China Aoxing Pharmaceutical Company Signed Definitive Acquisition Agreement to Acquire Shijiazhuang Lerentang Pharmaceutical Com...( - Acquisition to Expand Company's M...)

- Acquisition to Expand Company's Market Position and Portfolio in Pain

Management -

NEW YORK, March 12 /PRNewswire-FirstCall/ -- China Aoxing Pharmaceutical Company, Inc. (OTC Bulletin Board: CAXG), which has the largest manufacturing facility and product pipeline for highly regulated narcotic medicines and pain medication in China, today announced that Hebei Aoxing Pharmaceutical Group Company, the subsidiary of China Aoxing Pharmaceutical Company, signed a definitive acquisition agreement to acquire Shijiazhuang Lerentang Pharmaceutical Company Ltd. ("LRT"). LRT is a pharmaceutical company organized under the laws of China specializing in the manufacturing and distribution of modernized Chinese traditional medicines, with a strong portfolio of pain management products. The definitive acquisition agreement contemplates that CAXG will acquire 100% ownership of LRT. The purchase price will be paid 80 million RMB (approximately $10.8 million) in cash and 8 million shares of the Company's common stock. Completion of the transaction is expected to occur within the next 70 days. Completion, however, is subject to a number of conditions, including the receipt of approval from the Chinese government.

LRT, based in Shijiazhuang City, Hebei Province, China, was founded in 1935. It is a profitable company with the total product sales of approximately $9 million for the year ended December, 2007. LRT currently has 127 SFDA-approved products in its portfolio and has developed a rich line of pain management drugs in pills, tablets, capsules, oral solutions and other formulations. LRT's best selling product is the Zhong Tong An Capsules, an effective pain medicine developed solely by LRT to relieve dental pain, sore throats and oral ulcers. Zhong Tong An Capsules accounted for approximately 50% of LRT's total revenue in 2007. LRT currently has 52 products listed in the first and second classes of the National Medical Insurance
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