WuXi Biologics (Cayman) Inc. (2269.HK) Earnings Call Transcript & Summary

Good morning, everyone. Welcome to this session. I'm Yang Huang, China health care analyst of JPMorgan based in Hong Kong. Welcome to this session to be presented by WuXi Biologics. And the presenter will be WuXi Biologics' CEO, Dr. Chris Chen. Dr. Chen, we can get started.

Good morning. It's my time to report to you guys every year about the exciting progress of WuXi Biologics. So this year, we chose the title of A Scaled CRDMO Platform Delivering Sustainable High Growth. The scale at WuXi Biologics is incredible, and our business model, CRDMO, is very unique. And we want to make sure that we can deliver sustainable high growth. I'm going to start with briefly talking about our business model, mostly give you guys a business update and strategic footprint expansion. I cannot come to this conference without showcasing our technology leadership and our ESG progress. And then I'll give you a summary and outlook. Our business model is incredibly -- again, we said we are a scaled, integrated CRDMO model, basically a one-stop shop and with a huge scale. So our vision is every biologic can be made. We have delivered on that vision for the past 15 years. Every project that came to WuXi, we delivered. That's not an easy statement. Every biologic project that came to WuXi, we delivered. And that's why our mission -- our vision is every biologic can be made. We said our mission is accelerating the discovery, development and manufacturing of biologics for global partners and global clients. We did that. And then last year, we launched our CRDMO+ strategy. We really want to continue to focus on our clients, continue the global expansion, continue to innovate with our technology and continue to be agile to make our clients the best partners of the work. The enablers of our CRDMO strategy, we are very -- we are fully compliant with any global regulation. We have premier quality. Every BLA we filed gets approved. We are pushing into digital and WBS. WBS is our lean system, and we're proud of what we do. As I mentioned, we are a scaled CRDMO platform. What's our scale? Look at every year, we can deliver 10 PCCs, 10 assets, for our partners to use. We can deliver 200 INDs. I cannot imagine any other company who can do 200 INDs a year, who can do 20 BLAs a year. We will do 200 INDs this year. As you guys have seen from the slide, we signed 209 projects last year. So it's end-to-end, one-stop shop. So we started with, if you are an entrepreneur from Stanford University, we make the first milligram of protein for you, first gram, first kilogram, first metric ton. So as we scale manufacturing, our revenue grows exponentially as well. That's our business model. We cover all the modalities you think of: monoclonal antibody, bispecific, antibody drug conjugate. Because the technology is our strength, the more complex the molecule is, the higher market share we are. That's why recently, for the past couple of years, ADC and bispecifics are about 2/3 of our portfolio. And they also continue to be the fastest-growing segment of our industry. So we benefit really from more complex modality. So as a result, we won the 2025 Global Customer Value Leadership Award from Frost & Sullivan. So over the past 5 years, this week, everyone is very happy about M&A, right? Everyone is anticipating something big is going to happen. Over the past 5 years, 72 of WuXi Biologics clients was acquired, an average valuation of $1.4 billion. So because of our CMC work, we have helped 72 companies, 72 of my clients become acquired and become part of large pharma. And as a result, investors get rewarded with $100 billion of money. So going to the right side, over the past couple of years, we have already filed 600 INDs, 600 INDs, over the past couple of years. This year alone, we're going to -- have filed 200. You see the acceleration. On the commercial side, we have 25 commercial projects, we have 74 Phase III programs. Our reliability is unheard of, go back to our vision, every biologic can be made. Our manufacturing success rate is almost 98%, 99%. So that's almost -- if you sign a contract with us, you almost like bought an insurance. 10 years ago, when I visited Boston Biotech, every CEO -- if you ask every CEO, 50% of them had a headache with biotech manufacturing. 