Chinese pharma firm WuXi AppTec fell nearly 20% after U.S. lawmakers propose new ban

Asia Tech Wire (Jan 26) -- Chinese pharmaceutical company WuXi AppTec Co Ltd (2359.HK) plunged nearly 20% after U.S. lawmakers proposed a new ban.

Shares of Chinese innovative drug and CXO companies, represented by WuXi AppTec, fell on Friday afternoon.

Chinese companies WuXi Biologics (Cayman) Inc (2269.HK) and WuXi XDC Cayman Inc (2268.HK), which share the same beneficial owner, Ge Li, as WuXi AppTec, similarly fell about 20% in Hong Kong.

And BGI Genomics Co., Ltd. (00676.SZ), the Shenzhen-listed entity of China's largest genetics company BGI Group, fell more than 3%, while its Shanghai-listed entity MGI Tech Co Ltd (688114.SH) dropped more than 5%.

Not long ago, the U.S. Congress introduced bipartisan legislation to "ensure foreign adversary biotech companies of U.S. national security concern do not gain access to U.S. taxpayer dollars."

Once enacted, the legislation would restrict U.S. federally funded medical providers from using foreign adversary biotech companies of concern, including BGI Group and its subsidiaries, MGI and Complete Genomics, as well as WuXi AppTec.

Regarding the current market rumours, WuXi Biologics CEO Chris Chen replied to Chinese media outlet Yicai on Friday, "This is just a proposal from an anti-Chinese lawmaker, and it's a highly unlikely event that it will turn into a law, and it will take a few years."

"I personally don't serve in any military organisation either. We will make an announcement as soon as possible to clarify this," Chen said.

Chen's remarks came in response to a reference in the new bill that he "was previously an adjunct professor at the PLA's Academy of Military Medical Sciences."

According to Chinese media outlet Cailianshe, BGI responded on Friday, "The company has noticed the proposed introduction of the relevant biosafety bill in the U.S., but does not believe that there is a direct link between the company's share price movement today and the bill."

The genetics company said its management will evaluate and discuss the incident.

"If [it] will really have a serious impact on the company's performance, it is not ruled out that [the company] will take the initiative to communicate with the U.S. side," BGI said. "If the bill is really introduced in the future to adversely affect the company's performance, the company will also disclose."

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