Chinese contract research organization (CRO) WuXi PharmaTech reported another quarter of profit growth with a 7% increase compared to the same period last year despite a drop in revenues.
WuXi’s second-quarter 2009 gross profit grew to $27.1 million, up from $25.4 million in the second quarter 2008. Net revenues for the quarter decreased 3% from Q2 2008 to $67 million, due to a 69% drop in revenues in the CRO’s manufacturing services division. This decrease was partially offset by 19% growth in the laboratory services unit—the result of stronger demand for WuXi’s drug discovery and development services. According to the company, the majority of the drop in manufacturing services comes from large projects in 2008 that did not recur in 2009.
Based on the CRO’s financial performance in the second quarter, WuXi reiterated its full-year 2009 guidance to be $265 million to $275 million and increased its full-year 2009 adjusted EBITDA estimate from $72 million to the range of $80 to $85 million.
"WuXi PharmaTech's overall financial performance in the second quarter exceeded our expectations, both in revenues and profitability, building confidence that we will meet our previously announced guidance for revenues and beat our previously announced guidance for adjusted EBITDA for the full year," said chairman and CEO Dr. Ge Li in a statement. "The company is achieving its current financial goals in a difficult operating environment while investing in new growth opportunities that we expect will drive revenue and income growth over the next several years.”