Sinovac Reports Unaudited Fourth Quarter and Preliminary Full Year 2009 Record Financial Results - Conference call scheduled Tuesday

Reports Unaudited Fourth Quarter and Preliminary Full Year 2009 Record

Conference call scheduled Tuesday, April 6, 2010 at 9:00 a.m. EDT -

Provides full year 2010 sales guidance of $67.1 million to $72.5 million -

/PRNewswire-Asia/ Sinovac Biotech Ltd. (Nasdaq: SVA), a leading China-based vaccine

manufacturer, announced today its unaudited financial results for the three-month and

preliminary twelve-month periods ended December 31, 2009.

Financial Highlights

Sales for the fourth quarter increased 194% to $36.4 million

Sales for the twelve-month period grew 81% to $84.2 million

Operating income for the fourth quarter rose 449% to $17.1 million

Operating income for the twelve-month period increased 162% to $40.8 million

Net income attributable to shareholders for the fourth quarter rose 275%

to $8.9 million, with diluted EPS of $0.21

Net income attributable to shareholders for the full year 2009 grew 149%

to $20.0 million, with diluted EPS of $0.46

Cash and cash equivalents at December 31, 2009 were $75.0 million

In February 2010, Sinovac s subsidiary, Sinovac Beijing, completed

of production facilities, including land use right and five buildings with a total area of 32,322 square meters on

29,021 square meters, located in Changping District, Beijing. The Company plans to set up two new production lines, with

production capacity of approximately 40 million doses, to manufacture the vaccine for enterovirus 71 (EV 71),

which causes hand, foot,

and mouth disease (HFMD), as well as its currently marketed flu vaccines.

In February 2010, the Company closed a public common share

of 11,500,000 common shares, including 1,500,000 common shares pursuant to the full exercise of the underwriters

over-allotment option,

were issued at $5.75 per share. The Company received net proceeds of approximately $62.0 million, after

deducting underwriting discounts, commissions and offering expenses.

In January 2010, Sinovac established Sinovac Dalian, which focuses

research, development, manufacturing and commercialization of vaccines, such as rabies, chickenpox, mumps and

rubella vaccines for human use. Sinovac will manufacture live attenuated vaccines and vero cell cultured vaccines at the production facilities of

In January 2010, Sinovac received its fifth purchase order for its

Panflu.1(TM), from China s Ministry of Industry and Information Technology (MIIT) for the national

purchase plan of total 8.57 million doses. Under this purchase order, Sinovac is required to

deliver an additional

2.33 million doses of Panflu.1(15ug/0.5ml) to the Chinese Central Government, and the remaining 6.24

be stockpiled in our warehouse. Out of 2.33 million order, 0.18 million doses were delivered in 2009 required by the

government under emergency.

The remaining 2.15 million doses are required to deliver before March 15, 2010. However, the delivery was

postponed due to the delayed completion of batch release process within NICPBP.

The delivery schedule

shall be re-confirmed after the products are released by NICPBP in second quarter. The remaining 6.24 million

will be stockpiled in the Company s warehouse. In aggregate, Sinovac has received Panflu.1 orders for a total of

20.97 million doses from the MIIT after the two local CDC subsequently decreased the ordered quantity by 90,000 doses. As previously disclosed,

Sinovac has delivered

10.23 million doses of Panflu.1 in 2009. Out of 10.23 million doses, we replaced 0.15 million doses with longer

shelf life in 2010. Therefore, in 2009, we recognized the revenue of 10.08

million doses of H1N1.

In 2010, there will be 2.15 million doses will be delivered and 8.74 million doses will be stockpiled in the Company s

warehouse. Revenues of 8.74 million doses will not be recognized until 2011, when the shelf life expires, unless the government requests

to that depending on the outbreak of the H1N1 disease in China.

In December 2009, China s State Food and Drug Administration (SFDA) accepted the Company s application to commence human

its vaccine against human EV 71, which causes HFMD. This is the first clinical trial application submitted in China

for the EV71 vaccine. No vaccine or antiviral treatment is currently

Chairman, President and CEO of Sinovac, commented, Sinovac had a very

productive year executing on its core strategy to support continued growth by

simultaneously expanding its pipeline of novel products and increasing capacity

to meet rising demand for our world class vaccines. We believe that Sinovac has

established itself as a company that can strategically deliver steady and

robust growth. Going into 2009 with a net revenue CAGR of 74.0% between 2006

and 2008, we demonstrated this past year that we can exceed this growth and

maintain our strategy even as we lead in development to address a global

concluded, In the coming year, we will continue to work to position ourselves

as a well-rounded and diversified vaccine company with near-term and long-term

opportunities for growth. Sinovac has taken steps to increase its production

capacity to meet the additional anticipated demand as we continue to expand the

markets for our commercialized products. We see a substantial opportunity for

Healive, in particular, as we take advantage of the additional opportunities

presented by the changing landscape of the public and private markets in China.

We will seek to continue to develop our novel products, such as our EV 71

vaccine, pneumococcal conjugated vaccine, rabies vaccine, HIB vaccine, meningitis

vaccine, Japanese Encephalitis vaccine, chickenpox (varicella) vaccine, mumps vaccine and rubella vaccine.

Financial Review for

Three Months Ended December 31, 2009

During the fourth quarter of 2009, sales were $36.4 million, up 194%

from $12.4 million in the fourth quarter of 2008. Fourth quarter 2009 sales

included the full recognition of MIIT s purchase of 10.08 million doses

of Sinovac s Panflu.1 in December 2009, as part of China s national

purchase plan. The sales breakdown by product was as follows.

Gross profit for the

fourth quarter 2009 was $25.2 million, with a gross margin of 69%, compared to

$7.7 million and a gross margin of 63% for the same period of 2008. The gross margin for the fourth quarter of

2009 increased due to increased production efficiencies as Anflu and Panflu.1

utilized the same production line and lower product returns in the fourth

Total operating expenses for the fourth quarter of 2009 were $8.2 million,

compared to $4.6 million in the comparative period in 2008. Selling, general

and administrative expenses for the fourth quarter of 2009 were $6.3 million,

compared to $4.1 million in the same period of 2008. SG&A expenses as a

percentage of fourth quarter 2009 sales decreased to 17% from 33% during the

fourth quarter of the prior year. The

lower SG&A expenses as a percentage of revenue resulted from the increased economies

of scale associated with the significant sales growth.

Net research and development expenses for the fourth quarter 2009 were

$1.6 million, compared to $359,000 in the same period of 2008. The increased

R&D expenses in the fourth quarter of 2009 were mainly related to the

continued development of the EV 71 vaccine and pneumococcal conjugated vaccine.

Fourth quarter 2009 operating income was $17.1 million, compared to

operating income of $3.1 million in the fourth quarter of the prior year. The

higher operating income in the current year quarter was attributable to the

significant sales growth and the greater economies of scale.