Sinovac Reports Unaudited Second Quarter 2013 Financial Results - Conference call scheduled for Wednesday, August 14, 2013 at 8:00 AM EDT

BEIJING, Aug. 13, 2013 /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, 2013.

Second Quarter 2013 Financial Highlights (period-over-period comparisons to second quarter 2012)

  • Total sales increased by 86.4% to $17.5 million from $9.4 million.
  • Gross profit increased by 70.1% to $13.6 million from $8.0 million.
  • Net income attributable to common stockholders was $1.3 million, or $0.02 per basic and diluted share, compared to net loss attributed to common stockholders of $1.6 million, or $0.03 per basic and diluted share.
  • Cash and cash equivalents totaled $92.0 million as of June 30, 2013, compared to $91.2 million as of December 31, 2012.

Recent Business Highlights

On July 30, 2013, following the completion of inspection on clinical sites by the Beijing Drug Administration, Sinovac's registration documentations for its proprietary EV71 vaccine were submitted to and accepted by the Center for Drug Evaluation (CDE), China Food and Drug Administration for the technological review on Sinovac's new drug application (NDA) filing.

On August 6, 2013, the phase II clinical results for Sinovac's proprietary EV71 vaccine were published online in The Journal of Infectious Diseases (JID), the premier global journal for original research on infectious diseases. The paper is entitled "Immunogenicity, Safety, and Immune Persistence of A Novel Inactivated Human Enterovirus 71 (EV71) Vaccine: A Phase II, Randomized, Double-Blind, Placebo-Controlled Trial."

Dr. Weidong Yin, Chairman, President and CEO, commented, "We are pleased to report another quarter with strong sales rising by 86.4%, driven by robust hepatitis vaccines sales resulting from a favorable competitive environment in China and successful initiatives focused on each market segment implemented by our sales team.  With this diversified sales strategy, Sinovac is poised to maximize the upcoming commercial opportunity for our EV71 vaccine for which the NDA filing is under review in China. The top line growth in the current period was the key driver of a higher gross profit and a higher net income as compared to previous quarters."

Dr. Yin continued, "The review of our NDA filing for our EV71 vaccine is also moving forward to the technological review process by the CDE. Hand, foot and mouth disease (HFMD) continues to represent a significant unmet medical need in China with reports of over 900,000 HFMD cases and 156 fatalities in first half of 2013. We aim to launch the EV71 vaccine to provide a solution to address this unmet medical need as no treatment and prevention options exist for this highly contagious disease impacting children in China and surrounding countries."

Financial Review for Second Quarter Ended June 30, 2013

An analysis of sales and gross profit is as follows:      

In USD'000


2013Q2

% of total sales

2012Q2

% of total sales



(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

Hepatitis A(Healive)


7,021

40.2%

3,561

38.0%

Hepatitis A&B(Bilive)


9,586

54.9%

6,070

64.8%

Hepatitis vaccines


16,607

95.1%

9,631

102.8%







Influenza vaccines


48

0.3%

-268

-2.9%

Core sales


16,655

95.4%

9,363

99.9

Animal vaccine


64

0.4%

2

0.01%

Mumps


732

4.2%

-

-







Total sales


17,451

100%

9,365

100%







Cost of goods sold


3,861


1,376








Gross profit


13,590

77.9%

7,989

85.3%

Total sales increased by 86.4% to $17.5 million in the second quarter of 2013 from $9.4 million in the second quarter of 2012. Both Healive and Bilive contributed to the sales growth in the second quarter, resulting from the favorable competitive environment in the private pay market in China and initiatives implemented by the Company's sales team.

Gross profit increased by 70.1% to $13.6 million for the second quarter of 2013 from $8.0 million in the same period of 2012. Gross margin was 77.9% in the second quarter of 2013, compared to 85.3% in the same period of 2012. Excluding the impact of the H5N1 inventory provision of $0.2 million, the gross margin was 79.0% in the second quarter of 2013. The decline in gross margin was affected by the sales of different products mix with different gross margin.

