A few days ago, a piece of news about the draft version of the U.S. "Biosafety Act" stirred up the A-share biopharmaceutical sector. The stock prices of many companies suffered sharp declines, and related companies successively issued clarification announcements. Following the emergency response from WuXi AppTec (rights protection) on January 26, WuXi Biotech (688046) and MGI (688114) also issued clarification announcements on January 28.
MGI stated that the company noticed that the draft is still in the proposal stage, and there are many factual errors in the company's accusations. It may be revised or terminated in the future, and there is still great uncertainty whether it can become a law.
MGI stated that during the development process of the company, the company strictly abides by various laws and regulations in the locations where it operates and pays great attention to data security and privacy protection. As an upstream equipment provider in the gene sequencing industry, the company's business does not involve data collection, and the data generated by customers based on the company's sequencing platform are collected, stored, processed and controlled by the customers themselves.
Yaokang Biology stated that the company is a high-tech enterprise specializing in the research and development, production, sales and related technical services of experimental animal mouse models. It provides customers with commercialized mouse models with independent intellectual property rights. It also provides one-stop services such as model customization, customized breeding, and functional efficacy analysis to meet customers' needs related to experimental animal mouse models in basic research such as disease mechanism analysis, drug target discovery, drug efficacy screening and verification, and new drug development.
"The company's model animal mice are all produced using human genome sequences without racial differences published by the scientific research community, and do not involve any human gene sequence analysis business." Yaokang Biologics stated that all the company's technologies and samples are publicly available resources or commercially purchased resources in the scientific research community, and are not within the scope of the draft "Biosafety Act".
Yaokang Biology specifically mentioned that since the draft has not yet taken effect and is promulgated, the relevant content still needs further review and there is the possibility of changes. The company will also pay close attention to the progress of the draft legislative process. At present, the production and operation of the company and its subsidiaries are in normal order. At the same time, the company will also pay attention to changes in the external environment in a timely manner to ensure steady growth of the company's business.
According to previous media reports, on January 26, there were rumors in the industry that the United States plans to introduce the "Biosecurity Act" to ensure that foreign biotechnology companies cannot obtain U.S. taxpayer funds. If passed, the bill would restrict federally funded medical institutions from using foreign rival biotech companies, including BGI Group and its subsidiaries MGI and Complete Genomics, as well as another Chinese company, WuXi AppTec.
At the opening of the afternoon that day, the "WuXi Department" led a group of CXOs and innovative drug sectors to crash. Among them, WuXi AppTec's stock price fell to the limit, and BGI and MGI fell 3.02% and 5.36% respectively. Other stocks such as Tigermed, Pharmaron Chemicals, and Yakang Biotech also suffered heavy losses, with losses of more than 10%. Yakang Biotech fell 11.01% that day, and its stock price closed at 13.98 yuan per share.
On the evening of January 26, WuXi AppTec held an emergency conference call on the "American Proposal Rumored in the Industry" and issued a clarification announcement.
WuXi AppTec stated that the draft biosafety law has not yet taken effect and is promulgated. The subsequent legislative process requires the U.S. House of Representatives and the U.S. Senate to vote on their respective versions of the bill to form the final version after review by relevant committees. Therefore, the content of the draft biosafety law remains subject to further review and may be changed.
WuXi AppTec said it is closely monitoring the progress of the draft legislative process with its consultants. The company noted that the draft Biosafety Law contains content related to WuXi AppTec and believes that such content is neither appropriate nor accurate. The company firmly believes that WuXi AppTec's business development will not pose a risk to the security of any country. The company always abides by the laws and regulations of the countries where it operates, including China and the United States. Over the past two decades, WuXi AppTec has been a trusted partner in the global medical industry, continuing to provide drug R&D and production services to thousands of U.S. and global customers, helping to promote innovative drugs to be launched as soon as possible.
BGI responded that the company's management is evaluating the incident, but does not believe that the company's stock price trend that day is directly related to the bill. The possibility of the bill being introduced is mainly based on the position of relevant parties in the United States, and the company will not comment.