The U.S. House of Representatives version of the Biosafety Act was passed by the hearing, and WuXi AppTec once again strongly opposed it Titanium Media Focus

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2024-05-17 09:22Published on the official account of Beijing Titanium Media APP

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Following the hearing of the U.S. Senate version of the Biosecurity Act (No. S.3558), the U.S. House of Representatives version of the Biosecurity Act (H.R. 8333) was also overwhelmingly passed on May 15 local time.

In this regard, the company involved in the above-mentioned bill, WuXi AppTec (603259. SH) issued a statement on May 16 stating that "the Company strongly opposes this preconceived and unreasonable definition without due process." ”

Titanium media APP noted that even if the U.S. Senate and House versions of the "Biosecurity Act" have been passed through hearings one after another, there is still a long legislative process to go behind, and there is still a high degree of uncertainty about whether it can be finally passed. In addition, from the perspective of the direction of the revision of the content of the bill, the buffer period of decoupling has also been extended, and the exemption of the existing contracts/products of the companies involved in the current House version of the "Biosafety Act" has been extended to the beginning of 2032, that is, the 8-year exemption period.

Judging from the trend of the secondary market, after several sharp declines, the current market is increasingly "immune" to such verbal decoupling. As of the close of trading on May 16, the CRO index (8841421.WI) fell by only 0.12%. Among them, WuXi AppTec closed at 45.58 yuan per share, up 0.8%; WuXi Biologics (2269.HK) HK) closed at 14.56 yuan per share, up 0.41%; BGI (300676. SZ) closed at 40.93 yuan per share, up 0%, which is completely different from the previous sharp decline after the Senate version of the draft after the hearing.

The exemption period is extended to 8 years

On May 15, local time, the U.S. House of Representatives Oversight and Accountability Committee held a hearing and voted to report to the House of Representatives a draft piece of legislation numbered H.R. 8333, which is a revised version of the proposed draft of the Biosecurity Act, previously numbered H.R. 7085.

In draft H.R.8333, the names of companies such as WuXi AppTec remain in the definition of "biotechnology companies of concern"; The bill would restrict business dealings with BGI, WuXi AppTec and some other Chinese biotech companies on national security grounds. In a vote in the House of Representatives, the bill passed overwhelmingly 40-1.

Notably, the amendments to draft H.R. 8333 add a non-retroactive clause (the "grandfather" clause) to exempt existing contracts entered into prior to the effective date of the proposed restrictive covenant.

Compared with the previous version, the draft H.R.8333 explicitly adds WuXi Biologics in terms of the companies involved, and extends the exemption period to January 1, 2032, i.e., the exemption of the existing contracts/products of the companies involved is extended to January 1, 2032. This means that the exemption period for WuXi AppTec and other companies involved has been extended to 8 years.

"There is an eight-year grace period for the companies involved, which is relatively positive news for the listed company, meaning that the business of the company involved in the US market will not be immediately severely affected, with more time to adapt and adjust." A market source said.

In fact, the extension of the waiver period for the above amendments also reflects the pressure faced by US companies and multinational pharmaceutical companies.

AstraZeneca (AZN.US) contributed revenue of US$5.876 billion in China in fiscal year 2023, accounting for 13% of AstraZeneca's global market share. In fiscal year 2023, Merck (MRK.US) will have revenue of US$53.583 billion from its pharmaceutical business, with China contributing US$6.71 billion, accounting for 12.5%; In addition, multinational pharmaceutical companies such as Sanofi (SNY.US), Novartis (NVS.US) and Takeda (TAK.US) all account for a very high proportion of business in mainland China.

The content of the draft of the two houses needs to be run-in

From the perspective of dismantling the U.S. legislative process, usually the bill is proposed by the U.S. Senate and the House of Representatives at the same time, and if the bill is unanimously passed, it will be submitted to the president for signature, and it will officially take effect after signing; However, if the two chambers pass different versions of the bill, the two chambers will set up a consultative committee to resolve differences.

Compared with the Senate version of draft S.3558 and the House version of draft H.R. 8333, the content of the two versions is not consistent, and the content of draft H.R.8333 "the exemption of existing contracts/products of the company involved extends until January 1, 2032", which has not yet been reflected in draft S.3558.

This means that it will take some time for the two houses to resolve their differences, and there is still a long process to go before the final legislation is enacted. WuXi AppTec also confirmed this in its May 16 announcement, stating that "the content of draft H.R. 8333 and draft S.3558 needs to be agreed upon and is subject to further consideration and possible changes." ”

It is worth mentioning that in response to the approval of the H.R. 8333 draft, WuXi AppTec quickly issued an announcement stating that "the company strongly opposes this preconceived and unreasonable definition without due process." ”

At the same time, WuXi AppTec reiterates that the Company has not, is and will not pose a national security risk to the United States or any other country in the past, and has not been subject to any sanctions imposed by the U.S. government. WuXi AppTec does not have a human genomics business, and the company's existing businesses do not involve the collection of human genomics data in the United States, China, or any other region.

"The Company will continue to engage in communication and dialogue with stakeholders involved in the ongoing legislative process of draft H.R. 8333 and the draft legislation numbered S.3558, which was voted on March 6 by the U.S. Senate Committee on Homeland Security and Governmental Affairs." WuXi AppTec said.

Obviously, if the above bill is successfully implemented, the losses caused to domestic and multinational pharmaceutical companies in the United States will be very large. Earlier, at a Senate hearing, some lawmakers expressed concerns and voted against them, with Rand Paul calling it "narrow-minded protectionism."

(This article was first published in the Titanium Media APP, by |.) Zhang Haixia)

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