Following a back-and-forth with the Pentagon this year, contracting juggernaut WuXi AppTec appears to have largely evaded its designation by the U.S. as a company with ties to the Chinese military.
On Monday, the Department of Defense (DOD) said in a post on the Federal Register that the Deputy Secretary of War has called to remove WuXi AppTec from the Section 1260H list first published in June, which classified the contract research and manufacturing organization as a Chinese military company.
WuXi AppTec and its sister CDMO WuXi Biologics have taken flak in the U.S in recent years as China-targeting legislation like the Biosecure Act has worked its way into law. WuXi AppTec has vehemently opposed its classification as a biotech company of concern, however, and took its inclusion on the list of companies to court in June.
Subsequently, the company in August won a motion for preliminary injunction, which temporarily halted the DoD from implementing or taking any other action related to WuXi AppTec’s contested 1260H designation. In issuing the decision, a judge with the U.S. District Court for the District of Columbia noted at the time that WuXi AppTec’s inclusion on the list seemed to hinge on a “misreading” of its ties to the Chinese military.
The removal of WuXi AppTec from the list this week comes in direct response to that court outcome, per the Federal Register notice. The move does, however, allow the DoD to relist the company on “additional or supplementary grounds” and “without prejudice.”
Nevertheless, that outcome appears unlikely, Tony Ren, head of Asia healthcare research at Macquarie Capital, wrote in a note to clients this week.
“While DoD could relist WXAT on additional or supplementary grounds, historical precedent suggests relisting after removal is rare,” he said, naming a single Chinese automotive lidar company, Hesai, the only known example of a relisting taking place. In that instance, the re-listing occurred in just a matter of days, too.
Next up, the U.S. Office of Management and Budget will be tasked with determining whether WuXi AppTec is a company of concern based on a separate inter-agency review, with the outcome of the process due on Dec. 18. Given notification and appeal requirements around the process, and the fact that WuXi AppTec says it has so far not heard from OMB, a classification in 2026 looks unlikely, Ren said.
In framing the potential for the U.S. attempting other restrictions of WuXi AppTec in the future, Ren pointed out that multiple firms with ties to the Pentagon have investments that “compete against Chinese CDMOs.”
Biotechs and other companies that are dinged as companies of concern by the U.S. under the Biosecure act would effectively be frozen out of the U.S. market, as the designation freezes federal procurement and grants tied to equipment or services provided by a named company.
In a Hong Kong securities filing this week, WuXi AppTec noted (PDF) that the de-listing “relieves the Company from further adverse consequences of the 1260H designation.”
The company added that it will “remain committed to serving our customers and enabling the lifesaving and life-improving medicines they make for patients.”
Despite the cloud hanging over WuXi AppTec’s U.S. status this year, the company’s business has continued to boom.
Over the first nine months of 2026, the company reported sales of 45.54 billion Chinese yuan (around $6.8 billion), signaling a 39% jump over the period in 2025. The company also lifted its guidance for the year and now expects to chart sales in the range of 61 billion to 61.9 billion yuan, or roughly $9.1 billion to $9.3 billion in U.S. currencies.