Sinovac Biotech Ltd Stock Price, News & Analysis

Sinovac Biotech board of directors issued a public letter to shareholders addressing hostile actions by Vivo Capital. The key dispute centers around a US$55.00 per share special cash dividend announcement and board legitimacy following a 2018 Annual General Meeting.

The situation stems from a January 2025 Privy Council ruling that validated the 2018 board election results, declaring the former Vivo-controlled board as "imposters." The new board aims to distribute dividends to shareholders who received nothing for seven years, while Vivo Capital, through a subsidiary, already received over US$800 million in dividends from 2021-2024.

Key developments include the resignation of auditor Grant Thornton, NASDAQ trading halt since 2019, and disputes over a PIPE investment. The board plans to set aside additional US$11.00 per share pending PIPE shares cancellation. The company is working toward resuming NASDAQ trading and implementing the dividend plan despite legal challenges from Vivo Capital.

Vivo Capital has initiated multiple legal actions against Sinovac Biotech (NASDAQ:SVA) and its current Board of Directors, controlled by 1Globe Capital . The lawsuits follow the January 2025 decision by the Judicial Committee of the Privy Council that retroactively replaced four Board members with 1Globe nominees.

The new Board's controversial actions include resisting shareholder requests for special meetings, suggesting potential cancellation of 16% of Sinovac's common stock, and excluding Vivo's Board representative. These actions led to the resignation of Sinovac's independent auditor, Grant Thornton, who cited inability to rely on Board resolutions and management representations.

The legal proceedings include lawsuits in Antigua and Barbuda High Court, New York Supreme Court, and U.S. District Court of Massachusetts, aimed at protecting shareholder interests and preventing further actions that could destroy shareholder value. Trading of Sinovac's stock has been halted since 2019, and the company's NASDAQ status is at risk without a replacement auditor.

Sinovac Biotech (NASDAQ: SVA) shareholder Heng Ren Partners has sent a follow-up letter to Sinovac's Board on April 8, 2025, demanding disclosure of record and payment dates for the previously announced $55 per share special cash dividend. The letter also urges for an additional dividend of $41 per share, which would bring the total distribution to $96 per share.

Heng Ren argues that even after the proposed total dividend distribution, Sinovac would retain over $1.3 billion in net cash, deemed sufficient for operations. The shareholder highlights concerns about the company holding excess cash, referencing a June 2023 SEC inquiry about distribution limitations. According to Heng Ren, Sinovac's current cash reserves could finance nearly nine years of capital expenditures, even without revenue or operating cash flow.

Sinovac Biotech (NASDAQ: SVA) has announced a significant special cash dividend of US$55.00 per common share. The dividend will be funded from the company's available cash resources, including prior distributions from Sinovac Life Sciences Co., and other operating subsidiaries to Sinovac Biotech (Hong Kong)

Following a recent Privy Council court order, which confirmed the legitimacy of the board of directors elected at the February 6, 2018 Annual General Meeting, the Board is reviewing previous corporate actions. This includes assessment of the 11,800,000 common shares issued in July 2018 through a securities purchase agreement with Vivo Capital, and Prime Success, L.P. (2018 PIPE Shares). The dividend amount corresponding to these shares will be retained by the company pending final resolution of related issues.

Sinovac Biotech (NASDAQ:SVA) has appointed Sven H. Borho, CFA, as a new director to its Board of Directors and Chairman of the Audit Committee. Borho, a founder and Managing Partner of OrbiMed, brings over 30 years of healthcare investment experience to the role.

OrbiMed, a leading healthcare investment firm managing approximately $17 billion in assets, has been a SINOVAC shareholder since 2013 and currently holds over 2.7 million shares. The firm invests globally across the healthcare industry through various funds.

Following this appointment, SINOVAC's Board now comprises five members: Dr. Chiang Li (Chairman), Mr. Yuk Lam Lo, Dr. David Guowei Wang, Mr. Pengfei Li, and Mr. Sven H. Borho. The Audit Committee consists of Borho, Lo, and Wang.

Heng Ren Partners, a Sinovac Biotech (NASDAQ: SVA) shareholder since 2018, has issued an open letter demanding the company distribute $8.9 billion in cash to shareholders and reinstate trading of its shares. The letter highlights Sinovac's dramatic financial transformation, with revenues increasing from $246 million in 2019 to over $19 billion in 2021, largely due to CoronaVac vaccine success.

Despite accumulating over $10 billion in net cash for more than three years, Sinovac has not made any distributions to common shareholders. Meanwhile, Sinovac subsidiaries distributed $2.7 billion to other entities from 2021-2024. Trading has been suspended on NASDAQ for over six years due to litigation, which was resolved on January 16, 2025. A new board was appointed on February 28, 2025, but no concrete timeline for trading resumption has been provided.

Sinovac Biotech (NASDAQ:SVA) has received a formal court order from the Privy Council on February 8, 2025, following a judgment that validates the 2018 Annual General Meeting board election and invalidates the company's Rights Agreement (poison pill agreement). As a result, approximately 27.7 million common shares and 14.6 million Convertible Series B Preferred Shares held by the 2019 Rights Exchange Trust will be cancelled.

The new Board of Directors includes Dr. Chiang Li (Chairman), Mr. Yuk Lam Lo, Dr. David Guowei Wang, Mr. Pengfei Li, and Mr. Jianzeng Cao, with three members designated as independent directors. The executive management remains unchanged. The board is actively working with Nasdaq to address listing requirements and restore trading, which has been halted for six years due to the invalid poison pill agreement.

Sinovac Biotech (NASDAQ:SVA) announced that the Judicial Committee of the Privy Council in London has made two significant rulings: first, confirming that the slate of nominees proposed by a group of shareholders at the 2018 Annual General Meeting was the rightfully elected Board, and second, declaring the Company's Rights Agreement invalid.

The ruling will be effective following a court order expected within a week. The outgoing Board has committed to ensuring a smooth transition with the new Board members while preserving shareholder value.

Since the 2018 Annual General Meeting, the company highlights its achievements, particularly its role in the global COVID-19 pandemic response, having delivered 2.9 billion vaccine doses, representing 22% of total global vaccinations during the pandemic period.

Sinovac Biotech (NASDAQ: SVA) has launched enrollment for a Phase III clinical trial of its bivalent vaccine candidate against Hand Foot and Mouth Disease (HFMD). The vaccine targets both Enterovirus 71 (EV71) and Coxsackievirus 16 (CA16), marking the first Phase III trial for a multivalent HFMD vaccine globally.

The Phase III trial will evaluate efficacy, safety, and immunogenicity in children aged 6-71 months. Previous Phase I/II trials initiated in September 2023 showed favorable safety and immunogenicity results. The company has also developed a tetravalent enterovirus vaccine, recently approved for clinical trials, targeting EV71, CA16, CA10, and CA6.

HFMD primarily affects children under 5 years old, representing 90% of total cases.