Sinovac Reports Unaudited Fourth Quarter 2019 Financial Results and Files 2019 Annual Report on Form 20-F

Reports Unaudited Fourth Quarter 2019 Financial Results and Files 2019 Annual Report on Form 20-F

China, April 30, 2020 /Business Wire/ -- Sinovac Biotech Ltd. (NASDAQ: SVA) ("Sinovac" or the "Company"),

a leading provider of biopharmaceutical products in China, has filed its 2019 annual report on Form 20-F with the U.S. Securities

and Exchange Commission for the year ended December 31, 2019. The Company also reported its unaudited financial results for the

fourth quarter ended December 31, 2019.

Quarter and Full Year 2019 Financial Summary

Weidong Yin, Chairman, President, and CEO of Sinovac, commented, "Sinovac delivered strong performance in 2019 with growth

in sales and net earnings. We are pleased to report that during the fourth quarter of 2019, Anflu, the seasonal influenza vaccine,

was relaunched to the market after a one-year absence due to the manufacturing disruption orchestrated by the minority shareholder

of Sinovac Beijing in 2018. Furthermore, our varicella vaccine was granted market authorization in December 2019, and today the

batch release approval was obtained for our first batch varicella vaccines."

development team has had a busy year. In addition to our varicella vaccine being approved to market in China, we made good progress

on the development and regulatory advancement of our quadrivalent influenza vaccine (QIV), sabin inactivated polio vaccine (sIPV)

and 23-valent pneumococcal polysaccharide vaccine (PPV-23). We expect to obtain market authorization for QIV in 2020. As previously

announced, Sinovac is also at the forefront of the fight against COVID-19 through vaccine development. Our phase I human trial

is ongoing, and we expect to deliver results in the summer," Mr. Yin continued.

quarter of 2020, the COVID-19 outbreak has impacted the regular business of the Company. As disclosed previously, domestic sales

have ceased due to the suspension of vaccinations by the Chinese CDC since February, and exports are disrupted due to cancellations

of cargo flights and inflated freight costs. Any prolonged disruption of Sinovac's clinical trials could delay regulatory

approvals or the commercialization of any current or future products. Certain provinces and cities in China are starting to lift

some of the restrictive measures, and delivery of vaccines in China has slowly started to resume. The Company is closely monitoring

the situation in China as well as in the other countries in which it markets its vaccines," Mr. Yin concluded.

Pipeline Development

Sars-cov-2 (COVID-19)

vaccine - The Company initiated the development of a vaccine against COVID-19 at the end of January 2020. Preclinical

studies were conducted from then until early April, when the vaccine candidate was proved to be safe and can provide protection

on animals. The application for clinical studies was submitted to the National Medical Products Administration ("NMPA")

on March 13, 2020. Since then, 18 submissions have been made to the NMPA to complete the full submission for clinical application.

The NMPA implemented a concurrent review on the full submission and granted approval for human trials on April 13, 2020. The phase

I study commenced on April 16. The trial is ongoing.

Pneumococcal polysaccharide vaccine (PPV-23) - The Company submitted its application for a production license in 2017.

In 2018, the NMPA requested a supplementary submission. The technical review by the NMPA was commenced at the end of September,

and the site inspection was conducted in December 2019.

influenza vaccine (QIV) - The Company filed an application with the NMPA for a production license for the QIV vaccine

in March 2019. The NDA has been filed, and the site inspection was completed in March 2020. The Company expects the commercial

launch of QIV to occur in 2020.

Inactivated Polio vaccine (sIPV) - The production license application for the sIPV vaccine was accepted by the NMPA in

January 2019. In March 2019, given the high demand for effective polio vaccines, the application was granted fast track review.

Currently, the application is under review.

