-- Third Sequential Profitable Quarter --
-- Conference Call on Monday, March 31, 2008 at 9:00 a.m. ET --
BEIJING, March 31 /Xinhua-PRNewswire/ -- Sinovac Biotech Ltd. (Amex:
SVA), a leading provider of vaccines in China, today announced unaudited
financial results for the three months and twelve months ended December 31,
2007.
Highlights
-- Record full year 2007 sales of $33.5 million, up 118% year-over-year
-- Record full year 2007 net income of $7.7 million, or $0.19 per share
-- Fourth quarter 2007 sales increased 49% year-over-year to $9.2 million
-- Fourth quarter 2007 operating income rose 460% year-over-year to
$3.3 million
-- Fourth quarter 2007 net income increased to .0 million, or $0.05
per share
-- Reported positive preliminary Phase II results for pandemic influenza
(H5N1) whole viron vaccine
-- Sold 5.12 million doses of Healive(R) in 2007, up from 2.6 million
in 2006
-- Sold 1.59 million doses of Anflu(R) in 2007, up from 77,000 doses in
in 2006
Mr. Weidong Yin, Chairman, President and CEO, stated, ''2007 was a
record year for Sinovac from a commercialization and a clinical development
standpoint. Exceeding our internal projections for year-over-year sales
growth, our 2007 sales increased 118%, due to higher than anticipated sales
of our lead products, Healive(R), our inactivated hepatitis A vaccine, and
Anflu(R), our seasonal influenza vaccine, based on the proactive efforts of
our sales organization across China. In addition, we entered a promotion
agreement with GSK China for our seasonal influenza vaccine, Anflu(R), and
successfully launched a marketing campaign that yielded sales in the second
half of the year. We advanced the clinical development of our pandemic
influenza vaccine formulations. We successfully completed the Phase II
trial of our whole viron vaccine in 2007 that led to the submission with
the SFDA during the first quarter of 2008. Most recently during the first
quarter of 2008, the Phase I trial for the split inactivated vaccine was
completed.''
Mr. Weidong Yin, Chairman, President and CEO, continued, ''The fourth
quarter results marked our third sequential profitable quarter. Our
quarterly sales reflected the continued demand for our lead product,
Healive(R), our inactivated hepatitis A vaccine. Healive(R) was recently
selected by the Beijing Centers for Disease Control and Prevention for the
hepatitis A vaccination program.''
Full Year 2007
For twelve months ended December 2007, sales increased 118% to $33.5
million, compared to $15.4 million for 2006. The growth was attributable to
strong sales of the Company's inactivated hepatitis A vaccine, Healive(R),
and ongoing marketing initiatives in support of the Company's seasonal
influenza vaccine, Anflu(R).
Gross profit for 2007 was 7.0 million, with a gross margin of 80.6%,
compared to $11.1 million and 72.4%, respectively, for 2006. The higher
gross margin resulted from the increased economies of scale and lower
average unit costs associated with Healive(R) production and reflected
normalized Anflu(R) production expenses.
Total operating expenses for the full year 2007 increased to $13.6
million, compared to $10.7 million in the same period of 2006. Selling,
general and administrative (''SG&A'') expenses for 2007 were $12.0 million,
compared to $9.8 million for 2006. The year-over-year increase in SG&A
expenses reflected increased selling expense that is in line with the
increase in sales, offset by decreased bad debt provision due to
improvement in accounts receivable collection, decreased lower stock-based
compensation and reduced consulting fees.
Aggregated research and development expenses for the full year 2007
were $1.8 million, compared to $1.2 million for 2006. The Company's net R&D
expenses were $965,000 for 2007, compared to $325,000 for 2006. The R&D
expenses recognized as a reduction to government grants were $844,000 for
2007, compared to $845,000 for 2006.
Operating income was $13.5 million for the full year 2007, compared to
$440,000 for 2006. The year-over-year increase in operating income
reflected the significant increase in vaccine sales.
Net income for the twelve months ended December 31, 2007 was $7.7
million, or $0.19 per diluted share, compared to a net loss of $696,000, or
$0.02 per diluted share, for 2006. Net income for 2007 included $478,000 of
interest and financing expenses, .0 million of income taxes, and $3.6
million of minority interest. Net income for 2006 included $319,000 of
interest and financing expenses, $101,000 of income taxes, and $1.0 million
of minority interest.
