Full Press Release Details
Sinovac Reports Unaudited First Quarter
2012 Financial Results
- Conference call scheduled
for Tuesday, May 15, 2012 at 8:00 AM EDT -
Beijing - May 15, 2012 -
Sinovac Biotech Ltd. (NASDAQ: SVA), a leading provider of biopharmaceutical products in China, announced
today its unaudited first quarter financial results for the period ended March 31, 2012.
Financial Highlights (year-over-year
comparisons to first quarter 2011)
Recent Business Highlights
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 China improves, 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.
Financial Review for First Quarter Ended
An analysis of sales and gross profit is
| In USD | 2012Q1 | % of sales | 2011Q1 | % of sales | ||||||||||||
| Hepatitis A - Healive | 1,611,576 | 27.0 | % | 2,279,446 | 49.8 | % | ||||||||||
| Hepatitis A&B - Bilive | 4,015,460 | 67.2 | % | 2,087,382 | 45.5 | % | ||||||||||
| Hepatitis vaccines | 5,627,036 | 94.2 | % | 4,366,828 | 95.3 | % | ||||||||||
| Influenza vaccines | 314,084 | 5.3 | % | 216,406 | 4.7 | % | ||||||||||
| Animal vaccine | 32,347 | 0.5 | % | - | - | |||||||||||
| Total sales | 5,973,467 | 100 | % | 4,583,234 | 100 | % | ||||||||||
| Cost of sales | 2,255,289 | 37.8 | % | 1,586,017 | 34.6 | % | ||||||||||
| Gross profit | 3,718,178 | 62.2 | % | 2,997,217 | 65.4 | % |
Sales for the first quarter of 2012 were
$6.0 million, a 30.3% increase over the same period in 2011. Hepatitis vaccines sales increased by 28.9% year-over-year to $5.6
million, with Bilive sales in the private pay market up 92.4% to $4.0 million. Influenza sales grew by 45.1% year-over-year to
Gross profit margin in first quarter of
2012 was 62.2%, which was lower than the gross profit margin of 65.4% in the same period of last year. The planned low production
level as the animal vaccine facilities ramped up in the first quarter of 2012 lowered the gross margin. If factored out of the
calculation, the gross margin for first quarter 2012 would have been 65.1%. After deducting depreciation of land use rights, amortization
of licenses and permits, the gross margin was 61.8% and 62.7% for the first quarter of 2012 and 2011, respectively.
Selling, general and administrative expenses
for the first quarter of 2012 represented 72.3% of total sales, compared to 89.6% for the same quarter last year. The reduction
of the expenses as a percentage of sales was due to higher export sales with low direct selling costs in the first quarter of 2012.
The expenses as a percentage of sales was also impacted by the seasonality of the Company's sales, which, based on historical
trends, are typically lower in the first half of the year and expected to increase significantly in the second half of the year.
First quarter 2012 research and development
expenses reached $7.3 million, a $5.2 million increase over the same period in 2011. The high research development expenses included
$5.6 million for the ongoing EV71 clinical trial and $0.5 million for the pilot production activities underway for the mumps vaccine.
Research and development expenses in the quarter reflected the continued progress of the various research and development initiatives
intended to drive the Company's pipeline products towards commercialization.
Depreciation of property, plant and equipment
and amortization of licenses and permits for first quarter 2012 was $307,000, compared to $384,000 for the same period last year.
Although the Company had increased depreciation due to increased additions carried forward from 2011, it benefited from much lower
amortization expenses arising from fully amortized license and permits for the inactivated hepatitis A vaccine, which resulted
in lower depreciation and amortization expenses in the first quarter of 2012, compared to the same quarter last year.
Total operating expenses for the first
quarter 2012 were $11.9 million, compared to $6.5 million for the same quarter last year. The major driver of the higher operating
expense was the increase in research and development expenses as the Company advances its pipeline vaccine candidates.
The Company's operating loss was
$8.2 million for the first quarter 2012, compared to $3.5 million for the first quarter last year.
Loss before income taxes and non-controlling
interests was $7.7 million, compared to $3.4 million in the same quarter last year.
Net loss attributable to stockholders in
the first quarter 2012 was $5.6 million, or $0.10 per basic and diluted share, compared to a net loss of $2.8 million, or $0.05
per basic and diluted share, for the same quarter last year.
As of March 31, 2012, cash and cash equivalents
totaled $94.5 million, compared to $104.3 million as of December 31, 2011. During the first quarter of 2012, the Company utilized
$3.1 million of its cash resources to contribute to its ongoing clinical trial for its proprietary EV71 vaccine. The Company intends
to provide the trial with approximately additional $7 million during the remaining quarters of the year. Under the credit line
arrangements already in place that cover the ongoing capital needs of the Changping site development, $2.2 million was utilized
in the first quarter. Capital expenditure payments to complete the Changping site, which are covered by the same credit line arrangements,
are estimated to be around $20 million in the remaining quarters of 2012 and $1.7 million in 2013.
Conference Call Details
The Company will host a conference call
on Tuesday, May 15, 2012 at 8:00 a.m. EDT (May 15, 2012 at 8:00 p.m. China Standard Time) to review the Company's financial results
and provide an update on recent corporate developments. To access the conference call, please dial 1-877-407-4018 (USA) or 1-201-689-8471
(International). A replay of the call will be available from 11 a.m. EDT on May 15, 2012 to May 29, 2012 at midnight. To access
the replay, please dial 1-877-870-5176 (USA) or 1-858-384-5517 (International) and reference the replay pin number 393969.
A live audio webcast
of the call will also be available from the investors section on the corporate web site at www.sinovac.com. A webcast replay can
be accessed on the corporate website beginning May 15, 2012 and the replay will remain available for 30 days.
Sinovac Biotech Ltd. is a China-based biopharmaceutical
company that focuses on the research, development, manufacturing and commercialization of vaccines that protect against human infectious
diseases including hepatitis A and B, seasonal influenza, H5N1 pandemic influenza (avian flu) and H1N1 influenza (swine flu), as
well as animal rabies vaccine for canines. In 2009, Sinovac was the first company worldwide to receive approval for its H1N1 influenza
vaccine, Panflu.1, and has manufactured it for the Chinese Central Government, pursuant to the government-stockpiling program.
The Company is also the only supplier of the H5N1 pandemic influenza vaccine to the government-stockpiling program. Sinovac is
developing a number of new pipeline vaccines including vaccines for enterovirus 71 (against hand, foot and mouth disease), pneumococcal
conjugate, pneumococcal polysaccharides, mumps and rubella. Sinovac sells its vaccines mainly in China and exports selected vaccines
to Mongolia, Nepal, and the Philippines.
Safe Harbor Statement
This announcement contains forward-looking
statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform
Act of 1995. These forward-looking statements can be identified by words or phrases such as "will," "expects,"
"anticipates," "future," "intends," "plans," "believes," "estimates"
and similar statements. Among other things, the business outlook and quotations from management in this press release contain forward-looking
statements. Statements that are not historical facts, including statements about Sinovac's beliefs and expectations, are forward-looking
statements. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual
results to differ materially from those contained in any forward-looking statement. Sinovac does not undertake any obligation to
update any forward-looking statement, except as required under applicable law.
Helen Yang/Chris Lee
Sinovac Biotech Ltd.