3SBio Inc. Announces Unaudited Second Quarter 2009 Results
Second quarter revenue grew 36.8% year-over-year to RMB81.5 million (US$11.9million) Operating income grew 69.9% year-over-year to RMB25.8 million (US$3.8 million) Company reiterates FY2009 revenue guidance
Press Release
Source: 3SBio Inc.
On Tuesday August 11, 2009, 5:00 pm EDT
Companies:3SBio Inc.
SHENYANG, China, Aug. 11 /PRNewswire-Asia-FirstCall/ -- 3SBio Inc. (Nasdaq: SSRX - News; "3SBio" or "the Company"), a leading China-based biotechnology company focused on researching, developing, manufacturing and marketing biopharmaceutical products, today announced its unaudited financial results for the second quarter ended June 30, 2009.
Second Quarter 2009 Financial Highlights:
-- Total net revenues increased by 36.8% over the second quarter of 2008
to RMB81.5 million (US$11.9 million).
-- Operating income increased by 69.9% over the second quarter of 2008 to
RMB25.8 million (US$3.8million) on a GAAP basis, and increased by 60.1%
over the second quarter of 2008 to RMB27.1 million (US$4.0 million) on
a non-GAAP basis.
-- Net income increased by 39.2% over the second quarter of 2008 to
RMB27.0 million (US$4.0 million) on a GAAP basis, and increased by
26.3% over the second quarter of 2008 to RMB26.7 million
(US$3.9 million) on a non-GAAP basis.
-- Net income per American Depositary Share ("ADS") for the second quarter
of 2009 was RMB1.25 (US$0.18) compared with RMB0.89 (US$0.13) for the
second quarter of 2008 on a GAAP basis, and RMB1.24 (US$0.18) for the
second quarter of 2009 compared with RMB0.97 (US$0.14) for the second
quarter of 2008 on a non-GAAP basis.
First Half 2009 Financial Highlights:
-- Total net revenues increased by 30.5% over the first half of 2008 to
RMB150.1 million (US$22.0 million).
-- Operating income increased by 56.3% over the first half of 2008 to
RMB 45.9 million (US$6.7 million) on a GAAP basis, and increased by
51.1% to RMB 47.7 million (US$7.0 million) on a non-GAAP basis.
-- Net income increased by 9.5% over the first half of 2008 to
RMB42.9 million (US$6.3 million) on a GAAP basis, and increased 15.3%
over the first half of 2008 to RMB47.7 million (US$7.0 million) on a
non-GAAP basis.
-- Net income per ADS for the first half of 2009 was RMB1.99 (US$0.29)
compared with RMB1.80 (US$0.26) for the first half of 2008 on a GAAP
basis, and RMB2.21 (US$0.32) compared with RMB1.90 (US$0.28) for the
first half of 2008 on a non-GAAP basis.
Second Quarter 2009 Business Highlights
-- EPIAO, the Company's flagship injectable recombinant human
erythropoietin ("EPO") products, demonstrated strong growth with net
revenue from EPIAO rising 37.6% over the second quarter of 2008 to
RMB51.1 million (US$7.5million) in the second quarter of 2009.
-- TPIAO net revenue increased by 38.4% to RMB22.2million (US$3.3 million)
in the second quarter of 2009. TPIAO, the Company's protein-based
therapeutic recombinant human thrombopoietin ("TPO") product.
-- 3SBio continued to work closely with the State Food and Drug
Administration ("SFDA") to advance the regulatory approval of the three
new product programs submitted in 2008: 36,000 IU dosage formulation of
EPIAO, NuLeusin, and TPIAO label extension for the treatment of ITP.
-- Construction continued on schedule for the Company's new EPIAO plant,
which will support the future growth of EPIAO and serve as the first
step towards exploring global biosimilar opportunities. In June, Mr
Deyu Kong joined 3SBio as Director -- Manufacture and Process, and will
be based in Shenyang. Mr Kong brings a wealth of manufacturing
experience under US and EU compliant manufacturing environments.
-- While exports account for a small portion of revenue and the company
remains focused on its core business in China, 3SBio and its products
EPIAO and TPIAO continue to be recognized by more physicians and
patients in overseas markets. First half export sales grew 45.7%
year-over-year and have already exceeded overseas sales for all of 2008.
