Sinovac Reports Unaudited Second Quarter Financial Results

-- Conference call scheduled for Thursday, August 13, 2015 at 8:00 AM ET

  • Date: 2015-08-13
  • Pageview: 11212

BEIJING, Aug.12, 2015 /PRNewswire/ -- Sinovac Biotech Ltd. (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, 2015.

Second Quarter 2015 Financial Highlights
 (compared to the second quarter of 2014)

  • Quarterly sales were $18.5 million, an increase of 53.1% from $12.1 million in the prior year period.
  • Gross profit was $15.1 million, an increase of 66.6% from $9.1 million in the prior year period.
  • Gross margin was 81.6%, compared to 75.0% in the prior year period.
  • Net income attributable to common shareholders was $2.3 million, or $0.04 per basic and diluted share, compared to net loss attributable to common shareholders of $2.2 million, or $(0.04) per basic and diluted share, in the second quarter of 2014.

Mr. Weidong Yin, Chairman, President and CEO of Sinovac, commented, "I am very pleased to announce our strong sales and profitability during the second quarter. We continue to execute our strategy to drive sales while maintaining tight control over our operating costs. Although the general market environment remains the same as prior quarters, our sales results in the second quarter exemplify our team's ability to adjust to challenging market dynamics."

Mr. Yin continued, "Additionally, we continue to move forward in the approval process for our EV71 vaccine candidate. During July and August, CFDA inspectors have been conducting the site and GMP inspections of our manufacturing facility. The site inspection was completed last week and will be followed by sample testing. Our projected timing for EV71 commercialization remains unchanged. "

Business Update

EV71 vaccine. The China Food and Drug Administration (CFDA) has completed a site inspection and GMP inspection of the Company's EV71 vaccine manufacturing facility, which will be followed by sample testing. Once the results of the inspection are available and the sample vaccine has passed the required testing, the CFDA will conduct a comprehensive review of the vaccine. Upon approval, the CFDA will then issue the new drug certificate, and production and GMP licenses. The Company expects to be able to bring its first commercial batch of the EV71 vaccine to market approximately four months after beginning commercial production. The Company received its site inspection notification in May of 2015.

Unaudited Financial Results for Second Quarter 2015

   

2015 Q2

% of Sales

2014 Q2

% of Sales

(In USD'000 except percentage data)

Hepatitis A vaccine– Healive

 

8,462

45.7%

5,113

42.3%

Hepatitis A&B vaccine – Bilive

 

9,216

49.8%

6,439

53.3%

Hepatitis vaccines subtotal

 

17,678

95.5%

11,552

95.6%

Influenza vaccine- Anflu

 

526

2.8%

-

-

Animal Rabies vaccine- Rabend

 

18

0.1%

18

0.1%

Mumps vaccine

 

287

1.6%

520

4.3%

Regular sales

 

18,509

100.0%

12,090

100.0%

H5N1

 

-

-

-

-

Total sales

 

18,509

100.0%

12,090

100.0%

Cost of goods sold

 

3,407

18.4%

3,025

25.0%

Gross profit

 

15,102

81.6%

9,065

75.0%

In the second quarter of 2015, total sales were $18.5 million, an increase of 53.1% from $12.1 million during the same period of 2014. The sales increase is mainly attributable to increased sales of Healive and Bilive into the private pay market, and supported by increased sales into the public market as well.

Gross profit was $15.1 million in the second quarter of 2015, compared to $9.1 million in the prior year period. Gross margin increased to 81.6% from 75.0% in the prior year period. The gross margin expansion was primarily due to higher average selling prices of the Company's hepatitis vaccines in the private pay market and a lower inventory provision compared to the comparative quarter.

Selling, general and administrative expenses in the second quarter of 2015 were $9.2 million, compared to $8.6 million in the same period of 2014. This increase was mainly due to increased G&A expenses associated with the trial production of the EV71 vaccine for the site inspection.

