Despite External Challenges, WuXi AppTec Maintained Stable Operations in First Half of 2024; Revenue and Profit of the Second Quarter Both Steadily Improved QoQ as Expected, with Revenue Up 16.0% QoQ and Adjusted Non-IFRS Net Profit Up 28.5% QoQ
-- Revenue Reached RMB9,259 Million in the Second Quarter, Excluding
COVID-19 Commercial Projects, Up 0.3% Year-over-Year
-- Revenue Reached RMB17,241 Million for the First Half, Excluding COVID-19
Commercial Projects, Down 0.7% Year-over-Year
-- Net Profit Attributable to the Owners of the Company Reached RMB4,240
Million, and Diluted Earnings per Share (EPS) of RMB1.45 for the First
Half
-- Adjusted Non-IFRS Net Profit Attributable to the Owners of the Company
Reached RMB4,372 Million, and Adjusted Non-IFRS Diluted EPS of
RMB1.50([1]) for the First Half
-- Excluding COVID-19 commercial projects, Operating Cash Flow Up
48.3%/RMB1.50 billion Year-over-Year for the First Half
SHANGHAI, July 29, 2024 /PRNewswire/ -- WuXi AppTec (stock code: 603259.SH / 2359.HK), a global company that provides a broad portfolio of R&D and manufacturing services that enable companies in the pharmaceutical and life sciences industry, today announced its financial results for the first half ending June 30, 2024 ("Reporting Period"):
-- For the first half of 2024, revenue reached RMB17,241 million, excluding
COVID-19 commercial projects, revenue down 0.7% year-over-year.
-- Adjusted non-IFRS gross profit reached RMB6,865 million. Adjusted
non-IFRS gross profit margin was 39.8%.
-- Net profit attributable to the owners of the Company was RMB4,240
million; diluted EPS was RMB1.45. Adjusted non-IFRS net profit
attributable to the owners of the Company was RMB4,372 million; adjusted
diluted non-IFRS EPS was RMB1.50.
-- Excluding COVID-19 commercial projects, operating cash flow grew
48.3%/RMB1.50 billion year-over-year for the first half of 2024.
-- In the first half of 2024, we added over 500 new customers in addition
to maintaining the existing base of over 6,000 active customers. Demand
from customers across regions continued to grow.
-- As of June 30, 2024, backlog achieved RMB43.10 billion, growing 33.2%
year-over-year excluding COVID-19 commercial projects.
-- During the Reporting Period, revenue from the top 20 global
pharmaceutical companies was RMB6.59 billion, growing 11.9%
year-over-year excluding COVID-19 commercial projects.
-- The sustained and steady business growth is attributed to our unique
fully integrated Contract Research, Development and Manufacturing
Organization (CRDMO) platform. WuXi Chemistry's small molecule D&M
pipeline has maintained rapid growth, with a total of 644 new molecules
added in the Reporting Period. As of June 30, 2024, our small molecule
D&M pipeline reached 3,319 molecules, among which 14 commercial and
phase III projects were added during the Reporting Period.
-- In January 2024, total reactor volume of Solid Phase Peptide Synthesizer
increased to 32,000L. In May 2024, we announced the groundbreaking of
the new R&D and manufacturing site in Singapore.
-- Our unique integrated CRDMO business model continues to meet customer
demand. The Company keeps investing in D&M capacity, and expects D&M
capex to increase more than 50% year-over-year in 2025.
-- As an enabler of innovation and a trusted partner and contributor to the
global pharmaceutical and life sciences industry, the Company actively
promotes sustainability and enhances our global ESG leadership. The
Company joined the United Nations Global Compact (UNGC) in 2024, and was
named to FTSE4Good Index consecutively in 2023 and 2024. Our outstanding
ESG performance has also been widely acknowledged by major global ESG
rating agencies, including MSCI, CDP, EcoVadis, S&P and Sustainalytics.
[1] In the first half year of 2023 and 2024, WuXi AppTec had a fully-diluted weighted average share count of 2,949,311,622 and 2,913,355,532 ordinary shares, respectively.
