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Good morning and good evening to all global investors. Thank you for joining WuXi Biologics First Half 2022 Earnings Call. This is the Ziyi Chen, China health care analyst at Goldman Sachs. Before we cover the session, I would like to highlight that this call is strictly for clients of Goldman Sachs and WuXi Biologic only, and this conversation is not intended for the media and is off the record. Participants will be removed from the call if they cannot be properly identified. And this call is not for the purpose of sharing or receiving them public or otherwise confidential information. Attendees are public market participants who may not receive and should not request nonpublic or otherwise confidential information about issuers or securities or about the markets of securities.
So attending today's call, including Dr. Chris Chen, CEO, Mr. Ming Tu, CFO; and Ms. Eileen Wang, Head of IR for WuXi Biologics. And this call is going to be in English. Management is going to start with their presentation first, then we're going to open the line for question and answers. [Operator Instructions]
Now without further ado, I'm going to turn the call to Chris to get started. Chris, please.
Thank you, Lee. Good morning, good afternoon, good evening, global investors. Really my pleasure to share with you our 2022 interim results. So I will talk about interim results first and then everyone know about our [indiscernible] capacity. So I want to share with you our product. We are also a global leader in drug product CDMO.
We had a couple of positions in the past 2 years. I want to share with you actually [indiscernible] of those. And before the financial section to talk about ESG, and then I'll wrap up and answer any questions you may have.
I think 2022 is a most [indiscernible] most challenging period of WuXi Biologics in our history. The biotech funding slowdown, UVL challenges and you see the COVID [indiscernible] operations. But despite all those headwinds, we achieved incredible results. If you look at on the left side of our business performance, if you look at the number of projects, it'll go from 408 projects to 534, largest portfolio ever.
What I'm most proud of, actually is in the first half of the year, our non-COVID projects revenue grew 72.6%. In the full year, we expect this number to be more than 65%. So basically, everyone is very happy that WuXi Biologics made a huge contribution to fight COVID. You guys are also concerned what if the COVID revenue disappear, now you have the answer. Basically, this year, the non-COVID revenue will grow 65%. And last year, it grew on 64% as well. Even next year, we expect our non-COVID revenue to grow more 60%. So we have added 59 new projects, and we -- our commercial projects go from 4 to 14 and all those basically drive our backlog to grow from $12 billion to more than $18 billion.
And as a result, we increased the capacity by 50% from 150,000 liters to almost 260,000 liters. So we'll continue to add scientists and add an employee to get all the work done. And on the right side is the financial performance. You see the first half of last year was an incredible period because of our very high utilization rate and because of all the COVID opportunities presented to WuXi and we captured that opportunity. So the first half of 2021 was an incredible period all the financial metrics were all-time high. But despite all those challenges, we actually achieved even better. And you see all the growth in revenue, in top line, in bottom line, in EBITDA and EBITDA margin and EPS. So I'm very, very pleased with our first half performance.
And there is a little more detail. Again, on a very high basis of last year, we continue to deliver more than 60% growth on revenue and more than 60% growth on adjusted net profit. I think our profitability continues to be amazing. And if you look at every aspect from gross profit or net profit from diluted EPS. And gross profit margin reduced a little bit, as I said earlier, first half last year was incredible because we didn't have a staff. And since then, we had a 50% staff, right? If you think about it, we have about 7,000 people in the first half of last year, and we have more than 10,000 people now. So we added almost 50% of staff. And because of that, our profitability reduced a little bit. So we are hiring all those people to invest for the future.
In terms of the key financials, we have funds. We have close to RMB 9.9 billion of fund. Our total liability-to-equity ratio is very healthy, and we expect to have a very sufficient funds for our capacity expansion. We do not have any plan to issue equity in the near term. And we have some loans and we have also bank credit facilities, but our operating cash flow is very healthy, more than 82% growth. So again, this year, we -- our target is to be free cash flow positive and next year certainly will be free cash flow positive as well, right, starting this year. So the beginning of the year, we bought back about $500 million worth of shares, and we canceled those shares, mostly to offset the dilution because of the issue of -- issuance of new shares for management [indiscernible] programs.
In terms of CapEx, our first half is about CNY 2.7 billion. We are on track to spend about RMB 5.5 billion. And for the next 2 years, we raised our CapEx guidance to about RMB 6.5 billion each year. And again, we have our own fund from our cash flow. We do not need to issue any equity or even loans for those kind of expansion program. So I think -- again, I'm very pleased with the first half of 2022. And if you look at our growth, it actually comes from all the engines are firing at a very high speed, right? So most amazing, if you look at our D part, CRDMO, the D part, the early phase IND-enabling work, we actually grew 82% in the first half.
The Phase I, Phase II manufacturing will grow 40%. And then the Phase II in commercial manufacturing will grow 63.5%. So both pre-IND and late-phase commercial made clear contribution in the first half. And if you look at the right side, actually, that's why I highlighted earlier, our COVID revenue grew 46%, but our non-COVID revenue actually grew 72.6%. So non-COVID would really drive the revenue growth for this year. And again, COVID -- the manufacture through COVID, WuXi Biologics manufacture the best of us, the best in execution, the best in power in our technology platform. And because how we are successful we have executed this COVID project, we actually want a lot more recognition of our R&D capability on our manufacturing capabilities because we are able to deliver about 30 IND, each of them about 5- to 6-month time frame.
We're able to deliver 2 BLAs already for 14 months, 18 months. And we are able to manufacture 2,000 kilogram of antibodies using our technology and deliver successfully to the clients. So COVID made the best of WuXi. WuXi basically signed when we run all those -- complete all those COVID projects. So not only we made a very good CSR, corporate social responsibility in fighting COVID, but also our visibility, our recognition, our execution are demonstrated very well during COVID projects. And because of this, allowing us to win more trust from global clients. And that's why we continue to see high market share in R&D and in M. So because non-COVID project is so important for the midterm and long-term growth that's why I would highlight even more. If you look at the chart on the right side, in 2020, our company grow at 40%, but the non-COVID projects, which is the regular business only grew 12%. So the business is affected by COVID itself. And in 2021, our company really captured all the opportunities presented to WuXi by working on COVID projects, COVID vaccines. So the company delivered a man 83.3% growth. And then the non-COVID projects only delivered 64%. So basically COVID was driving the growth in 2020 and in 2021.
