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Be the first to know!! :: (Pinksheet:OPSY) Optical Systems, Inc., (OTCBB:GETA) Genta Incorporated, (OTCBB:GORO) Gold Resource Corp., (OTCBB:CGCA) Cobra Oil & Gas Co., (OTCBB:BSPM) Biostar Pharmaceuticals, Inc.
(M2 PressWIRE Via Acquire Media NewsEdge) StockMarketingInc: New York: www.StockMarketingInc.com :: (Pinksheet:OPSY) Optical Systems, Inc., (OTCBB:GETA) Genta Incorporated, (OTCBB:GORO) Gold Resource Corp., (OTCBB:CGCA) Cobra Oil & Gas Co., (OTCBB:BSPM) Biostar Pharmaceuticals, Inc.
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(Pinksheet:OPSY) Optical Systems, Inc.
LATEST NEWS!!
Optical Systems, Inc. Achieves Major Milestone in Cutting-Edge remoteCSR Program
DALLAS, Aug 13, 2009 -- Automotive Software Designers, Inc., a leading provider of software and services for the automotive retail industry, and a wholly-owned subsidiary of Optical Systems, Inc. (Pink Sheets: OPSY), today announced that Ebony Benjamin from Georgia became the 200th remoteCSR to join the company's BDC national team.
ASDI has initiated a high tech project to integrate more than 211 professional customer service representatives (CSR) from 32 states into our Business Development Center programs. This growing list of talented professionals provides phone call, text messaging, e-mail and other digital support for all of ASDI products and services.
The initial assignment for a remoteCSR includes support for ASDI's Identity Theft and Extended Service Agreement products. Each CSR has the option to be promoted as a Team Lead once they gain experience, and to work in other programs including our Sales Manager and Service Manager BDC programs. The remoteCSR work flow process is supported by ASDI with remoteMeetings, remoteTraining, remoteService and remoteSupport anywhere and at any time.
The infrastructure was designed and built by our team with expansion as a primary goal. We are proud to announce that we are now in a position to grow the remoteTeams to more than 1,000 remoteCSRs and Team Leads in 48 states without significant capital investment being required.
Unlike other BDC programs, there are no dialers, robo calls or short cuts in ASDI's BDC. Talking with and communicating with our customers is the way we operate.
ASDI projects that 1,000 remoteCSRs making 85,000 new contacts a day at the standard closing rate of 2 percent, has the potential to generate $50 million in revenue per year for the company's BDC.
"The company's cost effective software and services are continuing to gain traction in the automotive retail industry," said B.J. Grisaffi, Chief Executive Officer of Optical Systems, Inc. "We are currently evaluating numerous opportunities to license our software to companies in other high-growth industries, which require quality sales support and customer service."
About Optical Systems, Inc.
Optical Systems, Inc., through its operating subsidiary, Automotive Software Designers, Inc., develops technology and services for the automotive retail industry designed to maximize productivity and increase profits at auto dealerships. ASDI's flagship technology solution, Save-a-Deal, is a turnkey customer relationship management (CRM) tool for auto dealerships. Our business development center (BDC) provides a variety of services designed to help auto dealerships drive traffic to their showroom or Web site, retain customers and generate new streams of revenue. For more information, visit http://www.opticalsystemsinc.com
Safe Harbor Statement
This release includes forward-looking statements. Statements contained in this Release that are not historical facts may be deemed to be forward-looking statements. Investors are cautioned that forward-looking statements are inherently uncertain. Actual performance and results may differ materially from that projected or suggested herein due to certain risks and uncertainties including, without limitation, ability to obtain financing and regulatory and shareholder approvals for anticipated actions. Additional information concerning certain risks and uncertainties that could cause actual results to differ materially from that projected or suggested may be identified from time to time. The Company does not undertake any obligations to update forward-looking statements made by it. This news release shall not constitute an offer to sell or the solicitation of an offer to buy securities of the Company.
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(OTCBB:GETA) Genta Incorporated
TODAY'S NEWS!!
