China-based Contract Development and Manufacturing Organization (CDMO) WuXi AppTec (HKG: 2359) has reported a subdued performance for the first half of 2024, with its financial report indicating a decline in revenues and net profits. Revenues for the period stood at RMB 17.241 billion (USD 2.38 billion), marking an 8.64% year-on-year (YOY) decrease. Net profits also saw a significant drop, falling 20.2% to RMB 4.24 billion (USD 580 million).
The downturn was observed across all business sectors. WuXi AppTec’s chemical business revenues dropped 9.34% YOY to RMB 12.21 billion, while testing business sales fell 2.35% YOY to RMB 3.02 billion. Biology business revenues decreased by 5.17% YOY to RMB 1.17 billion, high-end treatment CTDMO business sales plummeted 19.43% YOY to RMB 570 million, and domestic new drug research and development service department revenues declined 24.80% YOY to RMB 260 million.
The impact of the Biosecure Act, which has flagged WuXi as a company of concern, is beginning to show on the company’s international markets. Since January, WuXi AppTec’s stock price and market performance have been affected. However, the company highlighted that in H1 2024, its revenue from US customers was RMB 10.71 billion, a 1.2% YOY decrease excluding specific commercial production projects. Revenue from Japan, South Korea, and other markets reached RMB 910 million, down 17.4% YOY. In contrast, the Chinese and European markets showed resilience, with revenues of RMB 3.4 billion and RMB 2.22 billion, up 2.8% and 5.3% YOY, respectively.
Despite the challenges, WuXi AppTec’s global business continues to expand, with over 500 new customers added in the first half of the year and an active customer base exceeding 6,000. As of June 2024, the company’s outstanding orders amounted to RMB 43.1 billion, a 33.2% YOY increase excluding specific commercial production projects. Revenue from the top 20 pharmaceutical companies worldwide reached RMB 6.59 billion, up 11.9% YOY.- Flcube.com
