in these forward-looking statements due to financial, economic, regulatory and political conditions affecting our Company, Rongheng, our partners and the biotechnology and pharmaceutical industries and the Chinese pharmaceutical market in general and the ability to obtain approval of the acquisition of Rongheng from the Chinese government. Given these risks and uncertainties, any or all of these forward-looking statements may prove to be incorrect. Therefore, you should not rely on any such factors or forward-looking statements. Beijing Med-Pharm undertakes no obligation to update publicly any forward-looking statement.
Beijing Med-Pharm Corporation
Fred M. Powell, CFO, 610-940-1675
Sam Brown Inc.
Mike Beyer, 773-463-4211
Source: Beijing Med-Pharm Corporation
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