Sinovac Biotech Ltd.

Sinovac Biotech Ltd.

March 02, 2005 10:43 ET

Sinovac Biotech Ltd.: Updates on its Avian Influenza Vaccine Development




MARCH 2, 2005 - 10:43 ET

Sinovac Biotech Ltd.: Updates on its Avian Influenza
Vaccine Development

BEIJING, CHINA--(CCNMatthews - March 2, 2005) - Sinovac Biotech Ltd.
("Sinovac") ("the Company") (AMEX:SVA) updates today on the development
of its human vaccine targeting the avian flu virus.

Sinovac's Avian Flu Vaccine Development

Sinovac is currently advancing its Inactivated New Human Influenza
(H5N1) vaccine (also referred to as Pandemic Influenza Vaccine) through
the various stages of pre-clinical studies.

On March 25 2004, Sinovac received a reassortant influenza strain
(NIBRG-14) for developing a Pandemic Influenza Vaccine (H5N1) from the
British National Biological Standard and Control (NIBSC), which is the
WHO International Laboratory for Biological Standards. The WHO
distributed this virus strain to major vaccine manufacturers all over
the world and recommended them to use it to develop a Pandemic Influenza
Vaccine, since they considered that this strain will be the epidemic
strain in the next potential outbreak caused by avian flu virus H5N1.

Sinovac completed a research protocol for developing an avian flu
vaccine in April 2004 after receiving the reassortant influenza strain
for bird flu H5N1 virus from the World Health Organization network.

According to the New Human Influenza Vaccine R & D Protocol, the vaccine
is produced through the pre-clinical steps of manual cultivation,
propagation, inactivation, purification, and splitting of virus strain
(H5N1). This set of processes mainly includes: studies on virus strain
breeding; infectious titer; antigenicity; immunogenicity; establishment
and testing on primary seed lot; master seed lot; working seed lot of
viral seed; passage stability study; vaccine bulk production technology
study; preparation prescription method study; testing method study;
animal protection study; animal-safety evaluation; final product
stability study; and scaled-production method study.

Current epidemiology shows that H5N1 is highly infectious and pathogenic
for birds, but not that serious for humans. However, whenever H5N1 virus
combines with human flu virus and both of them recombine to become a new
flu virus, then it is possible for that virus to be highly infectious
and pathogenic to humans." This kind of pandemic caused by the
recombination of human-animal flu virus has historically happened three
times. It caused worldwide disaster each time.

Moreover, according to Mr. Yin, president of Sinovac, in order to
prevent "Newly developed reassortant strain of highly pathogenic New
Human Influenza" caused by the genetic mixing of human and bird flu
virus together, Sinovac decided to develop an inactivated vaccine with
reassortant bird flu virus strain for humans by using gene reassorting

In December 2004, Sinovac signed a major co-development agreement with
the Chinese Centre of Disease Control and Prevention (China CDC) to
accelerate the development of an avian flu vaccine for which Sinovac
will own commercial rights. The Center for Disease Control and
Prevention (China CDC) is the main government institution in China
involved in the field of disease control and prevention.

In order to further discuss the vaccine development, in early January,
Sinovac invited Dr. John Wood and Dr. Lisa Major from NIBSC to Beijing
for a "Symposium on Flu virus and Avian Flu Virus". Officials from the
State Food and Drug Administration (China FDA) and scientists from China
CDC attended the symposium as well.

The ultimate aim of the vaccine is to provoke the human immune system
into action, so that it can destroy the reassortant bird flu virus if
infected. The drug approval process regulated by the State Drug
Administration (SFDA) in China is similar to the one regulated by the
FDA in the United States. The process involves pre-clinical in vitro
laboratory and in vivo animal testing; IND study (Investigational New
Drug); clinical Phases I, II and III; New Drug Application; and finally
Marketing Approval for sale. The SFDA has stated that it is
fast-tracking the drug approval process for Sinovac's potential avian
flu vaccine. Sinovac is currently progressing through the pre-clinical
stage - the first step of this process.

The following information is intended to provide investors with a
summary of background information currently available on avian influenza.

Potential for an Influenza Pandemic

All influenza viruses can change. It is possible that an avian influenza
virus could change so that it would infect humans and spread easily from
person to person. Because these viruses do not commonly infect humans,
there is little or no immune protection against them in the human
population. If an avian virus were able to infect people and gain the
ability to spread easily from person to person, an "influenza pandemic"
could begin.

