Stock market today: Stocks fall as investors rotate out of tech into Jackson Hole
PALO ALTO - Vivo Capital, an 8% shareholder in Sinovac Biotech Ltd. (NASDAQ:SVA), a small-cap biotech firm with a market capitalization of $39.56 million, has publicly contested statements made by Sinovac’s board of directors regarding the company’s governance and dividend distribution plans. According to InvestingPro data, the company’s overall financial health score is currently rated as WEAK, with concerning metrics across profitability and growth dimensions.
In a letter to shareholders, Vivo Capital refuted claims that it opposes dividend distributions, stating it supports fair dividend payments to all shareholders. The investment firm also denied ever controlling Sinovac’s board, noting it has held only one seat on the six-member board since its 2018 investment.
The dispute comes ahead of a special shareholder meeting scheduled for July 8, which was requisitioned by another major investor, SAIF Partners, to elect new directors. The stakes are particularly high given the company’s challenging performance, with the stock down 40% over the past year and trading near its 52-week low of $0.11.
Vivo highlighted its financial contributions to Sinovac, including a PIPE investment in July 2018 and a $7.5 million convertible bond investment in May 2020 that it claims were crucial for the development and commercialization of Sinovac’s COVID-19 vaccine, CoronaVac.
The investment firm expressed concern over recent board actions, including the resignation of Sinovac’s independent auditor, Grant Thornton Zhitong Certified Public Accountants LLP, and the company’s subsequent delayed filing of its annual report with the SEC. These events have led to a notification of non-compliance from NASDAQ, requiring Sinovac to submit a compliance plan by July 15, 2025.
Vivo also noted that Sinovac’s stock trading was halted in February 2019 due to litigation initiated by 1Globe, another investor that Vivo claims now controls the current board with three seats despite holding a minority interest.
The information in this article is based on a press release statement from Vivo Capital. Analyst price targets for SVA range from $0.44 to $4.38, suggesting significant uncertainty about the company’s future. For deeper insights into Sinovac’s financial health and more exclusive analysis, visit InvestingPro, which offers comprehensive financial metrics and expert recommendations.
In other recent news, Sinovac Biotech has been in the spotlight with several notable developments. The company recently submitted a regulatory filing with the U.S. Securities and Exchange Commission, a routine procedure for foreign private issuers, indicating no significant changes in its operations or financial status. Additionally, Sinovac has appointed Sven H. Borho, a founding partner of OrbiMed, as a new director and Chair of the Audit Committee, enhancing its board’s expertise. OrbiMed, a significant shareholder, manages $17 billion in assets and has held shares in Sinovac since 2013. In a separate development, Heng Ren Partners, a shareholder, has demanded that Sinovac distribute $8.9 billion in cash to its shareholders and work towards resuming trading on NASDAQ. The firm highlighted Sinovac’s substantial revenue growth, from $246 million in 2019 to over $19 billion in 2021, primarily due to its CoronaVac vaccine. Despite this growth, no cash distributions have been made to common shareholders, raising concerns among investors. Heng Ren also called for transparency regarding related party transactions and urged Sinovac to provide a clear timeline for the resumption of trading. These developments reflect ongoing shareholder interest and governance activities within Sinovac Biotech.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.