American Oriental Bioengineering acquires Nuo Hua and GHK

Nuo Hua is a holding company with subsidiaries and affiliated companies that maintain a significant presence in pharmaceutical wholesale and retail distribution in China. American Oriental Bioengineering (AOBO) acquired Nuo Hua for $39.5 million after terminating a previously announced, non-binding letter of intent to acquire another company in the distribution industry in China.

GuangXi HuiKe R&D Company (GHK) is engaged in pharmaceutical research and product development leading to State Food Drug Administration approval and expedient product launches in China. The acquired companies are reportedly profitable and AOBO believes that the acquisitions will significantly enhance AOBO’s distribution platform and product launch capabilities, particularly for new product launches starting in 2009.

Tony Liu, CEO of AOBO, said: “Nuo Hua provides us with a diverse range of incremental wholesale and retail distribution opportunities, such as in new top-tier hospitals and rural areas, both of which bolster our long-term growth capabilities. GHK lends the innovation we need to bring new products to market quickly and effectively, and brings us several existing patents, a fantastic team of product specialists, and industry know-how in China’s complex pharmaceutical registration process.

“The combination of Nuo Hua and GHK together is particularly exciting because we can leverage new product development across our enhanced wholesale and retail distribution network, which, through Nuo Hua, now covers major top-tier (class II and class III) hospitals in northern China, additional provincial and municipal hospitals, lower level distributors and retail chain pharmacies throughout the country. As a result of these two transactions, we anticipate at least three new product launches next year and at least 10 in 2010.”