Genta Incorporated Announces Second Quarter 2009 Financial Results
AGENDA Phase 3 trial in melanoma passes post-accrual futility analysis
BERKELEY HEIGHTS, N.J., Aug 14, 2009 -- AGENDA results expected Fourth Quarter 2009
--Genasense in novel combination shows promising activity in melanoma
--Genasense(R) 1-hour infusion initiated in melanoma
--Additional core patents issued for Genasense(R)
--Tesetaxel trial shows early efficacy and safety
Genta Incorporated (OTCBB: GETA) today announced financial results for the quarter ended June 30, 2009.
"The last several months have been extraordinarily important", said Dr. Raymond P. Warrell, Jr., Genta's Chief Executive Officer. "We now believe we will have sufficient financing that will enable release of primary data in our Phase 3 Genasense(R) trial in melanoma. Certainly, past and recent studies of other drugs in melanoma have proved repeatedly disappointing. We believe our biomarker-directed approach, coupled with our uniquely targeted new drug, may transform the treatment of this illness and finally offer meaningful benefit for patients. We expect to release results from our Phase 3 study within the next 3 months, which if positive should comprise the basis for worldwide regulatory applications."
Genta management will host a conference call and live audio webcast to discuss the Company's financial results and recent corporate activities today at 8:00 am EST. Participants can access the live call by dialing (877) 634-8606 (U.S. and Canada) or (973) 200-3973 (International). The access code for the live call is Genta Incorporated. The call will also be webcast live at http:www.genta.com/investorrelation/events.html.
For investors unable to participate in the live call, a replay will be available approximately two hours after the completion of the call, and will be archived for 30 days. Access numbers for this replay are: (800) 642-1687 (U.S. and Canada) and (706) 645-9291 (International); conference ID number is: 22633873.
Highlights of the preceding quarter ended June 30, 2009 included the following:
AGENDA: Phase 3 Trial of Genasense in Advanced Melanoma
AGENDA is a Phase 3, randomized, double-blind trial that has completed accrual of 315 patients with advanced melanoma. The study is designed to confirm certain safety and efficacy results from a prior randomized trial of Genasense(R) (oblimersen sodium) Injection combined with dacarbazine. AGENDA employs a biomarker to define patients who derived maximum benefit during the preceding study. Such patients are characterized by low-normal levels of lactate dehydrogenase (LDH), a tumor-derived enzyme that is readily detected in blood.
During the prior quarter, the Company released demographic information that showed good concordance of relevant patient characteristics between the prior trial and AGENDA. Moreover, the importance of LDH levels as a key factor associated with survival in advanced melanoma was independently confirmed by a publication from the leading European oncology cooperative group. An independent data monitoring committee completed its post-accrual analysis for safety and futility, and has recommended that AGENDA continue to completion.
Genasense Plus Novel Chemotherapy Yields Promising Activity in Melanoma
At the annual meeting of the American Society of Clinical Oncology (ASCO) in June 2009, investigators reported a high response rate and potentially extended survival in a pilot study of Genasense plus temozolomide and Abraxane(R) (paclitaxel protein-bound particles for injectable suspension) (albumen bound). Of 18 patients with stage 4 melanoma and normal LDH, 7 (39%) had achieved major responses: one with complete response (CR) and 6 with partial response. Five other patients had maintained stable disease (SD) after at least 3 treatment cycles for a disease control rate of 68%. The most common side-effects were similar to those associated with the chemotherapy drugs used alone. Median survival was 14.7 months and 50% of patients had survived longer than 1 year. These data compared favorably with median survival reported in the prior Phase 3 trial of Genasense in melanoma with similar LDH criteria for dacarbazine alone (9.7 months) or dacarbazine plus Genasense (11.4 months).
This trial has recently been amended to incorporate the new 1-hour IV infusion schedule of Genasense administered twice weekly, instead of the 5-day continuous IV infusion schedule used in the Phase 3 trials. Initial results are expected in the Fourth Quarter 2009.
Genasense Market Protection Expected to Extend up to 10 Years from Launch
Assuming AGENDA results are both positive and sufficient to secure approval in Europe and the U.S., Genta currently expects to hold exclusive marketing positions for up to 10 years from potential anticipated launch dates. In the U.S., the Company expects to file for extensions of its core composition patent up to the maximum allowable times pursuant to Hatch-Waxman legislation. The Company has also filed and/or received patents or patent applications that are expected to raise additional barriers to entry for generic competitors. In addition to these patents, the Company expects to receive up to 10 years of market protection pursuant to applicable rules in Europe for new chemical entrants.