But this year, you start to see the reverse. Now overall, we grew -- our non-COVID program is 72.6%, overall growth of 63.5%. So basically, this is the first time in the past 3 years our non-COVID program are actually driving the most of the company growth. This is exactly what we specially wanted to see, right? So basically, for this year and for next year, when COVID revenue slow down or even disappear, WuXi can manage. So as I mentioned earlier, if you look at our 2021, our non-COVID growth 64%. This year, we expect to grow 65%. Next year, we expect to grow 60% as well. So from 2021 to 2023, the 3-year CAGR of our regular business is actually 65% -- 64% to 65% growth. And that's -- and despite the big size of Wuxi Biologics. If you look at our past 8 years, our top line growth around 66%, and that's from a small base. Now that we are getting more than $1 billion of revenue, we're still able to maintain the non-COVID volume growth CAGR of 65%. And so that's the right side.
But if you look at the left side, that's all the project numbers that can tell you similar stories. In 2020, we have 316 projects and 85 non-COVID. In 2021, 428 projects, and 124 non-COVID. So non-COVID projects is mainstreamed. And if you look at the -- even the first half of this year versus the first half last year, we actually have more projects. So as I said, we have 3 headwinds COVID in China, UVL and the biotech funding slowdown. But we actually still managed to get more non-COVID budget than last year. Last year was a fantastic year for us in terms of market share, in terms of project addition. We added 128 organically, 128. And this year, we're targeting to achieve 120. And so we are -- we delivered what we achieved about 56 non-COVID projects even higher than last year.
And this is a very familiar chart you have seen. And this year, I would really want to emphasize that non-COVID revenue growth, a very exciting non-COVID projects growth. We added 2 slides before that. So you see a very familiar number, 534 total projects, very exciting. You see 59 total projects. And as I said earlier, 120 projects whole year is right there. In terms of 59 projects, only 3 of them are COVID and remaining 56 are non-COVID. So again, if you look at the overall project number, we added this first half, it's slightly less than last year. Last year, it was 68. For the last year, we had significant, 12 non-COVID projects. And this is year, we only have 3.
So overall, this half versus last half, we added more non-COVID projects despite overall projects slightly less. We are still very confident we can deliver 120 projects this year. You see about 29 Phase III projects. And we now have 14 Phase III commercial projects. The reason we changed our definition of commercial projects because we have so many Win-the-Molecule projects. Traditionally, previously, last time when I communicated with you, the 9 commercial program, all of them follow-the-molecule. So basically, we develop program ourselves. And that's why the first approval always come at WuXi. So now as the Win-the-Molecule project becomes so successful, a lot of programs already approved in other countries, or by in another CDMOs or in other -- in our clients' own facilities. So now that we actually -- they transfer to us. So previously, we treated in Phase III.
So for example, AstraZeneca's COVID program is already launched in 30 countries. But last year, we created as a Phase III because it's not approved in our facility yet. But this year, we are seeing more and more projects like this. We're seeing projects already approved outside of WuXi. And then when WuXi take over to basically align our definition of common project with a traditional CMO. But if you look at other companies like that in our industry, mostly as long as it's approved, it is considered a commercial project. So we also changed our definition. As long as it's approved, it's a commercial project. And that's why 4 -- 5 projects from Phase III to commercial this year. So 14 commercial. 9 of them is organic, 5 of them are Win-the-Molecule. We continue to see more and more Win-the-Molecule projects and you will see the commercial project very significantly in the next couple of years.
In the next 12 months, we hope to achieve another 10 Win-the-Molecule program. Maybe about 5 of them are actually really the program already launched outside of WuXi. So hopefully, next time when we talk to you, this number will also -- number will increase for commercial projects.
And all of us are watching for global market funding. I think -- so depending on the data you see, sometimes you see the global funding already stabilized, the fund in China continued to -- continue to be challenging. Overall, we're actually seeing -- on our project side, we have seen continuously great interest from our clients. We have not seen a meaningful funding slowdown at all. Because of this -- really the 59 projects added and because most significantly --- signed a couple of commercial projects, our backlog continues to grow, our backlog now exceed $18 billion, right? You see our 3-year backlog is maybe slightly less than what I presented last time is because we converted a lot of them to revenue, right? So in May, we have a $3.3 billion backlog. And we did not sign any new scheming and projects in May, but our 3-year backlog and reduced from $3.3 billion to $3 billion because we converted $300 million to revenue. So again, overall, this backlog is still very exciting, and we have committed over and over again. Our backlog is not expected to grow unless we sign a big commercial project because the backlog base is so high. So even though the backlog base is so high, we still continue to have strong capabilities for new products, we can start any project in 4 weeks.
If you look at our portfolio, you continue to see what's happening in our industry. Our portfolio is big enough. Now it's really mimic the whole industry. But you see we have 204 first-in-class programs. Our bispecifics grow at 40% and ADC grow at 58%, a vaccine side grow at 78%. So we continue to be the mainstream player for bispecific, ADCs, and certainly on the vacuum side. Very excited to see the growth of new modalities. I mentioned Win-the-Molecule already. I think in our first half, we won 5 programs the second half, we'll continue to win more programs, most notably late-phase and commercial programs. The Win-the-Molecule and because of Win-the-Molecule directly for the commercial program, we changed our definition. So as long as it's regulatory approved, is a commercial program to be in line with the global CMO standard practice. So I think I'm mentioning that we are talking about more than 10 programs. So from large pharma, and I'll give you a couple of examples. Number one is the European pharma, and we are talking to them 5 programs at our different facilities. Second is European. Again, European large pharma we're talking about, our biosimilar program already launched in the global market, and they want WuXi to be the manufacturer -- primary manufacturer for them. And so we are pushing ahead with the commercial ADC program. And the U.S. pharma, this is late-stage tech transfer of vaccine program for commercial launch. This is a program we have highlighted a couple of times already in the past. And lastly, the U.S. pharma, we're talking to them about more than 5 programs as well, looking at commercial manufacturing and 4K and 12k scale.
