Full Year 2008 Financial Highlights   -- Record full year 2008 sales increasing 39% year-over-year to $46.5      million   -- Sold 6.93 million doses of Healive(R) in 2008, up from 5.12 million in      2007   -- Record full year net income growing of 5% to $8.01 million   -- Full year EPS is $0.19   -- Cash and cash equivalents increased 93% to $32.9 million, compared to      the beginning of 2008, due to an increase in operation profits,      improved accounts receivable collection and raising capital.    Business Highlights   -- In 2008, Sinovac initiated the development program of a vaccine against      enterovirus 71 (EV 71), which causes hand, foot and mouth disease.      Development is progressing on schedule and good achievements have been      made to date.  Sinovac expects to file clinical trial application with      China SFDA in 2009.   -- Recognizing the sizeable market opportunity for animal vaccines,      Tangshan Yian, Sinovac's wholly owned subsidiary, is focusing on the      animal vaccine business to help drive growth.  In January 2009, the      Company obtained approval from China's Ministry of Agriculture to      conduct field trials of internally developed inactivated animal rabies      vaccine.  Sinovac expects the field trials to take approximately nine      months to complete and to launch the vaccine in China's veterinary      market in 2010.   -- Sinovac completed the pre-clinical trial for the Japanese encephalitis      vaccine in 2008 and filed the clinical trial application with SFDA in      January of 2009.   -- In an effort to enhance the competitiveness and improve efficiency of      the sales force, Sinovac increased headcount and modified the marketing      and sales organizational structure.   -- Sinovac continues to focus on expanding its product export      opportunities by moving forward on product registration outside of      China.  In late 2008, Sinovac entered into exclusive distribution      agreements for Healive in Nepal and India, and for Anflu in the      Philippines.  The local distribution partners in Nepal and Philippines      filed applications with local authorities in 2008.  The registration      process for Anflu in Mexico and Healive in Ukraine are progressing on      schedule.  Sinovac sold 11,000 doses of Healive to the Mongolian market      in 2009 and is currently negotiating a long-term distribution agreement.   -- In March 2009, Sinovac received GMP certification for its new filling      and packaging production facility, increasing the Company's annual      production capacity to 20 million doses, with the potential for 40      million doses   -- In October 2008, the Company established a wholly-owned subsidiary,      Sinovac Biotech (Hong Kong) Ltd, which is focused on registering and      distributing commercialized vaccines and those under development in      Hong Kong and then will be responsible for product exports.  The      subsidiary will also help to facilitate opportunities for R&D      collaboration in Hong Kong.   -- Sinovac has made progress in completing the clinical application to      import and commercialize LG Life Sciences' hepatitis B vaccine,      Euvax-B(TM), pursuant to the previously disclosed exclusive      distribution agreement.  Sinovac expects to obtain approval from the      SFDA to conduct clinical trials for Euvax-B in China in 2009.    

Mr. Weidong Yin, Chairman, President and CEO, commented, "We are pleased with our results for the quarter and the year, with full year 2008 sales up 39%, in line with our expectations. The sales of our vaccines continue to grow as awareness of the benefits of inoculations for hepatitis A and seasonal influenza increases across China. As reported in February 2009, the State Food and Drug Administration (SFDA) completed a site inspection of Sinovac in conjunction with the production capacity buildup program for Panflu, with the intention to protect China's residents if an outbreak of human bird flu should occur. In March, we received GMP certification at our filling and packaging production facility, which increased our annual production capacity to 20 million doses and provided the potential to double capacity to 40 million doses. This capacity expansion provides Sinovac with a solid foundation for supporting the government stockpiling program for Panflu and increasing the sales quantities for our commercialized vaccines, as well as providing for the future launch of products in our vaccine development pipeline. Although we are feeling the effect of the financial crisis, the healthcare industry is not very sensitive to the economic cycle. Sinovac has accumulated resources of technological expertise, operation management experiences, and investment capability, which positions the Company well to execute our sales growth strategy in 2009 and achieve our full year sales increase of 20% over 2008 levels.

