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Biostar

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Title: Biostar


1
Biostar Nasdaq BSPM
Pharmaceuticals,
Inc.
Investor Presentation Aug 2014
2
Forward Looking Statement
Statements contained in this presentation not
relating to historical facts are forward-looking
statements that are intended to fall within the
safe harbor rule under the Private Securities
Litigation Reform Act of 1995. All
forward-looking statements included herein are
based upon information available to the Company
as of the date hereof, and the Company assumes no
obligation to update any such forward-looking
statements. As a result, readers and potential
investors should not place undue reliance on
these forward-looking statements. To the extent
that any statements made here are not historical,
these statements are essentially forward-looking.
Forward-looking statements can be identified by
the use of words such as expects, plans,
will, may, anticipates, believes,
should, intends, estimates and other words
of similar meaning. These statements are subject
to risks and uncertainties that cannot be
predicted or quantified and, consequently, actual
results may differ materially from those
expressed or implied by these forward-looking
statements. Such risk factors include, without
limitation, our ability to properly execute our
business model, to attract and retain management
and operational personnel, potential volatility
in future earnings, fluctuations in the Companys
operating results, governmental decisions and
regulation, and existing and future competition
that the Company is facing. These forward-looking
statements are subject to known and unknown risks
and uncertainties that could cause actual events
to differ from the forward-looking statements.
More information about some of these risks and
uncertainties maybe found in the Companys
filings with the Securities and Exchange
Commission under the caption "Risk Factors in
such filings. Information regarding market and
industry statistics contained in this
presentation is included based on information
available to us that we believe is accurate. It
is generally based on industry and other
publications that are not produced for purposes
of securities offerings or economic analysis. We
have not reviewed or included data from all
sources and cannot assure investors of the
accuracy or completeness of any such data
included in this presentation. Forecasts and
other forward-looking information obtained from
these sources are subject to the same
qualifications and the additional uncertainties
accompanying any estimates of future market size,
revenues and market acceptance of products and
services.
-
2
3
Introduction
  • Biostar Pharmaceuticals, Inc. (Nasdaq BSPM) is a
    Chinese based developer,
  • manufacturer and marketer of pharmaceutical and
    health supplement products for a
  • variety of diseases and conditions
  • Strong RD capabilities (two high-tech
    laboratories)
  • Two world-class production facilities
  • Diverse portfolio of products
  • Extensive and efficient distribution network in
    28 provinces
  • 82 acres of raw material herb plantations
  • Future strategic development

3
4
Investment Considerations

Unique vertically integrated business model
-
RD, raw material plantation, processing,
manufacturing, distribution and sales

Large product portfolio and a strong pipeline of
new products to continue to drive growth
- - - -
Currently produces and sells 30 products and 1
medical device Innovative product pipeline with a
wide variety of OTC and prescription drugs In
2011, acquired permits and approvals for 86 drugs
and one health product In March 2013, acquired
additional 13 drug approval license numbers

Xin Aoxing - leading market position, strong
brand recognition throughout China
- -
Targets hepatitis B virus (HBV) which affects
more than 10 of Chinas population Strong
recognition OTC drug approved by Chinas State
Food and Drug Administration (SFDA)

Well positioned to take advantage of market
opportunities such as
- - -
Chinas 124 billion healthcare reform plan New
Rural Medical Care Cooperative Program Milestones
won a bid to supply hospitals In 1 province with
Huangyangning Tablets, 2 provinces with Wenweishu
Capsules, 8 provinces with Hyperthyroidism
Capsules
4
5
1 About Biostar
2 Financial Highlights
3 Growth Opportunities
5
6
Vertically
Integrated
Business
Model
RD Lab
Lab, Processing, Warehouse and
Drug Manufacturing
Raw Material
RD Lab
Drug Manufacturing
Offices in Xianyang
Farm
Two world- class production Facilities Xianyang
Weinan
Raw materials and 82 acres of plantation
Covers retail outlets, hospitals, pharmacies and
Clinics
Sales network covering 28 provinces
Two RD Laboratories
6
7
Self-farming
Reduces Costs Quality

