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3SBio Inc. Announces Unaudited Third Quarter 2009 Results
Date:11/12/2009

SHENYANG, China, Nov. 12 /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 third quarter ended September 30, 2009.

    Third Quarter 2009 Financial Highlights:

    -- Total net revenues increased by 35.8% over the third quarter of 2008 to
       RMB92.6 million (US$13.6 million).
    -- Operating income increased by 37.8% over the third quarter of 2008 to
       RMB28.5 million (US$4.2 million) on a GAAP basis, and increased by
       34.7% over the third quarter of 2008 to RMB29.8 million (US$4.4
       million) on a non-GAAP basis.
    -- Net income increased by 1343.5% over the third quarter of 2008 to
       RMB26.9 million (US$3.9 million) on a GAAP basis, and increased by
       25.6% over the third quarter of 2008 to RMB28.2 million (US$4.1
       million) on a non-GAAP basis.
    -- Net income per American Depositary Share ("ADS") for the third quarter
       of 2009 was RMB1.25 (US$0.18) compared with RMB0.09 (US$0.01) for the
       third quarter of 2008 on a GAAP basis, and RMB1.31 (US$0.19) for the
       third quarter of 2009 compared with RMB1.03 (US$0.15) for the third
       quarter of 2008 on a non-GAAP basis.

    First Nine Months 2009 Financial Highlights:

    -- Total net revenues in the first nine months of 2009 increased by 32.5%
       to RMB242.6 million (US$35.5 million) compared to RMB183.2 million
       (US$27.0 million) in the first nine months of 2008.
    -- Operating income increased by 48.6% over the first nine months of 2008
       to RMB74.5 million (US$10.9 million) on a GAAP basis, and increased by
       44.3% to RMB77.5 million (US$11.4 million) on a non-GAAP basis.
    -- Net income increased by 70.2% over the first nine months of 2008 to
       RMB69.8 million (US$10.2 million) on a GAAP basis, and increased by
       19.0% over the first nine months of 2008 to RMB75.8 million (US$11.1
       million) on a non-GAAP basis.
    -- Net income per ADS on a fully-diluted basis for the first nine months
       of 2009 was RMB3.24 (US$0.47) compared with RMB1.89 (US$0.28) for the
       first nine months of 2008 on a GAAP basis, and RMB3.52 (US$0.52)
       compared with RMB2.93 (US$0.43) for the first nine months of 2008 on a
       non-GAAP basis.

    Third Quarter 2009 Business Highlights

    -- EPIAO, the Company's flagship injectable recombinant human
       erythropoietin ("EPO") product, demonstrated strong growth with net
       revenue from EPIAO in the third quarter of 2009 rising 32.6% to RMB56.6
       million (US$8.3 million) compared to RMB42.7 million (US$6.3 million)
       in the third quarter of 2008.
    -- Net revenues for TPIAO, the Company's novel recombinant human
       thrombopoietin ("TPO") product, increased by 41.3% to RMB27.9 million
       (US$4.1 million) in the third quarter of 2009, compared to RMB19.7
       million (US$2.9 million) in the third quarter of 2008.
    -- Construction of the new EPIAO and TPIAO manufacturing plant in Shenyang
       remains on schedule for completion this year in preparation for
       validation and certification next year.
    -- Dr. Jing Lou, chief executive officer of 3SBio, commented:
       "Overall, the business is performing as expected with a strong set of
       results this quarter and we reiterate our full-year guidance of
       US$43-45 million. Construction of our new plant remains on schedule and
       we look forward to moving to validation and certification next year. We
       continued to develop our product pipeline and will update the market
       when we have reached significant milestones in the approval process."


    Three months ended September 30, 2009 Unaudited Financial Results

Net revenues. Net revenues increased by 35.8% to RMB92.6 million (US$13.6 million) for the third quarter of 2009 from RMB68.2 million (US$10.0 million) for the same period in 2008. This increase was largely due to continued strength from EPIAO and TPIAO products, which increased by 32.6% and 41.3%, respectively, over the same period in 2008. TPIAO remained 3SBio's second largest revenue contributor in the quarter, accounting for 30.1% of total net revenues. Export sales declined by 6.4% to RMB2.3 million (US$0.3 million), and revenues from our in-licensed IV Iron Sucrose supplement rose 113.7% to RMB3.7 million (US$0.5 million).

