Chengdu Kanghong Pharmaceuticals Group is a modern medicine enterprise group headquartered in Chengdu, Sichuan, and consisting of 9 member companies as follows: . Chengdu Kanghong Pharmaceutical Co., Ltd., . Sichuan Jishengtang Pharmaceuticals Co., Ltd., . Chengdu Hongda Pharmaceuticals Co., Ltd., . Kanghong & Sagent (Chengdu) Pharmaceuticals Co., Ltd., . Chengdu Konghong biological Science & Technology Co., Ltd., . Shanghai Kanghong Weichi Biotechnology Co., Ltd., . Chengdu Phargentech Co., Ltd., . Sichuan Kanghong Medicine Trade Co., Ltd., . Chengdu Kanghong Medicine Trade Co., Ltd., Since the establishment of the Group, the ideal of the enterprise is ‘contribute to the prosperity of the society and health of the people’, from which the name of the company is derived. By ‘prosperity’ we mean we aim to create greater values for the country and people and by ‘health’ we aim to provide better medical service and products. The company concentrates all resources to engage in the preparation and dealing of the medicines in psychosis, neurosis, digestion, respiration, incretion and tumors. We are striving to be one of the most outstanding pharmaceutical companies in China. Up to now, there are over 2,000 staffs in the Group. It has a modern base covering an area of over 280,000 m2 for the preparation of natural medicines, chemical medicines, and biological medicines. Its annual sale reaches RMB 1 billion with the sales network ranging across China’s all provinces, metropolitans, autonomous regions and southeastern Asia. Since the establishment of the Group, it has been supported and directed by the governments at all levels and been loved by people from all walks of life as well as by the mass of patients. The business scale and economic gains of the Group has made a rapid progress, resulting in accumulative taxation of over RMB 700 million paid to the country. Since 2005 it has turned in annual taxation more than RMB 100 in 3 successive years. The Group has been awarded “Important Enterprise with Advantages” at provincial and city levels in 5 successive years, and was awarded “Industrial Enterprise with Outstanding Contribution” in Sichuan province in 2006. Overview---Science and Technology Kanghong Pharmaceuticals Group has always maintained the development strategy based on product innovation and technology innovation and moved forward on the road of specialized development by concentrating on R&D, production and sale of the drugs for psychosis, neuropathy, respiration, digestion, incretion and tumor and more. As a result the Group has gradually formed its own core competitive edge. Up to now, the Group has owned 61 domestic and international invention patents, 4 class-1 in-research new drugs which are independently developed, and a complete new products marketing planning which has been extended to 2014. Konghong Technology Innovation Center also named Enterprise Group Technology Center (hereinafter shortened as the Technology Center) is a “National-level Enterprise Technology Center” accredited by five state ministries and commissions including Development & Reform Commission of the State, Ministry of Science & Technology, Ministry of Finance, General Taxation Administration of the State, and General Customs Administration of the State in October, 2006. It was then the only such center ratified by the state organs in China’s west signifying that the Group had been already on the higher platform for development. In 2007, the Center successfully passed the reassessment of the state. Now the Center has established a number of technical platforms for the Chinese medicines, biological medicines and chemical medicines to meet the demands of the research for new drugs In terms of biological medicine innovations, the Center has established the technology platforms of protein genetic engineering, the genetic therapeutic research & development, the analysis of disease-related genes, and the mass-production of the biological medicines. The Center has successfully developed a number of Class-I national new drugs, including the anti-tumor medicine which is under clinical experiment now and an ophthalmological genetic medicine for related diseases caused by the eye-ground blood vessels. In addition, Shanghai Konghong Weichi Biological Medicine Research Center has set up a technology platform for human-derived mono-colon antibodies. The present in-research projects are leading in the international standard to provide a solid foundation for the R&D of the new drugs. In terms of traditional Chinese medicines and chemical medicines, the Center has set up advanced technology platforms for screening and selecting medicine sources, for midphase clinical experiment of natural and herbal medicines, for standard preparation research, and for biological information research. By these platforms more than 20 new drugs have been successfully developed and marketed. There are still a dozen of inresearch projects carried out in the platforms, including some Class-I new chemical drugs with new chemical structures, some Class-I new biological drugs, some new preparations adopting the new-release system of the medical effect, some Chinese or natural medicines comprising the effective parts of the herbal sources, and some compound preparations comprising Chinese or natural herbs. All projects in research now own independent intellectual properties. Konghong post-doctoral work station was ratified by State Ministry of Personnel in 2000. Since then a dozen of PhD holders has entered the station to engage in the preliminary research and screening and evaluation of new drugs as well as the functional mechanism of the new drugs, etc. Overview - Production At present, the group has 4 GMP production bases in the fields of natural medicines, chemical medicines, traditional Chinese medicines and chemical source medicines. The bases produce 3 types of source medicine, 8 forms of drugs with 11 varieties. The products range in the areas of spiritual diseases, neuropathy, digestive, respiratory and internal secretion, etc. The production base at the headquarters of the Group possesses the most up-to-date technology in China to produce the scattering pills and slow-releasing pills, thus leading in the fields of spiritual, neuropathy and digestive medicine in the country The Group’s representative products include the “Venlafaxine Hydrochloride Capsule”, the first of its kind in the world as SNRI anti-depressant drug; the slow-releasing tablet of venlafaxine hydrochloride (Trade Name: Blossom) by using infiltrating pump technique and laser-percolating drilling technique; the world-first Aripiprazole Orally Disintegrating Tablet” (Trade Name: Brisking), a DDS type of drugs of anti-psychosis disease; the scattered tablet for promoting the peristalsis of stomach and duodenum and accelerating the gastric dynamos (Trade Name: New Boronia). Blossom was rated as the National Key New Product in 