Sinovac Reports Unaudited First Quarter 2009 Financi...(revenue growth. Financial Review...),Health

Financial Review for Three Months Ended March 31, 2009

During the first quarter of 2009, sales were $6.6 million, compared to $8.9 million in the first quarter of 2008. Sinovac continues to devote significant resources to marketing Healive to China's private market and an increase in demand for Healive in the public market is expected. The public market operates differently from the private market, which will impact the seasonality of the Company's sales.

    During the first quarter of 2009, Sinovac's unit dose sales were:

    Three months ended March 31           2009                  2008
                                        (doses)               (doses)
    Healive                             772,000             1,500,000
    Bilive                              176,000                31,000
    Anflu                               155,000                23,500

The hepatitis A vaccine market in China is currently experiencing a transitional period; it has previously been only private market but now private and public markets co-exist. In response to the market transition, Sinovac has adjusted its sales and marketing strategy for Healive in order to enter into the public market. In April, Sinovac won the MOH bid, marking the Company's entry into the public market. Since Sinovac had previously focused solely on the private market, it expects it will take some time to build up its position in the public market. Additionally, in the first quarter of 2009, due to a government mandate, China CDC largely devoted its resources to other vaccination programs which has adversely impacted sales of Healive and affected Sinovac's first quarter sales. Sales of Bilive increased significantly during the quarter and the Company expects it to become a complementary product to Healive in the private market, whereas Healive is expected to increasingly penetrate the publ
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