WuXi on the Right Track With 24% Growth in Revenues

WuXi PharmaTech (WX), a dominant player in China’s CRO/CMO space, today announced a solid 24% growth in revenues during 2010, and the company guided investors to expect a further 20% increase in its top-line for 2011. During 2010, WuXi’s sales totaled $334.1 million. The company predicts it’ll reach around $400 million in 2011, a steady progression from an enterprise that, at the moment, is not providing surprises.

Although all the company’s operations seem to be working smoothly, the contract manufacturing segment is providing the biggest percentage gains in revenue. In 2010, sales in Manufacturing Services jumped 95% to $39.2 million. For 2011, WuXi expects further growth of between 50% and 60% in this segment. WuXi commented that contract manufacturing has progressed from producing clinical-trial materials to large-scale manufacturing, a steadier source of income.

WuXi said Laboratory Services, the company’s biggest sector at 88% of all revenues, rose 18% over the year. That figure held for both the company’s China and U.S. operations, the latter constituting the business WuXi acquired in the not particularly successful 2008 transaction of U.S.-based AppTec.

All of this contributed to a 70% increase in full-year GAAP net income, which hit $90.8 million. That number, however, was inflated by the $30 million fee paid by Charles River (CRL) following its refusal to complete its merger with WuXi PharmaTech. In its disclosure, WuXi said it recorded $5 million of the total as expenses and the remaining $25 million as net income. Non-GAAP net income for 2010, which excludes the $30 million and several charges, was up 24% at $81.3 million.

Although the days of 100% annual growth in WuXi’s revenues are now past, the company now exhibits the stable growth of a more mature company, while at the same time earning excellent profit margins.

(Source: ChinaBioToday)