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

Sinovac Reports Unaudited Second Quarter Financial Results

-- Conference call scheduled for Friday, August 15, 2014 at

BEIJING, Aug.14, 2014 /PRNewswire/ -- Sinovac Biotech Ltd. (NASDAQ:

SVA), a leading provider of biopharmaceutical products in China, announced today its unaudited second quarter and half year financial

results for the period ended June 30, 2014.

Second Quarter 2014 Financial Highlights

(compared to the second quarter 2013)

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

"While sales were impacted during the second quarter by short-term challenges from the external market environment, we are

continuing to grow our sales channels and make strong progress in the development of our pipeline vaccines."

"In July, we received the first tranche of our RMB 60 million

government grant to build a dedicated facility for the production of the EV71 vaccine, which is currently under review by the Center

for Drug Evaluation. During the second quarter, we received our clinical trial license for the pneumococcal polysaccharide vaccine

(PPV) from the CFDA and expect to begin trials later this year."

"Although we experienced decreased sales in the second

quarter, we remain confident in our ability to execute our proven sales and marketing strategies, and continue to develop new vaccines

that are both effective and safe. We expect these initiatives to meaningfully contribute to our performance as market conditions

improve." Mr. Yin concluded.

Second Quarter 2014 Business Highlights

Public Tenders Sinovac has been selected by the

Beijing Health Bureau as the sole supplier of inactivated hepatitis A vaccine in pre-filled syringe dosage to the Expanded Program

of Immunization (EPI) for Beijing. The tender is valued at approximately RMB 16 million. The vaccines purchased by the Beijing

Health Bureau will be used for the period from 2014 to 2016. The Company expects to begin delivery in the coming months.

Additionally, Sinovac has also been selected by the Beijing

Centers for Disease Control and Prevention to be a supplier of the seasonal influenza vaccine to the citizens of Beijing for 2014.

The Company expects to begin delivery in the third quarter of 2014.

International Sales to Mexico Sinovac obtained its

commercialization license for Anflu in Mexico late last year. In early July, the Company delivered its first order of 150,000 doses

of Anflu to Mexico, as it continues its efforts in international market expansions.

PPV The Company received clinical trial approval

for its PPV in May. Sinovac has selected a site for the clinical trial and its draft proposal is currently under expert review.

The Company expects clinical trials to begin by the end of 2014, following approval by an ethics committee.

Other Operation Updates

Government Grant In April, Sinovac received approval

for a RMB 60 million government grant from China's Ministry of Finance, National Development and Reform Commission, Ministry of

Industry and Information Technology, and National Health and Family Planning Commission for construction of the Company's dedicated

EV71 vaccine production facility. Sinovac received the first RMB 20 million of the grant in July. The remainder will be provided

once construction and approval criteria are met.

VAT Rate Reduction The value added tax (VAT) rate

applied to the sales of Sinovac's vaccine products has been reduced to 3% from 6%, as authorized by the Ministry of Finance and

State Administration of Taxation of China. The reduced VAT rate was effective July 1, 2014, and therefore did not impact second

quarter results. Going forward, the reduced VAT rate will contribute to an improvement in the profitability of the Company's vaccines

Unaudited Financial Results for Second Quarter

In the second quarter 2014, total sales were $12.1 million,

a decrease of 30.7% from $17.5 million during the same period in 2013. This decrease was primarily due to softer demand in the

private vaccine market. China's CDCs have been also more conservative in their vaccination programs. Nevertheless, the Company

achieved record sales in the second quarter of 2013, which resulted in a higher basis for year-over-year comparison.

Gross profit was $9.1 million in the second quarter 2014, compared

to $13.6 million in the prior year period. Gross margin decreased to 75.0% from 77.9% in the prior year period. The slight decrease

in gross margin is attributable to idle capacity in the Company's influenza facility during the second quarter, which was charged

to cost of goods sold.

Selling, general and administrative expenses for the second

quarter 2014 were $8.6 million, compared to $8.8 million in the same period of 2013.

R&D expenses for the second quarter of 2014 were $3.3 million,

a $1.2 million increase over the same period in 2013. These expenses are primarily related to the continued advancement of pipeline

vaccine candidates, including sIPV, EV71, PPV, and varicella vaccine.

Net loss attributable to common stockholders for the second

quarter of 2014 was $2.2 million, or $ (0.04) per basic and diluted share, compared to a net income attributable to common stockholders

of $1.3 million, or $0.02 per basic and diluted share, in the same period last year.

Unaudited Financial Results for First Half of 2014

Total sales for the first half of 2014 were $25.6 million, a

decrease of 6.8% from $27.5 million in the same period of 2013. Sales for the first half of 2014 were impacted by decreased sales

of the Company's hepatitis A vaccine, Healive, as a result of the challenging environment in the private-pay market.

Gross profit for the first half of 2014 was $19.3 million, a

decrease of 6.4% from $20.7 million in the same period of 2013. Gross margin was 75.4% in the first half of 2014, compared to 75.1%

in the same period of 2013.

Selling, general and administrative expenses for the first half

of 2014 were $16.4 million, compared to $15.9 million for the same period of 2013.

R&D expenses in the first half of 2014 were $5.0 million,

compared to $3.9 million in the same period of 2013. These expenses are primarily related to the continued advancement of pipeline

Net loss attributable to stockholders in the first half of 2014

was $2.2 million or $(0.04) per basic and diluted share, compared to a net loss of $0.7 million, or $(0.01) per basic and diluted

share, in the same period of 2013.

As of June 30, 2014, cash and cash equivalents totaled $89.6

million, compared to $107.2 million as of December 31, 2013. Net cash used in operating activities was $11.4 million during the

first half of 2014. Net cash used in investing activities was $5.7 million, which was primarily used for payment of property, plant

and equipment for the Company's Changping facility. Net cash provided by financing activities was $0.9 million during the first

half of 2014, including loan proceeds of $8.9 million and loan repayment of $8.5 million. As of June 30, 2014, the Company

had $36.0 million of bank loans due within one year. Sinovac's cash and cash equivalents position of $89.6 million is sufficient

to meet both these loan repayment obligations as well as the Company's operational requirements.

Conference Call Details

Sinovac will host a conference call on Friday, August 15, 2014

at 8:00 a.m. ET (August 15, 2014 at 8:00 p.m. China Standard Time) to review the Company's financial results and provide an update

on recent corporate developments. To access the conference call, please dial 1-877-407-9039 (USA) or 1-201-689-8470 (International).

A replay of the call will be available from 11:00 a.m. ET on August 15, 2014 through August 29, 2014. To access the replay, please

dial 1-877-870-5176 (USA) or 1-858-384-5517 (International) and reference the replay pin number 13587706.

A live audio webcast of the call will also be available on the

Investor Relations section of the Company's website at www.sinovac.com. A webcast replay will be available on the Company's website

for 30 days following the call, beginning August 15, 2014.

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 hepatitis A and B, seasonal influenza, H5N1 pandemic influenza

(avian flu), H1N1 influenza (swine flu), mumps and canine rabies. 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. Sinovac

has filed a new drug application with the China Food & Drug Administration for its proprietary enterovirus 71 vaccine, having

been proven effective in preventing hand, foot and mouth disease in infants and children during its Phase III clinical trial.

The Company is currently developing a number of new products including a Sabin-strain inactivated polio vaccine, pneumococcal