Luoxin's Lansoprazole for Injection GrantedPharmaceutical Composition Patent

Becoming new favorite among digestive medicine

Driving optimization and upgrading of ulcer medicine industry structure

HONG KONG, June 28, 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 lansoprazole for injection has been granted an invention patent by the State Intellectual Property Office and has achieved large-scale production with a large market share. The product has become the new favorite among digestive medicines, leading to the optimization and upgrading of the industry structure. Besides, the innovation has greatly promoted the adjustment of the Company's products portfolio, motivated the R&D team to pursue further innovation, and become a new driver of growth for the Company.

The patent of lansoprazole for injection is named "lansoprazole freeze-dried powder for injection" with the code "ZL201010198253.6". The product is a kind of system-specific medicine used to treat gastric ulcer, duodenal ulcer, reflux esophagitis, Zollinger-Ellison syndrome (ZES), etc. Ulcer diseases are common in today's society with a tendency to recurring attacks, which is often accompanied by serious complications.

In recent years, many people eat irregularly and do not pay attention to their health, causing a variety of stomach disorders. There are signs that patients are getting younger. It is estimated that the size of stomach medicine market will continue to grow in the future, indicating a huge demand for anti-digestive-ulcer medicines in China. According to the "Pattern of China's Pharmaceutical Drug Market" released by the China Pharmaceutical Industry Information Center and Shanghai Institute of Pharmaceutical Industry Information Center, statistics show that the digestive medicine market increased 17.33% year on year in 2010 based on sample hospitals in 22 major domestic cities. It is expected by 2015 that the market size will exceed RMB15 billion with anti-digestive-ulcer medicines accounting for 40% of the market.

Lansoprazole for injection is a new medicine of National Category 3. Compared with other ulcer medicines, it has better clinical effects, quicker onset and smaller side effects. International study has found that treatment of gastric cytoplasmic proton pump inhibitors (PPIs) is far better than other medicines. As the new generation of PPIs, lansoprazole has obvious better performance than commonly used H2-receptor antagonists. Sales of PPIs in the world pharmaceutical market are in steady growth. According to IMS Health's data, the global market size of PPIs reached US$25.8 billion in 2007, US$26.5 billion in 2008 and US$27.2 billion in 2009 with a five-year CAGR of over 5% from 2005 to 2009.

"Research on Lansoprazole for injection" is the company's independent R&D project and was included into the Shandong Science and Technology Development Plan. After getting the national intellectual property right of lansoprazole for injection, the Company will further promote the development of proton pump inhibitors (PPIs). Currently, Luoxin is working on utilizing this medicine to treat increasing indications of gastric ulcer bleeding and has progressed to the stage of clinical trials. The Company is expected to be approved to increase the usage scope of clinical indications by July 2012 and therefore expand the clinical application of the product. Meanwhile, this innovation will upgrade the industry structure for ulcer medicines by expanding the industry chain. The Company has not only brought social and economic benefits, but has also boosted its overall competitiveness and accelerated its own development.

Mr. Liu Baoqi, Chairman of Luoxin, said, "Being granted the intellectual property of lansoprazole composition for injection, the Company has demonstrated its ability to retain its competitive advantage by continuously developing new medicines. Over the years, through increasing scientific research investment, leveraging on our experienced R&D team and own strong R&D capabilities, and aligning with local and overseas universities and research institutions, the Company is now backed by stronger R&D capabilities and has successfully developed a number of high-tech and high value-added products. The company will strive to enhance its independent innovation capability and standard, further accelerate the launch of patented medicines 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) system-specific medicines, including digestive system medicines, cardiovascular system medicines and respiratory system medicines; (2) anti-viral medicines; (3) antibiotics, including Cephalosporines antibiotics, Quinolones antibiotics and Macrolides antibiotics; (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.

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