Dragon Reports Second Quarter Results of 2004 VANCOUVER, Aug. 11
/PRNewswire-FirstCall/ -- Dragon Pharmaceutical Inc. (TSX: DDD; OTC
BB: DRUG; BBSE: DRP) is pleased to announce the results for the
second quarter ended June 30, 2004. For the three-month ended June
30, 2004 --------------------------------------- During the second
quarter in 2004, the Company posted revenues of $908,145 from the
sales of rHu Erythropoietin (EPO) compared to $1,007,686 for the
same period of the prior year. Revenues of $657,645 were generated
in China and $250,500 from outside of China during the second
quarter of 2004 compared to $576,894 in China and $430,792 from
outside of China for the same period in 2003. The gross profit
margin was 79% for the period in 2004, improved from the gross
margin of 68% for the same period in 2003. Net loss for the second
quarter in 2004 was $388,004 or $0.02 per share, compared to a net
loss of $236,424, or $0.01 per share, for the same period in 2003.
The increase in net loss for the second quarter in 2004 was mainly
due to an increase in research and development expenses for the EPO
product developed for the European market. For the six-month ended
June 30, 2004 ------------------------------------- Revenues for
the six-month period in 2004 were $1.79 million, up from $1.67
million from the same period in 2003. Sales in and outside of China
were $1.36 million and $0.43 million respectively during the period
in 2004 compared to $1.03 million in China and $0.64 million
outside of China for the same period in 2003. The gross profit
margin was 75% for the period of 2004, improved from 68% for the
same period in 2003. Net loss for the period of 2004 was $0.64
million or $0.03 per share compared to a loss of $0.97 million or
$0.05 per share for the same period in 2003, reflecting the results
of effective cost control measures and a leaner corporate
structure. During the second quarter of 2004, Dragon announced
entering into a definitive agreement to acquire Oriental Wave
Holdings Ltd. The proposed acquisition is subject to a number of
conditions including regulatory and shareholders' approval. If the
proposed acquisition is consummated, Oriental Wave will become a
wholly owned subsidiary of Dragon and the combined company,
headquartered in Vancouver, Canada, will have approximately 1,800
employees worldwide plus over 1,200 sales representatives in China.
In addition, the acquisition of Oriental Wave by Dragon will create
a competitive and growth oriented pharmaceutical company focusing
on major growth sectors of the global pharmaceutical industry,
namely, generic drugs (prescription and over-the- counter generic
drugs), bulk pharmaceutical chemicals (Clavulanic Acid, 7-ACA and
sterilized bulk drugs) and biotech drugs (EPO and in-licensed
G-CSF). "We are pleased with the progress we have accomplished so
far in 2004. On one hand, we have achieved operational improvement
with an increase in gross profit margin. On the other hand, we have
received regulatory approval for the sale of our EPO product in
Ecuador in addition to China, India, Egypt, Brazil and Peru. At the
same time, we are investing in our future by expanding our research
and development efforts for our anticipated EPO product
specifically designed for the European market to ensure Dragon a
timely entry to this prominent market", said Dr. Alexander Wick,
President and CEO of Dragon Pharmaceutical Inc. "However, probably
the most important and exciting news for Dragon during the quarter
was that Dragon has entered into a definitive agreement to acquire
Oriental Wave Holdings Ltd. Now, with a Registration Statement on
Form S-4, relating to the acquisition of Oriental Wave filed with
the U.S. Securities and Exchanges Commission, we are currently
targeting to have the proposed acquisition completed during the
fourth quarter of 2004. While we are very pleased with the progress
of the proposed acquisition, we look forward to completing the
acquisition process as soon as possible so that the combined
company will start generating the anticipated benefits as a result
of the business combination." About Dragon Pharmaceutical Inc.
-------------------------------- Dragon Pharmaceutical Inc. is an
international bio-pharmaceutical company headquartered in
Vancouver, Canada, with a GMP production facility in Nanjing,
China. Dragon's EPO is currently approved to treat anemia due to
renal failure and surgery in 6 countries: China, India, Brazil,
Egypt, Peru, and Ecuador. Additional regulatory submissions are in
progress throughout Central and Eastern Europe, Asia, Latin
America, the Middle East and Africa and the Company is in the final
preparation to enter the European Union market. Forward Looking
Statement: Cautionary Statement for Purposes of the "Safe Harbor"
Provisions of the Private Securities Litigation Reform Act of 1995:
All statements, other than historical facts, included in the
foregoing press release are forward-looking statements. These
forward looking statements include, but are not limited to, that
Dragon and Oriental Wave will consummate the acquisition.
