Form 6-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16 OR 15D-16
OF THE SECURITIES EXCHANGE ACT OF 1934
For the month of May 2010
Commission Filing Number: 001-33398
Simcere Pharmaceutical Group
(Translation of registrants name into English)
No. 699-18 Xuan Wu Avenue,
Xuan Wu District, Nanjing
Jiangsu Province 210042
Peoples Republic of China
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form
20-F or Form 40-F.
Form 20-F þ Form 40-F o
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by
Regulation S-T Rule 101(b)(1): o
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by
Regulation S-T Rule 101(b)(7): o
Indicate by check mark whether by furnishing the information contained in this Form, the registrant
is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the
Securities Exchange Act of 1934.
Yes o No þ
If Yes is marked, indicate below the file number assigned to the registrant in connection with
Rule 12g3-2(b): N/A
SIMCERE PHARMACEUTICAL GROUP
FORM 6-K
TABLE OF CONTENTS
2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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Simcere Pharmaceutical Group
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By: |
/s/ Zhigang Zhao
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Name: |
Zhigang Zhao |
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Title: |
Chief Financial Officer |
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DATE: May 18, 2010
3
Exhibit 99.1
SIMCERE PHARMACEUTICAL GROUP REPORTS PRELIMINARY UNAUDITED FIRST QUARTER 2010 RESULTS
NANJING, CHINA, May 18, 2010 Simcere Pharmaceutical Group (Simcere or the Company) (NYSE:
SCR), a leading pharmaceutical company specializing in the development, manufacturing, and
marketing of branded generic and proprietary pharmaceuticals in China, today reported preliminary
unaudited financial results for the quarter ended March 31, 2010.
Highlights
² |
|
Total revenue was RMB458.7 million (US$67.2 million) for the first
quarter of 2010, compared to RMB442.5 million for the same period
in 2009, representing year-over-year growth of 3.7%. |
|
² |
|
Gross margin for the first quarter of 2010 decreased to 79.7%
compared to 82.5% for the same period in 2009. |
|
² |
|
Income from operations was RMB30.9 million (US$4.5 million) for
the first quarter of 2010, a decrease of 49.5% from RMB61.1
million for the same period in 2009. |
|
² |
|
Net income attributable to Simcere was RMB20.5 million (US$3.0
million) for the first quarter of 2010, a decrease of 57.5% from
RMB48.2 million for the same period in 2009. |
While the first quarter remained challenging, we saw solid revenue growth for our edaravone
products and were encouraged by the continuing sales recovery of Endu, said Mr. Jinsheng Ren,
Chairman and Chief Executive Officer of Simcere Pharmaceutical Group. We believe that we will see
additional benefits arising from the restructuring of our sales force for the remainder of 2010.
Recently we were pleased to announce that Simceres diosmectite passed EU-GMP inspection and that
Endu successfully completed the Phase IV clinical study which verified the positive results of the
Phase III study regarding Endus safety and efficacy, Mr. Ren continued. Simceres strategic
cardiovascular portfolio also continues to grow with our recently launched cholesterol lowering
drug Rosuvastatin and hypertension drug Levamlodipine both performing well. We are confident that
these developments should help position Simcere for growth over the mid-to-long-term.
4
2010 First Quarter Financial Results
Total revenue for the first quarter of 2010 was RMB458.7 million (US$67.2 million), compared to
RMB442.5 million for the same period in 2009, representing a year-over-year growth of 3.7%.
Revenue from edaravone injection products under the brand names Bicun and Yidasheng increased by
8.5% to RMB173.2 million (US$25.4 million) for the first quarter of 2010 from RMB159.6 million for
the same period in 2009. Sales of edaravone injection products constituted 37.8% of the Companys
product revenue for the first quarter of 2010.
Revenue from Endu, the Companys patented anti-cancer biotech product, increased by 2.3% to RMB37.4
million (US$5.5 million) in the first quarter of 2010 from RMB36.5 million for the same period in
2009. Sales of Endu constituted 8.2% of the Companys product revenue for the first quarter of
2010.
