|Wuxi PharmaTech CEO Ge Li|
Chinese CRO WuXi PharmaTech ($WX) extended its run of quarterly growth on the eve of a shareholder vote that could take the company private in a multibillion-dollar deal.
In the third quarter, WuXi boosted its revenue 23.1% to $213.6 million, driven by 18% growth in lab services, a 19.6% jump in small-molecule manufacturing services and a 66% leap in biologics services. Profits, however, tumbled by nearly 50% to $16.1 million due largely to charges related to foreign exchange and losses tied to joint ventures with PRA Health Sciences ($PRAH) and AstraZeneca ($AZN), the company said.
WuXi is not providing a forward-looking guidance because it is preparing for the possibility of becoming a private company in the coming months. In April a group led by founder and CEO Ge Li made an offer to take the company off the market in a $3.3 billion deal. A special committee formed by WuXi's board has voted in favor of the transaction, and the idea will come before a shareholder vote on Nov. 25.
If the deal is approved, WuXi will become part of a newly formed parent company through an all-cash transaction that trades $46 for each of WuXi's American-traded securities. The total represents a 16.5% premium over WuXi's closing price before the offer came to light.
Meanwhile, the company has continued to expand its business beyond traditional CRO work and more in line with Li's long-stated vision of becoming "an open-access capability and technology platform that enables anyone and any company [to] discover and develop therapeutic products to benefit patients." That has meant embracing genomics through its NextCODE subsidiary, which has signed deals with hospitals around the world to provide patient screening, and expanding its footprint to include capacity for cell therapies and other next-generation therapeutics.
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