Hong Kong - WuXi Biologics (Cayman) Inc. ('WuXi Biologics' or 'the Group', stock code: 2269.HK), a leading global Contract Research, Development and Manufacturing Organization (CRDMO) service company offering end-to-end solutions for biologics discovery, development and manufacturing, is pleased to announce its audited annual results for the year ended December 31, 2023 ('Reporting Period').

2023 Financial Highlights

Revenue: The Group's revenue increased to RMB17,034.3 million with an increase of 11.6% y-o-y. The increase was primarily attributed to: (i) the successful execution of the Group's 'Follow and Win the Molecule' strategies, coupled with the leading technology platform, best-in-industry timeline and excellent execution track record, contributing to the growth of the Group's revenue; (ii) enlarged spectrum of services offered to the biologics industry, fast-growing technology platforms including ADCs and bispecific antibodies, contributing to the Group's revenue stream; (iii) the growth of research services revenue generated from the Group's various cutting-edge technologies and (iv) the utilization of existing and newly expanded capacities, including ramp-up of the manufacturing sites in Europe and the U.S..

Gross Profit and Gross Profit Margin: The Group's gross profit increased by 1.5% to RMB6,827.9 million, with a gross profit margin of 40.1%. The decrease of gross profit margin was mainly due to the expected ramp-up impact of new manufacturing facilities in Ireland, Germany, and the U.S., which was partially offset by the efficiency achieved from WBS and other continuous improvement initiatives.

Net Profit & Net Profit Attributable to Owners of the Company: Net profit and net profit attributable to owners of the Company for the Reporting Period amounted to RMB3,570.6 million and RMB3,399.7 million respectively, representing a 21.5% and 23.1% decrease compared to the same period last year. The decreases were mainly due to: (i) a decrease in gross profit margin due to the ramp-up impacts; (ii) a decrease in investment gains and losses due to the downturn in the capital market; (iii) a decrease in foreign exchange gains; (iv) increases in selling and marketing expenses, administration expenses and R&D expenses and (v) the listing expenses associated with the separate listing of WuXi XDC.

Adjusted Net Profit: Excluding non-recurring investment gains and losses, foreign exchange impact, share-based compensation, and the WuXi XDC listing expenses, the Adjusted Net Profit for the period decreased by 2.0% y-o-y to RMB4,950.4 million. Margin of adjusted net profit was 29.1%.

Basic Earnings Per Share (EPS): Basic EPS and adjusted basic EPS were RMB0.82 and RMB1.13, respectively.

In 2023, the Group's Free Cash Flow reached RMB0.6 billion, solidifying a strong financial foundation to support the Group's ongoing capacity enhancement, globalization efforts, and continuous investment in cutting-edge technologies.

2023 Business Highlights

Amid a challenging macroeconomic environment post COVID-19, the Group maintained its stable growth trajectory, underpinned by its unique CRDMO business model and the successful execution of its 'Follow and Win the Molecule' strategies.

The total number of integrated projects rose to a new height of 698 with 132 new integrated projects added to the pipeline, setting a historic record for non-COVID project additions within a fiscal year. 51 late-phase projects and 24 commercial manufacturing projects provided a solid foundation for the Group's continued revenue growth.

The 'Win-the-Molecule' strategy further propelled the growth of the project pipeline by contributing 18 external projects, including a record high of 9 late-phase and commercial manufacturing projects, which will boost near-term revenue growth and elevate long-term growth prospects.

As of Dec 31, 2023, the Group's total backlog, which includes Services and Milestones, reached US$20,592 million. Of this total, Services accounted for US$13,398 million and Milestones contributed US$7,194 million, ensuring sustainable growth in both the short and long term.

Bolstered by a robust non-COVID pipeline, the Group's non-COVID business maintained strong growth momentum with a notable 37.7% y-o-y revenue increase, reinforcing the Group's outlook for sustained long-term growth.

Late-phase and commercial manufacturing revenue increased to RMB7,731.5 million, accounting for 45.4% of the total revenue in 2023, driven by the accelerated momentum of the Group's late-stage and commercial manufacturing businesses. Excluding COVID-19 projects, revenue from late-phase and commercial manufacturing grew substantially by 101.7% y-o-y, showcasing the Group's continued growth momentum in the post-COVID era.

Leveraging industry-leading technology platforms, the Group's research business has flourished, establishing numerous drug discovery collaborations with a wide range of clients. Notable examples include a research service agreement with GSK plc (LSE/NYSE: GSK) for multiple novel bi- & multi-specific TCEs antibodies, and a research service agreement with BioNTech SE (NASDAQ: BNTX) for the discovery of investigational monoclonal antibodies (mAbs). These partnerships underscore the Group's strong research capabilities - the 'R' in its CRDMO business model.

The Group is devoted to providing a full range of CRDMO services through its industry-leading and globally accessible proprietary technology platforms. By the end of 2023, the Group boasted a diverse portfolio with 114 bispecific projects, including 45 WuXiBodyTM projects, 143 ADC projects, and 25 vaccine projects on its integrated platforms. These advanced platforms not only underpin the Group's integrated CRDMO business model but are also pivotal in driving the Group's ongoing growth.

To address burgeoning capacity demands and fulfill its 'Global Dual Sourcing' strategy, the Group is enhancing its global footprint through capacity increases in Ireland, Germany, the U.S., and Singapore. With diversified manufacturing facilities in China, the U.S., Ireland, Germany, and Singapore, the Group offers a versatile and robust global supply chain network, ensuring it can meet the needs of its clients and partners around the world.