50%. Half of them have -- if you're an investor, your portfolio company run into CMC issue, get a CRL from FDA. But now with WuXi Biologics' help, you don't have that headache. I think that's how reliable we are. And then on the regulatory side, as I said earlier, 100% of BLAs we filed get approved. So really I want to give you an update on our business side. As I said, we are CRDMO. The R part is very unique. Again, if you are a professor here at Stanford, you come up with an idea for pancreatic cancer. Who can help you create that molecule? We can. Because we use our platform, we use our CD3 platform, we use the ADC technology, use our big library. As a result of helping you get the molecule, we get 3% to 5% royalties. And if you couldn't -- if we use more technology, we can even get 5%, 8% royalties. And if we are lucky, we even get 10% royalties. So last year, the upfront payment and milestone payment from all those programs is actually a record high. And the biotech dollar we just generated from last year's contract alone reached $4 billion. Just CD3, as you know, our CD3 bispecific is a huge class, I believe is going to be more than 20 products approved. WuXi Biologics plays a key role in there. Back in 2016, we started to invest in our own CD3 platform. We looked at everyone's CD3, we said, "That's not the best. That's not the best for the industry." We start investing in our own CD3 platform. We spent $10 million in 3 or 4 years. Now every year, we're getting $50 million to $100 million return, almost net profit. So that's almost already a 10x return. Fast forward another 5 years or even 10 years, we may even get $1 billion of royalties from those programs. We have 20 programs that carry royalties, from regular 3% to 5% to as high as 10%. So again, 20 programs with 5% to 10% royalties, unbelievable. So this is an investment -- a couple of million dollar investment back in -- 10 years ago. Now it's generating $50 million to $100 million profit, and eventually will generate billions of dollars of profit. That's the beauty of WuXi Biologics are, and I think this is really exciting. And again, if you have the program, back in 2018, we signed a program with CTTQ, and later with Curon/Merck, GSK, RD. RD just announced very exciting science -- I'm sorry, Candid. Candid just announced a very exciting program. And then Zai Lab. And then last Christmas with another major multinational companies. So those are the programs, again, hopefully, will generate hundreds of millions of dollars of revenue and profit this year, next year, and will generate hopefully $1 billion of revenue and profit 5, 10 years from now. And those are the programs we're carrying royalties. We have a very exciting program from BioNTech, the B7-H3 antibody, Duality/BioNTech. We have a very exciting program from Merck, from GSK and from other large pharma who we cannot disclose. We have 50 programs like this, okay, 50 programs. So those -- this -- the revenue and profit from this is already a significant part of our business today. Last year, we estimate about 20% of profit comes from this business. Although this is a very small revenue, but because they are pure profit, so it's a very small percentage of revenue, but it's already 20% of profit large year. The year before, it's 15%. Fast forward another 5 years, maybe about 25% of profit comes from royalties, milestones and upfront payment. That's why our margin will continue to lead the industry. If you are an investor, this is famous, what we call golden funnel or diamond funnel, right? This funnel represents the more projects we're working on right now. It's unbelievable. Our funnel is getting close to 1,000 molecules. When I left Lilly and started this effort myself, my Lilly friend said, "It will be fantastic if you can work on 100 projects, 100 biologic programs." And then 15 years later, now we're close to 1,000 programs. And this tops any company's own portfolio. Again, because we are a service business, every molecule in the funnel gives me money, gives me revenue and profit. So there is no scale issue. Right? No matter how much money you have on R&D, you have limits, you cannot develop 1,000 molecules. There's no limit. This could be 1,000, it could be 1,500, it could 2,000, it could be 5,000, if our industry has the need. If AI can transform discovery, if someone can discover antibody in silico in a minute, I can develop them with -- they can give me 100 projects, I can develop them in a year. So we will be beneficiary of AI revolution in the next couple of years because we have the scale to deliver. We're delivering 200 INDs this year. Why not 300 in 5 years? Why not 400 in 5 years? There's no limit because every project contributes revenue and profit to us, right? So if you look at this golden funnel, we have close to -- we have 945 programs. Last year alone, we added 209 projects. That's why I said, this year we'll probably deliver 200 INDs. We have 25 commercial programs, we have 74 Phase III programs. So I always tell investors, when you look at