3SBio Inc. Announces Unaudited First Quarter 2009 Results

First Quarter Revenue Grows 23.7% Year-over-year to RMB68.6 Million (US$10.0
Million); Operating Income Grows 41.7% Year-over-year to RMB20.1 million
(US$2.9 million); Company Reiterates FY2009 Revenue Guidance

SHENYANG, China, May 19 /PRNewswire-Asia-FirstCall/ -- 3SBio Inc. (Nasdaq:
SSRX) ("3SBio" or "the Company"), a leading China-based biotechnology company
focused on researching, developing, manufacturing and marketing
biopharmaceutical products, today announced its unaudited financial results
for the first quarter ended March 31, 2009.
First Quarter 2009 Financial Highlights:
-- Total net revenues increased 23.7% over the first quarter of 2008 to
RMB68.6 million (US$10.0 million).
-- Operating income (non-GAAP) for the first quarter of 2009 was
RMB20.6 million (US$3.0 million), an increase from RMB14.6 million
(US$2.1 million) for the first quarter of 2008. GAAP operating income
was RMB20.1 million (US$2.9 million) for the first quarter of 2009, an
increase from RMB14.2 million (US$2.0 million) for the first quarter of
2008.
-- Net income (non-GAAP) for the first quarter of 2009 was RMB21.0 million
(US$3.1 million), compared to RMB20.2 million (US$2.9 million) for the
first quarter of 2008. GAAP net income for the quarter was
RMB15.9 million (US$2.3 million) for the first quarter of 2009,
compared to GAAP net income of RMB19.8 million (US$2.8 million) for the
first quarter of 2008.
-- Earnings per share (non-GAAP) for the first quarter of 2009 were
RMB0.14 (US$0.02), compared to RMB0.13 (US$0.02) for the first quarter
of 2008. GAAP earnings per share were RMB0.11 (US$0.02) for the first
quarter of 2009, compared to GAAP earnings per share of RMB0.13
(US$0.02) for the first quarter of 2008.

* Please refer to "Non-GAAP Financial Measures: Reconciliation of GAAP to
non-GAAP" section below for the definition and rationale of all of the
non-GAAP measures. Non-GAAP items for the three-month period ended March 31,
2008 have been included as comparatives to conform to the current year's
presentation basis.
First Quarter 2009 Business Highlights:
-- EPIAO, the Company's flagship injectable recombinant human
erythropoietin ("EPO") products, demonstrated resilient growth despite
a challenging environment, with net revenue from EPIAO rising 21.0%
over the first quarter of 2008 to RMB42.9 million (US$6.3 million) in
the first quarter of 2009.
-- TPIAO net revenue increased 21.3% to RMB18.7 million (US$2.7 million)
in the first quarter of 2009. TPIAO, the Company's protein-based
therapeutic recombinant human thrombopoietin ("TPO") products,
demonstrated its continued success in a slowing economy.
-- 3SBio continued to work closely with the SFDA to advance the regulatory
approval of the three new product programs submitted in 2008: 36,000 IU
dosage formulation of EPIAO, NuLeusin, and TPIAO label extension for
the treatment of ITP.
-- Construction continued on schedule on the Company's new EPIAO plant,
which will support the future growth of EPIAO and serve as the first
step towards exploring global biosimilar opportunities.

