China Biologic Products Reports Higher Results for the First Quarter 2012
Published: May 09, 2012
BEIJING, May 8, 2012/PRNewswire-Asia-FirstCall/ -- China Biologic Products, Inc. (NASDAQ: CBPO) ("China Biologic" or the "Company"), one of the leading plasma-based biopharmaceutical companies in the People's Republic of China ("PRC"), today reported higher financial results for the three months ended March 31, 2012 compared with the first quarter 2011.
Financial highlights for the first quarter 2012
- Total sales increased 37.0% to $47.2 million in the first quarter 2012 from $34.5 in the first quarter 2011.
- Gross profit increased 25.2% to $31.5 million in the first quarter 2012 from $25.2 million in the first quarter 2011.
- Income from operations increased 29.6% to $18.8 million in the first quarter 2012 from $14.5 million in the first quarter 2011.
- GAAP net income attributable to China Biologic increased 105.4% to $13.0 million in the first quarter 2012 from $6.3 million in the first quarter 2011.
- GAAP net income attributable to China Biologic per diluted share was $0.44 in the first quarter 2012 compared with $0.23 per diluted share in the first quarter 2011.
- Non-GAAP adjusted net income attributable to China Biologic increased 59.6% to $12.7 million in the first quarter 2012 from $8.0 million in the first quarter 2011.
- Non-GAAP net income attributable to China Biologic per diluted share was $0.48 in the first quarter 2012 compared with $0.31 per diluted share in the first quarter 2011.
Mr. Colin (Chao Ming) Zhao, Chief Executive Officer & President of China Biologic, said, "Our results for the first quarter 2012 were quite good, with sales up 37.0%, net income attributable to China Biologic up 105.4%, and diluted earnings per share up 91.3%, compared with the first quarter 2011. Our adjusted non-GAAP net income attributable to China Biologic also was up 59.6%, first quarter 2012 from first quarter 2011.
"This performance is especially gratifying, given that our sources of raw plasma supply were reduced by the closing of four of our plasma collection stations in August last year as directed by the Guizhou provincial government. Those stations had accounted for about 34% of our total raw plasma volume collected in 2010. We believe our first quarter 2012 performance shows that our interim strategy is working well.
"The demand for most of our plasma products continues to hold relatively strong, driven in the long-term by China's growing and aging population, increasing urbanization, economic growth, and the government's promotion of health care and its strategies and policies that encourage the expansion in plasma collection and the use of plasma products.
"Most importantly, Mr. Zhu Chen, China's Minister of Health, has encouraged the country to double plasma supply from 2012 to 2016, as part of China's newest five-year plan. According to Mr. Chen, the current supply of plasma can barely meet half of the potential demand for plasma protein products. We continue to hope and believe that the Minister's statements will induce local governments to support and cooperate in broadening the regions for developing and building new plasma collection stations, which are vital to the nation's health.
"Our interim strategy to bridge the period of shorter raw plasma supply includes developing alternativesolutions and opportunities to mitigate the plasma reduction from the closed collection stations, reallocation of resources from the closed stations to maximize their use within our company, and aggressively seeking new regions for new plasma stations. The process of locating and developing new stations includes numerous time-consuming activities and uncertainties, including analyzing and selecting the appropriate locations for successful plasma stations, gaining the extensive and detailed sequential approvals at various levels of government, station construction, equipment installation, inspections and licensing, and donor promotion and education programs.
"We also have adjusted our production plan and sales and marketing strategy to leverage our continuing plasma resources to maximize profit, given the changing market dynamics. We have focused on supplying our life-saving products through direct sales to those facilities with patients who have the most critical medical needs and to our best long-term customers. We are also focusing on our most profitable products. Our transition to direct sales continues to progress well. Clearly, those actions have started to deliver good performance in the first quarter of 2012.
"Our new product pipeline also continues to look good. We await approval from China's State Food and Drug Administration to begin selling our new Human Prothrombin Complex Concentrate and our new Human Coagulation Factor VIII. In addition, in the first quarter this year, we were authorized to begin phase III clinical trials for a new product, human fibrinogen, that is designed to be used to treat congenital or acquired fibrinogen deficiency associated with serious liver damage, cirrhosis, disseminated intravascular coagulation, or coagulation disorder resulting from the lack of fibrinogen related to postpartum hemorrhage, major surgery, trauma, or acute bleeding.
"Several words of caution are in order. If China's human health conditions change to require our products to help defend against major outbreaks of diseases, our inventory of plasma could be reduced, since we have less ability to collect higher levels of plasma due to having fewer plasma collection stations. As a result, we may not have the flexibility we currently have to choose the use of our plasma inventory to create and sell our most profitable products. Should major outbreaks of diseases occur, we would not likely be able to deliver improving financial performance. Because diseases are not easy to predict, we cannot estimate or assign a probability to that category of risk.
"With the additional assistance and support from our board of directors, we remain committed to accelerating our long-term earnings growth in the future by expanding our research and development and new product pipeline, increasing our direct sales to institutional customers rather than through distributors, expanding our geographic reach, locating and creating new raw plasma sources, and pursuing possible prudent acquisitions and mergers and potential international collaborations.
"With this good start to the year 2012, we are continuing to take the actions we believe will achieve our strategic goals that include creating long-term additional value for shareholders through outstanding products that are vital to human health."
Results for the first quarter ended March 31, 2012
Total sales increased $12.8 million or 37.0% to $47.2 million in the first quarter ended March 31, 2012 from $34.5 million in the first quarter 2011 mainly due to a mix of price and volume increases in certain of our plasma based products and favorable changes in foreign exchange translation that accounted for 5.7% of the sales increase. Total sales in RMB increased 31.3% in the first quarter 2012 from the first quarter 2011.