SG&A expenses for the second quarter of 2013 were $8.3 million, compared to $6.7 million in the same period of 2012. Selling expenses as a percentage of second quarter 2013 sales was 32.0%, compared to 38.9% during the second quarter of the prior year. The decrease in selling expense as a percentage of revenue was mainly due to the increased sales team productivity.

The G&A expenses for the second quarter of 2013 decreased to $2.7 million from $3.1 million in the second quarter of 2012. The decrease was mainly due to the effect that the bonuses, paid out or to be paid out, were recorded against a previously accrued liability account, named staff benefits, rather than charged to expenses. This had the effect of partially offsetting increased G&A resulting from the higher operating costs because the Company's Changping site is now fully operational. A part of the operating cost increase was related to the ongoing validation activities on the manufacturing facilities in support of the EV71 vaccine for which the NDA is currently under review.

R&D expenses in the second quarter of 2013 were $2.0 million, a decrease from $4.7 million in the same period of 2012. The lower R&D expenses in the current quarter were attributable to the completion of the phase III study of EV71 vaccine candidate in the first quarter of 2013. The R&D activities in the second quarter focused on the other vaccine candidates in the Company's pipeline.

Depreciation of property, plant and equipment and amortization of licenses and permits for the second quarter of 2013 were $0.5 million, compared to $0.3 million for the same period of last year. Depreciation increased because more assets were in service at the Changping facility as compared to the second quarter of 2012.

Net income attributable to common stockholders was $1.3 million, or $0.02 per basic share and diluted share, for the second quarter of 2013, compared to a net loss attributed to common stockholders of $1.6 million, or $0.03 per basic and diluted share, for the second quarter of 2012. Excluding the impact of the bonus revision of $1.6 million, which was paid out or to be paid out from an accrued liability account rather than charged to expenses, the net loss of the second quarter of 2013 would approximately be $0.3 million, or $0.01 per basic share and diluted share.

Financial Review for the Six Months Period Ended June 30, 2013

An analysis of sales and gross profit is as follows:                              

In USD'000


2013 YTD

% of total sales

2012 YTD

% of total sales



(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

Hepatitis A(Healive)


13,199

48.0%

5,172

33.7%

Hepatitis A&B(Bilive)


12,581

45.7%

10,085

65.8%

Hepatitis vaccines


25,780

93.7%

15,257

99.5%







Influenza vaccines


330

1.2%

46

0.3%

Core sales


26,110

94.9%

15,303

99.8%

Animal vaccine


78

0.3%

35

0.2%

Mumps


1,316

4.8%

-

-







Total sales


27,504

100%

15,338

100%







Cost of goods sold


6,853


3,631








Gross profit


20,651

75.1%

11,707

76.3%

Total sales were increased by 79.3% to $27.5 million in first half of 2013 from $15.3 million in the same period of 2012. The sales growth was achieved across every sales channel, including the public market, private market and sales through distributors, which demonstrated the success of the Company's sales strategy of combining a diversified sales model to largely improve the market coverage and penetration.

Gross profit of the first half year of 2013 increased by 76.4% to $20.7 million from $11.7 million in the same period of 2012. Gross margin was 75.1%, compared to 76.3% of the same period of last year. Excluding the impact of the H5N1 inventory provision of $0.8 million, the gross margin was 78.1%.

Selling, general and administrative expenses for the first half of 2013 were $14.6 million, compared to $11.0 million in the same period of 2012. Selling expenses as a percentage of first half year of 2013 sales was 31.3%, compared to 37.9% of first half year of the prior year. The G&A expenses increased to $6.0 million in the first half of 2012 from $5.2 million for the first half year of the prior year. The factors affecting selling, general and administrative expenses for the first half of 2013 were the same as for the second quarter, described above.

