NEW YORK, Nov. 20, 2007 (PRIME NEWSWIRE) -- The following is being issued by Genesis Pharmaceuticals Enterprises, Inc. (OTCBB:GTEC):
We are very pleased to have successfully completed the merger of Laiyang Jiangbo Pharmaceuticals Co., Ltd. ("Laiyang Jiangbo") with Genesis Technology Group, Ltd. -- resulting in a new public company called Genesis Pharmaceuticals Enterprises, Inc. I want to take a moment to reach out to all of our shareholders in order to review where we are, how we got here and what shareholders may expect in the future.
I am pleased to report that the final terms of the merger were completed on October 1, 2007. As a result of the merger, Genesis Pharmaceuticals Enterprises, Inc. is listed on the OTC Bulletin Board and trades under the symbol "GTEC."
The new company is a pharmaceutical company whose primary operations are those of our operating subsidiary Laiyang Jiangbo. Founded in 2003, Laiyang Jiangbo focuses on the research, development, production, marketing and sales of new and sophisticated pharmaceutical products in the People's Republic of China. We have rapidly established ourselves as a leader in drug development and modern marketing in China, and our lead drugs enjoy significant market share in their categories.
Our company has a very strong financial profile
For its fiscal year ended June 30, 2007, Laiyang Jiangbo reported revenue of US$76.2 million, up by 55% over the prior year. Gross profit increased by 64% to US$55 million, and our operating income increased by 53% to US$18.3 million, over the same period. For fiscal 2007, we reported audited net income of US$22.1 million, inclusive of a one-time US$9.9 million credit for a corporate and VAT tax exemption we received from the Chinese government. Our fiscal condition is also very solid, with total assets of US$55.4 million, shareholders' equity of US$27.3 million, and cash on hand of US$17.7 million, as of June 30, 2007.
Our company is well positioned in the very attractive China pharmaceutical market
Pharmaceutical demand in China is forecast to expand by more than 13% annually to reach about US$51 billion by 2010. Strong economic growth, changing demographic patterns, and the reform and expansion of health care systems are expected to drive greater demand for drugs. Genesis Pharmaceuticals is well positioned to meet that increased demand.
Our current products are approved by the Chinese State Food and Drug Administration and include Clarithromycin sustained-release tablets, Itopride Hydrochloride granules, Ciprofloxacin Hydrochloride tablets and Paracetamol tablets. We started sales of Baobaole chewable tablets this month, in November.
We have a strong and growing pipeline of Class 1 drugs
A research and marketing driven organization, our company is driven to bring new drugs to market that can significantly improve clinical outcomes for patients in major disease categories. Since 2005, our three major drugs (Ciprofloxacin Hydrochloride, Paracetamol and Clarithromycin) have been on the approved list for reimbursement by the national healthcare Insurance Catalogue. A fourth drug (Itopride Hydochloride) is expected to get provincial government approval soon, which will make it available to over 166 million potential users. We aim to have all of our new drugs under development be on government approval lists. This is very important to maximize the availability of drugs to patients and revenue generating potential of our products.
Genesis recently announced a US$5 million private placement financing for the acquisition of a new Chinese Class 1 drug Ligustrazine Ferulic Acid Acetate ("LFAA"), a cardiac cerebral vascular drug that is designed to help reduce blood clotting and prevent platelets in the blood from clumping together. Assuming that LFAA receives all of the necessary Chinese regulatory approvals, the Company plans to put the drug into trial production in fiscal year 2008, and expects fiscal year 2009 sales of US$9.9 million and fiscal year 2010 sales of US$26.3 million.
We are adding new drugs to our product line to increase overall growth for the company. We are currently seeking government approvals to produce Felodipine Sustained Release Tablets, Radix Isatidis Dispersible Tablets, Yuandu Hanbi Capsulesa and Bezoar Yijin Tablets. Drug sales have a lifecycle during which competition often leads to decreasing profit margins over time. Our focus going forward is on Chinese Class 1 drugs that often have high profit margins. Manufacturing these sophisticated new drugs requires advanced technology, which means competitors face high barriers to entry. We are committed to having and using the latest technology to manufacture new sophisticated drugs with high profit margins.
Genesis Pharmaceuticals Enterprises, Inc. will continue to grow by expanding its distribution network of 440 full time and 620 part time representatives throughout China. Sales to end users such as doctors and hospitals, and not just distributors, help build brand recognition and customer loyalty. Sales representatives will continue to sell existing and new products to existing and new customers.
Our team is committed to operate at world class standards.
We have a strong management team in place, which has recently been enhanced by the addition of a qualified Chief Financial Officer with U.S. GAAP experience, Elsa Sung. Most of Genesis Pharmaceuticals' senior management has extensive industry experience and has been in place since the founding of Laiyang Jiangbo in 2003. They will ensure that Genesis Pharmaceuticals executes its growth strategy.
Now, after completing our going public transaction, we are committed to developing the human resources and systems required to meet our responsibilities as a U.S. public company. We are committed to high quality disclosure and shareholders will be able to observe management activities and obtain accurate information about the Company through the company's website (www.genesis-china.net/), which will soon be relaunched in both English and Chinese.
We are committed to the highest level of corporate governance. Our new Board of Directors consists of high level managers and independent Directors:
Cao Wubo Chief Executive Officer and Chairman of the Board
Xu Haibo Vice President, Chief Operating Officer and Director
Feng Xiaowei Outside Director
Huang Lei Outside Director
Ge Jian Outside Director
Zhang Yihua Outside Director
Rodrigo Arboleda Outside Director (From Genesis Technology Group)
Robert Cain Outside Director (From Genesis Technology Group)
Over the next several quarters we plan to take the steps required to move Genesis Pharmaceuticals to a major stock market in the U.S. so as to attain greater visibility with investors and the media and enhance the marketability of our stock.
Genesis Pharmaceuticals' senior management plans to take a trip to the U.S. in December 2007. This trip will give U.S. shareholders a chance to meet with management and ask management questions about Genesis Pharmaceuticals.
I hope that this letter has given our new shareholders some sense of the development of our company and our strategic direction. Our team looks forward to updating you on our progress through regular conference calls and visits to meet with our investors. In closing, I would like to thank our customers, shareholders, directors and employees for the Company's present and future success. Thanks to all of you for your continuing interest in Genesis Pharmaceuticals.
Cao Wubo, Chief Executive Officer and Chairman of the Board
Genesis Pharmaceuticals Enterprises, Inc.
CONTACT: Genesis Pharmaceuticals Enterprises, Inc.
Ms. Elsa Sung CFO
+1-877-895-3650, Ext. 701
CCG Elite Investor Relations, Inc.
Mr. Crocker Coulson, President
+1-646-213-1915 (New York)
Source: PrimeNewswire (November 20, 2007 - 12:50 PM EST)