Navigation Links
Simcere Pharmaceutical Group Reports Unaudited Second Quarter 2008 Results
Date:8/5/2008

NANJING, China, Aug. 5 /Xinhua-PRNewswire/ -- Simcere Pharmaceutical Group (NYSE: SCR), a leading manufacturer and supplier of branded generic pharmaceuticals and manufacturer of the patented anti-cancer biotech product Endu in China, today reported unaudited financial results for the quarter ended June 30, 2008.

Highlights

-- Total revenue increased to RMB436.2 million (US$63.6 million) for the

second quarter, representing a 30.4% year-over-year growth;

-- Net income increased to RMB95.2 million (US$13.9 million) for the

second quarter, representing a 14.5% year-over-year growth; and

-- Gross margin was 81.7% for the second quarter 2008, compared to 83.7%

for the second quarter 2007.

Mr. Jinsheng Ren, Chairman and CEO of Simcere Pharmaceutical Group, commented, ''Simcere achieved steady sales growth this quarter compared to the same period last year. Our net profit remained strong and we saw strong growth for our other branded generics. During the quarter we received approval from the SFDA to manufacture and market a first- to-market generic Biapenem injection under the brand name Anxin. This approval strengthens our antibiotic product portfolio in line with our strategy to focus on first-to- market generic and innovative drugs.''

''Looking to the second half of 2008, we will continue to focus on building our portfolio of innovative and first-to-market drugs through organic growth and acquisitions,'' added Mr. Ren. ''We also plan to enhance our investment in sales and marketing activities to help Simcere achieve sustainable growth for the long-term."

The Company noted that year-over-year sales growth for Endu was slower then expected during the second quarter 30,221

Earnings per share:

Basic 0.69 0.76 0.11 1.36 1.66 0.24

Diluted 0.67 0.74 0.11 1.31 1.62 0.24

Earnings per ADS:

Basic 1.39 1.52 0.22 2.73 3.32 0.48

Diluted 1.34 1.48 0.22 2.63 3.23 0.47

Simcere Pharmaceutical Group

UNAUDITED CONSOLIDATED CONDENSED Balance Sheets

(Amounts expressed IN THOUSANDS)

December 31, June 30, June 30,

2007 2008 2008

RMB RMB USD

Assets

Current assets

Cash and cash equivalents

(including pledged bank

deposits) 498,262 339,047 49,431

Short term investments 470,000 610,000 88,933

Accounts and bills receivables,

net of allowance for doubtful

accounts 488,374 624,903 91,106

Inventories 65,241 85,311 12,438

Other current assets 35,276 79,982 11,661

Total current assets 1,557,153 1,739,243 253,569

Property, plant and equipment,

less accumulated depreciation 374,058 404,403 58,959

Land use rights 116,386 115,850 16,890

Intangible assets, net 251,221 296,417 43,215

Goodwill 161,496 187,902 27,395

Other assets 11,894 10,712 1,559

Total assets 2,472,208 2,754,527 401,587

Liabilities

Current liabilities

Short term bank loans and

borrowings 29,000 19,000 2,770

Accounts and bills payables 23,711 46,994 6,851

Other payables and accrued

liabilities 285,411 320,066 46,214

Income taxes payable 4,515 27,769 4,498

Total current liabilities 342,637 413,829 60,333

Long term loan 52,000 52,000 7,581

Deferred income taxes 61,690 61,775 9,006

Other long term liabilities 19,928 33,131 4,830

Total liabilities 476,255 560,735 81,750

Minority interests 12,137 28,123 4,100

Shareholders' equity

Contributed capital 9,840 9,847 1,436

Additional paid-in capital 1,550,697 1,567,083 228,468

Accumulated other comprehensive

loss (46,849) (88,672) 12,928)

Retained earnings 470,128 677,411 98,761

Total shareholders' equity 1,983,816 2,165,669 315,737

Commitments and contingencies

Total liabilities, minority

interests and shareholders'

equity 2,472,208 2,754,527 401,587

Note: The conversions of Renminbi (RMB) into United States dollars (USD)

as at the reporting dates are based on the noon buying rate of

USD1.00 = RMB6.8591 on June 30, 2008 in The City of New York for

cable transfers of Renminbi as certified for customs purposes by the

Federal Reserve. No representation is intended to imply that the RMB

amounts could have been, or could be, converted, realized or settled

into U.S. dollars at that rate on the reporting dates.

and the first six months of 2008 due to the disruption to sales activities resulting from the restructuring of Endu's sales force. In addition, the Company has offered a greater than anticipated volume of Endu for free to existing and new patients to accelerate participation in Endu's Phase IV clinical studies, resulting in fewer products being sold at the regular price.

