Biostar Pharmaceuticals Inc · OTC:BSPM
Biostar Pharmaceuticals — Investor Presentation (July 2011)
34 slides from Biostar Pharmaceuticals's investor presentation, Jul 18, 2011
Slide 1: Biostar Pharmaceuticals, Inc. Investor Presentation
Biostar Pharmaceuticals, Inc. Investor Presentation Biostar NASDAQ: BSPM July 2011
Slide 2: Forward-Looking Statement
Forward-Looking Statement This presentation includes statements that are “forward-looking statements.” While management has based any forward-looking statements contained in the presentation on its current expectations, the information on which such expectations were based may change. These forward-
Slide 3: Agenda
Agenda * Company Overview ¢ Product Portfolio & Pipeline ¢ Market Opportunities * Growth Strategy ¢ Investment Highlights ¢ Financial Highlights ¢ Key Growth Drivers ¢ Appendices
Slide 4: Company Overview
Company Overview en SS
Slide 5: Company Overview
Company Overview Mission & Vision Trust and integrity as principle; Win by quality and sincerity + Develops, manufactures and markets traditional Chinese medicines, Service Offerit ie i ic ie Te ene: generic pharmaceuticals and medical nutrients Headquarter + Headquarter in No.588 Shiji Xi Road, Xia
Slide 6: Products Distribution Network
Products Distribution Network R&D/ Manufacture/ Headquarter aneeainon: 25 Regional ae) Offices Hemeener Sales/ Distribution Distribution * Extensive sales network across China's 25 provinces * Rural medical sale outlets over 10,000 * Sales team of 286 members
Slide 7: Products Portfolio & Pipeline
Products Portfolio & Pipeline ee
Slide 8: A Diverse Portfolio of Product
A Diverse Portfolio of Product Xin Aoxing Oleanolic Acid Capsule ‘Acute and chronic hepatitis B ("HBV") Approved ore Ganwang Compound Influenza Approved Tiangi Dysmenorthea Capsule Menstrual swelling and cramping Approved Danshen Granule Alleviates blood stasis and angina ‘Approved Prescription Taoh
Slide 9: Innovative Product Pipeline
Innovative Product Pipeline Category Name Treatment Status KuntingWan Irregular menses Finished clinic test ore 2ushima ‘Aerosol pain suppressant Pending SEDA approval ‘Azithromycin Tympanitis, pharyngitis, bronchitis Pending SFDA final exam, Shenrong Strengthen immunity Finished clinic test Zhicuen
Slide 10: Flagship Product — Xin Aoxing
Flagship Product — Xin Aoxing Launched in 1998, a Chinese National Standard non-prescription OTC drug approved by SFDA and certified by the China Medical Association for treatment of HBV. The first-to-market OTC drug for treatment of HBV certified by the State Food and Drug Administration People’s H
Slide 11: Market Opportunities
Market Opportunities ee
Slide 12: Market Opportunities
Market Opportunities + China’s pharmaceutical market has an annual growth rate of 20% over the past ¢ China Pharmaceutical Market Sie (RMB ten years. ell + China’s 1,300 million population (70% living rural area, represents 900 million) provides immense growth potential. pear y 790 + Chinaisnow the
Slide 13: China's $124 Billion Healthcare Reform
China’s $124 Billion Healthcare Reform fan * Chinese government is investing $124 billion for a national healthcare reform for 2009-2011. The stimulus plan seeks to address five policy objectives: — Bring equality in urban and rural areas. A clear focus on improving China's underfunded publichealth
Slide 14: Market Opportunities — Xin Aoxing
Market Opportunities — Xin Aoxing Market penetration in China + Onethird of the global 350 million HBV patients resides in China* + 10% of China’s 1300 million population affected by HBV, 70% of population in rural area, representing 91 million target patients * Biostar only recorded 18% sales from
Slide 15: Growth Strategy
Growth Strategy ee
Slide 16: Well-Positioned to Capture Favorable Industry Trends
Well-Positioned to Capture Favorable Industry Trends Unique Business Model — A fully ver Lab, Processing, Warehouse and Raw Material id Offices in Xianyang Farm ‘and 10,000 outle R&D and production plant
Slide 17: Growth Strategies
Growth Strategies
Slide 18: Sales and Distribution Strategy
