WuXi Biologics plays defense after US bill brands certain Chinese biopharmas as security threats

New legislation aimed at blocking a group of Chinese biopharma firms from tapping into U.S. federal funding has sent shares tumbling in recent days.

Thursday, the House Select Committee on the Strategic Competition between the United States and the Chinese Communist Party unveiled the BIOSECURE act—a bill aimed at keeping taxpayer dollars out of the hands of so-called “foreign adversary biotech companies of U.S. national security concern.”

The bill specifically targets CDMO giants WuXi AppTec and WuXi Bio plus Chinese genomics companies BGI Group, MGI and Complete Genomics.

After plummeting Friday, WuXi Bio’s stock was down another 6% on Monday.

The manufacturing giant was quick to defend its position (PDF) in an announcement on the Hong Kong Stock Exchange.

The House committee’s bill contains a “misleading description” of Zhisheng Chen, CEO and executive director of the company, WuXi Biologics contends. WuXi Bio added that Chen has neither worked for China’s Academy of Military Medical Sciences or any military-affiliated institution, nor has he received compensation from military-affiliated institutions in the country.

“The company is committed to supporting its customers globally and to operating with the highest standards of compliance and in accordance with the applicable laws and regulations of all jurisdictions where it has business operations,” WuXi Bio said in its press statement.

The legistlation identifies biotechnology companies that allegedly pose a risk to U.S. national security by “engaging in joint research with, being supported by, or being affiliated with a foreign adversary’s military, internal security forces, or intelligence agencies.”

House members behind the bill are concerned that these companies could furnish Chinese officials with data obtained with biotechnology equipment or services—especially without express and informed consent from U.S. patients.

The BIOSECURE act is subject to further review and modification before it potentially becomes law.

The proposed legislation marks another potential hurdle for the troubled contract manufacturing arena, though, as of late, several manufacturing majors—including WuXi Biologics—have enjoyed turnarounds.

Just last week, WuXi XDC, the bioconjugation spinoff of WuXi Bio, snapped up an antibody-drug conjugate pact with South Korea’s Celltrion. The deal came a few months after WuXi XDC branched off from its parent company and launched onto the Hong Kong Stock Exchange.

Separately, Korea’s Samsung Biologics and Switzerland’s Lonza have largely bucked industry losing trends in their latest quarterly reports—at least as far as sales are concerned.

Calling its performance “exceptional,” Samsung Bio last week become Korea’s first domestic biopharma firm to generate 1 trillion won in annual profit. The 2023 result also marks another record revenue year for the CDMO giant.

And while Lonza is closing a plant in Guangzhou, China, the Swiss production juggernaut for 2023’s fourth quarter reported earnings beyond expectations, allowing it to maintain its guidance through 2028.