Investor Presentation

June 2014

Forward Looking Statement

This presentation includes statements that are “forward-looking statements”. Whilemanagement has based any forward-looking statements contained in the presentation onits current expectations, the information on which such expectations were based maychange. These forward-looking statements rely on a number of assumptions concerningfuture events and are subject to a number of risks, uncertainties, and other factors, manyof which are outside of Biostar’s control, that could cause actual results to materially differfrom such statements. Such risks, uncertainties, and other factors include, but are notnecessarily limited to, those set forth under the caption “Item 1A. Risk Factors” in Biostar’smost recent Form 10-K filing, as and to the extent revised and updated to date in itssubsequent Form 10-Q filings. In addition, Biostar operates in a highly competitive andrapidly changing environment, and new risks may arise. Accordingly, you should not placeany reliance on forward-looking statements as a prediction of actual results. Biostardisclaims any intention to, and undertakes no obligation to, update or revise any forward-looking statement. You are also urged to carefully review and consider the variousdisclosures in Biostar’s most recent Annual Report on Form 10-K, as well as other publicfilings with the SEC since the filing of Biostar’s Annual Report.

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Introduction

Biostar Pharmaceuticals, Inc. (Nasdaq: BSPM) is a China based developer,manufacturer and marketer of pharmaceutical and health supplement products for avariety of diseases and conditions

•Strong R&D capabilities (two high-tech laboratories)

•Two world-class production facilities

•Diverse portfolio of products

•Extensive and efficient distribution network in 25 provinces

•82 acres raw material & herbs plantation

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Investment Considerations• Unique vertically integrated business model

- R&D, raw material plantation, processing, manufacturing, distribution and sales

• A history of strong profitable growth---

Revenue: 2007-2011 CAGR of 55%Net Income: 2007 – 2011 CAGR of 54%Business remains strong despite the recent temporary setback due to industry-wide issues

• Large product portfolio and a strong pipeline of new products to drive continues growth----

Currently produces and sells 22 products and 1 medical deviceInnovative product pipeline of eight products (OTC and prescription drugs)In 2011, acquired permits and approvals for 86 drugs and one health productIn March 2013, acquired additional 13 drug approval numbers

• Xin Aoxing - leading market position, strong brand recognition throughout China--

Targets hepatitis B virus (HBV) which affects more than 10% of China’s populationStrong recognition: OTC drug approved by China’s State Food and Drug Administration (SFDA)

• Well positioned to take advantage of market opportunities such as:---

China’s $124 billion healthcare reform planNew Rural Medical Care Cooperative ProgramMilestone: won a bid to supply hospitals In three provinces with Huangyangning Tablets

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R&D LabLab, Processing, Warehouse and DrugManufacturing

Raw Material

Vertically Integrated Business Model

Offices in XianyangFarm

Two world-class

productionfacilities

Xianyang & Weinan

Sales

network covering

25 province

s

Covers retailoutlets,

hospitalsand

pharmacies

Rawmaterial

plantation

82 acres

Two R&DLaboratories

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Self-farming: Reduces CostsQuality

& Controls

In 2008 acquired 82 acres in Qinling Mountains

Planted and growing 13 herbs including:

Salvia miltiorrhiza Pricklyash peel Eucommia bark Gingko Honeysuckle Shizandra berryScutellaeria baicalensis georgiMilk vetehRadix codonopsitis

To control quality and reduce cost of raw materialsIn 2010 - all raw materials were purchased from suppliers; planted herbs were not yet ready for

harvest and use yetIn 2011 - Salvia miltiorrhiza is ready and being used as raw materialIn 2012 - Additional herbs to harvest and be ready for useGoal - increase production and fulfill all its needs for raw material or trade for other herbs: furtherreduce costs and control quality

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Strong R&D Capabilities

•Two R&D laboratories (Xianyang & Weinan)

30 internal scientists & researchers

Average 10 years of experience

•External R&D – Biostar sponsors and ownsthe Intellectual Property

Shaanxi College of Traditional Chinese Medicine

Shaanxi University of Science and Technology

Northwest University - College of Life Science

The Fourth Military Medical University

Xianyang lab

Weinan lab

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World-class Production Facilities - Xianyang

Xianyang facility

•Four Good Manufacturing Production (GMP)certified production lines producing tenproducts and one medical device

•Has annual production capacity of over $100million

•Two new production lines are under construction and waiting for GMP certification:

-Zushima spray line - estimated to generateapproximately $10 million in revenues annually

-Health products line - estimated to generateapproximately $20 million in revenues annually

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World-class Production Facilities - Weinan

Weinan facility

•In October 2011, acquired Shaanxi WeinanHuaren Pharmaceuticals

•Five production lines

•One high-tech laboratory

•Currently produces ten drugs and one health product

•$2.1million in net sales for the first quarter of2013

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New Facility Established in the Gansu ProvinceGansu Facility

• January 10th: Biostarestablishes new office in the Gansu Province of the People’s Republic of China.• FOCUS: the sales of Biostar’s Hepatitis 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 Biostar to set up a headquarter in Gansu to expand the company’s market share.