"EV 71 causing foot, hand, mouth disease is a significant health concern among children across Asia, as the viral illness has reportedly infected more than 500,000 children in China last year. Our research and development team has made significant progress in advancing the pre-clinical studies. We are aiming to develop the world's first EV 71 vaccine and have recently presented its findings at the Chinese New Vaccines Reporting Conference. We are on track to file the clinical trial application with the SFDA in 2009 in order to commence human dosing. The Company holds the development rights to this first-of-its-kind vaccine and intends to submit the patent application for this vaccine in China in 2009. We anticipate that this vaccine should become a flagship product given the severity of recent hand, foot and mouth disease outbreak in China and other countries. As the developer of a vaccine against hand, foot and mouth disease, Sinovac is well positioned to address this global unmet medical need as cases continue to be reported in China and neighboring countries. Sinovac is proud to take a leadership position, as we did with Panflu, to benefit China and the world by developing and manufacturing high quality, novel vaccines," concluded Mr. Yin.

Twelve Months Ended December 31, 2008

For the twelve months ended December 31, 2008, sales reached $46.5 million, compared to $33.5 million for the full year 2007, representing 39% growth.

During the twelve months ended December 31, 2008, Sinovac sold 6.93 million doses of Healive, compared to 5.12 million doses for the same period in 2007. Sinovac sold 1.56 million doses of Anflu during the full year 2008, compared to 1.59 million doses for the same period of the prior year. The Company sold 255,000 doses of Bilive during the 2008 period, compared to 15,684 doses in the prior year period. For the first twelve months of 2008, Healive, Anflu, and Bilive as a percentage of sales represented 88%, 9% and 3%, respectively.

Gross profit for twelve months ended December 31, 2008 was $36.6 million, with a gross margin of 79%, compared to $27.0 million, or 81%, for the same period of 2007.

Total operating expenses for the twelve months ended December 31, 2008 were $21 million, compared to $13.6 million for the same period 2007. Selling, general and administrative expenses for the twelve months ended December 31, 2008 were $17.5 million, compared to $12.0 million in the same period of 2007. SG&A expenses as a percentage of sales represented 37.6% in the 2008 period, compared to 35.7% in the same period of last year.

Net expenditures on research and development expenses for the twelve months ended December 31, 2008 were $2.8 million, compared to $965,000 in the same period of 2007. The increase in R&D expense for 2008 was partly attributable to the expenses for the development of its vaccines against avian flu, EV 71 and animal rabies.

Operating income was $15.6 million for the twelve months ended December 31, 2008, compared to $13.5 million in the same period of 2007. The year-over-year increase in operating income reflected increased sales of hepatitis A and hepatitis A&B vaccine in 2008.

Net income for the twelve months ended December 31, 2008 included $702,000 of interest and financing expenses, $3.0 million of income taxes expense, $291,000 of interest and other income and $4.2 million of minority interest. Net income for the same period of 2007 included $478,000 of interest and financing expenses, $2.0 million of income taxes, $191,000 of interest and other income and $3.6 million of minority interest. Net income for the twelve months ended December 31, 2008 was $8.0 million, or $0.19 per diluted share, compared to $7.7 million, or $0.19 per diluted share, in the same period of 2007.

In March 2009, Sinovac Beijing was granted High and New Technology Enterprises (HNTE) status by the Chinese government. HNTEs are entitled to the preferential income tax rate of 15%, compared to the unified income tax rate of 25%, retroactively to January 1, 2008. Sinovac Beijing will benefit from the lower tax rate for a three-year period, covering 2008, 2009 and 2010.

Retroactively applying the HNTE tax rate of 15% for the full year ended December 31, 2008 resulted in a $2.1 million decrease in the provision of the current income tax with a corresponding reduction in the income tax liability and a $1.1 million increase in deferred income tax expense with an offset to deferred income tax assets. The rate change was recorded in the period that changes occurred.

Three Months Ended December 31, 2008

For the fourth quarter 2008, sales were $12.4 million, compared to $9.2 million in the fourth quarter 2007. The year-over-year increase in sales reflected Sinovac's strategy to continue to devote significant resources to marketing Healive to the private pay market in China, as compared to the market created by government purchasing initiatives under the Expanded Immunization Program that may include the lower priced, live hepatitis A vaccine produced by state owned entities.

During the fourth quarter of 2008, Sinovac sold 1.62 million doses of Healive, compared to 1.14 million doses for the same period of 2007. Sinovac sold 1.05 million doses of Anflu during the fourth quarter of 2008, compared to 0.52 million doses for the same period of the prior year. During the fourth quarter of 2008, Sinovac sold 21,000 doses of Bilive, compared to nil doses in the prior year period. For the fourth quarter of 2008, Healive, Bilive and Anflu as a percentage of sales represented 78.8%, 1.5% and 19.7%, respectively.