Full Press Release Details
Sinovac Reports Unaudited Fourth Quarter 2020 Financial Results and Files 2020 Annual
BEIJING, China, April 22, 2021 /Business Wire/ Sinovac Biotech Ltd. (NASDAQ: SVA) ( Sinovac or the Company ), a leading provider
of biopharmaceutical products in China, has filed its 2020 annual report on Form 20-F with the U.S. Securities and Exchange Commission for the year ended December 31, 2020. The Company also reported its
unaudited financial results for the fourth quarter ended December 31, 2020.
Fourth Quarter and Full Year 2020 Financial Summary
Mr. Weidong Yin, Chairman, President, and CEO of Sinovac, commented, Sinovac experienced an exceptionally strong year in 2020. Despite the
unprecedented COVID-19 pandemic, we are pleased with our record financial performance both for the fourth quarter and full fiscal year. We moved quickly to develop an inactivated
COVID-19 vaccine, also known as CoronaVac, within a year s time and without having to sacrifice product quality.
We have built production facilities with an annual production capacity of 2 billion doses. At this time, over 200 million doses of our COVID-19 vaccine have been delivered to different countries to support vaccine rollout, and millions of people around the globe have been administered our vaccine. We always strive to achieve low incident rates when
developing vaccines, and we are happy to see CoronaVac s strong performance in the largest real world study in Chile, providing solid, real-life evidence that our vaccine helps to reduce hospitalized cases, ICU admissions, and fatal cases. Our
overarching goal is to deliver a safe, effective, and accessible vaccine to the world.
Mr. Yin added, As we worked to develop our COVID-19 vaccine, Sinovac also achieved good development progress with its other vaccine products as well. Two of our products, QIV and PPV-23, were granted market
authorization in China in 2020, and our existing business segments continued to grow, despite a reduction in vaccination activities in the first half of the year due to the COVID-19 outbreak and lockdown
Pipeline Development
COVID-19 Vaccine The Company initiated the development of an inactivated vaccine against COVID-19 (named CoronaVac) on January 28, 2020. The phase I and II human studies on healthy adults aged 18 to 59 and elderly adults aged 60 and above were conducted in China and enrolled 144 participants in the
phase I trial and 600 participants in the phase II trial, with 743 participants receiving at least one dose of investigational product. Results from the randomized, double-blind, placebo-controlled phase I/II clinical trial on safety, tolerability
and immunogenicity of CoronaVac were published in The Lancet Infectious Diseases on November 17, 2020.
Since September 2020, the
Company made rolling submission to China s National Medical Products Administration (NMPA), which carried out rolling reviews when the submissions were made. NMPA granted a conditional marketing authorization (CMA) to Sinovac for CoronaVac in
individuals aged 18 and above on February 5, 2021. As of March 31, 2021, CoronaVac has been granted either emergency approval or conditional marketing authorization by over 30 countries or regions.
Sinovac completed its phase I/II trial on pediatric populations aged 3 to 17 years old. 28 days after second dose, both the middle-dose and low-dose were well tolerated, and the seroconversaion rates were 96.77% and 100%, respectively. The pre-print of the publication named Safety, Tolerability and Immunogenicity
of an Inactivated SARS-CoV-2 Vaccine (CoronaVac) in Healthy Children and Adolescents: A Randomised, Double-Blind, and Placebo-Controlled, Phase 1/2 Clinical Trial is
Sabin Inactivated Polio vaccine (sIPV) The Company
submitted an application to NMPA for the product license of sIPV in January 2019. The Company expects the license to be issued in mid-2021.
Unaudited Financial Results for the Fourth Quarter of 2020
Sales for the fourth quarter of 2020 were $327.5 million, an increase from $81.1 million in the prior year period. The increase was due to higher
sales of the Company s influenza products, including the newly launched QIV, and sales of CoronaVac.
Gross profit in the fourth quarter of 2020 was
$283.9 million, an increase from $68.9 million in the prior year period. Gross margin was 86.7%, compared to 84.9% in the prior year period. The increase of gross margin was due to a change in sales mix in 2020.
Selling, general and administrative expenses in the fourth quarter of 2020 were $83.1 million, compared to $33.3 million in the prior year period.
The increase was mainly due to higher sales and increased marketing dedicated to revenue growth.
R&D expenses in the fourth quarter of 2020 were $2.7 million in 2020, compared to $7.8 million
in the prior year period.
Net income in the fourth quarter of 2020 was $172.7 million, compared to $32.8 million in the prior year period, due
to an increase in sales.
Net income attributable to common shareholders was $107.3 million, or $1.09 per basic and $0.96 per diluted share, in the
fourth quarter of 2020, compared to $21.7 million, or $0.22 per basic and $0.20 per diluted share, in the prior year period.
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, the Company issued new common and preferred shares of Sinovac. Without the effect of implementing the Rights Agreement and the newly-issued common and preferred shares,
basic and diluted earnings per share for the fourth quarter of 2020 would be $1.53 and $1.27, respectively.
Non-GAAP adjusted EBITDA was $198.9 million in the fourth quarter of 2020, compared to $30.8 million in the
prior year period. Non-GAAP net income was $175.3 million in the fourth quarter of 2020, compared to $34.0 million in the prior year period. Non-GAAP diluted
earnings per share in the fourth quarter of 2020 was $1.02, compared to earnings of $0.21 per share in the prior year period. Non-GAAP diluted earnings per share in the fourth quarter of 2020, excluding the
implementation of the Rights Agreement and the newly-issued common and preferred shares, would be $1.36. Reconciliations of non-GAAP measures to the nearest comparable GAAP measures are included at the end of
this earnings announcement.