WuXi Biologics, this is the only chart you need. You know we'll grow. You know our R is very good, you know our D is incredible, you know our M will give you a hockey stick growth, because of the funnel. As the program moves, that's the beauty of our CRDMO model, R will lead to D, D will lead to M. Even during BIOSECURE, our D to M conversion is more than 90%. Basically, clients -- once the project gets into the funnel, they don't leave. That's the stickiness of biologics. That's really our business model. If you look at the funnel, one big -- one great thing is actually more than -- last year, we signed 209 projects, is record high. The year before was 150. When we IPO-ed 15 years ago, this was 20. So in about 10 years, the number of projects we signed increased by tenfold. Among the 209 projects we signed last year, half of -- more than half of them come from U.S. More than half of them come from U.S. More than -- about 2/3 are the more complex modality, the most exciting modalities: bispecifics, multispecifics, the ADCs, right? And then as I mentioned earlier, we also have 23 Win the Molecule programs. This is when my peers could not deliver, they actually come pick WuXi to help them resurrect or salvage the program. We have 23 programs like that. And among the 23, 6 of them are Phase III. So that basically means we'll help them do PPQ. Eventually, we'll be helping them do commercial manufacturing. So this is unbelievable. Again, if you -- the only thing you need to remember about WuXi Biologics is this funnel. As the funnel grows, our growth will be there. Because as I said earlier, we deliver 100%. Every project coming to the funnel, we delivered. As a result, they stay in the funnel and they will go from R to D to M. If you look at our portfolio, it's already -- because it's so big, they mimic our industry. So we have about 340 mAbs, we have 196 bispecific programs. Bispecifics is a relatively new modality, recently really become exciting. But we have almost 200 assets already. And then we have about 250 ADCs. In our portfolio, we have almost 370 first-in-class programs. Again, go back to the concept of a Harvard professor come up with the idea on pancreatic cancer, we can help them deliver the first gram, first kilogram, hopefully, first metric ton. In biologics, there are 3 most exciting modalities, and we are keen of all 3. Bispecifics and multispecifics, we have the largest portfolio, probably about more than -- globally, more than half of the bispecifics are within WuXi's portfolio. It's also the fastest-growing modality. It's also the highest-margin modality because we have R, D and M. But for CD3 platform, we carry royalties, milestones. For our D, it's more complex, so the pricing is good. And for M, we have, currently, we have 3 manufacturing projects. All of them hopefully can be mega-blockbusters. So bispecifics is actually the fastest growing, most exciting, highest profit margin segment within all the WuXi Biologics' portfolio. It was not meaningful a couple of years ago. Last year, was already almost 20% of revenue. It's growing at a whopping 120%. So if you think about it, 2023 -- 2024 -- 2023, this is probably 4%, 5% of my business. 2024, become 10%. Last year, become almost 20%. And that's the fastest-growing segment. As I mentioned, I already highlighted my CD3 platform, but the most exciting bispecific in this industry is happening at WuXi Biologics. You see the CD3xCD19, CD3xCD20, CD3xPMSA, CD3x19x20, BCMA. And that's one class. The other class is -- everyone is watching the PD-1 VEGF. We have multiple programs, PD-1/VEGF. We have DLL4/VEGF, EGRFxTDF-beta, 4-1BBxCLDN18.2. So basically, if you read the news about a breakthrough of bispecific tomorrow, 70% chance WuXi Biologics is the CMC owner. And we'll benefit from this whole bispecific -- we will see next couple of years what the growth is going to be, but the past couple of years is very exciting. Again, go from 4% or 5% of revenue to 20% in 3 years, so a CAGR of almost 100%. Because we spin off XDC, so everyone knows ADC, and they will be presenting this afternoon. But this is also a very exciting modality. We have 252 ADCs. We already have quite a few POC-validated mAbs. We have the HER2 ADC, TROP2 ADC, folate receptor ADC, Nectin-4 ADC, and a lot emerging. Again, it's probably very similar. Tomorrow, if you hear a breakthrough in ADC, 65% chance, 2/3 chance WuXi Biologics is behind that -- WuXi Biologics and WuXi XDC is behind that. I said there are 3 most exciting segments of biologics. The other one is traditional mAb. mAb is not as exciting as it has once been. But because we have been working on this field for 10 years, now we have many programs that's