BIO Trade Group Announces Decision to Sever Connections with Chinese Biotech Firm WuXi AppTec

BIO Trade Group Cuts Ties with WuXi AppTec Amid Concerns Over National Security

In a bold move, the Biotechnology Innovation Organization (BIO) announced its decision to sever connections with Chinese biotech firm WuXi AppTec. This decision comes in response to mounting pressure from lawmakers and concerns over national security. BIO, a trade association representing the biotechnology industry, emphasized the critical role of the biotech industry in U.S. national security and expressed its determination to prevent other countries, particularly China, from becoming the global center of excellence in biomanufacturing.

BIO CEO John Crowley stated, “America and our allies cannot let this happen. Securing and advancing our preeminence in biomanufacturing will be one key component of a multi-prong approach to secure and advance this strategic imperative in biotechnology.” This strong statement reflects the growing concerns among U.S. lawmakers about China’s ambitions in the biotech sector.

The decision to cut ties with WuXi AppTec was further solidified in a letter sent by Mr. Crowley to Rep. Mike Gallagher, chairman of the House Select Committee on the Chinese Communist Party (CCP). In the letter, Mr. Crowley expressed BIO’s support for the BIOSECURE Act, a legislation introduced by Mr. Gallagher to restrict federally funded medical providers from working with Chinese biotech companies that could pose a risk to national security.

WuXi AppTec, in a letter dated March 12, claimed that it had terminated its membership with BIO. However, BIO updated its statement on March 14, clarifying that the Chinese biotech firm had “proactively ended its membership in BIO.” This move by WuXi AppTec comes as no surprise, considering the increasing scrutiny it has faced due to its alleged ties to the Chinese Communist Party and the People’s Liberation Army.

The BIOSECURE Act, which aims to address national security concerns, specifically targets several top Chinese firms with deep connections to the CCP and its military. These include WuXi AppTec, BGI, MGI, and Complete Genomics. The Senate’s Homeland Security Committee recently voted to advance the Senate version of the BIOSECURE Act, potentially dealing a blow to WuXi AppTec and other Chinese biotech companies if the legislation becomes law.

Rep. Gallagher welcomed BIO’s decision and praised its commitment to the BIOSECURE Act. He stated that the act recognizes the threat posed by CCP-backed companies like WuXi AppTec to America’s biotechnology industry. This endorsement further highlights the concerns among U.S. lawmakers about safeguarding national security and protecting the country’s biotech industry from foreign influence.

The repercussions of BIO’s decision were immediately felt, as WuXi AppTec shares dropped 13 percent on the Hong Kong Stock Exchange. The company’s Hong Kong-listed shares have already plunged 44 percent this year, reflecting investor concerns over its future prospects.

WuXi AppTec, along with its subsidiary WuXi Biologics, has a significant presence in the United States, with multiple offices, manufacturing facilities, and labs across various states. It has partnered with renowned pharmaceutical companies like Pfizer, AstraZeneca, and GlaxoSmithKline, as well as state-funded U.S. labs for various research projects.

However, allegations of deep connections with the CCP have raised eyebrows among U.S. lawmakers. A report by the think tank Jamestown Foundation highlights WuXi AppTec’s establishment of a CCP organization within its structure in China, boasting 20 Party branches and embedding the Party’s presence within its corporate culture. The report also reveals that WuXi AppTec has received investment from multiple PLA funds.

The severing of ties between BIO and WuXi AppTec marks a significant turning point in the relationship between the two entities. It showcases the growing concerns over national security and the desire to protect America’s biotech industry from potential threats. As the BIOSECURE Act progresses through Congress, the future of Chinese biotech firms operating in the U.S. remains uncertain. The outcomes of these developments will undoubtedly shape the landscape of the biotech industry in the years to come.

Source: Reuters