3 Sbio (NASDAQ:SSRX)

First Quarter 2012 Results

• Total net revenues increased by 24.5% over the first quarter of 2011 to RMB147.2 million (US$23.4 million), compared to RMB118.2 million (US$18.1 million) in the first quarter of 2011.
• Operating income was RMB35.5 million (US$5.6 million), compared to operating income of RMB25.3 million (US$3.9 million) in the first quarter of 2011.
• Net income was RMB32.6 million (US$5.2 million), compared to net income of RMB22.2 million (US$3.4 million) in the first quarter of 2011.
• Net income per American Depositary Share ("ADS") on a fully-diluted basis was RMB1.44 (US$0.23) compared to net income per ADS on a fully-diluted basis of RMB0.99 (US$0.15) for the first quarter of 2011.
• Cash, cash equivalents, restricted cash and time deposits were RMB790.8 million (US$125.6 million), including restricted cash of RMB0.7 million.

Dr. Jing Lou, chief executive officer of 3SBio, commented:

"We are on budget for the first quarter and reiterate our full year guidance of US$99-108 million. While we are concerned about government-mandated price cuts, we are confident that our economies of scale, recognized product quality and reputation for innovative research and development will enable us to continue to adapt to China's evolving health care reforms. We continue to focus on the implementation of the our business objectives for 2012, including continued focus on developing our pipeline products, new business initiatives in the dialysis service segment, seeking international partners to develop Uricase-PEG 20, and leveraging our world-class manufacturing capability to obtain approvals in countries where we can be among the first to introduce quality biosimilars at competitive prices."

SHENYANG, China, March 8, 2012 /PRNewswire-Asia/ -- 3SBio Inc. (NASDAQ: SSRX) ("3SBio") a leading China-based biotechnology company focused on researching, developing, manufacturing and marketing biopharmaceutical products, today announced a collaboration agreement with DaVita Inc. (NYSE: DVA), a leading provider of kidney care services for those diagnosed with chronic kidney disease to provide kidney care services in Jilin and Liaoning, two  provinces in northeastern China with a combined population of 64 million. The total investment is US$20 million with DaVita and 3SBio contributing 70% and 30% respectively.

"Our collaboration with DaVita will accelerate our initiatives to provide dialysis services where they are most needed, and contribute to a better quality of life for many of China's undertreated kidney disease patients," said Dr. Jing Lou, Chief Executive Officer of 3SBio.

"This relationship marks an important chapter in DaVita's long-term international plans," said DaVita Chairman and CEO Kent Thiry. "Patients will benefit from the strategic alliance of combining 3SBio's research and DaVita's focus on delivering outstanding clinical outcomes."

As a leading provider of kidney care services in the United States, DaVita has achieved clinical outcomes that have improved year-over-year for more than a decade, and it will share that expertise through its active engagement in managing the clinics.

In addition to establishing their joint venture, DaVita and 3SBio have also agreed to enter into a supply agreement for anemia management drugs throughout China. Most dialysis patients receive recombinant human erythropoietin, or EPO, to treat anemia. Since 2001, 3SBio's EPIAO has been the leading EPO drug in China, with a current market share in excess of 40% in value terms.

Full Year 2011 Financial Highlights:

• Total net revenues in 2011 increased by 29.4% to RMB541.6 million (US$86.1 million), compared toRMB418.6 million (US$63.4 million) in 2010.
• GAAP operating income in 2011 increased by 38.3% to RMB120.1 million (US$19.1 million), compared toRMB86.8 million (US$13.2 million) in 2010. Non-GAAP operating income in 2011 increased by 24.0% toRMB120.1 million (US$19.1 million), compared to RMB96.8 million (US$14.7 million) in 2010.
• GAAP net income attributable to 3SBio Inc. increased by 33.6% to RMB108.6 million (US$17.3 million), compared to RMB81.3 million (US$12.3 million) in 2010. Non-GAAP net income attributable to 3SBio Inc. increased by 19.0% to RMB108.6 million (US$17.3 million), compared to RMB91.2 million (US$13.8 million) in 2010.
• GAAP net income attributable to 3SBio Inc. per American Depositary Share ("ADS") on a fully-diluted basis was RMB4.84 (US$0.77) compared to RMB3.69 (US$0.56) in 2010. Non-GAAP net income attributable to 3SBio Inc. per ADS on a fully-diluted basis in 2011 was RMB4.84 (US$0.77) compared to RMB4.14(US$0.63) in 2010.
• Positive operating cash flow of RMB137.1 million (US$21.8 million) for the year ended December 31, 2011and as of December 31, 2011, cash and cash equivalents, restricted cash and time deposits of RMB765.7 million (US$121.7 million).

Dr. Jing Lou, chief executive officer of 3SBio, commented:

"We are pleased to report another year of strong top line growth, improved profitability and cash flow. Over the past five years, we have grown the business more than five times by focusing on our core areas of kidney and cancer therapeutics. The SFDA has recently approved our new EPIAO quality standard, which meets both Chinese and European Pharmacopoeia requirements, the only domestic biological medicine company in Chinato reach this standard. We expect this recognition will further support our efforts to develop international markets for both EPIAO and TPIAO. 3SBio's collaboration with DaVita marks our entry into the dialysis service area and demonstrates our long-term commitment to providing integrated solutions for China's dialysis patients. We are optimistic about the coming year and expect net revenue growth in the range of 15-25%, or between US$99 million and US$108 million."