"3SBio had a strong start to 2009, delivering revenue growth and
demonstrating the continued acceptance of our keystone EPIAO and TPIAO
products in domestic and international markets," commented Dr. Jing Lou, Chief
Executive Officer of 3SBio. "Our operating margin was solid and we continued
to generate positive cash flow, strengthening our bottom line performance
while ensuring 3SBio is in a financial position to pursue synergistic business
development opportunities that will positively benefit our company. 3SBio has
worked diligently to develop a portfolio of current and future pharmaceutical
products, and we remain on track to achieve our 2009 financial and operational
objectives."
First Quarter 2009 Unaudited Financial Results
Net revenues. Net revenues increased by 23.7% to RMB68.6 million (US$10.0
million) for the first quarter of 2009 from RMB55.5 million (US$7.9 million)
for the same period of 2008. This increase was largely due to continued
strength from TPIAO and EPIAO products which increased by 21.3% and 21.0%,
respectively, over the same period of 2008, and to a lesser degree by
impressive growth from export sales which grew 75.6% and our iron product
sales which grew 47.5% over the same period of last year.
The growth in sales from EPIAO was driven in part by an expanded oncology
sales force, which continued to perform well. TPIAO remained 3SBio's second
largest revenue contributor in the quarter, accounting for 27.3% of total net
revenues. Export sales exceeded RMB3.3 million (US$0.5 million), and sales of
3SBio's IV Iron Sucrose rose to RMB2.0 million (US$0.3 million) for the first
quarter of 2009.
Gross profit. As a result of continued sales growth from key products
despite the economic situation, gross profit increased by 23.8% to RMB62.6
million (US$9.2 million) for the first quarter of 2009 from RMB50.6 million
(US$7.2 million) for the same period of 2008. Gross margin increased slightly
to 91.3% for the first quarter of 2009 from 91.1% for the first quarter of
2008 and 90.6% for the fourth quarter of 2008.
Operating income. Non-GAAP operating income for the first quarter of 2009
grew 40.7% year-over-year to RMB20.6 million (US$3.0 million). GAAP operating
income was RMB20.1 million (US$2.9 million) for the first quarter 2009, an
increase of 41.7% from operating income of RMB14.2 million (US$2.0 million)
for the same period of 2008.
Operating expenses. Non-GAAP operating expenses were RMB42.1 million
(US$6.2 million) for the first quarter of 2009. GAAP operating expenses were
RMB42.5 million (US$6.2 million) for the first quarter of 2009, an increase of
16.8% from GAAP operating expenses of RMB36.4 million (US$5.2 million) for the
same period of last year. Increase in operating expenses was largely driven by
the increased sales & marketing expenses as 3SBio continued necessary
marketing efforts. -- Research and development ("R&D") cost. GAAP R&D cost
for the first
quarter of 2009 was RMB2.5 million (US$0.4 million), or 3.6% of net
revenue, compared to RMB2.8 million (US$0.4 million), or 5.0% of net
revenue for the same period of last year. The decline in R&D cost for
the first quarter of 2009 was due to the conclusion of several major
trials in the last quarter of 2008.
-- Sales, marketing and distribution expenses. GAAP sales, marketing and
distribution expenses for the first quarter of 2009 were
RMB32.9 million (US$4.8 million), compared to RMB25.6 million
(US$3.7 million) for the same period of last year. This represented a
slight increase to 48.0% of net revenue for the first quarter of 2009,
compared to 46.2% of net revenue for the same period of last year. The
increase was primarily attributable to higher sales activities in
general, continued investment in building the TPIAO brand and EPIAO
penetration of the Oncology market.
-- General and administrative expenses. GAAP general and administrative
expenses for the first quarter of 2009 were RMB7.1 million
(US$1.0 million), representing a decrease of 11.3% from general and
administrative expenses of RMB8.0 million (US$1.1 million) for the same
period of 2008. This marked a decline to 10.3% of net revenue for the
first quarter of 2009, compared to 14.4% of net revenue for the first
quarter of 2008.

