Sinovac Biotech Ltd. (NASDAQ: SVA) (“SINOVAC” or the “Company”),
a leading provider of biopharmaceutical products in China,
announced today its unaudited financial results for the six months
ended June 30, 2021.
First Half of 2021 Financial Summary
- Sales for the six months ended June 30, 2021 were $11.0
billion, compared to $67.7 million in the prior year period.
- The Company posted $5.1 billion of net income attributable to
common shareholders, or $51.42 per basic and $44.80 per diluted
share, in the six months ended June 30, 2021, compared to net loss
attributable to common shareholders of $12.6 million, or $0.13 loss
per basic and diluted share, in the prior year period.
Mr. Weidong Yin, Chairman, President and CEO of SINOVAC, said:
“We are working with global partners on joint vaccine research and
collaborating locally to make COVID-19 vaccines available around
the world. SINOVAC has become one of the largest global suppliers
of COVID-19 vaccines, supplying over 2.5 billion doses of its
inactivated vaccine, CoronaVac®, around the world, as of late
December 2021. As the world continues to face challenges and new
COVID-19 variants, SINOVAC remains committed to developing and
distributing safe and effective vaccines in China and across the
globe. We remain confident that our team of scientists will
continue to evolve our vaccines to address new challenges and
overcome the pandemic.”
Business Updates
COVID-19 Vaccine – CoronaVac®, the inactivated COVID-19
vaccine developed by SINOVAC, has been granted emergency use
approval or conditional market authorization by 56 countries and
regions. On June 1, 2021, CoronaVac® was approved for emergency use
under the World Health Organization (WHO) Emergency Use Listing
(EUL) procedure. On July 12, 2021, SINOVAC entered into an advance
purchase agreement with the Global Alliance for Vaccines and
Immunization (Gavi Alliance) to provide up to 380 million doses of
CoronaVac® for global distribution. In addition, CoronaVac® was
approved for pediatric use for children aged from three years and
above in nine countries. As of late December 2021, SINOVAC has
provided over 2.5 billion doses of CoronaVac® globally. With annual
production capacity of over 2 billion doses, SINOVAC is well
positioned to be a supplier of high-quality vaccines around the
world.
Sabin Inactivated Polio vaccine (sIPV) – the China
National Medical Products Administration (or NMPA) issued a product
license for its Sabin Inactivated Polio vaccine (sIPV) in July
2021.
Unaudited Financial Results for the First Half of
2021
Sales for the first half of 2021 were $11.0 billion, compared to
$67.7 million in the prior year period. The increase was due to
higher sales of CoronaVac® and sales growth of the Company’s other
products as the COVID-19 pandemic subsided in China and vaccine
schedules returned to normal. Sales during the first six months of
2021 are not indicative of future sales trends since sales of
CoronaVac® are expected to decline as the COVID-19 pandemic abates
and competitive pressure from other vaccines increases.
Gross profit in the first half of 2021 was $10.3 billion, an
increase from $58.2 million in the prior year period. Gross margin
was 94.2%, compared to 85.9% in the prior year period.
Selling, general and administrative expenses in the first half
of 2021 were $162.7 million, compared to $46.3 million in the prior
year period. The increase was mainly due to increased resources
dedicated to revenue growth and operation expansion.
R&D expenses in the first half of 2021 were $53.9 million,
compared to $20.1 million in the prior year period.
Net income in the first half of 2021 was $8.6 billion, compared
to a net loss of $8.7 million in the prior year period.
Net income attributable to common shareholders was $5.1 billion,
or $51.42 per basic and $44.80 per diluted share, in the first half
of 2021, compared to a net loss attributable to common shareholders
of $12.6 million, or $0.13 loss per basic and diluted share, in the
prior year period.
As the Company announced on February 22, 2019, the Company’s
Board of Directors determined that certain shareholders became
acquiring persons, as defined in the Company’s rights agreement
(“Rights Agreement”), under which a trigger event occurred. As a
result, the Company issued new common and preferred shares of
SINOVAC. Without the effect of implementing the Rights Agreement
and newly-issued common and preferred shares, basic and diluted
earnings per share for the first half of 2021 would be $71.43 and
$59.24, respectively.
Non-GAAP adjusted EBITDA was $10.2 billion in the first half of
2021, compared to a loss of $5.1 million in the prior year period.
Non-GAAP net income was $8.6 billion in the first half of 2021,
compared to a net loss of $7.5 million in the prior year period.
