PLYMOUTH MEETING, Pa.--(BUSINESS WIRE)--May 12, 2006 - Beijing Med-Pharm Corporation (BJGP.OB) today announced that it has entered into an agreement with Shanghai CAS Shenglongda Biotech (Group) Co., Ltd. ("Shanghai CAS") and Shanghai Rongheng International Trade Co. Ltd. of Orient International (Holding) Co. ("Orient International") regarding its potential acquisition of a majority interest in Shanghai Rongheng Pharmaceutical Co., Ltd. ("Rongheng"), a pharmaceutical distribution enterprise with operations in Shanghai, China's largest city.

Under Chinese law, a proposed sale of state-owned assets, such as equity interests in companies such as Rongheng, must be posted on a regional property exchange, in this case the Shanghai United Assets and Equity Exchange, to permit their sale to the highest qualified bidder. Under the terms of this agreement, the parties agreed to enter into definitive transactional documents if Beijing Med-Pharm emerges as the winning bidder for Rongheng on the Shanghai Exchange.

"This agreement anticipates a positive outcome for Beijing Med-Pharm in the government bidding process and represents the intention of all parties to complete the acquisition in that event," said David Gao, Chief Executive Officer of Beijing Med-Pharm. "Owning a majority equity interest in Rongheng, in addition to our recent acquisition of Beijing Wanwei Pharmaceutical Co., Ltd., would expand our ability to offer an end-to-end solution to foreign companies wishing to sell their pharmaceutical products into China."

Rongheng was established in 1999 and distributes to more than 250 hospitals in Shanghai, including all of the Class A hospitals in the city. Orient International and Shanghai CAS currently own approximately 90 percent of the equity interest in Rongheng. Beijing Med-Pharm announced in September 2005 that it had signed a non-binding letter of intent to purchase a majority interest in the company.

If the parties are able to execute definitive documents for the acquisition of Rongheng, the transaction must also be approved by the Chinese government. No assurance can be provided that the parties will be able to agree on definitive documents for the acquisition or that the acquisition will be completed.

Beijing Med-Pharm expects to participate in the management of Rongheng after completion of definitive documents and prior to the approval from the Chinese government.

In October, Beijing Med-Pharm received approval from the Ministry of Commerce of the People's Republic of China of its acquisition of 100 percent of the equity interests in another pharmaceutical distributor, Beijing Wanwei Pharmaceutical Co., Ltd., that serves Beijing, China's capitol. This was the first time that a U.S. corporation or other foreign firm had been allowed to acquire a Chinese pharmaceutical distribution firm.

About Beijing Med-Pharm Corporation

Beijing Med-Pharm is a pharmaceutical marketing and distribution company that offers the following services in China: pre-market entry analysis; clinical trial management; product registration; market research; pharmaceutical distribution to hospitals; and pharmaceutical marketing to physicians, hospitals and other healthcare providers.