CBI signs definitive share purchase agreement to acquire GL Biochem

Commonwealth Biotechnologies, Inc. (“CBI”) (NASDAQ Capital Market: CBTE) is pleased to announced it has entered into a revised and binding definitive share purchase agreement to acquire the parent of Shanghai-based GL

Biochem and its associated businesses (collectively the “GL Group”), the largest global supplier of research-grade peptide products and peptide reagents. Under the revised agreement, CBI will receive all of the stock of the GL Group’s holding company, Wise Century Group Limited, from its current shareholder, and will issue to that shareholder shares of CBI’s common stock equal to 78% of its then-outstanding shares, on a fully diluted basis. Closing is expected to occur promptly after CBI obtains shareholder approval for the transaction.

Board and Management

Upon closing, Dr. Hongyan Xu, Founder, Chairman, and CEO of the GL Group, will assume the role of Chairman and CEO of CBI. All current CBI directors and officers will resign upon closing. The existing CBI Board of Directors will be restructured to include two CBI nominee directors, Dr. Bill Guo and Mr. Samuel Sears in addition to Dr. Xu and four additional GL Group nominee directors.

Business Operations

On completion of the merger CBI will be the largest supplier of pre-clinical peptide reagents and custom peptide synthesis services in the world. The Company will be comprised of (i) the GL Group in China, (ii) Mimotopes Pty Ltd in Australia and (iii) assets in Richmond, Virginia. In addition to the GL Group, CBI will continue to own and operate Mimotopes Pty Ltd, based in Melbourne, Australia, an industry leader in the peptide and discovery chemistry sector, and will retain its land and buildings in Richmond, Virginia, which are now leased-back to Bostwick Laboratories Inc, the group that acquired the assets FIL and CBI Services from CBI in November 2009.

Industry Context

Peptides play an important role in modulating many physiological processes in the body and therefore have excellent potential as therapeutic agents. Peptide drugs have a number of advantages over both small molecules and proteins, including lower toxicity and immunogenicity, excellent specificity, high potency and a low probability of drug-drug interaction problems. Several technical challenges in the use of peptides as drugs have been overcome in recent years and they now represent one of the key growth areas in the drug discovery industry.

On completion of the merger, CBI will cater to the outsourcing requirements of universities, research institutes, and pharmaceutical and biotechnology companies for reagents as well as research and development services. Large pharmaceutical and biotechnology companies typically have limited capabilities in-house but choose to outsource much of their research and development work to specialist providers such as GL Biochem. Pharmaceutical companies are now unable to generate the large number of necessary candidate compounds in-house, and this phenomenon has led to an increasing trend for outsourcing of drug discovery research. The worldwide market for custom peptides is estimated to be between $550m and $990m in 2010.