- Conference call scheduled Monday, November 16, 2009 at 9:00 a.m.
ET - BEIJING, Nov. 15 /PRNewswire-Asia/ -- Sinovac Biotech Ltd.
(NASDAQ:SVA), a leading developer and provider of vaccines,
announced today its unaudited financial results for the three-month
and nine-month periods ended September 30, 2009. Financial
Highlights -- Sales for the third quarter increased 142% to $21.2
million -- Sales for the nine-month period increased 40% to $47.8
million -- Operating income for the third quarter rose 436% to
$12.4 million -- Operating income for the nine-month period
increased 90% to $23.7 million. -- Net income attributable to the
shareholders increased 606% to $5.2 million in the third quarter,
with diluted EPS of $0.12 -- Cash and cash equivalents at September
30, 2009 was $46.6 million. Business Highlights -- In August,
Sinovac reported positive top-line results from the completed
clinical trial for its internally-developed pandemic influenza A
(H1N1) vaccine, PANFLU.1(TM). The analysis of the clinical trial
results showed that Sinovac's H1N1 vaccine induces good
immunogenicity after one dose. The seropositive rate,
seroconvertive rate and GMT increasing multiple conform to
international criteria for vaccines, which indicated PANFLU.1 has a
good safety and immunogenicity profile. -- In August, Sinovac was
selected by the Beijing Public Health Bureau as one of four
manufacturers to supply seasonal influenza vaccine to the citizens
of Beijing. The Beijing Public Health Bureau completed the bidding
process for the purchase of flu vaccines and corresponding services
for 2009 on August 26, 2009. Sinovac will supply its seasonal
influenza vaccine, Anflu®, pursuant to this agreement. -- In
September, Sinovac's registration application for its pandemic
influenza A (H1N1) vaccine, PANFLU.1(TM), was approved by the State
Food and Drug Administration (SFDA) and a production license was
granted. Sinovac received a first purchase order for 3.3 million
doses and a second order purchase for 3.0 million doses on
September 4 and September 30, respectively, from China's Ministry
of Industry and Information Technology for the national purchase
plan. In October, Sinovac received a third purchase order for 5.19
million doses. In aggregate, Sinovac has received orders for a
total of 11.49 million doses of its PANFLU.1(TM) vaccine for
China's national purchase plan. -- In September, Sinovac signed an
agreement with Boryung Pharmaceutical Company Limited, a Korean
manufacturer of pharmaceuticals, to collaborate on marketing
efforts and possible vaccine supply efforts to the government of
South Korea for Sinovac's H1N1 vaccine. The agreement followed
meetings between Sinovac and the Korean Food and Drug
Administration (KFDA) and the Korean Center for Disease Control
(KCDC) where Sinovac presented the scientific data of Sinovac's
H1N1 vaccine. The collaboration provides Boryung exclusive rights
to represent Sinovac in discussions with the KFDA and KCDC in the
development of business opportunities in South Korea surrounding
Sinovac's H1N1 vaccine. -- In October, Sinovac obtained a
Certificate of Approval from Mexico's Secretaria de Salud to
distribute PANFLU.1 in Mexico. Imperiales S.A. de C.V., a
biopharmaceutical company with operations in Mexico since 1935, is
the exclusive distributor of Sinovac's vaccine products in the
Mexican market, pursuant to a prior distribution agreement signed
in 2005 with its affiliate. An application for Anflu was filed in
Mexico as well. -- In October, Sinovac received the Certificate of
Approval to distribute its H5N1 (bird flu) pandemic influenza
vaccine in Hong Kong. The Company plans to submit applications in
Hong Kong for approval of its PANFLU.1 (H1N1) and Anflu vaccines in
the coming months. -- In October, Sinovac was selected to supply
its seasonal flu vaccine, Anflu®, to the Shanghai government. This
marks Sinovac's entry into an additional new public market for its
seasonal flu vaccine. -- In November, Sinovac was selected among
five vaccine manufacturers by the Shanghai Government to supply its
hepatitis A vaccine, Healive®, to the public market of Shanghai.
