Revenue Increases 25.8% to $40.9 Million in the Quarter

Adjusted EBITDA of $4.3 Million in the Quarter, and $8.9 Million in the First Six Months of 2010

Company Reiterates 2010 Financial Guidance

PLYMOUTH MEETING, Pa., Aug. 9 /PRNewswire-Asia-FirstCall/ -- BMP Sunstone Corporation (Nasdaq: BJGP) ("BMP Sunstone" or the "Company") today announced financial results for the second quarter ended June 30, 2010.

    -- Revenue increased to $40.9 million from $32.5 million in the prior year
       period, an increase of 25.8%.
    -- Gross profit rose to $18.7 million from $14.4 million in the second
       quarter of 2009, coupled with gross margin expansion to 45.7% from
       44.3% in the prior year period.
    -- Operating income grew substantially to $2.3 million from $93,000 in the
       prior year period.
    -- Adjusted EBITDA was $4.3 million compared to $1.7 million in the prior
       year period. Non-GAAP net income was $2.2 million, or $0.05 per diluted
       share, compared to $300,000, or $0.01 per diluted share, in the second
       quarter of 2009.

David Gao, Chief Executive Officer of BMP Sunstone, stated, "We are delighted to see the initial benefits of the organizational changes we made earlier in the year. With Mr. Tong at the helm, our manufacturing business is now operating with increased efficiency, particularly within our sales and marketing department, where the reorganization helped drive increased sales of Sunstone's products. We also are starting to see improved margin performance in our distribution business as we continued our push to focus on higher margin products. The managerial and operational improvements we made in the first half of the year are proving to be worthwhile, and we are optimistic about our ability to continue strong growth of revenue and profit for our shareholders in the back part of the year."

Second Quarter 2010 Financial Results

Revenue in the second quarter of 2010 increased 25.8% to $40.9 million from $32.5 million in the second quarter of 2009. Revenue from manufacturing was $22.5 million, up 33.8% from the prior year period, reflecting continued demand for the Company's leading products and the initial benefits of the salesforce reorganization completed earlier in the year. Additionally, as of the first quarter of 2010, financial contributions from Sunstone Shengda Zhangjiakou Pharmaceutical Co., Ltd., were consolidated in the Company's manufacturing division and accounted for $1.9 million. Revenue from licensed products increased 24.8% year over year to $1.9 million, primarily due to successful sales and marketing efforts for Propess, Anpo and Ferriprox and further hospital coverage expansion. Revenue from distribution was $16.4 million, up 16.3% on a year over year basis.

Gross profit in the second quarter of 2010 increased to $18.7 million from $14.4 million in the second quarter of 2009. Gross margin was 45.7%, compared to 44.3% in the prior year period. Gross margin performance was driven by increased sales of manufactured and licensed products, which carried gross margins of 71.7% and 64.6% respectively. Additionally, revenue mix in the second quarter of 2010 reflects anticipated seasonality in Sunstone's business, as well as improved gross margin performance in the distribution business, as management continued its plan to proactively cease distribution of certain low margin wholesale products. Revenue from distribution contributed to a higher portion of total revenue than in the first quarter of 2010, and did so at a gross margin of 7.9%, up from 7.6% in the first quarter of 2010.

The Company's operating income increased to $2.3 million in the second quarter of 2010 from $93,000 in the second quarter of 2009. The Company's sales and marketing expenses, particularly at Sunstone, as well as general and administration expenses, were closely aligned with revenue performance in the second quarter of 2010. Operating expenses include approximately $821,000 of purchase accounting adjustments related to prior acquisitions, as well as approximately $491,000 of stock compensation expense, which reflects fewer options granted to senior management and board members on a year over year basis. Excluding purchase accounting adjustments and stock compensation, non- GAAP operating income improved 138.0% to $3.8 million from $1.6 million in the prior year period.

Adjusted EBITDA was $4.3 million in the second quarter of 2010, compared to $1.7 million in the second quarter of 2009. Improvement in adjusted EBITDA performance reflects enhanced revenue performance and operational efficiencies across the Company.

