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Good Manufacturing Practices Certification (GMP) Granted to Dragon’s Subsidiary in China

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The Company is pleased to announce that The State Drug Administration (SDA) of China (China¡¦s equivalent to the FDA in the United States) has recently granted a certificate of Good Manufacturing Practices (GMP) to Dragon¡¦s subsidiary Huaxin Pharmaceutical and Bioengineering Co. Ltd., following an inspection of Huaxin¡¦s plant in July of this year.

The GMP certificate is one of the key documents allowing Dragon to successfully register and gain approval for its drugs in overseas markets. The certificate, which was granted only after an exhaustive inspection by SDA authorities, is one of the first granted under the more stringent World Health Organization guidelines. To date, only a small fraction of plants in China have successfully passed GMP certification under the new regulations.

Such an inspection normally focuses not only on a plant¡¦s physical properties, but also on the thoroughness of its documented procedures for sanitation and manufacturing. Additionally, the individual qualifications of all staff were scrutinized to insure that key personnel meet criteria for education and professional experience.

The Company is also pleased to announce revenues of US$797,127 from the sale of Erythropoietin in China for the second quarter of 2000, representing 21% increase over revenues during the first quarter of 2000. During the second quarter the company recorded sales of 75,049 units. The Company incurred a net loss of US$184,540 for the same period.

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