HUBEI PROVINCE, China, Nov. 18 /PRNewswire-FirstCall/ -- Benda Pharmaceutical, Inc. , a China-based pharmaceutical company producing both Gendicine(R), a commercialized gene therapy medicine for the treatment of cancer, and traditional Chinese and conventional medicines, today announced financial results for the three and nine month periods ended September 30, 2008. The Company intends to file its Form 10-Q with the SEC today.
Nine Months Ended September 30, 2008
Revenue in the first nine months of 2008 increased 25.7% to $19.9 million from $15.8 million in the first nine months of 2007, primarily reflecting increased sales at Benda Ebei. SiBiono generated revenue of $1.8 million in the first nine months of 2008, down from $3.3 million in the prior year period. The decline in SiBiono-related revenue reflects the Company's reorganization of personnel in the department.
Gross profit in the first nine months of 2008 was $7.2 million, a 5.7% decrease from $7.7 million in the first nine months of 2007. Gross margin was 36.5%, compared with 48.7% in the same period in 2007. Gross margin performance reflected a drop in sales of Gendicine, which has historically generated a comparatively higher gross margin.
Operating loss in the first nine months of 2008 was $0.7 million, an improvement from an operating loss of $5.3 million in the first nine months of 2007. Operating expenses in the first nine months of 2008 was approximately $7.9 million, compared with $13.0 million in the first nine months of 2007. Operating expense reflects promotional fees for Gendicine and the introduction of new products in Benda Ebei, as well as a $1.4 million penalty paid to investors for registration delays. The Company incurred significantly higher operating costs in the prior year period related to the acquisition of SiBiono.
Net loss in the first nine months of 2008 improved to $4.7 million, or $0.05 per diluted share, from a net loss of $7.3 million, or $0.06 per diluted share, in the first nine months of 2007. Net loss in the first nine months of 2008 includes the impact of approximately $3.3 million in interest expenses related to the Company's outstanding convertible notes and the $1.4 million payment to investors related to the timing of the effectiveness of its registration statement on Form S-1. The Company was granted effectiveness on the S-1 filing and does not anticipate further penalty payments related to this S-1 filing going forward.
Three Months Ended September 30, 2008
Revenue in the third quarter of 2008 decreased 12.2% to $6.6 million from $7.6 million in the third quarter of 2007, primarily reflecting increased sales at Benda Ebei, offset by sales declines at SiBiono related to the Company's reorganization of personnel in the department. Benda management concluded the reorganization during the third quarter of 2008, and SiBiono has resumed production and sales. In the third quarter of 2008, the Company sold 3,021 vials of Gendicine, a sequential increase from sales of 1,087 vials sold in the first quarter of 2008 and 2,439 vials sold in the second quarter of 2008.
Gross profit in the third quarter of 2008 was $2.4 million, a decrease of 36.1% from $3.8 million in the third quarter of 2007. Gross margin was 36.5%, compared with 50.1% in the same period of 2007. The decline in gross margin was primarily due to a re-engineering of SiBiono's production department, which affected the sales of Gendicine. However, management believes that the re-engineering will lead to revenue growth in the coming quarters.
Operating income in the third quarter of 2008 decreased to $0.6 million from $1.7 million in the third quarter of 2007. Operating expense in the third quarter was approximately $1.8 million, compared with $2.1 million in the third quarter of 2007, reflecting the penalty payment of $0.3 million referenced above as well as advertising expenditure at SiBiono and Benda Ebei.
Net loss in the third quarter of 2008 was $0.8 million, or a net loss of $0.01 per basic and diluted share, compared to net income of $1.0 million, or net income of $0.01 per basic and diluted share, in the third quarter of 2007.
Charles Wan, Chairman and Chief Executive Officer of Benda, commented, ''We continue to be focused on enhancing our revenue performance at SiBiono, as well as our gross margin performance across the organization. The reorganization of personnel at SiBiono was completed in the third quarter and full-scale production is expected to resume in the fourth quarter of 2008. We continue to be optimistic about the market opportunities for SiBiono in the future.''
About Benda Pharmaceutical, Inc.
Benda Pharmaceutical, Inc. ( http://www.bendapharma.com ), a China-based pharmaceutical company, produces traditional Chinese and conventional medicines, as well as Gendicine(R), a commercialized gene therapy medicine for the treatment of cancer.
Safe Harbor Statement
The information contained herein includes forward-looking statements. These statements relate to future events or to our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward- looking statements. You should not place undue reliance on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could, and likely will, materially affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects our current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. We assume no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. The safe harbor for forward-looking statements contained in the Securities Litigation Reform Act of 1995 protects companies from liability for their forward-looking statements if they comply with the requirements of the Act.
CONTACT: Integrated Corporate Relations, Inc., Christine Duan, +1-203-
682-8200 for Benda Pharmaceutical, Inc.
Web site: http://www.bendapharma.com//