Full Press Release Details
Reports Unaudited First Half of 2023 Financial Results
China, August 15, 2023 /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, 2023.
Half of 2023 Financial Summary
Weidong Yin, Chairman, President and CEO of SINOVAC, commented "After experiencing three years of the COVID-19 pandemic, the
world is still facing the threat of various infectious diseases in 2023. The ability to combat global outbreaks remains vital to
world health. As a prominent biopharmaceutical products provider in China, SINOVAC continues to increase its investment in the
research and development and production of vaccines beyond COVID-19, and keeps exploring additional biomedical products
including antibodies. Meanwhile, we maintained a strong international presence, by providing high-quality vaccines and localized
ahead, SINOVAC is determined to sustain our business momentum in both domestic and international markets, strengthen our product portfolio
and partnerships, and provide many accessible pharmaceutical products to meet the increasing healthcare demand from around the world."
Antibody Products - SINOVAC's broad-spectrum neutralizing antibody products,
SA55 Injection and Nasal Spray, which are intended for the prevention and treatment of COVID-19 infections, were approved for clinical
trial in China. By leveraging its extensive experience in COVID-19 vaccine development and production, SINOVAC is capable of large-scale
manufacture of these broad-spectrum neutralizing antibody products in compliance with Good Manufacturing Practice standards.
A Vaccine - Healive , the first and only WHO prequalified inactivated
hepatitis A vaccine from China, has been registered in more than 20 countries and organizations worldwide by thus far, with additional
market approvals in Lebanon, Kyrgyzstan, Egypt, India and Pakistan this year.
Vaccine- A new and state-of-the-art influenza vaccine production line started
operations in Beijing. The plant, which complies with Chinese Good Manufacturing Practice guidelines and utilizes green production
processes, enables automated production at scale that expands SINOVAC capacity to meet the growing global demand for high-quality
influenza vaccines. SINOVAC's influenza vaccines expand international market accessibility in the first half of 2023 by
gaining more overseas market approvals, such as Pakistan and Chile.
Vaccine - SINOVAC's live attenuated varicella vaccine, the first WHO prequalified
Chinese varicella vaccine, successfully delivered to the Republic of T rkiye early this year. The vaccine was also registered in Lebanon and Kenya this year.
Foot and Mouth Disease Vaccine - SINOVAC's
bivalent inactivated vaccine, developed to combat enterovirus (EV) and coxsackievirus (CV) infections, was approved for clinical trials
in China this year. It aims to protect children from hand, foot and mouth disease caused by EV71 and CA16. SINOVAC's EV
71 vaccine, Inlive , has already safeguarded millions of children in China.
Development outside of China - SINOVAC has been named the exclusive strategic partner
of Bogot Bio, which will break ground as the first local human vaccine production facility to be established with local government
in Colombia's capital city of Bogota. SINOVAC's extensive expertise and experience in vaccine R&D and production, and successful
track record establishing vaccine manufacturing facilities will play a pivotal role in the new venture.
Unaudited Financial Results
for the First Half of 2023
the first half of 2023 were $140.4 million, compared to $1.2 billion in the prior year period. The decrease was mainly due to decreased
sales of CoronaVac . The negative gross margin at 34.2% was caused by the sharply reduced sales of CoronaVac combined with the COVID-19 employee incentive
plan established in 2022.
general and administrative expenses in the first half of 2023 were $231.0 million, compared to $155.9 million in the prior year period.
The increase was mainly due to a COVID-19 employee incentive plan established in 2022.
expenses in the first half of 2023 were $151.1 million, compared to $184.4 million in the prior year period.
in the first half of 2023 was $30.0 million, compared to net income of $790.4 million in the prior year period.
attributable to common shareholders was $14.0 million, or $0.14 per basic and $0.15 per diluted share, in the first half of 2023, compared
to a net income attributable to common shareholders of $481.6 million, or $4.84 per basic and $4.24 per diluted share, in the prior year
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 2023 would be $0.24 and $0.24, respectively.
adjusted EBITDA was $346.6 million loss in the first half of 2023, compared to $691.3 million income in the prior year period. Non-GAAP
net loss was $120.9 million in the first half of 2023, compared to $628.8 million net income in the prior year period. Non-GAAP diluted
earnings per share in the first half of 2023 was negative $0.32 compared to $3.41 per share in the prior year period. Non-GAAP diluted
earnings per share in the first half of 2023, excluding the implementation of the Rights Agreement and the newly-issued common and preferred
shares, would be negative $0.51. Reconciliations of non-GAAP measures to the nearest comparable GAAP measures are included at the end
of this news release.
June 30, 2023, cash and cash equivalents and restricted cash totaled $1.6 billion, compared to $4.3 billion as of December 31, 2022.
In the first half of 2023, net cash used in operating activities was $40.0 million, net cash used in investing activities was $2.7
billion reflecting the net position of short-term investment purchase over redemption, and net cash provided by financing activities was $217.2 million.
first half of 2023 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 the Company fully in favor, 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. 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.
On February 15, 2023, the Privy Council made a procedural decision to allow amendment of its existing application for permission to appeal,
and decided to deal with procedural and substantive issues together at the Final Hearing. 1Globe is still completing necessary procedural
filings, and has not yet taken steps to list a substantive hearing before the Privy Council. The appeal outcome is therefore pending.
disclosed, on March 5, 2018, SINOVAC 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 an amended answer to the Company's complaint, counterclaims and a third-party complaint against
the Company and Mr. Weidong Yin, alleging, among other allegations, that the Rights Agreement is not valid. On March 6, 2019, the Delaware
Chancery Court entered a status quo order, providing that the Company not distribute any of the Exchange Shares to the Company's
shareholders who did not trigger the Rights Plan until the final disposition of the pending Delaware litigation or further order of the
Court. On April 8, 2019, the Delaware Chancery Court stated that the Delaware litigation was pending the final outcome of 1Globe's
appeal of the Antigua Judgment.
Heng Ren Investments LP ("Heng Ren") filed suit against SINOVAC and Weidong Yin for alleged breach of fiduciary duties and
wrongful equity dilution on May 31, 2019, in Massachusetts state court. SINOVAC moved the matter from state court to the United States
District Court for the District of Massachusetts. On September 14, 2020, SINOVAC filed a motion to dismiss Heng Ren's claims. Subsequently,
on April 29, 2021, Heng Ren filed an amended complaint which alleged that Mr. Yin breached fiduciary duties owed to minority shareholders,
that SINOVAC aided and abetted breaches of fiduciary duties, and that both SINOVAC and Mr. Yin engaged in wrongful equity dilution. Heng
Ren requested damages, attorneys' fees, and prejudgment interest. On July 16, 2021, SINOVAC moved to dismiss Heng Ren's amended
complaint in the federal court in Massachusetts. On March 4, 2022, the court granted the motion as to the breach of fiduciary duty claims
and denied the motion as to the wrongful equity dilution claim, and denied reconsideration of its decision on the motion. SINOVAC has
answered the complaint. On January 19, 2023, SINOVAC filed a motion to stay the Heng Ren action pending the resolution of a putative shareholder
class action, described in the paragraph below. On February 15, 2023, the court stayed discovery in the Heng Ren matter pending the resolution