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Significant Designation for Biostar’s China 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.

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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.

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A Diverse Portfolio of Products - Xianyang

Xin Aoxing Capsule GanWang Taohuasan Tianqi Dysmenorrhea Capsule Danshen Granule

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Category Name Treatment SFDA

OTC

Xin Aoxing Oleanolic Acid Capsule Acute and chronic hepatitis B (“HBV”) Approved

Ganwang Compound Influenza Approved

Tianqi Dysmenorrhea Capsule Menstrual swelling and cramping Approved

PrescriptionDanshen Granule Alleviates blood stasis and angina Approved

Taohuasan Pediatric Children respiratory tract infection Approved

Health Product

Yizi Capsules Aids fertility and fetal development Provincial level approved

Tangning Capsules Type II diabetes Provincial level approved

Shengjing Capsules Replenish kidney function Provincial level approved

Aoxing Ointment Psoriasis, vitiligo and dermatitis Provincial level approved

Aoxing Ganbaodai Hepatic and liver protection Provincial level approved

Medical Device Hernia Belt Hernia Provincial level approved

A Diverse Portfolio of Products - Weinan

Common cold ApprovedAmantadine Hydrochloride

inflammatory

•

•

In April 2012, Biostar won a bid to supply hospitals In three provinces with Huangyangning Tablets

Penetration of hospital prescription drug market marks important milestone for Biostar

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Category Name Treatment SFDA

OTC

Zhitong Tougu Plaster Cream Pain reliever Approved

Compound Paracetamol and

Prescription

Fosfomycin Calcium Urinary tract infections Approved

Huangyangning Tablets* Cardiovascular disease Approved

Jiakangling Capsule Hyperthyroidism Approved

Qianlietong Capsule Prostate disease Approved

Wenweishu Capsules Chronic gastritis Approved

Danshen Tablets Coronary heart disease Approved

Piracetam Tablets Cerebrovascular disease Approved

Erythromycin Estolate Coated Particles Anti-bacterial anti- Approved

Health Product Huaren Changweitong Capsule Gastrointestinal function Approved

Flagship Product – Xin Aoxing• OTC drug for the treatment of HBV

––

Approved by SFDA

Recognized by China Consumer Association

• Targets a highly contagions disease

– More than 130 million people (10% of China’s population) are infected with HBV

• Has high effectiveness rateSolid Growth Over a 4-Year

Period– High effectiveness rate in relieving HBV symptoms

per People’s Hospital of Shaanxi Province)

- (as

Revenue Generated by Xin Aoxing ($ Million)

• Nationally branded product and easily accessible 60.553

– Sold at local pharmacies since 199837

• Low cost/high margin 1910

• Highly affordable

– In most cases covered by personal health insurance 2007 2008 2009 2010 2011

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Innovative Product Pipeline

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Category Name Treatment Status

OTCKunLingWan Irregular menses Finished clinical testing

Zushima Aerosol pain suppressant Pending SFDA approval

Prescription

Azithromycin Tympanitis, pharyngitis, bronchitis Pending SFDA final testing

Yinyangsuo Kidney disease Finished clinical testing

Zhixuening Uterine Bleeding Finished clinical testing

Xiao’aiping Tumors, esophagus cancer Finished clinical testing

Zhenbao Wan Thrombus & coronary heart disease Finished clinical testing

Large Distribution Network

Beijing

Beijing

Factory locations inXianyang and Weinan –Shaanxi province

Weinan

Xianyang

Provinces – Biostar’ssales networkcoverage- Extensive sales network across

China’s 25 provincesApproximately 13,000 rural medicalsales outlets in ShaanxiSales team of over 400 members

-

-

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s & Marketing Stra

istribution Strateg

Sales and Distribution Strategy

RURAL Marketing:MASS Advertising:Widen

Coverage

BroadenAwarenes

sSales & Markteing Strategy

• •Mass media advertising toincrease brand awareness

Continue to invest in new sales offices and sales- force

Build closer relationship with pharmacies and doctors

Increase penetration in25 existing provincialmarkets

Deepen penetration in rural markets by opening additional rural distribution centers

Invest in village clinics and sales centers

••

•

•

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Two-DimensionalSales Strategy

Distribution Strategy

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1 About Biostar

2 Financial Highlights3 Growth Opportunities

Historical Financial Performance

* Net income and EPS for 2011 and 2012 was based on 27.9 million shares outstanding and it was affected by: a) lower selling prices to the Chinesegovernment’s price control policy, and higher competition for Xin Aoxing b) higher advertising expenditures, c) $1.5 million higher general and administrativeexpenses mainly related to stock-based compensation and the acquisition of Shaanxi Weinan in late 2011, d) a $2.3 million increase in research anddevelopment expenses for acquiring a proprietary technology, and e) $1.8 million non-cash impairment loss on land use rights.

