BEIJING, Nov. 14, 2014 /PRNewswire/ -- Sinovac Biotech Ltd. (NASDAQ: SVA), a leading provider of biopharmaceutical products in China, today announced its unaudited financial results for the third quarter and nine months ended September 30, 2014.
Third Quarter 2014 Financial Highlights
(compared to the third quarter 2013)
- Quarterly sales were $17.1 million, a decrease of 22.3% from $22.1 million in the prior year period, which includes recognition of a special order of pandemic influenza vaccine (H5N1) revenue of $3.6 million. Excluding the impact from this special order, third quarter sales of regular vaccine products decreased 7.4% from the prior year period.
- Gross profit was $12.2 million, a decrease of 16.7% from $14.6 million in the prior year period. Excluding the special order of pandemic influenza vaccine (H5N1) sales impact from 3Q13, gross profit decreased 2.8% from $12.5 million in the same period of last year. Gross margin was 70.9%, compared to 66.1% in the prior year period. Excluding the impact from the special order of pandemic influenza vaccine (H5N1) in 3Q13, gross margin was 70.9%, compared to 67.6% in the same period of last year.
- Net income attributable to common stockholders was $0.1 million, or $0.00 per basic and diluted share, compared to $2.3 million, or $0.04 per basic and diluted share, in the third quarter of 2013.
Mr. Weidong Yin, Chairman, President and CEO of Sinovac, commented, "In the third quarter, the vaccine market in China began to show signs of recovery after the lower demand in the first half of the year. Although our regular sales were still down from the third quarter last year, we are encouraged by the uptick in demand for our seasonal flu vaccine from the private-pay market as well as consistent hepatitis A vaccine tenders in the public market.
"We continue to expand our presence in international markets with high sales potential for our vaccines. The Mexican Ministry of Health recently renewed our GMP certificate for the seasonal influenza and hepatitis A vaccines. Also during the third quarter, we received our registration license for our seasonal influenza vaccine in Chile.
"We are continuing to make progress on our pipeline vaccines. The expert panel review for our EV71 vaccine is scheduled in November 2014, which is one step forward in the process of new drug appication of our EV71 vaccine. We have also finalized the clinical trial protocol for our pneumococcal polysaccharide vaccine (PPV) and expect to begin clinical trials by the end of 2014," Mr. Yin concluded.
Third Quarter 2014 Business Highlights
Sales Update
Public Tenders Sinovac received notification that it has been selected by the Jiangsu Centers for Disease Control and Prevention to supply the Company's inactivated hepatitis A vaccine, Healive, to the Expanded Program of Immunization (EPI) in 2015. As one of two selected suppliers for the tender, Sinovac has committed to supplying 55% of the total tender of Jiangsu Province, which represents growth over Sinovac's contribution of 50% of the total tender amount in last year. Sinovac anticipates revenue of approximately RMB 18 million (or approximately $2.9 million) from this tender.
Additionally, Sinovac has been selected by the Tianjin Centers for Disease Control and Prevention to be the sole supplier of inactivated hepatitis A vaccines to the EPI in Tianjin for 2015 through 2017. The total value of this tender is approximately RMB 28 million (or approximately $4.6 million).
The Company expects to begin delivery of vaccines for both tenders by the end of 2014, according to demand.
GMPCertificate for Mexico On August 29, 2014, Sinovac passed on-site inspections of its Shangdi and Changping facilities and obtained a renewal of its GMP certificate from the Mexico Ministry of Health for its seasonal influenza and hepatitis A vaccines. The renewed GMP certificate is valid until February 2016.
Seasonal Influenza Vaccine Registration License in Chile 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
sIPV On October 29, 2014, the Beijing Drug Administration officially accepted Sinovac's clinical trial application for its Sabin inactivated polio vaccine (sIPV).
Unaudited Financial Results for Third Quarter 2014
(In USD'000 except percentage data) | 2014 Q3 | % of Sales | 2013 Q3 | % of Sales | |
Hepatitis A Healive | 3,967 | 23.1% | 5,252 | 23.8% | |
Hepatitis A&B Bilive | 3,176 | 18.5% | 5,355 | 24.3% | |
Hepatitis vaccines | 7,143 | 41.6% | 10,607 | 48.1% | |
Influenza vaccine | 9,647 | 56.3% | 8,417 | 38.1% | |
Animal vaccine | 102 | 0.6% | 54 | 0.2% | |
Mumps vaccine | 254 | 1.5% | (571) | (2.6)% | |
Regular sales | 17,146 | 100.0% | 18,507 | 83.8% | |
H5N1 | - | - | 3,568 | 16.2% | |
Total sales | 17,146 | 100.0% | 22,075 | 100.0% | |
Cost of goods sold | 4,986 | 29.1% | 7,474 | 33.9% | |
Gross profit | 12,160 | 70.9% | 14,601 | 66.1% |
In the third quarter 2014, total sales were $17.1 million, a decrease of 22.3% from $22.1 million during the same period in 2013. However, during the third quarter 2013, the Company recognized revenue of $3.6 million from sales of its pandemic influenza vaccine (H5N1) to the government stockpiling program. Excluding the impact of this special order, quarterly sales decreased 7.4% YoY in the third quarter. According to a joint notice on reducing and unifying the value added tax (VAT) rate published by the Ministry of Finance of China and State Administration of Taxation of China, the VAT rate applied to the sales of vaccine products was reduced to 3% from 6% effective July 1, 2014. Excluding the impact of the VAT rate reduction, quarterly sales decreased 10.1% YoY in the third quarter.
Gross profit was $12.2 million in the third quarter 2014, compared to $14.6 million in the prior year period. Gross margin increased to 70.9% from 66.1% in the prior year period. Excluding the impact from the sales of pandemic influenza vaccine (H5N1) in the third quarter of last year, gross margin was 70.9%, compared to 67.6% in the same period of last year. The increase in gross margin was primarily due to increased efficiency in the Anflu manufacturing processes.
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