Tesetaxel Dosing Trial Confirms Preliminary Efficacy and Safety
Tesetaxel, the leading oral taxane in clinical development, is completing a confirmatory study of dosing on a once every 3-weeks schedule. Data presented at ASCO showed a favorable safety profile with a low incidence of serious adverse events, along with objective responses that have been observed at less than the maximally tolerated dose. The trial is expected to conclude accrual in the third quarter of 2009. Genta intends to explore additional dosing schedules while examining efficacy in diseases that are prioritized in the Company's clinical development plan.
Financial Information
For the second quarter of 2009, the Company reported a net loss of $43.1 million or $(0.63) per share, compared with a net loss of $738.4 million, or $(1,004.84) per share, for the second quarter of 2008. For the six months ended June 30, 2009, the Company reported a net loss of $54.1 million, or $(1.24) per share, compared with a net loss of $748.0 million, or ($1,060.69) per share, for the six months ended June 30, 2008. Net product sales of $69,000 and $131,000 for the second quarter and six months ended June 30, 2009 declined from their comparison period figures of $131,000 and $248,000, respectively, due to the continued absence of promotional support.
In June 2008 and in April 2009, the Company entered into convertible note and warrant transactions (described below). At the time of both transactions, the Company did not have sufficient authorized shares to allow for the conversion of the convertible notes and related warrants. The June 2008 transaction required that the Company seek stockholder approval to increase the number of authorized shares of common stock. The April 2009 transaction required that the Company effect a reverse stock split in order to accommodate the required number of shares. While the Company's stockholders approved an increase in the number of authorized shares of common stock in October 2008 and authorized a reverse stock split in April 2009, the results that are being reported today reflect that the Company was required to mark-to-market the liabilities for the conversion feature of its notes and warrants issued as part of the transactions up until the Company's stockholders approved the changes in the corporate structure. These liabilities change with the price of Genta's common stock, and these fluctuations have caused us to report significant expense in both reporting periods. All share and per share data included in this press release have been retroactively adjusted to account for the effect of a 1-for-50 reverse stock split for all periods presented prior to June 26, 2009.
Research and development expenses were $3.7 million for the second quarter of 2009, compared with $4.5 million for the second quarter of 2008. Expenses in 2009 declined primarily due to lower expenses on the AGENDA clinical trial and lower payroll costs, resulting from lower headcount as we reduced our workforce in April 2008 and May 2008 to conserve cash. Research and development expenses were $6.0 million for the six months ended June 30, 2009, compared with $10.9 million for the six months ended June 30, 2008. In March 2008, we entered into a worldwide license agreement for tesetaxel. Pursuant to this agreement, we recognized $2.5 million for license payments. Expenses in 2009 also declined primarily due to lower payroll costs, resulting from lower headcount, as well as lower expenses on the AGENDA clinical trial.
Selling, general and administrative expenses were $2.0 million for the second quarter of 2009 and $4.1 million for the six months ended June 30, 2009, compared with $2.6 million for the second quarter of 2008 and $6.2 million for the six months ended June 30, 2008. These decreases were primarily due to lower office rent, resulting from our termination of a lease for one floor of office space in May 2008 and lower payroll costs, resulting from the two reductions in workforce. In May 2008, to reduce its ongoing expenses, the Company reduced its office space. The Company's landlord received a termination payment of $1.3 million, comprised of security deposits, and will receive a future payment of $2.0 million on January 1, 2011. This agreement resulted in an incremental $3.3 million in expenses for the second quarter and six months ended June 30, 2008.
On April 2, 2009, the Company issued approximately $6 million of April 2009 Notes, and corresponding warrants to purchase common stock, issued our private placement agent a warrant and incurred financing fees of $0.7 million. The April 2009 Notes bear interest at an annual rate of 8% payable semi-annually in other senior secured convertible promissory notes to the holder, and are convertible into shares of the Company's common stock at a conversion rate of 10,000 shares of common stock for every $1,000.00 of principal amount outstanding. The deferred financing costs are being amortized over the term of the convertible notes. At the time the April 2009 Notes were issued, the Company recorded a debt discount (beneficial conversion) relating to the conversion feature in the amount equal to the proceeds of $6.0 million and is amortizing the resultant debt discount over the term of the notes through their maturity date.