* Please refer to "Non-GAAP Financial Measures: Reconciliation of GAAP to
Non-GAAP" section below for specific non-GAAP operating expenses measures.
Interest income. The Company recorded net interest income of RMB4.1
million (US$0.6 million) for the first quarter of 2009, as compared RMB7.4
million (US$1.1 million) for the same period in 2008. As experienced last
quarter, the decrease in interest income was partially due to the decrease in
the prevailing market interest rates in the first quarter of 2009 compared to
the same period of last year.
Net income. Non-GAAP net income for the first quarter of 2009 was RMB21.0
million (US$3.1 million), excluding share-based compensation and recognition
of an impairment loss of RMB4.6 million (US$0.7 million) on available-for-sale
securities. This was comparable to non-GAAP net income of RMB20.2 million
(US$2.9 million) for the first quarter of 2008.
GAAP net income was RMB15.9 million (US$2.3 million) for the first quarter
2009, compared to net income of RMB19.8 million (US$2.8 million) for the same
period of 2008. GAAP net income was largely impacted by the recognition of an
impairment loss on available-for-sale securities. Based on the current market
condition and the performance of the available-for-sale securities held by the
Company, the Company expects no further impairment losses from the financial
instruments currently being held.
Cash and cash equivalents/Time deposits. 3SBio had positive operating cash
flows for the first quarter of 2009, and as of March 31, 2009 retained a
strong balance sheet with cash, cash equivalents and time deposits of RMB752.3
million (US$110.1 million), an increase from RMB733.0 million (US$107.4
million) as of December 31, 2008 and a slight decline from RMB790.4 million
(US$ 112.7 million) as of March 31, 2008.
Full Year 2009 Guidance
Based on current market conditions and visibility provided during the
first quarter, the Company maintains its total net revenue target for the full
year 2009 of between US$43 million to US$45 million, resulting in a
year-over-year increase of approximately 21% to 26%.
Conference Call
3SBio's senior management will host a conference call at 5:00 am
(Pacific) / 8:00 am (Eastern) / 8:00 pm (Beijing/Hong Kong) on Wednesday, May
20, 2009. The conference call may be accessed using the dial-in numbers below:
International Toll Dial-In Number: +6567357955 China (Landline):
8008190121
China (Mobile): 4006208038
U.K.: 08082346646
U.S.: 18665194004
Hong Kong: 800933053
Conference ID: 97106460

A telephone replay will be available shortly after the call until May 27,
2009,
at:
International Dial-In Number: +61 2 8235 5000
U.S Dial-in Number: +18662145335
Conference ID: 97106460

A live webcast of the conference call and the replay will be available on
the investor relations page of 3SBio's website at
http://bbs.3sbio.com/en/News/xinvestors.aspx .
Filing of 20F
3SBio filed its Annual Report on Form 20-F for the year ended December 31,
2008 with the SEC on April 21, 2009. The Company's Form 20-F and complete
audited financial statements can be found at http://www.3sbio.com . Hard copy
versions of the complete audited financial statements are available free of
charge upon request from 3SBio's Investor Relations.
Non-GAAP Financial Measures: Reconciliation of GAAP to non-GAAP
To supplement the Company's financial statements presented in accordance
with general accepted accounting principles ("GAAP"), the Company has utilized
some non-GAAP financial measures to provide investors and management with
supplemental measures that facilitate comparisons of operating performance and
trends with prior and future operating performance, and that may not otherwise
be apparent on a GAAP basis. These non-GAAP financial measures include
operating income and operating expenses before stock based compensation
expense, and net income, and earnings per share before stock based
compensation expense and recognition of an impairment loss on
available-for-sale securities. These measures may be different from non-GAAP
financial measures used by other companies. The presentation of this financial
information, which is not prepared under any comprehensive set of accounting
rules or principals, is not intended to be considered in isolation or as a
substitute for the financial information prepared and presented in accordance
with GAAP. Non-GAAP measures have limitations in that they do not reflect all
of the amounts associated with the Company's results of operations as
determined in accordance with GAAP. These measures should only be used to
evaluate the Company's results of operations in conjunction with the
corresponding GAAP measures. Please see the attached reconciliation of GAAP to
non-GAAP for an explanation of the amounts excluded to arrive at non-GAAP
financial measures for the three-month periods ended March 31, 2008 and March
31, 2009.
Statement Regarding Unaudited Financial Information
The unaudited financial information set forth above is preliminary and
subject to adjustments and modifications. The audited financial statements
and related notes are to be included in our annual report on Form 20-F for the
year ending December 31, 2009. Adjustments and modifications to the financial
statements may be identified during the course of this audit work, which could
result in significant differences from this preliminary unaudited financial
information.
Currency Convenience Translation
For the convenience of readers, certain RMB amounts have been translated
into US dollars at the rate of RMB6.8329 to US$1.00, the noon buying rate for
US dollars in effect on March 31, 2009 for cable transfers of RMB per US
dollar as certified for customs purposes by the Federal Reserve Bank of New
York. 2008 RMB figures were translated into US dollars at the rate of
RMB7.0120 to US$1.00, the noon buying rate for US dollars in effect on March
31, 2008.
About 3SBio Inc.
3SBio Inc. is a leading, fully integrated biotechnology company focused on
researching, developing, manufacturing and marketing biopharmaceutical
products, primarily in China. For more information, please visit 3SBio on the
web at http://www.3sbio.com .
Safe Harbor Statement
Certain statements in this release that are not purely historical in
nature, including the 2009 full year guidance information, statements
contained in "2009 Full Year Guidance" section, management comments and the
statements of Dr. Jing Lou, Chief Executive Officer of 3SBio, constitute
"forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended, and as defined in the Private Securities Litigation
Reform Act of 1995. These statements are based upon 3SBio management's
current expectations, and actual results could differ materially. Among the
factors that could cause 3SBio's actual results to differ from what the
company currently anticipates may include: competition from other domestic and
foreign pharmaceutical companies; the market conditions or pharmaceutical
products in China; market acceptance of 3SBio products; hospital or patient
demand for our products; 3SBio's ability to expand its production, sales and
distribution network and other aspects of its operations; its ability to
develop and commercialize additional products or additional indications for
existing products; its ability to analyze additional in-licensing
opportunities; its ability to effectively protect its intellectual property;
changes in the healthcare industry in China, including changes in the
healthcare policies and regulations of the PRC government and changes in the
healthcare insurance sector in the PRC; and fluctuations in general economic
and business conditions in China. As a result, actual results may differ
materially from the forward-looking statements contained herein. For
additional information on risk factors identified herein and other risk
factors, uncertainties and assumptions that may adversely and materially
affect 3SBio's business, financial conditions and results of operations,
please refer to the company's filings with the Securities and Exchange
Commission at http://www.sec.gov , including information detailed in Item 3.D
"Risk Factors" in 3SBio's annual report on Form 20-F for the year ended
December 31, 2008, as continually amended and updated. 3SBio undertakes no
obligation to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise, after the date of this
press release, except as required by law.

