WuXi companies plan to divest businesses

WuXi AppTec, the Chinese drug services firm popular with many US pharmaceutical and biotechnology companies, and its sister company WuXi Biologics have each decided to divest a business.

The decisions to sell come as both firms face uncertainty about business prospects in the US due to the Biosecure Act, proposed legislation that aims to prohibit federally funded pharma and biotech firms from working with a handful of Chinese companies, including both WuXi firms.

In the last week of December, WuXi AppTec announced plans to sell its cell and gene therapy unit to the US private equity firm Altaris for an undisclosed amount. The company had indicated in its third-quarter earnings report that because of the Biosecure Act, the segment wasn’t receiving sufficient amounts of new business.

Meanwhile, WuXi Vaccines, a subsidiary of WuXi Biologics, says it will sell a vaccine facility in Dundalk, Ireland, to the US drugmaker Merck & Co. for $521 million. WuXi Biologics says the sale will allow it to focus on providing vaccine production services from its sites in Suzhou, China.

According to Ireland’s Foreign Direct Investment Agency, the Dundalk site spans over 15,500 m²and is home to a three-story vaccine manufacturing facility.

WuXi has provided services to Merck at the site since 2019. Merck owns a nearby vaccine plant in Carlow, Ireland.

It is unclear whether the divestitures are linked to pressures in the businesses caused by the Biosecure Act. The legislation passed in the US House of Representatives in September. A similar bill is under consideration in the Senate.