Sinovac Biotech (NASDAQ:SVA)

Financial Highlights (year-over-year comparisons to first quarter 2011)

• Sales increased 30.3% to $6.0 million, with Bilive vaccines sales up 92.4%.
• Gross margin was 62.2%, which included higher costs due to planned low production level of the animal vaccine facilities in conjunction with its recent launch. Without these costs gross margin would have been 65.1%.
• Net loss attributable to common stockholders was $5.6 million, or $0.10 per basic and diluted share.
• Cash and cash equivalents totaled $94.5 million as of March 31, 2012, compared to $104.3 million as of December 31, 2011.

Dr. Weidong Yin, Chairman, President and CEO of Sinovac, commented, "The positive vaccine sales trend continued in the first quarter of 2012, which represented a good start for the year as the domestic vaccine market remains favorable. The positive effects of this market can be seen especially in the sales of Bilive, our combined hepatitis A and B vaccine, which increased by 92% year over year. We attribute this increase primarily to our sales and marketing experience and capabilities accumulated and improved in the private sector of the Chinese vaccine market over the past few years. We believe our increased strength in sales and marketing in the private market will also benefit the commercialization of other key products in our pipeline. Additionally, we are pleased to see that approximately 9% of our sales this quarter were generated from international markets. As our international sales team grows and the GMP standard in Chinaimproves, the Company is well positioned to take advantage of the opportunities across international markets. In general, our team will continue executing on its strategies to expand commercialized vaccine product sales."

Dr. Yin continued, "We are committed to advancing the development of our vaccine pipeline, which we believe will contribute to the Company's future growth. In the first quarter of 2012, we have substantially completed the key steps of the Phase III clinical trial for our EV71 vaccine, including the inoculation of, and blood collection from, these volunteers. The HFMD epidemic situation is becoming more serious, which not only indicates how important it is to develop our vaccine, but also allows for collection of sufficient data to evaluate the efficacy of the vaccine candidate in the Phase III study. In parallel with the vaccine development, the preparation of our dedicated EV71 vaccine production plant is underway to ensure that the vaccine is ready for commercial use soon after it is approved. "

BEIJING, May 14, 2012 /PRNewswire-Asia/ -- Sinovac Biotech Ltd. (Nasdaq: SVA), a leading provider of biopharmaceutical products in China, has appointed Mr. Danny Chung as Chief Financial Officer, effective immediately. Ms. Nan Wang, who has served as interim Chief Financial Officer since August 2011, will continue as the Company's Vice President.

"Mr. Chung possesses the relevant experiences and credentials, which meet the Company's needs," said Dr. Weidong Yin, Chairman and CEO. "Beyond his audit and accounting expertise, Mr. Chung has proven adept in the financial management of Chinese divisions of multinational companies. We are pleased to welcome him to Sinovac."

Mr. Chung has joined the Company since November 2011 as Sinovac Beijing's finance director, who brings to Sinovac over 20 years of experience in audit and financial management including healthcare industry. Mr. Chung graduated in 1983 from the Hong Kong Polytechnic and obtained a Professional Diploma in Accountancy. He has held professional membership in the U.S. Institute of Certified Public Accountants since 1990.

Fourth Quarter 2011 Results

• Sales in the fourth quarter 2011 increased 131.3% year-over-year to $21.1 million, compared to $9.1 million, and full year sales increased 70.2% to $56.8 million.
• Net income attributable to stockholders in the fourth quarter 2011 was $2.8 million, or $0.05 per basic and diluted share. Full year net loss attributable to stockholders was $845,000, or $0.02 per basic and diluted share.
• Operating cash flow in the fourth quarter was $16.6 million, up 40.6% compared to $11.8 million in the same period of last year. Compared to a cash outflow of $14.3 million in 2010, operating cash inflow in 2011 was $13.9 million.
• Cash and cash equivalents and short-term investments with guaranteed income totaled $104.3 million as of December 31, 2011, compared to $94.2 million as of September 30, 2011 and $103.1 million as of December 31, 2010.

