Performance soaring, controlling stake acquired in Dongyao Pharmaceutical, WUXI XDC (02268) further solidifies its position in the ADC CDMO market.

On January 14, 2026, WUXI XDC (02268) announced its financial results for the fiscal year 2025, and also disclosed its intention to acquire Dongyao Pharmaceutical Co., Ltd. through a cash tender offer. Dongyao Pharmaceutical had previously suspended trading on the morning of December 29, 2025, awaiting the announcement of the cash tender offer. The financial results showed impressive performance by WUXI XDC as an industry leader: revenue in 2025 increased by over 45% year-on-year, gross profit increased by over 70% year-on-year, and adjusted net profit (excluding interest income and expenses) increased by over 45% year-on-year. After adjusting for exchange rate effects, this growth rate is expected to exceed 65%. As a leader in the ADC CRDMO industry, WUXI XDC leverages both organic growth and external mergers and acquisitions in a strong business environment. With the acquisition of Dongyao Pharmaceutical, WUXI XDC aims to seize the opportunity to expand and gain additional operational capacity in China, strengthen its overall production capacity, and provide better empowerment and value-added services for biotech companies. Additionally, through this controlling acquisition, WUXI XDC also hopes to enrich its project portfolio, expand its customer base, and solidify its leadership position in the ADC CDMO field. "Funding in exchange for time," breaking the production capacity bottleneck in the CDMO industry With the continuous expansion of the clinical pipeline for bi-specific drugs, the commercial turning point in the industry has arrived, further highlighting the production capacity gap. Public data shows that by the end of December 2025, there were 21 approved ADC drugs worldwide, and new types of bi-specific drugs like AOC, RDC, and PDC are rapidly emerging, leading to a rich late-stage clinical pipeline and becoming a new growth driver in the biopharmaceutical field. In the context of the accelerating commercialization of the global bi-specific drug industry, the production capacity shortage has become a core constraint on the development of the CDMO industry. With the rapid expansion of clinical pipelines and the concentrated release of commercial demand, "production delivery capacity" has become a key competitive barrier for companies and a critical indicator for measuring the performance growth of CDMO firms in the capital market. For leading CDMO companies, the path to breaking through production capacity bottlenecks directly determines their market position. Building production lines internally involves multiple stages such as site selection, construction, and certification, with a typical cycle lasting 3-5 years and difficult to match the rapid growth pace of the commercialization of bi-specific drugs. WUXI XDC actively acquires mature production facilities, compliance systems, and production capacity reserves to capture market opportunities more efficiently and become the optimal solution in the bi-specific drug CDMO race. The acquisition of Dongyao Pharmaceutical by WUXI XDC is based on this industry logic and capital efficiency considerations, aiming to rapidly increase production capacity through external integration and inject certainty into performance growth. "Adding icing on the cake," consolidating technical platforms and talent base WUXI XDC showcases its research and development advantages in the industry through advanced conjugation technology, payload-linker technology, and rich experience in bi-specific drug development. It has introduced platforms such as WuXiDARx conjugation technology, dual payload conjugation technology, X-LinC linker technology, WuXiTecan-1, and WuXiTecan-2 payload linker technology. In order to meet the diverse order and complex research and development needs of global customers, WUXI XDC has always built an integrated technology platform driven by "independent research and development + external cooperation." This approach not only enriches the technical reserves but also enhances the front-end development capabilities, consolidating its leading position in research and development. Talent is the core production factor in the bi-specific drug CDMO industry, and the contradiction between the industry's rapid development and the insufficient supply of professional talents has become a key factor restricting industry development. WUXI XDC has long been focusing on building a talented team, with the team size exceeding 2,600 by the end of 2025. As the professional talent team expands, it creates a talent aggregation effect, providing continuous talent support for the company's long-term development. Riding the wave of industry growth, constructing a global production capacity matrix According to the NextPharma database from PharmaCube, as of December 31, 2025, Chinese innovative