WuXi PharmaTech Earmarks Proceeds from Share Offering for Facilities

WuXi PharmaTech (WX), the Shanghai-based CRO, announced after the close of trading on Friday that it would put 10.1 million ADSs up for sale in a secondary offering. Shares of WuXi ended the session on Friday at $22.15, making the proposed offering worth almost $224 million.

In the secondary, 4.26 million ADSs will be sold by the company, while 5.85 million ADSs will come from selling shareholders. WuXi said that 21 million ADSs would be outstanding after the completion of the transaction. However, the company also has 553,715,502 ordinary shares outstanding. Each ADS is worth 8 ordinary shares, so the ordinary shares are equivalent to an additional 69.2 million ADSs. Additional shares are reserved for options, employee incentive plans and convertible notes.

The company said it would earmark its share of the proceeds for the following projects:

• $33 million for Jinshan facility expansion
• $37 million for construction of preclinical drug safety evaluation center in Suzhou
• The rest for general corporate purposes, including working capital and acquisitions

Chairman and CEO Ge Li will sell 8 million ordinary shares (1.6% of the outstanding), leaving him with 27.2 million shares, or 5% of the total outstanding. All together, board members and executive offices of WuXi will sell 20.9 million ordinary shares in the offering, which comprises 4.2% of the total outstanding.

FMR LLC, the Fidelity Mutual Fund complex, will not sell any of its shares, though its holdings in WuXi PharmaTech will be diluted by about 1% in the transaction, dropping its ownership to 18.23%.

Various subsidiaries of United Overseas Bank of Singapore will sell 25 million shares or 5% of the total shares outstanding.

In August 2007, WuXi completed its IPO on the NYSE, offering 13.2 million ADSs at a price of $14 per share. The offering raised $153 million in net proceeds.

Disclosure: none.