Dr. Weidong Yin, Chairman, President and CEO of Sinovac, commented, "I am very pleased with our sales performance this year, especially for Bilive, which has been instrumental in expanding our private market share and increasing our revenue from private market in China. In 2011, we have gained traction in the public market and won tenders in Xinjiang Uyghur Autonomous Region, Shanghai and Beijing. While the Chinese vaccine market is recovering from unfavorable factors that occurred in 2010, we have nonetheless expanded our sales to overseas markets. We are now exporting vaccines to Mongolia, Nepal and the Philippines, and we focused on entering Mexico in 2012, subject to receipt of requisite local market clearance. In 2012, our sales team will continue its efforts to execute its sales strategies to expand existing commercialized vaccine products and we expect both of our animal rabies vaccine and mumps vaccine to contribute revenue to the Company this year."

Dr. Yin continued, "We are committed to advancing the development of our vaccine pipeline. Since there is no EV71 specific prevention method to help control the spread of HFMD, our development of this vaccine addresses a significant unmet medical need as recognized by the governments and parents across Asia. As such, advancing the clinical development of our proprietary EV71 vaccine is our highest priority program. Following the positive results from phase I and phase II clinical trials for our EV71 vaccine in 2011, we commenced the phase III clinical trial in January 2012. We have enrolled approximately 10,000 healthy volunteers, and completed the two shot inoculation schedule and the blood samples collection on the 56^th days after the first shot. We are collecting the epidemic situation data surrounding the clinical site and this data will be utilized to assess the vaccine's efficacy. We anticipate completing the clinical trial in the first half of 2013. Meanwhile, the construction of a dedicated EV71 vaccine production plant is progressing on schedule at our Changping site in Beijing."

Dr. Yin concluded, "In addition to improving our operating efficiencies, we continue to manage proactively our strong cash position, which provides ample resources to support our near-term R&D programs and production capacity expansion for our new vaccines. We are prudently investing in future growth for the long-term interest of our shareholders. "

Third Quarter 2011 Results

• Sales in the third quarter increased 60.8% year-over-year to $15.4 million, compared to $9.6 million, and year-to-date sales increased 47.2% to $35.7 million.
• Net loss attributable to stockholders in the third quarter was $2.1 million, or $0.04 per basic and diluted share. Year-to-date net loss attributable to stockholders was $3.6 million, or $0.07 per basic and diluted share.
• Cash and cash equivalents and short-term investments with guaranteed income totaled $94.2 million at September 30, 2011, compared to $92.7 million at June 30, 2011 and $103.1 million at December 31, 2010.

Dr. Weidong Yin, Chairman, President and CEO of Sinovac, commented, "Our third quarter 2011 sales reflected the continued demand for our hepatitis vaccines, which represent about two-thirds of the sales this quarter. Bilive revenue growth still remains significant in this quarter.The vaccine is sold in the private pay market, and recently went through a price increase that improved its margin contribution and represents a key opportunity for sales expansion. We are making significant progress in growing public market sales of Healive, which represented 24% of total third quarter sales, compared to 8% in the same period in 2010. And this year, Sinovac successfully won the Beijing Governmental tender to supply our seasonal influenza vaccine to the citizens of Beijing for the fourth time in recent years, which shows that our flu vaccines are trusted by the CDCs."

We finance our operations primarily through short-term and long-term borrowings, proceeds from our public offering, capital raised in our private placement, cash generated from operations and, to a lesser extent, cash from government research grants. We believe that our current cash and cash equivalents, and anticipated cash flow will be sufficient to meet our anticipated cash needs, including our cash needs for working capital and capital expenditure, for the next 12 months. We may, however, require additional cash due to changing business conditions or other future developments, including any investments or acquisitions we may decide to pursue.

First Quarter Results:

• Sales increased 5.3% year-over-year to $4.7 million, compared to $4.4 million. Excluding H1N1 vaccine, sales rose 50% compared to the prior year period.