Non-GAAP net income was $2.2 million, or $0.05 per diluted share, compared to $300,000, or $0.01 per diluted share, in the second quarter of 2009. On a GAAP basis, the Company reported net income of $660,000, or $0.02 per diluted share, compared to a net loss of $1.7 million, or ($0.04) per diluted share, in the second quarter of 2009. The earnings per share calculation is based on 51.1 million diluted shares outstanding, compared to 50.7 million diluted shares outstanding in the prior year period.

Non-GAAP net income and earnings per share exclude stock based compensation expense, amortization related to 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 June 30, 2010 and 2009.

Balance Sheet

The Company paid down roughly $2.4 million of bank debt during the quarter, while keeping cash and cash equivalents fairly consistent with prior quarters, at $22.3 million as of June 30, 2010. The Company had cash and cash equivalents of $23.0 million at March 31, 2010, and ended 2009 with approximately $21.5 million in cash and cash equivalents. As of June 30, 2010, and including notes receivable of $15.1 million, total cash and cash equivalents including notes receivable totaled $37.4 million. Notes receivables from customers for the settlement of trade receivable balances are guaranteed by established banks in China and have maturities of six months or less.

First Half 2010 Financial Results

For the six months ended June 30, 2010, revenue increased 11.3% to $79.9 million from $71.7 million in the first six months of 2009. During this same time period, gross profit increased 13.2% to $39.7 million from $35.1 million. Income from operations increased 60.9% to $5.3 million, compared to $3.3 million in the first six months of 2009. Adjusted EBITDA was $8.9 million in the first six months of 2010, compared to $6.3 million in the prior year period. Non-GAAP net income was $4.8 million, or $0.11 per diluted share, compared to $3.3 million, or $0.08 per diluted share, in the prior year period. On a GAAP basis, net income was $1.3 million, or $0.03 per share, compared to a net loss of $3.7 million, or ($0.09) per share, in the first six months of 2009. The EPS calculation is based on 51.0 million diluted shares outstanding, compared to 46.9 million diluted shares outstanding in the prior year period.

Full Year 2010 Financial Guidance

The Company continues to expect revenue to reach between $160 million and $170 million in fiscal 2010. Additionally, during fiscal 2010, the Company continues to expect adjusted EBITDA to reach between $16 million and $17 million and non-GAAP net income to reach between $9 million and $10 million.

Conference Call

The Company will hold a conference call at 5:00 pm ET on August 9, 2010 to discuss its results. Listeners may access the call by dialing 1-866-713-8310 or 1-617-597-5308 for international callers, access code: 12154394. Preregistration and a webcast will be available through the Company's website at http://www.bmpsunstone.com . A replay of the call will be accessible through August 16, 2010 by dialing 1-888-286-8010 or 1-617-801-6888 for international callers, access code: 59487271.

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. Through Sunstone the Company manufactures leading pediatric and women's health products, including two of China's most recognized brands, "Hao Wawa" and "Confort," sold in pharmacies throughout the country. The Company also markets a portfolio of products under exclusive multi-year licenses into China, primarily focused on women's health and pediatrics, as well as provides pharmaceutical distribution services through subsidiaries in Beijing and Shanghai. BMP Sunstone's main office is in Beijing, with a U.S. 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, the Company's expected financial performance in fiscal 2010 and the Company's expectations for its business units in fiscal year 2010. These statements are subject to uncertainties and risks including, but not limited to, the impact from the Company's recent organizational changes, changes in the Company's sales, marketing and distribution plans, changes in the Company's 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.

    For more information, please contact:

     ICR, LLC
     (Investor Relations)
     Ashley M. Ammon
     Tel:   +1-646-277-1227

     Christine Duan
     Tel:   +1-203-682-8200




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


                                For the Three months For the Six months
                                   ended June 30,       ended June 30,
                                    2010     2009       2010      2009
    Revenues:
    Third parties                 $40,863   $32,123   $79,879   $67,644
    Related parties                    --       360        --     4,102
    Total Revenues                 40,863    32,483    79,879    71,746
    Cost of Goods Sold             22,188    18,089    40,212    36,694
    Gross Profit                   18,675    14,394    39,667    35,052
    Sales and Marketing Expenses   11,768    10,300    23,938    23,811
    General and Administrative
     Expenses                       4,589     4,001    10,400     7,930
    Total Operating Expenses       16,357    14,301    34,338    31,741
    Profit From Operations          2,318        93     5,329     3,311
    Other Income (Expense):
    Interest Income                    53        84       100       108
    Interest Expense                 (995)   (1,058)   (2,347)   (2,475)
    Debt Issuance Cost
     Amortization                    (109)      (97)     (235)     (225)
    Equity Method Investment
     Income                            --        65        --        82
    Loss on Early Extinguishment
     of Debt                           --        --        --    (4,573)
    Gain on Derivatives                --      (447)       --     1,204
    Total Other Expense            (1,051)   (1,453)   (2,482)   (5,879)
    Profit (Loss) Before
     Provision For Income Taxes     1,267    (1,360)    2,847    (2,568)
    Provision For Income Taxes        669       372     1,585     1,154
    Net Profit (Loss)                $598   $(1,732)   $1,262   $(3,722)
    Less: Net Profit
     Attributable to the
     Noncontrolling Interest           62        16        23        16
    Net Profit (Loss)
     Attributable to BMP
     Sunstone Corporation            $660   $(1,716)   $1,285   $(3,706)


    Basic and Fully-Diluted
     Profit (Loss) Per Share
     Attributable to BMP
     Sunstone                       $0.02    $(0.04)    $0.03    $(0.09)

    Basic Weighted-average
     Shares Outstanding            42,145    41,539    42,055    41,154
    Fully Diluted Weighted-
     average Shares Outstanding    51,062    50,699    51,022    46,875



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

                              For the Three months   For the Six months
                                 ended June 30,         ended June 30,
                                2010         2009      2010        2009
    Revenues:
    Third parties                 $40,863   $32,123   $79,879     $67,644
    Related parties                    --       360        --       4,102
    Total Revenues                 40,863    32,483    79,879      71,746
    Cost of Goods Sold             22,024    17,974    39,884      36,464
    Gross Profit                   18,839    14,509    39,995      35,282
    Sales and Marketing
     Expenses                      10,947     9,547    22,307      22,332
    General and
     Administrative
     Expenses                       4,078     3,359     9,020       6,684
    Total Operating
     Expenses                      15,025    12,906    31,327      29,016
    Profit From Operations          3,814     1,603     8,668       6,266
    Other Income (Expense):
    Interest Income                    24        46        40          70
    Interest Expense                 (995)   (1,058)   (2,347)     (2,025)
    Equity Method
     Investment Income                 --        65        --          82
    Total Other Expense              (971)     (947)   (2,307)     (1,873)
    Profit Before Provision
     For Income Taxes               2,843       656     6,361       4,393
    Provision For Income
     Taxes                            669       372     1,585       1,154
    Net Profit                     $2,174      $284    $4,776      $3,239
    Less: Net Profit
     Attributable to the
     Noncontrolling
     Interest                          62        16        23          16
    Net Profit Attributable
     to BMP Sunstone
     Corporation                    2,236       300     4,799       3,255
      Basic and Fully-
       Diluted Profit Per
       Share Attributable
       to BMP Sunstone              $0.05     $0.01     $0.11       $0.08

    Basic Weighted-average
     Shares Outstanding            42,145    41,539    42,055      41,154
    Fully Diluted Weighted-
     average Shares
     Outstanding                   51,062    50,699    51,022      46,875



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

                                                   June 30,        December 31,
                                                     2010              2009
    Assets
    Current Assets:
    Cash and Cash Equivalents                      $22,284            $21,544
    Restricted Cash                                  1,125              1,125
    Notes Receivable                                15,087             17,541
    Accounts Receivable, net of allowance
     for doubtful accounts of $771 and
     $481                                           47,590             37,752
    Inventory, net of allowance for
     obsolescence of $178 and $98                   10,461              9,811
    Receivable from Alliance Unichem                    --              7,550
    Other Receivables                                3,634              3,648
    VAT Receivable                                   1,009              1,093
    Prepaid Expenses and Other Current
     Assets                                          7,336              6,322
    Total Current Assets                          $108,526            106,386
    Property and Equipment, net                     31,492             30,967
    Investment in Shengda                               --              2,950
    Investments at Cost                                367                146
    Goodwill                                        70,317             70,033
    Other Assets                                       327                405
    Land Use Rights, net of accumulated
     amortization                                    2,991              2,860
    Intangible Assets, net of accumulated
     amortization                                   39,980             38,508
    Total Assets                                  $254,000           $252,255

    Liabilities and Equity
    Current Liabilities:
    Notes Payable and Bank Borrowings               $2,791             $6,406
    Accounts Payable                                24,047             24,465
    Due to Related Parties                           1,315              1,437
    Deferred Revenues                                  128                208
    Accrued Expenses                                20,521             18,478
    Total Current Liabilities                       48,802             50,994
    Long-Term Debt, including debt
     premium                                        33,991             36,749
    Deferred Taxes                                   8,834              9,097
    Total Liabilities                               91,627             96,840
    Commitment and Contingencies                        --                 --
    Equity:
    Common Stock, $.001 Par Value;
     75,000,000 and 50,000,000 Shares;
     42,145,320 and 41,931,987 Shares
     Issued and Outstanding as of June
     30, 2010 and December 31, 2009,
     respectively                                       42                 42
    Additional Paid in Capital                     170,722            168,772
    Common Stock Warrants                            8,621              8,621
    Accumulated Deficit                            (31,661)           (32,946)
    Accumulated Other Comprehensive
     Income                                         10,235              9,486
    Total BMP Sunstone Corporation
     Stockholders' Equity                          157,959            153,975
    Non controlling Interest                         4,414              1,440
    Total Liabilities and Equity                   254,000           $252,255




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

                          Three months ended June 30, Six months ended June 30,
                                  2010     2009             2010      2009
    GAAP Gross Profit           $18,675  $14,394          $39,667   $35,052
    Amortization Related
     to Acquisition                 164      115              328       230
    Non GAAP Gross Profit     $  18,839  $14,509        $  39,995   $35,282


                          Three months ended June 30, Six months ended June 30,
                                  2010     2009             2010      2009
    GAAP Operating Income     $   2,318      $93        $   5,329    $3,311
    Stock Based Compensation        491      599            1,341     1,184
    Amortization Related
     to Acquisitions              1,005      911            1,998     1,771
    Non GAAP Operating
     Income                   $   3,814   $1,603        $   8,668    $6,266

                          Three months ended June 30, Six months ended June 30,
    (all amounts in $000)         2010     2009      2010      2009
    GAAP Net Income
     (Loss)                   $     660  $(1,716)       $   1,285   $(3,706)
    GAAP Basic and Fully
     Diluted EPS              $    0.02   $(0.04)       $    0.03    $(0.09)

    Stock Based Compensation        491      599            1,341     1,184
    Debt Discount and Premium
     Amortization and Issuance
     Cost                            80       59              175       637
    Amortization Related to
     Acquisitions                 1,005      911            1,998     1,771
    Loss on Early
     Extinguishment of Debt          --       --               --     4,573
    Gain (Loss) on
     Derivatives                     --       447              --    (1,204)
    Non GAAP Net Income       $   2,236     $300        $   4,799    $3,255
    Non GAAP EPS              $    0.05    $0.01        $    0.11     $0.08




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

                                    For the Three months  For the Six months
                                        ended June 30,       ended June 30,
    (all amounts in $000)               2010      2009       2010      2009
    Net Income (Loss)                $   660   $(1,716)    $1,285   $(3,706)
    Net Income Reconciliation to
     Adjusted EBITDA:
    Interest expense, net              1,048     1,019      2,384     1,962
    Income taxes                         669       372      1,585     1,154
    Depreciation                         796       631      1,516     1,153
    Amortization of intangibles and
     fair value of inventory increase  1,005       911      1,998     1,771
    Loss on Early Extinguishment of
     Debt                                 --        --         --     4,573
    Gain on derivatives                   --       447         --    (1,204)
    Amortization of debt discount and
     debt issuance costs                  80        59        175       636
    ADJUSTED EBITDA                  $ 4,258    $1,723     $8,943    $6,339

SOURCE BMP Sunstone Corporation

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