China biotech has moving U.S. target on the back
Pharmaceutical company WuXi Biologics
plunged 23% on Tuesday after Washington added it and 32 other Chinese groups to a list that would make U.S. imports of components like bioreactors much more painful. The $34 billion contract drugmaker rushed to explain
that the list is not the much-feared entity black list, and hinted things will improve once China’s Covid-19 restrictions ease and field inspections can be completed. But it’s the second time in merely two months that the company was hammered
out of fears over its heavy U.S. exposure as bilateral ties sour.
Even if WuXi Biologics’ planned mainland factories eventually make it self-sufficient for parts, the company is a moving target with over half of its revenue from North American clients, including a large proportion from the United States. The “Unverified List” may just be a starter proving the multiple ways that Washington can move to curb Chinese champions. Wuxi’s rich valuation, at 47 times next 12 months earnings per Refinitiv, is another reason to sell. (By Yawen Chen)
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