On June 9, 2008, the Company issued $20 million of 2008 Notes, issued our private placement agent a warrant and incurred financing fees of $1.2 million. The 2008 Notes bear interest at an annual rate of 15% payable at quarterly intervals in notes of equivalent terms, and are presently convertible into shares of Genta common stock at a conversion rate of 10,000 shares of common stock for every $1,000 of principal. The deferred financing costs are being amortized over the term of the convertible notes. At the time the notes were issued, the Company recorded a debt discount (beneficial conversion) relating to the conversion feature in the amount of $20.0 million and is amortizing the resultant debt discount over the term of the notes through their maturity date.
On April 2, 2009, based upon a Black-Scholes valuation model, the Company calculated a fair value of the conversion feature of the April 2009 Notes of $67.8 million and expensed $61.8 million, the amount that exceeded the proceeds of the $6.0 million from the closing. With implementation of the reverse stock split, the Company had sufficient shares of common stock in order to permit conversion of all the April 2009 Notes. The Company re-measured the conversion feature liability at $25.0 million, resulting in expense for the second quarter of 2009 of $19.0 million and credited the conversion feature liability to permanent equity. On June 9, 2008, based upon a Black-Scholes valuation model, the Company had calculated a fair value of the conversion feature of the 2008 Notes of $380.0 million and expensed $360.0 million, the amount that exceeded the proceeds of the $20.0 million from the closing. On June 30, 2008, the Company expensed an additional $380.0 million to mark the conversion feature liability of the June 2008 Note to market, resulting in a total expense in June 2008 of $720.0 million.
The warrants that were issued with the 2008 Notes and the April 2009 Notes were also treated as liabilities, due to the insufficient number of authorized shares of common stock at the time that they were issued. On April 2, 2009, the Company calculated a fair value of $1.125 per warrant for the warrants issued with the April 2009 Notes, or a total of $20.8 million. With the reverse stock split, the Company re-measured the warrants at a fair value per warrant of $0.415 per warrant, or $7.7 million, resulting in expense of $7.7 million, and credited the warrant liability to permanent equity. The warrants issued with the 2008 Notes were initially recorded at a fair value of $7.6 million and were also re-measured, resulting in expense of $7.2 million in June 2008.
At June 30, 2009, Genta had cash and cash equivalents totaling $0.7 million compared with $4.9 million at December 31, 2008. During the first six months of 2009, cash used in operating activities was $9.5 million compared with $14.4 million for the same period in 2008, reflecting the reduced size of the Company.
On July 7, 2009, the Company entered into a securities purchase agreement with certain accredited institutional investors to place up to $10 million in aggregate principal amount of units consisting of (i) 70% unsecured subordinated convertible notes, or the July 2009 Notes, and (ii) 30% common stock. In connection with the sale of the units, the Company also issued to the investors two-year warrants to purchase common stock in an amount equal to 25% of the number of shares of common stock issuable upon conversion of the July 2009 Notes purchased by each investor. The Company closed on $3 million of such July 2009 Notes, common stock and warrants on July 7, 2009. On August 6, 2009, we entered into an amendment whereby, among other matters, certain accredited institutional investors who were parties to the July 2009 securities purchase agreement agreed to purchase $10 million of additional notes and warrants having the same terms of the July 2009 Notes, as well as shares of common stock, increasing their aggregate investment to $13 million. The terms of the April 2009 Notes enable those noteholders, at their option, to purchase additional notes with similar terms.
About Genta
Genta Incorporated is a biopharmaceutical company with a diversified product portfolio that is focused on delivering innovative products for the treatment of patients with cancer. Two major programs anchor the Company's research platform: DNA/RNA-based Medicines and Small Molecules. Genasense(R) (oblimersen sodium) Injection is the Company's lead compound from its DNA/RNA Medicines program. The leading drug in Genta's Small Molecule program is Ganite(R) (gallium nitrate injection), which the Company is exclusively marketing in the U.S. for treatment of symptomatic patients with cancer related hypercalcemia that is resistant to hydration. The Company has developed G4544, an oral formulation of the active ingredient in Ganite(R), which has recently entered clinical trials as a potential treatment for diseases associated with accelerated bone loss. The Company is also developing tesetaxel, a novel, orally absorbed, semi-synthetic taxane that is in the same class of drugs as paclitaxel and docetaxel. Ganite and Genasense are available on a "named-patient" basis in countries outside the United States. For more information about Genta, please visit our website at: www.genta.com.
