American Oriental Bioengineering, Inc. (NYSE: AOB) completed two acquisitions while, at the same time, announcing it had declined to pursue a third. In August, AOB had announced a signed letter of intent to pay $110 million to acquire an unnamed China pharmaceutical distributor with $550 million in annual revenues. That deal has been scotched, and two smaller acquisitions have been completed in its place for a smaller total outlay of $53.1 million.

AOB will pay $39.5 million to buy Nuo Hua Investment Company Ltd., a drug distributing holding company. AOB projects that Nuo Hua will produce revenues of $80 million and net income of $2.3 million during 2009. That level of profitability is low, even for the notoriously tight-margined drug distribution business. However, Nuo Hua’s CAGR is over 30% since 2006. The company distributes more than 6,000 pharmaceutical products through its sales network. The network covers major top-tier (Class II and Class III) hospitals in Northern China, as well as provincial and municipal hospitals, lower level distributors and retail chain pharmacies throughout the country.

An additional $13.6 million will purchase GuangXi HuiKe Research and Development Company Ltd. AOB touted the development expertise of GuangXi HuiKe as well as its ability to get product approvals and then launch products. GuangXi HuiKe’s staff of 22 professionals has completed more than 60 development projects in the last few years. However, AOB did not disclose the company’s recent revenue history. AOB expects GuangXi HuiKe to launch three new products in 2009 and a minimum of ten in 2010.

Tony Liu, CEO of American Oriental Bioengineering, said the two new acquisitions will allow AOB to build and then promote the company’s drug portfolio.