Also, revenue from Yidasheng for the second quarter and the first six months of 2008 was lower than expected as the Company did not proceed with the planned transition of Yidasheng from the agency-sales model to Bicun's sales model. Under Yidasheng's current agency-sales model, sales and marketing activities and corresponding expenses are the responsibility of the sales agents; accordingly, the sales agents are offered a lower price than under Bicun's sales model, in which Simcere is responsible for product sales and marketing. Because Simcere does not incur corresponding marketing and sales costs under Yidasheng's agency-sales model, Simcere's net profit for the quarter was not impacted by the lower than expected Yidasheng revenue.

Due to the reasons cited above, the Company has adjusted its targeted total revenue for the full year of 2008; targeted net income for the full year of 2008 has not changed.

2008 Second Quarter Financial Results

Total revenue for the second quarter of 2008 was RMB436.2 million (US$63.6 million), representing a growth of 30.4% from RMB334.5 million for the same period in 2007. For the first six months of 2008, total revenue was RMB830.8 million (US$121.1 million), representing an increase of 28.5% from RMB646.7 million for the same period in 2007.

Revenue from Endu, the Company's patented anti-cancer pharmaceutical launched in July 2006, totaled RMB63.1 million (US$9.2 million) in the second quarter of 2008, an increase of 4.6% compared to RMB60.3 million in the corresponding period in 2007. For the first six months of 2008, revenue from Endu totaled RMB126.9 million (US$18.5 million), an increase of 27.8% compared to RMB99.3 million in the first six months of 2007.

Revenue from first-to-market Edavarone injection products under the brand names Bicun and Yidasheng totaled RMB147.6 million (US$21.5 million) in the second quarter of 2008, an increase of 34.3% compared to RMB109.9 million for the same period in 2007. For the first six months of 2008, revenue from Bicun and Yidasheng totaled RMB299.7 million (US$43.7 million), an increase of 57.5% compared to RMB190.3 million in the first six months of 2007.

Revenue from other first-to-market products, Jiebaishu and Sinofuan, totaled RMB10.1 million (US$1.5 million) in the second quarter of 2008. For the first six months of 2008, revenue from other first-to-market products totaled RMB13.4 million (US$2.0 million). There was no revenue generated from these two products for the same period in 2007.

Revenue from other branded generic products totaled RMB215.0 million (US$31.3 million) in the second quarter of 2008, an increase of 34.2% compared to RMB160.2 million for the same period in 2007. For the first six months of 2008, revenue from other branded generic products totaled RMB388.8 million (US$56.7 million), an increase of 10.1% compared to RMB353.1 million in the first six months of 2007.

Gross margin for the second quarter of 2008 decreased to 81.7%, as compared to 83.7% for the same period in 2007. The decrease was primarily due to the growth in other branded generics as a percentage of our total sales and the increased cost of some raw materials. For the first six months of 2008, gross margin decreased slightly to 82.4% compared to 82.7% for the first six months of 2007.

Research and development expenses for the second quarter of 2008 totaled RMB13.2 million (US$1.9 million), a decrease of 31.7% from RMB19.3 million for the corresponding period a year ago. As a percentage of total revenue, research and development expenses were 3.0% compared to 5.8% for the same period in 2007. This change was primarily due to recognition in this quarter of government grants which offset certain research and development expenses by RMB2.7 million (US$0.4 million), and the completion of some research and development projects related to Endu. For the first six months of 2008, research and development expenses totaled RMB31.0 million (US$4.5 million), compared to RMB33.1 million for the same period in 2007.

