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CHINDEX INTERNATIONAL, INC. ANNOUNCES
EXCLUSIVE AGREEMENT WITH POLICHEM, S.A.,
A EUROPEAN BASED PHARMACEUTICAL COMPANY

BETHESDA, MARYLAND (July 22, 1998) . . . . Chindex International, Inc. (Nasdaq:CHDX) (U.S. - China Industrial Exchange, Inc.), the largest independent U.S. distributor of Western healthcare products in the People’s Republic of China, today announced an exclusive agreement with Polichem S.A. (Polichem), for the nationwide marketing, sales and distribution of Polichem’s new immunostimulating Polimod pediatric formulation in China. Under the terms of the agreement, Chindex will assume exclusive responsibility for importation, marketing and physical distribution of the product beginning immediately. Polichem is an affiliate of Poli Group, a major manufacturer of chemical-pharmaceutical products with a strong presence in Europe.

"We estimate there to be a multi-million dollar market at this time in China for this class of product," said Mr. Alessandro Cescut, Intercontinental Director of Polichem. "This type of therapeutic stimulation of the immune system is proven effective in children with recurrent respiratory infections and in adults with chronic, obstructive pulmonary disease. We believe our new Polimod formulation will have an excellent reception in the China market. We will work with Chindex to first address the hospital market, and we are expecting that the OTC retail pharmacy markets will be increasingly accessible in the future."

"Polimod is a perfect addition to our growing portfolio of specialty pharmaceuticals," Chindex Chairperson, President and CEO Roberta Lipson commented in Beijing. "The overall market in China for foreign drug suppliers is already in the billions of dollars annually. As part of the ongoing reform of the Chinese healthcare system, we are also expecting the establishment of an over-the-counter (OTC) product category in the near future. This OTC designation will usher in a tremendous explosion in the mass market for foreign-supplied home healthcare products sold through retail pharmacies. With our early investment in distribution systems to access these market sectors with home health products and drugs such as Polimod, we will be in an exceptional strategic position to take advantage of this emerging market."

Dr. Eric Chien, Director of Pharmaceutical Business Development at Chindex commented on the agreement with Polichem: "We will begin targeting the sale of Polimod to the hospital market in five major metropolitan areas in the first year and plan to expand to the twenty top cities by the end of the year 2000. We will also begin marketing and distribution to the retail pharmacy markets in the Shanghai area where Chindex has already begun test marketing and distribution programs for other home healthcare products. We are also negotiating for additional drugs to add to our portfolio which will complement Polimod."

*****

Chindex is a leading American company in healthcare in the Greater Chinese marketplace including Hong Kong and Macau. It provides representative and distribution services to a number of major multinational companies including Acuson, Johnson & Johnson, Kendall Healthcare Products, and Schering AG. It also operates a private hospital corporation in China. With over seventeen years of experience, 200 employees, and operations in the United States, China and Hong Kong, the Chindex strategy is to expand its cross-cultural reach by providing leading edge technologies, quality products and services to Greater China’s professional communities.

 

U.S.-CHINA INDUSTRIAL EXCHANGE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

         
   

Three Months Ended June 30,

 

Three Months Ended June 30,

 
     

1998

   

1997

   

1998

   

1997

 
Sales  

$

5,492,000

 

$

3,757,000

 

$

8,405,000

 

$

9,255,000

 
Net commission income    

16,000

   

81,000

   

16,000

   

195,000

 
Total Revenue    

5,508,000

   

3,838,000

   

8,421,000

   

9,450,000

 
                           
Cost and Expenses                          

Cost of goods sold

   

3,564,000

   

2,744,000

   

5,702,000

   

6,669,000

 

Salaries and payroll taxes

   

1,233,000

   

1,020,000

   

2,407,000

   

1,855,000

 
Travel and entertainment    

483,000

   

644,000

   

756,000

   

949,000

 
Other    

1,198,000

   

935,000

   

2,085,000

   

1,575,000

 
                           
Total Costs and Expenses    

6,478,000

   

5,343,000

   

10,950,000

   

11,048,000

 
                           
Loss from operations  

(

970,000

)

(

1,505,000

)

(

2,529,000

)

(

1,598,000

)

                           
Other income and expenses                          
Interest expense    

27,000

   

5,000

   

39,000

   

21,000

 
Interest income    

41,000

   

111,000

   

108,000

   

320,000

 
Miscellaneous Income    

288,000

   

140,000

   

426,000

   

279,000

 
                           
Total other income/expenses    

302,000

   

246,000

   

495,000

   

578,000

 
                           
Loss before provision                          
for income taxes  

(

668,000

)

(

1,259,000

)

(

2,034,000

)

(

1,020,000

)

(Provision for) /benefit from                          

income taxes

 

(

3,000

)

(

498,000

)

(

44,000

)

 

424,000

 
Net loss  

$(

671,000

)

$(

761,000

)

$(

2,078,000

)

$(

596,000

)

Net loss per share  

$(

0.11

)

$(

0.12

)

$(

0.33

)

$(

$0.09

)

Weighted average shares

outstanding

   

6,322,500

   

6,322,500

   

6,322,500

   

6,322,00

 

 

 

 

 

 

The statements in this press release that relate to future plans, events or performance are forward-looking statements that involve risks and uncertainties, including risks associated with uncertainties pertaining to customer orders, demand for products and services, development of markets for the Company’s products and services and other risks identified in the Company’s SEC filings. Actual results, events and performance may differ materially. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

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Copyright 1997 U.S.-China Industrial Exchange, Inc. All Rights Reserved.