Revenue from Sinofuan, a 5-FU sustained release implant for the treatment of cancer, increased by
1.0% to RMB25.3 million (US$3.7 million) for the first quarter of 2010 from RMB25.1 million for the
same period in 2009. Sales of Sinofuan constituted 5.5% of the Companys product revenue for the
first quarter of 2010.
Revenue from other first-to-market products including Jiebaishu, a nedaplatin product, and Anxin, a
biapenem injection, increased by 12.7% to RMB8.7 million (US$1.3 million) from RMB7.7 million for
the same period in 2009. Sale of other first-to-market products constituted 1.9% of the Companys
product revenue for the first quarter of 2010.
Revenue from other branded generic products including Zailin and Yingtaiqing decreased by 10.4% to
RMB186.2 million (US$27.3 million) from RMB207.7 million for the same period in 2009. Sales of
other branded generic products constituted 40.7% of the Companys product revenue for the first
quarter of 2010.
Gross margin for the first quarter of 2010 decreased to 79.7% compared to 82.5% for the same period
in 2009. The decrease was primarily due to a decline in other revenue from RMB5.8 million for the
first quarter of 2009 to RMB1.0 million (US$0.2 million) for this quarter as well as lower gross
margin contribution from Jiangsu Yanshen. Other revenue was primarily comprised of government
subsidies and VAT refund.
Research and development expenses for the first quarter of 2010 totaled RMB30.6 million (US$4.5
million) which represented an increase of 22.1% from RMB25.0 million for the same period in 2009.
This increase was due primarily to the increased expenditure on on-going research and development
projects and increased salary expenses as a result of an increase in research and development
headcount. As a percentage of total revenue, research and development expenses increased to 6.7%
for the first quarter of 2010 from 5.7% for the same period in 2009.
Sales, marketing and distribution expenses for the first quarter of 2010 were RMB236.9 million
(US$34.7 million), which represented an increase of 7.8% from RMB219.8 million for the same period
in 2009. As a percentage of total revenue, sales, marketing and distribution expenses increased to
51.6% for the first quarter of 2010 from 49.7% for the same period in 2009. This increase was due
primarily to increased spending on promotional activities for products such as Bicun, Endu, Anxin
and Yingtaiqing and increased expenses associated with market research.
General and administrative expenses were RMB67.2 million (US$9.9 million) for the first quarter of
2010, which represented an increase of 13.4% from RMB59.3 million for the same period in 2009. As a
percentage of total revenue, general and administrative expenses increased to 14.7% for the first
quarter of 2010 from 13.4% for the same period in 2009.
Share-based compensation expenses, which wereb allocated to research and development expenses,
sales, marketing and distribution expenses, and general and administrative expenses, based on the
nature of the work that the relevant employee was assigned to perform, totaled RMB8.0 million
(US$1.2 million) for the first quarter of 2010. Share-based compensation expenses for the first
quarter of 2009 were RMB6.3 million.
Income from operations was RMB30.9 million (US$4.5 million) for the first quarter of 2010, which
represented a decrease of 49.5% from RMB61.1 million for the same period in 2009.
5
Income tax expense for the first quarter of 2010 was RMB1.3 million (US$0.2 million), which was
primarily comprised of the tax expense of RMB7.9 million (US$1.2 million) relating to our
profitable subsidiaries. This amount was offset by recognition of tax credits of RMB5.8 million
(US$0.8 million) relating to tax losses of certain subsidiaries.
Net income attributable to Simcere was RMB20.5 million (US$3.0 million) for the first quarter of
2010, compared to RMB48.2 million for the same period in 2009. Net margin, representing net income
divided by total revenue, was 4.5% for the first quarter of 2010, compared to 10.9% for the first
quarter of 2009.
Basic and diluted earnings per American Depository Share (ADS) for the first quarter of 2010 were
RMB0.37 (US$0.05) and RMB0.36 (US$0.05), respectively. One ADS represents two ordinary shares of
the Company.