Sinovac will supply Healive valued at RMB 20.6 million, or
approximately $3 million, pursuant to the purchase order that will
be in effect for one year. Mr. Weidong Yin, Chairman, President and
CEO of Sinovac, commented, "We are very proud that Sinovac was the
first company in the world to develop a vaccine for the H1N1
pandemic flu virus. This achievement was made possible by the
Company's focus on its mission to provide Chinese children with the
best vaccines in the world, and let children in the world benefit
from vaccines made in China. To this end, we have not only acted as
a successful provider of H1N1 vaccine to China, but have also made
strides toward providing other markets such as South Korea and
Mexico with PANFLU.1. "Sinovac has been able to demonstrate its
flexibility and agility as a leading vaccine Company by excelling
in the rapid development and production of this new product, while,
at the same time, also realizing product orders for Anflu and the
H5N1 Panflu vaccine, both inside and outside of China. We will
continue to leverage our leadership position in the development of
the H1N1 vaccine to pursue international marketing opportunities
for our entire vaccine portfolio. We will also continue our
development efforts to expand our portfolio of marketed vaccines,
such as EV71, pneumococcal conjugated vaccine, and rabies, in the
coming years." Mr. Yin concluded, "Our strong third quarter results
were a testament to our ability to commercialize our H1N1 and H5N1
vaccines. We recorded revenues from doses sold in China and Macau.
Given our strong product mix, we were able to maintain our gross
profit margin in excess of 80%. With the continued execution of our
commercialization strategy, we remain on track to exceed the
previously projected full year 2009 revenue range of $55 million to
$60 million." Market Overview The People's Republic of China (PRC)
government's expansion program of publicly funded inoculations has
driven increased demand for Sinovac's principal product, Healive.
Although the gross margin on public sales is lower than on private
sales, Sinovac expects to realize volume-related offsetting cost
savings and efficiencies. In the current year, Sinovac expects to
generate significant revenues from the sale of its H1N1 vaccine;
this is expected to be a short-term initiative that will extend
through to the end of the influenza season in the spring of 2010.
These sales are not expected to be recurring, but demonstrate the
Company's ability to develop, manufacture and distribute vaccines
on short notice. At the same time, the outbreak of H1N1 pandemic
flu appears to have increased the demand for seasonal flu vaccines.
It is expected that increasing sales of Anflu will benefit the
company over the long-term. Financial Review for Three Months Ended
September 30, 2009 During the third quarter of 2009, sales were
$21.2 million, up 142% from $8.7 million in the third quarter of
2008. During the third quarter of 2009, Sinovac's unit dose sales
were: Three months ended September 30, 2009 2008 (000 doses) (000
doses) ----------- ----------- Healive 989 1,087 Bilive 215 28
Anflu 4,312 512 Panflu (H5N1) 20 0 PANFLU.1 (H1N1) 586 0 Sales of
the hepatitis A vaccine to the public market (including doses
purchased by the Ministry of Health) accounted for 31% of total
hepatitis A vaccine sales in the quarter. Sales of Bilive increased
significantly during the quarter due to a successful marketing
campaign. Sales revenues for 20,000 doses of Panflu (H5N1) to Macau
and 586,000 doses of PANFLU.1 (H1N1) were booked during the third
quarter of 2009. Gross profit for the third quarter 2009 was $17.5
million, with a gross margin of 83%, compared to $7.1 million and a
gross margin of 81%, for the same period of 2008. The gross margin
was favorably impacted by the utilization of the Anflu production
line to produce PANFLU.1 (H1N1) and Panflu (H5N1). The gross margin
for the third quarter of 2009 increased from the gross margin of
81% reported in the third quarter of 2008 due to efficiencies
resulting from expanded production volume of Bilive and increased
utilization of the flu production line. Total operating expenses
for the third quarter of 2009 were $5.1 million, compared to $4.8
million in the comparative period in 2008. Selling, general and
administrative expenses for the third quarter of 2009 were $3.5
million, compared to $3.8 million in the same period of 2008.
SG&A expenses as a percentage of third quarter 2009 sales
decreased to 17%, down from 43% during the prior year. The lower
selling and administrative expenses as a percentage of revenue
resulted from the increased economies of scale associated with the
significant growth of sales. Net research and development expenses
for the third quarter 2009 were $1.4 million, compared to $812,000
in the same period of 2008. The increased R&D expenses in the
third quarter of 2009 were mainly related to the completion of the
H1N1 clinical trial and the continued development of the EV 71
vaccine, pneumococcal conjugated vaccine, and universal pandemic
influenza vaccine. Third quarter 2009 operating income was $12.4
million, compared to operating income of $2.3 million in the prior
year. Net income for the third quarter of 2009 included $246,000
interest and financing expenses and $3.8 million in income tax
expenses. Net income for the same period of 2008 included $190,000
of interest and financing expenses and $911,000 of income tax
expenses. Net income attributable to shareholders for third quarter
of 2009 was $5.2 million, or $0.12 per diluted share, up 606%
compared to net income attributable to shareholders of $740,000, or
$0.02 per diluted share, in the same period of 2008. As of
September 30, 2009, Sinovac's cash and cash equivalents totaled
$46.6 million, compared to $32.9 million as of December 31, 2008.
