With the BIOSECURE Act on the verge of passage and bringing with it the threat of crippling the business of four Chinese companies, the largest of the group, manufacturing powerhouse WuXi AppTec has reported a revenue decline.
In the first half of 2024, sales for WuXi AppTec fell by 9%, to 17.2 billion yuan ($2.4 billion) year over year. When adjusting for revenue from COVID products, however, the slide was just 1%, the company said.
In addition, WuXi’s U.S. revenue fell (PDF) by 1% in the first half, while revenue in Europe increased by 5%. Coming in at 10.7 billion yuan ($1.5 billion), U.S. sales accounted for 62% of WuXi’s revenue, pointing up the company’s concern.
The BIOSECURE Act would restrict federally-funded U.S. drugmakers from doing business with “companies of concern,” which include BGI, MGI and Complete Genomics. The Act was conceived because of concerns surrounding national security.
A survey earlier this month from L.E.K. Consulting showed that beyond the companies of concern, there is considerable concern from U.S. firms about dealing with any company in China. There have been indications that other Chinese firms could be added to the “companies of concern” list.
In its earnings presentation, WuXi addressed the BIOSECURE Act, saying that it “involves uncertainty and multiple steps remain in the legislative process before such proposed legislation is enacted into law.”
WuXi added that it has been “actively working together with its advisors to set the record straight and advocate for appropriate changes to the proposed legislation.”
To that end, the company spent $360,000 on lobbying efforts in the second quarter in U.S., more than tripling the $100,000 it spent on lobbying in the fourth quarter of last year, according to the Korean Biomedical Review.
“The Company strongly disagrees with any preemptive and unfair designation of us as a named ‘biotechnology company of concern’ without due process,” WuXi said in its presentation. “The Company fully complies with the laws and regulations in the countries and regions in which we operate.”
Despite the declines, WuXi reported that demand continues to grow as it added more than 500 new customers in the first half, in addition to maintaining its existing base of more than 6,000 active customers.
It also is preparing to manufacture lentiviral vectors for a “blockbuster commercial CAR-T product,” it said.