- Conference call scheduled Wednesday, August 19, 2009 at 8:00 a.m.
ET - BEIJING, Aug. 19 /PRNewswire-Asia/ -- Sinovac Biotech Ltd.
(NYSE Amex: SVA), a leading developer and provider of vaccines in
China, announced today its unaudited financial results for the
three-month and six- month periods ended June 30, 2009. Financial
Highlights -- Sales for the quarter increased 21% to $20.0 million
-- Sales for the six-month period increased 5% to $26.6 million --
Operating income for the quarter rose 52% to $10.7 million --
Operating income for the six-month period increased 11% to $11.3
million. -- Net income attributable to the shareholders increased
74% to $5.8 million in the second quarter, with diluted EPS of
$0.14 -- Cash and cash equivalents at June 30, 2009 was $46.7
million. Business Highlights -- In June, Sinovac received the first
order in China to supply its pandemic influenza A (H1N1) vaccine to
the Beijing government. The initial order consisted of vaccines for
2 million people; delivery is expected by the end of September with
additional orders expected to commence in October. -- In July,
Sinovac began the clinical trial of its H1N1 influenza vaccine,
enrolling 1,614 volunteers, including 101 elders, 706 adults, 404
juveniles and 403 children. The trial began on July 21, 2009 and
all of the volunteers received their first shot of the vaccine
through July 25, 2009. During the three-day observation period,
none of the volunteers experienced a severe adverse reaction.
Between August 12 and 15, 2009, the volunteers received the second
shot of the vaccine. Preliminary tests on the H1N1 influenza
vaccine have indicated that the vaccine is safe and reliable in
humans. Mr. Weidong Yin, Chairman, President and CEO of Sinovac,
commented, "We are very pleased with our second quarter results,
with sales up 21% and net income up 74%. Our revenue growth in the
quarter was partly driven by increased sales of our inactivated
hepatitis A vaccine, Healive(R), to the public market, as we worked
to fulfill the previously announced purchase order from China's
Ministry of Public Health (MOH). Sinovac fulfilled and recorded 89%
of the original order for $12.8 million worth of doses in the
second quarter of 2009. Going forward, we will continue to focus on
increasing our penetration of both the private and public markets.
"Since the onset of the global outbreak of the H1N1 influenza
virus, Sinovac has earned a great deal of recognition from local
and national governments and health agencies for our efforts to
help prevent and control the spread of this virus. As China's only
approved manufacturer of a pandemic influenza (H5N1) vaccine, we
had the fully integrated human vaccine development expertise and
manufacturing capability necessary to quickly produce a vaccine for
H1N1. In June, Sinovac was the first company in China to receive an
order for the H1N1 influenza vaccine; we expect to deliver the
initial order of vaccines for 2 million people to the Beijing
government by the end of September 2009. Administration of the
second dose of H1N1 vaccine to volunteers began on August 12, 2009
and has been completed. The clinical data unblinding conference was
held in Beijing on the afternoon of August 17, 2009. The analysis
of the clinical trial results showed that the H1N1 vaccine
developed by Sinovac induces good immunogenicity and has good
safety profile after one dose. Sinovac plans to complete the
summary report as soon as possible and fully evaluate the safety
and immunogenicity of the H1N1 vaccine. We plan to apply for the
Production License for H1N1 vaccine in compliance with SFDA's
regulations. We are very proud to be able to make such a
significant contribution in helping to slow the spread of this
epidemic in China. Mr. Yin continued, "We remain very excited about
our growth prospects for 2009 and beyond. In addition to the H1N1
vaccine, we have a robust pipeline of other investigational
vaccines, including enterovirus 71 (EV 71), pneumococcal conjugated
vaccine, and Japanese encephalitis. Overall, our objective for the
next three to five years is to have one or two product candidates
per year entering into clinical trials beginning in 2010 and one or
two products launched into the market per year commencing in 2012.
In addition to our organic growth strategy, we have the financial
flexibility to selectively pursue acquisition candidates that will
help to expand our product pipeline, due to $47 million of cash and
cash equivalents on our balance sheet. Previously, we projected
revenues of $55 million to $60 million for the full year 2009.
Based largely on expected demand for our H1N1 vaccine, we believe
that our 2009 revenues will exceed expectations. However, due to
uncertainty on the timing of future orders, we are not able to
further quantify our expectations. Market Overview The market for
Sinovac's principal product, Healive, has been developed with the
PRC government greatly expanding publicly funded inoculations. As a
result, the share of the market generated by public sales is
expected to increase in the next few years, and private market
sales are expected to decrease as a percentage of overall sales.