The increase in cash and cash equivalents primarily reflects an
advance payment received for a vaccine-stockpiling program.
Financial Review for Nine Months Ended September 30, 2009 During
the nine months ended September 30, 2009, sales were $47.8 million,
up 40% from $34.1 million for the same period in 2008. Sinovac
recorded strong revenues growth in the second and third quarters,
which greatly improved the Company's performance for the year to
date. During the first nine months of 2009, Sinovac's unit dose
sales were: Nine months ended September 30 2009 2008
------------------------------ ---- ---- (000 doses) (000 doses)
----------- ----------- Healive 5,024 5,313 Bilive 708 234 Anflu
4,448 498 Panflu (H5N1) 20 0 PANFLU.1 (H1N1) 586 0 Gross profit for
the nine-month period was $38.9 million, with a gross margin of
81%, compared to $28.8 million and a gross margin of 84%, for the
prior year period. The gross margin was adversely affected by the
lower selling price of Healive vaccine delivered to the Ministry of
Health, of which 2.08 million doses was delivered in the second
quarter of 2009. Total operating expenses for the first nine months
of 2009 were $15.2 million, compared to $16.3 million in the
comparative period in 2008. Selling, general and administrative
expenses for the first nine months of 2009 were $12.0 million,
compared to $13.4 million in the prior year period. SG&A
expenses as a percentage of sales decreased to 25%, down from 39%
in the comparative period of the prior year. Net research and
development expenses for the first nine months of 2009 were $2.8
million, compared to $2.4 million in the prior year period.
Operating income for the nine months ended September 30, 2009 was
$23.7 million, compared to an operating income of $12.5 million in
the prior year period. Net income for the first nine months of 2009
included $571,000 in interest and financing expenses and $6.4
million in income tax expenses. Net income for the same period of
2008 included $747,000 of interest and financing expense and $3.2
million of income tax expense. Net income attributable to
shareholders for the first nine months of 2009 was $11.1 million,
or $0.26 per diluted share, compared to net income of $5.6 million,
or $0.13 per diluted share, in the same period of 2008. Conference
Call Details The Company will host a conference call on Monday,
November 16, 2009 at 9:00 a.m. EDT (10:00 p.m. China Standard Time)
to review the Company's third quarter financial results for the
period ended September 30, 2009 and provide an update on recent
corporate developments. To access the conference call, please dial
1-877-407-4018 (USA) or 1-201-689-8471 (international). A replay of
the call will be available from 12:00 p.m. ET on November 16, 2009
until November 30, 2009. To access the replay, please dial
1-877-660-6853 (USA) or 1-201-612-7415 (international) and
reference the account number 3055 and the access code 337401. A
live audio webcast of the call will also be available from the
Investors section on the corporate web site at
http://www.sinovac.com/. A webcast replay can be accessed on the
corporate website beginning November 16, 2009 and the replay will
remain available for 30 days. About Sinovac Sinovac Biotech Ltd. is
a China-based biopharmaceutical company that focuses on the
research, development, manufacture and commercialization of
vaccines that protect against human infectious diseases. Sinovac's
commercialized vaccine products include Healive® (hepatitis A),
Bilive® (combined hepatitis A and B), Anflu® (seasonal influenza),
Panflu(TM) (pandemic influenza (H5N1)), and PANFLU.1(TM) (pandemic
influenza A (H1N1)). Sinovac is developing vaccines for enterovirus
71, universal pandemic influenza, pneumococcal infection, Japanese
encephalitis, and human rabies. Its wholly owned subsidiary,
Tangshan Yian, is conducting field trials for independently
developed inactivated animal rabies vaccines. Safe Harbor Statement
This announcement contains forward-looking statements. These
statements are made under the "safe harbor" provisions of the U.S.
Private Securities Litigation Reform Act of 1995. These
forward-looking statements can be identified by words or phrases
such as "will," "expects," "anticipates," "future," "intends,"
"plans," "believes," "estimates" and similar statements. Among
other things, the business outlook and quotations from management
in this press release contain forward-looking statements.
Statements that are not historical facts, including statements
about Sinovac's beliefs and expectations, are forward-looking
statements. Forward-looking statements involve inherent risks and
uncertainties. A number of important factors could cause actual
results to differ materially from those contained in any
forward-looking statement. Sinovac does not undertake any
obligation to update any forward-looking statement, except as
required under applicable law. Helen G. Yang Sinovac Biotech Ltd.
