AlphaRx unit enters into joint venture, will construct new facility in China

By Lisa Kerner

Erie, Pa., May 1 - AlphaRx Inc.'s wholly owned subsidiary, AlphaRx International Holdings Ltd. (AIH), has entered into a joint venture agreement with an unnamed Chinese marketing company to establish a new company to manufacture, market and distribute AIH's proprietary line of pharmaceutical and consumer health products in Asia.

The Chinese marketing company agreed to fund the joint venture with working capital of $31 million. In lieu of payment to the joint venture company, AIH will license certain products and develop new novel branded generic products.

Under the agreement, the new company will issue to AIH common shares equivalent to 30% of its total issued and outstanding shares. AIH will also receive a 5% royalty on all gross sales.

The new company plans to complete construction of a state-of-the-art manufacturing facility in Lianyungang City, Jiangsu Province, China, by the first quarter of 2007.

AIH is a Hong Kong-based pharmaceutical company.

Located in Markham, Ont., AlphaRx is an emerging biopharmaceutical company specializing in products for arthritis, tuberculosis, ocular infection and inflammation, cataracts, hospital acquired pneumonia and sepsis.

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