Research and development expenses for the first half of 2013 was $3.9 million, a $8.1 million decrease from $12.0 million for the same period in 2012.  The lower R&D expenses were attributable to the completion of the phase III trial for the EV71 vaccine.

Depreciation of property, plant and equipment and amortization of licenses and permits for first half year of 2013 was $1.3 million, compared to $0.6 million for the same period of last year. Depreciation increased because more assets were in service at the Changping facility compared to the same period in 2012.

Net loss attributable to stockholders in the first half of 2013 was $0.7 million, or $0.01 per basic and diluted share, compared to a net loss of $7.2 million, or $0.13 per basic and diluted share, for the same period of last year. Excluding the impact of the bonus revision of $1.6 million, which was paid out from an accrued liability account rather than charged to expenses, the net loss of the first half year of 2013 would approximately be $2.3 million, or $0.04 per basic share and diluted share.

As of June 30, 2013, cash and cash equivalents totaled $92.0 million, compared to $91.2 million as of December 31, 2012. Net cash used in operating activities was $9.3 million in the first half of 2013. Net cash used in investing activities was $2.2 million, which was mainly used to acquire property, plant and equipment for the Changping site. Net cash provided by financing activities was $11.6 million in the first half of 2013, including loan proceeds of $10.8 million.  The Company continues to source new financing resources to commercialize other pipeline products when appropriate.

Management Change

Ms. Nan Wang, Vice President of Sinovac, has been appointed as Chief Financial Officer, effective June 1, 2013. Mr. Danny Chung, who was Chief Financial Officer, has resigned for family reasons.

Other Developments

Sinovac owns a controlling 73.09% interest in Sinovac Biotech Co., Ltd. (Sinovac Beijing), while Sino Bioway holds the remaining 26.91% non-controlling interest. On April 8, 2013, the board of directors of Sinovac Beijing approved the transfer of Sino Bioway's interest in Sinovac Beijing to a subsidiary of Sino Bioway, Xiamen Bioway Biotech Co., Ltd. The transfer was completed on May 13, 2013. There was no impact on Sinovac Beijing's daily operations and no change to the composition of the board of directors of Sinovac Beijing after the completion of the transaction.

Conference Call Details

The Company will host a conference call prior to the market opening on Wednesday, August 14, 2013, at 8:00 a.m. EDT (August 14, 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 1-877-407-0784 (USA) or 1-201-689-8560 (International).  A replay of the call will be available from 11 a.m. EDT on August 14, 2013, to August 28, 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 418775.

A live audio webcast of the call will also be available from the investors section on the corporate web site at www.sinovac.com.  A webcast replay can be accessed on the corporate website beginning August 14, 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) and filed new drug application with China Food & Drug Administration.  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:  +86-10-8279-9659/9696
Fax:  +86-10-6296-6910
Email: ir@sinovac.com

Investors:
Stephanie Carrington
The Ruth Group
Tel:  +1-646-536-7017
Email: scarrington@theruthgroup.com

Media:
Aaron Estrada
The Ruth Group
Tel:  +1-646-536-7028
Email: aestrada@theruthgroup.com

 

SINOVAC BIOTECH LTD.

Consolidated Balance Sheets

(Unaudited)

June 30,2013

(Expressed in U.S. Dollars)





