Several major US asset managers, including BlackRock, have increased their investments in WuXi AppTec, a Chinese pharmaceutical contractor, over the past two months. The move comes as orders for drugs used in weight-loss treatments surge, boosting expectations for the company's earnings in the first half of the year.
WuXi AppTec provides contract development and manufacturing services to drugmakers. Global investors are showing growing interest in China's pharmaceutical services and biotechnology sectors, according to Linda Shu, head of China healthcare research at HSBC. "WuXi AppTec is heavily owned given its..." she said, noting the company's prominent position in the market.
The increased backing from firms like BlackRock signals confidence in the demand for weight-loss medications, which have seen a sharp rise in popularity worldwide. The investments are seen as a bet that WuXi AppTec will benefit from the manufacturing needs of these drugs.
The trend reflects a broader interest in China's healthcare industry, which has been expanding rapidly. While some investors have been cautious due to geopolitical tensions, the strong performance of the drug manufacturing sector is drawing capital back.
The exact value of the increased stakes was not disclosed. WuXi AppTec did not immediately respond to requests for comment.