As CDMO giants Wuxi AppTec and WuXi Biologics come under mounting scrutiny for their alleged ties to Chinese government officials, they are losing a key ally in Washington, D.C.
Wednesday, the Biotechnology Industry Organization (BIO) said it's taking "important steps" to support U.S. national security. Those steps include supporting the BIOSECURE Act, which looks to prevent "adversary biotech companies" from obtaining federal funding.
"Our adversaries abroad have stated that they intend to become the biotechnology center of excellence in the world," BIO CEO John Crowley said in a statement. "America and our allies cannot let this happen. Securing and advancing our preeminence in biomanufacturing will be one key component of a multi-prong approach to secure and advance this strategic imperative in biotechnology.”
At the same time, former member WuXi AppTec has "proactively ended its membership" in the trade group, according to BIO's release.
In a letter to Crowley, WuXi AppTec's chief operating officer for the U.S. and Europe, Richard D. Connell, Ph.D., said the company has "become the target of U.S. legislative efforts that preemptively and unfairly target our company without due process."
The "misinformed efforts, which recently extended to maligning our membership in BIO, risk distracting from the important and honorable work of BIO," Connell added in the letter.
All of this comes after the chairman of the House Select Committee on the Chinese Communist Party, Mike Gallagher, R-Wisconsin, began raising questions about whether BIO should be forced to register as a foreign agent. Gallagher recently asked U.S. Attorney General Merrick Garland to start a review of BIO's lobbying against the BIOSECURE Act.
Back in January, a bipartisan group of lawmakers began advancing legislative efforts to crack down on certain Chinese biopharma companies because of alleged ties to government officials and the Chinese military. The U.S. Senate's homeland security committee last week voted to advance a version of the BIOSECURE Act.
As WuXi Biologics' stock price crashed in late January, the company defended itself and said the lawmakers had mischaracterized its CEO, Zhisheng Chen.
More recently, WuXi AppTec said it strongly objects to "blanket allegations and preemptive actions against our company without due process."
In his letter this week, Connell stressed that WuXi AppTec "has never been subject to U.S. sanctions or determined by any federal government agency to pose a national security risk to the United States."
Besides the two CDMO giants, the BIOSECURE Act targets Chinese genomics companies BGI Group, MGI and Complete Genomics.
Editor's note: This story was updated at 8:20 a.m. on March 15 to reflect that WuXi AppTec ended its membership in BIO.