By P.R. Venkat and Sherry Qin


WuXi AppTec shares continued declining after the Chinese company said that alleged findings by a U.S. draft bill against it were neither legitimate nor accurate and that its business wouldn't pose security risks for any country.

On Monday, WuXi AppTec's Shanghai-listed shares fell by an additional 10%, the daily trading limit, to 59.36 yuan ($8.30). WuXi AppTec and WuXi Biologics were 6.0% and 5.7% lower, respectively, in Hong Kong at midday.

The declines came despite WuXi AppTec saying late Friday that it abides by laws and regulations in the countries in which it operates, including China and the U.S.

The biotechnology company's statement was in response to a proposed bill barring federal contracts with Beijing Genomics Institute and some Chinese biotech entities due to alleged connections with the People's Liberation Army.

The WuXi companies were among those named in the bill. Lawmakers said WuXi AppTec "presents a national security threat to the United States," naming examples of its connections with the military. It said WuXi Biologics' chief executive was once an adjunct professor at China's Academy of Military Medical Sciences.

In a separate filing Monday, WuXi Biologics said that the draft bill contained a misleading description of the background of its CEO, Zhisheng Chen.

"He has neither worked for the Academy of Military Medical Sciences or any military-affiliated institution nor has he received compensation from military-affiliated institutions," WuXi Biologics said.

Analysts said the proposed bill is still in the early stages and faces many uncertainties.

"Whether the bill will be passed as is or significantly modified is yet to be seen," Citi analysts led by John Yung said in a research note.

Still, the proposed bill has renewed geopolitical concerns and will become a big overhang for contract research organizations and contract development and manufacturing organizations in the medium run, Deutsche Bank research analyst Cyrus Ng said in a note.


Write to P.R. Venkat at venkat.pr@wsj.com and Sherry Qin at sherry.qin@wsj.com


(END) Dow Jones Newswires

01-28-24 2341ET