SOURCE: First China Pharmaceutical Group, Inc.

First China Pharmaceutical Group, Inc.

November 30, 2010 09:15 ET

First China Pharma Announces LOI to Acquire Major Regional Distributor

HONG KONG--(Marketwire - November 30, 2010) -  First China Pharmaceutical Group, Inc. (OTCBB: FCPG) ("First China" or the "Company") is pleased to announce the November 29th signing of a Letter of Intent ("LOI") towards the acquisition of 100% of the interests of Shandong Run Kang Pharmaceutical Co. Inc. ("Run Kang") of Jinan City, Shandong Province, Peoples Republic of China.

Run Kang was founded in 2006 and is principally focused on the distribution of Western medicinal products and drugs as well as traditional Chinese remedies to regional pharmacies, clinics and hospitals. Based in Jinan City (pop. 6,000,000), the company is strategically located about 250 miles south of the national capital of Beijing in north-western Shandong province (pop. 94,000,000).

The company currently employs 50 individuals tasked with managing and coordinating an active warehouse and logistics center servicing over 100 major customers and offering an inventory of over 1000 product lines.

Unaudited sales figures for 2009 were shown as RMB 120 million ($17 million USD), with sales for 2010 currently reported as RMB 100 million ($14.8 million USD).

As part of the proposed acquisition, First China plans to extend its existing inventory of over 5,000 product lines as well as immediately implement its highly efficient fulfillment operation in order to generate increased regional sales and create heightened national brand visibility and awareness. 

First China Pharmaceutical's CEO Mr. Zhen Jiang Wang comments, "Shandong Run Kang Pharmaceutical is ideally positioned for growth and simply needs an infusion of ideas and technology to spur the company to new heights. We look forward to concluding negotiations quickly as we feel this acquisition could generate a great deal of interest in what we are doing nationally as well as delivering substantially to our bottom line."

The proposed transaction will use commercially reasonable efforts to execute a definitive agreement as soon as possible and the definitive agreement shall contain customary representation and warranties, covenants and indemnification provisions.

Details of the company's business, finances, appointments and agreements can be found as part of the Company's continuous public disclosure as a reporting issuer under the Securities Exchange Act of 1934 filed with the Securities and Exchange Commission's ("SEC") EDGAR database.

About First China Pharmaceutical Group, Inc. (OTCBB: FCPG)
First China Pharmaceutical Group, Inc. aims to develop a high growth pharmaceutical distribution company generating significant revenue from the sale of healthcare products in China. As part of its business strategy, the Company has acquired the assets of Kun Ming Xin Yuan Tang Pharmacies Co. Ltd. (XYT), which includes a strategic advantage over its competitors as it is believed to be one of a limited number of pharmaceutical distribution companies in Yunnan Province that has obtained government approval to fulfill orders over the internet. First China Pharmaceutical Group plans to continue the rapid growth of the company from its current position as a provider of approximately 5,000 drugs to more than 4,700 pharmacies, hospitals and clinics in China's Yunnan Province. For more information visit: www.firstchinapharma.com

Notice Regarding Forward-Looking Statements
This news release contains "forward-looking statements" as that term is defined in Section 27A of the United States Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Statements in this press release which are not purely historical are forward-looking statements and include any statements regarding beliefs, plans, expectations or intentions regarding the future. Such forward-looking statements include, among other things, regulatory incentives, the development of new business opportunities, and projected costs, revenue, profits and results operations. Actual results could differ from those projected in any forward-looking statements due to numerous factors. Such factors include, among others, the inherent uncertainties associated with new projects and development stage companies. These forward-looking statements are made as of the date of this news release, and we assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. Although we believe that any beliefs, plans, expectations and intentions contained in this press release are reasonable, there can be no assurance that any such beliefs, plans, expectations or intentions will prove to be accurate. Investors should consult all of the information set forth herein and should also refer to the risk factors disclosure outlined in our annual report on Form 10-K for the most recent fiscal year, our quarterly reports on Form 10-Q and other periodic reports filed from time-to-time with the Securities and Exchange Commission.

ON BEHALF OF THE BOARD
First China Pharmaceutical Group, Inc.
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Zhen Jiang Wang
Chairman and CEO

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