WuXi PharmaTech ($WX) has been in expansion mode for its manufacturing, which of course, comes with financing pressures. To raise some cash for the expansion of its small-molecule manufacturing subsidiary, SynTheAll Pharmaceutical, WuXi intends to sell off 6% of the business in anticipation of raising $80 million.
The China and U.S.-based WuXi said in a statement last week that it has an agreement to sell 7,160,000 common shares of SynTheAll (STA) stock to 33 institutional investors in China. The private placement deal is for ¥498,694,000 in cash, which it says amounts to about $80 million at current exchange rates. It said the investors agreed to sit on the shares for at least 12 months, the same lock-up period agreed to by WuXi and STA management who bought shares. When it is done, WuXi says it will still own 89.1% of the drug manufacturing operation.
STA manufactures small-molecule advanced intermediates and APIs for preclinical and clinical trials and for commercialization. It has manufacturing operations in Shanghai in the Waigaoqiao Free Trade Zone and in Changzhou in Jinshan. WuXi said STA is building new facilities in Changzhou to give a big boost to its production capacity, which the $80 million will help cover.
SynTheAll is not part of WuXi's biologics operations, which the company also is expanding in Changzhou. In May, it said it would invest about $100 million in a two-year project to double a biologics facility there. It also is building 45,000 square feet of clinical and commercial manufacturing space at its cell technologies operations in Philadelphia.
- here's the release
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