EX-99.1 2 v408725_ex99-1.htm EXHIBIT 99.1

Exhibit 99.1

 

Sinovac Reports Unaudited Fourth Quarter and Full Year 2014 Financial Results

 

- Conference call scheduled for April 20, 2015 at 8:00 a.m. ET -

 

BEIJING, April 20, 2015 /PRNewswire/ -- Sinovac Biotech Ltd. (SVA), a leading provider of biopharmaceutical products in China, today announced its unaudited financial results for the fourth quarter and full year ended December 31, 2014.

 

Fourth Quarter 2014 Financial Highlights

(Compared to the fourth quarter 2013)

 

ŸQuarterly sales were $20.3 million, a decrease of 11.4% from $22.9 million in the prior year period. Excluding revenue recognized from the stockpiling of H5N1 pandemic influenza vaccine of $0.1 million in the fourth quarter of 2014 and $7.2 million in the fourth quarter of 2013, the Company’s fourth quarter 2014 regular product sales were $20.2 million, an increase of 28.2% from $15.8 million in the prior year period.

 

ŸGross profit was $15.1 million, an increase of 2.9% from $14.7 million in the prior year period. Excluding H5N1 vaccine sales, gross margin was 75.3% in the fourth quarter of 2014, compared to 60.4% in the prior year period.

 

ŸNet income attributable to common stockholders was $1.3 million, or $0.02 per basic and diluted share for the fourth quarter of 2014, compared to $5.8 million, or $0.10 per basic and diluted share, for the fourth quarter of 2013.

 

Full Year 2014 Financial Highlights

(Compared to the full year 2013)

 

ŸTotal sales were $63.1 million, a decrease of 13.0% from $72.5 million in the prior year. Excluding revenue recognized from the stockpiling of H5N1 pandemic influenza vaccine of $0.2 million in 2014 and $10.7 million in 2013, the Company’s annual sales of regular products were $62.9 million, an increase of 1.8% from $61.8 million in the prior year.

 

ŸGross profit was $46.6 million, a decrease of 9.1% from $51.3 million in the prior year. Excluding H5N1 vaccine sales, gross margin was 74.2% in 2014, compared to 72.6% in 2013.

 

ŸNet loss attributable to common stockholders was $0.9 million, or $(0.02) per basic and diluted share in 2014, compared to a net income attributable to common shareholders of $7.4 million, or $0.13 per basic and diluted share in 2013.

 

Mr. Weidong Yin, Chairman, President and CEO of Sinovac, commented, "Although the overall vaccine market environment was challenging in 2014, total sales of our regular products increased by 1.8% year-over-year, which is in line with our expectations. This growth is primarily due to increased sales of our hepatitis A&B vaccine, Bilive, in the private-pay market, as well as our hepatitis A vaccine, Healive, and seasonal flu vaccine, Anflu, in the public-pay market.

 

 
 

 

"We continue to make progress on our pipeline vaccines. We have submitted all required supplementary documentation for our EV71 vaccine candidate and are in the final stages of the approval process. We had begun clinical trials on our pneumococcal polysaccharide vaccine (PPV) at the beginning of April 2015. In the fourth quarter of 2014, we submitted our investigational new drug application for our proprietary hepatitis B vaccine and a new generation of hepatitis A & B combination vaccine to the China Food and Drug Administration (CFDA). Most recently, in January 2015, our pneumococcal conjugate vaccine (PCV) was approved to begin human clinical trials. We believe the advancement of our pipeline programs will serve as catalysts for future growth of the Company. ”

 

Fourth Quarter 2014 Business Highlights

 

Sales Update

 

Public Tenders. Sinovac has been a supplier of the seasonal flu vaccines for the Beijing Center for Disease Control (CDC)’s immunization program for the past eight years. During the 2014-2015 flu season, the Company was one of four suppliers of the flu vaccines in Beijing and its share of this tender increased to 40% from 23% in the 2013-2014 flu season, representing a total tender value of approximately $1.9 million.

