SOURCE: AXM Pharma, Inc.

August 03, 2005 12:30 ET

China's Revaluation Process Is a Positive for AXM Pharma's China Operations

LAS VEGAS, NV -- (MARKET WIRE) -- August 3, 2005 -- AXM Pharma, Inc. (AMEX: AXJ) announced today that the recent announcement by the Chinese central bank that it will no longer peg its currency to the U.S. dollar could have a positive impact on the Company's Chinese-based assets.

The Chinese central bank announced that it will no longer peg its currency to the U.S. dollar, but instead, will let the RMB float in a tight range (0.3%) against a basket of foreign currencies. The Company views this decision by China as a positive to the extent that it signals growing maturity in the Chinese financial system. China is now one step closer to true integration with the global economy and is good news for capitalism.

Chet Howard, CEO of AXM Pharma, Inc., noted that, "It is the Company's view that this revaluation will be a positive for AXM Pharma. At this point, we do not know the exact mix of the currency basket, or how much the initial pricing may change the RMB-dollar exchange rate, but there are significant potential opportunities for earnings gains from this revaluation process for U.S. listed China-based companies producing RMB sales & earnings (ie: higher dollar valued RMB earnings). Also, there are potential earnings gains for U.S. product manufacturers exporting to China, through higher profit margins."

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 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.

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    (866) 562-0134