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Egor Romanyuk
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I have worked as Logistics executive for over 10 years and have been trading BioTech stocks for secondary income. At age of 27 I retired and took up trading BioTech stocks as primary income.
My company:
Barna Financial Services Inc.
  • Biostar Pharmaceuticals Unnoticed And Undervalued. 1 comment
    Apr 1, 2014 11:14 AM | about stocks: BSPM

    Summary

    • Biostar Pharmaceuticals unnoticed and undervalued with increasingly positive earning reports.
    • 2013 revenue at 52 million. 0.06 EPS over (2.09) EPS YOY.
    • Decreased operating cost by 51% YOY.

    Biostar Pharmaceuticals (NASDAQ:BSPM) is a holdings company, basing most of its operations in the People's Republic of China through its subsidiaries. The company's lead product is Xin Ao Xing Oleanic Acid Capsule, an over the counter medicine for chronic Hepatitis B, a disease affecting approximately 10 % of China's population (150 million people)

    As of December 31st, 2011, the company's product line also includes five other OTC products, 10 prescription-based pharmaceuticals, five nutriceticals or health products and one medical device.

    The research of applying Oleanic Acid to treat liver cancer has been well reported in the United State in recent years. Biostar's research scientists have discovered that the "AO" factor existed in the Oleanic Acid was remarkably effective in killing the hepatitis B virus, and it may also be used to kill liver cancer cells. In February the company joined Shaanxi University of Chinese Medicine to develop a potential blockbuster drug.

    Shortly after making that announcement, the company went through with a secondary offering to collect $4.1 million dollars by selling shares at 2.49 per share.

    Even after dilution the current float is merely 10.9 million shares, valuing the company at around $30 million dollars. This figure seems very undervalued to me, especially with increasingly growing year revenues in the range from $49-52 million dollars.

    March, 31st 2014 the company released its year end Earning report, declaring revenues of over $52 million and EPS of 0.06. Although revenue has not increased significantly, only 7%, the operating cost has by lowered by 51%, resulting in positive net profit, in contrast of -$21 million the prior year. The company also saw a whooping 145% increase in hospital orders for the year.

    It is evident that the company is undervalued just by comparing revenues to the market cap. I give it a fair value of $7 per share applying a 2x multiplier, which for Biotech stocks is minimal.

    Disclosure: I am long BSPM.

    Themes: healthcare, biotech Stocks: BSPM
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  • China Investors Group
    , contributor
    Comments (43) | Send Message
     
    The science regarding oleanic acid for liver disease is minimal, and a few articles in the literature does not a strong case make.

     

    FYI, Shaanxi University of Chinese Medicine is a school of Traditional Chinese medicine (TCM), not allopathic medicine.

     

    This natural compound (from the fruits or leaves of the Oleaceae plants) will never become a blockbuster drug, it has been around for ages and has no patent protection in Blockbuster markets, such as the US or Europe. It can be purchased over the internet from natural health food stores.

     

    Blockbuster drugs costs hundreds of millions to develop; the 4 million which Biostar raised won't even pay for animal model studies and initial safety phase 1 studies, much less phase 2, phase 3, and subsequent launch costs.

     

    Egor, I would appreciate if you could reply to my comment. I am very disappointed with how BSPM paints this "opportunity," which was really a spoof to raise quick money, in my opinion.
    19 May, 04:58 AM Reply Like
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