AppTec buy drives WuXi to loss in Q4
Net revenues came in at $64m in the quarter, with the growth driven by WuXi’s China-based laboratory services business, but the group posted an operating loss of $49m, reversing a $12m profit a year ago.
WuXi said one reason for the loss was the continuing expenses associated with its $151m purchase of AppTec in January 2008. The business did not achieve its revenue expectations during the course of the year, leading WuXi to shut down AppTec’s biologics manufacturing operations in December 2008 after seeing a drop in demand for contract biomanufacturing.
“In retrospect, we wish we had foreseen the unprecedented economic downturn and credit freeze that severely impacted many of AppTec's customers,” said Dr. Ge Li, WuXi’s chief executive.
With the divestment of the contract manufacturing business the surviving US-based analytical testing and contract research and development services business at WuXi AppTec is profitable, he continued. Taken together, WuXi’s Chinese laboratory testing operations plus AppTec accounted for $205m in sales last year, double the year-earlier level.
For the full-year WuXi ‘s net revenues reached a little of $260m, in line with its expectations and up 87 per cent over 2007. Operating earnings were $72m, up 38 per cent over 2007. WuXi is projecting net revenues of $265m-$275m for 2009.
Looking ahead, Dr Li said WuXi will launch a recruitment drive to answer “growing demand” for its laboratory services, and is also investing in a toxicology facility in Suzhou, with the aim of offering non-GLP toxicology services in the second half of 2009 and GLP toxicology services in mid-2010.
It is also building an expanded manufacturing facility in Jinshan, due to open by the end of the year, that will offer commercial-scale manufacture of advanced intermediates and active pharmaceutical ingredients (APIs) for products in late-stage-development.