getting to commercial stage that will give us incredible revenue: FcRn franchise, IGF1R. We have mAbs for autoimmune disease, for kidney disease, for allergy disease. Yesterday, I'm with a client, he had the antibody for hair growth. Even for white hair, it grows back to dark. So I may need to produce 10 tonnes for that mAb for China alone, 10 metric tons. So initially, I was hoping for Alzheimer's, maybe actually the hair growth actually is better than Alzheimer's in terms of that modality. So for WuXi Biologics, we get to work with the most exciting partners globally. We have quite a few programs for kidney disease, for autoimmune disease, for pain and allergy, even for hair growth. So that's why I think in summary, this slide, this is the most exciting part of WuXi Biologics. We will grow, we'll see even growth acceleration, because bispecifics is growing at a CAGR of almost 100% in the past couple of years. ADC, you see the XDC growth and continue to see strong growth fast forward. And on the mAb side, on the development side, it's growing on market because our size is so big. But on the manufacturing side, we'll see 30% to 50% CAGR in the next couple of years on revenue growth. So I already highlighted multispecifics, bi and multispecifics, as really WuXi Biologics' most exciting platform. Because again, this is really such a good example, good manifesto of WuXi Biologics' business model. We have R, who generates hundreds of million dollars of revenue and profit this year. We have D, the largest portfolio. The D will carry into M. The M, we already have 3 exciting programs that's already -- 1 of them is already mega-blockbuster, 2 of them hopefully will become mega-blockbuster. So the M will generate hundreds of million-dollar revenue for us as well. And that's why I said -- so really, the multispecifics are really the most exciting part of WuXi Biologics' portfolio in the next couple of years. So go back to our R, D, M. I already mentioned that every BLA we filed get approved, get accepted by U.S. FDA, EMA, by China, and that continues to be our track record. So it's almost like, there's a test, we always score 100 percentile in it. You can go to a website, search our peers, what their track record is. But so far, we are 100%. So I mentioned very exciting R, very exciting D, and now the M part. A surrogate or a leading indicator of manufacturing growth or CMO growth is actually the number of PPQs. You see, our number of PPQs a couple of years ago was a single digit. During COVID, we benefited quite a lot from COVID mAbs, COVID vaccines. That's why in 2022, we had 22 COVID -- 22 PPQs. More than half of them are COVID programs. So if you take out the COVID program, it was about 10 programs in the past couple of years, and last year was 28. So go from an average of 10 to 30, so tripled the number of PPQs. And then this, as of now, we have 34 scheduled. During this JPMorgan Conference, we'll probably sign another 3 or 4. At the end of this year, it will probably be much higher than this. So last year, it was about 28; this year, probably about 38 or even more. And then PPQ is a leading indicator of manufacturing growth. On the bottom we show you how PPQ is translating into product approval, translating into manufacturing revenue. The nature of our business, most of our programs are new drugs. So they have a sales launch curve. So don't expect us to sign a PPQ today, $100 million revenue tomorrow. We will sign a PPQ today, we'll have $20 million, $50 million revenue in the next 2 years, but then we have to wait for FDA approval. And then we have to wait for sales launch. So from a PPQ to a peak sales probably require 6 years, and that's the patience, we have to wait. So a lot of people are expecting -- a lot of investors keep asking, why cannot your M grow faster? Because we're working on new drugs, we have to allow themselves to peak. We have to allow the sales to grow. And that's why our revenue profile, M revenue profile, is there. M revenue is there, but it's going to grow faster than we expected, but we need some time. And that's the beauty of our business model, right? So you'll see the M revenue will grow in a very fast fashion. Because 2025, as I said earlier, the number of PPQ already tripled to the average over the past couple of years. That basically means about 27, 28-ish of revenue will grow very, very fast. Another factor is our PPQ success rate, 99%. We have done about 100 PPQs, we only have 1 of them had the issue. Our industry average, maybe 90%. That's a tremendous success factor. Again, that basically means if you want us to launch the product, we will help you launch the product on time. On time, with a 1% chance of