Despite External Challenges, WuXi AppTec Revenue and Profit Continued to Grow QoQ in the First Three Quarters of 2024; the Third Quarter Revenue Back to RMB 10+ Billion, Up 14.6% YoY Excluding COVID-19 Commercial Projects; Backlog Up 35.2% YoY

• Revenue Reached RMB10,461 Million in the Third Quarter, Excluding COVID-19 Commercial Projects, Up 14.6% Year-over-Year
• Revenue Reached RMB27,702 Million for the First Three Quarters, Excluding COVID-19 Commercial Projects, Up 4.6% Year-over-Year
• Net Profit Attributable to the Owners of the Company Reached RMB6,533 Million, and Diluted Earnings per Share (EPS) of RMB2.24 for the First Three Quarters
• Adjusted Non-IFRS Net Profit Attributable to the Owners of the Company Reached RMB7,346 Million, and Adjusted Non-IFRS Diluted EPS of RMB2.52^[1] for the First Three Quarters
• Operating Cash Flow Up 10.4% Year-over-Year for the Three Quarters Excluding COVID-19 commercial projects; Free Cash Flow Achieved RMB5.56 Billion

SHANGHAI, Oct. 28, 2024 /PRNewswire/ -- WuXi AppTec (stock code: 603259.SH / 2359.HK), a global company that provides a broad portfolio of R&D and manufacturing services that enable companies in the pharmaceutical and life sciences industry, today announced its financial results for the first three quarters ending September 30, 2024 ("Reporting Period"): 

• For the first three quarters of 2024, revenue reached RMB27,702 million, excluding COVID-19 commercial projects, revenue grew 4.6% year-over-year.
• Adjusted non-IFRS gross profit reached RMB11,341 million. Adjusted non-IFRS gross profit margin was 40.9%.
• Net profit attributable to the owners of the Company was RMB6,533 million; diluted EPS was RMB2.24. Adjusted non-IFRS net profit attributable to the owners of the Company was RMB7,346 million; adjusted diluted non-IFRS EPS was RMB2.52.
• Operating cash flow growth continued to outpace revenue growth; operating cash flow up 10.4% year-over-year for the first three quarters of 2024 excluding COVID-19 commercial projects; free cash flow achieved RMB5.56 billion.
• Demand from customers across regions continued to grow. In the first three quarters of 2024, we added over 800 new customers while maintaining the existing base of over 6,000 active customers.
• As of September 30, 2024, backlog achieved RMB43.82 billion, growing 35.2% year-over-year.
• In the first three quarters of 2024, revenue from the top 20 global pharmaceutical companies reached RMB11.22 billion, growing 23.1% year-over-year excluding COVID-19 commercial projects.
• The sustained and steady business growth is attributed to our unique fully integrated Contract Research, Development and Manufacturing Organization (CRDMO) platform. WuXi Chemistry's small molecule D&M pipeline has maintained rapid growth, with a total of 915 new molecules added in the first three quarters. As of September 30, 2024, our small molecule D&M pipeline reached 3,356 molecules, among which 20 commercial and phase III projects were added in the first three quarters.
• In January 2024, the total reactor volume of Solid Phase Peptide Synthesizer increased to 32,000L, and is expected to reach 41,000L by end of 2024; it will continue to increase in 2025.
• In May 2024, we announced the groundbreaking of the new R&D and manufacturing site in Singapore; Phase I is expected to commence operation in 2027.

Management Comment

Dr. Ge Li, Chairman and CEO of WuXi AppTec, said, "Despite external challenges, we delivered a steady quarter-over-quarter increase in revenue and profit as expected for the first three quarters of 2024. The third quarter revenue returned to over RMB10 billion, growing 14.6% year-over-year excluding COVID-19 commercial projects. Meanwhile, our backlog reached RMB43.8 billion, growing 35.2% year-over-year." 

