Wuxi AppTec and Wuxi Biologics drop on passage of US bill targeting China biotech firms

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Shares of Wuxi AppTec and Wuxi Biologics fell after the US House passed a bill that would restrict business with Chinese biotech companies

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A Wuxi Biologics office. Photo: Wuxi Biologics

Zhang Shidongin Shanghai

Published: 12:27pm, 10 Sep 2024Updated: 6:31pm, 10 Sep 2024

Wuxi AppTec and Wuxi Biologics shares tumbled in Hong Kong after the US House of Representatives approved a bill that would restrict business with certain targeted Chinese biotech companies, setting the stage for passage in the Senate.

Wuxi AppTech slumped 10 per cent to HK$32.20 on Tuesday and its affiliate, Wuxi Biologics, slid 3.9 per cent to HK$10.90; the Hang Seng Index, by comparison, was 0.2 per cent higher. The shares of Wuxi AppTec that are listed in Shanghai lost 5.4 per cent to 37.29 yuan.

The House passed the bill 306 to 81 on Monday and it must be approved by the Senate before it goes to President Joe Biden for his signature. If the legislation becomes law, it will bar federal contracts with the targeted companies and their American subsidiaries. Five Chinese entities will be targeted initially: Wuxi AppTec, Wuxi Biologics, BGI Group, its spin-off unit, and a US subsidiary.

The legislation is intended to encourage US firms to cut their reliance on Chinese manufacturing and research while preventing American health data from going to Beijing.

Wuxi AppTec and Wuxi Biologics denied that they pose a security risk to the US and that they are engaged in human genomics businesses or collect relevant data, according to separate statements to the Hong Kong exchange on Tuesday.

“The Senate has not scheduled the proposed Biosecure Act for consideration and the legislative route forward is unclear at this stage,” Wuxi AppTec said in its statement. “The company will work closely with its advisers to continue our engagement and dialogue with the relevant stakeholders involved in the legislative process.”