SOURCE: AXM Pharma, Inc.

July 12, 2005 08:28 ET

AXM Pharma's Sunkist® Vitamin & Nutritional Supplement Lines Distributed to 10,000 Outlets and Moves Into High Gear in June 2005

LAS VEGAS, NV -- (MARKET WIRE) -- July 12, 2005 -- AXM Pharma, Inc. (AMEX: AXJ) announced today June 2005 production of Sunkist products is on track. Operations reports summarize June activities as production 242,000 pounds of finished product and shipment of 200,000 pounds or 30 million individual pieces for the existing 8 SKUs. From the consumer's perspective, this quantity was packed into 660,000 retail packs which are sold by our distributors in Hong Kong, China and Taiwan to high consumer traffic outlets such as Carrefour, Costco, Mannings, Watsons, 7-11, and leading pharmacies, for a total approaching 10,000 outlets in the initial phase for distribution coverage. The average product mix in each outlet is less than one dozen of each product.

"The results of the first month's work are very encouraging," stated Peter W. Cunningham, AXM's President of International Sales. He went on to say that, "...the team did a great job, and we have the right product mix with the chewchews and the dissolve in the mouth films, the right Brand with Sunkist® and the right focus on urban markets in Asia, we have entered fast growth China, steady growth Hong Kong and mature Taiwan. We expect reorders to begin shortly."

Euromonitor LLC reported the combined market size for Taiwan, Hong Kong & China for Vitamin Supplements of all types in 2003 was more than US$ 1.6 billion.

                                      2003
                                      Average
              2003                    Per capita
Vitamin       Market                  Urban
Supplement    Value US$    Growth     Annual
Markets       Million      Rates      Spend US$

China          645.00       66%        2.58
Hong Kong       92.00       14%       15.33
Taiwan         937.50        7%       50.00

Source: Euromonitor LLC, OTC market research report published June 2004
Further encouraging information is that the functional food market in China is growing rapidly as the standard of living in China increases and there is more disposable income for health related products. According to Packaged Facts, functional food sales are projected to exceed $30 billion in the U.S. by the end of the decade. China is expected to follow a similar trend. The increasing sophistication of Chinese consumers, especially those in urban areas, coupled with their rising affluence, has resulted in a value for money approach where health products are concerned. The leading distributor of functional foods in China generated $360 million in revenues in 2003.

According to DataMonitor, consumers are taking a more holistic view of health and looking to diet, exercise and lifestyle to complement medical treatment. This attitude is a golden opportunity for functional food and drinks players. It encourages consumers to trade-up to healthier food and drink in order to achieve their aims. These consumers are now more willing to pay extra for health products if they feel that it adds value to their lives. Even in rural areas, traditionally very conservative, consumer lifestyles are increasingly influenced by urban consumption patterns.

AXM Pharma Inc., http://www.axmpharma.com, through its wholly owned subsidiary, Werke Pharmaceuticals, Inc., is the 100% owner of AXM Pharma Shenyang, Inc. ("AXM Shenyang"), a Wholly Foreign Owned Enterprise ("WFOE") under the laws of the People's Republic of China. AXM Shenyang is located in the City of Shenyang, in the Province of Liaoning, China. AXM Shenyang and its predecessor company Shenyang Tianwei Pharmaceutical Factory, Ltd. ("STPF"), has an operating history of approximately 10 years. AXM Shenyang historically has been a manufacturer and distributor of proprietary and generic pharmaceutical products, which include injectables, capsules, tablets, liquids and medicated skin products for export and domestic Chinese sales. For additional information on AXM Pharma Inc, please visit http://www.iccinfo.com or call Investor Communications Company, LLC at 866 562 0134.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: The statements contained in this news release include certain predictions and projections that may be considered forward-looking statements under securities law. These statements involve a number of important risks and uncertainties that could cause actual results to differ materially including, but not limited to, the performance of joint venture partners, as well as other economic, competitive and technological factors involving the Company's operations, markets, services, products and prices. With respect to AXM, except for the historical information contained herein, the matters discussed in this news release are forward-looking statements involving risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. Potential risks and uncertainties include, but are not limited to, AXM's extremely limited operating history, uncertainties related to the Company's access to additional capital, competition and dependence on key management.

Contact Information

  • Contact Information:
    Tom Bostic
    Investor Communications Company, LLC
    (866) 562-0134