Full Press Release Details
SINOVAC BIOTECH 6K, PRESS RELEASE, 11.22.04
SINOVAC BIOTECH LTD.
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RELEASES FINANCIAL STATEMENTS FOR FIRST SIX MONTHS OF 2004
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- SHOWING SALES INCREASE OF 110%
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BEIJING, November 22, 2004 - Sinovac Biotech Ltd. ("Sinovac") ("the Company")
(NASD OTC-BB: SNVBF) has released financial statements for the first six months
of 2004 in a Form 6-K filing with the SEC on 12th November 2004, in support of
its AMEX listing application. The updated financial statements cover Company
business activities to the end of June 2004, during which Sinovac sales
increased by 110% over the first six months of 2003.
Full Sinovac Financial Statements are Available Online
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Sinovac management encourages investors to view this most recent financial
statement filing. Please refer to the SEC website at www.sec.gov, click on
"Search for Company Filings", then click on "Companies & Other Filers", then
input "Sinovac" in the "Company Name" box, and then click on the filing "Form
6-K" dated 12th November 2004. You may also contact Sinovac Investor Relations
at info@sinovac.com to request a copy of the Sinovac financial report by email
This filing contains many details of Sinovac's financial statements and business
plan. The second half of the filing is a Management Discussion & Analysis
section which details such aspects as (I) Sinovac's vaccine products and the
global and Chinese markets for these products; (II) Company objectives and
vaccine approvals and trials; (III) Summary and history of Sinovac's vaccine
development, R&D and production facilities, and management; and (IV) Operating
results detailing sales, expenses, cash flow and liquidity and management's
sales forecast for the second half of 2004.
Financial Statements Management Discussion & Analysis Summary (all figures are
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Vaccines and Markets
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The global vaccine market in 2001 was valued at $ 5.4 billion and is forecast to
reach $17 billion by 2010 (Datamonitor). Issues of quality and cost have created
a shortage of effective, affordable vaccines to prevent hepatitis A, hepatitis
B, and influenza. The undersupply of influenza vaccines is acute, especially in
China, with an estimated annual shortfall of some 15 to 20 million doses. With
an aging population and a growing health-conscious middle class, the demand for
influenza vaccines is growing as much as 30% per year in China.
Sinovac has three vaccines that have completed all three phases of clinical
trials - Hepatitis A, Hepatitis A&B combined, and influenza ("flu"). The
Hepatitis A vaccine, Healive(TM), is currently experiencing strong sales growth
in China and applications have been filed for its sale in nine other countries
to date. Sinovac's Hepatitis A&B combined vaccine, Bilive(TM), is expected to
receive SFDA approval to commence sales in China soon and to achieve similar
sales growth to Healive(TM). The flu vaccine completed clinical trials in April
2004 and a New Drug Application has been filed with the SFDA (Chinese FDA).
Approval of Sinovac's flu vaccine is expected in 2005 upon completion of the flu
vaccine manufacturing facilities. Since demand for a safe and effective flu
vaccine in China greatly outstrips supply, sales are expected to escalate
rapidly. Furthermore, since individuals are vaccinated against the flu on an
annual basis, demand is expected to remain high every year.
Sinovac is currently the only company to have commenced clinical trials for a
vaccine to prevent SARS. The Company has also started development for a vaccine
targeting avian flu.
During the first half of 2004, the Company generated sales revenue of
$2.29million, exceeding the first half of 2003 sales by 110%, or $1.2million. In
addition to favorable economic factors, the Company attributes this revenue
growth to its strong sales network and increasing recognition of the Company's
accomplishments as a world-class biotechnology firm.
The Company's immediate objective is to increase sales of its inactivated
hepatitis A vaccine, HealiveTM, in the Chinese market and to develop overseas
markets for this product. Management anticipates that BiliveTM vaccine for
hepatitis A&B and flu vaccine will commence sales in 2005.
The Company further expects to complete the Phase I clinical trial and reporting
for its proprietary SARS vaccine by next spring. The level of the neutralized
antibody in the blood serum of each volunteer is being tested. An evaluation of
the safety profile and immunogenicity effect of the vaccine will also be
released. If the vaccine receives SFDA approval for Phase I, then it will
proceed into Phase II clinical trials. A second phase of clinical testing would
include more participants from a wider demographic range.
If Sinovac can obtain the necessary financing, then the Company intends to
construct a second split-flu vaccine production line with much greater
production capacity than the facilities currently being built. Sinovac is also
looking for and evaluating synergistic acquisition targets both in China and
internationally that could dramatically increase corporate revenue and leverage
such acquisitions' existing market share to allow faster penetration of
Sinovac's current vaccines.
R&D and Production Facilities
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Sinovac's corporate headquarters and primary research and development facilities
are located in the Beijing University Biological Industry Park at a 4,113 square
meter, state-of-the-art plant. The Company's new flu production line is situated
in a 2,600 square-meter facility, being built to global Good Manufacturing
Practice (GMP) standards and is expected to have a production capacity of 2
million doses of flu vaccine per year. All of Sinovac's facilities conform to
the world health authorities' recommended bio-safety standards and the primary
manufacturing plant has been certified as meeting the GMP standard of both the
China State Pharmaceutical Administration and the US Food and Drug
Sales revenue is attributed to HealiveTM, the only product of the Company that
is currently available in the market. The sales of this product increased from
$1,090,856 for the first half of 2003 to $2,291,558 of the corresponding period
of this year, equivalent to a 110% increase. The Company expects to commence
sales of its hepatitis A&B combine vaccine, HealiveTM, and its flu vaccine in
Gross profit margin remains high at 66.75% in the first half of 2004, which is
approximately equal to 67.24% for the corresponding period of 2003.
Research & Development Expenses
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Research and development expenses are very low since Sinovac's first 3 vaccines