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after the hong kong stock market opened on october 4, wuxi’s share price soared. as of press time at noon, the share price of wuxi apptec (2359.hk) has soared by more than 16%, and wuxi biologics (2269.hk) has soared by more than 13%.

the sharp rise in share prices of wuxi companies was related to a report released by a securities firm. a report issued by clsa pointed out that wuxi may sell its cell and gene therapy (cgt) business assets, which will constitute a positive catalyst for fundamentals.

just the day before, there were media reports that wuxi apptec planned to put up for sale the four bases of its ctdmo wuxi biotech (atu) in philadelphia, usa, which is responsible for cgt production. wuxi biologics, meanwhile, has hired consultants to help gauge buyer interest in some of its manufacturing sites in europe. wuxi biologics has manufacturing sites in germany and ireland in europe.

in response to this news, a relevant person from wuxi biologics responded to a reporter from china business news: "this is our routine assessment, and there is no conclusion yet." the person also emphasized that the consideration of selling assets is in line with the u.s. biosafety act. it doesn't matter.

wuxi apptec said in a statement: "we are evaluating options to continue operating our atu business consistent with our priorities, which are the primary and most urgent treatment needs of our employees and patients."

clsa believes that since the cgt business is highly sensitive to the u.s. biosafety act and has grown slower than expected in the past few years, the sale of this business will have a positive impact on wuxi.

the biosecurity act is currently awaiting approval by the u.s. senate. the bill aims to prevent u.s. biopharmaceutical companies from collaborating with certain chinese companies, including wuxi. if the biosafety bill is passed into law, it is expected to have a profound impact on the biopharmaceutical industry, which currently relies heavily on chinese third-party pharmaceutical manufacturing service providers.

a recent report from data agency global data said the bill could affect more than 120 u.s. drugs, about half of which are in clinical trials and a third in early preclinical research and discovery stages.

"wuxi's plan to sell overseas assets will have a wide-ranging impact on the biopharmaceutical industry. considering its huge business volume in the united states, this will be a big deal." an investor in the us biopharmaceutical industry told first financial reporter said.

as early as 2020, wuxi biogene completed the expansion of its cgt production base in philadelphia, usa, tripling the scale of high-end testing services. however, according to the first half of 2024 results announced by wuxi apptec, revenue from the high-end treatment ctdmo business fell by nearly 20% year-on-year. regarding the decline in revenue, wuxi apptec said that commercialization projects are still in the early stages of ramping up volume; some projects are delayed or canceled due to customer reasons; and affected by the proposed u.s. bill, there are insufficient new orders.

wuxi biologics' first-half financial report is also worrying, especially the decline in gross profit margin, which has attracted market attention. wuxi biologics said that the production capacity of new production bases in ireland, germany and the united states continues to climb, which is one of the reasons for the decline in gross profit margin.

earlier this year, wuxi biologics suspended the construction of its worcester, massachusetts, u.s. base. the company's biopharmaceutical clinical production plant at its cranbury, new jersey, u.s. site has been officially put into production in 2022. this base is also the site of wuxi biologics. the first gmp manufacturing plant in north america.

duty editor: grace