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3SBio Inc. Announces Unaudited Fourth Quarter and Fiscal Year 2008 Results
Date:3/11/2009

SHENYANG, China, March 11 /PRNewswire-Asia-FirstCall/ -- 3SBio Inc. (Nasdaq: SSRX) ("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 fourth quarter and fiscal year ended December 31, 2008.

    Fiscal Year 2008 Financial Highlights:
    -- Total net revenues increased 35.0% over 2007 to RM243.2 million
       (US$35.7 million).
    -- Adjusted non-GAAP operating income was RMB59.7 million (US$8.8 million)
       for 2008, when excluding share-based compensation expense and a RMB6.9
       million (US$1.0 million) recognition of the one-time upfront payment
       related to the licensing deal with AMAG Pharmaceuticals. Adjusted
       non-GAAP operating income was RMB49.5 million (US$6.8 million) for 2007.
       GAAP operating income for 2008 was RMB47.8 million (US$7.0 million).
    -- Adjusted non-GAAP net income was RMB75.0 million (US$11.0 million),
       further excluding non-operating investment losses on available-for-sale
       securities, comparing to adjusted non-GAAP net income of RMB79.8
       million (US$10.9 million) in 2007. GAAP net income for 2008 was RMB39.5
       million (US$5.8 million).
    -- Adjusted non-GAAP earnings per American depositary share ("ADS") were
       RMB3.46 (US$0.51), compared to RMB3.81 (US$0.52) in 2007. GAAP earnings
       per ADS for 2008 were RMB1.82 (US$0.27).


    Fourth Quarter 2008 Financial Highlights:
    -- Total net revenues increased 31.5% over the fourth quarter of 2007 to
       RMB60.1 million (US$8.8 million).
    -- Adjusted non-GAAP operating income for the fourth quarter was RMB6.1
       million (US$0.9 million) when excluding share-based compensation
       expense and the AMAG recognition. Adjusted non-GAAP operating income
       was RMB6.3 million (US$0.9 million) for 2007. GAAP operating loss was
       RMB2.3 million (US$0.3 million) for the quarter.
    -- Adjusted non-GAAP net income was RMB11.3 million (US$1.7 million),
       compared to adjusted non-GAAP net income of RMB15.3 million for 2007.
       GAAP net loss for the quarter was RMB1.5 million (US$0.2 million).
    -- Adjusted non-GAAP earnings per ADS were RMB0.52 (US$0.08), compared to
       RMB0.70 (US$0.10) in fourth quarter of 2007. GAAP loss per ADS was
       RMB0.07 (US$0.01) for the fourth quarter of 2008.

    *  Please refer to "Reconciliation Tables of GAAP to adjusted Non-GAAP
       Figures" at the end of this press release. Adjusted (Non-GAAP) items
       for the three- and twelve-month periods ended December 31, 2007 have
       been revised to conform to the current year's presentation basis.

    Fiscal Year 2008 Business Highlights:
    -- EPIAO, the Company's flagship injectable recombinant human
       erythropoietin ("EPO") products, continued to outpace EPO market growth
       in China. Net revenue from EPIAO increased 32.0% year-over-year in the
       fourth quarter of 2008 to RMB39.3 million (US$5.8 million), and
       increased 27.5% to RMB154.6 million (US$22.7 million) for the full year
       2008, as 3SBio further enhanced its market leadership position, with
       41.1% of EPO market share according to fourth quarter 2008 IMS data.
    -- The high quality of EPIAO, a key factor contributing to EPIAO's success
       and leading market position in China, was further validated by a study
       sponsored by Amgen. The study shows that among 12 EPO products
       manufactured in Asia, 3SBio's EPIAO has the biophysical and biochemical
       properties that most resemble Epogen. The article was published in the
       Journal of Pharmaceutical Sciences in July, 2008.
    -- TPIAO, the Company's protein-based therapeutic recombinant human
       thrombopoietin ("TPO") products, continued their rapid uptake trend and
       are increasingly adopted as the standard of care for Chemo Induced
       Thrombocytopenia. TPIAO net revenue increased 39.7% year-over-year in
       the fourth quarter of 2008 to RMB16.4 million (US$2.4 million), and
       increased 56.9% in 2008 to RMB67.6 million (US$9.9 million).
    -- 3SBio completed all three Phase III programs on schedule, and submitted
       them for SFDA approval:
       -- In September 2008, the Company filed for approval of a 36,000 IU
          dosage formulation of EPIAO for the treatment of anemia associated
          with chemotherapy in cancer patients. If approved, 36,000 IU dosage
          formulation of EPIAO will further enhance the Company's effort to
          penetrate Oncology market given the convenience of a weekly
          injection.
       -- In November 2008, the Company filed for approval of NuLeusin for the
          treatment of late stage metastatic renal cell carcinoma, and if
          approved this is expected to be the only treatment of this kind
          available in China. NuLeusin, 3SBio's second-generation IL-2, is a
          genetically modified form of IL-2, possessing improved biochemical
          properties over naturally occurring IL-2.
       -- In December 2008, the Company filed for approval of a TPIAO label
          extension for the treatment of idiopathic thrombocytopenic purpura
          (ITP) in China, representing the first of a series of indications
          that the Company plans to pursue to build and grow TPIAO brand.
    -- 3SBio demonstrated its business development capabilities through a
       strategic partnership with AMAG Pharmaceutical, to develop and
       commercialize Ferumoxytol, a new generation of IV Iron therapy, in
       China. 3SBio plans to initiate China SFDA registration trials in 2009,
       further enhancing the Company's long term growth potential through a
       diversified product portfolio.
    -- The Company streamlined internal organization structures and vendor
       relationships, to further strengthen capabilities and increase
       operational efficiency, and recruited key management staff.
    -- 3SBio expanded the Oncology and Nephrology focused sales and marketing
       organization to over 221 personnel, covering over 2000 leading
       hospitals in China.
    -- 3SBio was jointly certified by the Liaoning Provincial Office of
       Science and Technology, Liaoning Provincial Department of Finance,
       National Revenue Office of Liaoning Province and Local Revenue
       Administration of Liaoning Province as a "High-Tech Enterprise." A
       "High-Tech Enterprise" is an official designation accorded to a company
       that, among other criteria, is engaged in a business field which
       receives special endorsement from the national government and has more
       than 60% of its income from high-tech products or services.

