HONG KONG – Growing domestic and international sales of vaccines buoyed strong growth for one of China's top biotechs, as reflected in its first quarter results for 2014. Beijing-based Sinovac Biotech Ltd. (NASDAQ:SVA) reported $13.5 million in sales, a jump of 34.8 percent from $10.1 million during the same period in 2013. Sinovac's shares lost 21 cents Thursday, to close at $6.06.

"It is growing at a rather high rate," Lillian Wan, analyst at investment bank Jefferies said of Sinovac. "Traditionally, Chinese biopharmaceutical companies have an average growth rate of about 20 percent to 25 percent."

Gross profit in the first quarter totaled $10.3 million, up 45.4 percent from $7.1 million.

"The growth was driven by higher sales of our commercialized vaccines in China, especially from Bilive, our combined hepatitis A and B vaccine," said Weidong Yin, Sinovac's chairman, president and CEO.

Hepatitis vaccines are the top-selling products for Sinovac. Revenue derived from Bilive in the first quarter doubled from nearly $3 million in the first quarter of 2013 to just under $6 million year-on-year. At present, Sinovac's top seller is Healive, an inactivated hepatitis A vaccine that accounted for more than $6 million in sales during the first quarter of 2014.

Sinovac's sales of hepatitis, mumps and animal vaccines overall trended upward during the first quarter, while sales of influenza vaccines dropped from $294,000 to $61,000 year-on-year.

Sinovac is currently enjoying strong domestic and global demand for its inactivated hepatitis A vaccine.

In November 2013, Sinovac won a public tender to supply the Center for Disease Control of northwest China's Gansu province with 40,000 doses of inactivated hepatitis A vaccine for its emergency stockpiling program for 2014. Delivery of the order will be completed this year.

Sinovac also supplies its inactivated hepatitis A vaccine to Mongolian health authorities. It shipped a total of approximately 147,000 doses of the vaccine to Mongolia for this year's national vaccination program.

Additionally Sinovac obtained a registration license for its inactivated hepatitis A vaccine Healive from Instituto de Salud Pùblica de Chile (Chile's Institute of Public Health). The license is valid for five years after the date of issuance.

Higher plant utilization lowered the unit costs for both Healive and Bilive and was the driving factor behind the rise in the first quarter's gross profit margin from 70.2 percent to 75.8 percent.

Sinovac received a ¥60 million (US$9.6 million) government grant to build a dedicated production facility for its enterovirus 71 (EV71) vaccine that protects children from hand, foot and mouth disease.

China's Ministry of Finance, National Development and Reform Commission, Ministry of Industry and Information Technology and National Health and Family Planning Commission jointly approved the grant. Sinovac will receive an initial tranche of ¥20 million this year, with the remainder granted in additional tranches upon satisfaction of certain criteria.

Sinovac received approval from the CFDA on May 21 to conduct a human clinical trial for its 23-valent pneumococcal polysaccharides vaccine (PPV) for the prevention of streptococcus pneumonia infections such as pneumonia and septicemia. The company filed the application in 2011 and trials will begin in late 2014.

"In line with our mission to develop and commercialize vaccines that address unmet medical needs in China and other countries, we continue to advance our pipeline vaccine candidates and expand our portfolio," Yin said. "Obtaining regulatory approval to commence human trials of PPV is another milestone we achieved."

He added that Sinovac's vaccine for chickenpox (varicella) is currently under review by the CFDA.

On April 28, Sinovac inked an agreement with the Netherlands' Institute for Translational Vaccinology (Intravacc) to commercialize a Sabin inactivated polio vaccine (sIPV) in China as well as other countries. The company will be responsible for clinical trials, launching the vaccine and applying for regulatory approval in China. (See BioWorld Asia, April 29, 2014.)

"The technology transfer agreement with Intravacc for sIPV exemplifies Sinovac's strategy to expand its vaccine pipeline through external collaboration," said Yin. "Under the WHO's global polio eradication plan, sIPV has significant market potential for Sinovac both in China and international markets."