Safe Harbor
This press release may contain forward-looking statements with respect to business conducted by Genta Incorporated. By their nature, forward-looking statements and forecasts involve risks and uncertainties because they relate to events and depend on circumstances that will occur in the future. Such forward-looking statements include those that express plan, anticipation, intent, contingency, goals, targets, or future developments and/or otherwise are not statements of historical fact. The words "potentially", "anticipate", "could", "calls for", and similar expressions also identify forward-looking statements. The Company does not undertake to update any forward-looking statements. Factors that could affect actual results include, without limitation, risks associated with:
-- the Company's ability to obtain necessary regulatory approval for Genasense(R) from the U.S. Food and Drug Administration ("FDA");
-- the safety and efficacy of the Company's products or product candidates;
-- the Company's assessment of its clinical trials;
-- the commencement and completion of clinical trials;
-- the Company's ability to develop, manufacture, license and sell its products or product candidates;
-- the Company's ability to enter into and successfully execute license and collaborative agreements, if any;
-- the adequacy of the Company's capital resources and cash flow projections, the Company's ability to obtain sufficient financing to maintain the Company's planned operations, or the Company's risk of bankruptcy;
-- the adequacy of the Company's patents and proprietary rights;
-- the impact of litigation that has been brought against the Company; and
-- the other risks described under Certain Risks and Uncertainties Related to the Company's Business, as contained in the Company's Annual Report on Form 10-K and Quarterly Report on Form 10-Q.
-- There are a number of factors that could cause actual results and developments to differ materially. For a discussion of those risks and uncertainties, please see the Company's Annual Report on Form 10-K for 2008 and its most recent quarterly report on Form 10-Q.
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(OTCBB:GORO) Gold Resource Corp.
LATEST NEWS!!
Gold Resource Corporation Clarifies Federal Open Pit Permit Announcement
DENVER, CO, Aug 13, 2009 -- Gold Resource Corporation (GRC) (OTCBB: GORO) (FRANKFURT: GIH) needs to clarify its previous press release of August 12, 2009. Information provided by its Mexican environmental consultant assisting GRC in obtaining the Federal permits prematurely informed the company it had been "granted the permit" but in fact it has not yet taken possession of the permit. Though the company believes this to be a technicality at this point and that the permit is very close to being issued to the company, it does not yet have it in its possession.
About GRC:
Gold Resource Corporation is a mining company focused on production and pursuing development of gold and silver projects that feature low operating costs and produce high returns on capital. The Company has 100% interest in four potential high-grade gold and silver properties in Mexico's southern state of Oaxaca. The company has 46,095,489 shares outstanding and no warrants. For more information, please visit GRC's website, located at www.Goldresourcecorp.com and read the Company's 10-K for an understanding of the risk factors involved.
This press release contains forward-looking statements that involve risks and uncertainties. The statements contained in this press release that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. When used in this press release, the words "plan," "target," "anticipate," "believe," "estimate," "intend" and "expect" and similar expressions are intended to identify such forward-looking statements. Such forward-looking statements include, without limitation, the statements regarding Gold Resource Corporation's strategy, future plans for production, future expenses and costs, future liquidity and capital resources, and estimates of mineralized material. All forward-looking statements in this press release are based upon information available to Gold Resource Corporation on the date of this press release, and the company assumes no obligation to update any such forward-looking statements. Forward looking statements involve a number of risks and uncertainties, and there can be no assurance that such statements will prove to be accurate. The Company's actual results could differ materially from those discussed in this press release. In particular, there can be no assurance that commercial production at the El Aguila Project will be achieved in the time frames estimated, at the rates and costs estimated, or even at all. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the company's 10-K filed with the Securities and Exchange Commission.
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(OTCBB:CGCA) Cobra Oil & Gas Co.
LATEST NEWS!!