Dr. Jing Lou, Chief Executive Officer of 3SBio, commented, "3SBio delivered solid operating and financial performance in our second consecutive year since going public in early 2007. We once again demonstrated our ability to execute on our business strategy and achieve above market rate top-line growth and solid bottom-line operating profitability, despite significant investment in building brands in the marketplace, developing new products and growing the organization. 3SBio enters 2009 as a company with strengthened capabilities to generate a solid operating cash flow, a robust balance sheet, and a stream of near-term new product offerings to sustain mid- and long-term growth. Based on our 2008 performance and our view on the macro economic environment, as well as market and operating conditions in 2009, we are confident in setting a total net revenue target of between US$43 million to US$45 million for the full year of 2009."

Fourth Quarter and Fiscal Year 2008 Unaudited Financial Results

Net revenues. Net revenues increased by 31.5% to RMB60.1 million (US$8.8 million) in the fourth quarter of 2008 from the same period in 2007. This increase was primarily due to the growth in TPIAO and EPIAO products, which increased by 32.0% and 39.7%, respectively, from the same period in 2007.

Net revenues increased by 35.0% to RMB243.2 million (US$35.7 million) in 2008 from RMB180.2 million (US$24.7 million) in 2007. This increase was primarily attributed to the continued growth in EPIAO products, sales of which increased by 27.5% from RMB121.2 million (US$16.6 million) in 2007 to RMB154.6 million (US$22.7 million) in 2008. The growth in sales from EPIAO was driven in part by an expanded oncology sales force, which continued to perform well. The Company also witnessed rapid market adoption of TPIAO products, which generated revenues of RMB67.6 million (US$9.9 million) in 2008, compared to RMB43.1 million (US$5.9 million) in 2007. TPIAO was 3SBio's second largest revenue contributor in 2008, accounting for 27.8% of our total net revenues in the period. Sales from in-licensed Iron Sucrose supplement increased 117.8% to RMB7.0 million (US$1.0 million) in 2008. Export sales registered a steady growth of 22.2% to RMB8.3 million (US$1.2 million) in 2008, accounting for 3.4% of total net revenue.

Gross profit. As a result of strong sales across our product lines, gross profit increased by 36.3% to RMB54.4 million (US$8.0 million) in the fourth quarter of 2008 from RMB39.9 million (US$5.5 million) for the same period in 2007. Gross margin increased to 90.6% in the fourth quarter 2008 from 87.4% for the same period in 2007.

In 2008, gross profit grew 36.1% to RMB221.5 million (US$32.5 million) from RMB162.7 million (US$22.3 million) in 2007. Gross margin of 91.1% in 2008 remained in line with the gross margin of 90.3% in 2007.

Operating income/loss. Adjusted non-GAAP operating income for the fourth quarter was RMB6.1 million (US$0.9 million), excluding share-based compensation expense of RMB1.4 million (US$0.2 million) and a RMB6.9 million (US$1.0 million) recognition of the upfront payment related to the licensing deal with AMAG Pharmaceuticals. Adjusted non-GAAP operating income for the full year was RMB59.7 million (US$8.8 million), an increase of 20.6% over year 2007. Adjusted non-GAAP operating income was RMB49.5 million (US$6.8 million) for 2007.

