With the potential passage of the BIOSECURE Act looming, WuXi Biologics reported a 24% drop in net profit in the first half of 2024.
WuXi Biologics released its interim 2024 financial report on Wednesday, touting more than 60 new contracts signed in the first six months of the year—including about half from U.S. companies— as it faces mounting pressure from Congress. However, during the same period, the Chinese biotech reported a 24% drop in net profit.
In the first half of 2024, WuXi Biologics saw $250 million in net profit, down from almost $328 million during the same period last year. Gross profit, adjusted net profit and adjusted diluted earnings-per-share were also down.
Still, WuXi biologics inked 61 new integrated projects, approximately half of which were with U.S.-based biopharma companies, according to a company presentation. The Chinese biotech said it “is one of our best six-month periods for new project adds to date.”
WuXi Biologics reported that the majority of these new projects are in the early phases of drug development—51 contracts are for pre-investigational new drug programs while five are in early-stage studies. Only three projects dealt with late-phase programs while one is in the commercial manufacturing stage.
The company’s late-stage contracts have climbed to 56, which the biotech said lays “a strong foundation for future commercial manufacturing.” WuXi Biologics now has 16 commercial-stage projects after it culled eight dormant COVID-19 agreements and one non-COVID program.
The growth is despite mounting legislative pressure on the company in the form of the BIOSECURE Act. Introduced in January 2024 by Reps. Mike Gallagher (R-Wis.) and Raja Krishnamoorthi (D-Ill.), the bill is meant to keep U.S. taxpayer dollars away from “foreign adversary biotech companies.”
The BIOSECURE Act names five companies: WuXi Biologics, WuXi AppTec, Beijing Genomics Institute, Complete Genomics and MGI. Lawmakers in May 2024 updated the bill, introducing a grandfather clause that would allow existing contracts with these companies until 2032.
In June 2024, the House Rules Committee left the bill out of the National Defense Authorization Act (NDAA), which specifies the budget and outlines the spending for the U.S. Department of Defense for the coming fiscal year. Still, House Speaker Mike Johnson (R-La.) last month said that he still planned to hold a vote—and pass—the legislation by the end of the year.
WuXi Biologics addressed the looming BIOSECURE Act in Wednesday’s business report, acknowledging that if the bill becomes law, it may affect projects funded by the U.S. government. However, the company emphasized that the legislation would not cover projects using private or other sources of funding. WuXi Biologics said it is currently working with clients to mitigate the potential impacts of the BIOSECURE Act.