 

As previously announced, Sinovac was selected by the Tianjin CDC to be the sole supplier of inactivated hepatitis A vaccines to the Expanded Immunization Program (EPI) in Tianjin for years from 2015 to 2017. The total value of this tender is approximately RMB 28 million ($4.6 million) over three years.

 

Seasonal Influenza Vaccine Registration License in Chile. As previously announced, Sinovac obtained a registration license for its seasonal influenza vaccine from Chile's Institute of Public Health. The license is valid until October 2019.

 

R&D Update

 

EV71 vaccine. In January 2015, the Company submitted supplementary documentation to the CFDA, as required following review of the new drug application (NDA) by an expert panel in November 2014. Currently, Sinovac is waiting for the results of the review by CFDA regarding supplementary documentations.

 

Pneumococcal 23-valent polysaccharide vaccine (PPV). The Company obtained its clinical trial license in May 2014. Sinovac had started trials at the beginning of April 2015.

 

Varicella vaccine. The Company is currently preparing supplementary materials for the clinical trial application, following review by an expert panel in November 2014. The Company expects to receive its clinical trial approval in 2015.

 

Pneumococcal 13-valent conjugate vaccine (PCV). The Company obtained its clinical trial license in January 2015, having filed its application with the CFDA in March 2011.

 

 
 

 

Sabin-inactivated polio vaccine (sIPV). The clinical trial application for the sIPV vaccine was accepted by Beijing Food and Drug Administration in October 2014 and the vaccine is currently under review by the CFDA.

 

Hepatitis B vaccine and new generation of hepatitis A & B vaccine. The Company has completed pre-clinical studies for its proprietary hepatitis B vaccine and filed a clinical trial application in December 2014. Simultaneously, Sinovac is developing a new generation of its hepatitis A & B combination vaccine based on its monovalent hepatitis A and hepatitis B vaccines.

 

Rubella vaccine. The Company obtained the clinical trial license in December 2014, and expects to develop this vaccine as a measles, mumps and rubella (MMR) combination vaccine.

 

Unaudited Financial Results for Fourth Quarter 2014

 

 

(In USD’000 except percentage data)

  2014 Q4   % of Sales   2013 Q4   % of Sales 
Hepatitis A – Healive   10,997    54.2%   7,970    34.7%
Hepatitis A&B – Bilive   6,321    31.1%   2,846    12.4%
Influenza vaccine   2,423    11.9%   3,409    14.9%
Animal vaccine   22    0.1%   617    2.7%
Mumps vaccine   456    2.2%   934    4.1%
Regular sales   20,219    99.5%   15,776    68.8%
H5N1 vaccine   100    0.5%   7,169    31.2%
Total sales   20,319    100.0%   22,945    100.0%
Cost of goods sold   5,204    25.6%   8,255    36.0%
Gross profit   15,115    74.4%   14,690    64.0%

 

Quarterly sales were $20.3 million, a decrease of 11.4% from $22.9 million in the fourth quarter of 2013. Excluding revenue of the Company’s H5N1 vaccine under the government stockpiling program, regular sales were $20.2 million in the fourth quarter of 2014, an increase of 28.2% over $15.8 million in the prior year period. The increase was primarily driven by increased sales of the Company’s hepatitis vaccines, due to increased demand in the private-pay market as well as an increase in average selling price.

 

Gross profit was $15.1 million, an increase of 2.9% from $14.7 million in the prior year period. Excluding the impact from H5N1 vaccine revenue, gross margin was 75.3%, compared to 60.4% in the prior year period. The increase in gross margin was primarily driven by the improved efficiency in the Company’s manufacturing processes, which resulted in lower unit costs, as well as increased selling prices of some of the Company’s products.

 

Selling, general and administrative expenses for the fourth quarter of 2014 were $9.9 million, compared to $7.9 million in the same period of 2013. The increase was primarily due to the trial production of EV71 as well as foreign exchange loss due to the appreciation of the US dollar against the Chinese RMB.

