BioSpace Collaborative

Academic/Biomedical Research
News & Jobs
Biotechnology and Pharmaceutical Channel Medical Device and Diagnostics Channel Clinical Research Channel BioSpace Collaborative    Job Seekers:  Register | Login          Employers:  Register | Login  

NEWSLETTERS
Free Newsletters
Archive
My Subscriptions

NEWS
News by Subject
News by Disease
News by Date
PLoS
Search News
Post Your News
JoVE

CAREER NETWORK
Job Seeker Login
Most Recent Jobs
Search Jobs
Post Resume
Career Fairs
Career Resources
For Employers

HOTBEDS
Regional News
US & Canada
  Biotech Bay
  Biotech Beach
  Genetown
  Pharm Country
  BioCapital
  BioMidwest
  Bio NC
  BioForest
  Southern Pharm
  BioCanada East
  US Device
Europe
Asia

DIVERSITY

PROFILES
Company Profiles

INTELLIGENCE
Research Store

INDUSTRY EVENTS
Research Events
Post an Event
RESOURCES
Real Estate
Business Opportunities

 News | News By Subject | News by Disease News By Date | Search News
Get Our Industry eNewsletter FREE email:    
   

China Biologic Products Reports Financial Results for the Second Quarter and First Half of 2012


8/10/2012 11:59:44 AM

BEIJING, Aug. 9, 2012 /PRNewswire-Asia-FirstCall/ -- China Biologic Products, Inc. (NASDAQ: CBPO, "China Biologic" or the "Company"), a leading fully integrated plasma-based biopharmaceutical company in China, today announced its unaudited financial results for the second quarter of 2012.

Second Quarter 2012 Financial Highlights

  • Total sales in the second quarter of 2012 increased by 21.1% to $50.5 million from $41.7 million in the same quarter of 2011.
  • Gross profit increased by 17.8% to $34.3 million from $29.2 million in the same quarter of 2011. Gross margin was 68.0% in the second quarter of 2012 compared with 70.0% in the second quarter of 2011.
  • Income from operations increased by 23.7% to $21.3 million from $17.2 million. The operating margin was 42.2% in the second quarter of 2012 compared with 41.4% in the second quarter of 2011.
  • Net income attributable to the Company was $12.8 million, a decrease of 22.7% from $16.6 million in the same quarter of 2011. Non-GAAP adjusted net income attributable to the Company was $13.3 million or $0.50 per diluted share in the second quarter of 2012, representing a 52.2% increase from $8.7 million or $0.33 per diluted share in the same quarter of last year.

Mr. David (Xiaoying) Gao, Chairman and chief executive officer ("CEO") of China Biologic, commented, "The latest quarter and first half of the year represented periods of positive change and growth at the Company. In the second quarter, both sales and income from operations grew over 20%. Non-GAAP adjusted net income attributable to the Company increased 52.2% to $13.3 million. As of the end of the first half of 2012, we have achieved over 50% of our full-year revenue target. Our direct sales model allows us to achieve better margins on most of our products and we also experienced increased market demand due to industry supply shortage for most plasma products during the period."

"We are also pleased to announce that we received the manufacturing approval certificate from the SFDA for Human Coagulation Factor VIII in June 2012 and expect to commence commercial production later in 2012. This is a milestone for China Biologic, as the Company rounds out its product portfolio and reinforces its market leadership."

Mr. Gao continued, "While focused on developing new plasma sources to grow our market penetration, internally China Biologic continues to strengthen its corporate governance structures as well. During the first half of 2012, the Board of Directors implemented key senior personnel changes, including my appointment as Chairman and CEO, and Mr. Ming Yang's appointment as CFO. We believe we now have a strong executive team in place with valuable experience in China healthcare industry to implement the Company's business strategies, ensure transparency and increase long-term shareholder value. At the board level, we are also proud to have added industry veteran Mr. Albert Yeung as an independent director."

Second Quarter 2012 Financial Performances

Total sales in the second quarter of 2012 were $50.5 million, representing an increase of 21.1% from $41.7 million in the same quarter of 2011. Excepting foreign exchange influence, the increase in sales was primarily attributable to a mix of price and volume increases in certain plasma-based products, as well as a substantial increase in sales of placenta polypeptide products. During the three months ended June 30, 2012, most of the Company's approved products recorded price increases of mid-teen percentages. The general price increase for the human albumin product and immunoglobulin product group was primarily attributable to a shortage of supply in the first half of 2012 following the provincial government's decision to close certain plasma stations in Guizhou.