Gross profit. As a result of continued sales growth from key products, GAAP gross profit for the third quarter of 2009 increased by 38.3% to RMB86.1 million (US$12.6 million) from RMB62.2 million (US$9.2 million) for the same period in 2008. GAAP gross margin increased by 1.7% to 93.0% for the third quarter of 2009 from 91.3% for the same period in 2008.

Operating expenses. GAAP operating expenses were RMB57.6 million (US$8.4 million) for the third quarter of 2009, an increase of 38.6% from GAAP operating expenses of RMB41.5 million (US$6.1 million) for the same period in 2008. Non-GAAP operating expenses were RMB56.4 million (US$8.3 million) for the third quarter of 2009, an increase of 40.3% from non-GAAP operating expenses of RMB40.2 million (US$5.9 million) for the same period in 2008. The increase in operating expenses was largely driven by higher R&D expenses, particularly at the early stage of the pipeline.

    -- Research and development ("R&D") costs. GAAP R&D costs for the third
       quarter of 2009 were RMB7.6 million (US$1.1 million), or 8.2% of net
       revenue, compared to RMB4.2 million (US$0.6 million), or 6.2% of net
       revenue for the same period in 2008.

    -- Sales, marketing and distribution expense. GAAP sales, marketing and
       distribution expenses for the third quarter of 2009 were RMB41.6
       million (US$6.1 million), or 44.9% of net revenue, compared to RMB29.3
       million (US$4.3 million), or 42.9% of net revenue, for the same period
       in 2008. The increase was primarily attributable to higher sales
       activities in general and continued investment in building the TPIAO
       and EPIAO brands.

    -- General and administrative expenses. GAAP general and administrative
       expenses for the third quarter of 2009 were RMB8.4 million (US$1.2
       million), representing an increase of 4.6% from general and
       administrative expenses of RMB8.0 million (US$1.2 million) for the same
       period in 2008. This marked a decline to 9.1% of net revenue for the
       third quarter of 2009, compared to 11.8% of net revenue for the third
       quarter of 2008.

Operating income. GAAP operating income was RMB28.5 million (US$4.2 million) for the third quarter of 2009, an increase of 37.8% from operating income of RMB20.7 million (US$3.1 million) for the same period in 2008. Non-GAAP operating income for the third quarter of 2009 grew by 34.7% to RMB29.8 million (US$4.4 million), compared to RMB22.1 million (US$3.3 million) in the third quarter of 2008.

GAAP operating margin for the third quarter of 2009 was 30.8% as compared to 30.4% for the same period in 2008. Non-GAAP operating margin was 32.2% for the third quarter of 2009, as compared to 32.4% in the same period in 2008.

Interest income. The Company recorded net interest income of RMB2.6 million (US$0.4 million) for the third quarter of 2009, compared to RMB5.5 million (US$0.8 million) for the same period in 2008.

Net income. GAAP net income was RMB26.9 million (US$3.9 million) for the third quarter of 2009, 1343.5% higher than net income of RMB1.9 million (US$0.3 million) for the same period in 2008. GAAP net income per ADS on a fully-diluted basis for the third quarter of 2009 increased to RMB1.25 (US$0.18) from RMB0.09 (US$0.01) for the same period in 2008. GAAP net margin for the third quarter of 2009 was 29.1% as compared to 2.7% for the same period in 2008.

Non-GAAP net income for the third quarter of 2009 was RMB28.2 million (US$4.1 million), 25.6% higher than non-GAAP net income of RMB22.4 million (US$3.3 million) for the same period in 2008. Non-GAAP net income per ADS on a fully diluted basis for the third quarter of 2009 increased to RMB1.31 (US$0.19) from RMB1.03 (US$0.15) for the same period in 2008. Non-GAAP net margin for the third quarter of 2009 was 30.4% as compared to 32.9% for the same period in 2008.

