Biostar Pharmaceuticals (NASDAQ:BSPM)

First Quarter 2013 Financial Results

• Revenue for the first quarter of 2013 decreased 23.9% to approximately $12.1 million compared to $15.9 million for the first quarter of 2012.
• Net income was approximately $0.6 million for the first quarter of 2013, a 74.1% decrease compared to $2.2 million for the first quarter of 2012. Diluted earnings per share were $0.06 for the first quarter of 2013 compared to $0.23 for the first quarter of 2012, based upon approximately 10.0 million and 9.4 million diluted common shares outstanding, respectively.

"We finished the first quarter of 2013 with positive momentum," commented Ronghua Wang, Chairman and Chief Executive Officer of Biostar. "Our net income was positive in the quarter and this reflects a gradual improvement in our sales. We expect the negative impact from the Capsule Incident is now behind us and we are optimistic that with our continued expansion of our product portfolio, supported by comprehensive marketing and distribution strategies, we are in position to leverage our product portfolio for optimal growth," Wang concluded.

Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing

On May 1, 2013, Biostar Pharmaceuticals, Inc. (the “Company”) received a notification letter (the “Notice”) from NASDAQ's Listing Qualifications Department (“NASDAQ”) advising the Company that for the past 30 consecutive business days, the bid price for the Company’s common stock has closed below the minimum $1.00 per share requirement set forth in Nasdaq Listing Rule 5450(a)(1) (the “Minimum Bid Price Rule”).
 
The Notice also stated that the Company would be provided 180 calendar days, or until October 28, 2013, to regain compliance with the Minimum Bid Price Rule. To do so, the bid price of the Company’s common stock must close at or above $1.00 per share for a minimum of ten consecutive business days prior to that date.  
 
If the Company does not regain compliance by October 28, 2013, the Company may be eligible for an additional grace period if it applies to transfer the listing of its common stock to The NASDAQ Capital Market.  To qualify, the Company would be required to meet the continued listing requirements for market value of publicly held shares and all other initial listing standards for The NASDAQ Capital Market, with the exception of the minimum bid price requirement, and provide written notice of its intention to cure the minimum bid price deficiency during the second compliance period by effecting a reverse stock split if necessary.  If the NASDAQ staff determines that the Company will not be able to cure the deficiency, or if the Company is otherwise not eligible for such additional compliance period, NASDAQ will provide notice that the Company's common stock will be subject to delisting.  At that time, the Company may appeal the delisting determination to a Hearings Panel.
 
The Company intends to continue to monitor the bid price for its common stock. If the Company’s common stock does not trade at a level that is likely to regain compliance with the NASDAQ requirements, the Company’s Board of Directors will consider other options that may be available to achieve compliance.

XIANYANG, China, April 15, 2013 /PRNewswire/ -- Biostar Pharmaceuticals, Inc. (NASDAQ GM: BSPM) ("Biostar" or "the Company"), a PRC-based manufacturer and marketer of pharmaceutical and health supplement products in China for a variety of diseases and conditions, today announced financial results for the full year endedDecember 31, 2012.

• EPS Net Loss for the fourth quarter was ($0.68) vs last years earnings of $0.09

"We experienced very difficult business environment in 2012. The incident related to capsule manufacturers has significantly negative impact on our business as most of our products are in capsule format, including our flagship product Xin Aoxing Capusule. We expect this impact is temporary and we have seen the gradually recovery of sales of our capsule products in the fourth quarter of 2012," commented Mr. Ronghua Wang, Chairman and Chief Executive Officer of Biostar. "We believe that Chinese healthcare industry is still in a rapid growth and with our continued marketing efforts, an expanding product portfolio and strong demand for our product portfolio, we are well positioned to recover from the temporary loss and capitalize on the long-term secular growth occurring in our industry."

For the twelve months ended December 31, 2012, revenue decreased approximately 46.4% to $49.3 million compared to 2011. Sales of Aoxing Pharmaceutical's capsule products were affected by the suspension of sale and negative publicity associated with Chinese SFDA's investigation of several capsule manufacturers which used industrial gelatin with high chromium content in their products (the "Capsule Incident"). Net sales of capsule products decreased by $51.3 million or 63.2%. The sales of other Aoxing Pharmaceutical products were also affected by the negative publicity. Net sales of these products decreased by $1.5 million or 15.1%. The Company acquired Shaanxi Weinan Huaren Pharmaceuticals, Ltd. ("Shaanxi Weinan") in the fourth quarter in 2011, and continued the sales of Shaanxi Weinan's then existing products. These products accounted for $7.4 million or 15.1% of total net sales in 2012. The Company discontinued one product due to low sales volume and demand. During 2012, the Company reintroduced six of Shaanxi Weinan's previous products, which accounted for $0.7 million or 1.4% of total net sales in 2012.

• In 2012, the Company has also begun sales of three new products that were sold exclusively at a local hospital. These products accounted for $2.9 million or 5.8% of total net sales in 2012.
• Compared to the fiscal year of 2011, cost of sales decreased by about $8.1 million or 29.4% for the year ended December 31, 2012. This decrease is mainly due to the decrease in net sales.
• Gross profit was $29.9 million, decreased by $34.5 million or 53.6% for the year ended December 31, 2012, as compared to the year ended December 31, 2011. The decrease in gross profit was due primarily to the decrease in sales volume. Gross profit loss as a result of the Capsule incident was estimated at $34.5 million.
• Net loss was $20.0 million for the fiscal year ended December 31, 2012, a decrease of approximately $32.2 million from net income of $12.2 million for the same period in 2011. Fully diluted loss per share were $2.09 as compared to fully diluted earning per share of $1.31 for the fiscal years of 2012 and 2011 based on 9.6 million and 9.3 million shares, respectively.

CFO Resignation

On December 14, 2012, Zack Pan, the Chief Financial Officer of Biostar Pharmaceuticals, Inc. (the “Company”), tendered his resignation as the Company’s CFO effective as of December 15, 2012. Mr. Pan’s departure was not due to any disagreement with the Company, but due to his intention to pursue other professional and personal opportunities. The Company is thankful to Mr. Pan for his service as the Company’s CFO and wishes his success in his future endeavors. The Company intends to retain Mr. Pan as a consultant to assist the Company with the CFO transition, as discussed below. The terms of this consulting arrangement have not been finalized as of the date of this report.

Effective as of December 18, 2012, the Board of Directors of the Company (the “Board”) appointed Qinghua Liu as the Company’s Interim Chief Financial Officer. Ms. Liu will hold this office until the Board finds a permanent appointment to the office of the CFO of the Company. Ms. Liu is currently a member of the Board of the Company.  From January 2010 to present, Ms. Liu held the office of Assistant to the Chairman of the Board of the Company, Chief Financial Officer of Shaanxi Aoxing Pharmaceuticals Co., Ltd., and Supervisor of Shaanxi (Xi’an) Biostar Biotech, Ltd.  From March 2007 to January, Ms. Liu held the offices of Vice General Manager, Financial Manager, Chief Accountant and Director of Shaanxi Aoxing Pharmaceuticals Co., Ltd. From January 1998 to March 2007, she was Financial Manager and Chief Accountant of Shaanxi Aoxing Pharmaceuticals Co., Ltd.  Ms. Liu holds a degree in Auditing and Financial Management from Northwest Institute of Light Industry, PRC.

In addition, the Board also approved the terms and provisions of Ms. Liu’s interim CFO employment with the Company to include base salary of approximately USD$11,550 per year, subject to review and adjustment by the Board. In addition, Ms. Liu will also be eligible to receive performance bonus and equity compensation, all to be determined in the Board’s discretion, as well as various health and other benefits available to the employees of the Company.

XIANYANG, China, December 21, 2012 /PRNewswire/ -- Biostar Pharmaceuticals, Inc. (NASDAQ GM: BSPM) ("Biostar" or "the Company"), a PRC-based manufacturer and marketer of pharmaceutical and health supplement products in China for a variety of diseases and conditions, today announced that its call center commenced operations on December 10, 2012.

Earlier this year, the Company established a call center in Xianyang as its new business-to-customer ("B2C") sales platform. The Company has staffed the call center with 14 professionally trained sales employees (8 operators and 6 sales agents) that are primarily responsible for incoming inquiries and orders. The staff is also responsible for informing customers about drug promotions, introducing customers to new drugs, gathering customer feedback, and, if so requested, connecting them with doctors for further consultation. Additionally, the call center sales personnel is responsible for outreach activities, including contacting medical product distribution agencies throughout China about product promotions, signing new distribution agreements and negotiating renewals.

The B2C call center is currently promoting sales of Biostar products that treat joint pain, kidney ailments, rhinitis, and digestion problems.

Ronghua Wang, Biostar's Chief Executive Officer and Chairman, commented, "Since the call center became operational, our staff has been handling over 300 customer calls daily and has booked sales of between RMB50,000 - RMB80,000 (approximately $8,000 - $13,000) daily."

