Wuxi Biologics Will Be Removed From U.S. Commerce Department's ‘Unverified List’

As a CXO giant listed in Hong Kong, Wuxi Biologics will be removed from the list eight months after it was added to the ‘Unverified list’ of the Bureau of Industry and Security on Feb. 7, 2022, according to the new revisions.

biotechnology

According to Federal Register, the Bureau of Industry and Security (BIS) of the U.S. Department of Commerce revised the 'Unverified List' (UVL) on Oct. 7, 2022, which is scheduled to be published on Oct. 13. And Wuxi Biologics (WXXWY) is one of the nine removals from the UVL.

Influenced by the news, Wuxi Biologics (Cayman) Inc. ADR (American depositary receipt) rose by 6.64% on Oct. 7 and closed the day at around $13.50.

Wuxi Biologics, a Hong Kong-listed CXO giant, and its subsidiaries are engaged in providing comprehensive, integrated, and highly customized services to pharmaceutical and biotechnology companies. The company distributes its products primarily in the United States and China. In fact, Wuxi Biologics has been involved in the dispute for more than eight months.

In February, the U.S. Commerce Department announced an addition of 33 Chinese entities to the UVL, including Wuxi Biologics (Cayman) subsidiaries in Shanghai and Wuxi. In response, Wuxi Biologics stated that the company was on the UVL due to the untimely routine verification procedures of certain hardware controllers for bioreactors and hollow fiber filters caused by COVID-19 in the last two years.

While Wuxi Biologics claimed UVL has no impact on its business or ongoing services to global partners, the list still raised continuing concerns about the company and international relations with the CXO segment.

As the overseas pharmaceutical giants are the staple source of income of CXO companies like Wuxi Biologics, the stock prices of these enterprises have been significantly retracted, and their valuation has continued to hit record lows since the event.

Wuxi Apptec (2359.HK) also issued a clarification in February, declaring that Wuxi Biologics and Wuxi Apptec are two independent public companies. Despite the statement, Wuxi Apptec's share price still suffered a dramatic strike. And other CXO companies such as Asymchem (6821.HK), Pharmaron (3759.HK), and Joinn (6127.HK) were also being affected.

The removal of UVL of Wuxi Biologics is expected to lead to a substantial repair in the valuation of the CXO sector.


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Disclaimer: This article's content is intended to be used solely for informational and educational purposes, and not as investment advice. Always do your research and consider your personal ...

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