As of December 31, 2007, Sinovac's cash and cash equivalents totaled
$17.1 million, compared to $9.2 million as of December 31, 2006.
Fourth Quarter 2007
For the fourth quarter 2007, sales increased 49% to $9.2 million,
compared to $6.2 million in the fourth quarter 2006. The growth was
attributable to strong sales of the Company's inactivated hepatitis A
vaccine, Healive(R), and ongoing marketing initiatives in support of the
Company's seasonal influenza vaccine, Anflu(R).
Gross profit for fourth quarter of 2007 was $6.3 million, with a gross
margin of 68.3%, compared to $4.9 million and 78.9%, respectively, for the
same period of 2006. The lower gross margin resulted primarily from lower
margin sales of Anflu(R).
Total operating expenses for the fourth quarter of 2007 decreased to
$3.0 million, compared to $4.3 million in the same period of 2006. Selling,
general and administrative expenses for fourth quarter of 2007 were .5
million, compared to $4.0 million in the same period of 2006. The
year-over-year decrease in SG&A expenses was attributable primarily to the
partial reversal of bad debt provision in the fourth quarter of 2007 based
on the improvement of account receivables and lower consulting fees.
Aggregated research and development expenses for the fourth quarter of
2007 were $756,000, compared to $300,000 in the same period of 2006. The
Company's net R&D expenses were $354,000 for the fourth quarter of 2007,
compared to $162,000 in the same period of 2006. The R&D expenses
recognized as a reduction to government grants were $755,726 in the fourth
quarter of 2007, compared to 99,776 in the same period of 2006.
Operating income was $3.3 million for the fourth quarter of 2007,
compared to $588,000 in the same period of 2006. The year-over-year
increase in operating income reflected the significant increase in vaccine
sales and the lower operating expenses.
Net income for the fourth quarter of 2007 was .0 million, or $0.05
per diluted share, compared to $181,000, or $0.005 per diluted share, in
the same period of 2006. Net income for the fourth quarter of 2007 included
94,000 of interest and financing expenses, $42,000 of income taxes, and
$965,000 of minority interest. Net income for the same period of 2006
included $95,000 of interest and financing expenses, $405,882 of income
taxes, and $559,000 of minority interest.
Sales and Marketing
During the twelve months ended December 31, 2007, Sinovac sold total
5.12 million doses of Healive(R), up from 2.6 million doses in 2006. During
the fourth quarter of 2007, Sinovac sold approximately 1.14 million doses
of Healive(R), up from 1.07 million for the same period of 2006. During the
fourth quarter, the higher sales reflected Sinovac's ongoing marketing
activities. The initiation of the government paid market for the hepatitis
A vaccine in China is expected to impact the seasonality of Healive(R)
sales established in previous years.
For the twelve months ended December 31, 2007, Sinovac sold 1.59
million doses of Anflu(R), which accounted for 14.3% of full year sales.
During the fourth quarter of 2007, Sinovac sold 0.52 million doses of
Anflu(R), which accounted for 27% of quarterly sales. Sinovac is
co-marketing Anflu(R) with GSK China and recently launched an extensive
marketing campaign. Seasonal influenza vaccine sales to CDCs typically
occur during third quarter, subject to seasonality as people get vaccinated
from the end of the third quarter to the beginning of the fourth quarter.
Research and Development
In April 2007, Sinovac was granted approval by the China State Food and
Drug Administration (SFDA) to enter into Phase II clinical trials for
Panflu, the Company's pandemic influenza vaccine (H5N1). The SFDA approval
covered Phase Ib and Phase II trials of the whole viron vaccine and Phase I
and Phase II trials of the split vaccine.
In December 2007, Sinovac reported positive top-line results of
completed Phase II clinical trial of its pandemic influenza (H5N1) whole
viron inactivated vaccine. The randomized, double-blind trial of the
vaccine was designed to assess the safety and immunogenicity of the
vaccine. The study included 402 volunteers, between the ages of 18 and 60,
who were each vaccinated with two doses of 5 ug, 10 ug or 15 ug. The
preliminary results of the trials suggested that each of the three dosages
may induce varying degrees of immune response. In February 2008, the report
with results from the Phase II trial of the whole viron inactivated vaccine
was submitted for review to the SFDA.