Forward-looking statements are not guarantees of future
performance. They involve risk, uncertainties and assumptions
including risks discussed under "Risks Associated With Dragon
Pharmaceuticals" in the Company's annual report on Form 10-KSB, SEC
File No.: 0-27937 and other documents filed with the SEC. The
Company does not undertake the obligation to publicly revise these
forward- looking statements to reflect subsequent events or
circumstances. The foregoing may be deemed to be soliciting
materials of Dragon in connection with its definitive agreement to
acquire Oriental Wave announced on June 14, 2004. This disclosure
is being made in connection with Regulation of Takeovers and
Security Holder Communications (Release Nos. 33-7760 and 34- 42055)
adopted by the Securities and Exchange Commission ("SEC") and Rule
14a- 12 under the Securities Exchange Act of 1934, as amended.
Dragon shareholders and other investors are urged to read the proxy
statement prospectus that Dragon has filed with the SEC in
connection with the proposed acquisition because it contains
important information about Dragon, Oriental Wave and related
matters. Dragon and its directors and executive officers may be
deemed to be participants in Dragon's solicitation of proxies from
Dragon shareholders in connection with the proposed acquisition.
Information regarding the participants and their security holdings
can be found in each of Dragon's most recent proxy statement and
Form 10-KSB filed with the SEC, which are or will be available from
the SEC and Dragon as described below, and the proxy statement when
it is filed with the SEC. The proxy statement / prospectus will be
available for free, both on the SEC web site (http://www.sec.gov/)
and from Dragon as follows: Garry Wong Dragon Pharmaceutical, Inc
1900 - 1055 West Hastings Street, Vancouver, British Columbia, V6E
2E9 Telephone: (604) 669-8817 or North American Toll Free:
1-877-388-3784 Fax: (604) 669-4243 Email: Website:
http://www.dragonpharma.com/ or http://www.dragonbiotech.com/ In
addition to the proposed proxy statement/prospectus, Dragon files
annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any reports,
statements or other information filed by Dragon at the SEC's public
reference room at 450 Fifth Street, N.W., Washington, D.C. 20549.
Please call the SEC at 1-800-SEC-0330 for further information on
the public reference rooms. Dragon filings with the SEC are also
available to the public from commercial document-retrieval services
and on the SEC's web site at http://www.sec.gov/. SELECTED
CONSOLIDATED STATEMENT OF OPERATIONS(x)
------------------------------------------------ For the
Three-month For the Six-month ------------------- -----------------
Ended June 30 Ended June 30 ------------- ------------- 2004 2003
2004 2003 ---- ---- ---- ---- Sales $908,145 $1,007,686 $1,786,415
$1,672,009 Gross Profit 713,390 680,698 1,344,918 1,143,740 Gross
Profit Margin 79% 68% 75% 68% Net (loss) for the period (388,004)
(236,424) (637,427) (970,452)
---------------------------------------------- (Loss) per share -
basic and diluted $(0.02) $(0.01) $(0.03) $(0.05)
---------------------------------------------- Weighted average
number of common shares outstanding Basic and diluted 20,560,022
20,334,000 20,511,011 20,334,000 SELECTED CONSOLIDATED BALANCE
SHEET DATA(x) ------------------------------------------- June 30,
2004 December 31, 2003 ------------- ----------------- Cash and
Short-term Securities $ 2,608,594 $ 3,126,667 Total Current Assets
$ 5,739,882 $ 5,622,402 Total Current Liabilities $ 1,325,780 $
1,428,257 Total Shareholders' Equity $ 7,567,029 $ 9,707,795 Total
Assets $ 8,892,809 $ 11,136,052 (x) For greater detail, please
refer to the Company's 10-QSB, which has been filed with the SEC
and the Ontario Securities Commission. The full financial
statements will also be available on Dragon's website at
http://www.dragonpharma.com/ or http://www.dragonbiotech.com/. The
Company's financial statements comply with U.S. GAAP (Generally
Accepted Accounting Principles) and all dollar amounts are
expressed in U.S. currency. DATASOURCE: Dragon Pharmaceuticals Inc.
CONTACT: Garry Wong, Dragon Pharmaceutical, Inc, 1900 - 1055 West
Hastings Street, Vancouver, British Columbia, V6E 2E9, Telephone:
(604) 669-8817 or North American Toll Free: 1-877-388-3784, Fax:
(604) 669-4243, Email: , Website: http://www.dragonpharma.com/ or
http://www.dragonbiotech.com/
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