Company Exceeds Guidance with 2008 Revenue of RMB243.2 million (US$35.7 million); Full year 2008 Adjusted Non-GAAP Operating Income Grew 20.6% over 2007 to RMB59.7 million (US$8.8 million)

Provides 2009 Net Revenue Guidance Range of US$43-US$45 million

SHENYANG, China, March 11 /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 fourth quarter and fiscal year ended December 31, 2008.

    Fiscal Year 2008 Financial Highlights:
    -- Total net revenues increased 35.0% over 2007 to RM243.2 million
       (US$35.7 million).
    -- Adjusted non-GAAP operating income was RMB59.7 million (US$8.8 million)
       for 2008, when excluding share-based compensation expense and a RMB6.9
       million (US$1.0 million) recognition of the one-time upfront payment
       related to the licensing deal with AMAG Pharmaceuticals. Adjusted
       non-GAAP operating income was RMB49.5 million (US$6.8 million) for 2007.
       GAAP operating income for 2008 was RMB47.8 million (US$7.0 million).
    -- Adjusted non-GAAP net income was RMB75.0 million (US$11.0 million),
       further excluding non-operating investment losses on available-for-sale
       securities, comparing to adjusted non-GAAP net income of RMB79.8
       million (US$10.9 million) in 2007. GAAP net income for 2008 was RMB39.5
       million (US$5.8 million).
    -- Adjusted non-GAAP earnings per American depositary share ('ADS') were
       RMB3.46 (US$0.51), compared to RMB3.81 (US$0.52) in 2007. GAAP earnings
       per ADS for 2008 were RMB1.82 (US$0.27).

    Fourth Quarter 2008 Financial Highlights:
    -- Total net revenues increased 31.5% over the fourth quarter of 2007 to
       RMB60.1 million (US$8.8 million).
    -- Adjusted non-GAAP operating income for the fourth quarter was RMB6.1
       million (US$0.9 million) when excluding share-based compensation
       expense and the AMAG recognition. Adjusted non-GAAP operating income
       was RMB6.3 million (US$0.9 million) for 2007. GAAP operating loss was
       RMB2.3 million (US$0.3 million) for the quarter.
    -- Adjusted non-GAAP net income was RMB11.3 million (US$1.7 million),
       compared to adjusted non-GAAP net income of RMB15.3 million for 2007.
       GAAP net loss for the quarter was RMB1.5 million (US$0.2 million).
    -- Adjusted non-GAAP earnings per ADS were RMB0.52 (US$0.08), compared to
       RMB0.70 (US$0.10) in fourth quarter of 2007. GAAP loss per ADS was
       RMB0.07 (US$0.01) for the fourth quarter of 2008.
    *  Please refer to 'Reconciliation Tables of GAAP to adjusted Non-GAAP
       Figures' at the end of this press release. Adjusted (Non-GAAP) items
       for the three- and twelve-month periods ended December 31, 2007 have
       been revised to conform to the current year's presentation basis.
    Fiscal Year 2008 Business Highlights:
    -- EPIAO, the Company's flagship injectable recombinant human
       erythropoietin ('EPO') products, continued to outpace EPO market growth
       in China. Net revenue from EPIAO increased 32.0% year-over-year in the
       fourth quarter of 2008 to RMB39.3 million (US$5.8 million), and
       increased 27.5% to RMB154.6 million (US$22.7 million) for the full year
       2008, as 3SBio further enhanced its market leadership position, with
       41.1% of EPO market share according to fourth quarter 2008 IMS data.
    -- The high quality of EPIAO, a key factor contributing to EPIAO's success
       and leading market position in China, was further validated by a study
       sponsored by Amgen. The study shows that among 12 EPO products
       manufactured in Asia, 3SBio's EPIAO has the biophysical and biochemical
       properties that most resemble Epogen. The article was published in the
       Journal of Pharmaceutical Sciences in July, 2008.
    -- TPIAO, the Company's protein-based therapeutic recombinant human
       thrombopoietin ('TPO') products, continued their rapid uptake trend and
       are increasingly adopted as the standard of care for Chemo Induced
       Thrombocytopenia. TPIAO net revenue increased 39.7% year-over-year in
       the fourth quarter of 2008 to RMB16.4 million (US$2.4 million), and
       increased 56.9% in 2008 to RMB67.6 million (US$9.9 million).
    -- 3SBio completed all three Phase III programs on schedule, and submitted
       them for SFDA approval:
       -- In September 2008, the Company filed for approval of a 36,000 IU
          dosage formulation of EPIAO for the treatment of anemia associated
          with chemotherapy in cancer patients. If approved, 36,000 IU dosage
          formulation of EPIAO will further enhance the Company's effort to
          penetrate Oncology market given the convenience of a weekly
          injection.
       -- In November 2008, the Company filed for approval of NuLeusin for the
          treatment of late stage metastatic renal cell carcinoma, and if
          approved this is expected to be the only treatment of this kind
          available in China. NuLeusin, 3SBio's second-generation IL-2, is a
          genetically modified form of IL-2, possessing improved biochemical
          properties over naturally occurring IL-2.
       -- In December 2008, the Company filed for approval of a TPIAO label
          extension for the treatment of idiopathic thrombocytopenic purpura
          (ITP) in China, representing the first of a series of indications
          that the Company plans to pursue to build and grow TPIAO brand.
    -- 3SBio demonstrated its business development capabilities through a
       strategic partnership with AMAG Pharmaceutical, to develop and
       commercialize Ferumoxytol, a new generation of IV Iron therapy, in
       China. 3SBio plans to initiate China SFDA registration trials in 2009,
       further enhancing the Company's long term growth potential through a
       diversified product portfolio.
    -- The Company streamlined internal organization structures and vendor
       relationships, to further strengthen capabilities and increase
       operational efficiency, and recruited key management staff.
    -- 3SBio expanded the Oncology and Nephrology focused sales and marketing
       organization to over 221 personnel, covering over 2000 leading
       hospitals in China.
    -- 3SBio was jointly certified by the Liaoning Provincial Office of
       Science and Technology, Liaoning Provincial Department of Finance,
       National Revenue Office of Liaoning Province and Local Revenue
       Administration of Liaoning Province as a 'High-Tech Enterprise.' A
       'High-Tech Enterprise' is an official designation accorded to a company
       that, among other criteria, is engaged in a business field which
       receives special endorsement from the national government and has more
       than 60% of its income from high-tech products or services.