2012 Full Year Guidance

Based on current market and operating conditions and the following goals, the Company expects net revenues to grow by 15-25% in 2012, or between US$99 million to US$108 million.

Third Quarter 2011 Financial Highlights:

• Total net revenues increased by 27.5% over the third quarter of 2011 to RMB147.4 million (US$23.1million), compared to RMB115.6 million (US$17.3 million) in the third quarter of 2010.
• Operating income increased by 48.7% to RMB39.8 million (US$6.2 million), compared to operating income of RMB26.8 million (US$4.0 million) in the third quarter of 2010.
• Net income attributable to 3SBio Inc. increased by 50.4% to RMB33.7 million (US$5.3 million), compared to net income of RMB22.4 million (US$3.4 million) in the third quarter of 2010.
• Net income attributable to 3SBio Inc. per American Depositary Share ("ADS") on a fully-diluted basis increased by 48.5% to RMB1.50 (US$0.23) compared to net income per ADS on a fully-diluted basis of RMB1.01 (US$0.15) for the third quarter of 2010.
• Cash, cash equivalents and time deposits were RMB756.3 million (US$118.6 million, including restricted cash of RMB0.7 million) at September 30, 2011.

Dr. Jing Lou, chief executive officer of 3SBio, commented: "We are pleased to see continued strong sales growth driven by improved patient access to renal care and growing use of EPIAO in the treatment of chemotherapy related anemia, where EPIAO remains the only EPO approved for this indication. Preparations are underway for the launch of high dosage 36,000 IU EPIAO which will contribute to the growing awareness of EPIAO's quality of life benefits for patients undergoing chemotherapy treatment. We are also seeing meaningful sales contributions from the recent launch of TPIAO for ITP, a treatment for immune thrombocytopenia approved by the SFDA in March. Export sales have accelerated since the completion of our new state-of-the-art manufacturing facility, with demand from markets such as Egypt and Thailand driven by our compelling value proposition of world-class biological medicines at competitive prices. We reiterate our full year guidance of US$76-82 million."

Second Quarter 2011 Results

First Quarter Results:

• Total net revenues increased by 22.7% over the first quarter of 2010 to RMB118.2 million (US$18.1 million), compared toRMB96.4 million (US$14.1 million) in the first quarter of 2010.
• Operating income was RMB24.2 million (US$3.7 million), compared to operating income of RMB28.2 million (US$4.1 million) in the first quarter of 2010.
• Net income was RMB22.2 million (US$3.4 million), compared to net income of RMB26.7 million (US$3.9 million) in the first quarter of 2010.
• Net income per American Depositary Share ("ADS") on a fully-diluted basis was RMB0.99 (US$0.15) compared to net income per ADS on a fully-diluted basis of RMB1.22 (US$0.18) for the first quarter of 2010.

Dr. Jing Lou, chief executive officer of 3SBio, commented: "We remain on track to achieve our key objectives for 2011 andreiterate our full year guidance of 20-30% top line growth. We launched our marketing and educational campaign in key cities for the recently approved TPIAO for ITP indication. We also submitted an application to the SFDA to conduct clinical trials for voclosporin. We are now working with a partner to obtain regulatory approval for EPIAO in Malaysia. If successful, it will be one of the first biosimilar EPO products to be approved in Malaysia, one of the 39 members of the Pharmaceutical Inspection Cooperation Scheme ("PIC/S"). Our export sales efforts continue to focus on forming strong marketing partnerships and seeking regulatory approval in those developed markets where our new state-of-the-art production facility, low production costs andrecognized product quality provide us with a commercial edge over our international competitors."

On August 11, 2009 Dr. Jing Lou, chief executive officer of 3SBio, commented:

 'We had a good quarter with an encouraging trend in our operating performance. Sales of our leading products, EPIAO and TPIAO both grew by over 37% due to the strong growth of the dialysis market and our continued efforts to raise awareness of 3SBio in the oncology segment of the market. Our share of the Chinese EPO market now exceeds that of our five closest competitors combined and we reiterate our 2009 revenue guidance.

Guidance Update:

"3SBio had a strong start to 2009, delivering revenue growth and demonstrating the continued acceptance of our keystone EPIAO and TPIAO products in domestic and international markets,' commented Dr. Jing Lou, Chief Executive Officer of 3SBio. 'Our operating margin was solid and we continued to generate positive cash flow, strengthening our bottom line performance while ensuring 3SBio is in a financial position to pursue synergistic business development opportunities that will positively benefit our company. 3SBio has worked diligently to develop a portfolio of current and future pharmaceutical products, and we remain on track to achieve our 2009 financial and operational objectives."

Guidance Report: 

Dr. Jing Lou, Chief Executive Officer of 3SBio, commented, "3SBio delivered solid operating and financial performance in our second consecutive year since going public in early 2007. We once again demonstrated our ability to execute on our business strategy and achieve above market rate top-line growth and solid bottom-line operating profitability, despite significant investment in building brands in the marketplace, developing new products and growing the organization. 3SBio enters 2009 as a company with strengthened capabilities to generate a solid operating cash flow, a robust balance sheet, and a stream of near-term new product offerings to sustain mid- and long-term growth. 

Full Year Fiscal 2009 Guidance Ending December

Source: PR Newswire (March 11, 2009)