As of March 31, 2010, the Company had cash, cash equivalents and restricted cash of RMB332.4
million (US$48.7 million), compared to RMB458.1 million as of December 31, 2009.
Financial Information
The preliminary unaudited condensed consolidated statements of income and balance sheets
accompanying this press release have been prepared by management using U.S. GAAP. This preliminary
financial information is not intended to fully comply with U.S. GAAP because it does not present
all of the financial information and disclosures required by U.S. GAAP.
The preliminary unaudited financial information is subject to the completion of the annual
impairment review of goodwill and intangible assets and the purchase price allocation in respect of
the Companys acquisitions of Yanshen Biological Technology Stock Co., Ltd. (Jiangsu Yanshen) in
2009 and is subject to change. Specifically, in the preliminary unaudited condensed consolidated
information of income and balance sheets accompanying this press release, goodwill, intangible
assets and other assets and liabilities recorded as a result of the Jiangsu Yanshen acquisition as
of December 31, 2009 and March 31, 2010, respectively, are subject to change. These balances also
do not reflect any potential adjustments or impairment charges, if any, and the Company is
currently evaluating the impact of the events occurred in 2009 and 2010 since acquisition. Readers
and investors are strongly advised to read all public announcements the Company has made in respect
of Jiangsu Yanshen in 2009 and 2010.
6
Safe Harbor Statement
This press release contains forward-looking statements. These statements constitute
forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of
1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995.
These forward-looking statements can be identified by terminology such as anticipate, believe,
estimate, expect, forecast, intend, may, plan, project, predict, should and
will and similar expressions. In particular, the quotations from management in this press release
contain forward-looking statements. These forward looking statements are based upon managements
current views and expectations with respect to future events and are not a guarantee of future
performance. Furthermore, these statements are, by their nature, subject to a number of risks and
uncertainties that could cause actual performance and results to differ materially from those
discussed in the forward-looking statements as a result of a number of factors. Further information
regarding these and other risks is included in Simceres filings with the U.S. Securities and
Exchange Commission at www.sec.gov. Simcere does not undertake any obligation to update any
forward-looking statement, except as required under applicable law.
Conference Call
Simcere Pharmaceutical Group will host a conference call to discuss the Companys results for the
first quarter of 2010 on Tuesday, May 18, at 8:00 a.m. Eastern Time (Tuesday, May 18 at 8:00 p.m.
Beijing/Hong Kong time). The management team will be on the call to discuss the results for first
quarter of 2009 and to answer questions.
To access the conference call, please dial:
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United States toll-free dial-in number: |
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+1 866 730 5769 |
United States toll/International dial-in number: |
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+1 857 350 1593 |
South China toll-free/Chine Telecom dial-in number: |
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+86 10 800 130 0399 |
North China toll-free/China Telecom dial-in number: |
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+86 10 800 152 1490 |
South China toll-free/China Netcom dial-in number: |
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+86 10 800 852 1490 |
Hong Kong dial-in number: |
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+852 3002 1672 |
Please ask to be connected to Simceres Q1 2010 earnings call and provide the following passcode:
88084854. Simcere will also broadcast a live audio webcast of the conference call. The broadcast
will be available by visiting the Investor Relations section of the Companys web site at
www.simcere.com.
Following the earnings conference call, an archive of the call will be available by dialing:
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United States toll-free dial-in number:
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+1 888 286 8010 |
United States toll/International dial-in number:
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+1 617 801 6888 |
The passcode for replay participants is: 45084556. The telephone replay also will be archived on
the Investor Relations section of the Companys web site for seven days following the earnings
announcement.
About Simcere Pharmaceutical Group
Simcere Pharmaceutical Group (NYSE:SCR, Simcere) is a leading pharmaceutical company specializing
in the development, manufacturing, and marketing of branded generic and proprietary pharmaceuticals
in China. In recent years, Simcere has been focusing its strategy on the development of innovative
pharmaceuticals and first-to-market generics, and has introduced an innovative anti-cancer
medication Endu, a first-to-market medication Sinofuan, and first-to-market generics such as Bicun
and Anxin. Simcere manufactures and sells antibiotics, anti-cancer medication, stroke management
medication and biopharmaceutical drugs such as vaccines. Simcere concentrates its research and
development efforts on the treatment of diseases with high incidence and/or mortality rates and for
which there is a clear demand for more effective pharmacotherapy such as cancer, strokes,
orthopaedics and infectious diseases. For more information about Simcere Pharmaceutical Group,
please visit www.simcere.com.
