Sinovac Files 2017 Annual Report on Form 20-F and Reports Unaudited Second Half, Audited Full Year 2017 Financial Results BEIJING

Sinovac Files 2017 Annual Report on Form 20-F and Reports Unaudited

Audited Full Year 2017 Financial Results

BEIJING, May 11, 2018 /PRNewswire/ -- Sinovac Biotech Ltd. (NASDAQ:

SVA) ("Sinovac" or the "Company"), a leading provider of biopharmaceutical products in China, announced

today that it has filed its annual report for the year ended December 31, 2017 on Form 20-F (the "2017 Annual Report")

with the U.S. Securities and Exchange Commission. The Company also reported its unaudited financial results for the six months

ended December 31, 2017, as well as audited financial results for the year ended December 31, 2017.

Filing of 2017 Annual Report

The Company has filed its 2017 Annual Report with the SEC on May

11, 2018. The 2017 Annual Report is available on the SEC's website www.sec.gov. Sinovac will also post the 2017 Annual

Report on its website www.sinovac.com under SEC Filings in the Investor Relations section. The Company will provide a hard

copy of the 2017 Annual Report to its shareholders upon request, free of charge. Requests for a hard copy of the 2017 Annual Report

can be made by sending a request by email to ir@sinovac.com and submitting the complete mailing details on a request form.

Unaudited Second Half of 2017 Financial Highlights

Full Year 2017 Financial Highlights

In 2017, the vaccine market recovered from the impact caused by

the Shandong incident in 2016. The Company's new product, EV71, made a significant contribution to the revenue. Hepatitis

vaccine and flu vaccine sales rebounded compared to 2016.

Research and Development

Varicella - Sinovac obtained clinical research approval

for its proprietary Varicella vaccine candidate from the China Food and Drug Administration (CFDA) in September 2015 and completed

phase I clinical trials in 2016. The phase III trial was completed in 2017 with preliminary phase III data showing that Sinovac's

varicella vaccine was 87.1% (95% CI: 69.7%, 94.5%) efficacious against chickenpox caused by Varicella-zoster Virus (VZV). The

results of the lot consistency study indicated that the immunogenicity of the three vaccine lots was consistent. The Company filed

the production license application with the CFDA before the end of 2017.

sIPV - In November 2015, the Company obtained clinical

trial licensing for its Sabin IPV. Phase I/II clinical trials were completed in 2017. A phase III trial was commenced in April

2017 and recently unblended. The preliminary results of the trial after unblinding show that the seroconversion rate of poliovirus

type II is superior to the control vaccine and seroconversion rates of the other two types of poliovirus are non-inferior

to the control vaccine. In addition, the geometric mean titer ("GMT") of all three poliovirus types were higher

than the control vaccine.

23 Valent Pneumococcal Polysaccharide Vaccine - A

phase III trial on 23-PPV was completed with results showed that the immunogenicity and safety of Sinovac's vaccine candidate

were not inferior to the controlled vaccine, a 23-PPV already commercialized in China. Furthermore, the results showed that the

vaccine candidate could be used by the target age group to control and prevent diseases caused by pneumonia. The New Drug Application

was filed to the CFDA in August 2017. Due to the aggressive actions taken by the minority shareholder of Sinovac Biotech Co.,

Ltd. (Sinovac Beijing), Sinovac Beijing was forced to suspend all preparations for and ultimately postpone the CFDA inspection

of the manufacturing site necessary for 23-valent PPV production approval.

Quadrivalent Influenza Vaccine (QIV) - The Company

initiated the development of a QIV in May 2013. Following the completion of preclinical studies, the Company applied for the clinical

license from the CFDA. The approval to conduct a human clinical trial was issued by the CFDA in November 2016, and the trial was

initiated in the fourth quarter of 2017. In contrast to the trivalent influenza vaccine, such as Sinovac's Anflu product,

which includes an influenza A H1N1 virus, an influenza A H3N2 virus, and a B virus, the quadrivalent flu vaccine is designed to

protect against four different flu viruses: two influenza A viruses and two influenza B viruses. Adding another B virus to the

vaccine is expected to provide broader protection against circulating flu viruses because there are two very different lineages

of B viruses that both circulate during most seasons.

