Shares of GenScript Biotechnology Co., Ltd (HKG: 1548), a China-based Contract Development and Manufacturing Organization (CDMO), plummeted over 17% in trading today following a request by a US House of Representatives committee on China for the FBI to investigate the company and its subsidiaries. The committee, led by chair John Moolenaar and member Raja Krishnamoorthi, seeks a briefing on intelligence and enforcement information related to GenScript, Bestzyme, Legend Biotech, and ProBio.
In a letter dated May 30, 2024, the congressmen expressed concerns that GenScript’s role as a CDMO, including the production of custom gene synthesis for companies and US government entities, could pose potential risks to the intellectual property of US firms and the company’s broader role in advancing the People’s Republic of China’s biotech capabilities. They also pointed to alleged links between the company and the Chinese Communist Party (CCP), citing various members of party committees across the firm and its subsidiaries.
The letter notes that since 2023, GenScript has received US government contracts worth millions of dollars from departments including Health and Human Services (HHS), Agriculture (USDA), Defense (DOD), and Veterans Affairs (VA), for a range of products and services.
While acknowledging that the company’s aspirations do not necessarily equate to illicit behavior, the authors emphasized the need for vigilance in protecting US competitiveness and preventing the transfer of sensitive technologies to entities influenced by the PRC.
Originally founded in New Jersey, US, in 2002, GenScript has significant operations in Greater China, headquartered in Nanjing. The company, which went public on the Hong Kong Stock Exchange in 2015, employs over 6,000 people globally and operates in over 100 countries. Its subsidiary, Legend Biotech, focuses on the development of innovative chimeric antigen receptor (CAR) T cell therapies and has a global co-development partnership with Johnson & Johnson for the drug Carvytki (ciltacabtagene autoleucel), which received its first US market approval in February 2022.
In response to the congressional letter, GenScript issued a statement today clarifying that no illicit behavior has been alleged and emphasizing that it is not under government control, pledging to engage with the committee to clarify its business and commitment to the life sciences sector.- Flcube.com
