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I n v e st or P r ese n t a t i on June 20 1 4

I n v e st or P r ese n t a t i on June 20 1 4. F o r w a r d Looking S t a t eme n t. T h i s p r ese n t a ti o n i n c l u de s st a t eme n t s t h a t a re “ f o r w a r d - l oo k i n g st a t eme n t s ” . W h il e

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I n v e st or P r ese n t a t i on June 20 1 4

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  1. Investor Presentation June2014

  2. Forward Looking Statement This presentation includes statements that are “forward-looking statements”. While managementhasbasedanyforward-lookingstatementscontainedinthepresentationon its currentexpectations, the informationon which such expectations were based may change.Theseforward-lookingstatementsrelyonanumberofassumptionsconcerning futureeventsandaresubjecttoanumberofrisks,uncertainties,andotherfactors,many ofwhichareoutsideofBiostar’scontrol,thatcouldcauseactualresultstomateriallydiffer fromsuchstatements.Suchrisks,uncertainties,andotherfactorsinclude,butarenot necessarilylimitedto,thosesetforthunderthecaption“Item1A.RiskFactors”inBiostar’s mostrecentForm10-Kfiling,asandtotheextentrevisedandupdatedtodateinits subsequentForm10-Qfilings.Inaddition,Biostaroperatesinahighlycompetitiveand rapidlychangingenvironment,andnewrisksmayarise.Accordingly,youshouldnotplace any reliance on forward-looking statements as a prediction of actual results. Biostar disclaimsanyintentionto,andundertakesnoobligationto,updateorreviseanyforward- looking statement. You are also urged to carefully review and consider the various disclosuresinBiostar’smostrecentAnnualReportonForm10-K,aswellasotherpublic filingswiththeSECsincethefilingof Biostar’sAnnualReport. 2

  3. Introduction BiostarPharmaceuticals,Inc.(Nasdaq:BSPM)isa Chinabaseddeveloper, manufacturerandmarketerof pharmaceuticalandhealthsupplementproductsfora varietyofdiseasesand conditions •StrongR&Dcapabilities (twohigh-techlaboratories) •Twoworld-class productionfacilities •Diverseportfolioof products •Extensiveand efficientdistributionnetworkin25provinces •82acresraw material& herbsplantation 3

  4. InvestmentConsiderations • Uniqueverticallyintegratedbusinessmodel - R&D,rawmaterialplantation,processing,manufacturing,distributionandsales • Ahistoryofstrong profitablegrowth - - - Revenue:2007-2011CAGRof55% NetIncome:2007–2011CAGRof54% Businessremainsstrongdespitetherecenttemporarysetbackduetoindustry-wideissues • Largeproductportfolioandastrongpipelineofnewproductstodrivecontinuesgrowth - - - - Currentlyproducesandsells22productsand1medicaldevice Innovativeproductpipelineofeightproducts(OTCandprescriptiondrugs) In2011,acquiredpermitsandapprovalsfor86drugsandonehealthproduct InMarch2013,acquiredadditional13drugapprovalnumbers • XinAoxing-leadingmarketposition,strongbrandrecognitionthroughoutChina - - TargetshepatitisBvirus(HBV)which affectsmorethan10% ofChina’spopulation Strongrecognition: OTCdrugapprovedbyChina’sStateFoodandDrugAdministration(SFDA) • Wellpositionedto takeadvantageofmarketopportunitiessuchas: - - - China’s$124billionhealthcarereformplan NewRuralMedicalCareCooperativeProgram Milestone:wonabidtosupplyhospitalsInthreeprovinceswithHuangyangningTablets 4

  5. Vertically Integrated Business Model Raw Material Lab,Processing,Warehouseand R&DLab Drug Manufacturing OfficesinXianyang Farm Twoworld- class production facilities Xianyang& Weinan Sales network covering25 provinces Coversretail outlets, hospitals and pharmacies Raw material plantation 82acres TwoR&D Laboratories 5