 

 
 

 

R&D expenses for the fourth quarter of 2014 were $3.5 million, a $1.1 million increase over the same period in 2013. This increase was attributable to the continued advancement of Sinovac’s pipeline products, including preclinical development and milestone payment of sIPV and trial production of PPV.

 

Net income attributable to common stockholders was $1.3 million, or $0.02 per basic and diluted share, compared to $5.8 million, or $0.10 per basic and diluted share, for the fourth quarter of 2013.

 

Unaudited Financial Results for Full Year 2014

 

 (In USD’000 except percentage data)  2014    % of Sales   2013    % of Sales 
Hepatitis A – Healive   26,515    42.0%   26,420    36.4%
Hepatitis A&B – Bilive   21,935    34.8%   20,782    28.7%
                     
Influenza vaccine   12,131    19.2%   12,156    16.8%
Animal vaccine   169    0.3%   750    1.0%
Mumps vaccine   2,150    3.4%   1,680    2.3%
Regular sales    62,900    99.7%   61,788    85.2%
H5N1 vaccine   201    0.3%   10,736    14.8%
Total sales   63,101    100.0%   72,524    100.0%
Cost of goods sold   16,493    26.1%   21,273    29.3%
Gross profit   46,608    73.9%   51,251    70.7%

 

Total sales in 2014 were $63.1 million, a decrease of 13.0% from $72.5 million. Excluding the impact from one-time H5N1 vaccine revenue recognition in 2013, the Company’s annual sales of regular products increased by 1.8% year over year. The growth was mainly due to the sales of hepatitis A&B vaccines in the private-pay market, as well as sales of hepatitis A vaccines and the seasonal flu vaccine in the public-pay market.

 

Gross profit of 2014 was $46.6 million, a decrease of 9.1% from $51.3 million in 2013. Gross margin was 73.9%, compared to 70.7% in the prior year period. Excluding the impact from H5N1 vaccine, gross margin was 74.2% in 2014, compared to 72.6% in 2013.The increase in gross margin was primarily driven by the improved efficiency in the Company’s manufacturing processes, which resulted in lower unit costs. 

 

Selling, general and administrative expenses for 2014 were $34.8 million, consistent with expenses of $34.5 million in 2013.


R&D expenses for 2014 were $11.0 million, compared to $8.4 million in 2013. The increase in the R&D expenses was primarily related to the continued development of the Company’s pipeline vaccine candidates, including the preclinical development and milestone payment for sIPV, and trial production of PPV.

 

Net loss attributable to stockholders in 2014 was $0.9 million or $(0.02) per basic and diluted share, compared to net income of $7.4 million, or $0.13 per basic and diluted share in 2013.

 

 
 

 

Balance Sheet Highlights

 

As of December 31, 2014, cash, cash equivalents totaled $90.0 million, compared to $107.2 million as of December 31, 2013. Net cash used in operating activities was $8.6 million in 2014. Net cash used in investing activities was $12.5million, which was primarily used for payment of property, plant and equipment for the Company’s PPV and varicella production facilities. Net cash provided by financing activities was $5.2 million in 2014, including proceeds from loans of $17.8 million which were offset by repayment of loans of $16.6 million, as well as $3.5 million in government grant received. As of December 31, 2014, the Company had $47.4 million of bank loans due within one year. Sinovac's cash and cash equivalents and time deposit position of $91.5 million are sufficient to meet both these loan repayment obligations and the Company's operational requirements.

 

When appropriate, the Company will seek new commercial bank loans to finance the commercialization of pipeline products.

 

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. 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 polysaccharides vaccine, pneumococcal conjugate vaccine and varicella vaccine. Sinovac primarily sells its vaccines in China, while also exploring growth opportunities in international markets. The Company has exported select vaccines to Mexico, Mongolia, Nepal, and the Philippines, and was recently granted a license to commercialize its hepatitis A vaccine in Chile. For more information, please visit the Company's website at www.sinovac.com .