So overall, I think last year seems to be the hockey stick point for really for WuXi Biologics in terms of CMO, right? So our reputation, our strong brand. Now we are referenced at as a best-in-class in terms of manufacturing, again, mostly through our COVID programs. and also through our more than 10 regulatory approvals from U.S. FDA and from EMA. So it's stronghold of WuXi in terms of CMO. Now we are able to compete with any company out there on the big CMO programs. And that's why we are very confident that WuXi Biologics can deliver consistent, sustainable high growth in the next couple of years. And that's why I'm so confident that we can actually deliver a CAGR of 55% for the non-COVID project in -- starting this year -- starting last year.
Yes. So again, this is -- we updated our commercial programs., So now we are expecting maybe 15 programs this year. And we're expecting more than 30 pro 2025. So among the current 14 commercial program, 6 of them are from Win-the-Molecule strategy. And we have 6 of them are post-COVID program, 8 of them are non-COVID. So basically COVID, non-COVID almost in half and half. It's very diversified pipeline. So going forward, we expect our Follow-the-Molecule and Win-the-Molecule probably make equal contribution to the CMO projects. Maybe every year, we'll add a couple from Follow-the-Molecule strategy and every year we would add a couple from Win-the-Molecule strategy. And that, again, shows really how successful we are on the Win-the-Molecule side. So CMO revenue will be the key driver for us starting last year.
And because of that, we also increased our capacity to now our capacity by 2026 is 580,000 in capacity. I think, again, WuXi does not invest in capacity drive. We look at our portfolio. We look at how many projects are coming and we look at macro and how much project we need, that's the math. So our capacity also will be spread from U.S. to Europe to Singapore and China. So with China about 65% of capacity and outside of China, about 1/3 of capacity. So I think the -- our investment in -- outside of China has been very, very successful.
Let's go back to WuXi's strategy starting 3 years ago, we will start to build a parallel supply chain in U.S. and Europe. So now for the early phase R&D work, we're going to start working in New Jersey, also called MFG18 is already running. Now we actually hosted 19 client visits. We signed $54 million contract just in the first 6 months of the year. It was also interesting, we actually attracted another more than 10 clients. These are new clients for WuXi. Basically, they do not want to work with our facilities in China. But as soon as the opportunity is ready in the U.S., they start to work with us. So basically, 10 new clients for our U.S. site. And Ireland will be almost ready end of this year, we're doing tech transfer for 3 projects right now. And among the 10 programs that we're talking about in the next 12 months, most likely 5 of them will go to Ireland and for commercial manufacturing.
Our drug product activity, DP7 is an acquisition from a Bayer. We've been very successful including in our network. We are building opportunity in U.S. We're pacing ourselves, because originally, we're trying to have a very aggressive capacity build in the U.S. just to make sure we mitigate the geopolitical risk. And however, now we are seeing our European facilities has been playing a perfect role in managing that risk for those clients who are concerned. And most of the clients are not concerned about this at all. I think so we are pacing ourselves in U.S. capacity building. Now we are getting these ready in 2024. I think overall, during COVID, and we actually hired 800 people in our global supply chain in our global manufacturing sites, U.S., Europe, and we plan to hire another 400 people. So this really showcases the success of WuXi Biologics in not only we can hire best talent in China, we can also have very good talent in Europe, in the U.S. and eventually in Singapore.
So I talked about Singapore already. I think Singapore is a perfect case for us to diversify our capacity and to meet the growing needs from all regions. Our Singapore site can support U.S., in Europe and China. And if the Chinese company want to manufacture also in China can use Singapore supply chain for that. And because of that, we are making a very big investment in Singapore. We're planning about 10 years, $1.4 billion investment. We're also building a CRDMO. So we'll cover the D and with M and will accompany R as well. It covers also vaccines and biologics. So I think some of you may remember last year, our U.S. business growth, in fact Europe grew even faster and China sort of didn't grow much at all. Now you see a very different picture. Obviously, China has resumed 55% growth. So that's why I think WuXi Biologics serving in regions make it very nicely. So if some regions lagging lying behind other will pick up. And then in the next quarter, the sales will change as well.
So now you see a very balanced growth. U.S. 55% revenue, growing 78%. We actually -- again, despite UVL, despite the political noise and despite the funding in biotic slowdown. So our U.S. is still the main market. We actually added 32 new customers. So the clients that never worked with us before. Again, as I said earlier, U.S. side alone attracted more than 12 new clients. And so we -- overall, we added 32 new customers from U.S. Among the new projects we added the first half, 59%, more than 60% of them is still from U.S. I think the U.S. continues to be our most important market for WuXi Biologics. Europe on a very high base last year continue to grow very nicely. And China, again, resume -- reversed the trend of low growth last year, now it's growing 34% again. This is a building of the diversified income for all the regions.
I think we WuXi Biologics has been finding programs and combining COVID with our global partners. We have made a good contribution in making AstraZeneca vaccine, and AstraZeneca antibody, GSK antibody and Vir antibody. So first half of this year, we actually achieved more than RMB 2 billion of revenue. This year, our total revenue was probably around CNY 3 billion, is actually on par with last year. Last year, it was CNY 3 billion billing as well. So basically, COVID revenue, again, there was no growth this year. And then the non-COVID revenue will grow more than 65%. That will contribute to the whole growth of the company. Currently, we are still expecting about CNY 1 billion revenue next year. And again, our non-COVID revenue will grow very significantly at around 65% that still give us very high 30s growth next year.
