(By Balaseshan) Biostar Pharmaceuticals Inc. (NASDAQ: BSPM) said it has signed another one-year agreement valued at about $8 million to manufacture and supply 16 new drugs for Xijing Military Hospital.
Biostar said the new drugs will be used to treat a variety of diseases such as pharyngitis, nasopharynx, gastroenteropathy, nephropathy, asthma, hyperplasia of mammary glands, dermatosis, gynecological diseases, etc.
The material terms of this agreement are similar to those of the first two one-year agreements signed with the same hospital in September and October 2012 for $3.6 million and $3.0 million, respectively.
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With this new agreement, Biostar will be manufacturing a total of 24 drugs for Xijing Military Hospital (10 granules, 13 capsules, and one powder drug) with a combined value of $14.6 million.
"The signing of these agreements is a result of our hard work to quickly complete experimental tests, trial production, and pass manufacturing technology and quality inspections. These types of contracts have the potential to generate substantial revenues, have very low sales expenses and a much shorter sales cycle," said Ronghua Wang, Chief Executive of Biostar.
The company said the agreements mark the initial step of its strategic partnership with The Fourth Military Medical University (FMMU), one of China's most prestigious military medical universities and research centers.
"As previously announced, we are working to become a strategic partner of FMMU in the fields of research and product development and also to become a production base for manufacturing drugs specifically for the needs of China's military," Wang added.
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Biostar, through its subsidiary and controlled affiliate in China, develops, manufactures and markets pharmaceutical and health supplement products for a variety of diseases and conditions. Its most popular product is its Xin Aoxing Oleanolic Acid Capsule, an OTC medicine for chronic hepatitis B, a disease affecting about 10% of the Chinese population.
BSPM closed Monday's regular session at $0.98. The stock has been trading between $0.91 and $3.42 for the past 52 weeks.