Mr. Wang continued, "We are confident that the services we are offering through our B2C sales platform will further enhance customer confidence in and loyalty to our products, and will provide an additional boost to the Company's sales efforts going forward. Our goal is to gradually increase daily sales volume and ultimately achieve approximately $5 million in 2013 revenues from the sale of products through our call center."

XIANYANG, China, December 4, 2012 /PRNewswire/ -- Biostar Pharmaceuticals, Inc. (NASDAQ GM: BSPM) ("Biostar" or "the Company"), a PRC-based manufacturer and marketer of pharmaceutical and health supplement products in China for a variety of diseases and conditions, today announced that on November 26, 2012, it signed another one-year agreement valued at approximately $8 million to manufacture and supply Xijing Military Hospital with 16 new drugs used to treat a variety of diseases such as pharyngitis, nasopharynx, gastroenteropathy, nephropathy, asthma, hyperplasia of mammary glands, dermatosis, gynecological diseases, etc.

The material terms of this agreement are similar to those of the first two one-year agreements signed with the same hospital in September and October 2012 for $3.6 million and $3.0 million, respectively. With this new agreement, Biostar will be manufacturing a total of 24 drugs for Xijing Military Hospital (10 granules, 13 capsules, and one powder drug) with a combined value of $14.6 million.

Ronghua Wang, Biostar's Chief Executive Officer and Chairman, commented, "We are pleased to have signed another drug manufacturing contract with Xijing Military Hospital as we continue to expand our drug portfolio with high quality products that are manufactured specifically for the needs of this hospital. The signing of these agreements is a result of our hard work to quickly complete experimental tests, trial production, and pass manufacturing technology and quality inspections. These types of contracts have the potential to generate substantial revenues, have very low sales expenses and a much shorter sales cycle."

Mr. Wang continued, "These agreements mark the initial step of our strategic partnership with The Fourth Military Medical University ('FMMU'), one of China's most prestigious military medical universities and research centers. As previously announced, we are working to become a strategic partner of FMMU in the fields of research and product development and also to become a production base for manufacturing drugs specifically for the needs of China's military.

Third Quarter 2012 Results

• Net sales decreased to $10.0 million from $24.8 million;
• Gross margin decreased to 52.6% as compared to 69.9%;
• Loss from operations was $5.8 million, as compared to income from operations of $5.9 million; and,
• The net loss was $5.9 million, or $0.63 per diluted share, as compared to net income of $4.5 million, or $0.47 per diluted share.

Ronghua Wang, Biostar's Chief Executive Officer and Chairman commented, "Although as expected, our 2012 third quarter overall results were below those of the 2011 third quarter, our business has shown signs of recovery and net sales for the current quarter increased by approximately $1.8 million, or 22% as compared to the 2012 second quarter.

Mr. Wang concluded, "Despite the temporary setback, our business remains solid. We are confident that as a result of our efforts, our sales will continue to gradually recover in the coming months. Based on net sales recorded for the month of October and first half of November, and we expect 2012 fourth quarter sales to be significantly higher than 2012 third quarter."

XIANYANG, China, October 15, 2012 /PRNewswire/ -- Biostar Pharmaceuticals, Inc. (NASDAQ GM: BSPM) ("Biostar" or "the Company"), a PRC-based manufacturer and marketer of pharmaceutical and health supplement products in China for a variety of diseases and conditions, today announced that on October 8, 2012 it signed a one-year agreement valued at approximately $3.0 million to manufacture and supply Xijing Hospital with five additional drugs.

Specifically, the five drugs include: Qing Wen Granule (used to treat viral colds), Ru Xiao Kang Capsule (used to treat hyperplasia of mammary glands, breast swelling and mastadenoma), Stomach and Intestine Purifying Capsule (used to treat chronic gastritis, enteritis and ulcers), Juteng Capsule (used to treat hypertension, hyperlipidemia, cerebral arteriosclerosis, encephalatrophy and strokes), and Ding An Kang Granule (used to treat insomnia and irritability).

The material terms of this agreement are similar to those of the $3.6 million agreement signed with Xijing Hospital last month, as these five drugs will also be exclusively sold at and given to patients admitted to the hospital for treatment.

Ronghua Wang, Biostar's Chief Executive Officer and Chairman, commented, "We have successfully completed experimental tests and trial production for these five drugs and also passed manufacturing technology and quality inspections. As per the terms of the agreement, we will immediately start manufacturing the five drugs; the first supply is expected to be delivered to Xijing Hospital at the end of October 2012."

Mr. Wang added, "We are pleased to have signed two drug manufacturing contracts with Xijing Hospital, which is managed by The Fourth Military Medical University ("FMMU"), one of China's most prestigious military medical universities and research centers. We are currently manufacturing eight drugs for the Xijing Hospital and are working to sign additional contracts for more than a dozen new drugs."

Mr. Wang concluded, "We will continue to expand our cooperation with Xijing Hospital and FMMU to become a strategic partner in the fields of research and product development. The cooperation with FMMU enables us to enhance shareholder value by expanding our product range, increasing sales and profitability."

XIANYANG, China, October 2, 2012 /PRNewswire/ -- Biostar Pharmaceuticals, Inc. (NASDAQ GM: BSPM) ("Biostar" or "the Company"), a PRC-based manufacturer and marketer of pharmaceutical and health supplement products in China for a variety of diseases and conditions, today announced that on September 24, 2012 it signed a one-year agreement to manufacture and supply Xijing Hospital with three new drugs: Gastritis Granule, Pharyngitis Granule and Nasosinusitis Granule.

This agreement is valued at approximately RMB 24 million (or approximately $3.6 million); starting in October 2012, Biostar will deliver the first monthly supply valued at approximately RMB 2 million (or approximately $0.3 million).

These three drugs will be exclusively sold at and given to patients admitted to Xijing Hospital for treatment. Gastritis Granule is used to treat chronic and atrophic gastritis; Pharyngitis Granule is used to treat acute and chronic throat inflammation; and, Nasosinusitis Granule is used to treat acute and chronic sinusitis. Full release.

XIANYANG, China, August 20, 2012 /PRNewswire-Asia/ -- Biostar Pharmaceuticals, Inc. (NASDAQ GM: BSPM) ("Biostar" or "the Company"), a PRC-based manufacturer and marketer of pharmaceutical and health supplement products in China for a variety of diseases and conditions, today announced that its Zushima Analgesic Spray ("Zushima spray") pain relief drug has received the "Army New Drug Certificate", which is registered with China military authorities as "Military Medicine Certificate # Z2012002".

Zushima spray, which was developed in cooperation with Lanzhou Military Institute of Drugs and Instruments specifically for the needs of China's military, relieves pain and topical swelling, joint pain due to rheumatic conditions, and helps improve blood circulation near affected areas.

Zushima spray has been listed in the military pharmaceutical R&D program since June 2006; entered clinical trials in 2008 which were completed in 2010; passed examination and approval of General Logistics department of China's Ministry of Health on April 15, 2011, and received the "Army New Drug Certificate" by People's Liberation Army General Logistics department last month.

Biostar completed the construction of a dedicated plant and production line for Zushima spray in May 2012, and the testing of all equipment in July. Good Manufacturing Practice (GMP) certification for this line is expected shortly, to be followed by production approval. Zushima spray will initially be sold in military hospitals and is expected to generate between $4 million - $5 million in 2013 revenues. In addition, Biostar intends to seek SFDA's approval to sell Zushima spray in the national market.

Ronghua Wang, Biostar's Chief Executive Officer and Chairman, commented, "We are pleased that after completing several years of clinical trials, we received this approval for Zushima's "Army New Drug Certificate". It marks an important milestone for Biostar as the Chinese military market represents a new opportunity for growth. Since last year, we have been cooperating with military universities such as The Fourth Military Medical University and have signed LOIs to conduct clinical trials for new products, which should enable us to become a producer of drugs specifically for the needs of China's military."

Second Quarter 2012 vs. Second Quarter 2011

• Net sales decreased to $8.2 million from $25.9 million;
• Gross margin decreased to 56.0% as compared to 71.9%;
• Loss from operations was $12.2 million, as compared to income from operations of $6.0 million. Loss from operations for the current period included a charge to operations of $7.9 million shown on the following tables as "credits for negative publicity" relating to a write-down of accounts receivables. Excluding this write-down, loss from operations for the current period was $4.3 million;
• The net loss was $9.5 million, or $1.01 per diluted share, as compared to net income of $4.2 million, or $0.45 per diluted share. Excluding the aforementioned credits to negative publicity, the net loss for the current period would have been $3.6 million or $0.38 per diluted share.

Ronghua Wang, Biostar's Chief Executive Officer and Chairman commented, "As previously announced, the suspension of sales of gel capsule products severely affected all China-based pharmaceutical companies that use gelatin capsules to manufacture their drugs, including Biostar. This has been a major issue for China's pharmaceutical industry as many large pharmaceutical companies reported substantial losses for the April � July period. Unfortunately, we were not immune to the industry-wide losses and our sales and overall results for the 2012 second quarter were similarly adversely affected."

