WuXi PharmaTech Announces Fourth Quarter and Full Year 20...(doubling of revenues from our top ten cu...)

Gross margins. Overall gross margin was 42.9% in the fourth quarter 2007, down from 56.0% in the fourth quarter 2006 mainly due to the appreciation of RMB across our cost lines and higher bonus incentive payments to our scientific staff over the same period last year.

Gross margins for the full year 2007 were 46.5%, compared to 49.1% for 2006. The decrease is primarily due to the appreciation of RMB across our cost lines and investment in new services such as formulation and toxicology during the year, offset by increased gross margins for our research manufacturing from achieved economies of scale and increased number and scope of research manufacturing projects.

Operating Expenses. Operating expenses decreased 23.7% to $6.6 million in the fourth quarter 2007 from $8.6 million in the fourth quarter 2006 due to bonuses allocated to scientists. Operating expenses as a percentage of total net revenues decreased to 17.7% in the fourth quarter 2007 from 37.7% over the same period last year.

For the full year 2007, operating expenses grew 35.1% to $32.7 million from $24.2 million in 2006. Operating expenses as a percentage of total net revenues in 2007 declined to 24.2% in 2007 from 34.6% in 2006 due to economies of scale.

Net Income. Net income increased by 205.7% to $12.1 million for the fourth quarter 2007 from $4.0 million for the fourth quarter 2006. Net profit margin increased to 32.7% in the fourth quarter 2007 from 17.4% in the fourth quarter 2006. Non-GAAP net income, excluding share-based compensation expenses for the fourth quarter 2007, grew by 156.7% to $16.6 million, compared to the non-GAAP net income of $6.5 million from the fourth quarter 2006. Diluted earnings per ADS were $0.17 and diluted earnings per ADS excluding share-based compensation expenses (non-GAAP) were $0.23 for the fourth quarter 2007.

Net income for the full year 2007 incre
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