WuXi XDC (02268.HK) announced that the company intends to offer approximately 178 million shares globally, 17.845 million shares in Hong Kong, China, and approximately 161 million shares in the international offering, with an expected pricing date of November 10 from November 7 to November 10, 2023, and an offer price of HK$19.90-20.60 per offer share. Morgan is the joint sponsor and the shares are expected to be listed on the Main Board of the Stock Exchange on 17 November 2023.
本次香港IPO，药明合联引入基石投资者包括Invesco Advisers, Inc.、General Atlantic Singapore SPV 64 Pte. Ltd.、Al-Rayyan Holding LLC、UBS Asset Management (Singapore) Ltd.、HongShan Funds、Novo Holdings A/S、以及Lake Bleu Funds。
The cornerstone investors have agreed to subscribe or procure their designated entities to subscribe for the relevant number of Offer Shares at the Offer Price in aggregate of approximately HK$2,346.6 million subject to certain conditions. Assuming that the over-allotment option is not exercised and immediately following the completion of the Global Offering, the total number of Offer Shares to be subscribed for by cornerstone investors will be approximately 116 million Offer Shares at the Offer Price of HK$20.25 per Offer Share (i.e. the median of the indicative offer price range set out in this prospectus).
Synthesis | Company Announcement Prospectus Edit | Echo
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WuXi XDC is a leading CRDMO (end-to-end integrated small molecule drug outsourcing that includes the full lifecycle from drug development to launch) focused on the global ADC and broader bioconjugate drug market, and is the only company dedicated to providing comprehensive end-to-end services.
According to Frost & Sullivan, WuXi XDC is the world's second-largest CRDMO engaged in bioconjugates such as ADCs in terms of revenue in 2022, and the company is the world's largest bioconjugate CRDMO in terms of total projects as of the end of 2022.
With expertise in biologics and small molecule medicines, WuXi XDC provides interdisciplinary services covering the discovery, research, development and manufacturing of bioconjugates. The company provides these services in close proximity to state-of-the-art laboratories and production sites, significantly reducing development time and costs. As a comprehensive one-stop bioconjugate research, development and manufacturing platform, the company's mission is to continuously strengthen the company's platform, promote and transform the development of the bioconjugate industry, and empower global biopharmaceutical partners to benefit patients around the world.
Bioconjugates such as ADCs are a unique drug modality that distinguishes them from small molecule drugs or biologics.
In the case of ADCs, a small cytotoxic drug (i.e., payload) is covalently linked (also known as conjugated) to a biological component (i.e., antibody) through a chemical linker. Therefore, ADCs are designed to combine the specific targeting of antibodies with the cell killing power of highly effective cytotoxic small molecule drugs. This combination design may reduce off-target toxicity of conventional chemotherapy while increasing efficacy, thereby improving safety and efficacy.
Recently, several ADCs have shown promising efficacy against various cancers and are rapidly gaining market share. In 2022, global sales of ADC drugs reached approximately $7.9 billion, representing a CAGR of more than 40% since 2018. With the continuous advancement of conjugation technology and the ever-expanding library of bioconjugate drug components, the bioconjugate drugs currently under development are not only used for the treatment of tumors, but also continue to expand the therapeutic field to autoimmune diseases, infectious diseases, metabolic disorders, etc.
With the recent revolutionary progress in drug design and conjugation technology, the market for bioconjugate drugs such as ADCs is at an inflection point in growth. According to Frost & Sullivan, the global ADC drug market size is expected to grow from $7.9 billion in 2022 to $64.7 billion in 2030, growing at a CAGR of 30.0%. The expected growth of the global ADC drug market is much higher than that of the global biologic drug market (excluding bioconjugates), which is expected to grow at a CAGR of 9.2% over the same period.
As of the Latest Practicable Date, there were 15 approved ADC drugs globally, of which 11 have been approved since 2018 and 4 since 2021. The product pipeline of ADC drugs is also abundant. According to Frost & Sullivan, as of June 30, 2023, 231 ADC drug candidates have entered the clinical stage globally, with 134, 79 and 18 in Phase I, II and III clinical trials, respectively, and 57 ADC drug candidates in the clinical stage in 2022.
The potential of bioconjugates, such as ADCs, is also evident in high-profile acquisitions and licensing deals in this area. According to Frost & Sullivan, there have been more than 100 transactions involving ADCs since 2022, including the recently announced acquisition of Seagen Inc., a leading biotechnology company specializing in the development of ADCs for the treatment of cancer, for a total of approximately $43 billion.
According to Frost & Sullivan, Chinese biotech companies have been in a leading position in ADC out-licensing transactions. According to the same sources, since 2022 and as of the Latest Practicable Date, 10 Chinese pharmaceutical and biotechnology companies have entered into a total of 14 ADC out-licensing transactions with overseas partners, totaling US$22 billion. Of the 10 Chinese companies, eight are WuXi XDC customers.
The development of bioconjugates, such as ADCs, requires a range of interdisciplinary capabilities in biologics and small molecule drugs, which most biopharmaceutical companies do not have. As a result, the outsourcing rate of bioconjugate drug development has reached about 70%, which is much higher than the 34% outsourcing rate for other biologics.
The global ADC outsourcing services market reached $1.5 billion in 2022 at a CAGR of 34.5% from 2018 to 2022 and is expected to grow significantly to $11 billion by 2030, growing at a CAGR of 28.4% from 2022 to 2030.
