WuXi AppTec Forges Ahead with Optimistic 2024 Forecast Amid U.S. Regulatory Challenges

WuXi AppTec

Amid a climate fraught with uncertainty, WuXi AppTec, a renowned Contract Development and Manufacturing Organization (CDMO), has adopted a strategy of perseverance, unveiling an optimistic forecast for 2024. This positive outlook comes despite looming concerns over a crackdown in the U.S. related to national security issues.

WuXi AppTec is setting its sights on revenue growth and the successful execution of expansion initiatives in the coming year, undeterred by potential challenges posed by U.S. legislation that threatens to significantly impact the company’s operations in the region. This legislation could jeopardize a substantial portion of WuXi AppTec’s business, with the company having derived 65% of its total revenue, amounting to 26.1 billion yuan ($3.6 billion), from its U.S. clientele last year.

The company shared its annual forecast alongside its 2023 financial results, which showcased a 2.5% increase in revenue to 40.34 billion yuan ($5.6 billion). Notably, excluding COVID-19 related projects, WuXi AppTec’s growth was an impressive nearly 26% year-over-year. A significant portion of this revenue was generated in the U.S., with European sales contributing 12%, China 18%, and Japan, Korea, and other regions making up 5%, as per the company’s earnings report.

Looking ahead to 2024, WuXi AppTec anticipates revenue to range between 38.3 billion and 40.5 billion yuan, marking a growth of 3% to 9% after discounting COVID projects. The company also expects to maintain healthy cash flow, which will support its ongoing capacity expansion endeavors.

Despite the external uncertainties, particularly those related to the BIOSECURE Act, WuXi AppTec remains steadfast. In January, WuXi AppTec, along with WuXi Biologics, found themselves labeled as “foreign adversary biotech companies of U.S. national security concern” under the proposed legislation, which also targeted Chinese genomics firms such as BGI Group, MGI, and Complete Genomics.

In response to these allegations, WuXi AppTec’s leadership, including the CEO and co-CEOs, issued an open letter in February to contest the U.S. defense bill, which they deemed “misguided.” They refuted the “blanket allegations” and stressed that the company poses no national security risk to any nation.

The potential enactment of the BIOSECURE Act poses a significant threat to WuXi AppTec’s business, as it could prevent the company from securing U.S. contracts or grants and prohibit the federal government from engaging with drugmakers associated with the companies identified in the bill. This could have far-reaching implications for many firms within the U.S. life sciences sector.

Amid these challenges, WuXi AppTec’s chairman and CEO, Ge Li, leveraged the earnings announcement to reiterate the company’s opposition to the BIOSECURE Act. He emphasized the need for due process and highlighted that the legislation is still under review, allowing for possible amendments. During this period, WuXi AppTec plans to “explore possible solutions” and advocate for a fair assessment based on factual evidence.


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