Although the gross margin on public sales is lower than on private
sales, Sinovac expects to realize offsetting cost savings and
efficiencies. In the current year, Sinovac expects to generate
significant revenues from the sale of H1N1 vaccine, but 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. In future periods, the Company is seeking to expand its
sales by adding new product lines, including the sale of animal
vaccines by its subsidiary Tangshan Yian. Financial Review for
Three Months Ended June 30, 2009 During the second quarter of 2009,
sales were $20.2 million, up 21.2 percent from $16.5 million in the
second quarter of 2008. Sinovac continues to devote significant
resources to marketing Healive to China's private market and an
increase in demand for Healive in the public market is expected as
well. During the second quarter of 2009, Sinovac's unit dose sales
were: Three months ended June 30 2009 2008 (000 doses) (000 doses)
Healive 3,263 2, 720 Bilive 315 176 Sales of Healive in the quarter
were largely driven by fulfillment of the previously announced MOH
purchase order as part of its vaccination campaign. Sales of the
hepatitis A vaccine to the public market accounted for 60% of total
sales in the quarter. Sales of Bilive increased significantly
during the quarter and the Company expects it to become a
complementary product to Healive in the private market, whereas
Healive is expected to increasingly penetrate the public market.
Gross profit for the second quarter 2009 was $16.3 million, with a
gross margin of 81%, compared to $13.9 million and a gross margin
of 84%, for the same period of 2008. The gross margin was adversely
impacted by the lower selling price on the 2 million doses of
hepatitis A vaccine sold to MOH. The gross margin for the second
quarter of 2009 increased from the gross margin of 78% reported in
the first quarter of 2009 due to efficiencies resulting from
expanded production volume. Total operating expenses for the second
quarter of 2009 were $5.6 million, compared to $6.9 million in the
comparative period in 2008. Selling, general and administrative
expenses for the second quarter of 2009 were $4.9 million, compared
to $6.0 million in the same period of 2008. SG&A expenses, as a
percentage of second quarter 2009 sales, decreased to 24%, down
from 37% during the prior year. The lower selling expenses resulted
from the higher proportion of Healive sold to the government. Net
research and development expenses for the second quarter 2009 were
$550,000, compared to $668,000 in the same period of 2008. R&D
expenses in the second quarter of 2009 were mainly related to the
EV 71 vaccine, pneumococcal conjugated vaccine, and universal
pandemic influenza vaccine. Second quarter 2009 operating income
was $10.7 million, compared to operating income of $7.0 million in
the prior year. Net income for the second quarter of 2009 included
$126,000 in net interest and financing expenses and $2.1 million in
income tax expenses. Net income for the same period of 2008
included $541,000 of net interest expense and $1.6 million of
income tax expense. Net income for second quarter of 2009 was $5.8
million, or $0.14 per diluted share, up 75% compared to net income
of $3.3 million, or $0.08 per diluted share, in the same period of
2008. As of June 30, 2009, Sinovac's cash and cash equivalents
totaled $46.7 million, compared to $32.9 million as of December 31,
2008. The increase in cash and cash equivalents primarily reflects
an commercial bank loan obtained in the second quarter. Financial
Review for Six-Months Ended June 30, 2009 During the six-months
ended June 30, 2009, sales were $26.6 million, up 4.7 percent from
$25.4 million for the same period in 2008. Sinovac recorded a
strong second quarter, which greatly improved the company's
performance for the year to date. During the first six-months of
2009, Sinovac's unit dose sales were: Six months ended June 30 2009
2008 (000 doses) (000 doses) Healive 4,034 4,220 Bilive 491 207
Anflu 136 23 Gross profit for the six-month period was $21.4
million, with a gross margin of 80%, compared to $21.7 million and
a gross margin of 86%, for the prior year period. The gross margin
was adversely affected by the lower selling price of the 2 million
doses of hepatitis A vaccine sold to MOH in the second quarter of
2009. Total operating expenses for the first six months of 2009
were $10.0 million, compared to $11.6 million in the comparative
period in 2008. Selling, general and administrative expenses for
the first six months of 2009 were $8.4 million, compared to $9.6
million in the prior year period. SG&A expenses as a percentage
of sales decreased to 32 percent, down from 38 percent in the
comparative period. Net research and development expenses for the
first six-months of 2009 were $1.3 million, compared to $1.6
million in the prior year period. Operating income for the
six-months ended June 30, 2009 was $11.3 million, compared to an
operating income of $10.2 million in the prior year period. Net
income for the first six months of 2009 included $159,000 in net
interest and financing expenses and $2.6 million in income tax
expenses. Net income for the same period of 2008 included $653,000
of net interest expense and $2.3 million of income tax expense. Net
income for the first six months of 2009 was $5.8 million, or $0.14
per diluted share, compared to net income of $4.9 million, or $0.12
per diluted share, in the same period of 2008. Conference Call
Details The Company will host a conference call on Wednesday,
August 19, 2009 at 8:00 a.m. ET (8:00 p.m. China Standard Time) to
review the Company's second quarter financial results for the
period ended June 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 11:00 a.m. ET on August 19, 2009
until September 2, 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 330444. 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 August 19, 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
vaccine products include Healive(R) (hepatitis A), Bilive(R)
(combined hepatitis A and B), Anflu(R) (influenza), Panflu(TM)
(pandemic influenza (H5N1) has already been approved for government
stockpiling) and an H1N1 vaccine. Sinovac is developing vaccines
for enterovirus 71, universal pandemic influenza, Japanese
encephalitis vaccine, and human rabies vaccine. 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. SINOVAC BIOTECH LTD.
