BioProgress plc Announces China Supply Agreement

BioProgress plc (LSE: AIM: BPRG), the provider of innovative delivery mechanisms for the pharmaceutical oral dosage markets, announces that it has granted exclusive distribution rights in China and Taiwan to AXM Pharma, Inc. (AMEX: AXJ) for certain formulations of BioProgress' revolutionary SoluleavesTM oral drug and flavours delivery technology that uses dissolve-in-the-mouth films. This agreement is for an initial period of two years, which could then be extended by mutual agreement.

The products, which include children's multi vitamins, Vitamin C and Echinacea dissolve-in-the-mouth films, will be manufactured by BioTec Films LLC in Tampa, Florida and will be distributed by AXM Pharma under both the Sunkist(R) brand and AXM Pharma's house brands. Sunkist(R) is America's largest citrus marketing cooperative - its grower-owners are 6,000 citrus producers in California and Arizona, most of whom are small family farmers.

Graham Hind, Chief Executive of BioProgress, said: "This agreement with AXM Pharma represents our first foray into the highly lucrative Chinese marketplace in an extremely cost effective manner, and I am confident that it will add at least $2 million to our revenues during the initial two year period, with the majority of this flowing straight through to the bottom line. AXM Pharma has a solid track record of marketing and distributing pharmaceutical products throughout China and we are well positioned to benefit from their existing channels to market."

Peter Cunningham, President and CEO of AXM Pharma, said: "We are very excited about this agreement with BioProgress, and particularly for Sunkist(R) products where we have exclusive rights in China. AXM has considerable experience in China and we expect the SoluleavesTM technology to add significant value to our product offering in this vast market."

Forward-Looking Information.

The Ordinary Shares of BioProgress plc are registered under the US Securities and Exchange Act of 1934. This announcement contains certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may vary materially from the expectations contained in the forward-looking statements. The forward-looking statements in this release include statements addressing future financial and operating results and the timing and benefits of the reorganisation. Detailed information about factors pertinent to the business of the company that could cause actual results to differ is set forth in the Company's filings with the Securities and Exchange Commission. The Company is under no obligation to (and expressly disclaim any such obligation to) update or alter its forward-looking statements whether as a result of new information, future events or otherwise. This announcement is for information only and does not constitute an offer or invitation to acquire or dispose of any securities or investment advice. The distribution of the announcement and/or issue of securities in certain jurisdictions may be restricted by law.

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About BioProgress

BioProgress listed on AIM in May 2003 and is engaged in the research, development, and design of patented encapsulation systems that use water soluble and biodegradable films for the dietary supplement, pharmaceutical and other sectors. The Company's patent portfolio comprises 80 patents within 24 patent families and has product development agreements and strategic alliances with several global companies. BioProgress aims to provide a cost effective and animal-free encapsulation process for pharmaceutical drugs in liquids, tablets and powders, thereby addressing the needs of the entire market for oral dosage forms while providing novel delivery mechanisms not possible with traditional processes.

The Company has also developed patented and licensed the world's first flushable ostomy pouch that offers a newly enhanced quality of life not previously possible for the end user. Market research shows the global ostomy market to be worth $1 billion annually.

The Company's business model provides it with several significant revenue streams including sales of encapsulating machines and film, plus licence and fees for research development services.

About AXM Pharma, Inc.

AXM Pharma, Inc. is a global pharmaceutical company engaged in the production, marketing and distribution of pharmaceutical products in China. The Company produces, markets and distributes medicines in various dosages and forms in most areas of medicinal treatment, as well as herbal remedies, vitamins and adjunctive therapies.

AXM Pharma Inc., (, through its wholly owned subsidiary, Werke Pharmaceuticals, Inc., is the 100% owner of AXM Pharma Shenyang, Inc. ("AXM Shenyang"), a Wholly Foreign Owned Enterprise ("WFOE") under the laws of the People's Republic of China. AXM Shenyang is located in the City of Shenyang, in the Province of Liaoning, China. AXM Shenyang and its predecessor company Shenyang Tianwei Pharmaceutical Factory, Ltd. ("STPF"), has an operating history of approximately 10 years. AXM Shenyang historically has been a manufacturer and distributor of proprietary and generic pharmaceutical products, which include injectables, capsules, tablets, liquids and medicated skin products for export and domestic Chinese sales. AXM Shenyang is currently awaiting re-licensing of its pharmaceutical products pursuant to new national licensing requirements for pharmaceutical products in China and certification of its new factory. Approval of the re-licensing and factory certification is expected in the fourth quarter of 2004.

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