Cobra Oil & Gas Co. Enters Into Letter Of Intent With Enercor, Inc. For Purchase Of 62.5% Working Interest Covering 640 Acres Within The P.R. Spring Deposit In Uintah County, Utah
HOUSTON, Aug 10, 2009 -- Cobra Oil & Gas Co. (OTCBB:CGCA) (Hereafter "Cobra"), an independent oil and gas exploration company and focused on the strategic exploration and development of domestic energy projects, has entered into a Letter Of Intent (LOI) with Enercor, Inc. (Enercor) to purchase 62.5% representing a title and working interest covering a total of 640 gross acres. This acreage is adjacent to the Utah Oil Sands prospect in the P.R. Spring Deposit in Uintah County, Utah.
According to terms of the LOI Cobra's purchase price will be 300,000 shares of Common Stock, fully paid and non-assessable. Cobra intends to include this lease in its development activities of other adjacent leases. Other title holders of this lease include Questar Corporation.
Max Pozzoni, President of Cobra Oil & Gas, stated, "We are pleased to continue expanding our holdings within the Utah Oil Sands prospect".
Both parties may cancel the agreement prior to the closing date with written notice. The close of the proposed transaction shall take place on or before September 9th, 2009.
About Cobra Oil & Gas Co.
Cobra Oil & Gas Co. is a publicly traded independent oil and gas exploration and production company headquartered in Houston, Texas (NASDAQ OTC BB: CGCA - News). Shareholders and prospective investors are encouraged to visit Cobra Oil & Gas's website: http://www.cobraoilgas.com and to subscribe to the email newsletter. Please feel free to call our investor relations toll-free at 1-866-503-8613 if you have any questions.
Forward-Looking Statements
Statements in this news release that are not historical facts are forward-looking statements that are subject to risks and uncertainties. Words such as "expects", "intends", "plans", "may", "could", "should", "anticipates", "likely", "believes" and words of similar import also identify forward-looking statements. Forward-looking statements are based on current facts and analyses and other information that are based on forecasts of future results, estimates of amounts not yet determined and assumptions of management.
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(OTCBB:BSPM) Biostar Pharmaceuticals, Inc.
TODAY'S NEWS!!
Biostar Pharmaceuticals, Inc. Announces Second Quarter 2009 Financial Results
--Second Quarter 2009 Revenue Increased 40.6% to Approximately $13.2 Million and Net Income Increased 119.3% to Approximately $3.9 Million with EPS of $0.17--Gross Margins Improved 1630-Basis Points to 73.5% over Q2 2008
XIANYANG, China, Aug 14, 2009 -- Biostar Pharmaceuticals, Inc. (OTC Bulletin Board: BSPM) ("Biostar" or "the Company"), a Xianyang-based developer, manufacturer and supplier of pharmaceutical products and medical nutrients addressing a variety of diseases and conditions, today announced fiscal results for its second quarter ended June 30, 2009.
SUMMARY FINANCIALS
Second Quarter 2009 Results
Q2 2009 Q2 2008 CHANGE Net Sales $13.2 million $9.4 million +40.6% Gross Profit $9.7 million $5.4 million +80.5% Net Income $3.9 million $1.8 million +119.3% EPS (Fully Diluted) $0.16 $0.08 +100%
Six Month 2009 Results 1H 2009 1H 2008 CHANGE Net Sales $20.7 million $16.2 million +27.5% Gross Profit $14.5 million $9.6 million +51.9% Net Income $5.7 million $3.6 million +58.8% EPS (Fully Diluted) $0.24 $0.15 +60%
Second Quarter 2009 Financial Results
Revenue for the second quarter of 2009 increased 40.6% to approximately $13.2 million compared to approximately $9.4 million for the second quarter of 2008. The increase in revenues resulted from Biostar's enhanced marketing and sales efforts which increased sales of its Xin Aoxing Oleanolic Acid Capsule ("Xin Aoxing Capsule") and Tianqi Dysmenorrhea Capsules ("Tainqi Capsule"). Xin Aoxing Capsule, one of Biostar's flagship OTC products which treats symptoms common to hepatitis B patients, contributed approximately 67.5% to total revenues for the quarter, and increased $4.1 million, or 84.1% to $8.9 million, compared to the second quarter of 2008. The increase was primarily due to market penetration in two additional provinces through local wholesalers. Revenues generated by another core OTC product, Tianqi Capsule, which treats dysmenorrhea and bloating for women, increased 25.3% to approximately $1.4 million from the second quarter of 2008. The increase in sales of Tianqi Capsule was mainly due to the continued implementation of the "new rural cooperative medical supply network plan" which markets directly to consumers in China's rural area through retail pharmacies.
