WuXi Biologics posts 4.3% rise in first-half profit, defying biotech headwinds

Higher gross margins, surging projects and continued demand from North American markets help power the drug developer’s strong first-half performance

WuXi Biologics, one of China’s largest contract drug developers, posted a 4.3 per cent increase in profit attributable to shareholders in the first half of the year, as stronger demand and improved capacity utilisation lifted revenue and margins.

The Wuxi, Jiangsu-based company’s net profit attributable to shareholders rose to 2.44 billion yuan (US$363 million) in the six months ended June, according to its filing to the Hong Kong stock exchange on Tuesday. Revenue increased 18.4 per cent to 11.79 billion yuan, the filing showed.

Adjusted net profit attributable to shareholders, which strips out foreign-exchange movements and other non-core items, jumped 38.4 per cent to 3.31 billion yuan. The company recorded a foreign-exchange loss of 585.1 million yuan during the period, compared with a 1.5 million yuan gain a year earlier.

Gross profit jumped 28.1 per cent to 5.45 billion yuan, while gross margin expanded to 46.2 per cent from 42.7 per cent. The company said the improvement was driven by operating leverage, higher capacity utilisation and productivity gains.

Its shares also jumped 7.4 per cent on Tuesday to close at HK$52.20 (US$6.65), ahead of the earnings release.