Full Press Release Details
Sinovac Reports Unaudited Second Quarter
2020 Financial Results
WIRE)-- Sinovac Biotech Ltd. (NASDAQ: SVA) ("Sinovac" or the "Company"), a leading provider of biopharmaceutical
products in China, announced today its unaudited financial results for the second quarter ended June 30, 2020.
Second Quarter and First Half
of 2020 Financial Summary
Mr. Weidong Yin, Chairman, President, and CEO of
Sinovac, commented, "While COVID-19 has had a negative impact on many businesses around the globe, Sinovac is navigating
this challenging environment effectively. Sales of our existing vaccine products are getting back on track as demonstrated by the
material sequential revenue improvement of our core vaccines. Additionally, we are making good strides with our Covid-19 vaccine
development. Our CoronaVac vaccine candidate shows great progress and we are pleased to be conducting clinical trials in China
and in coordination with other select countries. Going forward, we will maintain our focus on maximizing sales of our existing
vaccines, further develop our pipeline candidates as well as accelerate our development of a Covid-19 vaccine."
Entering into the second quarter, as many places in China eased
levels of control implemented to prevent the spread of COVID-19, vaccination services gradually resumed. Despite this, there was
still an impact caused by the outbreak. Vaccination centers had to restrict the number of outpatients and prioritized vaccination
under national immunization programs. The vaccination rate of the private market in China remains low, and the market size is lower
than the same period last year. Due to reduced cargo flights and restriction of travelling, Sinovac's overseas sales were
also reduced from the prior year period.
Pipeline Development
COVID-19 Vaccine - The Company initiated
the development of an inactivated vaccine against COVID-19 (named CoronaVac) on January 28th, 2020. Preclinical study results were
published in the peer-reviewed academic journal Science. On April 13th, 2020, the National Medical Products Administration
("NMPA") granted approval to conduct Phase I and II clinical trials in China. The Phase I and II trials commenced on
April 16, 2020 in Jiangsu Province, China. Preliminary phase I/II results of healthy adults aged 18 to 59 were recently reported.
There were no serious adverse events after vaccinating a total of 743 participants who volunteered in the trials, demonstrating
a good safety profile for the vaccine candidate. Over 90% seroconversion was observed in the Phase II clinical trial after a two-dose
vaccination 14 days apart. A Phase II study on elderly adults is being conducted, which will be followed by child and adolescent
groups. The Company expects to complete the Phase II trial by the end of 2020.
The Company has so far started two phase III clinical
trials, one in Brazil which started on July 21, 2020 and one in Indonesia which started on August 11, 2020.
Quadrivalent Influenza vaccine ("QIV")
- the China National Medical Products Administration (or NMPA) issued a product license for its quadrivalent Influenza
vaccine (or QIV) in June.
Sabin Inactivated Polio vaccine ("sIPV")
- An application for a product license for sIPV was submitted to the National Medical Products Administration in January
2019. The Company expects the license to be issued in the beginning of 2021.
23-valent pneumococcal polysaccharide
vaccine ("PPV") - Site inspection for PPV was completed in June 2020. The Company expects to commercially
launch PPV to the Chinese market in the beginning of 2021.
Unaudited Financial Results for Second Quarter 2020
| Summary of sales and gross profit (In $000 except percentage data) | 2020 Q2 | % of Sales | 2019 Q2 | % of Sales | ||||||||||||
| Hepatitis A vaccine - Healive | 18,508 | 35.4 | % | 13,870 | 21.7 | % | ||||||||||
| Hepatitis A&B vaccine - Bilive | - | 0.0 | % | - | 0.0 | % | ||||||||||
| Hepatitis vaccines subtotal | 18,508 | 35.4 | % | 13,870 | 21.7 | % | ||||||||||
| Influenza vaccine | (49 | ) | (0.1 | %) | - | 0.0 | % | |||||||||
| EV 71 vaccine - Inlive | 27,061 | 51.7 | % | 47,873 | 74.7 | % | ||||||||||
| Mumps vaccine | 5,099 | 9.7 | % | 2,302 | 3.6 | % | ||||||||||
| Varicella vaccine | 1,707 | 3.3 | % | - | 0.0 | % | ||||||||||
| Total sales | 52,326 | 100.0 | % | 64,045 | 100.0 | % | ||||||||||
| Cost of sales | 7,561 | 14.4 | % | 6,092 | 9.5 | % | ||||||||||
| Gross profit | 44,765 | 85.6 | % | 57,953 | 90.5 |
Sales for the second quarter of 2020 decreased 18.3% to $52.3
million from $64.0 million in the prior year period.
Gross profit in the second quarter of 2020 was $44.8
million, compared to a gross profit of $58.0 million in the prior year period. Gross margin was 85.6%, compared to 90.5% in the
Selling, general and administrative expenses in the
second quarter of 2020 decreased 1.3% to $29.8 million from $30.2 million in the prior year period.
