WuXi AppTec reports strong 2021 interim results

WuXi AppTec, a company that provides a broad portfolio of R&D and manufacturing services that enable companies in the pharmaceutical, biotech and medical device industries worldwide to advance discoveries and deliver groundbreaking treatments to patients, is pleased to announce its financial results for the first half of 2021 (Reporting Period).

This document serves purely as a summary and is not intended to provide a complete representation of the relevant matters. For further information, please refer to the 2021 interim report and relevant announcements published on the websites of the Shanghai Stock Exchange 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 dealing in the shares of the Company.

All financials disclosed in this press release are prepared based on International Financial Reporting Standards (IFRS), in currency of RMB.

The 2021 Interim Report of the Company has not been audited.

1H 2021 Financial Highlights
Revenue grew 45.7% year-over-year to RMB10,537 million. The strong revenue growth was mainly attributable to the Company’s continued focus on leveraging its unique integrated end-to-end platform to achieve synergy and strong growth across our business segments.

• Our China-based laboratory services revenue grew 45.2% to RMB5,487 million.
• Our CDMO services revenue grew 66.5% to RMB3,599 million.
• Our U.S.-based laboratory services declined 15.7% to RMB659 million.
• Our clinical research and other CRO services revenue grew 56.5% to RMB783 million.

• IFRS gross profit increased 46.1% year-over-year to RMB3,884 million. Gross profit margin was 36.9%.^[3]
• Adjusted Non-IFRS gross profit increased 44.1% year-over-year to RMB4,102 million. Adjusted Non-IFRS gross margin was 38.9%.
• EBITDA increased 51.6% year-over-year to RMB3,942 million.
• Adjusted EBITDA increased 53.4% year-over-year to RMB3,649 million.
• Net profit attributable to owners of the Company increased 55.8% year-over-year to RMB2,675 million. The strong net profit growth is mainly attributable to robust revenue growth, continuous improvements to the Company’s operating efficiencies and gains from our venture capital investment portfolio, partially offset by the fair value losses of RMB1,493 from derivative component of convertible bonds as a result of significant H-share price increase during the Reporting Period. In the first half of 2021, the net gain from venture and fund investments contributed RMB2,148 million, due primarily to fair market value gains post certain portfolio companies’ IPO and gains from the sale of shares of certain companies within our venture investment portfolio during the Reporting Period.
• Adjusted non-IFRS net profit attributable to owners of the Company increased 67.8% year-over-year to RMB2,448 million.
• Diluted EPS increased 46.8% year-over-year to RMB0.91, while adjusted diluted non-IFRS EPS increased by 58.5% year-over-year to RMB0.84.

Continuous Improvements in ESG Performance
In the first half of 2021, while working to manage the long-term effects of the COVID-19 pandemic, we continued to improve our ESG performance to meet our sustainability goals and expectations. We aimed to reduce carbon emissions and enhance our business’ resilience to climate change. The intensity of our greenhouse gas emissions and energy consumption decreased by 6.5% and 6.9%, respectively. At the same time, we have sought to improve diversity and inclusion within our workplace and to make investments in our people. As a result, we have been awarded the “Most Attractive Employers for Medical Graduates in China” by Universum for the past three consecutive years. By the end of June 30, 2021, the number of female employees remained at 53% of our workforce. These efforts and practices are recognized by our investors and clients, as well as various ESG rating agencies. We remain committed to “doing the right thing and doing it right,” and will focus on delivering our commitments to our customers, employees, investors, communities and the environment to operate in a sustainable way both today and in the future.

Management Comment
Dr. Ge Li, Chairman and CEO of WuXi AppTec, said, “During the Reporting Period, our revenue increased 45.7% over the prior year to RMB10,537 million and our adjusted non-IFRS net profit attributable to owners of the Company increased 67.8% year-over-year to RMB2,448 million. We are proud that over our more than twenty-year history, WuXi AppTec has earned a solid reputation due to our track record of continuously delivering stable and outstanding results for our stakeholders, and that trend has continued in 2021.”

“Relentlessly focused on serving our customers better, we are making changes to the organization of our business segments starting from Q3 2021. We have integrated our capabilities to form three new business divisions– WuXi Chemistry, WuXi Biology, and WuXi Testing which now possess the end-to-end capabilities needed to provide integrated services to customers.

“Dr. Minzhang Chen was named as a Co-CEO and will lead the newly-formed WuXi Chemistry division, which now encompasses all chemistry services, including research, development and commercial manufacturing under one roof. This is our new business model that we have named CRDMO (Contract Research, Development and Manufacturing Organization). After this integration, WuXi Chemistry will have 10,190 research scientists, 3,741 API process development and formulation development scientists, and 4,036 manufacturing staff. It is the largest and most comprehensive chemistry services organization in the world with a workforce of 17,967 as of June 30, 2021.”

“Dr. Steve Yang continues to serve as a Co-CEO and will lead our WuXi Testing and WuXi Biology divisions. WuXi Testing now integrates our preclinical testing services (DMPK, Toxicology, Bioanalytical) and clinical testing services (clinical CRO and SMO) to provide customers with seamless drug testing services from preclinical testing to clinical trials. WuXi Biology provides a full spectrum of biology-related discovery services from in-vitro and in-vivo biology, high throughput screening, DEL, and many other biology services.”

Dr. Ge Li concluded, “We believe that these three new integrated business divisions plus the existing WuXi ATU and WuXi DDSU will allow WuXi AppTec to better serve our global customers. The fundamentals of our business and its future outlook both remain very strong. Looking ahead, we will further increase investment in our R&D services in both capacity and capabilities, particularly in new modalities. We are confident that this will better enable our customers to bring innovative medicines to patients in need – realizing our vision that ‘every drug can be made and every disease can be treated.” MB Bureau