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Coronavirus drugs research firm WuXi Biologics’ largest shareholder sells stake for US$893 million windfall

  • WuXi Biologics Holdings raised HK$6.1 billion by selling a 2.43 per cent stake after the market closed on Tuesday
  • WuXi’s stock has skyrocketed by about tenfold from its IPO price of HK$20.6

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WuXi Biologics’ stock was trading 3.1 per cent lower in Hong Kong on Wednesday afternoon. Photo: Sam Tsang
Eric Ng

The largest shareholder of WuXi Biologics, China’s biggest outsourced biologic drugs services provider, has sold its stake in the company for a ninth time since its initial public offering three years ago.

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The stock has doubled in price since the start of this year, and WuXi Biologics Holdings raised HK$6.1 billion (US$893 million) by selling a 2.43 per cent stake after the market closed on Tuesday. It has now reaped HK$40.7 billion from selling WuXi shares.

WuXi’s stock has skyrocketed by about tenfold from its IPO price of HK$20.6. The company’s net profit, adjusted for share-based executives’ compensation and non-recurring accounting items not tied to its core operations, rose 40.7 per cent to 734 million yuan in the first half of 2020. Its adjusted net profit tripled to 1.2 billion yuan last year from 408 million yuan in 2017, the year in which it went public.

Biologics Holdings’ selling price of HK$185 per share represented a 6.7 per cent discount on WuXi’s Monday close of HK$198.3. Its stock was trading 3.1 per cent lower at HK$192.2 on Wednesday afternoon.

Biologics Holdings is owned by its founders and various institutional investors, and is led by WuXi chairman Ge Li. It sold 33 million shares on Tuesday, it said in a filing to the Hong Kong exchange on Wednesday. Biologics Holdings’ stake in WuXi fell to 23.35 per cent from 25.77 per cent following the sale.

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The coronavirus pandemic has disrupted operations at many of WuXi’s American and European clients and delayed clinical trials, which has resulted in the deferral of about US$100 million in revenue to next year, according to an Essence Securities report. But the outbreak has also brought in more business. WuXi has signed more than 10 deals with clients to research antibodies that can potentially tackle the novel coronavirus, which Essence analyst Ma Shuai said could earn it US$80 million in revenue.
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