Sinovac Reports Unaudited Second Quarter 2012 Financial Results - Conference call scheduled for Wednesday

Sinovac Reports Unaudited Second Quarter

2012 Financial Results

- Conference call scheduled for Wednesday, August 15, 2012 at

BEIJING, Aug. 15, 2012 /PRNewswire-Asia/ - Sinovac Biotech

Ltd. (the company) (NASDAQ: SVA), a leading provider of biopharmaceutical products in China, announced today its unaudited second

quarter financial results for the period ended June 30, 2012. Sinovac is a China-based biopharmaceutical company that focuses on

the research, development, manufacturing and commercialization of vaccine products. The company is making efforts to implement

its business strategy to expand its range of product portfolio for both domestic and international markets. The Company has built

a solid foundation of commercialized vaccines for hepatitis A, hepatitis A&B and seasonal flu. It has developed specialized

pandemic flu vaccines for the H1N1 (swine flu) and H5N1 (avian flu) strains that have been stockpiled by Chinese government. Sinovac

also has an extensive human vaccine pipeline inclusive of EV71 and pneumococcal vaccine candidates.

2012 Second Quarter Financial Highlights (year-over-year

comparisons to second quarter 2011)

Recent Business Highlights

Dr. Weidong Yin, Chairman, President and CEO of Sinovac, commented,

"Our financial results for the first half of 2012 clearly demonstrate the management team's progress in executing on our business

strategies. We continue to aggressively expand our hepatitis A&B vaccine business in the private pay market, and we believe

that we can leverage this experience when we commercialize our EV71 vaccine and other pipeline products in China. Besides strengthening

our capability in the private market, we have been making significant efforts to expand our presence in the public market. Recently,

we attribute winning the Gansu tender to the development of our public pay market sales initiatives."

Dr. Yin continued, "The Company's increased investment

in R&D is driven by our EV71 Phase III trial, which is continuing in line with our targeted schedule. We are pleased to see

the progress we have made in this Phase III clinical trial. The healthcare professionals participating in the trial are actively

collecting the required data based on the quality and quantity specified in the protocol for the efficacy analysis of the vaccine

candidate. In parallel with the clinical trial, the preparation of our dedicated EV71 vaccine production plant is underway. We

anticipate that once the clinical trial is completed and after SFDA approval is obtained, we can immediately apply for the GMP

certification for the plant, and make sure the EV71 vaccine product can be launched into the market without delay."

Dr. Yin continued, "We are on track to receive the GMP

certification for our mumps vaccine. We are very pleased to see that after more than two years of development, Sinovac Dalian's

first product is expected to be launched into the market in the coming months. This product will be the first mumps vaccine launched

domestically which is manufactured in the plant that is in compliance with the new GMP standards in China."

Dr. Yin concluded, "Our strong cash position and secured

credit line with a local commercial bank ensure our short-term investment needs on pipeline product development and facilities

to drive the short-term and medium-term growth."

Financial Review for Second Quarter Ended June 30, 2012

An analysis of sales and gross profit is as follows:

Core vaccine sales in the second quarter of 2012 increased 17.6%

to $9.4 million, compared to $8.0 million in the same period of 2011. Bilive vaccines sales were up 25.8% this quarter. Total sales

decreased 40.2%, compared to $15.7 million in the same period of last year that included $7.7 million of non-core government stockpile

pandemic flu H5N1 vaccine sales.

Gross profit margin of the core sales was 85.3%, compared to

84.2% in the same period of last year. The overall gross profit margin for the same period in 2011 was 68.8% since the prior year

quarter included a substantial proportion of non-core H5N1 vaccine sales that carried a lower gross margin. After deducting depreciation

of land use rights, amortization of licenses and permits, the respective overall gross margins were 84.8% and 67.9% for the second

quarters of 2012 and 2011.