R&D expenses in the second quarter of 2015 were $2.2 million, compared to $3.3 million in the same period of 2014. This decrease is primarily attributable to an entrance fee incurred after the signing of the licensing agreement of sIPV production technology in the second quarter of 2014 and the purchase of the virus seeds for its sIPV candidate during the same period.

Net income attributable to common shareholders for the second quarter of 2015 was $2.3 million, or $ 0.04 per basic and diluted share, compared to a net loss attributable to common shareholders of $2.2 million, or $(0.04) per basic and diluted share, in the same period last year.

Unaudited Financial Results for First Half of 2015

(In USD'000 except percentage data)

 

2015 H1

% of Sales

2014 H1

% of Sales

Hepatitis A vaccine – Healive

 

11,385

41.0%

11,552

45.1%

Hepatitis A&B vaccine – Bilive

 

14,271

51.4%

12,437

48.5%

Hepatitis vaccines subtotal

 

25,656

92.4%

23,989

93.6%

Influenza vaccine - Anflu

 

1,112

4.0%

61

0.2%

Animal Rabies vaccine - Rabend

 

80

0.3%

44

0.2%

Mumps vaccine

 

930

3.3%

1,440

5.6%

Regular sales

 

27,778

100.0%

25,534

99.6%

           

H5N1

 

-

-

102

0.4%

Total sales

 

27,778

100.0%

25,636

100.0%

Cost of goods sold

 

5,841

21.0%

6,303

24.6%

           

Gross profit

 

21,937

79.0%

19,333

75.4%

Total sales for the first half of 2015 were $27.8 million, an increase of 8.4% from $25.6 million in the same period of 2014. The increase is primarily due to increased sales of Bilive into the private pay market.

Gross profit in the first half of 2015 was $21.9 million, an increase of 13.5% from $19.3 million in the same period of 2014. Gross margin was 79.0% in the first half of 2015, compared to 75.4% in the same period of 2014.

Selling, general and administrative expenses in the first half of 2015 were $16.1 million, consistent with $16.4 million in the same period of 2014.

R&D expenses in the first half of 2015 were $4.4 million, compared to $5.0 million in the same period of 2014. In the first half of 2015, the R&D expenses incurred by the Company is mainly attributable to the phase III clinical trial on PPV. Instead, in the first half of 2014, a substantial portion of the Company's R&D expenses were related to its  sIPV program as explained above.

Net income attributable to common shareholders in the first half of 2015 was $20,000, or $0.00 per basic and diluted share, compared to a net loss of $2.2 million, or $(0.04) per basic and diluted share, in the same period of 2014.

As of June 30, 2015, cash and cash equivalents totaled $64.8 million, compared to $91.5 million as of December 31, 2014. Net cash used in operating activities was $7.8 million in the first half of 2015. Net cash used in investing activities was $2.8 million, which was primarily used for the purchase of property, plant and equipment. Net cash used in financing activities was $16.1 million during the first half of 2015, representing loan proceeds of $12.0 million offset by loan repayments of $28.5 million. As of June 30, 2015, the Company had $32.6 million of bank loans due within one year. When appropriate, the Company will seek new commercial bank loans to finance the commercialization of pipeline products, as well as for other operational purposes.

Conference Call Details

Sinovac will host a conference call on Thursday, August 13, 2015 at 8:00 a.m. ET (August 13, 2015 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 1-877-407-9039 (USA) or 1-201-689-8470 (International). A replay of the call will be available from 11:00 a.m. ET on August 13, 2015 through August 27, 2015. To access the replay, please dial 1-877-870-5176 (USA) or 1-858-384-5517 (International) and reference the replay pin number 13616892.

A live audio webcast of the call will also be available on the Investor Relations section of the Company's website at www.sinovac.com. A webcast replay will be available on the Company's website for 30 days following the call.

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
Tel: +86-10-8279-9871
Fax: +86-10-6296-6910
Email: ir@sinovac.com

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

Katherine Knight
Phone: +1 (646) 277-1276
Email: katherine.knight@icrinc.com

SINOVAC BIOTECH LTD.