Controls
  • In 2008 acquired 82 acres in Tsinling Mountains
  • Planted and growing 13 herbs including
  • Salvia miltiorrhiza
  • Pricklyash peel
  • Eucommia bark
  • Gingko
  • Honeysuckle
  • Shizandra berry
  • Scutellaeria baicalensis georgi
  • Milk veteh
  • Radix codonopsitis
  • To control quality and reduce cost of raw
    materials

In 2010 - all raw materials were purchased from
suppliers planted herbs were harvested gradually
and the use of this is increasing
In 2011 - Salvia miltiorrhiza is being used as
raw material
From 2012-2014 - Additional herbs to harvest and
be ready for use
Goal - increase production and fulfill all needs
for raw materials or trade for other herbs
further
reduce costs and control quality
7
8
Strong RD Capabilities
  • Two RD laboratories (Xianyang Weinan)
  • 30 scientists researchers
  • Average 10 years of experience
  • External RD Biostar sponsors and owns
  • the Intellectual Property
  • Shaanxi College of Traditional Chinese Medicine
  • Shaanxi University of Science and Technology
  • Life Science College of Northwest University
  • The Fourth Military Medical University

Xianyang lab
Weinan lab
8
9
World-class Production Facilities
-
Xianyang
Xianyang facility
4 Good Manufacturing Production (GMP) certified
production lines producing 10 products and 1
medical device When fully launched, the company
anticipates annual production capacity over 100
million Two new production lines are under
construction and waiting for GMP
certification -Zushima production line -When
fully launched, the company anticipates to
generate approximately 30 million in revenues
annually
- -Health products line - When fully launched,
the company anticipates to generate approximately
10 million in revenues annually
9
10
World-class Production Facilities in Weinan
Weinan facility
  • Acquired Shaanxi Weinan Huaren Pharmaceuticals In
    October 2011
  • Five production lines
  • One high-tech laboratory
  • Currently, produces 20 drugs and one healthcare
    product
  • 3.0 million in net sales for the first quarter
    of 2014

10
11
Significant Designation for Biostars China
Subsidiaries
  • ?In January 2014, Biostar's operating subsidiary,
    Shaanxi Aoxing Pharmaceutical Co.,Ltd, was
    designated as the experimental base of the Liver
    Disease Health Education in Shaanxi province.
  • ?Shaanxi Aoxing Pharmaceutical has been awarded
    numerous honors of Shaanxi Pharmaceutical and
    Health Products Cooperation Association Director
    Unit.
  • ?The company believes that the above-referenced
    awards and experimental status will provide a new
    platform for product promotion, research and
    development of Biostar Hepatites B products.
  • ?More efforts will be directed towards the search
    and development of both current and future
    products.

11
12
New Partnership with Universities in Shaanxi
  •  A new liver cancer drug was developed in March
    2014 by the company and its partnerthe Research
    Institute of Pharmaceuticals at Shaanxi
    University of Chinese Medicine.
  •  Current cases of cancer on a global scale have
    been increasing drastically with China holding
    the larger percentage of the demographic
  •    According to the World Health Organization
    (WHO), in 2012 on a global basis, there were 14
    million new cancer cases and 8.2 million deaths
    China accounted for 3.07 million of the new cases
    and 2.2 million of the deaths.
  •    In 2012, China accounted for approximately
    50 of the worlds liver cancer cases.
  • Signed letter of intent in May 2014 with
    Northwest University to cooperate and develop a
    new Myocardial ischemia medication

12
13
A
Diverse
Portfolio
of
Products
-
Xianyang
Category Name

Treatment
SFDA
OTC
Aoxing 1 Oleanolic Acid Capsule
Acute and chronic hepatitis B (HBV)
Approved Ganwang Compound
Influenza
Approved Tianqi
Dysmenorrhea Capsule Menstrual
swelling and cramping
Approved
Prescription
Danshen Granule
Alleviates blood stasis and angina
Approved Taohuasan Pediatric
Children respiratory
tract infection Approved
Health Product
Yizi Capsules
Aids fertility and fetal development
Provincial level approved
Tangning Capsules
Type II diabetes
Provincial level
approved Shengjing Capsules
Replenish kidney function
Provincial level
approved Aoxing Ointment
Psoriasis, vitiligo and
dermatitis Provincial
level approved Aoxing Ganbaodai
Hepatic and liver protection
Provincial level
approved
Medical Device
Hernia Belt
Hernia
Provincial
level approved
Xin Aoxing Capsule
GanWang
Taohuasan
Tianqi Dysmenorrhea Capsule
Danshen Granule
13
14
A Diverse Portfolio of Products- Weinan
Category Name

