Tongjitang Chinese Medicines Co. TCM (NYSE)

November 21, 2007 – 7:00 pm

Tongjitang Chinese Medicines Company (Tongjitang), incorporated on May 16, 2006, is a vertically integrated and specialty pharmaceutical company focusing on the development, manufacturing and marketing of Chinese medicine. The Company’s principal product, Xianling Gubao, is a Chinese medicine for the treatment of osteoporosis in China.ÿ Tongjitang’s product portfolio consists primarily of Xianling Gubao and three other China State Food and Drug Administration (SFDA)-approved Chinese medicines.

The Company’s product development pipeline includes potential expanded uses of its existing products for medical indications and a number of product candidates that are intended to address medical needs in China, primarily in the therapeutic areas of women’s health, mental health and dermatology. In addition to Xianling Gubao, the Company manufactures and markets a portfolio of 10 other Chinese medicines approved by the SFDA, including three principal products: Zaoren Anshen Capsules, an over the counter (OTC) medicine for treating insomnia; Moisturizing and Anti-Itching Capsules, an OTC medicine for treating inflammatory skin conditions, and Dianbaizhu Syrup, a prescription medicine for treating vertigo. It also manufactures 37 western medicines.

During the year ended December 31, 2006, 2,257 Chinese hospitals included Xianling Gubao on their lists of approved prescription medicines, or formularies. The Company refers to these hospitals as formulary hospitals. Tongjitang manufactures 48 products, consisting of 11 Chinese medicines and 37 western medicines. Its principal products are four Chinese medicines: Xianling Gubao, Zaoren Anshen Capsules, Moisturizing and Anti-Itching Capsules, and Dianbaizhu Syrup.

Xianling Gubao

The Company sells Xianling Gubao both as a prescription and as an OTC medicine. Xianling Gubao is a formulation consisting of extracts of six different plants, including barrenwort. Tongjitang has conducted two double-blind, placebo-controlled trials of Xianling Gubao for the treatment of osteoporosis in a total of 175 patients. In these trials, the subjects received either Xianling Gubao or a placebo, a substance that is not a drug but bears nearly identical physical attributes, such as appearance, weight and taste, to the drug itself. One trial evaluated 85 osteoporosis patients who took either Xianling Gubao or the placebo. Forty-three of 85 subjects took Xianling Gubao, and the other 42 took the placebo. The trial compared the means of bone mineral density changes in two groups at three time points (baseline, 12 and 24 months), using body weight as a covariate, or independent variable.

Tongjitang is conducting a Phase IV, randomized, double-blind trial to evaluate Xianling Gubao for the prevention of ischemic bone necrosis, a side effect of systemic steroid use. Approximately 800 patients who take systemic steroid therapy will be randomized at 10 medical centers to either Xianling Gubao or placebo. The dose of Xianling Gubao will be approximately twice that marketed. In December 2006, the Company applied to register Xianling Gubao as a food additive in Singapore.

Zaoren Anshen Capsules

Zaoren Anshen Capsules are an OTC medicine used to treat insomnia and improve sleep quality. Zaoren Anshen Capsules are a formulation consisting of three plant extracts and contain active ingredients described in traditional Chinese medicine literature as having sedative and sleep-inducing properties. In particular, extract of Zizyphus Hu, one of the plants used in Zaoren Anshen Capsules, has demonstrated inhibitory effects on excitatory signal pathways in the brain of test animals. Another active ingredient in Zaoren Anshen Capsules, beta-sitosterol, has been shown to reduce anxiety in test animals.

Moisturizing and Anti-Itching Capsules

Moisturizing and Anti-Itching Capsules, based on a formulation consisting of six plant extracts, are an OTC medicine used for the treatment of severe itchiness caused by multiple conditions, including dry skin, skin rashes, dermatitis and aging skin. In pre-clinical trials, Moisturizing and Anti-Itching Capsules were shown to reduce the reaction of guinea pigs to histamine, a substance that causes local inflammation and itchiness and is the target for antihistamines, a western medicine prescribed for itchiness. In addition, animal tests show that Moisturizing and Anti-Itching Capsules have an anti-inflammatory effect. The Company conducted clinical trials on Moisturizing and Anti-Itching Capsules involving 53 patients who had been diagnosed with itchiness from various causes. For two weeks, 37 of the 53 patients received Moisturizing and Anti-Itching Capsules and the remaining 16 received another SFDA-approved Chinese medicine for the treatment of the same symptoms. Approximately 99.1% of the 37 patients who took Moisturizing and Anti-Itching Capsules experienced significant improvement in itching symptoms and associated skin damage, while 75% of the 16 patients who took the other medicine experienced a similar degree of improvement.

Dianbaizhu Syrup

Dianbaizhu Syrup is a prescription medicine used to treat vertigo, which is a feeling of dizziness when one’s sense of balance has been disrupted. It is made up of an extract from Gaultheria yunnanensis (Franch) Rehd. The efficacy of Dianbaizhu Syrup may be due to its effect in increasing the volume of blood flow in the patient’s heart and brain. One of the trials conducted on Dianbaizhu Syrup evaluated 182 patients with Meniere’s disease, a cause of vertigo. Ninety-four patients of the 182 patients took Dianbaizhu Syrup, while the remaining 88 patients took an active control drug, such as Venoruton (Trihydroxyethylrutoside) injection, which is a western medicine approved by the SFDA for the treatment of vertigo. Ninety-one or 96.9% of the patients in the treatment group, as compared with 77 or 87.6% of the patients in the control group, reported either the disappearance of vertigo symptoms or a significant reduction in vertigo symptoms.

Another trial compared Dianbaizhu Syrup with Flunarizine, an injectible western medicine approved by the SFDA and used in the treatment of vertigo symptoms. This trial involved a total of 83 patients, 42 of whom took Dianbaizhu Syrup and the remaining 41 of whom took Flunarizine for four weeks. Both groups presented significant improvement in vertigo symptoms. In October 2006, the Company initiated a Phase IV clinical trial to evaluate the efficacy and safety of Dianbaizhu Syrup.

The Company competes with Guizhou Fuhua Pharmaceutical Co., Ltd. and Beijing Qihuang Pharmaceutical Co., Ltd.

source: http://stocks.us.reuters.com/stocks/fullDescription.asp?rpc=66&symbol=TCM

Tags: Chinese Medicine, NYSE, stock, tongjitang

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