3SBio Inc. and subsidiaries
Unaudited consolidated balance sheet
(expressed in thousands)

December 31, March 31, March 31,
2008 2009 2009
RMB RMB US$
Assets
Current assets
Cash and cash equivalents 439,237 302,164 44,222
Time deposits with financial
institutions 293,809 450,098 65,872
Accounts receivable, less allowance
for doubtful accounts:
December 31, 2008 - - RMB4,503; March
31, 2009 - - RMB4,565 (US$668) 73,767
80,891
11,838
Inventories 7,748 8,984 1,315
Prepaid expenses and other
receivables 8,249 7,767 1,137
Deferred tax assets 1,802 1,600 234

Total current assets 824,612 851,504 124,618

Available-for-sale securities 26,700 19,758 2,892
Property, plant and equipment, net 78,185 88,208 12,909
Lease prepayments 8,894 8,806 1,289
Non-current deposits 8,521 6,723 984
Intangible assets, net 5,225 4,950 724
Deferred tax assets 781 251 37

Total assets 952,918 980,200 143,453

Liabilities

Current liabilities

Accounts payable 1,939 3,102 454
Deferred grant income 374 374 55
Accrued expenses and other payables 25,273 31,958 4,677
Income tax payable 1,256 4,470 654
Other current liabilities 57 -- --

Total current liabilities 28,899 39,904 5,840

Deferred grant income 3,152 3,058 448
Other liabilities 472 -- --

Total liabilities 32,523 42,962 6,288

Commitments and contingencies -- -- --

Shareholders' equity

Share capital -ordinary shares
US$0.0001 par value, 500,000,000
shares authorized, 150,586,455
issued and outstanding as of March
31, 2009 and 152,099,155 issued and
outstanding as of December 31, 2008. 121 121 18
Additional paid-in capital 908,377 908,873 133,014
Accumulated other comprehensive loss (102,126) (101,665) (14,879)
Retained earnings 114,023 129,909 19,012

