대한뉴팜

A representative of Daehan New Pharm stated that, due to the spread of foot-and-mouth disease (FMD), sales of FMD disinfectants have increased, resulting in an 86% growth in disinfectant sales compared to the previous year, and that continuous sales growth is expected in the future. At a time when FMD, which began in Ganghwa Island, is spreading to Chungju in North Chungcheong Province and showing signs of nationwide expansion, the sales of Daehan New Pharm Co., Ltd.’s professional disinfectant products such as All Clean Up and Kingcide are increasing among local governments and agricultural cooperatives purchasing FMD disinfectants. After the outbreak of FMD, All Clean Up, a specialized disinfectant for FMD, was supplied as part of the quarantine project by the National Agricultural Cooperative Federation, and additional supplies were also delivered to regional livestock cooperatives and dairy cooperatives in Yangpyeong, Anyang, Hongseong, and Dangjin. In addition, more than ten local governments, including Hwaseong City Hall in Gyeonggi Province, have requested to purchase disinfectants, and deliveries have been made and are being prepared. Various other organizations have also contacted the company to urgently purchase disinfectants, and to meet the additional demand, the company is focusing on securing major raw materials for disinfectant production. As a result, sales of FMD-related products are increasing, and it is expected that the increase in disinfectant sales of Daehan New Pharm Co., Ltd., which has relatively high brand recognition, will stand out compared to its competitors.

On April 15, 2010, Daehan New Pharm Co., Ltd. delivered 3,470 kg of All Clean Up, a trisodium-based disinfectant, after it wased for purchase by the National Agricultural Cooperative Federation (NACF) as part of its foot-and-mouth disease (FMD) and avian influenza (AI) quarantine program. The FMD outbreak that began in Ganghwa Island in April is a Class 1 statutory contagious disease that affects cattle, sheep, pigs, and other livestock. It is a viral infection with an incubation period of 2 to 7 days, followed by high fever and symptom onset. Commonly known as “Aphthae” or “mouth-and-foot disease,” FMD is a fatal, Class 1 viral livestock disease that targets cloven-hoofed animals such as cattle, pigs, and goats. Once infected, animals develop a high fever exceeding 40 degrees Celsius, excessive salivation, and blisters on the mouth, hooves, and udders. The mortality rate is approximately 50–60% in pigs and 5–7% in cattle. Meanwhile, as part of local government quarantine projects related to disinfectant purchases, Daehan New Pharm Co., Ltd. supplied disinfectants to 17 local governments, including Gyeonggi Provincial Government, as of April 2010. All disinfectants supplied by the company are verified, high-quality products that have undergone efficacy testing conducted by university institutions.

