Net income for the twelve months of 2009 included $1.3 million in interest and other income, $534,000 of interest and financing expense, and $11.1 million in income tax expenses. Net income for the same period of 2008 included $291,000 of interest and other income, $702,000 of interest and financing expense, and $3.0 million of income tax expense. Net income attributable to shareholders for the twelve months of 2009 was $20.0 million, or $0.46 per diluted share, compared to net income of $8.0 million, or $0.19 per diluted share, in the same period of 2008.
Recent Developments
In November 2009, Sinovac entered into a joint venture agreement with Dalian Jin Gang Group to form Sinovac Dalian. Sinovac Dalian was established in January 2010 to focus on the research, development, manufacturing and commercialization of vaccines, such as rabies, chickenpox, mumps and rubella vaccines for human use. And in February 2010, Sinovac's subsidiary, Sinovac Beijing, completed the acquisition of production facilities, including land use right and buildings, located in Changping District, Beijing. Sinovac plans to build up capacity for it seasonal flu vaccine and pipeline products.
In 2009, Sinovac's research and development program was restructured, pursuant to which the Company established an R&D team in Beijing to better utilize its scientific and personnel resources. Sinovac's R&D program is equipped with world-class facilities that provide a platform for about 50 scientists conducting vaccine research and development. Currently, eight major R&D projects are underway.
In 2009, Healive sales to the public market represented 43.31% of total Healive sales. The significant portion of sales from the public market, particularly from Sinovac's largest market segment of children 18 months, resulted from Sinovac's high value-added services to its customers. In juxtaposition to the growth in the public market for the hepatitis A vaccine in 2009, the demand in the private market for the hepatitis A vaccine for the 18 month population has decreased as that segment is now covered by the public market vaccination program. In 2010, it is projected that the public market demand for the hepatitis A vaccine will continue to gradually increase. Therefore, Sinovac is well positioned to further expand its market share in the public market in 2010 and, at the same time, expand its sales to a broader target population encompassing a wider scope of age groups in the private market.
As we indicated previously, the public market purchase of hepatitis A vaccine will be fully implemented in China in 2010 as per Chinese government plan. However, in the first quarter of 2010, the public market is not open up enough as many local CDCs are still in the preparation for the tendering process, which we expect, will take off from the 2nd quarter of 2010.
Sinovac has previously entered into distribution agreements with local market distribution partners to register the Company's vaccines in Philippines, Mexico, India, Hong Kong and Korea. The process to register the vaccines and receive the regulatory approval is underway in the majority of those countries. Sinovac expects selling activities in some of those countries to commence in 2011 at the earliest.
2010 Guidance
In China, the public perceptions of vaccines have been impacted by recent media reports. Earlier this year, the media reported on improper storage of vaccines by a distributor in China's Shanxi province, which might have linked to a few cases of serious adverse events. Although Sinovac was not involved with both events, we believe that these issues may adversely impact the public's perceptions of vaccine safety and thus may reduce vaccine administration by the Chinese government. Therefore, we expect our organic business may be impacted in the short-term. But we still expect our business to grow gradually and the at the same time, the Company will increase investment on vaccine R&D and capacity buildup for existing products and pipeline product in order to maintain the sustainable growth in the long-term. Furthermore, we believe that our core competencies inclusive of proven R&D capability, manufacturing and distribution capabilities position us to capitalize on potential partnership or acquisition opportunities during this period.
For the full year 2010, the Company expects sales of its non-H1N1 vaccines to increase by approximately 10% to 20%, compared to $54.5 million in non-H1N1 vaccines sales in 2009. It is anticipated that the 2.15 million doses of Panflu.1 purchased by the government will be delivered to the local CDC and the remaining 8.74 million doses of Panflu.1 will be stockpiled by the government in the Company's warehouse facility in 2010. And we expect that the revenue of these 8.74 million H1N1 vaccine will be recognized in one year time when it's expired if not being delivered before it shelf life is ended. Total 2010 sales, including recognized revenue for the 2.15 million doses of Panflu.1, are expected to be in the range of approximately $67.1 million to $72.5 million.
In 2010, the Company expects to advance the clinical development of its pipeline products as follows: (i) to commence clinical trials in China for its EV71 vaccine and Japanese encephalitis vaccine upon receiving the approval of clinical trial application from SFDA in 2010; (ii) to file the clinical trial application with the SFDA for its pneumococcal conjugate vaccine; and (iii) to file clinical trial applications with the SFDA for three products (haemophilus influenzae type b (Hib) vaccine, mumps vaccine, and rubella vaccine) under development at Sinovac Dalian. And in the year, we will keep executing our business plan to increase our potential capacity through the plant transformation of facilities in Dalian JV and Changping facility to prepare for the industrialization of our pipeline products to fuel the future growth.
SOURCE Sinovac Biotech Ltd.