CHINA NUOKANG (NASDAQ:NKBP)

BEIJING, Sept. 27, 2012 (GLOBE NEWSWIRE) -- China Nuokang Bio-Pharmaceutical Inc. (Nasdaq:NKBP) ("Nuokang" or the "Company"), a leading China-based biopharmaceutical company focused on the research, development, manufacture, marketing and sales of hospital-based medical products, today announced that it has entered into an Agreement and Plan of Merger (the "Merger Agreement") with Kingbird Investment Inc. ("Parent"), a Cayman Islands exempted company with limited liability and beneficially owned by Ms. Yuhuan Zhu, the wife of Mr. Baizhong Xue, the Company's Chairman and Chief Executive Officer, and Kingbird Mergerco. Inc., a Cayman Islands exempted company with limited liability and a direct wholly-owned subsidiary of Parent ("Merger Sub").

Subject to satisfaction of the Merger Agreement's terms and conditions, Merger Sub will merge with and into the Company, with the Company continuing as the surviving corporation (the "Merger"). Pursuant to the Merger Agreement, each of the Company's ordinary shares issued and outstanding immediately prior to the effective time of the Merger (the "Shares") will be canceled and cease to exist in exchange for the right to receive $0.725 without interest, and each ADS, which represents eight Shares, will represent the right to surrender the ADS in exchange for $5.80 in cash without interest, except for (a) Shares owned by Parent, Merger Sub or the Company (as treasury shares, if any), or by any direct or indirect wholly owned subsidiary of Parent, Merger Sub or the Company, in each case immediately prior to the effective time of the Merger, which will be cancelled, cease to exist and receive no consideration, (b) Shares beneficially owned by Mr. Xue or his affiliates immediately prior to the effective time of the Merger, which will survive the Merger and receive no consideration, and (c) Shares owned by shareholders who have validly exercised and have not effectively withdrawn or lost their rights to dissent from the Merger under the Cayman Companies Law (the "Dissenting Shares"), which will be cancelled for the right to payment of fair value of the Dissenting Shares in accordance with the Cayman Companies Law. The offer represents a premium of 56.8% over the Company's closing price of $3.70 per ADS on May 8, 2012, the last trading day prior to the Company's announcement of its receipt of a "going-private" proposal and a premium of 101.1% to the volume-weighted average closing price of the Company's ADSs during the 90 trading days prior to May 8, 2012.

Second Quarter 2012 Financial Highlights

• Revenue was RMB72.9 million ($11.5 million)¹, compared to RMB79.5 million in the prior year period;
• Baquting revenue was RMB68.9 million ($10.8 million), compared to RMB76.1 million in the prior year period;
• Gross profit was RMB64.2 million ($10.1 million), compared to RMB70.9 million in the prior year period;
• Gross margin was 88.1%, compared to 89.2% in the prior year period;
• Operating income was RMB13.2 million ($2.1 million), compared to RMB21.0 million in the prior year period;
• Net income was RMB10.5 million ($1.7 million), or RMB0.56 ($0.09) per diluted ADS², compared to RMB14.1 million, or RMB0.72 per diluted ADS, ($0.11)
• Non-GAAP adjusted net income was RMB11.3 million ($1.8 million), compared to RMB15.7 million in the prior year period.

Mr. Baizhong Xue, the Company's Chairman and Chief Executive Officer, stated, "We are pleased to announce financial results for the second quarter of 2012 which demonstrate our continued progress with our corporate restructuring and profit making. Revenues from Baquting, our flagship product, rose sequentially by approximately 20% to RMB68.9 million from RMB57.5 million in the first quarter of 2012. Revenues through our sales agent channels remained strong while direct sales revenue, although less than the second quarter of 2011, improved from the first quarter of 2012. We are encouraged by these signs and continue to believe in the potential of our product portfolio."

Chairman Xue continued, "We remain focused on rebuilding and strengthening our business across various dimensions. For example, we continued regaining revenue levels with Baquting, whose quarter-over-quarter growth indicates that revenues generated by this product are approaching levels that were achieved prior to the restructuring. Moving beyond our core product offerings as part of a diversification strategy, we continued investing in clinical trials and market education for Kaitong and the Alpha Lipoic Acid Capsule ("ALA"). The Company is in the process of securing the required SFDA production permit for ALA. We likewise continued investing in R&D to support ongoing innovation. I am especially encouraged to see a sequential rise in net profit, which positively reflects on the progress the Company is making."

