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| WuXi PharmaTech CEO Ge Li |
WuXi PharmaTech, China's largest CRO, banked another strong revenue quarter thanks to escalating demand for clinical trials in its home country, and now the company is raising its annual profit expectations by about 7.6%.
The CRO boosted net revenue 16.6% to $146.7 million in the third quarter, fueled by a 9.2% jump in its lab services segment, which pulled in $108.1 million, and a 43.6% leap in its manufacturing business, which cleared $38.6 million on the period. WuXi still makes most of its cash running local clinical studies, and the company's China-based lab services grew 10.3% to $85 million, outpacing its U.S. operation, which increased 5.4% to $23.1 million.
Now, WuXi is expecting full-year revenue of up to $578 million, good for about 16% annual growth, and the company has raised the high end of its 2013 earnings per share guidance by 11 cents to $1.55.
WuXi is counting on its years-long diversification efforts to deliver that planned growth, and the CRO has spent millions expanding its manufacturing footprint and technological capabilities in a bid to stand out among global service providers. WuXi has invested heavily in small-molecule and biologics manufacturing, and the company recently secured CLIA certification for its genomics lab, making it the first in China to earn the mark, CEO Ge Li said.
"While achieving current growth, we are also making the investments necessary to sustain growth," Li said in a statement. "... These and other achievements demonstrate that we are succeeding in our mission of building an open-access technology and capability platform that enables anyone and any company to discover and develop therapeutic products to benefit patients."
The company plans to spend about $60 million in capital expenditures on the year, the company said, continuing to build up its infrastructure and fund a recently launched joint venture with PRA.
WuXi's broad expansion efforts over the past few years have helped it recruit big-name partners like AstraZeneca ($AZN), Vertex Pharmaceuticals ($VRTX) and Ambrx, and the CRO believes its expertise and footprint make it an ideal partner for Western drugmakers looking for inroads into China.
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