Treatment

SFDA
OTC
Zhitong TouGu Ointment
Analgesic
Approved Anfengwan Compound tablets
Cold
Approved Deafness Tongqiao Pills
Deafness
Approved Wenweishu Capsules
Chronic
gastritis
Approved Chuzhang Zehaifu
Tablets Cataract

Approved
Prescription
Fosfomycin Calcium Capsules
urinary tract infection

Approved Huangyangning tablets
CHD

Approved Hyperthyroidism Capsules
hyperthyroidism

Approved Qianlietong Capsules
prostatic hypertrophy
Approved compound
Danshen tablets
CHD
Approved Piracetam Tablets
cerebrovascular
disease
Approved Erythromycin Estolate
Granules antisepsis and anti-inflammation

Approved Jingang Tablets
enchance kidney

Approved Aspirin Enteric-coated Tablets
cerebrovascular disease

Approved Liganlong Capsules
chronic hepatitis

Approved Longdan Xiegan Pills
purge pathogenic fire, clear heat

Approved Yanlixiao Capsules
anti-inflammation

Approved Danxiang Rhinitis Tablets
Allergic rhinitis, sinusitis

Approved Azithromycin Dispersible Tablets
anti-inflammation

Approved
Huaren Changweitong Capsules
enhance stomach function
Approved

Healthcare

Biostar has been the supplier of hospitals in 10
provinces, providing Huangyangning Tablets,
Wenweishu Capsules and Hyperthyroidism Capsules
since April 2012. The penetration of hospital
prescription drug has a milestone significance to
Biostar.
14
15
Competitive Advantages
  • Four nationally approved medications
  • Zhitong Tougu Plaster , Hyperthyroidism
    Capsules , Qianlietong Capsules ,
  • Yinyangsuo Tablets
  • Two exclusive nationally approved medicines
  • Zhitong Tougu Plaster , Amoxicillin
    Enteric-coated Tablets
  • Awaiting approval for army licensed drugs,
    exclusive production
  • Zushima Analgesic Spray
  • OTC medicine updated from the local standards to
    national standards
  • Xin Aoxing Oleanolic Acid
  • Two national patents
  • Zhitong Tougu Plaster,Aoxing Ganbao

15
16
Flagship Product

New
Aoxing

OTC drug for the treatment of HBV

Approved by SFDA Recognized by China Consumer
Association

Targets a highly contagious disease More than
130 million people (10 of Chinas population)
are infected with HBV

Has high effectiveness rate

High effectiveness rate in relieving HBV
symptoms per People's Hospital of Shaanxi
Province)
- (as

Nationally branded product and easily accessible

Sold at local pharmacies since 1998

Low cost/high margin

Highly affordable

In most cases covered by personal health insurance
16
17
Innovative Product Pipeline
Category Name
Treatment
Statute
Zushima Aerosol pain
suppressant Provided for the PRC
military,

Pending PLA approval
OTC
Prescription Drug
Yinyangsuo Tablets Tonifying kidney
National new drug, SFDA approved


Working on the paperwork Oleanolic Acid Injection
Liver cancer ,Liver cirrhosis Applied
for project approval Danshensu Yibingzhi
Myocardial ischemia In the 12th
5-year plan database

National class-one chemical
drug
17
18
Large Sales Network
Beijing
Factories in Xianyang and Weinan in Shaanxi
Province
Weinan
Xianyang
Biostar sales network coverage
  • Across 28 provinces
  • More than 13,000 in Shaanxi rural area
  • Sales team with 400 employees

18
19
Current Bid Distribution
Heilongjiang
Liaoning
Beijing
Hebei
Huangyangning Tablets bidding zone
Henan
Shanghai
Chongqing
Wenweishu Capsules bidding zone
  • Bidding for medicines across 10 provinces
  • Selling in nearly 30 hospitals
  • Planning on a hospital sales team with 200
    members.