Daehan New Pharm Co., Ltd. Analysis of Financial Results (January–December 2009)1. Increase in Product Sales(Unit: Million KRW) Jan–Dec 2009 Jan–Dec 2008 Change % Sales Products 38,643 30,695 7,948 25.9% Merchandise 1,760 3,282 -1,522 -46.4% Total 40,403 33,977 6,426 18.9% - The company discontinued its Avent cosmetics business as of mid-2009.- Sales from the discontinued business: KRW 24 million in 2009 vs. KRW 4,197 million in 2008.- As a result, merchandise sales decreased sharply, while product sales increased by 25.9% compared to the previous year.2. Significant Improvement in Operating Profit(Unit: Million KRW) Jan–Dec 2009 Jan–Dec 2008 Change Change (%) Operating Profit 5,453 (13.5%) 2,736 (8.1%) 2,717 99.3% Non-operating Income 3,540 10,990 -7,449 Non-operating Expenses 6,643 6,366 277 Income before Income Taxes from Continuing Operations 2,350 (5.8%) 7,360 (21.7%) -5,009 -68.1% (1) Operating profit reached KRW 5.45 billion (margin 13.5%) in 2009, up from KRW 2.74 billion (margin 8.1%) in 2008, representing a 99.3% year-on-year increase.1) Achieved cost reduction and profit improvement through strict profit-oriented management.2) Enhanced both sales and profitability bying and focusing on high-profit products.(2) Income before income taxes from continuing operations was KRW 2.35 billion (margin 5.8%) in 2009, compared with KRW 7.36 billion (margin 21.7%) in 2008, showing a decrease from the prior year.(Unit: Million KRW) Jan–Dec 2009 Jan–Dec 2008 Change Remarks Foreign Exchange Gains 336 10,659 -10,323 Foreign Exchange Losses 2,408 231 2,176 - A foreign exchange loss occurred due to the depreciation of the Korean won related to USD 22 million in loans receivable.- Income before income taxes from continuing operations decreased by approximately KRW 5 billion (68.1%) year-on-year, mainly due to this foreign exchange loss. However, this was a non-cash loss with no actual cash outflow.3. Improvement in Financial Structure1) Improved Liquidity(Unit: Million KRW) End-2009 End-2008 Remarks Current Assets 46,034 38,959 Increase by 7,075 Current Liabilities 24,486 34,802 Decrease by 10,316 Current Ratio 188.0% 111.9% - Current ratio improved from 111.9% at the end of 2008 to 188.0% at the end of 2009, an improvement of 76.1 percentage points.2) Improved Debt Ratio(Unit: Million KRW) End-2009 End-2008 Remarks Liabilities 35,509 42,049 Decrease by 6,540 Assets 76,318 77,064 Debt Ratio 46.5% 54.6% - Debt ratio improved from 54.6% at the end of 2008 to 46.5% at the end of 2009, an improvement of 8.1 percentage points.3) Improved Soundness of Asset Structure(Unit: Million KRW) End-2009 End-2008 Change Remarks Long-term Loans Receivable 25,687 41,498 -15,810 Total Assets 111,827 119,113 -7,286 Ratio to Total Assets (%) 23.0% 34.8% -11.9% - On June 30, 2009, USD 8 million in long-term loans were collected, resulting in a significant reduction in loan receivables.- On July 1, 2009, USD 750,000 was collected as loan interest.- On December 24, 2009, USD 3 million in long-term loans were offset through the acquisition of treasury stock.- The ratio of long-term loans to total assets improved from 34.8% at the end of 2008 to 23.0% in the current year, a reduction of 11.8 percentage points.

Notice of Convocation of the 26th Annual General Meeting of Shareholders In accordance with Article 25, Paragraph 2 of the Articles of Incorporation, the 26th Annual General Meeting of Shareholders will be convened as follows. 1. Date and Time:March 12, 2010 (Friday), 9:00 a.m. 2. Venue:Main Conference Room, Hyangnam Pharmaceutical Industrial Complex,900-1 Sangsin-ri, Hyangnam-eup, Hwaseong-si, Gyeonggi-do 3. Agenda ItemsReports: Audit Report Business Report Matters for Resolution: Agenda Item No. 1: Approval of Balance Sheet, Income Statement, and Statement of Appropriation of Retained Earnings (Proposed) Agenda Item No. 2: Partial Amendment to the Articles of Incorporation Agenda Item No. 3: Appointment of Outside Director Agenda Item No. 4: Approval of Director Remuneration Limit Agenda Item No. 5: Approval of Auditor Remuneration Limit 4. Exercise of Voting Rights by Beneficial ShareholdersPursuant to Article 314, Paragraph 5 of the Financial Investment Services and Capital Markets Act, the Korea Securities Depository (KSD) is not authorized to exercise voting rights on behalf of the shareholders at this general meeting. Therefore, shareholders do not need to submit any statements of intention regarding the exercise of voting rights to the KSD. As before, shareholders may exercise their voting rights directly by attending the meeting in person, or indirectly by submitting a proxy. February 26, 20101062-4, Namhyeon-dong, Gwanak-gu, SeoulDaehan New Pharm Co., Ltd.Chief Executive Officer: Bae Gun-woo (Seal omitted)