Management Comment
Dr. Ge Li, Chairman and CEO of WuXi AppTec, said, "Despite external challenges, both our revenue and profit in the second quarter of 2024 steadily improved quarter-over-quarter as expected. We achieved backlog of RMB 43.10 billion, growing 33.2% year-over-year excluding COVID-19 commercial projects."
"The Company's performance in the first half of 2024 again demonstrated that WuXi AppTec's unique integrated CRDMO business model can effectively meet the growing demand of customers worldwide. It enables the Company to closely follow scientific innovations, develop distinct industry insights, instantly seize opportunities in new molecules as they rise, and continue to drive solid business growth. We aim to deliver revenue of RMB 38.3-40.5 billion and free cash flow of RMB 4-5 billion in 2024, while adjusted non-IFRS NPM is expected to remain at a similar level as last year. Although the recently proposed U.S. legislation may create short-term uncertainty for the Company, our customers and the global pharmaceutical and life sciences industry, WuXi AppTec remains steadfast in 'doing the right thing and doing it right' and committed to continuously enhancing our capabilities and capacity as we support the industry and our customers to bring groundbreaking therapies to patients around the world."
Business Performance by Segments
-- WuXi Chemistry: CRDMO Business Model Drives Continuous Growth
-- Despite external challenges, H1 revenue of WuXi Chemistry reached
RMB12.21 billion, growing 2.1% year-over-year excluding COVID-19
commercial projects. H1 adjusted non-IFRS gross profit margin was
43.8%. With the continued business growth in the second half,
full-year gross profit margin is expected to keep flat as last year.
-- Small molecule drug discovery services ("R") continues to generate
downstream opportunities. In the past 12 months, we successfully
synthesized and delivered more than 450,000 new compounds to
customers, and resulted in 7% year-over-year growth. Through our
"follow-the-customer" and "follow-the-molecule" strategies, we
established trusted partnerships with our customers globally,
supporting the sustainable growth of our CRDMO business. The number
of molecules converted from R to D&M continued to grow.
-- Small molecule development and manufacturing (D&M) services remains
strong. i. H1 revenue of small molecule D&M services reached
RMB7.39 billion. Excluding COVID-19 commercial projects, H1 revenue
was down 2.7% year-over-year on top of the strong base of over 50%
year-over-year growth in the first half of 2023, and full-year
revenue is expected to maintain positive growth. ii. Small
molecule CDMO pipeline continued to expand. In the first half, 644
new molecules were added to the small molecule D&M pipeline. As of
June 30, 2024, our small molecule D&M pipeline reached 3,319
molecules, including 67 commercial projects, 74 in phase III, 353 in
phase II and 2,825 in phase I and pre-clinical stages, among which
14 commercial and phase III projects were added during the Reporting
Period. iii. In May 2024, we announced the groundbreaking of the
new R&D and manufacturing site in Singapore.
-- Specifically, TIDES business (mainly oligo and peptides) sustains
rapid growth. i. H1 revenue of TIDES grew strongly by 57.2%
year-over-year to RMB2.08 billion. As of June, 30, 2024, TIDES
backlog grew 147% year-over-year. ii. The number of TIDES D&M
customers increased 25% year-over-year to 151, and the number of
TIDES molecules increased 39% year-over-year to 288. iii. In
January 2024, the total reactor volume of solid phase peptide
synthesizers increased to 32,000L.
-- WuXi Testing: Drug Safety Evaluation Service & Site Management
Organization (SMO) Maintain Leading Positions
-- H1 revenue of WuXi Testing reached RMB3.02 billion. Adjusted
non-IFRS gross profit margin was 35.9%.
-- H1 revenue of lab testing services was down 5.4% year-over-year to
RMB2.12 billion. Among which, revenue from drug safety evaluation
services was down 6.3% year-over-year due to market impact, while we
maintained an industry leading position in the Asia-Pacific region.
-- In the first half, the Qidong and Chengdu facilities both received
the National Medical Products Administration (NMPA) and Organization
for Economic Co-operation and Development (OECD) GLP qualifications.