  6. Self-farming: Reduces Costs Quality & Controls In2008acquired82acresin QinlingMountains Plantedand growing13herbsincluding: Salviamiltiorrhiza Pricklyashpeel Eucommiabark Gingko Honeysuckle Shizandraberry Scutellaeriabaicalensisgeorgi Milkveteh Radixcodonopsitis Tocontrolqualityand reducecostofrawmaterials In2010-allrawmaterialswerepurchasedfromsuppliers;plantedherbswerenotyetreadyfor harvestanduseyet In2011-Salviamiltiorrhizaisreadyandbeingusedasrawmaterial In2012-Additionalherbstoharvestandbereadyforuse Goal-increaseproductionandfulfillallitsneedsforrawmaterialor tradeforotherherbs:further reducecostsandcontrolquality 6

  7. Strong R&D Capabilities •TwoR&Dlaboratories (Xianyang& Weinan) 30internalscientists&researchers Average10yearsofexperience •ExternalR&D– Biostarsponsorsand owns theIntellectualProperty ShaanxiCollegeofTraditionalChineseMedicine ShaanxiUniversityofScienceandTechnology NorthwestUniversity-CollegeofLifeScience TheFourthMilitaryMedicalUniversity Xianyanglab Weinanlab 7

  8. World-classProduction Facilities - Xianyang Xianyangfacility •FourGoodManufacturingProduction(GMP) certifiedproductionlines producingten products and onemedicaldevice •Hasannualproductioncapacityof over $100 million •Twonewproductionlinesare under constructionandwaitingforGMPcertification: -Zushimasprayline- estimatedtogenerate approximately$10millioninrevenuesannually -Healthproductsline-estimatedtogenerate approximately$20millioninrevenuesannually 8

  9. World-classProduction Facilities - Weinan Weinanfacility •InOctober2011,acquiredShaanxiWeinan HuarenPharmaceuticals •Fiveproductionlines •Onehigh-techlaboratory •Currentlyproducestendrugsandonehealth product •$2.1millioninnetsalesforthefirstquarterof 2013 9

  10. New Facility Established in the Gansu Province Gansu Facility •  January 10th: Biostarestablishesnew office in the Gansu Province of the People’s Republic of China. • FOCUS: the sales of Biostar’sHepatitis B products in Gansu, Qinghai and Tibet. • Historically, the three provinces have shown a good consistent sales record primarily due to poor medical conditions and high incidences of Hepatitis B in the population from the three provinces. • Due to China’s ongoing expansion of their national healthcare reform, it was logical for Biostarto set up a headquarter in Gansu to expand the company’s market share. 9

  11. Significant Designation for Biostar’sChina Subsidiary •  January 15th: Biostar’s China operating subsidiary, Shaanxi Aoxing Pharmaceutical Co., Ltd., was designated as the Shaanxi Province Liver Disease Health Education Base. •  Shaanxi Aoxing Pharmaceutical has been awarded numerous honors of Shaanxi Pharmaceutical and Health Products Cooperation Association Director Unit • The new title for the facility will now provide a new platform for promotion, research and development of Biostar’s Hepatitis B products. • The reach and development of current and future products will not increase significantly. 9

  12. New Partnership with Shaanxi University •  March 6th: Partnered with the Research Institute of Pharmaceuticals at Shaanxi University of Chinese Medicine to develop a new liver cancer drug. •  Current cases of cancer on a global scale has been increasing drastically with China holding the larger percentage of the demographic • o   According to the World Health Organization (WHO), in 2012 on a global basis, there were 14 million new cancer cases and 8.2 million deaths; China accounted for 3.07 million of the new cases and 2.2 million of the deaths. • o   In 2012, China accounted for approximately 50% of the world’s liver cancer cases. 9

  13. A Diverse Portfolio of Products - Xianyang Category Name Treatment SFDA OTC XinAoxingOleanolic AcidCapsule Acuteandchronic hepatitisB (“HBV”) Approved GanwangCompound Influenza Approved TianqiDysmenorrheaCapsule Menstrualswelling andcramping Approved Prescription DanshenGranule Alleviatesblood stasisandangina Approved TaohuasanPediatric Childrenrespiratorytractinfection Approved Health Product YiziCapsules Aidsfertilityandfetaldevelopment Provinciallevelapproved TangningCapsules TypeII diabetes Provinciallevelapproved ShengjingCapsules Replenishkidneyfunction Provinciallevelapproved AoxingOintment Psoriasis,vitiligoanddermatitis Provinciallevelapproved AoxingGanbaodai Hepaticandliver protection Provinciallevelapproved MedicalDevice HerniaBelt Hernia Provinciallevelapproved XinAoxingCapsule GanWang Taohuasan TianqiDysmenorrheaCapsule DanshenGranule 10