Daehan New Pharm Launches “Vital Oxide,” a Disinfectant for H1N1 Flu — Annual Sales Expected to Reach 10 Billion Won Daehan New Pharm Co., Ltd. (CEO Bae Gun-woo) announced that it will begin full-scale sales of “Vital Oxide” on November 27. The product was developed by the U.S.-based Vital Technologies, registered with the U.S. Environmental Protection Agency (EPA) as a disinfectant, and certified by the National Sanitation Foundation (NSF) as a food-surface sanitizer. Vital Oxide was the first product registered with the U.S. EPA as being effective in killing the H1N1 influenza virus while remaining safe for human use. The product contains stabilized chlorine dioxide, which works through oxidation by oxygen atoms to eliminate 99.9% of bacteria such as Bacillus and Staphylococcus aureus, as well as E. coli. It is an advanced formula developed by nano-sizing the composition particles, enhancing both penetration and sterilization power. Chlorine dioxide is 100% biodegradable, making this an environmentally friendly product. Whereas most hand sanitizers containing alcohol can cause dryness and rough skin by stripping away moisture and keratin, Vital Oxide offers high safety with minimal skin irritation. It can be used for hand cleansing and sterilization in households, schools, toys, and vehicles, positioning it as a well-being sterilizing and disinfecting product. Daehan New Pharm also announced that it will begin full-scale advertising campaigns through newspapers, online platforms, and other mass media starting in December. Vital Oxide will be available in two types: a portable 50 mL mist-type bottle and a 500 mL spray-type bottle. The company has already secured contracts totaling approximately 1 billion won in sales for December and expects sales to reach 10 billion won next year, based on current trends. In addition, the company received clinical trial approval for Oseltamivir Capsules (product name: Daehan New Pharm Oseltamivir Capsules), a generic version of Tamiflu for the treatment of H1N1 influenza, following the submission of its bioequivalence study plan to the Korea Food and Drug Administration.

Daehan New Pharm Co., Ltd. Analysis of Financial Results (January–September 2009)1. Increase in Product Sales (Unit: Million KRW) Jan–Sep 2009 Jan–Sep 2008 YoY Change Products 29,054 27,307 1,747 (6.4%) Merchandise 598 4,644 -4,046 (-87.1%) Total 29,652 31,951 -2,299 (-7.2%) - The company discontinued its Avent cosmetics business as of mid-2009.- As a result, sales of merchandise decreased significantly due to the discontinuation of the business, while product sales increased by 6.4% compared to the same period of the previous year.2. Significant Improvement in Operating Profit (Unit: Million KRW) Jan–Sep 2009 Jan–Sep 2008 YoY Change Change (%) Operating Profit 4,215 (14.2%) 1,492 (4.7%) 2,723 182.4% Non-operating Income 3,614 8,416 -4,802 Non-operating Expenses 5,555 3,887 1,668 Ordinary Profit 2,274 (7.7%) 6,021 (18.8%) -3,747 -62.2% (1) Operating profit rose sharply from KRW 1.5 billion (margin 4.7%) in 2008 to KRW 4.2 billion (margin 14.2%) in 2009, an increase of 182% year-on-year.1) Profit-oriented Management and Rebuilding of Business Model- Pursued strict profit-oriented management focused on cost reduction and profit maximization.- Developed a new business model: shifted from direct sales to pharmacies and hospitals to a distribution system through general and exclusive wholesalers, enabling cost savings through shorter logistics cycles and faster collection of accounts receivable, thereby improving liquidity.2)ion and Concentration of Product Portfolio- Enhanced sales and profitability by focusing on highly profitable products.- The number of items decreased from around 400 in 2008 to about 130 high-profit items by the end of September 2009.3) Cost Reduction- Company-wide cost-saving measures reduced expenses by approximately KRW 2.4 billion compared to the same period of the previous year.(2) Ordinary profit recorded KRW 2.3 billion (margin 7.7%) in 2009, down from KRW 6.0 billion (margin 18.8%) in 2008.(Unit: Million KRW) Jan–Sep 2009 Jan–Sep 2008 YoY Change Foreign Exchange Gains 730 8,294 -7,564 Foreign Exchange Losses 1,210 220 990 - An exchange loss occurred due to the depreciation of the Korean won on the USD 25 million loan receivable.- Ordinary profit declined by approximately KRW 3.7 billion (62.2%) year-on-year, primarily due to this foreign exchange loss, which was only a book loss without any actual cash outflow.3. Improvement in Financial Structure1) Liquidity Enhancement(Unit: Million KRW) End-Sep 2009 End-2008 Remarks Current Assets 44,593 38,959 Current Liabilities 24,952 34,802 Current Ratio 178.7% 111.9% - Current ratio improved from 111.9% at the end of September 2008 to 178.7% at the end of September 2009, an increase of 66.8 percentage points.2) Improvement in Debt Ratio(Unit: Million KRW) End-Sep 2009 End-2008 Remarks Liabilities 34,148 42,049 Assets 80,731 77,064 Debt Ratio 42.3% 54.6% - Debt ratio improved from 54.6% at the end of September 2008 to 42.3% at the end of September 2009, a decrease of 12.3 percentage points.3) Improvement in Asset Composition and Soundness(Unit: Million KRW) End-Sep 2009 End-2008 YoY Change Remarks Long-term Loans Receivable 30,993 41,498 -10,505 Total Assets 114,879 119,113 -4,234 Ratio to Total Assets (%) 27.0% 34.8% -7.9% - Collected USD 8 million in long-term loans on June 30, 2009, leading to a significant reduction in outstanding long-term receivables.- Collected USD 750,000 in interest on July 1, 2009.- The ratio of long-term loans to total assets improved from 34.8% at the end of September 2008 to 27.0% in the current period, a reduction of 7.9 percentage points.