June 30,2013

December 31,2012

Cash and cash equivalents

92,046,428

91,240,956

Accounts receivable

31,248,974

23,440,135

Inventories

16,655,331

10,529,476

Prepaid expenses and deposits

914,771

1,072,078

Total current assets

140,865,504

126,282,645




Property, plant and equipment

79,838,322

80,083,383

Long-term inventory

-

28,692

Long-term prepaid expenses

213,310

289,766

Deposits for acquisition of equipment

280,534

483,278

Deferred tax asset

467,490

445,589

License and permit

964,416

1,149,914

Total assets

222,629,576

208,763,267




Current liabilities



Loans payable

6,213,808

3,328,590

Accounts payable and accrued liabilities

26,522,072

24,777,808

Income tax payable

242,381

238,775

Deferred revenue

59,471

1,378,425

Deferred research grants

437,609

431,097

Total current liabilities

33,475,341

30,154,695




Deferred research grants

4,593,360

4,068,602

Loans payable

39,425,475

31,181,235

Due to related party

3,278,261

3,230,125

Deferred revenue

10,955,779

10,693,247

Total long-term liabilities

58,252,875

49,173,209




Total liabilities

91,728,216

79,327,904




Commitments and contingencies



Stockholder's equity



Common stock

55,353

55,092

Additional paid in capital

106,808,942

106,245,934

Accumulated other comprehensive income

12,983,039

11,770,927

Dedicated reserves

11,808,271

11,808,271

Accumulated deficit

(12,845,353)

(12,156,414)

Total stockholders' equity

118,810,252

117,723,810




Non-controlling interest

12,091,108

11,711,553

Total equity

130,901,360

129,435,363

Total equity and liability

222,629,576

208,763,267

 

SINOVAC BIOTECH LTD.

 Consolidated Statements of Operations and Comprehensive Income (loss)

June 30,2013

 (Unaudited)

 (Expressed in U.S. Dollars)


 Three Months ended June 30


 Six Months ended June 30


2013

2012


2013

2012







 Sales

17,451,442

9,364,632


27,503,657

15,338,099

 Cost of sales(exclusive of depreciation of land use right and amortization of licenses and permits of $201,211(2012-$67,486) for three months and $97,449(2012-$12,507) for six months 

3,860,856

1,375,917


6,852,720

3,631,206

 Gross profit

13,590,586

7,988,715


20,650,937

11,706,893







 Selling, general and administrative expenses

8,265,312

6,700,526


14,628,669

11,020,815

 Provision for doubtful account

603,601



885,791

-

 Research and development expenses

2,041,639

4,676,703


3,889,246

12,018,875

 Depreciation of property, plant and equipment and amortization of licenses

541,720

313,265


1,313,866

620,708

 Loss (gain) on disposal and impairment of property, plant and equipment

82

-


(2,319)

-

 Government grants recognized in income

-

(405,082)



(476,286)

 Total operating expenses

11,452,354

11,285,412


20,715,253

23,184,112

 Operating income (loss)

2,138,232

(3,296,697)


(64,316)

(11,477,219)







 Interest and financing expenses 

(770,319)

(232,078)


(1,433,406)

(446,398)

 Interest income

582,602

498,856


1,023,920

1,096,527

 Other income (expenses)

(53,667)

14,635


7,095

132,713

 Income (loss) before income taxes and  Minority interest 

1,896,848

(3,015,284)


(466,707)

(10,694,377)

 Income tax recovery 

17,272

797,462


14,783

800,364







 Consolidated net income (loss) 

1,914,120

(2,217,822)


(451,924)

(9,894,013)

Net Income (loss) attributable to the noncontrolling interest

595,222

(587,684)


237,015

(2,650,820)

 Net income (loss) attributable to stockholders

1,318,898

(1,630,138)


(688,939)

(7,243,193)

 Net income (loss)

1,914,120

(2,217,822)


(451,924)

(9,894,013)







Foreign currency translation adjustment

1,118,992

(469,734)


1,352,701

177,049

 Total comprehensive income (loss)

3,033,112

(2,687,556)


900,777

(9,716,964)

  Less: comprehensive (income) loss attributable to non-controlling interests 

706,887

(633,486)


377,604

(2,613,075)

 Comprehensive income (loss) attributable to stockholders

2,326,225

(2,054,070)


523,173

(7,103,889)







 Weighted average number of shares of






   Basic

55,056,191

54,804,498


54,995,674

54,784,801

  Diluted

55,522,748

54,804,498


54,995,674

54,784,801







 Basic and diluted earnings (loss) per share

0.02

(0.03)


(0.01)

(0.13)

 

SINOVAC BIOTECH LTD.