Tel: +86-10-8289-0088 x9871 Fax: +86-10-6296-6910 Email: Investors:
Amy Glynn/Stephanie Carrington The Ruth Group Tel:
+1-646-536-7023/7017 Email: Media Janine McCargo The Ruth Group
Tel: 656-536-7033 Email: SINOVAC BIOTECH LTD. Consolidated Balance
Sheets (Unaudited) (Expressed in U.S. Dollars) September 30,
December 31, 2009 2008 ASSETS Current assets Cash and cash
equivalents $46,579,789 $32,894,102 Accounts receivable - net
36,917,624 19,486,596 Inventories 13,541,462 6,486,351 Income tax
refundable - 348,018 Prepaid expenses and deposits 877,260 933,297
Deferred tax assets 678,620 1,189,831 Total current assets
98,594,755 61,338,195 Property, plant and equipment 21,426,879
19,262,099 Long term inventories 3,110,828 942,514 Deferred tax
asset 532,854 569,937 Licenses and permits 794,567 1,090,477 Total
assets $124,459,883 $83,203,222 LIABILITIES AND STOCKHOLDERS'
EQUITY Current liabilities Loans payable $21,937,522 $8,024,277
Accounts payable and accrued liabilities 14,301,303 11,909,037
Income tax payable 2,962,831 - Due to related parties 46,971 46,971
Dividends payable to non-controlling shareholder of Sinovac Beijing
115,957 115,677 Deferred tax liability 768,876 - Deferred research
grants 1,051,099 1,182,703 Total current liabilities 41,184,559
21,278,665 Deferred government grants 2,690,382 2,836,994 Loan
payable - 2,188,439 Deferred revenue 9,798,760 - Long-term debt
12,489,142 5,025,433 Total liabilities 53,673,701 26,304,098
Commitments and contingencies STOCKHOLDERS' EQUITY Preferred stock
- - Authorized 50,000,000 shares at par value of $0.001 each Issued
and outstanding: nil Common stock 42,584 42,894 Authorized:
100,000,000 shares at par value of $0.001 each Issued and
outstanding: 42,583,761(2008- 42,893,928 ) Additional paid in
capital 42,299,500 41,629,506 Accumulated other comprehensive
income 4,218,717 4,143,225 Dedicated reserves 5,549,684 5,549,684
Retained earnings (accumulated deficit) 9,407,160 -1,651,534 Total
stockholders' equity 61,517,645 49,713,775 Non-controlling interest
9,268,537 7,185,349 Total equity 70,786,182 56,899,124 Total
liabilities and equity $124,459,883 $83,203,222 SINOVAC BIOTECH
LTD. Consolidated Statements of Income and Comprehensive Income
Three Months and Nine Months Ended September 30, 2009 and 2008
(Unaudited) (Expressed in U.S. Dollars) Three months ended Nine
months ended September 30 September 30 2009 2008 2009 2008 Sales
$21,224,685 $8,753,671 $47,809,111 $34,137,101 Cost of sales -
(exclusive of depreciation of land -use rights and amortization of
licenses and permits of $104,732 (2008 - $102,742) for three months
and $314,081 (2008- $202,575) for nine months 3,675,695 1,658,862
8,886,251 5,320,667 Gross profit 17,548,990 7,094,809 38,922,860
28,816,434 Selling, general and administrative expenses 3,519,977
3,791,916 11,927,879 13,408,452 Research and development expenses -
net of 1,443,834 811,901 2,753,009 2,408,745 $133,176 (2008-
$16,829) for three months and $261,861 (2008- $147,958) for nine
months in government research grants Depreciation of property,
plant and equipment and amortization of licenses and permits
179,962 178,404 511,835 526,117 Total operating expenses 5,143,773
4,782,221 15,192,723 16,343,314 Operating income 12,405,217
2,312,588 23,730,137 12,473,120 Interest and financing expenses
(246,036) (189,935) (571,349) (747,496) Interest income and other
income (expenses) 77,300 58,456 243,451 (36,685) Income before
income taxes and non-controlling interest 12,236,481 2,181,109
23,402,239 11,688,939 Income taxes recovery (expense) - Current
(3,230,985) (1,005,174) (5,026,902) (4,229,613) - Deferred
(551,478) 94,028 (1,399,428) 991,461 Consolidated net income for
the period 8,454,018 1,269,963 16,975,909 8,450,787 Less: net
income attributable to non-controlling interest (3,228,659)
(530,084) (5,917,215) (2,814,703) Net income attributable to the
stockholders $5,225,359 $739,879 $11,058,694 $5,636,084 Net income
