Jiangsu Yanshen found liable for producing and selling inferior quality products

Simcere Pharmaceutical Group ("Simcere" or the "Company") (NYSE: SCR), a leading pharmaceutical company specializing in the development, manufacturing, and marketing of branded and proprietary pharmaceuticals in China, today announced that Jiangsu Yanshen Biological Technology Stock Co., Ltd. ("Jiangsu Yanshen"), in which Simcere holds a 52.5% controlling stake, has been found liable for producing and selling inferior quality products by the People's Court of Tianning District, Changzhou City and was sentenced to a fine of RMB4.6 million. The fine consists of penalties and confiscated revenues from previous sales of substandard human-use rabies vaccine and is in addition to the RMB25.6 million administrative fine imposed by the Changzhou Food and Drug Administration on May 17, 2010. The fines of RMB4.6 million and the administrative fines of RMB25.6 million have already been accrued in the previous financial statements. Six members of Jiangsu Yanshen's former management team were also found guilty and received individual penalties.

Simcere obtained a controlling stake in Jiangsu Yanshen in November 2009, and subsequently discovered quality control problems relating to the production of its human-use rabies vaccine manufactured in 2008, prior to Simcere's stake acquisition. On November 23, 2009, Simcere urged the board of Jiangsu Yanshen to replace its general manager and head of quality assurance and demanded that Jiangsu Yanshen implement a total suspension of production effective from the November 30, 2009 to facilitate an internal inspection and rectification of its quality control systems. Jiangsu Yanshen has since been actively cooperating with the relevant authorities in the investigation. To date there have been no reported adverse events related to the vaccine batches in question.

Jiangsu Yanshen's operations remain suspended until further notice and it is uncertain when it will resume vaccine production.