Sinovac Reports Unaudited Second Half of 2018 Financial Results and Files 2018 Annual Report on Form 20-F

Reports Unaudited Second Half of 2018 Financial Results and Files 2018 Annual Report on Form 20-F

China, April 29, 2019 /PRNewswire/ -- Sinovac Biotech Ltd. (NASDAQ: SVA) ("Sinovac" or the "Company"),

a leading provider of biopharmaceutical products in China, has filed its 2018 annual report on Form 20-F with the U.S. Securities

and Exchange Commission for the year ended December 31, 2018. The Company also reported its unaudited financial results for the

second half of the year ended December 31, 2018.

Half of 2018 Financial Highlights

Full Year 2018 Financial Highlights

overall vaccine market in China grew in 2018 despite serious impacts from the Changchun vaccine scandal. In addition, although

there was no seasonal flu vaccine supply in 2018 due to the production suspension, total sales of the Company's regular products

increased by 31.7% year over year.

- Human clinical studies have been completed. The new drug application (NDA) was filed with the National Medical Products

Administration (NMPA, previously known as the China State Food and Drug Administration) in November 2017. The clinical site inspection

was completed in 2018. The technical review on the registration dossier was also conducted in 2018 and supplementary documents

were issued and responded to during the year.

Inactivated Polio Vaccine (sIPV) - The Company has completed phase III clinical studies, which found that the immune

responses against the three types of poliovirus in the studied sIPV were not inferior to those achieved with the control IPV and

demonstrated a good safety profile. A sequential study of inoculation with bivalent oral polio vaccine (bOPV) was completed in

January 2019, the NDA was submitted to the NMPA. The consistency study on three consecutive lots is expected to start in 2019.

Valent Pneumococcal Polysaccharide Vaccine - The Company filed an NDA in June 2017. The clinical trial site inspection

has been completed, and a registration dossier is being reviewed by the NMPA. The technical review on the registration dossier

was conducted in 2018 and supplementary documents were issued and responded to during the year.

Influenza Vaccine (QIV) - Phase III trial has been completed. The preliminary results of the trial show that the vaccine

is safe and immunogenic. The NDA has been filed, and the application is under review by the NMPA.

Financial Results for Second Half of 2018

Summary of sales and gross profit

for the second half of 2018 were $107.2 million, which remains the same compared to $107.4 million in the prior year period. Revenue

generated by Hepatitis A vaccine increased by $12.0 million compared to same period in 2017, which was offset by $13.6 million

decrease in the Company's influenza vaccine. In second half of 2018, nil revenue generated by the Company's influenza

vaccine in the flu season 2018-2019 caused by the suspension of influenza vaccine production and destruction of inventory in April

2018 as a result of the disruptive actions of the minority shareholder of our subsidiary, Sinovac Biotech Co., Ltd.

profit was $95.8 million compared to gross profit of $94.9 million in the prior year period. Gross margin was 89.4% compared to

88.4% in the prior year period. Gross profit in the second half of 2018 increased slightly due to a change in sales mix, with a

greater proportion of sales generated by the Company's higher-margin EV71 vaccine.

general and administrative expenses in the second half of 2018 were $69.2 million compared to $50.6 million in the same period

of 2017. The increase was mainly due to higher professional and consulting fees associated with ongoing litigation.

expenses in the second half of 2018 were $11.8 million compared to $11.7 million in the same period of 2017.

income in the second half of 2018 was $13.5 million compared to $20.9 million in the prior year period.

income attributable to common shareholders was $7.7 million, or $0.11 per basic and diluted share, compared to net income attributable

to common shareholders of $15.0 million, or $0.26 per basic and diluted share, in the prior year period.

adjusted EBITDA was $20.6 million in the second half of 2018 compared to $35.4 million in the prior year period. Non-GAAP net income

in the second half of 2018 was $15.9 million compared to $20.2 million in the prior year period. Non-GAAP diluted earnings

per share in the second half of 2018 were $0.13 compared to $0.25 per share in the prior year period. Reconciliations of non-GAAP

