--2Q09 Revenue Increased 20.7% YoY to $71.2 Million--

--2Q09 Net Income Attributable to Controlling Interest was $13.2 million or

                         $0.17 per Diluted Share--   -- Company Generates Approximately $22.9 Million of Operating Cashflow--   

American Oriental Bioengineering, Inc. , ("the Company" or "AOBO"), a pharmaceutical company dedicated to improving health through the development, manufacture and commercialization of a broad range of prescription and over the counter ("OTC") products in China, today announced financial results for the second quarter ended June 30, 2009.

Revenue in the second quarter of 2009 increased 20.7% to $71.2 million from $59.0 million in the second quarter of 2008, reflecting continued demand for the Company's core pharmaceutical and nutraceutical products. Revenue from pharmaceutical products increased 17.4% to $58.4 million from $49.8 million in the prior year's second quarter. Revenue from prescription pharmaceutical products increased 23.2% to $25.2 million during the second quarter of 2009, reflecting an increase in sales from prescription formulation Jinji and CCXA products, which offset declines in sales of Shuanghuanglian Injection Powder ("SHL"). OTC pharmaceutical products generated $33.3 million in revenue during the second quarter of 2009, up from $29.4 million in the prior year's period, reflecting continued demand for Boke and GLP products, as a result of marketing efforts and improved recognition of the products. Nutraceutical products generated revenue of approximately $9.5 million in the second quarter of 2009, up 3.3% from $9.2 million in the prior year's period, reflecting increased sales of new beverage products launched in the beginning of 2009. The Company generated $3.3 million from its distribution business.

Gross profit in the second quarter of 2009 increased 3.9% to $41.6 million from $40.1 million in the second quarter of 2008. Gross margin was 58.4%, compared to 67.9% in the prior year's period, reflecting continued revenue mix shift to CCXA's generic product sales, increasing raw material prices and low margin distribution business.

Operating income in the second quarter of 2009 was $18.3 million compared to $18.7 million in the second quarter of 2008. Selling and marketing expenses increased 22.2% to $9.4 million from $7.7 million in the prior year period. The increase primarily reflects marketing and promotional initiatives to support the continuous growth of revenues. Advertising expense was $7.8 million in the second quarter of 2009, compared to $7.5 million in the prior year's period.

Net income attributable to controlling interest for the second quarter of 2009 was $13.2 million, compared to $13.9 million in the prior year's period. Excluding $1.4 million of interest expense and $0.2 million of amortized financing costs related to the Company's outstanding convertible notes, the Company's net income attributable to controlling interest increased 6.5% to $14.8 million, or $0.17 per diluted share. In the prior year's second quarter, net income per diluted share was approximately $0.18.

As of June 30, 2009, the Company had $100.7 million in cash and generated approximately $22.9 million of operating cashflow during the second quarter of 2009.

Mr. Tony Liu, Chairman and Chief Executive Officer of American Oriental Bioengineering, commented, "We are pleased with our second quarter performance as we continued to enhance our diversified product portfolio and pursue further vertical integration. Our marketing capabilities, extensive distribution platform, diversified product offering and ongoing rural expansion offset anticipated challenges in SHL sales during the second quarter of 2009. We also made significant progress this quarter optimizing our distribution business, so that we solidify our presence in Tier I and II hospital channels and remain on-track for net income contributions for the full year. We continue to drive revenue growth and consistently generate cash despite the uncertain regulatory environment in China's healthcare sector, and we are confident in our ability to be a top-five pharmaceutical company in China."

Conference Call

The Company will hold a conference call at 8:00 am ET on August 7, 2009 to discuss second quarter 2009 results. Listeners may access the call by dialing 1-866-761-0749 or 1-617-614-2707 for international callers, access code: 54060064. A webcast will also be available through AOB's website at http://www.bioaobo.com/ . A replay of the call will be available through August 14, 2009. Listeners may access the replay by dialing 1-888-286-8010 or 1-617-801-6888 for international callers, access code: 18519426.

About American Oriental Bioengineering, Inc.

American Oriental Bioengineering, Inc. is a pharmaceutical company dedicated to improving health through the development, manufacture and commercialization of a broad range of prescription and over the counter products in China.

Statements made in this press release are forward-looking and are made pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties that may cause actual results to differ materially from those set forth in these statements. The economic, competitive, governmental, technological and other factors identified in the Company's filings with the Securities and Exchange Commission, including the Form 10-K for the year ended December 31, 2008, may cause actual results or events to differ materially from those described in the forward looking statements in this press release. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether because of new information, future events, or otherwise.