 

Contact

 

Sinovac Biotech Ltd.
Helen Yang / Chris Lee
Tel: +86-10-8279-9659 / 9696
Fax: +86-10-6296-6910
Email: ir@sinovac.com

 

ICR Inc.
Bill Zima
U.S: 1-646-308-1707
Email: william.zima@icrinc.com

 

 
 

 

SINOVAC BIOTECH LTD.

Consolidated Balance sheets

As of December 31, 2014 and 2013

(Expressed in thousands of U.S. Dollars, except for numbers of shares and per share data)

 

Current assets  December 31,2014   December 31,2013 
         
Cash and cash equivalents   90,018    107,242 
Time deposit   1,500    - 
Accounts receivable – net   40,757    31,927 
Inventories   18,832    14,329 
Prepaid expenses and deposits   1,430    1,150 
Deferred tax assets   2,266    2,602 
Total current assets   154,803    157,250 
           
Property, plant and equipment   68,417    67,963 
Prepaid land lease payments   10,405    10,948 
Long-term inventories   2,648    2,781 
Long-term prepaid expenses   3    154 
Prepayments for acquisition of equipment   1,387    708 
Deferred tax assets   515    117 
Licenses   352    772 
Total assets   238,530    240,693 
           
Current liabilities          
Bank loans and current portion of long-term debt   47,375    16,217 
Loan from a non-controlling shareholder   2,595    3,324 
Accounts payable and accrued liabilities   23,237    28,037 
Income tax payable   1,101    246 
Deferred revenue   4,996    875 
Deferred government grants   530    458 
           
Total current liabilities   79,834    49,157 
           
Deferred government grants   7,494    4,746 
Long-term debt   1,803    32,146 
Deferred revenue   7,191    11,005 
Other non-current liabilities   482    - 
Total long term liabilities   16,970    47,897 
           
Total liabilities   96,804    97,054 
           
Commitments and contingencies          
Equity          
Preferred stock   -    - 
Common stock   56    56 
Additional paid-in capital   108,243    107,393 
Accumulated other comprehensive income   12,022    14,141 
Statutory surplus reserves   12,627    11,808 
Accumulated deficit   (6,384)   (4,714)
Total stockholders' equity   126,564    128,684 
           
Non-controlling interests   15,162    14,955 
Total equity   141,726    143,639 
Total liabilities and equity   238,530    240,693 

 

 
 

 

SINOVAC BIOTECH LTD.

Consolidated Statements of Comprehensive Income (loss)

For the three and twelve months ended December 31, 2014 and 2013

(Unaudited)

(Expressed in thousands of U.S. Dollars, except for numbers of shares and per share data)

 

   Three months ended December 31   Twelve months ended December 31 
   2014   2013   2014   2013 
Sales   20,319    22,945    63,101    72,524 
Cost of sales   5,204    8,255    16,493    21,273 
Gross profit   15,115    14,690    46,608    51,251 
                     
Selling, general and administrative expenses   9,891    7,894    34,787    34,538 
Provision (recovery) for doubtful accounts   (170)   (1,561)   329    (504)
Research and development expenses   3,522    2,461    11,034    8,384 
Loss on disposal and impairment of property, plant and equipment   44    91    74    88 
Government grants recognized in income   (104)   -    (104)   - 
Total operating expenses   13,183    8,885    46,120    42,506 
Operating income   1,932    5,805    488    8,745 
                     
Interest and financing expenses   (920)   (863)   (3,407)   (3,031)
Interest income   565    600    2,685    2,168 
Other income   1,177    121    1,356    263 
Income before income taxes and non-controlling interests   2,754    5,663    1,122    8,145 
Income tax benefit (expense)   (616)   2,287    (1,458)   2,225 
                     