Mr. Wang continued, "Sales of our flagship gel capsule product Xin Aoxing decreased approximately 83% and 53% for the three and six months ended June 30, 2012, respectively, as we did not record sales of this product in May and June. Sales for all other gel capsule products also declined. Only two non-gel capsule drugs, Danshen Granule and Taohuasan Pediatrics were not affected during the current second quarter. Net sales from our newly acquired Weinan facility accounted for approximately 22% and 14% of sales for the three and six months ended June 30, 2012, respectively. There were no sales reported from drugs manufactured at this facility for the 2011 corresponding periods since this business was acquired during the fourth quarter of 2011.

XIANYANG, China, August 4, 2012 /PRNewswire-Asia/ -- Biostar Pharmaceuticals, Inc. (NASDAQ GM: BSPM) ("Biostar" or "the Company"), a PRC-based manufacturer and marketer of pharmaceutical and health supplement products in China for a variety of diseases and conditions, today announced that on July 30, 2012, after a thorough inspection of raw materials used in every production category, it received "green-light" approval from Xianyang State Food and Drug Administration (SFDA) authorities to restart sales of its gel capsule products.

Ronghua Wang, Biostar's Chief Executive Officer and Chairman, commented, "In April 2012, during an industry-wide investigation by SFDA, 254 drug manufacturers in 28 provinces were found to use gel capsules that had a chromium content higher than edible gelatin. As a result, SFDA suspended sales of gel capsules until the investigation was completed. As previously disclosed, during this investigation, one batch of samples of our Xin Aoxing capsule was found to have chromium content higher than edible gelatin. This was an isolated incident and sales of products made from the tainted batch represented approximately 0.2% of total 2011 net sales."

Mr. Wang continued, "The cessation of sales of gel capsule products has severely affected allChina-based pharmaceutical companies that use gelatin capsules to manufacture their drugs, including Biostar. This has been a major issue for China's pharmaceutical industry as many large pharmaceutical companies reported substantial losses for the April - July period. Unfortunately, we were not immune to the industry-wide losses, and Biostar's sales and overall results for the 2012 second quarter were similarly adversely affected. We expect net sales for the 2012 second quarter to be in the range of $7.5 million - $8 million, or approximately 50% lower than those in the first quarter of 2012. This is mainly due to an approximately 55% decrease in sales from products manufactured at our Aoxing facility, offset by an approximately 14% increase in sales from products manufactured at Weinan facility, acquired in October 2011."

Mr. Wang added, "However, during this difficult time for us and our industry peers, we took all the necessary steps to restart sales of gel capsule drugs immediately after the anticipated receipt of the approval from the SFDA. Currently, our employees are working overtime and we have added a second shift. We also started an aggressive advertising campaign to help improve consumer confidence in our products and have established incentives for our sales force in all of our distribution offices nationwide."

He added, "We expect sales for 2012 third quarter to significantly improve as compared to the 2012 second quarter, and a full rebound is expected for the last quarter of the year."

Mr. Wang concluded, "Despite this setback, our business and prospects remain strong. We will continue to pursue increased market share of our current products, while introducing new products from our large portfolio of SFDA-approved OTC and prescription drugs. Additionally, we will continue bidding on new hospital contracts for prescription drugs, to supply hospitals with prescription drugs, which will provide us with a more predictable recurring revenue stream. Finally, we continue to cooperate with scientific research institutions to develop new drugs as we are now doing with The Fourth Military Medical University."

As referenced above, the Company's sales revenue as of the second quarter ended June 30, 2012 is estimated and therefore should be considered preliminary. All such estimates are subject to change to reflect any adjustments that are identified before the Company completes its financial statements and files its Quarterly Report on Form 10-Q for the quarter ended June 30, 2012.

XIANYANG, China, August 4, 2012 /PRNewswire-Asia/ -- Biostar Pharmaceuticals, Inc. (NASDAQ GM: BSPM) ("Biostar" or "the Company"), a PRC-based manufacturer and marketer of pharmaceutical and health supplement products in China for a variety of diseases and conditions, today announced that on July 30, 2012, after a thorough inspection of raw materials used in every production category, it received "green-light" approval from Xianyang State Food and Drug Administration (SFDA) authorities to restart sales of its gel capsule products.

Ronghua Wang, Biostar's Chief Executive Officer and Chairman, commented, "In April 2012, during an industry-wide investigation by SFDA, 254 drug manufacturers in 28 provinces were found to use gel capsules that had a chromium content higher than edible gelatin. As a result, SFDA suspended sales of gel capsules until the investigation was completed. As previously disclosed, during this investigation, one batch of samples of our Xin Aoxing capsule was found to have chromium content higher than edible gelatin. This was an isolated incident and sales of products made from the tainted batch represented approximately 0.2% of total 2011 net sales."

Mr. Wang continued, "The cessation of sales of gel capsule products has severely affected all China-based pharmaceutical companies that use gelatin capsules to manufacture their drugs, including Biostar. This has been a major issue for China's pharmaceutical industry as many large pharmaceutical companies reported substantial losses for the April - July period. Unfortunately, we were not immune to the industry-wide losses, and Biostar's sales and overall results for the 2012 second quarter were similarly adversely affected. We expect net sales for the 2012 second quarter to be in the range of $7.5 million - $8 million, or approximately 50% lower than those in the first quarter of 2012. This is mainly due to an approximately 55% decrease in sales from products manufactured at our Aoxing facility, offset by an approximately 14% increase in sales from products manufactured at Weinan facility, acquired in October 2011."

Mr. Wang added, "However, during this difficult time for us and our industry peers, we took all the necessary steps to restart sales of gel capsule drugs immediately after the anticipated receipt of the approval from the SFDA. Currently, our employees are working overtime and we have added a second shift. We also started an aggressive advertising campaign to help improve consumer confidence in our products and have established incentives for our sales force in all of our distribution offices nationwide."

He added, "We expect sales for 2012 third quarter to significantly improve as compared to the 2012 second quarter, and a full rebound is expected for the last quarter of the year."

Mr. Wang concluded, "Despite this setback, our business and prospects remain strong. We will continue to pursue increased market share of our current products, while introducing new products from our large portfolio of SFDA-approved OTC and prescription drugs. Additionally, we will continue bidding on new hospital contracts for prescription drugs, to supply hospitals with prescription drugs, which will provide us with a more predictable recurring revenue stream. Finally, we continue to cooperate with scientific research institutions to develop new drugs as we are now doing with The Fourth Military Medical University."

As referenced above, the Company's sales revenue as of the second quarter ended June 30, 2012 is estimated and therefore should be considered preliminary. All such estimates are subject to change to reflect any adjustments that are identified before the Company completes its financial statements and files its Quarterly Report on Form 10-Q for the quarter ended June 30, 2012.

XIANYANG, China, June 13, 2012 /PRNewswire-Asia/ -- Biostar Pharmaceuticals, Inc. (NASDAQ GM: BSPM) ("Biostar" or "the Company"), a PRC-based manufacturer and marketer of pharmaceutical and health supplement products in China for a variety of diseases and conditions, today announced that it signed a Letter of Intent ("LOI") with The Fourth Military Medical University ("FMMU") to jointly conduct Phases I to III clinical trials for Viacom Pine II Cream ("Viacom") drug. The LOI has been submitted to China's military authorities for approval.

Viacom is a prescription drug developed by the First Affiliated Hospital of Dermatology of FMMU specifically for the needs of China's military and will be used to treat skin diseases such as bacterial and fungal infections, dermatitis and eczema. Viacom has passed all standard tests related to quality, stability, toxicology and efficiency. Phases I to III clinical trials must be conducted for a period of three years prior to receiving final approval from military authorities to start production.

FMMU is one of China's most prestigious military medical universities and research centers and its primary purpose is to advance China's military medicine. In January 2012, Biostar was one of nine PRC pharmaceutical companies selected to cooperate with FMMU in the fields of research and product development.

According to the terms of the LOI, FMMU will be responsible for:

    Submitting applications and receiving approvals to commence clinical trials; coordinating with China's military authorities during clinical trials and securing all needed approvals to continue Phases I to III of these clinical trials for the next three years at FMMU's facilities; securing final production approvals by October 2015; and providing the technology to ensure the quality and effectiveness of the product.

Biostar will be responsible for:

    Coordinating with FMMU to complete the clinical trials before October 2015; bearing all costs of clinical trials and approvals; completing the construction of the production line and obtaining the GMP certification on time; and manufacturing the drug using the technology provided by FMMU.

