Dragon Pharmaceutical Inc. (TSX: DDD; OTC BB: DRUG; BBSE: DRP) is pleased to announce the results for the second quarter ended June 30, 2004.
For the three-month ended June 30, 2004 During the second quarter in 2004, the Company posted revenues of $908,145 from the sales of rHu Erythropoietin (EPO) compared to $1,007,686 for the same period of the prior year. Revenues of $657,645 were generated in China and $250,500 from outside of China during the second quarter of 2004 compared to $576,894 in China and $430,792 from outside of China for the same period in 2003. The gross profit margin was 79% for the period in 2004, improved from the gross margin of 68% for the same period in 2003.
Net loss for the second quarter in 2004 was $388,004 or $0.02 per share, compared to a net loss of $236,424, or $0.01 per share, for the same period in 2003. The increase in net loss for the second quarter in 2004 was mainly due to an increase in research and development expenses for the EPO product developed for the European market.
For the six-month ended June 30, 2004 Revenues for the six-month period in 2004 were $1.79 million, up from $1.67 million from the same period in 2003. Sales in and outside of China were $1.36 million and $0.43 million respectively during the period in 2004 compared to $1.03 million in China and $0.64 million outside of China for the same period in 2003. The gross profit margin was 75% for the period of 2004, improved from 68% for the same period in 2003. Net loss for the period of 2004 was $0.64 million or $0.03 per share compared to a loss of $0.97 million or $0.05 per share for the same period in 2003, reflecting the results of effective cost control measures and a leaner corporate structure.
During the second quarter of 2004, Dragon announced entering into a definitive agreement to acquire Oriental Wave Holdings Ltd. The proposed acquisition is subject to a number of conditions including regulatory and shareholders’ approval. If the proposed acquisition is consummated, Oriental Wave will become a wholly owned subsidiary of Dragon and the combined company, headquartered in Vancouver, Canada, will have approximately 1,800 employees worldwide plus over 1,200 sales representatives in China. In addition, the acquisition of Oriental Wave by Dragon will create a competitive and growth oriented pharmaceutical company focusing on major growth sectors of the global pharmaceutical industry, namely, generic drugs (prescription and over-the-counter generic drugs), bulk pharmaceutical chemicals (Clavulanic Acid, 7-ACA and sterilized bulk drugs) and biotech drugs (EPO and in-licensed G-CSF).
“We are pleased with the progress we have accomplished so far in 2004. On one hand, we have achieved operational improvement with an increase in gross profit margin. On the other hand, we have received regulatory approval for the sale of our EPO product in Ecuador in addition to China, India, Egypt, Brazil and Peru. At the same time, we are investing in our future by expanding our research and development efforts for our anticipated EPO product specifically designed for the European market to ensure Dragon a timely entry to this prominent market” said Dr. Alexander Wick, President and CEO of Dragon Pharmaceutical Inc. “However, probably the most important and exciting news for Dragon during the quarter was that Dragon has entered into a definitive agreement to acquire Oriental Wave Holdings Ltd. Now, with a Registration Statement on Form S-4, relating to the acquisition of Oriental Wave filed with the U.S. Securities and Exchanges Commission, we are currently targeting to have the proposed acquisition completed during the fourth quarter of 2004. While we are very pleased with the progress of the proposed acquisition, we look forward to completing the acquisition process as soon as possible so that the combined company will start generating the anticipated benefits as a result of the business combination.”