WuXi Shares Hit by U.S. Committee Seeking Inquiry, Blacklisting
By Kimberley Kao
Shares of the WuXi family of biotech and research companies extended losses amid fresh concerns of U.S. lawmakers pushing for government restrictions on the Chinese companies.
WuXi AppTec was recently 15% lower at 40.00 Hong Kong dollars (US$5.12) on Wednesday as trading resumed in Hong Kong after the Lunar New Year holiday. Sister company WuXi Biologics was last down 9.1%, while WuXi XDC Cayman, a contract medical-research unit in which WuXi Biologics and WuXi Apptec are controlling shareholders, shed 9.3%.
The declines came after a group of U.S. lawmakers this week urged the Defense, Commerce and Treasury departments to investigate WuXi AppTec and subsidiaries over alleged ties to the Chinese military and the Chinese Communist Party.
The House Select Committee on the Chinese Communist Party asked in a four-page letter that the departments add the companies to various blacklists, saying that both WuXi AppTec and WuXi Biologics "[threaten] U.S. intellectual property and national security."
WuXi Biologics on Wednesday said the letter wrongly described the company as a subsidiary of WuXi AppTec, adding that it "has not, does not and will not pose any national security risk to the U.S. or any other country."
WuXi AppTec, in a statement on Tuesday, similarly denied posing any national-security risk to the U.S. It said it has completed U.S. government reviews in the past and is confident that another review would conclude that it poses no risk.
WuXi AppTec was mentioned in a U.S. bill introduced last month that aims to bar federal contracts with some Chinese biotech entities due to alleged connections with the People's Liberation Army.
WuXi AppTec and WuXi Biologics shares in Hong Kong have both nearly halved since the U.S. draft bill was introduced in late January.
China's markets remain closed for the holidays.
Write to Kimberley Kao at kimberley.kao@wsj.com
(END) Dow Jones Newswires
February 14, 2024 01:38 ET (06:38 GMT)
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