Consolidated Balance sheets

As of June 30, 2015 and December 31, 2014

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

     

Current assets 

June 30, 2015

December 31,2014

     

Cash and cash equivalents

64,756

91,518

Accounts receivable – net

44,144

40,757

Inventories

23,228

18,832

Prepaid expenses and deposits 

1,154

1,430

Deferred tax assets

1,669

2,266

Total current assets

134,951

154,803

     

Property, plant and equipment

67,814

68,417

Prepaid land lease payments

10,275

10,405

Long-term inventories

2,650

2,648

Long-term prepaid expenses

-

3

Prepayments for acquisition of equipment

1,398

1,387

Deferred tax assets

445

515

Licenses

176

352

Total assets

217,709

238,530

     

Current liabilities

   

Short-term bank loans and current portion of long-term debt

32,640

47,375

Loan from a non-controlling shareholder

2,595

2,595

Accounts payable and accrued liabilities 

19,565

23,237

Income tax payable

750

1,101

Deferred revenue

3,893

4,996

Deferred government grants

904

530

Total current liabilities

60,347

79,834

     

Deferred government grants

6,463

7,494

Long-term debt

-

1,803

Deferred revenue

7,197

7,191

Other non-current liabilities

479

482

Total long term liabilities

14,139

16,970

     

Total liabilities

74,486

96,804

     

Commitments and contingencies 

   

Equity

   

Preferred stock

-

-

Common stock

56

56

Additional paid-in capital

109,073

108,243

Accumulated other comprehensive income

12,065

12,022

Statutory surplus reserves

12,627

12,627

Accumulated deficit

(6,364)

(6,384)

Total shareholders' equity

127,457

126,564

     

Non-controlling interests

15,766

15,162

Total equity

143,223

141,726

Total liabilities and equity

217,709

238,530

 

 

 SINOVAC BIOTECH LTD. 

 Consolidated Statements of Comprehensive Income (loss) 

For the three and six months ended June 30, 2015 and 2014

 (Unaudited) 

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

             
   

 Three months ended June 30 

 

 Six months ended June 30 

   

2015

2014

 

2015

2014

 Sales 

 

18,509

12,090

 

27,778

25,636

 Cost of sales 

 

3,407

3,025

 

5,841

6,303

 Gross profit 

 

15,102

9,065

 

21,937

19,333

             

 Selling, general and administrative expenses 

 

9,172

8,589

 

16,093

16,381

 Provision for doubtful accounts 

 

173

132

 

84

294

 Research and development expenses 

 

2,221

3,265

 

4,433

4,967

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

 

(24)

29

 

(24)

29

 Government grants recognized in income

 

(437)

-

 

(443)

-

 Total operating expenses 

 

11,105

12,015

 

20,143

21,671

 Operating income (loss) 

 

3,997

(2,950)

 

1,794

(2,338)

             

 Interest and financing expenses  

 

(421)

(832)

 

(1,009)

(1,582)

 Interest income

 

288

765

 

715

1,545

 Other income 

 

28

71

 

103

217

 Income (loss) before income taxes and non-controlling
     interests  

 

3,892

(2,946)

 

1,603

(2,158)

 Income tax expense 

 

(440)

(76)

 

(991)

(423)

 Net Income (loss) 

 

3,452

(3,022)

 

612

(2,581)

 Less: (Income) loss attributable to the non-controlling interests

(1,181)

774

 

(592)

337

 Net Income (loss) attributable to shareholders of 
     Sinovac 

 

2,271

(2,248)

 

20

(2,244)

             

 Other comprehensive income (loss), net of tax of nil 

           

  Foreign currency translation adjustments

 

(11)

(319)

 

55

(2,403)

 Total comprehensive income (loss) 

 

3,441

(3,341)

 

667

(4,984)

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

 

(1,186)

738

 

