WuXi PharmaTech (Cayman) Inc.
- Company Name
- WuXi PharmaTech (Cayman) Inc.
- Stock Symbol
- Class Period
- Between September 1, 2015 and December 10, 2015 or who purchased during the Class Period and held the shares on December 10, 2015
- Motion Deadline
- April 23, 2019
- Southern District of New York
The complaint charges WuXi and certain of its officers with violations of the Securities Exchange Act of 1934. WuXi is an integrated R&D services platform along the entire value chain of drug discovery and development. Originally incorporated in China, the Company reincorporated in the Cayman Islands in August 2007. Upon its reincorporation, the Company became a holding company for its numerous pharmaceutical, biotechnology, and medical device research and development services companies operating in the United States and China. Among the Company’s subsidiaries were WuXi AppTec, WuXi Biologics, and WuXi NextCODE.
On April 30, 2015, the Company announced that it had received a preliminary non-binding proposal letter to acquire all outstanding shares of the Company for $46.00 in cash per American Depositary Share (“ADS”). The take-private offer was made by a group of investors led by Wuxi’s founder, Chairman, and CEO, Ge Li, and Ally Bridge Group Capital Partners, a global healthcare-focused investment group. On August 14, 2015, the Company announced that it had entered into a definitive Agreement and Plan of Merger with New WuXi Life Science Limited (“Parent”) and WuXi Merger Limited, a wholly owned subsidiary of Parent, for approximately $3.62 billion, equal to $46 per ADS (the “Merger”). The Company’s extraordinary general meeting of shareholders where WuXi shareholders were asked to approve the Merger was scheduled for November 25, 2015.
The complaint alleges that, in support of the forthcoming shareholder vote, the defendants issued numerous false and misleading statements designed to undervalue the Company by omitting defendants’ intentions to spin-off and publicly list shares of its various subsidiaries in China. Not long after WuXi was delisted from the NYSE on December 10, 2015, defendants started to spin off and/or publicly list the securities of its subsidiaries, including WuXi Biologics, WuXi NextCODE, and WuXi AppTec, resulting in astronomical gains for defendants within the short period since consummation of the Merger.
On June 6, 2017, it was announced that defendants had completed an initial public offering (“IPO”) of its former subsidiary, WuXi Biologics, raising over $510 million. In June 2018 it was reported that defendants sold a 4.08% equity stake in WuXi Biologics for $505 million, equating to a total equity value of over $12.3 billion. In September 2017, WuXi NextCODE raised $240 million in its series B financing round, valuing the company at $1.2 billion. One year later, on November 27, 2018 WuXi NextCODE announced that it had closed its series C financing round, raising an additional $200 million.
Lastly, on May 8, 2018, WuXi AppTec completed its A-share IPO and listing on the Shanghai Stock Exchange, after receiving fast-track approval by China’s securities regulator. The offering raised $354 million, at a $3.5 billion valuation. After seeing its stock price on the Shanghai Stock Exchange more than triple since its IPO, in July 2018, WuXi AppTec filed a prospectus in Hong Kong to become dual listed. On December 12, 2018, WuXi AppTec announced that it had raised $1.01 billion in its Hong Kong debut listing. WuXi AppTec’s Honk Kong IPO valued WuXi’s former subsidiary at $10.2 billion, approximately three times the value defendants paid for the entire company barely two years prior.