Biostar Pharmaceuticals (NASDAQ:BSPM)

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Tuesday, October 25, 2011

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

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Tuesday, October 11, 2011

XIANYANG, China, October 11, 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 its wholly owned subsidiary, Shaanxi Aoxing Pharmaceutical, Ltd., entered into a Share Transfer Agreement ("Agreement") to acquire Shaanxi Weinan Huaren Pharmaceuticals, Ltd. ("Shaanxi Weinan") from the holders of 100% of equity interests in Shaanxi Weinan. The aggregate purchase price is RMB 61 million (approximately USD$9.62 million), all cash and payable in several tranches, as discussed in detail below.

Shaanxi Weinan owns drug approvals and permits for a portfolio of 86 drugs and one health product, all of which, following the completion of this acquisition, will be added to the Company's current drug portfolio. The Company anticipates to complete this acquisition on or before October 31, 2011, after all the closing conditions are met, as discussed below (the "Closing").

Pursuant to the terms of the Agreement, the Company agreed to pay cash purchase consideration as follows:

RMB 30 million (approximately USD$4.73 million) was deposited with the Equity Holders on December 29, 2010,
RMB 15 million (approximately USD$2.37 million) will be paid to the Equity Holders within three (3) business days as of the Closing Date (as defined below), provided they completed their respective share transfer registration with the applicable PRC authorities within 15 days of this Agreement, and
RMB 16 million (approximately USD$2.52 million) upon (i) the completion of the audit (by the auditing firm appointed by the Company) of Shaanxi Weinan's financial statements for 2009 and 2010 and confirmation of its 2009 and 2010 revenues of at least RMB 21 million and RMB 28 million, respectively, and of the net profit after tax of at least 15%, and (ii) the Equity Holders have paid their respective individual income and other applicable taxes for the transfer of the Equity Ownership to be completed within 2 months of this Agreement, and have performed certain additional obligations under the Agreement, and (iii) there are no material change in the operations or finances of Shaanxi Weinan, at closing of the proposed acquisition.

Ronghua Wang, Biostar Pharmaceutical's Chairman of the Board and Chief Executive Officer noted, "The Shaanxi Weinan's portfolio of 86 drugs and one heath product, does not, for the most part, overlap with our current product line. This acquisition should enable us to further increase our market share in the 25 provinces where we currently distribute and expand into the remaining provinces. Upon closing, we will start marketing many of these products using our extensive sales network, which covers 25 provinces and over 11,000 rural medical sales outlets. This acquisition is expected to be accretive to earnings in 2012."

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