Ronghua Wang, Biostar's Chief Executive Officer and Chairman, commented, "Following the initial clinical research, Viacom has demonstrated encouraging results for the treatment of several skin diseases such as bacterial and fungal infections, dermatitis and eczema which are common among members of the PRC armed forces. Additionally, these types of skin diseases affect a large portion of China's population and, if not treated properly, could result in severe health complications. Once Viacom receives approval from the military authorities to be sold in military hospitals, we will apply to receive SFDA's approval to sell it in health care centers and hospitals all over the country."

Mr. Wang continued, "This LOI follows the Cooperation Agreement we signed in January 2012, according to which Biostar was selected to work with FMMU's staff to share resources and ideas and to carry out Phases I to IV of clinical trials for products which, when approved, will be sold directly to China's military and to the three hospitals managed by FMMU. We are targeting additional LOIs with FMMU to conduct clinical trials for new products, which will help us become a production base for manufacturing drugs specifically for the needs of China's military."

First Quarter 2012 vs. First Quarter 2011

• Net sales increased 4.0% to $15,899,541 from $15,288,927;
• Gross margin decreased to 68.2% as compared to 69.9%;
• Income from operations decreased to $3,187,824, as compared to $3,728,163; and,
• Net income decreased to $2,167,415, or $0.23 per diluted share, as compared to $2,723,513, or $0.30 per diluted share.(1)
• Net income for first quarter of 2012 included $791,127 in research and development (R&D) expense which was not included in the first quarter of 2011. Excluding that expense, net income for the first quarter of 2012 was $2,958,542, or $0.32 per diluted share.

Ronghua Wang, Biostar's Chief Executive Officer and Chairman commented, "The 4% increase in total net sales for the 2012 first quarter was due to approximately $1.6 million of net sales of products manufactured at the Weinan facility, offset by a slight decrease in sales for Xin Aoxing and all other products manufactured at the Xianyang facility."

Mr. Wang concluded, "Our 2012 goals are to grow our business by:

• Continuing to make efforts to increase the market share of our current products, while introducing additional new products as we have a large portfolio of OTC and prescription drugs already approved by SFDA.
• Introducing a new OTC product later this year which we believe has the potential to become another flagship product, similar to Xin Aoxing. Based upon our research, this product addresses a large underserved market and we therefore expect it to become a growth catalyst for Biostar.
• Continue bidding on new hospital contracts for prescription drugs. We are encouraged by the recently won bid to supply hospitals based in the provinces of Liaoning, Hebei and Shandong with Huangyangning Tablets for up to three years. This win marked an important milestone, as hospital contracts for prescription drugs provide us with a more predictable recurring revenue stream."

XIANYANG, China, April 23, 2012 /PRNewswire-Asia-FirstCall/ -- Biostar Pharmaceuticals, Inc. (NASDAQ GM: BSPM) ("Biostar" or "the Company"), a PRC-based manufacturer and marketer of pharmaceutical and health supplement products in China for a variety of diseases and conditions, today announced that its Shaanxi Weinan subsidiary, acquired in October 2011, won a bid and has been selected as the exclusive supplier of Huangyangning Tablets, a prescription drug used for the treatment of cardiovascular disease, to all hospitals based in the provinces of Liaoning, Hebei and Shandong for up to three years. Biostar will supply Huangyangning Tablets to these hospitals based on patient needs in each hospital.

Ronghua Wang, Biostar's Chairman of the Board and Chief Executive Officer noted, "Bidding on and winning this contract are very important milestones for Biostar. After the acquisition of Shaanxi Weinan, we expanded our product portfolio with seven prescription drugs, bringing our total number of prescription drugs to nine. Following the completion of the acquisition, we focused marketing efforts for prescription drugs on expanding sales to hospitals which entails contract bidding. Of note, historically we have sold our products to local pharmacies and pharmaceutical distributors, but with this win we have penetrated the hospital prescription drug market. This win will provide us with guaranteed sales for Huangyangning Tablets, a drug used to treat cardiovascular symptoms such as chest pain and arrhythmia embolism. The product is widely used by cardiovascular patients all over China."

Mr. Wang added, "The cardiovascular disease drug market in China has been increasing by 18% annually, reaching over RMB 135 billion in 2011, and is the largest segment of pharmaceutical market in China. According to research conducted by the Chinese Center for Disease Control and Prevention, patients with cardiovascular disease have one of the highest mortality rates. Recent studies show that one person suffers a stroke or myocardial infarction every 12 seconds; deaths from cardiovascular diseases account for approximately 40% of total deaths in China."

Mr. Wang concluded, "We have submitted bids and plan to submit more to sell Huangyangning Tablets in other provinces and we plan to do the same for our other prescription drugs. These types of hospital contracts will provide Biostar with a good foundation for continued growth in sales and profits for the years to come. Our focus has always been to increase shareholder value and we are pleased that the acquisition of Shaanxi Weinan in late 2011 is proving to be a good investment for Biostar."

XIANYANG, China, April 4, 2012 /PRNewswire-Asia-FirstCall/ -- Biostar Pharmaceuticals, Inc. (NASDAQ GM: BSPM) ("Biostar" or "the Company"), a PRC-based developer, manufacturer and marketer of pharmaceutical and health supplement products in China for a variety of diseases and conditions, today announced that its Board of Directors unanimously approved a reverse split of its common stock at a ratio of 1-for-3, with anticipated trading on the post-split basis on NASDAQ commencing at the open of the stock market on April 4, 2012.

Accordingly, as of the effective date of the reverse split, each 3 shares of issued and outstanding common stock and equivalents will be converted into 1 share of common stock. In addition, the common stock will trade under a new CUSIP number. The Company's ticker symbol will remain unchanged (although NASDAQ may append a fifth-letter identifier "D" to indicate the completion of the reverse stock split, and after a 20 trading-day period following effectiveness of the reverse split, the ticker symbol will revert to "BSPM"). The reverse stock split will become effective upon the filing of the Company's Articles of Amendment to its Articles of Incorporation with the State of Maryland. As noted above, the foregoing action has been duly approved by unanimous written consent of Biostar's Board of Directors pursuant to the Maryland General Corporation Law, without stockholder approval requirement.

As a result of the reverse stock split, the number of outstanding common shares will be reduced to approximately 9,398,892. Fractional stockholdings will be rounded up to the nearest whole number. The reverse stock split will affect all stockholders uniformly and will not affect any stockholder's ownership percentage of the shares of the Company's common stock. Biostar stockholders should contact their broker or Biostar's transfer agent, Interwest Stock Transfer Company at (801) 272-9294, for instruction relating to the reverse stock split procedures.

The purpose of the reverse stock split is to raise the per share trading price of the Company's common stock to regain compliance with the minimum $1.00 continued listing requirement for the listing of its common stock on The NASDAQ Global Market. As previously announced, in order to maintain the Company's listing on Nasdaq, on or before April 23, 2012, the Company's common stock must have a closing bid price of $1.00 or more for a minimum of 10 prior consecutive trading days. There can be no assurance that the reverse stock split will have the desired effect of raising the closing bid price of the Company's common stock prior to April 23, 2012, to meet this requirement.

XIANYANG, China, April 4, 2012 /PRNewswire-Asia-FirstCall/ -- Biostar Pharmaceuticals, Inc. (NASDAQ GM: BSPM) ("Biostar" or "the Company"), a PRC-based developer, manufacturer and marketer of pharmaceutical and health supplement products in China for a variety of diseases and conditions, today announced that its Board of Directors unanimously approved a reverse split of its common stock at a ratio of 1-for-3, with anticipated trading on the post-split basis on NASDAQ commencing at the open of the stock market on April 4, 2012.

Accordingly, as of the effective date of the reverse split, each 3 shares of issued and outstanding common stock and equivalents will be converted into 1 share of common stock. In addition, the common stock will trade under a new CUSIP number. The Company's ticker symbol will remain unchanged (although NASDAQ may append a fifth-letter identifier "D" to indicate the completion of the reverse stock split, and after a 20 trading-day period following effectiveness of the reverse split, the ticker symbol will revert to "BSPM"). The reverse stock split will become effective upon the filing of the Company's Articles of Amendment to its Articles of Incorporation with theState of Maryland. As noted above, the foregoing action has been duly approved by unanimous written consent of Biostar's Board of Directors pursuant to the Maryland General Corporation Law, without stockholder approval requirement.

As a result of the reverse stock split, the number of outstanding common shares will be reduced to approximately 9,398,892. Fractional stockholdings will be rounded up to the nearest whole number. The reverse stock split will affect all stockholders uniformly and will not affect any stockholder's ownership percentage of the shares of the Company's common stock. Biostar stockholders should contact their broker or Biostar's transfer agent, Interwest Stock Transfer Company at (801) 272-9294, for instruction relating to the reverse stock split procedures.

The purpose of the reverse stock split is to raise the per share trading price of the Company's common stock to regain compliance with the minimum $1.00 continued listing requirement for the listing of its common stock on The NASDAQ Global Market. As previously announced, in order to maintain the Company's listing on Nasdaq, on or before April 23, 2012, the Company's common stock must have a closing bid price of $1.00 or more for a minimum of 10 prior consecutive trading days. There can be no assurance that the reverse stock split will have the desired effect of raising the closing bid price of the Company's common stock prior to April 23, 2012, to meet this requirement.