drug BD out-licensed transactions reached a total annual amount of $135.655 billion, with an initial payment of $7 billion and a total number of transactions reaching 157, far exceeding the $51.9 billion and 94 transactions in 2024. The out-licensing of Chinese innovative drugs has shown explosive growth, with record highs in initial payments and total transaction amounts. ADC, as a core segment in the field of bi-specific drugs, has become a focus of global capital competition, and WUXI XDC's performance in this segment is particularly outstanding, with continuous revenue growth since its listing, fully demonstrating the growth potential of the bi-specific drug CDMO sector and the company's core competitiveness. With the continued growth of its business, expanding production capacity naturally becomes the "strategic cornerstone" supporting high growth. By the end of December 2025, WUXI XDC had surpassed 630 global cooperation clients, with a total of 252 iCMC projects. Additionally, the company held 18 PPQ projects and 1 commercial project, demonstrating its outstanding performance in market expansion and production capacity, reflecting the strong demand for the company's production capacity in the market. The current shortage of production capacity in the industry is not simply due to insufficient quantity but a structural shortage of "high-quality, integrated" production capacity. On one hand, hundreds of ADC drugs globally are in active clinical stages, leading to rigid demand for commercial production capacity with the rapid expansion of R&D pipelines. On the other hand, the complex production processes of bi-specific drugs, high industry barriers, and long supply chain further exacerbate the production capacity gap. In this context, WUXI XDC has completed production capacity layouts in Wuxi, Jiangyin, Hefei, and Singapore. This global production capacity layout not only accurately matches the local production needs of global clients but also enhances operational efficiency through the synergistic allocation of production capacity, consolidating the company's leading position in the bi-specific drug CDMO sector and fully leveraging the industry's growth opportunities. The expansion of production capacity continues Based on this, we believe that with WUXI XDC's consistent and steady pace, the company will continue to actively and prudently promote its overseas production capacity expansion strategy in order to further consolidate its leading position in the global bi-specific drug CDMO field. In September 2025, WUXI XDC successfully completed a $350 million refinancing round based on its outstanding performance and good reputation in the industry. Combined with the $200 million credit obtained earlier and the accumulated financial reserves, the company has formed a sufficient capital pool to solidify the foundation for advancing its global production capacity expansion strategy. Leveraging its strong financial reserves and mature expansion experience, WUXI XDC will continue to advance its overseas production capacity expansion strategy in a "proactive and prudent" manner, currently evaluating expansion opportunities globally and enhancing its global production network layout. This initiative will not only achieve local production capacity delivery but also deepen the company's market coverage in the global bi-specific drug CDMO field, consolidating its leading position in the industry. Conclusion WUXI XDC's accelerated production capacity layout is a microcosm of the rapid development of the bi-specific drug industry, driving the CDMO industry into a golden development period. According to Frost & Sullivan, the global ADC drug market was approximately $17.2 billion in 2025, with a compound annual growth rate (CAGR) of 30.6% from 2023 to 2032, and is expected to exceed $115.1 billion in 2032. The global ADC outsourcing service market is also growing strongly, with an estimated market size of $11 billion in 2030, and a CAGR of 28.4% from 2022 to 2030, providing broad growth opportunities for CDMO companies in both segments. Production capacity shortage is a phase-specific challenge in the high-growth bi-specific drug CDMO industry, and it is difficult to completely alleviate in the short term. However, in the medium to long term, with the continuous release of new production capacity by leading companies and the increase in industry concentration, the supply-demand contradiction for production capacity will gradually ease. With precise judgment of industry trends, WUXI XDC takes the lead in completing production capacity positioning through a combination of "acquisition + expansion," actively occupying a favorable position in the current production capacity competition, and is expected to lead the competition landscape in the future bi-specific drug CDMO industry with comprehensive advantages in production capacity scale, technological barriers, and global layout.