Avian Flu

Avian flu is currently drawing significant media attention as world
health authorities warn of a global pandemic caused by the spread and
mutation of the avian flu virus.

A 28-nation conference on avian flu held in Ho Chi Minh City, Vietnam
has just concluded. The conference was staged by the United Nations'
Food and Agriculture Organization (FAO), the World health Organization
(WHO), and the World Organization for Animal Health (OIE).

"The threat is real and the potential is very high" for a pandemic,
Samuel Jutzi of the FAO told a news conference at the end of the three
day event. "The longer the virus continues to circulate in
poultry-production systems and ducks, the higher is the probability of
infection of humans."

The Associated Press quoted Dr. Shigeru Omi, the WHO's Western Pacific
regional director, as saying, "We at WHO (the World Health Organization)
believe that the world is now in the gravest possible danger of a
pandemic. If the virus becomes highly contagious among humans, the
health impact in terms of deaths and sickness will be enormous, and
certainly much greater than SARS (severe acute respiratory syndrome)."

The WHO official further warned that governments should develop
preparedness plans to ensure the continuation of basic public services
such as transportation, sanitation, and power in the event of a
pandemic. The virus in question, the H5N1 strain, has shown itself to be
very versatile and resilient, having infected tigers and domestic cats,
which were not believed to be susceptible to influenza. The H5N1 virus
is well entrenched, according to Jutzi. He added further, "We must
assume that avian influenza will persist for many years in some of the
countries that had disease outbreaks in 2004-2005."

Vietnam has been hit hardest by the avian flu virus, which erupted
across much of Asia at the end of 2003 and has killed 46 people: 33
Vietnamese, 12 Thais and a Cambodian. Another case has been reported in
21-year-old man whose younger sister may also have caught the virus,
officials said. Almost all other people known to have caught the virus
contracted it from contact with sick birds. It has killed more than 70
per cent of people infected. While Vietnam has borne the brunt, the H5N1
virus is now also endemic in Thailand, Indonesia and China, the FAO said.

The conference agreed that the way Asia raises poultry, usually around
the house and free to wander among other animals, would have to change.
According to estimates cited by the FAO, avian flu cost Asian farmers
and agricultural industries $10 billion in 2004.

In North America, the presence of avian influenza was confirmed at
several poultry farms in British Columbia in February 2004. The outbreak
spread to some 42 farms and led to the culling of 1.3 million birds from
42 farms, at a cost of $42 million, before it was successfully contained
by the end of May 2004. At least two cases of humans with avian
influenza were confirmed.

Avian Influenza in Birds

Avian influenza, also known as bird flu, is a type of influenza
predominant in birds. It was first identified in Italy in the early
1900s and is now known to exist worldwide. The causative agent is the
avian influenza (AI) virus. AI viruses all belong to the influenza virus
A genus of the Orthomyxoviridae family and are negative-stranded,
segmented RNA viruses. Avian influenza spreads in the air and in manure.
Wild fowl, such as migratory ducks, often act as resistant carriers and
spread it to more susceptible domestic stocks. Contaminated feed, water,
equipment and clothing can also transmit the virus. However, there is no
evidence that the virus can survive in well-cooked meat. The incubation
period is three to five days. Symptoms in animals vary, but virulent
strains can cause death within several days.

Avian Influenza in Humans

While avian influenza spreads rapidly among birds, it does not easily
infect humans, and there is no confirmed evidence of human-to-human
transmission. Of the 15 subtypes known, only subtypes H5 and H7 are
known to be capable of crossing the species barrier. Avian influenza in
humans can be detected reliably with standard influenza tests. Antiviral
drugs are clinically effective in both preventing and treating the
disease. Vaccines, however, take at least four months to produce and
must be prepared for each subtype.

Conditions favorable for the emergence of antigenic shift have long been
thought to involve humans living in close proximity to domestic poultry
and pigs. Because pigs are susceptible to infection with both avian and
mammalian viruses, including human strains, they can serve as a "mixing
vessel" for the scrambling of genetic material from human and avian
viruses, resulting in the emergence of a novel subtype. Recent events,
however, have identified a second possible mechanism. Evidence is
mounting that, for at least some of the 15 avian influenza virus
subtypes circulating in bird populations, humans themselves can serve as
the "mixing vessel".

The symptoms of avian influenza in humans are akin to those of human
influenza, i.e. fever, sore throat, cough and in severe cases pneumonia.
Human deaths from avian influenza were unconfirmed until 1997, when six
people in Hong Kong died from a particularly virulent H5N1 strain.