Net Income (loss)   2,138    7,950    (336)   10,370 
Less: (Income) attributable to the non-controlling interests   (834)   (2,129)   (515)   (2,928)
Net Income (loss) attributable to stockholders of Sinovac   1,304    5,821    (851)   7,442 
                     
Other comprehensive income (loss), net of tax of nil                    
Foreign currency translation adjustments   (988)   1,086    (2,427)   2,686 
Total comprehensive income (loss)   1,150    9,036    (2,763)   13,056 
Less: comprehensive (income) attributable to non-controlling interests   (699)   (2,279)   (207)   (3,244)
Comprehensive income (loss) attributable to stockholders of Sinovac   451    6,757    (2,970)   9,812 
                     
Weighted average number of shares of                    
Basic   55,749,040    55,497,357    55,681,076    55,301,276 
Diluted   56,106,941    56,057,462    55,681,076    55,802,338 
                     
Earning (loss) per share                    
Basic   0.02    0.10    (0.02)   0.13 
Diluted   0.02    0.10    (0.02)   0.13 

 

 
 

 

SINOVAC BIOTECH LTD.

Consolidated Statements of Cash Flows

For the three and twelve months ended December 31, 2014 and 2013

(Unaudited)

(Expressed in thousands of U.S. Dollars)

 

   Three months ended   Twelve months ended  
    December 31    December 31 
   2014   2013   2014   2013 
Cash flows provided by (used in) operating activities                    
Net income (loss)  $2,138   $7,950   $(336)  $10,370 
Adjustments to reconcile net income (loss) to net cash                    
provided by (used in) operating activities:                    
- deferred income taxes   (707)   (2,287)   (162)   (2,225)
- stock-based compensation   72    72    287    281 
- inventory provision   689    629    1,273    1,399 
- provision(recovery) for doubtful accounts   (170)   (1,561)   329    (504)
- loss (gain) on disposal and impairment of equipment   44    (349)   74    88 
- deferred government grant recognized in income   (104)   -    (104)   - 
- depreciation of property, plant and equipment and amortization of licenses   2,872    1,706    8,142    6,433 
- amortization of the prepaid land lease payments   80    -    278    311 
- accretion expenses   29    47    114    100 
Changes in:                    
- accounts receivable   (284)   8,197    (9,691)   (7,256)
- inventories   638    (1,624)   (6,170)   (7,547)
- income tax payable   602    -    899    7 
- prepaid expenses and deposits   277    415    (496)   242 
- deferred revenue   1,217    4,037    601    (675)
- accounts payable and accrued liabilities   (374)   2,684    (4,167)   4,552 
- other non-current liablitites   482    -    482    - 
Net cash provided by (used in) operating activities   7,501    19,916    (8,647)   5,576 
                     
Cash flows provided by (used in) financing activities                    
- Proceeds from bank loan   -    2,942    17,837    16,800 
- Repayments of bank loan   (5,957)   (3,927)   (15,962)   (4,089)
- Proceeds from issuance of common stock,                    
net of share issuance costs   176    281    512    848 
- Proceeds from shares subscribed   45    (196)   51    18 
- Government grants received   91    149    3,520    842 
- Repayment of loan from a non-controlling shareholder   (649)   -    (649)   - 
                     
Net cash provided (used in) by financing activities   (6,294)   (751)   5,309    14,419 
                     
Cash flows used in investing activities                    
- Acquisition of property, plant and equipment   (3,696)   (1,739)   (11,003)   (5,176)
- Time deposit placed with financial institution   (1,500)   -    (1,500)   - 
                     
Net cash used in investing activities   (5,196)   (1,739)   (12,503)   (5,176)
                     
Exchange gain (loss) on cash and cash equivalents   (347)   790    (1,383)   1,182 
                     
Increase (decrease) in cash and cash equivalents   (4,336)   18,216    (17,224)   16,001 
                     
Cash and cash equivalents, beginning of year   94,354    89,026    107,242    91,241 
                     
Cash and cash equivalents, end of year  $90,018   $107,242   $90,018   $107,242