Sales and Distribution Strategy RURAL Marketing: Broaden Awareness Widen Coverage Sales & Marketing Strategy Distribution Strategy + Mass media advertising * Increase penetration in for OTCdrugseg. Xin existing 25 provincial Aoxingto build brand markets awareness i Biostar * Deepen penetration in a=
Slide 19: The Unique Story of Biostar - Investment Highlights
The Unique Story of Biostar - Investment Highlights ee
Slide 20: Investment Highlight
Investment Highlight Vertically integrated with a full range of pharmaceutical solution including R&D))raw materialiplantsuony processing, manufacturing, distribution and sales. Highly integrated business model, Ahistory of strong organic and acquisitive growth. 2007-2010 revenue growth reached a CA
Slide 21: Financial Highlights
Financial Highlights ee
Slide 22: Solid Financial Performance
Solid Financial Pe Revenue (USD Milion) “| i iil od 2007 2008 2009 2010 102010102011 2007 2008 2009 2010 102010 10 201 Net Income (USD Million) 2 |. 2 | is 2 2007 2008 2009 2010 102010 10 201 Non-GAAP Net Income (USD Million) 2007 2008 2009 2010 102010102011 22
Slide 23: Cost and Gross Margin
Cost and Gross Margin Cost of Xin Aoxing Capsule Gross Margin of Xin Aoxing (USD Million) Capsule 86% 1 95% 85% iil III 2007 2008 2009 2010 102010102011 2007 2008 2009 2010 102010 10 20. Cost of Sales (USD Million) Gross Margin 13% THI TH soy WTI 2007 2008 2009 2010 102010102011 23
Slide 24: Healthy Cash Inflow From Operation
Healthy Cash Inflow From Operation V4 Net Cash Provided by Operating Activities as at Dec 31 (USD Thousand) 12881 5.678 — = im — 7 2007 2008 2009 2010 Cash & Cash Equivalents as at Dec 31 (USD Thousand) 13211 as78 2007 2008 2009 2010
Slide 25: 2011 Priorities
2011 Priorities Top Line * 20-25% top line growth in 2011 Expansion + Expand sales and marketing team to 400 members Presence + Increase presence to four! new provinces 1 Entered three new provinces (Zhejiang, Hunan and Hainan) as at June 30,2011 Penetration + Increase rural penetration to 13,000 cl
Slide 26: Key Growth Drivers
Key Growth Drivers ee
Slide 27: Key Growth Drivers
Key Growth Drivers Near Term + Increase presence to new provinces within China = Entered Zhejiang, Hunan and Hainan provinces in 1H2011 + Ruralarea penetration - Rural market grew 88% in 192011, better than overall growth of 24% in same period * 8pipeline products — Three health products and one med
Slide 28: Appendices - Facilities
Appendices - Facilities aaa!
Slide 29: Internal R&D
* Internal R&D — — 30internal scientists & researchers: Average 10 years of experience * External R&D — Biostar sponsors and owns the IP: — Shaanxi College of Traditional Chinese Medicine — Shaanxi University of Science and Technology — Northwest University - College of Life Science
Slide 30: World-class Production Facilities
World-class Production Facilities * BIOSTAR has 4 Good Manufacturing Production (GMP) certified production lines. + Potential to expand to an annual production capacity of over $100 million. * New line for proprietary Zushima Spray to expand capacity by projected $10M. + New health products producti
Slide 31: Self-farming Reduces Costs
Self-farming Reduces Costs * Acquired land since 2008 - 82 acre land area in Qinling Mountains * Lower raw material costs to enhance profitability * Provide additional revenue stream in the future * Planting 13 herbs, main herbs include: = Salvia miltiorrhiza = Priclklyash peel = Eucommia bark = Gin
Slide 32: Appendices - Regulatory Compliances
Appendices - Regulatory Compliances
Slide 33: Regulatory Compliances
Regulatory Compliances * — Quality Control Related = Good Manufacturing Practice (“GMP”) Certification, regulated by the State Foods and Drugs Administration (“SFDA”)- All Chinese pharmaceutical manufacturers must be GMP certified to produce medicines of any kind. Biostar received its first GMP cert
Slide 34: Corporate website and IR Contact
Corporate website: ‘wwwbiostar pharmaceuticals.com IR Contact: Zack Pan, CFO T:+1-405-996-8829 E:zpan@aoxing-group.com Fleishman-Hillard T:852-2530-0228 E:biostar @fleishman.com
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