WuXi PharmaTech Inc. (WX)

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Last Call: WuXi down on disappointing AppTec sales
Wednesday May 28, 5:19 pm ET
Shares of WuXi PharmaTech fall over 1st-quarter revenue disappointment in AppTec unit

NEW YORK (AP) -- Shares of WuXi PharmaTech Inc., a China-based pharmaceutical and biotechnology research and development outsourcing company, fell Wednesday as some analysts were disappointed by first-quarter results at the company's recently acquired AppTec Laboratory Services Inc. unit.

On Tuesday, WuXi said its profit that more than doubled in the first quarter, beating Wall Street estimates. Additionally, the company reaffirmed its 2008 revenue outlook.

However, AppTec collected $11 million in revenue, which Credit Suisse analyst J. Du characterized as weak considering that WuXi has previously estimated full-year revenue from the unit of between $85 million and $95 million.

WuXi completed its $151 million acquisition of St. Paul, Minn.-based AppTec at the end of January. AppTec provides testing, research and development, and biologics manufacturing services.

Citi Investment Research analyst Hoki Luk noted that AppTec's manufacturing gross margin was in the single digits in the quarter, compared with 16 percent in the prior-year period, which he said was much lower than expected "and meant aggressive improvement would be needed."

Nevertheless, Luk kept a "Buy" rating and $28 price target on WuXi shares.

American Depositary Shares of WuXi fell $1, or 4.6 percent, to $20.76 Wednesday.