Three Biopharma firms disclosed concerns about how emerging geopolitical tensions between the U.S. and China might impact their business with the contract manufacturer.
WuXi AppTec, a key partner for many U.S.-based biopharma companies, has recently been caught up in controversy pertaining to the proposed BIOSECURE Act. Now, companies including Merck, Iovance Biotherapeutics and Kyverna Therapeutics, have detailed interactions with the SEC about potential impacts on their future programs.
Introduced in January 2024 by Rep. Mike Gallagher (R-WI), the BIOSECURE Act aims to guarantee that taxpayer money isn’t used to help fund “foreign adversary biotech companies” posing threats to U.S. national security. It also prohibits federal contracting with “certain biotechnology providers” tied to foreign adversaries. The biotech companies of concern listed in the proposed legislation are WuXi AppTec, BGI, MGI and Complete Genomics.
If signed into law, the legislation would prevent biopharma companies that contract with “companies of concern” from also having contracts with the U.S. government, according to the law firm Foley Hoag.
On March 14, news emerged that WuXi had separated from the trade organization BIO after U.S. intelligence officials told senators that the company had shared a U.S. client’s intellectual property with the Chinese government without consent.
In an SEC document filed Feb. 28, cell therapy biotech Iovance noted that it has contracted a WuXi subsidiary to manufacture its cell therapy products commercially, but also stated that the “current geopolitical tensions” with China may “impact our ability to expand manufacturing capacity” with the company’s facilities. Jen Saunders, senior director of investor relations and corporate communications at Iovance, told BioSpace in an email that the biotech does not anticipate any “significant impact” from the BIOSECURE Act—or a different version of it—on its ability to manufacture and meet the demand for its recently approved cell therapy Amtagvi.
“Our manufacturing facility, the Iovance Cell Therapy Center, is built to support several thousand patients annually,” Saunders said, adding that the company is comfortable with its internal capabilities to address anticipated near-term demand and is currently working to expand its existing facility to more than double capacity.
In February 2024, Rep. Gallagher and Rep. Raja Krishnamoorthi (D-IL) penned a letter to Commerce Secretary Gina Raimondo, Treasury Secretary Janet Yellen and Defense Secretary Lloyd Austin, asking them to investigate WuXi and have the company placed on control lists. These lists include the DoD’s Chinese Military Companies List (1260H list), the Department of Commerce’s Bureau of Industry and Security Entity List and the Department of Treasury’s Non-SDN Chinese Military-Industrial Complex Companies List.
Iovance noted in the document that if WuXi is added to any of these lists, it could “materially impact” its manufacturing service agreement with the company.
In its own SEC filing last week, Kyverna explained that it has partnered with a WuXi subsidiary to manufacture its CAR T cell candidate KYV-101 while developing its manufacturing methods. As with Iovance, the addition of WuXi to one or more of the aforementioned lists could “materially impact” Kyverna’s use of the subsidiary, according to the filing.
In a statement emailed to BioSpace, a Kyverna spokesperson said it is aware of the “ongoing concerns related to the BIOSECURE Act” and is “closely monitoring the developments.”
And it isn’t just smaller biotechs that could end up caught in the crosshairs of this proposed legislation. Merck detailed in an SEC document filed Feb. 26 that its business in China has been growing over the past few years, and said the country’s importance to its vaccine and pharma business has increased. Merck also has “significant” research and production operations in China and does work with WuXi.
“If geopolitical tensions were to increase and disrupt the Company’s operations in China, such disruption could result in a material adverse effect on the Company’s product development, sales, business, cash flow, results of operations, financial condition and prospects,” according to the document.
BioSpace reached out to Merck for further comment but has not heard back.
Elsewhere, Jacob Van Naarden, president of Eli Lilly’s Loxo Oncology division, told BioSpace in a previous interview that the company is not facing direct pressure to divest from China but is “trying to be cautious” about the situation.
Tyler Patchen is a staff writer at BioSpace. You can reach him at tyler.patchen@biospace.com. Follow him on LinkedIn.
