On the evening of January 14, several listed companies under the WuXi group released a joint announcement: WuXi XDC (WuXi Biologics’ conjugates arm) has made a full takeover offer for Mabpharm Limited (Dongyao Pharmaceutical) at a cash price of HK$4 per share.
In the capital market, it is rare for one listed company to completely acquire another. Mabpharm has approximately 773 million shares outstanding, with a total market capitalization of about HK$3.091 billion (approximately RMB 2.763 billion). The maximum consideration for the offer is around HK$2.79 billion. According to the announcement, the offer price represents a 99% premium over Mabpharm’s closing price of HK$2.01 on December 22, 2025 (the last undisturbed trading day), and a 280.79% premium over its audited net asset value per share of HK$1.05.
The rationale is clear. Mabpharm began transitioning from a biotech company to a CDMO (Contract Development and Manufacturing Organization) in 2020, but its operating performance has remained weak. Last year, it slipped back into losses and experienced the departure of senior executives. Its sluggish performance kept its share price hovering between HK$1 and HK$2 for a long time, indicating the need for stronger operational support.
More importantly, Mabpharm owns the production capacity that WuXi XDC urgently needs. ADC (antibody-drug conjugate) manufacturing is highly complex, and building new facilities—from site selection to regulatory certification—typically takes three to five years. Mabpharm’s ADC capacity is already in place. According to its financial reports, by the end of 2024, the company had over 20,000 liters of antibody bioreactor capacity, multiple 100–500 liter conjugation reactors for ADC drug substance, and commercial formulation facilities capable of producing up to 50,000 vials per batch.
The deal is clearly beneficial to both sides, with Mabpharm gaining the most in the short term. Following the announcement, Mabpharm’s share price surged as much as 77% on January 15, closing at HK$4.19 per share. WuXi XDC’s shares rose 5.61% at the open but later retreated, ending the day down 3.76%.
Globally, ADC production relies heavily on outsourcing. The hotter ADC R&D becomes, the stronger the demand for CDMO services. As an industry leader, WuXi XDC is in a phase of rapid growth, with revenue and net profit in 2025 increasing by 45% and 38%, respectively.
In recent years, WuXi XDC has accelerated expansion at its facilities in Wuxi, Singapore, and other locations. By the end of 2025, its Wuxi site had achieved a single-batch drug substance scale of up to 2,000 liters, annual payload-linker capacity of 50 kg, and annual conjugated formulation output of approximately 15 million vials, with plans to expand to 37 million vials by early 2028.
In September last year, the company successfully completed a US$350 million refinancing, mainly to fund further capacity expansion. With the ADC development boom continuing, WuXi XDC cannot afford to let production bottlenecks constrain growth.
Mabpharm was among the earliest Chinese companies to develop ADC drugs, including HER2 ADCs following the model of trastuzumab emtansine. However, its pipeline lacked competitiveness and failed to achieve timely commercialization. As a result, it began transforming into an ADC CDMO in 2020. Currently, it operates two antibody production lines and two complete commercial ADC production lines, with annual antibody drug substance capacity of 300,000 liters and formulation capacity of 30 million units; ADC drug substance capacity of 960 kg and formulation capacity of 5.3 million vials.
The company claims that for standard XDC projects, the timeline from DNA sequence to IND filing can be shortened to as fast as 11 months. By the first half of last year, it had added 14 new ADC projects, bringing the total to 169, with signed but unfulfilled orders worth RMB 200 million. After the acquisition, these capacities and projects can be directly integrated into WuXi XDC’s operations.
The biggest question for the market is whether WuXi XDC can fully utilize Mabpharm’s capacity after the acquisition.
ADC development enthusiasm remains strong and is expected to continue for years. As of the end of December 2025, 21 ADC drugs had been approved globally, with more than 1,100 pipelines in development. However, many companies are targeting the ADC CDMO market. Among listed Chinese firms alone, players such as Mabpharm, Asymchem, Porton Pharma, and AusBio are all rapidly expanding capacity.
Although Mabpharm built certain manufacturing advantages, its CDMO business has only been operating for a few years and contributes just about 15.8% of revenue. Its in-house product development and CDMO operations failed to generate strong synergy, leaving it still heavily reliant on product sales—primarily a bevacizumab biosimilar, which now faces pressure from centralized procurement. In 2025, intensified competition, delayed order deliveries, and rising overseas expansion costs pushed the company back into losses.
This case highlights that despite the high technical barriers of ADC manufacturing and the limited number of specialized global CDMOs, not all capacity can secure sufficient orders—otherwise Mabpharm would not have been acquired. Whether WuXi XDC can translate the newly acquired capacity into large contracts remains to be seen.
WuXi XDC has stated that after completion, Mabpharm will remain listed, while its operations will be continuously reviewed, with adjustments made where necessary. On the client side, some major ADC developers, such as AstraZeneca and Daiichi Sankyo, have also begun building their own production capacity. Although not yet a dominant trend, it signals potential changes in the market environment.
In this context, CDMOs must build strong competitive moats in delivery quality and efficiency to enhance client stickiness. WuXi XDC disclosed that by the end of December 2025, it had more than 630 global clients and 252 iCMC projects. In the ongoing race of capacity and efficiency, the company is determined to maintain its leading position.