R&D expenses in the second quarter of 2020 were $14.5 million,
compared to $6.3 million in the prior year period, as the Company continued to invest in its product pipeline, including sIPV and
PPV, as well as research and development of the COVID-19 vaccine.
Net loss in the second quarter of 2020 was $1.3 million,
compared to net income of $17.1 million in the prior year period.
Net loss attributable to common shareholders was $5.3 million,
or $0.05 loss per basic and diluted share, compared to net income attributable to common shareholders of $10.7 million, or $0.11
earnings per basic and diluted share, in the prior year period.
As the Company announced on February 22, 2019, its 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 into a trust for the benefit of the Company's shareholders who
did not trigger the Rights Plan. Excluding the effect of the "Trigger Event" and the newly issued common and preferred
shares, basic and diluted loss per share for the second quarter of 2020 would have been $0.05.
Non-GAAP adjusted EBITDA was $2.2 million in the second quarter
of 2020, compared to $23.0 million in the prior year period. Non-GAAP net loss in the second quarter of 2020 was $0.5 million,
compared to income of $18.0 million in the prior year period. Non-GAAP diluted loss per share in the second quarter of 2020 was
$0.04, compared to earnings of $0.12 per share in the prior year period. Non-GAAP diluted loss per share in the second quarter
of 2020 excluding the effect of the "Trigger Event" and the newly issued common and preferred shares would have been
$0.07. Reconciliations of non-GAAP measures to the nearest comparable GAAP measures are included at the end of this earnings announcement.
Unaudited Financial Results for First Half 2020
Summary of sales and gross profit
| (In $000 except percentage data) | 2020 H1 | % of 2019 | H1 Sales | % of Sales | ||||||||||||
| Hepatitis A vaccine - Healive | 24,629 | 36.3 | % | 24,402 | 24.2 | % | ||||||||||
| Hepatitis A&B vaccine - Bilive | - | 0.0 | % | - | 0.0 | % | ||||||||||
| Hepatitis vaccines subtotal | 24,629 | 36.3 | % | 24,402 | 24.2 | % | ||||||||||
| Influenza vaccine | 382 | 0.6 | % | - | 0.0 | % | ||||||||||
| EV 71 vaccine - Inlive | 33,719 | 49.8 | % | 73,225 | 72.8 | % | ||||||||||
| Mumps vaccine | 7,280 | 10.8 | % | 2,972 | 3.0 | % | ||||||||||
| Varicella vaccine | 1,707 | 2.5 | % | - | 0.0 | % | ||||||||||
| Total sales | 67,717 | 100.0 | % | 100,599 | 100.0 | % | ||||||||||
| Cost of sales | 9,542 | 14.1 | % | 9,871 | 9.8 | % | ||||||||||
| Gross profit | 58,175 | 85.9 | % | 90,728 | 90.2 | % |
In the first half of 2020, the COVID-19 outbreak
had an impact on the regular business of the Company. Domestic sales ceased due to the suspension of vaccinations by the Chinese
CDC in February 2020, and exports were disrupted due to cancellations of cargo flights and inflated freight costs. As a result,
the Company's sales for the first half of 2020 decreased 32.7% to $67.7 million from $100.6 million in the prior year period.
Gross profit in the first half of 2020 was $58.2
million, compared to a gross profit of $90.7 million in the prior year period. Gross margin was 85.9%, compared to 90.2% in the
Selling, general and administrative expenses in the
first half of 2020 decreased 14.0% to $46.3 million from $53.8 million in the prior year period. The Company incurred lower selling
expenses as the market was inactive due to the COVID-19 outbreak.
R&D expenses in the first half of 2020 were $20.1
million, compared to $10.8 million in the prior year period, as the Company continued to invest in its product pipeline, including
sIPV and PPV, as well as research and development of the COVID-19 vaccine.
Net loss in the first half of 2020 was $8.7 million, compared
to net income of $20.7 million in the prior year period.
Net loss attributable to common shareholders was $12.6 million,
or $0.13 loss per basic and diluted share, compared to net income attributable to common shareholders of $11.8 million, or $0.13
earnings per basic and diluted share, in the prior year period.
As the Company announced on February 22, 2019, its 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 into a trust for the benefit of the Company's shareholders who
did not trigger the Rights Plan. Excluding the effect of the "Trigger Event" and the newly issued common and preferred
shares, basic and diluted loss per share for the second quarter of 2020 would have been $0.14.
Non-GAAP adjusted EBITDA was a loss of $5.1 million
in the first half of 2020, compared to income of $29.8 million in the prior year period. Non-GAAP net loss in the first half of
2020 was $7.5 million, compared to income of $21.9 million in the prior year period. Non-GAAP diluted loss per share in the first
half of 2020 was $0.12, compared to earnings of $0.14 per share in the prior year period. Non-GAAP diluted loss per share in the
second quarter of 2020 excluding the effect of the "Trigger Event" and the newly issued common and preferred shares
would have been $0.12. Reconciliations of non-GAAP measures to the nearest comparable GAAP measures are included at the end of