Chelsea_SunChelsea_Sun ・ Feb. 5, 2024
China's WuXi AppTec Refutes Claim of Ties with Governments
The company "has not, does not and will not pose a national security risk to any country," said WuXi AppTec.

BEIJING, February 5 (TMTPOST) – China's WuXi AppTec (603259.SH/02359.HK) witnessed a significant drop in its Hong Kong stocks last Friday, with A-shares falling to the daily limit. 

As a response, WuXi AppTec released an announcement last Sunday, saying that the company "has not, does not and will not pose a national security risk to any country," and it should not be listed as a "biotechnology company of concern" in a draft U.S. bill.

It also said that, as a global company with operating bases in Asia, Europe, and North America, it does not have a human genomics business and does not collect human genome data in any of its existing businesses. Moreover, the company has no links with any government or military organization. 

Last Friday, before the market opened, WuXi AppTec announced its plan to buy back 1 billion yuan of its A-shares to safeguard its market value and shareholders' interests, but the announcement failed to restore investor confidence.

As the company has a daily turnover of billions of yuan, a 1-billion-yuan buyback seemed like a drop in the ocean.

On Friday, Wuxi AppTec plunged 21.2% to its lowest since August 2019, and Wuxi Biologics (02269.HK) lost 20.7% to a five-year low.

This situation is similar to that in January 26, when news of the introduction of the Biosecurity Act spread rapidly. That day, WuXi AppTec's A-shares declined to the limit, and its Hong Kong stocks fell by 16.43%.

Since the news about the Biosecurity Act came out, various listed companies involved have quickly responded and made clarifications. However, the moves have not boosted confidence in the capital market.

During this sensitive period, the abnormal fluctuations in the scale of margin trading for WuXi AppTec's A-shares have also attracted attention, with many suspecting many intend to short-sell the company’s shares.

Last Friday, the Science and Technology Board Daily reported that a Bank of America Merrill Lynch analyst specializing in U.S. medical policy said in a conference call that the impact of the Biosecurity Act may exceed market expectations.

There were rumors that the analyst said in the conference call that the legislation of the bill was "only a matter of time," with legislation possibly as early as March next year, and the coverage and depth of the bill might be underestimated.

In China, a research report from Haitong Securities last Sunday said that the U.S. Biosecurity Bill is still in the draft stage, expressing optimism about WuXi AppTec's compliant operations and long-term development. Last Sunday, CITIC Securities released a rating report, maintaining a "buy" rating for WuXi AppTec. 

(Note: 1 yuan equals $0.14.)

(This article was first published on the TMTPost App. Authors | Yang Yaru, Zhang Haixia; Editor | Sun Cheng)

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