This slide is always my -- the slide I'm proud most is our track record, is our operational excellence, right? So as we have the capacity to handle 150 INDs, 12 BLAs. We have already delivered so many -- 315 INDs already and 20 BLAs approved, 20 BLA/MAAs approved in all the different regions. And if you look at the facility we're building the success rate we're running overall is incredible. And this is also the slide I use most recently when I work with the clients. They just look at this number, they know WuXi is a world-class company, world-class operation. We continue to deliver -- our track record in execution. Now we have the best execution in our industry. If you look at WuXi Vaccines, the business continue to grow very well. We have a lot of large integrated projects I shared with you before, 16 of them, but we also have a lot of smaller stand-alone projects. Now we're serving 17 clients on 38 projects. Some of them are recombinant DNA vaccines, mRNA vaccines, viral vaccines and microbial vaccines, very diversified network.
ADC represents the most exciting aspect of our industry, the newer modality within fast growth and WuXi Biologics continue to higher market share overall. And if you look at our program, we have 76 integrated programs. We'll probably contribute about 1/3 of the global INDs for ADC. And that's the combination we're making to the global community on really enabling them to do ADC. ADC concept is still the same, Follow-the-Molecule, Win-the-Molecule. We are able to do ADCs at a faster timeline and better track record than almost any CMO out there. So ADC is expected to be our growth engine for the next couple of years.
And lastly, quality has always been our competitive advantage and now is our moat as well because we continue to see regulatory approvals and regulatory inspections. Now we have 25 regulatory inspections and 6 from FDA, 7 from EMA. And also this jibes very well with our global CMO acceptance, right? So if you don't have the quality, there's no CMO. So because of our 10 years accumulation in relevant experience in FDA, EMA inspection that also set up WuXi very well to compete for the CMO projects out there. That's also the success of the Win-the-Molecule strategy. I think talent has always been key for us. And if you're seeing tremendous growth in talent, I think we are very happy that by end of this year, we'll probably have more than 1,200 people working in U.S., in Europe. And our key talent retaining rate actually incredibly high this period, 97%. Again, because of the sort of the biotech slowdown, particularly slowdown and funding challenges in our industry, WuXi Biologics are able to retain our top talent, and that's set up very well for the growth for the next couple of years.
On UVL, I have shared with you a lot of progress already as an on-site inspection for Wuxi city was completed in June. I'm very happy to share with you actually now 2 U.S. suppliers has already obtained export license to ship bioreactors to Wuxi city just this week and last week. So very recent update. Essentially, the UVL restrictions for our Wuxi site is almost been finally lifted, being removed. So now our suppliers are able to ship us bioreactors starting last week, and one of the supplier last week, one of the supplier this week. So now the only UVL impact to our site that is Shanghai. So unfortunately, Shanghai still have some spreading COVID outbreak. We are working very closely with the Chinese government and the U.S. Commerce Department on trying to find an inspection date for Shanghai. And hopefully, Shanghai core situation can improve, and then we can run the inspection as soon as possible.
And overall, I think now most of our clients are beyond UVL and really clients have no concerns about UVL and our suppliers have already mitigated the core -- managing to suppliers everything through the UVL challenge in the past couple of months. So again, UVL, there's no meaningful challenges to clients, no meaningful challenge to the supplier, and the Wuxi city being very close to be removed from the list and Shanghai, we hope the inspection can happen very soon. I think if you look at our financial numbers, you probably never ever imagine that Shanghai actually, we actually lost productivity in Shanghai for about 2 months, right?
So as everyone knows, Shanghai will lock down for 2 months. We have been -- none of that is actually reflected in the financial numbers because we have a very good strategy. We have a global diversified network. And for the work Shanghai couldn't do, we can transfer to Wuxi city, to Suzhou, to Hangzhou, to Cranbury and early next year to Chengdu, western part of China. I think during COVID, and we also seen more than 600 people actually camped in our campus. We're actually able to keep our manufacturing running at 100% rate, a 100% success. So it's incredible component on the company. And lastly, we are able to very quickly recover once the COVID is over in Shanghai. If you look at our overall supply chain, I think you have done almost no -- you haven't seen anything related to COVID at all. We are able to ship materials to U.S. sites, we're able to receive material from our vendors. So our business community plan works very, very well. And our supply chain basically are able to supply us 100% manufacturing needs. Again during the regular business, everyone can get supplier, everyone can buy items or even ship materials to the client, but during COVID lockdown in Shanghai, WuXi is able to manage this so successfully. We're really diversing our supply chain, resilient and demonstrate our operational excellence.
So I think that's the first 30-minute update on COVID, on the first half of the year. I also wanted to give you a very quick update on our global drug product capacity. As everyone knows our drug substance capacity and capability already, right? But you may not be familiar with the drug product. We are also one of the best drug products developer now and the manufacturer. So we have already developed more than 350 formulations. And we are -- we have one of the largest groups on drug product development. Our strategy for drug product is very similar to our substance, end-to-end, one-stop shop and build our technology first and deliver. So all of the same study we applied to drug substance and can be applied to our product. And that also led us to the success of our drug product capabilities and capacities.
And if you look at our drug product projects, we can serve all modalities, potential antibodies, bispecifics, ADCs and other recombinant proteins. I think this is incredible. You see the number of project rose from 2018, 85 projects all the way to 2021, mor than 240 projects. If you look at our manufacturing, I think we are able to do our manufacturing batches, we made 97 badges in 2018. Now we actually have 590 batches in 2022. You see significant growth of our number of batches. And you also see our technology from high concentration drug product development, as you see different modalities. You see the rapid expansion of capacity in the [indiscernible]. So to make sure we have a very significant drug product capability, we have built 11 facilities globally in U.S., in China and in Germany to accommodate all these requests to manufacture drug products throughout the facilities in there.
So now moving over to the part 3 of our discussion, I want to share with you how successfully we integrated all the acquisitions. When COVID hit and when we face with all COVID projects, we didn't have capacity and then we -- the actions we take on, especially acquiring facilities that we acquired from Bayer. We acquired facilities from Pfizer in China and acquired a business in Suzhou, very close to Shanghai. And those acquisitions cannot be very well executed, and now I'm able to share with you how successful we're to integrate those business.