Fourth Quarter 2011 Results

• Net sales decreased 8.1% to $25,985,024 from $28,277,390;
• Gross margin was 68.3% as compared to 76.1%;
• Income from operations decreased to $2,542,230, compared to $8,122,473; and,
• Net income decreased to $833,630, or $0.03 per diluted share, compared to $6,105,736, or $0.22 per diluted share.

Ronghua Wang, Biostar's Chief Executive Officer and Chairman commented, "Net sales for the 2011 fourth quarter declined by approximately $2.3 million from the same period of 2010, mainly due to lower net sales of our flagship product, Xin Aoxing Capsule. To combat increased competition facing our Xin Aoxing Capsule, in mid-2011 we started a 'Buy 3 Get 1 Free' promotion, and as a result, sales volume increased, but net sales decreased by approximately $2.7 million from the 2010 fourth quarter. Since the start of this promotion, gross margin for Xin Aoxing Capsule has declined, but continues to remain above 80%."

Mr. Wang continued, "For all the other products, although sales volume increased, selling prices were depressed due to the Chinese government's price control policy through its drug-tendering model called 'lowest-price-win' Anhui EDL (essential drug list). This accounted for much of the decline in gross margin. Notwithstanding the lower selling prices, however, for 2011 as a whole, net sales increased by approximately $11.8 million or 14.6%. This was a direct result of our ongoing efforts to gain market share in our current locations, as well as, to expand our operations into new provinces.

Mr. Wang noted, "Another persistent reason for the decline in gross margin for the 2011 fourth quarter and the year has been the significant increase of raw materials costs, especially those used in Taohuasan Pediatrics Medicine and Tianqi Dysmenorrhea Capsule. To control costs and enhance quality of our raw materials, we have planted 13 herbs at our 82 acre plantation in Qinling Mountains, two of which, salvia miltiorrhiza and honeysuckle, have been harvested and are being used to produce Danshen Granule and a health product. Other herbs should be ready for harvest in 2012. We plan to either trade these herbs for other raw materials or sell them."

Mr. Wang added, "We continue to execute our strategy to grow our Company organically and through acquisitions. In 2011, we expanded our geographic coverage by adding three new provinces into our network, for a total of 25 provinces, and have increased our rural presence in the province of Shaanxi to approximately 13,000 sales outlets. To further increase our market share, we have expanded our sales force to over 400 people and increased our advertising spending. Additionally, we continue to invest in the development of several innovative products. Our team of 30 scientists and researchers continues to develop new products and we currently have eight OTC products and prescription drugs in our pipeline. "

Mr. Wang noted, "With the 2011 acquisition of Shaanxi Weinan, we increased our portfolio of drug approvals and permits by an additional 86 drugs and one health product. Currently, we are manufacturing eleven products at Shaanxi Weinan's facilities, and we expect to generate over $5 million in net sales in 2012 from the sale of these products."

Mr. Wang concluded, "We believe that Biostar is well positioned to take advantage of opportunities in China's pharmaceutical market, ranked the third largest in the world in 2011, over $50 billion in size and with growth projected at more than 20% in the next five years. Our large portfolio of drug approvals and permits, state-of-the-art research laboratories, high-tech production facilities, large distribution network and geographic coverage, are the foundations for our continued growth. To address the significant unmet needs of its population, China's $124 billion healthcare reform plan, launched in 2009, has made accessibility and affordability two major government guidelines. Our business plan works well with those goals. Additionally, we participate in the New Rural Medical Care Cooperative Program launched by the Chinese government in 2008, and benefit from greater numbers of people seeking medicines offered in hospitals and healthcare centers. We expect to announce 2012 revenue guidance when we issue our results for the first quarter of 2012."

Third Quarter 2011 Results

XIANYANG, China, Oct. 25, 2011 /PRNewswire-Asia-FirstCall/ -- Biostar Pharmaceuticals, Inc. (NASDAQ GM: BSPM) ("Biostar" or "the Company"), a developer, manufacturer and marketer of pharmaceutical and health supplement products for a variety of diseases and conditions, today announced that on October 20, 2011, it completed the previously announced acquisition of Shaanxi Weinan Huaren Pharmaceuticals, Ltd. for an aggregate cash price of RMB 61 million (approximately USD$9.62 million).  Additionally, the name of the acquired company changed to Shaanxi Weinan Aoxing Pharmaceuticals, LLC. ("Shaanxi Weinan").

Following the completion of this acquisition, Biostar increased its portfolio of drug approvals and permits with an additional 86 drugs (60 prescription drugs and 26 OTC drugs) and one health product.

Ronghua Wang, Biostar's Chairman of the Board and Chief Executive Officer noted, "With the closing of this transaction, we have completed a significant step towards achieving our growth strategy of expanding our product portfolio and increasing our market share.  Shaanxi Weinan's state-of-the-art facility has five production lines, a high-tech laboratory, and is located approximately 60 miles from our Xianyang facility." 

Mr. Wang added, "The acquisition of Shaanxi Weinan's portfolio will also help us further diversify our product mix.  We will continue to manufacture and market Shaanxi Weinan's existing products: Fosfomycin Calcium (prescription drug used to fight urinary tract infections), Huangyangning Tablets (prescription drug used for the treatment of cardiovascular disease), Zhitong Tougu Plaster Cream (OTC cream used as a pain reliever), Jiakangling Capsule (prescription drug used for the treatment of hyperthyroidism), Qianlietong Capsule (prescription drug used to diagnose benign prostatic hypertrophy), Wenweishu Capsules (prescription drug used to treat chronic gastritis), and Huaren Changweitong Capsule (health product used to improve gastrointestinal function).

"Furthermore, based on the results of market research we recently conducted, we plan to start to manufacture and market a number of new products including: Compound Paracetamol and Amantadine Hydrochloride (OTC drug used to fight the common cold), Danshen Tablets (prescription drug used for the treatment of coronary heart disease), Piracetam Tablets (prescription drug used for the treatment of cerebrovascular disease), Erythromycin Estolate Coated Particles (prescription drug used as anti-bacterial anti-inflammatory).  We expect to make these products available in the market in the next four months. Most of these drugs target widespread diseases and conditions affecting all ages, are sold in local pharmacies and hospitals in China, are included in the National Essential Medicines List and in most cases, are covered by personal health insurance." 

Mr. Wang noted, "Currently, these drugs are being manufactured and sold by several pharmaceutical companies in China and competition we are facing is formidable.  We plan to utilize our extensive distribution network which covers 25 provinces, over 11,000 rural medical sales outlets in the Shaanxi province and our sales team of over 300 people, to aggressively promote these products by offering them at prices lower than our competitors.  Our platform is supported by China's $124 billion healthcare reform plan launched in 2009 with accessibility and affordability being the two major government guidelines of this plan.   Additionally, our goal is to continue to take advantage of the New Rural Medical Care Cooperative Program launched by the Chinese government in 2008, and benefit from an increased number of patients seeking cures through medicines offered in hospitals and healthcare centers."

Mr. Wang concluded, "In 2012, we expect to generate at least $5 million in revenues from the newly acquired company. As previously announced, the acquisition of Shaanxi Weinan is expected to be accretive to 2012 earnings."

Pictures of the Shaanxi Weinan facility and laboratory can be found at our website by clicking the following link:  http://www.biostarpharmaceuticals.com/newsdisp.asp?id=131 

Second Quarter 2011 Results

• Total net sales in 2Q2011 increased 33.6% from 2Q2010 to $25.9 million. Total net sales in 1H2011 increased 29.7% from 1H2010 to $41.2 million.
• Diluted earnings per share were $0.15 and $0.20 for the 2Q2011 and 2Q2010, based upon 27,783,978 and 27,797,012 diluted common stocks outstanding, respectively.
• Non-GAAP diluted earnings per share were $0.20 and $0.21for 2Q2011 and 2Q 2010 respectively.

SECOND QUARTER AND FIRST HALF 2011 FINANCIAL SUMMARY:

Looking ahead, with our expanded sales network, enhanced brand positioning and diversified product portfolio, we remain confident about the company's business outlook. We maintain the previously provided guidance for top-line growth of 20-25% for our fiscal year ending December 31, 2011. We anticipate to continue improving our operations to drive growth and increase value for our shareholders."

Rodman and Renshaw on BSPM                              7/25/2011

Termination of Coverage

Effective immediately, we are terminating coverage on Biostar Pharmaceuticals, Inc. (BSPM) to better allocate resources within our coverage universe. Our last rating on Biostar was Market Outperform/Speculative Risk with a Target Price of $7.00. Investors should not rely on our previously published financial projections.

