WuXi PharmaTech climbs as Goldman starts coverage

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Shares of WuXi PharmaTech Cayman Inc. rose Thursday after a Goldman Sachs analyst started coverage of the stock with a "Buy" rating, and placed WuXi on a list of recommended stocks.

Profits should keep growing over the next two years for the Shanghai-based research and development outsourcing company, said analyst Wei Du. Du said WuXi is in a better competitive position than its rivals,[link widoczny dla zalogowanych], and China may become a top research outsourcing market for drugmakers in developing countries.

He put the stock on the "Conviction Buy List,[link widoczny dla zalogowanych]," and WuXi shares gained $1.25, or 10.3 percent,[link widoczny dla zalogowanych], to $13.40 in afternoon trading.

Du said laboratory service revenue should keep growing,[link widoczny dla zalogowanych], while the toxicology service and manufacturing service businesses have good potential over the coming years.

"We see strong potential for growth in WuXi‘s manufacturing business in the long term,[link widoczny dla zalogowanych], given its reputation and service quality," he wrote.