GAAP operating loss was RMB2.3 million (US$0.3 million) in the fourth quarter 2008, down from operating income of RMB6.1 million (US$0.8 million) for the same period in 2007. Operating income decreased by 1.6% to RMB47.8 million (US$7.0 million) in 2008 from RMB48.5 million (US$6.7 million) in 2007.

Operating expenses. Adjusted non-GAAP operating expenses were RMB48.5 million (US$7.1 million) in the fourth quarter and RMB162.1 million (US$23.8 million) in the full year of 2008. This was an increase of 44.3% and 43.2% from adjusted non-GAAP operating expenses of RMB33.6 million (US$4.6 million) and RMB113.2 million (US$15.5 million) in the fourth quarter and full year of 2007 respectively.

    -- Research and development cost (non-GAAP). Adjusted R&D cost for the
       fourth quarter was RMB5.3 million (US$0.8 million) and RMB15.0 million
       (US$2.2 million) for the full year, excluding the one-time upfront
       payment for the license fee of RMB6.9 million (US$1.0 million) and
       share-based compensation expense. This was an increase of 43.4% and
       29.0% from adjusted R&D cost of RMB3.7 million (US$0.5 million) and
       RMB11.6 million (US$1.6 million) in the fourth quarter and full year of
       2007 respectively. The overall increase in R&D cost for the fourth
       quarter and fiscal year 2008 was mainly attributable to research and
       development expenses associated with the number of clinical tests
       conducted and the continued development of other pipeline products.
    -- Sales, marketing and distribution expenses (non-GAAP). Adjusted Sales,
       marketing and distribution expenses for the fourth quarter were RMB38.0
       million (US$5.6 million) and RMB118.8 million (US$17.4 million) for the
       full year, excluding share-based compensation expense. This was an
       increase of 67.4% and 41.1% from adjusted expenses of RMB22.7 million
       (US$3.1 million) and RMB84.2 million (US$11.5 million) in the fourth
       quarter and full year of 2007 respectively. 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.
    -- General and administrative expenses (non-GAAP). Adjusted general and
       administrative expenses for the fourth quarter were RMB5.1 million
       (US$0.8 million) and RMB28.4 million (US$4.2 million) for the full year,
       excluding share-based compensation expense. This was a decrease of
       28.6% and an increase of 63.1% from adjusted general and administrative
       expenses of RMB7.2 million (US$1.0 million) and RMB17.4 million (US$2.4
       million) in the fourth quarter and full year of 2007 respectively. The
       increase in general and administrative expense in fiscal year 2008 was
       primarily attributable to compliance cost associated with being a
       public company and increase of management personnel.

In the fourth quarter of 2008, total GAAP operating expenses increased by 67.8% to RMB56.7 million (US$8.3 million) as compared to the same period in 2007. In 2008, total GAAP operating expenses increased by 52.1% to RMB173.7 million (US$25.5 million) from RMB114.2 million (US$15.7 million) in 2007.

    -- Research and development costs (GAAP). Research and development cost
       increased by 234.8% to RMB12.4 million (US$1.8 million) in the fourth
       quarter 2008 from RMB3.7 million (US$0.5 million) for the same period
       in 2007. Research and development cost increased by 93.2% to RMB22.5
       million (US$3.3 million) in 2008 from RMB11.6 million (US$1.6 million)
       in 2007, with R&D cost as a percentage of total net revenues increasing
       to 9.2% in 2008 from 6.5% in 2007.
    -- Sales, marketing and distribution expenses (GAAP). Sales, marketing and
       distribution expenses increased by 68.8% to RMB38.3 million (US$5.6
       million) in the fourth quarter 2008 from RMB22.7 million (US$3.1
       million) for the same period in 2007. Sales, marketing and distribution
       expenses increased 37.4% to RMB119.8 million (US$17.6 million) for 2008
       from RMB84.2 million (US$11.5 million) for 2007. Sales, marketing and
       distribution expenses as a percentage of total net revenues increased
       to 49.2% in 2008 from 46.7% in 2007.
    -- General and administrative expenses (GAAP). General and administrative
       expenses decreased by 19.2% to RMB6.0 million (US$0.9 million) in the
       fourth quarter 2008 from RMB7.4 million (US$1.0 million) for the same
       period in 2007. General and administrative expenses increased 71.2% to
       RMB31.5 million (US$4.6 million) in 2008 from RMB18.4 million (US$2.4
       million) in 2007. General and administrative expenses as a percentage
       of net revenues increased to 12.9% in 2008 from 10.2% in 2007.

Interest income. The Company recorded net interest income of RMB5.9 million (US$0.9 million) in fourth quarter 2008 as compared RMB9.0 million (US$1.2 million) for the same period in 2007. 3SBio recorded net interest income of RMB24.0 million (US$3.5 million) in 2008 as compared to net interest income of RMB35.2 million (US$4.8 million) for 2007. The decrease in interest income was due in part to an environment with decreasing interest rates.

