WuXi Secures New US Contracts Despite Biosecurity Concerns
WuXi Biologics has secured 61 new projects in the first half of 2024, with half originating from the U.S. The proposed BIOSECURE Act, which targets named Chinese biotech firms including WuXi Bio because of national security concerns. Although Wuxi has reiterated its commitment to regulatory compliance and denies it poses any security threats, it saw modest revenue growth and a significant decline in profits.
The following article originally appeared in Fierce Pharma.
Despite some Western drugmakers’ concerns around working with Chinese manufacturers in light of the looming BIOSECURE Act, WuXi Biologics continues to pick up a steady stream of new contracts.
Wednesday, WuXi Bio said it added 61 new projects in the first six months of 2024, half of which came from the U.S. That compares favorably to the 46 new projects added over the same stretch in 2023 and demonstrates the company’s resilience “[a]mid a dynamic geopolitical landscape,” WuXi Bio noted in an earnings release.
Most of the assignments are in their infancy, though, with 52 of the new projects covering preclinical candidates. Five of the new projects cover early-phase clinical work, and three cover projects in late-stage testing, according to the company’s release. Only one of the new WuXi Bio ventures covers commercial manufacturing.
The update comes as WuXi Bio faces uncertainty linked to the BIOSECURE Act in the U.S. Congress, which seeks to halt federal contracts with certain Chinese biotech firms that allegedly pose a national security risk to the U.S.
The legislation—which names WuXi Bio and its sister company WuXi AppTec explicitly—would effectively prevent other drugmakers from doing business with the named companies. The House is expected to vote on the bill next month, according to Axios.
WuXi Bio didn’t mince words about BIOSECURE in its release, calling out the proposed law by name and stressing that it’s committed to “adhering to the highest standards of regulatory compliance and operational excellence.”
WuXi Bio added that it does not have a human genomics business nor collect human genomic data across any of its global businesses.
“The Group firmly believes that it has not, does not, and will not pose a security risk to the United States or any other countries,” WuXi Bio said in its release. “The Group will continue to closely monitor this process and remains committed to supporting its clients globally and to operating in accordance with the applicable laws and regulations of all jurisdictions where it has business operations.”
While the flow of new projects bodes well for WuXi Bio, the company’s financials aren’t in the best shape.
Over the first six months of 2024, WuXi Bio’s revenue increased just 1% to 8.6 billion Chinese yuan ($1.2 billion) versus the first half of 2023. Taking COVID sales out of the mix, WuXi Bio’s revenue grew 7.7%, and non-COVID late-phase and commercial manufacturing revenue grew 11.7% year over year, the company said.
Perhaps more concerning, the group’s net profit sank 24% to 1.8 billion yuan (around $249 million).
Still, WuXi Bio is optimistic about the future. The company noted that it now has a total of 56 late-phase projects in the books, which it says lay a “strong foundation for commercial manufacturing.” The company’s current roster of commercial production projects stands at 16 after the removal of eight COVID and one non-COVID “dormant" assignments, the company explained.
Elsewhere, WuXi Bio’s site in Dundalk, Ireland, is “making great progress” and seeing significant commercial demand from 2024 onward, the company added. In its earnings presentation, WuXi Bio noted that the site is almost fully booked for 2025.
As of June 30, WuXi’s boasted a total workforce of 12,435 employees, the company pointed out.
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