Biostar Pharmaceuticals, Inc. (BSPM)

[GorillaGorilla]

Things I found interesting in 10-K

They give away one month supplies - I assume this affects margin and more so when they enter an area.

We continue to aggressively advertise this product and has actively maintained a program where consumers can try a one-month supply of the drug for free.


Ownership of "Meipude", the hernia company begins start of Q2

Recent Development

On March 18, 2010, we entered into an agreement to acquire 100% of Xi’an Meipude Bio-Technology Co., Ltd., a Xi’an-based medical equipment and nutrients manufacturer (“Meipude”) for RMB 7.85 million ($1.1million). We officially took control over the operations and the assets of Meipude on March 29, 2010, including its facilities, corporate documents and records, and business licenses and certificates. The Administration for Industry and Commerce of Xi’an Hi-Tech District has also accepted our application to change Meipude’s ownership registration, and we expect to receive the certificate attesting to such change shortly. Meipude manufactures and distributes topical hernia treatment belts, also manufactures a nutraceutical product for treatment of gynecological inflammation in young and middle-aged women. Meipude has been manufacturing and selling its products in Shaanxi and an adjacent province since 2004.


They are unaffected by price controls

For the years ended December 31, 2008 and 2009, our Danshen Granule is the only product subject to price controls which did not affect our gross profit, gross margin and net income in a material respect. It is possible that additional products may be subject to price control, or that price controls may be increased in the future. To the extent that our products are subject to price control, our revenue, gross profit, gross margin and net income will be affected since the revenue we derive from our sales will be limited and we may face no limitation on our costs.

All their major drugs are reimbursable - companies were fighting to get on the list so I suspect that's a good thing. Though note since Hep B drug is not presciptioned it follows from their statement it isn't reimbursed or surely they would have mentioned their best selling drug - something to keep eye on - it's still going to be more convenient than interferon et al and they can advertise it. I don't know how much of the costs reimbursment makes on interferon etc but costs must be substantial.

Under Chinese regulations, patients purchasing medicine listed by the central and/or provincial governments in the insurance catalogue may be reimbursed, in part or in whole, by a social medicine fund. Accordingly, pharmaceutical distributors prefer to engage in the distribution of medicine listed in the insurance catalogue. Currently, our main prescription products are listed in the insurance catalogue.

http://www.sec.gov/Archives/edgar/data/1418133/000118518510000334/biostar10k123109.htm

rich