Amidst the growing market concerns U.S. Congress delays bill, targeting Chinese biotech companies

The legislation aims at restricting federal agencies from entering into contracts with several prominent Chinese biotech companies, including BGI Group, MGI, Complete Genomics, and WuXi AppTec, along with their subsidiaries.

A bill in the U.S. Congress that triggered a significant sell-off in shares of WuXi AppTec of China has encountered a delay in the Senate this week, according to information from a Senate aide and three other reliable sources on Friday.

The proposed legislation primarily aims to restrict federal agencies from entering into contracts with several prominent Chinese biotechnology companies, including BGI Group, MGI, Complete Genomics, and WuXi AppTec, along with their subsidiaries. In addition, the bill seeks to prevent the U.S. government from involving in contracts with any companies utilizing equipment or services provided by these entities.

This week as expected, the bill that was sponsored by Democratic Senator Gary Peters did not move out of the committee and will be considered in the future as said by the majority aide for the Senate Committee on Homeland Security and Governmental Affairs, chaired by Peters. As remarked by another congressional aide, it is expected for the bill to move out of the committee for around a few weeks.

A companion bill accuses the companies of aiding the military of Beijing. This companion bill was proposed by the chair of the House Select Committee on China, the Republican Congressman Mike Gallagher. The congressional aide also added by saying that to move the House bill out of the committee no date has yet been fixed. The Senate aide further said on Friday that the biotech companies of China pose a threat to the sensitivity of American data and also the personal health information that can be accessed by the communist party of China. The growing fear of the investors over the draft legislation targeting the biotech giants of China resulted in the tumbling of the shares of WuXi AppTec and WuXi Biologics.

Last week the WuXi AppTec said that the content related to the company in the proposed U.S. legislation on biosecurity is inappropriate and not accurate. The development of the bill is being watched by the company, it said. BGI Group asserted that it firmly supports protecting data but the legislation which will effectively drive BGI from the United States market will not achieve this goal. The company further added that in the United States, it does not collect patient samples or does not have access to personal or generic data.

However, critics of the proposed legislation raise concerns about the possible impact on scientific collaborations and advancements in the biotech sector. The delay in the Senate is likely to intensify debates on striking a balance between national security concerns and maintaining a collaborative approach in the scientific and technological spheres.