Biostar Pharmaceuticals, Inc, a Xianyang-based developer, manufacturer and supplier of pharmaceutical products and medical nutrients addressing a variety of diseases and conditions, has completed preparation to launch its flagship Xin Aoxing Oleanolic Acid (Xin Aoxing) capsules for the treatment of hepatitis B in Beijing and Shanghai in early January 2010.

Management anticipates approximately US$ 9 million in incremental revenues during 2010 from these two new markets with average gross margins of approximately 72 per cent. Biostar launched its marketing and operational initiatives for selling Xin Aoxing Capsules in these markets during December, including staff recruitment, establishing sales offices, engaging distributors and deploying advertisement. The company launched Xin Aoxing Capsules in the Tianjin market in November 2009, which has already generated US$ 0.5 million in revenues during its first month. Beijing, Shanghai, and Tianjin are three of the largest markets in China with a total population estimated at 50 million, and Biostar will leverage both distributors and direct sales in these three markets.

"We are very pleased with the progress we have made to expand our Xin Aoxing Capsules into Beijing and Shanghai. Our focus on the Tianjin, Beijing and Shanghai markets is part of a strategy to develop high-population territories along with continued expansion of our rural networks," said Wang Ronghua, chairman and CEO of Biostar Pharmaceuticals, Inc. "Year 2009 was a key turning point for our company as we completed several key growth initiatives and built a foundation for 2010. The success of our marketing strategy for our Xin Aoxing Capsules helped us achieve significant growth in first three quarters of 2009. Our focus on expanding product sales to the rural area has also enabled us to gain incremental market share, which we believe will contribute meaningfully to future growth."

As of December 11, 2009, Biostar also reported a total of 5,010 sales outlets in its New Rural Cooperative Medical Drug Supply Network, exceeding its target to cover 5,000 sales outlets by the end of 2009.