China Sky One Medical Purchases Competitor Heilongjiang Tianlong Pharmaceutical Company

2006-12-13 13:57 1434

LOS ANGELES, Calif., Dec. 13 /Xinhua-PRNewswire-FirstCall/ -- China Sky

One Medical, Inc. (OTC Bulletin Board: CSKI), one of the leading producers

and distributors for external-Chinese medicines in China, has announced that

a strategic agreement was reached between Liu Yan-qing, president of China

Sky One Medical, Inc. and Mr. Wu Jie-chen, president of Heilongjiang Tianlong

Pharmaceutical Company. As a result of this agreement, CSKI will acquire all

of the products, dealership, marketing network of Tianlong Beijing office and

the Beijing office staff for USD $381,700. Under the terms of the agreement,

CSKI will complete the transaction by December 15, 2006, and complete the

transition with Tianlong by December 31, 2006, with the expectation that

beginning on January 1, 2007, all products, dealership, marketing network,

staff of Tianlong at its Beijing office will be under the ownership and

management of CSKI.

CSKI and Tianlong have historically been competitors. CSKI had sales

advantages over Tianlong in most cities in China, except in Beijing. Facing

the continuous increase of sales power of CSKI in China, including Beijing,

Tianlong has recently changed its strategy and decided to close its branches

in all areas of China except its Beijing office, and plans to focus on the

research and manufacturing of drugs. In contrast, CSKI has devoted its

efforts to realizing the maximum utilization of its sales network by selling

drugs from domestic and overseas suppliers as well as the development of

pharmaceuticals with the ownership of the related intellectual property.

The two companies entered into the agreement as a means of combining the

efforts, resources and product offerings of both companies.

Tianlong’s Beijing office had revenues of approximately USD $1.5 million

from January to November of 2006, with 20% in net profits. CSKI expects

sales to increase by 30% in 2007, which means the purchase of Tianlong would

increase 2007 sales to approximately USD $1.98 million. The terms of the

transaction were negotiated between the presidents of both companies, and are

based on market input and CSKI’s expectation of revenues resulting from the


About China Sky One Medical, Inc.

China Sky One Medical, Inc., a Nevada corporation, is a holding company

whose principal operations are through its subsidiaries, which are engaged in

the manufacture, marketing and distribution of pharmaceutical and medicinal

products. Through its wholly owned subsidiaries, American California

Pharmaceutical Group, Inc. (“ACPG”), Harbin Tian Di Ren Medical Science and

Technology Company (“TDR”), Kangxi Medical Care Product Factory

(“Kangxi”), and Harbin First Bio-Engineering Company Limited (“First”),

the Company’s principal revenue source is the manufacture and sale of over-

the-counter pharmaceutical products.

ACPG, a wholly-owned subsidiary of the Company, operates as a holding

company for the other subsidiaries. TDR’s principal business is the

manufacture and sale of branded nutritional supplements and over-the-counter

plant and herb-based medicinal products. Its manufacturing facilities are in

the City of Harbin, Heilongjiang Province. It has evolved into an integrated

manufacturer, marketer, and distributor of external use natural Chinese

medicinal products sold primarily to and through domestic pharmaceutical

chain stores in China with its subsidiaries, Kangxi and First. Kangxi’s

principal business activity is to manufacture and sell branded external use

Chinese medicine and other natural products under the registered trademark

“Kangxi.” It has 6 product lines: spray, ointment, powder, patch, cream,

and miscellaneous health and beauty products. It has become one of the

leading external use Chinese medicine factories with a full range of product

lines and development capacity. First’s principal business activity is to

research and develop the use of natural medicinal plants and biological

technology products such as New Endothelin-1. First is one of the first

companies in Heilongjiang Province conducting research and development of

high technology biological products. Its facility is now under final

inspection by the Chinese State Food and Drug Administration (“SFDA”) for

the qualification as a certified GMP production facility. On July 31, 2006,

Kangxi merged with First, with Kangxi’s existing business activities

continuing under First.

Certain of the statements made herein constitute forward-looking

statements within the meaning of the Private Securities Litigation Reform Act

of 1995. Such statements typically involve risks and uncertainties and may

include financial projections or information regarding our future plans,

objectives or performance. Actual results could differ materially from the

expectations reflected in such forward-looking statements as a result of a

variety of factors, including the risks associated with the effect of

changing economic conditions in The People’s Republic of China, variations

in cash flow, reliance on collaborative retail partners and on new product

development, variations in new product development, risks associated with

rapid technological change, and the potential of introduced or undetected

flaws and defects in products, and other risk factors detailed in reports

filed with the Securities and Exchange Commission from time to time.

Source: China Sky One Medical, Inc.
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