Non-GAAP diluted earnings per share in the first half of 2021 was
$44.78, compared to a loss of $0.12 per share in the prior year
period. Non-GAAP diluted earnings per share in the first half of
2021, excluding the implementation of the Rights Agreement and the
newly-issued common and preferred shares, would be $59.22.
Reconciliations of non-GAAP measures to the nearest comparable GAAP
measures are included at the end of this earnings announcement.
As of June 30, 2021, cash and cash equivalents and restricted
cash totaled $6.9 billion, compared to $1.1 billion as of December
31, 2020. In the first half of 2021, net cash provided by operating
activities was $9.1 billion, net cash used in investing activities
was $3.3 billion and net cash used in financing activities was
$30.0 million.
Legal Proceedings
As previously disclosed by the Company, on March 13, 2018,
1Globe Capital LLC (“1Globe”) filed a complaint against the Company
in the Antigua Court. The trial of the matter took place from
December 3 to 5, 2018. On December 19, 2018, the Antigua judge
handed down his judgment (the “Antigua Judgment”), finding the
Company fully in favor, dismissing 1Globe’s claim and declaring the
Rights Agreement was validly adopted as a matter of Antigua law. On
January 29, 2019, 1Globe filed a Notice of Appeal against the
Antigua Judgment. On March 4, 2019, 1Globe filed an application for
urgent interim relief, seeking an injunction to prevent the Company
from continuing to implement its Rights Agreement until the
resolution of the appeal. This application was heard on April 4,
2019, at which the Court of Appeal issued an order restraining the
Company from operating the Rights Agreement in any way that affects
1Globe’s rights or shareholding or otherwise distributing the
exchange shares to the Company’s shareholders who did not trigger
the Rights Plan until after the determination of the appeal (the
“Exchange Shares”). 1Globe’s appeal against the Antigua Judgment
was heard on September 18, 2019, and the appeal decision was
announced by the Eastern Caribbean Supreme Court, Court of Appeal
on December 9, 2021, upholding the Antigua Judgment in each point.
1Globe has announced its intention to apply for leave to appeal to
the Privy Council.
As previously disclosed, on March 5, 2018, the Company filed a
lawsuit in the Court of Chancery of the State of Delaware, seeking
a determination on whether 1Globe, the Chiang Li Family, OrbiMed
Advisors, LLC and certain other shareholders of the Company had
triggered the Rights Agreement. On April 12, 2018, 1Globe filed an
amended answer to the Company’s complaint, counterclaims and a
third-party complaint against the Company and Mr. Weidong Yin,
alleging, among other allegations, that the Rights Agreement is not
valid. On March 6, 2019, the Delaware Chancery Court entered a
status quo order, providing that the Company not distribute any of
the Exchange Shares to the Company’s shareholders who did not
trigger the Rights Plan until the final disposition of the pending
Delaware litigation or further order of the Court. On April 8,
2019, the Delaware Chancery Court stated that the Delaware
litigation was pending the outcome of 1Globe’s appeal of the
Antigua Judgment.
Separately, Heng Ren Investments LP (“Heng Ren”) filed suits
against SINOVAC and Weidong Yin on May 31, 2019 in Massachusetts
state court for the alleged breach of fiduciary duties and wrongful
equity dilution. SINOVAC moved the matter from the state court to
the United States District Court for the District of Massachusetts.
Heng Ren alleged that Mr. Yin breached fiduciary duties owed to
minority shareholders, that SINOVAC aided and abetted breaches of
fiduciary duties and that both SINOVAC and Mr. Yin engaged in
wrongful equity dilution. Heng Ren requested damages, attorney
fees, and prejudgment interest. In July 2021, SINOVAC moved to
dismiss Heng Ren’s amended complaint in the federal court in
Massachusetts. The court’s decision on this motion is still
pending.
Status of Exchange Shares and Trading in the Company’s
Shares
As a result of the pending legal proceedings described above,
the Exchange Shares are expected to remain in a trust for the
benefit of the Company’s shareholders who did not trigger the
Rights Plan until, at least, the conclusion of the appeal against
the Antigua Judgment and the final disposition of the Delaware
litigation or further order of the Delaware Chancery Court. The
Exchange Shares remain issued and outstanding. The Nasdaq Stock
Market LLC implemented a halt on trading of the Company’s common
shares at the time the Exchange Shares were issued to the trust.
The Company is currently unable to estimate when trading will
resume, or if Nasdaq will take any additional action in regards to
trading of the Company’s common shares.
About SINOVAC
Sinovac Biotech Ltd. is a China-based biopharmaceutical company
that focuses on the research, development, manufacturing and
commercialization of vaccines that protect against human infectious
diseases. SINOVAC's product portfolio includes vaccines against
COVID-19, enterovirus71 (EV71), hepatitis A and B, seasonal
influenza, 23-valent pneumococcal polysaccharide (“PPV”), H5N1
pandemic influenza (avian flu), H1N1 influenza (swine flu),
varicella, mumps and poliomyelitis. SINOVAC’s COVID-19 vaccine,
CoronaVac®, has been granted emergency use approval or conditional
marketing authorization in Asia, Latin America, Africa and Middle
East countries. Healive®, the hepatitis A vaccine manufactured by
the Company, has passed the assessment under WHO prequalification
procedures in 2017. The EV71 vaccine, an innovative vaccine
developed by SINOVAC against hand foot and mouth disease caused by
EV71, was commercialized in China in 2016. In 2009, SINOVAC was the
first company worldwide to receive approval for its H1N1 influenza
vaccine, which it has supplied to the Chinese Government's
vaccination campaign and stockpiling program. The Company is also
the only supplier of the H5N1 pandemic influenza vaccine to the
government stockpiling program. In 2021, SINOVAC’s Sabin-strain
inactivated polio vaccine has approved for registration. The
Company is developing several new products including combined
vaccines. SINOVAC primarily sells its vaccines in China, while also
exploring growth opportunities in international markets. The
Company is seeking market authorization of its regular products in
countries outside of China. For more information, please see the
Company’s website at www.sinovac.com.
Safe Harbor Statement
This press release may include certain statements that are not
descriptions of historical facts, but are forward-looking
statements. These statements are made under the “safe harbor”
provisions of the U.S. Private Securities Litigation Reform Act of
1995. These forward-looking statements can be identified by
terminology such as “will,” “expects,” “anticipates,” “future,”
“intends,” “plans,” “believes,” “estimates” and similar statements.
Forward-looking statements involve risks, uncertainties and other
factors that could cause actual results to differ materially from
those contained in any such statements. In particular, the outcome
of any litigation is uncertain, and the Company cannot predict the
potential results of the litigation it filed or filed against it by
others. Additionally, the triggering of a shareholder rights plan
is nearly unprecedented, and the Company cannot predict the impact
on the Company or its stock price as a result of the trigger of the
rights plan.
Non-GAAP Financial Measures
To supplement its consolidated financial statements, which are
prepared and presented in accordance with GAAP, SINOVAC uses the
following non-GAAP financial measures: non-GAAP adjusted EBITDA,
non-GAAP net income and non-GAAP diluted EPS. For more information
on these non-GAAP financial measures, please refer to the table
captioned “Reconciliations of non-GAAP Measures to the Nearest
Comparable GAAP Measures” in this results announcement.
SINOVAC believes that non-GAAP adjusted EBITDA, non-GAAP net
income and non-GAAP diluted EPS help identify underlying trends in
its business that could otherwise be distorted by the effect of
certain income or expenses that SINOVAC includes in net income and
diluted EPS. SINOVAC believes that non-GAAP adjusted EBITDA,
non-GAAP net income and non-GAAP diluted EPS provide useful
information about its core operating results, enhance the overall
understanding of its past performance and future prospects and
allow for greater visibility with respect to key metrics used by
our management in its financial and operational decision-making.
Non-GAAP adjusted EBITDA, non-GAAP net income and non-GAAP diluted
EPS should not be considered in isolation or construed as an
alternative to income from operations, net income, diluted EPS, or
any other measure of performance or as an indicator of SINOVAC’s
operating performance. These non-GAAP financial measures presented
here may not be comparable to similarly titled measures presented
by other companies. Other companies may calculate similarly titled
measures differently, limiting their usefulness as comparative
measures to our data.
Non-GAAP adjusted EBITDA represents net income and
excludes interest and financing expenses, interest income, net
other income and income tax benefit (expenses), and certain
non-cash expenses, consisting of share-based compensation expenses,
amortization and depreciation that SINOVAC does not believe are
reflective of the core operating performance during the periods
presented.
Non-GAAP net income represents net income before
share-based compensation expenses and foreign exchange gain or
loss.
Non-GAAP diluted EPS represents non-GAAP net income
attributable to common shareholders divided by the weighted average
number of shares outstanding during the periods on a diluted basis,
including accounting for the effect of the assumed conversion of
options.
