On May 15, 2024, the US House Oversight Committee is set to review a “BioSecurity” bill proposal that could have significant implications for the biotechnology industry. The bipartisan-supported bill aims to prohibit companies receiving US government funding from engaging in commercial dealings with certain biotech companies identified as national security concerns, including China-based BGI, MGI, Complete Genomics, and WuXi AppTec (SHA: 603259, HKG: 2359), along with their affiliates.
The mark-up stage, which is the final review of the bill’s text and content by the committee before it proceeds to the House floor for a vote, can result in minor edits or significant revisions. If enacted, the legislation would impact companies that rely on these Chinese biotech firms for essential services.
Analysis by Endpoints News suggests that a potential immediate ban on relations with WuXi AppTec and its affiliates could disrupt the industry. At least 10 US-based companies have disclosed their heavy dependence on WuXi and its affiliates for critical supply chain components, such as chemical synthesis, reagents, starting materials, and active pharmaceutical ingredients (APIs), during their Q4 2023 earnings calls. These companies include industry giants like Eli Lilly, Amicus Therapeutics, Iovance Biotherapeutics, Spyre Therapeutics, Vir Biotechnology, Fibrogen, AgeX Therapeutics, Sound Therapeutics, and Structure Therapeutics. In many cases, WuXi serves as the sole global supplier of APIs for significant pipeline products, and any ban could jeopardize the ability of these biotechs to file New Drug Applications (NDAs) for key products. Given the tight cash flow conditions under which many biotechs operate, such delays could be devastating, especially for young companies in the industry.- Flcube.com