  14. A Diverse Portfolio of Products - Weinan Category Name Treatment SFDA OTC ZhitongTouguPlasterCream Painreliever Approved CompoundParacetamol and Commoncold Approved Amantadine Hydrochloride Prescription FosfomycinCalcium Urinarytractinfections Approved HuangyangningTablets* Cardiovasculardisease Approved JiakanglingCapsule Hyperthyroidism Approved QianlietongCapsule Prostatedisease Approved WenweishuCapsules Chronicgastritis Approved DanshenTablets Coronaryheartdisease Approved PiracetamTablets Cerebrovasculardisease Approved ErythromycinEstolateCoated Particles Anti-bacterialanti- Approved inflammatory HealthProduct HuarenChangweitongCapsule Gastrointestinalfunction Approved • • InApril2012,BiostarwonabidtosupplyhospitalsInthreeprovinceswithHuangyangningTablets PenetrationofhospitalprescriptiondrugmarketmarksimportantmilestoneforBiostar 11

  15. Flagship Product – Xin Aoxing • OTCdrug forthetreatmentofHBV – – ApprovedbySFDA RecognizedbyChinaConsumerAssociation • Targetsahighlycontagionsdisease – Morethan130millionpeople(10%ofChina’s population)areinfectedwithHBV • Hashigheffectivenessrate SolidGrowthOvera 4-Year Period – HigheffectivenessrateinrelievingHBVsymptoms perPeople’sHospitalofShaanxiProvince) -(as RevenueGeneratedbyXinAoxing($Million) • Nationallybrandedproductandeasilyaccessible 60.5 53 – Soldatlocalpharmaciessince1998 37 • Lowcost/highmargin 19 10 • Highlyaffordable – Inmost casescoveredbypersonalhealthinsurance 2007 2008 2009 2010 2011 12

  16. Innovative Product Pipeline Category Name Treatment Status OTC KunLingWan Irregularmenses Finishedclinicaltesting Zushima Aerosolpainsuppressant PendingSFDAapproval Prescription Azithromycin Tympanitis,pharyngitis,bronchitis PendingSFDAfinaltesting Yinyangsuo Kidneydisease Finishedclinicaltesting Zhixuening UterineBleeding Finishedclinicaltesting Xiao’aiping Tumors,esophaguscancer Finishedclinicaltesting ZhenbaoWan Thrombus&coronaryheartdisease Finishedclinicaltesting 13

  17. Large Distribution Network Beijing Beijing Factorylocations in XianyangandWeinan– Shaanxiprovince Weinan Xianyang Provinces–Biostar’s sales network coverage - Extensivesalesnetworkacross China’s25provinces Approximately13,000ruralmedical salesoutletsinShaanxi Salesteamofover400members - - 14

  18. Sales and Distribution Strategy s& MarketingStra istributionStrateg RURALMarketing: MASSAdvertising: Widen Coverage Broaden Awareness Sales & Markteing Strategy Distribution Strategy • • Massmediaadvertisingto increasebrandawareness Continuetoinvestinnew salesofficesandsales- force Buildcloserrelationship withpharmaciesand doctors Increasepenetrationin 25existingprovincial markets Deepenpenetrationin ruralmarketsbyopening additionalrural distributioncenters Investinvillageclinics andsalescenters • • Two-Dimensional SalesStrategy • • 15

  19. 1 AboutBiostar 2FinancialHighlights 3 GrowthOpportunities 16

  20. Historical Financial Performance *Netincomeand EPSfor 2011and 2012wasbasedon27.9millionshares outstandingand itwasaffectedby:a)lowersellingpricestothe Chinese government’spricecontrolpolicy,andhighercompetitionforXinAoxingb)higheradvertisingexpenditures,c)$1.5millionhighergeneralandadministrative expensesmainlyrelatedto stock-basedcompensationandthe acquisitionofShaanxiWeinaninlate 2011,d)a $2.3millionincreaseinresearchand developmentexpensesfor acquiringaproprietary technology,and e)$1.8millionnon-cashimpairmentlosson landuserights. 17

  21. 2012& 2011 RevenueBreakdown Product by 2012: $49.3 Million 2011: $92 Million XinAoxing Taohuasan 0.9% 0.0% 8.6% GanWang 7.2% Tianqi 4.5% Danshen 7.1% Paracetamol 65.8% 7.2% HealthProductstotal 5.9% ShaanxiWeinan products MedicalDevice 18