7
Investor and Media Contacts:
Email: ir@simcere.com
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In Nanjing:
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In the United States: |
Frank Zhao
Chief Financial Officer
Simcere Pharmaceutical Group
Tel: 86-25-8556-6666 ext 8818
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Kate Tellier
Brunswick Group
Tel: 1-212-333-3810 |
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In Beijing:
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In Hong Kong: |
Ruirui Jiang
Brunswick Group
Tel: 86-10-6566-2256
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Joseph Lo Chi-Lun
Brunswick Group
Tel: 852-3512-5000 |
8
SIMCERE PHARMACEUTICAL GROUP
PRELIMINARY UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(AMOUNTS EXPRESSED IN THOUSANDS, EXCEPT SHARE AND ADS DATA)
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Three months ended March 31, |
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2009 |
|
2010 |
|
2010 |
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RMB |
|
RMB |
|
USD |
Product revenue |
|
|
436,633 |
|
|
|
457,648 |
|
|
|
67,047 |
|
Other revenue |
|
|
5,873 |
|
|
|
1,021 |
|
|
|
150 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue |
|
|
442,506 |
|
|
|
458,669 |
|
|
|
67,197 |
|
Cost of materials and production |
|
|
(77,320 |
) |
|
|
(93,096 |
) |
|
|
(13,639 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
365,186 |
|
|
|
365,573 |
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|
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53,558 |
|
|
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|
|
|
|
|
|
|
|
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Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Research and development expenses |
|
|
(25,047 |
) |
|
|
(30,592 |
) |
|
|
(4,482 |
) |
Sales, marketing and distribution expenses |
|
|
(219,779 |
) |
|
|
(236,879 |
) |
|
|
(34,704 |
) |
General and administrative expenses |
|
|
(59,288 |
) |
|
|
(67,240 |
) |
|
|
(9,851 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations |
|
|
61,072 |
|
|
|
30,862 |
|
|
|
4,521 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
2,569 |
|
|
|
1,296 |
|
|
|
190 |
|
Interest expense |
|
|
(2,503 |
) |
|
|
(4,965 |
) |
|
|
(727 |
) |
Foreign currency exchange (losses)/gains |
|
|
(84 |
) |
|
|
67 |
|
|
|
10 |
|
Equity in losses of equity method affiliated
companies |
|
|
|
|
|
|
(4,450 |
) |
|
|
(652 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before income taxes |
|
|
61,054 |
|
|
|
22,810 |
|
|
|
3,342 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
|
(7,592 |
) |
|
|
(1,316 |
) |
|
|
(193 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
53,462 |
|
|
|
21,494 |
|
|
|
3,149 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Net income attributable to the
noncontrolling interest |
|
|
(5,288 |
) |
|
|
(1,012 |
) |
|
|
(148 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Simcere |
|
|
48,174 |
|
|
|
20,482 |
|
|
|
3,001 |
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|
|
|
|
|
|
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|
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|
|
|
|
|
|
Earnings per share attributable to Simcere: |
|
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|
|
|
|
|
|
|
|
|
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Basic |
|
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0.40 |
|
|
|
0.19 |
|
|
|
0.03 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
|
0.40 |
|
|
|
0.18 |
|
|
|
0.03 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per ADS attributable to Simcere: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