"WuXi AppTec remains committed to providing exceptional service to our customers and helping patients worldwide. We firmly believe that the Company's unique integrated CRDMO business model can effectively serve customers' evolving needs while fostering the Company's ability to closely follow scientific innovations, generate industry insights, capture new molecule opportunities, and continuously drive long-term business growth. In 2024, the Company expects to achieve revenue of RMB 38.3-40.5 billion and free cash flow of RMB 6-7 billion, and maintain adjusted non-IFRS NPM at a similar level as last year. Although the recently proposed U.S. legislation may create short-term uncertainty for the global pharmaceutical and life sciences industry, WuXi AppTec remains steadfast in 'doing the right thing and doing it right', and will continuously enhance our capabilities and capacity as we support our customers' efforts to bring groundbreaking therapies to patients around the world. Together, we can realize our vision that 'every drug can be made and every disease can be treated'."

Business Performance by Segments

• WuXi Chemistry: CRDMO Business Model Drives Continuous Growth; Q3 2024 Revenue Achieved Positive YoY Growth, and Up 26.4% YoY Excluding COVID-19 Commercial Projects
  • Despite external challenges, WuXi Chemistry Q3 revenue grew 1.4% year-over-year to RMB7.88 billion; excluding COVID-19 commercial projects, revenue increased 26.4% year-over-year. Q1-Q3 revenue reached RMB20.09billion, growing 10.4% year-over-year excluding COVID-19 commercial projects. Q1-Q3 adjusted non-IFRS gross profit margin was 45.5%. Full-year gross profit margin is expected to keep flat as last year.
  • Small molecule drug discovery services ("R") continues to generate downstream opportunities. In the past 12 months, we successfully synthesized and delivered more than 450,000 new compounds to customers, which resulted in 7% year-over-year growth. Through our "follow-the-customer" and "follow-the-molecule" strategies, we established trusted partnerships with our customers globally, supporting the sustainable growth of our CRDMO business. The number of molecules converted from R to D&M continued to grow.
  • Small molecule development and manufacturing (D&M) services remains strong.
    i. Q1-Q3 revenue of small molecule D&M services reached RMB12.47 billion, up 7.0% year-over-year excluding COVID-19 commercial projects. 
    ii. The small molecule CDMO pipeline continued to expand. In the first three quarters, 915 new molecules were added to the small molecule D&M pipeline. As of September 30, 2024, our small molecule D&M pipeline reached 3,356 molecules, including 68 commercial projects, 79 in phase III, 357 in phase II and 2,852 in phase I and pre-clinical stages, among which 20 commercial and phase III projects were added in the first three quarters.
    iii. In May 2024, we announced the groundbreaking of the new R&D and manufacturing site in Singapore; Phase I is expected to commence operation in 2027.
  • Specifically, TIDES business (mainly oligo and peptides) sustains rapid growth.
    i. Q1-Q3 revenue of TIDES grew strongly by 71.0% year-over-year to RMB3.55 billion. TIDES full-year revenue is expected to grow over 60%. As of September, 30, 2024, TIDES backlog grew 196% year-over-year.
    ii. TIDES D&M customers grew 20% year-over-year, and the number of TIDES molecules grew 22% year-over-year.
    iii. In January 2024, the total reactor volume of solid phase peptide synthesizers increased to 32,000L, and is expected to reach 41,000L by end of 2024; it will continue to increase in 2025.
    
    
• WuXi Testing: Drug Safety Evaluation Service & Site Management Organization (SMO) Maintain Leading Positions 
  • Q1-Q3 revenue of WuXi Testing reached RMB4.62 billion. Adjusted non-IFRS gross profit margin was 34.6%.
  • Q1-Q3 revenue of lab testing services was down 7.9% year-over-year to RMB3.26 billion, with Q3 revenue up 5.5% quarter-over-quarter. Among which, Q1-Q3 revenue from drug safety evaluation services was down 10.1% year-over-year due to market impact as pricing gradually reflected in revenue along with backlog conversion, while Q3 revenue up 10.1% quarter-over-quarter, maintaining an industry leading position in the Asia-Pacific region.
  • In the first three quarters, the Qidong and Chengdu facilities received the National Medical Products Administration (NMPA) and Organization for Economic Co-operation and Development (OECD) GLP qualifications. The Suzhou facility was reviewed for the first time by the Japan Pharmaceuticals and Medical Devices Agency (PMDA) for on-site audit and successfully passed.
  • New modality business continued to develop, while new vaccine capability continued to improve, and market share of nucleic acids, conjugates, and mRNA further expanded.
  • The Company is committed to actively enabling customers going global, and supported 70%+ China biotech companies with successful out-licensing deals in the first three quarters of 2024.
  • Q1-Q3 revenue of clinical CRO & SMO grew 3.4% year-over-year to RMB1.36 billion. Among which, SMO revenue grew 16.0% year-over-year, maintaining industry leading position in China. In the first three quarters, SMO supported 50 new drug approvals for customers, and Clinical CRO enabled our customers to obtain 21 IND approvals.
  • The SMO business continued steady growth, maintaining significant advantages in multiple therapeutic areas (cardiovascular disease, ophthalmology, rheumatology, central nervous system, endocrinology, medical aesthetics and rare tumors, etc.).
    
