Luoxin's Ambroxol Hydrochloride Included as National "New Key Drug Formulation" Grand Science and Technology Project of 12th Five-Year Plan

Optimizes product portfolio with system-specific medicines becoming core competitive products

HONG KONG, June 23, 2011 /PRNewswire-Asia/ -- Shandong Luoxin Pharmacy Stock Co., Ltd. ("Luoxin" or the "Company", HKEx stock code: 8058), a leading PRC pharmaceutical enterprise, announced today that its product Ambroxol Hydrochloride is included as the National New Key Drug Formulation Grand Science and Technology Project of the 12th Five-Year Plan. As the Company's product portfolio is increasingly optimized, the gross profit contribution of several system-specific medicines rose significantly. With obvious advantage of diversified products, the Company has become one of the few pharmaceutical enterprises with high technology, high growth potential and specialized products.

Ambroxol Hydrochloride for injection is a kind of system-specific medicine. It is the latest, most effective, and safest lubrication expectorant and mucus dissolving clinical medicine, which has apparent curative effect on treatment for abnormal mucus secretion and expectoration dysfunction resulting from operation anesthesia, newborns, bronchial lung disease, cold and other respiratory diseases. Therefore, the market demand for this product is huge. According to the data of Medical Economic Daily, Ambroxol Hydrochloride takes up over 60% of expectorant medicine, which accounts for 54% clinically. This makes Ambroxol Hydrochloride a leading medicine among all expectorants and cough medicines. The "New Key Drug Formulation" is considered one of the 16 major technology projects by the national mid-to-long term (2006-2020) technology development plan, playing an important part in the implementation of the innovative national development plan in the pharmaceutical field. Its main target is to accelerate the historical and strategic transformation of China's pharmaceutical research and pharmaceutical industry from replication to independent innovation, and to promote China as a strong pharmacy country rather than a big one. Luoxin's product being included as a "New Key Drug Formulation" project will enhance the Company's independent innovative capability and standard in new medicine research and production, and will further enhance the overall competitiveness and the development of the Company.

Over the years, Luoxin strives to optimize its product portfolio and diversify its product categories. The system-specific medicine has become one of Luoxin's core products, which has been generating more profit to the Company. The contribution of gross profit of system-specific medicine rose from 58% in 2010 to 63% in the first three months of 2011. The gross profit of Ambroxol Hydrochloride increased from 15.85% in 2010 to 19.61% in the first three months of 2011. The revenue generated by Ambroxol Hydrochloride from January to March was RMB58.58 million. Leveraging on its experienced R&D team and strong R&D capability, together with its alliance with local and overseas universities and institutions, the Company is able to retain its competitive advantage through developing new medicines.

Mr. Liu Baoqi, Chairman of Luoxin, said, "By improving production and enhancing technology, the Company has been striving to enhance its product quality and technological standard, enhance the curative effect, ensure the safety, lower costs and reduce side effects to provide quality, affordable, safe and effective medicine. The Company will further increase its scientific research investment while adjusting its products portfolio and scale to accelerate the launch of its new medicine with intellectual property. The Company will strive to provide high quality products and boost its core competitiveness."

About Shandong Luoxin Pharmacy Stock Co., Ltd.

Luoxin has been listed on the GEM of the Stock Exchange of Hong Kong Limited since 9 December 2005. The Company was recognized as one of the "Top Ten Pharmaceutical Enterprises with Growth Potential" and named as one of the "Top 100 Pharmaceutical Companies in China" since 2006. It was also selected on the "List of Small and Medium-sized Enterprises in China with Most Potentials" by Forbes for three consecutive years. The Company is principally engaged in the development, manufacturing and sale of different types of prescription and OTC (over-the-counter) medicines in 4 major categories: (1) antibiotics, including Cephalosporines antibiotics, Quinolones antibiotics and Macrolides antibiotics; (2) anti-viral medicines; (3) system-specific medicines, including digestive system medicines, cardiovascular system medicines and respiratory system medicines; and (4) other chemical medicines, including Antineoplastic medicines. The Company's production facilities are located in the High and New Technology Experimental Zone, Linyi, Shandong Province, the PRC, and has obtained all required production permits as well as GMP certification. Its sales and marketing networks cover 27 provinces and 4 municipalities in the PRC.

For further information, please contact: