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BMP Sunstone Reports First Quarter 2009 Financial Results
Date:5/18/2009

PLYMOUTH MEETING, Pa., May 18 /PRNewswire-Asia-FirstCall/ -- BMP Sunstone Corporation (Nasdaq: BJGP) ("BMP Sunstone" or the "Company"), today announced financial results for the first quarter ended March 31, 2009.

    Financial Highlights from the First Quarter Ended March 31, 2009

    -- First quarter revenues increased to $39.3 million from $18.1 million in
       the prior year period.
    -- Gross profit increased to $20.7 million from $7.7 million in the prior
       year period. Gross margin was 52.6% versus 42.7%.
    -- Operating income improved to $3.2 million from a loss of $1.4 million
       in the prior year period.
    -- Non-GAAP net income was $3.0 million, compared to a net loss of
       $106,000 in the first quarter of 2008.
    -- Non-GAAP EPS, as defined below, was $0.07 for the quarter, compared to
       net loss per share of ($0.00) in the prior year period.
    -- Adjusted EBITDA was $4.6 million in the first quarter of 2009, compared
       to $639,000 in the first quarter of 2008.
    -- First quarter 2009 financial results include a net non-cash loss of
       approximately $2.9 million, reflecting a loss on the early
       extinguishment of debt, partially offset by a gain on the embedded
       derivative value on convertible notes.

Non-GAAP net income and earnings per share exclude stock based compensation expense, amortization related to Sunstone and Wanwei acquisitions, amortization of debt discount and issuance cost, loss on early extinguishment of debt and gain on the embedded derivative value on convertible notes. Adjusted EBITDA is a non-GAAP measure which provides earnings before interest, taxes, depreciation and amortization and excludes loss on early extinguishment of debt and gain on the embedded derivative value on convertible notes. Please refer to the financial tables provided in this news release for a reconciliation of GAAP results to non-GAAP results for the three-month periods ended March 31, 2009 and 2008.

David Gao, Chief Executive Officer of BMP Sunstone, stated, "We are very pleased with our financial performance in the first quarter of 2009. Our results reflect continued revenue growth, operating improvements and cost efficiencies."

First Quarter 2009 Financial Results

Revenue in the first quarter of 2009 increased to a record $39.3 million from $18.1 million in the first quarter of 2008, reflecting increased demand for the Company's manufactured and licensed products, including $24.5 million of revenue from Sunstone, which was acquired in February of 2008. Revenue from distribution increased 80% to $13.4 million in the first quarter of 2009 from $7.4 million in the prior year period, reflecting revenue from Rongheng, which was acquired in July 2008, and sales growth of Wanwei's major products. Revenue from licensed products increased 13% to $1.4 million from $1.2 million in the prior year period, reflecting sales and marketing efforts of Anpo, Propess, Ferriprox and Galake compared to the prior year.

Gross profit in the first quarter of 2009 increased to a record $20.7 million from $7.7 million in the first quarter of 2008. Gross margin was also a record 52.6%, compared to 42.7% in the prior year period. Gross margin performance reflects increased sales of higher margin products and services from Sunstone and BMP China.

Operating income was a record $3.2 million in the first quarter of 2009, compared to an operating loss of $1.4 million in the first quarter of 2008, reflecting continued cost control and cost synergies. General and administrative expenses as a percentage of revenue were approximately 10.0%, compared to 17.4% in the prior year period.

Non-GAAP net income was $3.0 million, or $0.07 per diluted share, compared to a non-GAAP net loss of $106,000, or ($0.00) per diluted share, in the first quarter of 2008. The EPS calculation is based on 40.8 million diluted shares, compared to 35.1 million diluted shares in the prior year period. On a GAAP basis, the Company reported net loss of $2.0 million in the first quarter of 2009, or ($0.05) per share, compared to a net loss of $2.8 million, or ($0.08) per share, in the prior year period.

First quarter financial results include non-cash items related to the Company's convertible notes. These include $4.6 million in deferred loan costs, debt discount and debt premium, relative to the early extinguishment of debt, offset by a $1.6 million gain on the embedded derivatives in the January 2009 notes and common stock warrants issued as part of the February 2009 equity issuance.

Balance Sheet

As of March 31, 2009, the Company had cash and cash equivalents of $21.2 million and notes receivable of $18.8 million, totaling $40.0 million. Notes receivables are notes accepted from customers for the settlement of trade receivable balances. All notes receivables are guaranteed by established banks in China and have maturities of six months or less.

Financial Guidance

BMP Sunstone is reiterating its revenue, non-GAAP and EBITDA guidance for 2009. As previously announced, for the fiscal year 2009, revenue is anticipated to increase at least 35% year over year to reach $150 to $160 million. EBITDA is expected to reach $16 million to $18 million, and non-GAAP net income is expected to reach $9 million to $11 million.