Dr. Jing Lou, Chief Executive Officer of 3SBio, commented, '3SBio delivered solid operating and financial performance in our second consecutive year since going public in early 2007. We once again demonstrated our ability to execute on our business strategy and achieve above market rate top-line growth and solid bottom-line operating profitability, despite significant investment in building brands in the marketplace, developing new products and growing the organization. 3SBio enters 2009 as a company with strengthened capabilities to generate a solid operating cash flow, a robust balance sheet, and a stream of near-term new product offerings to sustain mid- and long-term growth. Based on our 2008 performance and our view on the macro economic environment, as well as market and operating conditions in 2009, we are confident in setting a total net revenue target of between US$43 million to US$45 million for the full year of 2009.'

Fourth Quarter and Fiscal Year 2008 Unaudited Financial Results

Net revenues. Net revenues increased by 31.5% to RMB60.1 million (US$8.8 million) in the fourth quarter of 2008 from the same period in 2007. This increase was primarily due to the growth in TPIAO and EPIAO products, which increased by 32.0% and 39.7%, respectively, from the same period in 2007.

Net revenues increased by 35.0% to RMB243.2 million (US$35.7 million) in 2008 from RMB180.2 million (US$24.7 million) in 2007. This increase was primarily attributed to the continued growth in EPIAO products, sales of which increased by 27.5% from RMB121.2 million (US$16.6 million) in 2007 to RMB154.6 million (US$22.7 million) in 2008. The growth in sales from EPIAO was driven in part by an expanded oncology sales force, which continued to perform well. The Company also witnessed rapid market adoption of TPIAO products, which generated revenues of RMB67.6 million (US$9.9 million) in 2008, compared to RMB43.1 million (US$5.9 million) in 2007. TPIAO was 3SBio's second largest revenue contributor in 2008, accounting for 27.8% of our total net revenues in the period. Sales from in-licensed Iron Sucrose supplement increased 117.8% to RMB7.0 million (US$1.0 million) in 2008. Export sales registered a steady growth of 22.2% to RMB8.3 million (US$1.2 million) in 2008, accounting for 3.4% of total net revenue.