INVESTMENT THESIS

Biostar is a Chinese pharmaceutical company that is focused on developing, manufacturing and marketing pharmaceutical products and health products in China. The company has a portfolio of ten marketed products. Biostar’s flagship product Xin Aoxing Oleanolic Acid Capsule targets the largest hepatitis B market in the world. Xin Aoxing is one of the few SFDA approved over the counter (OTC) drugs in China to treat hepatitis B. In 2010, the company recorded $53MM in sales, representing 66% of total revenue. With continuous aggressive marketing effort, sales of Xin Aoxing are estimated to reach $64MM in 2011, a 20% growth YoY. The company reported $80MM in total revenues in 2010, and we estimate $98MM in sales in 2011, representing a 23% growth over 2010.

Additionally, Biostar has established an extensive marketing network with 21 distributors and over 270 sales people. Through direct-to-consumer advertising, Biostar has established a regional brand name and has penetrated 22 provinces. By the end of 2010, Biostar reported a total of 10,000 rural clinics that are included in the network. The company is expected reach 13,000 rural clinics in 2011.

Valuation

We derive our valuation for Biostar based on an analysis of P/E multiples of comparable companies. Companies with similar growth opportunities are currently trading at approximately a ~11X P/E multiple. By applying a 11X P/E multiple to our 2011 EPS estimates of $0.60, the estimated value of Biostar would be $7/share.

INVESTMENT RISKS

Biostar faces risks similar to other Chinese companies in the pharmaceutical industry, including changes in regulatory and health policies, delays in regulatory approval, clinical trial failure, and insufficient funds for long-term sustainability.

Notice Regarding Privacy and Confidentiality:

This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member FINRA.
Member SIPC.

Notice Regarding Privacy and Confidentiality:

This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member SIPC.
Member FINRA.

Rodman & Renshaw on BSPM

BioStar also provided preliminary results for its share repurchase program. As of the close of business on June 10, 2011, Mr. Wang had repurchased approximately 115,000 shares at an average price per share of US$1.26. As background, BioStar announced on May 25, 2011, that its Board of Directors has approved Chief Executive Officer and Chairman of the Board, Mr. Ronghua Wang, to adopt a repurchase of up to 200,000 shares of the Company's common stocks effective from June 1, 2011 to November 11, 2011. For more information related to Mr. Wang's repurchase, please refer to the Company's press release "Biostar Pharmaceuticals, Inc. Approves Share Repurchase Plan; CEO Adopts 10b5-1 Trading Plan" dated May 25, 2011.

XIANYANG, China, May 25, 2011 /PRNewswire-Asia-FirstCall/ -- Biostar Pharmaceuticals, Inc. (NASDAQ GM: BSPM), Xianyang-based manufacturer of a leading over-the-counter Hepatitis B medicine, Xin Aoxing Oleanolic Acid Capsules ("Xin Aoxing Capsules"), and a variety of pharmaceutical products, today announced that, following the Board's approval, the Company's Chief Executive Officer and Chairman of the Board, Ronghua Wang, has adopted a stock trading plan in accordance with the guidelines specified by Exchange Rules 10b5-1 and 10b-18 and other legal SEC legal requirements under the Exchange Act.   

The Plan is effective as of June 1, 2011 and is valid through November 11, 2011. Under this plan, Mr. Wang may purchase up to 200,000 shares of the Company's common stock, subject to certain conditions. The timing and actual number of shares repurchased will depend on a variety of factors including regulatory restrictions on price, manner, timing, and volume, corporate and other regulatory requirements and other market conditions in an effort to minimize the impact of the purchases on the market for the stock. There can be no assurance that any shares will be repurchased either through plan or otherwise.

Rule 10b5-1 permits corporate officers, directors and others to adopt written, pre-arranged stock trading plans when they are not in possession of material, non-public information. These plans allow insiders to have shares bought or sold for their accounts over a period of time regardless of any material, non-public information they may receive after adopting their plans.

Mr. Wang stated, "The Board's authorization of the share repurchase plan reflects our confidence in the strength and confidence we have in the fundamental strength of our business. We remain strongly committed to maximizing the long-term shareholder value and realizing the full potential of our business and operations."

As of May 25, 2011, Biostar had approximately 27.4 million shares of common stock outstanding.

Business Developments

Biostar continued to expand its reach into the rural market, which has less competition and pharmaceutical consumption per capita is almost 10% of urban areas. As of March 31, 2011, Biostar has opened 10,000 rural sales outlets in 22 provinces. The Company plans to include all 10 of its products at all rural locations, in addition to select pharmaceuticals from other producers, in order to drive incremental revenues through existing locations, while improving profitability.

Aoxing continued to grow by contributing $11.1 million of sales, a 20% increase from 2010. The Company plans to add 130 new staff to the sales team during 2011 which would bring the total number to 400 and will continue to make meaningful investments in its marketing strategy, by incorporating television, print and radio across multiple provinces. Aoxing is currently sold in 22 provinces and the management team plans to expand into four additional provinces, including Hainan, Hunan, Guangxi, and Zhejiang during 2011.

Biostar launched 5 new products during 2010, including health products such as Tangning Capsule, Yizi Capsule, Shengjing Capsule and Aoxing Ointment. Total revenue from new products was approximately $0.7 million during the first quarter of 2011. In early April 2011, the Company's Zushima Analgesic spray, a pain reliever product intended for use by military personnel passed the examination of Chinese military drug administration. Currently the Company is preparing for the additional required documents and expects to receive the final approval and license to produce in Zushima Analesic spray in late 2011.

"We are optimistic about 2011 and the ability to sell through all of our products through a robust distribution channel and rural sales network. We are confident in meeting our target for the year of 20-25% growth in revenues year-over-year.

On April 6, 2011, Deyin Chen, the Chief Financial Officer of Biostar Pharmaceuticals, Inc. , tendered his resignation as the Company’s CFO effective immediately. Mr. Chen’s departure was not due to any disagreement with the Company, but due to his intention to pursue other professional and personal opportunities. The Company is thankful to Mr. Chen for his service as the Company’s CFO and wishes his success in his future endeavors.

Effective as of April 7, 2011, the Board of Directors of the Company appointed Mr. Zack Zibing Pan as the Company’s Chief Financial Officer.

Fourth Quarter Results:

• Revenue for the fourth quarter of 2010 increased 65.7% to approximately $28.2 million compared to $17.1 million for the fourth quarter of 2009.

"We are very pleased to report solid operating progress for both the fourth quarter and full year, which was supported by robust revenue growth across several products. We implemented a broader marketing strategy for our flagship Xin Aoxing Capsule, complemented by our expansion into more retail locations in rural areas. This enabled us to achieve record sales and earnings for the year," commented Ronghua Wang, Chairman and Chief Executive Officer of Biostar. "We expect to have 13,000 rural locations by the end of 2011, up from approximately 10,000 at the end of 2010, and believe this sales channel will further drive incremental growth for the year."

• Operating income for the fourth quarter of 2010 totaled approximately $7.9 million, a 146% increase from $3.2 million reported for the fourth quarter of 2009
• Adjusted Non-GAAP net income for the fourth quarter was $6.3 million, or $0.24 per diluted common share vs. $0.12 the year before.

Rodman & Renshaw on BSPM                              12/13/2010

On Track to Achieve 4Q10 & Full Year Guidance 

Key Points: 

• Biostar reported unaudited updates on sales and rural distribution network. 
• The company reported combined revenue of $18.3MM in October and November 2010, a 68% increase YoY. 
• Sales of the flagship product Xin Aoxing were $12.4MM, representing a 67% growth YoY. 
• Rural distribution network surpassed 9,500 clinics, on track to reach 10,000 by YE10. 
• We reiterate our Market Outperform Rate with a 12-month target price of $7 per share.   

Maintains Strong Revenue Growth in the World’s Largest Hepatitis B Market 

Biostar’s flagship product Xin Aoxing targets the largest hepatitis B market in the world. The market for hepatitis B drugs could potentially grow multiple fold from current $700MM in China. Xin Aoxing is one of the few SFDA approved OTC drugs for the treatment of hepatitis B. The OTC classification allows Biostar to conduct direct-to-consumer (DTC) advertisement campaigns and to build regional brand name. Sales of Xin Aoxing reached $12.4MM in October and November. We previously projected $50MM in Xin Aoxing sales in 2010. Given reported sales of $47.2MM in the first 11 months, we believe Biostar is likely to beat our estimates on Xin Aoxing sales in 2010.

2010 Revenue Guidance Achievable 

The company guided to $80MM in sales for 2010. Since sales of $70MM were recorded in the first 11 months, the company is expected to achieve $10MM in sales in December. Historically, the fourth quarter is the strongest and December is the strongest sales month. We believe the company is on track to meet its 2010 guidance.