          AMERICAN ORIENTAL BIOENGINEERING, INC. AND SUBSIDIARIES                   CONDENSED CONSOLIDATED BALANCE SHEETS                    ASSETS                                                 JUNE 30,         DECEMBER 31,                                                  2009              2008                                               (UNAUDITED)   CURRENT ASSETS   Cash and cash equivalents                  $100,730,402       $70,636,510   Accounts receivable, net of reserve of    $505,433 and $226,330 at June 30, 2009    and December 31, 2008, respectively         31,396,881        36,982,167   Inventories, net                             16,829,834        13,042,123   Advances to suppliers                         3,135,694         3,593,979   Notes receivable                                 81,075           708,076   Refundable deposit                                   --         6,396,996   Deferred tax assets                             421,660           347,216   Other current assets                            937,087           744,903   Total Current Assets                        153,532,633       132,451,970    LONG-TERM ASSETS   Property, plant and equipment, net           96,151,689        98,154,443   Land use rights, net                        148,301,203       148,988,870   Deposit for long-term assets                  6,717,514         6,347,174   Construction in progress                     25,871,656        25,385,835   Deferred tax assets                           1,327,627         1,313,832   Other intangible assets, net                 21,146,928        23,690,440   Goodwill                                     28,543,226        28,543,226   Long-term investment and advance             55,452,267        54,963,064   Unamortized financing cost                    3,751,838         4,215,983   Total Long-Term Assets                      387,263,948       391,602,867    TOTAL ASSETS                               $540,796,581      $524,054,837            LIABILITIES AND EQUITY                                                 JUNE 30,         DECEMBER 31,                                                  2009              2008                                               (UNAUDITED)   CURRENT LIABILITIES   Accounts payable                            $12,548,451       $12,287,887   Notes payables                                3,011,486         3,262,877   Other payables and accrued expenses          14,251,673        19,766,652   Taxes payable                                   625,261           420,671   Short-term bank loans                         6,720,430         7,140,148   Current portion of long-term bank loans          59,396            58,659   Other liabilities                             2,511,295         2,253,440   Deferred tax liability                        1,121,738           846,026   Total Current Liabilities                    40,849,730        46,036,360    LONG-TERM LIABILITIES   Long-term bank loans, net of current    portion                                        774,641           804,521   Long-term notes payable                              --           269,908   Deferred tax liabilities                     15,963,766        16,083,768   Convertible notes                           115,000,000       115,000,000   Total Long-Term Liabilities                 131,738,407       132,158,197   TOTAL LIABILITIES                           172,588,137       178,194,557    COMMITMENTS    EQUITY   SHAREHOLDERS' EQUITY   Preferred stock, $0.001 par value;    2,000,000 shares authorized;    1,000,000 shares issued and    outstanding at June 30, 2009 and    December 31, 2008, respectively                  1,000             1,000   Common stock, $0.001 par value;    150,000,000 shares authorized;    78,301,439 and 78,249,264 shares    issued and outstanding at June 30,    2009 and December 31, 2008, respectively        78,301            78,249   Common stock to be issued                       311,999           376,335   Prepaid forward repurchase contract         (29,998,616)      (29,998,616)   Additional paid-in capital                  196,752,860       195,741,544   Retained earnings (the restricted    portion of retained earnings is    $29,532,699 at June 30, 2009 and    December 31, 2008, respectively)           171,019,548       149,923,681   Accumulated other comprehensive income       29,510,788        29,086,006   Total Shareholders' Equity                  367,675,880       345,208,199   NON-CONTROLLING INTEREST                        532,564           652,081   TOTAL EQUITY                                368,208,444       345,860,280   TOTAL LIABILITIES AND EQUITY               $540,796,581      $524,054,837             AMERICAN ORIENTAL BIOENGINEERING, INC. AND SUBSIDIARIES    CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME                                (UNAUDITED)                             THREE MONTHS ENDED         SIX MONTHS ENDED                                 JUNE 30,                  JUNE 30,                            2009         2008          2009         2008    REVENUES              $71,222,037  $59,010,005  $117,299,227  $97,778,603   COST OF GOODS SOLD     29,594,923   18,928,447    47,255,261   31,406,083   GROSS PROFIT           41,627,114   40,081,558    70,043,966   66,372,520        Selling and        marketing          9,396,129    7,687,892    14,607,631   12,717,600       Advertising         7,779,936    7,452,231    13,347,293   11,846,572       General and        administrative     4,315,714    5,253,274     8,881,357    9,165,957       Depreciation and        amortization       1,850,274    1,010,461     3,709,189    1,987,671       Total operating        expenses          23,342,053   21,403,858    40,545,470   35,717,800    INCOME FROM    OPERATIONS            18,285,061   18,677,700    29,498,496   30,654,720    EQUITY IN EARNINGS    (LOSS) FROM    UNCONSOLIDATED    ENTITIES                (173,258)    (640,008)      264,536     (641,067)   INTEREST INCOME    (EXPENSE), NET        (1,620,069)     (30,616)   (3,199,338)     (13,769)   OTHER INCOME    (EXPENSE), NET           (16,329)    (255,770)     (114,938)    (356,502)   INCOME BEFORE INCOME    TAXES                 16,475,405   17,751,306    26,448,756   29,643,382    INCOME TAXES            3,369,107    3,891,614     5,472,406    6,361,562    NET INCOME             13,106,298   13,859,692    20,976,350   23,281,820   NET INCOME    ATTRIBUTABLE TO NON-    CONTROLLING INTEREST     123,068           --       119,517           --   NET INCOME    ATTRIBUTABLE TO    CONTROLLING INTEREST  13,229,366   13,859,692    21,095,867   23,281,820    OTHER COMPREHENSIVE    INCOME       Foreign currency        translation gain,        net of tax            46,316    5,154,761       424,782   12,089,196   TOTAL OTHER    COMPREHENSIVE    INCOME, NET OF TAX        46,316    5,154,761       424,782   12,089,196    COMPREHENSIVE INCOME  $13,275,682  $19,014,453   $21,520,649  $35,371,016    NET INCOME PER SHARE       BASIC                   $0.18        $0.18         $0.28        $0.30       DILUTED                 $0.17        $0.18         $0.28        $0.30    WEIGHTED AVERAGE    NUMBER OF SHARES    OUTSTANDING       BASIC              74,582,920   78,223,659    74,560,809   78,207,405       DILUTED            88,815,593   78,223,659    86,939,711   78,208,181  

American Oriental Bioengineering, Inc.

CONTACT: Ashley M. Ammon of Integrated Corporate Relations, Inc.,+1-203-682-8208

Web site: http://www.bioaobo.com/

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