2014

3SBio Inc. Announces Unaudited Second Quarter and First Half 2012 Results Q2 Net revenues grew 31.0% year-on-year to RMB178.3 million (US$28.1 million)

Reiterates 2012 net revenues guidance of US$99-US$108 million

Anti-TNF innovative new drug application submitted to SFDA

Acquired rights to metadoxine, a treatment for alcoholic liver disease

SHENYANG, China, Aug. 14, 2012 /PRNewswire-Asia/ -- 3SBio Inc. (NASDAQ: SSRX) ("3SBio" or "the Company"), a leading China-based biotechnology company focused on researching, developing, manufacturing and marketing biopharmaceutical products, today announced its unaudited financial results for the second quarter and first half ended June 30, 2012.

Second Quarter 2012 Financial Highlights:
  • Total net revenues increased by 31.0% over the second quarter of 2011 to RMB178.3 million (US$28.1 million), compared to RMB136.1 million (US$21.1 million) in the second quarter of 2011.
  • Operating income was RMB43.8 million (US$6.9 million), compared to operating income of RMB30.2 million (US$4.7 million) in the second quarter of 2011.
  • GAAP Net income was RMB30.6 million (US$4.8 million), compared to net income of RMB30.4 million (US$4.7 million) in the second quarter of 2011. Non-GAAP Net income was RMB41.9 million (US$6.6 million), compared to net income of RMB30.4 million (US$4.7 million) in the second quarter of 2011.
  • GAAP Net income per American Depositary Share ("ADS") on a fully-diluted basis was RMB1.34 (US$0.21) compared to net income per ADS on a fully-diluted basis of RMB1.34 (US$0.21) for the second quarter of 2011. Non-GAAP Net income per American Depositary Share ("ADS") on a fully-diluted basis was RMB1.84 (US$0.29) compared to net income per ADS on a fully-diluted basis of RMB1.34 (US$0.21) for the second quarter of 2011.
  • Cash, cash equivalents and time deposits were RMB818.0 million (US$128.8 million, including restricted cash of RMB0.7 million) at June 30, 2012.

First Half 2012 Financial Highlights:

  • Total net revenues increased by 27.9% over the first half of 2011 to RMB325.4 million (US$51.2 million), compared to RMB254.4 million (US$39.4 million) in the first half of 2011.
  • Operating income was RMB79.3 million (US$12.5 million), compared to operating income of RMB55.4 million (US$8.6 million) in the first half of 2011.
  • GAAP net income was RMB63.2 million (US$9.9 million), compared to net income of RMB52.5 million (US$8.1 million) in the first half of 2011. Non-GAAP Net income was RMB74.5 million (US$11.7 million), compared to net income of RMB52.5 million (US$8.1 million) in the first half of 2011.
  • GAAP net income per American Depositary Share ("ADS") on a fully-diluted basis was RMB2.79 (US$0.44) compared to net income per ADS on a fully-diluted basis of RMB2.34 (US$0.36) for the first half of 2011. Non-GAAP net income per American Depositary Share ("ADS") on a fully-diluted basis was RMB3.29 (US$0.52) compared to net income per ADS on a fully-diluted basis of RMB2.34 (US$0.36) for the first half of 2011.

Second Quarter 2012 Business Highlights

Operations

  • EPIAO, the Company's flagship injectable recombinant human erythropoietin (EPO) product, demonstrated strong growth with net revenue in the second quarter of 2012 rising 25.4% to RMB100.5 million (US$15.8 million), compared to RMB80.2 million (US$12.4 million) in the second quarter of 2011.
  • Net revenues for TPIAO, the Company's novel recombinant human thrombopoietin (TPO) product, increased by 32.3% to RMB56.0 million (US$8.8 million) in the second quarter of 2012, compared to RMB42.3 million (US$6.5 million) in the second quarter of 2011.
  • Net revenues for Iron Sucrose Supplement increased by 59.6% to RMB9.9 million (US$1.6 million) in the second quarter of 2012, compared to RMB6.2 million (US$1.0 million) in the second quarter of 2011.
  • Net export revenues increased by 85.0% to RMB8.3 million (US$1.3 million), accounting for 4.7% of total net revenue in the second quarter of 2012, compared to RMB4.5 million (US$0.7 million), or 3.3% of net revenues in the second quarter of 2011.  The increase was partly attributable to increased sales to Thailand and Egypt.
  • The SFDA approved our application to conduct the China arm of the multi-center phase III trial of voclosporin, a new generation calcineurin inhibitor licensed from Isotechnika Pharma Inc. ("Isotechnika") (TSX: ISA).  According to the approved protocol, this will be a phase |III, randomized, multi-center, concentration-controlled comparison study on renal transplant patients. Patient enrollment is scheduled from the third quarter of 2012. 
  • 3SBio purchased the manufacturing technology, trademark and exclusive distribution rights for metadoxine, a treatment for alcoholic liver disease from Shandong Qidu Pharmaceutical Co., Ltd for total consideration of RMB12 million. Metadoxine will be sold through the same distribution channels as our legacy products, Intefen and Inleusin. 
  • An innovative new drug application ("IND") was submitted to the SFDA for sss07, a humanized anti-TNF monoclonal antibody.. All non-clinical studies of sss07 have been completed.  Pre-clinical results showed a promising pharmacokinetic profile which could improve treatment options for rheumatoid arthritis patients.  Phase 1 trials are expected to begin in 2015, subject to regulatory approval.

