The sharp decline in manufacturing revenues was attributed to a payment for a single, non-recurring project in Q1 2008, postponements and delays and the inherent variability of the business.
Difficulties in the manufacturing business were partially offset by 28 per cent growth in the China-based laboratory services sector, which is inline with its targets for 2009. To support this growth WuXi is investing in infrastructure in China, according to Ge Li, CEO of WuXi PharmaTech.
Li said: “We are planning capital expenditures of $50-60m (€37-44m) in 2009, the majority targeted for upgrading and expanding the facilities in our China-based Laboratory Services business to support the business growth.
“With the construction of a new facility in Jinshan, we have now expanded our manufacturing capability to commercial scale, with the aim of producing key ingredients for late-stage clinical trials and commercial supplies. We continue to invest in our Suzhou facility with the aim of becoming the leading China-based service provider in drug safety evaluation.”
WuXi’s financial guidance identifies China as the main area of growth, with revenues from US testing services predicted to remain flat and manufacturing generating less income than in 2008. Revenues for the quarter rose by five per cent to $59.1m.
Shift in geography and services
In addition to recognising China as its main area for growth, WuXi also identified growing demand for services outside of its core discovery chemistry business.
These include: “discovery biology, DMPK (drug metabolism and pharmacokinetics)/ADME (absorption, distribution, metabolism, and excretion), process research, and bioanalytical services,” according to Li.