SINOVAC Reports Unaudited First Half of 2022 Financial Results

SINOVAC Reports Unaudited First Half of 2022

BEIJING, China, December 29, 2022 /Business Wire/

-- Sinovac Biotech Ltd. (NASDAQ: SVA) ("SINOVAC" or the "Company"), a leading provider of biopharmaceutical products

in China, announced today its unaudited financial results for the six months ended June 30, 2022.

First Half of 2022 Financial Summary

COVID-19 Vaccine - CoronaVac ,

the inactivated COVID-19 vaccine developed by SINOVAC, has been approved for use in more than 60 countries and regions worldwide. At

this time, over 2.9 billion doses of CoronaVac have been delivered globally, making SINOVAC the largest China-based COVID-19

vaccine provider the international market.

Notably, CoronaVac has become

the only inactivated COVID-19 vaccine in the world approved for use for children as young as six months old, after the Secretary of Health

of the HKSAR of the PRC approved the lowering of the minimum age for receiving CoronaVac from three years to six months

old for "off-label use" in early August 2022.

By gaining worldwide recognition and approvals,

the Company and its scientific research partners are continuously carrying out a number of real-world studies and clinical trials in

different countries and regions.

According to a phase III clinical trial of CoronaVac

among children aged 6 to 35 months, a high level of antibody positive conversion was observed with the antibody level equal to,

or higher than that of adults.

In 2022, study results have also confirmed the

safety and effectiveness of CoronaVac for pediatric and adolescent populations in Chile, as well as the adequate prevention

from three doses of SINOVAC COVID-19 vaccine, especially for individuals over 60 years old, from several Omicron waves in Hong Kong.

Sabin Inactivated Polio Vaccine ("sIPV")

- the Poliomyelitis Vaccine (Vero Cell), inactivated, Sabin strains, was prequalified by the World Health Organization ("WHO")

in June 2022, and sIPV is now available for United Nations (UN) agencies to purchase to support the global polio endgame strategy.

Hepatitis A Vaccine - Healive ,

the first and only WHO prequalified hepatitis A vaccine from China, celebrated its 20th anniversary of market launch in July

2022. With more nations' healthcare authorities' approvals, such as Kenya and Indonesia this year, Healive

has been registered in 21 countries and organizations around the world and authorized to be administered in 33 countries and regions,

to susceptible individuals over 12 months old.

Varicella Vaccine - the live attenuated

varicella vaccine was prequalified by WHO in November 2022, marking the first WHO prequalified Chinese varicella vaccine, and the fourth

SINOVAC vaccine to receive WHO approval.

Quadrivalent Influenza Vaccine ("QIV")

- the latest development of SINOVAC's influenza vaccine product family, entered the global market this year, by gaining a couple

of overseas commercialization approvals. A phase III clinical trial for QIV was initiated in Chile through a collaboration with the Pontificia

Universidad Cat lica de Chile in July.

Unaudited Financial Results for the First

Sales for the first half of 2022 were $1.2 billion,

compared to $11.0 billion in the prior year period. The decrease was due to the lower sales of CoronaVac as the initial

two-dosage vaccination schedules were completed around the globe in 2021 and third booster shots were only administered in certain countries

including China in 2022. Sales of non-pandemic vaccines increased 37% from $128 million to $ 176 million on broad-based growth, especially

in seasonal influenza vaccine.

Selling, general and administrative expenses

in the first half of 2022 were $155.9 million, compared to $162.7 million in the prior year period. Selling, general and administrative

expenses did not decrease in proportion to total sales as expenses incurred to sell CoronaVac in the comparative period

were a relatively low proportion of CoronaVac revenues.

R&D expenses in the first half of 2022 were

$184.4 million, compared to $53.9 million in the prior year period. The increase was due to the largely invested into R&D on COVID-19

vaccines and overseas clinical trials of regular products.

Net income in the first half of 2022 was $790.4

million, compared to $8.6 billion in the prior year period.

Net income attributable to common shareholders

was $481.6 million, or $4.84 per basic and $4.24 per diluted share, in the first half of 2022, compared to a net income attributable

to common shareholders of $5.1 billion, or $51.42 per basic and $44.80 per diluted share, in the prior year period.

