American Oriental Bioengineering Completes Acquisition of Changchun Xinan Pharmaceutical Group Company Ltd.

Thursday, September 6, 2007 General News
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NEW YORK, Sept. 6 American OrientalBioengineering, Inc. (NYSE: AOB) ("AOBO"), a leading manufacturer anddistributor of plant-based pharmaceutical and nutraceutical products, todayannounced that it has completed the acquisition of Changchun XinanPharmaceutical Group Company Limited ("CCXA"). The purchase price for this allcash transaction is approximately USD $28.5 million (RMB 215 million).

CCXA is a privately owned business primarily serving the rural healthcaremarket with more than 100 plant-based pharmaceutical products in itsportfolio. AOBO believes CCXA's leading products will be highly complimentaryto its existing product line and will also expand the variety of AOBO'scurrent product offering. CCXA's products cover both the prescription and OTCmarkets. In 2006, CCXA was profitable and generated approximately USD$9.0million (68 million RMB) in revenue annually with approximately 40 productscontributing to the overall revenue. Some of these products include Nubao, ablood circulation enhancer for treatment of premenstrual syndromes;Kanguzensheng Tablet for the treatment of bone spurs; Yakangling, a plant-based pharmaceutical product that treats gingivitis; and Nanbao, a plant basedmale sexual drive enhancer.

Tony Liu, Chief Executive Officer of AOBO stated, "We are pleased towelcome CCXA to our expanding business portfolio. CCXA has promising andprofitable products that we intend to leverage across our large distributionnetwork. With over 100 products in its portfolio, CCXA has the opportunity tobenefit from the government's efforts to offer affordable pharmaceuticalproducts for its citizens, particularly in rural areas of the country and weare pleased that most of its products are currently covered under thegovernment insurance plan. We intend to identify ways to improve CCXA'soperating efficiency, add greater structure to the product line and implementa more beneficial pricing strategy. We look forward to enhancing overallproductivity and efficiency in this business."

"AOBO continues to be an aggressive brand consolidator in China's consumerhealthcare market. We have successfully executed the integration of severalacquisitions and plan to continue to seek out strong targets like CCXA thatcan leverage our solid marketing, sales, and distribution platforms,"concluded Liu.

The monetary exchange rate used for this transaction is US$1.00 : RMB 7.55

About American Oriental Bioengineering, Inc.

American Oriental Bioengineering is a leading, fully integrated, plantbased pharmaceutical and plant based nutraceutical company dedicated toimproving health through the development, manufacture and commercialization ofmodernized plant based products in China.

Safe Harbor Statement

This news release contains forward-looking statements as defined by thePrivate Securities Litigation Reform Act of 1995. Forward-looking statementsinclude statements concerning plans, objectives, goals, strategies, futureevents or performance, and underlying assumptions and other statements thatare other than statements of historical facts. These statements are subject touncertainties and risks including, but not limited to, product and servicedemand and acceptance, changes in technology, economic conditions, the impactof competition and pricing, government regulation, and other risks containedin reports filed by the Company with the Securities and Exchange Commission.All such forward-looking statements, whether written or oral, and whether madeby or on behalf of the company, are expressly qualified by the cautionarystatements and any other cautionary statements which may accompany theforward-looking statements. In addition, the company disclaims any obligationto update any forward-looking statements to reflect events or circumstancesafter the date hereof.

SOURCE American Oriental Bioengineering, Inc.


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