Biostar Pharmaceuticals, Inc.
Biostar Pharmaceuticals, Inc. sells five SFDA approved medicines in China. Some 56 percent of its revenues are generated by Xin Aoxing Oleanolic Acid Capsules, the only SFDA-approved, OTC treatment for hepatitis B. Biostar is also building a raw material processing center. It began growing its own crops last year, and once the operation is producing fully, the company will be able to supply all of its own raw materials and sell to other TCM manufacturers.
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Biostar Pharmaceuticals' Q2 revenues grow 46% as sales of flagship Hep B drug increase
Biostar Pharmaceuticals, Inc. (Nasdaq: BSPM), a Xianyang-based manufacturer of the over-the-counter Hepatitis B medicine Xin Aoxing Oleanolic Acid Capsules as well as a variety of pharmaceutical products, posted revenue growth of 46.4% for the second quarter of 2010 , reaching revenues of $19.4 million, due largely to the sale of its Hepatitis B flagship product. Net income also rose 44.7% to $5.6 million compared to Q2 2009, while diluted earnings per share were $0.20 versus $0.16 last year.
Sales of Xin Aoxing capsules increased by 41.7% to $12.7 million with a gross margin of 85.0%, compared to $8.9 million in the second quarter of 2009. During the period, sales of Xin Aoxing represented 65.4% of total revenues and benefited from $1.7 million in sales from the Beijing, Tianjing and Shanghai markets, which were launched in the first quarter of 2010, in addition to $1.6 million from four new provincial markets including Jiangsu, Jiangxi, Chongqing and Hebei province.
Biostar`s Gan Wang Compound Paracetamol capsules helped as well, as its sales grew 42%, benefitting from unusually cold weather during Q2 in Shaanxi province, the company said. It also continued its expansion into rural communities in China, with products now being sold at 7,000 locations : 4.0 million in revenues were generated through this sales channel during the second quarter, up 58.8% from the year ago period. The quarter also saw the company launch health supplement products.
"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," said chairman and CEO
Ronghua Wang.
"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."
Indeed, the company re-iterated its guidance for the year, expecting revenues to reach between $80 million to $82 million and net income to total between $18 million and $20 million.
Biostar expects to receive the final approval to produce its Zushima Analgesic Spray in October. With $30 million in anticipated capacity, it expects to generate $3 million in revenue for fiscal 2011 and to grow at least 50% for the coming years, added Wang.
As at June 30, cash and cash equivalents totaled $9.7 million.
Biostar Pharmaceuticals develops, manufactures and markets pharmaceutical and health supplement 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 (OTC) medicine for chronic hepatitis B, a disease affecting approximately 10% of the Chinese population. In addition to its hepatitis product, it currently manufactures two broad-based OTC products, two prescription-based pharmaceuticals, one medical device and five health supplements.
