Sinovac Reports Unaudited First Quarter 2013 Financial Results

        Sinovac Reports Unaudited First Quarter 2013 Financial Results

-Conference call scheduled for Tuesday, May 28, 2013 at 8:00 AM EDT -

PR Newswire

BEIJING, May 28, 2013

BEIJING, May 28, 2013 /PRNewswire/ -- Sinovac Biotech Ltd. (NASDAQ: SVA), a
leading provider of biopharmaceutical products in China, announced today its
unaudited first quarter financial results for the period ended March 31, 2013.

First Quarter 2013 Financial Highlights (Year-over-year comparisons to first
quarter 2012)

  oTotal sales increased by 68% to $10.1 million.
  oGross profit increased by 90% to $7.1 million and gross profit margin
    percentage increased to 70% from 62%.
  oNet loss attributable to common stockholders was $2.0 million, or $0.04
    per basic and diluted share, compared to a net loss of $5.6 million, or
    $0.10 per basic and diluted share, for the first quarter 2012.
  oCash and cash equivalents totaled $91.6 million as of March 31, 2013,
    compared to $91.2 million as of December 31, 2012.

Business Highlight:

  oIn January 2013, Sinovac completed a pre-clinical study for its varicella
    vaccine candidate and submitted an application to the China Food and Drug
    Administration (CFDA) to commence clinical trials.
  oIn April, Sinovac Biotech Co., Ltd. or Sinovac Beijing, the main operating
    subsidiary company of Sinovac, obtained a certificate of Good
    Manufacturing Practices for Pharmaceutical Products (GMP certificate) from
    the China Food and Drug Administration (CFDA) for its proprietary
    vaccines, its Haidian bulk production plants, and its Changping filing and
    packaging facility. The GMP certificate covers Sinovac Beijing's vaccines
    commercialized in China and approved for stockpiling, inclusive of the
    inactivated hepatitis A vaccine (human diploid cell); Inactivated
    hepatitis A and B combined vaccine; influenza vaccine (split virion),
    inactivated; H5N1 pandemic influenza vaccine (inactivated, adjuvanted);
    pandemic influenza vaccine (split virion, adjuvanted); and H1N1 influenza
    A vaccine (split virion, inactivated). The GMP certificate is valid for
    five years expiring on April 17, 2018.

Dr. Weidong Yin, Chairman, President and CEO, commented, "I am very pleased
with the sales performance of our hepatitis A vaccine in the first quarter
2013, which is the primary driver to the total sales growth of 68%
year-over-year. In the first quarter, the mumps vaccine manufactured by our
Dalian site was commercialized, which also contributed to the sales growth in
the first quarter."

Dr. Yin continued, "As our commercialized vaccines keep growing, our near-term
pipeline product, the enterovirus 71 (EV71) vaccine, realized another
significant milestone. Enterovirus 71 (EV71) vaccine remains to be a
significant unmet medical need across China and Asia because of the widespread
outbreaks of hand, foot and mouth disease (HFMD) caused by EV71 and
significant pediatric mortality rates. In 2012, over 2 million cased were
reported and over 500 fatal cased published by China National Health and
Family Planning Commission ( or "NHFPC", previously named China Ministry of
Health). We announced the approximately 95% efficacy rate of our proprietary
EV71 vaccine from the phase III clinical trial on this vaccine. Based on the
study results, our EV71 vaccine candidate has a good safety, immunogenicity
and efficacy profile. The next step is to file the new drug application to
Beijing Drug Administration in order to apply for the new drug certificate and
the production license. And it is expected to launch in 2014."

"We are also committed to advance our other vaccine development pipeline. We
have a few pipeline products, including varicella vaccine, pneumococcal
vaccines and rubella vaccine that are under the evaluation by CFDA for
granting a clinical trial approval. We believe the advancement of these
product development programs will maintain our sustainable growth in long

Financial Review for First Quarter Ended March 31, 2013

An analysis of sales and gross profit is as follows:

In USD'000              2013Q1 % of Sales 2012Q1 % of Sales Change %
Hepatitis A- Healive   6,165  61.3%      1,612  27.0%      282.4%
Hepatitis A&B- Bilive  2,995  29.8%      4,015  67.2%      -25.4%
Hepatitis vaccines      9,160  91.1%      5,627  94.2%      62.8%
Influenza vaccines      294    3.0%       314    5.3%       -6.4%
Core sales              9,454  94.1%      5,941  99.5%      59.1%
Animal vaccine          13     0.1%       32     0.5%       -59.4%
Mumps vaccines          585    5.8%       -      -          -
Total sales             10,052 100%       5,973  100%       68.3%
Cost of goods sold      2,992  29.8%      2,255  37.8%      32.7%
Gross profit            7,060  70.2%      3,718  62.2%      89.9%

Total sales for the first quarter 2013 increased by 68% to $10.1 million, from
$6.0 million in first quarter of 2012. The total sales growth was primarily
driven by sales increase in Healive which was due to the favorable competitive
landscape. The mumps vaccine manufactured by our Dalian site was firstly
commercialized in the current quarter that also contributed to the total sales
growth. The total sales growth was partly offset by the decrease of Bilive

Gross profit of the first quarter 2013 increased by 90% to $7.1 million from
$3.7 million in the same period of 2012. Gross profit margin percentage
increased to 70% from 62% in 2012 with Healive sales represented 61% of the
current quarter sales compared to 27% in same period of 2012. The main
reasons for the increased gross profit margin in first quarter 2013 were the
lower unit cost of Healive resulted from higher production volume in response
to increased sales and the higher sales mix of Healive vaccines in syringe
sold at premium price.

Selling, general and administrative expenses for the first quarter 2013 were
$6.4 million, compared to $4.3 million in the same period of 2012. SG&A
expenses as a percentage of the sales in first quarter of 2013 were 63%,
compared to 72% for the same quarter of prior year. The increase in SG&A
expenses was mainly due to increased selling activities and costs that
resulted in sales increases in hepatitis A and new mumps vaccines; Material
and labor costs mainly for the ongoing validation activities to prepare for
GMP certification for the EV71 manufacturing facilities in the Changping site;
And higher operating, amortization and utilities costs in current quarter in
Changping site, which was under renovation in same period of prior year.

R&D expenses in the first quarter of 2013 were $1.8 million, a significant
decrease from $7.3 million in the same period of 2012 as the EV71 vaccine
Phase III clinical trial was approaching to the end stage in current quarter
where it just started in the same period of 2012. Also, since mumps was
commercialized, no research and development expenses in current quarter while
it was being developed in the same period of 2012.

Depreciation of property, plant and equipment and amortization of licenses and
permits for the first quarter of 2013 was $0.8 million, compared to $0.3
million for the same period of prior year. Depreciation increased because more
assets were put into service at the Changping facility since the last quarter
of 2012.

Net loss attributable to stockholders in the first quarter of 2013 was $2.0
million, or $0.04 per basic and diluted share, compared to a net loss of $5.6
million, or $0.10 per basic and diluted share, for the same quarter of last

As of March 31, 2013, cash and cash equivalents totaled $91.6 million,
compared to $91.2 million as of December 31, 2012. Net cash used in operating
activities was $5.6 million in the first quarter of 2013. Net cash of $2.1
million was used in investing activities which was mainly used for payment and
prepayment for acquiring property, plant and equipment for Changping facility.
Net cash provided by financing activities was $8.0 million in the first
quarter of 2013, including loan proceeds of $7.5 million drawn under credit
facilities already in place supporting EV71 vaccine commercialization and
daily operations.When appropriate, the Company will seek new sources of
financing to commercialize other pipeline products.

Conference Call Details

The Company will host a conference call on Tuesday, May 28, 2013 at 8:00 a.m.
EDT (May 28, 2013 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 1-877-407-4018 (USA) or 1-201-689-8471
(International). A replay of the call will be available from 11 a.m. EDT on
May 28, 2012 to June 11, 2013 at midnight. To access the replay, please dial
1-877-870-5176 (USA) or 1-858-384-5517 (International) and reference the
replay pin number 414862.

A live audio webcast of the call will also be available from the investors
section on the corporate web site at A webcast replay can be
accessed on the corporate website beginning May 28, 2013 and the replay will
remain available for 30 days.

About Sinovac

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 including hepatitis A and B,
seasonal influenza, H5N1 pandemic influenza (avian flu), H1N1 influenza (swine
flu) and mumps, as well as animal rabies vaccine for canines. The Company
recently concluded the phase III clinical trial for enterovirus 71 (against
hand, foot and mouth disease). In 2009, Sinovac was the first company
worldwide to receive approval for its H1N1 influenza vaccine, Panflu.1, and
has manufactured it for the Chinese Central Government, pursuant to the
government-stockpiling program. The Company is also the only supplier of the
H5N1 pandemic influenza vaccine to the government-stockpiling program. Sinovac
is developing a number of new pipeline vaccines including vaccines for
pneumococcal polysaccharides, pneumococcal conjugate, varicella and rubella.
Sinovac sells its vaccines mainly in China and exports selected vaccines to
Mongolia, Nepal, and the Philippines. Sinovac has also been granted a license
to commercialize seasonal flu vaccine in Mexico.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are
made under the "safe harbor" provisions of the U.S. Private Securities
Litigation Reform Act of 1995. These forward-looking statements can be
identified by words or phrases such as "will," "expects," "anticipates,"
"future," "intends," "plans," "believes," "estimates" and similar statements.
Among other things, the business outlook and quotations from management in
this press release contain forward-looking statements. Statements that are not
historical facts, including statements about Sinovac's beliefs and
expectations, are forward-looking statements. Forward-looking statements
involve inherent risks and uncertainties. A number of important factors could
cause actual results to differ materially from those contained in any
forward-looking statement. Sinovac does not undertake any obligation to update
any forward-looking statement, except as required under applicable law.

Helen Yang/Chris Lee
Sinovac Biotech Ltd.
Tel: +86-10-8279-9871/9659
Fax: +86-10-6296-6910

Stephanie Carrington
The Ruth Group
Tel: +1-646-536-7017

Aaron Estrada
The Ruth Group
Tel: +1-646-536-7028

Consolidated Balance Sheets
March 31,2013
(Expressed in U.S. Dollars)
                                         March 31,2013 December 31,2012
Cash and cash equivalents                91,562,252    91,240,956
Accounts receivable                      27,343,747    23,440,135
Inventories                              12,216,885    10,529,476
Prepaid expenses and deposits            934,590       1,072,078
Other assets                             1,455,089     -
Total current assets                     133,512,563   126,282,645
Property, plant and equipment            69,028,391    69,171,601
Land-use right                           10,876,860    10,911,782
Long-term inventory                      -             28,692
Long-term prepaid expenses               245,454       289,766
Deposits for acquistion of equipment     623,601       483,278
Deferred tax asset                       444,481       445,589
License and permit                       1,053,253     1,149,914
Total assets                             215,784,603   208,763,267
Current liabilities
Loans payable                            5,753,714     3,328,590
Accounts payable and accrued liabilities 26,862,950    24,777,808
Income tax payable                       239,517       238,775
Deferred revenue                         213,821       1,378,425
Deferred research grants                 432,437       431,097
Total current liabilities                33,502,439    30,154,695
Deferred research grants                 4,433,927     4,068,602
Loans payable                            36,218,996    31,181,235
Due to related party                     3,240,162     3,230,125
Deferred revenue - H5N1                  10,826,303    10,693,247
Total long-term liabilities              54,719,388    49,173,209
Total liabilities                        88,221,827    79,327,904
Commitments and contingencies
Stockholder's equity
Common stock                             55,099        55,092
Additional paid in capital               106,506,367   106,245,934
Accumulated other comprehensive income   11,975,712    11,770,927
Dedicated reserves                       11,808,271    11,808,271
Accumulated deficit                      (14,164,251)  (12,156,414)
Total stockholders' equity               116,181,198   117,723,810
Non-controlling interest                 11,381,578    11,711,553
Total equity                             127,562,776   129,435,363
Total equity and liability               215,784,603   208,763,267

Consolidated Statements of Operations and Comprehensive Income (loss)
March 31,2013
(Expressed in U.S. Dollars)
                                                   Jan-Mar 2013 Jan-Mar 2012
Sales                                             10,052,215    5,973,467
Cost of sales(exclusive of depreciation of land
use right and amortization of licenses and permits 2,991,864     2,255,289
of $103,762 and $54,979 in the first quarter of
2013 and 2012 respectively)
Gross profit                                      7,060,351     3,718,178
Selling, general and administrative expenses      6,363,357     4,320,289
Provision for doubtful account                    282,190       -
Research and development expenses                 1,847,607     7,342,172
Depreciation of property, plant and equipment and 772,146       307,443
amortization of licenses and permits
Loss on disposal and Impairment of equipment      (2,401)       -
Government grants recognized in income            -             (71,204)
Total operating expenses                          9,262,899     11,898,700
Operating income                                  (2,202,548)   (8,180,522)
Interest and financing expenses                  (663,087)     (214,320)
Interest income                                   441,318       597,671
Other income and expenses                         60,762        118,078
Loss before income taxes and Minority interest  (2,363,555)   (7,679,093)
Income taxes -current                             -             2,902
Income taxes -deferred                            (2,489)       -
Income tax expense - total                        (2,489)       2,902.00
Consolidated Net Loss                            (2,366,044)   (7,676,191)
Net Income attributable to the noncontrolling      (358,207)     (2,063,136)
Net Income attributable to stockholders           (2,007,837)   (5,613,055)
Net Loss                                          (2,366,044)   (7,676,191)
Foreign currency translation adjustment            233,709       646,783
Total comprehensive income (loss)                 (2,132,335)   (7,029,408)
 Less: comprehensive (income) loss attributable   (329,283)     (1,979,589)
to non-controlling interests
Comprehensive income (loss) attributable to       (1,803,052)   (5,049,819)
Weighted average number of shares of
 Basic                                           55,097,228    54,608,919
 Diluted                                          55,097,228    54,608,919
Loss per share
 Basic                                           (0.04)        (0.10)
 Diluted                                         (0.04)        (0.10)

Consolidated Statements of Cash Flow
March 31,2013
(Expressed in U.S. Dollars)
                                                     Jan-Mar 2013 Jan-Mar 2012
Cash flows from(used in) operating activities:
Net income(loss)                                    (2,366,044)  (7,676,191)
Deferred income tax                                 2,489        (2,902)
Stock-based compensation                            75,839       80,175
Inventory provison                                  -            85,864
Provision for (recovery of) doubtful allowance      282,190      -
Disposal of Fixed assets                            436,739      -
Fixed assets impairment                             -            -
Unrealized foreign exchange and gain                -            (210,581)
Research and development expenditures qualified     -            (79,113)
forgovernment grant
Depreciation of property, plant and equipment,     1,698,367    1,252,550
Deferred government grants recognized as income     -            (71,204)
Accreation expenses                                 -            68,391
Changes in assets and liabilities:                  -            -
Accounts receivable, trade                          (3,777,167)  (1,285,806)
Inventory                                          (3,075,056)  (1,319,475)
Income tax payable                                  -            12,210
Prepaid expenses and deposits                       (143,749)    782,156
Defer revenue                                       (1,066,999)  (99,517)
Accounts payables and accrued liabilities           2,364,764    (3,404,810)
Net cash provided by operating activities           (5,568,627)  (11,868,253)
Cash flows from financing activities
Loan proceed                                        7,479,781    2,023,939
Loan Payments                                       -            -
Proceeds from issuance of common stock              164,000      3,040
Proceed from shares subscribed                      -            -
Exercise of stock options                           10,880       47,360
Government grant received                           303,626      -
Repayment from (loan to) non-controlling            -            (800,717)
shareholder of Sinovac Beijing
Repayment from (loan to) non-controlling            -            3,175,266
shareholder of Sinovac Dalian
Net cash provided by financing activities           7,958,287    4,448,888
Cash flows from investing activities:
Proceeds from disposal of equipment                 -            -
Proceeds from redemption of short-term investments  -            -
Purchase of short-term investments                  -            -
Prepayments for acquisition of equipment            (138,554)    -
Acquisition of property, plant and equipment        (2,021,953)  (2,960,461)
Net cash used in investing activities               (2,160,507)  (2,960,461)
Exchange gain on cash and cash equivalents          92,143       582,778
Increase in cash and cash equivalents               321,296      (9,797,048)
Cash and cash equivalents, beginning of year        91,240,956   104,286,695
Cash and cash equivalents, end of year              91,562,252   94,489,647

SOURCE Sinovac Biotech Ltd.

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