Beijing Med-Pharm Corporation and Alliance Boots plc Joint Venture Acquisition Plans Approved by Guangzhou Pharmaceuticals Company Ltd. ShareholdersPLYMOUTH MEETING, Pa.--(BUSINESS WIRE)--Apr 3, 2007 - Beijing Med-Pharm Corporation (Nasdaq: BJGP) today announced that shareholders of Guangzhou Pharmaceuticals Company Ltd ("GPCL") have approved the formation of a 50:50 joint venture in Guangzhou Pharmaceuticals Corporation ("GP Corp."), the third largest pharmaceutical wholesaler in China, with Alliance BMP Limited, a UK-based investment vehicle formed by Beijing Med-Pharm and Alliance Boots plc (AB.LSE). GPCL shareholders voted to approve the joint venture at an Extraordinary General Meeting held in Hong Kong on April 2, 2007.
In addition, Alliance BMP's application to the Ministry of Commerce (MOFCOM) of the People's Republic of China for government approval of the transaction has been filed and was accepted on March 15, 2007. MOFCOM has 90 days to rule on the application, at which time it can approve the transaction, reject it, or request additional information. Should MOFCOM approve, the transaction is expected to close in the second half of 2007. No assurance can be provided that the acquisition will be completed until this government clearance is received.
"We have made rapid progress toward completing this transaction, a testament to the strength of this collaboration, and are now awaiting government approval," said David Gao, Chief Executive Officer of Beijing Med-Pharm. "We look forward to tapping into the extensive distribution capabilities of GP Corp. in Southern China and to participating, with Alliance Boots, in the continued growth of one of China's most successful pharmaceutical distribution enterprises."
In January, Beijing Med-Pharm announced the formation of Alliance BMP Limited to acquire a 50 percent interest in GP Corp. for RMB 545 million ($69.0 million) in cash, constituting a direct capital injection into GP Corp. Alliance Boots will own 80 percent of Alliance BMP Limited and Beijing Med-Pharm will own 20 percent. Alliance BMP will hold four of the eight GP Corp. board seats and David Gao will serve as chairman of GP Corp. The formation of Alliance BMP also creates a vehicle through which Beijing Med-Pharm and Alliance Boots can make additional investments in China.
GP Corp. was founded in 1951 and is a subsidiary of GPCL, a majority state-owned pharmaceutical enterprise which is listed on the Hong Kong and Shanghai stock exchanges. GPCL currently owns 90 percent of GP Corp. In the joint venture with Alliance BMP, GPCL will retain ownership of the remaining 50 percent of GP Corp.
GP Corp. has grown rapidly in recent years, with annual revenues increasing from RMB 4.4 billion ($565 million) in 2003 to RMB 6.4 billion ($820 million) in 2005. GP Corp. serves more than 12,000 hospitals, pharmacies, and other wholesalers from eight distribution facilities located throughout Guangdong Province and southeast China.
About Alliance Boots plc
Alliance Boots was created as Europe's leading pharmacy-led health and beauty group through the merger of Alliance UniChem and Boots Group in July 2006. The merger builds upon the existing strategies of both groups, combining complementary skills and businesses to create an international force in pharmacy-led health and beauty whilst reinforcing the Group's commitment to the independent pharmacists through enhanced wholesale distribution and related services. The formation of the GP Corp. joint venture will expand Alliance Boots wholesale presence to 15 countries.
About Beijing Med-Pharm Corporation
Beijing Med-Pharm is a pharmaceutical marketing and distribution company that offers the following services in China: pre-market entry analysis; clinical trial management; product registration; market research; pharmaceutical distribution to hospitals; and pharmaceutical marketing to physicians, hospitals and other healthcare providers.
Forward Looking Statements
In addition to historical facts or statements of current condition, this press release contains forward-looking statements within the meaning of the "Safe Harbor" provisions of The Private Securities Litigation Reform Act of 1995, including statements regarding the terms of the proposed joint venture, the expected benefit for Beijing Med-Pharm, the expected timing of the closing of the described transactions and the expectation that David Gao will initially serve as the Chairman of the reorganized GP Corp. Forward-looking statements provide Beijing Med-Pharm's current expectations or forecasts of future events. Actual results could differ materially from those reflected in these forward-looking statements due to (i) the inability to satisfy closing conditions, (ii) if the described transactions close, the ability for the joint venture to be successful and (iii) general financial, economic, regulatory and political conditions affecting the biotechnology and pharmaceutical industries and the Chinese pharmaceutical market. Given these risks and uncertainties, any or all of these forward-looking statements may prove to be incorrect. Therefore, you should not rely on any such factors or forward-looking statements. Beijing Med-Pharm undertakes no obligation to update publicly any forward-looking statement.
Fred M. Powell, 610-940-1675
Sam Brown Inc.
Mike Beyer, 773-463-4211
Posted: April 2007