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3SBio Inc. Announces Unaudited Fourth Quarter and Fiscal Year 2007 Results
Date:2/20/2008

on, and I believe we are currently in a stronger position to compete as we have ever been in the history of our company. We continue to focus our efforts on maintaining growth, margins and profitability, and I am confident in our ability to continue to deliver shareholder value.''

Fourth Quarter and Fiscal Year 2007 Unaudited Financial Results

Net Revenues. Our net revenues increased by 29.8% to RMB45.7 million (US$6.3 million) in the fourth quarter 2007 from the same period in 2006. This increase was primarily due to the growth in our TPIAO and EPIAO products, which increased by 99.3% and 14.7%, respectively, from the same period in 2006.

Our net revenues increased by 41.0% to RMB180.2 million (US$24.7 million) in 2007 from RMB127.8 million in 2006. This increase was primarily attributed to the continued growth in our leading EPIAO products, sales of which increased by 22.6% from RMB98.8 million in 2006 to RMB121.2 million (US$16.6 million) in 2007. The growth in sales from EPIAO was driven in part by our expanded oncology sales force, which continued to perform well. We also witnessed rapid market adoption of our TPIAO products, which generated revenues of RMB43.1 million (US$5.9 million) in 2007, compared to RMB16.1 million in 2006. TPIAO was our second largest revenue contributor in 2007, accounting for 23.9% of our total net revenues in the period. Sales from our in-licensed Iron Sucrose supplement increased by more than six fold to RMB3.2 million (US$0.4 million) in 2007. Our export sales registered a steady growth of 15.4% to RMB6.8 million (US$0.9 million) in 2007, which accounted for 3.8% of our total net revenue in 2007.

Cost of Revenues. Cost of revenues increased by 103.5% in fourth quarter 2007 to RMB5.7 million (US$0.8 million) from RMB2.8 million. This increase was primarily attributed to the increase in direct material costs in connection with the growth in sales and the higher personnel costs and bonuses as compared to th
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