Pharmaceutical outsourcing specialist WuXi PharmaTech
Revenues at WuXi were up 69%, thanks in part to its acquisition of U.S.-based AppTec Laboratory Services. But even excluding the acquisition, WuXi saw nice organic growth of 36% year over year. The bottom line looked even better, with operating income almost double what it produced in the year-ago quarter.
The one stain on an otherwise stellar quarter was the revenue that came from AppTec. In the two months that WuXi owned the company this year, AppTec contributed $11 million in revenues. At that rate, it will contribute about $60 million in 2008 -- well shy of WuXi's guidance in March of $85 million to $90 million.
WuXi doesn't seem worried about the lower-than-expected revenue from AppTec; management reiterated its previous revenue guidance of between $280 million and $300 million for the year. WuXi blamed the low revenue from AppTec on lower utilization of its biologic manufacturing facilities and expects to get utilization up to 50% by the end of the year. Since biologic manufacturing takes time to develop and scale up, it's likely that WuXi has estimated correctly -- especially since the company can see its manufacturing schedule well into the future.
Given the way pharmaceutical companies like Wyeth