Dragon Reports Third Quarter Results of 2004 VANCOUVER, Nov. 15
/PRNewswire-FirstCall/ -- Dragon Pharmaceutical Inc. (TSX: DDD; OTC
BB: DRUG; BBSE: DRP) is pleased to announce the results for the
third quarter ended September 30, 2004. For the three-month ended
September 30, 2004 --------------------------------------------
During the third quarter in 2004, the Company posted revenues of
$1,057,254 from the sales of rHu Erythropoietin (EPO) compared to
$1,151,646 for the same period of the prior year. Revenues of
$691,669 were generated in China and $365,585 from outside of China
during the third quarter of 2004 compared to $742,467 in China and
$409,179 from outside of China for the same period in 2003. The
gross profit margin was 73% for the period in 2004, which improved
from the gross margin of 69% for the same period in 2003. Net loss
for the third quarter in 2004 was $212,148 or $0.01 per share,
compared to a net loss of $282,581 or $0.01 per share, for the same
period in 2003. The decrease in net loss for the third quarter in
2004 was mainly due to lower selling, general and administrative
expenses and research and development expenses related to the
development of EPO product for the European market. For the
nine-month ended September 30, 2004
------------------------------------------- Revenues for the
nine-month period in 2004 were $2.84 million, slightly up from
$2.82 million from the same period in 2003. Sales in and outside of
China were $ 2.05 million and $0.79 million respectively during the
period in 2004 compared to $1.77 million in China and $1.05 million
outside of China for the same period in 2003. The gross profit
margin was 75% for the period of 2004, improved from 69% for the
same period in 2003. Net loss for the period of 2004 was $0.85
million or $0.04 per share compared to a loss of $1.25 million or
$0.06 per share for the same period in 2003, reflecting a higher
gross margin and lower selling, general and administrative expenses
the results of effective cost control measures and a leaner
corporate structure. Status on the Proposed Acquisition of Oriental
Wave and the Annual General Meeting
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Dragon has filed a revised preliminary Proxy Statement with the
U.S. Securities and Exchange Commission (SEC) in connection to the
proposed acquisition of Oriental Wave. Once the regulatory reviews
are completed, Dragon will announce the date for the Annual General
Meeting which is currently anticipated to be in the second half of
December, 2004. New Markets for Dragon's EPO: Dominican Republic,
Trinidad-Tobago and Kosovo
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Dragon is pleased to announce that Dragon's EPO products have been
granted market approvals in the Dominican Republic and
Trinidad-Tobago as advised by Dragon's licensees. In addition, the
health authority of Kosovo has accepted our licensee's application
for the market approval and under such a circumstance, Dragon's
licensee is allowed to bid for government tender and has since won
such a tender. Initial shipment of our EPO products to all three
additional markets has been started during the fourth quarter of
2004. Together with the already approved markets in China, Brazil,
India, Egypt, Peru and Ecuador, Dragon's EPO products have been
marketed in a total of 9 countries across Asia, Central and South
America, the Middle East and Eastern Europe. For details, please
refer to the announcement of a separate press release regarding the
Dominican Republic, Trinidad-Tobago and Kosovo markets. "During the
third quarter, we managed to achieve 16% sequential growth in
revenues over the second quarter. We are especially encouraged to
see stronger international sales during the third quarter. On a
year-to-date basis, we continued to lower our cost structure which
led to a lower net loss. Compared to last year, our net loss has
already been decreased by 33% at a similar revenue level.", said
Dr. Alexander Wick, President and CEO of Dragon Pharmaceutical Inc.
"Further, while the regulatory review process in connection with
the proposed acquisition of Oriental Wave has taken longer time
than expected, we look forward to completing the process as soon as
we can so that we can hold the Annual General Meeting to vote on
the transaction by the end of this year." 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 products are being marketed in 9
countries: China, India, Egypt, Brazil, Peru, Ecuador,
Trinidad-Tobago, Dominican Republic and Kosovo. Additional
regulatory submissions are in progress throughout Central and
Eastern Europe, Asia, Latin America, the Middle East and Africa,
and the Company is preparing to enter the European Union market.
Dragon Pharmaceutical Inc. 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, the combined company will have diverse and proven
product lines under 3 divisions: a Pharma division for prescription
and over-the-counter generic drugs, a Chemical division for bulk
pharmaceutical chemicals such as Clavulanic Acid, 7-ACA and
sterilized bulk drug production, and a Biotech division for EPO and
in-licensed G-CSF. For details, please refer to the press release
on June 14, 2004 - "Dragon and Oriental Wave Announce the Signing
of Definitive Agreement to Create a Competitive and Growth Oriented
Pharmaceutical Company". For further information, please contact
Garry Wong (email: ) at (604) 669-8817 or North America toll free
at 1-877-388-3784 or visit our web site at
http://www.dragonpharma.com/ or http://www.dragonbiotech.com/.
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 definitive proxy statements that will be filed with the SEC and
sent to shareholders 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 definitive proxy statement when it is filed with the SEC. The
definitive proxy statement 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 preliminary proxy
statement, 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-months For the Nine-months --------------------
------------------- Ended September 30 Ended September 30
------------------ ------------------ 2004 2003 2004 2003 ---- ----
---- ---- Sales $ 1,057,254 $1,151,646 $ 2,843,669 $ 2,823,654
Gross Profit $ 775,718 $ 797,648 $ 2,120,636 $ 1,941,387 Gross
Profit Margin 73.4% 69.3% 74.6% 68.8% Net (loss) for the period $
(212,148) $ (282,581) $ (849,576) $ (1,253,034)
--------------------------------------------------------
-------------------------------------------------------- (Loss) per
share - basic and diluted $ (0.01) $ (0.01) $ (0.04) $ (0.06)
--------------------------------------------------------
-------------------------------------------------------- Weighted
average number of common shares outstanding Basic and diluted
20,582,000 20,334,000 20,534,847 20,337,590 SELECTED CONSOLIDATED
BALANCE SHEET DATA(x) -------------------------------------------
September December 30, 2004 31, 2003 ------------ ------------ Cash
and Short-term Securities $ 2,383,072 $ 3,126,667 Total Current
Assets $ 5,689,283 $ 5,622,402 Total Current Liabilities $
1,341,471 $ 1,428,257 Working Capital $ 4,347,812 $ 4,194,145 Total
Shareholders' Equity $ 8,917,951 $ 9,707,795 Total Assets $
10,259,422 $ 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, (email: ), at
(604) 669-8817 or North America toll free at 1-877-388-3784, or
visit our web site at http://www.dragonpharma.com/ or
http://www.dragonbiotech.com/
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