Consolidated Statements of Income and Comprehensive Income Three
Months and Six Months Ended June 30, 2009 and 2008 (Unaudited)
(Expressed in U.S. Dollars) Three months ended Six months ended
30-Jun 30-Jun 2009 2008 2009 2008 Sales $20,018,327 $16,521,429
$26,584,426 $25,383,430 Cost of sales 3,762,786 2,613,939 5,210,556
3,661,805 Gross profit 16,255,541 13,907,490 21,373,870 21,721,625
Selling, general and administrative expenses 4,860,279 6,038,650
8,407,902 9,616,536 Research and development expenses 549,734
667,508 1,309,175 1,596,844 Depreciation of property, plant and
equipment and amortization of licenses and permits 167,004 169,484
331,873 347,713 Total operating expenses 5,577,017 6,875,642
10,048,950 11,561,093 Operating income 10,678,524 7,031,848
11,324,920 10,160,532 Interest and financing expenses -199,113
-399,854 -325,313 -557,561 Interest income and other income
(expenses) 73,020 -141,491 166,151 -95,141 Income before income
taxes and non- controlling interest 10,552,431 6,490,503 11,165,758
9,507,830 Income taxes recovery (expense) - Current -1,471,543
-2,579,104 -1,795,917 -3,224,439 - Deferred -690,556 970,614
-847,950 897,433 Net income for the period 8,390,332 4,882,013
8,521,891 7,180,824 Net income attributable to non- controlling
interest -2,581,676 -1,545,764 -2,688,556 -2,284,619 Net income
attributable to the stockholders $5,808,656 $3,336,249 $5,833,335
$4,896,205 Net income for the period $8,390,332 $4,882,013
$8,521,891 $7,180,824 Other comprehensive income Foreign currency
translation adjustment -38,279 960,676 26,620 2,243,204
Comprehensive income 8,352,053 5,842,689 8,548,511 9,424,028
Comprehensive income attributable to non- controlling interest
2,583,246 1,551,187 2,695,811 2,299,930 Comprehensive income
attributable to stockholders $5,768,807 $4,291,502 $5,852,700
$7,124,098 Earnings per share - basic and diluted 0.14 0.08 0.14
0.12 Weighted average number of shares of common stock outstanding
- Basic 42,427,503 42,851,228 42,653,223 41,983,709 - Diluted
42,431,249 43,210,296 42,653,223 42,351,756 SINOVAC BIOTECH LTD.
Consolidated Balance Sheets (Unaudited) (Expressed in U.S. Dollars)
June 30, December 31, 2009 2008 ASSETS Current assets Cash and cash
equivalents $46,704,452 $32,894,102 Accounts receivable - net
31,740,850 19,486,596 Inventories 9,654,400 6,486,351 Income tax
refundable 521,484 348,018 Prepaid expenses and deposits 678,673
933,297 Deferred tax assets 448,965 1,189,831 Due from related
party 1,460,963 -- Total current assets 91,209,787 61,338,195
Property, plant and equipment 21,244,659 19,262,099 Long term
inventories 2,919,129 942,514 Deferred tax asset 545,102 569,937
Licenses and permits 893,146 1,090,477 $116,811,823 $83,203,222
Total assets LIABILITIES AND STOCKHOLDERS' EQUITY Current
liabilities Loans payable $24,105,891 $8,024,277 Accounts payable
and accrued liabilities 11,708,409 11,909,037 Due to related
parties 46,971 46,971 Dividends payable to non-controlling
shareholder of Sinovac Beijing 115,835 115,677 Deferred research
grants 1,011,842 1,182,703 Total current liabilities 36,988,948
21,278,665 Deferred government grants 2,749,228 2,836,994 Loan
payable 2,191,445 2,188,439 Deferred revenue-H5N1 9,642,356 --
Long-term debt 14,583,029 5,025,433 Total liabilities 51,571,977
26,304,098 Commitments and contingencies STOCKHOLDERS' EQUITY
Preferred stock -- -- Common stock 42,424 42,894 Additional paid in
capital 41,422,187 41,629,506 Accumulated other comprehensive
income 4,162,591 4,143,225 Dedicated reserves 5,549,684 5,549,684
Retained earnings (Accumulated deficit) 4,181,800 -1,651,534 Total
stockholders' equity 55,358,686 49,713,775 Non-controlling interest
9,881,160 7,185,349 Total equity 65,239,846 56,899,124 Total
liabilities and equity $116,811,823 $83,203,222 SINOVAC BIOTECH
LTD. Consolidated Statements of Cash Flows Three Months and Six
Months Ended June 30, 2009 and 2008 (Unaudited) (Expressed in U.S.
