FAST NEWS: WuXi Biologics boosts new projects target

January 11, 2024

2269.HK

Contract drug services provider WuXi Biologics announced on Wednesday it has raised its guidance for new projects in 2024 from 80 to 110, despite a slowdown in biotech financing, after seeing a strong recovery in demand in the second half of last year.

The latest: Contract drug services provider WuXi Biologics (Cayman) Inc. (2269.HK) announced on Wednesday it has raised its guidance for new projects in 2024 from 80 to 110, despite a slowdown in biotech financing, after seeing a strong recovery in demand in the second half of last year.

Looking up: The company expects commercialized projects to contribute more revenue in the future, with seven expected to contribute more than $200 million in annual revenue each and 10 contributing between $100 million and $200 million each.

Take Note: The rise in new projects will probably result in increased research and development spending, which could undermine the company’s profits.

Digging Deeper: Founded in 2010, WuXi Biologics is a subsidiary of WuXi AppTec (2359.HK) that mainly engages 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. The company’s overseas customers continue to grow as a result of rising global demand for pharmaceutical research. In the first quarter of this year, 55% of its new projects are coming from North America, and 20% are from Europe and other non-China locations.

Market Reaction: WuXi Biologics’ stock jumped on Thursday to close up 8% at HK$30.25 by the midday break. The stock now trades near the lower end of its 52-week range.

Translation by A. Au

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