China Biologic Products, Inc, one of the leading plasma-based pharmaceutical companies in the People's Republic of China (PRC), announced that on October 10, 2008, its indirect majority owned subsidiary, Shandong Taibang Biological Products Co, Ltd (Taibang), entered into an agreement to acquire 35% of the equity interest in Xi'an Huitian Blood Products Co, Ltd (Huitian), a biopharmaceutical company based in Xi'an, Shaanxi Province from Fan Qingchun (the Shareholder), a PRC citizen, for an aggregate purchase price of RMB 44,000,000 (approximately $6.44 million). The transaction is expected to be completed within two months.

Expected benefits of the acquisition include: increase in plasma supply and additional production capacity, expansion into Shaanxi Province, which has had historically high collection volumes, additional synergies by leveraging overhead and research and development spending, solidifies position as the largest non-state-owned producer of plasma-based products in China.

"We are excited about the potential of this acquisition to further strengthen our position in the plasma-based biopharmaceutical industry in China. Following our recently announced transaction to acquire a 90 per cent controlling interest in Chongqing Dalin Biologic Technologies Co Ltd (Dalin), this will transform China Biologic into the largest non-state-owned producer of plasma based products in China,' said Chao Ming Zhao, CEO of China Biologic Products. "We plan to supply technical support to Huitian for its renovation, strengthen its research and development program and provide the management expertise to grow the business. We believe the two acquisitions position China Biologic to significantly grow our revenues and profitability in 2009, while affording us the ability to increase our supply of plasma and achieve higher utilization levels over time across our expanded geographic platform."

Huitian is the only biopharmaceutical manufacturer in Shaanxi Province, which has a population of 37 million. Huitian produces about 80 tons of plasma-based products per year and has 200 tons of annual production capacity. China Biologic believes that Huitian currently has approximately 1.2 per cent market share in China, which would result in a combined market share of approximately 17 per cent if the recently announced Dalin acquisition is included. The top six largest plasma-based biopharmaceutical companies in China have a total market share of approximately 50 per cent.

Huitian is one of the 32 government approved plasma-based product producers in China, and it is in compliance with Good Manufacturing Practices ('GMP') standards. It is also approved by the PRC's State Food and Drug Administration ('SFDA') to produce four types of plasma-based products including Human Albumin, Human Immunoglobulin, Human Immunoglobulin for Intravenous Injection, and Human Hepatitis B Immunoglobulin.

Huitian currently owns three out of the four plasma collection stations in Shaanxi Province that have passed government standards, yielding approximately 80 tons of plasma supply per year. Shaanxi Province historically has had a high collection volume with approximately ten plasma collection stations in operation, collecting approximately 300 tons of plasma supply each year. Management believes Huitian's plasma supply in Shaanxi Province has strong long-term growth potential.

China Biologic will fund Taibang's acquisition of the 35% interest in Huitian. China Biologic believes that it will be able to secure the large majority of the financing required for the two acquisitions from domestic bank facilities and available cash resources. Taibang's other shareholder, Shandong Institute of Biological Products, who owns approximately 17% of Taibang, contractually agreed with China Biologic's wholly-owned subsidiary, Logic Express, to allocate to Logic Express all of the economic benefits (i.e., revenues and net income) and burdens (i.e., expenses, losses and liabilities) of the 35% interest in Huitian that will be acquired by Taibang. Shandong Institute of Biological Products will not contribute any amounts toward the financing of Huitian. The remaining 65% interest in Huitian is owned by Shaanxi Power Construction Group Corporation ('SPCGC') in China, a power construction company in Shaanxi Province. According to the terms of the contract, both parties have agreed not to sell their equity interests in Huitian to a third party within the next five years, giving each other the right of first refusal thereafter. China Biologic plans to expand Huitian's plasma collection capacity in Shaanxi Province and eventually acquire the remaining interest from SPCGC if such opportunity exists.

"We are pleased to announce this second significant acquisition. We believe this acquisition, in addition to the previously announced acquisition of Qianfeng, will further increase our plasma supply, diversify our customer base, expand our geographic reach and enable us to benefit from economies of scale," said Tung Lam, CEO of Shandong Taibang Biological Products. "We are building a strong high-technology, biopharmaceutical franchise in China. Our products remain in great demand and are critical in saving lives. Therefore, we believe our company is insulated from economic cycles and in the long-term our shareholders will be rewarded."