BEIJING, June 15, 2012 (GLOBE NEWSWIRE) -- China Nuokang Bio-Pharmaceutical Inc. (Nasdaq:NKBP) ("Nuokang" or the "Company"), a leading China-based biopharmaceutical company focused on the research, development, manufacture, marketing and sales of hospital-based medical products, today announced that Robert Tianruo Pu, the chief financial officer of the Company, has tendered his resignation for personal reasons, effective June 30, 2012. Felix Chungfai Wong, currently the Company's finance director, will replace Mr. Pu to serve as the chief financial officer. Upon his resignation, Mr. Pu will remain with the Company as a consultant.

"Mr. Pu has made significant contributions to Nuokang's growth and development since he joined in September 2008. We thank him for his leadership and dedication to the Company. We wish him all the best in his future endeavors," commented Mr. Baizhong Xue, the Company's chairman and chief executive officer.

Felix Chungfai Wong joined Nuokang in February 2012 as its finance director. Mr. Wong has three decades of experience in finance, management and accounting in the U.S. and Greater China. He joined Nuokang from ITT Corporation, a company listed on the New York Stock Exchange, where he held various senior financial management positions. Prior to that, he held various senior finance positions across a broad range of industries, including finance manager of Roche (China) Investment Ltd., one of the world's leading pharmaceutical and diagnostics firms. He also has a decade of auditing experience in large multinational accounting firms in Hong Kong and Singapore. Mr. Wong graduated from the Accountancy Faculty of the Hong Kong Polytechnic University and is a member of the Hong Kong Institute of Certified Public Accountants, the Association of Chartered Certified Accountants and the Institute of Chartered Accountants in England & Wales.

BEIJING, May 21, 2012 (GLOBE NEWSWIRE) -- China Nuokang Bio-Pharmaceutical Inc. (Nasdaq:NKBP) ("Nuokang" or the "Company"), a leading China-based biopharmaceutical company focused on the research, development, manufacture, marketing and sales of hospital-based medical products, today announced that it has formed an independent committee of its board of directors (the "Independent Committee") to review and evaluate the preliminary, non-binding proposal received from Mr. Baizhong Xue, chairman and chief executive officer of Nuokang, on May 10, 2012 to acquire all of the outstanding shares of the Company not currently owned, legally or beneficially, by Mr. Xue or companies controlled by Mr. Xue.

The Independent Committee is composed of the following independent directors of the Company: Mr. Sean Shao, Mr. Mingde Yu, and Mr. David Xiaoying Gao. Mr. Sean Shao has been elected as the chairman of the Independent Committee. The Independent Committee has appointed Skadden, Arps, Slate, Meagher & Flom LLP as its legal counsel to assist the evaluation of Mr. Xue's proposal and additional proposals that may be made by Mr. Xue and his affiliates, if any.

The Independent Committee is considering Mr. Xue's proposal but has not made any decisions. The Independent Committee has not set a definitive timetable to complete its evaluation of Mr. Xue's proposal or any other alternative and does not currently intend to announce developments unless and until an agreement has been reached. There can be no assurance that any definitive offer will be made, that any agreement will be executed, or that a transaction with Mr. Xue or any other transaction will be approved or consummated.

BEIJING, May 9, 2012 (GLOBE NEWSWIRE) -- China Nuokang Bio-Pharmaceutical Inc. (Nasdaq:NKBP) ("Nuokang" or the "Company"), a leading China-based biopharmaceutical company focused on the research, development, manufacture, marketing and sales of hospital-based medical products, today announced that its board of directors has received a preliminary, non-binding proposal from Mr. Baizhong Xue, chairman of the board and chief executive officer of Nuokang, to acquire all of the outstanding ordinary shares of the Company not currently owned, legally or beneficially, by Mr. Xue and companies controlled by Mr. Xue in cash at a proposed price of $5.80 per American depositary share (each outstanding Nuokang American depositary share represents eight Nuokang ordinary shares). Mr. Xue currently beneficially owns approximately 61.2% of the Company's ordinary shares (excluding share options of the Company). Please refer to the enclosed Exhibit A for a copy of the proposal.

The Company's board of directors intends to form a special committee of independent directors to consider the proposal. There can be no assurance that any definitive offer will be made, that any agreement will be executed or that a transaction with Mr. Xue or any other transaction will be approved or consummated.

