In mid-January 2025, WuXi Biologics announced that the company will add 151 projects in 2024, bringing the total number of projects to 817; the company expects that 24 PPQ (process performance confirmation) projects will be advanced in 2025, and the Irish production facility is expected to achieve profitability as planned in 2025.

The above announcement actually conveys two very important messages. In 2024, the number of new projects of WuXi Biologics reached a new high. At the same time, the company's "pioneer" Irish base in the international layout of that year ushered in a major breakthrough.

But behind this announcement, as WuXi Biologics CEO Chen Zhisheng commented, it was a year of "roller coaster" for WuXi Biologics.

In the ten years from 2014 to 2023, WuXi Biologics' revenue compound annual growth rate exceeded 50%, which means that the company achieved a growth rate that was three times higher than the industry average. However, due to the disappearance of COVID-19 demand, WuXi Biologics' performance growth slowed down in 2022 and 2023. Combined with the geopolitical impact encountered in 2024, the company faces great pressure in 2024.

However, Chen Zhisheng believes that the company's business development and operation have not been affected by the challenges of the external environment. So far, the company's "follow and win molecules" dual-wheel drive strategy has achieved remarkable results, especially in the current environment where Chinese innovative drug companies are going overseas in various forms, WuXi Biologics has helped companies further open up growth space. Moreover, judging from the experience of biopharmaceutical development, the demand for outsourcing is continuous, and WuXi Biologics, as the industry leader, will still be the most competitive participant in this industry.

The following is the oral statement of WuXi Biologics CEO Chen Zhisheng:

2025 will be a year of accelerated growth

At this year's JPM conference (the 43rd J.P. Morgan Healthcare Conference), I met 120 customers, and the biggest feeling was that customers have money again. This actually reflects the recovery of overseas biopharmaceutical industry investment and financing.

We have long proposed that November 2023 is the turning point for overseas biotechnology industry investment and financing. At present, the above prediction is completely correct. Since November 2023, the overseas industry recovery has continued to this day, which has prompted customers to start "crazy order signing" again. The year before last, half of the customers who wanted to cooperate with WuXi Biologics could not cooperate because they had no money; last year, the proportion had dropped to 20%. As a result, the number of new projects of the company reached a record high of 151 last year.

At this year's JPM Summit, I proposed that WuXi Biologics is "ready to go" and is about to accelerate its development. This is not only because of the recovery of overseas investment and financing, but also because the company has now completely digested the income gap caused by the disappearance of the new crown demand. In other words, the factors that are not conducive to the company's development are completely gone. Therefore, after WuXi Biologics has gone through 2023 and 2024, 2025 will be a year of accelerated growth.

We just held a full member meeting yesterday (Note: January 24, 2025). I also told my colleagues at the meeting that WuXi Biologics has been in a state of slowing growth in the past few years, but this is not because our internal business capabilities have declined. The main reason for the slowdown is that the company has done too well during the COVID-19 period, and the COVID-19 business accounts for a considerable proportion of the total revenue.

So, when the COVID-19 business suddenly disappeared, a huge revenue gap was created - WuXi Biologics' COVID-19 drug revenue added up to about 8 billion. It takes time to create 8 billion in new revenue. In the past two years, WuXi Biologics has spent time trying to make up for this "gap".

In addition, the overall environment is always fluctuating, and last year was also a very stressful year in the company's history. But I think, overall, 2024 is very good. Although it has been a roller coaster ride, the final result is good.

The overseas boom continues

As early as 2017 and 2018, WuXi Biologics had already started overseas layout, including the United States, Ireland, Germany, and Singapore. This is the company's established strategy, and the company has been firmly implementing it in recent years.

Why is the Irish factory so important to us? Because we are a CRDMO model (Note: "CRDMO" refers to the outsourcing service of biological drugs in the discovery (R), development (D), and production (M) process, expressed as R, D, and M in this article). The D and R sides are relatively insensitive to geopolitics, but the M side is subject to greater geopolitical pressure. The customer contract period of the M side is generally 10-20 years. This is actually the reason why WuXi Biologics has to carry out global layout early.

This also means that if we want to maximize the business model of CRDMO, the M side must be deployed overseas in advance, and overseas must be successful.

Among the many overseas bases, the Irish base represents WuXi Biologics' "first shot" overseas. If the Irish base is successful, then the US and Singapore bases can also be successful. I also said to the company that the Irish and Singapore bases are the "two legs" of WuXi Biologics' accelerated efforts. They can drive the continuous development of the company's M side and can more perfectly execute the projects of global customers.

In addition, we have always believed that using disposable production technology is the best for the industry, and this has been proven so far. Therefore, WuXi Biologics uses disposable technology in its factories in Ireland, China, Singapore, the United States and anywhere in the world.

In the past six years, through horizontal expansion and continuous process innovation, we have successfully completed more than 300 batches of commercial production at multiple sites around the world, ranging from 4,000 liters to 16,000 liters. Our practice has proved that disposable bioreactors are not only comparable to traditional stainless steel tanks in terms of cost, but are also more environmentally friendly and more flexible. If stainless steel technology is a landline, then disposable technology is a mobile phone. We believe that the future must belong to disposable production technology.

As far as the general trend is concerned, I am still relatively optimistic. It can be seen that hot products continue to emerge in the industry and the industry structure is also adjusting and changing, which are all conducive to the development of WuXi Biologics.

In terms of products, among biological drugs, bispecific antibody drugs and antibody-drug conjugates (ADCs) will be "hot" in 2024. These are areas that WuXi Biologics has laid out very early. With the continuous development of related products, WuXi Biologics will receive more orders.

On the industry structure side, large pharmaceutical companies usually prefer to develop small molecule drugs themselves, while biotechnology companies prefer to develop biological drugs. At present, the strength of small and medium-sized biotechnology companies is also growing. 2024 is also one of the years with the most products approved for listing by small and medium-sized biotechnology companies. These companies also need companies that can provide external services. WuXi Biologics is often their preferred partner.

In the new year, on the one hand, I hope that the payment problem of domestic innovative drugs can be solved as soon as possible, because the breakthrough on the payment side will inevitably drive capital to invest more actively in biotechnology companies, which can once again drive the development of the industry. On the other hand, I believe that the boom in overseas BD transactions (referring to commercial authorization) of Chinese biotechnology companies will continue. As an enabler, WuXi Biologics will also gain a lot of development opportunities from such transactions.

In 2024, WuXi Biologics' market share in China's innovative drug overseas projects using CDMO has reached 70%. This also reflects WuXi Biologics' excellent service capabilities and excellent business standards. Our company's services are fully in line with international standards and are highly recognized by multinational companies. Overseas products are seamlessly connected from China to overseas, and clinical trials can be started overseas immediately.

I believe that whether it is bispecific antibodies, ADCs, or BD, overseas expansion has just begun, and this trend will continue in 2025. In addition, we must see that the demand for outsourcing in the process of biopharmaceutical development is solid and continuous. Based on such demand, there is no doubt that the industry will continue to develop.

Source: https://finance.eastmoney.com/