Financial Results for the Fourth Quarter of 2019

Summary of sales and gross profit

for the fourth quarter of 2019 were $81.1 million, an increase of 52.4% from $53.2 million in the prior year period. The increase

was due to reintroduction of the Company's influenza vaccine and higher sales of the mumps vaccine due to a revamped sales

and marketing strategy and supply shortage on the market.

lack of Bilive sales remains attributed to its suspended production,

which was due to a lack of supply of the hepatitis B vaccine antigens from the Company's sole supplier.

profit in the fourth quarter of 2019 was $68.9 million compared to gross profit of $46.5 million in the prior year period. Gross

margin was 84.9% compared to 87.3% in the prior year period. The decrease of gross margin was due to a change of sales mix, primarily

caused by increased sales of the lower-margin influenza vaccine.

general and administrative expenses in the fourth quarter of 2019 were $33.3 million compared to $40.7 million in the prior year

period. The Company incurred lower legal and consulting fees associated with the Company's ongoing litigation matters in

expenses in the fourth quarter of 2019 were $7.8 million compared to $7.1 million in the prior year period, as the Company continued

to invest in the development of its pipeline product candidates, including sIPV and PPV.

income in the fourth quarter of 2019 was $32.8 million compared to $0.3 million in the prior year period. Net income increased

due to higher revenue and lower selling, general and administrative expenses.

income attributable to common shareholders was $21.6 million, or $0.22 per basic and $0.20 per diluted share, compared to net loss

attributable to common shareholders of $1.2 million, or $0.02 per basic and diluted share, in the prior year period.

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"), and a "Trigger

Event" occurred under the Rights Agreement. As a result, new common and preferred shares of the Company were issued. Without

the effect of the implementation of the Rights Agreement and the newly issued common and preferred shares, basic and diluted earnings

per share for the fourth quarter of 2019 would be $0.33.

adjusted EBITDA was $30.7 million in the fourth quarter of 2019 compared to $2.2 million in the prior year period. Non-GAAP net

income in the fourth quarter of 2019 was $34.0 million compared to $1.0 million in the prior year period. Non-GAAP diluted earnings

per share in the fourth quarter of 2019 were $0.21 per share compared to $0.02 losses per share in the prior year period. Non-GAAP

diluted earnings per share in the fourth quarter of 2019 excluding the implementation of the Rights Agreement and the newly issued

common and preferred shares would be $0.36 per share. Reconciliations of non-GAAP measures to the nearest comparable GAAP measures

are included at the end of this earnings announcement.

Company's fourth quarter 2019 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.

Results for the Twelve Months Ended December 31, 2019

Summary of sales and gross profit

in 2019 were $246.1 million, an increase of 7.1% from $229.7 million in the prior year. The increase was due to reintroduction

of the Company's influenza vaccine and higher sales of the mumps vaccine for the same reason mentioned in quarterly results.

profit in 2019 was $213.6 million compared to gross profit of $204.9 million in the prior year. Gross margin was 86.8% compared

to 89.2% in the prior year. The decrease of gross margin was due to a change in sales mix, with a higher proportion of sales of

the influenza vaccine, which has a lower profit margin.

general and administrative expenses in 2019 were $121.5 million compared to $137.0 million in the prior year. The Company incurred

lower legal and consulting fees associated with the Company's ongoing litigation matters in 2019.

expenses in 2019 were $24.3 million compared to $21.9 million in the prior year.

income in 2019 was $65.2 million compared to $36.1 million in the prior year. Net income increased primarily due to higher revenue

and lower selling, general and administrative expenses.

income attributable to common shareholders was $39.8 million, or $0.42 per basic and $0.41 per diluted share, compared to net income

attributable to common shareholders of $21.8 million, or $0.34 per basic and diluted share, in the prior year.

the implementation of the Rights Agreement, as described above, and the newly issued common and preferred shares, basic and diluted

earnings per share for 2019 would be $0.63.

adjusted EBITDA was $76.4 million in 2019 compared to $54.8 million in the prior year. Non-GAAP net income in 2019 was $68.5 million

compared to $39.9 million in the prior year. Non-GAAP diluted earnings per share in 2019 were $0.43 per share compared to $0.38

per share in the prior year. Non-GAAP diluted earnings per share in 2019, excluding the implementation of the Rights Agreement

and the newly issued common and preferred shares, would be $0.73 per share. Reconciliations of non-GAAP measures to the nearest

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

of December 31, 2019, cash and cash equivalents totaled $152.7 million compared to $158.2 million as of December 31, 2018. In 2019,

net cash provided by operating activities was $39.1 million, net cash used in investing activities was $42.5 million, and net cash

provided by financing activities was $1.7 million, including loan proceeds of $2.1 million and loan repayment of $3.3 million.

As of December 31, 2019, the Company had $5.9 million in bank loans due within one year. The Company expects that its current cash

position will be able to support its operations for at least the next 12 months.

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