During the three months ended June 30, 2012, human albumin products and human immunoglobulin for intravenous injection ("IVIG") products remained the largest two sales contributors.

  • As a percentage of total sales, human albumin product revenue decreased to 38.7% in the second quarter of 2012 from 51.3% in the same quarter of 2011. During the three months ended June 30, 2012, sales volume of human albumin products declined by 18.4%, mainly due to decreased production volumes resulting from reduced raw material supply brought on by the closure of several plasma collection stations in Guizhou in 2011.
  • As a percentage of total sales, IVIG revenue increased to 42.1% in the second quarter of 2012 from 38.6% in the same quarter of 2011. Sales volume of IVIG products increased by 15.2% in the reporting quarter, mainly due to the increased production volume and access to higher inventory levels built up in the later part of 2011 in anticipation of the seasonal demand associated with Hand-Foot-and-Mouth Disease outbreaks.

Cost of sales increased by 28.9% to $16.1 million in the second quarter of 2012, from $12.5 million in the same quarter of 2011. Cost of sales as a percentage of total sales was 32.0%, slightly up from 30.0% in the same quarter of 2011. Volume and percentage increases in cost of sales were mainly due to increased sales activities and higher compensation paid to plasma donors, which brought the company's donor compensation amounts in line with the industry norm and helped the Company expand its plasma collection volume and donor base.

Gross profit increased by 17.8% to $34.3 million in the second quarter of 2012, from $29.2 million in the same quarter of 2011. Gross margin decreased slightly to 68.0% from 70.0% in the second quarter of 2011, due to the increase in raw material costs.

Total operating expenses in the second quarter of 2012 increased by 9.3% to $13.0 million from $11.9 million in the same quarter of 2011, primarily attributable to a 37.1% increase in selling expenses, which was partly offset by a 23.7% decrease in research and development expenses. As a percentage of total sales, total operating expenses decreased slightly to 25.8% for the three months ended June 30, 2012, from 28.6% in the same quarter of 2011.

Selling expenses in the second quarter of 2012 rose to $4.2 million from $3.0 million in the same quarter of 2011, representing an increase of 37.1%. The increase was primarily due to higher expenses related to selling expenses associated with the placenta polypeptide products since late December 2011. Excluding the selling expenses associated with placenta polypeptide products, selling expenses for plasma products were in line with the increase of sales. As a percentage of total sales, selling expenses was 8.3% in the second quarter of 2012, slightly up from 7.3% in the second quarter of 2011.

General and administrative expenses in the second quarter of 2012 rose to $7.9 million from $7.7 million in the same quarter of 2011, representing an increase of 3.5%. The increase was mainly due to the hiring of several senior management team members during the second quarter of 2012. As a percentage of total sales, general and administrative expenses was 15.7% in the second quarter of 2012, down from 18.4% in the second quarter of 2011.

Research and development expenses in the second quarter of 2012 declined to $0.9 million from $1.2 million in the same quarter of 2011, representing a decrease of 23.7%. The decrease in research and development expenses was primarily due to the fact that several research and development projects that we are currently undertaking are still in their earlier stages and do not require substantial investments. As a percentage of total sales, research and development expenses for the three months ended June 30, 2012 and 2011 were 1.8% and 2.9%, respectively.

Income from operations in the second quarter of 2012 was $21.3 million, an increase of 23.7% from $17.2 million in the same quarter of 2011.

Interest expense decreased to $0.2 million in the second quarter of 2012, from $2.3 million in the same period of 2011. The decrease was primarily due to that the convertible notes were fully converted in June 2011 and the short-term bank loans were repaid in May 2012.

Provision for income taxes in the second quarter of 2012 was $3.3 million, as compared to $5.3 million in the same quarter of 2011. The effective income tax rates were 15% and 20% for the three months ended June 30, 2012 and 2011, respectively.

Net income decreased by 5.2% to $19.6 million for the three months ended June 30, 2012, from $20.7 million in the same period of 2011. Net margins were 38.8% and 49.6% for the three months ended June 30, 2012 and 2011, respectively. The decrease was a result of the cumulative effects of the foregoing factors.

