Pharmaceutical outsourcing begins to emerge from the trough

Ask AI · Why is clinical research recovery slow, and why are orders and performance out of sync?

Interface News reporter | Li Kewen

Interface News editor | Xie Xin

The pharmaceutical outsourcing (CXO) industry gradually warmed up in 2025, but the divergence is still obvious.

On March 31, 2026, Innovent new drug, Tigermed, and WuXi Advanced Therapies? (Cilasmylin?)? (Note: Please check the English name—this entity must be kept aligned with the source.)，along with WuXi PharmaTech and WuXi Biologics, all released their 2025 results. With WuXi AppTec and WuXi Biologics’ annual reports published earlier as well, the overall industry picture is already fairly clear: the R&D and production links in the mid-to-lower end are repairing first, while the upstream clinical research end is still stabilizing.

R&D and production are the main lines of repair in this round of the pharmaceutical outsourcing industry. As pipelines continue to move into later stages and commercial orders begin to be fulfilled, these two ends recover growth first in 2025. This is most clearly reflected in full-chain, platform-type companies such as WuXi AppTec, WuXi Biologics, and WuXi Advanced Therapies? (Cilasmylin?)?.

In 2025, WuXi AppTec’s chemistry business revenue was 36.465 billion yuan, up 25.5%. Of this, small-molecule R&D and manufacturing business revenue was 19.92 billion yuan, up 11.4%; revenue from oligonucleotide and peptide business was 11.37 billion yuan, up 96.0%. By comparison, revenue from testing business and biology business increased only 4.7% and 5.2%, respectively—revenue was 4.04 billion yuan and 2.68 billion yuan.

In 2025, WuXi Biologics’ revenue from late-stage clinical development services and commercial manufacturing was 9.46 billion yuan, up 26.4%; revenue from preclinical services was 2.639 billion yuan, up 31.9%; revenue from early-stage clinical development services was 9.314 billion yuan, down 30.8% year over year.

WuXi Advanced Therapies also shows a similar structure. WuXi Advanced Therapies’ revenue from chemical and formulation process development and production services was 3.483 billion yuan, up about 16.5%. By comparison, in 2025 its laboratory services revenue was 8.159 billion yuan, up about 15.8%; clinical research services revenue was 1.957 billion yuan, up about 7.1%.

Interface News Li Kewen chart

Within the clinical research end, there is also divergence: the recovery in preclinical services is slightly better than that in clinical-stage services.

The recovery in preclinical services shows up in order recovery. Taking Innovent new drug as an example, in 2025 its in-hand orders and newly signed orders were around 2.6 billion yuan. Compared with 2024, its in-hand orders were about 2.2 billion yuan, and signed orders were about 1.84 billion yuan. Among them, the signed volumes for antibody, small nucleic acids, ADC, peptide and other projects grew faster year over year. Meanwhile, high-difficulty, long-cycle projects such as reproductive toxicology in non-human primates and carcinogenicity studies remained on an upward trajectory.

This is related to the sequence by which industry demand is transmitted. As investment and financing recover, external licensing heats up, and more new modality projects emerge, the first demand to be driven is preclinical demand—namely, rigid segments such as safety evaluation, toxicology, pharmacokinetics, and new-modality validation.

But the rise in orders has not immediately translated into financial figures. There is a time lag between order recovery and performance recovery. In 2025, Innovent new drug’s nonclinical research services revenue was 1.577 billion yuan, down 17.75% year over year. Its gross margin was only 21.01%, another 8.18 percentage points lower than the previous year. Innovent new drug’s overall gross margin on main business was 20.71%, down 7.72 percentage points versus the previous year.

Clinical-stage services are still being held back by historical burdens. Tigermed is a typical example. Since 2023, the average unit price of newly signed domestic clinical operations orders has kept falling. By 2025, although the prices for newly signed projects have basically stabilized, many of the projects executed that year were still contracts secured at low prices in the previous years, and profit pressure has not yet been cleared.

In 2025, Tigermed’s net newly added orders grew 20.7%, and outstanding contracts to be executed grew 15.3%—improvement on the order side is already visible. However, the recovery on the revenue side is not obvious: main business revenue grew only 3.7%, including clinical trial technology services revenue increasing only 2.79%. More importantly, gross margin fell from 29.56% in 2024 to 20.09% now.

Behind the divergence above, there is also a hidden adjustment in the customer mix.

Multinational pharmaceutical companies have become the key large customers that pharmaceutical outsourcing companies must win. These customers have steadier R&D budgets, projects are at later stages, stronger payment capability, and a lower probability of canceling projects. That is why the mid-to-lower segments—R&D and production—recovered first.

WuXi Advanced Therapies’ performance can clearly illustrate this. In 2025, WuXi Advanced Therapies’ revenue from customers among the world’s top 20 pharmaceutical companies was 2.831 billion yuan, up 29.37%, accounting for 20.09% of operating revenue; revenue from other customers grew only 11.66%.

Pharmaceutical outsourcing companies have also begun proactively screening biotech company customers. Tigermed’s strategy adjustment reflects this change. Tigermed has clearly focused on orders from domestic pharmaceutical companies and high-quality biotech companies, while continuing to expand business with multinational pharmaceutical enterprises.

The biggest fear for pharmaceutical outsourcing companies is that customers run away halfway because they don’t have money. Now, whoever can secure customers with stronger payment ability and higher project certainty will see faster improvement in order quality and performance recovery.