0.80 |
|
|
|
0.37 |
|
|
|
0.05 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted |
|
|
0.80 |
|
|
|
0.36 |
|
|
|
0.05 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
120,624,814 |
|
|
|
110,031,322 |
|
|
|
110,031,322 |
|
Diluted |
|
|
120,624,814 |
|
|
|
112,802,481 |
|
|
|
112,802,481 |
|
9
SIMCERE PHARMACEUTICAL GROUP
PRELIMINARY UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(AMOUNTS EXPRESSED IN THOUSANDS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
March 31, |
|
March 31, |
|
|
2009 |
|
2010 |
|
2010 |
|
|
RMB |
|
RMB |
|
USD |
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
|
|
|
|
Cash, cash equivalents and restricted cash |
|
|
458,145 |
|
|
|
332,384 |
|
|
|
48,695 |
|
Accounts and bills receivables, net |
|
|
704,321 |
|
|
|
633,415 |
|
|
|
92,797 |
|
Inventories |
|
|
106,655 |
|
|
|
103,872 |
|
|
|
15,218 |
|
Other current assets |
|
|
102,743 |
|
|
|
101,663 |
|
|
|
14,894 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets |
|
|
1,371,864 |
|
|
|
1,171,334 |
|
|
|
171,604 |
|
Property, plant and equipment, net |
|
|
744,713 |
|
|
|
763,326 |
|
|
|
111,830 |
|
Land use rights |
|
|
146,158 |
|
|
|
145,357 |
|
|
|
21,295 |
|
Goodwill and intangible assets, net |
|
|
949,517 |
|
|
|
929,349 |
|
|
|
136,152 |
|
Investments in and advance to affiliated companies |
|
|
121,865 |
|
|
|
117,671 |
|
|
|
17,239 |
|
Other assets |
|
|
58,035 |
|
|
|
61,657 |
|
|
|
9,034 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
|
3,392,152 |
|
|
|
3,188,694 |
|
|
|
467,154 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Short-term borrowings and current installments of
long-term debts |
|
|
76,000 |
|
|
|
36,000 |
|
|
|
5,274 |
|
Accounts payables |
|
|
41,439 |
|
|
|
42,055 |
|
|
|
6,161 |
|
Bills payables |
|
|
110,810 |
|
|
|
386 |
|
|
|
57 |
|
Other payables and accrued liabilities |
|
|
464,616 |
|
|
|
421,558 |
|
|
|
61,759 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
692,865 |
|
|
|
499,999 |
|
|
|
73,251 |
|
Long-term debts, excluding current installments |
|
|
122,685 |
|
|
|
122,851 |
|
|
|
17,998 |
|
Deferred tax liabilities |
|
|
147,782 |
|
|
|
142,458 |
|
|
|
20,871 |
|
Other liabilities |
|
|
21,561 |
|
|
|
21,819 |
|
|
|
3,197 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
984,893 |
|
|
|
787,127 |
|
|
|
115,317 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
Simcere shareholders equity |
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary shares at par |
|
|
8,716 |
|
|
|
8,640 |
|
|
|
1,266 |
|
Additional paid-in capital |
|
|
1,170,687 |
|
|
|
1,139,043 |
|
|
|
166,873 |
|
Accumulated other comprehensive loss |
|
|
(43,886 |
) |
|
|
(39,352 |
) |
|
|
(5,765 |
) |
Retained earnings |
|
|
940,938 |
|
|
|
961,420 |
|
|
|
140,851 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Simcere shareholders equity |
|
|
2,076,455 |
|
|
|
2,069,751 |
|
|
|
303,225 |
|
Noncontrolling interest |
|
|
330,804 |
|
|
|
331,816 |
|
|
|
48,612 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity |
|
|
2,407,259 |
|
|
|
2,401,567 |
|
|
|
351,837 |
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity |
|
|
3,392,152 |
|
|
|
3,188,694 |
|
|
|
467,154 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: The conversions of Renminbi (RMB) into United States dollars (USD) as at the reporting dates
are based on the noon buying rate of USD1.00 = RMB6.8258 on March 31, 2010 as set forth in the H.
10 statistical release of the Federal Reserve Board. No representation is intended to imply that
the RMB amounts could have been, or could be, converted, realized or settled into U.S. dollars at
that rate on the reporting dates.
10