WuXi AppTec sees sales drop as US seeks to cut ties with China
WuXi AppTec reported shrinking sales as it continues to grapple with a looming US bill seeking to cut ties with Chinese biotechnology companies.
Revenue from US clients fell 1.2 per cent to 10.7 billion yuan (S$2 billion) in the first half of the year, excluding Covid-19 projects, the Shanghai-based company said on Monday (Jul 29). That dragged total revenue down 8.6 per cent from a year earlier to 17.2 billion yuan. Net income dropped 20 per cent to 4.2 billion yuan.
Despite the dip, the US remains the biggest source of revenue for WuXi AppTec. Only 2 per cent of life sciences companies have severed ties with Chinese firms named in the Biosecure Act, including WuXi AppTec and its sister company WuXi Biologics, according to a survey in June.
If enacted, the Biosecure Act would restrict US federal-funded medical providers from contracting with the companies named and others connected to “foreign adversaries”.
The House Oversight Committee approved a modified version of the bill in May, which gave US companies until 2032 to decouple from biotech companies “of concern”. The widely-supported bill was omitted from the 2025 National Defense Authorization Act in June, making the legislative path unclear.
A similar amendment to include the bill in the Senate version of the National Defense Authorization Act was proposed on Jul 10 and is currently under review by a Senate committee, WuXi AppTec said in the earnings statement. The company said it continues to work with consultants to clarify the facts and advocate for revisions.
Revenue from its cell and gene-therapy business unit, WuXi Advanced Therapies, fell 19 per cent to 575 million yuan in the first half as the impact from the Biosecure Act kicked in, while the Tides division grew by 57 per cent as demand for GLP-1 drugs explodes.
WuXi AppTec maintained its full-year revenue growth guidance of between 2.7 and 8.6 per cent, excluding Covid projects, despite the US uncertainty. BLOOMBERG
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