(Yicai) Jan. 29 -- Shares of WuXi AppTec and MGI Technology tumbled despite the two companies defending themselves against draft US legislation that targets Chinese biotech firms on the alleged grounds of national security.

WuXi AppTec [SHA: 603259] plunged by its 10 percent daily trading limit to CNY59.36 (USD8.26) a share in Shanghai today, while in Hong Kong its stock [HKG: 2359] sank 10.6 percent to HKD57.75 (USD7.39). MGI Tech [SHA: 688114] slid 12.3 percent to CNY67.32 and its parent company BGI Genomics [SHA: 300676] fell 2.5 percent to CNY40.45.

What the proposed Biosecure Act says about WuXi AppTec is neither appropriate nor accurate, and the firm abides by the laws and regulations of the countries where it does business, including China and the United States, it said on Jan. 26. WuXi AppTec’s business development will not threaten the security of any country, it pointed out.

The draft bill makes factual errors about MGI Tech, and the genetic sequencing devices and technology provider does not collect data from clients, it said yesterday, adding that the data generated by clients on its gene sequencing platform are all collected, stored, processed, and controlled by the clients, it added.

BGI Genomics will conduct an internal assessment of the proposed bill and then decide whether to issue a public announcement based on its impact on the firm's business direction and performance, National Business Daily reported, citing the Shenzhen-based company.

The Biosecure Act would ban certain Chinese biotech firms from getting US government contracts. It was introduced by Senator Gary C. Peters on Dec. 20, and it gained bipartisan support from lawmakers on Jan. 25, who said it would protect the health and genetic information of Americans. The bill puts WuXi AppTec, from which WuXi Biologics was spun off several years ago, and Shenzhen-based BGI Genomics on a list of “biotechnology companies of concern.”

GemPharmatech offers mouse models to its clients and one-stop services, including custom-made models, custom-made breeding, and analyzing pharmaceutical effects and it does not do any human gene sequencing analysis, it said yesterday. All technologies and samples the firm buys and uses are public or commercial resources and are not restricted by the Biosecure Act, it noted. 

Shares of GemPharmatech [SHA: 688046] fell 0.6 to CNY13.89 apiece today, after tumbling by the 10 percent daily trading limit on Jan. 26.

The bill "is just a proposal by a US senator and is highly unlikely to become law," Chen Zhisheng, chief executive of WuXi AppTec's unit WuXi Biologics, told Yicai on Jan. 26. Even if the bill were passed, it would "take years for it to become law," he noted. It would need to be passed by the House and Senate and signed by President Joe Biden before becoming law.

Editor: Martin Kadiev