Biostar Pharmaceuticals, Inc. (NASDAQ: BSPM) $84M (MarketCap)

Biostar Pharmaceuticals, Inc

Biostar Pharmaceuticals, Inc. (NASDAQ: BSPM) $84M (MarketCap)

Biostar Pharmaceuticals, Inc. (NASDAQ: BSPM), through its wholly-owned subsidiary in China, develops, manufactures, and markets pharmaceutical and medical nutrient products for a variety of diseases and conditions. The company's most popular product is its Xin Ao Xing Oleanolic Acid Capsule, an over-the-counter medicine for chronic hepatitis B, a disease affecting approximately 10% of the Chinese population. It runs just over $1 per day, and has been proven highly effective in clinical trials. BSPM's Xin Aoxing Oleanolic Acid Capsule is the only product on the market that treats chronic hepatitis B disease at at price most Chinese can afford.In addition to its hepatitis product, Biostar manufactures two broad-based OTC products, two prescription-based pharmaceuticals and thirteen nutrients. The Company has adopted international standards and is in the process of applying for two patents.

On May 25th, Biostar announced that it commenced assembly of its production line for its proprietary Zushima product. The Chinese Military Drug Administration did clinical trials for Zushima Analgesic Aerosol spray in April through the Chinese No. 4 Military Medical University. Zushima was classified as a "Specially Needed Drug" after these trial studies, initiating an expansion into new markets. The product is a traditional Chinese herbal product used to relieve pain through a topical application to affected areas or closed wounds; and can also be used in the treatment of certain rheumatic conditions. The company intends to complete construction of its production line in early August, which will have an annual capacity of $30 million. Upon completion, Biostar plans to obtain formal approval from the Military FDA and a Good Manufacturing Process certification, which will enable the launch of Zushima to the Chinese military, civil hospitals, and pharmacies in Shaanxi province.

With the release of promising first quarter 2010 financial results on May 17th, the company plans to continue this upward trend in its new Zushima product. Financial highlights included a 66% increase in revenue to $12.4 million compared to $7.4 million in the 2009 first quarter. Biostar also reported 77% gross margins, a 1,270-basis point improvement, and a 32.1% increase in non-GAAP adjusted net income. It reiterated guidance for 2010, projecting revenue to be between $80-$82 million and net income to be between $18-$20 million. The company is forecasting $2 million in initial Zushima sales and a $6 million contribution to revenues during 2011, with gross margins of 55%.

Rongua Wang, Chairman and CEO, concluded ""Our development of Zushima represents two important strategic goals for Biostar. First, Zushima highlights our commitment to develop new products to expand our product portfolio. Second, Zushima paves the way for entrance into the Chinese military market, which represents a large, new addressable market. We anticipate receiving our final approvals by September of 2010 and look forward to a successful launch of Zushima."

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