Dr. Jing Lou, chief executive officer of 3SBio, commented: "We are pleased with our improved operating performance over the past quarter, which reflects the investments made in recent years to expand the reach and effectiveness of our sales, marketing and distribution platform. We reiterate our full year net revenue guidance of between US$99-108 million".  He continued: "This past quarter we launched sales of metadoxine, a SFDA- approved treatment for alcoholic liver disease, and we continue to seek other opportunities to enhance our portfolio of marketable medicines that target large unmet needs in China.  Our R&D pipeline continues to move forward with the submission to the SFDA of an innovative new drug application for sss07, an anti-TNF monoclonal antibody being developed for the treatment of rheumatoid arthritis, a chronic disease which afflicts an estimated 1% of the world's population. We are also making preparations to begin patient recruitment in the third quarter for the China arm of the phase III multi-center trial for Isotechnika's voclosporin, an innovative anti-rejection treatment for renal transplant patients." 

Three Months Ended June 30, 2012 Unaudited Financial Results

Net revenues. Net revenues increased by 31.0% to RMB178.3 million (US$28.1 million) for the second quarter of 2012 from RMB136.1 million (US$21.1 million) for the same period in 2011. This increase was largely due to continued strong sales of EPIAO and TPIAO which grew by 25.4% and 32.3%, respectively, over the same period in 2011. TPIAO remained 3SBio's second largest revenue contributor in the quarter, accounting for 31.4% of total net revenues. Export sales increased by 85.0% year-on-year to RMB8.3 million (US$1.3 million), and revenues from Iron Sucrose rose 59.6% year-on-year to RMB9.9 million (US$1.6 million).

Gross profit. As a result of continued sales growth from key products, gross profit for the second quarter of 2012 increased by 30.9% to RMB159.0 million (US$25.0 million) from RMB121.5 million (US$18.8 million) for the same period in 2011. Gross margins remained the same, 89.2% for the second quarter of 2012 and for the same period in 2011.

Operating expenses. Operating expenses were RMB115.2 million (US$18.1 million) for the second quarter of 2012, representing an increase of 26.2% from RMB91.3 million (US$14.1 million) for the same period in 2011.

  • Research and development ("R&D") costs.  R&D costs for the second quarter of 2012 were RMB22.5 million (US$3.5 million), or 12.6% of net revenues, compared to RMB10.7 million (US$1.7 million), or 7.8% of net revenues, for the same period in 2011. The increased R&D expenses were attributable to the IND submission for sss07, an anti-TNF monoclonal antibody, and manufacturing process development for pegsiticase, a treatment for refractory gout. 
  • Sales, marketing and distribution expenses.  Sales, marketing and distribution expenses for the second quarter of 2012 were RMB73.7 million (US$11.6 million), or 41.3% of net revenues, compared to RMB65.3 million (US$10.1 million), or 48.0% of net revenues, for the same period in 2011. The decline in sales, marketing and distribution expenses as a percentage of net sales was mainly attributable to improved sales force productivity following the expansion of the sales force in 2010 and 2011.
  • General and administrative expenses. General and administrative expenses for the second quarter of 2012 were RMB19.3 million (US$3.0 million), or 10.8% of net revenues, compared to RMB15.4 million (US$2.4 million), or 11.3% of net revenues for the same period in 2011.