Nine months ended September 30, 2009 Unaudited Financial Results

Net revenues. Net revenues for the first nine months of 2009 increased by 32.5% to RMB242.6 million (US$35.5 million), from RMB183.2 million (US$27.0 million) for the same period in 2008. 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 for the first nine months of 2009 increased by 30.6% to RMB150.5 million (US$22.1 million) from RMB115.2 million (US$17.0 million) for same period in 2008. Net revenues from TPIAO in the first nine months of 2009 increased by 34.4% to RMB68.8 million (US$10.1 million) from RMB51.2 million (US$7.5 million) for the same period in 2008. In addition, revenue from our export business was RMB9.1 million (US$1.3 million), representing an increase of 27.9% over the first nine months of 2008, while revenue from our in-licensed IV Iron Sucrose supplement was RMB8.7 million (US$1.3 million), representing an increase of 67.7% over the first nine months of 2008.

Gross profit. GAAP gross profit for the first nine months of 2009 increased by 33.9% to RMB223.7 million (US$32.8 million) from RMB167.1 million (US$24.6 million) for the same period in 2008. GAAP gross margin increased by 1.0% to 92.2% for the first nine month months of 2009 from 91.2% for the same period in 2008.

Operating income. For the first nine months ended September 30, 2009, GAAP operating income increased by 48.6% to RMB74.5 million (US$10.9 million), compared to RMB50.1 million (US$7.4 million) for the same period in 2008. Non- GAAP operating income increased by 44.3% to RMB77.5 million (US$11.4 million), compared to RMB53.7 million (US$7.9 million) for the same period in 2008.

GAAP operating margin for the first nine months ended September 30, 2009 was 30.7% as compared to 27.3% for the nine months ended September 30, 2008. Non-GAAP operating margin was 31.9% for the nine months ended September 30, 2009, as compared to 29.3% in the same period in 2008.

Net income. GAAP net income for the first nine months of 2009 increased by 70.2% to RMB69.8 million (US$10.2 million) compared with RMB41.0 million (US$6.0 million) for the same period in 2008. GAAP net margin for the first nine months ended September 30, 2009 was 28.8% as compared to 22.4% for the same period in 2008. GAAP net income per ADS on a fully diluted basis for the first nine months of 2009 increased to RMB3.24 (US$0.47) from RMB1.89 (US$0.28) for the same period in 2008.

Non-GAAP net income for the first nine months of 2009 increased by 19.0% to RMB75.8 million (US$11.1 million) compared with RMB63.7 million (US$9.4 million) for the same period in 2008. Non-GAAP net margin for the first nine months ended September 30, 2009 was 31.2% as compared to 34.8% for the same period in 2008. Non-GAAP net income per ADS for the first nine months of 2009 increased to RMB3.52 (US$0.52) from RMB2.93 (US$0.43) for the same period in 2008.

Cash and cash equivalents / Time deposits. 3SBio had positive operating cash flows of RMB61.6 million (US$9.0 million) for the first nine months of 2009, and as of September 30, 2009 retained a strong balance sheet with cash, cash equivalents and time deposits of RMB731.5 million (US$107.2 million), a 0.2% decrease 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 third 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) / 9:00 pm (Beijing/Hong Kong) on November 13, 2009 to discuss its 2009 third quarter financial results and recent business activity. The conference call may be accessed using the dial-in numbers below:

    Conference ID: 38479039

    Local dial-in:
    China - landline 800-819-0121
    China - mobile 400-620-8038

    International toll-free dial-in:
    Hong Kong 800930346
    United Kingdom 080-8234-6646
    United States 1-866-519-4004
    International toll dial-in: 65-6735-7955

    Replay- Conference ID: 38479039
    A telephone replay will be available two hours after the call until
    November 20, 2009, at:
    International dial-in: +61-2-8235-5000
    United States dial-in: 1-866-214-5335

Webcast

A live webcast of the conference will be available on the investor relations page of 3SBio's website at http://bbs.3sbio.com/en/News/xinvestors.aspx and at http://tinyurl.com/yf93ntk . A replay of the webcast will be available within one hour after the conclusion of the call.