  22. 2013vs. 2012Highlights • • • • InApril 2012–PRC governmentsuspendedsales of gelcapsule products AllChina-basedpharmaceuticalcompaniesthatusegelatincapsules to manufacturedrugs,wereseverelyaffected Manylarge pharmaceuticalcompaniesreported substantiallossesforthe April–Julyperiod Biostarwasnot immune to theindustry-widelosses As aresult… Salesand overallresultsfor2012weresimilarlyadverselyaffected • 19

  23. Moving Forward: InlateJuly,Xianyang(SFDA) gavethe“greenlight”approvaltorestartsalesof gelcapsuleproducts Despitethetemporarysetback,businessremainsstrong Businessplan: Continue to bring newproductsto market Expand geographicreach Broadenchannelsofdistribution Reinvigoratesalesofflagship gelcapsule productXinAoxing Stepstaken: Rampup production:Employeesare workingovertime,asecond shiftwasadded Rebuildconsumerconfidence:aggressive advertisingcampaignwasinitiated, including medical journals and health magazines Newsalesbusinessmodel:establishingaB2Ccall center–direct salesto customers 20

  24. Balance Sheet Highlights at 3/31/2013 21

  25. 1 AboutBiostar 2 FinancialHighlights 3GrowthOpportunities 22

  26. OtherGrowth Opportunities China’smedicineandpharmaceuticalindustryisone of thefastestgrowingindustriesof the Chineseeconomy (accordingtoDataMonitor& IMSHealth) • Theworld’sthirdlargestprescriptiondrug market • Grownatover16%annually(since2000) Mentalityof patientslivingin ruralareasis changing • 70%ofChina’s1.3 billionpeopleliveinrural areas • Numberof patientsseekingcuresthrough “modern”medicinesofferedinhospitalsand healthcarecentersis rapidlyincreasing Highlyfragmentedmarketandgovernmentbacked consolidationinitiativesprovideM&A opportunities 23

  27. China’sHealthcare Reform • China's$124billionhealthcarereform plan waslaunchedin 2009. Twomajor guidelinesofthe planareaccessibilityandaffordability – – Thefirstphase completedbythe endof2011increasedaccessibility Thesecondphase to becompletedby2020 aims to increaseaffordabilityby makingmedicinesandmedicalservicesaffordable toeveryone. • ChinesegovernmentincreasedthenumberofmedicinesincludedintheNational ReimbursementDruglist(fullyor partiallyreimbursable) Privatehealthinsurancehasbecomemoreaffordable • • $5.6billioninvestmentover3 yearshasfacilitatedthe “Newrural cooperativemedicalcareprogram” – Investmentonpatient educationandencouragement touse“modern” medicine Provides patients sufferingform severediseaseswith additionalfinancialassistance Shaanxi,Sichuan,Chongqing,Gansu,Henan,Hubei, and Hunancomprised30%of the$5.6 billionspending – – 24

  28. RegulatoryCompliances • QualityControlRelated – GoodManufacturingPractice (“GMP”) Certification, regulatedbythe State FoodsandDrugs Administration (“SFDA”)–All Chinesepharmaceuticalmanufacturersmust be GMP certifiedto produce medicines ofanykind. Biostarreceivedits firstGMP certificationin2006and receivedanotherverification in2011 fora periodoffiveyears. • Newdrug approvalandlicensing – SFDAand ChinaTraditionalMedicineAdministration Bureauregulatethe process ofnew drug approval andlicensinginChina.RedwoodCapitalestimatesthatonly15% ofnew-to-marketdrugapplicationsgot approval bySFDA. • Environmentalregulations – Subjectto environmentallawsandregulationsstipulatedbynationaland local environmentprotection bureausinChina. • IntellectualPropertyRightsandPatents – Biostarhas filed forcopyrightprotectionforthevarious namesandbrands ofproducts. 25

  29. Howto Contact Us Corporatewebsite: www.biostarpharmaceuticals.com Contact: AllyGong Tel:+86-29-3368-6638 Email: office@aoxing-group.com 26

  30. Biostar Nasdaq:BSPM Pharmaceuticals, Inc. Investor Presentation June 2014

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