NEW YORK, Nov. 19 /PRNewswire-FirstCall/ -- NeoStem, Inc. , announced today that it has sent the following letter to its shareholders, discussing the Company’s acquisition, on October 30, 2009, of China Biopharmaceuticals Holdings, Inc. (CHBP), an integrated bio-pharmaceutical company based in the People’s Republic of China. The merger gives NeoStem a controlling 51% interest in Suzhou Eyre Pharmaceutical Co. Ltd., CHBP’s primary operating subsidiary and a prominent and profitable China pharmaceutical company. The letter outlines NeoStem’s near-term and long-term business strategies following this acquisition.
November 18, 2009
The completion on October 30, 2009 of our merger with China Biopharmaceuticals Holdings, Inc. is a major milestone and accomplishment for NeoStem. The net effect of the merger is our acquisition of a controlling 51% interest in Suzhou Erye Pharmaceuticals (“Erye”), a China-based pharmaceutical company with revenues on track to exceed $60 million in 2009. This marks our transition to being a vertically integrated, biopharmaceutical development and distribution company with an effective platform for significant growth in China, which is one of the world’s most dynamic consumer markets. I intend to use this letter to our shareholders to clarify NeoStem’s near term and long term business strategies.
Erye is expanding its research, development and distribution capabilities, and is on track to become one of the largest antibiotic producers in Eastern China.
While NeoStem will continue to offer through Erye traditional pharmaceutical products, we will advance our research and development activities in the US and China focused on stem cell-based therapies beyond hematologic malignancies which have been used therapeutically for over 40 years. The Chinese market for adult stem cell therapies is more advanced than in the US and we look forward to the expansion of these revenue opportunities
NeoStem’s market capitalization has increased since the closing of the merger by approximately $40 million to a market capitalization of approximately $59 million as of the writing of this letter. Although the merger resulted in a dilution of the management team’s equity ownership of NeoStem, the team retains a significant stake in NeoStem’s continuing success and remains aligned with your interests as shareholders. We believe the future for NeoStem is very bright, remain committed to growing the value of your NeoStem holdings and want you to know that we appreciate your continuing support. I look forward to updating you further in the near future with progress on many of the exciting new initiatives that we have launched in the pharmaceutical and stem cell therapies sectors, both in the US and China.
Forward-Looking Statements
NeoStem, Inc.
