Dragon Pharmaceutical Inc. (TSX: DDD, OTC BB: DRUG) (“Dragon”) today updates its previously announced Letter of Intent to merge with Oriental Wave Holding Limited (“Oriental Wave”).
Oriental Wave’s auditor, an accounting firm registered with the Public Company Accounting Oversight Board, has completed its audit and issued its report on Oriental Wave’s 2003 financial statements. Oriental Wave’s consolidated revenues and earnings were US$26 million and US$7.5 million for the year ended December 31, 2003. Revenues primarily consisted of sales by Oriental Wave’s Chemical Drug division. In January 2004, Oriental Wave’s Clavulanic Acid facility of the Chemical Intermediate division commenced production, operation and sales which will be reflected in 2004. Another facility for Chemical Intermediate division producing 7-ACA is under final construction and is expected to start operations during the third quarter of 2004.
Dragon would like to further clarify that, if the proposed merger is consummated, it is anticipated that Dragon, the surviving company, will continue to be a company listed on the Toronto Stock Exchange (Ticker: DDD) and quoted on Over-the-counter Bulletin Board. (Ticker: DRUG).
“The proposed merger will be an important milestone for the history of Dragon by transforming into a serious player in the global pharmaceutical industry with proven product lines, significant infrastructure, operations and sizable revenues from the prominent Chinese market and a competitive edge to be successful in the international market covering both developing and developed countries. Our current listing status in both U.S. and Canada stock markets would allow the combined company to access the North American capital market, where there is re-emerging investor interest in both biotech and chemical generic drug sectors as well as in companies with material access to the significant Chinese pharmaceutical market.” said, Dr. Alexander Wick, President and CEO of Dragon.
Dragon’s and Oriental Wave’s proposed merger is conditioned upon a number of conditions including entering into a definitive agreement which is currently being negotiated by the parties. Both companies intend to conclude the negotiation as soon as practical so as to start the regulatory process with the US Securities and Exchange Commission (“SEC”) and Toronto Stock Exchange (“TSX”). A special shareholders’ meeting to approve certain aspects of the proposed merger is expected to occur during the third quarter of 2004.