According to a report by the Financial Times on Thursday, as the United States increasingly imposes restrictions on Chinese biotechnology companies citing national security concerns, WuXi AppTec and its subsidiary WuXi Biologics are planning to sell some of their operations in the United States and Europe.
The U.S. House of Representatives passed the Biosecure Act last month, explicitly naming Chinese companies including WuXi AppTec and WuXi Biologics, and restricting cooperation with these companies by domestic enterprises.
The Financial Times reported on Thursday citing sources familiar with the matter that WuXi AppTec has already sold its cell and gene therapy manufacturing division, WuXi Advanced Therapies, which has four labs and manufacturing facilities in Philadelphia.
The Biosecure Act targets five Chinese companies, including WuXi AppTec and WuXi Biologics. The act prohibits pharmaceutical companies with contracts with the U.S. government from using the services of these Chinese companies after 2032.
According to the Financial Times, based on information from three sources, in addition to selling the cell and gene therapy manufacturing division, WuXi AppTec is working with consultants to evaluate market interest in some of its European production facilities. Management is concerned that these facilities may no longer be needed.
With the passage of the Biosecure Act by the U.S. House of Representatives categorizing “WuXi” as a “concerned biotechnology company,” WuXi AppTec’s new business in Europe has dried up in recent months. Revenue from European customers in the first six months of 2024 decreased by 27% compared to the previous year. Meanwhile, WuXi Biologics’ stock price has dropped nearly 30% this year, and WuXi AppTec’s stock price has fallen by 14%.
Industry research by Bloomberg suggests that there is a high probability, up to 70%, that the Biosecure Act will ultimately become law.
With the upcoming elections in November in the United States, executives at WuXi AppTec have noted that the time for this Congress to pass the act is running short.
In addition to WuXi AppTec and WuXi Biologics, the Biosecure Act specifically names other Chinese companies including BGI Group, BGI Genomics, and the BGI subsidiary Complete Genomics.