Dr. Jing Lou, chief executive officer of 3SBio, commented: "We had a good quarter with an encouraging trend in our operating performance. Sales of our leading products, EPIAO and TPIAO both grew by over 37% due to the strong growth of the dialysis market and our continued efforts to raise awareness of 3SBio in the oncology segment of the market. Our share of the Chinese EPO market now exceeds that of our five closest competitors combined and we reiterate our 2009 revenue guidance. I am pleased to have Mr. Deyu Kong join us as Director -- Manufacture and Process. He will be based in Shenyang where we are expanding our manufacturing capacity at least four-fold. Mr Kong's experience with international biotech manufacturing protocols will help us as we explore biosimilar opportunities in the EU and US."
Three months ended June 30, 2009 Unaudited Financial Results
Net revenues. Net revenues increased by 36.8% to RMB81.5 million (US$11.9 million) for the second quarter of 2009 from RMB59.6 million (US$8.7 million) for the same period in 2008. This increase was largely due to continued strength from EPIAO and TPIAO products which increased by 37.6% and 38.4%, respectively, over the same period in 2008. The growth in sales from EPIAO was driven in part by an expanded oncology sales force, which continued to perform well. TPIAO remained 3SBio's second largest revenue contributor in the quarter, accounting for 27.3% of total net revenues. Export sales grew by 25.5% to RMB3.5 million (US$0.5 million), and sales of 3SBio's IV Iron Sucrose rose 42.7% to RMB3.0 million (US$0.4 million).
Gross profit. As a result of continued sales growth from key products, gross profit increased by 38.1% to RMB75.0 million (US$11.0 million) for the second quarter of 2009 from RMB54.3 million (US$7.9 million) for the same period in 2008. Gross margin increased by 0.9% to 92.0% for the second quarter of 2009 from 91.1% for the same period in 2008.
Operating expenses. GAAP operating expenses were RMB49.2 million (US$7.2 million) for the second quarter of 2009, an increase of 25.8% from GAAP operating expenses of RMB39.1 million (US$5.7 million) for the same period in 2008. Non-GAAP operating expenses were RMB48.0 million (US$7.0 million) for the second quarter of 2009, an increase of 28.2% from non-GAAP operating expenses of RMB37.4 million (US$ 5.5 million) for the same period in 2008. The increase in operating expenses was largely driven by higher sales and marketing expenses.
-- Research and development ("R&D") costs. GAAP R&D costs for the second
quarter of 2009 were RMB4.3 million (US$0.6 million), or 5.2% of net
revenue, compared to RMB3.0 million (US$0.4 million), or 5.1% of net
revenue for the same period in 2008.
-- Sales, marketing and distribution expense. GAAP sales, marketing and
distribution expenses for the second quarter of 2009 were
RMB36.2 million (US$5.3 million), compared to RMB26.6 million
(US$3.9 million) for the same period in 2008. The increase was
primarily attributable to higher sales activities in general, continued
investment in building the TPIAO brand and EPIAO penetration of the
oncology market. This represented 44.5% of net revenue, almost
unchanged from 44.6% for the same period in 2008.
-- General and administrative expenses. GAAP general and administrative
expenses for the second quarter of 2009 were RMB8.7 million
(US$1.3 million), representing a decrease of 8.7% from general and
administrative expenses of RMB9.5million (US$1.4 million) for the same
period in 2008. This marked a decline to 10.6% of net revenue for the
second quarter of 2009, compared to 15.9% of net revenue for the second
quarter of 2008.
Operating income. GAAP operating income was RMB25.8 million (US$3.8 million) for the second quarter of 2009, an increase of 69.9% from operating income of RMB15.2 million (US$2.2 million) for the same period in 2008. Non-GAAP operating income for the second quarter of 2009 grew by 60.1% to RMB27.1 million (US$4.0 million), compared to RMB 17.0 million (US$2.5 million) in the second quarter of 2008.
Interest income. The Company recorded net interest income of RMB2.5 million (US$0.4 million) for the second quarter of 2009, compared to RMB5.2 million (US$0.8 million) for the same period in 2008. As experienced in the first quarter of 2009, the decrease in interest income was partially due to the decrease in the prevailing market interest rates in the second quarter of 2009, compared to the same period in 2008.