Fourth Quarter 2011 Results

• Revenue was RMB57.0 million ($9.1 million)^[1], compared to RMB79.3 million in the prior year period;
• Baquting revenue was RMB52.2 million ($8.3 million), compared to RMB76.7 million in the prior year period;
• Gross profit was RMB47.2 million ($7.5 million), compared to RMB70.0 million in the prior year period;
• Gross margin was 82.7% compared to 88.2%, in the prior year period;
• Operating loss was RMB36.8 million ($5.9 million), compared to an operating income of RMB4.2 million in the prior year period;
• Net loss was RMB46.7 million ($7.4 million), or RMB2.42 ($0.39) per diluted ADS^[2], compared to a net income of RMB278,000, or RMB0.01 per diluted ADS, in the prior year period; and
• Non-GAAP adjusted net loss was RMB6.3 million ($1.0 million) compared to an adjusted net income of RMB3.9 million in the prior year period.

Mr. Baizhong Xue, the Company's Chairman and Chief Executive Officer, stated, "We believe this quarter marked an important milestone in Nuokang's restructuring efforts. As we have noted in the past few months, including in our announcement of the recent changes in our management team, it became clear toward the end of 2011 that Nuokang needed to refocus our direction in order to achieve greater success as a publicly-listed and diversified pharmaceutical company. We are proud of the staff that helped Nuokang build Baquting into a market leader and successfully become a U.S.-listed company. At the same time, we believe that the changes in our management team will allow us to better lead Nuokang in the future. Financially, we have taken the steps to create a healthier balance sheet. We have paid down most of our debt, increased operating cash flow by decreasing days sales outstanding, removed the overhang of our lease obligations and expensed one-time costs to show a cleaner balance sheet. We believe these steps are necessary to prepare Nuokang to achieve its long-term potential.

"Our financial performance this quarter was affected by the aforementioned efforts. First, as we have noted before, we recognize that our exploration of certain strategic alternatives to increase shareholder value has negatively impacted our short-term results. While our externally managed marketing agent sales continued to grow and the volume of Baquting sales for the fourth quarter remained relatively stable, this performance was tempered by the decrease in our higher-margin and higher-price direct sales. This shift in revenue mix therefore resulted in a lower average price per unit and a noticeable sequential revenue decline. Second, we resolved our obligation through a recent contract for the Penglai plant for RMB13.4 million. We believe this action was prudent as it removes the financial overhang of the potential costs. Lastly, to present a cleaner balance sheet, we have conservatively incurred an allowance for non-trade receivables of RMB8.6 million. These efforts to strengthen our financial condition and the one-time and non-operational charge of RMB11.6 million related to exploration of strategic alternatives, led to a net loss for the fourth quarter of 2011. Moving forward, we are excited to have a stronger management team and healthier balance sheet to better support our future growth.

"Overall, we believe that our efforts have laid a solid foundation for a gradual but steady recovery from 2011. Despite the challenges of the fourth quarter, we are pleased to note that Baquting remains the leader in the hemocoagulase market with 36% market share. Looking forward, we are focused on maintaining this market leadership position while further strengthening management of our direct sales team to achieve a more favorable revenue mix and greater sales volume. Our new vice president of sales and marketing has proactively reached out to employees to cultivate greater confidence in and excitement for Nuokang's growth potential. In addition to Baquting, revenue from Kaitong has been steadily growing. For 2012, we expect to see revenue contribution from Kaitong and our newly acquired Alpha Lipoic Acid Capsule. We also expect our expenses to normalize in 2012 compared to the fourth quarter of 2011, during which we chose to conservatively recognize one-time, non-operational charges. Although the recovery process may be gradual, we are confident that 2012 will show sequential revenue and profitability growth compared to 2011."

BEIJING, Feb. 27, 2012 (GLOBE NEWSWIRE) -- China Nuokang Bio-Pharmaceutical Inc. (Nasdaq:NKBP) ("Nuokang" or the "Company"), a fully integrated, China-based biopharmaceutical company focused on the research, development, manufacture, marketing and sales of hospital-based medical products, today announced the following management team changes:

• Mr. Felix Chungfai Wong has been appointed finance director to succeed Ms. Lixin Niu;
• Mr. Tong Le has been appointed vice-president of sales & marketing to succeed Mr. Tao Zhu;
• Mr. Steven Duan has been promoted to vice-president of investor relations from director of investor relations; and
• Mr. Yong Xu will be succeeded by a new vice-president of administration and human resources, to be officially confirmed pending a necessary quiet period.

