Tongjitang Chinese Medicines Company (NYSE: TCM) (“Tongjitang” or the “Company”), a vertically integrated and profitable specialty pharmaceutical company focusing on the development, manufacturing, marketing and selling of modernized traditional Chinese medicine (“TCM”) in China, today announced that the Ministry of Science and Technology and the National Administration for the Protection of State Secrets of the People’s Republic of China have granted the Company national trade secret status for its flagship product, Xianling Gubao (“XLGB”).
The trade secret program in China protects intellectual property without publicly disclosing the detailed information involved in a patent application, such as manufacturing techniques or TCM formulae. Additionally, the state grants trade secret status to leading products demonstrating unique commercial value and brand value. Such products typically have a long history and proven efficacy in their respective markets, and presently in China there are approximately twenty TCM products with trade secret status.
Xiaochun Wang, Tongjitang’s chief executive officer and chairman stated, “We are ecstatic to announce this significant milestone for our Company – which is a great testament to our leadership in the modernized TCM market. We are one of only a handful of modernized TCM providers to earn this honor and we are very pleased with the benefits we’ll receive, such as manufacturing exclusivity and pricing protection. We also expect that new product developments, such as our next generation XLGB product, should receive expedited treatment from China’s State Food & Drug Administration (“SFDA”) when the time comes.”
Specifically, trade secret status benefits Tongjitang in the following ways:
* Manufacturing exclusivity. Trade secret status ensures that for a five year period, SFDA will not approve any other products carrying the same medicinal formula in any dosage formats.
* Pricing. Trade secret status can strengthen Tongjitang’s pricing power for XLGB despite potential fluctuations in China’s national insurance coverage policies. As a product protected by trade secret status, XLGB’s position as the preferred TCM remedy for osteoporosis at many state hospitals and clinics may be further enhanced since the consumers may likely perceive the trade secret status conferred by the governmental organizations as supporting evidence or proof of XLGB’s efficacy.
* SFDA approval. Trade secret status can expedite the SFDA’s approval of modified or new dosage and format, and new indication treatment, such as XLGB chewable tablets, and next generation XLGB products respectively.
ABOUT TONGJITANG CHINESE MEDICINES COMPANY:
Tongjitang Chinese Medicines Company, through its operating subsidiaries Tongjitang Pharmaceutical, Tongjitang Distribution, Tongjitang Chain Stores, and Tongjitang Planting, is a vertically integrated and profitable specialty pharmaceutical company focusing on the development, manufacturing, marketing and selling of modernized traditional Chinese medicine in China. Tongjitang’s principal executive offices are located in Shenzhen, China.
Tongjitang’s flagship product, Xianling Gubao, is the leading traditional Chinese medicine for the treatment of osteoporosis in China as measured by sales in Renminbi amounts. In addition to Xianling Gubao, the company manufactures and markets 10 other modernized traditional Chinese medicine products and 37 western medicines. Visit www.tongjitang.com for more information.
Safe Harbor Statements:
This press release contains forward-looking statements that are made pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995. Although the Company believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, they cannot assure you that their expectations will turn out to be correct, and investors are cautioned that actual results may differ materially from those described in the forward -looking statements in this press release. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: our growth strategy; our future business development, results of operations and financial condition; our heavy dependence on the success of Xianling Gubao; our ability to market Xianling Gubao to hospitals and to retail pharmacies; the retail prices of our principal products’ being subject to price control by the government authorities in China; our products’ inclusion in national and provincial medical catalogs of the National Medical Insurance Program in China; our ability to obtain approval from the State Food and Drug Administration in China to convert a provisional national production standard of our principal products to a national final production standard; our ability to continue having the exclusive production rights for our products; our ability to further improve our barrenwort extraction efficiency; our ability to obtain manufacturing or marketing approval for our future products; our dependence on a limited number of distributors for a significant portion of our net revenues; our ability to protect our intellectual property rights and defend infringement or misappropriation claims by third parties; intense competition in the pharmaceutical market in China; the supply of quality medicinal raw materials; and uncertainties with respect to the legal system in China. Further information regarding these and other risks is and will be included in our registration statement on Form F-1 and other documents filed and to be filed with the U.S. Securities and Exchange Commission. The Company does not undertake any obligation to update any forward-looking statement, except as required under applicable law. All information provided in this press release is as of the date of this press release, and the Company undertakes no duty to update such information, except as required under applicable law