Non-GAAP Financial Measures: Reconciliation of GAAP to Non-GAAP

To supplement the Company's financial information presented in accordance with general accepted accounting principles ("GAAP"), the Company has utilized some 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. These non-GAAP financial measures include non- GAAP cost of revenue, non-GAAP gross profit, non-GAAP operating expenses, non- GAAP operating income, non-GAAP net income, non-GAAP net income per share, and non-GAAP net income per ADS. These measures may be different from non-GAAP financial measures used by other companies. The presentation of this financial information, which is not prepared under any comprehensive set of accounting rules or principals, is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. Non-GAAP measures have limitations in that they do not reflect all of the amounts associated with the Company's results of operations as determined in accordance with GAAP. These measures should only be used to evaluate the Company's results of operations in conjunction with the corresponding GAAP measures. Please see the attached reconciliation of GAAP to non-GAAP for an explanation of the amounts excluded to arrive at non-GAAP financial measures for the three-month periods ended September 30, 2009 and September 30, 2008 and for the nine month periods ended September 30, 2009 and September 30, 2008.

Statement Regarding Unaudited Financial Information

The unaudited financial information set forth above is preliminary and subject to adjustments and modifications. The audited financial statements and related notes are to be included in our annual report on Form 20-F for the year ending December 31, 2009. Adjustments and modifications to the financial statements may be identified during the course of the 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 RMB6.8262 to US$1.00, the noon buying rate for US dollars in effect on September 30, 2009 for cable transfers of RMB per US dollar as certified for customs purposes by the Federal Reserve Bank of New York. A rate of 6.7899 was used for comparative purposes as of September 30, 2008.

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 the disclosures of 3SBio, Inc. (the "Company" or "3SBio") for the third quarter of fiscal 2009 ("Disclosures") that are not purely historical in nature may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The Disclosures include the press release, the conference call and any accompanying materials, and any other information issued, released or publicized by the Company with respect to the third quarter of fiscal 2009.

These forward-looking statements address activities, events, conditions, or developments that we currently expect or anticipate may occur in the future, and include, but may not be limited to, discussions and statements regarding revenue guidance, product development, timing of plant construction completion, testing and certification, impact of the government policies and regulations, regulatory approval process, production capacity, capital expense estimate, future operations, investment portfolio management, and future strategies. Forward-looking statements can be identified by such terminology as "believe," "expect," "plans," "strategy," "potential", "prospects," "forecast," "estimate," "project," "anticipate," "aim," "will" or "would", "may" or "might", and words, phrases, expressions, and usages of similar meaning or substance or the negative of such words, phrases, expressions and usages.

Forward-looking statements are based on management's current assumptions, beliefs, expectations, and projections, in light of the information currently available to it, and actual results, performances, or achievements could differ materially from those implied or expressed by the forward-looking statements. 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 expected market growth for pharmaceutical products in China; market acceptance of 3SBio products; expected hospital or patient demand for our products; the completion of 3SBio's ongoing clinical trials as planned; receipt and timing of regulatory approvals for 3SBio's new products and uses; 3SBio's ability to expand its production, sales and distribution network and other aspects of its operations; 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 factors identified above and other risk factors, uncertainties and assumptions that may affect 3SBio's business, financial conditions and results of operations, please refer to the Company's filings with the Securities and Exchange Commission at www.sec.gov, and, in particular, "Introduction - Cautionary Statement concerning Forward Looking Statements", Item 3.D "Risk Factors", Item 5. "Operating and Financial Review and Prospects", and other applicable discussions in 3SBio's annual report on Form 20-F for the year ended December 31, 2008.

All the statements in the Disclosures speak as of the date of the initial release, even if subsequently made available on the 3SBio website or otherwise. 3SBio undertakes no obligation to update or revise these forward-looking statements, whether as a result of new information, subsequent events or otherwise, after the date of this press release.