Operating income.  Operating income was RMB43.8 million (US$6.9 million) for the second quarter of 2012, a 45.2% increase from operating income of RMB30.2 million (US$4.7 million) for the same period in 2011. Operating margin for the second quarter of 2012 was 24.7%, a 2.6% increase from operating margin of 22.1% for the same period in 2011. The increase in operating margin is primarily due to a decrease in sales, marketing and distribution expenses as a percentage of net sales.

Interest income. Net interest income was RMB7.2 million (US$1.1 million) for the second quarter of 2012, compared to RMB5.1 million (US$0.8 million) for the same period in 2011. The increase is primarily due to the combined effect of increased time deposits and higher interest rates on time deposits.

Net income. GAAP net income was RMB30.6 million (US$4.8 million) for the second quarter of 2012, a 0.8% increase over net income of RMB30.4 million (US$4.7 million) for the same period in 2011. GAAP net income per ADS on a fully-diluted basis for the second quarter of 2012 was RMB1.34 (US$0.21), unchanged from the same period in 2011. GAAP net margin for the second quarter of 2012 was 17.2%, a 5.1% decrease over net margin of 22.3% for the same period in 2011. 

Non-GAAP net income was RMB41.9 million (US$6.6 million) for the second quarter of 2012, a 38.1% increase over net income of RMB30.4 million (US$4.7 million) for the same period in 2011. Non-GAAP net income per ADS on a fully-diluted basis for the second quarter of 2012 increased to RMB1.84 (US$ 0.29) compared to RMB1.34 (US$ 0.21) for the same period in 2011. Non-GAAP net margin for the second quarter of 2012 was 23.6%, a 1.3% increase over net margin of 22.3% for the same period in 2011. The difference between GAAP and non-GAAP net income is due to a 60% writedown in available-for-sale securities, following a decline deemed  to be other than temporary in the market value of 3SBio's US$4.5 million investment in the common shares of Isotechnika (TSX:ISA).

Six Months Ended June 30, 2012 Unaudited Financial Results

Net revenues. Net revenues increased by 27.9% to RMB325.4 million (US$51.2 million) for the first half of 2012 from RMB254.4 million (US$39.4 million) for the same period in 2011. This increase was largely due to continued strong sales of EPIAO and TPIAO which grew by 23.7% and 28.0%, respectively, over the same period in 2011. TPIAO remained 3SBio's second largest revenue contributor in the first half, accounting for 31.5% of total net revenues. Export sales increased by 82.7% year-on-year to RMB16.0 million (US$2.5 million), and revenues from Iron Sucrose rose 51.3% year-on-year to RMB16.7 million (US$2.6 million).

Gross profit. As a result of continued sales growth from key products, gross profit for the first half of 2012 increased by 29.9% to RMB291.5 million (US$45.9 million) from RMB224.4 million (US$34.7 million) for the same period in 2011. Gross margin increased by 1.4% to 89.6% for the first half of 2012 from 88.2% for the same period in 2011. The increase was mainly attributable to improved manufacturing productivity of the new plant.

Operating expenses. Operating expenses were RMB212.2 million (US$33.4 million) for the first half of 2012, representing an increase of 25.6% from RMB169.0 million (US$26.1 million) for the same period in 2011.

  • Research and development ("R&D") costs.  R&D costs for the first half of 2012 were RMB33.3 million (US$5.2 million), or 10.2% of net revenues, compared to RMB18.4 million (US$2.9 million), or 7.2% of net revenues, for the same period in 2011. The increased R&D expenses were attributable to the IND submission for sss07, an anti-TNF monoclonal antibody and manufacturing process development for pegsiticase, a treatment for refractory gout. 
  • Sales, marketing and distribution expenses.  Sales, marketing and distribution expenses for the first half of 2012 were RMB143.4 million (US$22.6 million), or 44.1% of net revenues, compared to RMB120.7 million (US$18.7 million), or 47.4% of net revenues, for the same period in 2011.  The decline in sales, marketing and distribution expenses as a percentage of net sales is mainly attributable to improved sales force productivity following the expansion of the sales force in 2010 and 2011.
  • General and administrative expenses. General and administrative expenses for the first half of 2012 were RMB36.2 million (US$5.7 million), or 11.1% of net revenues, compared to RMB31.0 million (US$4.8 million), or 12.2% of net revenues for the same period in 2011.