Sales, marketing and distribution expenses for the second quarter of 2008 were RMB197.9 million (US$28.9 million), an increase of 24.6% from RMB158.8 million for the corresponding period a year ago. As a percentage of total revenue, sales, marketing and distribution expenses were 45.4% compared to 47.5% for the same period in 2007. The decrease in sales, marketing and distribution expenses as a percentage of total revenue was primarily due to fewer marketing conferences held during the quarter. For the first six months of 2008, sales and marketing expenses were RMB362.5 million (US$52.8 million), an increase of 22.8% from RMB295.1 million in the first six months of 2007.

General and administrative expenses were RMB47.0 million (US$6.8 million) for the second quarter of 2008, representing an increase of 1.8% from RMB46.1 million for the second quarter of 2007. As a percentage of total revenue, general and administrative expenses were 10.8% compared to 13.8% for the same period in 2007. The decrease in general and administrative expenses as a percentage of total revenue was mainly attributable to the one-off expenses related to the Company's initial public offering incurred in the second quarter of 2007. For the first six months of 2008, general and administrative expenses were RMB94.0 million (US$13.7 million), an increase of 22.0% from RMB77.1 million in the corresponding period in 2007.

Share-based compensation expenses, which were allocated to research and development expenses, sales, marketing and distribution expenses, and general and administrative expenses, based on the nature of the work the Company's employees were assigned to perform, totaled RMB6.4 million (US$0.9 million) for the second quarter of 2008. The share-based compensation expenses for the second quarter of 2007 were RMB7.7 million. For the first six months of 2008, share-based compensation expenses totaled RMB13.4 million (US$2.0 million), a decrease of 7.5% from RMB14.5 million for the first six months of 2007.

Operating income was RMB98.1 million (US$14.3 million) for the second quarter of 2008, representing an increase of 73.9% as compared to RMB56.4 million for the corresponding period of 2007. For the first six months of 2008, operating income was RMB197.3 million (US$28.8 million), an increase of 51.3% as compared to RMB130.5 million in the corresponding period in 2007.

Income tax expense for the second quarter of 2008 totaled RMB18.1 million (US$2.6 million) compared to an income tax credit of RMB4.0 million for the corresponding period of 2007. For the first six months of 2008, income tax expense was RMB34.9 million (US$5.1 million) compared to an income tax credit of RMB2.5 million for the first six months of 2007. In addition to the overall increase in taxable income, the increased income tax expense in 2008 was primarily due to the expiration of tax holidays enjoyed by two PRC subsidiaries.

Net income was RMB95.2 million (US$13.9 million) for the second quarter of 2008, compared to RMB83.1 million in the corresponding period a year ago and representing growth of 14.5%. The Company's net margin (net income as a percentage of total revenue) was 21.8% for the second quarter of 2008 compared to 24.9% for the second quarter of 2007. For the first six months of 2008, net income was RMB207.3 million (US$30.2 million), an increase of 38.1% as compared to RMB150.1 million for the first six months of 2007. Net margin for the first six months of 2008 was 24.9% as compared to 23.2% for the first six months of 2007.

Basic earnings per American Depository Share (ADS) for the second quarter of 2008 and the first six months of 2008 were RMB1.52 (US$0.22) and RMB3.32 (US$0.48) respectively, and diluted earnings per ADS for the second quarter of 2008 and the first six months of 2008 were RMB1.48 (US$0.22) and RMB3.23 (US$0.47) respectively. Each ADS represents two ordinary shares.

As of June 30, 2008, the Company had cash and cash equivalents (including pledged bank deposits), and short term investments of RMB949.0 million (US$138.4 million) compared to RMB968.3 million as of December 31, 2007.

Financial Outlook

Based on its first six months performance, the Company has adjusted its targeted total revenue for the full year 2008 to be in the range between RMB1.7 billion and RMB1.8 billion. The Company maintains its targeted net income for the full year 2008 to be in the range between RMB390.0 million and RMB400.0 million.

The above targets are based on the Company's current views on the operating and marketing conditions which are subject to change.