In 2007, Sinovac initiated a co-development project with ��National
Institute for Viral Disease Control and Prevention, China CDC to develop a
universal pandemic influenza vaccine to against pandemic flu caused by
unknown flu viruses. It's in pre-clinical trial and we expect to file a
clinical trial application in 2010.
Conference Call Details
The Company will hold a conference call on Monday, March 31, 2008 at
9:00 a.m. ET (9:00 p.m. Beijing time). The conference call dial-in numbers
are 1- 877-407-4018 (USA) or 1-201-689-8471 (international).
A replay of the call will be available from 12:00 p.m. ET on March 31,
2008 until April 14, 2008 at midnight. To access the replay, please dial 1-
877-660-6853 (USA) or 1-201-612-7415 (international) and reference the
account number 3055 and the access code 279686. A live audio webcast of the
call will also be available on the Investors section on the corporate web
site at http://www.sinovac.com. A webcast replay can be accessed on the corporate
website beginning March 31, 2008 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, manufacture and commercialization of
vaccines that protect against human infectious diseases. Sinovac's vaccines
include Healive(R) (hepatitis A), Bilive(R) (combined hepatitis A and B)
and Anflu(R) (influenza). Sinovac is currently developing human vaccines
against the H5N1 strain of pandemic influenza, Japanese encephalitis and
SARS. Additional information about Sinovac is available on its website,
http://www.sinovac.com. To be added to our distribution list, please email:
info@sinovac.com.
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.
Consolidated Statement of Operations and Comprehensive Income (Loss)
Three Months and Twelve Months Ended December 31, 2007 and 2006
(Expressed in U.S. Dollars)
Three months Twelve months
ended December 31 ended December 31
2007 2006 2007 2006
Sales 9,201,946 6,187,773 33,541,187 15,354,608
Cost of sales 2,915,135 1,308,609 6,502,328 4,231,785
Gross profit 6,286,811 4,879,164 27,038,859 11,122,823
Selling, general
and administrative
expenses 2,472,518 3,976,111 11,958,498 9,752,783
Research and
development
expenses 353,790 162,012 965,000 324,970
Depreciation and
amortization 165,750 152,656 640,568 605,262
Total operating
expenses 2,992,058 4,290,779 13,564,066 10,683,015
Operating income
(loss) 3,294,753 588,385 13,474,793 439,808
Interest and
financing
expenses (294,412) (95,129) (478,436) (319,197)
Interest and other
income 0 41,461 190,668 285,148
Income (loss)
before income
taxes and
minority
interest 3,000,341 534,717 13,187,025 405,759
Income taxes
recovery (expense) (42,478) 204,856 (1,974,118) (100,513)
Income (loss)
before minority
interest 2,957,863 739,573 11,212,907 305,246
Minority interest
share of (income)
loss (964,588) (558,934) (3,562,501) (1,001,279)
Net Income (loss)
for the year 1,993,275 180,639 7,650,406 (696,033)
Foreign currency
translation
adjustment 513,502 12,858 1,310,985 302,490
Comprehensive
income (loss) 2,506,777 193,497 8,961,391 (393,543)
Earnings (Loss) per
share
- Basic 0.05 0.005 0.19 (0.02)
- Diluted 0.05 0.004 0.19 (0.02)
Weighted average
number of shares
of common stock
outstanding
- Basic 40,312,158 39,893,803 40,254,192 38,229,944
- Diluted 40,851,072 40,335,656 40,637,876 38,229,944
For more information, please contact:
Helen G. Yang
Sinovac Biotech Ltd.
Phone: +86-10-82890088 x871
Fax: +86-10-62966910
Email: info@sinovac.com
Investors/Media:
Stephanie Carrington/Janine McCargo
The Ruth Group
Tel: +1-646-536-7017 /7033
Email: scarrington@theruthgroup.com / jmccargo@theruthgroup.com
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