Operating income.  Operating income was RMB79.3 million (US$12.5 million) for the first half of 2012, a 43.0% increase from operating income of RMB55.4 million (US$8.6 million) for the same period in 2011. Operating margin for the first half of 2012 was 24.4%, a 2.5% increase from operating margin of 21.9% for the same period in 2011. The increase in operating margin is primarily due to lower sales, marketing & distribution expenses as a percentage of net sales.     

Interest income. Net interest income was RMB12.6 million (US$2.0 million) for the first half of 2012, compared to RMB8.7 million (US$1.4 million) for the same period in 2011. The increase is primarily due to the combined effect of increased time deposits and higher interest rates on time deposits.

Net income. GAAP net income was RMB63.2 million (US$9.9 million) for the first half of 2012, a 20.3% increase over net income of RMB52.5 million (US$8.1 million) for the same period in 2011. Net income per ADS on a fully-diluted basis for the first half of 2012 increased to RMB2.79 (US$0.44) compared to RMB2.34 (US$0.36) for the same period in 2011. Net margin for the first half of 2012 was 19.4%, a 1.3% decrease over net margin of 20.7% for the same period in 2011.

Non-GAAP net income was RMB74.5 million (US$11.7 million) for the first half of 2012, a 41.9% increase over net income of RMB52.5 million (US$8.1 million) for the same period in 2011. Non-GAAP net income per ADS on a fully-diluted basis for the first half of 2012 increase to RMB3.29 (US$0.52) compared to RMB2.34 (US$0.36) for the same period in 2011. Non-GAAP net margin for the first half of 2012 was 22.9%, a 2.2% increase over net margin of 20.7% for the same period in 2011.  The difference between GAAP and non-GAAP net income is due to a 60% writedown in available-for-sale securities, following a decline deemed  to be other than temporary, in the market value of 3SBio's US$4.5 million investment in the common shares of Isotechnika (TSX:ISA).

Conference Call 3SBio's senior management will host a conference call on Wednesday, August 15, 2012 8:00pm China Standard Time (8:00am US Eastern or 5:00am US Pacific) to discuss its unaudited second quarter 2012 results and recent business activity. The conference call may be accessed using the dial-in numbers below:

Conference ID: 99264748

Local dial-in:
China landline: 800-819-0121
China mobile: 400-620-8038
Hong Kong : 852-2475-0994
United States: 718-354-1231

International toll-free dial-in:
Hong Kong:  800930346
United States:  1-866-519-4004
United Kingdom:  080-8234-6646

International toll dial-in: 65 6723 9381

Replay- Conference ID: 99264748

A telephone replay will be available two hours after the call until August 22, 2012 at:
International:  61-2-8235-5000
United States: 1-866-214-5335

Webcast

A live webcast of the conference will be available on the investor relations section of 3SBio's website at www.3sbio.com and at http://www.media-server.com/m/p/q3dh6cij.

A replay of the webcast will be available within one hour after the conclusion of the call.

Non-GAAP Financial Measures: Reconciliation of GAAP to Non-GAAP

To supplement the Company's financial information presented in accordance with general accepted accounting principles ("GAAP"), the Company has utilized some non-GAAP financial measures to provide investors and management with supplemental measures that facilitate comparisons of operating performance and trends with prior and future operating performance, and that may not otherwise be apparent on a GAAP basis. The non-GAAP financial measure represents non-GAAP net income. The measure may be different from non-GAAP financial measures used by other companies. The presentation of this financial information, which is not prepared under any comprehensive set of accounting rules or principals, is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. Non-GAAP measures have limitations in that they do not reflect all of the amounts associated with the Company's results of operations as determined in accordance with GAAP. These measures should only be used to evaluate the Company's results of operations in conjunction with the corresponding GAAP measures. Please see the attached reconciliation of GAAP to non-GAAP for an explanation of the amounts excluded to arrive at non-GAAP financial measures for the three-month periods ended June 30, 2011 and June 30, 2012 and for the six-month periods ended June 30, 2011 and June 30, 2012.

Statement Regarding Unaudited Financial Information

The unaudited financial information set forth above is preliminary and subject to adjustments and modifications. The audited financial statements and related notes are to be included in the Company's annual report on Form 20-F for the year ending December 31, 2012. Adjustments and modifications to the financial statements may be identified during the course of the audit work, which could result in significant differences from this preliminary unaudited financial information.