Net income attributable to the Company was $12.8 million, a decrease of 22.7% from $16.6 million in the same quarter of 2011. The decrease was a result of the cumulative effects of the foregoing factors.

Non-GAAP adjusted net income attributable to the Company was $13.3 million or $0.50 per diluted share in the second quarter of 2012 compared with $8.7 million or $0.33 per diluted share in the same quarter of 2011.

Non-GAAP adjusted net income and diluted earnings per share in the second quarter of 2012 excluded an aggregate $0.6 million gain, which was related to the change in the fair value of derivative liabilities, and $1.0 million of non-cash employee share-based compensation expenses.

First Half 2012 Financial Performances

Total sales in the first half of 2012 were $97.7 million, an increase of 28.3% from $76.1 million in the same period of 2011. The increase in sales was primarily attributable to a mix of price and volume increases in plasma-based products, as well as a substantial increase in sales of placenta polypeptide products.

As a percentage of total sales, sales from human albumin products and IVIG products were 46.4% and 37.4%, respectively, for the six months ended June 30, 2012.

Cost of sales increased by 45.9% to $31.8 million in the first half of 2012, from $21.8 million in the same period of 2011. Cost of sales as a percentage of total sales was 32.6%, as compared to 28.7% in the same period of 2011. Volume and percentage increases in cost of sales was mainly due to increased sales activities and higher compensation paid to plasma donors, which brought the Company's donor compensation amounts in line with the industry norm.

Gross profit increased by 21.2% to $65.8 million in the first half of 2012 from $54.3 million in the same period of 2011. Gross margin decreased to 67.4% in the first half of 2012 from 71.3% in the same period of 2011, mainly due to the increase in raw material costs.

Total operating expenses in the first half of 2012 increased by 14.0% to $25.7 million from $22.5 million in the same period of 2011, primarily attributable to a 63.8% increase in selling expenses, which was partly offset by a 15.0% decrease in research and development expenses. As a percentage of total sales, total operating expenses decreased slightly to 26.3% for the six months ended June 30, 2012, from 29.6% in the same period of 2011.

Income from operations for the six months ended June 30, 2012 was $40.1 million, an increase of 26.4% from $31.8 million in the same period of 2011.

Provision for income taxes in the first half of 2012 was $6.5 million, as compared to $9.6 million in the same period of 2011. The effective income tax rates were 15% and 24% for the six months ended June 30, 2012 and 2011, respectively.

Net incomeattributable to the Company increased by 12.6% to $25.8 million for the six months ended June 30, 2012, from $22.9 million in the same period of 2011. Net margins were 26.4% and 30.1% for the six months ended June 30, 2012 and 2011, respectively.

Non-GAAP adjusted net income attributable to the Company was $26.0 million or $0.98 per diluted share for the six months ended June 30, 2012 compared with $16.7 million or $0.62 per diluted share in the same period of 2011.

Non-GAAP adjusted net income and diluted earnings per share in the six months ended June 30, 2012 excluded an aggregate $1.8 million gain, which was related to the change in the fair value of derivative liabilities, and $2.0 million of non-cash employee share-based compensation expenses.

As of June 30, 2012, the Company had cash and short-term investment of $105.8 million, compared to $89.4 million as of December 31, 2011.

Net cash provided by operating activities for the six months ended June 30, 2012 was $32.1 million, as compared to $12.3 million for the six months ended June 30, 2011.

Outlook

For the full year of 2012, the Company reiterates sales guidance of between $168 million and $176 million, representing a year-over-year growth of between approximately 10.0% and 15.0%. The Company estimates full year non-GAAP adjusted net income to be in the range of $38 million to $40 million.

Conference Call

The Company will host a conference call at 8:00 am, Eastern Time on Friday, August 10, 2012, which is 8:00 pm, Beijing Time on August 10, 2012, to discuss second quarter 2012 results and answer questions from investors. Listeners may access the call by dialing:



Read at BioSpace.com

   

ADD TO DEL.ICIO.US    ADD TO DIGG    ADD TO FURL    ADD TO STUMBLEUPON    ADD TO TECHNORATI FAVORITES
 

//-->