The real names of Chinese companies concerned about technology leaks are revealed.
‘Biosecurity Act’ passed by the U.S. Senate Homeland Security Committee
Obesity treatment – Concerns about supply shortages such as anti-cancer drugs
Observation of “Benefits from Samba and Hanmi Pharmaceuticals”
Following the semiconductor industry, the United States has also begun to keep China in check in the bio industry. Due to the U.S. measures, there is an increased possibility that CDMO (Consignment Development and Manufacturing) volumes from Chinese companies that were doing business with the U.S. will be transferred to Korea. Samsung BioLogics, the 4th largest global CDMO company, and Hanmi Pharmaceutical, which has a production process for obesity treatment drugs for which demand has recently rapidly increased, are mentioned as positive companies.
On the 6th (local time), the U.S. Senate Homeland Security Committee passed the ‘Biosecure Act’, which restricts trade with Chinese biotech companies, by a vote of 11 to 1. The bill clearly lists four Chinese bio companies that are concerned about technology leaks. These include Wuxi Apptech, a global CDMO company, and Beijing Genome Institute (BGI), MGI, and Complete Genomics, which are genetic analysis companies.
In order for the Biosecurity Act to finally take effect, it must pass the plenary session of the Senate and House of Representatives and receive the signature of the President. Experts believe that the bill will be passed without difficulty as the United States has recently been strengthening its checks on China in the high-tech field. In January of this year, a bill with the same content was proposed in the U.S. House of Representatives.
Wuxi Biologics, an affiliate of Wuxi Apptech specified in the bill, is the world’s third largest company, accounting for approximately 10% of the global CDMO market. As of 2022, Wuxi Biologics’ sales are approximately 2.81 trillion won, of which approximately 66% are generated in the United States. It is highly likely that a significant portion of this volume will flow to domestic CDMO companies.
In particular, Samsung BioLogics, which mainly produces antibody medicines, overlaps a lot of the medicines it produces with Wuxi BioLogics. An industry insider said, “All global pharmaceutical companies are aware that the production portfolios of the two companies are similar,” and added, “Consignment production usually involves long-term contracts, so there is a high possibility that they will choose Samsung over Wuxi, which carries greater geopolitical risk.”
Glucagon-like peptide-1 (GLP-1) type obesity treatment drugs, for which demand has recently rapidly increased, are also major drugs appearing in the ‘FA market’. In particular, Eli Lilly, one of the two major manufacturers of obesity treatment products, is severely lacking in production facilities. This is because last month, competitor Novo Nordisk acquired part of the Catalan plant, a global CDMO company. “We and the pharmaceutical industry rely on our Chinese partners for many of our materials,” Lilly said in a recent filing with the U.S. Securities and Exchange Commission. “(The U.S.-China conflict) could cause confusion for patients and have a detrimental effect on our business.” “He also mentioned.
Currently, Hanmi Pharmaceuticals has secured the GLP-1 production process in Korea. Hanmi Pharmaceutical is also developing ‘efpeglenatide’, a GLP-1 type obesity treatment drug. An official from Hanmi Pharmaceutical said, “The production scale is not as large as the global level, but some volume production is possible.” Hanmi Pharmaceutical was also mentioned as a major contract manufacturing (CMO) company that could sign additional production contracts when there was a serious supply shortage of obesity treatment drugs in the United States last year.
After news broke that the Biosecurity Act had passed the Senate Homeland Security Committee, the stock price of Wuxi Apptech, which was listed on the Hong Kong Exchange, fell 20.6% at the closing price. Wuxi Biologics also fell 21.5%.
Source: Donga
Mark Jones is a world traveler and journalist for News Rebeat. With a curious mind and a love of adventure, Mark brings a unique perspective to the latest global events and provides in-depth and thought-provoking coverage of the world at large.