Dollars) Three Months ended Six Months ended June 30 June 30 2009
2008 2009 2008 Cash flows from (used in) operating activities Net
Income for the period $8,390,332 $4,882,013 $8,521,891 $7,180,824
Adjustments to reconcile net income to net cash used by operating
activities: - deferred income taxes 690,556 -970,614 847,950
-897,433 - Loss (income) on disposal fixed assets 2,434 -- -7,349
-- - stock-based compensation 61,540 16,635 128,043 33,271 -
provision for doubtful debts 1,443,986 932,113 2,312,924 1,559,918
- depreciation of property, plant and equipment, and amortization
of licenses 431,753 388,460 864,107 780,563 - research and
development expenditures qualified for government grant -70,374
-126,829 -128,685 -130,848 Change in other assets and liabilities -
accounts receivable 12,080,553 -9,218,834 14,543,552 13,369,079 -
inventories -2,803,876 -865,187 -5,135,639 -2,314,630 - income tax
refundable 712,224 -- -173,028 -- - prepaid expenses and deposits
224,922 -403,304 255,826 -84,290 - advance from stockpiling program
9,644,568 -- 9,644,568 -- - accounts payable and accrued
liabilities 1,487,986 3,668,617 -1,283,789 4,142,407 Net cash
provided by (used in) operating activities 8,135,498 -1,696,930
1,303,267 -3,099,297 Cash flows from (used in) financing activities
Loan proceeds 16,074,281 -- 16,074,281 -- Loan repayment -- -- --
-- Proceeds from issuance of common stock -- 1,966 -- 9,815,265
Repurchase of common shares -16,189 -- -335,832 -- Loan to
non-controlling shareholder of Sinovac Beijing -- -- -1,460,600 --
Proceeds from shares subscribed -- 39,295 -- 39,295 Dividends paid
to non- controlling shareholder of Sinovac Beijing -- -- --
-2,947,877 Government grant received -- 70,695 -- 70,695 Net cash
provided by financing activities 16,058,092 111,956 14,277,849
6,977,378 Cash flows from (used in) investing activities Restricted
cash -- 935,765 -- -434,921 Acquisition of property, plant and
equipment -750,509 -1,229,151 -1,762,001 -2,236,575 Net cash used
in investing activities -750,509 -293,386 -1,762,001 -2,671,496
Exchange effect on cash and equivalents -47,508 119,919 -8,765
542,189 Increase (decrease) in cash and cash equivalents 23,395,573
-1,758,441 13,810,350 1,748,774 Cash and cash equivalents,
beginning of period 23,308,879 20,578,712 32,894,102 17,071,497
Cash and cash equivalents, end of period $46,704,452$18,820,271
$46,704,452$18,820,271 Cash paid for interest, net of interest
capitalized $206,866 $133,612 $330,268 $306,005 Cash paid for
income taxes $759,318 $871,557 $1,968,944 $1,309,963 For more
information, please contact: Helen G. Yang Sinovac Biotech Ltd.
Tel: +86-10-8289-0088 x9871 Fax: +86-10-6296-6910 Email: Investors:
Amy Glynn/Sara Pellegrino The Ruth Group Tel: +1-646-536-7023/7002
Email: Media Janine McCargo The Ruth Group Tel: +1-656-536-7033
Email: DATASOURCE: Sinovac Biotech Ltd. CONTACT: Helen G. Yang of
Sinovac Biotech Ltd., +86-10-8289-0088 x9871, Fax +86-10-6296-6910,
; or Investors, Amy Glynn & Sara Pellegrino,
+1-646-536-7023/7002, & , or Media, Janine McCargo,
+1-656-536-7033, , all of The Ruth Group Web site:
http://www.sinovac.com/
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