NeoStem Outlines to Shareholders Near-term and Long-term Business Strategies Following Acquisition of Chinese Pharmaceutical Company
NEW YORK, Nov. 19 /PRNewswire-FirstCall/ -- NeoStem, Inc. (NYSE
Amex: NBS), announced today that it has sent the following letter
to its shareholders, discussing the Company's acquisition, on
October 30, 2009, of China Biopharmaceuticals Holdings, Inc.
(CHBP), an integrated bio-pharmaceutical company based in the
People's Republic of China. The merger gives NeoStem a controlling
51% interest in Suzhou Eyre Pharmaceutical Co. Ltd., CHBP's primary
operating subsidiary and a prominent and profitable China
pharmaceutical company. The letter outlines NeoStem's near-term and
long-term business strategies following this acquisition.
The Letter to Shareholders follows: November 18, 2009 Dear Fellow Shareholders:
The completion on October 30, 2009 of our merger with China
Biopharmaceuticals Holdings, Inc. is a major milestone and
accomplishment for NeoStem. The net effect of the merger is our
acquisition of a controlling 51% interest in Suzhou Erye
Pharmaceuticals ("Erye"), a China-based pharmaceutical company with
revenues on track to exceed $60 million in 2009. This marks our
transition to being a vertically integrated, biopharmaceutical
development and distribution company with an effective platform for
significant growth in China, which is one of the world's most
dynamic consumer markets. I intend to use this letter to our
shareholders to clarify NeoStem's near term and long term business
strategies.
NeoStem has evolved from its beginnings as a one-dimensional
healthcare services company with nominal revenues to a
multi-dimensional biopharmaceutical company with state-of-the-art
capabilities in stem cell collection, processing, cryopreservation,
and therapeutic development and pharmaceutical drug development and
distribution, with significant revenues.
Erye is expanding its research, development and distribution
capabilities, and is on track to become one of the largest
antibiotic producers in Eastern China.
The acquisition of Erye provides us a pharmaceutical
distribution system in one of the world's fastest growing consumer
markets and we anticipate Erye's recent robust sales and earnings
growth to continue. Earlier this year, the Chinese government
announced that improving the healthcare for its citizens is a major
priority and, according to Forbes.com, China's State Council has
approved the spending of $124 billion on its healthcare system
between 2009 and 2011. Owning a controlling interest in one of the
largest antibiotic producers/distributors in China positions us to
take advantage of this growth with products we develop in China and
products we develop or license in the US for manufacturing and
distribution in China. Given our size and distribution
capabilities, any significant product acquisition or development
could accelerate our revenue growth.
While NeoStem will continue to offer through Erye traditional
pharmaceutical products, we will advance our research and
development activities in the US and China focused on stem
cell-based therapies beyond hematologic malignancies which have
been used therapeutically for over 40 years. The Chinese market for
adult stem cell therapies is more advanced than in the US and we
look forward to the expansion of these revenue opportunities
We believe that our revenues and profitability will reflect our
growth from a service company to a fully integrated international
biopharmaceutical company and that this will produce a positive
response in the investor market.
NeoStem's market capitalization has increased since the closing
of the merger by approximately $40 million to a market
capitalization of approximately $59 million as of the writing of
this letter. Although the merger resulted in a dilution of the
management team's equity ownership of NeoStem, the team retains a
significant stake in NeoStem's continuing success and remains
aligned with your interests as shareholders. We believe the future
for NeoStem is very bright, remain committed to growing the value
of your NeoStem holdings and want you to know that we appreciate
your continuing support. I look forward to updating you further in
the near future with progress on many of the exciting new
initiatives that we have launched in the pharmaceutical and stem
cell therapies sectors, both in the US and China.
Robin Smith, MD, MBA CEO Forward-Looking Statements
This letter and press release contain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995. Forward-looking statements reflect management's current
expectations, as of the date of this letter, and involve certain
risks and uncertainties. The Company's actual results could differ
materially from those anticipated in these forward-looking
statements as a result of various factors. Factors that could cause
future results to materially differ from the recent results or
those projected in forward-looking statements include the "Risk
Factors" described in the Company's Registration Statement on Form
S-4/A filed with the Commission on October 6, 2009 as well as
periodic filings made with the Securities and Exchange Commission.
The Company's further development is highly dependent on future
medical, research and product development and market acceptance,
which is outside its control.
CONTACT: NeoStem, Inc. Robin Smith, Chief Executive Officer T: 212-584-4180 E: rsmith@neostem.com
Source: NeoStem, Inc.
CONTACT: Robin Smith, Chief Executive Officer NeoStem, Inc.,
+1-
212-584-4180, rsmith@neostem.com
Web Site: http://www.neostem.com/
Posted: November 2009
