Kun Run Biotechnology net revenue increases 65% for the quarter ended September 30, 2009

Kun Run Biotechnology, Inc. (the "Company" or "Kun Run") (OTC Bulletin Board: KURU), a leading bio-pharmaceutical company in China that focuses on manufacturing and sales of peptides and peptide-based drugs, today announced its financial results for the third quarter ended September 30, 2009.

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.

Third Quarter 2009 Results

Net revenue was $4.0 million for the quarter ended September 30, 2009, up 65% from $2.4 million in the third quarter of 2008. This increase was mainly attributable to the increase in sales of our products. For the three months ended 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 $1.20 million in the same period of 2008. Thymosin Alpha 1 for injection gradually became our best selling product since its superior curative effects and strong market acceptance, contributing $1,326,439 in revenue (33% of total sales) for the three months ended September 30, 2009, representing a 57% increase from the same period of 2008. Meanwhile, DDAVP generated $508,063, or 12% of total sales for the three months ended September 30, 2009, an increase of 158% from $196,902 for the same period in 2008.

Gross profit for the quarter was $2.8 million, a 62% increase from $1.8 million in the third quarter of 2008. Gross margin was 70% in the third quarter 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 to the reduction of provision for doubtful debts and reduced research and development 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, up 30% from $7.8 million in the quarter ended September 30, 2008. Gross profit margin was 71%, which remained relatively unchanged as compared to the same period in 2008.

Operating income was $6.0 million, or 59% of revenue. Net income was $5.1 million 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 cash equivalents. Kun Run generated $2.9 million in cash flow from operations in the first nine months of 2009, compared to $4.3 in the first nine months of 2008. Shareholders' equity stood at $24.0 million, with a debt to equity ratio of 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 record revenue and solid profits. During the past nine months, Kun Run has demonstrated success in developing and commercializing peptide medicine in the China market and has built reputable brand awareness with superior quality. With the extra capacity added by the newly operated facility, we have strengthened and diversified our product portfolio in China to support the market growth. We are committed to a profitable growth strategy."