WuXi PharmaTech ($WX) is moving toward an IPO for one of its R&D and manufacturing subsidiaries, hoping to take advantage of a new market in its native China.
The CRO, which is traded on the New York Stock Exchange, plans to list its SynTheAll Pharmaceutical business on China's New Third Board, an over-the-counter exchange founded last year. SynTheAll focuses on process chemistry and manufacturing for small-molecule drugs, WuXi said, a capital-intensive mission the company believes will be better supported by giving it access to public markets. SynTheAll pulled in $142.1 million in revenue in 2013--about a quarter of the company's total--and $127.9 million for the first 9 months of this year, according to WuXi.
WuXi has submitted an application to China's National Equities Exchange and Quotations, noting that there are no guarantees that SynTheAll will wind up on the New Third Board and no promises for an IPO at the moment.
Any potential spinout of SynTheAll will leave WuXi's biologics manufacturing business intact, the company said, allowing it to focus on its fastest growing segments.
Last quarter, WuXi's revenue jumped 18% to $173.6 million in, a gain driven by 16% growth in its lab services business and a 23% leap in manufacturing. Net income came in at $32 million on the quarter, a 5% increase over last year. WuXi slightly increased its full-year projections, accounting for its September buyout of CRO XenoBiotic Laboratories and its guidance-exceeding third-quarter performance. The company expects to pull in as much as $672 million in 2014, an improvement over its previously announced range of between $665 million and $670 million.
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