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China Medical Technologies Announces the Completion of the Sale of its HIFU Business
Date:12/30/2008

FU distributors. The Company believes that these adverse business conditions for the HIFU Business are unlikely to improve in 2009 because the HIFU Business is more susceptible to the adverse impact of the recent economic downturn due to the high price of the HIFU equipment. In order to improve the outlook for the HIFU Business, the Company would need to adopt aggressive measures including providing selling price reductions as well as entering into profit sharing arrangements with hospitals directly to which free HIFU equipment would be provided by the Company. To date, the profit sharing arrangements with hospitals for the HIFU equipment have been entered into by HIFU distributors only. These measures could have a significant adverse effect on the revenue and the profitability of the HIFU Business in the foreseeable future.

As previously disclosed, the Company's HIFU registration certificate renewal application has been under review by the SFDA for some time. The long review process was initially due to the administrative delays. In November 2008, the SFDA required the Company to provide new clinical trial data for each approved indication for the renewal assessment which was not required in the previous renewal process for therapeutic medical equipment. The Company expects the new requirements from the SFDA to prolong the renewal process. In addition, the SFDA may require the submission of new clinical trial data for all approved indications within a time limit which is not feasible for the Company because the clinical trial data for certain indications may not be readily available. As a result, the Company may only be able to submit completed clinical trial data for certain approved indications for the renewal requirements. If that happens, the scope of the renewed registration certificate may be narrower than the previously approved scope which will likely have an adverse effect on the sales of the HIFU equipment.
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SOURCE China Medical Technologies, Inc.
Copyright©2008 PR Newswire.
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