    
• WuXi Biology: New Modality Business Drives Growth; WuXi Biology Platform Continues to Generate Downstream Opportunities 
  • Q1-Q3 revenue of WuXi Biology reached RMB1.83 billion. Adjusted non-IFRS gross profit margin was 38.0%.
  • The Company focused on improving capabilities related to new modalities. In the first three quarters, revenue from new modalities grew 6.0% year-over-year, contributing 28.5% of WuXi Biology revenue.
  • The number of customers and projects served by the nucleic acid platform continued to increase. Cumulatively, the Company provided services to 280+ customers, and successfully delivered 1,300+ projects since 2021.
  • The Company proactively built capabilities to collaboratively develop membrane proteins and peptides, leading to a remarkable increase in business volume of related protein production, screening and subsequent validation services.
  • The Company further integrated resources of the in vivo pharmacology platform, and continued to improve platform capabilities and efficiency. The Company also fully leveraged the advantage of the one-stop service platform with in vitro & in vivo synergy to further gain market share in metabolic, cardiovascular and neurological areas, and the number of customers served grew 50%+ year-over-year.
  • The Company continued to build a comprehensive and integrated screening platform, with related revenue up 20.2% year-over-year, among which revenue from peptide discovery services grew 200%+ year-over-year.
  • WuXi Biology continued to generate downstream opportunities and contributed over 20% of the Company's new customers.
• WuXi ATU: Currently Assessing Options for Continuing Operations and Avoiding Impact on Patients due to Proposed U.S. Legislation 
  • Q1-Q3 revenue of WuXi ATU reached RMB0.85 billion. Adjusted non-IFRS gross profit margin was (29.7)%. Primarily due to: 1) the completion of high-margin projects in 2023; commercial projects still in the early stages of ramping up; 2) certain projects were delayed, or cancelled due to customers' considerations; as well as insufficient new business wins due to the proposed U.S. legislation.
  • The Company continues to improve our CTDMO integrated enabling platform. As of September 30, 2024, we provided development, testing and manufacturing services for 59 projects, including 2 commercial projects, 4 Phase III projects (1 projects in BLA preparation stage), 8 Phase II projects and 45 pre-clinical and Phase I projects, among which, the world's first innovative TIL-based therapy was approved by the U.S. Food and Drug Administration (FDA) in February 2024.
  • We are preparing for BLA filing to manufacture the lentiviral vector (LVV) used in a commercial CAR-T product. We completed process performance qualification (PPQ), started post-PPQ manufacturing, and expect to file pre-approval submission (PAS) to FDA in the fourth quarter of 2024. Moreover, we enabled the world's first clinical trial of in vivo CAR-T therapy, providing end-to-end services of process development and GMP manufacturing for plasmids and viral vectors.

This release provides a summary of the results and does not intend to provide a complete statement relating to the Company, its securities, or any relevant matters herein that a recipient may need in order to evaluate the Company. For additional information, please refer to the WuXi AppTec 2024 Third Quarterly Results Presentation and 2024 Third Quarterly Report disclosed on the Company's official website, as well as the Company's disclosure documents and information on the Shanghai Stock Exchange, the Stock Exchange of Hong Kong Limited website. Investors are advised to exercise caution and be aware of the investment risks in trading Company shares.

