3SBio Hits Q2 Targets, Reports 50% Increase in Revenue

3SBio (SSRX), the Shenyang biotech that made its U.S. IPO in February, released its second quarter financial report, showing the company greatly increased both revenues and earnings. The company said its revenues jumped 49% over the year-earlier quarter to 43.1 million RMB ($5.7 million), and earnings were up 70% to 13.8 million RMB ($1.8 million). That works out to an earnings-per-ADS of 14 cents.

3SBio remains heavily dependent upon its recombinant human erythropoietin products, which are biosimilar versions of Amgen’s (AMGN) flagship drug, erythropoietin or EPO. The 3SBio version is legal in China because Amgen never patented its EPO drugs there (see story).

In the most recent quarter, 3SBio’s EPO drug saw revenues that were up 32% at 30 million RMB ($3.9 million), an amount that represents two-thirds of the company’s total sales. This drug, EPIAO, commands a market share of 36% in terms of revenue in China.

3SBio’s newer offering, the protein-based therapeutic recombinant human thrombopoietin drug marketed as TPAIO, had a bigger percentage jump. It was up 263% over the comparable 2006 period at 9.6 million RMB ($1.3 million).

Looking to the future, management made several declarations that bode well for continued growth. During July, 3SBio was given exclusive access for EPIAO in 19 hospitals in the Beijing military hospital system. The company also declared that it is making progress in training an oncology sales force. All personnel are expected to have complete their training by the end of the third quarter. 3SBio is targeting 121 additional hospitals in 14 for sales, and it will work with partners to sell its products outside of China.

3SBio will break ground on a new manufacturing plant outside of Shenyang before the end of 2007. European consultants will be hired to ensure that the facility is fully compliant with EMEA standards. The plant is scheduled for completion by the end of 2008. As we have noted elsewhere (see story), biosimilars, or generic versions of biotech drugs, have a better chance of being accepted in the near future in Europe than they do in the U.S. Evidently, 3SBio plans on making its initial assault on the generic market in Europe.

3SBio received a very warm welcome from U.S. investors when it made its IPO in February. The company priced at $16, up from a $12-$14 range, and then traded up to a high of $18. Since then, it has seen selling pressure, which forced it down to a low of $8.18. Thursday, after the earnings release, it climbed 3%, moving 31 cents higher to $10.69.

Disclosure: none.