WuXi soars on manufacturing and plots another leap in 2014

WuXi PharmaTech CEO Ge Li

WuXi PharmaTech ($WX) boosted its revenue 15.6% last year, and China's largest CRO is expecting to match that growth in the new year, counting on steady demand for manufacturing and a larger share of the U.S. research market.

The company's 2013 sales came in at $578.1 million, reflecting 12.5% growth in laboratory services and a 25.8% jump in manufacturing. WuXi's Chinese revenue increased 18.4% to $485.9 million on the year, while its U.S. sales ticked up 2.8% to $92.2 million. Meanwhile, net profits skyrocketed 32.3% to $114.6 million, largely driven by a 17.7% increase in operating income.

In the fourth quarter, WuXi posted $157.2 million in revenue, a 25.1% year-over-year improvement credited to its whopping 72.5% increase in manufacturing services. Net income jumped 37.9% to $32.9 million on the quarter.

Now the CRO is looking to keep that momentum going into 2014, expecting full-year revenue to come in between $660 million and $670 million, good for up to 16% annual growth. WuXi is forecasting annual earnings per share from $1.68 to $1.73, and the company expects to spend about $85 million on capital expenditures, looking to expand its small-molecule manufacturing and invest in new labs.

Being the largest contractor in the industry's most in-demand emerging market puts WuXi in an enviable position, but CEO Ge Li said his company wants to be more than just a source of cost arbitrage. The CRO has struck up revenue-sharing and non-traditional partnerships with its clients over the past year, and Li said that reflects a top-down effort to innovate in the space.

"With the 2014 financial guidance that we provide today, we express our belief that many of the favorable trends of 2013 will continue in 2014," Li said in a statement. "... WuXi is transitioning from being an R&D service provider to becoming an R&D service and solution provider by creating an open-access technology and service platform that enables anyone and any company to discover, develop, and commercialize innovative healthcare products to benefit the world's patients."

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