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

The 2024 Third Quarterly Report of the Company has not been audited.

Third Quarter 2024 Results by Segments

Unit: RMB million

Year-to-Date 2024 Results by Segments

Unit: RMB million

About WuXi AppTec

As a global company with operations across Asia, Europe, and North America, WuXi AppTec provides a broad portfolio of R&D and manufacturing services that enable the global pharmaceutical and life sciences industry to advance discoveries and deliver groundbreaking treatments to patients. Through its unique business models, WuXi AppTec's integrated, end-to-end services include chemistry drug CRDMO (Contract Research, Development and Manufacturing Organization), biology discovery, preclinical testing and clinical research services, advanced therapies CTDMO (Contract Testing, Development and Manufacturing Organization), helping customers improve the productivity of advancing healthcare products through cost-effective and efficient solutions. WuXi AppTec received an AA ESG rating from MSCI for the fourth consecutive year in 2024 and its open-access platform is enabling more than 6,000 customers from over 30 countries to improve the health of those in need – and to realize the vision that "every drug can be made and every disease can be treated." Please visit: http://www.wuxiapptec.com

Forward-Looking Statements

This press release may contain certain statements that are or may be forward looking, which can be recognized by the use of words such as "expects", "plans", "will", "estimates", "projects", "intends", or words of similar meaning. Such forward-looking statements are not historical facts, but instead are predictions about future events based on our beliefs, development strategy, business plan as well as assumptions made by and information currently available to our management. Although we believe that our predictions are reasonable, future events are inherently uncertain and our forward-looking statements may turn out to be incorrect. Our forward-looking statements are subject to risks relating to, among other things, the ability of our service offerings to compete effectively, our ability to meet timelines for the expansion of our service offerings or production capacity, our ability to reach the scale of our production capacity expansion plans, our ability to protect our clients' intellectual property, competition, unforeseeable change of international policy, the impact of emergencies and other force majeure. Our forward-looking statements do not constitute any profit forecast by our management nor a undertaking by WuXi AppTec Co., Ltd. ("WuXi AppTec" or the "Company") to our investors. ACCORDINGLY, YOU ARE STRONGLY CAUTIONED THAT RELIANCE ON ANY FORWARD-LOOKING STATEMENTS INVOLVES KNOWN AND UNKNOWN RISKS AND UNCERTAINTIES. All forward-looking statements contained herein are qualified by reference to the cautionary statements set forth in this section. All information provided in this press release is as of the date of this press release and are based on assumptions that we believe to be reasonable as of this date, and we do not undertake any obligation to update any forward-looking statement or information in this press release to reflect future events or circumstances, except as required under applicable law.

Use of Non-IFRS and Adjusted Non-IFRS Financial Measures

We provide non-IFRS gross profit and non-IFRS net profit attributable to the owners of the Company, which exclude share-based compensation expenses, issuance expenses of convertible bonds, fair value gain or loss from derivative component of convertible bonds, foreign exchange-related gains or losses, amortization of acquired intangible assets from merge and acquisition, non-financial assets impairment, talent incentive and retention expenses funded by cash donation from shareholders, etc. We also provide adjusted non-IFRS net profit attributable to the owners of the Company and earnings per share, which further exclude realized and unrealized gains or losses from our venture capital investments and joint ventures. Neither is required by, or presented in accordance with IFRS.

We believe that the adjusted financial measures used in this press release are useful for understanding and assessing our core business performance and operating trends, and we believe that management and investors may benefit from referring to these adjusted financial measures in assessing our financial performance by eliminating the impact of certain unusual, non-recurring, non-cash and non-operating items that we do not consider indicative of the performance of our core business. Such adjusted non-IFRS net profit attributable to the owners of the Company, the management of the Company believes, is widely accepted and adopted in the industry the Company is operating in. However, the presentation of these adjusted non-IFRS financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with IFRS. You should not view adjusted results on a stand-alone basis or as a substitute for results under IFRS, or as being comparable to results reported or forecasted by other companies.