ACQUISITION AGREEMENT







THIS AGREEMENT executed as of October 6, 2000,





AMONG:





     DRAGON  PHARMACEUTICALS  INC., a company  organized and existing  under the

     Laws of the  State of  Florida,  the  United  States of  America,  having a

     principal  place of business  at 1200 - 543  Granville  Street,  Vancouver,

     B.C., V6C 1X8



     ("Dragon")





AND:



     ALPHATECH  BIOENGINEERING  LIMITED,  a company organized and existing under

     the Laws of Hong Kong  having  its  registered  office at 45 Des Voeux Road

     Central, 11th Floor, Hong Kong



     ("Alphatech")





AND:



     LONGBIN LIU, of 1200 - 543 Granville Street, Vancouver, B.C., V6C 1X8



AND:





     PHILIP YUEN, of 45 Des Voeux Road Central, 11th Floor, Hong Kong



     (together the "Shareholders")





WHEREAS:



(A)  Dragon carries on the business of the development, production and marketing

     of recombinant protein medicines;



(B)  Alphatech owns certain assets and technology  relating to the production of

     vaccines;



(C)  Shareholders are the sole shareholders of Alphatech; and



(D)  Alphatech has agreed to sell certain of such assets and technology, as well

     as certain  rights related  thereto,  to Dragon on the terms and subject to

     the conditions hereinafter contained;





NOW THEREFORE THIS  AGREEMENT  WITNESSES  THAT in  consideration  for the sum of

$10.00 and the mutual covenants and agreements herein contained,  and other good

and  valuable  consideration  the  sufficiency  and  receipt of which are hereby

acknowledged, the parties mutually agree as follows:



{PAGE}



                                     Part 1



                                 INTERPRETATION



Definitions



1.1  In this Agreement,  including the recitals,  except as otherwise  expressly

     provided or unless the context otherwise requires,



     Affiliate  means a company that is related to another  company by virtue of

     the fact that the first company is, directly or indirectly, a subsidiary of

     the  second  company  or  both  companies  are,   directly  or  indirectly,

     subsidiaries   of  the  same  company  or  each  company  is,  directly  or

     indirectly, controlled by the same person or company;



     Assets means all the assets  ordinarily  used, or in which  Alphatech  hold

     rights, in connection with the Business, including



     (a)     the Books and Records,

     (b)     the Cells,

     (c)     the Material Contracts,

     (d)     the Rights, and

     (e)     the Technology,



     and  all  other  tangible  and  intangible  property  and  assets  used  in

     connection  with the Business  whether  located on Alphatech's  premises or

     otherwise;



     Assumed Liabilities means those Liabilities set out in Schedule D ;



     Books and Records  means all books,  records,  files,  documents  and other

     written,   electronically   maintained  or  computer  accessed  information

     relating solely to the Assets or the Business;



     Business  means the business of producing  Hepatitis B vaccine  through the

     application  of genetic  techniques  on hamster  ovary cells  including the

     culturing of the Cells and the  purification  of the HBsAg from the culture

     of the Cells;



     Business  Day means a day that is not a  Saturday  or a Sunday or a British

     Columbia provincial, Canadian federal, Florida state, United States federal

     holiday or Hong Kong holiday;



     Cells means a cell-line of hamster ovary cells and in particular a HBsAgCHO

     cell culture,  which act as a host expression  system for the production of

     HBsAg;



     Confidential   Information  means  all  information   (including,   without

     limitation,  trade secrets, know-how,  specifications,  analyses, formulae,

     drawings,   data,  reports,   patterns,   devices,   plans,  processes,  or

     compilations)  and any other  documentation,  whether  written,  graphic or

     stored electronically or magnetically,  belonging to either Party or any of

     its Affiliates,  including:



     (a)  all proprietary information licensed to or acquired, used or developed

          by the  party  including  information  in  respect  of  laboratory  or

          research   procedures  and   techniques,   research   data,   chemical

          compositions  and  processes  and  other  scientific   strategies  and

          concepts; and



{PAGE}





     (b)  all  information   relating  to  the  party's   business,   structure,

          personnel, operations, financial condition, marketing, advertising and

          commercial  strategies,  customer and supplier  lists,  agreements and

          contractual  records  and  correspondence  that  may not be  generally

          known;



     Closing  means  the  completion  of the sale  and  purchase  of the  Assets

     hereunder by the transfer and conveyance  thereof and the completion of any

     other  related or ancillary  matters all as provided  herein,  and "Closing

     Time" means the time that Closing occurs;