The Suzhou facility was reviewed for the first time by the Japan
Pharmaceuticals and Medical Devices Agency (PMDA) for on-site audit
and successfully passed.
-- New modality business continued to develop, while new vaccine
capability continued to improve, and market share of nucleic acids,
conjugates, and mRNA further expanded.
-- H1 revenue of clinical CRO & SMO grew 5.8% year-over-year to RMB0.89
billion. Among which, SMO revenue grew 20.4% year-over-year,
maintaining industry leading position in China. In the Reporting
Period, SMO supported 31 new drug approvals for customers, and
Clinical CRO enabled our customers to obtain 14 IND approvals.
-- SMO business continued steady growth, maintaining significant
advantages in multiple therapeutic areas (cardiovascular disease,
ophthalmology, rheumatology, central nervous system, endocrinology,
medical aesthetics and rare tumors, etc.).
-- WuXi Biology: New Modality Business Drives Growth; WuXi Biology Platform
Continues to Generate Downstream Opportunities
-- H1 revenue of WuXi Biology reached RMB1.17 billion. Adjusted
non-IFRS gross profit margin was 37.2%.
-- The Company focused on improving capabilities related to new
modalities. In the Reporting Period, revenue from new modalities
grew 8.1% year-over-year, contributing 29.0% of WuXi Biology
revenue.
-- Number of customers and projects served by the nucleic acid platform
continued to increase. Cumulatively, the Company provided services
to 260+ customers, and successfully delivered 1,200+ projects since
2021.
-- The Company proactively built capabilities to collaboratively
develop membrane proteins and peptides, leading to remarkable
increase in business volume of related protein production, screening
and subsequent validation services.
-- The Company further integrated resources of the in vivo pharmacology
platform, and continued to improve platform capabilities and
efficiency. The Company also fully leveraged the advantage of the
one-stop service platform with in vitro & in vivo synergy to further
gain market share in metabolic, cardiovascular and neurological
areas, and the number of customers served grew 30%+ year-over-year.
-- WuXi Biology continued to generate downstream opportunities and
contributed over 20% of the Company's new customers.
-- WuXi ATU: Commercial and Existing Clinical Stage Projects Continue to
Advance; Revenue and Profit below Expectation due to Proposed U.S.
Legislation
-- H1 revenue of WuXi ATU reached RMB0.57 billion. Adjusted non-IFRS
gross profit margin was (27.5)%. Primarily due to: 1) the completion
of high-margin projects in 2023; commercial projects are still in
early stage of ramping up; 2) certain projects were delayed, or
cancelled due to customers' pipeline prioritization or funding
issue; as well as insufficient new business wins due to the proposed
U.S. legislation.
-- The Company continues to improve our CTDMO integrated enabling
platform. As of June 30, 2024, we provided development, testing and
manufacturing services for 64 projects, including 2 commercial
projects, 5 Phase III projects (2 projects in BLA preparation
stage), 8 Phase II projects and 49 pre-clinical and Phase I
projects, among which, the world's first innovative TIL-based
therapy was approved by the U.S. Food and Drug Administration (FDA)
in February 2024.
-- We are preparing for BLA filing to manufacture the lentiviral vector
(LVV) used in a commercial CAR-T product. We completed process
performance qualification (PPQ), started post-PPQ manufacturing, and
expect to file pre-approval submission (PAS) to FDA in the second
half of 2024. Moreover, we expect to complete PPQ in the second half
of 2024 and file PAS to FDA in the first half of 2025 for a
blockbuster commercial CAR-T product.
This release provides a summary of the results and is not intended to be a comprehensive report. For additional information, please refer to the WuXi AppTec 2024 Interim Results Presentation and 2024 Interim Report disclosed on the Company's official website, as well as the 2024 Interim Report and other relevant announcements published on the websites of the Shanghai Stock Exchange (www.sse.com.cn) and the Stock Exchange of Hong Kong (www.hkexnews.hk), and the designated media for dissemination of the relevant information. Investors are advised to exercise caution and be aware of the investment risks in trading Company shares.
