WuXi AppTec saw a slight drop in revenue and a bigger fall in profit in the first half of 2024, with US revenue dipping as the company remains a political target for American lawmakers.
Despite the 1.2% decline, the US remains the biggest source of WuXi AppTec’s revenue, accounting for RMB $10.71 billion ($1.48 billion) over six months — or 62% of total revenue. The contract research, development and manufacturing giant reported growth in both China and Europe, while recording lower revenue in Japan, Korea and other regions.
In a reflection of the existential threat that the Biosecure Act could pose to the company’s US operations, WuXi dedicated two of 24 slides in the presentation to address the proposed legislation, vowing to keep engaging with US lawmakers to try and reshape the legislative process.
Among its subsidiaries, WuXi Advanced Therapies saw the largest decline in revenue, part of which was attributed to “insufficient new business wins due to the proposed U.S. legislation.”
The Philadelphia-based unit is focused on cell and gene therapies. WuXi cited several other reasons for the revenue drop: “high-margin projects were completed in 2023; commercial projects are still in early stage of ramping up;” and “certain projects were delayed, or cancelled due to customers’ pipeline prioritization or funding issue.”
In the face of those external challenges, WuXi said it maintained “stable operations” in the first half of the year.
On the brighter side, revenue and profit in the second quarter were both up from the first quarter. Revenue jumped from RMB$7.98 billion to RMB$9.26 billion, totaling RMB$12.74 billion for the first six months.
The company also added more than 500 new customers — on top of an existing base of more than 6,000 — achieved a backlog of RMB $43.10 billion, growing 33.2% year-over-year excluding Covid-19 commercial projects. In a press release, CEO Ge Li said the company aims to deliver 2024 revenue of RMB $38.3-40.5 billion.
“Although the recently proposed U.S. legislation may create short-term uncertainty for the Company, our customers and the global pharmaceutical and life sciences industry, WuXi AppTec remains steadfast in ‘doing the right thing and doing it right’ and committed to continuously enhancing our capabilities and capacity as we support the industry and our customers to bring groundbreaking therapies to patients around the world,” he said.
With Biosecure, WuXi noted that “multiple steps remain in the legislative process” and that the contents are still subject to review and changes. Recent filings revealed that WuXi more than tripled its lobbying spend on bills moving through Congress in the second quarter.
“The Company have been actively working together with its advisors to set the record straight and advocate for appropriate changes to the proposed legislation,” it wrote.
Editor’s note: This story has been corrected to reflect that WuXi AppTec’s US revenue for the first half of 2024 is RMB $10.71 billion, or $1.48 billion in US dollars.