Jiangbo Pharmaceuticals, Inc.(fka JGBO)

[996]

Genesis is slowly but steadily being picked up on other websites:
http://www.istockanalyst.com/article/viewarticle+articleid_2668094.html

Genesis Pharma Books 31% Higher Revenues in 2008
By: China Bio Today Wednesday, October 01, 2008 2:04 PM

Genesis Pharmaceuticals Enterprises (OTCBB: GNPH) released its 2008 full-year (ended June 30) financial report, showing that the company continues to do well. In 2008, revenues for the company climbed 31% to $99.5 million, though net income was up a miniscule 2% at $22.5 million. The net income works out to $1.84 per share, fully diluted.

The culprit for the relative shortfall in profit seems to have been Selling, General & Administrative costs, which rose 63% or $16 million in the year to $41.6 million. In 2008, SG&A constituted 42% of revenues, as opposed to just 34% in 2007. The rise in SG&A was partially offset by a decline in R&D spending, which fell to $3 million in 2008 from $11 million last year.

Looking ahead to 2009, Genesis expects to achieve revenues between $122 and $130 million during its next fiscal year, while operating income will be in a range between $40 and $43 million. The company’s 2008 operating income was $32.2 million.

During the past 12 months, the company completed a private placement of $35 million worth of convertible notes, and it received SFDA approval for Baobaole chewable tablets, a TCM for gastric distress. In September, after its fiscal year ended, the company effected a 40-to-1 reverse split of its stock. At the time of the reverse split, Genesis was worth $5 per share, post-split. Its price wandered lower following the split, but has now recovered. After the earnings announcement, Genesis moved up $.75 to $7.75, for a Price/Earnings ratio of just over 4.

Genesis ended its fiscal year with $48 million in cash and working capital of $73 million. Cash flow from operating activities in 2008 was $17.1 million.

In July, Genesis received SFDA approval to being producing Radix Isatidis Dispersible Tablets, a TCM for viral influenza. Sales in China will begin in October. The company is awaiting word from the SFDA on approval for three additional products.

The following is a description of Genesis’ principal products:

Clarithromycin sustained-release tablets -- semi-synthetic antibiotics. Genesis’ China subsidiary is one of only two domestic producers of this drug. It produced $46.4 million in revenues, approximately 50% of the China market share.

Itopride Hydrochloride granules – treats digestive system diseases. It produces $35.5 million in revenues. Genesis’ subsidiary has approximately 10-12% of the China market share.

Ciprofloxacin Hydrochloride tablets – an antibiotic. Produced $2.5 million in revenue last year but now being phased out. For a short period of time, Genesis’s subsidiary found itself as the only company in China with significant supplies of the raw material and produced the drug. Now that the shortage has evaporated, it no longer represents a market opportunity.

Paracetamol tablets -- a nonprescription analgesic used for treating fever due to common flu or influenza. Produced $500,000 in revenue in fiscal 2008. Will be phased out because revenues have declined in recent years.