    For more information, please contact:

    Investor Contacts

     Bo Tan
     Chief Financial Officer
     3SBio Inc.
     Tel:   +86-24-2581-1820
     Email: ir@3SBio.com

     Tom Folinsbee
     Director of Investor Relations
     3SBio Inc.
     Tel:   +852-8191-6991
     Email: ir@3SBio.com



    3SBio Inc. and subsidiaries
    Consolidated balance sheets
    (expressed in thousands)
                                         December 31 September 30 September 30
                                              2008        2009         2009
                                              RMB         RMB          US$
    Assets                                           (unaudited)  (unaudited)

    Current assets

    Cash and cash equivalents               439,237     334,196       48,958
    Time deposits with financial
     institutions                           293,809     397,306       58,203
    Accounts receivable, less allowance
     for doubtful accounts: December 31,
     2008 - RMB4,503; September 30, 2009
     - RMB3,439 (US$504)                     48,927      71,495       10,474
    Notes receivable                         24,840      30,278        4,436
    Inventories                               7,748      12,130        1,777
    Prepaid expenses and other
     receivables                              8,249       9,260        1,357
    Deferred tax assets                       1,802       2,581          378

    Total current assets                    824,612     857,246      125,583

    Available-for-sale securities            26,700      14,682        2,151
    Property, plant and equipment, net       78,185     139,263       20,401
    Lease prepayments                         8,894       8,629        1,264
    Non-current deposits                      8,521      15,596        2,285
    Intangible assets, net                    5,225       4,400          645
    Deferred tax assets                         781         106           16

    Total assets                            952,918   1,039,922      152,345

    Liabilities

    Current liabilities

    Accounts payable                          1,939       3,062          449
    Deferred grant income                       374         374           55
    Accrued expenses and other payables      25,273      35,569        5,211
    Income tax payable                        1,256       3,323          487
    Other current liabilities                    57          --           --

    Total current liabilities                28,899      42,328        6,202

    Deferred grant income                     3,152       2,871          421
    Other liabilities                           472          --           --

    Total liabilities                        32,523      45,199        6,623

    Commitments and contingencies                --          --           --

    Shareholders' equity

    Share capital - ordinary shares
     US$0.0001 par value, 500,000,000
     shares authorized, 150,575,955 and
     150,635,189 issued and outstanding
     as of December 31, 2008 and
     September 30, 2009, respectively           121         121           18
    Additional paid-in capital              908,377     911,562      133,539
    Accumulated other comprehensive loss   (102,126)   (100,768)     (14,762)
    Retained earnings                       114,023     183,808       26,927

    Total shareholders' equity              920,395     994,723      145,722

    Total liabilities and shareholders'
     equity                                 952,918   1,039,922      152,345



    3SBio Inc. and subsidiaries
    Consolidated statements of income
    (expressed in thousands, except per share,
     per ADS and other share and ADS data)

    Three Months Ended September 30, 2009
                                               Adjust-
                         GAAP        GAAP       ment     Non-GAAP   Non-GAAP
                          RMB         US$       RMB         RMB        US$
                      (unaudited)(unaudited)(unaudited)(unaudited)(unaudited)
    Net Revenues:
    EPIAO               56,558       8,285       --        56,558       8,285
    TPIAO               27,893       4,086       --        27,893       4,086
    Intefen              1,633         239       --         1,633         239
    Inleusin               473          69       --           473          69
    Iron                 3,703         542       --         3,703         542
    Export               2,282         334       --         2,282         334
    Others                  21           3       --            21           3

    Total net revenues  92,563      13,558       --        92,563      13,558
    Cost of revenues    (6,473)       (948)     123  (1)   (6,350)       (930)

    Gross profit        86,090      12,610       --        86,213      12,628

    Operating expenses
    Research and
     development costs  (7,616)     (1,116)     121  (1)   (7,495)     (1,098)
    Sales, marketing
     and distribution
     expenses          (41,551)     (6,087)     169  (1)  (41,382)     (6,062)
    General and
     administrative
     expenses           (8,386)     (1,229)     820  (1)   (7,566)     (1,108)

