Arguing that the Defense Department might have misread evidence and inflicted harm on the company, a federal judge has thrown WuXi AppTec a lifeline as the research and manufacturing services juggernaut fights its recent classification by the U.S. government as a Chinese military company.
Late last week, a judge with the U.S. District Court for the District of Columbia granted WuXi AppTec’s motion for preliminary injunction, which temporarily stops the Department of Defense (DoD) from “enforcing, implementing or taking any other action pursuant to the 1260H Designation,” the company said in a recent filing (PDF).
WuXi AppTec and its sister CDMO WuXi Biologics have faced repeated scrutiny from China hawks in the U.S. government in recent years.
In early June, WuXi AppTec landed on the DoD’s 1260H list of what it has alleged are Chinese military companies, claiming that they support that nation’s armed forces while maintaining business ties to the United States. That in turn would make WuXi AppTec a biotech company “of concern” under the Biosecure Act, which locks up U.S. federal procurement and grants tied to equipment or services provided by the named companies.
WuXi AppTec has consistently defended itself and argued that the U.S. government’s characterization of its business is inaccurate and misleading. The company took the matter of its 1260H label to court in late June, with a hearing over its motion taking place on July 22.
With the new ruling in the D.C. court, WuXi AppTec says it is getting relief from the “immediate adverse consequences” of the 1260H designation as it continues to fight that classification on a more comprehensive level.
“In the meantime, our operations remain fully functional, and we remain focused on our commitment to serving our customers and the patients relying on the lifesaving and life-improving medicines they make,” WuXi AppTec said in the notice posted to its website.
In issuing his decision, Chief Judge James Boasberg said WuXi AppTec had made a reasonable case that the Defense Department acted in an “arbitrary and capricious” manner, according to Bloomberg News. Boasberg also acknowledged that the DoD label is “inflicting harm on WuXi that later relief cannot repair.”
Harm has come in the form of work suspensions, cancelled projects and transfers of programs to rival suppliers for WuXi AppTec, the South China Morning Post reports.
The Defense Department’s allegations earlier this summer hinged on claims of indirect ownership of WuXi AppTec by China’s State-owned Assets Supervision and Administration Commission of the State Council (SASAC), a policy-making civilian agency under the Chinese Ministry of Industry and Information Technology called the State Administration of Science, Technology and Industry for National Defense (SASTIND). The DoD also alleged ties to the People’s Liberation Army (PLA).
WuXi AppTec hit back at the time, with a spokesperson telling Fierce that the company is “not owned or controlled by or affiliated with any PRC military or government entity,” adding that “we do not provide services to the PRC military,” and stressing that “we are not associated with the PRC’s defense industrial base or military-civil fusion programs.”
WuXi argued at the time the classification was “clearly a mistake”—a position Judge Boasberg seemed to agree with, noting in his opinion, as cited by Bloomberg, that the DoD’s claims appeared to be based on a “misreading” of those suspect company ties.
WuXi AppTec has been caught in the crosshairs of ongoing scrutiny over China’s booming biotechnology industry since 2024, when the Biosecure Act, which aims to keep taxpayer dollars away from “foreign adversary biotech companies of national security concern,” was first introduced.
Lawmakers have mounted separate efforts in recent months to put more heat on the spate of China investments and licensing deals being struck by U.S. drugmakers, too.