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BMP Sunstone Reports First Quarter 2008 Financial Results

- Company Reports Record Revenue and Gross Margin Performance -

- Revenue Increased 218% Year Over Year to $18.1 million -

- 42.7% Gross Margin Reached in 1Q 2008 -

PLYMOUTH MEETING, Penn., May 19 /Xinhua-PRNewswire-FirstCall/ -- BMP Sunstone Corporation (Nasdaq: BJGP) ("BMP Sunstone" or the "Company"), today announced its financial results from the first quarter of 2008. The Company intends to file its Form 10Q today.

Key Highlights from the First Quarter of 2008 include:

-- Revenue increased 218% year over year to $18.1 million from $5.7

million in 1Q07

-- Gross profit increased to $7.7 million from $654,000 in 1Q07

-- Gross margin increased to 42.7% from 11.5% in 1Q07

-- Adjusted EBITDA improves to $1,523,000 from a loss of $1.4 million in


David Gao, Chief Executive Officer of BMP Sunstone, stated, "Our first quarter 2008 financial results are the strongest achieved in our Company's history and reflect the initial revenue and gross margin contributions from Sunstone. Our growing licensed products business also drove gross margin improvements and we are excited about the increasing presence we are realizing at BMP China."

Gao continued, "Through the Sunstone acquisition, we significantly enhanced our product offering with two of China's leading healthcare brands in therapeutic areas that we believe are extremely compelling: pediatrics and women's health. We also expanded our distribution reach into more than 50,000 retail pharmacies in China. With a stronger brand portfolio and a materially larger retail presence, we remain dedicated to realizing synergies across our organization in 2008 and beyond."

Revenue for the first quarter of 2008 was $18.1 million, as compared to $5.7 million in the first quarter of 2007. OTC sales, which reflect Sunstone revenues, were included in the period from February 18, 2008 to the end of the quarter, and contributed $9.5 million. Revenue from licensed products was $1.2 million in the first quarter of 2008 as compared to $406,000 in the first quarter of 2007. Revenue from distribution was $7.4 million in the first quarter of 2008 compared to $5.3 million in the comparable period of 2007.

Gross profit increased to $7.7 million from $654,000 in the first quarter of 2007. This reflects a gross margin of 42.7%, which is a substantial increase year over year from 11.5% in the first quarter of 2007. The increase in gross margins was due to Sunstone revenue contributions as well as increased licensed products sales, both of which carry a higher gross margin than distribution revenue. Gross profit includes a one time non-cash adjustment of $609,000 related to amortization on the fair value inventory for the Sunstone acquisition. Excluding this adjustment, gross profit margin would have been 46.1%.

Loss from operations improved to $1.4 million from $1.8 million in the first quarter of 2007. Operating expense increases included Sunstone-related general and administrative expenses, as well as costs related to additional senior management, administrative and corporate staff in China. General and administration expenses increased 70% to $3.2 million in the first quarter of 2008 from $1.9 million in the first quarter of 2007. Excluding the $609,000 purchase accounting adjustment in cost of sales, described above, the loss from operations improved to $787,000 from a loss of $1.8 million in the prior year period.

Adjusted EBITDA in the first quarter of 2008 was $1,523,000, which excludes the impact of $563,000 of stock compensation expense, $977,000 of amortization debt discount and issuance costs, $802,000 of interest expense, $609,000 of amortization of fair value inventory for the Sunstone acquisition, and $470,000 of amortization for the Sunstone acquisition. The Company incurs significant non-cash charges for depreciation, amortization and stock compensation expense that may not reflect the Company's operating performance and ability to generate cash flow from operations. Management believes that adjusted EBITDA is a worthwhile indicator of the Company's financial performance. Adjusted EBITDA is a non-GAAP financial measure within the meaning of the Securities and Exchange Commission (SEC) regulations. A reconciliation of Adjusted EBITDA to net income is included in a table at the end of this press release.

Net loss was $2.5 million, or ($0.07) per diluted share. On a pro forma basis, assuming the Sunstone acquisition was completed on January 1, 2008, revenues would be $26.8 million, net loss would be ($1.4) million and EPS would be ($0.04) in the first quarter of 2008.

Balance Sheet

As of March 31, 2008, the Company had cash and cash equivalents as well as bills receivable totaling $22.8 million. This compares to $22.8 million as of December 31, 2007. The Company had long-term debt of approximately $22.5 million as of March 31, 2008.

Business Update

On May 6, 2008, the clinical trial application for Enablex was officially accepted by China's State Food & Drug Administration. The clinical trial application acceptance is a key requirement to pursuing the clinical trial and an integral step toward the completion of the Enablex commercialization process in China.

Financial Outlook

The Company continues to expect to reach revenue of at least $96.0 million in the full year 2008, with a corresponding net loss of roughly $3.0 million, or $0.07 per share, based on 39.5 million shares outstanding. This financial guidance includes the impact of approximately $9.0 million of non-cash expenses through the year, including but not limited to the amortization of the debt discount on the Company's long term debt financing as well as stock compensation expenses. The Company's financial guidance excludes any pending acquisitions.

Mr. Gao concluded, "Creating cost synergies across our organization remains a top priority for the future and we also remain committed to our long-term goal to be one of China's leading specialty pharmaceutical companies."

Conference Call

The Company will hold a conference call on May 19, 2008, at 8:00 am ET to discuss fiscal first quarter 2008 results. Listeners may access the call by dialing 1-888-680-0865 or 1-617-213-4853 for international callers, access code: 87528378. A webcast will also be available through BMP Sunstone's website at . A replay of the call will be available through May 26, 2008. Listeners may access the replay by dialing 1-888-286-8010 or 1-617-801-6888 for international callers, access code: 25780211.