As the Company announced on February 22, 2019,

the Company's Board of Directors determined that certain shareholders became acquiring persons, as defined in the Company's

rights agreement ("Rights Agreement"), under which a trigger event occurred. As a result, the Company issued new common and

preferred shares of SINOVAC. Without the effect of implementing the Rights Agreement and newly-issued common and preferred shares, basic

and diluted earnings per share for the first half of 2022 would be $6.76 and $5.61, respectively.

Non-GAAP adjusted EBITDA was $691.3 million in

the first half of 2022, compared to $10.2 billion in the prior year period. Non-GAAP net income was $628.8 million in the first half

of 2022, compared to $8.6 billion in the prior year period. Non-GAAP diluted earnings per share in the first half of 2022 was $3.41 compared

to $44.78 per share in the prior year period. Non-GAAP diluted earnings per share in the first half of 2022, excluding the implementation

of the Rights Agreement and the newly-issued common and preferred shares, would be $4.51. Reconciliations of non-GAAP measures to the

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

As of June 30, 2022, cash and cash equivalents

and restricted cash totaled $6.9 billion, compared to $11.6 billion as of December 31, 2021. In the first half of 2022, net cash used

in operating activities was $808.2 million, net cash used in investing activities was $3.6 billion and net cash provided by financing

activities was $11.7 million.

The Company's first half of 2022 financial

statements are prepared and presented in accordance with U.S. GAAP. However, they have not been audited or reviewed by the Company's

independent registered accounting firm.

As previously disclosed by the Company, on March

13, 2018, 1Globe Capital LLC ("1Globe") filed a complaint against the Company in the Antigua Court. The trial of the matter

took place from December 3 to 5, 2018. On December 19, 2018, the Antigua judge handed down his judgment (the "Antigua Judgment"),

finding fully in favor of the Company, dismissing 1Globe's claim and declaring the Rights Agreement was validly adopted as a matter

of Antigua law. On January 29, 2019, 1Globe filed a Notice of Appeal against the Antigua Judgment. On March 4, 2019, 1Globe filed an

application for urgent interim relief, seeking an injunction to prevent the Company from continuing to implement its Rights Agreement

until the resolution of the appeal. This application was heard on April 4, 2019, at which the Court of Appeal issued an order restraining

the Company from operating the Rights Agreement in any way that affects 1Globe's rights or shareholding or otherwise distributing

the exchange shares to the Company's shareholders who did not trigger the Rights Plan until after the determination of the appeal

(the "Exchange Shares"). 1Globe's appeal against the Antigua Judgment was heard on September 18, 2019, and the appeal

decision was announced by the Eastern Caribbean Supreme Court, Court of Appeal (the "Court of Appeal") on December 9, 2021,

upholding the Antigua Judgment in each point. The Court of Appeal also confirmed that SINOVAC's Rights Agreement was consistent

with its Articles of Incorporation and By-laws, and Antiguan business law. In January 2022, the Court of Appeal extended the order initially

made on April 4, 2019, that restrains SINOVAC from taking further action under its Rights Agreement, including the distribution of the

previously issued Exchange Shares, until the conclusion of any appeal to the Privy Council. 1Globe applied for leave to appeal to the

Judicial Committee of the Privy Council (the "Privy Council"), and the hearing of the application was held on February 24,

2022, in which the Court of Appeal granted 1Globe leave to appeal to the Privy Council on certain grounds, although not including the

challenge to the validity of the Rights Agreement. On April 19, 2022, 1Globe renewed its application directly to the Privy Council for

leave to appeal on its ground of appeal concerning the validity of the Rights Agreement. On July 13, 2022, 1Globe filed its Notice of

Appeal on those grounds on which the Court of Appeal had granted 1Globe leave to appeal. On September 16, 2022, 1Globe filed an application

to the Privy Council seeking permission to amend its existing application for permission to appeal, and its existing Notice of Appeal,

and to seek permission to appeal on another ground rejected by the Court of Appeal concerning the exercise of the Antigua Court's

discretion. Sinovac responded on October 21, 2022, and the parties now await a decision from the Privy Council upon these procedural

applications. 1Globe has not yet taken steps to list a substantive hearing before the Privy Council.

As previously disclosed, on March 5, 2018, the

Company filed a lawsuit in the Court of Chancery of the State of Delaware, seeking a determination on whether 1Globe, the Chiang Li Family,

OrbiMed Advisors, LLC and certain other shareholders of the Company had triggered the Rights Agreement. On April 12, 2018, 1Globe filed