SOURCE: Aoxing Pharmaceutical

April 19, 2011 09:00 ET

Aoxing Pharmaceutical Company Completes Technology Transfer in Joint Venture With Macfarlan Smith Ltd.

JV Successfully Adopts Advanced Process Technology to Produce Naloxone Hydrochloride API

NEW YORK, NY--(Marketwire - Apr 19, 2011) - 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 that Hebei Aoxing API Pharmaceutical Company, Ltd., the joint venture ("JV") between Aoxing Pharma and Macfarlan Smith Ltd., a wholly owned subsidiary of Johnson Matthey Plc, has succeeded in adopting advanced process technology from Macfarlan Smith. This technology transfer will allow the JV to produce naloxone hydrochloride API (active pharmaceutical ingredient) with quality meeting both European and Chinese pharmacopoeia specifications.

On April 15, 2011, John Fowler, President at Johnson Matthey Pharmaceutical Materials & Services, and Roger Kiburn, Managing Director at Johnson Matthey Pharmaceuticals, visited the facility located in Xinle City, Hebei Province. "We are highly encouraged by and satisfied with the JV's progress following our recent visit to the facility and meeting with the technical personnel involved. We look forward to seeing the JV apply for GMP certification and approval of the process change to Macfarlan Smith's technology by the SFDA. With the success to date of the first product, naloxone hydrochloride, we are excited to see the JV partners work closely on other API's moving forward," they commented.

Mr. Zhenjiang Yue, Chairman and CEO of Aoxing Pharma, commented, "Since we signed the JV agreement with Macfalan Smith Ltd, the JV has received its foreign investment authorization certificate, manufacturing license, and business license and met all legal requirements. We have worked hard to ensure the successful construction of workshops and related facilities. Under the guidance of Macfarlan Smith technologists, the JV has just adopted advanced process technology from Macfarlan Smith and completed the synthesis of three batches of naloxone hydrochloride API. This was accomplished at low cost with a quality meeting both European and Chinese pharmacopeia reference standards. We look forward to applying for GMP certification of the workshops, approval of the process change, and the development of other API products through the JV. I would particularly like to thank the technologists from Macfarlan Smith who have been so closely involved in the technology transfer and ensuring it a smooth success."

Naloxone Hydrochloride API represents the first commercial opportunity for the joint venture, which is initially focusing on eight API products. The next step for the JV is to apply for GMP certification of the workshops and approval of the process change.

About Hebei Aoxing API Pharmaceutical Company, Ltd.

Hebei Aoxing API Pharmaceutical Company, Ltd., is a joint venture between Hebei Aoxing Pharmaceutical Group Company ("Hebei Aoxing"), the operating subsidiary of Aoxing Pharma, and Macfarlan Smith Ltd., a wholly owned subsidiary of Johnson Matthey Plc (LSE: JMAT), headquartered in the United Kingdom. Under the terms of the agreement, Macfarlan Smith contributes technology expertise and capital to the joint venture. Hebei Aoxing contributes capital, fixed assets, and related API manufacturing licenses. 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 oversees a management team responsible for corporate strategies and operations. The general manager of the JV is appointed by Macfarlan Smith. The joint venture is located on the Hebei Aoxing campus in Xinle City, 200 kilometers south west 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 strategic alliance partnerships 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 contained in this communication not relating to historical facts are forward-looking statements that are intended to fall within the safe harbor rule for such statements under the Private Securities Litigation Reform Act of 1995. The information contained in the forward-looking statements is inherently uncertain, and the Company's actual results may differ materially due to a number of factors, many of which are beyond its ability to predict or control, including among many others, the Company's ability to complete GMP certification of the workshops, obtain process approvals, develop the product line as and when anticipated. These forward-looking statements are subject to known and unknown risks and uncertainties that could cause actual events to differ from the forward-looking statements. More information about some of these risks and uncertainties may be found in the reports filed with the Securities and Exchange Commission by the Company. The Company operates in a highly competitive and rapidly changing business and regulatory environment, thus new or unforeseen risks may arise. Accordingly, investors should not place any reliance on forward-looking statements as a prediction of actual results. These forward-looking statements are based on the Company's current expectations and beliefs concerning future developments and their potential effects on the Company. There can be no assurance that future developments affecting the Company will be those anticipated by the Company. The Company undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

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