Threat of a Pandemic

World health authorities fear that if the avian influenza virus
undergoes antigenic shift with a human influenza virus, the new subtype
created could be both highly contagious and highly lethal in humans.
Such a subtype could cause a global influenza pandemic. According to the
United States Centre for Disease Control (CDC) there were three
pandemics in the 20th century:

- 1918-19, "Spanish flu" caused the highest number of known deaths:
between 20 million to 50 million people may have died worldwide. Many
people died within the first few days after infection and others died of
complications soon after. Nearly half of those who died were young,
healthy adults.

- 1957-58, "Asian flu" was first identified in China in late February
1957; it spread to the United States by June and caused about 70,000

- 1968-69, "Hong Kong flu" was first detected in Hong Kong in early 1968
and spread to the United States later that year, causing approximately
34,000 deaths. This virus is still in circulation today.

Both the 1957-58 and 1968-69 pandemic viruses were a result of the
reassortment of a human virus with an avian influenza virus. The origin
of the 1918 pandemic virus is not clear.

Links to Sites and Media Articles relating to Avian Influenza

MSNBC WHO: Bird flu pandemic is imminent - Governments must act
swiftly to prevent outbreak, officials say The Next Big Killer. The tsunami that killed 140,000 people
across southern Asia in December ranks as one of the most devastating
disasters in recent decades. But the next global catastrophe could be
much worse.

CNN WHO warns of dire flu epidemic -

International Herald Tribune Tens of millions could die from flu

CIDRAP Avian flu could cost Asia $130 billion

Associated Press WHO Urges Preparation for Flu Outbreak,0,250919.story?coll=sn

New York Times U.N. Health Official Foresees Tens of Millions Dying
in a Global Flu

World Health Organization Communicable Disease Surveillance & Response
(CSR) - Avian Influenza

World Health Organization Communicable Disease Surveillance & Response
(CSR) - Situation Updates - Avian Influenza

United States CDC Avian Influenza

United States CDC Influenza Pandemics

US-ASEAN Business Council SARS and Avian Flu - Helpful Links and
Benchmarking Information

CIDRAP Avian Influenza Avian Influenza - Basic Information About Avian Influenza

Hong Kong Government Information Center Prevention of Avian Influenza

(Note: Due to the length of some of the above links you may have to cut
and paste them into your browser for them to work.)

About Sinovac Biotech Ltd.

Sinovac Biotech Ltd. specializes in the research, development,
commercialization, and sales of human vaccines for infectious illnesses
such as hepatitis A and hepatitis B, influenza, "SARS", and avian flu.
Sinovac is one of the leading emerging biotechnology companies in China.

Sinovac now has two vaccines fully approved for sale in China -
Healive™ for Hepatitis A and Bilive™ for Hepatitis A&B combined.
The Hepatitis A vaccine, Healive™, is currently experiencing strong
sales growth in China. Sinovac's Hepatitis A&B combined vaccine,
Bilive™, received approval in China in January 2005 and is expected
to achieve similar sales growth to Healive™. The Company's flu
vaccine completed clinical trials in April 2004. Approval of Sinovac's
flu vaccine is expected in 2005 upon completion of a new flu vaccine
production line.

Sinovac is currently the world leader in the development of a SARS
vaccine. Preliminary Phase I results show that this SARS vaccine is safe
and induces SARS-neutralizing antibodies in the human body. In addition,
the Company is co-developing a human vaccine targeting the avian flu
virus in partnership with China CDC.

For further information please refer to the Company's filings with the
SEC on EDGAR or refer to Sinovac's website at

If you would like to receive regular updates on Sinovac please send your
email request to

This news release may include forward-looking statements within the
meaning of Section 27a of the United States Securities Act of 1933, as
amended, and Section 21e of the United States Securities and Exchange
Act of 1934, as amended, with respect to achieving corporate objectives,
developing additional project interests, Sinovac's analysis of
opportunities in the acquisition and development of various project
interests and certain other matters. These statements are made under the
"safe harbor" provisions of the United States Private Securities
Litigation Reform Act of 1995 and involve risks and uncertainties which
could cause actual results to differ materially from those in the
forward-looking statements contained herein.


Contact Information

    Sinovac Biotech Ltd.
    Tracey Gabert
    Investor Relations
    (888) 888-8312 or (604) 684-5990 outside of North America