Net income/loss. Adjusted non-GAAP net income for the fourth quarter was RMB11.3 million (US$1.7 million), excluding several one-off items, including recognition of the AMAG licensing deal of RMB6.9 million (US$1.0 million) and recognition of an RMB4.4 million (US$0.7 million) impairment loss on available-for-sale securities. For 2008, adjusted non-GAAP net income was RMB75.0 million (US$11.0 million), comparing to adjusted net income of RMB79.8 million (US$10.9 million) in 2007.

GAAP net loss was RMB1.5 million (US$0.2 million) in the fourth quarter 2008, compared to net income of RMB17.9 million (US$2.4 million) for the same period in 2007. GAAP net income for 2008 was RMB39.5 million (US$5.8 million), compared to RMB81.5 million (US$11.2 million) in 2007.

Cash and cash equivalents/Time deposits. As of December 31, 2008, 3SBio had cash, cash equivalents and time deposits of RMB733.0 million (US$107.4 million), compared to RMB811.0 million (US$111.2 million) as of December 31, 2007.

    2009 Full Year Guidance & Selected Company Objectives
    -- Maintain and enhance the Company's EPIAO market share leadership
       position, through continued penetration of the Oncology market and
       gaining market share within the Dialysis market.
    -- Maximize the commercial potential of TPIAO, through continuing
       penetration of the Oncology market and the initiation of clinical
       trials for other potential high value indications.
    -- Focus on working with the SFDA to secure regulatory approval of the
       three new product programs; 36,000 IU dosage formulation of EPIAO,
       NuLeusin, and TPIAO label extension for the treatment of ITP.
    -- Initiate Ferumoxytol registration trial in China, following US FDA
       approval.
    -- Submit application for clinical trials of NuPIAO, the Company's second
       generation EPO product.
    -- Leverage Nephrology and Oncology focused franchise and strong balance
       sheet to continue efforts in the business development front.
    -- Complete construction on our new EPIAO plant to support future growth
       of EPIAO in China, and as the first step towards exploring global
       biosimilar opportunities.

Based on these goals and current market and operating conditions, the Company's total net revenue target for the full year 2009 is estimated to be between US$43 million to US$45 million, resulting in 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 Thursday, March 12, 2009. The conference call may be accessed using the dial-in numbers below:

    International Toll Dial-In Number:    +6567357955
    China  (Landline)                     800 819 0121
    China (Mobile)                        400 620 8038
    U.K.                                  08082346646
    U.S.                                  18665194004
    H.K.                                  800933053
    Conference ID:                        87494181

A telephone replay will be available shortly after the call until March 19, 2009, at:

    International Dial-In Number:         +61 2 8235 5000
    U.S. Dial-in Number:                  18662145335
    Conference ID:                        87494181

A live webcast of the conference call and the replay will be available on the investor relations page of 3SBio's website at http://www.3sbio.com/en/News/ShowInfo_nnn11.aspx?ID=71 .

Reconciliation of GAAP to Adjusted Non-GAAP

The Company has utilized some adjusted Non-GAAP financial measures to provide investors and management with supplemental measures that facilitate comparisons of operating performance and trends with prior and future operating performance, and that may not otherwise be apparent on a GAAP basis. Please see the attached Reconciliation Tables of GAAP to Adjusted Non-GAAP Figures for an explanation of the amounts excluded to arrive at adjusted non-GAAP figures for the three-month and full year periods ended December 31, 2008 and 2007.

Statement Regarding Unaudited Financial Information

The unaudited financial information set forth above is preliminary and subject to adjustments and modifications. The audit of the financial statements and related notes to be included in our annual report on Form 20-F for the year ended December 31, 2008 is still in progress. Adjustments and modifications to the financial statements may be identified during the course of this audit work, which could result in significant differences from this preliminary unaudited financial information.

Currency Convenience Translation

For the convenience of readers, certain RMB amounts have been translated into US dollars at the rate of RMB6.8225 to US$1.00, the noon buying rate for US dollars in effect on December 31, 2008 for cable transfers of RMB per US dollar as certified for customs purposes by the Federal Reserve Bank of New York. 2007 RMB figures were translated into US dollars at the rate of RMB7.2946 to US$1.00, the noon buying rate for US dollars in effect on December 31, 2007.

About 3SBio Inc.

