China's WuXi PharmaTech picks bankers for IPO of biologics unit

CEO Ge Li

Shanghai-based CRO WuXi PharmaTech, which delisted from the New York Stock Exchange, is finalizing its plans to relist in Hong Kong in a $1.5 billion deal and has chosen the banks that will handle the listing for its biologics unit, according to a report by Dealstreetasia.com.

The company has hired Bank of America and Morgan Stanley to arrange the Hong Kong IPO, the report said, citing sources, adding that the listing could take place in the second half of 2016.

Sources cited in the report also said WuXi is considering a mainland listing, but those plans are "at an early stage," the source said in the report.

Investors the world over are looking to biologics to be the next driver of investment growth because of high barriers to entry for competitors, patent protection and the prices that can be charged for the medicines, which are harder to produce because of their complexity, but which also can treat conditions other chemical drugs cannot.

WuXi PharmaTech delisted and went private last year in a $3.3 billion deal by founder and CEO Ge Li and a group of investors that included Ally Bridge Group, Boyu Capital, Hillhouse Capital, and Singapore's Temasek Life Sciences, according to the report.

WuXi PharmaTech announced in early January it would spend $120 million on a new biologics center at its Shanghai headquarters that would eventually house 800 scientists and cover about 250,000 square feet, according to the report.

A spate of recent public offerings by China-based, or focused, drug firms, as well as management-led buyouts, has caught attention with demand seen strong despite volatile global markets as the government steps up reform efforts in the sector.

- here's the report from Dealstreetasia.com

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