Currency Convenience Translation

For the convenience of readers, certain RMB amounts have been translated into US dollars at the rate of RMB6.353 to US$1.00, the noon buying rate for US dollars in effect on June 30, 2012 as set forth in the H.10 statistical release of the U.S. Federal Reserve Board.  A rate of 6.4635 was used for comparative purposes as of June 30, 2011, which was the noon buying rate for US dollars on that date for cable transfers of RMB per US dollar as certified for customs purposes by the Federal Reserve Bank of New York.

About 3SBio Inc.

3SBio is a leading, fully integrated, profitable biotechnology company focused on researching, developing, manufacturing and marketing biopharmaceutical products primarily in China.  Its focus is on addressing large markets with significant unmet medical needs in nephrology, oncology, supportive cancer care, inflammation and infectious diseases.  With headquarters and GMP-certified manufacturing facilities in Shenyang, PRC, 3SBio employs over 800 people. Shares trade in the form of American Depositary Shares (ADSs) on the NASDAQ stock market under the ticker symbol "SSRX". Please see www.3SBio.com for more information.

 Cautionary Statement concerning Forward Looking Statements

Certain statements in the disclosures of 3SBio, Inc. (the "Company" or "3SBio") for the second quarter of 2012 ("Disclosures") that are not purely historical in nature may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The Disclosures include the press release, the conference call and any accompanying materials, and any other information issued, released or publicized by the Company with respect to the second quarter and the year of 2012.

These forward-looking statements address activities, events, conditions, or developments that we currently expect or anticipate to occur in the future, and may include, but may not be limited to, discussions and statements regarding: full year revenue target, business growth and prospects, product pricing trends,  government policies and regulations and the impact thereof,  market size or patient number or illness prevalence estimates, product development prospects, future pipeline progress, regulatory review, certification and approval prospects, operation plans and objectives, partnerships or collaborations and the outcome thereof, capital expense estimate, future operations and strategies. Forward-looking statements can be identified by such terminology as "believe," "expect," "plans," "strategy," "potential", "prospects," "forecast," "estimate," "project," "anticipate," "aim," "will" or "would", "may" or "might", and words, phrases, expressions, and usages of similar meaning or substance or the negative thereof.

Forward-looking statements are based on management's current assumptions, beliefs, expectations, and projections, in light of the information currently available, and actual results, performances, or achievements could differ materially from those implied or expressed by the forward-looking statements.  Among the factors that could cause actual results to differ from what the Company currently anticipates may include: regulatory actions such as adverse drug pricing adjustments; government procurement and reimbursement practice; other government policies and regulations; competition from other domestic and foreign pharmaceutical companies; risks and uncertainties related to cooperation, joint venture, and partnerships, including deal consummation risks; changes in China's healthcare insurance system; the segment market growth for our  products; market acceptance of our products; hospital or patient demand for our products; progress of our clinical trials; receipt and timing of regulatory approvals for new products and indications; our ability to enhance production, sales and distribution network and other aspects of operation; our ability to effectively protect intellectual property; changes in the healthcare industry in China; and fluctuations in general economic and business conditions in China.

For additional information on factors identified above and other risk factors, uncertainties and assumptions, please refer to the Company's filings with the Securities and Exchange Commission at www.sec.gov, and, in particular, "Introduction – Cautionary Statement concerning Forward Looking Statements", Item 3.D "Risk Factors", Item 5. "Operating and Financial Review and Prospects", and other applicable discussions in 3SBio's annual report on Form 20-F for the year ended December 31, 2011.

All the statements in the Disclosures speak as of the date of the initial release, even if subsequently made available on the 3SBio website or otherwise.  3SBio undertakes no obligation to update or revise these forward-looking statements, whether as a result of new information, subsequent events or otherwise, after the date of this press release.

Investor Contacts

Bo Tan
Chief Financial Officer

3SBio Inc.
Tel: + 86 24 2581-1820
ir@3SBio.com

Tom Folinsbee
Director of Investor Relations
3SBio Inc.
Tel: + 852 8191-6991
ir@3SBio.com



 

3SBio Inc.

Unaudited consolidated balance sheets

    (expressed in thousands)

 


December 31,

2011


June 30,

2012


June 30,

2012


RMB


RMB


US$

Assets



(unaudited)


(unaudited)







Current assets












Cash and cash equivalents

245,813


323,528


50,925

Restricted cash

665


667


105

Time deposits with financial institutions

499,201


463,809


73,006

Accounts receivable, less allowance for doubtful accounts:






December 31, 2011 – RMB2,542; June 30, 2012 – RMB2,211(US$348)

113,949


128,426


20,215

Notes receivable

47,243


56,444


8,885

Inventories

27,604


31,871


5,017

Prepaid expenses and other receivables

26,672


37,404


5,888

Available-for-sale securities

22,830


17,246


2,715

Prepaid to related parties

6,000


3,000


472

Deferred tax assets

2,750


2,920


460







Total current assets

992,727


1,065,315


167,688







Time deposits with financial institutions

20,000


30,000


4,722

Available-for-sale securities

10,848


11,224


1,767

Investment in non-consolidated affiliates

2,245


1,280


201

Property, plant and equipment, net

198,053


211,938


33,360

Prepaid  land use rights

17,448


17,173


2,703

Prepayment and noncurrent deposits

16,801


4,534


714

Intangible assets, net

49,615


50,371


7,929

Long term receivables, less allowance for doubtful accounts:






December 31, 2011 RMB 818; June 30, 2012 RMB818 (US$129)

3,111


2,756


434

Deferred tax assets

262


271


43







Total assets

1,311,110


1,394,862


219,561







Liabilities and shareholders' equity












Current liabilities












Accounts payable

6,218


5,882


926

Deferred grant income

374


374


59

Accrued expenses and other payables

48,389


46,315


7,291

Income tax payable

8,894


4,697


739







Total current liabilities

63,875


57,268


9,015







Deferred grant income

2,029


10,514


1,655







Total liabilities

65,904


67,782


10,670







Shareholders' equity












Share capital - ordinary shares US$0.0001 par value, 500,000,000 shares

authorized, 154,473,159 and 154,577,456 issued and outstanding as of

December 31, 2011 and June 30, 2012, respectively

124


124


20

Additional paid-in capital

973,218


984,044


154,894

Accumulated other comprehensive loss

(126,290)


(118,590)


(18,666)

Retained earnings

387,317


450,490


70,910







To   Total shareholders' equity attributable to 3SBio Inc.

1,234,369


1,316,068


207,158

Non-controlling interest

10,837


11,012


1,733

Total shareholders' equity

1,245,206


1,327,080


208,891







Total liabilities and shareholders' equity

1,311,110


1,394,862


219,561

 

 

3SBio Inc.

Unaudited consolidated statements of income

(expressed in thousands, except per share, per ADS and other share and ADS data)

 


For the Three Months Ended


For the Three Months Ended


June 30, 2011


June 30, 2012


RMB

US$


RMB

US$


(unaudited)

(unaudited)


(unaudited)

(unaudited)

Net Revenues:






EPIAO

80,175

12,404


100,508

15,821

TPIAO

42,312

6,546


55,963

8,809

Intefen

1,365

211


1,247

196

Inleusin

762

118


802

126

Iron sucrose

6,204

960


9,905

1,559

Export

4,508

697


8,340

1,313

Others

806

125


1,523

240







Total net revenues

136,132

21,061


178,288

28,064

Cost of revenues

(14,660)

(2,268)


(19,284)

(3,035)







Gross profit

121,472

18,793


159,004

25,029







Operating expenses






Research and development costs

(  10,686)

(1,653)


( 22,482)

(3,539)

Sales, marketing and distribution expenses

(65,314)

(10,105)


(73,699)

(11,601)

General and administrative expenses

(15,413)

(2,385)


(19,337)

(3,044)

Grant income

93

14


306

48







Operating income

30,152

4,664


43,792

6,893







Interest income

5,105

790


7,199

1,133

Impairment loss on available-for-sale securities

-

-


(11,343)

(1,785)

Share of  income/(loss) in  non-consolidated affiliates

526

81


(135)

(21)

Other income, net

1,459

226


354

56

Total other income, net

7,090

1,097


(3,925)

(617)







Income before income tax expense

37,242

5,761


39,867

6,276

Income tax expense

(6,890)

(1,066)


(9,203)

(1,449)

Net  income

30,352

4,695


30,664

4,827

Less: net income attributable to non-controlling interest

-

-


(84)

(13)

Net  income attributable to 3SBio Inc.

