US lawmakers link CEO of WuXi Biologics to Chinese army

Biopharma firm with major facility here name-checked in proposed law, causing jitters for drug makers

A bill in the United States that would prohibit US companies receiving federal grant aid from working with four Chinese biologics firms has highlighted the previous link between the CEO of WuXi Biologics – which has a major manufacturing base in Ireland – to the Chinese army.

However, the bill – which would be known as the Biosecure Act when enacted – has not named the IDA-backed WuXi Biologics as a national security threat to the US.

The bill notes that the Chinese government wants to “dominate biotechnology as an industry of the future”.

The Financial Times reported yesterday that Western clients of Chinese firms including WuXi Biologics – such as pharmaceutical giants Eli Lilly and Vertex Pharmaceuticals – have begun talks with rival contract biologics manufacturers in order to diversify production away from Chinese companies that could be hit by the US legislation.

The proposed legislation would prohibit any head of a US executive agency from procuring or obtaining any biotechnology equipment or service produced by “biotechnology companies of concern”.

It would also prohibit loan and grant funds being used to procure or obtain such products or services from those biotech firms.

WuXi Biologics, whose shares are listed in Hong Kong, has a major manufacturing facility outside Dundalk, Co Louth.

It announced in 2018 that it would spend €325m to build a major biologics drug substance manufacturing facility at a site there. It is one of the largest contract manufacturing sites for single-use biologics in the world. It was also the company’s first site outside China.

In 2019, WuXi Vaccines said it would spend $240m to build a facility at the Dundalk site. The group now employs 800 people at the Dundalk campus.

WuXi Biologics’ CEO is Chris Chen. He has a PhD from the University of Delaware and has previously worked for drug giants including Eli Lilly and Merck.

“Chris Chen, CEO of WuXi Biologics, was previously an adjunct professor at the PLA’s [People Liberation Army] Academy of Military Medical Sciences,” notes a draft of the proposed Biosecure Act. The company was asked for comment. The proposed Act names WuXi AppTec, whose shares are listed in Shanghai and Hong Kong, as being a “national security threat” to the US.

The company provides a suite of R&D and manufacturing services to pharmaceutical firms. The US bill lists a number of connections WuXi Apptec allegedly has to the Chinese military.

Wuxi AppTec has previously denied any ties to China’s military and said its business does not pose national security risks to any country. Shares in both WuXi AppTec and WuXi Biologics have slumped in the past number of months as investors fret about the possible consequences of the Biosecure Act.

Wuxi AppTec plunged 21pc on one day in February, hitting its lowest since August 2019, and Wuxi Biologics lost 21pc the same day, dropping to a fiveyear low. The shares have continued to fall. WuXi Biologics’ stock is now trading 72pc lower than a year ago.

WuXi AppTec shares are 60pc lower than a year ago.