To Total shareholders' equity 920,395 937,238 137,165

Total liabilities and shareholders'
equity 952,918 980,200 143,453

3SBio Inc. and subsidiaries
Unaudited quarterly consolidated statements of income
(expressed in thousands, except per share , per ADS and other share and
ADS data)
Three Months Ended March 31, 2009

GAAP GAAP Adjustment
RMB US$ RMB
Net Revenues
EPIAO 42,910 6,280 --
TPIAO 18,710 2,738 --
Intefen 1,266 185 --
Inleusin 268 39 --
Iron 2,046 299 --
Export 3,331 487 --
Others 67 10 --

Total net revenues 68,598 10,038 --
Cost of revenues (5,999) (878) 51 (1)

Gross profit 62,599 9,160 --

Operating expenses
Research and development
costs (2,457) (360) 70 (1)
Sales, marketing and
distribution expenses (32,949) (4,822) 134 (1)
General and administrative
expenses (7,089) (1,037) 193 (1)

Total operating expenses (42,495) (6,219)

Operating income 20,104 2,941

Other income / (expenses),
net
Interest income 4,072 596 --
Grant income 94 14
Impairment loss on available-
for-sale Securities (4,624) (677) 4,624 (2)
Others (342) (50) --
Total other income /
(expenses), net (800) (117)

Income before income tax
expense 19,304 2,824 --
Income tax expense (3,418) (500)

Net income 15,886 2,324

Net income per share
Basic and diluted (3) 0.11 0.02

Basic weighted average number
of shares Outstanding 150,586,455 150,586,455
Diluted weighted average
number of shares Outstanding 150,586,455 150,586,455

Net income per ADS
Basic and diluted (3) 0.74 0.11

Basic weighted average number
of ADSs Outstanding 21,512,351 21,512,351
Diluted weighted average
number of ADSs Outstanding 21,512,351 21,512,351

Non-GAAP Non-GAAP
RMB US$
Net Revenues
EPIAO 42,910 6,280
TPIAO 18,710 2,738
Intefen 1,266 185
Inleusin 268 39
Iron 2,046 299
Export 3,331 487
Others 67 10

Total net revenues 68,598 10,038
Cost of revenues (5,948) (870)

Gross profit 62,650 9,168

Operating expenses
Research and development
costs (2,387) (349)
Sales, marketing and
distribution expenses (32,815) (4,802)
General and administrative
expenses (6,896) (1,009)

Total operating expenses (42,098) (6,160)

Operating income 20,552 3,008

Other income / (expenses),
net
Interest income 4,072 596
Grant income 94 14
Impairment loss on available-
for-sale Securities -- --
Others (342) (50)
Total other income /
(expenses), net 3,824 560

Income before income tax
expense 24,376 3,568
Income tax expense (3,418) (500)

Net income 20,958 3,068

Net income per share
Basic and diluted (3) 0.14 0.02

Basic weighted average number
of shares Outstanding 150,586,455 150,586,455
Diluted weighted average
number of shares Outstanding 150,586,455 150,586,455

Net income per ADS
Basic and diluted (3) 0.97 0.14

Basic weighted average number
of ADSs Outstanding 21,512,351 21,512,351
Diluted weighted average
number of ADSs Outstanding 21,512,351 21,512,351

Notes to reconciliation of our GAAP statements of income to our non-GAAP
statements of income:
(1). To exclude share-based compensation expense from its non-GAAP
measures primarily because they are non-cash expenses that the
Company does not believe are reflective of ongoing operating results.
(2). To exclude impairment loss on available-for-sale securities from its
non-GAAP measures primarily because they are non-cash expenses that
the Company does not believe are reflective of ongoing operating
results.
(3). The options that the Company had granted had no impact on diluted EPS
for the quarter ended March 31, 2009, because the average market
price of the Company's common stock during the period was less than
the price at which the options would have been convertible into the
Company's common stock. The weighted average exercise price of the
outstanding options as of March 31, 2009 was $1.10 per share.