failure, where our industry average is 10% chance of failure. So as I mentioned earlier, most of our drugs are launching. Most of the commercial drugs are launching. So their revenue will need to ramp up. That's why we have close to 99 CMO projects, but our revenue is still relatively low comparing to our peers, because they're launching. And that's a good sign because it basically means our growth comes not only from number of projects, but also from project growth itself. So for example, for 1 program, we currently only have $30 million revenue. But in 5 years, we'll have $100 million of revenue. So that program will grow from $30 million to $100 million. In the meantime, we'll keep adding more and more programs into the funnel. So as everyone knows, WuXi Biologics is a global company. We have a global footprint. We have a footprint in Ireland, in Germany, in U.S., in Singapore, and we just announced Qatar, right? So we are increasing our strategic investment in U.S. Our total investment in WuXi Biologics and WuXi XDC combined, our total investment in the U.S. will be about $1 billion. We want to provide an alternative supply chain in U.S. end-to-end, from the DNA to IND to BLA. We are doing that in Singapore as well, an end-to-end supply chain. XDC was building a facility in Singapore, from piling the -- from piling the ground to mechanical ready, 15 months. It's unheard of. This is a project on time, on budget. So XDC will highlight this right now. We'll start generating revenue starting this year. We are -- our drug product facility, this is a prefilled syringe, our bio facility will be ready next year. Our drug services facility will be ready. This is a large scale, 120,000-liter facility, for mAb, will be ready 2 years from now. So we're putting a lot of efforts in Singapore. Our current effort is U.S. and Singapore. But we just launched a very exciting effort into Qatar. That's 6 countries we'll be operating in. We really think Qatar is probably the only country where we can replicate the execution and the profit margin of our China site, because it's such an attractive place. Before I went to Qatar, I didn't know much about the country other than World Cup, other than really the fascinating city. But once we get into Qatar, it's such a friendly business environment. And we really wanted to make Qatar, make Doha, our future hub of biotech R, D and M. I envision we'll have thousands of employees in Doha by end of this decade. So Qatar is -- besides Ireland, besides U.S., Ireland, Germany, Singapore, China, Qatar is our sixth country. We'll have a significant capacity there. And you will see. Because we have very strong cash flow, we don't need any equity fundraising for the -- to support the project. Our own cash will be more than enough to support the project. So don't worry about any fundraising from WuXi Biologics. As I mentioned earlier, technology is always a highlight of WuXi Bio. The reason we can deliver every project on time and on budget and the reason we can be much faster than our peers is because of technology. I want to highlight a few. The CD3 technology I already highlighted. The WuXiBody bispecific, we -- both technologies we invested back in 2016. Again, now you know, now it's a no-brain -- now everyone knows bispecific is important. But we kind of know bispecific is important 10 years ago. That's why we build the technology. That's why we can generate hundreds of million dollars of IP income from those technology already. And we have a multispecific platform, we have a single-domain platform, we have ADC platform. Last September, we announced most exciting technology of WuXi Biologics' history. It's our new cell line. As you know, Wuxi Biologics' core core is based on cell, based on the cell. 15 years ago when I started with the company, we have to screen 10,000 cells. 15 years ago, it takes 9 months, 10,000 cells, get 2 grams per liter. Last month, 30 cells -- from 10,000 cells to 30 cells, from 9 months to 2 months, from 2 grams to 10 grams per liter. So this is probably the best technology our industry can offer. And this is the only one in the service space we can offer. So we actually have companies who are willing to pay $100 million to license the technology. So this is going to be a game changer. For every program come to WuXi, we can get 10 grams per liter. So if every program is 10 grams per liter, then what's your bioreactor size? You only need a 5K reactor. 