Gross profit. As a result of strong sales across our product lines, gross profit increased by 36.3% to RMB54.4 million (US$8.0 million) in the fourth quarter of 2008 from RMB39.9 million (US$5.5 million) for the same period in 2007. Gross margin increased to 90.6% in the fourth quarter 2008 from 87.4% for the same period in 2007.

In 2008, gross profit grew 36.1% to RMB221.5 million (US$32.5 million) from RMB162.7 million (US$22.3 million) in 2007. Gross margin of 91.1% in 2008 remained in line with the gross margin of 90.3% in 2007.

Operating income/loss. Adjusted non-GAAP operating income for the fourth quarter was RMB6.1 million (US$0.9 million), excluding share-based compensation expense of RMB1.4 million (US$0.2 million) and a RMB6.9 million (US$1.0 million) recognition of the upfront payment related to the licensing deal with AMAG Pharmaceuticals. Adjusted non-GAAP operating income for the full year was RMB59.7 million (US$8.8 million), an increase of 20.6% over year 2007. Adjusted non-GAAP operating income was RMB49.5 million (US$6.8 million) for 2007.

GAAP operating loss was RMB2.3 million (US$0.3 million) in the fourth quarter 2008, down from operating income of RMB6.1 million (US$0.8 million) for the same period in 2007. Operating income decreased by 1.6% to RMB47.8 million (US$7.0 million) in 2008 from RMB48.5 million (US$6.7 million) in 2007.

Operating expenses. Adjusted non-GAAP operating expenses were RMB48.5 million (US$7.1 million) in the fourth quarter and RMB162.1 million (US$23.8 million) in the full year of 2008. This was an increase of 44.3% and 43.2% from adjusted non-GAAP operating expenses of RMB33.6 million (US$4.6 million) and RMB113.2 million (US$15.5 million) in the fourth quarter and full year of 2007 respectively.

    -- Research and development cost (non-GAAP). Adjusted R&D cost for the
       fourth quarter was RMB5.3 million (US$0.8 million) and RMB15.0 million
       (US$2.2 million) for the full year, excluding the one-time upfront
       payment for the license fee of RMB6.9 million (US$1.0 million) and
       share-based compensation expense. This was an increase of 43.4% and
       29.0% from adjusted R&D cost of RMB3.7 million (US$0.5 million) and
       RMB11.6 million (US$1.6 million) in the fourth quarter and full year of
       2007 respectively. The overall increase in R&D cost for the fourth
       quarter and fiscal year 2008 was mainly attributable to research and
       development expenses associated with the number of clinical tests
       conducted and the continued development of other pipeline products.
    -- Sales, marketing and distribution expenses (non-GAAP). Adjusted Sales,
       marketing and distribution expenses for the fourth quarter were RMB38.0
       million (US$5.6 million) and RMB118.8 million (US$17.4 million) for the
       full year, excluding share-based compensation expense. This was an
       increase of 67.4% and 41.1% from adjusted expenses of RMB22.7 million
       (US$3.1 million) and RMB84.2 million (US$11.5 million) in the fourth
       quarter and full year of 2007 respectively. 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 (non-GAAP). Adjusted general and
       administrative expenses for the fourth quarter were RMB5.1 million
       (US$0.8 million) and RMB28.4 million (US$4.2 million) for the full year,
       excluding share-based compensation expense. This was a decrease of
       28.6% and an increase of 63.1% from adjusted general and administrative
       expenses of RMB7.2 million (US$1.0 million) and RMB17.4 million (US$2.4
       million) in the fourth quarter and full year of 2007 respectively. The
       increase in general and administrative expense in fiscal year 2008 was
       primarily attributable to compliance cost associated with being a
       public company and increase of management personnel.

In the fourth quarter of 2008, total GAAP operating expenses increased by 67.8% to RMB56.7 million (US$8.3 million) as compared to the same period in 2007. In 2008, total GAAP operating expenses increased by 52.1% to RMB173.7 million (US$25.5 million) from RMB114.2 million (US$15.7 million) in 2007.

    -- Research and development costs (GAAP). Research and development cost
       increased by 234.8% to RMB12.4 million (US$1.8 million) in the fourth
       quarter 2008 from RMB3.7 million (US$0.5 million) for the same period
       in 2007.