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2012 & 2011 Revenue BreakdownProduct

by

2012: $49.3 Million 2011: $92 Million

Xin Aoxing

Taohuasan0.9%

0.0%8.6% Gan Wang7.2%

Tianqi

4.5%Danshen

7.1% Paracetamol65.8%

7.2% Health Products total

5.9% Shaanxi WeinanproductsMedical Device

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2013 vs. 2012 Highlights•

•

•

•

In April 2012 – PRC government suspended sales of gel capsule products

All China-based pharmaceutical companies that use gelatin capsules to manufacture drugs, were severely affected

Many large pharmaceutical companies reported substantial losses for the April – July period

Biostar was not immune to the industry-wide losses

As a result…

Sales and overall results for 2012 were similarly adversely affected•

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$ in millions (except in per shares) 2013 2012Net Sales $52.7 $49.3Gross Margins 40% 60.5%Operating Income (loss) $0.51 $(21.80)Net Income (loss) $0.81 $(20)EPS $.06 $(2.09)

Moving Forward:

In late July, Xianyang (SFDA) gave the “green light” approval to restart sales of gel capsule products

Despite the temporary setback, business remains strong

Business plan: Continue to bring new products to market

Expand geographic reachBroaden channels of distributionReinvigorate sales of flagship gel capsule product Xin Aoxing

Steps taken: Ramp up production: Employees are working overtime, a second shift was added

Rebuild consumer confidence: aggressive advertising campaign was initiated, including medical journals and health magazines

New sales business model: establishing a B2C call center – direct sales to customers

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Balance Sheet Highlights at 3/31/2013

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Highlights December 31, 2013 December 31, 2012

Cash and cash equivalents $80,072 $1,759,078

Total Current assets $35,985,502 $41,974,131

Total Assets $67,564,444 $70,475,300

Total current laibilities $4,791,505 $12,702,552

Total stockholder's equity $62,772,939 $57,772,748

Total liabilities and stockholder's equity $67,564,444 $70,475,300

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1 About Biostar

2 Financial Highlights

3 Growth Opportunities

Other Growth Opportunities

China’s medicine and pharmaceutical industry is one of the fastest growing industries of theChinese economy (according to Data Monitor & IMS Health)

• The world’s third largest prescription drugmarket

• Grown at over 16% annually (since 2000)

Mentality of patients living in rural areas ischanging

• 70% of China’s 1.3 billion people live in ruralareas

• Number of patients seeking cures through “modern” medicines offered in hospitals and healthcare centers is rapidly increasing

Highly fragmented market and government backed consolidation initiatives provide M&Aopportunities

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China’s Healthcare Reform

• China's $124 billion healthcare reform plan was launched in 2009. Two majorguidelines of the plan are accessibility and affordability

––

The first phase completed by the end of 2011 increased accessibilityThe second phase to be completed by 2020 aims to increase affordability bymaking medicines and medical services affordable to everyone.

• Chinese government increased the number of medicines included in the NationalReimbursement Drug list (fully or partially reimbursable)Private health insurance has become more affordable•

• $5.6 billion investment over 3 years has facilitated the“New rural cooperative medical care program”

– Investment on patient education and encouragementto use “modern” medicineProvides patients suffering form severe diseases withadditional financial assistanceShaanxi, Sichuan, Chongqing, Gansu, Henan, Hubei,and Hunan comprised 30% of the $5.6 billion spending

–

–

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Regulatory Compliances

• Quality Control Related

– Good Manufacturing Practice (“GMP”) Certification, regulated by the State Foods and DrugsAdministration (“SFDA”) – All Chinese pharmaceutical manufacturers must be GMP certified to producemedicines of any kind. Biostar received its first GMP certification in 2006 and received another verificationin 2011 for a period of five years.

• New drug approval and licensing

– SFDA and China Traditional Medicine Administration Bureau regulate the process of new drug approvaland licensing in China. Redwood Capital estimates that only 15% of new-to-market drug applications gotapproval by SFDA.

• Environmental regulations

– Subject to environmental laws and regulations stipulated by national and local environment protectionbureaus in China.

• Intellectual Property Rights and Patents

– Biostar has filed for copyright protection for the various names and brands of products.

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How to Contact Us

Corporate website:www.biostarpharmaceuticals.com

Contact:Ally GongTel: +86-29-3368-6638Email: office@aoxing-group.com

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BiostarNasdaq: BSPM

Pharmaceuticals, Inc.

Investor PresentationJune 2014