Marketing Efforts Fuel Growth 

Biostar has established an extensive marketing network with 21 distributors and over 280 sales people. Through DTC advertising, Biostar has established a regional brand name and has penetrated 22 provinces. In 3Q10, Biostar reported a total of 8,500 rural clinics that are included in the network. In October and November, Biostar added an additional 1,000 rural clinics. We believe the company is on schedule to reach 10,000 by YE10, as guided.

Valuation 

We derive our valuation for Biostar based on an analysis of P/E multiples of comparable companies. Companies with similar growth opportunities are currently trading at approximately a ~9X P/E multiple. By applying a 9X P/E multiple to our 2011 EPS estimates, the estimated value of Biostar would be $7/share.


Notice Regarding Privacy and Confidentiality: 

This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member FINRA.
Member SIPC.

Rodman & Renshaw on BSPM

Investment Opinion 

We are initiating coverage of Biostar Pharmaceuticals with a Market Outperform / Speculative Risk rating and a 12-month target price of $7/share. Biostar has established strong historical revenue growth with its flagship product Xin Aoxing targeting the world’s largest hepatitis B market. The company’s future growth could be driven by increasing market penetration of Xin Aoxing in addition to a pipeline of smaller marketed products.

Intend to Dominate the World’s Largest Hepatitis B Market 

Biostar’s flagship product Xin Aoxing targets the largest hepatitis B market in the world. One third of the world’s hepatitis B patients reside in China. The market for hepatitis B drugs could potentially grow multiple fold from current $700MM in China. Xin Aoxing is one of the few SFDA approved OTC drugs for the treatment of hepatitis B. In addition, the OTC classification allows Biostar to conduct direct-to-consumer (DTC) advertisement campaigns and to build regional brand name. Sales of Xin Aoxing reached $35MM in 1-3Q10, contributing 67% of total revenue. In our opinion, Xin Aoxing could reach $50MM in sales in 2010 and $80MM in 2013.

Marketing Efforts Fuel Growth, Survey Supports Strong Potential 

Biostar has established an extensive marketing network with 21 distributors and over 280 sales people. Through DTC advertising, Biostar has established a regional brand name and has penetrated 22 provinces and over 8,500 rural clinics. Our survey on 16 out of 21 distributors suggests strong growth potential for the key product based on brand name recognition and customer loyalty. The company plans to increase market penetration by expanding its sales network to 10,000 rural clinics by YE10, and to 26 provinces by YE11.

China’s Healthcare Initiative to Drive Demand 

China’s economic growth is predicted to outpace the rest of the world in 2010 and 2011. Chinese pharmaceutical industry is a key contributor to overall growth. Based on the announced $124B healthcare budget for 2009-2011, we believe the potential demand for pharmaceutical products could increase by six-fold in 2010.

Valuation 

We derive our valuation for Biostar based on an analysis of P/E multiples of comparable companies. Companies with similar growth opportunities are currently trading at approximately a ~9X P/E multiple. By applying a 9X P/E multiple to our 2011 EPS estimates, the estimated value of Biostar would be $7/share.

Notice Regarding Privacy and Confidentiality:

This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member FINRA.
Member SIPC.  

• Biostar's preliminary estimates of its combined revenues for October and November 2010 shows that the revenues for the period increased 68% to approximately $18.3 million, compared to $10.9 million for the same period of 2009.

• Sales of Xin Aoxing Capsules, Biostar's flagship product, increased by 67% to $12.4 million or 68% of total unaudited revenue for the first two months of the fourth quarter 2010.

Similarly, the Company estimates its unaudited revenues for the first 11 months of 2010 to be $70.2 million, approximately 88% of the Company's full year revenue guidance of $80 million, an increase of 49% compared to the same period of last year. Xin Aoxing's sales were $47.2 million, growing 47% during the first 11 months of 2010. The Company continued its expansion into rural communities in China with products now being sold at over 9,500 locations as of November 30, 2010, up approximately 12% from the end of the third quarter ending September 30, 2010.

"Historically for our Company, the fourth quarter is the strongest sales quarter and December is the strongest sales month. Strong reorders for Xin Aoxing in new markets, driven by a successful advertising program, and supported by sales growth in several other products gives us confidence we will meet our 2010 guidance. We are also on track to meet our 10,000 location target for the rural expansion program and believe this sales channel will drive incremental growth during 2011," commented Ronghua Wang, Chairman and Chief Executive Officer of Biostar. "We will continue to maintain stringent credit terms with our customers to enhance working capital. At the same time, we are working on expanding Xin Aoxing's delivery format to include an injectable form, which we expect to be more effective when applied to patients diagnosed with acute or severe Hepatitis B."

The revenue and other financial estimates contained in this press release have not been audited or reviewed by our independent certified public accountants and accordingly they express no opinion or other form of assurance as to this information. The Company provides no assurance that these preliminary estimates will not change following the Company's completing the fourth fiscal quarter of 2010 and the financial audit of such results of operations, or that such changes will not be material.

"We were pleased with the balanced growth across several products in our portfolio which resulted in a near 30 percent revenue growth and strong cash flow,” commented Ronghua Wang, Chairman and Chief Executive Officer of Biostar. “The third quarter results are a testament to increased customer acceptance of many of our new products, our growing brand recognition and our ability to leverage the proper distribution channels. As we strive to optimize our sales and marketing strategies and enter additional rural markets, we anticipate further growth for our products.”

Financial Guidance

The Company is reiterating its 2010 sales and net income guidance of $80 million and $18 million, respectively.

 Biostar Pharmaceuticals, Inc. today announced it has expanded its rural distribution network in the third quarter ended September 30, 2010 to 8,500 locations, an increase of approximately 21.4% from the second quarter ended June 30, 2010.

Biostar sees significant opportunities created by the state-implemented New Rural Cooperative Medical System to expand its rural distribution network. As of September 30, 2010, 10 of the Company's products were available for sale in approximately 8,500 rural retail locations across 22 provinces. Based on current internal projections, management expects the Company's rural retail distribution to double over the next few years. Sales to rural markets grew 66% in the first half of 2010 to $4.8 million, representing approximately 15% of total sales.

"We continue to expand our rural distribution network aggressively," commented Ronghua Wang, Chairman and Chief Executive Officer of Biostar. "With the PRC government allocating nearly $5.6 billion to expand basic medical services to all 900 million rural farmers by 2010, Biostar is well positioned to capitalize on this secular growth opportunity. We see many more years of healthy growth as more Chinese consumers have access to our products and our brand awareness continues to grow. Expanded rural distribution, coupled with strong growth in existing markets, makes us confident in reaching our 2010 sales and net income guidance of $80 million and $18 million, respectively."

Financial results of the second quarter ended June 30, 2010.

• Revenue increased 46.4% to $19.4 million.
  
• 2010 Non-GAAP adjusted net income increased 50.9% to $5.8 million.
  
• Adjusted EPS of $0.21 vs. $0.16.

"We are pleased to report another quarter of strong revenue growth, which benefited from the 42% growth in sales of our flagship product. We are seeing dividends from the resources allocated to expand brand recognition and awareness for our Xin Aoxing Capsules as a preferred medical treatment for Hepatitis B in China," commented Ronghua Wang, Chairman and Chief Executive Officer of Biostar. "The addition of new rural network locations and our nutritional supplement product line is anticipated to generate incremental revenues for the balance of 2010. Collectively, our growth plan gives us confidence in meeting our 2010 guidance."

"We are making progress on all aspects of our business. We expect to receive the final approval to produce Zushima Analgesic Spray in October. With $30 million in anticipated capacity, we expect to generate $3 million in revenue for fiscal 2011 and to grow at least 50% for the coming years. We will remain focused on expanding our sales footprint, branding our leading products, while introducing higher margin products, which we believe will collectively drive further growth and increased profitability," concluded Mr. Wang.

Biostar reiterates guidance for 2010:

• Revenue expected to be between $80.0 to $82.0 million.
  
• Net income between $18.0 to $20.0 million.

Please note: On July 6, 2010, GeoTeam removed all Chinese stocks that were on GeoBargains and GeoSpecial lists to respective Radar lists as we complete our "quality assessment."

Our intent over the short-term is to build a check list to assess the risk position of firms in the ChinaHybrid space. For the time being this will consist of the following: (this list is likely to grow substantially)

First quarter 2010 Conference call Excerpts:

• Management would like to reiterate revenue guidance for 2010 of $80 million to $82 million and net income between $18 million to $20 million. This represents between 54.1% to 53.8% revenue growth and between 71.4% to 90.5% net income growth year-over-year. Management is expecting increasing demand in existing markets and the new market development of our Xin Aoxing capsule will be the major contributor of year-over-year revenue growth. We launched Beijing and Shanghai markets in the first quarter and then four new markets, including Xinyan, Shaanxi; Xinyang, Su; Hubei in Guangshen Provinces in early April. We believe these new markets will drive significant revenue growth and enable us to gain incremental market share in the latter of 2010. In addition, we expect the Mei pude acquisition to contribute asset acquisition to contribute approximately $3 million in incremental revenue during 2010.
  