All financial information disclosed in this press release is prepared based on International Financial Reporting Standards (IFRS), in currency of RMB.
The 2024 Interim Report of the Company has not been audited.
Second Quarter 2024 Results by Segments
Unit: RMB million
Segment Revenue Change Adjusted Change Adjusted non-
non-IFRS IFRS Gross Profit
Gross Profit
Margin
WuXi Chemistry 6,647.24 (5.5) % 2,936.36 (8.7) % 44.2 %
WuXi Testing 1,527.75 (6.7) % 551.98 (13.8) % 36.1 %
WuXi Biology 608.10 (7.3) % 218.53 (19.5) % 35.9 %
WuXi ATU 294.69 (24.3) % (65.94) Note 1 (22.4) %
WuXi DDSU 177.10 0.6 % 132.59 110.2 % 74.9 %
Others 4.11 (71.1) % 1.91 (32.7) % 46.3 %
Total 9,258.98 (6.5) % 3,775.42 (9.6) % 40.8 %
Notes: 1. Adjusted non-IFRS gross profit of WuXi ATU was RMB(65.94) million in Q2 2024, compared to
RMB(16.34) million in Q2 2023, a decline of RMB49.59 million.
2. Any sum of the data above that is inconsistent with the total is due to rounding.
First-Half 2024 Results by Segments
Unit: RMB million
Segment Revenue Change Adjusted Change Adjusted non-
non-IFRS IFRS Gross Profit
Gross Profit Margin
WuXi Chemistry 12,209.87 (9.3) % 5,345.41 (12.4) % 43.8 %
WuXi Testing 3,018.36 (2.4) % 1,083.08 (7.3) % 35.9 %
WuXi Biology 1,168.91 (5.2) % 434.37 (15.0) % 37.2 %
WuXi ATU 574.95 (19.4) % (157.90) Note 1 (27.5) %
WuXi DDSU 257.18 (24.8) % 154.15 49.7 % 59.9 %
Others 11.66 (53.1) % 6.04 (35.7) % 51.9 %
Total 17,240.92 (8.6) % 6,865.16 (12.6) % 39.8 %
Notes: 1. Adjusted non-IFRS gross profit of WuXi ATU was RMB(157.90) million in H1 2024, compared to
RMB(40.36) million in H1 2023, a decline of RMB117.54 million.
2. Any sum of the data above that is inconsistent with the total is due to rounding.
Consolidated Statement of Profit or Loss[2] - Prepared under IFRS
RMB Million Three Six
Months
Months Ended Ended
June
30, June
30,
2024 2023 2024 2023
Revenue 9,259.0 9,907.5 17,240.9 18,871.3
Cost of sales (5,563.8) (5,877.5) (10,540.0) (11,315.6)
Gross profit 3,695.1 4,030.0 6,700.9 7,555.7
Other income 269.0 243.8 511.0 439.8
Other gains and losses 15.5 863.4 208.4 1,061.2
Impairment losses under expected credit losses (62.4) (95.4) (82.1) (101.7)
("ECL") model, net of reversal
Impairment losses of non-financial assets - (42.9) (42.9)
Selling and marketing expenses (178.4) (177.6) (357.5) (353.5)
Administrative expenses (667.0) (657.1) (1,277.5) (1,326.5)
R&D expenses (329.9) (309.7) (636.3) (667.0)
Operating Profit 2,741.9 3,854.5 5,066.8 6,565.1
Share of results of associates 81.9 (30.7) 115.8 (76.5)
Share of results of joint ventures (4.4) (0.6) (4.2) 7.7
Finance costs (67.3) (36.9) (128.9) (101.1)
Profit before tax 2,752.2 3,786.3 5,049.6 6,395.2
Income tax expense (430.2) (615.2) (768.7) (1,038.3)
Profit for the
period 2,322.0 3,171.1 4,280.8 5,356.9
Profit for the period attributable to:
Owners of the Company 2,297.6 3,145.0 4,239.8 5,313.1
Non-controlling interests 24.4 26.1 41.0 43.8
2,322.0 3,171.1 4,280.8 5,356.9
[2] If the sum of the data below is inconsistent with the total, it is caused by rounding
Consolidated Statement of Profit or Loss[3] (continued) - Prepared under IFRS
Three
Months Six
Months
Ended Ended
June
30, June
30,
2024 2023 2024 2023
Weighted average number of ordinary shares for
calculating EPS (express in shares)
- Basic 2,895,745,826 2,940,013,234 2,907,737,554 2,936,843,517
- Diluted 2,899,828,193 2,948,738,581 2,913,355,532 2,949,311,622
Earnings per share
(expressed in RMB per
S
hare)
- Basic 0.79 1.07 1.46 1.81
- Diluted 0.79 1.07 1.45 1.79
[3] If the sum of the data below is inconsistent with the total, it is caused by rounding
Consolidated Statement of Financial Position[4]
- Prepared under IFRS
RMB Million June 30, December 31,
2024 2023
Non-current Assets
Property, plant and equipment 26,033.9 25,844.4
Right-of-use assets 2,358.1 2,348.3
