Dragon Pharmaceutical Inc.
OTC Bulletin Board : DRUG
TSX : DDD

Dragon Pharmaceutical Inc.

April 22, 2008 07:00 ET

Dragon Pharma Announces Strategic Realignment of its Business Segments into Two Divisions: Cephalosporin and Penicillin

VANCOUVER, BRITISH COLUMBIA--(Marketwire - April 22, 2008) - Dragon Pharmaceutical Inc. ("Dragon" or the "Company") (TSX:DDD)(OTCBB:DRUG)(BBSE:DRP), a leading international pharmaceutical company, today announced that beginning with the first quarter of 2008, the Company has realigned its business segments into two divisions: Cephalosporin and Penicillin. This realignment better reflects the Company's business strategy to become a leading vertically integrated manufacturer and distributor of a broad line of high-quality antibiotic products. As a result, the segment information included in the financial statements, 10-Q and 10-K reports will reflect this realignment of business segments.

This realignment of business segments shows the strategic planning of the Company:

- Focusing on antibiotic product lines, currently on Cephalosporin group and Penicillin group, two of the most important product lines for anti-infective drugs which have been widely used for treatment of various infections and diseases worldwide;

- Integrating product lines from intermediates to Active Pharmaceutical Ingredients (API), and to formulated products in order to maximize market dominating position;

- Developing new pipelines within the product lines horizontally to leverage the current resources for future growth.

The two new business divisions consist of the following:

Cephalosporin Division: operates the production and sales of 7-ACA, an important intermediate for cephalosporin antibiotics, and 7-ACA downstream APIs and finished formulation drugs. Currently, the Company's downstream API products include the crude powder of ceftazidime. The formulation products include injectable powder for ceftriaxone, cefazolin, cefotaxime, cefoperazone, ceftazidime and cefuroxime. Dragon plans to expand its current product offerings to incorporate more high-margin cephalosporin antibiotic drugs.

To view the Product Pipeline Chart for the Cephalosporin Division, see below link.

Penicillin Division: currently operates the production and sales of Clavulanic Acid and Cefalexin. Cefalexin was successfully launched and placed into the Company's product portfolio in January 2008. Clavulanic Acid is a drug that combines with penicillin group antibiotics to increase the effectiveness of against bacteria resistance. Cefalexin is a Penicillin G downstream product that is widely used to treat urinary tract infections, respiratory tract infections, skin and soft tissue infections. The Company intends to introduce more Penicillin G downstream antibiotics into the market in order to generate new drivers of growth, build products synergy and reduce the Company's exposure to overall market fluctuations. A stable and comprehensive supply of key ingredients will reduce the Company's current high dependency on third party suppliers.

To view the Product Pipeline Chart for the Penicillin Division, see below link.

"Today's announcement reflects our core business strategy with a focus on enhancing our position as a leading producer and supplier of a wide range of high-quality antibiotic products while creating vertically integrated business operations from intermediates to bulk APIs and finished formulation drugs," said Dragon's Chairman and CEO, Mr. Yanlin Han. "We believe that this strategic decision will offer the Company increased flexibility to expand pipelines and have a better control on product quality and operation costs in the entire production process. We have achieved significant growth in sales and profits for all our products in 2007. With the strengthened market leadership position, coupled with our enhanced product strategy, we are confident Dragon is well positioned for long-term growth."

To view charts please click on the following link: http://media3.marketwire.com/docs/DDD_Charts.pdf

About Dragon Pharmaceutical Inc.

Dragon Pharmaceutical, headquartered in Vancouver, Canada, is a leading manufacturer and distributor of a broad line of high-quality antibiotic products including 7-ACA, a key intermediate to produce cephalosporin antibiotics, Clavulanic Acid, and formulated cephalosporin antibiotic drugs. Dragon is the third largest 7-ACA producer and the first manufacturer and market leader of Clavulanic Acid products in China. Dragon utilizes its nationwide sales distribution network, close customer relationships, understanding of local markets and customer needs and low cost structure to outperform its international and domestic peers. With an annual capacity of 780 tons, Dragon is the largest exporter of 7-ACA in China. To learn more about Dragon Pharmaceutical Inc., please visit www.dragonpharma.com.

Safe Harbor Statement

This press release contains forward looking statements, including but not limited to, that the Company will continue to experience growth in sales of its main products, that it will continue to be able to improve its production technology and efficiency, that it will continue to achieve continuous growth in business and profitability in the near future. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward looking statements. Readers should not place undue reliance on forward looking statements, which only reflect the views of management as of the date hereof. The Company does not undertake the obligation to publicly revise these forward looking statements to reflect subsequent events or circumstances. Readers should carefully review the risk factors and other factors described in its periodic reports filed with the Securities and Exchange Commission.

Contact Information

  • Dragon Pharmaceutical Inc.
    Maggie Deng
    Chief Operating Officer
    (604) 669-8817 or North America Toll Free: 1-877-388-3784
    or
    Dragon Pharmaceutical Inc.
    Karen Huang
    Manager, Business Research & Development
    (604) 669-8817 or North America Toll Free: 1-877-388-3784
    Email: irdragon@dragonpharma.com
    Website: www.dragonpharma.com