WuXi AppTec and WuXi Biologics Consider Asset Sales Amid BIOSECURE Act Scrutiny

Asset Sales Considered:
WuXi AppTec is looking to sell its cell and gene therapy manufacturing unit, which includes four facilities in Philadelphia, while WuXi Biologics is considering the sale of some of its production sites in Europe.

BIOSECURE Act Impact:
The BIOSECURE Act, which aims to prevent American biopharma companies from working with certain Chinese firms, has named WuXi AppTec and WuXi Biologics as threats to U.S. national security. This has led to significant uncertainty for the companies' operations in the U.S. and Europe.

Market Reaction:
Shares of WuXi AppTec and WuXi Biologics surged in Hong Kong following reports of potential asset sales, with WuXi AppTec's shares rising almost 12% and WuXi Biologics' shares increasing nearly 15%.

Legislative Background:
The BIOSECURE Act, which was passed by the U.S. House of Representatives with bipartisan support, is now awaiting action from the Senate. The bill includes a grandfather clause allowing existing U.S. contracts with Chinese biotechs until January 1, 2032.

Industry Concerns:
The biopharma industry is heavily dependent on third-party service providers based in China, and the BIOSECURE Act could have far-reaching implications, affecting over 120 U.S. drugs partnered with companies named in the bill.