Net income. GAAP net income was RMB27.0 million (US$4.0 million) for the second quarter of 2009, 39.2% higher than net income of RMB19.4 million (US$2.8 million) for the same period in 2008. Non-GAAP net income for the second quarter of 2009 was RMB26.7 million (US$3.9 million), 26.3% higher than non-GAAP net income of RMB21.1 million (US$3.1 million) for the second quarter of 2008.
Six months ended June 30, 2009 Unaudited Financial Results
Net revenues. Our net revenues increased by RMB35.1 million, or 30.5%, from RMB115.0 million (US$16.8 million) for the six months ended June 30, 2008 to RMB150.1 million (US$22.0 million) for the six months ended June 30, 2009. The increase was primarily attributable to increased sales from our EPIAO and TPIAO products, underpinned by continued strong demand in the oncology and nephrology markets.
Net revenues from EPIAO increased by RMB21.4 million, or 29.5%, to RMB94.0 million (US$13.8 million) for the six months ended June 30, 2009. Net revenues from TPIAO increased by RMB9.5 million, or 30.0%, to RMB40.9 million (US$6.0 million) for the six months ended June 30, 2009. In addition, revenue from our export business was RMB6.9 million (US$1.0 million), representing an increase of 45.7% over the first half of 2008, while revenue from our in-licensed Iron Sucrose supplement was RMB5.0 million (US$0.7 million), representing an increase of 44.6% over the first half of 2008.
Operating income. For the six months ended June 30, 2009, GAAP operating income increased by 56.3% to RMB45.9 million (US$6.7 million), compared to RMB29.4 million (US$4.3 million) for the same period in 2008. year. Non-GAAP operating income increased by 51.1% to RMB47.7 million (US$7.0 million), compared to RMB31.6 million (US$4.6 million) for the same period in 2008.
GAAP operating margin for the six months ended June 30, 2009 was 30.6% as compared to 25.5% for the six months ended June 30, 2008. Non-GAAP operating margin was 31.8% for the six months ended June 30, 2009, as compared to 27.4% in the same period in 2008.
Net income. GAAP net income for the first half of 2009 increased by RMB3.7 million, or 9.5%, to RMB42.9 million (US$6.3million) compared with RMB39.1 million (US$5.7 million) for the same period in 2008. GAAP net margin for the six months ended June 30, 2009 was 28.6% as compared to 34.0% for the six months ended June 30, 2008. GAAP net income per ADS for the first half of 2009 increased to RMB1.99 (US$0.29) from RMB1.80 (US$0.26) for the corresponding period in 2008.
Non-GAAP net income for the first half of 2009 increased by RMB6.3 million, or 15.3%, to RMB47.7 million (US$7.0 million) compared with RMB41.3 million (US$6.0 million) for the same period in 2008. Non-GAAP net margin for the six months ended June 30, 2009 was 31.8% as compared to 35.9% for the six months ended June 30, 2008. Non-GAAP net income per ADS for the first half of 2009 increased to RMB2.21 (US$0.32) from RMB1.90 (US$0.28) for the corresponding period in 2008.
Cash and cash equivalents / Time deposits. 3SBio had positive operating cash flows of RMB 33.2 million (US$4.9 million) for the first half of 2009, and as of June 30, 2009 retained a strong balance sheet with cash, cash equivalents and time deposits of RMB756.1 million (US$110.7 million), a 3.1% increase from RMB733.0 million (US$107.4 million) as of December 31, 2008.
2009 Full Year Guidance
Based on current market conditions and visibility provided during the second quarter, the Company reiterates its total net revenue target for the full year of 2009 of between US$43 million to US$45 million, resulting in a year-over-year increase of approximately 21% to 26%.
Conference Call
3SBio's senior management will host a conference call at 5:00 am (Pacific) / 8:00 am (Eastern) / 8:00 pm (Beijing/Hong Kong) on Wednesday, August 12, 2009 to discuss its 2009 second quarter financial results and recent business activity. The conference call may be accessed using the dial-in numbers below:
Conference ID: 21352657
Local dial-in:
China - landline 800-819-0121
China - mobile 400-620-8038
International toll-free dial-in:
Hong Kong 800933053
United Kingdom 080-8234-6646
United States 1-866-519-4004
International toll dial-in: 65-6735-7955