Goodwill 1,841.2 1,820.9
Other intangible assets 876.6 906.7
Interests in associates 2,356.4 2,180.4
Interests in joint ventures 25.5 35.2
Deferred tax assets 489.5 366.7
Financial assets at fair value through profit or 8,939.3 8,626.0
loss ("FVTPL")
Other non-current assets 117.7 105.8
Biological assets 1,097.9 1,012.5
44,136.2 43,246.9
Current Assets
Inventories 3,291.6 2,886.1
Contract costs 878.3 695.6
Biological assets 1,062.0 1,154.6
Amounts due from related parties 57.7 86.7
Trade and other receivables 9,093.7 9,372.7
Contract assets 1,200.8 1,234.4
Income tax recoverable 4.9 17.5
Financial assets at FVTPL - 11.0
Derivative financial instruments - 414.0
Other current assets - 785.8
Pledged bank deposits 1.6 1.6
Term deposits with initial term of over three 4,971.0 3,761.4
months
Bank balances and cash 9,699.5 10,001.0
30,261.1 30,422.5
Total Assets 74,397.3 73,669.3
[4] If the sum of the data below is inconsistent with the total, it is caused by rounding
Consolidated Statement of Financial Position (continued) [5]
- Prepared under IFRS
RMB Million June 30, December 31,
2024 2023
Current Liabilities
Trade and other payables 6,777.4 7,333.5
Amounts due to related parties 14.3 11.5
Derivative financial instruments 659.7 501.9
Contract liabilities 2,522.7 1,955.4
Bank borrowings 2,919.3 3,721.6
Lease liabilities 234.7 240.5
Income tax payables 520.3 991.9
13,648.4 14,756.3
Non-current Liabilities
Bank borrowings 2,892.3 687.0
Deferred tax liabilities 596.9 530.1
Deferred income 1,045.1 1,079.9
Lease liabilities 1,119.8 1,098.6
5,654.2 3,395.6
Total Liabilities 19,302.6 18,151.9
Net Assets 55,094.8 55,517.4
Capital and Reserves
Share capital 2,911.9 2,968.8
Reserves 51,802.0 52,153.6
Equity attributable to owners of the Company 54,713.9 55,122.5
Non-controlling interests 380.8 395.0
Total Equity 55,094.8 55,517.4
[5] If the sum of the data below is inconsistent with the total, it is caused by rounding
Adjusted Non-IFRS Net Profit Attributable to the Owners of the Company[6]
RMB Million Three
Months Six
Months
Ended Ended
June
30, June
30,
2024 2023 2024 2023
Net
p
rofit attributable to the owners of the Company under 2,297.6 3,145.0 4,239.8 5,313.1
IFRS
Add:
Share-based compensation expenses 77.2 158.1 165.0 324.4
Issuance expenses of Convertible Bonds - 0.3
Fair value gain from derivative component of Convertible - (40.2)
Bonds
Foreign exchange related losses/(gains) 14.6 (500.7) 29.0 (336.5)
Amortization of acquired intangible assets from merge and 13.4 14.4 27.0 28.5
acquisition
Non-financial assets impairment - 42.9 42.9
Non-IFRS net profit attributable to the owners of the Company 2,402.7 2,859.7 4,460.7 5,332.5
Add:
Realized and unrealized losses/(gains) from venture capital 51.9 (107.8) (92.7) (230.2)
investments
Realized and unrealized share of losses/(gains) from joint 4.4 0.6 4.2 (7.7)
ventures
Adjusted non-IFRS net profit attributable to the owners of the 2,459.1 2,752.6 4,372.2 5,094.7
Company
[6] If the sum of the data below is inconsistent with the total, it is caused by rounding
About WuXi AppTec
As a global company with operations across Asia, Europe, and North America, WuXi AppTec provides a broad portfolio of R&D and manufacturing services that enable the global pharmaceutical and life sciences industry to advance discoveries and deliver groundbreaking treatments to patients. Through its unique business models, WuXi AppTec's integrated, end-to-end services include chemistry drug CRDMO (Contract Research, Development and Manufacturing Organization), biology discovery, preclinical testing and clinical research services, advanced therapies CTDMO (Contract Testing, Development and Manufacturing Organization), helping customers improve the productivity of advancing healthcare products through cost-effective and efficient solutions. WuXi AppTec received an AA ESG rating from MSCI for the third consecutive year in 2023 and its open-access platform is enabling more than 6,000 customers from over 30 countries to improve the health of those in need - and to realize the vision that "every drug can be made and every disease can be treated." Please visit: http://www.wuxiapptec.com
