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Dragon Pharma announces 2007 full year financial results
Date:3/31/2008

2006. Mainly driven by the rising customer demand in the Indian market, sales revenue from Clavulanic Acid also increased by 49% to $16.8 million while total sales quantity increased 63% to 39 tons, up from 24 tons in 2006. As a result of the increased sales, combined with higher facility utilization and improved production technology, the Chemical Division's gross margin for 2007 increased to 28.13% from 19.86% for 2006.

The Company views its research and development capability as a competitive edge and constantly strives to improve its production technology so as to enhance core capability. An important achievement that was completed in 2007 was the successful adoption of an enzymatic process to the production of 7-ACA. Currently the Company is in the process of converting its entire production to incorporate this innovative technology. It is expected that the overall adoption will further lower the production costs and additionally reduce the amount of capital investment pertaining to the environment protection. In addition, subsequent to the year end of 2007, the Company has increased its annual production capacity for 7-ACA and Clavulanic Acid by 30% and 56% respectively in order to meet rising customer demand. Management believes that all these improvements will further reinforce its market leadership position and contribute positively to its financial performance in the coming years.

With a more focused antibiotic product portfolio and effective marketing strategies, the Company has also substantially increased its sales and improved its gross margin for the formulation drugs. By strengthening its sales team and utilizing its national distribution network and close customer relationship, the Company has significantly expanded its market share in the Chinese market. Mainly due to the increased sales volume and selling prices, revenues for the Pharma Division have climbed to $16.9 million in 2007, up 156% from $6.6 million in 2006, and the gross
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SOURCE Dragon Pharmaceutical Inc.
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