Mr. Baizhong Xue, the Company's chairman and chief executive officer, commented, "We would like to begin by thanking Mr. Tao Zhu, Ms. Lixin Niu and Mr. Yong Xu for their contributions in building Baquting into our flagship product and guiding Nuokang through our transition into a U.S. publicly-listed corporation. Their talent and hard work has helped drive Nuokang's historical growth." Full release

BEIJING, Jan. 11, 2012 (GLOBE NEWSWIRE) -- China Nuokang Bio-Pharmaceutical Inc. (Nasdaq:NKBP) ("Nuokang" or the "Company"), a fully integrated, China-based biopharmaceutical company focused on the research, development, manufacture, marketing and sales of hospital-based medical products, today announced that it has acquired from Shandong Qidu Pharmaceutical Co., Ltd. ("Qidu Pharma") for a cash consideration of RMB18 million the manufacturing license and marketing rights for Alpha Lipoic Acid Capsule ("ALA"), also known as Thioctic Acid, an antioxidant product that addresses diabetic neuropathy. Upon the transfer of the manufacturing license from Qidu Pharma, the Company will be one of the two pharmaceutical companies in China licensed to manufacture ALA. ALA will be in the new drug monitoring period through October 2014, during which period there will be no additional market entrants due to current Chinese government regulations.

The Company expects to begin manufacturing ALA in its production facilities in Penglai, China in 2014 when the transfer of the ALA manufacturing license is expected to be completed. Until that time, Qidu Pharma has agreed to fulfill the full production needs for ALA for the Company on a contractual basis at a pre-determined, fixed price. The Company has begun to actively participate in provincial tendering processes for the drug and expects to begin recognizing meaningful revenues from it in the second half of 2012.

Mr. Baizhong Xue, the Company's Chairman and Chief Executive Officer, stated, "We are excited to broaden our portfolio to include a diabetic drug. We believe, with the evolving lifestyles and food consumption habits of the Chinese population and more than 90 million diabetic patients in China, there is a growing market for diabetes-related medical products in China. ALA has been clinically proven to be able to lower or maintain blood glucose levels and help manage diabetic peripheral neuropathy by killing free radicals. ALA has been used for years as a prescription drug to treat peripheral neuropathy in several European and South American countries including Germany, Russia and Argentina. It has also been widely used as a nutraceutical product in the United States. Most importantly, we believe that this acquisition demonstrates our continued dedication to product diversification and brings us closer to our goal of becoming one of China's leading diversified biopharmaceutical companies."

BEIJING, Dec. 23, 2011 (GLOBE NEWSWIRE) -- The Company held its annual general meeting at 9 a.m. Beijing time on December 23, 2011. Each of the proposals submitted for shareholder approval was approved.

The primary resolution approved was to continue to engage Ernst & Young Hua Ming as the independent auditor of the Company for the fiscal year ending December 31, 2011.

Third Quarter 2011 Results

• Revenue increased 3.5% to RMB87.2 million ($13.7 million)¹ from RMB84.3 million in the prior year period;
• Baquting revenue increased 8.8% to RMB83.9 million ($13.2 million) from RMB77.1 million in the prior year period;
• Gross profit increased 3.5% to RMB75.5 million ($11.8 million) from RMB73.0 million in the prior year period;
• Gross margin remained flat at 86.6%, compared to 86.5% in the prior year period;
• Operating income was RMB16.5 million ($2.6 million); and
• Net income was RMB7.6 million ($1.2 million) or RMB0.39 ($0.06) per diluted ADS vs ($0.07) in prior year

Mr. Baizhong Xue, the Company's Chairman and Chief Executive Officer, stated, "We are pleased to announce both year-over-year and sequential revenue growth for our third quarter of 2011. Baquting revenue rose to $83.9 million, growing 8.8% year-over-year and 10.2% quarter-over-quarter. Baquting sales volume similarly rose to 4.3 million units from 3.9 million units in both the prior year period and in the prior quarter. We also maintained a leading market share of 38% as of July 2011. We believe these are indicators of the strength of our commercialization platform, through which we have achieved sustained market leadership for Baquting and hope to drive the success of our new-to-market products. Looking forward, we aim to continue strengthening our business model and commercialization of new products to drive long-term growth and increase shareholder value."

Second Quarter 2011 Financial Highlights

• Revenue was RMB79.5 million ($12.3 million)¹ compared to RMB82.4 million in the prior year period;
• Baquting revenue was RMB76.1 million ($11.8 million) compared to RMB77.8 million in the prior year period;
• Gross profit was RMB70.9 million ($11.0 million) compared to RMB73.2 million in the prior year period;
• Gross margin was 89.2% compared to 88.8% in the prior year period;
• Operating income was RMB21.0 million ($3.3 million); and
• Net income was RMB14.2 ($2.2 million) or RMB0.72 ($0.11) per diluted ADS vs RMB0.98 ($0.13) ADS

Mr. Baizhong Xue, the Company's Chairman and Chief Executive Officer, stated, "We are pleased by the strong sequential growth and profitability of our second quarter 2011 performance. We believe that this is an important data point in demonstrating our success in integrating the new sales structure. The first quarter was significantly affected by the sales team reorganization process but this quarter shows that we have quickly resumed normal operations. Moving forward, we expect our reorganization to strengthen the reach and effectiveness of our distribution network."