I want to use 2 examples. I already talked about the Bayer opportunity has already been up and running, drug substance -- drug products DP7. So when we acquired CMAB, now we call them WuXi Biologics (Suzhou). I think when we acquired them, they were known leading CMO in China. We know they have a fairly good recognition and reputation. But in comparison to WuXi, the numbers, their numbers or metrics at are almost day and night. So within about a year, we're able to increase the product output by 4x within 2x. We're able to deliver operations from 70% success rate to 100% successfully. We have the digitalized facility of more than 80% in the first year, the facility -- the first 4 year we took over the facility.
So all that means the financials. We're talking about the execution of WuXi Biologics. So we are able to deliver $100 million revenue from this site and it's a 3x increase. We are able to deliver a GP margin of about 48%. So that is one of the best in the industry GP margin. For this acquisition, 1 year under the WuXi umbrella, we're able to achieve better turnaround, basically 3x increase in revenue, from a money-losing business to a very high-margin business and also, again, from a 70% success rate to 100% success rate. How can we achieve that? We actually -- what happened, we actually dropped employee 30-people SWAT team. We totally upgraded the whole facility. We upgraded system. We now are redesigning the facility. We upgraded the team. So I think the CMAB acquisition give us an insight how competition was in China. So if you look at every aspect from technology, from quality, from execution, from experience, there are more than 5 years behind us in every aspect. So because of this, we really don't see meaningful competition from local CDMOs competing from China. So again, our main competitor would be from global top 10 players. I think -- again, it's amazing it took less than a year to convert this Chinese local CDMO to a premier global CDMO. And that's how this team can execute. And this also can be the moral, how we can help other sites globally or how our future acquisitions can work, right? So I think the successful integration of our first CDMO acquisition, really showcased on strong M&A, also focusing our execution, how we can upgrade the facility from a local standard to global standard from a money-losing business to a profitable business and profit margin at the industry premier level.
Very similar story for the Pfizer facility in Hangzhou, very similar story. We're able to deliver in about within 33 days. And overall, the Pfizer facility now is already 80% utilization. So when Pfizer had the facility, they got a couple of batches in a year, so they probably were around maybe 3% to 5% utilization. The first year we have operations, again, we run it at 80%. We're able to deliver at around $200 million of revenue at an industry average gross margin as well.
So post-acquisition, post the CMAB acquisition as a business -- as a 5 acquisition as the assets turned out to be very well for WuXi. And again, this set up how we can really conduct our business for the future acquisitions. And before I turn it over to Ming, I want to talk briefly on ESG. I think ESG is very important component of our business strategy. We want to be -- continue to be a global leader in the governance. We want to be a globally the green op business, we want to enable our clients, we want to give back to our society. I think we just issued our 2021 ESG report. There is a lot of data in this report, very exciting. And all our recognition has been reflected in this slide, a lot of -- or most of our recognition. So we continue to receive very good rating for our ESG performance from MSCI, to Sustainalytics, to FTSE4Good. We are, again, the top 10 constituent of FTSE4Good Emerging Market Index for this year. So all ESG efforts have been recognized globally. And as a global leader, we are committed to the future, I mean emission reduction, committed to water consumption reduction as well in the next 10 years. And our Global Engineering group is really [indiscernible] deployment. So we're looking at every aspect in our business. So we want every new opportunity to be greener than the previous one, not only more efficient more modern, more states, but also more greener than the previous facility. I think that one of the facilities will be running next couple of months in our facility in near Beijing, Hebei is MFG8. We have all aspects of ESG components in this facility. Another facility that we'll be running end of this year is Ireland facility. This will be the greenest facility ever for biologics. Ireland is very green to begin with, 60% of renewable energy supply, none from the coal. And we also use the largest disposable manufacturing facility. This is actually besides our manufacturing facility in China, this is actually the largest disposable manufacturing facility globally. So we have reduced detergent and water usage by more than 30% to 50%. So I think with that, I'll hand over to Ming for the financials.
Thank you, Chris. So now I'm going to talk about our financial performance. Our revenue and profitability continued to grow into the record territory. So this page here gives us the highlights of our financial metrics in the first half of 2022.
First, revenue. As you can see that in the first half of 2022, our revenue exceeded CNY 7.2 billion, a 63.5% increase over the same period last year continuing our journey of exponential growth over the past 9 years with a CAGR of 63%. The 63.5% revenue increase in this year was primarily driven by the successful execution of our follow on Win-the-Molecule strategies with more customers, more projects and more revenue per project as more and more projects are moving into the later stages. And significant growth of revenue from late sales and the commercial manufacturing, now representing almost half of our portfolio.
As Chris mentioned, the 82% increase in our pre-IND revenue enabled by the R of our unique CRDMO model, research and discovery. The 73% revenue surge from the non-COVID sector, while the demand from COVID sector is still pretty strong, but although growing at a decelerating pace. Also the exciting new growth platforms such as ADCs, bispecifics, drug products also contributed significantly to our robust growth in the first half. And of course, our capacity expansion and associated utilization are the key enablers for us to achieve this significant growth on our top line.
Moving to the right. Gross profit increased by more than 49% to approximately RMB 3.4 billion. The increase in the gross profit was primarily driven by the robust revenue growth. The profit growth from late phase and commercial manufacturing sector, the full utilization of existing and new manufacturing facilities despite the COVID constraints. And of course, our constant improvement of the operational efficiencies. The group's revenue growth exceeded the gross profit growth in the reporting period, primarily due to the reasons Chris mentioned, the first half of 2021 was an extraordinary or I should say, exceptional period with record profitability.
We took a large number of new integrated projects with very limited new resources added. So when everyone was working at 120 or 150 of their capacity, it became a baseline that was very difficult to beat or repeat. On the other hand, in the first half of 2022, we continue to invest in talent acquisition, in retention, capacity expansion, R&D and also global footprint extension to assure the long-term sustainable growth. Hence, compared to the same period last year, our adjusted GP margin rate dropped about 2 points from 55.7 to about 53.4. But compared to the historical GP margin performance, it is still a very healthy expansion.