5K reactor already gives you 50 kilos. It's incredible, this technology. But this is something -- again, this is something we start to cook back in 2019. We are very excited to stand here now, but the investment comes from 2019. If you think about 2019, we have what we call semi-targeted. For those of you who are experts in biology, we found a spot. So typically, in our industry, you put a DNA mixed with a cell. The DNA -- you don't know where the DNA go into the cell. That's how you get a cell line. That's why you need to look at 10,000 cells to figure out which one is the highest producing. Over the past 5 years, we found a hotspot in cell genome. We know exactly where we want to go to. And we have the technology to deliver the DNA to that spot. That's why every cell -- 10 years ago, because -- when you look at 10,000 cells, there are some 0, some 1, a few 2. But now every cell is 8 to 10 grams per liter. So technically, I don't need to pick. I just put a DNA together with the cell, take the cell, and that's your cell bank. That's why we can cut the time line from 6 months to 2 months, increase productivity from 2 grams to 10 grams per liter. And this will transform our industry. Again, we can make -- because if it's 10 grams per liter, annual cost of biologics will be a few thousand dollars. If it's a recent -- for example, a PD-1. PD-1, the annual manufacturing cost of PD-1 using this technology is only a few thousand, $2,000, $3,000. We can make biologics really, really affordable. I think because we pioneered the whole disposable manufacturing, a lot of investors, a lot of clients initially also doubt whether disposable works. If you have a 10-gram per liter, if you have disposable, now you know why it works. For WuXi Biologics, we planned this whole thing from the get-go, right? Because my 10-gram per liter times 5,000 to 6,000-liter reactor, I get 40 kilos. If you look at the first generation of Herceptin-Avastin, they were made in 20,000-liter reactor because the titer is only 1 gram per liter. So every bag, you get 20 kilos. Now with my technology, everybody gets 40 kilo. I can double the throughput comparing to what the traditional industry output. And that's why my reactor scale is smaller. But if you have a grandfather cell line, if you have an old cell line, if you have a grandfather project, I can do it for you. Over the past couple of years, we have done 300 batches by multiplexing the reactor. One reactor is only 4K, but why don't we put 4 of them together? Become 16K. We did that in Ireland, we did that in China. So I think with our capacity, we can actually deliver 30 metric tons. I mentioned earlier, a hair implant or hair growth antibody may need 10 metric tons. But I can build a 10 metric ton facility in China in 2 years. Now I can build it in Qatar in 2 years, in Singapore in 2 years. So I think the manufacturing platform is super-rigid, is cost competitive. I think industry always have a debate, disposable, why disposable should be more expensive than stainless steel? We have a disposable manufacturing in the room. We've already proven with our 300 batch, there is no cost difference. Disposable, a single plastic bag is as effective cost-wise comparing to a stainless steel vessel, because your CapEx is lower, your footprint is smaller and you are more environmentally friendly. So as our industry evolves, we see a lot of project go from IV to subcu. Even for oncology projects, patients want to do it at home. So as a result, we actually delivered all those technologies to enable, pay us to convert IV product into a subcu. We have done many projects already. So if you have -- I think if you have a drug that needs 4-hour IV infusion, patients have to stay in the hospital for 6 hours. Now with WuXi's help, we can convert it into a subcu you can administer at home, 2 minutes, 1 injection. All the technology we have enable that. Drug product has been -- is also a core part of our business that's growing. We're already developing 500 formulations. We have a project, we can formulate the protein to 150, even 250 mg per ml. That's why with the -- if your dose is only 20 mg, we can be making it into 1 ml you can deliver at home instead of go to a hospital IV for 4 hours. Those are the technologies that we are developing. We have been helping global companies with that. As our industry evolves, and this week you probably see AI companies everywhere, and AI is also part of the game for WuXi Bio. It's built into our platform. We want to be the world-leading digital CRDMO. I think we have a DaVinci Client Portal, so all the data, our client needs, you can access it from DaVinci. We have a BioFoundry, is our own system for documenting every data. Every piece of data is in the BioFoundry. We have -- manufacturing batch record electronic system to allow paperless manufacturing. Really all those platforms are already in the works. And hopefully, by next year, we'll be