Forward-Looking Statements
This press release may contain certain "forward-looking statements" which are not historical facts, but instead are predictions about future events based on our beliefs as well as assumptions made by and information currently available to our management. Although we believe that our predictions are reasonable, future events are inherently uncertain and our forward-looking statements may turn out to be incorrect. Our forward-looking statements are subject to risks relating to, among other things, the ability of our service offerings to compete effectively, our ability to meet timelines for the expansion of our service offerings, our ability to protect our customers' intellectual property, unforeseeable international tension, competition, the impact of emergencies and other force majeure. Our forward-looking statements in this press release speak only as of the date on which they are made, and we assume no obligation to update any forward-looking statements except as required by applicable law or listing rules. Accordingly, you are strongly cautioned that reliance on any forward-looking statements involves known and unknown risks and uncertainties. All forward-looking statements contained herein are qualified by reference to the cautionary statements set forth in this section. All information provided in this press release is as of the date of this press release and are based on assumptions that we believe to be reasonable as of this date, and we do not undertake any obligation to update any forward-looking statement, except as required under applicable law.
Use of Non-IFRS and Adjusted Non-IFRS Financial Measures
We provide non-IFRS gross profit and non-IFRS net profit attributable to the owners of the Company, which exclude share-based compensation expenses, issuance expenses of convertible bonds, fair value gain or loss from derivative component of convertible bonds, foreign exchange-related gains or losses, amortization of acquired intangible assets from merge and acquisition, non-financial assets impairment, talent incentive and retention expenses funded by cash donation from shareholders, etc. We also provide adjusted non-IFRS net profit attributable to the owners of the Company and earnings per share, which further exclude realized and unrealized gains or losses from our venture capital investments and joint ventures. Neither is required by, or presented in accordance with IFRS.
We believe that the adjusted financial measures used in this press release are useful for understanding and assessing our core business performance and operating trends, and we believe that management and investors may benefit from referring to these adjusted financial measures in assessing our financial performance by eliminating the impact of certain unusual, non-recurring, non-cash and non-operating items that we do not consider indicative of the performance of our core business. Such adjusted non-IFRS net profit attributable to the owners of the Company, the management of the Company believes, is widely accepted and adopted in the industry the Company is operating in. However, the presentation of these adjusted non-IFRS financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with IFRS. You should not view adjusted results on a stand-alone basis or as a substitute for results under IFRS, or as being comparable to results reported or forecasted by other companies.
SOURCE WuXi AppTec
