WuXi AppTec gets fast-track approval for $900M-plus Shanghai IPO

WuXi AppTec has received approval from the Chinese stock regulatory body to relist on Shanghai Stock Exchange through an IPO, less than two months after the CRO giant submitted its revised prospectus.

As its prospectus (PDF, Chinese) shows, WuXi plans to raise 5.74 billion Chinese yuan ($914 million) by issuing about 104 million shares. The money will be used to expand the company’s R&D capabilities and build new facilities.

After delisting from the New York Stock Exchange through a go-private deal in 2015 that valued the company at $3.3 billion, WuXi announced plans last March to go back to its home country.

WuXi is deemed the largest CRO and one of the highest-valued biotechnology firms on the Chinese mainland, employing over 14,000 people stationed at 26 facilities and subsidiaries around the globe. Its reported revenues for the first nine months of 2017 reached 5.68 billion Chinese yuan ($903 million), with profits of 1.06 billion Chinese yuan, according to the prospectus.

WuXi’s core small-molecule drug R&D business is to be listed on the Shanghai market. The company had previously listed its CDMO subsidiary, STA, separately on China’s new OTC market. According to its unaudited 2017 report, revenues from that business jumped 24% to reach 2.19 billion Chinese yuan. The biologics unit, WuXi Biologics, became a Hong Kong-listed company last June. Since then, its market cap has jumped from $4.1 billion on its debut day to about $11.5 billion as of March 26.

Genomics firm WuXi NextCODE, another business in the big WuXi family, pulled off a $240 million series B last September and was recently listed among 164 Chinese companies evaluated by the country’s Ministry of Science and Technology as a “unicorn,” with a valuation of $1.2 billion.

The short time the China Securities Regulatory Commission used to process WuXi’s application—compared to what could usually take over a year—reflects the Chinese government’s recent welcoming attitude toward high-tech unicorns, as it fears losing emerging technologies and investments to exchanges in Hong Kong and New York.

Hong Kong Stock Exchange is currently finalizing the details of a plan to allow prerevenue biotechs to be listed. Current proposal puts a minimum market cap requirement of at least HK$1.5 billion ($191 million) on contenders.