• We continue to make progress on all facets of our business and continue to stress our competitive advantage. Our efforts and investment to emphasize sales and marketing will further enhance the market leadership of our Xin Aoxing capsule and increase the sales of our products (unintelligible) our distribution network, including the rural supply network. In addition, our research and development efforts to maximize product development activities will expand our product pipeline. We believe that our emphasis of broadening our product pipeline, coupled with our enhanced sales and marketing effort, and the planned expansion of (inaudible) will continue to yield significant increases in revenue in the second quarter of 2010 and beyond.
  
• We spent more on advertising expense during the first quarter. The results will be seen in the second quarter on the revenue growth. We, usually we can… we usually accomplish 40% of our revenue projection by the end of second quarter and then the rest of the 60% in the second half of the year. And, in terms of net income, we expect to reach about 20% of our net revenue to… net income to revenue percentage during the second quarter of 2010. So we are very confident we can meet this projection.
  
• You have seen our growth from the year 2008 to 2009 and we have been always (unintelligible) on our projection, to meet our projection. We have created returns to the shareholders. In terms of our current cash and then the revenue generated from operations, will be enough for us to meet the 2010 guidance. As far as the additional financing, we remain flexible on this issue, but we don’t have a specific plan on this.

See full transcript...

Added to the GeoSpecial list on August 14, 2009 @ $3.85
 
Catalyst: Leader in its industry with strong competitive advantage
Peak performance: Reached a high of $5.51 on April 23, 2010.
Current Price: $3.50

Current road block: Dilution; Sub par first quarter 2010 margin performance; Regulatory issues.

Remains on the GeoSpecial list.  The company has reiterated its guidance, which should bode well for EPS comparisons in 2010, especially during the second half of the year. The company put to rest negative rumors regarding its standing with China regulatory bodies.

    -- Q1 2010 revenue increased 66.0% to $12.4 million
    -- Q1 gross margins were 77.0%, a 1,270-basis point improvement
    -- Q1 2010 Non-GAAP adjusted net income increased 32.1% to $2.4 million
       with adjusted EPS of $0.09
    -- Biostar reiterates guidance for 2010: Revenue expected to be between
       $80.0 to $82.0 million and net income between $18.0 to $20.0 million

"We are pleased to report another quarter of strong revenue growth, as Biostar gains further brand recognition and awareness for our Xin Aoxing Capsules. With momentum in several key markets, we are confident that this flagship product is becoming known as one of the major medical treatments for Hepatitis B in China," commented Ronghua Wang, Chairman and Chief Executive Officer of Biostar. "We are optimistic that with our continued expansion into new markets, supported by comprehensive marketing and distribution strategies, including direct sales, we are in position to leverage our product portfolio for optimal growth." Wang concluded.

For those following BSPM, it is no secret by now that there was a rumor flying around about the suspension of their main oleanic acid drug in Shaanxi Province. It is quite possible that the stir and unusual trading activity was created by some news and blog sources (These are translated versions of the pages):

Source 1

Source 2

This morning, BSPM issued a press release addressing this matter:

"On April 22, 2010 the Shaanxi SFDA published on its website a notification stating that the marketing language used in connection with several pharmaceutical products sold in the province are not within approved parameters."

The good news is that the company has swiftly remedied the problem:

"The Company has made proper modifications to its sales and marketing materials and has accordingly received a new advertising approval for its Xin Aoxing from the Shaanxi SFDA on April 27, 2010."

"The notification has not disrupted production or sales of Xin Aoxing and is not expected to have any impact on previously announced fiscal 2010 revenue and net income guidance."

Since BSPM was trading above $5.00, we are optimistic that shares will gravitate back to those levels and may offer a short-trading opportunity for investors.

^a The above forecasts reflect the Company's current and preliminary views and are therefore subject to change. Please refer to the Company's Safe Harbor Statement (usually in press releases) for the factors that could cause actual results to differ materially from those contained in any forward-looking statement.

^b Non-GAAP EPS figures generally exclude certain non-operating gains and losses as well as certain non-cash items. Non-GAAP information should not be viewed in isolation or as a substitute for reported, or GAAP information . For a more complete explanation of the company's definition of non-GAAP please refer to its financial press releases. The GeoTeam® non-GAAP figures may, from time to time, differ from company supplied figures.  The GeoTeam® non-GAAP figures apply a 25% and 36% tax rate for Chinese and United States companies respectively.

^c The company provided 2009 operating income guidance and 2010 net income guidance. The GeoTeam provided implied EPS figures from this data as well as implied full year 2009 net income figures.

^d GeoTeam assumption.

Notes from Brean Murray, Carret & Co. China Growth Conference on November 19, 2009

Our second interview of the day was with the CEO of Biostar Pharmaceuticals (OTCBB:BSPM). The Company demonstrated that it has a coherent understanding of its markets and the steps necessary to accelerate growth.

Biostar is a pharmaceutical company that manufactures & distributes 15 nonprescription, prescription and nutraceutical products.

Biostar's Appeal

We are most excited about three aspects of Biostar's story.

First of all, BSPM flagship Hepatitis drug is the only-over-counter option available in China. According to the BSPM two other companies have the license for such a drug, but failed to compete due lack of market of awareness. For example, one of its competitors, in an effort to cut costs, chose to market tablets versus Biostar's choice to produce capsules. In the end the less effective tablet product failed to garner favor, and Biostar's choice to first focus on quality obviously paid off.

We asked management if this favorable insulation from competition can continue.

Answer:

First, the Chinese government is not issuing anymore OTC hepatitis licenses and is also limiting advertising campaigns for for prescription hepatitis manufacturers.

Secondly, China is encouraging Pharma companies to educate and provide hepatitis treatment to the neglected rural regions where Hepatitis is much more prevalent. BSPM intends to respond to this significant market opportunity by being an early entrant into the rural areas.

Finally, the Company recently completed a capital raise enabling it to construct a raw materials processing facility. This vertical move may help Biostar achieve the following benefits:

• The Company's goal is to utilize 25% of raw material production internally.
• BSPM may generate another source of revenue as it will sell the remaining 75% externally.
• Margins should improve.
• Supply disruption risks may be mitigated.

Answer:

"We have a conservative management structure that is concerned primarily with quality and not quantity of products. There are several ways we can still enjoy rapid growth with our current structure. First, we don’t have full China coverage which we expect to gain within two years. Second, our penetration into into the rural areas offers a whole new avenue of growth for new and seasoned product portfolio. Third, we can consider making acquisitions of distributors to increase our market presence into areas we are not serving."

We were also pleased to learn that it takes BSPM as little as one month to push a product through a distribution network.

Our last inquiry touched upon the status of Biostar's capacity utilization?

Answer: At 100% capacity Biostar can approach a $100 million annual revenue run rate. "We are currently operating at 60% with goals of reaching 80% in 2010."

In summary, what we have is a conservative management team with aggressive goals to grow via market penetration, emphasizing product quality and control of its raw material supply.

Investors may begin to notice BSPM if it continues to build on the EPS momentum established in the previous two quarters of 2009, boasting growth in excess of 100%. Income from operations targets of $15.9 million for 2009 and $21.1 million for 2010 affirms that Biostar will continue to post solid earnings gains in the upcoming year.

With implied 2010 EPS of $0.71 and a current price of $3.15, BSPM is selling at a P/E of 4.4 in a sector that is gaining steam. Thus, both value and growth investors may find the BSPM an intriguing play.

Excerpt From GeoBargain & GeoSpecial Review article, November 17, 2009.

Biostar Pharmaceuticals (OTC BB:BSPM) Closing Price Nov. 16, 2009: $3.16

• Added to the GeoSpecial List on August 17, 2009 at $3.80.
• Has yet to perform

Biostar Pharmaceuticals announced the closing of a $3.6 million equity financing on November 6, 2009. The proceeds will be used to fulfill Biostar’s vertical integration strategy to “manage and control a large portion of its production which includes harvesting, raw material processing, pharmaceutical ingredient synthesizing and finally medicine manufacturing in our current facility.”

The GeoTeam is speculating that the end result should lead to increased sales and margins. The Company also reaffirmed its income from operations make-good targets of $15.9 million for 2009 and $21.1 million for 2010. At a share price of $2.95, the stock is selling at a meager P/E of 5.67 on the GeoTeam’s calculated 2010 fully taxed EPS of $0.52. This is a situation that value investors may find favorable.

Biostar Pharmaceuticals (OTC BB:BSPM), GeoSpecial

The Company reported a sharp increase for its 2009 third quarter financial results.

On November 6, 2009, BSPM announced that is on track to meet its make-good provisions, which call for income from operations of $15.9 million for 2009 and $21.1 million for 2010.

BSPM has reported 2009 nine months net income of $8.8 million. This implies that fourth quarter net income will be around $3.0 million (with a 25% tax rate) and EPS of around $0.11

See BSPM new release