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Shares of WuXi AppTec and WuXi Biologics surged in Hong Kong on Friday, following a report that the two firms are looking to divest some of their operations in the wake of new United States legislation targeting Chinese biotech companies.
WuXi AppTec's shares closed up almost 12 per cent to HK$67.10 on Friday, while shares of subsidiary WuXi Biologics rose nearly 15 per cent to HK$21.45.
Those gains were made after The Financial Times, citing people familiar with the matter, reported on Thursday that WuXi AppTec has put on the market its cell and gene therapy unit WuXi Advanced Therapies, which operates four laboratories and manufacturing facilities in Philadelphia, Pennsylvania.
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According to the report, WuXi Biologics is working with advisers to gauge interest from potential bidders for its European production facilities, including two in Germany and one in Ireland.
One of about 10 facilities operated in mainland China by WuXi Biologics, a global contract research, development and manufacturing organisation. Photo: WuXi Biologics alt=One of about 10 facilities operated in mainland China by WuXi Biologics, a global contract research, development and manufacturing organisation. Photo: WuXi Biologics>
Friday's market performance comes weeks after the shares of WuXi AppTec and WuXi Biologics tumbled in Hong Kong after the US House of Representatives last month passed a bill that would restrict business with certain targeted Chinese biotech companies.
The reported divestment initiatives show the two companies' efforts to head off the potential impact of the Biosecure Act, which must be approved by the US Senate before it goes to President Joe Biden for his signature.
If the bill is enacted into law, it will bar federal contracts with the targeted Chinese firms and their American subsidiaries. The initial targets are WuXi AppTec, WuXi Biologics and BGI Group, along with its spin-off MGI and US subsidiary Complete Genomics.
The legislation aims to encourage US firms to cut their reliance on Chinese research and manufacturing, while safeguarding US data and American firms' intellectual property that could be threatened by China.
WuXi AppTec and WuXi Biologics previously denied that they pose any security risk to the US.
WuXi AppTec founder, chairman and chief executive Li Ge (centre) is flanked by then-joint company secretary Yao Chi (left) and vice-chairman Edward Hu at the firm's global offering press conference in Hong Kong on November 30, 2018. Photo: Edward Wong alt=WuXi AppTec founder, chairman and chief executive Li Ge (centre) is flanked by then-joint company secretary Yao Chi (left) and vice-chairman Edward Hu at the firm's global offering press conference in Hong Kong on November 30, 2018. Photo: Edward Wong>