WuXi AppTec's order backlog has reached a record high. Following the release of its first-quarter results, WuXi AppTec, a leading "pickaxe seller" in the pharmaceutical industry, saw its stock price surge significantly. On the morning of April 28, the company's Hong Kong-listed shares soared by 14.92%, while its A-shares hit the daily upside limit. This surge subsequently boosted the entire pharmaceutical R&D and manufacturing CXO sector.
Within the sector on the morning of April 28, Asymchem Laboratories' A-shares also rose by the daily limit. Stocks including GemPharmatech, Pharmaron, Joinn Laboratories, Pharmablock, and Amoytop Biotech all gained over 4%. In the Hong Kong market, shares of Asymchem Laboratories, Pharmaron, and Joinn Laboratories increased by more than 5%.
In the first quarter of 2026, WuXi AppTec reported revenue of 12.436 billion yuan, a year-on-year increase of 28.81%. Net profit attributable to shareholders of the listed company was 4.652 billion yuan, up 26.68% year-on-year. The company's three main business segments—Chemistry, Testing, and Biology—all achieved double-digit growth. The Chemistry business, which contributes approximately 85% of the company's revenue, grew by 43.7% year-on-year. This growth was primarily driven by the steady progression of pipeline molecules to later stages and the phased release of new capacity added last year.
The performance of the CXO industry, in which WuXi AppTec operates, is highly correlated with global innovative drug R&D investment and pharmaceutical financing cycles. Since 2025, global pharmaceutical innovation has shown clear signs of recovery in both funding and R&D. Data from industry reports indicate that global primary market financing for healthcare returned to over $20 billion in the third quarter of 2025, a significant increase of nearly 40% year-on-year. Concurrently, the total value of global pharmaceutical transactions reached a record high of $275.1 billion. R&D activity also intensified, with approximately 4,300 new clinical trials initiated in North America and Europe in 2025, the highest number since 2021. Notably, out-licensing deals for Chinese innovative drugs experienced explosive growth in 2025, with the total value surging to $135.7 billion, accounting for nearly half of the global total for such transactions.
These transactions provide strong financial support for innovative drug R&D. As innovative drug companies' funding conditions improve and their R&D progresses, this is directly translating into increased demand for full-chain CXO services, leading to a rise in CXO orders. WuXi AppTec's business focuses on enabling innovative drug production, specifically covering integrated, end-to-end CRDMO services. According to its first-quarter report, WuXi AppTec's order backlog continued to grow, reaching a record high of 59.77 billion yuan by the end of the first quarter, an increase of 23.6% year-on-year. WuXi AppTec stated that to better meet growing client demand, it plans to accelerate the construction of its new base in Changzhou.
As of April 27, 18 companies within the A-share CXO sector, including WuXi AppTec, had disclosed their first-quarter reports. Half of these companies reported a year-on-year increase in net profit attributable to shareholders. The improvement in their performance is also largely attributable to the recovery in R&D activity in the upstream innovative drug industry.
For example, Biocytogen and GemPharmatech primarily enable pre-clinical drug research, with both companies engaged in the R&D and creation of experimental animal models. In the first quarter, Biocytogen turned a profit, reporting net profit attributable to shareholders of 104 million yuan, a substantial increase of 8.85 times year-on-year. This was mainly due to a significant increase in revenue from pharmacological efficacy services and model animals, the recognition of substantial milestone income, and improved operational efficiency from expense management. GemPharmatech reported a net profit attributable to shareholders of 47.1083 million yuan for the first quarter, a year-on-year increase of 57.12%.
Regarding the reasons for the improved profit margin in the first quarter, GemPharmatech indicated in recent investor communications that overseas business achieved high-speed growth, accounting for approximately 25% of total revenue, with overall gross margins for overseas business being higher than domestic. Domestic industrial client demand was positive, and the proportion of high-margin gene-edited strains within total commercial mouse sales increased. Furthermore, the company expects its full-year 2026 net profit margin to improve compared to 2025. The animal models developed by GemPharmatech are primarily mouse models. Regarding capacity planning, the company also stated that, given strong market demand, it has begun fitting out the second phase of its Guangdong facility, with 18,000 new cages expected to become operational in the third quarter of 2026.
Porton Pharma Solutions provides R&D and manufacturing outsourcing services for various drug types and therapies, including small molecule drugs, large molecule drugs, cell and gene therapies, and novel modalities, with its small molecule active pharmaceutical ingredient business being the cornerstone. The company is also expanding into emerging businesses. In the first quarter, Porton Pharma Solutions also turned a profit, with net profit attributable to shareholders surging 7.5 times year-on-year to 24.7111 million yuan. The company's first-quarter revenue was 886 million yuan, an increase of approximately 11% year-on-year. Revenue from the small molecule API business was 831 million yuan, up about 9% year-on-year, while new businesses collectively generated revenue of 50.73 million yuan, an increase of approximately 25% year-on-year. In the first quarter of 2026, Porton Pharma Solutions secured new orders for its novel modalities business worth approximately 57 million yuan, a year-on-year increase of about 66%.
Conversely, among A-share CXO companies reporting a decline in first-quarter performance, some attributed the decrease in revenue to impacts on their generic drug businesses from factors such as volume-based procurement. Asymchem Laboratories, which enables drug production, reported a 6.82% year-on-year decrease in first-quarter net profit attributable to shareholders, mainly due to higher exchange losses resulting from the appreciation of the Renminbi, compared to exchange gains in the same period last year. On an adjusted basis, net profit attributable to shareholders was 423 million yuan, an increase of 27.91% year-on-year.
A recent research report from Southwest Securities suggested that the combined effect of recovering overseas R&D and the repair of the domestic innovative drug market, coupled with full order books locking in growth for 2026-2027, positions the CXO sector to potentially enter a new cycle of rising prosperity.
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