Safe Harbor Statement

This press release contains forward-looking statements. These statements 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 U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as ''anticipate,'' ''believe,'' ''estimate,'' ''expect,'' ''forecast,'' ''intend,'' ''may,'' ''plan,'' ''project,'' ''predict,'' ''should'' and ''will'' and similar expressions. In particular, the quotations from management in this press release contain forward-looking statements. These forward looking statements are based upon management's current views and expectations with respect to future events and are not a guarantee of future performance. Furthermore, these statements are, by their nature, subject to a number of risks and uncertainties that could cause actual performance and results to differ materially from those discussed in the forward-looking statements as a result of a number of factors. Further information regarding these and other risks is included in Simcere's filing with the U.S. Securities and Exchange Commission at http://www.sec.gov . Simcere does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

Conference Call

Simcere Pharmaceutical Group will host a conference call to discuss the second quarter 2008 earnings on Tuesday, August 5, at 8 a.m. Eastern Time (Tuesday, August 5 at 8 p.m. Beijing/Hong Kong time). The management team will be on the call to discuss quarterly results and highlights and to answer questions.

To access the conference call, please dial:

United States toll-free dial-in number: + 1 866 510 0704

United States dial-in number: + 1 617 597 5362

China toll-free dial-in number: +86 10 800 130 0399

Hong Kong dial-in number: +852 3002 1672

Please ask to be connected to Simcere's second quarter 2008 earnings call and provide the following passcode: 25912661. Simcere also will broadcast a live audio webcast of the conference call. The broadcast will be available by visiting the ''Investor Relations'' section of the Company's Web site at http://www.simcere.com .

Following the earnings conference call, an archive of the call will be available by dialing:

United States toll-free dial-in number: +1 888 286 8010

International dial-in number: +1 617 801 6888

The passcode for replay participants is: 83949361. The telephone replay also will be archived on the ''Investor Relations'' section of the company's Web site at http://www.simcere.com for seven days following the earnings announcement.

About Simcere Pharmaceutical Group

Simcere Pharmaceutical Group (NYSE:SCR, Simcere) is a leading manufacturer and supplier of branded generic pharmaceuticals and manufacturer of the patented anti-cancer biotech product Endu in the rapidly growing China market. In recent years, Simcere has been focusing its strategy on the development of first-to-market generic and innovative pharmaceuticals, and has introduced a first-to-market generic stroke management medication under the brand name Bicun and an innovative anti-cancer medication under the brand name Endu. Simcere currently manufactures and sells more than 50 pharmaceutical products including antibiotics, anti-cancer medication and stroke management medication and is the exclusive distributor of three additional pharmaceuticals that are marketed under its brand names. Simcere concentrates its research and development efforts on the treatment of diseases with high incidence and/or mortality rates and for which there is a clear demand for more effective pharmacotherapy such as cancer, strokes, osteoporosis and infectious diseases and currently has more than 12 pipeline products. For more information about Simcere Pharmaceutical Group, please visit http://www.simcere.com .

Simcere Pharmaceutical Group

UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF INCOME

(Amounts expressed IN THOUSANDS, EXCEPT PER SHARE AND PER ADS DATA)

Three months ended Six months ended

June 30 June 30

2007 2008 2008 2007 2008 2008

RMB RMB USD RMB RMB USD

Product revenue 330,394 435,839 63,542 642,666 828,768 120,828

Other revenue 4,061 359 52 4,061 2,072 302

Total revenue 334,455 436,198 63,594 646,727 830,840 121,130

Cost of materials

and production (53,700)(79,957)(11,657)(110,967)(146,077)(21,297)

Gross profit 280,755 356,241 51,937 535,760 684,763 99,833

Operating expenses:

Research and

development expenses (19,345)(13,221) (1,927) (33,091) (30,994) (4,519)

Sales, marketing and

distribution

expenses (158,845)(197,939)(28,858)(295,149)(362,458)(52,843)

General and

administrative

expenses (46,126)(46,955) (6,846) (77,056) (93,982)(13,702)

Income from operations 56,439 98,126 14,306 130,464 197,329 28,769

Interest income 6,435 11,395 1,661 6,921 21,802 3,179

Interest expense (1,788) (2,761) (402) (5,790) (3,243) (473)

Foreign currency

exchange gains -- 11,524 1,680 -- 38,079 5,552

Other income 20,526 1,104 161 20,526 1,104 161

Earnings before income

taxes and minority

interests and

minority interests 81,612 119,388 17,406 152,121 255,071 37,188

Income tax

credit/(expense) 4,022 (18,087) (2,637) 2,546 (34,869) (5,084)

