WuXi AppTec said it has “unwavering commitment” to protecting its customer’s intellectual property, in the face of allegations it passed a US client’s information to Chinese authorities.
Although the Biosecure Act “may create short-term uncertainty” for the wider biopharma industry, the Shanghai-headquartered company “remains steadfast in ‘doing the right thing and doing it right,’” WuXi AppTec CEO Ge Li said in the company’s first-quarter earnings press release Monday.
Ge LiWuXi AppTec is dedicated to “prioritizing our customers’ needs, protecting their intellectual property, and abiding by the laws and regulations in the countries in which we operate,” Li added.
The Biosecure Act — which would block US biopharma companies from working with China-based service providers — specifically named WuXi AppTec as a “company of concern.” A Reuters report last month said US agencies informed senators in February that WuXi AppTec allegedly transmitted IP to Chinese authorities without the knowledge of the US unnamed client.
To demonstrate it is compliant with industry standards, WuXi AppTec said it has a 100% pass rate from 748 quality audits and inspections made last year by regulators and third parties, with no critical findings.
A further 83 information security audits were made in 2023 with no critical findings. Also, 24 of its operating sites, including ones in China, are ISO/IEC 27001 certified — a global standard in information security management.
Nonetheless, WuXi AppTec’s revenue dropped in the first three months of the year by 11% to 8 billion yuan ($1.1 billion) compared to last year’s Q1 at 9 billion yuan ($1.2 billion). The company’s net profit in the same period also decreased by 10.4% to 1.9 billion yuan ($262 million) compared to last year at 2.2 billion yuan ($304 million).
The company did not say the reason behind the decline in its earnings slide deck dated April 30.
One of AppTec’s main subsidiaries, WuXi Chemistry, had a 13.5% revenue drop to 5.6 million yuan ($768 million) in Q1 compared to last year’s 6.4 million yuan ($884 million).
The Biosecure Act would be a significant blow to WuXi AppTec, notably that a majority of its clients are based in the US. In the first three months of this year, US customers made up 62% of its revenue. WuXi AppTec said it secured 300 new customers in the quarter, which is a slight dip from 310 last year.
WuXi Biologics, the sister company of WuXi AppTec, last month touted its sales backlog in its bid for “certainty and stability.”