3SBio Inc. is a leading, fully integrated biotechnology company focused on researching, developing, manufacturing and marketing biopharmaceutical products, primarily in China. For more information, please visit 3SBio on the web at http://www.3sbio.com

Safe Harbor Statement

Certain statements in this release that are not purely historical in nature, including the 2009 full year guidance information, statements contained in "2009 Full Year Guidance & Selected Company Objectives" section, and management comments, constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the Private Securities Litigation Reform Act of 1995. These statements are based upon 3SBio management's current expectations, and actual results could differ materially. Among the factors that could cause 3SBio's actual results to differ from what the company currently anticipates may include: competition from other domestic and foreign pharmaceutical companies; the market conditions or pharmaceutical products in China; market acceptance of 3SBio products; hospital or patient demand for our products; 3SBio's ability to expand its production, sales and distribution network and other aspects of its operations; its ability to develop and commercialize additional products or additional indications for existing products; its ability to analyze additional in-licensing opportunities; its ability to effectively protect its intellectual property; changes in the healthcare industry in China, including changes in the healthcare policies and regulations of the PRC government and changes in the healthcare insurance sector in the PRC; and fluctuations in general economic and business conditions in China. For additional information on these and other factors as well as risks, uncertainties and assumptions that may adversely and materially affect the 3SBio's business, financial conditions and results of operations, please refer to the company's filings with the Securities and Exchange Commission at http://www.sec.gov , particularly information set forth in Item 3.D "Risk Factors" in 3SBio's annual report on Form 20-F for the year ended Dec. 31, 2007, as continually amended and updated. 3SBio undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this press release.



                         3SBio Inc. and Subsidiaries
                    Unaudited Consolidated Balance Sheets

    (expressed in thousands)              December 31 December 31  December 31
                                              2007       2008          2008
                                               RMB        RMB           US$
    Assets

    Current assets

    Cash and cash equivalents               811,026     439,237       64,380
    Time deposits with financial
     institutions                                --     293,809       43,065
    Accounts receivable, less
     allowance for doubtful
     accounts:
    December 31, 2007 - RMB5,257;
     December 31, 2008 RMB4,503 (US$660)     55,186      73,767       10,812
    Inventories                               6,882       7,748        1,136
    Prepaid expenses and other
     receivables                             12,074       8,249        1,209
    Structured deposits                       3,527          --           --
    Deferred tax assets                       2,335       1,802          264

    Total current assets                    891,030     824,612      120,866

    Available-for-sale securities            15,196      26,700        3,914
    Property, plant and equipment, net       49,465      78,185       11,459
    Lease prepayments                         9,247       8,894        1,304
    Non-current deposits                      6,124       8,521        1,249
    Intangible assets, net                       --       5,225          766
    Income tax receivable                       556          --           --
    Deferred tax assets                       1,857         781          114

    Total assets                            973,475     952,918      139,672

    Liabilities

    Current liabilities

    Accounts payable                          1,693       1,939          284
    Deferred grant income                       374         374           55
    Accrued expenses and other
     payables                                22,626      25,273        3,705
    Income tax payable                           --       1,256          184
    Other current liabilities                    67          57            8

    Total current liabilities                24,760      28,899        4,236

    Deferred grant income                     3,526       3,152          462
    Other liabilities                           848         472           69

    Total liabilities                        29,134      32,523        4,767

    Commitments and contingencies
    Minority interests                          549          --           --

    Shareholders' equity

    Share capital - ordinary shares
     US$0.0001 par value, 500,000,000
     shares authorized, 152,099,155 and
     150,575,955  shares issued and
     outstanding as of December 31, 2007
     and  2008, respectively                    122         121           18
    Additional paid-in capital              917,527     908,377      133,144
    Accumulated other comprehensive
     loss                                   (48,338)   (102,126)     (14,970)
    Retained earnings                        74,481     114,023       16,713

    Total shareholders' equity              943,792     920,395      134,905

    Total liabilities, minority
     interests and shareholders' equity     973,475     952,918      139,672



          Reconciliation Tables of GAAP to Adjusted Non-GAAP Figures



    Three Months Ended December 31, 2008
    (unaudited)           Actual    Actual Adjustment     Adjusted    Adjusted
                           GAAP      GAAP                 Non-GAAP    Non-GAAP
                           RMB       US$     RMB            RMB         US$
    Net Revenues:
     EPIAO               39,326    5,764                   39,326      5,764
     TPIAO               16,373    2,400                   16,373      2,400
     Intefen              1,199      176                    1,199        176
     Inleusin               209       31                      209         31
     Iron                 1,796      263                    1,796        263
     Export               1,148      168                    1,148        168
     Others                  13        2                       13          2

    Total net revenues   60,064    8,804                    60,064      8,804
    Cost of revenues     (5,622)    (824)     110  (1)      (5,512)      (808)

    Gross profit         54,442    7,980                    54,552      7,996

    Operating expenses
    Research and
     development
     costs              (12,439)  (1,823)   7,110  (2)      (5,329)      (781)
    Sales, marketing
     and distribution
     expenses           (38,337)  (5,619)     309  (1)     (38,028)    (5,574)
    General and
     administrative
     expenses            (5,960)    (874)     825  (1)      (5,135)      (753)

