Dragon Pharmaceutical Inc. (TSX: DDD; OTC BB: DRUG; BBSE: DRP) is pleased to announce the results for the third quarter ended September 30, 2004.
For the three-month ended September 30, 2004
During the third quarter in 2004, the Company posted revenues of $1,057,254 from the sales of rHu Erythropoietin (EPO) compared to $1,151,646 for the same period of the prior year. Revenues of $691,669 were generated in China and $365,585 from outside of China during the third quarter of 2004 compared to $742,467 in China and $409,179 from outside of China for the same period in 2003. The gross profit margin was 73% for the period in 2004, which improved from the gross margin of 69% for the same period in 2003.
Net loss for the third quarter in 2004 was $212,148 or $0.01 per share, compared to a net loss of $282,581 or $0.01 per share, for the same period in 2003. The decrease in net loss for the third quarter in 2004 was mainly due to lower selling, general and administrative expenses and research and development expenses related to the development of EPO product for the European market.
For the nine-month ended September 30, 2004
Revenues for the nine-month period in 2004 were $2.84 million, slightly up from $2.82 million from the same period in 2003. Sales in and outside of China were $ 2.05 million and $0.79 million respectively during the period in 2004 compared to $1.77 million in China and $1.05 million outside of China for the same period in 2003. The gross profit margin was 75% for the period of 2004, improved from 69% for the same period in 2003. Net loss for the period of 2004 was $0.85 million or $0.04 per share compared to a loss of $1.25 million or $0.06 per share for the same period in 2003, reflecting a higher gross margin and lower selling, general and administrative expenses the results of effective cost control measures and a leaner corporate structure.
Status on the Proposed Acquisition of Oriental Wave and the Annual General Meeting
Dragon has filed a revised preliminary Proxy Statement with the U.S. Securities and Exchange Commission (SEC) in connection to the proposed acquisition of Oriental Wave. Once the regulatory reviews are completed, Dragon will announce the date for the Annual General Meeting which is currently anticipated to be in the second half of December, 2004.
New Markets for Dragon’s EPO: Dominican Republic, Trinidad-Tobago and Kosovo
Dragon is pleased to announce that Dragon’s EPO products have been granted market approvals in the Dominican Republic and Trinidad-Tobago as advised by Dragon’s licensees. In addition, the health authority of Kosovo has accepted our licensee’s application for the market approval and under such a circumstance, Dragon’s licensee is allowed to bid for government tender and has since won such a tender. Initial shipment of our EPO products to all three additional markets has been started during the fourth quarter of 2004. Together with the already approved markets in China, Brazil, India, Egypt, Peru and Ecuador, Dragon’s EPO products have been marketed in a total of 9 countries across Asia, Central and South America, the Middle East and Eastern Europe. For details, please refer to the announcement of a separate press release regarding the Dominican Republic, Trinidad-Tobago and Kosovo markets.
“During the third quarter, we managed to achieve 16% sequential growth in revenues over the second quarter. We are especially encouraged to see stronger international sales during the third quarter. On a year-to-date basis, we continued to lower our cost structure which led to a lower net loss. Compared to last year, our net loss has already been decreased by 33% at a similar revenue level.” said Dr. Alexander Wick, President and CEO of Dragon Pharmaceutical Inc. “Further, while the regulatory review process in connection with the proposed acquisition of Oriental Wave has taken longer time than expected, we look forward to completing the process as soon as we can so that we can hold the Annual General Meeting to vote on the transaction by the end of this year.”