Adjusted EBITDA, which is a proxy of our operating cash generation increased by more than 59% to RMB 3.7 billion in the first half. The adjusted EBITDA margin reached 51.2%, slightly lower than the same period last year, but is a 6.6 percentage points higher than the total year of 2021. Adjusted net profit is the GAAP-based net profit, excluding the impact of foreign exchange gains, share-based compensations and fair value gains from our investment portfolios. This is the proxy for our business profitability under continuous operations. As you can see that adjusted net profit increased to 61% from CNY 1.8 billion in the first half of 2021 to CNY 2.9 billion in the first half of 2022. The increase in adjusted net profit margin was primarily contributed by the certain gross profit and was partially offset by the increase in R&D expenses as we are investing for the future.
Next page, please. This page illustrates our consistent growth over the past 8 years on GAAP-based net income, net profit attributable to owners of the company, earnings per share and adjusted earnings per share. You can see that our net profit has grown more than 83x between 2014 and 2021 and exceeded CNY 3.5 billion last year. We achieved another 39% increase over such a big baseline to reach CNY 2.6 billion in the first half. Net profit attributable to shareholders also increased to 38% during the reporting period to reach about CNY 2.5 billion. Diluted earnings per share increased by more than 38% year-over-year to RMB 0.58 per share, and adjusted EPS on a diluted basis increased 63% to RMB 0.65. Again, the most important metric here is the adjusted earnings per share as it strips out the share-based compensation, foreign exchange hedging results, investment gain and loss impacts. It is a true indicator of our operating performance.
Chris, next page, please. Slide 53 give us more insight into our gross margin. In the first half of 2022, our gross margin reached 47.4%. Excluding share-based compensation, our adjusted gross margin reached 53.4%. You can see the composition of the cost components in the stack bars below, with roughly 18.5% in labor costs, 20.8% in material and 13% in overhead, which includes maintenance, utilities, depreciation of the manufacturing facilities.
Labor costs and overhead as a percentage of revenue are lower than our historical average, while material costs as a percentage of revenue was relatively higher than the historical pattern. The key driving force here is the quantum leap of the late phase and the commercial manufacturing projects, which shifted the gravity of our cost structure from labor towards material as the batch sizes increase drastically. At the same time, the labor efficiencies, automation and the full utilization of the manufacturing facilities also contributed to the lower weights of the labor and overhead in our cost structure. Compared to the same period last year, the 2.6 percentage points of higher labor costs in the first half of this year were driven by the increase of additional headcounts we hired in the second half of 2021 and also the share-based compensation. The weight of the material and overhead are within striking distance of those in first half last year and the total year 2021.
Next page, please. Page 54 illustrates the sustained growth of our adjusted EBITDA since 2017. Adjusted EBITDA is basically the EBITDA, excluding the nonoperating items such as share-based compensation following change and the investment gain and loss. As I mentioned earlier, it is a true indicator of our operating cash generation capability. As you can see, our adjusted EBITDA increased from about CNY 600 million in 2017 to 4.6 in 2021 with a CAGR of 64%. In the first half of this year, our adjusted EBITDA increased 59% to reach CNY 3.7 billion.
Not only did our adjusted EBITDA increased at a phenomenal pace, our adjusted EBITDA margin also have expanded over the years from high 30s to low 40s now into the 50s territory. The expansion of the adjusted EBITDA margin is primarily driven by the extension of the adjusted net profit. Through our relentless pursuit of the productivity programs, automation and economy scale. Secondly, our years of investment in capacity and global footprint has also yielded some fruition. We extended our drug substance capacity from nearly 35,000 liters in 2017 to 262,000 liters at the end of this year. The associated CapEx are amortized through depreciation excluded from the EBITDA calculation, but all these investments made the generation of the revenue, margin and EBITDA a possibility. Again, our goal this year is to reach a positive free cash flow and use the operating cash inflow to fund our capacity expansion, as Chen mentioned earlier. Next page, please.
Slide 55 presents the evolution of our return on equity over the past 5 years. During 2017, our year of IPO, our ROE was 6.4% and over the years improvement reached 10.7% in 2021. In the first half of this year, our ROE exceeded 7%. So if you simply times that number by 2, our ROE this year can reach the range of 12% to 14%. On the right-hand side of the page, you can see that the 5-year average ROEs of the 3 global leaders in the CDMO industry. Obviously, there is a range, it's difficult to develop an industry norm. However, at WuXi Biologics, we always aim to be one of the best. The reason our ROE historically was in the upper single-digit range was because of our consistent investment in capacity, technology and global footprint. We just talked about the evolution of our drug substance increase from, say, 35,000 liters in 2017 to 262,000 liters by the end of this year, 8-fold increase.
Biologics industry is such a long-cycle business that it could take 8 to 10 years to go from DNA to BLA. Similarly, building a world-class biologic facility is also a journey from engineering study to construction to mechanical completion to GMP certification, it could take 2 to 3 years. And after that, commercial arrangements, customer acceptance, quality certification and gradually filling the facility to reach full utilization could take another 2 to 3 years. That is why our ROE was lagging our investment when we were expanding. The good news is that now with our profitability grows much faster than our CapEx, we can reap the fruition of the past investment and see our ROE continually improve to the top range of the industry.
Secondly, we all know that ROE is also a function of leverage ratio. Ever since our IPO, we have been following a very conservative funding strategy. We probably rely more on equity funding than debt funding. Hence, our ROE might appear to be lower without leverage, but it brings more financial stability and flexibility into our long-term growth.
Now I'm going to pass the button back to Chris.
Thank you,. I think if you look at the past 10 years, how successful WuXi is, we attribute those to the 7 factors WuXi established ourselves as a premier CRDMO. So our strategy has been ahead of the time for our industry. Whenever industry needs, we have them. We invest in vaccine back in 2018 and '19. We are able to hire the best people. Our people can execute. We incubate our technology to be really -- the technology to drive for our projects. And so far, we have been be able to be demonstrated as the best execution capabilities in our industry. Our quality has always been improving over the past 3 years, now become a barrier for other people to copy our business model. The Wuxi speed is always known in the industry. So now that we have the speed and we have execution, so basically, we can deliver project at the faster speed and at 100% assurance on the execution side and similar quality. I think those are the very key factor for us of that. And this will continue to be the key factor for our success as well.