    Total operating
     expenses           (56,736)  (8,316)                  (48,492)    (7,108)

    Operating (loss)
     /income             (2,294)    (336)                    6,060        888

    Other income
     /(expenses), net
    Interest income       5,916      867                     5,916        867
    Grant income            107       16                       107         16
    Impairment loss on
     available-for-sale
     securities          (4,391)    (644)   4,391  (3)          --         --
    Others                 (716)    (105)                     (716)      (105)
    Total other
     income, net            916      134                     5,307        778

    (Loss)/income
     before
     income tax
     expense and
     minority interests  (1,378)    (202)                   11,367      1,666
    Income tax expense     (457)     (67)      --  (4)        (457)       (67)

    (Loss)/income
     before minority
     interests           (1,835)    (269)                   10,910      1,599
    Minority interests,
     net of tax             377       55                       377         55

    Net (loss)/income    (1,458)    (214)                   11,287      1,654




    Three Months Ended December 31, 2008
     (unaudited), continued
                          Actual    Actual  Adjustment  Adjusted    Adjusted
                           GAAP      GAAP               Non-GAAP    Non-GAAP
                            RMB       US$       RMB        RMB        US$
    Net (loss)/in
     come per share:
    Basic and diluted       (0.01)     (0.00)                0.08        0.01

    Basic weighted
     average number
     of shares
     outstanding      150,575,955 150,575,955         150,575,955 150,575,955

    Effect of
     dilutive
     potential
     shares                    --          --              10,500      10,500
    Diluted
     weighted
     average
     number of
     shares
     outstanding      150,575,955 150,575,955         150,586,455 150,586,455


    Net (loss)/in
     come per ADS:
    Basic and
     diluted                (0.07)      (0.01)               0.52        0.08

    Basic
     weighted
     average
     number of
     ADSs
     outstanding        21,510,851 21,510,851          21,510,851  21,510,851

    Effect of
     dilutive
     potential
     ADSs                       --         --               1,500       1,500
    Diluted
     weighted
     average
     number of
     ADSs
     outstanding        21,510,851 21,510,851          21,512,351  21,512,351

Notes to reconciliation of our GAAP statements of income to our adjusted non-GAAP statements of income:

    (1) To exclude share-based compensation expense.
    (2) To exclude one-time upfront payment for licenses fee of RMB 6,948,000
        and share-based compensation expense of RMB 162,000 for R&D staff.
    (3) To exclude investment losses on available-for-sale securities
    (4) No income tax effect on adjustments is required as they are incurred
        by overseas companies that are not subject to income tax.




    Three Months Ended December 31, 2007
    (unaudited)        Actual   Actual  Adjustment    Adjusted       Adjusted
                        GAAP     GAAP                 Non-GAAP       Non-GAAP
                         RMB      US$     RMB           RMB             US$
    Net Revenues:
     EPIAO             29,798    4,085                 29,798          4,085
     TPIAO             11,718    1,606                 11,718          1,606
     Intefen            1,128      155                  1,128            155
     Inleusin             251       34                    251             34
     Iron                 970      133                    970            133
     Export             1,625      223                  1,625            223
     Others               193       26                    193             26

    Total revenues     45,683    6,262                 45,683          6,262
    Cost of revenues   (5,737)    (786)                (5,737)          (786)

    Gross profit       39,946    5,476                 39,946          5,476

    Operating expenses
    Research and
     Development costs (3,715)    (509)                (3,715)          (509)
    Sales, marketing
     and distribution
     expenses         (22,712)  (3,114)               (22,712)        (3,114)
    General and
     administrative
     expenses          (7,379)  (1,012)    192  (1)    (7,187)          (985)

    Total operating
     expenses         (33,806)  (4,635)               (33,614)        (4,608)

    Operating income    6,140      841                  6,332            868

    Other income/
     (expenses), net
    Interest income     9,048    1,240                  9,048          1,240
    Interest expense      (70)     (10)                   (70)           (10)
    Grant income          199       27                    199             27
    Others                299       41                    299             41
    Total other
     income, net        9,476    1,298                  9,476          1,298

    Income before
     Income tax
      expense and
      minority
     interests         15,616    2,139                 15,808          2,166
    Income tax
     credit/
     (expense)          2,163      297  (2,739) (2)      (576)           (79)

    Income before
     minority
     interests         17,779    2,436                 15,232          2,087
    Minority
     interests,
     net of tax           116       15                    116             16

    Net income         17,895    2,451                 15,348          2,103





    Three Months Ended December 31, 2007
    (unaudited), continued
                       Actual      Actual  Adjustment    Adjusted    Adjusted
                        GAAP        GAAP                 Non-GAAP    Non-GAAP
                        RMB         US$       RMB          RMB         US$

    Net income
     Per share:
    Basic and
     diluted             0.12        0.02                    0.10        0.01