(604)

638

 Comprehensive income (loss) attributable to
    
 shareholders of Sinovac 

 

2,255

(2,603)

 

63

(4,346)

             

 Weighted average number of shares of common stock
     outstanding 

           

   Basic 

 

56,019,451

55,663,566

 

55,974,252

55,625,509

   Diluted 

 

56,187,591

55,663,566

 

56,219,495

55,625,509

             

 Earning (loss) per share 

           

   Basic 

 

0.04

(0.04)

 

0.00

(0.04)

   Diluted 

 

0.04

(0.04)

 

0.00

(0.04)

 

SINOVAC BIOTECH LTD.

Consolidated Statements of Cash Flows

For the three and six months ended June 30, 2015 and 2014

(Unaudited)

(Expressed in thousands of U.S. Dollars)

 

Three months ended

Six months ended

 

June 30

June 30

   

2015

 

2014

 

2015

 

2014

Cash flows provided by (used in) operating activities

               

Net income (loss)

$

3,452

$

(3,022)

$

612

$

(2,581)

  Adjustments to reconcile net income (loss) to net cash

               

Used in operating activities:

               

 - deferred income taxes

 

165

 

58

 

699

 

369

 - stock-based compensation

 

208

 

71

 

321

 

143

 - inventory provision

 

521

 

321

 

566

 

542

 - provisionfor doubtful accounts

 

173

 

132

 

84

 

294

 - loss (gain) on disposal and impairment of equipment 

 

(24)

 

29

 

(24)

 

29

 - government grants recognized in income

 

(437)

 

-

 

(443)

 

-

 - depreciation of property, plant and equipment and amortization of license

1,759

 

1,903

 

3,451

 

4,534

 - amortization of the prepaid land lease payments

 

68

 

65

 

137

 

132

 - accretion expenses

 

30

 

28

 

59

 

55

Changes in:

               

 - accounts receivable

 

(1,770)

 

1,327

 

(3,613)

 

(3,654)

 - inventories

 

(3,544)

 

(4,905)

 

(5,086)

 

(7,784)

 - income tax payable 

 

(382)

 

-

 

(382)

 

-

 - prepaid expenses and deposits

 

(143)

 

234

 

521

 

(348)

 - deferred revenue 

 

(1,104)

 

33

 

(1,104)

 

(685)

 - accounts payable and accrued liabilities

 

1,446

 

(1,889)

 

(3,578)

 

(2,459)

                 

Net cash provided by (used in) operating activities

 

418

 

(5,615)

 

(7,780)

 

(11,413)

                 

Cash flows provided by (used in) financing activities

               

 - Proceeds from bank loans

 

11,154

 

3,182

 

11,956

 

8,917

 - Repayments of bank loans

 

(9,138)

 

(6,084)

 

(28,541)

 

(8,542)

 - Proceeds from issuance of common stock,

               

   net of share issuance costs

 

237

 

147

 

500

 

252

 - Proceeds from shares subscribed 

 

9

 

31

 

9

 

80

 - Government grants received 

 

6

 

185

 

9

 

185

                 

Net cash provided by (used in) financing activities

 

2,268

 

(2,539)

 

(16,067)

 

892

                 

Cash flows used in investing activities

               

 - Acquisition of property, plant and equipment

 

(1,064)

 

(3,479)

 

(2,845)

 

(5,683)

                 

Net cash used in investing activities

 

(1,064)

 

(3,479)

 

(2,845)

 

(5,683)

                 

Exchange gain (loss) on cash and cash equivalents

 

64

 

(385)

 

(70)

 

(1,404)

                 

Increase (decrease) in cash and cash equivalents

 

1,686

 

(12,018)

 

(26,762)

 

(17,608)

                 

Cash and cash equivalents, beginning of period

 

63,070

 

101,652

 

91,518

 

107,242

                 

Cash and cash equivalents, end of period

$

64,756

$

89,634

$

64,756

$

89,634

 
 
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