US House committee voices support for bill to restrict BGI, WuXi AppTec (updated)

WuXi Biologics (Cayman)

15/05/2024 17:12

(Adds comments from committee chair and member in paragraphs 5
and 12)
    By Karen Freifeld
       May 15 (Reuters) - A U.S. House of Representatives
committee voiced bipartisan support on Wednesday for legislation
that would restrict business with China's BGI, WuXi AppTec
 603259.SS  and certain other biotech companies on national
security grounds.
    A committee member called for a recorded vote on the
measure, which will be needed to officially advance the
legislation and will come later in the day. 
    Members of the House Committee on Oversight and
Accountability expressed support for the Biosecure Act. If the
committee passes it, the bill would need to go through the full
House and Senate before President Joe Biden could sign it into
law.
    The bill would push U.S. pharmaceutical and healthcare
companies to lessen their reliance on Chinese research and
manufacturing.
    "This bill is a necessary step towards protecting America’s
sensitive healthcare data from the CCP before these companies
become more embedded in the U.S. economy," Republican
Representative James Comer, the committee chair, said before the
vote. "CCP" is the acronym for the Chinese Communist Party.
    The U.S. Senate Homeland Security and Governmental Affairs
committee approved 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 affected Chinese companies in trading in
Hong Kong earlier this week.
    The latest draft also adds WuXi Biologics  2269.HK  to a
list of companies 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.
    "U.S. taxpayer dollars should not be funding (Chinese)
biotech companies that are actively working with the CCP and the
People's Liberation Army to potentially collect Americans'
genomic data and intellectual property and use that data to
further their authoritarian objectives," said Representative
Raja Krishnamoorthi, a Democrat who introduced the revised House
bill last week with Republican colleague Brad Wenstrup. 
    In 2023, Wuxi Biologics earned about 47% of its 17 billion
yuan ($2.35 billion) 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, California. It
is a subsidiary of China's MGI  688114.SS , 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.
 ($1 = 7.2190 Chinese yuan renminbi)

 (Reporting by Karen Freifeld; additional reporting by Makini
Brice in Washington; Editing by Michael Erman, Chris Sanders and
Jonathan Oatis)
 ((karen.freifeld@thomsonreuters.com; +1(646) 223-6921;))