    Basic
     weighted
     average
     number
     of shares
     outstanding  152,099,155 152,099,155             152,099,155 152,099,155
    Effect of
     dilutive
     potential
     shares           323,897     323,897                 323,897     323,897
    Diluted
     weighted
     average
     number
     of shares
     outstanding  152,423,052 152,423,052             152,423,052 152,423,052

    Net income
     per ADS:
    Basic and
     diluted             0.82        0.11                     0.7        0.10

    Basic
     weighted
     average
     number
     of ADSs
     outstanding   21,728,451  21,728,451              21,728,451  21,728,451
    Effect of
     dilutive
     potential
     ADSs              46,271      46,271                  46,271      46,271
    Diluted
     weighted
     average
     number
     of ADSs
     outstanding   21,774,722  21,774,722              21,774,722  21,774,722

Notes to reconciliation of our GAAP statements of income to our adjusted statements of income:

     (1) To exclude share-based compensation expense
     (2) To exclude reinvestment



    Year Ended December 31, 2008
    (unaudited)      Actual      Actual    Adjustment    Adjusted    Adjusted
                      GAAP        GAAP                   Non-GAAP    Non-GAAP
                       RMB         US$        RMB          RMB         US$
    Net Revenues:
     EPIAO           154,570      22,656                  154,570      22,656
     TPIAO            67,585       9,906                   67,585       9,906
     Intefen           4,989         731                    4,989         731
     Inleusin            773         113                      773         113
     Iron              6,984       1,024                    6,984       1,024
     Export            8,289       1,215                    8,289       1,215
     Others               55           8                       55           8

    Total revenues   243,245      35,653                  243,245      35,653
    Cost of
     revenues        (21,741)     (3,187)     370  (1)    (21,371)     (3,132)

    Gross profit     221,504      32,466                  221,874      32,521

    Operating
     expenses
    Research and
     development
     costs           (22,477)     (3,295)   7,469  (2)    (15,008)     (2,200)
    Sales,
     marketing
     and
     distribution
     expenses       (119,778)    (17,556)   1,000  (1)   (118,778)    (17,410)
    General and
     administrative
     expenses        (31,458)     (4,611)   3,097  (1)    (28,361)     (4,157)

    Total operating
     expenses       (173,713)    (25,462)                (162,147)    (23,767)

    Operating income  47,791       7,004                   59,727       8,754

    Other income/
     (expenses), net
    Interest income   23,953       3,511                   23,953       3,511
    Grant income         388          57                      388          57
    Net realized
     (loss)/gain
     on available-
     for-sale
     securities      (18,995)     (2,784)  19,144   (3)       149          22
    Impairment loss
     on available-
     for-sale
     securities       (4,391)       (644)   4,391   (4)        --          --
    Others             1,896         278                    1,896         278
    Total other
     Income ,net       2,851         418                   26,386       3,868

    Income before
     income tax
     expense and
     minority
     interests        50,642       7,422                   86,113     12,622

    Income tax
     expense         (11,649)     (1,707)      --   (5)   (11,649)    (1,707)

    Income before
     minority
     interests        38,993       5,715                   74,464     10,915
    Minority
     interests,
     net of tax          549          80                      549         80

    Net income        39,542       5,795                   75,013     10,995



    Year Ended December 31, 2008
    (unaudited), continued
                          Actual      Actual  Adjustment  Adjusted   Adjusted
                           GAAP        GAAP               Non-GAAP   Non-GAAP
                            RMB         US$     RMB         RMB         US$
    Net income per
     share:
    Basic and diluted         0.26        0.04               0.49        0.07

    Basic weighted
     average number
     of shares
     outstanding       151,655,631 151,655,631        151,655,631 151,655,631
    Effect of dilutive
     potential shares       57,118      57,118             57,118      57,118
    Diluted weighted
     average number
     of shares
     outstanding       151,712,749 151,712,749        151,712,749 151,712,749

    Net income per ADS:
    Basic and diluted         1.82        0.27               3.46        0.51

    Basic weighted
     average number of
     ADSs outstanding   21,665,090  21,665,090         21,665,090  21,665,090
    Effect of dilutive
     potential ADSs          8,160       8,160              8,160       8,160
    Diluted weighted
     average number of
     ADSs outstanding   21,673,250  21,673,250         21,673,250  21,673,250

Notes to reconciliation of our GAAP statements of to our adjusted non-GAAP statements of income:

    (1) To exclude share-based compensation expense.
    (2) To exclude one-time upfront payment for license fee of RMB6,948,000
        and share-based compensation expense of RMB 521,000 for R&D staff.
    (3) To exclude realized loss on available-for-sale securities.
    (4) To exclude impairment loss on available-for-sale securities.
    (5) No income tax effect on adjustments is required as they are
        incurred by overseas companies that are not subject to income tax.



