Semafor Signals
Chinese medical company linked to army scientists in investigation
Insights from the New York Times, Reuters, and Politico
The News
Employees of Chinese pharmaceutical company WuXi AppTec have been linked to China’s People Liberation Army in a new Reuters investigation. In particular, WuXi AppTec co-invented altitude sickness treatments with army scientists, the report found, a priority for China’s military in the Himalayas.
According to public patent records and science papers, 10 patent filings from 2018 to 2023 listed six WuXi AppTec’s staff and six scientists at the PLA General Hospital in Beijing as the drug’s co-inventors. The PLA General Hospital serves as China’s top military medical school and research center.
WuXi AppTec and its sister company WuXi Biologics have faced increasing pressure in the US as lawmakers hope to restrict American businesses from working with Chinese “biotechnology companies of concern” on intellectual property and national security grounds. Under the US’ BIOSECURE Act, drugmakers have until 2032 to cut ties with Chinese companies.
SIGNALS
China’s data sharing regulations raise US alarm
An investigation in February alleged that WuXi AppTec had transferred US intellectual property to Beijing without consent, a claim that the company’s leadership has refuted. An existing Chinese 2017 law that requires companies to “assist and cooperate with the state intelligence work” and share information upon request with the government “regardless of who owns that IP” has caused major concerns abroad. But the connection with the PLA may be more circumstantial: China enrolls civilians in its military hospital schools and “people forget that public health really for the most part has been run by the PLA,” a former US counterintelligence officer at Georgetown University told Reuters.
US probe into WuXi could disrupt critical drug supply chains
While US lawmakers have cited national security concerns over WuXi AppTec, they have not broadly discussed “the vast scope of work” that WuXi does, the New York Times reported. Records show that WuXi is “heavily embedded” in making ingredients for cancer, HIV, and obesity treatments. Smaller biotech companies that depend on WuXi are alarmed about finding another contractor and noted that could set back drug development for years. Switching to alternative partners in the supply chain could also exacerbate existing drug shortages. “It’s not just as simple as flipping a switch and moving it over,” one industry lobbyist told Bloomberg.
Chinese biotech companies suffer market, advocacy setbacks
WuXi AppTec has denied allegations that it is a threat to US national security, telling Reuters that it “did not collaborate with PLA General Hospital or any other PLA-related entity” in the altitude sickness drug development and that it has ”no special ties" to China’s military. Yet a greenlight of the BIOSECURE Act in the US Senate in March led to a sharp drop in share value for WuXi AppTec’s Shanghai and Hong Kong listings, the Wall Street Journal reported. Other Chinese biotech companies targeted such as Complete Genomics and BGI were dropped by their lobbying firms, Politico found, after some lawmakers threatened to blacklist firms working for certain Chinese companies.
