China Biologic Products (CBPO) Tops Q3 EPS by 13c

China Biologic Products (NASDAQ: CBPO) reported Q3 EPS of $0.94, $0.13 better than the analyst estimate of $0.81. Revenue for the quarter came in at $78.8 million versus the consensus estimate of $75.3 million.

Mr. David (Xiaoying) Gao, Chairman and Chief Executive Officer of China Biologic, commented, "We are pleased to report another healthy quarter that exceeded our expectations, despite a slightly negative impact from foreign currency translation, as we were able to sell a greater volume of finished products made from the purchased plasma than we originally anticipated and benefited from modestly better product pricing. During this quarter, market demand for plasma products remained strong and we continued to make progress on our further penetration into tier-one markets. As we announced last quarter, we expected to experience a lower year-over-year growth rate in the third quarter compared to the first half of the year, due to a relatively high volume sold in the third quarter of 2014 following the first batch approval from the upgraded Guizhou facility last July. Additionally, we had a relatively low volume of products available for sale during most of the third quarter this year following the meaningful growth in demand for our products in the first half of the year. However, our inventories have now been replenished as the first 143 tonnes of plasma and pastes purchased earlier this from Xinjiang Deyuan year have been fully processed. Since late September, we began to deliver to the market products made from such raw materials. The majority of these products are expected to be delivered to the market in 2016."

Mr. Gao continued, "We recently announced several important developments. We entered into a strategic cooperation agreement with Xinjiang Deyuan to source no less than 500 tonnes of raw plasma over the next three years. Access to this additional source material represents a meaningful growth catalyst for China Biologic, as we continue to expand our own collection capabilities. As part of this effort, we were pleased to announce that we received approval in October to start plasma collection in our newly built branch collection facility in Shandong Province. Also, in October, Shandong Taibang received approval from the CFDA to begin clinical trials on a new generation IVIG product. We expect to be able to begin commercial production of the new generation IVIG in 2018 in our new operating facility in Shandong."

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