3SBio Inc. and subsidiaries
Unaudited quarterly consolidated statements of income
(expressed in thousands, except per share, per ADS and other share and ADS
data)
Three Months Ended March 31,2008

GAAP GAAP Adjustment
RMB US$ RMB
Net Revenues
EPIAO 35,469 5,058 --
TPIAO 15,420 2,199 --
Intefen 1,084 155 --
Inleusin 177 25 --
Iron 1,387 198 --
Export 1,897 270 --
Others 33 5 --

Total net revenues 55,467 7,910 --
Cost of revenues (4,911) (700) 34 (1)

Gross profit 50,556 7,210

Operating expenses
Research and development
costs (2,756) (393) 51 (1)
Sales, marketing and
distribution expenses (25,623) (3,654) 93 (1)
General and administrative
expenses (7,994) (1,140) 245 (1)

Total operating expenses (36,373) (5,187)

Operating income 14,183 2,023

Other income / (expenses),
net
Interest income 7,386 1,053
Grant income 93 13
Others 1,355 194
Total other income /
(expenses), net 8,834 1,260

Income before income tax
expense and minority
interests 23,017 3,283
Income tax expense (3,344) (477)

Income before minority
interests 19,673 2,806
Minority interests, net of
tax 77 11

Net income 19,750 2,817

Net income per share
Basic and diluted 0.13 0.02

Basic weighted average number
of shares Outstanding 152,099,155 152,099,155
Effect of dilutive potential
shares 1,634 1,634
Diluted weighted average
number of shares Outstanding 152,100,789 152,100,789

Net income per ADS:
Basic and diluted 0.91 0.13

Basic weighted average number
of ADSs Outstanding 21,728,451 21,728,451
Effect of dilutive potential
ADSs 233 233
Diluted weighted average
number of ADSs Outstanding 21,728,684 21,728,684

Non-GAAP Non-GAAP
RMB US$
Net Revenues
EPIAO 35,469 5,058
TPIAO 15,420 2,199
Intefen 1,084 155
Inleusin 177 25
Iron 1,387 198
Export 1,897 270
Others 33 5

Total net revenues 55,467 7,910
Cost of revenues (4,877) (696)

Gross profit 50,590 7,214

Operating expenses
Research and development
costs (2,705) (386)
Sales, marketing and
distribution expenses (25,530) (3,641)
General and administrative
expenses (7,749) (1,105)

Total operating expenses (35,984) (5,132)

Operating income 14,606 2,082

Other income / (expenses),
net
Interest income 7,386 1,053
Grant income 93 13
Others 1,355 194
Total other income /
(expenses), net 8,834 1,260

Income before income tax
expense and minority
interests 23,440 3,343
Income tax expense (3,344) (477)

Income before minority
interests 20,096 2,866
Minority interests, net of
tax 77 11

Net income 20,173 2,877

Net income per share
Basic and diluted 0.13 0.02

Basic weighted average number
of shares Outstanding 152,099,155 152,099,155
Effect of dilutive potential
shares 1,634 1,634
Diluted weighted average
number of shares Outstanding 152,100,789 152,100,789

Net income per ADS:
Basic and diluted 0.93 0.13

Basic weighted average number
of ADSs Outstanding 21,728,451 21,728,451
Effect of dilutive potential
ADSs 233 233
Diluted weighted average
number of ADSs Outstanding 21,728,684 21,728,684

Notes to reconciliation of our GAAP statements of income to our non-GAAP
statements of income:
(1). To exclude share-based compensation expenses from its non-GAAP
measures primarily because they are non-cash expenses that the
Company does not believe are reflective of ongoing operating results.

For further information, please contact:

Investor Contact:
3SBio Inc.
Bo Tan, CFO
Tel: +86-24-2581-1820
Email: Tanbo@3sbio.com

Investor Relations (China):
FD Beijing
Peter Schmidt
Tel: +86-10-8591-1953
Email: Peter.schmidt@fd.com

Investor Relations (US):
FD US
Evan Smith
John Capodanno
Tel: +1-212-850-5600

SOURCE 3SBio Inc.

3SBio Inc., Bo Tan, CFO, +86-24-2581-1820, Tanbo@3sbio.com or FD Beijing,
Peter Schmidt, +86-10-8591-1953, Peter.schmidt@fd.com and FD US, Evan
Smith/John Capodanno, +1-212-850-5600, all for 3SBio Inc.