As the BIOSECURE Act works its way through the U.S. legislative branch, two companies named in the bill are reportedly weighing sales of certain units and facilities.
R&D powerhouse WuXi AppTec has put its cell and gene therapy manufacturing arm, WuXi Advanced Therapies, on the market, The Financial Times reported Thursday, citing three people close to the matter.
At the same time, WuXi AppTec’s sister CDMO, WuXi Biologics, is working with advisors to gauge interest in some of its European production facilities, FT’s sources said.
The reported sales moves come shortly after the BIOSECURE Act passed on a 306-81 vote in the U.S. House of Representatives last month. It’s now up to the Senate to decide on the fate of the legislation, which seeks to block certain Chinese biotech equipment and service providers from the U.S. market over national security concerns.
Aside from WuXi AppTec and WuXi Biologics, the bill also names a trio of Chinese genomics companies: BGI Group, MGI and Complete Genomics. More companies could potentially be added to the bill in the future.
“We are assessing options for continuing WuXi Advanced Therapies’ (WuXi ATU) operations in line with our priorities: our employees and the patients who need essential, time-critical and life-saving treatments,” a WuXi AppTec spokesperson told Fierce Pharma over email.
WuXi Biologics, for its part, said that it “continues to experience good business momentum” and is “consistently” winning new projects across the U.S., Europe, China and in Asia.
The company regularly conducts business reviews and does not comment on market speculation, a company spokesperson said in an emailed statement.
WuXi Advanced Therapies operates four laboratories and manufacturing facilities in Philadelphia, according to FT’s report. Talks about a sale of the unit have reportedly been ongoing for months, with rival contractors already approaching the company about buying up all or some of the firm’s assets, FT’s sources said.
As for WuXi Biologics, FT’s sources suggested new business in Europe has dried up in recent months as biopharmas with or seeking U.S. federal contracts have become skittish about working with the Chinese company. WuXi Biologics is specifically weighing a sale of two German manufacturing facilities it purchased from Bayer and expanded last year, the FT report says.
In August, WuXi Biologics said it had added 61 new projects in the first six months of 2024, half of which came from the U.S. That figure topped the 46 projects the CDMO added over the same stretch in 2023. Most of the new projects revolve around preclinical candidates.
The update came as WuXi Biologics reported a 1% year-over-year revenue increase to 8.6 billion Chinese yuan ($1.2 billion) during the first half of 2024.
Over the same span, WuXi AppTec’s sales fell 9% to 17.2 billion yuan ($2.4 billion)—though when adjusting for COVID revenue, the slide was just 1%, the company said at the time.
WuXi AppTec and WuXi Biologics have long defended themselves against the allegations laid out in BIOSECURE.
“We and many across the pharmaceutical and life sciences industry are deeply concerned about the legislation’s impact on U.S. leadership in biotechnology innovation, drug development, and patient care,” WuXi AppTec told Fierce Pharma after last month’s House vote.
Meanwhile, WuXi Bio stressed in its latest earnings report that “[t]he group firmly believes that it has not, does not, and will not pose a security risk to the United States or any other countries.”
Though the BIOSECURE Act has yet to be signed into law, a summer survey from L.E.K. Consulting found that U.S.-based life sciences companies’ confidence in working with Chinese firms had already taken a severe hit. The feeling among drugmakers outside the U.S. was milder.
New research from CPHI Milan released earlier this week suggested many manufacturers are unsupportive of the bill. Among a pool of 280 companies questioned by CPHI, just 19% took the view that China-based CDMOs are “a threat and should be removed from Western supply chains.”
Thirty-eight percent of respondents called the issue “politically motivated” and said that it sets a “concerning precedent for the industry,” while the remaining 43% of companies took a more balanced view, acknowledging the contributions of the targeted companies while vouching for the need to diversify supply partners.