(Bloomberg) -- WuXi AppTec Co. 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% to 10.7 billion yuan ($1.5 billion) in the first half of the year, excluding Covid-19 projects, the Shanghai-based company said Monday. That dragged total revenue down 8.6% from a year earlier to 17.2 billion yuan. Net income dropped 20% to 4.24 billion yuan.
Despite the dip, the US remains the biggest source of revenue for WuXi AppTec. Only 2% of life sciences companies have severed ties with Chinese firms named in the Biosecure Act including WuXi AppTec and its sister company WuXi Biologics Cayman Inc., 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 July 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 ATU, fell 19% to 575 million yuan in the first half as the impact from the Biosecure Act kicked in, while the Tides division grew by 57% as demand for GLP-1 drugs explodes.
WuXi AppTec maintained its full-year revenue growth guidance of between 2.7% and 8.6%, excluding Covid projects, despite of the US uncertainty.
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