Rumor has spread that the United States has imposed sanctions against China! This time it is a Chinese pharmaceutical company

On the afternoon of December 15, WuXi AppTec's A-share stock price suddenly fell in a straight line, falling to a halt at 14:39.

It's a "collective dive." At the same time, Hong Kong stocks and A-share biomedical companies and CRO companies all plummeted: WuXi Biologics' stock price fell more than 22% intraday; Jinsrui Biotechnology and Rongchang Bio-Hong Kong stocks fell more than 18%; Kanglong Huacheng Hong Kong stocks fell 16%; WuXi Junuo fell 11.43%...

Source: Oriental Fortune Network

According to global network news, the US Department of Commerce is expected to add more than 20 Chinese companies to the "entity list" on December 16, including some bio-related enterprises.

A US senatorial letter circulating in the industry also shows that "the United States cannot turn a blind eye to the threat posed by Chinese biotechnology companies and proposes to include Chinese biotechnology companies such as BGI Gene on the 'entity list'."

WuXi AppTec, BGI And other companies believe that the collapse in stock prices is related to the above-mentioned STATEMENT of the US Department of Commerce.

The so-called "entity list" is a list of controls issued by the United States in the name of national security interests. U.S. exporters are not allowed to help listed companies obtain any supplies without obtaining a license. Simply put, the Entity List is a "blacklist" of U.S. export trade.

This time, the stick reached out to the biomedical industry.

CRO has been hit, and global drug research and development cannot be separated from China

WuXi AppTec was the first to pay attention to the relevant rumors, and the company said that the business was normal.

WuXi AppTec is the largest CRO company in China and ranks among the top five in the world. According to this year's semi-annual report, WuXi AppTec's overseas business accounts for nearly 80%, and the top ten customers are all world-renowned pharmaceutical giants, including Johnson & Johnson, Pfizer, Merck, GlaxoSmithKline, Roche, etc.

In the past decade, China's CROs responsible for R&D OEM have flourished, and after WuXi AppTec, there are a number of CRO companies such as WuXi Biologics, Kanglong Chemical, Tigermed, Andeley, as well as Enterprises such as Zhaoyan New Drug and Boteng Shares in the industrial chain.

Nearly 80% of the revenue of WuXi AppTec, Kanglong Chemical, Kailaiying and other enterprises comes from overseas. Although China's biomedical enterprises have developed rapidly, the industry as a whole is weak, and the business volume is not enough to compare with international giants.

Therefore, for the rumors of "sanctioning biomedical enterprises", each company in the CRO industry chain paid attention to it at the first time, but the attitude was different:

First, CDMO companies at the back end of the CRO industry chain generally expressed a wait-and-see.

WuXi Biologics told the Health Bureau that everything is normal at present; Boteng shares told the media that the company needs to wait for further official news, "sanctions may target the business of genetic information", but it will not have much impact on the company's main business; Jiuzhou Pharmaceutical said that the company's US business is small and has little impact on profits.

Second, the companies responsible for preclinical research bore the brunt of it, and WuXi AppTec and KanglongHuacheng were relatively cautious and unwilling to respond to rumors.

Whether R&D OEM "involves U.S. national security interests" is itself worth exploring. CROs have strict confidentiality rules, and core data is strictly processed. Huatai Securities commented on this incident and believed that the United States may indeed sanction Chinese biomedical companies, but there will not be too many enterprises affected, and traditional pharmaceutical companies and device companies have no risk.

Huatai believes that according to the "practice" of the previous rounds of sanctions by the United States, most of the companies on the list are related to the military, so the possibility of CXO companies on the list is extremely small.

In fact, leaving Chinese CRO companies, it is the big American pharmaceutical companies that hurt even more.

China is a blessed land for the world's CRO industry. On the one hand, China has a large number of relatively low-cost, high-quality talent base, which is particularly cost-effective for foreign pharmaceutical companies. This is also an important reason why WuXi AppTec can rank among the global leaders of the CRO industry within 10 years.

On the other hand, China has the fastest growing pharmaceutical market, and the proportion of DOMESTIC customers of CRO companies is also increasing. In particular, the internationalization of China's pharmaceutical industry is in the ascendant, and many CRO companies also have layouts in the United States, Europe, Australia and other markets, which has also stirred up the pattern of the global CRO industry.

Therefore, sanctioning Chinese CRO companies will seriously affect the interests of U.S. pharmaceutical companies: they will have to face more expensive R&D services.

BGI has been smeared many times, which is not conducive to scientific and technological progress

In the rumors of sanctions, Chinese pharmaceutical companies that have been dragged into the water are even more innocent.

On the afternoon of December 15, the stock prices of domestic pharmaceutical companies such as Jinsirui, Junshi Biological, and Hengrui Pharmaceutical fell. These enterprises have a common feature: they have implemented the internationalization strategy very early and have a certain proportion of overseas markets.

A number of companies told the Health Bureau that they could not evaluate the current rumors.

A person from a biopharmaceutical company with overseas business told the Health Bureau that specific countermeasures have not been discussed within the company, and the initial judgment will not be too big, "The company's overseas projects are not too many, and there are also local enterprises to cooperate in business."

There is a company that may be the eye of the storm of this sanctions incident.

In the information disclosed through various channels, the general "Chinese biotechnology enterprises" are described, and the only Chinese enterprises that have been named are BGI Gene.

The ACCUSATIONS of BGI Gene flowed out as early as August this year. Because BGI is involved in genetic testing, COVID-19 nucleic acid testing and other businesses, it is alleged that it may involve human genetic information. In the previous rumors about "sanctioning biotechnology companies", Huadadu has been mentioned.

The Health Bureau has learned that the news of the sanctions has stirred up a lot of waves within BGI. In the view of some internal employees, compared with the open and inclusive business environment in China and the fair competition of Chinese and foreign enterprises, the Blind Suppression of Chinese Enterprises by the United States is not conducive to promoting scientific and technological progress, and ultimately the rights and interests of patients are damaged.

For the reaction of the pharmaceutical sector stock market, a BGI employee remained optimistic: "The industry will not stagnate, at least for BGI, it pays more attention to the accumulation and innovation of technology." ”

The Health Bureau will also continue to pay attention to this matter.

#WuXi AppTec ##美国对华制裁 #