Shares of Chinese biotech service providers WuXi AppTec and WuXi Biologics surged on Monday, after a draft US legislation seeking to eliminate their linchpin role in global drug development missed its last big window for passage into law this year.
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WuXi AppTec’s shares rose as much as 12 per cent in early trading in Hong Kong on Monday, lifting the stock to the highest level in two months. WuXi Biologics gained as much as 13 per cent, while MGI Tech climbed 4.3 per cent in Shanghai.
The absence of the so-called Biosecure Act from the proposed amendments to the US National Defence Authorisation Act comes as a reprieve for the companies, which risked being barred from federally-funded contracts. Such restrictions would give global drug makers reason to sever ties with Chinese drug research and contract manufacturers.
The latest twist is a blow to a meandering legislative effort that was once widely expected to be completed before the end of 2024.
Since the bill’s debut late last year, it has also gone through several iterations that softened its impact, including the introduction of a waiver programme, the clarification that Medicare and Medicaid reimbursement is not affected, as well as the inclusion of a grandfather clause that gives US companies until 2032 to end their relationships with the named Chinese firms.
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While there is still a chance for the bill’s passage, the window is increasingly narrowing before the US Congress goes on recess.