 Consolidated Statements of Cash Flow

June 30,2013

 (Unaudited)

 (Expressed in U.S. Dollars)


 Three Months ended June 30


 Six Months ended June 30


2013

2012


2013

2012

 Cash flows used in operating activities:






 Net income (loss) for the period

1,914,120

(2,217,822)


(451,924)

(9,894,013)

 deferred income tax

(17,272)

69,231


(14,783)

66,329

 stock-based compensation

61,854

173,791


137,693

253,966

 inventory provison

767,811

1,239,399


767,811

1,325,263

 provision for (recovery of) doubtful allowance

603,602

-


885,792

-

 Impairment of equipment and losses(gain) on disposal

82

2,460


(2,319)

2,460

 unrealized foreign exchange gain (loss) 

-

166,701


-

(43,880)

 research and development expenditures qualified for  government grant

-

-


-

(79,116)

  depreciation of property, plant and equipment, 

1,787,173

1,293,974


3,485,540

2,546,524

 deferred government grants recognized as income

-

(325,965)



(397,169)

 accreation expenses

34,282

68,398


52,373

136,789

 Changes in assets and liabilities:






 accounts receivable, trade

(4,510,518)

614,574


(8,287,685)

(671,232)

 inventory 

(3,581,987)

(4,845,918)


(6,657,043)

(6,165,393)

 income tax payable

-

(3,136,687)


-

(3,124,477)

  prepaid expenses and deposits

399,292

(293,778)


255,543

488,378

  defer revenue

(161,644)

(5)


(1,228,643)

(99,522)

 accounts payables and accrued liabilities

(592,990)

882,535


1,753,684

(2,522,272)

 Net cash used by operating activities

(3,296,195)

(6,309,112)


(9,303,961)

(18,177,365)







 Cash flows from financing activities






 Loan proceed

3,304,721

3,985,568


10,784,502

6,009,507

 Loan Payments

(161,606)

-


(161,606)

-

  Proceeds from issuance of common stock

406,240

343,040


417,120

393,440

 Subscription received

8,456

2,400


8,456

2,400

 Dividends paid to non-controlling shareholder of Sinovac Beijing

-

-


-

(800,717)

 Loan from non-controlling shareholder of Sinovac Dalian

-

-


-

3,175,266

 Government grant received

220,187

240,580


523,813

240,580

 Net cash provided by financing activities

3,777,998

4,571,588


11,572,285

9,020,476







 Cash flows used in investing activities:






 Prepayments for acquisition of equipment

346,884

1,219,610


208,330

886,830

 Acquisition of property, plant and equipment

(855,249)

(4,878,770)


(2,439,947)

(7,506,451)

 Net cash used in investing activities

(508,365)

(3,659,160)


(2,231,617)

(6,619,621)







 Exchange gain on cash and cash equivalents

510,738

347,410


768,765

930,188







 Increase (decrease) in cash and cash equivalents

484,176

(5,049,274)


805,472

(14,846,322)







 Cash and cash equivalents, beginning of period

91,562,252

94,489,647


91,240,956

104,286,695







 Cash and cash equivalents, end of period

92,046,428

89,440,373


92,046,428

89,440,373







 Cash paid for interest

696,361

231,563


1,295,796

477,639

 Cash paid for income taxes

-

-


-

-

 Supplemental schedule of non-cash activities:






 Acquisition of property, plant and equipment included in






 accounts payable and accrued liabilities

3,750,767

9,962,278


3,750,767

9,962,278

SOURCE Sinovac Biotech Ltd.



RELATED LINKS
http://www.sinovac.com

More by this Source


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

 

PR Newswire Membership

Fill out a PR Newswire membership form or contact us at (888) 776-0942.

Learn about PR Newswire services

Request more information about PR Newswire products and services or call us at (888) 776-0942.