Shares in Chinese pharmaceutical company Biostar Pharmaceuticals Inc (NASDAQ:BSPM) headed north after the company announced it was launching a new topical health product in China next month.
The stock jumped 61.81% on Tuesday to close at $5.55 with 17.48 million shares traded.
Biostar develops, manufactures and markets pharmaceutical and health supplement products for a variety of diseases and conditions.
Biostar Pharmaceuticals Inc (NASDAQ:BSPM) to launch “Easy Breathing”
Biostar has designed its new product called Easy Breathing using the principles of traditional Chinese medicine.
To be manufactured and sold in China, Easy Breathing will alleviate the symptoms of patients suffering from rhinitis and sinusitis. Accordingly, it is claimed to relieve a stuffy nose, inhibit nasal bacteria and viruses, and mitigate the inflammation of nasal mucosa.
“In the past several months, we have been preparing various steps necessary for the launch of this new product,” said Wang Ronghua, Biostar’s Chairman. “Though we do not anticipate any significant sales revenue in 2016, we expect to sell approximately 400,000 units within the next 2 years, which is expected to yield approximately RMB50 million (or US$7.5 million).”
Biostar Pharmaceuticals Inc (NASDAQ:BSPM) acquired Xianyang Yongsheng Health Products Co., Ltd.
In late September, in furtherance of its ambitions surrounding traditional Chinese medicine, Biostar acquired Xianyang Yongsheng Health Products Co., Ltd., a company which maintains a 24-acre herbal medicine ecological park, and sells tea and capsules and the popular wine brand “Yuye.”
Mr Ronghua said at the time that the acquisition addressed the growing interest of Chinese consumers in health products developed on the principles of traditional Chinese medicine.
Though no consideration details were given in respect of the acquisition, Biostar would acquire full ownership of Xianyang Yongsheng, subject to due diligence, for cash and issue of shares of Biostar’s restricted common stock.
In August, Biostar Pharmaceuticals Inc (NASDAQ:BSPM) said it may not survive
Biostar appears to have risen like a phoenix after its disastrous Q2 results declared in August:
- Net sales $0.6 million (down 95.6% year on year)
- Net loss $6.9 million (compared to net loss of just $0.5 million a year ago)
- Doubtful debt provision of $6.3 million
“As result of the Company’s materially reduced sales, working capital deficit of $2,060,971 and cash balance of $207,110, the Company has determined that there is substantial doubt as to our ability to continue as a going concern,” the company said.
“If the Company is unable to renew its GMP certificates and subsequently achieve regular production levels, the Company’s results of operations may be materially adversely affected,” it further warned.
After the news, shares tanked as low as $2.02 by September 13.
For reasons unknown, the next day shares jumped 65% to close at $3.39. Bear trap?
After yesterday’s trading shares are up 175% on the September low.