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Worldwide Licensing Rights, excluding China, for Recombinant Human Granulocyte Colony Stimulating Factor (rhG-CSF)


Dragon Pharmaceutical Inc. (TSX: DDD; OTC BB: DRUG) today announced that it has entered into an agreement with Suzhou Zhongkai Bio-Pharmaceuticals Company Limited (“Zhongkai”) to in-license the exclusive right to commercialize its Recombinant Human Granulocyte Colony Stimulating Factor (“rhG-CSF? product worldwide, excluding the People’s Republic of China (the “Agreement”).

Using a non-mammalian cell fermentation technique (e.coli) with an in-house developed and patented purification process in the 6000m2 Chinese State Food and Drug Administration (“SFD&A”) cGMP-approved manufacturing facility in Suzhou, China, Zhongkai is one of the leading producers of rhG-CSF product, with approximately 16% market share in China, where competition is fierce with at least 20 other domestic producers. Dragon chose to in-license Zhongkai’s rhG-CSF based on the company’s evident superiority in compliance with cGMP, its well-documented processes, and the purity, safety, and efficacy of its product. Zhongkai’s rhG-CSF is currently approved in China for oncology indication.

Human G-CSF is a glycoprotein which regulates the production and release of functional neutrophils from the bone marrow. Myelosuppressive chemotherapy often upsets the patient’s white blood cell count, leading to febrile neutropenia. The primary indications for rhG-CSF are in chemotherapy associated with the treatment of various cancers.

Zhongkai’s product containing rhG-CSF causes marked increases in peripheral blood neutrophil counts within twenty four to thirty six hours. rhG-CSF functions within the body to stimulate production of more white blood cells, helping to reverse neutropenia so that cancer patients undergoing chemotherapy can continue with as near to normal white blood cell counts as possible. In some cancer patients, chemotherapy must actually be interrupted until neutropenia has been separately managed and brought under control, and in the case of certain tumor types, successful chemotherapy must be given according to a correct dosage and schedule.

“The competition is fierce in China with about 20 G-CSF products already in the market. As a result, we decided to partner with a leading producer in the market and focusing on developing the international market outside of China. This will bring much better economic value to Dragon without incurring significant risk in research and developing and the high investment to bring the drug into production” said Dr. Alexander Wick, President and CEO of Dragon. “This is an excellent opportunity for both Dragon and Zhongkai. Under the agreement, Dragon will leverage its regulatory approval knowledge and expertise from launching its own rh-Erythropoietin (“EPO”) business internationally and will also utilize its existing licensing partnerships developed over time around the world to bring Zhongkai’s rhG-CSF to the international market. A good quality, competitive bio-generic drug from China, like Zhongkai’s rhG-CSF product, warrants the market exposure opportunities from both developing and developed countries. As a matter of fact, our international marketing and distribution partners have been quite keenly awaiting this product. Similar to Dragon’s current strategy for the EPO product which has been approved in a number of developing countries and is in preparation to enter the European market, Dragon intends to commercialize the rhG-CSF initially in non-patented developing countries and will eventually extend the market coverage to developed countries upon expiry of the relevant patents. In the case of the European Union market, we believe that the relevant patents will expire in 2006 and by that time, we’ll have an infrastructure, partnership and invaluable experience from launching our EPO product in the European Union market.”

This partnership with Zhongkai is part of our continued initiative to utilize our strengths and expertise in commercializing other in-house or in-licensed pharmaceutical products internationally. We have just announced entering into a letter of intent to merge with Oriental Wave Holding Ltd., on March 24, 2004, which would create a company that offers biotech generic drugs, chemical generic drugs and chemical intermediate produced in China competitively and marketed in China and international markets.” said Dr. Wick. “We believe that the combined company will be ready to fully leverage the production infrastructure and sales network in China, diverse and proven product lines and distribution partnership around the world to make the combined company a serious player in the global pharmaceutical industry.”

About Suzhou Zhongkai Bio-Pharmaceuticals Company Limited
Founded in 1996, Suzhou Zhongkai Bio-Pharmaceuticals Co. Ltd is a wholly owned subsidiary of Jiangsu Wuzhong Industrial Co. Limited. Zhongkai is currently engaged in research and development for two additional therapeutics: one recombinant drug, and the other with the development & refinement of an existing therapeutic based on Traditional Chinese Medicine.

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