Cost of goods sold for the three months ended June 30, 2009 was approximately $3.5 million or 26.5% of revenue as compared to approximately $4.0 million or 42.8% of revenue for the three months ended June 30, 2008.
The Company yielded gross profits of $9.7 million and gross margins of 73.5%, compared to $5.4 million of gross profits and a gross margin of 57.2% during the second quarter of fiscal 2008. Gross profits grew by 80.5% on a year-over-year basis. The increase in gross profit was a result of increased revenue in Xin Aoxing Capsule and Tainqi Capsule and a decrease in raw material prices of Xin Aoxing Capsule and Danshen Granule. The Sichuan province, the main region where herbs are cultivated for raw materials used in manufacturing several of Biostar's OTC medicines, has resumed production after recovering from the earthquake. During the second quarter of 2009, gross margin of three products is over 50%, Xin Aoxing Capsule (84%), Tianqi Capsule (64%) and Taohuasan Pediatrics Medicine (65%).
Operating expenses for the three months ended June 30, 2009 were approximately $4.3 million, up 26.6% from $3.4 million in the same period of 2008. The increase was primarily a result of Biostar's expanded marketing efforts, including increased costs for TV advertising, promotion, and commission associated with an expanded sales force.
Operating income for the second quarter of 2009 totaled approximately $5.5 million, a 170.8% increase from the approximately $2.0 million reported for the second quarter of 2008. Operating margins were 41.3% and 21.4% for the second quarter of 2009 and 2008, respectively. The increase in the operating margin was primarily due to increased revenues and decrease in cost of good sold.
For the second quarter of 2009, net income was approximately $3.9 million, a 119.3% increase, compared to approximately $1.8 million for the second quarter of 2008. Diluted earnings per share were $0.16 compared to $0.08 for the second quarter of 2009 and 2008 respectively, based up on 23.7 million and 23.2 million shares. The increase in net income during the second quarter of 2009 was a result of increased revenues and improved profitability.
The Company had an effective tax rate of 26.1% and 12.3%, for the second quarter of 2009 and 2008, respectively. The increase was primarily due to the expiration of the 50% income tax reduction on December 31, 2008.
"We are very pleased to report strong revenue and net income growth and further improvement in our gross margins which benefited from the success of our overall marketing strategy and solid sales increases, especially in Xin Aoxing Capsule. We anticipate that our strategy will increase sales and that allocating incremental dollars to our marketing budget will improve our brand while allowing us to successfully penetrate new target markets which eventually translate into both strong top and bottom-line growth," commented Mr. Ronghua Wang, Chairman and Chief Executive Officer of Biostar. "The Chinese government recently announced a new health care reform plan and will invest $123 billion between 2009 and 2011 with a stated goal of covering 90% of the urban and rural residents with basic medical insurance. With continued marketing efforts, an expanding product portfolio and strong demand for our hepatitis-B product, we are ideally positioned to capitalize on the long-term secular growth occurring in our industry."
Six Month Results
For the six months ended June 30, 2009, revenues increased approximately 27.5% to $20.7 million compared to the same period in 2008. Gross profit was approximately $14.5 million for the first six months of 2009, representing an increase of 51.9% from the first six months of 2008. Gross margins were 70.2% for the first six months of 2009 compared to 58.9% for the same period in 2008.
Income from operations was $7.8 million for the first six months of 2009, representing an increase of 87.9% over the first six months of 2008. Operating margins were 37.6% for the first six months of 2009 compared to 25.5% for the first six months of 2008. Net income was $5.7 million for the six months ended June 30, 2009, an increase of approximately 58.8% from the same period in 2008. Fully diluted earnings per share were $0.24 compared to $0.15 for the first six months of 2009 and 2008 respectively, based up on 23.7 million and 23.2 million shares.
Balance Sheet and Cash Flow
The Company had a current ratio of 3.2 to 1 and approximately $1.9 million in cash and cash equivalents on June 30, 2009 compared approximately $0.8 million in cash and cash equivalents on December 31, 2008.
