China Shenghuo Pharmaceutical Holdings, Inc. Announces Closing of Phase II Clinical Trial for Wei Dingkang Soft Capsules

KUNMING, China, July 18 /Xinhua-PRNewswire-FirstCall/ -- China Shenghuo Pharmaceutical Holdings, Inc. ("China Shenghuo," "the Company") (Amex: KUN), a leading specialty pharmaceutical company engaged in researching, developing, manufacturing and marketing Sanchi-based medicinal products in the People's Republic of China ("PRC"), today announced the completion of testing during Phase II clinical trials for its Wei Dingkang Soft Capsules.

"The completion of Phase II testing is a significant milestone in the development of this important new drug," said Mr. Gui Hua Lan, Chairman and Chief Executive Officer of China Shenghuo. "We expect Wei Dingkang Soft Capsules will be a profit driver in the near future, and we seek to bring a growing number of products to market in the coming months."

Wei Dingkang Soft Capsules use traditional Chinese medicine techniques to treat peptic ulcer disease by inhibiting helicobacter pylori growth, relieving stomach muscle spasms and reducing inflammation of intestinal lining. The product is a National Type V innovative drug and has been designated as a Major Science and Technology Project in Yunnan Province.

The Company expects testing results to be available in several weeks. Phase III trials will begin upon State Food and Drug Administration approval of results from Phase II.

In anticipation of upcoming production of the new drug, China Shenghuo is applying to the Yunnan Provincial Development and Reform Committee and Yunnan Agriculture Bureau to begin a pilot cultivation project to produce 72 tons per year of Daemonorops margaritae palms, the key ingredient used to produce Wei Dingkang Soft capsules, on 3.35 square kilometers. The projected cost to extract the ingredient is $9,210 per metric ton. However, the Company expects this will result in a cost savings of approximately 20% versus purchasing the extract from an outside supplier. Because the palms are in short supply, the project will also provide for sufficient resources for the production of Wei Dingkang Soft Capsules.

"By vertically integrating the main ingredient used to produce Wei Dingkang Soft Capsules, China Shenghuo will be able to closely control costs and improve our margins on new products," Mr. Lan said. "The project's strategic location provides a geographical advantage, as well as significant cultivation experience from the local population."

About China Shenghuo Pharmaceutical Holdings, Inc.

Founded in 1995, China Shenghuo Pharmaceutical Holdings, Inc. ("China Shenghuo" or "the Company") is a leading specialty pharmaceutical company that focuses on the research, development, production and marketing of Sanchi-based medicinal products. Through its subsidiary, Kunming Shenghuo Pharmaceutical (Group) Co., Ltd ("Kunming Shenghuo"), it owns thirty-one SFDA (State Food and Drug Association)-approved medicines, including the flagship product Xuesaitong Soft Capsules, which has already been listed in the Insurance Catalogue. At present, Shenghuo incorporates a sales network of agencies and representatives throughout China, which markets Sanchi-based traditional Chinese medicine into 1,650 hospitals and 1,500 drug stores as prescription and OTC drugs primarily for the treatment of cardiovascular, cerebrovascular and peptic ulcer disease. The Company also exports medicinal products to Asian countries such as Indonesia, Russia and Kyrgyzstan.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: This press release contains certain "forward-looking statements," as defined in the United States Private Securities Litigation Reform Act of 1995, that involve a number of risks and uncertainties. There can be no assurance that such statements will prove to be accurate and the actual results and future events could differ materially from management's current expectations. Such factors include, but are not limited to, the company's reliance on one supplier for Sanchi, market acceptance of Wei Dingkang Soft Capsules, ability to establish and maintain a strong brand, continued maintenance of certificates, permits and licenses required to conduct business in China, protection of company's intellectual property rights, market acceptance of the company's products, changes in the laws of the People's Republic of China that affect the company's operations, approval of this product by the State Food and Drug Administration, the company's ability to obtain all necessary government certifications and/or licenses to conduct the company's business, plans to cultivate Daemonorops margaritae, cost of complying with current and future governmental regulations and the impact of any changes in the regulations on the company's operations and other factors detailed from time to time in the Company's filings with the United States Securities and Exchange Commission and other regulatory authorities. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

For more information, please contact:

Ms. Gao Qionghua, CFO

China Shenghuo Pharmaceutical Holdings, Inc

Tel: +86-871-7282608

Email: qionghua_kmsh@163.com

Crocker Coulson, President

CCG Elite Investor Relations

Tel: +1-646-213-1915 (New York)

Email: crocker.coulson@ccgir.com