(MENAFN) Wuxi App Tech, a prominent Chinese pharmaceutical group, has announced its intention to vigorously lobby against proposed legislation in Washington that poses a threat to its business operations in the United States. With the US market accounting for 65 percent of its total revenues, the company views the proposed draft law as a significant challenge to its operations and profitability. Edward Ho, the vice president and chief investment officer of Wuxi App Tech, emphasized the company's proactive approach in engaging with advisors to address concerns and advocate for revisions to the proposed legislation. This announcement came during a call with analysts following the release of the company's full-year equity report.
The proposed legislation, known as the "Biosecurity Law," has raised concerns within the pharmaceutical sector, particularly regarding its potential impact on companies with ties to China. Under the proposed law, companies receiving federal funding would face restrictions on contracting with biotechnology groups in countries deemed "foreign adversaries," with Wuxi App Tech and the Chinese genomics group BGI specifically targeted for their alleged links to the Chinese government. This heightened scrutiny reflects broader national security concerns and underscores the regulatory challenges faced by Chinese companies operating in the US market.
Wuxi App Tech plays a crucial role in the pharmaceutical supply chain, serving as a major supplier of basic components to leading international pharmaceutical companies and collaborating on the development of medicines. Notable partners include Pfizer and Eli Lilly, highlighting the company's significant contributions to the global pharmaceutical industry. Despite facing regulatory headwinds, Wuxi App Tech reported robust financial performance, with revenues reaching 16.1 billion RMB ($2.2 billion) over the past year. A substantial portion of these revenues, amounting to RMB26 billion, was generated from dealings with the top 20 pharmaceutical companies, with the United States representing the largest and most profitable market for the company.
As Wuxi App Tech navigates regulatory challenges and seeks to safeguard its interests in the US market, its proactive engagement with stakeholders and advocacy efforts underscore its commitment to addressing concerns and preserving its business operations. However, the outcome of its lobbying efforts remains uncertain amidst evolving geopolitical tensions and heightened scrutiny of Chinese companies operating in strategic sectors such as pharmaceuticals.
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