FAST NEWS: Wuxi Bio Dives after Major Stakeholder Sells Shares
The latest: Contract drug services provider WuXi Biologics (Cayman) Inc. (2269.HK) announced on Tuesday that Biologics Holdings, one of its substantial shareholders controlled by its Chairman Li Ge, sold 56 million of its shares for about HK$3.98 billion ($510 million).
Looking up: Major share sales for several listed companies in the past week were discounted by as much as 17% to the latest trading price. By comparison, Biologics Holdings is selling its shares for HK$71, representing a discount of just 3.9% to WuXi Biologics’ Monday closing price of HK$73.90.
Take Note: Biologics Holdings’ stake in WuXi Biologics will be reduced from 15.14% to 13.82%, but it will remain a substantial shareholder of the company.
Digging Deeper: Founded in 2010, WuXi Biologics is a subsidiary of WuXi AppTec (2359.HK) and is mainly engaged in contract drug research, with operations in Shanghai, Wuxi and Suzhou. The company was spun off and separately listed in Hong Kong in 2017. Its integrated contract research, development and manufacturing organization (CRDMO) model enables it to offer end-to-end R&D and production services for biologics, a broader spectrum of services than typical contract research organizations (CROs) or contract development and manufacturing organizations (CDMOs). Growing global demand for pharmaceutical R&D services has boosted the company’s revenue from overseas customers in recent years. Its revenue jumped 63.5% to 7.2 billion yuan in the first half of last year, while its net profit rose 37.6% to 2.53 billion yuan.
Market Reaction: WuXi Biologics’ stock sank on Tuesday to close down 5.4% at HK$69.90 by the midday break, well below the HK$71 sale price. The stock now trades in the middle of its 52-week range.
Translation by Jony Ho
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