As global competition in the ADC (Antibody-Drug Conjugate) field intensifies, WuXi XDC is making another strategic move to expand its footprint.
Recently, WuXi XDC unveiled a cash tender offer proposal carrying a 99% premium, announcing its intention to acquire TOT Biopharm for a maximum consideration of HK$2.79 billion.
This acquisition by WuXi XDC aims to enhance its operational manufacturing capacity, enrich its project portfolio, broaden its client base, and further solidify its leading market position in the field of contract development and manufacturing organizations (CDMO) for antibody-drug conjugates.
However, there is a notable performance gap between WuXi XDC and TOT Biopharm. In the first half of last year, WuXi XDC achieved revenue of RMB 2.701 billion, a year-on-year increase of 62.19%, and recorded a net profit attributable to shareholders of RMB 746 million, surging 52.74% year-on-year.
During the same period, TOT Biopharm reported revenue of RMB 489 million, a decrease of 6.04% year-on-year, and recorded a net profit attributable to shareholders of just RMB 4 million, plummeting 87.13% year-on-year.
As of the market close on January 19th, WuXi XDC's latest market capitalization reached HK$86.737 billion, while TOT Biopharm's market capitalization stood at HK$3.292 billion.
Public information shows that WuXi XDC is a key component of the "WuXi ecosystem" built by pharmaceutical magnate Li Ge. Besides WuXi XDC, the "WuXi系" also includes three other listed companies: WuXi AppTec, WuXi Biologics, and JW Therapeutics.
It is noteworthy that on the "2025 Hurun Rich List" released last October, Li Ge ranked 109th with a personal fortune of RMB 51.5 billion, which increased by 58% compared to 2024.
WuXi XDC Acquires TOT Biopharm for HK$2.8 Billion
On the evening of January 14th, WuXi XDC, WuXi Biologics, and TOT Biopharm issued a joint announcement stating that Citigroup Global Markets, representing the offeror WuXi XDC, had launched a voluntary conditional cash offer for TOT Biopharm.
As of the announcement date, the total issued shares of TOT Biopharm were approximately 773 million. WuXi XDC offered a cash price of HK$4 per share, representing a premium of approximately 99% over TOT Biopharm's undisturbed closing price of HK$2.01 per share on the Hong Kong Stock Exchange.
According to the announcement, the total valuation of the offer is approximately HK$3.105 billion, with the maximum consideration being approximately HK$2.79 billion, which the company intends to pay using internal resources.
Upon completion of the transaction, TOT Biopharm will become a subsidiary of both WuXi XDC and WuXi Biologics, and its financial results will be consolidated into the financial statements of both WuXi XDC and WuXi Biologics.
WuXi XDC believes the acquisition presents a suitable opportunity to expand and acquire additional operational manufacturing capacity in China. Through this transaction, the company intends to enhance its operational manufacturing capabilities.
From WuXi XDC's perspective, the deal aligns with its ongoing business development plan, helping to further enrich its project portfolio and expand its client base. The transaction will enable the company to further consolidate its leading market position in the ADC CDMO sector.
Information from WuXi XDC's official website reveals that WuXi XDC is a joint venture established by WuXi Biologics and STA Pharmaceutical Co. Ltd., (合全药业) and is a leading global open-access, integrated contract research, development and manufacturing organization (CRDMO) platform for bioconjugates.
WuXi XDC is primarily engaged in providing comprehensive CRDMO services, including the discovery, process development, and Good Manufacturing Practice (GMP) production of bioconjugate drugs, monoclonal antibody intermediates, and related linkers and payloads for bioconjugate drugs.
The controlling shareholder of WuXi XDC, WuXi Biologics and its subsidiaries, is a biologics CDMO that primarily provides end-to-end solutions for biologic discovery, development, and production.
The acquisition target, TOT Biopharm, is a biopharmaceutical company focused on the research, development, and commercialization of innovative oncology drugs and therapies.
According to The Paper, TOT Biopharm initially focused on innovative drug R&D and began transitioning in 2020 to develop its CXO business, focusing on biologics CDMO. Tianyancha data shows that TOT Biopharm was listed on the Hong Kong Stock Exchange in November 2019.
Leveraging extensive practical experience, mature technology platforms, and a quality system, TOT Biopharm currently engages in diverse strategic collaborations with domestic and international pharmaceutical companies, providing one-stop CDMO solutions for drug development and production to help clients accelerate the development and production of biologics, particularly ADCs.
Significant Performance Gap Behind "Big Fish Eating Small Fish" Deal
Judging from the financial performance of the two companies, WuXi XDC's business scale and profitability are significantly higher than those of TOT Biopharm.
It was noted that on the same day the joint announcement was released, WuXi XDC also disclosed a positive profit alert, forecasting significant growth in its key financial performance indicators for 2025.
Particularly striking is the expectation that the growth rates for its gross profit and adjusted financial metrics will substantially outpace its revenue growth, indicating a further improvement in the company's operational efficiency and profitability.
Specifically, WuXi XDC expects its full-year revenue for 2025 to increase by more than 45% year-on-year, while net profit is expected to grow by more than 38% year-on-year.
Gross profit is anticipated to surge by over 70% year-on-year. The fact that the gross profit growth rate is expected to be higher than the revenue growth rate indicates effective optimization of product/service profit margins and cost control capabilities.
Adjusted net profit before interest income and expenses is projected to increase by more than 45% year-on-year. Excluding the impact of exchange rate fluctuations, this growth rate is expected to exceed 65%, confirming the strong profit growth momentum of the company's core operating business.
