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Sinovac Reports Unaudited Third Quarter Financial Results

The following excerpt is from the company's SEC filing.

BEIJING, November 11, 2015 /PRNewswire/ -- Sinovac Biotech Ltd. (NASDAQ: SVA), a leading provider of biopharmaceutical products in China, announced today its unaudited third quarter and nine month financial results for the period ended September 30, 2015.

Third Quarter 2015 Financial Highlights

compared to the third quarter of 2014)

Quarterly sales were $16.8 million, a decrease of 2.0% from $17.1 million in the comparative period. This decline was largely due to changes in exchange rate.

Gross profit w as $11.2 million, a decrease of 8.3% from $12.2 million in the prior year period. Gross margin was 66.4%, compared to 70.9% in the prior year period.

Net loss attributable to common shareholders was $1.6 million, or $(0.03) per basic and diluted share, compared to net income attributable to common shareholders of $89,000, or $0.00 per basic and diluted share, in the third quarter of 2014.

Mr. Weidong Yin, Chairman, President and CEO of Sinovac, commented, “Our results this quarter reflect consistent recurring sales of our core products. We are pleased to announce that the site inspection and GMP inspection for production of our EV71 vaccine have been completed, which is a critical step in the final phase of the approval process. We expect to receive final approval for production from the CFDA by early next year. Also, we were pleased to receive clinical trial approval for our varicella vaccine candidate. This live-attenuated vaccine will be an important addition to our product portfolio and will serve as a component in our pipeline measles-mumps-rubella-varicella (MMRV) combination vaccine. We continue to focus on maximizing the distribution of our core vaccine products, as we advance our product pipeline to drive growth for years to come.”

Third Quarter 2015 Business Highlights

Sales and Marketing

In October, Sinovac received a tender from the Jiangsu provincial government to be the supplier of hepatitis A vaccines for the third consecutive year. Under this agreement, Sinovac became the sole supplier of the 2015 hepatitis A vaccine tender in Jiangsu for the first time and will provide 1.1 million doses of its inactivated hepatitis A vaccines over the next 12 months to the Jiangsu provincial government.

As previously announced, Sinovac was also awarded a tender from the Beijing government to supply seasonal influenza vaccines for its 2015 vaccination campaign. The Beijing government plans to order a minimum of 1.2 million doses of the seasonal flu vaccine this year from four domestic vaccine manufacturers for its campaign.

Research and Development

The site inspection and GMP inspection of the Company’s EV71 vaccine production facility have been completed. The vaccine samples have passed the required testing by the CFDA. Sinovac expects to receive final approval for its EV71 vaccine by early 2016.

Varicella Vaccine

Sinovac obtained approval from the CFDA to begin human clinical trials on its varicella vaccine candidate. The Company is currently confirming the site, training staff and preparing for volunteer screening. Sinovac expects the clinical trials to be completed by 2017. Sinovac is currently renovating an existing building on its Dalian campus, which will serve as the commercial production plant for the varicella vaccine. The plant will have a designed annual capacity of 5,000,000 doses.

Unaudited Financial Results for

Third Quarter 2015

(In USD'000 except percentage data)

2015 Q3

% of Sales

2014 Q3

Hepatitis A – Healive

Hepatitis A&B – Bilive

Hepatitis vaccines subtotal

Influenza vaccine

Animal vaccine

Mumps vaccine

Regular sales

16,797

17,146

Total sales

Cost of sales

11,154

12,160

Total sales in the third quarter of 2015 were $16.8 million, a decrease of 2.0% compared to $17.1 million in the same period of 2014. The slight decrease is attributable to the depreciation of the Chinese RMB against the US dollar.

Gross profit was $11.2 million in the third quarter of 2015, compared to $12.2 million in the prior year period. Gross margin decreased to 66.4% from 70.9% in the prior year period. The decrease is primarily due to a lower utilization rate of the Company’s production facilities in 2015. Additionally, in the third quarter of 2015, the Company delivered more Healive to the public market, which resulted in a lower average selling price of products sold compared to the prior year period.

Selling, general...


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