WUXI PharmaTech (Cayman) Inc, a Shanghai-based drug research and development outsourcing company, plans to raise as much as US$130 million in an initial public offering in the United States to finance its expansion.
The company is offering 10 million American Depositary Shares, or ADSs, at the New York Stock Exchange. Each ADS equals eight ordinary shares and is estimated between US$11 and US$13 apiece, it said in a statement to the US Securities Exchange Commission on Tuesday night.
A group of share holders of the company, incorporated in the Cayman Islands, are also offering an additional three million ADSs, making the proportion of its stake for sale in the offering at about 20 percent.
It expects to receive net proceeds of US$107.8 million, or US$129 million if the underwriters exercise their option to buy additional ADSs in full, based on an assumed offering price of US$12.
WuXi PharmaTech benefited from the needs of global drug makers to seek outsourcing research and development to cut costs. Last year, it served 70 pharmaceutical and biotechnology companies, including nine of the world's 10 largest pharmaceutical companies.
The company plans to use US$40 million from the proceeds for expansion of its manufacturing plant in suburban Shanghai, and another US$40 million for the construction of a preclinical drug safety evaluation center in Suzhou.