    Total operating
     expenses          (57,553)     (8,432)               (56,443)     (8,268)

    Operating income    28,537       4,178                 29,770       4,360

    Other income/
     (expenses), net
    Interest income      2,637         386       --         2,637         386
    Grant income            94          14       --            94          14

    Others                 124          18       --           124          18
    Total other income,
     net                 2,855         418                  2,855         418

    Income before
     income tax
     expense            31,392       4,596                 32,625       4,778
    Income tax expense  (4,471)       (655)      --        (4,471)       (655)

    Net income          26,921       3,941                 28,154       4,123

    Net income per
     share:
    Basic and diluted     0.18        0.03                   0.19        0.03

    Basic weighted
     average number
     of shares     150,621,780 150,621,780            150,621,780 150,621,780
     outstanding
    Effect of
     dilutive
     potential
     shares            608,488     608,488                608,488     608,488
    Diluted
     weighted
     average
     number of
     shares
     outstanding   151,230,268 151,230,268            151,230,268 151,230,268

    Net income
     per ADS:
    Basic and
     diluted              1.25        0.18                   1.31        0.19

    Basic weighted
     average number
     of ADSs
     outstanding    21,517,397  21,517,397             21,517,397  21,517,397
    Effect of
     dilutive
     potential
     ADSs               86,927      86,927                 86,927      86,927
    Diluted
     weighted
     average
     number of
     ADSs
     Outstanding    21,604,324  21,604,324             21,604,324  21,604,324



    3SBio Inc. and subsidiaries
    Consolidated statements of income
    (expressed in thousands, except per share,
     per ADS and other share and ADS data)

    Three Months Ended September 30, 2008
                                               Adjust-
                           GAAP       GAAP      ment      Non-GAAP  Non-GAAP
                            RMB        US$       RMB         RMB       US$
                       (unaudited)(unaudited)(unaudited)(unaudited)(unaudited)
    Net Revenues:
    EPIAO               42,650       6,282       --        42,650       6,282
    TPIAO               19,736       2,907       --        19,736       2,907
    Intefen              1,398         206       --         1,398         206
    Inleusin               186          27       --           186          27
    Iron                 1,733         255       --         1,733         255
    Export               2,439         359       --         2,439         359
    Others                   8           1       --             8           1

    Total net
     revenues           68,150      10,037                 68,150      10,037
    Cost of revenues    (5,923)       (872)     111   (1)  (5,812)       (856)

    Gross profit        62,227       9,165                 62,338       9,181

    Operating
     expenses
    Research and
     development
     costs              (4,242)       (625)     154   (1)  (4,088)       (602)
    Sales, marketing
     and distribution
     expenses          (29,260)     (4,309)     297   (1) (28,963)     (4,266)
    General and
     administrative
     expenses           (8,018)     (1,181)     838   (1)  (7,180)     (1,057)

    Total operating
     expenses          (41,520)     (6,115)               (40,231)     (5,925)

    Operating income    20,707       3,050                 22,107       3,256

    Other income/
     (expenses), net
    Interest income      5,461         804       --         5,461         804
    Grant income            94          14       --            94          14
    Impairment loss
     on available-
     for-sale
     securities        (19,144)     (2,819)  19,144   (2)      --          --
    Others              (1,058)       (156)      --        (1,058)       (156)
    Total other
     income, net       (14,647)     (2,157)                 4,497         662

    Income before
     income tax
     expense and
     minority
     interests           6,060         893                 26,604       3,918
    Income tax
     expense            (4,272)       (629)      --        (4,272)       (629)

    Income before
     minority
     interests           1,788         264                 22,332       3,289
    Minority
     interests, net
     of tax                 77          11       --            77          11

    Net income           1,865         275                 22,409       3,300

    Net income per
     share:
    Basic and diluted     0.01        0.00                   0.15        0.02

    Basic weighted
     average number
     of shares
     outstanding   151,862,722 151,862,722            151,862,722 151,862,722
    Effect of
     dilutive
     potential
     shares              7,222       7,222                  7,222       7,222
    Diluted
     weighted
     average
     number of
     shares
     outstanding   151,869,944 151,869,944            151,869,944 151,869,944

