(Yicai) Aug. 4 -- Shares in WuXi AppTec surged by the exchange-imposed limit in Shanghai today after the Chinese biotech firm posted a 29.4 percent jump in net profit in the first six months from a year earlier, surpassing CNY10 billion (USD1.5 billion) for the first time to reach CNY11.08 billion (USD1.6 billion).

WuXi AppTec’s mainland stock [SHA: 603259] soared 10 percent to CNY141.35 (USD21), giving the Shanghai-based firm a market capitalization of CNY421.7 billion (USD62.4 billion). Its Hong Kong-traded shares [HKG: 2359] surged 11.1 percent to HKD181.10 (USD23), lifting the company’s valuation to HKD540.3 billion (USD68.9 billion).

Operating revenue soared 38.9 percent in the six months ended June 30 from a year earlier to CNY28.9 billion (USD4.2 billion), driven by the success of multiple customer products, the strength of its Contract Research, Development and Manufacturing Organization business model and the execution capabilities of its global management team, according to the interim report released by the firm yesterday. Excluding the impact of mergers and acquisitions, its revenue from continuing operations, including its chemistry, testing and biology segments, jumped 48 percent year on year.

The supply of laboratory monkeys has remained tight this year, pushing prices sharply higher, with prices reaching up to CNY200,000 (USD29,586) per animal.

WuXi AppTec operates its own breeding farm and has been improving operational practices to increase breeding rates and reduce mortality, company management said at the earnings call today. The facilities are used exclusively for the firm’s own research needs, while procurement will remain flexible and fully compliant with market conditions, it said.

Gains from changes in the fair value of biological assets came to about CNY260 million (USD38.4 million) in the first six months, accounting for only a small portion of WuXi AppTec’s net profit of CNY11.08 billion, management added. Most of the profits were generated by its core business operations.

The National Medical Products Administration has recently sought public opinion on the proposed PIONEER initiative, or the Propel Innovation and Operation of NAM to Enhance Efficiency in Research and Development, which seeks to promote alternatives to traditional animal testing such as organoids, organ-on-a-chip technologies and artificial intelligence-based computing models.

The adoption of alternative methods is an industry trend that aligns with regulatory requirements and WuXi AppTec is actively embracing new technologies, management said. However, demand for animal testing continues to grow strongly across the industry, as most new molecular entities still rely heavily on animal data in preclinical studies such as safety evaluations. This trend is reflected in both the company’s order volume and overall business performance, it added.

Editor: Kim Taylor