Looking at a longer timeframe, WuXi XDC's performance in recent years has also been impressive. Data from Tonghuashun iFinD shows that in just five years, WuXi XDC's revenue skyrocketed over 41-fold from RMB 96 million in 2020 to RMB 4.052 billion in 2024; its net profit attributable to shareholders also soared from RMB 26 million in 2020 to RMB 1.07 billion in 2024.
The positive profit trend indicated by WuXi XDC's recent profit alert had already begun to emerge in its 2025 interim report. In the first half of last year, the company achieved revenue of RMB 2.701 billion, a year-on-year increase of 62.19%, and recorded a net profit attributable to shareholders of RMB 746 million, up 52.74% year-on-year.
In terms of project types, WuXi XDC's ADC business dominates, generating revenue of RMB 2.504 billion in the first half of last year, accounting for 92.7% of the company's total revenue.
As of the end of the first half of last year, WuXi XDC had 201 integrated ADC projects and 24 non-ADC integrated projects, representing 89.3% and 10.7% of the total ongoing integrated projects, respectively.
In the first half of last year, WuXi XDC's gross profit margin increased by 4 percentage points year-on-year to 36.1%, primarily due to the company's continuous efforts to enhance operational efficiency, optimize procurement strategies, and accelerate the commissioning of newly deployed production lines by improving the utilization rate of existing production facilities.
WuXi XDC stated in its interim report that it aims to maintain its rapid business growth by providing world-class bioconjugate CRDMO services and empowering its global partners to accelerate and transform the development of ADCs and broader bioconjugate drugs.
In contrast, the interim report card delivered by the acquisition target, TOT Biopharm, last year was less satisfactory.
In the first half of last year, TOT Biopharm experienced a rare decline in revenue, falling 6.04% year-on-year to RMB 489 million. Its net profit attributable to shareholders shrank by nearly 90% to just RMB 4 million, hovering on the edge of breakeven.
TOT Biopharm attributed the revenue decline primarily to the fact that some key projects had not yet reached their delivery milestones.
The sharp decline in net profit, besides the above reason, was also mainly affected by increased depreciation and amortization following the commissioning of construction projects.
Simultaneously, the company intensified its efforts to expand into overseas markets, optimized its organizational structure, and enhanced its management system, leading to slight increases in both selling and administrative expenses.
In the first half of last year, TOT Biopharm added 16 new projects, including 14 ADC projects, accumulating to a total of 169 projects, and assisted 12 projects in advancing from the preclinical stage to the clinical stage.
In terms of capacity, TOT Biopharm is located in the Suzhou Industrial Park, covering an area of 50,000 square meters. It possesses 4 complete international top-tier commercial production lines (2 for antibodies, 2 for ADCs), including 5 drug substance workshops (containing non-toxic conjugation drug substance workshops) and 4 drug product workshops.
Among these, the annual antibody drug substance capacity is 300,000 liters, and the annual drug product workshop capacity is 30 million units. The annual ADC drug substance capacity is 960 kilograms, and the annual drug product capacity is 5.3 million vials.
TOT Biopharm stated that its production capacity offers significant flexibility, having successfully completed numerous non-standard orders with high production line changeover efficiency, providing customized services and supporting client on-site participation in key trial milestones.
Li Ge Holds Four Listed Companies with a Fortune of RMB 51.5 Billion
As the helmsman of the "WuXi ecosystem," Li Ge now controls four listed enterprises: WuXi AppTec, WuXi Biologics, JW Therapeutics, and WuXi XDC.
Among them, the earliest company founded by Li Ge and the most widely recognized by the public is WuXi AppTec. After delisting from U.S. markets, the company subsequently listed on the A-share and Hong Kong stock markets in 2018.
As a globally leading pharmaceutical R&D service provider, WuXi AppTec is dedicated to providing new drug R&D and production services for the global pharmaceutical and life sciences industry.
To enable clients to develop new drugs more efficiently, WuXi AppTec integrates CRO, CDMO, and CMO services and capabilities through its unique integrated CRDMO business model.
As WuXi AppTec's business matured, the three other companies—WuXi Biologics, JW Therapeutics, and WuXi XDC—were successively established through spin-offs or joint ventures with other companies.
In December 2015, WuXi AppTec completed its privatization and delisted from the NYSE. At that time, an internal source close to WuXi AppTec's senior management indicated to the First Financial Daily that WuXi AppTec's next move would likely involve splitting its business segments into three separate companies for listing domestically.
Among these, WuXi Biologics was originally the biologics division of WuXi AppTec. In 2015, WuXi Biologics was spun off from WuXi AppTec and listed on the Hong Kong Stock Exchange in 2017.
In 2016, WuXi AppTec and U.S. biopharmaceutical company Juno Therapeutics jointly established JW Therapeutics, aiming to build a leading cell therapy company in China. Subsequently, JW Therapeutics was listed on the Hong Kong Stock Exchange in November 2020.
WuXi XDC, meanwhile, was established as a joint venture by WuXi Biologics and STA Pharmaceutical Co. Ltd., (合全药业) in 2021. The company provides comprehensive end-to-end CRDMO services for global bioconjugate pharmaceutical companies and bioconjugate drug developers. In November 2023, WuXi XDC was successfully listed on the Hong Kong Stock Exchange.
By building the "WuXi系" empire, Li Ge has become a regular feature on major rich lists. On the "2025 Hurun Rich List" released last October, Li Ge ranked 109th with a personal fortune of RMB 51.5 billion, which increased by 58% compared to 2024.
Following the acquisition of TOT Biopharm, whether WuXi XDC can subsequently consolidate its business and achieve new performance breakthroughs remains a subject for continued observation.
Comments