To maximize its business potential, the Group's subsidiary, WuXi XDC Cayman Inc., a leading global CRDMO focused on ADC and the broader bioconjugate market, was listed on the Main Board of the Hong Kong Stock Exchange on November 17, 2023 (stock code: 2268.HK), embarking on a new chapter of growth and opportunity.

Excluding COVID-19 projects, the combined revenue from the North American and European markets grew strongly by 52.5% y-o-y. Furthermore, non-COVID revenue from Europe saw a significant surge of 172.4%, fueled by ongoing business momentum and enhanced global outreach.

The Group has consistently advanced its WBS initiatives, implementing over 370 WBS projects in 2023 and achieving cost savings exceeding RMB245 million across materials, capital expenditure, and operating expenses. Moreover, these initiatives have resulted in a significant reduction in inventory, equivalent to RMB270 million. The Group is committed to further developing WBS as a management system to drive continuous improvement and create value for its clients and partners.

The Group continues to adhere to the highest quality standards, and has completed 33 regulatory inspections conducted by the U.S. FDA, EU EMA, China NMPA and other global regulatory agencies since 2017.

As of Dec 31, 2023, the Group's total staff reached 12,740, with a top-tier biologics development team of 4,432 scientists. The Group's international hiring has been fruitful. Talent retention has remained robust, with a key talent retention rate of approximately 97%, surpassing the industry average.

The Group has incorporated Environmental, Social and Governance (ESG) as an essential part of its sustainable business growth strategies. The Group's ESG performance has been evaluated by major ESG rating agencies and institutional investors, resulting in recognitions that include: listing on the Dow Jones SustainabilityTM World Index and Emerging Markets Index; an MSCI AAA Rating; the EcoVadis Platinum Medal; ranking as a Sustainalytics Industry and Regional Top-Rated Company and scoring a CDP 'A' rating for water security and 'A-' for climate change.

Amidst an increasingly dynamic macroeconomic environment in 2023, the Group maintained its growth momentum supported by strong execution, advanced technologies, flexible manufacturing capacities, a premier quality system, and a persistent pursuit of operational excellence. Adhering to its 'Follow and Win the Molecule' strategies and capitalizing on its distinctive CRDMO business model, the Group will continue to build momentum around its long-term growth and accelerate the empowerment of global partners for the benefit of patients worldwide.

About WuXi Biologics

WuXi Biologics (stock code: 2269.HK) is a leading global Contract Research, Development and Manufacturing Organization (CRDMO) offering end-to-end solutions that enable partners to discover, develop and manufacture biologics from concept to commercialization for the benefit of patients worldwide.

With over 12,000 skilled employees in China, the United States, Ireland, Germany and Singapore, WuXi Biologics leverages its technologies and expertise to provide customers with efficient and cost-effective biologics discovery, development and manufacturing solutions. As of December 31, 2023, WuXi Biologics is supporting 698 integrated client projects, including 24 in commercial manufacturing.

WuXi Biologics views Environmental, Social, and Governance (ESG) responsibilities as an integral component of our ethos and business strategy, and we aim to become an ESG leader in the biologics CRDMO sector. Our facilities use next-generation biomanufacturing technologies and clean-energy sources. We have also established an ESG committee led by our CEO to steer the comprehensive ESG strategy and its implementation, enhancing our commitment to sustainability.

Forward-Looking Statements

This announcement may contain certain 'forward-looking statements' that are not historical facts, but instead are predictions about future events based on our expectations as well as assumptions made by and information currently available to our management. Although we believe that our predictions are reasonable, future events are inherently uncertain and our forward-looking statements may turn out to be incorrect. Our forward-looking statements are subject to risks relating to, among other things, the ability of our service offerings to compete effectively, our ability to meet timelines for the expansion of our service offerings, and our ability to protect our clients' intellectual property. Our forward-looking statements in this announcement speak only as of the date on which they are made, and we assume no obligation to update any forward-looking statements except as required by applicable law or listing rules. Accordingly, you are strongly cautioned that reliance on any forward-looking statements involves known and unknown risks and uncertainties. All forward-looking statements contained herein are qualified by reference to the cautionary statements set forth in this section.

Non-IFRS Measures

To supplement the Group's condensed consolidated financial statements which are presented in accordance with the IFRS, the Company has provided adjusted net profit, adjusted net profit margin, adjusted EBITDA, adjusted EBITDA margin and adjusted basic and diluted earnings per share as additional financial measures, which are not required by, or presented in accordance with, the IFRS.

The Company believes that the adjusted financial measures are useful for understanding and assessing underlying business performance and operating trends, and that the Company's management and investors may benefit from referring to these adjusted financial measures in assessing the Group's financial performance by eliminating the impact of certain unusual, non-recurring, non-cash and/or non-operating items that the Group does not consider indicative of the performance of the Group's core business. These non-IFRS financial measures, as the management of the Group believes, are widely accepted and adopted in the industry in which the Group is operating. However, the presentation of these non-IFRS financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with the IFRS. Shareholders of the Company and potential investors should not view the adjusted results on a stand-alone basis or as a substitute for results under IFRS. And these non-IFRS financial measures may not be comparable to similarly-titled measures represented by other companies.

Contact:

Email: esg@wuxibiologics.com

Email: PR@wuxibiologics.com

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