By Sherry Qin
Shares of the WuXi family of companies tumbled on concerns that a proposed bill will block the U.S. government from doing business with Chinese biotechnology companies due to alleged military ties, potentially broadening sanctions already existing in sectors from semiconductors to cotton trade.
In Hong Kong, WuXi Biologics closed 18% lower. WuXi AppTec, a sister company, shed 16%, and WuXi XDC, the recently listed medical-research unit of WuXi Biologics, lost 20%. Shanghai-listed shares of WuXi AppTec fell by their daily limit of 10%.
The selloffs in Asia afternoon trading on Friday came after U.S. lawmakers introduced a bill Thursday barring 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.
The companies didn't immediately respond to requests for comment by Dow Jones Newswires.
The proposed legislation would restrict federally funded medical providers from working with biotech companies of concern.
Analysts were skeptical, however, that the bill would turn into law.
"It's highly unlikely," said Christopher Lui, Jefferies's head of Asia healthcare. "It's the election year so there will be a lot of volatility," with China featuring as a topic of debate, he said.
Sonija Li, head of retail research at Maybank, said the selloff appeared to be a knee-jerk reaction as the bill circulated in the trading community.
"I think traders are evaluating the potential impact from this act and fear spread rapidly when share price slumped," she said.
Write to Sherry Qin at sherry.qin@wsj.com
(END) Dow Jones Newswires
January 26, 2024 05:38 ET (10:38 GMT)
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