Sinovac Slashes 2010 Revenue Guidance by One-Third

Oct.25.10 | About: Sinovac Biotech, (SVA)

Sinovac Biotech (NSDQ: SVA) lowered its financial guidance for 2010 by a full 33%, saying it now expects revenues to be $40 million to $45 million. Earlier, the company expected 2010 sales to fall in a $60-67 million range. The company blamed the shortfall on a vaccine scare in China, caused by media reports of severe side effects of a vaccine administered in Shanxi province.

Even the reduced 2010 revenues may be a stretch for Sinovac. In the first six months of the year, the company reported just $8.5 million of sales, and Q3 revenues will be about $10 million. That puts the company at $18.5 million for nine months. It will need a $22 million minimum Q4 to reach its goals.

The good news for Sinovac is that the last quarter of the year is the best period for Sinovac’s seasonal flu vaccine, Anflu. And the company reported Beijing has ordered supplies of Anflu, which it will distribute free of charge to its citizens. However, Beijing’s order totaled only 375,000 doses of Anflu for its 22 million citizens. Sinovac valued the contract at 8.8 million RMB ($1.3 million).

Last year, Sinovac was a high-flyer. The H1N1 flu scare surfaced in early summer, and Sinovac responded with an H1N1-specific vaccine. The fear about flu spilled over to create demand for seasonal flu vaccine as well, and Sinovac posted record-high revenues of $84 million. Until 2009, Sinovac was heavily dependent for revenues on its hepatitis B vaccine, Healive. Its flu vaccine did not find much traction in the China market until 2009.

In related news, Sinovac also reported today that Anflu was accepted by the Hong Kong Department of Health for administration there. Sinovac did not comment on its marketing plans in Hong Kong.

Sinovac plans to announce its Q3 financial report about November 15.

Disclosure: none.