Selling, general and administrative expenses for the second

quarter 2012 were $6.7 million, compared to $5.0 million in the same period of 2011. SG&A expenses as a percentage of second

quarter 2012 sales were 71.6%, compared to 31.8% during the second quarter of the prior year. Excluding the pandemic flu H5N1 vaccine

sales in prior year quarter, SG&A expenses as a percentage of sales were 71.6% and 62.5% for the current quarter and prior

year quarter respectively. The increased SG&A expenses was mainly due to the increased spending on sales and marketing programs

to penetrate the private-pay market, preparation costs for GMP upgrade, and validation efforts for the equipment at Changping site

Research and development expenses for the second quarter reached

$4.7 million, a $2.4 million increase over the same period in 2011, mainly due to the ongoing EV71 Phase III clinical trial. The

increase in research and development expenses in the second quarter over last year quarter was in line with 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 second quarter 2012 was $0.3 million, compared to $0.5 million for the same period of last year. The

lower depreciation and amortization expenses in the second quarter of 2012 was mainly benefited from lower amortization expenses

arising from fully amortized license and permits for the inactivated hepatitis A vaccine,

Total operating expenses for the second quarter 2012 were $10.3

million, compared to $7.6 million for the same quarter last year. The major drivers of the higher operating expense were the increased

research and development expenses as the Company advances its pipeline vaccine candidates, and increased SG&A expenses due

to more spending for core vaccines sales after offsetting from additional government grants recognized in income.

The Company's operating loss was $2.3 million for the second

quarter 2012, compared to $3.1 million operating income for the same quarter last year. The swing from operating income in the

last year's quarter to operating loss in this year's quarter was mainly due to the loss of the prior year contribution from government

stockpile H5N1 vaccine sales of $7.7 million and the $2.7 million change in operating expenses discussed above.

Loss before income taxes and non-controlling interests was $2.0

million, compared to the net income $3.4 million in the same quarter last year.

Net loss attributable to stockholders in the second quarter

2012 was $0.9 million, or $0.02 per basic and diluted share, compared to a net income of $1.3 million, or $0.02 per basic and diluted

share, for the same quarter last year.

As of June 30, 2012, cash and cash equivalents totaled $89.4

million, compared to $94.5 million as of March 31, 2012 and $104.3 million as of December 31, 2011, respectively. The Company

utilized $2.3 million and $5.4 million of its cash resources in the second quarter and first six months period, respectively, for

its ongoing clinical trial for its proprietary EV71 vaccine. The Company intends to allocate approximately an additional $3.7 million

during the second half of 2012 and $0.9 million in 2013 to fund the ongoing Phase III trial. Under the credit line arrangements

already in place that cover the ongoing capital needs of the Changping site development, $2.8 million was utilized in the second

quarter, with $5.0 million utilized during the first half of the year. Capital expenditure payments to complete the Changping site,

which are covered by the same credit line arrangements, are estimated at$17.2 million in the remaining quarters of 2012 and $1.7

Financial Review for the Six Months Period Ended June 30,

An analysis of sales and gross profit is as follows:

Core vaccines sales of the first six months period of 2012 increased

21.3% to $15.3 million, compared to $12.6 million in the same period of 2011. Bilive vaccines sales were up 45.9% during

the first six months of 2012. Total sales decreased 24.6% to $15.3 million, compared to $20.3 million in the same period of last

year, in which there was non-core government stockpile pandemic flu H5N1 vaccine sales of $7.7 million.

Gross profit margin of the core sales for the first six month

period of 2012 was 76.3%, compared to the 77.5% in the same period of last year. The overall gross profit margin of the same period

in 2011 was 68.2%. After deducting depreciation of land use rights, amortization of licenses and permits, the overall gross margin

was 75.9% and 66.9% for the first six months period of 2012 and 2011, respectively.

Selling, general and administrative expenses for the first six

months period of 2012 were $11.0 million, compared to $9.1 million in the same period of 2011. SG&A expenses as a percentage

of the 2012 first six months period sales was 71.9%, compared to 44.7% in the same period of 2011. Excluding the pandemic flu H5N1

vaccine sales in first six month of 2011, the SG&A expenses as a percentage of sales was 71.9% for both the first six months

period of 2012 and 2011.

Research and development expenses for the first six months period

of 2012 reached $12.0 million, a $7.6 million increase over the same period in 2011 which was mainly because of the ongoing EV71

Depreciation of property, plant and equipment and amortization