Biostar Pharmaceuticals Inc., through its wholly-owned subsidiary in China, develops, manufactures and markets pharmaceutical and medical nutrient products for a variety of diseases and conditions.

The company announced today that the Chinese Military Drug Administration has granted clearance to begin clinical trials on their new drug application, the Zushima Analgesic Aerosol Spray. This product is a traditional Chinese herbal product used to relieve pain through a topical application to affected areas or closed wounds. The spray can also be used in the treatment of certain rheumatic conditions.

The product is classified as a “specially needed drug” by the Chinese Military Drug Administration, but it will also be available to the general public. The product is being co-developed by Biostar and Lanzhou Military Medicine and Equipment Institute. However, the intellectual property will be solely owned by Biostar Pharmaceuticals.

Biostar expects to receive formal product approval by the Chinese Military Drug Administration in the second quarter of 2010. The company anticipates its initial customers for the product to be the Chinese military and civil hospitals and pharmacies in the Shaanxi province. This product is expected to contribute at least $2 million to 2010 revenues. The gross margin of the product will be in line with the company’s other products.

Chairman and CEO of Biostar Pharmaceuticals, Wang Ronghua, commented on the approval for the clinical trials. He said, “We are very pleased that Zushima spray received approval to commence clinical trials, which is an important milestone to validate its efficacy. We anticipate Zushima will drive incremental revenue growth in 2010 and beyond.”