Tongjitang Chinese Medicines Comments On Share Incentive Plan

Main Category: Pharma Industry / Biotech Industry
Article Date: 20 Dec 2007 - 3:00 PDT

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Tongjitang Chinese Medicines Company (NYSE: TCM), a leading specialty pharmaceutical company focusing on the development, manufacturing, marketing and selling of modernized traditional Chinese medicine in China, commented on its employee share incentive plan. The Company recently filed a Form S-8 with the U.S. Securities and Exchange Commission to register the ordinary shares issued or issuable under the Company's 2006 Share Incentive Plan.

The maximum number of shares that could be issued under the share incentive plan is ten percent of the aggregate issued and outstanding shares at such time. As of now, the Company has granted 5,200,000 share options (equivalent to 1,300,000 ADS), with the exercise price of USD2.91 per ordinary share (USD11.64 per ADS). Approximately one-third of these options had vested in August 2007, and approximately one-third of these options will vest in 2008 and 2009, respectively. Additionally, the Company has granted 1,656,714 restricted shares (equivalent to 414,179 ADS). These restricted shares have a vesting schedule similar to that of the options above.

Xiaochun Wang, Tongjitang's chief executive officer and chairman of its board of directors, stated, "We are pleased to put into effect our share incentive plan so that we retain and motivate our employees. We live by our goal to make Tongjitang one of China's leading TCM institutions over the long-term and our seasoned, dedicated employees are the driving force in this pursuit."

About Tongjitang Chinese Medicines Company

Tongjitang Chinese Medicines Company, through its operating subsidiaries Tongjitang Pharmaceutical, Tongjitang Distribution, Tongjitang Chain Stores, and Tongjitang Planting, is a vertically integrated and profitable specialty pharmaceutical company focusing on the development, manufacturing, marketing and selling of modernized traditional Chinese medicine in China. Tongjitang's principal executive offices are located in Shenzhen, China.

Tongjitang's flagship product, Xianling Gubao, is the leading traditional Chinese medicine for the treatment of osteoporosis in China as measured by sales in Renminbi amounts. In addition to Xianling Gubao, the company manufactures and markets 10 other modernized traditional Chinese medicine products and 37 western medicines.

http://www.tongjitang.com

Safe Harbor Statement

This press release contains forward-looking statements that are made pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995. Although the Company believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, they cannot assure you that their expectations will turn out to be correct, and investors are cautioned that actual results may differ materially from those described in the forward -looking statements in this press release. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: our growth strategy; our future business development, results of operations and financial condition; our heavy dependence on the success of Xianling Gubao; our ability to market Xianling Gubao to hospitals and to retail pharmacies; the retail prices of our principal products' being subject to price control by the government authorities in China; our products' inclusion in national and provincial medical catalogs of the National Medical Insurance Program in China; our ability to obtain approval from the State Food and Drug Administration in China to convert a provisional national production standard of our principal products to a national final production standard; our ability to continue having the exclusive production rights for our products; our ability to further improve our barrenwort extraction efficiency; our ability to obtain manufacturing or marketing approval for our future products; our dependence on a limited number of distributors for a significant portion of our net revenues; our ability to protect our intellectual property rights and defend infringement or misappropriation claims by third parties; intense competition in the pharmaceutical market in China; the supply of quality medicinal raw materials; and uncertainties with respect to the legal system in China.

Further information regarding these and other risks is and will be included in our registration statement on Form F-1 and other documents filed and to be filed with the U.S. Securities and Exchange Commission. The Company does not undertake any obligation to update any forward-looking statement, except as required under applicable law. All information provided in this press release is as of the date of this press release, and the Company undertakes no duty to update such information, except as required under applicable law.

Tongjitang Chinese Medicines Company