WuXi AppTec Sells Irish Vaccine Plant for $500 Million

WuXi AppTec Biologics announced on Monday that it has agreed to sell its vaccine plant in Ireland to U.S. pharmaceutical giant Merck & Co. for approximately $500 million. This move comes after the U.S. House of Representatives passed the Biosecure Act, which aims to prohibit federal contracts with specific Chinese biotechnology companies and their business partners. For the bill to become law, it still needs to pass the U.S. Senate and be signed by the President.

BTIG analyst Justin Zelin pointed out that WuXi AppTec seems to be seeking to downsize its business, possibly preparing to reduce its contract business. According to the Financial Times report last October, WuXi AppTec had planned to sell part of its business. The analyst also mentioned that amidst the new government's tougher stance on China, the bill has received broad support in concept, but it needs to be incorporated into a broader legislative framework to become law.

The primary aim of the bill is to protect the personal health and genetic information of Americans from falling into the hands of foreign adversaries and to encourage the U.S. pharmaceutical and biotechnology industries to reduce their reliance on Chinese drug component manufacturing and early-stage research. Additionally, WuXi AppTec announced in December last year that its subsidiary had reached an agreement with U.S. private equity firm Altaris LLC to sell its cell and gene therapy business in the U.S. and the U.K.