Dragon Pharmaceutical Inc. (TSX: DDD; OTC BB: DRUG) today announced results for the three-month and twelve-month periods ending December 31, 2003.
* Generated revenues of $3.65 million and a net loss of US$1.99 million, or $0.10 per share for the full year of 2003.
* Continued momentum in developing the International market:
* Launched rh-Erythropoietin (“EPO”) into the Brazilian Market in addition to China, India, Egypt and Peru.
* Doubled revenues from international market outside of China.
* Received Market Approval for the Surgery indication and a new dosage presentation of 6000 IU from Chinese State Food and Drug Administration for the Chinese market.
* Doubled the production capacity of the Nanjing manufacturing facility to fulfill the demand from China and other developing markets.
* Entered into an Agreement with a European research institute to develop a high yield and proprietary EPO cell-line and production process technology for the European market.
* Appointed Mr. James Harris as the Vice President of International Sales and Marketing.
* Subsequent to the year-end:
o Entered into a Letter of Intent to merge with Oriental Wave Holding Limited to create a unique company that has diverse and proven product lines (biotech drugs, chemical drugs and chemical intermediate) with already sizable revenues from the tremendous Chinese market and the future of potential in the international market.
o Entered into an agreement with Suzhou Zhongkai Bio-Pharmaceuticals Company Limited to in-license the exclusive right to commercialize its Recombinant Human Granulocyte Colony Stimulating Factor (“rhG-CSF”) product worldwide, excluding China.
o Entered into an agreement with Dr. Longbin Liu on the debt related to the Hepatitis B Vaccine project and reimbursement of certain research projects for Dragon to receive a total of $5.04 million.
Fourth Quarter of 2003
During the quarter, the Company posted revenues of $0.82 million compared to $1.18 million of 2002. Net loss from the quarter has been narrowed down to $572,700 or $0.03 per share, improved from the net loss of $4.0 million, or $0.20 per share in the fourth quarter in 2002.
Full Year of 2003
The Company posted revenues of $3.65 million compared to $7.36 million of 2002 which included a one-time order of $3.7 million bulk EPO. Net loss for 2003 was narrowed down to $1.99 million or $0.10 per share from a loss of $5.25 million or $0.26 per share in 2002.
“Since 2002, the Company has streamlined our operations both in China and internationally. As a result, we managed to reduce the operating cost significantly, especially in the area of selling, general and administration and continued to narrow the net loss from the operation. We will maintain our efforts to achieve ongoing improvement on our cost structure by tight control of expenses and more importantly, to implement necessary strategies to increase our revenues by expanding into more markets for our EPO products as well as increasing more product diversity” stated Dr. Alexander Wick, President and CEO of Dragon.
Sales and Marketing Review
Sales in China and outside of China were $2.26 million and $1.39 million, respectively for 2003 compared to $3.0 million and $0.7 million respectively for 2002. In addition to Chinese and international sales in 2002, there was a one-time order of $3.7 million for research purpose.
“We continue to achieve remarkable progress in international market by launching our EPO into the Brazil market and doubling the international revenues from 2002 even though we are a bit disappointed with the overall sales in China which was affected by the outbreak of the Severe Acute Respiratory Syndrome (“SARS”) epidemic at the beginning of 2003. Our EPO products are sold through hospitals in China and patients, including patients using EPO, avoided going to the hospital in order to minimize the risks of contracting SARS at the peak of the SARS epidemic which covered the first half of 2003″ said Dr. Wick. “The Company has implemented some necessary measures, including altering the structure of the sales organization and sales model in China to ensure our competitiveness in the market. We are also in the process of finding suitable potential sales partners to complement our own sales network in China to make sure we achieve the full potential in the Chinese market. On the international front, we have achieved satisfactory progress in 2003 and we expect to continue the momentum by obtaining additional market approval in 2004″
During the year, Dragon also received the approval from the Chinese State Food and Drug Administration (“SFDA? for the use of EPO in surgical patients as well as approval for a new dosage of 6000IU, which is used for this indication.
In early 2003, Dragon appointed Mr. James Harris III, a 22-year veteran in the biotech and pharmaceuticals industry, as the Vice President of International Sales and Marketing. Mr. Harris brings invaluable sales and marketing expertise and experience of marketing Amgen’s EPO and Granulocyte Colony Stimulating Factor (“G-CSF”).