The Company s fourth quarter 2020 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.
Financial Results for the Twelve Months Ended
Sales in 2020 were $510.6 million, an increase from $246.1 million in the prior year. The increase was due to higher
sales of the Company s influenza products, including the newly launched QIV, and sales of CoronaVac.
Gross profit in 2020 was $443.4 million,
compared to gross profit of $213.6 million in the prior year. Gross margin was 86.8%, which is the same compared to the prior year.
and administrative expenses in 2020 were $176.5 million, compared to $121.5 million in the prior year. The increase was mainly due to higher sales and increased marketing dedicated to revenue growth.
R&D expenses in 2020 were $48.8 million, compared to $24.3 million in the prior year. The Company continued to invest in the advancement of
pipeline vaccines, including sIPV and COVID-19 vaccines.
Net income in 2020 was $185.2 million, compared to $65.2 million in the prior year. Net income
increased primarily due to increased sales.
Net income attributable to common shareholders was $104.4 million, or $1.06 per basic and $0.97 per
diluted share, compared to net income attributable to common shareholders of $39.8 million, or $0.42 per basic and $0.41 per diluted share, in the prior year.
Excluding the implementation of the Rights Agreement, as described above, and the newly-issued common and preferred shares, basic and diluted earnings per
share for 2020 would be $1.55 and $1.29, respectively.
Non-GAAP adjusted EBITDA was $230.0 million in 2020,
compared to $76.4 million in the prior year. Non-GAAP net income in 2020 was $197.1 million in 2020, compared to $68.5 million in the prior year. Non-GAAP
diluted earnings per share in 2020 was $1.03, compared to earnings of $0.43 per share in the prior year. Non-GAAP diluted earnings per share in 2020, excluding the implementation of the Rights Agreement and
the newly-issued common and preferred shares, would be $1.44 per share. Reconciliations of non-GAAP measures to the nearest comparable GAAP measures are included at the end of this earnings announcement.
As of December 31, 2020, cash and cash equivalents totaled $1,041.0 million, compared to $152.7 million as of December 31, 2019. In 2020,
net cash provided by operating activities was $479.3 million, net cash used in investing activities was $204.8 million, and net cash provided by financing activities was $592.6 million, including proceeds of $541.0 million from a
subsidiary s financing, loan proceeds of $33.2 million and loan repayments of $6.0 million. As of December 31, 2020, the Company had $32.9 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.
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 that 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 is now pending.
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 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 outcome of 1Globe s appeal of the Antigua Judgment.
Separately, Heng Ren Investments LP ( Heng Ren ) filed suits against Sinovac and Weidong Yin on
May 31, 2019, in Massachusetts state court, for alleged breach of fiduciary duties and wrongful equity dilution. Sinovac moved the matter from the state court to the United States District Court for the District of Massachusetts. Heng Ren
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,
attorney fees, and prejudgment interest. On September 14, 2020, Sinovac Antigua filed a motion to dismiss Heng Ren s claims. The court s decision on this motion is still pending.
Status of Exchange Shares and Trading in the Company s Shares
As a result of the pending legal proceedings described above, the Exchange Shares are expected to remain in a trust for the benefit of the Company s
shareholders who did not trigger the Rights Plan until, at least, the conclusion of the appeal against the Antigua Judgement and the final disposition of the Delaware litigation or further order of the Delaware Chancery Court. The Exchange Shares
remain issued and outstanding. The Nasdaq Stock Market LLC implemented a halt on trading of the Company s common shares at the time the Exchange Shares were issued to the trust. The Company is currently unable to estimate when trading will
resume, or whether Nasdaq will take any additional action in regards to the trading of the Company s common shares.
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. Sinovac s product portfolio includes vaccines against COVID-19, enterovirus71 (EV71), hepatitis A and B, seasonal influenza,
23-Valent pneumococcal polysaccharide ( PPV ), H5N1 pandemic influenza (avian flu), H1N1 influenza (swine flu), varicella vaccine and mumps. Sinovac s
COVID-19 vaccine, CoronaVac, has been granted emergency use approval or conditional marketing authorization by over 30 countries or region worldwide. Healive, the hepatitis A vaccine manufactured by the
Company, has passed the assessment under WHO prequalification procedures in 2017. The EV71 vaccine, an innovative vaccine developed by Sinovac against hand foot and mouth disease caused by EV71, was commercialized in China in 2016. In 2009, Sinovac
was the first company worldwide to receive approval for its H1N1 influenza vaccine, which it has supplied to the Chinese Government s vaccination campaign and stockpiling program. The Company is also the only supplier of the H5N1 pandemic
influenza vaccine to the government stockpiling program. The Company is developing a number of new products including a Sabin-strain inactivated polio vaccine and combined vaccines. Sinovac primarily sells its vaccines in China, while also exploring
growth opportunities in international markets. The Company is seeking market authorization of its products in over 30 countries outside of China. For more information please see the Company s website at www.sinovac.com.
Safe Harbor Statement
This press release may include certain statements that are not descriptions of historical facts, but are forward-looking statements. These statements are made