Gao continued, "China's healthcare opportunity is large and growing. We believe our combination of branded OTC products at Sunstone, in-licensed RX products at BMP China, and our established distribution networks -- which enable us to control sales channels in key markets -- position us very competitively. We remain focused on delivering enhanced profitability over the long term, and we remain enthusiastic about the market we address.

"Our 2009 financial guidance reflects sales and marketing expansion in China resulting from continued performance at all of our business units, especially at Sunstone, and reflects operational synergies resulting from acquisitions we completed over the past eighteen months. In 2009, we expect all of our business units to be profitable, which will mark a significant milestone in the Company's development," concluded Gao.

Conference Call

The Company will hold a conference call at 5:00 pm ET on May 18, 2009 to discuss first quarter 2009 results. Listeners may access the call by dialing 1-888-679-8034 or +1-617-213-4847 for international callers, access code: 95397072. Preregistration and a webcast will also be available through the Company's website at http://www.bmpsunstone.com . A replay of the call will be available through May 28, 2009. Listeners may access the replay by dialing 1-888-286-8010 or +1-617-801-6888 for international callers, access code: 95991592.

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. Currently this portfolio includes eight products under exclusive multi-year licenses for China, primarily focused on women's health and pediatrics. The Company also owns Sunstone Pharmaceutical Co. Ltd., which manufactures leading pediatric and women's health products, including two of China's most recognized brands, "Hao Wawa" and "Confort," sold through approximately 120,000 pharmacies in China. The Company also provides pharmaceutical distribution services through its subsidiaries in Beijing and Shanghai, and through its affiliate, Guangzhou Pharmaceuticals Corp. The Company has its main office in Beijing, with a US office in Plymouth Meeting, PA. For more information, please visit http://www.bmpsunstone.com .

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 regarding the Company's competitive advantages, the impact of changes in China's healthcare industry on the Company's growth, the Company's expected financial performance in 2009 and the Company's expectations for each of its business units in 2009. These statements are subject to uncertainties and risks including, but not limited to, operating performance, general financial, economic, and political conditions affecting the biotechnology and pharmaceutical industries and the Chinese pharmaceutical market, the ability to timely manufacture and distribute the Company's products and other risks contained in reports filed by the Company with the Securities and Exchange Commission. In addition, the Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.



                    BMP Sunstone Corporation and Subsidiaries
                 Condensed Consolidated Statements of Operation
               ($ amounts, except per share amounts in thousands)


                                         For the Three months ended March 31,
                                                    2009              2008
    Revenues:
    Third parties                                  $35,521           $17,298
    Related parties                                  3,742               791
    Total Revenues                                  39,263            18,089
    Cost of Goods Sold                              18,605            10,368
    Gross Margin                                    20,658             7,721
    Sales and Marketing Expenses                    13,511             5,961
    General and Administration Expenses              3,929             3,156
    Total Operating Expenses                        17,440             9,117
    Profit (Loss) From Operations                    3,218            (1,396)
    Other Income (Expense):
    Interest Income                                     24                48
    Interest (Expense)                              (1,417)           (1,569)
    Debt Issuance Cost Amortization                   (128)             (210)
    Equity Method Investment Income                     17               675
    Loss on Early Extinguishment of Debt            (4,573)               --
    Gain on Derivatives                              1,651                --
    Total Other Income (Expense)                    (4,426)           (1,056)
    Loss Before Provision For Income
     Taxes                                          (1,208)           (2,452)
    Provision For Income Taxes                         782               347
    Net Loss                                       $(1,990)          $(2,799)
    Basic and Fully-Diluted Loss Per
     Share                                          $(0.05)           $(0.08)

    Basic Weighted-average Shares
     Outstanding                                    40,765            35,096
    Fully Diluted Weighted-average Shares
     Outstanding                                    43,066            36,598



                    BMP Sunstone Corporation and Subsidiaries
                      Condensed Consolidated Balance Sheets
                            ($ amounts in thousands)

                                                  March 31,      December 31,
                                                    2009              2008
    Assets
    Current Assets:
    Cash and Cash Equivalents                      $21,251           $15,740
    Restricted Cash                                    781             1,150
    Notes Receivable                                18,776            15,797
    Accounts Receivable, net of allowance
     for doubtful accounts of $210 and
     $127                                           38,254            30,897
    Inventory, net of allowance for
     obsolescence of $45 and $0                      9,570            10,184
    Due from Related Party                           2,435             1,834
    Other Receivables                                2,189             2,168
    VAT Receivable                                     989               921
    Prepaid Expenses and Other Current
     Assets                                          5,181             6,247
    Total Current Assets                            99,426            84,938
    Property and Equipment, net                     23,999            22,840
    Investment in Alliance BMP Limited              15,093            15,093
    Investment in Shengda                            2,938                --
    Investments, at Cost                               146               146
    Goodwill                                        69,950            69,866
    Other Assets                                       716               875
    Land Use Rights, net of accumulated
     amortization                                    1,983             2,002
    Intangible Assets, net of accumulated
     amortization                                   41,107            41,891
    Total Assets                                  $255,358          $237,651

