WuXi Biologics Sells Irish Vaccine Plant to Merck for $500 Million Amid Overseas Asset Divestment

Source:财联社 Reporter Lu Afeng

　　FollowingWuXi AppTec(603259.SH) After selling the WuXi ATU business in the United States and the United Kingdom,WuXi Biologics(02269.HK) also followed suit in divesting overseas assets.

January 6,WuXi BiologicsPublic announcement, withMSD(MSD International GmbH) reached an agreement,MSDWill AcquireWuXi BiologicsWuXi Biologics' wholly-owned subsidiary, WuXi Hede, has a vaccine manufacturing facility in Ireland with a total transaction value of approximately 500 million US dollars. The vaccine facility is still under construction.

The establishment of the vaccine plant was originally related toMSDClosely Related. In February 2020, WuXi Biologics announced that its subsidiary, WuXi Vaccines, had entered into a strategic partnership with a "global vaccine giant," signing a 20-year vaccine production and supply contract. According to the cooperation agreement at that time, WuXi Vaccines would establish an integrated industrial production and supply base in Ireland, which would include vaccine drug substance, formulation, process scale-up, and quality control (QC) laboratories. This facility would be dedicated to producing the global vaccine giant’s innovative vaccines for the global market.

AndJanuary 6The announcement on [date] indicated that the "global vaccine giant" is MSD. This also means that the factory, which primarily provided contract manufacturing of vaccines for MSD, has been directly sold to the "client."

WuXi Biologics Chairman Chasen Chen stated that, given the Ireland vaccine facility was a dedicated site designed and built to produce commercial vaccine products for MSD to meet its business needs, the asset transaction not only allows the company to monetize its previous investment in the Ireland vaccine facility but also enhances its asset efficiency and profitability. This enables the company to focus on providing vaccine CDMO services to clients through its vaccine base located in Suzhou, China, while empowering MSD to better integrate vaccine production into its global manufacturing network, benefiting patients worldwide.

"The news about the sale of the Ireland vaccine plant had been circulating in the industry since last year, and now it has finally materialized. Personally, I believe there are two reasons: first, WuXi Biologics is attempting to divest from less promising businesses; second, there are concerns that the progress of the Biosecurity Act legislation might affect future orders for this plant," Zhao Heng, founder of healthcare strategy consulting firm Latitude Health, told reporters from Caixin.

On December 24 last year,WuXi AppTecPublic Announcement: The entire WuXi ATU business in the U.S. and the U.K. will be sold to Altaris, an American private equity fund. At the time, the industry viewed this move as shedding allegations and suspicions related to gene services while attempting to avoid risks associated with the U.S. Biosecure Act. On the other hand, some believed that selling the ATU business might weaken the company’s long-term potential in the cell and gene therapy field.

Notably, WuXi Biologics will leverage this transaction toWuXi AppTecSimilarly, a large amount of cash flow was generated.

Particularly, at the end of August last year, WuXi Biologics announced to the public that the shareholders...Haili BiologicsWuXi Biologics to Acquire 30% Stake in WuXi MSD for $109 Million, Becoming the Wholly-Owned Parent Company of WuXi MSD.

Editorial Responsibility: Chang Fuqiang