for the period $8,454,018 1,269,963 16,975,909 8,450,787 Other
comprehensive income Foreign currency translation adjustment 64,108
33,637 90,728 2,358,956 Total comprehensive income 8,518,126
1,303,600 17,066,637 10,809,743 Less: comprehensive income
attributable to non-controlling interest 3,229,599 522,960
5,932,451 2,889,658 Comprehensive income attributable to
stockholders $5,288,527 $780,640 $11,134,186 $7,920,085 Earnings
per share - basic and diluted $0.12 $0.02 $0.26 $0.13 Weighted
average number of shares of common stock outstanding - Basic
42,428,755 42,873,511 42,574,921 42,299,187 - Diluted 43,631,572
43,142,788 42,758,104 42,638,584 SINOVAC BIOTECH LTD. Consolidated
Statements of Cash Flows Three Months and Nine Months Ended
September 30, 2009 and 2008 (Unaudited) (Expressed in U.S. Dollars)
Three Months ended Nine Months ended September 30 September 30 2009
2008 2009 2008 Cash flows from (used in) operating activities Net
Income for the period $8,454,018 $1,269,963 $16,975,909 $8,450,787
Adjustments to reconcile net income to net cash used by operating
activities: - deferred income taxes 551,478 (94,028) 1,399,428
(991,461) - loss (income) On disposal fixed assets 641 2,249
(6,708) 2,249 - stock-based compensation 180,152 16,635 308,195
49,907 - provision for doubtful debts (1,595,787) 408,289 717,137
1,968,207 - depreciation of property, plant and equipment, and
amortization of licenses 529,957 517,751 1,394,064 1,298,314 -
research and development expenditures qualified for government
grant (133,176) (16,829) (261,861) (147,677) Change in other assets
and liabilities - accounts receivable (3,545,198) 4,718,247
(18,088,750)(8,650,832) - inventories (4,063,146) (1,620,126)
(9,198,785)(3,934,756) - income tax refundable (payable) 3,482,345
- 3,309,317 - - prepaid expenses and deposits (197,728) 273,079
58,098 188,789 - advance from stockpiling program 147,160 -
9,791,728 - - accounts payable and accrued liabilities 3,646,229
(2,168,844) 2,362,439 1,973,562 Net cash provided by operating
activities 7,456,945 3,306,386 8,760,211 207,089 Cash flows from
(used in) Financing activities Loan proceeds - (3,572,010)
16,074,281 - Loan repayment (4,384,356) 2,143,206 (4,384,356)
(3,572,010) Proceeds from issuance of common stock 693,285 -
693,285 2,143,206 Repurchase of common shares - - (335,831)
9,854,560 Loan repayment from non- controlling shareholder of
Sinovac Beijing 1,461,298 - - - Proceeds from shares subscribed
4,035 20,060 4,035 20,060 Dividends paid to non- controlling
shareholder of Sinovac Beijing (3,846,501) - (3,846,501)
(2,947,877) Government grant received 171,326 143,626 171,326
214,321 Net cash provided by (used in) financing activities
(5,900,913) (1,265,118) 8,376,239 5,712,260 Cash flows from (used
in) investing activities Restricted cash - 434,196 - (725)
Acquisition of property, plant and equipment (1,718,443)
(1,046,849) (3,480,444)(3,283,424) Net cash used in investing
activities (1,718,443) (612,653) (3,480,444)(3,284,149) Exchange
effect on cash and equivalents 37,748 303,614 29,681 845,803
Increase (decrease) in cash and cash equivalents (124,663)
1,732,229 13,685,687 3,481,003 Cash and cash equivalents, beginning
of period 46,704,452 18,820,271 32,894,102 17,071,497 Cash and cash
equivalents, end of period $46,579,789 $20,552,500 $46,579,789
$20,552,500 Cash paid for interest, net of interest capitalized
$285,423 $150,657 $615,691 $456,665 Cash paid (received) for income
taxes $(251,359) $1,502,166 $1,717,585 $2,812,129 DATASOURCE:
Sinovac Biotech Co., Ltd. CONTACT: Helen G. Yang of Sinovac Biotech
Ltd., Tel: +86-10-8289-0088 x9871, Fax: +86-10-6296-6910, or ;
Investors: Amy Glynn, +1-646-536-7023, or , or Stephanie
Carrington, +1-646-536-7017, or , Media: Janine McCargo,
+1-656-536-7033, or , all of The Ruth Group for Sinovac Biotech
Ltd. Web Site: http://www.sinovac.com/
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