    Net income per
     ADS:
    Basic and
     diluted              0.09        0.01                   1.03        0.15

    Basic weighted
     average number
     of  ADSs
     outstanding    21,694,675  21,694,675             21,694,675  21,694,675
    Effect of
     dilutive
     potential ADSs      1,032       1,032                  1,032       1,032
    Diluted weighted
     average number
     of ADSs
     outstanding    21,695,707  21,695,707             21,695,707  21,695,707



    3SBio Inc. and subsidiaries
    Consolidated statements of income
    (expressed in thousands, except per share,
     per ADS and other share and ADS data)

    Nine Months Ended September 30, 2009
                                               Adjust-
                         GAAP       GAAP        ment     Non-GAAP   Non-GAAP
                         RMB        US$         RMB         RMB        US$
                     (unaudited)(unaudited) (unaudited) (unaudited)(unaudited)
    Net Revenues:
    EPIAO              150,549      22,055       --       150,549      22,055
    TPIAO               68,820      10,082       --        68,820      10,082
    Intefen              4,188         614       --         4,188         614
    Inleusin             1,166         171       --         1,166         171
    Iron                 8,700       1,275       --         8,700       1,275
    Export               9,133       1,338       --         9,133       1,338
    Others                  88          13       --            88          13

    Total net
     revenues          242,644      35,548       --       242,644      35,548
    Cost of
     revenues          (18,990)     (2,782)     365  (1)  (18,625)     (2,728)

    Gross profit       223,654      32,766       --       224,019      32,820

    Operating expenses
    Research and
     development
     costs             (14,325)     (2,099)     366  (1)  (13,959)     (2,045)
    Sales, marketing
     and distribution
     expenses         (110,742)    (16,223)     471  (1) (110,271)    (16,154)
    General and
     administrative
     expenses          (24,137)    (3,536)    1,808  (1)  (22,329)     (3,271)

    Total operating
     expenses         (149,204)    (21,858)              (146,559)    (21,470)

    Operating income    74,450      10,908                 77,460      11,350

    Other income/
     (expenses), net
    Interest income      9,163       1,342       --         9,163       1,342
    Grant income           281          41       --           281          41
    Disposal gain on
     available-for-sale
     securities          1,611         236   (1,611) (2)       --          --
    Impairment loss on
     available-for-sale
     securities         (4,624)       (677)   4,624  (2)       --          --
    Others               1,463         214       --         1,463         214
    Total other income,
     net                 7,894       1,156                 10,907       1,597

    Income before
     income
     tax expense        82,344      12,064       --        88,367      12,947
    Income tax
     expense           (12,559)     (1,840)      --       (12,559)     (1,840)

    Net income          69,785      10,224                 75,808      11,107

    Net income
     per share:
    Basic and
     diluted              0.46        0.07                   0.50        0.07

    Basic weighted
    Average number
     of shares
     outstanding   150,598,359 150,598,359            150,598,359 150,598,359
    Effect of
     dilutive
     potential
     shares            114,151     114,151                114,151     114,151
    Diluted
     weighted
     average
     number of
     shares
     outstanding  150,712,510  150,712,510            150,712,510 150,712,510

    Net income
     per ADS:
    Basic and
     diluted             3.24         0.47                   3.52        0.52

    Basic weighted
     average
     number
     of ADSs
     outstanding   21,514,051   21,514,051             21,514,051  21,514,051
    Effect of
     dilutive
     potential ADSs    16,307       16,307                 16,307      16,307
    Diluted
     weighted
     average
     number of
     ADSs
     outstanding   21,530,358   21,530,358             21,530,358  21,530,358



    3SBio Inc. and subsidiaries
    Consolidated statements of income
    (expressed in thousands, except per share,
     per ADS and other share and ADS data)

