WuXi Biologics Jumps on Hope Key US Sanction Bill May Hit Wall

(Bloomberg) -- Shares in WuXi Biologics Cayman Inc. surged the most in 19 months on speculation a US bill that can ban Chinese biotechnology firms from doing business may be excluded from the National Defense Authorization Act.

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The stock jumped 14% in Hong Kong, the most since November 2022. The biosecure bill — which sought to bar some biotech providers “of concern” with alleged ties to a foreign adversary — wasn’t added in the US fiscal 2025 NDAA, a key step to becoming legally effective.

The bill has caused the stock to slump this year on concerns the company will be excluded from US pharmaceutical production supply chains. Investors widely expected that the bill would initially be added to the NDAA ahead of becoming a law.

There are some “obstacles” in the process and there may not be a decision before the presidential election given the tight schedule, said Criss Wang, an analyst at Smartkarma. However, the process may not be over due to conflicting information over the global pharmaceutical supply chain excluding China, added Wang.

“The further legislative route is unclear for now,” sister company WuXi AppTec Co. said in a written response. “The company will continue to monitor the relevant legislative process closely.” WuXi AppTec shares closed 8.5% higher in Hong Kong.

The largely unexpected exclusion from NDAA now creates some uncertainty around the path forward for the Biosecure Act, which may bode well for China-based contract research organizations “at least temporarily,” Morgan Stanley analysts including Sean Wu wrote in a note.

--With assistance from Lulu Shen.

(Updates with company response, Morgan Stanley note, share price)

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