So in a way, we can deliver a project better, faster and cheaper than most of our peers in our industry. That's why we continue to see us take more market share and to deliver sustainable high growth. And if you look at the competition, we have built layers and layers of moat, from either competition from China or competition from globally. I think most recently, now we come to the ESG as the differentiation factor as well. A lot of large pharma, they have a minimum criteria on ESG. If you don't score certain rating in ESG, large pharma would not work with you, again, large pharma the most reliable CDMO partner, most coveted CDMO clients, everyone want to go after them, but they have very strong ESG ratings required. So ESG now become also our moat as well.
So to summarize, I think this year, as I said, it's the most challenging part 6 months of our company's history, but we still continue to see huge demand of our services in every region. We added 59 projects. We are still on target to deliver 120 projects this year. Among 59, 56 are actually non-COVID projects. So if you look at the non-COVID product alone, we actually added more price this year than last year. So our business growth momentum continued to be very strong. And because of that, we are raising the guidance for this year, where our revenue guidance was already at 45%, we're raising it to 47%. Our profit guidance was -- adjusted net profit guidance was already 40%, we're raising it to 47% as well. So certainly, we're raising both our profit -- adjusted net profit guidance and also our revenue growth to both 47%. That's incredible accomplishment from the team to achieve that. And we continue to have strong drivers for sustainable high growth in R&D and EM. And this first half was amazing means that the non-COVID revenue grew 72.6% and the full year 65%. Next year, we expect another 65% growth on the non-COVID budget. So our 3-year CAGR of non-COVID project growth is 65% despite of our size -- company size. And again, COVID make WuXi sign -- because of how we execute the COVID funding with our speed, with our success rate, with our track record, with our delivery, now we're actually able to win more projects, either R&D projects or commercial manufacturing projects. We are very happy with the new modalities growth, ADC, bispecifics and vaccine and drug products.
Again, large pharma continues to be our key client, and it's a target point for us. Our large pharma clients go from 10% revenue to about 40% revenue. And we'll continue to maintain a strong relationship with the large pharma, and we are talking to them about 10 commercial programs manufacturing there. And lastly, I mentioned very clearly that we are able to integrate the 3 successful acquisitions, making them earnings accretive and make them from -- make our competitor CDMO in China from a local CDMO to a global premium CDMO at $100 million revenue and 48% gross margin. We can take over a basic facility from Pfizer and get that utilized at 80% and delivering $200 million of revenue last year -- next year. And we can make a Bayer facility run and within 12 months get credit by European agencies. And lastly, ESG continues to be our focus, and we will be ESG leader, and we want ESG to be a differentiating factor for WuXi Biologics as well.
Thank you for your attention. We're happy to answer any questions you have.
[Operator Instructions] We have one online to raise hand. [ Chen Chen ], you can unmute yourself.
Actually, I have 2 questions about CapEx and capacity. My first question is, well, I am not sure if I hear Chris right just now. You mentioned you raised the CapEx guidance for 2023 and 2024. However, I also noticed that the new capacity plan for these 2 years is actually a bit lower than what was disclosed before. So why more CapEx need to lower capacity for the coming 2 years. Does it mean we now aim to build more capacity overseas this as it's more expensive to build overseas capacity? That's my first question. And my second one is, you also mentioned that you would adjust capacity according to your project pipeline. So that's the plan to decrease capacity in 2023, we are now becoming like a bit more conservative for the next year.
Yes, I think most of your questions center around 2023, 2024 capacity. So that's actually certainly moved by WuXi to delay or to pace ourselves in U.S. capacity. So as you know, U.S. capacity is the highest -- is the most costly to build, is the least profitable comparing to our global network. We have achieved higher profitability in China, followed by Singapore, followed by Ireland, followed by Germany and followed by U.S.
So U.S. is the most expensive to build and less profitable. And because initially, we are -- we were very concerned about China-U.S. trade tension back in 2019 and 2020, we want to build a very large capacity in the U.S. Now over the past couple of years, we seem to be able to mitigate from the China-U.S. relationship by really the facility in Ireland and now facility in Singapore. So we specifically paused the facility in U.S. a little bit. And that's the observation you have in 2023, 2024 that we have slightly lower capacity because we delayed the U.S. facility to end of 2024. So all the questions are centered around that.
So again, we are raising guidance for -- raising our CapEx for next year, the year after mostly to increasing capacity. Did that answer your question? I think the 2023, 2024 is really a strategic move by the company to -- we don't really need the U.S. capacity that quickly. And as you know, U.S. is most costly to build, least profitable and also there's a very high inflation right now in the U.S. So it's a significant move by the company to -- basically, we don't need the U.S. capacity as fast as we anticipated. And our European capacity is more than enough to cover that.
And now we also get a lot of feedback from our U.S. clients. They're very happy with Singapore. So we don't really need to build U.S. facility very quickly. That's mostly the delay in the capacity ramp-up in '23 and '24.
Understood. And a follow-up question. So for the Singapore side, do you expect the margin to be somewhere between China and the U.S.? And I also noticed that there are over 10 late-stage projects currently under discussion with some Europe and U.S. big pharma. So I don't know, like in terms of choice, do they prefer to do their projects in China sites or our overseas sites?
So I already shared with you about 5 of them are in Ireland, the remaining 5 will be in China. So China and Ireland are both very competitive in there. Because we offer clients different prices, so if they want to do in China, it's cheaper. And Singapore is a little bit more expensive, Ireland is little more expensive, the U.S. the most expensive. So that's -- so basically, we have -- we charge clients more in U.S. followed by Ireland and followed by Singapore, followed by China. So we give all kinds of different options. If they want the best cost competitive options, it will be China and Singapore. And then if they want to be closer to themselves, will be higher than Germany and U.S.
There have been a couple of questions online. The first one is a question on the supply chain. Given WuXi Biologics has some pretty ambitious capacity expansion plan over the next few years, could you please comment on condition of supply chain and its readiness to meet the ambition for your expansion? For example, single-use consumable, disposable bioreactors and filters where those supply chain has been quite tight.
