Aoxing Pharmaceutical Company Inc. Updates on Joint Venture Progress with Johnson Matthey Pharma Services

NEW YORK, NY--(Marketwire - October 26, 2010) - Aoxing Pharmaceutical (NYSE Amex: AXN) (“Aoxing Pharma”), a specialty pharmaceutical company focusing on research, development, manufacturing and distribution of narcotic and pain-management products, today announced updates on the progress of Hebei Aoxing API Pharmaceutical Company, Ltd, the joint venture between Aoxing Pharma and Johnson Matthey Plc. The chemical synthesis laboratories and pilot-manufacturing plant recently passed the GMP inspection of the China State Food and Drug Administration (SFDA).

Aoxing Pharma has recently completed construction on the dedicated newly renovated facility for the joint venture, which focuses on research, development, manufacturing and marketing of active pharmaceutical ingredients (“API’) of narcotics and neurological drugs for the China market. Full GMP certification from the China SFDA and a pharmaceutical business license is expected by year-end 2010.

“We are very pleased with the substantial progress that has been achieved by the joint venture that was created in April 2010 which paves the way for receiving GMP certification by the China SFDA by December 2010,” said Mr. Zhenjiang Yue, Chairman and CEO of Aoxing Pharma. “This is an important milestone for both Aoxing Pharma and Johnson Matthey Plc. We were pleased to recently welcome senior executives from Johnson Mattey to the newly renovated facility and look forward to starting chemical synthesis and manufacturing in 2011.”

About Hebei Aoxing API Pharmaceutical Company, Ltd

The joint venture represents a significant new opportunity for both Aoxing Pharma and Johnson Matthey Plc. to expand their business in the rapidly growing pharmaceutical market in China.

Under the terms of the agreement, Macfarlan Smith Ltd, a wholly owned subsidiary of Johnson Matthey Plc., headquartered in the United Kingdom, contributes technology expertise and capital to the joint venture. Hebei Aoxing Pharmaceutical Group Company, Ltd. (“Hebei Aoxing”), the operating subsidiary of Aoxing Pharma, contributes capital, fixed assets and related API manufacturing licenses. The joint venture company is called Hebei Aoxing API Pharmaceutical Company, Ltd. Hebei Aoxing has a 51% stake in the Company, while Macfarlan Smith (Hong Kong) Ltd, (a wholly owned subsidiary of Johnson Matthey Pacific Ltd), holds 49%. Each company has equal representation on a board of directors that oversee a management team responsible for corporate strategies and operations.

The new joint venture is located on the Hebei Aoxing campus in Xinle City, 200 kilometers southwest of Beijing. The total capital investment is projected to be approximately $15 million during the first five years. It will initially develop eight narcotic API products for the China market but its product range could potentially exceed 30 products.

About Aoxing Pharmaceutical Company, Inc.

Aoxing Pharmaceutical Company, Inc. is a US incorporated specialty pharmaceutical company with its operations in China, specializing in research, development, manufacturing and distribution of a variety of narcotics and pain-management products. Headquartered in Shijiazhuang City, outside Beijing, Aoxing has the largest and most advanced manufacturing facility in China for highly regulated narcotic medicines. Its facility is one of the few GMP facilities licensed for the manufacture of narcotic medicines by the China State Food and Drug Administration (SFDA). It has a joint venture collaboration with Johnson Matthey Plc. to produce and market narcotics and neurological drugs in China. It also has a strategic alliance partnership with QRxPharma, Phoenix PharmaLabs, Inc. and American Oriental Bioengineering, Inc. For more information, please visit: www.aoxingpharma.com.

Safe Harbor Statement from Aoxing Pharmaceutical Company, Inc.

Statements made in this press release are forward-looking and are made pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties that may cause actual results to differ materially from those set forth in these statements. The economic, competitive, governmental, technological and other risk factors identified in the Company’s filings with the Securities and Exchange Commission, including the Form 10-K for the year ended June 30, 2010, may cause actual results or events to differ materially from those described in the forward looking statements in this press release. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether because of new information, future events, or otherwise.