Chinese biotech giant Wuxi AppTec sees first-half earnings surge amid US scrutiny

 Wuxi AppTec, Asia’s largest provider of contract pharmaceutical research, posted net income that smashed market expectations in the first half of the year amid strong demand tied to weight-loss and diabetes drugs, as well as gains in its US business.

Interim net profit attributable to the owners of the Shanghai-based drug contractor advanced 33.7 per cent to 11.08 billion yuan (US$1.64 billion) from a year earlier, surpassing a Bloomberg mean consensus estimate – drawn from a pool of 25 analysts covering the stock – of a 14.5 per cent increase.

Driven by strong commercial momentum across various client drug programmes, “we delivered strong growth across revenue, profit and cash flow” in the first half of 2026, said Li Ge, chairman and CEO of Wuxi AppTec, in a statement on Monday.

The company’s Hong Kong-traded shares edged up 1.37 per cent to HK$162.90 on Monday. The stock has jumped about 62 per cent, year to date. Hong Kong’s stock benchmark, the Hang Seng Index, rose 0.48 per cent on Monday.

Wuxi AppTec generated 28.9 billion yuan in revenue for the first half of the year, marking a 38.9 per cent year-on-year increase.

Sales in the United States climbed to 22.28 billion yuan in the first half of 2026, compared with 14.24 billion yuan during the same period last year. The US revenue accounted for about 77 per cent of its total revenue.

Earlier this year, the company had forecast full-year revenue of between 51.3 billion yuan and 53 billion yuan, with continuing operations expected to expand 18 to 22 per cent, year on year.

Wuxi AppTec’s “tides” business, which includes GLP-1 peptides, has been the company’s growth engine since 2022, according to a Nomura report in July. Revenue from such business rose 44.3 per cent, year on year, to 7.26 billion yuan in the first half, with full-year revenue expected to grow by about 45 per cent.

Wuxi AppTec has increasingly found itself caught in the crossfire of Washington’s efforts to curb China’s growing biotechnology ambitions. In June, the US Department of Defence placed Wuxi AppTec on its 2026 Section 1260H list of alleged “Chinese military companies” – a designation that could jeopardise the firm’s eligibility for future US government contracts under the Biosecure Act.

WuXi AppTec sued the US Department of Defense on June 11.

“This erroneous designation is not supported by facts or law,” CEO Li said in his statement on Monday. “We have taken legal action to protect the interests of our customers, employees and shareholders.

“We believe that the facts will prevail after an objective and fair judicial review of this ongoing litigation.”

The move is part of a broader crackdown by US lawmakers on China’s biotech sector. In late June, the House Select Committee on China opened an investigation into five major American drug makers, Bristol-Myers Squibb, Eli Lilly, Merck, AbbVie and Pfizer, demanding details on clinical trials that the companies conducted at People’s Liberation Army hospitals and in the Xinjiang Uygur autonomous region, citing ethical and national security concerns, according to a statement from the committee.

https://www.scmp.com/business/banking-finance/article/3362817/chinese-biotech-giant-wuxi-apptec-sees-first-half-earnings-surge-amid-us-scrutiny