Dragon Sells EPO Business; Focus on Antibiotic Core Business
November 14 2007 - 7:00PM
PR Newswire (US)
VANCOUVER, Nov. 14 /PRNewswire-FirstCall/ -- Dragon Pharmaceutical
Inc. (TSX: DDD; OTCBB: DRUG; BBSE: DRP) today announced that it has
entered an agreement with an unaffiliated party for the sale of its
EPO business which accounted for less than 3% of Dragon's
consolidated revenue for the first nine months of 2007. The
decision was made based on the studies of the EPO market which
showed limited growth potential, if not downward trend, during the
next three years. The Company considers this decision an important
part of Dragon's ongoing strategy to fully focus on its core
business of antibiotic product lines that have shown tremendous
growth over the past years. Over the past three years, Dragon's
revenues from antibiotic products increased from $31.23 million for
the year of 2005 to approximately $60 million for the first nine
months of 2007, reflecting the strong market demand as well as
enhanced competitiveness of the Company in antibiotic products.
Mainly due to the strong growth of antibiotic products, EPO
business only accounted for less than 3% of total revenues for the
first nine months of 2007, as compared to 11% of the total revenues
for the year of 2005. Since EPO business is no longer a significant
and growing component of our product portfolio, the Company decided
that it is in the best interests of its shareholders to sell its
EPO business and concentrate all its resources on the antibiotic
product lines which offered the greatest growth potential.
According to the agreement, the EPO business will be sold for $2.08
million. The transaction is expected to be completed during the
fourth quarter of 2007. Because of this disposal, the Company
recorded a non-cash impairment charge of $2.64 million during the
current quarter related to the write down of the intangible assets
and goodwill associated with the Biotech division which was created
as a result of the reverse take-over of Dragon Pharmaceutical Inc.
by Oriental Wave Holdings Limited on January 12, 2005. During the
three and nine months ended September 30, 2007, the Company
recognized $0.97 million and $2.12 million after-tax income from
continuing operations. "Our EPO business performed well during the
past years. However, an in-depth review of the EPO business has
concluded that it is very demanding in market resources but with
very limited growth potential," said Mr. Yanlin Han, Chairman and
CEO of the Company. "We are focusing our efforts in the antibiotic
market which we intend to lead while showing a sustainable and
growing profit. In addition, the Company is also actively exploring
additional business opportunities in broadening its core antibiotic
product offerings and increasing production capacities. We are
confident that the benefits of all these initiatives will be
reflected in the Company's performance in the future." This press
release contains forward looking statements such as the Company's
Chemical and formulation business to be competitive and successful
in the marketplace. 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 view 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 with the Securities and Exchange Commission. CONTACT:
Dragon Pharmaceutical Inc.: Maggie Deng, Telephone: (604) 669-8817
or North America Toll Free: 1-877-388-3784, Email: , Website:
http://www.dragonpharma.com/ DATASOURCE: Dragon Pharmaceutical Inc.
CONTACT: Dragon Pharmaceutical Inc.: Maggie Deng, Telephone: (604)
669-8817 or North America Toll Free: 1-877-388-3784, Email: ,
Website: http://www.dragonpharma.com/
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