In addition, the logistical difficulties of transporting different bioconjugate components, the stringent requirements for safe manufacturing and handling of cytotoxins, and the increasing need for accelerated development timelines pose significant challenges to the vast majority of outsourcing service providers in this space. WuXi XDC believes that these challenges are best addressed through an end-to-end CRDMO with integrated service capabilities and close proximity to facilities, as is the case with the company.
WuXi XDC's comprehensive one-stop bioconjugate platform provides end-to-end CRDMO services, including discovery, process development, and GMP manufacturing of bioconjugates, monoclonal antibody intermediates, and bioconjugates-related linkers and payloads.
The Company's discovery services include discovery chemistry, conjugation discovery, in vitro and in vivo characterization, and developability studies to select preclinical drug candidates. The company also empowers preclinical and clinical research through bioconjugated drug substance process development, bioconjugate formulation development, analytical method development, post-stage development and process validation.
In addition, WuXi XDC offers non-GMP and GMP-compliant bioconjugated ingredients, drug substances, and drug product manufacturing through the company's dedicated and specialized facilities. The Company also expects to achieve commercial GMP manufacturing of ADC products in the near future.
WuXi XDC has accumulated extensive practical experience in bioconjugates, providing more than 7,000 bioconjugate molecules (including more than 500 protein carriers and more than 600 linkers and payloads) to the company's customers.
The company has completed CMC development and initiated GMP manufacturing with more than 10 advanced ADCs and other bioconjugate drug conjugates, making the company's conjugation technology portfolio one of the broadest in the industry, according to Frost & Sullivan.
According to Frost & Sullivan, in terms of revenue in 2022, WuXi XDC ranked second in the world and first in China in terms of CRDMO of bioconjugates such as ADCs. With the Company's comprehensive one-stop bioconjugate platform, the Company's global market share by revenue increased from 1.8% in 2020 to 4.6% in 2021 and further increased to 9.8% in 2022.
According to Frost & Sullivan, as of the end of 2022, the company had 94 overall projects in progress, accounting for more than 35% of the total number of global bioconjugate drug outsourcing projects in the same year. As of the end of 2020, 2021 and 2022, and June 30, 2023, WuXi XDC had 9, 12, 24 and 30 ADC drug candidates, respectively, from discovery to CMC development as a result of the "Enablement" strategy.
The number of WuXi XDC customers increased significantly from 49 in 2020 to 115 in 2021 and further to 167 in 2022. As of June 30, 2023, the Company has served a total of 304 customers, including most of the major players in the global ADC and bioconjugate markets. As of the same date, the Company has won all ADC development contracts for ADC drug candidates with dual IND and/or BLA submissions in China and the U.S., and since 2022, eight of the 10 Chinese companies that have outsourced their ADC pipelines overseas are the Company's customers.
According to Frost & Sullivan, WuXi XDC had the largest number of ADC and other bioconjugate programs in the world in 2022. As of June 30, 2023, the company has 110 overarching projects in progress and has helped customers submit IND applications for 47 ADC drug candidates, and in 2022 alone, the company has helped customers submit IND applications for 18 ADC drug candidates worldwide. Since its inception and as of June 30, 2023, the Company has executed 350 discovery projects.
WuXi XDC recorded strong revenue growth during the Track Record Period. For the years ended December 31, 2020, 2021 and 2022 and the six months ended June 30, 2023, the Company's revenue was RMB96.4 million, RMB311 million, RMB990 million and RMB994 million, respectively. During the same period, the company recorded net profits of 26.3 million yuan, 54.9 million yuan, 156 million yuan and 177 million yuan respectively. During the same period, the company's adjusted net profit (non-IFRS measure) was 32.8 million yuan, 77.1 million yuan, 194 million yuan and 216 million yuan, respectively.
As of June 30, 2023, WuXi XDC had an outstanding order backlog of US$411 million. As of the same date, the Company had 67 ongoing preclinical bioconjugate programs and 43 ongoing post-IND bioconjugate programs. As the pre-IND project progresses to the post-IND phase and the post-IND project progresses through the clinical and commercialization phases, the general range of project contract value is also expected to increase and revenue growth is expected.
WuXi XDC is headquartered in Wuxi, China. As of the Latest Practicable Date, the Company operated three bases in Wuxi, Shanghai and Changzhou. These bases are located within a radius of 200 kilometres or about two hours' drive, which facilitates logistics coordination and management, improves efficiency, and potentially reduces overall costs.
As of the Latest Practicable Date, WuXi Biologics directly owned 60% of the total issued share capital of the Company, while WuXi AppTec's indirect subsidiary, WuXi STA Pharmaceuticals, had a direct 40% interest in the total issued share capital of the Company. WuXi STA is directly wholly owned by Shanghai WuXi STA, which is 98.56% owned by WuXi AppTec (Shanghai), which is directly wholly owned by WuXi AppTec. Immediately following the IPO, WuXi Xi STA Pharmaceuticals, Shanghai WuXi STA Pharmaceuticals, WuXi AppTec (Shanghai) and WuXi AppTec will remain the controlling shareholders of the Company, and the Company will remain subsidiaries of WuXi Biologics.
The proceeds from WuXi XDC's Hong Kong IPO are intended to be used for the construction of the Company's manufacturing facilities in Singapore and the expansion of the Company's antibody intermediates manufacturing capacity in China to further expand the Company's manufacturing capacity, to selectively pursue strategic alliances, investments and acquisitions to expand the Company's technology platform and service offerings, and for working capital and other general corporate purposes.