launching all of those. So we're already launching piece by piece as of this year. WuXi Biologics' vision of manufacturing is in 3 years, we don't need anyone in the plant. In 3 years, we don't need anyone in the plant. The plant runs by itself. It's fully automated, continuous processing. And that's why we're launching what we call PatroLab. This is a digital twin of our manufacturing facility. If you ever gets a chance to visit our Shanghai facility, you can already see it. We have it already running at a 50-liter scale. So it's a 50-liter reactor, but it continues to run. Every day, you get 10 grams per liter in there. So you get -- it's a very small vessel, but every day you get 500 grams, and it keeps running in there. And then we have a digital twin that allows us to manufacture them. We use Raman to -- we don't even need to sample. We don't even need to sample. Because every data, the computer is monitoring it and helps us make decisions. So this is what we call our PatroLab. It's our own version of digital -- a digital version of a manufacturing facility. We always are very proud of our ESG performance. But if you look at every metric, every metric, our ESG score is the highest -- one of the highest in the industry. That's something I'm -- really as a global company emerged from China, I'm very proud of what we have done and what we have been doing with ESG. I think overall, we are on track to deliver 2025 with sustainable growth momentum into 2026. So we are on track to deliver a very strong 2025 with both top line and bottom line. I already mentioned to you that bi and multispecifics are our most exciting platform and the fastest-growing within Wuxi Bio because we have R, D and M. We have already fully established track record in large-scale manufacturing with either disposable or our own high-producing cell line. We'll continue to invest in technology. So I highlighted the CD3 technology we invested, highlighted bispecific technology we invested, highlighted cell line technology we invested, right? On the R side, we see a record high number of milestones and the upfront payment. On the D side, record number of projects. On the M side, the number of PPQ increased by 75% comparing to last -- the year before. We are very excited about Qatar and our future investment in Qatar. Looking forward into 2026, I think we'll continue to see, and you already know the funnel, you can see the growth in 2026. We always continue to see R grow strong, D grow strong, M grow strong. We have quite a few blockbusters. We had FDA inspection in our Ireland facility last month. We have 1 more FDA inspection next month in our [ Shijiazhuang facility, Hebei facility ]. We have 1 March, basically FDA coming to us almost every month for a product approval inspection. So we're expecting a few product launch this year. All those inspections are hopefully for mega-blockbuster products. So the revenue -- the explosive growth of manufacturing revenue will come. Thank you.

Thank you, Dr. Chen. Before we start Q&A session, may I invite Mr. Tu, the company's CFO, to join us on the stage. So for our audience, if you have questions, you can raise your hand, but please wait for mic so that everyone can hear you. And also for our online audience, if you have questions, you can submit the questions through our conference digital app. Any questions from audience? Here. Just please wait for mic.

For the 3 end-markets: bispecific/multispecific, ADCs and mAbs, what are the underlying market demand during the next, let's say, 5 years?

Because of confidentiality, I cannot disclose the program, but one of them should be a $5 billion product. The other one should be towards -- the other one, the analysts, because all of them are public companies, financial analysts expect $2 billion to $3 billion. So the 3 mAb -- the 3 bispecific combined peak sales should be around $10 billion. So they are really mega-blockbusters.

Congratulations to you and WuXi Bio as a whole. You definitely delivered a wonderful performance in 2025. And it's exciting to see that you have a huge investment in Middle East. Can you just elaborate a little bit more in terms of at what level of contribution to the future performance, let's say, in 2 years, as you mentioned that you will get to the project and finish in 2 years, and -- yes.

In Qatar, we probably expect $500 million to $800 million of revenue by end of the decade, by 2030. So 4 years from now, we'll be $500 million, $800 million in revenue.

Okay. And in Middle East, I'm wondering if there was any technical problems, let's say, to deploy the talent. So what's your strategy or plan to solve this problem?

You mean talent challenge?

Talent, yes.