Hutchmed Regulatory News (HCM)

17 Jan 2007 07:00

Hutchison China Meditech Limited17 January 2007 For Immediate Release Hutchison China MediTech Limited ("Chi-Med") (AIM: HCM) Related Party Transaction Chi-Med formalises China Sales and Distribution Arrangements London: Wednesday, 17 January 2007: Chi-Med today announces that its jointventure China health supplements business, Hutchison Healthcare Limited ("HHL"),has entered into a distribution agreement (the "Agreement") with HutchisonWhampoa (China) Commerce Limited ("HWCCL") to formalise the existingarrangements pursuant to which HHL supplies, and HWCCL buys and distributes, ZhiLing Tong products (the "Products") in various provinces in China. TheAgreement, which relates to distribution arrangements previously carried outunder an agreement referred to in Chi-Med's Admission Document, is for a termcommencing with effect from 4 January 2006 to 31 December 2007 (the "Term"). The aggregate amount of net sales of the Products (less rebate) under theAgreement accumulated up to the end of December 2006 reached RMB16.1 million(approximately US$2.02 million). HWCCL is also appointed as an agent of the Products in various provinces inChina during the Term. The Agreement contains typical conditions for atransaction of this type, including rebates, credit line and credit period, aswell as the sharing of certain marketing expenses. HHL is based in Guangzhou, Guangdong Province, China and researches, develops,manufactures and sells Western and Traditional Chinese Medicine ("TCM") healthsupplement products. Zhi Ling Tong capsules are made from pure docosahexaenoicacid ("DHA"), an Omega-3 fatty acid extracted from algae, and are designed topromote the brain and retinal development of babies and young children. Zhi LingTong calcium lactate powder is designed as a calcium supplement for babies andyoung children. HWCCL is an indirect wholly-owned subsidiary of Hutchison Whampoa (China)Limited, which holds an effective interest of approximately 72% of the issuedand outstanding securities of Chi-Med. Chi-Med owns an effective interest ofapproximately 67.97% of the registered capital of HHL. As such, the transactionis classified as a related party transaction under the Rules of the AlternativeInvestment Market of the London Stock Exchange, on which Chi-Med is admitted totrade. The directors of Chi-Med consider, having consulted Lazard & Co. Limited,Chi-Med's Nominated Adviser, that the terms of the Agreement are fair andreasonable insofar as Chi-Med's shareholders are concerned. Ends Enquiries Chi-Med Telephone: +852 2121 8200Christian Hogg, CEO Citigate Dewe Rogerson Telephone: +44 (0) 20 7638 9571Anthony Carlisle +44 (0) 7973 611 888Chris Gardner +44 (0) 7903 737 649Yvonne Alexander +44 (0) 7866 610 682 About Chi-Med Chi-Med is the holding company of a pharmaceutical and healthcare group basedprimarily in China and was admitted to trading on the Alternative InvestmentMarket of the London Stock Exchange in May 2006. Chi-Med is focused onresearching, developing, manufacturing, and selling pharmaceuticals, healthsupplements and other consumer health and personal care products derived fromTraditional Chinese Medicine ("TCM") and botanical ingredients. Its overall aimis to draw on the untapped wealth of knowledge and history of usage in the TCMindustry to develop products for the global market. Chi-Med has threecomplementary businesses: drug R&D, China healthcare and consumer products. Chi-Med engages in the research and development, manufacture and sale of Westernand TCM health supplement products through its subsidiary Hutchison HealthcareLimited ("HHL"). Many of the formulations of HHL's supplement products are basedon World Health Organisation's recommended daily intake of various activeingredients. HHL's two major products are Nao Ling Tong capsules and Zhi LingTong capsules. Nao Ling Tong is made from Omega-3 fatty acids with a high DHA/EPA ratio and is used to improve memory by supplementing DHA levels in thebrain. Zhi Ling Tong is made from pure DHA, an Omega-3 fatty acid extracted fromalgae, and is used to promote the brain and retinal development of babies andyoung children. Chi-Med is majority owned by Hutchison Whampoa Limited, an internationalcorporation listed on the Main Board of The Stock Exchange of Hong Kong Limited. This information is provided by RNS The company news service from the London Stock Exchange