1999 and listed into the National Catalogues of Basic Drugs of Medical Insurance. All products mentioned above have all been listed in the National Torch Project. Chengdu Kanghong Pharmaceutical Co., Ltd., a branch company of the Group, passed GMP certification assessment by the State Drug Supervision Administration (SDFA), so became the first pharmaceutical enterprise to gain GMP system certification in Sichuan province, and gained the first GMP certificate (No.A0001) issued by the SDFA since its formation. The highlighted products of the Group such as ‘Songling Xiemaikang Capsule’, ‘Yiqing Capsule’, and ‘Zhengkening Capsule’ are listed in the National Catalogues of Basic Drugs of Medical Insurance and the National Catalogues for the Protected Chinese Medicine. At the same time ‘Songling Xiemaikang Capsule’ is the listed in the National Catalogues of Basic Drugs, National Patented New Drug, and National Key New Product. It was the most selected Chinese medicine in hospitals to depress and modulate the blood pressures. ‘Yiqing Capsule’, and ‘Zhengkening Capsule’ are also widely used in hospitals as the major brand to eliminate heat and suppress coughing. The latter was awarded ’ the Well-known Brand of Sichuan Province”. As a member company of the Group, Sichuan Jishengtang Pharmaceuticals Co., Ltd. has always stuck to its traditional principle of “sparing no efforts and sources in making the medicine”, applied its 80 years’ experience in using rich local resources of natural herbs, as well as modern production process to produce the quality products. ‘Gankeshuangqing Capsule’ owns the intellectual property right protection for 20 years, and it is the first high-effect and plant-based drug in China to be specially used in the treatment of acute upper respiratory infection and acute bronchitis. ‘Danshu Capsule’ was awarded the gold medal in the National Torch Project and listed in the National Catalogues of Basic Drugs of Medical Insurance. It is an ideal medicine for gall blander channel. As a branch of the Group, Chengdu Kanghong Biological Science & Technology Co. Ltd. is a brand-new high-tech enterprise specialized in research and development of biotechnology pharmacy. The research of three Class-I national registered new medicines is in full operation, including individualized tumor vaccine (KH901), ophthalmologic genetic engineering pharmacy (KH902) and tumor genetic engineering pharmacy (KH903). At present the company has successfully established three national-leading platforms, namely, large-scale virus production and purification platform, large-scale protein and antibody production and purification platform, tumor vaccine production technical platform. All these platforms keep the same pace with the international-level. The individualized tumor vaccine (KH901) utilizes the suspension cell-tissue culture processing equipment to make the medicine reach the same production level and quality level of the overseas products, not to mention that it serves a number of overseas and domestic pharmaceutical enterprises in terms of the production of the related medicines. In regard to the CHO suspended cell and non-serum culture processing for protein medicines are leading in the country in terms of the production scale and quantity. Overview - Service Trading companies under the Group such as Sichuan Kanghong Medicine Trade Co., Ltd., insists on a specialized marketing approach of “establishing own sales network, practicing strict regulations, surviving by quality, and gaining profits through service.” The Group regards quality and service as life and operates according to GSP standards to set up a accomplished quality assurance system. With our efforts of many years, we have obtained good sales achievement and established a good reputation in social as well as in industry. Now our sales network covers over 30 provinces, autonomous regions, and metropolitans and even reaches the southeastern Asia. We are proud of having a highly specialized team of academic promotion. Not only do we have a team but we also have an accomplished training system. At present is formed a high-quality, high-efficiency, and specialized marketing team with professionalism and executive power by our rich marketing experience, strict management and effective training. The Group has always assumed as its own obligation to care for the people’s health and spread health knowledge. In the operation process, we are honest to clients as well as to society. According to the sales approach of “Academic promotion on the basis of specialization”, we have been insisting on launching different types of academic exchanges events by inviting experts from home and abroad to deliver speeches to medical staff, patients and general public about knowledge of medicine and new drugs so that they can more effectively and safely use the medicines. We serve as a bridge between enterprise, doctors, patients and general public. Overview - Global Strategies In December, 2006, a joint-venture entitled Kanghong Sagent (Chengdu) Pharmaceuticals Co., Ltd. was established with total investment over USD 100 millions by Chengdu Kanghong Technology Industrial (Group) Corporation and American Sagent Pharmaceuticals, Inc., with each investing 50%. The company is located in the Export Processing Area of the West Park of Chengdu High & New Technology Industry Development Zone, covering an area of 170 mu with the first-stage building areas of 50 thousand sq.m. The factory is set up according to state-of-art American GMP standards with all-encompassing insulation production technology, and will pass SFDA certification and American FDA certification. On August 2, 2008, Konghong-Sagent designing mode was assessed in Washington, D.C., U.S.A by 6 FDA experts and officials. Having heard about the new designing ideal, they reckoned this mode might be the first of its kind in Asian-pacific to adopt the total insulation production line which definitely conforms to the FDA’s ideal of the quality based on the designing and expressed their hope to see it come into full operation in China. It is planned the production base of Kanghong Sagent (Chengdu) Pharmaceuticals Co., Ltd. will be in full operation in 2009. The main products comprise three categories, that is, anti-tumor drugs, anti-infective and daily-use clinical injections. The production scale is expected to be 300 million product units with the annual production worth USD 1 billion. All products will be directly sold to the global markets. In future Kanghong Pharmaceuticals Group shall always maintain our ideal of ‘contribute to the prosperity of the society and health of the people’ and insist on developing with an innovative approach. We shall be down-to-earth to strive forward with steady pace so as to develop more high-quality and high-tech drugs to better serve public health, to promote progress in pharmaceutical industry, and repay the care from the society.