Sinovac Biotech Ltd. (AMEX: SVA) reported a very strong first quarter, maintaining the successes that, across the board, China-based biopharmas have been able to announce for early 2008.

In Sinovac’s case, Q1 revenues were more than twice those of the year-earlier quarter. The company said it generated $8.9 million in sales, an increase of 123%. Gross profit was up 135% at $7.8 million, representing a gross margin of 88%. And net income was up 106% at $1.6 million, or 4 cents per share, fully diluted.

The company said that its revenue increases were driven by Healive®, Sinovac’s Hepatitis A vaccine and its lead product. Because Healive is a high margin drug, the rise in Healive sales was also responsible in the increase in company-wide gross margin from 83% a year ago to 88% this year. The company spent heavily to promote Healive, which kept Sinovac’s net income from rising as much as its revenues. In Q1, Sinovac sold 1.5 million doses of Healive, up from 700,000 doses in Q1 of 2007.

So far this year, Sinovac has also completed the following achievements:
• Raised $9.75 million in a private placement;
• Received a production license for Panflu™, the company’s whole viron pandemic flu vaccine, which will be added to the national stockpiling program in China;
• Completed Phase I trials of its split-viron pandemic flu vaccine, with plans to start a Phase II trial in Q2.

Sinovac ended the quarter with cash levels of $20.6 million, up from $17.1 million at the end of 2007.

Following the news, Sinovac opened the session higher, but then sold off. It is trading at $4.06, a decline of 28 cents or 6%. At this level, Sinovac has a market capitalization of $164 million and a PE ratio of 21.6.