Biostar Pharma Skyrockets on New Chinese Product Launch

Biostar Pharmaceuticals Inc. (NASDAQ: BSPM) is watching its shares nearly double on Tuesday after the company announced that it is releasing a new product line to treat respiratory irritation and inflammation. Specifically, Biostar is launching a product called “Easy Breathing” which is designed to treat rhinitis and sinusitis. Product launch will take place in November.

The move that we are seeing in the stock is heavily impacted by the sheer size of the market that this drug is stepping into, China.

This new product was developed by the company’s R&D team over the past 3 years. Having been developed based upon the principles of the traditional Chinese medicine, the product is designed to have effects of relieving stuffy nose, inhibiting nasal bacteria and viruses, and mitigating effects on the inflammation of nasal mucosa. It will be manufactured, distributed and sold in China.

For a brief background, rhinitis is irritation and inflammation of the mucous membrane inside the nose and sinusitis is an inflammation or swelling of the tissue lining the sinuses.

Also, Biostar is a Chinese-based manufacturer and marketer of pharmaceutical and health supplement products in China for a variety of diseases and conditions.

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Wang Ronghua, Biostar’s Chairman commented:

This new product was developed by our R&D personnel in response to market demand. It offers the benefits of low cost and short course of treatment. In connection with the launch of this product, we intend to utilize the Internet marketing and advertising, including WeChat and other similar media.

He added:

In the past several months, we have been preparing various steps necessary for the launch of this new product. 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).

Shares of Biostar were last trading up about 90% at $6.53, with a consensus analyst price target of $7.00 and a 52-week trading range of $1.08 to $7.05.

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