SINOVAC BIOTECH LTD.
Consolidated Balance
sheets
As of June 30, 2021 and
December 31, 2020
(Expressed in thousands of
U.S. Dollars)
June 30, 2021
December 31, 2020
Current assets
(Unaudited)
Cash and cash equivalents $
6,843,650
$
1,041,008
Restricted cash
12,710
9,196
Short-term investment
2,973,701
135,248
Accounts receivable - net
1,393,084
253,487
Inventories
407,663
105,813
Prepaid expenses and deposits
58,201
15,541
Total current assets
11,689,009
1,560,293
Property, plant and equipment – net
636,846
200,371
Prepaid land lease payments
20,892
8,247
Intangible assets - net
1,400
1,474
Long-term prepaid expenses
25
25
Prepayments for acquisition of equipment
27,586
20,192
Deferred tax assets
140,000
26,891
Right-of-use assets
112,053
83,833
Total assets
12,627,811
1,901,326
Current liabilities Short-term bank loans and current
portion of long-term bank loans
22,358
32,941
Loan from a non-controlling shareholder
13,320
6,155
Accounts payable and accrued liabilities
958,867
211,428
Income tax payable
1,366,193
35,262
Deferred revenue
334,664
364,005
Deferred government grants
14,594
15,159
Dividend payable
587,846
11,143
Lease liability
9,902
3,517
Total current liabilities
3,307,744
679,610
Deferred government grants
3,913
4,229
Long-term bank loans
12,552
2,155
Deferred tax liability
56,129
2,724
Loan from a non-controlling shareholder
6,195
6,130
Lease liability
110,250
85,488
Other non-current liabilities
866
865
Total long-term liabilities
189,905
101,591
Total liabilities
3,497,649
781,201
Commitments and contingencies
Equity Preferred
stock
15
15
Common stock
99
99
Additional paid-in capital
540,473
538,924
Subscriptions receivable
(7,109)
(7,109)
Accumulated other comprehensive income
39,649
19,925
Statutory surplus reserves
50,377
50,377
Accumulated earnings
5,249,609
144,241
Total shareholders' equity
5,873,113
746,472
Non-controlling interests
3,257,049
373,653
Total equity
9,130,162
1,120,125
Total liabilities and equity $
12,627,811
$
1,901,326
SINOVAC BIOTECH LTD.
Consolidated Statements of
Comprehensive Income
For the six months ended June
30, 2021 and 2020
(Expressed in thousands of
U.S. Dollars, except for numbers of shares and per share
data)
Six months ended June
30
2021
2020
(Unaudited)
(Unaudited)
Sales $
10,981,056
$
67,717
Cost of sales
631,766
$
9,542
Gross profit
10,349,290
58,175
Selling, general and administrative expenses
162,657
46,253
Provision (recovery) for doubtful accounts
(561)
1,034
Research and development expenses
53,911
20,147
Loss on disposal of property, plant and equipment
294
33
Government grants recognized in income
(686)
(253)
Total operating expenses
215,615
67,214
Operating income (loss)
10,133,675
(9,039)
Interest and financing expenses
(1,522)
(594)
Interest income
30,804
1,148
Other expenses, net
(949)
(78)
Income (loss) before income taxes
10,162,008
(8,563)
Income tax expense
(1,569,934)
(111)
Net income (loss)
8,592,074
(8,674)
Less: income attributable to non-controlling interests
(3,483,748)
(948)
Net income (loss) attributable to shareholders of Sinovac
5,108,326
(9,622)
Preferred stock dividends
(2,958)
(2,991)
Net income (loss) attributable to common shareholders of
Sinovac
5,105,368
(12,613)
Net income (loss)
8,592,074
(8,674)
Other comprehensive income (loss), net of tax of nil Foreign
currency translation adjustments
30,995
(4,045)
Comprehensive income (loss)
8,623,069
(12,719)
Less: comprehensive income attributable to non-controlling
interests
(3,495,019)
(127)
Comprehensive income (loss) attributable to shareholders of
Sinovac $
5,128,050
(12,846)
Earnings (loss) per share Basic net income (loss) per
share
51.42
(0.13)
Diluted net income (loss) per share
44.80
(0.13)
Weighted average number of shares of common stock
outstanding Basic
99,294,743
98,899,342
Diluted
114,013,068
98,899,342
SINOVAC BIOTECH LTD.
