WuXi Biologics stays the course with positive 2024 outlook as national security crackdown threatens business in US
27 Mar 2024
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Source: FiercePharma
WuXi Biologics issued its sunny forecast as the company reported an 11.6% year-over-year revenue increase to 17.03 billion Chinese yuan (about $2.4 billion).
Following a similarly optimistic forecast from WuXi AppTec—and amid a national security-related controversy in the U.S.—Chinese contract developer and manufacturer WuXi Biologics is accentuating the positive.
In an earnings announcement (PDF) issued Tuesday, WuXi Biologics said that, despite headwinds, the company is well positioned to capture new business opportunities in 2024. WuXi credits that optimism, in part, to its focus on biologics, which are witnessing increasing demand given an aging global population and the prevalence of chronic diseases.
Large biopharma companies are increasingly outsourcing key services to CDMOs like WuXi Biologics in an effort to cut costs and boost efficiency, the company pointed out. Meanwhile, small and medium-sized biotech companies lacking in-house R&D and production capabilities also rely on outsourcing services to advance their projects.
WuXi Biologics issued its sunny forecast as the company reported an 11.6% year-over-year revenue increase to 17.03 billion Chinese yuan (about $2.4 billion).
The company’s non-COVID business saw a 37.7% revenue increase, while late-phase and commercial manufacturing revenue increased to 7.73 billion yuan, making up 45.5% of WuXi’s total 2023 sales.
Given WuXi's end-to-end contract research, development and manufacturing platform, the company plans on continuing to deliver "sustainable growth,” according to the report.
WuXi Biologics is attempting to stay the course and keep its head up despite the looming threat from U.S. legislation that could scupper much of its business. The so-called BIOSECURE Act, unveiled in January, branded WuXi Biologics and its sibling WuXi AppTec “foreign adversary biotech companies of U.S. national security concern” while also calling out Chinese genomics companies BGI Group, MGI and Complete Genomics.
The proposed legislation is aimed at keeping taxpayer dollars out of the hands of those alleged companies of concern. House members behind the bill are concerned that these companies could furnish Chinese officials with data obtained with biotechnology equipment or services—especially without express and informed consent from U.S. patients.
Nevertheless, WuXi Biologics was quick to defend itself, claiming in late January that the bill contains a “misleading description” of Zhisheng Chen, its CEO and executive director.
“The company is committed to supporting its customers globally and to operating with the highest standards of compliance and in accordance with the applicable laws and regulations of all jurisdictions where it has business operations,” WuXi Bio said in its press statement at the time.
More recently, a Republican lawmaker behind the bill, Rep. Mike Gallagher, R-Wisconsin, revealed his plan to resign next month. His departure from Congress leaves the BIOSECURE Act's future somewhat uncertain.
Still, WuXi Biologics' share price has yet to recover from sharp declines earlier this year. It's down about 50% so far in 2024.
That's also the case at sister company WuXi Apptec, which earlier this month presented its own positive outlook for the remainder of 2024. WuXi AppTec counts on revenue growth and expansion projects unfolding as planned this year despite the threat from the legislation.
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