Biostar wins approval to restart gel capsule sales in China

Sales suspended in April after Xianyang SFDA revealed high chromium content at 254 manufacturers

Biostar Pharmaceuticals, a Chinese manufacturer of pharmaceutical and health supplement products for a variety of diseases, has been given the go-ahead from the Chinese regulator to restart sales of its gel capsule products.

The Xianyang-based firm said this follows last month’s ‘thorough inspection of raw materials in every production category’ by the Xianyang State Food and Drug Administration (SFDA).

The SFDA suspended sales of gel capsules in April across China after an investigation revealed chromium content higher than edible gelatin at 254 drug manufacturers in 28 provinces. One batch of Biostar Pharmaceuticals’ Xin Aoxing capsule, an over-the-counter (otc) medicine for chronic hepatitis B, was found to be contaminated.

Ronghua Wang, Biostar's chairman and ceo, said: ‘This was an isolated incident and sales of products made from the tainted batch represented approximately 0.2% of total 2011 net sales.’

He added that the suspension of sales of gel capsule products has ‘severely affected’ all China-based pharmaceutical companies that use gelatin capsules to manufacture their drugs, including Biostar.

‘This has been a major issue for China's pharmaceutical industry as many large pharmaceutical companies reported substantial losses for the April–July period. Unfortunately, we were not immune to the industry wide losses, and Biostar’s sales and overall results for the 2012 second quarter were similarly adversely affected,’ he said.

Wang expects net sales for Q2 to be around 50% lower than those in Q1 at US$7.5m–$8m.

‘This is mainly due to an approximately 55% decrease in sales from products manufactured at our Aoxing facility, offset by an approximately 14% increase in sales from products manufactured at Weinan facility, acquired in October 2011,’ he said.

Wang added that following the SFDA’s green light to restart sales, the firm has added a second shift and staff are working overtime.

‘We expect sales for 2012 third quarter to significantly improve as compared to the 2012 second quarter, and a full rebound is expected for the last quarter of the year,’ he said.

In spite of this setback, Biostar Pharmaceuticals says its business and prospects remain strong. The firm aims to increase market share of its current products, while introducing new SFDA-approved otc and prescription drugs. It will also continue bidding for new hospital contracts for prescription drugs, which will provide it with ‘a more predictable recurring revenue stream’.

In addition, it will continue to cooperate with scientific research institutions to develop new drugs. The firm already has agreed to cooperate with The Fourth Military Medical University.

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