American Oriental Bioengineering Completes Acquisition of Changchun Xinan Pharmaceutical Group Company Ltd.

NEW YORK, September 06, 2007 /PRNewswire-FirstCall/ -- American Oriental Bioengineering, Inc. ("AOBO"), a leading manufacturer and distributor of plant-based pharmaceutical and nutraceutical products, today announced that it has completed the acquisition of Changchun Xinan Pharmaceutical Group Company Limited ("CCXA"). The purchase price for this all cash transaction is approximately USD $28.5 million (RMB 215 million).

CCXA is a privately owned business primarily serving the rural healthcare market with more than 100 plant-based pharmaceutical products in its portfolio. AOBO believes CCXA's leading products will be highly complimentary to its existing product line and will also expand the variety of AOBO's current product offering. CCXA's products cover both the prescription and OTC markets. In 2006, CCXA was profitable and generated approximately USD$9.0 million (68 million RMB) in revenue annually with approximately 40 products contributing to the overall revenue. Some of these products include Nubao, a blood circulation enhancer for treatment of premenstrual syndromes; Kanguzensheng Tablet for the treatment of bone spurs; Yakangling, a plant- based pharmaceutical product that treats gingivitis; and Nanbao, a plant based male sexual drive enhancer.

Tony Liu, Chief Executive Officer of AOBO stated, "We are pleased to welcome CCXA to our expanding business portfolio. CCXA has promising and profitable products that we intend to leverage across our large distribution network. With over 100 products in its portfolio, CCXA has the opportunity to benefit from the government's efforts to offer affordable pharmaceutical products for its citizens, particularly in rural areas of the country and we are pleased that most of its products are currently covered under the government insurance plan. We intend to identify ways to improve CCXA's operating efficiency, add greater structure to the product line and implement a more beneficial pricing strategy. We look forward to enhancing overall productivity and efficiency in this business."

"AOBO continues to be an aggressive brand consolidator in China's consumer healthcare market. We have successfully executed the integration of several acquisitions and plan to continue to seek out strong targets like CCXA that can leverage our solid marketing, sales, and distribution platforms," concluded Liu.

The monetary exchange rate used for this transaction is US$1.00 : RMB 7.55

About American Oriental Bioengineering, Inc.

American Oriental Bioengineering is a leading, fully integrated, plant based pharmaceutical and plant based nutraceutical company dedicated to improving health through the development, manufacture and commercialization of modernized plant based products in China.

Safe Harbor Statement

This news release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. These statements are subject to uncertainties and risks including, but not limited to, product and service demand and acceptance, changes in technology, economic conditions, the impact of competition and pricing, government regulation, and other risks contained in reports filed by the Company with the Securities and Exchange Commission. All such forward-looking statements, whether written or oral, and whether made by or on behalf of the company, are expressly qualified by the cautionary statements and any other cautionary statements which may accompany the forward-looking statements. In addition, the company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.

CONTACT: Wilfred Chow, SVP Finance of American Oriental Bioengineering,Inc., +1-212-786-7568; or Bill Zima or Ashley Ammon MacFarlane, both ofIntegrated Corporate Relations, Inc., +1-203-682-8200, for AmericanOriental Bioengineering, Inc.

Ticker Symbol: (NYSE:AOB)

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Posted: September 2007


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