Yes, that's a great question. I didn't highlight that during my part. So in my supply chain line, I mentioned during COVID, we can actually ship stuff. But we are able to get everything we need. So this is the fortunate part of WuXi. So we have not missed significant revenue because of supply chain. So again, partly because our purchase power, partly because of our growth and everyone wants to work with us. They want to make sure they satisfy the WuXi's needs.
So we -- our revenue impact on the supply chain is limited to a few million dollars where a lot of the global CDMO, even large pharma clients actually, I talked to one last time, they actually missed 20, 30 manufacturing slot because they couldn't get the supplies. For WuXi, we WuXi, we only missed 2 or 3 slots because of the manufacturing supply chain challenges. So overall, we are doing very well on the supply chain side. We're very confident.
Got it. And this is for the commercial projects. What share of the total volume is WuXi able to capture from a commercial project when it is to Follow-the-Molecule and also when it is Win-the-Molecule
Follow-the-Molecule so far, we think we can still -- we can keep at least 80%. Our goal is to keep 90% of the project. Basically, if -- when they're ready, we'll keep 90% of that. So Win-the-Molecule, so right now, I think probably will be hopefully, we can win 20% to 30% on the new projects out there. And that's already very significant, right? Again, there are 20, 30 good players out there, 3 or 4, 5, that's a very strong place out there to fight for the market share.
Got it. Here's a question on the biotech funding environment. Could you talk a little more about what you have seen from the clients in the past couple of months since the end of the first half. How would you characterize the prior priorities and focus in this tough environment?
That's a great question. We actually -- we haven't seen a slowdown on new projects. We haven't seen a slowdown in commercial projects. It's only in the middle of the Phase I and Phase II. If you look at our revenue, actually, you've seen that growth as well, there is similar trend. Our Phase I, Phase II revenue only grew 40%. So that seems to be the company that struggles most, the company just IPO'd and maybe 1 or 2 projects within the clinic. I think that's -- those are the companies we have seen sometimes they have to decide what programs they want to go for and how fast they want to push for it. But on the new project, new information side, we have not seen any slowdown. On the commercial product, we're definitely seeing slowdown.
Got it. And also, you mentioned about 5 new commercial projects. Are they China-only products? Are they PD-1, PD-L1s?
The new commercial projects, all of them are from global large pharma. So they're not a PD-1, PD-L1 for local market.
Great. Since you mentioned about the -- how do you drive product margin, the DP side compared to that of the DS side in terms of margin? And how do you think about the contribution of the DP to the overall revenue growth over the next few years?
I think DP, the percentage will probably double, but that overall is still very small comparing to DS. So we'll probably see 10% to 15% revenue growth from DP side, the margin is comparable.
Got it. Another question is, do you have the cancellation fees baked into your contracts?
Yes, that's a standard, industry standard.
Okay. And what is the policy on the accounts payables? Is the period expected to get longer or shorter in the future? Because if a third party -- is there any way a third party can help to handle with that?
Yes, we are more disciplined in collecting funds from our clients. So you should see our accounts receivable becoming shorter and kind of [indiscernible].
And here's another question. Just to confirm the guidance for the non-COVID revenue. Are you guiding for 65% non-COVID revenue growth in 2022 and 2023?
Yes.
So 65% for both years?
For both years, yes.
Got it. And another question is what has been the main contributor to the China growth in the first half?
That's a great question. It's all of the above with R&D and M. That's why -- so the project in China we still see -- we still consider China very specific market, very important to us.
Got it. And how much of the orders on hand are related to COVID? And how should we expect the Cove project contribution in 2023?
That's why -- so the last year COVID was 30% of revenue. This year, it's probably 20%. And next year, right now, it looks like probably single digits. So that's why the non-COVID project revenue growth -- I'm so confident the non-COVID project revenue growth was -- helped the company deliver a very exciting year still next year.
Sure. So -- and here's another question. For Trogarzo from TaiMed, they're now shifting from WuXi Biologics to Samsung Biologics as its future CDMO partner and they comment that the gross margin will be increased from 50% to 70%. Does this indicate that Samsung Biologics has lower manufacturing costs?
It's a scale. At WuXi because they didn't want to invest, we were doing 2,000 liter scale. At Samsung, they're doing this at much larger scale. So in the same scale, we have a similar cost. It's really a scaling, not a margin issue.
Got it. And also to what extent is the new capacity expansion covered and protected from your own Follow-the-Molecule and visibility into your pipeline?
80% of the capacity we built is for our own internal portfolio, 20% is for the upside and opportunistic. So that's why we are the most conservative, most logical in terms of capacity planning. Because we look at our portfolio saying this is -- and I look at the portfolio, we look at the risk and look at the success rate and adjust that and that's the capacity we need.
Got it. Another question coming from investor is, what was the commercial CMO revenue in first half 2022? And how does it compare to last year? What was the mix in the COVID and the non-COVID?
Because of our business model, we don't differentiate our Phase III and commercial, there's huge revue between Phase III and commercial. That's why we want to report Phase III and commercial combined in there. So I think on COVID and non-COVID, COVID probably around 30%, 70% is still non-COVID.
Got it. I think that's pretty much all the questions. Lastly, well, just another one is, could you please comment on the 2023 growth rate? Is there any updated guidance on that?
That's why we still anticipate some COVID revenue. As in the non-COVID revenue will grow 65%. And if you average that, so it will be probably still be high 35% -- high 30%.
Got it. Great. I think that's pretty much all the questions we got from the investors. So now I'm going to turn the call back to Chris for any final wrap-up comments.
Again, I think what I'm most excited about is actually the non-COVID growth. For last year, 65% this year; this year probably 65%; next year, probably talking around 65% as well. So despite the company's current size. And that's really what I promise always, I always promise you a unsustainable high growth as the most exciting aspect of them.
Right. Thank you, Chris, and thank you, Ming, for joining this today's call, and thank you, everyone, for joining this call. We're going to wrap up the call here. Have a good day. Thank you.
Thank you.
Thank you.