Simcere’s Q1: Revenue Increases 26%

Simcere Pharmaceutical Group (NYSE: SCR) released its first quarter financial report showing modestly higher revenues and a large increase in net profit. In Q1, Simcere booked revenues of 394 million RMB ($56.3 million), a solid increase of 26% from the year earlier period, and net income of 112 million RMB ($16 million), a much larger jump of 68%.

Sales of its leading first-to-market products climbed during the quarter, but its branded generics business suffered a decline. The company’s cancer drug, Endu, saw its revenues rise 64% to 64 million RMB ($9.1 million), which was 16% of the company’s total. Simcere’s two stroke treatments, the Edavarone injections, brought in 152 million RMB ($21.7 million) of revenue, which constituted 39% of Simcere’s sales and represented an 89% year-over-year increase. The revenue from Simcere’s branded generics slipped 8% to 177 million RMB ($25.3 million)

Because the margins for Simcere’s first-to-market drugs are higher than the generics, the company’s gross margins improved to 83.2% from 81.7%.

The net earnings work out to 25 cents per ADS, fully diluted, an increase of 35%.

Simcere reiterated guidance of full-year revenues of 2 billion RMB ($286 million) and net income of approximately 395 million RMB ($57 million).

Among other milestones of the period, Simcere pointed to its recently announced acquisition of a 70% interest in Wuhu Zhong Ren Pharmaceutical Co. Ltd., which produces sustained release anti-tumor implants, the third post-IPO acquisition for Simcere. The company promised more acquisitions in the future.

Disclosure: none.