Biostar Pharmaceuticals (NASDAQ:BSPM)

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.

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.