Dr. Weidong Yin, Chairman, President and CEO of Sinovac, commented, "Following the adjustment to our sales strategy and sales team structure, our sales in China rebounded during the first quarter, which is a positive sign for 2011. We will continuously commit our resources to achieving sales growth."

• Net loss attributable to shareholders for first quarter of 2011 was $2.8 million, or $0.05 per diluted share, as compared to $307,000, or $0.01 per diluted share, in the same period of 2010.

BEIJING, March 3, 2011 /PRNewswire-Asia/ -- Sinovac Biotech Ltd. announced today it submitted the application to commence clinical trials for its 13-valent pneumococcal conjugate vaccine (PCV) to China's State Food and Drug Administration (SFDA) on March 3, 2011.

Sinovac initiated its PCV research program in 2008. The vaccine targets infants under two years old. The target population in China is estimated at 34 million.  The market in China is currently served by only one internationally produced 7-valent pneumococcal conjugate vaccine with three-dose basic vaccination schedule, as no domestic manufacturer has been granted a license to manufacture PCV.  According to the World Health Organization's (WHO) data as of November 2010, over 50 countries have included PCV into their national immunization programs, including the United States, United Kingdom, Australia, Canada and Mexico. Due to the high prices of three PCV vaccines currently globally available, it is cost prohibitive for China and other emerging countries to incorporate this vaccine into their immunization programs. The World Health Organization concluded in March 2011 following an assessment in December 2010 that China's State Food and Drug Administration (SFDA) has been shown to comply with international standards for vaccine regulation. This could eventually open the door for vaccines produced in China to be supplied through United Nations agencies to developing countries.

BEIJING, Jan. 31, 2011 /PRNewswire-Asia/ -- Sinovac Biotech Ltd. (Nasdaq: SVA), a leading provider of biopharmaceutical products in China, announced today the submission of the applications to commence human clinical trials for its 23-valent and 24-valent pneumococcal polysaccharides vaccines to the Chinese State Food Drug Administration (SFDA) on January 31, 2011. The preclinical studies were completed and showed good safety and efficacy profile in animal models.

Sinovac independently developed the pneumococcal polysaccharides vaccine (PPV) and will retain full commercialization rights to the vaccine upon approval. The supplied quantity of PPV was doubled in China over the past three yearsCdemonstrating the consistent increasing market demand. And the gap between demand and supply in Chinese market still exists. PPV remains relatively expensive in China due to the limited available products. The target population of PPV is children over 2 years old and adults in all age groups, especially the elderly over 65 years old.

 BEIJING,Jan. 6, 2011/PRNewswire-Asia/ -- Sinovac Biotech Ltd. announced today its preliminary unaudited sales range for the fourth quarter and full year endedDecember 31, 2010. A conference call to discuss these preliminary sales will be held onJanuary 6, 2011 at 8:00 a.m. Eastern Standard Time. The Company will issue its final unaudited fourth quarter and full year 2010 financial results on or aboutMarch 31, 2011.

 Sinovac expects its fourth quarter 2010 preliminary unaudited sales to be in the range of approximately $7.8 million to $10.8 million and its full year 2010 preliminary unaudited sales to be in the range of $32 million to $35 million.  The shortfall in sales as compared to the revised total 2010 sales expectations issued in October 2010 was attributable to the weaker than expected sales of Anflu and Healive in the private market. 

 

Dr. Weidong Yin, Chairman & CEO, commented, "We faced a challenging external market environment in 2010, which negatively impacted vaccine demand in the private market. As the company grows, we cannot avoid market-related volatility. We believe it is a great experience for Sinovac's fast-growing management team to learn and grow. Recognizing the importance of addressing this market situation, we are undertaking initiatives to adjust our sales strategy. Concurrently, we are continuing to advance our R&D projects with the aim of completing development and launching our new products. Currently, we have sufficient cash on hand to support Company's R&D activities, capacity expansion, potential M&A and international collaborations, which are the company's driving forces for future growth." 

 

The preliminary sales ranges are preliminary unaudited estimates for the fourth quarter and full year ended December 31, 2010