Paclitaxel
Paclitaxel is extracted from the bark of the yew tree (Taxus), which grows in Asia, Europe and North America. First commercialised in 1994 by Bristol-Myers Squibb under the brand name, Taxol, it prevents individual cancer cells from separating into two new cells, thus inhibiting further cancer growth. It is in a class of compounds known as taxanes and it is administered by injection. Today, this drug is one of the main-stream treatments for cancer of the ovaries, breast, certain types of lung cancer, and a cancer of the skin and mucous membranes more commonly found in patients with acquired immunodeficiency syndrome (AIDS). It is estimated to have generated revenues in excess of US$9 billion since it came to market.

Paclitaxel and TNP
TNP is one of several companies in China extracting paclitaxel from the yew tree. It supplies the raw material indirectly to manufacturers who produce the final drug ready for injection. At present, TNP only supplies companies in Russia and South America but the Directors believe there is clearly potential for further supply into Europe and North America, subject to certain regulatory conditions being met. Although TNP does not supply paclitaxel into China, it is still subject to Chinese legislation on production. In 2003, TNP identified an opportunity to gain a significant advantage over other producers of paclitaxel, whilst optimising profits, by opening its own plantation of Taxus trees in Luonan. TNP estimates that in 2008 it would be able to produce 10kg of paclitaxel per annum from this land which would produce over 300,000 paclitaxel injections. In the interim, until TNP’s plantation is fully operational, TNP has executed non-exclusive supply contracts to supply yew trees and branches to the Group. TNP is currently fulfilling all its customers’ orders through these arrangements.

Homoharringtonine

Homoharringtonine is an alkaloid extracted from the branches and leaves of the Cephalotaxus tree. Although the cephalotaxus can be found in Korea, Japan, Burma, Laos, Vietnam and India, its main geographical distribution is in China, which can claim at least seven species within its borders.In China, formulations of homoharringtonine have been developed from pure dry active ingredients for intravenous injection. Whilst this drug has been prescribed for acute myeloid leukaemia in China since 1977, and is also now used in the treatment of other cancers, but has only recently, after extensive clinical studies, received clearance in the Western world for human use. 80 percent of the Chinese Cephalotaxus Sinensis (from which TNP extracts homoharringtonine) grows in the mountain range where TNP is located. The Group obtains its supply of the branches and leaves from local trading companies, by way of exclusive supply agreements. Also TNP is exploring the possibility of purchasing further plantations to cultivate the Cephalotaxus trees itself.

TNP and the Traditional Chinese Medicine Market
TNP holds the drug registration approvals (a Chinese licence to produce a drug) for eight products

• Geng Ni’an An – used to treat the symptoms of menopause ;
• Ru Ning　–　used to alleviate the pain of sore breasts;
• Du zhong Ping ya　–　used to treat high blood pressure;
• Bu Nao An Shen　–　used to treat headaches, insomnia and palpitation;
• Zao Ren An Shen　–　used to treat insomnia and headaches caused by neurological problems;
• Jiang Zhi Jian Fei　–　used to reduce cholesterol and help weight loss;
• Da Bai Du　–　used to treat urinary infection; and
• Huo Li Yuan　–　used to treat insomnia and amnesia.

TNP also has drug registration approvals for a further 3 products which the Directors anticipate will be launched in 2007. These are:

• Qizao kili – used to treat leukocytopenia and weakened immune system;
• Biastong Pian – used to treat constipation;
• Hugan Pian – for chronic hepatitis and hepatocisthosis.

Production capacity