    Year Ended December 31, 2007
    (unaudited)       Actual     Actual   Adjustment    Adjusted      Adjusted
                       GAAP       GAAP                  Non-GAAP      Non-GAAP
                       RMB         US$      RMB           RMB           US$
    Net Revenues:
     EPIAO           121,220     16,618      --         121,220        16,618
     TPIAO            43,074      5,905      --          43,074         5,905
     Intefen           4,123        565      --           4,123           565
     Inleusin          1,027        141      --           1,027           141
     Iron              3,206        440      --           3,206           440
     Export            6,784        930      --           6,784           930
     Others              739        101      --             739           101

    Total revenues   180,173     24,700                 180,173        24,700
    Cost of
     revenues        (17,427)    (2,389)     --         (17,427)       (2,389)

    Gross profit     162,746     22,311                 162,746        22,311

    Operating
     expenses
    Research and
     development
     costs           (11,635)    (1,595)     --         (11,635)       (1,595)
    Sales,
     marketing
     and
     distribution
     expenses        (84,187)   (11,541)     --         (84,187)      (11,541)
    General and
     administrative
     expenses        (18,379)    (2,520)    995  (1)    (17,384)       (2,383)

    Total
     operating
     expenses       (114,201)   (15,656)               (113,206)      (15,519)

    Operating
     income           48,545      6,655                  49,540         6,792

    Other income/
     (expenses),
     net
    Interest
     income           36,015      4,937                  36,015         4,937
    Interest
     expense            (825)      (113)     --            (825)         (113)
    Grant income       1,067        146      --           1,067           146
    Others               205         28      --             205            28
    Total other
     income, net      36,462      4,998                  36,462         4,998

    Income before
     income tax
     expense
     and minority
     interests        85,007     11,653                  86,002        11,790
    Income tax
     expense          (3,419)      (469) (2,739) (2)     (6,158)         (844)

    Income
     before
     minority
     interests        81,588     11,184                  79,844        10,946
    Minority
     interests,
     net of tax          (75)       (10)                    (75)          (10)

    Net income        81,513     11,174                  79,769        10,936




    Year Ended December 31, 2007
    (unaudited), continued
                             Actual    Actual Adjustment   Adjusted   Adjusted
                              GAAP      GAAP               Non-GAAP   Non-GAAP
                              RMB       US$     RMB          RMB        US$

    Net income per share:
    Basic and diluted          0.56       0.08                0.54        0.07

    Basic weighted
     average number
     of shares          146,646,049 146,646,049        146,646,049 146,646,049
     outstanding
    Effect of dilutive
     potential shares        68,993      68,993             68,993      68,993
    Diluted weighted
     average number of
     shares outstanding 146,715,042 146,715,042        146,715,042 146,715,042

    Net income per ADS:
    Basic and diluted          3.89        0.53               3.81        0.52

    Basic weighted
     average number
     of ADSs             20,949,436  20,949,436         20,949,436  20,949,436
     outstanding
    Effect of dilutive
     potential ADSs           9,856       9,856              9,856       9,856
    Diluted weighted
     average number ADSs
     of outstanding      20,959,292  20,959,292         20,959,292  20,959,292

Notes to reconciliation of our GAAP statements of income to our adjusted statements of income:

     (1) To exclude share-based compensation expense.
     (2) To exclude reinvestment tax refund.



    For more information, please contact:

    Investor Contact:
     Bo Tan, CFO
     3SBio Inc.
     Tel:   +86-24-2581-1820
     Email: Tanbo@3sbio.com

    Investor Relations (China):
     Peter Schmidt
     FD Beijing
     Tel:   +86-10-8591-1953
     Email: Peter.schmidt@fd.com

    Investor Relations (US):
     Evan Smith / John Capodanno
     FD US
     Tel:   +1-212-850-5600

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SOURCE 3SBio Inc.
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All rights reserved


Related biology technology :

1. 3SBio Inc. Receives Official Recognition as a High-Tech Enterprise
2. 3SBio Inc. to Report 2008 Fourth Quarter and Full Year Earnings on March 11, 2009
3. 3SBio Inc. Appoints Mr. Bo Tan as Chief Financial Officer
4. 3SBio Inc. to Present at the Piper Jaffray 20th Annual Health Care Conference
5. 3SBio Inc. Announces Third Quarter 2008 Results
6. 3SBio Inc. Files for SFDA Approval of NuLeusin
7. 3SBio Inc. Announces Preliminary Third Quarter 2008 Results
8. 3SBio Inc. Schedules 2008 Third Quarter Earnings Release on Monday, November 10, 2008
9. 3SBio Inc. Files for SFDA Approval of High-dose (36,000 IU) EPIAO
10. 3SBio Inc. to Present at the UBS Global Life Sciences Conference
11. 3SBio Inc. Announces Results of Annual General Meeting
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