China-based Wuxi announced 11% growth in its net revenues when compared to last year, which was boosted by manufacturing services the most of all service offerings.
Revenue growth of 19.7% in manufacturing services was buttressed by strong demand in both research manufacturing and commercial manufacturing compared to the first quarter of 2013. That growth follows similarly steep growth in manufacturing from last quarter.
“Three years ago, we had only one commercial manufacturing product,” Ge Li, chairman and CEO of WuXi PharmaTech, said on the conference call last week. “Today, we have eight, plus 11 more products in Phase III that have good potential to become commercial manufacturing products for us. Four of these 19 products have been designated by the FDA as breakthrough or faster-track compounds, indicating the high quality of the molecules that we are working on for our customers.”
The company is working on a two-year $100 million project to build a new small-molecule research manufacturing and commercial manufacturing facility in Changzhou City, which is about 110 miles away from Shanghai, Li added in the call. Phase I of this expansion will double the company’s current manufacturing capacity, and it’s expected to be completed by Q4 of 2015.
Li, echoing what Charles River’s CEO said a few days prior, also said that the “favorable biotech funding environment in the US will generate new business throughout our organization in the next few years as our integrated drug discovery and development platform enables biotech companies to utilize our capabilities and capacity to rapidly advance their product pipelines.”
CFO and CIO Eduard Hu noted in the conference call that Wuxi’s backlog in biotech is “north of $50m.”
Li also noted in the conference call that the company’s biologics business “is ramping up rapidly. As one of example for our progress, we recently shipped drug substance and drug product for TaiMed Biologics' HIV product ibalizumab to the US, and it was approved by the FDA for expanded access program, the first such approval for a biologic drug manufactured in China.”
The company is particularly looking into the growth of biologics as it has finished construction on a materials characterization testing facility in Minnesota, as well as a biologics biosafety testing facility in China.
However, not all was positive for Wuxi as a depreciation in the Chinese Renmibi versus the US dollar of about 3% since February resulted in a loss of $13.9m in the quarter.
“This loss was partially offset by operating margin improvement caused in part by the same currency movement, as well as by a $5.m gain from the sale by our corporate venture fund of an investment in an IPOed company,” Li added. “Apart from this mark-to-market loss, our financial performance in 2014 is meeting or exceeding our previous expectations.”