Income before minority

interests 85,634 101,301 14,769 154,667 220,202 32,104

Minority interests (2,511) (6,135) (894) (4,599)(12,919) (1,883)

Net income 83,123 95,166 13,875 150,068 207,283
'/>"/>

SOURCE Simcere Pharmaceutical Group
Copyright©2008 PR Newswire.
All rights reserved

Related medicine news :

1. Simcere Pharmaceutical Group Acquires a 51% Stake in Boda Pharmaceutical Co., Ltd.
2. Simcere Pharmaceutical Group Reports Third Quarter 2007 Results
3. Simcere Pharmaceutical Group to Announce Fourth Quarter 2007 Earnings on Tuesday, March 4, 2008
4. Simcere Pharmaceutical Group Reports Unaudited Fourth Quarter and Fiscal Year 2007 Results
5. Simcere Pharmaceutical Group Announces Participation in Brean Murray Carret & Co.s Fourth Investor Tour of China
6. Simcere Pharmaceutical Group to Announce First Quarter 2008 Earnings on Tuesday, May 6, 2008
7. Simcere Pharmaceutical Group Acquires 70% Stake in Wuhu Zhong Ren Pharmaceutical Co. Ltd.
8. Simcere Pharmaceutical Group Announces SFDA Approval of First-to-Market Generic Biapenem Injection Anxin
9. Mylan Commences Tender Offers and Consent Solicitations for Its 5.750% Senior Notes Due 2010 and 6.375% Senior Notes Due 2015 in Connection With Its Proposed Acquisition of Mercks Generic Pharmaceutical Business
10. Arena Pharmaceuticals to Present at the NewsMakers in the Biotech Industry Conference
11. Caraco Pharmaceutical Laboratories, Ltd. Announces FDA Approval to Market Generic Version of Zyloprim(R)
Post Your Comments:
*Name:
*Comment:
*Email:
(Date:6/25/2016)... ... 25, 2016 , ... First Choice Emergency Room , the largest network ... the Medical Director of its new Mesquite-Samuell Farm facility. , “We are pleased ... location,” said Dr. James M. Muzzarelli, Executive Medical Director of First Choice Emergency Room. ...
(Date:6/25/2016)... ... June 25, 2016 , ... On Friday, June 10, Van Mitchell, Secretary ... Work award to iHire in recognition of their exemplary accomplishments in worksite health promotion. ... Maryland Workplace Health & Wellness Symposium at the BWI Marriott in Linthicum Heights. iHire ...
(Date:6/24/2016)... (PRWEB) , ... June 24, 2016 , ... Those who ... with these feelings, many turn to unhealthy avenues, such as drug or alcohol abuse, ... Marne, Michigan, has released tools for healthy coping following a traumatic event. , Trauma ...
(Date:6/24/2016)... (PRWEB) , ... June 24, 2016 , ... ... Conference and Scientific Sessions in Dallas that it will receive two significant new ... the grants came as PHA marked its 25th anniversary by recognizing patients, medical ...
(Date:6/24/2016)... (PRWEB) , ... June 24, 2016 , ... Comfort Keepers® ... American Cancer Society and the Road To Recovery® program to drive cancer patients to ... and other adults to ensure the highest quality of life and ongoing independence. ...
Breaking Medicine News(10 mins):
(Date:6/26/2016)... , June 27, 2016  VMS Rehab Systems, ... Board will take whatever measures required to build a ... stock which is currently listed on the OTC Markets-pink ... Company Chairman and CEO, "We are seeing an anomaly ... to understand, not only by the Company, but shareholders ...
(Date:6/24/2016)... , June 24, 2016  Consumers have ... and regulators/payers have placed more emphasis on patient ... patient support programs in the pharmaceutical industry have ... medications. Consequently, pharmaceutical companies are focusing on becoming ... are providing products and services that improve health. ...
(Date:6/24/2016)... June 24, 2016  Global Blood Therapeutics, Inc. (GBT) ... developing novel therapeutics for the treatment of grievous ... the closing of its previously announced underwritten public ... the public offering price of $18.75 per share. ... offered by GBT. GBT estimates net proceeds from ...
Breaking Medicine Technology: