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    OTC Stock on the Move – Lotus Pharmaceuticals Price Recovers on Stock Uplisting

    Lotus Pharmaceuticals Inc. (OTC BB: LTUS) stock rallied up and down over the last trading days, and closed the October 22 session at $1.17, growing by 15% over October 21. The news that that Dr. Ashley resigned from the company’s board of directors has caused a 11.7% decline in the stock price; however, the subsequent announcement of plans to uplist the company to a national securities exchange have triggered a recovery.

    Lotus manufactures branded drugs and distributes them along with drugs produced by third-party manufacturers throughout China. The company has a nationwide sales network to directly and indirectly sell to hospitals, clinics and drug stores in approximately 30 provinces in China. Additionally, the company operates 10 retail pharmacy locations in Beijing. Lotus manufactures branded drugs and distributes them along with drugs produced by third-party manufacturers throughout China. Lotus’ drug development program is focused on the treatment of cerebro-cardiovascular disease, asthma and diabetes, and has several drug candidates that could enter the market already in 2011.

    The recently announced plans to uplist to a major exchange confirm the company’s solid track record. A number of previously announced developments like SOX compliance project, retention of Sichenzia Ross Friedman Ference LLP., as the company’s general corporate legal counsel and the engagement of RedChip Companies Inc., to lead the company’s public and investor relations efforts were at the bottom of uplisting plans. In addition, the company announced several new appointments to the management team targeting, among other, a better guidance towards uplisting.

    During Q1 2010, Lotus commenced construction of the Beijing building complex, which is scheduled for completion in 2010. The company plans to use the internally generated cash to fund the construction of the building complex to consolidate its dispersed operating units into one single location.  The company announced that approximately 65% of the work was completed, as of August 2010.

    On the technology side, Lotus has been issued a patent by the State Intellectual Property Office of the People’s Republic of China for controlled-release oral gliclazide. The patent covers the composition and preparation methods for the drug through 2030. Gliclazide is commonly used to control mild to moderate adult-onset Type 2 diabetes.  The drug release is designed to be minimally affected by pH, gastric acid and food intake and has the potential to provide a more stable and sustained drug delivery compared to conventional gliclazide, resulting in fewer side effects, greater efficacy and an improved safety profile. The company’s target is to capture approximately 10% of the global gliclazide market, which is expected to reach $225 million by 2014.

    In addition, Lotus reported that it has entered Clinical Trial I with R-Bambuterol(R) to evaluate the safety and tolerability of the new drug as well as the biological activity by measuring responses in healthy volunteers. R-Bambuterol(R) Hydrochloride Tablets showed significant efficacy and less toxicity in preclinical trials as an anti-asthma drug than Bambuterol currently available in the market.

    The company’s market capitalization of $62.5 million looks discounted compared to the recently reported results and management’s guidance.  For the first half of 2010, ended June 30, Lotus’ total revenues were $34.1 million, an increase of 34% from $25.5 million in the same period last year. Net income for the same period was $11.3 million, an increase of 35% from $8.4 million during the same period last year. Earnings per share (diluted) for the first half of 2010 was $0.21, as compared to $0.17 in the first half of 2009.

    Moreover, the company’s management reaffirmed recently its previously issued guidance of $73.6 million in revenues and $21.4 million in net income for fiscal 2010. This compares to approximately $57.8 million in revenues and $16.4 million in net income for 2009.

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