Wuxi Biologics IPO in Hong Kong brings in $511m

Wuxi Biologics (Cayman) Inc. completed a successful IPO on the Hong Kong stock exchange on Tuesday, raising $511m.

The biologics-focused contract R&D and manufacturing firm was established by Wuxi AppTech – which still owns a 75% - in 2008 to provide services for biopharmaceutical companies.

Wuxi Biologics stock reached a value of HK$28.70 per share on the first day of trading, up 39% from its listing price.

According to Wuxi Biologics’ prospectus – which was filed in January – the firm sees itself as a gateway to China’s “booming” biologics market.

Wuxi Biologics’ generated revenue of RMB697m ($101m) in the nine months to September 30, 2016 which is up 91% on the comparable period in 2015.

Profit for the nine months to the end of September was RMB136m, up from RMB9.7m generated in the first nine months of 2015. For comparison, revenue and profit in 2014 were RMB331m and RMB42m, respectively.

Wuxi Biologics manufacturing and development infrastructure consist of three sites: a facility in Wuxi that uses single-use disposable technology; a plant in Shanghai that focuses on drug discovery; and a biosafety testing laboratory in Suzhou.

The firm is also expanding its Wuxi site to support protein and monoclonal antibody (mAb) drug production. The expansion will up capacity from 5,000L to 35,000L and is expected to be operational at the end of the year.

Wuxi also plans to add mammalian culture based manufacturing capacity at its Shanghai site in a project expected to start in June.

Chinese CMO sector

Demand for CMOs in China is likely to increase if a pilot scheme launched by the State Council last June is adopted.

Under the scheme – plans for which were announced in November 2015 - firm’s seeking approval in ten of the country’s 34 provinces have the option of hiring a CMO.

Current rules require that applicants must own a GMP-compliant manufacturing company to make the drugs.