    Nine Months Ended September 30, 2008
                                               Adjust-
                              GAAP     GAAP     ment      Non-GAAP  Non-GAAP
                               RMB      US$      RMB           RMB       US$
                       (unaudited)(unaudited)(unaudited)(unaudited)(unaudited)
    Net Revenues:
    EPIAO             115,244       16,972       --       115,244      16,972
    TPIAO              51,212        7,542       --        51,212       7,542
    Intefen             3,790          558       --         3,790         558
    Inleusin              564           83       --           564          83
    Iron                5,188          764       --         5,188         764
    Export              7,141        1,052       --         7,141       1,052
    Others                 42            6       --            42           6

    Total net
     revenues         183,181       26,977                183,181      26,977
    Cost of
     revenues         (16,119)      (2,374)     260 (1)   (15,859)     (2,336)

    Gross profit      167,062       24,603                167,322      24,641

    Operating expenses
    Research and
     development
     costs            (10,038)      (1,478)     359 (1)    (9,679)     (1,425)
    Sales, marketing
     and distribution
     expenses         (81,441)     (11,994)     691 (1)   (80,750)    (11,893)
    General and
     administrative
     expenses         (25,498)      (3,756)   2,271 (1)   (23,227)     (3,421)

    Total operating
     expenses        (116,977)     (17,228)              (113,656)    (16,739)

    Operating income   50,085        7,375                 53,666       7,902

    Other income/
     (expenses), net
    Interest income    18,037        2,656       --        18,037       2,656
    Grant income          281           41       --           281          41
    Impairment loss on
     available-for-sale
     securities       (19,144)      (2,819)  19,144 (2)        --          --
    Others              2,761          407       --         2,761         407
    Total other income,
     net                1,935          285                 21,079       3,104

    Income before
     income
     tax expense
     and minority
     interests         52,020        7,660                 74,745      11,006
    Income tax
     expense          (11,192)      (1,648)      --       (11,192)     (1,648)

    Income before
     minority
     interests         40,828        6,012                 63,553       9,358
    Minority
     interests,
     net of tax           172           25       --           172          25

    Net income         41,000        6,037                 63,725       9,383

    Net income per
     share:
    Basic and diluted    0.27         0.04                   0.42        0.06

    Basic weighted
     average number
     of shares
     outstanding  152,019,769  152,019,769            152,019,769 152,019,769
    Effect of
     dilutive
     potential
     shares             7,222        7,222                  7,222       7,222
    Diluted
     weighted
     average
     number of
     shares
     outstanding  152,026,991  152,026,991            152,026,991 152,026,991

    Net income
     per ADS:
    Basic and
     diluted             1.89         0.28                   2.93        0.43

    Basic weighted
    average
    number of
    ADSs
    outstanding    21,717,110   21,717,110             21,717,110  21,717,110
    Effect of
     dilutive
     potential
     ADSs               1,032        1,032                  1,032       1,032
    Diluted
     weighted
     average
     number of
     ADSs
     outstanding   21,718,142   21,718,142             21,718,142  21,718,142



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

    (1) To exclude share-based compensation expenses from its non-GAAP
        measures primarily because they are non-cash expenses that the Company
        does not believe are reflective of ongoing operating results.
    (2) To exclude the impact caused by the impairment and/or disposal
        losses on available-for-sale securities from its non-GAAP measures,
        which is one-off in nature.

SOURCE 3SBio Inc.


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SOURCE 3SBio Inc.
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1. 3SBio Inc. to Report 2009 Third Quarter Earnings on November 12, 2009
2. 3SBio Inc. to Hold 2009 Annual General Meeting on October 12, 2009
3. 3SBio Inc. Announces Appointment of Ernst & Young Hua Ming as Independent Auditor
4. 3SBio Inc. Announces Unaudited Fourth Quarter and Fiscal Year 2008 Results
5. 3SBio Inc. Receives Official Recognition as a High-Tech Enterprise
6. 3SBio Inc. to Report 2008 Fourth Quarter and Full Year Earnings on March 11, 2009
7. 3SBio Inc. Appoints Mr. Bo Tan as Chief Financial Officer
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9. 3SBio Inc. Announces Third Quarter 2008 Results
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11. 3SBio Inc. Announces Preliminary Third Quarter 2008 Results
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