WuXi plans spinoff to ‘create value’

Themis Qi

WuXi Biologics (2269) is planning to spin off its international business unit WuXi XDC with a Hong Kong listing.

The Wuxi-based company said the separation will enable the subsidiary to develop a unique global leading contract research, development and manufacturing organization dedicated to evolving all bioconjugates starting from antibody-drug conjugates.

After the spinoff, WuXi Biologics can allocate its capital and resources in a more organized and efficient way and thus create more value for the company and its shareholders, according to a statement released yesterday.

WuXi XDC submitted an application to go public in Hong Kong on Friday, with details of the global offering to be finalized, said the parent.

The percentage ratios of the proposed spinoff and global offering would not exceed 5 percent.

The company holds a 60 percent controlling interest in WuXi XDC which will remain a subsidiary of WuXi Biologics after the spinoff.

WuXi Biologics is a leading contract research, development and manufacturing organization that offers one-stop end-to-end solutions that enable partners to discover, develop and manufacture biologics, while the subsidiary takes charge of providing services related to ADC and other bioconjugates for overseas customers.

ADC, a new class of highly potent biologics, can make significant progress in the treatment of tumors. Around 10 ADCs have been approved by the US Food and Drug Administration since 2019. By the end of last year, WuXi Biologics secured 94 ADC-integrated projects globally with 40 investigational new drug submissions.

For the year ended December, WuXi Biologics posted a 30.5 percent jump in net profit to 4.42 billion yuan (HK$4.79 billion) but declared no final dividend.

Revenue surged 48.4 percent to 15.27 billion yuan.

WuXi Biologics saw its income from north America and Europe advance 62.5 percent and 11.9 percent respectively, and both markets accounted for 72 percent of its total revenue.