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

Financial Results for the Twelve Months

Ended December 31, 2018

Summary of sales and gross profit

in 2018 were $229.7 million, an increase of 31.7% from $174.3 million in 2017. Sales increased primarily due to revenue generated

by the Company's EV71 and hepatitis vaccines.

profit in 2018 was $204.9 million, an increase of 33.0% from $154.1 million in 2017. Gross margin was 89.2% compared to 88.4% in

2017. Gross profit in 2018 also increased primarily due to higher sales generated by the Company's EV71 vaccine.

general and administrative expenses in 2018 were $137.0 million compared to $87.4 million in 2017. The Company's selling,

general and administrative expenses increased with the higher level of sales activity. The Company incurred $11.4 million in professional

and consulting fees associated with ongoing litigation.

expenses in 2018 were $21.9 million compared to $20.5 million in 2017. R&D expenses were mainly incurred by the development

of varicella vaccine and sIPV.

income was $36.1 million in 2018 compared to net income of $36.7 million in 2017.

income attributable to common shareholders was $21.8 million, or $0.34 per basic and diluted share in 2017, compared to net income

attributable to common shareholders of $25.8 million, or $0.45 per basic and diluted share in 2017.

Non-GAAP adjusted EBITDA was $54.8 million

in 2018 compared to $51.3 million in 2017. Non-GAAP net income in

2018 was $39.9 million compared to net income of $36.4 million in 2017. Non-GAAP diluted earnings per share in

2018 were $0.38 compared to diluted earnings per share of $0.44 in 2017. Reconciliations of non-GAAP measures to the nearest

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

of December 31, 2018, cash and cash equivalents and restricted cash totaled $158.2 million compared to $116.0 million as of December

31, 2017. In 2018, net cash provided by operating activities was $7.9 million. Net cash used in investing activities was $25.3

million, which was primarily due to the purchase of short-term investments. Net cash provided by financing activities was $64.2

million, including loan proceeds of $18.9 million and loan repayment of $43.9 million. As of December 31, 2018, the Company had

$3.3 million of 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.

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 enterovirus71,

or EV71, hepatitis A and B, seasonal influenza, H5N1 pandemic influenza (avian flu), H1N1 influenza (swine flu), and mumps. 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, pneumococcal polysaccharides vaccine, pneumococcal conjugate vaccine and varicella vaccine.

Sinovac primarily sells its vaccines in China, while also exploring growth opportunities in international markets. The Company

has exported select vaccines to over 10 countries in Asia and South America. For more information please see the Company's

website at www.sinovacbio.com.

press release contains "forward-looking statements" within the meaning of the United States federal securities laws.

Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity,

performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed

or implied by these forward-looking statements. Factors that might cause such a difference include our inability to compete successfully

in the competitive and rapidly changing marketplace in which we operate, failure to retain key employees, cancellation or delay

of projects, failure to satisfy regulatory and other requirements, disapproval or delay in approval of new products by regulatory

bodies, disruptions to our operations, the results of any pending litigation, potential litigation relating to our shareholder

rights plan, any halt in trading of the Company's securities, and adverse general economic conditions in China, the United

States and elsewhere. These risks and other factors include those listed under "Risk Factors" and elsewhere in our

Annual Report on Form 20-F as filed with the Securities and Exchange Commission. In some cases, you can identify forward-looking

statements by terminology such as "may," "will," "should," "expects," "intends,"

"plans," "anticipates," "believes," "estimates," "predicts," "potential,"

"continue," or the negative of these terms or other comparable terminology. Although we believe that the expectations

reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance

or achievements. The Company assumes no obligation to update the forward-looking information contained in this release.

supplement its consolidated financial statements, which are prepared and presented in accordance with GAAP, Sinovac uses the following

non-GAAP financial measures: non-GAAP adjusted EBITDA, non-GAAP net income and non-GAAP diluted EPS. For more information