BIO Expels WuXi, Agrees With U.S. Government

By Louis Garguilo, Chief Editor, Outsourced Pharma

“BIO is taking steps now to separate from WuXi-AppTec regarding membership in the organization.”

It didn’t take long for newly installed Biotechnology Innovation Organization President & CEO John F. Crowley to come out swinging, and he’s landed his first punch on WuXi.

“As a combat veteran and former Naval Intelligence Officer with JSOC and member of the U.S. Intelligence Community, I have a uniquely vivid perspective on the threats posed to the national security of America and our allies,” he starts off his announcement.

According to Crowley and BIO, the answer to the headline of my recent headline, Is WuXi AppTec An Enemy Of The State?, is a militant yes.  

If TiK Tok is the Chinese combatant of the IT/social-media space, WuXi is now firmly in place as our counterpart in the biopharma industry.

But there are stark differences between the two, and it’s instructive to clearly define what they are and what is being alleged.

WuXi Our Tik Tok?

First, Tik Tok as our foil.

The bill that passed the U.S. House and is now sitting in the Senate – President Biden says he will sign it if reaches his desk – demands the outright sale of Tik Tok by its Chinese ownership to an American organization.

The reason? Reams of U.S.-user personal information can and is being handed over by Tik Tok to the Chinese Communist Party. And that’s not for the purspose of improving user experience, let’s say.

Furthermore, the U.S. government (and many others) say Tik Tok supresses information, and on the other hand, pushes out false narratives, derisive and slanted narratives, and the app can effectively interfere in our elections, and harm our youth.

Since Tik Tok’s U.S.-customer data bases are already located in the U.S., it appears there are no actual hard assets (i.e., facilities;) that would need to change hands.

However, the U.S. cannot mandate a tech transfer (as China does in many cases), so it appears a sale means the algorithms running the software and created in China will be removed from the app, and the app will be rebuilt by U.S. software/app developers – the new owners.

So what does WuXi do to have gained the ire of the U.S. government, and now one of our industry organizations?

“Our adversaries abroad have stated that they intend to become the biotechnology center of excellence in the world,” explains BIO’s Crowley.

WuXi, then, is being accused of aiding and abetting Chinese asperations to become the best biotech center in the world. 

“America and our allies cannot let this happen,” continues the BIO CEO.

Why?

“Securing and advancing our preeminence in biomanufacturing will be one key component of a multi-prong approach to secure and advance this strategic imperative in biotechnology.”

I suppose the difference is how these plans are being implemented.

We are ahead, Crowley seems to be saying, we did it honestly, but China is doing it nefariously, specifically by stealing IP, we presume.

And WuXi is being kicked out of his organization because it is a China-based contract development and manufacturing organization and part of the China scheme.

I’m not privy to any classified government information, but to the best of my knowldege, of the hundreds (thousands?) of WuXi customers over the decades of the company’s existence, no one has ever accused or even suspected WuXi of leaking IP or other information.

If readers know differently, please correct the record.

Of course having a successful biopharma company like WuXi is good for growing China's industry. But does the existence of WuXi really harm U.S. interests in 2024?

A Strange Target

WuXi has incredible hard assets (labs and facilities) in China – and in the U.S. (and other locations).

Is BIO saying its members – an impressive chunk of our industry – should be warned off using any of these CDMO locations or services?

That would certainly harm a number of U.S. cities and states.

While acknowledging Crowley’s concerns, the irony here is that WuXi’s global facilites greatly assist the U.S. biotechnology industry, have aided in reshoring of U.S. manufacturing, and served U.S. communities well.

Like all CDMOs, the WuXi business model is predicated on advancing science and technology, and producing materials and drugs for sponsors and patients. If they weren’t doing this, they’d have no customers.

Here’s what one experienced U.S.-based outsourcing professional recently wrote to me:

“WuXi Apptec and WuXi Biologics to date have been my best CDMOs for both small molecules and biologics, in terms of quality, timeline, cost AND communication.

“If I need to change a team for any reason, they reply immediately that they will do so to ensure completing the project on time."

This professional says the attitude is quite different, for example, at a major E.U.-based CDMO he has contracted with.

Back to hard assetts, WuXi has worked with state and local authorities to build labs and large-scale, advanced facilities in the U.S., including locations in:

• California
• Georgia
• Massachussetts
• New Jersey
• Pennsylvania
• Texas

In locations such as King of Prussia (Pennslyvania), emerging biotech centers are enhanced by landing a WuXi facility.

Are these now seen by BIO as facilities non grata for the U.S. biopharma industry?

If so, there's some strong opposition to this line of thinking. For example, an outsourcing professional recently told me:

“The U.S. and E.U. bio/pharma should wake up and learn something from WuXi, particularly when we do observe this ‘crisis’ in the US bio/pharma industry.

“This should not be about a threat and fear of competition, but about active investments in and the development of new bio/pharma that is actually a part of the solution.

Where is the investment in the US-based CDMOs?”

Back to Crowley, he says specifically, “The capabilities and capacity to create, manufacture and distribute state-of-the-art newer and better medicines and vaccines is the foundation for America to continue its essential role as the 'World’s Medicine Chest.'”

But it sure does seem like WuXi – as well as other foreign-owned CDMOs investing in facilities in the U.S., or assisting U.S. biopharma from their home countries – is doing just that.

For me, a proponent of taking on the China Communist Party for unfair trade practices, I nonetheless remain mystified the U.S. government, and now BIO, is targeting WuXi as our enemy.