US Senate committee takes up bill targeting China's BGI, WuXi Apptec (updated)

BGI AD

06/03/2024 12:29

(Adds Complete Genomics comment paragraph 13)
    By Karen Freifeld
       March 6 (Reuters) - A bill in the U.S. Senate that would
restrict business with China's BGI, WuXi Apptec  603259.SS  and
other biotech companies on national security grounds faces its
first big test in Congress on Wednesday. 
    The draft legislation, which is designed to keep Americans'
personal health and genetic information from foreign
adversaries, will be discussed in a committee meeting and could
be changed and either moved forward for a vote or held back for
more discussion.
    The bill has spurred deep concern among investors, driving a
sell-off in the shares of WuXi AppTec when news of its
introduction first reached Chinese markets last month. 
    As currently written, it would prohibit federal agencies
from contracting with China's BGI, MGI, Complete Genomics, WuXi
AppTec, their affiliates and other biotechnology companies
deemed of concern. It would also stop the government from
entering contracts with companies that use their equipment or
services.
    But when members of the Homeland Security and Governmental
Affairs Committee meet on Wednesday to mark up the bill, it is
possible one or more company names could be stripped from the
text. 
    The companies have denied they pose any security threats.
    The committee expects the bill to move forward on a
bipartisan basis, an aide for Senator Gary Peters, chair of the
Homeland Security and Governmental Affairs Committee said.
    A companion bill introduced in the House in January accuses
BGI, a genomics company, of posing a threat to U.S. national
security through its collection of genetic data. It describes
MGI and Complete Genomics as subsidiaries and affiliates.
    WuXi Apptec, which provides R&D and manufacturing services
to the pharmaceutical and healthcare industry, allegedly has
ties to the Chinese military, according to the House version of
the bill. 
    The companies have said the proposed legislation contains
false, misleading and unfounded allegations.
    Rick Connell, WuXi Apptec's chief operating officer for the
U.S. and Europe, said the company was closely monitoring the
markup. 
    "We are confident that upon considering the facts, lawmakers
will understand that WuXi AppTec does not pose a national
security risk," Connell said, and is "a trusted partner to
customers in the U.S. and around the world."
        San Jose, Calif.-based Complete Genomics said there is
no basis for its inclusion in the bill. It makes genomic
sequencing instruments but said it does not have access to or
collect genetic data. It is a subsidiary of MGI, a publicly
traded company in Shenzhen, and has said the two companies are
no longer subsidiaries of any other entity.
  
    BGI Group said it supports the bill's premise of protecting
Americans' personal data, but that it does not have access to
that data. It said the legislation will "drive BGI out of the
U.S." and limit competition. 
    Once it moves out of committee, the bill must pass in both
the full Senate and the House, and then needs be signed by the
president.

 (Reporting by Karen Freifeld; Editing by Stephen Coates and
Chizu Nomiyama)
 ((karen.freifeld@thomsonreuters.com; +1(646) 223-6921;))