Accounts receivable was approximately $15.3 million on June 30, 2009 versus approximately $11.7 million on December 31, 2008. The number of days sales outstanding (i.e. days sales in accounts receivable) increased to 134 for the six months ended June 30, 2009 from 117 for the same period last year due to slower payments of customers during the current economic slowdown.
On June 30, 2009, the Company had stockholders' equity of $29.0 million, with total assets of $36.3 million versus total liabilities of $7.3 million.
For the first six months of 2009, the Company generated approximately $1.2 million in cash from operations versus approximately $1.7 million use in operations for the same period in 2008, with the variance principally coming from the increase in net income.
Business Development
During the second quarter of 2009, Biostar finished the engineering design and commenced construction for its new raw material processing facility expected to be operational during the fourth quarter of 2009. The raw material processing facility is part of the Company's herbal plantation base. The plantation base will be utilized to service Biostar's own raw material demand ensuring the Company's product quality, lowering its overall production costs and providing incremental revenue by selling excess raw materials into the market.
During the second quarter of 2009, Biostar commenced the full implementation of the new rural cooperative medical drug supply network plan. In April, Biostar deployed over 30 salesmen to set up a network covering approximately 1,320 sales outlets in the rural areas of 10 counties located throughout the Shaanxi province. This is the initial phase of Biostar's two-year plan to build a rural supply network covering 10,000 sales outlets throughout six provinces. The goal is to build the largest regional pharmaceutical supply network in rural areas of the PRC in order to capitalize on the growth opportunity driven by an increase in disposable income of farmers and government's significant capital commitment to rural communities throughout the PRC.
Biostar received approval from the local government to produce Yizi Capsules, Tangning Capsules, and Shengjing Capsules. The Company has launched these products through its domestic market channels and initial revenues have been generated by late July, 2009.
"We are making progress on all aspects of our business. From commencing construction for our new raw material processing facility, to establishing 1,320 rural sales outlets, to receiving three new product approvals which further diversifies our portfolio, we have set the foundation for long-term growth and profitability in our business. We remain focused on introducing higher margin products and building brand value which will enable us to achieve further market share gains," concluded Mr. Wang.
Conference Call
The Company will host a conference call to discuss the 2009 second quarter financial results on Friday, August 14, 2009 at 10:30 a.m. EDT. Interested participants should call 877-941-1848 within the United States, or US +1-480-629-9722 if calling internationally. The conference ID is 4139784. It is advisable to dial in approximately 5-10 minutes prior to 10:30 a.m. EDT. This call is being web cast by ViaVid Broadcasting and can be accessed at ViaVid's website at http://www.viavid.netor at the following link: http://viavid.net/dce.aspx?sid=00006906 .
About Biostar Pharmaceuticals, Inc.
Biostar Pharmaceuticals, Inc., through its wholly-owned subsidiary in China, develops, manufactures and markets pharmaceutical and medical nutrient products for a variety of diseases and conditions. The Company's most popular product is its Xin Ao Xing Oleanolic Acid Capsule, an over-the-counter ("OTC") medicine for chronic hepatitis B, a disease affecting approximately 10% of the Chinese population. In addition to its hepatitis product, Biostar manufactures two broad-based OTC products, two prescription-based pharmaceuticals and thirteen nutrients. The Company has adopted international standards and is in the process of applying for three patents.
Safe Harbor
Certain statements in this release concerning our future growth prospects are forward-looking statements, within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding the success of our investments, risks and uncertainties regarding fluctuations in earnings, our ability to sustain our previous levels of profitability including on account of our ability to manage growth, intense competition, wage increases in China, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, our ability to successfully complete and integrate potential acquisitions, withdrawal of governmental fiscal incentives, political instability and regional conflicts and legal restrictions on raising capital or acquiring companies outside China. Additional risks that could affect our future operating results are more fully described in our United States Securities and Exchange Commission filings including our S-1 dated June 27, 2008, our Quarterly Report on Form 10-Q for the quarter ended March 31, 2009, our 10-K for the year ended December 31, 2008, and other recent filings. These filings are available at http://www.sec.gov . We may, from time to time, make additional written and oral forward-looking statements, including statements contained in our filings with the Securities and Exchange Commission and our reports to shareholders. We do not undertake to update any forward-looking statements that may be made from time to time by or on our behalf.
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