Source: Securities Times
On March 7, there was a sharp drop across the board for medicinal products. Up to now, A shares$WuXi AppTec (603259.SH)$Hong Kong stocks fell to a halt$WUXI APPTEC (02359.HK)$fell nearly 19%,$WUXI BIO (02269.HK)$It fell more than 21%.
According to the news, in the middle of the night of March 6, Beijing time, the US Senate Homeland Security Committee held a hearing on the proposal. The US Senate version of the “Biosafety Act” (S3558) was passed with an 11-1 vote.
This similar bill, numbered “S3558,” was proposed in the Senate by Senate Committee Chairman Gary Pitt (Democrat) and Republican Bill Hagerty (Bill Hagerty) in December 2023.
The core content of the bill is to restrict the US government and the companies it actually controls from signing contracts with specific biotechnology companies, clearly specify which companies are specific biotech companies, and require the establishment of a blacklist.
Yao Ming Kangde's quick announcement
In the afternoon, Yao Ming Kang quickly issued a clarification notice explaining and clarifying matters relating to a proposed legislative draft recently submitted to the US House of Representatives and the US Senate.
The amendments to the draft include, but are not limited to, a non-retroactive clause (“grandfather” clause), that is, exemption from existing contracts signed prior to the entry into force of proposed legislation; and procedures relating to the designation and review of “concerned companies” by US government agencies.
Despite these revisions and the existing national security assessment procedures of US government agencies, the draft pre-defines Pharmacovigilant as one of the “biotechnology companies to pay attention.”
Yao Ming Kang said, “The company strongly opposes this kind of preemptive and unfair definition without due process. We firmly believe that Pharmaceutical Kangde did not in the past, does not present, and will not pose a national security risk to the United States or any other country. The company also once again reiterated that Yao Ming Kangde has no human genomics business, nor does the company collect human genomics data in any of its current businesses.
Over the next few months, the above draft will continue to go through the Senate's legislative process. The company will cooperate with consultants to continue exchanges and dialogues with relevant parties involved in the draft and the ongoing legislative process for the corresponding bill in the US House of Representatives. The content of the draft still needs further review and may be changed.”
Long and short changes in a short period of time
Developments relating to the US Biosafety Act have received a lot of attention recently. There have been rapid changes in a short period of time, and market expectations have peaked.
Last week, a Biden executive order revealed signs of optimism. The order may restrict genetic companies' activities in the US, but at the same time, it may also reduce legislative pressure on Chinese contract R&D and manufacturing companies (such as Pharmaceutical Kangde and Pharmaceutical Biotech).
After the news came out, on March 4, the CXO sector, represented by “Pharmacomics,” skyrocketed.
Soon, the news was reversed again.
On the evening of March 6, the amendment passed a hearing resolution, which is not good news for the Department of Medicine. The passage of the above hearing means that the bill has officially passed the Senate's “second reading” and is about to enter the Senate for a “third reading.”
However, this result does not mean that the draft bill has received general support within the larger National Assembly.
To be implemented, this bill still has to go through many steps: 1. Pass it by the US Senate session; 2. Pass it by the US House Committee and Plenary Session; 3. It reaches the National Assembly and is finally signed by the US President before it can be implemented.
There are also a lot of variables in it. If the House Committee does not pass the bill, then in the end, the bill will enter a game between the two houses, and it will take even longer to be implemented.
Whether the draft can finally be passed was met with extensive discussion and voting by the Senate and House of Representatives in the later stages. Statistics show that historically, only 2% of China-related laws were passed when they became official laws.
This means that there will continue to be games and disputes over the progress of the Biosafety Act.
However, from an industrial and legal perspective, industry insiders believe that “there are substantial barriers to whether this bill can be passed.”
The stock price of Pharmacomics fluctuates greatly
With the long and short changes in peripheral news, the stock price of Yao Ming series fluctuates greatly.
At the end of January, a bill aimed at “preventing foreign adversaries from stealing sensitive US genetic data and personal health information” was introduced in the House of Representatives, which mentioned$BGI Genomics (300676.SZ)$The Group and its subsidiaries Huada Intelligent Manufacturing and Pharmaceutical Kangde.
Affected by this, the drug class plummeted for a while. Yao Ming Kangde issued three consecutive clarification notices within half a month.
Recently, this news also took a turn.
Among the proposed amendments to the US Biological Act, there is an opinion that “it affects the normal supply of pharmaceuticals in the US and interferes with normal market transactions” with regard to the drug description part. As a result, the relevant provisions may be weakened or amended as the bill moves forward.
Editor/jayden