A number of legal matters have recently arisen related to the actions

of certain shareholders of the Company in connection with 2017 Annual General Meeting of Shareholders ("2017 AGM")

in the United States and Antigua by the Company or 1 Globe. The progress of each litigation was disclosed in the form of 20-F

filed by the Company.

On April 9, 2018, the Company received a document request from

the SEC requesting all of the Company's documents concerning 1Globe, the Chiang Li Family, OrbiMed, certain other shareholders,

and their affiliates. We have been cooperating with the SEC. We understand the SEC is conducting a fact-finding investigating

to determine whether these shareholders and possibly other parties violated the U.S. securities laws. We do not have any information

to suggest the SEC is investigating the actions of the Company or its officers and directors. We cannot predict the outcome of

the SEC's investigation.

Unaudited Financial Results for Second Half of 2017

Sales from continuing operations in the second half of 2017 were

$107.4 million compared to $60.1 million in the prior year period. Sales increased primarily due to revenue generated by the Company's

Gross profit from continuing operations was $94.9 million compared

to gross profit of $46.1 million in the prior year period. Gross margin was 88.4% compared to 76.7% in the prior year period.

Growth margin in the second half of 2016 was lower due to higher idle capacity costs charged to cost of sales and a negative gross

profit for the hepatitis A&B vaccine due to higher sales returns provision provided in 2016 as a result of the Shandong incident.

Gross profit in the second half of 2017 also increased due to higher gross profit generated by the Company's EV71 vaccine.

Selling, general and administrative expenses in the second half

of 2017 were $50.6 million compared to $27.5 million in the same period of 2016. The Company's selling, general and administrative

expenses increased with higher levels of sales activity. The Company also incurred a cost of $0.6 million relating to the proposed

privatization of Sinovac.

R&D expenses in the second half of 2017 were $11.7 million

compared to $7.8 million in the same period of 2016. The increase was mainly due to higher R&D expenses on the varicella and

sIPV vaccine pipeline products.

Income from continuing operations in the second half of 2017 was

$20.9 million compared to $11.1 million in the prior year period.

Net income attributable to common shareholders was $15.0 million,

or $0.26 per basic and diluted share, compared to net income attributable to common shareholders of $7.7 million, or $0.13 per

basic and diluted share, in the prior year period.

Non-GAAP EBITDA was $35.4 million in the second half year of compared

to $20.1 million in the prior year period. Non-GAAP net income from continuing operations in the second half of 2017 was $20.2

million compared to $13.4 million in the prior year period. Non-GAAP diluted earnings per share from continuing operations in

the second half of 2017 were $0.25 per share compared to $0.17 per share in the prior year period. Reconciliations of non-GAAP

measures to the nearest comparable GAAP measures are included at the end of this earnings announcement.

Financial Results for the Twelve Months Ended December 31, 2017

Sales from continuing operations in 2017 were $174.3 million, an

increase of 140.7% from $72.4 million in 2016. Sales increased primarily due to revenue generated by the Company's EV71

vaccine as well as sales recovery in the Company's other products following the 2016 Shandong vaccine incident.

Gross profit from continuing operations in 2017 was $154.1 million,

an increase of 208.0% from $50.0 million in 2016. Gross margin was 88.4% compared to 69.1% in 2016. Gross margin in 2016 was lower

due to higher inventory provision provided for the hepatitis A&B and mumps vaccines, higher idle capacity costs charged to

cost of sales, and a negative gross profit for the hepatitis A&B vaccine due to a higher sales returns provision provided

in 2016 as a result of the Shandong incident. Gross profit in 2017 also increased due to higher gross profit generated by the

Company's EV71 vaccine.

Selling, general and administrative expenses in 2017 were $87.4

million compared to $42.0 million in 2016. The Company's selling, general and administrative expenses increased with the

higher level of sales activity, and the Company also incurred a cost of $1.5 million related to the proposed privatization of

R&D expenses in 2017 were $20.5 million compared to $12.6 million

in 2016. The increase was mainly due to higher R&D expenses on the varicella and sIPV vaccine pipeline products.

Net income from continuing operations was $36.7 million in 2017

compared to a net loss of $3.1 million in 2016. Net income from discontinued operations was nil in 2017 compared to $2.3 million