AXM Pharma Completes Acquisition Of Controlling Interest In Chinese Pharmaceutical Distributor

New York - AXM Pharma, Inc., a manufacturer of proprietary and generic pharmaceutical and nutraceutical products for the Chinese and other Asian markets, announced that it has completed the acquisition of a 51% interest in Liaoning Ming Cheng Medical & Pharmaceutical Co., Ltd. ("Ming Cheng") through the issuance of 3.7 million shares of AXM Pharma's common stock. Founded in 2000, Ming Cheng is a distributor of pharmaceutical and other medical products in China. The acquisition closed on July 1, 2006. AXM will consolidate the results of Ming Cheng for financial reporting purposes beginning in the Company's third quarter.

Founded in 2002, Ming Cheng is located in Shenyang, a key pharmaceutical distribution center in northeastern China, and is mainly engaged in the distribution of patented Chinese Medicines, antibiotics, biochemical medicines and healthcare products. Ming Cheng's sales are primarily in Beijing, Tianjin and the provinces of Hebei, Liaoning, Jilin and Heilongjiang. Ming Cheng distributes over 5,000 products and has exclusive distribution rights to approximately 100 products. The company has approximately 100 employees and sells to approximately 13,000 wholesalers and retail outlets.

"We are pleased that we were able to complete the acquisition of a majority interest in Ming Cheng," said Wang Weishi, CEO of AXM Pharma. "Ming Cheng's large customer will allow us to market our innovative pharmaceutical products to an expanded customer base. In addition, its broad range of innovative products, including many proprietary products, will allow us to penetrate new markets and further expand the customer base. We believe this transaction should enable the company to significantly increase revenue during the second half of the year, and improve its operating results."

SOURCE: AXM Pharma