Consolidated Statements of
Cash Flows
For the six months ended June
30, 2021 and 2020
(Expressed in thousands of
U.S. Dollars)
Six months ended
June 30
2021
2020
(Unaudited)
(Unaudited)
Cash flows provided by (used in) operating activities Net
income (loss)
8,592,074
(8,674
)
Adjustments to reconcile net income to net cash provided by (used
in) operating activities: Deferred income taxes
(70,894
)
(2,490
)
Share-based compensation
1,512
1,501
Inventory provision
1,433
459
Provision (recovery) for doubtful accounts
(561
)
1,034
Loss on disposal of property, plant and equipment
294
33
Depreciation of property, plant and equipment and amortization of
licenses
16,526
2,324
Amortization of prepaid land lease payments
1,372
117
Amortization of Intangible assets
89
-
Government grants recognized in income
(686
)
(253
)
Changes in: Accounts receivable
(1,133,990
)
5,057
Inventories
(301,530
)
(18,869
)
Income tax payable
1,327,797
2,247
Prepaid expenses and deposits
(42,465
)
(4,457
)
Deferred revenue
(32,856
)
(837
)
Accounts payable and accrued liabilities
729,031
6,922
Other non-current liabilities
(9
)
-
Net cash provided by (used in) operating activities
9,087,137
(15,886
)
Cash flows provided by (used in) financing activities
Proceeds from bank loans
13,346
13,046
Repayments of bank loans
(13,902
)
(3,803
)
Proceeds from shares subscribed
37
-
Dividend paid to non-controlling shareholders
(37,798
)
-
Government grants received
1,235
3,898
Convertible Debt
-
14,732
Loan from a non-controlling shareholder
7,110
-
Repayments of loan from a non-controlling shareholder
(25
)
-
Net cash provided by (used in) financing activities
(29,997
)
27,873
Cash flows used in investing activities Purchase of
short-term investments
(4,379,773
)
(35,551
)
Proceeds from redemption of short-term investments
1,548,716
49,771
Proceeds from disposal of equipment
52
17
Prepaid land lease payments
(12,390
)
-
Acquisition of property, plant and equipment
(431,485
)
(36,458
)
Net cash used in investing activities
(3,274,880
)
(22,221
)
Effect of exchange rate changes on cash and cash
equivalents and restricted cash
23,896
(1,094
)
Increase (decrease) in cash and cash equivalents and
restricted cash
5,806,156
(11,328
)
Cash and cash equivalents and restricted cash, beginning
of year
1,050,204
155,878
Cash and cash equivalents and restricted cash, end of
year
6,856,360
144,550
SINOVAC BIOTECH LTD.
Reconciliations of Non-GAAP
measures to the nearest comparable GAAP measures
For the six months ended June
30, 2021 and 2020
(Expressed in thousands of
U.S. Dollars, except for numbers of shares and per share
data)
Six months ended June
30
2021
2020
(Unaudited)
(Unaudited)
Net income (loss)
8,592,074
(8,674)
Adjustments: Share-based compensation
1,512
1,501
Depreciation and amortization
17,987
2,441
Interest and financing expenses, net of interest income
(29,282)
(554)
Net other income
949
78
Income tax expense
1,569,934
111
Non-GAAP adjusted EBITDA
10,153,174
(5,097)
Net income (loss)
8,592,074
(8,674)
Add: Foreign exchange loss (gain)
(5,153)
(300)
Add: Share-based compensation
1,512
1,501
Non-GAAP net income (loss)
8,588,433
(7,473)
Net income (loss) attributable to common shareholders of
Sinovac
5,105,368
(12,613)
Add: Preferred stock dividends
2,958
-
Net income (loss) attributable to common shareholders of Sinovac
for computing diluted earnings per share
5,108,326
(12,613)
Add: Non-GAAP adjustments to net income
(1,830)
851
Non-GAAP net income (loss) attributable to common shareholders
of Sinovac for computing non-GAAP diluted earnings per share
5,106,496
(11,762)
Weighted average number of shares on a diluted basis
114,013,068
98,899,342
Diluted earnings (loss) per share
44.80
(0.13)
Add: Non-GAAP adjustments to net income (loss) per share
(0.02)
0.01
Non-GAAP Diluted earnings (loss) per share
44.78
(0.12)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211230005289/en/
Sinovac Biotech Ltd. Helen Yang Tel: +86-10-8279-9871 or
+86-10-5693-1897 Fax: +86-10-6296-6910 Email: ir@sinovac.com
ICR Inc. Bill Zima U.S.: 1-646-308-1707 Email:
william.zima@icrinc.com
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