Also note that pre-registration is available to expedite access to the call. Please visit: .

About BMP Sunstone Corporation

BMP Sunstone Corporation is a specialty pharmaceutical company that is building a proprietary portfolio of branded pharmaceutical and healthcare products in China and is pursuing partnerships with other companies seeking to enter the Chinese pharmaceutical market. It is the only U.S. public company to offer industry partners a comprehensive suite of market-entry services in China that includes pre-market entry analysis, clinical trial management, product registration, market research, as well as pharmaceutical marketing and distribution. The Company provides distribution services for a wide range of products, including Western medicines, traditional Chinese medicines, bio-chemical medicines, medical applications, branded generic pharmaceuticals, over-the-counter healthcare products, and home healthcare supplies and equipments. BMP Sunstone's proprietary portfolio primarily focuses on women's health and pediatrics. The Company is headquartered in Plymouth Meeting, Pennsylvania.

Safe Harbor Statement

This news release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts, including but not limited to statements about our acquisitions, joint ventures and management team being able to generate successful results for 2008 and any information regarding guidance for our results for future periods. These statements are subject to uncertainties and risks including, but not limited to, our ability to generate additional revenue, control our expenses and take advantage of synergies between our various subsidiaries and other risks contained in reports filed by the Company with the Securities and Exchange Commission. All such forward-looking statements, whether written or oral, and whether made by or on behalf of the company, are expressly qualified by the cautionary statements and any other cautionary statements which may accompany the forward-looking statements. In addition, the Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.



($ in thousands)

March 31, December 31,

2008 2007


Current Assets:

Cash and Cash Equivalents $8,398 $22,837

Restricted Cash 1,297 1,297

Accounts Receivable, net of

allowance for doubtful accounts

of $50 and $44, respectively 27,821 11,707

Inventory, net of allowance for

obsolescence of $0 7,581 2,897

Bills Receivable 14,386 --

Note Receivable 659 659

Due from Related Party 2,169 --

Other Receivables 1,499 720

VAT Receivable 870 828

Prepaid Expenses and Other Current

Assets 4,748 2,444

Total Current Assets 69,428 43,389

Restricted Cash -- --

Property and Equipment, Net 23,355 745

Investment in Hong Kong Health

Care -- 33,126

Investments at cost 142 137

Investment in Alliance BMP 15,093 --

Goodwill 65,953 --

Other Assets 923 3,053

Intangible Assets, net of

accumulated amortization 43,697 473

Total Assets $218,591 $80,923

Liabilities and Stockholders'


Current Liabilities:

Notes Payable $4,871 $117

Accounts Payable 13,972 8,784

Deferred Revenue 1,725 151

Due to Related Parties 4,656 --

Accrued Expenses 19,234 3,952

Total Current Liabilities 44,458 13,004

Long-term debt, net of debt

discount 22,525 18,910

Deferred Taxes 10,934 --

Total Liabilities 77,917 31,914

Stockholders' Equity:

Common stock, $0.001 par value;

75,000,000 shares authorized 39,462,026

and 31,240,913 shares are issued and

outstanding at March 31, 2008 and

December 31, 2007 39 31

Additional Paid in Capital 156,317 66,123

Common Stock Warrants 9,156 9,747

Accumulated Deficit (30,078) (27,600)

Accumulated Other Comprehensive

Income 5,240 708

Total Stockholders' Equity 140,674 49,009

Total Liabilities and

Stockholders' Equity $218,591 $80,923



($ in thousands except per share amounts)

Quarter Ended March 31,

2008 2007


Third Parties $17,298 $5,685

Related Parties 791 --

Total Revenues 18,089 5,685

Cost of Goods Sold 10,368 5,031

Gross Margin 7,721 654

Sales and Marketing Expenses 5,961 614

General and Administration

Expenses 3,156 1,859

Total Operating Expenses 9,117 2,473

Loss From Operations (1,396) (1,819)

Other Income (Expense):

Interest Income 48 150

Interest Expense (1,569) (19)

Debt Issuance Cost Amortization (210) --

Equity Method Investment Income 996 --

Total Other (Expense) Income (735) 131

Loss Before Provision for Income

Taxes (2,131) (1,688)

Provision for Income Taxes 347 --

Net Loss $(2,478) $(1,688)

Basic and Fully-Diluted Loss Per

Share $(0.07) $(0.06)

Basic and Fully-Diluted Weighted -

average Shares Outstanding 35,096 26,588



($ in thousands except per share amounts)

Quarter Ended March 31,

2008 2007

Adjusted EBITDA $1,523 $(1,413)

Adjustment: FAS123R 563 316

EBITDA 960 (1,729)

EBITDA Reconciliation to GAAP Net


Interest Income (48) (150)

Interest Expense 802 19

Income Taxes 347 --

Depreciation 257 26

Amortization of intangibles and fair

value of inventory increase 1,103 64

Amortization of debt discount and

debt issuance costs 977 --

Net Loss $(2,478) $(1,688)

For more information, please contact:

BMP Sunstone Corporation

Fred M. Powell

Chief Financial Officer

Tel: +1-610-940-1675

Integrated Corporate Relations, Inc.

Ashley Ammon MacFarlane and Christine Duan

Tel: +1-203-682-8200 (Investor Relations)

SOURCE BMP Sunstone Corporation
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