WuXi bets $50M on a new venture fund and eyes $200M more

Wuxi PharmaTech CEO Ge Li

Chinese CRO giant WuXi PharmaTech ($WX) is looking to expand its investment portfolio, planning to debut a $250 million new fund that will back startups in the U.S. and China.

WuXi is putting up a $50 million investment in the new fund, rounding up backers to fill in the rest with hopes of completing its second major foray into venture capital. The CRO's first effort, a $63 million fund closed in 2011, went toward about 18 companies. The new fund, once complete, will be operated by three unnamed operating partners and a non-operating duo of WuXi CEO Ge Li and CFO Edward Hu, the company said.

The deeper dive into VC comes amid a transformational year for WuXi, which has pivoted from its role as a traditional CRO to become a diversified R&D company. Major bets in genomics, gene therapy and complex manufacturing have boosted WuXi's profile around the industry, and Li has long said the company's goal is to become a value-adding partner for global R&D, not just a box-checking contractor.

Meanwhile, the CRO's board is in the process of weighing an offer from Li, who co-founded the company, and major shareholder Ally Bridge Group Capital Partners to take WuXi private for $46 per share. WuXi has assembled a special committee of board members to evaluate the offer, declining to provide a timetable for when it will decide on a deal that values the company at more than $3 billion.

- read WuXi's filing

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The money will be used to expand its footprint in both China and the U.S., including a new R&D operation in Boston.