WuXi PharmaTech (Cayman) Inc. (“WuXi PharmaTech” or “the Company”), the leading China-based pharmaceutical and biotechnology research and development outsourcing company, today announced its unaudited financial results for the second quarter ended June 30, 2007.

Second Quarter 2007 Highlights:

— Total net revenues increased 99.3% over the second quarter of 2006 to
US$30.2 million.
— Net income increased 482.1% over the second quarter of 2006 to US$7.1
million.
— Diluted earnings per American Depositary Share (“ADS”) for the second
quarter of 2007 was US$0.11. Diluted earnings per ADS excluding share-
based compensation expenses (non-GAAP) for the second quarter of 2007
was US$0.13.
“During the second quarter of 2007, we experienced strong revenue and earnings growth compared to the same period last year,” said Dr. Ge Li, Chairman and Chief Executive Officer of WuXi PharmaTech. “We achieved solid growth throughout our business divisions, with revenue from laboratory services up 102.1% and revenue from research manufacturing up 86.8%. In the second quarter of 2007, laboratory services remained the major revenue contributor, accounting for 83.1% of our total net revenues, with research manufacturing accounting for the remainder. Our strong revenue growth was driven by the robust demand for drug R&D outsourcing services that we provide, and was a direct result of our ability to expeditiously deliver quality results to customers. As we continue to implement our growth strategy of becoming a full service provider of drug R&D outsourcing services, we are making steady progress in the expansion of the Jinshan manufacturing facility and the design of our new preclinical drug safety evaluation center in Suzhou.”

Second Quarter 2007 Unaudited Financial Results

Net Revenues. Net revenues amounted to US$30.2 million in the second quarter of 2007, compared to US$15.2 million for the second quarter of 2006, representing an increase of 99.3%, primarily attributable to increased business volume and the expansion of services and capacities. Net revenues from laboratory services increased by 102.1% from US$12.4 million in the second quarter of 2006 to US$25.1 million in the second quarter of 2007. This increase was a result of an increased number of projects and expanded laboratory service offerings. Net revenues from research manufacturing increased 86.8% over the second quarter of 2006 to US$5.1 million. Research manufacturing increased on an annualized basis as the Company has expanded and ramped up manufacturing capabilities.

Gross Profit. Gross profit increased 118.0% to US$15.3 million in the second quarter of 2007, compared to US$7.0 million in the second quarter of 2006. Second quarter 2007 gross profit reflects laboratory services cost of revenues of $11.8 million, compared to $5.7 million in the second quarter of 2006, and research manufacturing cost of revenues of $3.2 million, compared to $2.4 million in the second quarter of 2006. Overall gross margin was 50.5% in the second quarter of 2007, up from 46.2% in the second quarter of 2006. The increase was primarily due to the improvement in our research manufacturing gross margins of 37.7% in the second quarter of 2007, compared to 11.2% in the same period of 2006, as at that time we had expanded our manufacturing capacity but had not yet ramped up production.

Operating Expenses. Operating expenses, consisting of selling and marketing expenses and general and administrative expenses, increased by 41.6% from US$5.5 million in the second quarter of 2006 to US$7.8 million in the second quarter of 2007. This increase was primarily due to business expansion. Operating expenses as a percentage of total net revenues decreased from 36.2% in the second quarter of 2006 to 25.7% in the second quarter of 2007.

Share-Based Compensation Expenses. The Company’s share-based compensation expenses, which were allocated to related expense line items, decreased in aggregate by US$1.7 million in the second quarter of 2007 from the second quarter of 2006.

Net Income. Net income increased by 482.1% from US$1.2 million for the second quarter of 2006 to US$7.1 million for the second quarter of 2007. Net income excluding share-based compensation expenses (non-GAAP) for the second quarter of 2007 was US$8.6 million, a 96.7% increase compared to the non-GAAP net income of $4.4 million from second quarter of 2006. Diluted earnings per ADS was US$0.11 for the second quarter of 2007. Diluted earnings per ADS excluding share-based compensation expenses (non-GAAP) was US$0.13 for the second quarter of 2007.

Cash Flow. As of June 30, 2007, the Company had a cash balance of US$48.5 million. Net cash inflow from operating activities was US$13.0 million in the second quarter of 2007, compared to an inflow of US$15.5 million in the first quarter of 2007.

Initial Public Offering. On August 9, 2007, WuXi PharmaTech successfully completed its initial public offering (“IPO”) of 15,167,326 American Depositary Shares (“ADSs”), including 1,978,347 ADSs issued in connection with the exercise of the over-allotment option in full. Each ADS represents eight of our ordinary shares.

In addition, upon the consummation of the IPO, 216,498,550 preference shares that were classified as mezzanine equity as of June 30, 2007, were automatically converted on a one-for-one basis into 216,498,550 ordinary shares or the equivalent of 27,062,319 ADSs.

Business Outlook

The Company estimates that its revenues for 2007 will range from US$128 million to US$132 million.

Conference Call

Following the earnings announcement, WuXi PharmaTech’s senior management will host a conference call at 8:00 am (Eastern) / 5:00 am (Pacific) / 8:00 pm (Beijing/Hong Kong) on Thursday, September 6, 2007 to discuss its 2007 second quarter financial results and recent business activities. The conference call may be accessed by calling (US) +1 718 354 1157 / (UK) +44 (0)20 7138 0815 / (HK) +852 3002 1616. A telephone replay will be available shortly after the call until October 5, 2007 at (US) +1 718 354 1112/ (UK) +44 (0)20 7806 1970 / (HK) +852 3002 1607, Passcode: 1468987.

A live webcast of the conference call and replay will be available on the investor relations page of WuXi PharmaTech’s website at http://www.wuxipharmatech.com .

About WuXi PharmaTech

Founded in 2000, Shanghai-based WuXi PharmaTech is the leading China-based pharmaceutical and biotechnology R&D outsourcing company. As a research- driven and customer-focused company, WuXi PharmaTech provides pharmaceutical and biotechnology companies a broad and integrated portfolio of laboratory and research manufacturing services throughout the drug discovery and development process. WuXi PharmaTech’s services are designed to assist its global partners in shortening the cycle and lowering the cost of drug discovery and development by providing cost-effective and efficient outsourcing solutions that save its customers both time and money. Its operations are grouped into two segments: laboratory services, consisting of discovery chemistry, service biology, analytical, pharmaceutical development and process development services, and research manufacturing, focusing on manufacturing of advanced intermediates and active pharmaceutical ingredients for R&D use. In 2006, WuXi PharmaTech provided services to 70 pharmaceutical and biotechnology customers, including nine of the top ten pharmaceutical companies in the world, as measured by 2006 total revenues. For more information, please visit: http://www.wuxipharmatech.com .

Posted: 09|6|07 at 9:38 am. Filed under: Finance News.