Zhejiang
Jiangxi
Hyperthyroidism Capsules bidding zone
Guangxi
19
20
1 About Biostar
2 Financial Highlights
3 Growth Opportunities
20
21
Historical Financial Performance
21
22
Looking Forward
In late July 2012, Xianyang SFDA gave thegreen
light of approval to restart sales of gel
capsule products.
Despite the temporary setback, business remains
strong.
  • Continue introducing new products.
  • Expand the market.
  • Broaden channels of distribution.
  • Restart the sales of star product Xin Aoxing.

Business Plan
Steps taken
Re-establish customer confidence Started
aggressive advertising campaign in medical
journals and health magazines.
New Business ModelEstablished a B2C call center
for direct sales to customers
Established a hospital
sales team consisting of approximate 200 sales
representatives

22
23
Balance Sheet Highlights As of 31/12/2013
Highlights 31/12/2013 31/12/2012
Cash and Cash Equivalents 80,072 1,759,078
Total Current Assets 35,985,502 41,974,131
Total Assets 67,564,444 70,475,300
Total Current Liabilities 4,791,505 12,702,552
Total Shareholders Equity 62,772,939 57,772,748
Total Liabilities and Shareholders Equity 67,564,444 70,475,300
23
24
1 About Biostar 2 Financial Highlights
3 Growth Opportunities
24
25
Other Growth Opportunities
Chinas medicine and pharmaceutical industry is
one of the fastest growing industries in
the Chinese economy (According to Data Monitor
IMS Health)
  • The worlds third largest prescription drug
  • market
  • Grown at over 16 annually (since 2000)
  • Profits ranked 5th highest in China

Mentality of patients living in rural areas
is changing 70 of Chinas 1.3 billion rural
population. Number of patients seeking cures
through Modern medicines offered in hospitals and
healthcare centers is rapidly increasing
Highly fragmented market and government backed
consolidation initiatives provide
MA opportunities
25
26
Chinas Healthcare Reform

China's 124 billion healthcare reform plan was
launched in 2009. Two major guidelines of the
plan are accessibility and affordability

The first phase completed by the end of 2011
increased accessibility The second phase to be
completed by 2020 aims to increase affordability
by making medicines and medical services
affordable to everyone.

Chinese government increased the number of
medicines included in the National Reimbursement
Drug list (fully or partially reimbursable) Privat
e health insurance has become more affordable


5.6 billion investment over 3 years has
facilitated the New rural cooperative medical
care program

Investment on patient education and
encouragement to use modernmedicine Provides
patients suffering from severe diseases
with additional financial assistance Shaanxi,
Sichuan, Chongqing, Gansu, Henan, Hubei, and
Hunan comprised 30 of the 5.6 billion spending


26
27
Future Strategic Development
  • Biostars Strategies
  • 3 strategic moves based on medication, strength,
    simultaneous development
  • 3 innovations management innovation, operations
    innovation, technological
  • innovations
  • 4 accelerating processes internet marketing,
    information modernization, industrial
    diversification, service standardization
  • 1 strategic goal build up a pharmaceutical
    mainstay company

27
28
Implementation of Development Strategies
N Cina
  • Seek to acquire smaller, similarly situated
    pharmaceutical companies and pharmaceutical
    distribution companies, utilized to achieve
    economies of scale and optimize the scale of
    production and sales
  • Development of technological resources, supplying
    pipeline for 1-2 new products a year
  • Every 2 years create a new leading product, with
    targeted sales over RMB 100 Million
  • Diversified industrial development strategy
    pattern implementation of drug development,
    medicine cultivation, drug production, drug,
    pharmaceutical chain store sales
  • Build a pharmaceutical company, create economies
    of scale, improve yield per share, return to
    investors

28
29
How to Contact
Us
Corporate website www.biostarpharmaceuticals.com
Contact Ally Gong Tel 86-29-3368-6638 Email
office_at_aoxing-group.com
29
30
Biostar Nasdaq BSPM
Pharmaceuticals,
Inc.
Investor Presentation Aug 2014
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