    Liabilities and Stockholders' Equity
    Current Liabilities:
    Notes Payable and Bank Borrowings,
     net of debt discounts                         $18,328           $33,591
    Accounts Payable                                28,544            27,482
    Due to Related Parties                           5,426             4,361
    Deferred Revenues                                  128               128
    Accrued Expenses                                16,373            14,601
    Total Current Liabilities                       68,799            80,163
    Long-Term Debt, including debt
     premium                                        25,297                --
    Derivative Liability                               894
    Deferred Taxes                                   9,763             9,856
    Total Liabilities                              104,753            90,019
    Stockholders' Equity:
    Common Stock, $.001 Par Value;
     75,000,000 Shares Authorized as of
     March 31, 2009 and December 31,
     2008; 41,500,409 and 40,246,410
     Shares Issued and Outstanding as of
     March 31, 2009 and December 31,
     2008, respectively                                 41                40
    Additional Paid in Capital                     164,850           160,864
    Common Stock Warrants                            9,780             9,049
    Accumulated Deficit                            (33,032)          (31,042)
    Accumulated Other Comprehensive
     Income                                          8,966             8,721
    Total Stockholders' Equity                     150,605           147,632
    Total Liabilities and Stockholders'
     Equity                                       $255,358          $237,651



                    BMP Sunstone Corporation and Subsidiaries
                 Condensed Consolidated Statements of Operation
               ($ amounts, except per share amounts in thousands)
                                    Non GAAP

                                         For the Three months ended March 31,
                                                    2009              2008
    Revenues:
    Third parties                                  $35,521           $17,298
    Related parties                                  3,742               791
    Total Revenues                                  39,263            18,089
    Cost of Goods Sold                              18,490             9,699
    Gross Margin                                    20,773             8,390
    Sales and Marketing Expenses                    12,785             5,544
    General and Administration Expenses              3,325             2,526
    Total Operating Expenses                        16,110             8,070
    Profit (Loss) From Operations                    4,663               320
    Other Income (Expense):
    Interest Income                                     24                48
    Interest (Expense)                                (967)             (802)
    Debt Issuance Cost Amortization                     --                --
    Equity Method Investment Income                     17               675
    Loss on Early Extinguishment of Debt                --                --
    Gain on Derivatives                                 --                --
    Total Other Income (Expense)                      (926)              (79)
    Profit Before Provision For Income
     Taxes                                           3,737               241
    Provision For Income Taxes                         782               347
    Net Profit (Loss)                               $2,955             $(106)
    Basic Profit (Loss) Per Share                    $0.07             $0.00
    Fully Diluted Profit (Loss) Per Share            $0.07             $0.00

    Basic Weighted-average Shares
     Outstanding                                    40,765            35,096
    Fully Diluted Weighted-average Shares
     Outstanding                                    43,066            36,598



                    BMP Sunstone Corporation and Subsidiaries
                             Non GAAP Reconciliations
                   ($ amounts, except per share in thousands)

                                                 Three Months Ended March 31,
                                                     2009              2008
    GAAP Gross Profit                              $20,658            $7,721
    Amortization Related to Acquisition                115               669
    Non GAAP Gross Profit                          $20,773            $8,390

                                                 Three Months Ended March 31,
                                                      2009              2008
    GAAP Operating Income (Loss)                    $3,218           $(1,396)
    Stock Based Compensation                           585               563
    Amortization Related to Acquisitions               860             1,153
    Non GAAP Operating Income                       $4,663              $320

                                                 Three Months Ended March 31,
                                                      2009              2008
    GAAP Net Loss                                  $(1,990)          $(2,799)
    GAAP EPS                                        $(0.05)           $(0.08)

    Stock Based Compensation                           585               563
    Debt Amortization and Issuance Cost                578               977
    Amortization Related to Acquisitions               860             1,153
    Loss on Early Extinguishment of Debt             4,573                --
    Gain on Derivatives                             (1,651)               --
    Non GAAP Net Income (Loss)                      $2,955             $(106)
    Non GAAP EPS                                     $0.07             $0.00



                    BMP Sunstone Corporation and Subsidiaries
                         Adjusted EBITDA Reconciliation
                            ($ amounts in thousands)

                                         For the Three Months Ended March 31,
                                                     2009              2008
    Net Loss                                       $(1,990)          $(2,799)
    Net Loss Reconciliation to Adjusted
     EBITDA:
    Interest expense, net                              943               754
    Income taxes                                       782               347
    Depreciation                                       522               257
    Amortization of intangibles and fair
     value of inventory increase                       860             1,103
    Loss on Early Extinguishment of Debt             4,573                --
    Gain on derivatives                             (1,651)               --
    Amortization of debt discount and
     debt issuance costs                               577               977
    EBITDA                                          $4,616              $639


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SOURCE BMP Sunstone Corporation
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