Chairman Xue continued, "We recognize that commercialization of our new products progresses slower than expected but would like to highlight Baquting's continued strong performance. Our sales volume rose this quarter to 3.9 million units from 3.2 million units in the previous quarter and 3.8 million units in the prior year period. Furthermore, we have seen Reptilase, one of our key competitors, gradually recede from the market as it has been over a year since the expiration of its import license and its inventory in China is depleting. Concurrently, we are proud to note that our own market share has risen again to 40% as of June 2011. Looking forward, we are confident that Baquting will retain a leading market share position and will continue to grow."

We have financed our operations primarily through cash flows from operations, short-term bank borrowings, the sale of preferred shares in private placements and proceeds from our initial public offering in December 2009. We believe that our current levels of cash and cash flows from operations and bank borrowings, combined with the net proceeds from our initial public offering in December 2009, will be sufficient to meet our anticipated cash needs for at least the next 12 months. However, we may need additional cash resources in the future if we experience changed business conditions or other developments. We may also need additional cash resources in the future if we find and wish to pursue opportunities for investment, acquisition, strategic cooperation or other similar actions

First Quarter Results:

• Revenue was RMB64.5 million ($9.9 million) compared to RMB69.7 million in the prior year period;
• Baquting revenue was RMB60.8 million ($9.3 million) compared to RMB65.8 million in the prior year period;
• Gross profit was RMB56.3 million ($8.6 million) compared to RMB62.4 million in the prior year period;
• Gross margin was 87.2% compared to 89.5% in the prior year period;
• Operating income was RMB17.9 million ($2.7 million); and
• Net income was RMB10.9 ($1.7 million) or RMB0.55 ($0.08) per diluted ADS

 

Mr. Baizhong Xue, the Company's Chairman and Chief Executive Officer, stated, "For the full year of 2011, we are confident in our ability to deliver 15% top-line growth. Our first quarter 2011 financial results were in line with our expectations for the quarter, generating strong profitability of RMB10.9 million in net income and a 17% net margin. At the same time, with the Chinese New Year holiday, our first quarter revenue is seasonally the weakest quarter of the year. We expect our sales performance to ramp up during the second half of the year. Furthermore, we implemented a significant restructuring initiative to increase the efficiency of our direct sales team, which led to certain near term volatility."

Mr. Robert Pu, Chief Financial Officer of the Company, said, "We continue to expect 15% top-line growth for the full year of 2011, driven by revenue growth in the second half of 2011. Our direct sales team reorganization and continued product launch efforts add certain near-term volatility but we are confident that the second half of 2011 will demonstrate significant growth as we begin to realize the benefits of our new structure and revenue contribution from our product launches grow."

Fourth Quarter Highlights:

• Revenue was RMB79.3 million ($12.0 million) compared to RMB82.9 million in the prior year period;
• Baquting revenue remained flat at RMB76.7 million ($11.6 million) compared to RMB76.3 million in the prior year period;
• Gross profit was RMB70.0 million ($10.6 million) compared to RMB72.0 million in the prior year period;
• Gross margin increased to 88.2% compared to 86.9% the prior year period;
• Operating income was RMB4.2 million ($0.6 million); and
• Net income was RMB278,000 or RMB0.01 ($0.00) per diluted ADS

Mr. Baizhong Xue, the Company's Chairman and Chief Executive Officer, stated, "We are proud of our revenue achievements for the full year of 2010. Driven by the steady growth of our established Baquting franchise, we have increased our full year 2010 revenue by over 11.6% to $47.8 million, the high end of our revenue guidance range provided last quarter. Our quarterly revenue continues to fluctuate due to seasonality but we believe the steady growth of our annual revenue is a testament to the long-term revenue potential of our business."

Mr. Robert Pu, Chief Financial Officer of the Company, said, "With two new products lined up in the coming year, 2011 will be an exciting time for Nuokang. At the same time, it is difficult to assess the market acceptance of our new product launches. We are confident, however, that our mature Baquting franchise will maintain its steady growth momentum. We will provide a more specific update once we are better able to assess the near term market potential of our pipeline products."