The last thing that China's CXOs want to hear has happened.
On the evening of March 6, Beijing time, the U.S. Committee on Homeland Security and Affairs passed the Senate Biosecurity Act (S3558), the future willRestricting business dealings with Chinese biotech companies such as BGI and WuXi on the grounds of ***.
The bill affects Chinese gene sequencing leaders BGI, MGI, MGI's U.S. subsidiary Complete Genomics, as well as CXO leaders WuXi AppTec and WuXi Biologics. According to the Act, the executive agencies and companies in the United States are prohibited from procuring or acquiring any biotechnology equipment or services produced or provided by these enterprises, providing loans or providing loans, etc.
According to the Health Knowledge Bureau,The Act was amended to exempt contracts and agreements that had already been signed. In other words, the orders currently in hand of these companies can continue to be executed.
On the 7th**, WuXi dived across the boardWuXi AppTec's A shares fell to the limit, and Hong Kong stocks fell more than 15%; WuXi Biologics' Hong Kong stock fell more than 20%. It is worth mentioning that the stock price performance of BGI, which was also named by the United States, was almost 'stable', with BGI falling by nearly 3% and MGI falling by less than 1%.
In this regard, BGI said that the stock price fluctuated little because the company's operating income from the United States accounted for a small proportion. On the other hand, more than half of WuXi Xi's business revenue is in the United States, so it was "hit hard" by the bill.
Biosafety Act (s.).3558) also involves the reshaping of the pattern of the pharmaceutical industry chain between China and the United States. For WuXi in the spotlight, the rain is coming.
If you want to add sin, there is no excuse
WuXi AppTec has operations in six states, including Pennsylvania, California and Delaware. According to the financial report data, in the first three quarters of 2023, WuXi AppTec achieved operating income of 29.5 billion yuan, and its single-quarter revenue exceeded 10 billion yuan. More than 80% of the revenue comes from overseas, and the U.S. market alone contributes two-thirds.
WuXi AppTec has to face two proposals at the same time, one from the U.S. Senate, which passed the hearing on the evening of March 63558, another Proposition HR7085 from the House of Representatives, is similar in content.
The CRO business belongs to the biomedical industry, which is also related to the "genetic information" in the two proposals, and has become a sharp sword stabbed by the United States at WuXi AppTec.
Previously, WuXi AppTec has repeatedly strongly opposed and stated many times: it has not, is and will not pose a *** risk to the United States or any other country in the past, and will not be, the companyThere is no human genomics business, and the company does not collect human genomics data in its existing businesses.
But the other side of the ocean completely selectively ignored all this, and the US House of Representatives still put it"Poses a threat to the United States through the collection of genetic data" and "has ties with China".and other groundless charges were placed on WuXi AppTec.
After communicating with the U.S. Senate Governing Board, the U.S. Global Biotechnology Industry Organization stated: SMotion 3558 isThe confusion between gene sequencing services and the concept of CDMO by US politicians is a fundamental misunderstanding of the operation of the biotechnology market.
At the hearing on March 6, about SThe 3558 vote lasted the longest, lasting nearly 4 minutes. The presiding officer of the hearing was Gary Peters, S., Chairman of the U.S. Committee on Homeland Security and AffairsProposal 3558 is exactly what he proposed. February 12thPeters had agreed with several other senators to target WuXi AppTec and WuXi Biologics on the grounds that "it threatens the United States."to convince the US Secretaries of the Treasury, Defense, and Commerce.
In the end, the House committee still pushed S. by a vote of 11-1Bill 3558 Legislative Draft. The only negative vote came from Republican Senator Rand Paul of KentuckyHe strongly condemned the senators for "exploiting anger at China to do some narrow protectionist acts for their state." ”
The game will continue
WuXi AppTec has business connections with major global pharmaceutical companies and would be banned from doing business altogetherIt will lead to the disruption of the U.S. pharmaceutical chain.
The U.S. hasn't really fully studied the consequences of stopping its partnership with WuXi AppTec, which is another reason for the only negative vote mentioned above.
According to the U.S. authoritative Act Information **govtrack,On the evening of March 7, Beijing time, SMotion 3558 will be sent to the House of Representatives, which is considered by the corresponding committee of the House of Representatives.
According to the legislative process in the United States, WuXi AppTec still has a glimmer of life: The House of Representatives has the right to make changes to the proposal, and after the full House of Representatives votes, it needs to be sent to the United States**, and the proposal may be optionally signed. There's a lot of room for manoeuvre.
Last week,Biden**It sent an optimistic signal to the CXO sector, indicating that it wouldMeasures to avoid a broader decoupling of the U.S. relationship with other countries' real consumer, economic, scientific, and ** relationships.
Investors remain cautiously optimistic for now. Lai Chuanliang, senior partner and manager of Qianhai Ruifeng Capital Management, said, sThere is a high probability that Bill 3558 will be revised, and the final version may not be what it is now. Recently,Eli Lilly's filings with the SEC also expressed the importance of Chinese partners to the pharmaceutical industry as a whole"Due to geopolitics, it is not feasible to find an alternative supplier when necessary, which will adversely affect the entire pharmaceutical business. ”
Most investors have questioned the success of the legislation. Zhan Kai, an international partner at Shanghai Yuanda Winston Law Firm, said that from a legislative and technical point of view, this year is an election year in the United States, and the real working hours are short, and the possibility of passing the bill this year is very low. Moreover,The confrontation between the "radicals" and the "rationalists" has made the industry intuitively feel the game between the American regimes, which is a substantial obstacle on the road to the formal passage of the bill.
In recent years, the pharmaceutical industry has risen from the game between enterprises to the state, and the pharmaceutical industry chain has gradually become one of the core wrestling points of the strategic competition between China and the United States. Today's WuXi AppTec is just one microcosm, and it is foreseeable that there are many more new challenges facing China's pharmaceutical industry.
Written by丨Miao Miao.
Editor丨Jiang Yun Jia Ting.
Operated by Han Jinrui.
Illustration by Visual China.
Disclaimer: Original content of the Health Knowledge Bureau, please do not do it without permission**