US House committee advances bill to restrict BGI, WuXi AppTec (updated)

WuXi Biologics (Cayman)

15/05/2024 15:32

(Adds committee vote.)
    By Karen Freifeld
       May 15 (Reuters) - U.S. legislation that would restrict
business with China's BGI, WuXi AppTec  603259.SS  and certain
other biotech companies on national security grounds was passed
by a committee in the House of Representatives on Wednesday.
    The House Committee on Oversight and Accountability voted to
approve the Biosecure Act, which now must get through the full
House and Senate before the president could sign it into law.
The bill would push U.S. pharmaceutical and healthcare companies
to lessen their reliance on Chinese research and manufacturing.
    The U.S. Senate Homeland Security and Governmental Affairs
committee voted in favor of similar legislation in March.
    The latest version of the House bill gives U.S. companies
until 2032 to end work with the Chinese firms, news that lifted
shares of potentially impacted Chinese companies in trading in
Hong Kong earlier this week.
    The latest draft also adds WuXi Biologics  2269.HK  to a
list of company of concern that includes WuXi AppTec, as well as
BGI, MGI and Complete Genomics.
    Supporters say the legislation is needed to keep Americans'
health and genetic information from foreign adversaries, who
could weaponize the data. They also say it is dangerous for
China to dominate the biotechnology supply chain.
    The targeted companies say the proposed legislation is based
on false and misleading allegations and would limit competition.
They say they do not pose a threat to U.S. national security and
that they should not be included in the bill. 
    The Biosecure Act would bar federal agencies from
contracting with biotech companies deemed of concern. It also
would prohibit contracts with companies that use those
companies' equipment or services.
    In 2023, Wuxi Biologics earned about 47% of its 17 billion
yuan in annual sales from North America and about 18% from
China, according to its annual report.
    Two-thirds of WuXi AppTec's revenue came from the U.S.
market in the first nine months of 2023, according to an
investor. 
    Complete Genomics - another "company of concern" - is a U.S.
founded company, headquartered in San Jose, Calif. It is a
subsidiary of China's MGI, a publicly traded global company. 
    BGI, a leading provider of genetic sequencing services
around the world, has said the legislation will drive the
company out of the U.S.

 (Reporting by Karen Freifeld; Editing by Michael Erman and
Chris Sanders)
 ((karen.freifeld@thomsonreuters.com; +1(646) 223-6921;))