News
NewSpring Capital Recognizes Another Successful Exit
AppTec Laboratory Services, Inc., a NewSpring Ventures and NewSpring Healthcare Portfolio Company, Sold to WuXi PharmaTech
RADNOR, PA, January 9, 2008 – NewSpring Capital is pleased to announce that AppTec Laboratory Services, Inc., a portfolio company of its affiliate funds, NewSpring Ventures and NewSpring Healthcare, has been acquired by WuXi PharmaTech (NYSE: WX), a leading China-based pharmaceutical and biotechnology R&D outsourcing company, with consideration payable to AppTec shareholders of approximately $151 million with the assumption of AppTec’s debt totaling approximately $11.7 million. Shanghai-based WuXi PharmaTech completed its initial public offering of nearly $185 million in August 2007 and cited acquisitions as a use of proceeds in their SEC-filed IPO prospectus.
NewSpring Capital, through its affiliate funds, NewSpring Ventures and NewSpring Healthcare, led AppTec’s $11 million Series B round in February 2005, in which existing investors Thomas McNerney & Partners, Affinity Capital Management, Brightstone Capital and others participated. Zev Scherl, a General Partner of NewSpring Capital and board member of AppTec commented, "AppTec has exceeded our expectations since early 2005 when we made the investment.” The exit, which is expected to close within the next sixty days pending regulatory approvals, is expected to generate an internal rate of return (IRR) in excess of 50% for both NewSpring Capital funds.
Since NewSpring Capital’s February 2005 investment, AppTec grew from 2004 sales revenues of $22 million to 2007 sales revenues expected in the range of $70-$72 million, representing a compounded annual growth rate of approximately 46%. Scherl commented, "It was a pleasure working with the CEO Bonnie Baskin and the entire AppTec management team. The AppTec investment has been a positive experience since day one for us," he said. "We are very pleased that AppTec will be a good complement to WuXi."
Dr. Ge Li, Chairman and Chief Executive Officer of WuXi PharmaTech, commented on the importance of the acquisition for WuXi, "We are very excited to announce the combination of WuXi PharmaTech and AppTec Laboratory Services, an important milestone in realizing our vision of becoming the global R&D outsourcing leader. WuXi's chemistry services will be complemented by AppTec's biologics testing and manufacturing capabilities to create a fully integrated service platform, from which we will be able to provide more value-added services to our customers. "
St. Paul, Minn.-based AppTec was founded in 2001 and provides comprehensive GLP/GMP-compliant testing, contract research and development, and custom cGMP manufacturing services for biopharmaceuticals, medical devices, cellular therapeutics and tissue-based products. The company has three state-of-the-art facilities, which are located in St. Paul, MN, Philadelphia, PA, and Atlanta, GA.
AppTec’s Chief Executive Officer Dr. Bonita L. Baskin, commented, "Combining these two companies creates a unique single source platform that has the ability to transform the outsourced R&D model globally. I, along with the AppTec team, share with Dr. Li our excitement over the prospects of this combination."
About AppTec Laboratory Services, Inc.
With over 20 years experience, AppTec is a trusted leader in providing high-value testing, contract R&D, and cGMP manufacturing services for the biopharmaceutical and medical device industries. AppTec offers a fully integrated approach for the development of highly regulated products such as biopharmaceuticals, traditional pharmaceuticals, cellular therapeutics, medical devices, and combination and tissue-based products. Possessing the full set of competencies, facilities, and key personnel necessary, AppTec helps clients take their products efficiently and cost-effectively through the product development process. The company has three state-of-the-art facilities, which are located in St. Paul, MN; Philadelphia, PA; and Atlanta, GA. All AppTec facilities are FDA registered and GLP/GMP compliant. Additional qualifications include ISO certification, AAALAC accreditation, FDA registration for HCT/Ps, and accreditation by the American Association of Tissue Banks.
About WuXi PharmaTech
Founded in 2000, Shanghai-based WuXi PharmaTech is the leading China-based pharmaceutical and biotechnology R&D outsourcing company. As a research- driven and customer-focused company, WuXi PharmaTech provides pharmaceutical and biotechnology companies a broad and integrated portfolio of laboratory and research manufacturing services throughout the drug discovery and development process. WuXi PharmaTech's services are designed to assist its global partners in shortening the cycle and lowering the cost of drug discovery and development by providing cost-effective and efficient outsourcing solutions that save its customers both time and money. Its operations are grouped into two segments: laboratory services, consisting of discovery chemistry, service biology, analytical, pharmaceutical development and process development services, and research manufacturing, focusing on manufacturing of advanced intermediates and active pharmaceutical ingredients for R&D use. In 2007, its 80 customers included nine of the world's top ten pharmaceutical companies by revenue. For more information, please visit www.wuxipharmatech.com.
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