This week, a Senate aide and three additional sources reported that a bill in the US Congress that precipitated a sell-off in shares of China’s WuXi AppTec encountered a delay in the Senate.
This bill would forbid federal agencies from entering into contracts with any of the following Chinese biotechnology companies: BGI Group, MGI, Complete Genomics, WuXi AppTec, and their subsidiaries. Furthermore, contracts with businesses that utilize their tools or services would no longer be allowed by the government.
Wuxi AppTec’s stock fell 21% the next day as a result.
As anticipated, the bill, which is sponsored by Democratic Senator Gary Peters, did not pass out of committee this week. The Senate Committee on Homeland Security and Governmental Affairs, chaired by Senator Peters, will take it up at a later time, according to a majority aide.
According to a different congressional aide, the bill is not anticipated to come out of committee for at least a few weeks.
The companies are accused of providing military assistance to Beijing in a companion bill put forth by Congressman Mike Gallagher, a Republican and the head of the House select committee on China.
That congressional aide stated that no deadline has been set to take the House bill out of committee.
The Senate aide claimed on Friday that the Chinese biotech companies are a threat to the Chinese Communist Party’s ability to access private health records and sensitive American data.
WuXi AppTec and WuXi Biologics.
WuXi AppTec and WuXi Biologics’ stock prices fell on Friday as investor apprehension over the proposed legislation that targets the massive Chinese biotech companies increased.
Drug R&D and manufacturing company WuXi AppTec has denied any connections to China’s military and stated that no nation’s national security is at risk from its operations.
WuXi AppTec.
WuXi AppTec stated last week that it is inappropriate and inaccurate for proposed U.S. legislation on biosecurity to contain information about the company. In a filing to the Shanghai Stock Exchange, the company stated that it is “closely watching” the bill’s progress.
As stated last week, BGI Group is in favor of safeguarding personal information; however, the legislation that “will effectively drive BGI from the U.S. market will not accomplish this goal.” In the United States, the company stated, it does not obtain patient samples or genetic or personal data.
BGI Group.
Due to claims that they represent a “significant risk” of aiding in Chinese government surveillance, BGI Group units are listed on an export control list maintained by the U.S. Department of Commerce.
Additionally, Reuters revealed that BGI works with China’s military to gather genetic data from millions of women for broad research on population traits.