Daehan New Pharm Accelerates Development of Tamiflu Generic (Oseltamivir Capsules) Daehan New Pharm Co., Ltd. (CEO Bae Gun-woo) has begun full-scale development of a generic version of “Tamiflu,” the antiviral medication for H1N1 influenza, under the product name Daehan New Pharm Oseltamivir Capsules. The company explained that, given the growing public anxiety over H1N1 influenza and the rapid increase in infections and fatalities, this initiative is intended as a precautionary measure in anticipation of a potential compulsory license in the future. To this end, the company signed a clinical testing agreement with BioSuntech Co., Ltd., a certified clinical research institution, for the Tamiflu generic, and submitted a bioequivalence study plan to the Korea Food and Drug Administration on the 3rd. Earlier, in August, Daehan New Pharm also signed a five-year supply contract with PharmSwell Bio Co., Ltd., which has the capability to manufacture the active pharmaceutical ingredient (API) for the H1N1 treatment — oseltamivir phosphate, the raw material for Tamiflu.

Daehan New Pharm Signs Exclusive Contract to Sell “Vital Oxide,” a Disinfectant Registered with the U.S. EPA KOSDAQ-listed Daehan New Pharm Co., Ltd. (CEO Bae Gun-woo) announced that it has signed an exclusive sales agreement for “Vital Oxide,” a sterilizing and disinfecting agent developed by U.S.-based Vital Technologies and registered with the U.S. Environmental Protection Agency (EPA). As public concern over the H1N1 influenza virus continues to grow and the number of infections rises exponentially, clinical tests conducted by U.S. ATS Labs confirmed that Vital Oxide eliminates 99.9% of the H1N1 virus. One of the key features of Vital Oxide is that it uses nano-technology to stabilize chlorine dioxide. Through oxidation by oxygen atoms in the chlorine dioxide, the product achieves 99.9% sterilization against Gram-positive and Gram-negative bacteria, including Staphylococcus aureus and E. coli. The disinfecting efficacy of the product has been verified through sterilization testing conducted by the Korea Testing & Research Institute (KTR). Unlike most conventional hand sanitizers that rely on alcohol and are only effective for bacterial removal, Vital Oxide also provides sterilization against bacteria and the H1N1 virus. Moreover, it has been certified by the National Sanitation Foundation (NSF) as a food-surface sanitizer, reflecting its extremely low toxicity and high level of safety. Daehan New Pharm plans to introduce Vital Oxide next month as a multipurpose product designed for hand sanitization and H1N1 infection prevention.

On August 20, Daehan New Pharm Co., Ltd. announced that its project for the development of alternative antibiotics had beened as part of the Technology Innovation Development Program organized by the Small and Medium Business Administration. The company has secured government funding of 560 million won over two years and plans to jointly develop alternative antibiotics with Sungkyunkwan University by 2011. As a condition for participation in the project, the company was required to attract matching investment from a third-party institution. Accordingly, Daehan New Pharm decided to issue convertible bonds without security totaling 560 million won, with Woori Bank designated as the underwriting institution. The company emphasized that this financing decision is unrelated to its current financial condition, and that there are no issues affecting its liquidity or financial stability.