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Kun Run Biotechnology, Inc. Announces Third Quarter 2009 Results

Friday, November 13, 2009 General News
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HAIKOU, China, Nov. 13 Kun RunBiotechnology, Inc. (the "Company" or "Kun Run") (OTC Bulletin Board: KURU), aleading bio-pharmaceutical company in China that focuses on manufacturing andsales of peptides and peptide-based drugs, today announced its financialresults for the third quarter ended September 30, 2009.
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Third Quarter 2009 Results

Net revenue was $4.0 million for the quarter ended September 30, 2009, up65% from $2.4 million in the third quarter of 2008. This increase was mainlyattributable to the increase in sales of our products. For the three monthsended September 30, 2009, the sales of TP-5 products were $1.95 million,accounting for 48% of total sales, increased by $745,256, or 62% from $1.20million in the same period of 2008. Thymosin Alpha 1 for injection graduallybecame our best selling product since its superior curative effects and strongmarket acceptance, contributing $1,326,439 in revenue (33% of total sales) forthe three months ended September 30, 2009, representing a 57% increase fromthe same period of 2008. Meanwhile, DDAVP generated $508,063, or 12% of totalsales for the three months ended September 30, 2009, an increase of 158% from$196,902 for the same period in 2008.
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Gross profit for the quarter was $2.8 million, a 62% increase from $1.8million in the third quarter of 2008. Gross margin was 70% in the thirdquarter of 2009.

Operating expenses in the third quarter of 2009 were $446,106, down 30%from $637,324 in the third quarter of 2008. This decrease was primarily due tothe reduction of provision for doubtful debts and reduced research anddevelopment costs.

Operating income was $2.4 million, or 59% of revenue, an increase of 114%from $1.1 million, or 46% of revenue, in the third quarter of 2008.

Net income was $2.0 million, or $0.08 per share (basic and diluted),compared to a net income of $865,524, or $0.04 per share (basic and diluted),in the third quarter of 2008.

Nine months Ended September 30, 2009 Results

Net revenue was $10.1 million in the quarter ended September 30, 2009, up30% from $7.8 million in the quarter ended September 30, 2008. Gross profitmargin was 71%, which remained relatively unchanged as compared to the sameperiod in 2008.

Operating income was $6.0 million, or 59% of revenue. Net income was $5.1million or $0.20 per basic and fully diluted share, up 48% from $3.4 million,or $0.14 per fully diluted share in the nine-month period of 2008.

Financial Condition

As of September 30, 2009, the Company had $230,539 in cash and cashequivalents. Kun Run generated $2.9 million in cash flow from operations inthe first nine months of 2009, compared to $4.3 in the first nine months of2008. Shareholders' equity stood at $24.0 million, with a debt to equity ratioof 0.55 at the end of September 30, 2009.

Mr. Ye Xiaoqun, Chief Executive Officer of Kun Run Biotechnology commented,"I am satisfied with our third quarter performance, as we achieved recordrevenue and solid profits. During the past nine months, Kun Run hasdemonstrated success in developing and commercializing peptide medicine in theChina market and has built reputable brand awareness with superior quality.With the extra capacity added by the newly operated facility, we havestrengthened and diversified our product portfolio in China to support themarket growth. We are committed to a profitable growth strategy."

About Kun Run Biotechnology, Inc.

Kun Run Biotechnology Ltd., together with its subsidiaries, engages inmanufacture and sale of polypeptide medicines. It uses solid phase peptidesynthesis (SPPS) and advanced purifying technology to produce varioustherapeutic polypeptide drugs, of which is 'TP-5' most known for efficientlyregulating humans' immune systems in order to defend and cure malignantdiseases. The company maintains two state-of-art manufacturing plants andpossesses one of the largest peptide synthesizing capacities across Asia.

Safe Harbor Statement

Certain statements set forth in this press release constitute'forward-looking statements.' Such statements are not guarantees of futureperformance and are subject to risks and uncertainties that could cause theCompany's actual results and financial position to differ materially fromthose included within the forward-looking statements. Forward-lookingstatements involve risks and uncertainties, including those relating to theCompany's ability to introduce, manufacture and distribute new drugs. Actualresults may differ materially from predicted results, and reported resultsshould not be considered as an indication of future performance. The potentialrisks and uncertainties include, among others, the Company's ability to obtainraw materials needed in manufacturing, the continuing employment of keyemployees, the failure risks inherent in testing any new drug, the possibilitythat regulatory approvals may be delayed or become unavailable, patent orlicensing concerns that may include litigation, direct competition from othermanufacturers and product obsolescence. More information about the potentialfactors that could affect the Company's business and financial results areincluded in the Company's filings, available via the United States Securitiesand Exchange Commission.Third Quarter 2009 Highlights -- Revenues increased 65% from the third quarter of 2008 to a quarterly revenue of $4.0 million -- Gross profit was $2.8 million, compared to $1.8 million in the third quarter of 2008 -- Operating income was $2.4 million, an increase of 114% from $1.1 million in the third quarter of 2008 -- Net income increased 137%, compared to $2.0 million in the third quarter of 2008, or $0.08 per basic and fully diluted share.

SOURCE Kun Run Biotechnology, Inc.
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