30,352

4,695


30,580

4,814







Net income attributable to 3SBio Inc. per share:






Basic

0.20

0.03


0.20

0.03

Diluted

0.19

0.03


0.19

0.03

Basic weighted average number of shares outstanding

153,013,696

153,013,696


154,563,170

154,563,170

Diluted weighted average number of shares outstanding

158,002,003

158,002,003


159,307,811

159,307,811







Net income attributable to 3SBio Inc. per ADS:






Basic

1.39

0.21


1.38

0.22

Diluted

1.34

0.21


1.34

0.21

Basic weighted average number of ADSs outstanding

21,859,099

21,859,099


22,080,453

22,080,453

Diluted weighted average number of ADSs outstanding

22,571,715

22,571,715


22,758,259

22,758,259

 

 

3SBio Inc.

Unaudited consolidated statements of income

(expressed in thousands, except per share, per ADS and other share and ADS data)

 


For the Six Months Ended


For the Six Months Ended


June 30, 2011


June 30, 2012


RMB

US$


RMB

US$


(unaudited)

(unaudited)


(unaudited)

(unaudited)

Net Revenues:






EPIAO

148,976

23,049


184,227

28,998

TPIAO

80,031

12,382


102,464

16,128

Intefen

2,570

398


2,215

349

Inleusin

1,370

212


1,201

189

Iron sucrose

11,061

1,711


16,734

2,634

Export

8,746

1,353


15,979

2,515

Others

1,613

250


2,619

412







Total net revenues

254,367

39,355


325,439

51,225

Cost of revenues

(29,960)

(4,635)


(33,942)

(5,343)







Gross profit

224,407

34,720


291,497

45,882







Operating expenses






Research and development costs

(  18,436)

(2,852)


( 33,293)

(5,241)

Sales, marketing and distribution expenses

(120,674)

(18,670)


(143,366)

(22,567)

General and administrative expenses

(31,037)

(4,802)


(36,179)

(5,695)

Grant income

1,187

184


603

95







Operating income

55,447

8,580


79,262

12,474







Interest income

8,727

1,350


12,583

1,981

Impairment loss on available-for-sale securities

-

-


(11,343)

(1,785)

Share of  income/loss in  non-consolidated affiliates

20

3


(965)

(152)

Other income, net

1,565

242


477

75

Total other income, net

10,312

1,595


752

119







Income before income tax expense

65,759

10,175


80,014

12,593

Income tax expense

(13,245)

(2,049)


(16,666)

(2,623)

Net  income

52,514

8,126


63,348

9,970

Less: net income attributable to non-controlling interest

-

-


(175)

(28)

Net  income attributable to 3SBio Inc.

52,514

8,126


63,173

9,942







Net income attributable to 3SBio Inc. per share:






Basic

0.34

0.05


0.41

0.06

Diluted

0.33

0.05


0.40

0.06

Basic weighted average number of shares outstanding

152,861,181

152,861,181


154,543,391

154,543,391

Diluted weighted average number of shares outstanding

157,373,613

157,373,613


158,730,629

158,730,629







Net income attributable to 3SBio Inc. per ADS:






Basic

2.40

0.37


2.86

0.45

Diluted

2.34

0.36


2.79

0.44

Basic weighted average number of ADSs outstanding

21,837,312

21,837,312


22,077,627

22,077,627

Diluted weighted average number of ADSs outstanding

22,481,945

22,481,945


22,675,804

22,675,804

 

 

Reconciliations of GAAP net income to non-GAAP net income for the second quarter of 2011 and 2012

(in RMB thousands, unaudited)

 


Three months ended

June 30, 2011


Three months ended

June 30, 2012




GAAP

Adjustment

Non-GAAP


GAAP

Adjustment

Non-GAAP


RMB

US$

RMB

RMB

US$


RMB

US$

RMB

RMB

US$

   Net income

30,352

4,695

-

30,352

4,695


30,580

4,814

11,343

41,923

6,599

The adjustment for the three months ended June 30, 2012 is for the exclusion of the impairment loss of US$1,785,000 (RMB11, 343,000) on available-for-sale securities.

 

 

Reconciliations of GAAP net income to non-GAAP net income for the first half of 2011 and 2012

(in RMB thousands, unaudited)

 


Six months ended

June 30, 2011


Six months ended

June 30, 2012




GAAP

Adjustment

Non-GAAP


GAAP

Adjustment

Non-GAAP


RMB

US$

RMB

RMB

US$


RMB

US$

RMB

RMB

US$

   Net income

52,514

8,126

-

52,514

8,126


63,173

9,942

11,343

74,516

11,727

The adjustment for the six months ended June 30, 2012 is for the exclusion of the impairment loss of US$1,785,000 (RMB11, 343,000) on available-for-sale securities.

SOURCE 3SBio Inc.



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