     Closing Date means  October 13, 2000,  or such other date as is agreed upon

     by the parties;



     Encumbrance  means  any  mortgage,  charge,  pledge,  hypothecation,  lien,

     easement,   right-of-way,   encroachment,   security  interest,   covenant,

     condition,  right  of  re-entry,  right  of  possession,   lease,  license,

     assignment,  option,  claim or other title  defect,  encumbrance  or charge

     whatsoever,  whether or not  registered or  registrable  and whether or not

     consensual  or arising by law,  statutory  or  otherwise,  that secures the

     payment of any  Liabilities or the performance of any obligation or creates

     in favour of or grants to any Person a proprietary right;



     Governmental Authority means, as applicable,  the government of Canada, the

     government  of the United States of America,  the  government of a Canadian

     province or  territory,  the  government of a state in the United States of

     America,  the  government  of  Hong  Kong,  and  a  ministry,   department,

     commission,  board,  bureau or other agency of, or  municipality,  regional

     district or other local governing body established by, any such government,

     or other political  subdivision  thereof and includes any Person exercising

     executive,  legislative,  judicial,  regulatory or administrative functions

     of, or pertaining to, any such government;



     Hazardous  Substance  includes  any  contaminants,   pollutants,  dangerous

     substances,  liquid wastes,  industrial wastes, hauled liquid wastes, toxic

     substances,  hazardous wastes, hazardous materials, or hazardous substances

     as defined in or pursuant to any law, judgment,  decree, order, injunction,

     rule,  statute and  regulation  of any court,  arbitrator  or  Governmental

     Authority  by which the  Business,  the Assets or  Alphatech is bound or to

     which Business, the Assets or Alphatech is subject;



     HBsAg means Hepatitis B vaccine protein;



     Liabilities  in respect of a Person means  collectively,  all  liabilities,

     indebtedness,  capitalized  lease  obligations,  advances,  debts,  duties,

     endorsements, guarantees, obligations, responsibilities and undertakings of

     such Person assumed, created, incurred, or made, or to which such Person is

     bound or  subject,  whether  voluntary  or  involuntary,  however  arising,

     whether due or not due,  absolute,  inchoate or  contingent,  liquidated or

     unliquidated,  determined or undetermined,  direct or indirect,  express or

     implied, and whether in respect of which such Person is liable individually

     or jointly with others;



     Material Contracts means all contracts, engagements or commitments, whether

     written or oral,  to which  Alphatech  is entitled in  connection  with the

     Business  including  the right,  title and  interest  of  Alphatech  in the

     material agreements and contracts described in Schedule C;



     Permitted Encumbrances means the Encumbrances described in Schedule D;



     Person means an individual,  corporation,  body  corporate,  firm,  limited

     liability  company,   partnership,   syndicate,   joint  venture,  society,

     association,  trust,  unincorporated organization or Governmental Authority

     or any trustee, executor, administrator or other legal representative;



{PAGE}



     Purchase Price has the meaning assigned to it in ss.3.1;



     Rights means the right to commercialize,  manufacture,  have  manufactured,

     market and sublicense the Technology; and



     Technology means all ideas, methods,  inventions,  know-how, trade secrets,

     techniques and formulations  developed or acquired or licensed by Alphatech

     relating  to the  Cells  and  the  commercial  production  of  HBsAg  and a

     Hepatitis   B  vaccine,   including   methods  for   industrial   scale-up,

     purification and vaccine production.



Interpretation



1.2  In this  Agreement,  except as  expressly  provided  or unless the  context

     otherwise requires,



     (a)  "this  Agreement"  means this  Acquisition  Agreement,  including  the

          Schedules  hereto, as from time to time supplemented or amended by one

          or more agreements entered into pursuant to the applicable  provisions

          hereof,



     (b)  the headings in this Agreement are inserted for  convenience  only and

          do not  form a  part  of  this  Agreement  and  are  not  intended  to

          interpret,  define  or limit  the  scope,  extent  or  intent  of this

          Agreement or any provision hereof,



     (c)  the word "including", when following any general statement or term, is

          not to be construed  as limiting the general  statement or term to the

          specific  items or matters  set forth or to similar  items or matters,

          but rather as permitting the general statement or term to refer to all

          other items or matters that could  reasonably fall within its broadest

          possible scope,



     (d)  all  accounting  terms not otherwise  defined herein have the meanings

          assigned to them, and all  calculations to be made hereunder are to be

          made, in accordance with United States generally  accepted  accounting

          principles applied on a consistent basis,



     (e)  all  references  to currency  mean  currency  of the United  States of

          America,

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