By Karen Freifeld
(Reuters) – U.S. legislation that would restrict business with China’s BGI, WuXi AppTec and some other biotechnology companies on national security grounds will be voted on by a committee in the House of Representatives on Wednesday.
If approved by the House Oversight and Accountability Committee, the Biosafety Act would still have to be voted on by the full House and Senate before the president could sign it into law. The bill would pressure U.S. pharmaceutical and healthcare companies to decrease their dependence on Chinese research and production.
The U.S. Senate Homeland Security and Governmental Affairs Committee voted in favor of similar legislation in March.
The latest version of the House bill gives U.S. companies until 2032 to end work with Chinese companies, news that lifted shares of potentially impacted Chinese companies in talks in Hong Kong earlier this week.
The latest draft also adds WuXi Biologics to a list of companies of concern that includes WuXi AppTec, as well as BGI, MGI, and Complete Genomics.
Supporters say the legislation is needed to keep Americans’ health and genetic information away from foreign adversaries who could weaponize the data. They also say it is dangerous for China to dominate the biotechnology supply chain.
The targeted companies say the proposed legislation is based on false and misleading claims and would limit competition. They say they do not pose a threat to U.S. national security and should not be included in the bill.
The Biosafety Act would prohibit federal agencies from contracting with biotechnology companies deemed to be of concern. It would also prohibit contracts with companies that use equipment or services from those companies.
In 2023, Wuxi Biologics made about 47% of its 17 billion yuan in annual sales from North America and about 18% from China, according to its annual report.
Two-thirds of WuXi AppTec’s revenue came from the US market in the first nine months of 2023, according to one investor.
Complete Genomics – another “worrying company” – is a US-founded company headquartered in San Jose, California. It is a subsidiary of China’s MGI, a publicly traded global company.
BGI, a leading provider of genetic sequencing services worldwide, said the legislation will expel the company from the U.S.
(Reporting by Karen Freifeld; Editing by Michael Erman)
